Lords Sitting of 10 April 1984

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Southwell.

Vehicle Excise Duty: Enforcement
Lord Underhill: 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 action they propose to take to build up staff at the Driver and Vehicle Licensing Centre, Swansea in order to enable it to recover unpaid vehicle excise duty.
Lord Lucas of Chilworth: My Lords, the Department of Transport has already improved the efficiency of its vehicle excise duty enforcement operations. With the help of the police, revenue from enforcement increased 50 per cent. in 1983, over the previous year. More remains to be done to improve efficiency. Our immediate aim is to make the best use of all the available resources.
Lord Underhill: My Lords, although I welcome the improvements which the Minister has just recounted, does he recall the Written Answer given in the other place on 2nd February, which indicated that, after allowing for the cases which were cleared up as a result of prosecutions or payments made out of court, there were still 550,000 cases which could not be satisfactorily settled? Is it not a fact that the Permanent Secretary of the Department of Transport has given evidence that at least 300,000 cases could not be followed up because of the shortage of staff, particu-larly at DVLC?
Lord Lucas of Chilworth: My Lords, I am aware of the Written Answer in the other place on 2nd February and, indeed, of the figures which the noble Lord. Lord Underhill, has quoted that the Permanent Secretary gave when he was before the Committee in the other place. The 300,000 cases which have not been concluded would not, however, necessarily have been satisfactorily concluded with an increase in the number of enforcement officers. The number of enforcement officers has been increased by 150 persons in the last 14 months—a higher figure than ever before.
Lord Gainford: My Lords, in the light of the information which we have just heard, is there any danger of DVLC Swansea becoming a mausoleum of parchment?
Lord Lucas of Chilworth: My Lords, if by "a mausoleum of parchment" my noble friend is referring to the amount of paperwork which lies around, that may be so. However, in fact there are over 50 million transmissions of documents as regards vehicles and over 18 million transmissions of
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documents with regard to drivers. So we are concerned with something like 60 million to 70 million pieces of paper which human beings require to register their vehicles and themselves.
Lord Underhill: My Lords, I am sorry to rise again, but the Minister did say that the Permanent Secretary of the Department had given evidence on the lines that I suggested. As everyone in this House believes, surely, in cost-effectiveness, is it not in the interests of everyone that there should be adequate staff to follow up the 300,000 cases which the Permanent Secretary gave evidence could not be followed up because of shortage of staff?
Lord Lucas of Chilworth: My Lords, the Department of Transport like other departments of state, is concerned with tax evasion and it does what it can to minimise it. As regards increasing the number of staff—and the noble Lord, Lord Underhill, has the figures at his fingertips as, indeed, I have them in the document—the noble Lord will also observe that the Permanent Secretary of my Department did say that that would not necessarily be a proper use of manpower. We have to increase the efficiency of those people whom we have in enforcement—one sixth of the total force—and the other technical arms that are available to us.
The Earl of Selkirk: My Lords, would it not help the manpower position if cars were licensed for two years with perhaps some small incentive, instead of for one year?
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend for that suggestion. I hope that my noble friend will not misunderstand me when I say that this is one of the matters that has been considered on more than one occasion. We do not believe that that would be so, because of the huge number of vehicle transactions during the course of a year—that is, transfers and the like.
Lord Inglewood: My Lords, can my noble friend say who, in fact, is responsible for the enforcement of these provisions? We know that the police are responsible to a certain extent, but my noble friend also referred to enforcement officers. Who are they? Are there sufficient?
Lord Lucas of Chilworth: My Lords, there are nearly 1,000 enforcement officers in the Departmemt of Transport—about one sixth of the total force in the DVLC—who enforce licensing regulations. We are also helped considerably by the police. There have been 64 blitz campaigns in which the police have aided the department in enforcing licensing. We are grateful to the police, because this has had a very great impact as regards reducing the numbers of those attempting to evade the law in this respect.
Lord Cledwyn of Penrhos: My Lords, in the light of the noble Lord's replies can he say what steps his department are taking to improve productivity in Swansea? That seems to me to be the question which requires an answer, given that it is well accepted that the average efficiency of the staff in Swansea is at least

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as good as the average efficiency anywhere else in the noble Lord's department.
Lord Lucas of Chilworth: My Lords, I am grateful to the noble Lord the Leader of the Opposition for his praise of the officers in our department in the DVLC. If I told him that about a quarter of a million documents come into the DVLC every morning and that about a quarter of a million documents go out every evening, he will recognise that that is a very high productivity rate for 4,000 people. As regards enforce-ment by the field force, when the new computer arrangements are completed in the middle of next year, we anticipate that this will speed up the time taken to identify miscreants, if that is the word, or evaders of tax. This will enable those field officers to get on to their cases very much faster, and will result in a higher rate of productivity.
Viscount Hanworth: My Lords, can the noble Lord the Minister say whether there is any reason why traffic wardens should not check on licences at the same time as they check on illegal parking, and report back to the police?
Lord Lucas of Chilworth: My Lords, in the course of their duties traffic wardens observe. Where an offence for which they have responsibility is committed and there is another offence—for example, a missing road fund VED disc—they would report that offence. However, there are difficulties with the identification of such reports.
Lord Leatherland: My Lords, as it appears that the existing staff cannot cope adequately and promptly with their task, will the noble Lord consider making licences completely free for people of 85 years of age and over?
Lord Lucas of Chilworth: My Lords, I cannot accept what the noble Lord, Lord Leatherland, said in the first part of his question. We believe that our enforce-ment officers are hardworking and that their numbers are adequate. As regards the matter of free licences, I do not think that the noble Lord means that to be taken seriously, because 1 am sure he would accept that all of us who enjoy the benefits of using a car have to pay the taxes that accrue.

Cost of Warmth Index
2.45 p.m.
Lord Stallard: 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 whether they will give consideration to the construction of a cost of warmth index to measure heating needs.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, Her Majesty's Government are studying the recent proposals by the National Right to Fuel Campaign for the construction of a cost of warmth index. We are also examining alternative ways of identifying heating problems of individual low-income households, including the use of existing audit services.
Lord Stallard: My Lords, I am grateful to the Minister for that reply, and for telling us of the information that he has received and is considering from the National Right to Fuel Campaign. Is he aware that the poorest pensioners in our society—that is, those on incomes of less than £50 per week—spend a greater proportion of their income on fuel than the rest of us? I think the figure is 16 per cent., as opposed to 6 per cent. or less for those in the more wealthy groups. Will the noble Earl assure us that the informa-tion on the cost of warmth index that he has just mentioned, from the National Right to Fuel Campaign, will be fed to his right honourable friend in another place during the consideration of the social security system, so that the problems of fuel poverty can be given urgent consideration?
The Earl of Avon: My Lords, the noble Lord has, indeed, underlined the fact that this is a very difficult problem, and I believe that this report goes to the nub of it. As regards the matter of help with fuel bills, the Government are spending more than ever before: some £380 million in 1983–84 in supplementary benefits for heating additions to around 2½ million recipients.
Viscount Massereene and Ferrard: My Lords, is my noble friend aware that in most new council house buildings fireplaces are not included? Is this policy not extremely stupid? Will my noble friend not agree that in the event of a power strike old-age pensioners and old people would have no heating at all? Furthermore, if such people live in the country it will be quite easy for them to get hold of firewood—perhaps someone could get firewood for them—which they can burn to keep warm.
The Earl of Avon: My Lords, I think that it must be for the owner of the house to satisfy himself whether or not he wants a fireplace among the comforts of his house. Many of us are taking the opposite view and are bricking in our fireplaces in order further to insulate our homes.
Lord Molloy: My Lords, is the noble Earl aware that the Answer which he gave to my noble friend will be very welcome indeed to those of us who have been involved with and know about, through local government, the tragedies which afflict the house-bound and old people simply because they do not have enough money to keep warm in an English winter? It must be a terrible disgrace to our society. When this information is to hand, will the noble Earl make sure that it is not spoilt by cut-backs in local government, whose social service officers find out from those who are house-bound and old the ones who are in need of assistance to keep warm? Because the alternative is that these old people will die.
The Earl of Avon: My Lords, I am sure that we all sympathise with what the noble Lord says. I am equally sure that in their spending local authorities take into account this very serious item.
Lord McNair: My Lords, will the noble Earl agree that warm clothes and food are just as important in keeping warm as is fuel? Therefore, will he agree that a cost of warmth index should reflect the price of those items?
The Earl of Avon: My Lords, I am sure that the noble Lord has seen this very substantial pamphlet and will know that its authors have appreciated most of the problems.
Lord Stoddart of Swindon: My Lords, although I welcome what the noble Earl has said about the cost of warmth index and the Government's attitude towards it, can I have his assurance now that there will not be a repeat performance next year of what happened this year, when the fuel industries were forced to increase prices against their will?
The Earl of Avon: My Lords, I think that the noble Lord is making a rather strong political point, which I do not think affects this at all. As a morning after the night before, I discard it.

Sea Eagle: Missile
2.50 p.m.
Lord Beswick: 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 when they expect to make a decision about the purchase of a new ship-launched anti-ship missile to equip the Royal Navy Type 23 frigates.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, very shortly.
Lord Beswick: Yes, my Lords, and I thank the noble Lord for that information, which I already knew. While there is still time for the Government to change their mind on this, while there is still time to change the order from the American Harpoon, would the noble Lord confirm the fact that the British Sea Eagle outperforms the American Harpoon and the Exocet? Would it not be a serious blow to the British industry, especially in their export markets, if the British Government choose the American weapon?
Lord Trefgarne: My Lords, I would not wish to anticipate the announcement that will be made, but I can say that all the contenders were excellent.
Lord Bishopston: My Lords, if the Government have come to a decision which they have yet to announce, can they assure the House that they will not only have taken into account the particular needs of the Royal Navy and how they can be best met, but also have had regard to the splendid record of the British aerospace industry and also of its future needs? If a decision has not yet been taken will the noble Lord take these things into account?
Lord Trefgarne: Yes, my Lords, I can assure the noble Lord that all those factors will be taken into account.
Lord Gladwyn: My Lords, is it not a fact that the Soviet navy is now fully equipped with anti-ship missiles of the latest type—and very efficient ones too, I understand—and is that not reason for the
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Government to get a move on in order to equip our navy with similar weapons?
Lord Trefgarne: My Lords, the Soviet navy does indeed pose an important threat. That is why we have to make all the arrangements that we do and spend the money that we do on enhancing our own fleet.
Lord Shackleton: My Lords, while accepting that the Government have to get the best value for money, would the noble Lord not agree that the advantages to this country of having a viable and indeed exportable piece of equipment like the Sea Eagle could outweigh simple financial costs? Would he take that into account?
Lord Trefgarne: My Lords, as I say all these things are taken into account, but I would not wish to anticipate the announcement.
Lord Hankey: My Lords, will the Government bear in mind that it is truly impossible to export British products of a defence nature unless the Government buy them themselves?
Lord Trefgarne: My Lords, I would not necessarily agree with that. But in any event of course the Sea Eagle, to which I believe the noble Lord has referred, is already in the RAF inventory.
Lord Beswick: My Lords, the noble Lord said that all these contenders were good, and of course they were, but would he make it absolutely clear that what I said at first is true, that the Sea Eagle outperforms the others? Will he make that clear? Would he also say when it was decided to buy the American Harpoon what rate of exchange was agreed? Was it not $1·6 to the pound, and has not the rate of exchange now changed? May I also ask what undertakings have been reached about the price of spares, and does this not come into the total cost?
Lord Trefgarne: My Lords, if I were to answer what are frankly rather loaded questions, I should be anticipating the statement, and I cannot do that.
Lord Bishopston: My Lords, would the Minister have regard also to the situation when the Falklands campaign was on so that we, through having a British project, are able to get the changes necessary at short notice in order properly to equip our forces?
Lord Trefgarne: My Lords, I fear that the answer to that question is the same as the one I just gave to the noble Lord, Lord Beswick.
Lord Shackleton: My Lords, could the noble Lord explain what he means by a loaded question? Does he mean one that the Government are unable to answer?

Falkland Islands: Airfield Land
2.54 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

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The Question was as follows:
To ask Her Majesty's Government whether the land for the Mount Pleasant Airfield in the Falkland Islands has now been purchased and what was the price for all the relevant elements.
Lord Trefgarne: My Lords, the contracts for the purchase have now been exchanged. The price paid for the 8,300 acres was £55,000. In addition the normal severance compensation has been paid and was assessed to be £100,000. The construction of the airfield necessitates the resiting of Mount Pleasant House and other farm facilities and services to enable farming operations to continue, the cost of which is £83,877.
Lord Orr-Ewing: My Lords, I thank my noble friend for that reply. Could he say whether, as a result of using negotiations rather than compulsory purchase, he was able to buy this farming land at just over £6·50 an acre? Was this because negotiation was used? Could he perhaps tell the House when the first runway on this land will become serviceable for operational purposes?
Lord Trefgarne: My Lords, we always prefer to acquire land by voluntary agreement rather than compulsory purchase. Indeed, as a result of reaching the voluntary agreement with the owners of this land they were able to grant us a licence to begin work on the aerodrome, as a result of which the first runway will now be operational about this time next year.
Lord Beswick: My Lords, does the noble Lord recall that when I first asked this Question he said on 13th March that this was a confidential matter between the Government and the owners of the land? May I ask him why he is now able to change his mind about this? Could he not have an equally satisfactory U-turn about my previous Question?
Lord Trefgarne: My Lords, the answer to the noble Lord's supplementary question is that the contract has now been signed. It had not been signed when the noble Lord put to me his original Question.
Lord Beswick: My Lords, may I just follow on? Now that the contract has been signed, on the question of the amount of compensation under the general heading of disturbance is it not a fact that the price comes to the £30 an acre which I said originally?
Lord Trefgarne: No, my Lords; the price per acre was in fact as my noble friend recounted. The compensation is a quite separate matter which is of course calculated by different means.
Lord Broxbourne: My Lords, could my noble friend say whether the price paid here reflects the principles and criteria of assessment of compensation in English statute law, and, if there are any divergences therefrom, of what they consist?
Lord Trefgarne: Yes, my Lords. Had we gone to compulsory purchase the price would no doubt have been subject to arbitration, and our belief is that the amount we have agreed to pay would have been the sort of figure that would have been arrived at by arbitration.
Lord Cledwyn of Penrhos: My Lords, is this not even so an excessive amount to pay for this land, the total being over £238,000? Could the noble Lord answer the following questions? First, could he confirm what he said during the last exchange on this matter, that the Property Services Agency consulted the Government, and did representatives of the Property Services Agency visit the Falkland Islands to inspect the land in question? Secondly, could he say what is the average price of land in this area of the Falkland Islands? Is it true, as was reported in the press, that it is between £1 and £2 per acre? That would be of interest. Thirdly, on the question of disturbance, where the sum paid or agreed on the exchange of contracts, as he said, was £100,000, can the noble Lord describe how that can be justified for disturbance in this part of the world?
Lord Trefgarne: My Lords, may I take the noble Lord's questions in order? First, yes, it was the case that the Property Services Agency were the Government's principal but not sole advisers in this matter; and, indeed, they have a number of represen-tatives on the islands at the present time. As for the rate per acre, that very much depends upon the profitability of the land, or, rather, the number of sheep that it will sustain. The noble Lord, Lord Shackleton, asked me about that on the last occasion on which we discussed this matter. The price we have paid reflects the fact that this is in fact rather good land. The site is in the middle of a much larger farm, and thus the piece of land that we have acquired for the purpose of building the aerodrome has divided that farm up very substantially. It was that factor which we took into account in reaching the compensation figure to which I referred.
Lord Shackleton: My Lords, is the noble Lord aware that applying criteria as to the division of farms in a part of the world where there are no roads anyway is not of the same significance? Would he not agree that in fact the payment for the land, which is moderate land—even if it were very good land the amount would still be excessive—is out of all proportion to other sales of land and farms with complete houses elsewhere in the Falklands?
Lord Trefgarne: My Lords, that was not the conclusion which the Government reached in considering this matter. But I would emphasise that this was originally a much larger farm. We have taken a substantial piece of land from virtually the middle of the site, and I think it is quite reasonable to suggest that we have therefore greatly affected the future viability of that farm.
Lord Bishopston: My Lords, when the Minister speaks of compensation, that is being paid to the Falkland Islands Company or the Coalite Company, I presume, has he reminded the company in purchasing and paying the price they demand that unless the British forces had ensured that the islands were still under British control none of the assets of these companies would be worth anything? Is it not rather outrageous that we have to pay a price demanded in this way? Is the Minister aware also that there are many other facilities which people will need in the

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Falklands, our forces included, which are also under monopoly control? Will he remind the Falklands Islands Government of the need for immediate land reform by using the powers which they have in their possession?
Lord Trefgarne: My Lords, that is another question, if I may say so, but the fact remains that the alterna-tives that confronted us were to acquire the land either by voluntary agreement or else by compulsory purchase. Had it been by compulsory purchase the price would have been set by arbitration, if agreement could not have been reached. We have no powers and do not seek to take any powers to confiscate the land.
Lord Orr-Ewing: My Lords, it has been reported, and would my noble friend like to comment, that the Falklands Islands Company offered some of this land as a gift to the Government because of their gratitude? Was this offer made? Was it considered and, if so, why was it refused?
Lord Trefgarne: My Lords, the Falkland Islands Company initially offered to donate about half the land required and suggested that the Ministry of Defence might in turn make a similar contribution in cash towards the cost of a swimming pool in Port Stanley. There would thus have been no real savings to public funds and, in any event, they did not say what price they would have required for the other half.
Lord Beswick: My Lords, when the noble Lord talks about disturbance—I think the term used in the contract was "dislocation"—did that dislocation mean only the moving of an old hut and a telephone line? Is that not the dislocation that was incurred? Will the noble Lord make it clear that when one includes compensation the actual price paid per acre for this land is £30, as I originally said, which compares very strangely with £1 to £6 per acre for similar land in the area?
Lord Trefgarne: My Lords, the noble Lord asks about the dislocation or the disruption as he suggests. I am not a great expert on fanning but I imagine that it is much more difficult to run a farm in two parts with a big aerodrome in the middle than it is to run one particular area.
Lord Hankey: My Lords, are the Government aware that most people will be delighted that the Government are getting on rapidly with the construction of this airfield which is essential both for the development and the defence of the Falklands?
Lord Trefgarne: My Lords, I am greatly obliged to the noble Lord.
Viscount Montgomery of Alamein: My Lords, will my noble friend confirm whether the very sad news which has appeared on the tape in the last few hours concerning a very serious fire at Port Stanley hospital is correct?
Lord Trefgarne: My Lords, yes, I am very sorry to have to say that a major fire broke out at five o'clock
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this morning local time at the combined civil and military hospital at Port Stanley. About two-thirds of the building, including the military wing, has been destroyed. Six civilians are confirmed dead and one civilian is missing. All three services provided assistance in fighting the fire. The cause has not yet been established. An inquiry will, of course, be set in hand.
Lord Shackleton: My Lords, I accept that the Leader of the House must be concerned at the width of the questioning that we have now reached on this particular point, but as the question of a swimming pool has come up, is the Minister aware that the Falkland islanders were offered a swimming pool, an offer which has never yet been honoured, at the time the "Great Britain" was brought back to this country? Is he now aware that there is very serious concern that this transaction calls for further investigation?
Lord Trefgarne: My Lords, I must confess that I do not agree with the noble Lord about that. As to the question of a swimming pool, I hope that the Falkland islanders will not have to wait another hundred years.
Lord Beswick: My Lords, the whole House will wish to be associated with the expression of sympathy and sadness at the tragedy at the hospital in Port Stanley.

Dinner
Viscount Long: My Lords, it may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening.

Telecommunications Bill
The Lord Advocate (Lord Mackay of Clashfern):
My Lords, I beg to move that the Commons Amendments to certain of the Lords Amendments and Commons Amendments in lieu of a Lords Amendment be now considered.
Moved. That the Commons Amendments to certain of the Lords Amendments and Commons Amendments in lieu of a Lords Amendment be now considered.—(Lord Mackay of Clashfern.)
On Question, Motion agreed to.
COMMONS AMENDMENTS TO CERTAIN OF THE LORDS AMENDMENTS AND COMMONS AMENDMENTS IN LIEU OF A LORDS AMENDMENT
References to the Bill are to Bill (96)]
[The Commons amendments are printed in italics]
LORDS AMENDMENT
1 Page 19, line 40, leave out from "is" to "may" in line 41 and insert "contravening or has contravened and is likely again to contravene any of the conditions of his licence, the Director"
The Commons agreed to the above amendment with the following amendment:
2 Line 3, leave out "the Director".
Lord Mackay of Clashfern: My Lords, as your Lordships may be aware, another place has disagreed

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with the amendment which is listed as Amendment No. 3 to Clause 18 made in your Lordships' House on Report. As your Lordships will recall, the Government were opposed to that amendment at that time for reasons which I sought to give then. My noble friend Lord Morris clearly appreciated some of the difficulties which might be caused by the amendment since he moved further amendments at Third Reading in your Lordships' House.
Amendment No. 2, which is an amendment to Amendment No. 1, is consequential to the amendments which are in issue as a result of that decision of the other place.
I believe it will be for the convenience of your Lordships if I were to try to explain not only Amendment No. 2, which has just been referred to, but also Amendments Nos. 3 to 11, as part of the explanation.
LORDS AMENDMENT
3 Page 22, line 35, at end insert—
"(5A) Where a final order has been made or a provisional order has been confirmed, any contravention of a condition of the licence to which it applies, which occurred prior to that order taking effect and which would have been in breach of the duty owed by virtue of subsection (5) above had that order then been in force, shall be actionable with the prior consent in writing of the Director at the suit or instance of any person who has suffered loss or damage as a result of that contravention.
(5B) In any proceedings brought against any person in pursuance of subsection (5A) above, it shall be a defence for him to prove that he took all such reasonable steps and exercised all due diligence to avoid contravening the condition of the licence in question."
The Commons disagreed to the above amendment but proposed the following amendments in lieu thereof:
4Page 19, line 30, leave out "(3)" and insert "(2)".
5Page 19, line35, leave out from "condition" to end of line 38.
6Page 19, line 39, leave out "(3)" and insert "(5)".
7Page 19, line 40, after "Director", insert "(a)".
8Page 19, line 41, leave out "may" and insert ", and
(b) that it is requisite that a provisonal order be made, the Director shall (instead of taking steps towards the making of a final order)".
9Page 20, leave out lines 1 and 2 and insert—
"(3) In determining for the purposes of subsection (2)(b) above whether it is requisite that a provisional order be made, the Director shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of the relevant condition, is likely to be done, or omitted to be done, before a final order may be made.".
10 Page 20, line 9, leave out "The duty imposed by subsection b(1) or" and insert "The duties imposed by subsections (1) to ".
11 Page 20, line 24, leave out from "at" to "is" in line 25 and insert "such time, being the earliest practicable time, as".
As I indicated at the time that my noble friend Lord Morris moved his amendments on Third Reading, which he withdrew, these amendments would have gone some way towards meeting some of the difficulties which I had raised at Report, but not all. I expressed the view that the fundamental difficulty was not really capable of being dealt with at that stage. My noble friend Lord Morris agreed to withdraw his amendments on the understanding that the Government would consider the matter further.
The Government have given the matter most careful consideration and for reasons which I shall
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elaborate shortly we have proposed certain amendments to Clause 16 which we hope will be acceptable to your Lordships in place of Amendment No. 3.
Before dealing with the amendments in detail I should perhaps mention that, because of the compara-tive complexity of the alterations we propose, the Government have made available to your Lordships in the Printed Paper Office two documents; one, labelled A, is the text of Clause 16 as your Lordships sent it to another place and the second, labelled B, is the text of Clause 16 incorporating the Government's amendments agreed to by another place.
As I have indicated, the Government disagree and the Commons have disagreed with your Lordships' Amendment No. 3. It adds two subsections (5A) and (5B) to Clause 18. These would provide that when a final order has been made or where a provisional order has been confirmed any person who has suffered loss or damage as the result of any contravention of the licence condition to which the order refers should have the right to sue for damages in respect of any contravention of the condition which took place before the order was made.
This is a radical change from the Bill as approved by another place originally. In another place provision was made for the right to obtain damages to commence only when a final order had been made or a provisional order confirmed. This means that an operator became exposed to a liability to pay damages only when the director had taken formal steps to specify that a condition had been breached and that specific steps had to be taken to cease the contravention.
The procedures leading up to the making of a final order or to the confirmation of a provisional order involve delay while the operator is given the opportunity to object to the proposed final order or to the terms of a provisional order.
The Government accept that this delay is undesirable and agree that damages should be payable earlier. Another place has now agreed with the amendment which your Lordships made whereby damages become available as soon as a provisional order is made. Amendment No. 3 goes further and proposes that the right to damages should go right back to the time when the licence condition was first breached. The only limitation on the ability to claim damages is the requirement that before anyone can go to the court he must first obtain the consent of the director—which is as Amendment No. 3 stands. The Government are convinced that this amendment would do serious damage not only to telecommunications operators, both large and small, but also to those who depend upon telecommunications. It would also do significant harm to the regulatory arrangements which have been worked out so carefully both in this House and in another place.
The main reason why Amendment No. 3 is objectionable is because it introduces retrospection. If it remained in the Bill, it would bring about circumstances where an operator would be exposed to unlimited damages in respect of courses of action which appeared to be entirely acceptable at the time

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they were taken. This problem arises because licence conditions will not be precise rules; they will set out broad guidelines. For example, licences for public telecommunications operators will contain an obligation not to engage in undue preferences or undue discrimination. This is not a precise obligation and its interpretation will be a matter of judgment by the director. The director could decide in the circumstances of 1984 that a particular course of conduct did not amount to undue discrimination. But, as circumstances changed, a judgment might also alter, so that in 1988 he might want to make an order requiring an operator to cease a practice which he, the director, had accepted in 1984.
If he acted in this way, Amendment No. 3 would cause damages to be payable by the operator in respect of the practice in question over the entire period between 1984 and 1988 even though the director had initially accepted the practice in question. Moreover, the damages would be subject to no particular limit. The result would be very great uncertainty for operators who would not be able to obtain any reliable guidance from the director on the meaning of their licence conditions and so would find it very difficult to take many commercial decisions. This uncertainty would obviously harm British Telecom. Its position would be impossible if each of its 19 million customers had the potential opportunity to claim damages without limit in respect of past actions which they had been told at the time complied with the licence conditions. The position of small operators such as radio telephone or message-handling companies would be no better. They, like British Telecom, would have licence conditions; but they have very limited resources, and actions for damages could virtually drive them into liquidation.
The amendment would also do serious harm to the enforcement provisions in the Bill. As the Bill was drafted, the licence conditions are enforced by the director and if he discovers a breach he must normally make an order requiring the operator to take specific steps to comply with his licence conditions. If the operator fails to take those steps at once, he is exposed to actions for damages and to court injunctions or interdicts. The director has a duty to act and, of course, to act quickly. This will produce swift remedies. If, however, his action gave others the right to sue for damages in respect of the period before he makes his order, the director, before he makes any order, will have to take account of the potential impact of those damages on the operator concerned. This would seriously delay decision taking, to the detriment of customers. Moreover, if the damages looked like seriously damaging the operator's ability to provide services, the director would be inhibited by Clause 3(1)(b) from making any order at all. The result would then be that licence conditions would go unenforced, which is the opposite of what my noble friend had in mind in proposing this amendment.
Finally, I should point out that Amendment No. 3 has introduced the idea of people having to obtain the consent of the director before they can go to court to sue for damages. This arrangement was an effort by my noble friend to restrict those to whom this remedy would be available and to limit some of the retrospection and damage that the amendment would
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otherwise cause. But it seems wholly wrong for the director, an appointed official, to be able, as it were, to stand in the doorway of the court and to say which citizen can and which citizen cannot obtain the protection of the court. My noble friend recognised that in the amendments which he moved in this matter at Third Reading.
For these reasons, I propose that your Lordships should not insist on the said Amendment No. 3 but should agree to the Amendments No. 2 and Nos. 4 to 11 made by another place in lieu of Amendment No. 3.
We think that actions for damages should be limited to losses and damage sustained after the director makes his orders but we recognise entirely the two main concerns that lay behind the amendment itself. First, there was concern that the director might be slow in making an order; and, second that serious damage or injustice could be done to customers or to other operators if contraventions of licence conditions went without remedy for any length of time. In recognition of these problems, the Government have proposed, and another place has agreed to, eight amendments to Clause 16 and an amendment to your Lordships' Amendment No. 1—which is the amendment I am speaking to at the moment—with the aim of speeding up the director's decisions on whether or not to make orders, and of recognising the damage that breaches of licence conditions can cause.
May I say what these amendments do? First, Amendments Nos. 5, 7 and 8 reduce the director's discretion about whether to make a final order or a provisional order. Final orders take effect only after consultation procedures have been carried out, and these take a minimum of 28 days or more. This delay can cause damage. On the other hand, provisional orders can take effect at once. Under the amendments agreed in another place, the director will be under a duty to make a provisional order and not to wait for the final order-making procedures to take effect whenever he thinks it requisite that a provisional order should be made.
The second change is introduced by Amendment No. 9. It gives the director a new duty, when he is considering whether it is requisite to make a provisional order, to have particular regard to the extent to which any person is likely to suffer damage or loss if a contravention of the relevant licence condition continues while the final order-making procedures are followed. That is precisely the concern that my noble friend had in mind in moving his amendment. What we have sought to do is to meet that concern in this particular way by imposing on the director a duty to have regard to this particular aspect in exercising his powers.
The result of Amendments Nos. 5,7,8 and 9 is that subsections (2) and (3) of Clause 16 will place the director under a duty to make a provisional order if he thinks it requisite to do so; and, when he is considering whether it is requisite, to have particular regard to whether anyone is suffering loss or damage. The third change is introduced by Amendment No. 11. This deletes the reference to a provisional order taking effect at the end of a period and substitutes a require-ment that a provisional order shall take effect at the earliest practicable time. In practice, when the director

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makes an order he has to serve the order on the operator concerned, and the operator concerned has to read it and take steps to obey it. This will inevitably take some time. If, for example, a new price list has to be printed this could genuinely take several days to accomplish; but if the order requires an anti-competitive tender to be withdrawn this could be accomplished almost immediately.
What the amendment does is to ensure that in all circumstances a provisional order or a final order can take effect at the earliest practicable time. Amendments Nos. 4, 6 and 10 are purely technical and reflect the fact that subsections (1) to (4) inclusive now impose duties, and that matters which were formerly dealt with in subsections (1) and (3) are now dealt with in subsection (2). Amendment No. 2 to your Lordships' Amendment No. 1 is also purely technical and is consequential upon Amendments Nos. 5, 7 and 8. I beg to move that your Lordships agree to Amendment No. 2 to your Lordships' Amendment No. 1.
Moved, That this House doth agree with the Commons in their Amendment No. 2 to the Lords Amendment No. 1. —(Lord Mackay of Clashfern.)
Lord Bruce of Donington: My Lords, I am grateful to the noble and learned Lord for having threaded his way through the somewhat tortuous passages that have been occasioned by reason of the deliberations in another place. Aside from all other issues, the other place having accepted some 300 of your Lordships' amendments to the Bill, thereby underlining the importance of the revising capacity of this Chamber, it would be very churlish indeed to deny the elected House the effect of the amendments now proposed.
Continuing to act in the revisory sense, may I draw the attention of the noble and learned Lord the Lord Advocate to Amendment No. 8 and ask him to relate it to the test at line 41? The noble and learned Lord will then find, I think, that the deletion of the word "may" leaves this particular part of the Bill not making sense. I invite his consideration to the deletion of the word "he" in front of "may": otherwise the sentence does not make any sense at all. This is a very minor and I presume technical amendment which does not affect the sense of the thing. Indeed, I observe on the printed hand-out with which the noble and learned Lord has been kind enough to provide us that the amendment to the amendment I have suggested as being technical has already been put into effect. However, I would like to hear the observations of the noble and learned Lord on that because, in my view—and he may or may not agree with me—Amendment No. 8, page 19, line 41, which proposes to leave out "may", ought to read "leave out 'he may' ".
Clause 18 of the Bill is heavily dependent on this clause because Clause 16 deals with the validity of the licence and the enforcement of the licence. The noble and learned Lord will be aware that he made some subsequent amendments to Clause 18 to which the other place has been good enough to agree. Therefore, would the noble and learned Lord confirm the remarks he made at column 377 of the House of Lords Hansard for 29th March, which set out the position in
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regard to industrial disputes and deals with the question of damage being caused deliberately to the actual person affected? Will he confirm that that assurance is not in any way affected by the amendments that have now been made to Clause 16?
3.25 p.m.
Lord Morris: My Lords, I am extremely grateful to Her Majesty's Government, and congratulate them on the considerable skill which they and their staff have brought to bear in tabling this amendment. It was a very difficult matter to handle in such a few days. I think they have met with considerable skill the sincerely held concern expressed in your Lordships' House. Personally I am most grateful for the fact that they came to my rescue.
As I see it, the amendment preferred in another place achieves what was set out to be achieved by this House by very different means, and has dealt with the danger of retrospective action as explained by the noble and learned Lord the Lord Advocate. The director will, of course, have a specific duty to act by issuing a provisional order when he believes the licence condition is being breached, and he will be able to act quickly, which was another fear expressed in your Lordships' House. The director must take account of any loss or damage that a person may suffer through breach of the licence conditions. This is a duty. It is also a great improvement. The claimant will not have to prove the damage he actually suffered; he need only demonstrate that damages are likely to be suffered, which is a strengthening of the position of the director general of British Telecommunications.
Before I become too salutary in praise of my noble friend there are two particular points I should like to raise. My noble and learned friend suggested there was a substitution for a discretion by placing a duty by means of these amendments, but it is very important to remember that that duty only flows after it appears to the director that a contravention has actually taken place. The question I should like to ask my noble and learned friend, if he sees fit to answer it, is this: should the unlikely event happen where it appears to any reasonable man that a contravention has occurred, but for some reason known only to the Director General of Telecommunications it does not appear so to him, what recourse does the complainant have? My noble and learned friend knows that a writ of mandamus is a difficult and strong test to win in the courts, or to prove to the courts. I should like guidance on that matter.
My other point is this: my noble and learned friend the Lord Advocate earlier suggested that Amendment No. 82 would not work in the way that we had hoped, because it would be impossible to frame the licence conditions sufficiently precisely to prevent retrospective action when the director has to exercise his discretion. I believe the new and preferred wording of Clause 18 does not alleviate the responsibility of my right honourable friend the Secretary of State of seeking to frame the conditions sufficiently precisely to enable the director to act under the new enforcement powers of Clause 18.
I hope that when this House has the opportunity to debate the major licences of British Telecommunications, we shall find that, paying due

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regard to the dominant position of British Telecommunications in the market, the anti-competitive practices proscribed in this Bill are matched by the licences. It is of the greatest importance that we constantly remind ourselves that these licences are in effect a form of subsidiary legislation or, to put it another way, they should be bound half-calf and set on the same shelves as Private Bills and statutory instruments over which Parliament has no means of emendation, but only means of scrutiny. It is critically important that this should be borne in mind at all times. I remain confident that Her Majesty's Government will undoubtedly see the practical political wisdom of considering with great care what your Lordships' House has to say and, indeed, what another place has to say when we come to consider these major telecommunications operator licences.
I thank my noble and learned friend once again for doing what he has done. I am delighted and most grateful.
Lord Spens: My Lords, I should also like to thank Her Majesty's Government for this series of amendments. Admittedly, it took me quite a long time this morning before the availability of documents A and B, which I got only a few moments ago, to work out exactly what was meant, because the amendments relate to the original Bill before it was amended in your Lordships' House. I think Clause 16 has been amended at every stage in this House, including Third Reading, which meant that there was no up-to-date text of it to look at this morning. The amendments made by another place are quite excellent because they have now put on to the director a duty where previously it was only a possibility that he might issue a provisional order.
There is still the problem of speed. The noble and learned Lord the Lord Advocate mentioned that. To give an example of it, I read today in the Daily Telegraph that British Telecommunications is to stop issuing the final notice which threatens disconnection within seven days if the telephone bill has not been paid. I think I complained on Second Reading about the speed with which they issue a reminder over a holiday period like Christmas time. If they are now going to disconnect phones without final reminders, there may well be the possibility that when this law comes into operation there will be people who are suffering damage from having had their phones deliberately cut off. I am not saying that it will happen with the deliberate knowledge of the Board of British Telecom, but it could easily happen through manoeuvres a little further down the line. That means that someone could be suffering damage from the actual moment when the Bill comes into operation, and therefore speed is very important. The other point has been made by the noble Lord, Lord Morris, and that concerns the conditions of the licence. We shall have to look at those very carefully to see whether the licence conditions are sufficiently wide to protect the interests of the smaller companies which may be involved as users or suppliers to the huge monopoly that British Telecom is going to be. Having said that, I should like again to thank the Front Bench for these amendments, which have improved the Bill immensely.
Lord Campbell of Alloway: My Lords, may I very briefly ask my noble and learned friend the Lord Advocate whether he would agree that this duty, cast in its present form, is qualified in the sense that it does not arise until a conclusion has been reached as a matter of administrative discretion?
Lord Mackay of Clashfern: My Lords, I am extremely grateful to your Lordships who have welcomed the action taken by the Government and another place in this connection. I will now try to deal with the specific points that have been raised. First, as to the point made by the noble Lord, Lord Bruce of Donington, on Amendment No. 8, if I have understood correctly the way these amendments go together—that is a fairly important "if"— Amendment No. 1 on this paper affects the line to which the noble Lord, Lord Bruce, was referring. The result is that, if you take account of Amendment No. 1, already made as it were, and then go on to Amendment No. 8, the two together make correct sense. I know it is quite difficult to follow this and I would not ask the noble Lord to give an immediate answer, but that is my impression and also the impression that has been advised to me; and I hope that it is correct.
The second point raised by the noble Lord is a more important one: that is, he asked whether I could confirm that what I had said before regarding industrial action is still correct. My understanding of the position is that the amendments which were made by your Lordships in that part of the Bill have been entirely accepted in another place: they were discussed there and accepted. Therefore what I said, as I understand the Bill's provisions in that regard, still stands as it did when I said it originally.
My noble friend Lord Morris made very much the same point in his questions as did the noble Lord, Lord Campbell of Alloway: that the duty arises only when a particular state of mind has been reached by the director, and of course that is as it has to be. That makes it more difficult than otherwise it would be to enforce the duty; but I have no doubt that if it were established that the director's action in not coming to such a conclusion in his mind was utterly perverse, the court would be able to afford a remedy. Therefore I would answer my noble friend Lord Campbell of Alloway in the affirmative.
So far as the question of my noble friend Lord Morris is concerned, I believe the court would find a remedy but, as he pointed out, remedies of that kind are not easily obtained. One reason is that it is not easy to establish the basic state of facts that he is postulating, because one would hope that the Director would not act perversely but would act appropriately and that the duty would arise on a properly balanced appreciation of the facts.
So far as the point raised by the noble Lord, Lord Spens, is concerned, all I can do, I think, is to undertake to draw to the attention of British Telecom the remarks that he has made in this connection. With these answers, perhaps I may renew my Motion to your Lordships.
On Question, Motion agreed to.
LORDS AMENDMENT
Lord Mackay of Clashfern: My Lords, I beg to move that this House do not insist on their Amendment No. 3 to which the Commons have disagreed and that the House do agree with the Commons in their Amendments Nos. 4 to 11 in lieu thereof.
[Printed earlier col. 1039.]
I have already spoken to these.
Moved, That this House doth not insist on their Amendment No. 3, and agrees to the Commons Amendments Nos. 4 to 11 in lieu thereof.—(Lord Mackay of Clashfern.)
On Question, Motion agreed to.
LORDS AMENDMENT
[Nos. 12 and 13]
After Clause 79, insert the following new clause: Information etc. to be marked on or to accompany apparatus.
".—(1) Where it appears to the Secretary of State expedient that any description of relevant apparatus should be marked with or accompanied by any information or instruction relating to the apparatus or its installation or use, the Secretary of State may by order—

(a) impose requirements for securing that relevant apparatus of that description is so marked or accompanied, and

(b) regulate or prohibit the supply of any such apparatus with respect to which the requirements are not complied with;

and the requirements may extend to the form and manner in which the information or instruction is given.

(2) An order under this section may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.
(3) Where an order under this section is in force with respect to relevant apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply relevant apparatus of that description in contravention of the order shall, subject to section (Offences due to default of third person) below, be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(4) For the purposes of this section a person exposing [27] relevant apparatus for supply or having such apparatus in his possession shall be deemed to offer to supply it.
(5) In this section and section (Information etc. to be given in advertisements) below—

(a) "relevant apparatus" means wireless telegraphy apparatus or apparatus designed or adapted for use in connection with wireless telegraphy apparatus; and

(b) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978."

The Commons agreed to the above amendment with the following amendment:
13 Line 27, at end insert "for supply".
Lord Mackay of Clashfern: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13 to your Lordships' Amendment No. 12. This amendment remedies an omission to subsection (4) of the new clause added to Part VI of the Bill by your Lordships, enabling the Secretary of State to require information to be marked on wireless telegraphy and related apparatus. The subsection is intended to make it clear that for the purposes of this section "offer to supply" includes exposing for supply or having in one's possession for supply apparatus to which the new clause applies.
The subsection as at present drafted, however, could be taken to mean that a person having apparatus in his possession for purposes other than supply is to be deemed to offer to supply it. The present amendment,
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therefore, adds the words "for supply" after "having in his possession" in subsection (4) to avoid this possibility and to make clear the true intent of the provision. It thereby also brings it into line with the wording of subsection (5) of Clause 28 of the Bill on which it is modelled. I beg to move.
Moved, That this House doth agree with the Commons in their Amendment No. 13 to the Lords Amendment No. 12.—(Lord Mackay of Clashfern.)
Lord Bruce of Donington: My Lords, we are grateful to the noble Lord for having corrected this particular amendment which we made. Your Lordships must indeed have been getting very tired at that time of night to have allowed this one to get away. It is quite clearly something we should have insisted on before we sent it to another place; but we are very grateful for the correction.
Lord Mackay of Clashfern: My Lords, I am sure that the tremendous amount of work which your Lordships did so successfully makes this a very minor omission.
Lord Orr-Ewing: My Lords, would my noble friend bear in mind that this amendment was passed at 4 a.m. this morning in another place and that that shows a sense of urgency and dedication to duty of all those concerned, well above any standards we normally set? Could the same expedition now be given to perhaps republishing the draft licence so that we could consider that with rather more time than we have had to consider these amendments? Perhaps we might even have the discussion paper on bands 1 and 3, which we are still waiting for.
Lord Mackay of Clashfern: My Lords, I am happy to draw my noble friend's remarks to the attention of my right honourable friend.
Lord Taylor of Gryfe: My Lords, I am not skilled in these matters parliamentary at all. Perhaps the noble and learned Lord could confirm that there were some 300 amendments passed to this Bill when it was before this House. Is this the final report from the other place on the total of the amendments passed?
Lord Mackay of Clashfern: My Lords, assuming that your Lordships agree with the Motion I am now moving, I think I can assure your Lordships that this is the final stage, except for Royal Assent.
On Question, Motion agreed to.

Rent (Scotland) Bill [H.L.]
3.39 p.m.
Lord Mackay of Clashfern: My Lords, I beg to move that this Bill be now read a second time. It is a consoli-dation measure, consolidating in relation to Scotland certain enactments relating to rents, tenants' rights and connected matters. It is pure consolidation and is intended to make no change in the existing law. If your Lordships approve, it will be referred in the usual way to the Joint Committee on Consolidation Bills, which will consider it and make its report to your Lordships in due course. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read a second time.— (Lord Mackay of Clashfern.)
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Administration of Estates (Small Payments) (Increase of Limit) Order 1984
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, I beg to move that the draft Administration of Estates (Small Payments) (Increase of Limit) Order 1984, laid before the House on 12th March, be agreed to. This order seeks to extend the limit up to which sums can be paid from a deceased person's estate without probate or letters of adminis-tration. The Administration of Estates (Small Payments) Act 1965 sets a limit of £500, but there are powers in the Act to increase this limit with the approval of Parliament. The limit was last raised to £1,500 in 1975. The Government have reviewed the limit again, and now seek to increase it to £5,000.
For more than a century prior to 1965 the limit for exemption was £ 100. The limit was revised to £500 in 1965 and, as I have said, to £1,500 in 1975. It is obviously right to keep the limit under review, and desirable for Her Majesty's Government to raise it from time to time as past inflation erodes the nominal value of such limits. The 1965 Act allows a wide range of deposit-taking bodies a discretionary power to make payments of a deceased depositor's money although subject to a limit set by the Treasury. Among the bodies concerned are the Department for National Savings, Trustee Savings Banks, friendly societies, trade unions and building societies. I should add that the new limit does not take effect at once for all bodies, but it is a necessary step to pave the way for some amending regulations. The department will be introducing these in due course. This order will apply to deaths occurring from one month after the date it comes into operation.
The proposal to raise the limit is, of course, common sense. People have saved more since the limit was last fixed in 1975, and more estates are being caught by the £ 1,500 limit, which at the same time has become more restrictive in real terms. To restore the limit to its 1975 level would require an immediate increase to about £4,000. So to provide a bit of headroom and avoid the need to return to the matter again too quickly, Her Majesty's Government have decided to propose a higher limit. This will save the administrative effort involved, requiring as it does consultation with a large number of departments and organisations. I commend the new limit of £5,000 and the order to your Lordships. My Lords, I beg to move.
Moved, That the draft order laid before the House on 12th March be approved.— (Lord Glenarthur.)
Lord Barnett: My Lords, I appreciate the need to increase the limit, as the noble Lord the Minister has indicated, but I wonder whether he can tell us, given the fact that inflation is scheduled to be at 3 per cent. by 1989, why he has chosen to increase the limit to £5,000 rather than to, say, £4,000, £10,000, £20,000 or whatever.
Lord Glenarthur: My Lords, as I hoped I indicated when I moved the Motion, £4,000 would be a realistic figure but £5,000 gives us adequate headroom, in view of the fact that it is an administrative burden to re-set it. There is no question of suggesting that the rate of inflation will rise, as perhaps lies behind the noble Lord's question. We are simply setting that limit because reviews involving 20 or so departments are a fairly large administrative burden to bear.
On Question, Motion agreed to.

Carriage by Air Acts (Application of Provisions) (Overseas Territories) (Amendment) Order 1984
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, I beg to move that the draft Carriage by Air Acts (Application of Provisions) (Overseas Territories) (Amendment) Order 1984 be approved. The carriage of passengers and cargo by air in British overseas territories is governed, as in this country, by the Carriage by Air Act 1961, by the Carriage by Air (Supplementary Provisions) Act 1962 and by various orders made under those Acts. In broad terms, they lay down the rules on tickets, airway bills and baggage, and they provide for the strict liability of the carrier (so that negligence does not have to be proved) subject to the limitation of the amount of the carrier's liability. We are concerned today with some proposed technical modifications to the rules for our overseas territories, matching modifications already made in respect of this country.
The order for which I seek the approval of your Lordships' House substitutes special drawing rights for gold francs as the unit in which the limits of the air carrier's liability are expressed for the purposes of non-international carriage under the law of the dependent territories to which the order will apply. At the same time, the order will raise the limits of the air carrier's liability in relation to non-international carriage under the law of dependent territories. The limits will be increased from 875,000 gold francs to 100,000 special drawing rights. In terms of sterling equivalents, this represents an increase from about £41,000 to about £71,000.
The order will apply to Bermuda, the British Antarctic Territory, the British Indian Ocean Territory, the British Virgin Islands, the Cayman Islands, the Sovereign Base Areas of Akrotiri and Dhekelia, the Falkland Islands and Falkland Island Dependencies, Gibraltar, Hong Kong, Montserrat, St. Helena and Ascension and the Turks and Caicos Islands. The Governments of all these territories have been consulted on the terms of the draft order, and agree.
The change from gold francs to special drawing rights and the increase in the limits of liability will bring the law of the dependent territories into line with the law of the United Kingdom under the Carriage by Air Acts (Application of Provisions) Order 1967, as amended in 1979 and 1981. The International Monetary Fund discarded the gold franc as a unit of account for its transactions following the entry into

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force of the second amendment to its articles of agreement in 1978. As a result of this, the limits of the air carrier's liability in non-international carriage under the law of the United Kingdom were converted into special drawing rights in 1979. At that time the limits were not increased.
In April 1981 the Civil Aviation Authority introduced an amended standard condition in air transport licences which required United Kingdom airlines to contract for a limit of not less than 100,000 special drawing rights per passenger for the purpose of international carriage. Although the limits of liability in international carriage are set by international convention (the Warsaw convention and related instruments) it is permissible for airlines to contract for higher limits, and this they often do. The increase in the contractual limits for the purposes of international carriage made it desirable to bring the limits in relation to non-international carriage into line. This was done as a matter of United Kingdom law later in 1981.
The present order will, as I have said, bring the position in dependent territories into line with the position in the United Kingdom. The order is substan-tially similar to the Carriage by Air Acts (Application of Provisions) (Amendment) Orders of 1979 and 1981, though the provisions concerning the conversion of special drawing rights into local currency have been adapted to take account of the fact that not all the currencies in question (for example the East Caribbean dollar) are regularly quoted by the IMF. It is clearly desirable to bring the law in dependent territories into line with the law in the United Kingdom, particularly in relation to carriage between the United Kingdom and dependent territories. No objection on the part of airlines in dependent territories is anticipated, and the increase in limits will be welcomed by the air traveller. My Lords, I beg to move.
Moved, That the draft order laid before the House on 27th February be approved.— (Baroness Young.)
Lord Barnett: My Lords, I am sure your Lordships will appreciate that the IMF were very sensible to move away from gold francs to SDRs, given that everybody in your Lordships' House and the country at large will understand the difference between gold francs and SDRs. But I wonder whether the noble Baroness can tell us what assumptions the Government made in deciding to increase the real amount to 100,000 SDRs. I wonder whether, at the same time, she can also tell us how this compensation level for non-international traffic compares with other western European countries in respect of this particu-lar form of travel compensation for death and injury. Also, what representations, if any, has she had from those who might possibly be affected by this increase in the level of compensation?
Lord Hawke: My Lords, can my noble friend say what is the current exchange rate between sterling and SDRs?
Baroness Young: My Lords, the noble Lord, Lord Barnett, has asked me two questions on this order. If
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I may first take the second question that he asked, about what representations have been made, the fact of the matter is that the order gives an approximate equity of treatment between the air carrier and the traveller, in the sense that the carrier's liability is limited under the order and the plaintiff (or in this case the traveller) does not have to prove negligence and therefore qualifies for the amount. In that sense, therefore, there is advantage to both sides. So far as I know, any representations have been covered in the proposals which have been made.
Turning to the noble Lord's first question about the basis for the sums of money, may I say to him that it takes into account both the rate of inflation and the change in currency rates. It does not exactly parallel the orginal amount of compensation when these matters were first introduced. However, the fact of the matter is that it is open to anybody who is either a traveller or involved in this non-international travel to take out personal insurance in order to cover this amount.
I do not have the information for which my noble friend Lord Hawke asked me. If I may, I shall write to him.
On Question, Motion agreed to.

Repatriation of Prisoners Bill [H.L.]
3.52 p.m.
Read a third time.
Clause 1 [Issue of warrant for transfer]:
Lord Mishcon Lord Mishcon moved Amendment No. 1:
Page 2, line 28, at end insert (" including where possible details of his earliest possible release date and the provisions regarding remission and parole that would apply to him")
The noble Lord said: My Lords, the House will doubtless recollect that during the passage of this Bill, which has its foundations in humanity and which therefore appeals very much to your Lordships, all of us were concerned that before a prisoner gave his consent to repatriation he should be in full possession of all the relevant factors. Your Lordships may remember that the words "the effect" occur in the Bill. The noble and learned Lord, Lord Denning, supported the idea that the words "the effect" would cover quite clearly the balance of sentence yet unserved, parole and also the remission of sentence. However, in an exchange between us (when one has an exchange with the noble and learned Lord, Lord Denning, the weight is on his side if it happens to be me on the other side, and the lightness on mine) I believe that the noble and learned Lord smilingly conceded that hereafter it would be better not to have arguments about what the words "the effect" might cover but to write the matter very clearly into the Bill.
The noble Lord the Minister also uttered words of sympathy for my amendment but wondered whether the words "the effect" might not cover the matter. However, with his usual courtesy he promised to consider what had been said. I, together with those who supported the amendment, felt that the matter was very definitely worthy of his consideration.
I have received a letter from the Minister and, if he will permit me to do so, I shall read from it the relevant

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excerpt, only because, as your Lordships will understand, I want it to be on the record. In the course of this very helpful letter the Minister said:
"The purpose would be to put beyond doubt that information provided to the prisoner about the effect of a warrant would include, where possible, information about the earliest date of release and about provisions for remission and parole. I indicated that I had no definite objection in principle to such a clarification but that questions of definition might present drafting problems. I think we shall probably be able to meet you on this point. As 1 anticipated, there are drafting problems, but we shall consider very carefully what is needed with a view to the possibility of introducing an amendment in the Commons. We must, of course, take care to get the drafting right, and I think you will agree that it would not be reasonable to try to rush this through for the Lords' Third Reading. I should emphasise also that we do not regard the present drafting as deficient in this respect. We are quite sure that the interpretation of 'the effect' of a warrant must include the matters in question, and it was helpful to have Lord Denning's support on this. We see no harm in principle, however, in providing the clarification proposed".
In the light of what is said in that letter, and recognising, obviously, the need to have careful drafting, and also the very short period which has elapsed between Report and Third Reading, I am more than happy to accept that assurance. If the noble Lord would merely nod his head, or say something in assent, I should at once withdraw the amendment, which I beg to move.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, nods do not appear on the record, and I should not want the whole of my undertaking to be on the authority, as it were, of the noble Lord's very helpful reading of my letter. It is only necessary for me to say that I meant what I said when I signed the letter. I am glad to confirm that we have no objection in principle to an amendment which is designed to provide the clarification which the noble Lord and others consider to be necessary. However, we shall need time to prepare an appropriate amendment. If, therefore, the noble Lord will agree to withdraw the present amendment, we shall do our best to introduce a mutually acceptable one in another place.
Lord Mishcon: My Lords, the noble Lord the Minister having spoken, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mishcon Lord Mishcon moved Amendment No. 2:
Page 3, line 6, at end insert—
(" ( ) In the case of the Secretary of State refusing to agree under section l(l)(b) above to the proposed transfer of a prisoner into the United Kingdom such refusal shall be in writing accompanied (unless the Secretary of State shall consider that it would be contrary to public policy to do so) by a statement of reasons and shall be notified to the prisoner in his own language.")
The noble Lord said: My Lords, another matter which concerned your Lordships very deeply was that any question of a refusal when the Secretary of State had exercised his judgment upon the matter of repatri-ation should first be in writing and should secondly be communicated to the prisoner, and, thirdly, that the grounds of the refusal should be given. In the latter connection, I endeavoured to give examples to your Lordships upon which I had been briefed by a very worthy society which looks after prisoners abroad and tries to protect their interests, mistakes having occurred because of the authorities thinking that a
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prisoner abroad had been convicted of an offence, whereas in fact he was not responsible for any such conviction. The only opportunity for a prisoner languishing abroad, who is a British subject, to deal with the reasons for refusal would be if they were given to him. He would then have a proper opportunity to deal with them.
If I may paraphrase what he said, the noble Lord the Minister said that he had no objection to the reasons being given in writing. Indeed, he thought that that would be the obvious course for the refusal to take. There is no difference between us, therefore, on that point. However, there was a difference between us on the other two aspects; namely, the communication to the prisoner and the giving of the reasons. In regard to the communication to the prisoner, the noble Lord the Minister said that this is very much a matter of international convention and agreement and that very likely refusal under the terms of the convention would go to the authorities in a foreign country and not necessarily to the prisoner; that it would be for the authorities in that foreign country to make the communication to the prisoner.
I endeavoured to say, as did others who participated in that discussion, that that arrangement really was not good enough. We live in a peculiar world and we must have conventions and agreements with nations who do not order their affairs in the same way that we pride ourselves we do in connection with the regularity of the governmental machine and its orderliness and reliability. Also, it might be for other reasons that a communication might not reach the prisoner. There is not the slightest difficulty in our consul or other diplomatic representative seeing to it that notice of a refusal reaches our British subject or someone so connected with this country that he comes under the provisions of this Bill. So I was unhappy with the Minister's reply on that aspect.
When it came to the question of giving reasons, the noble Lord the Minister said something which I believe all of us felt was extremely sound. He said that there could be aspects of public policy which, under this Bill, would make it wrong for the Secretary of State to have to give reasons. The Minister said that there could be questions of security. That certainly affected the judgment of those who were concerned with our previous amendment at Report stage.
An amendment has now been put down which makes it perfectly clear, as your Lordships will see, that there is no need for the Secretary of State to communicate the reasons for his refusal if he considers that it would be contrary to public policy so to do. I believe that I am right in saying to your Lordships that if you use the word "consider" and it is a matter for the opinion of the Secretary of State, then it is not a matter that can be challenged—certainly not successfully—by any judicial review.
I thought that with that amendment I had sealed the gap which the Minister wanted to close. But again, in a not-so-helpful part of his otherwise very helpful letter, the Minister informed me (and I will paraphrase what he said, but he will correct me if my paraphrasing is not just) that he is still unhappy. First, he is unhappy about the question of communication—and, as I have said, I do not believe that he should be. Secondly, he is not happy that I have filled the whole of the gap in

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regard to the Secretary of State having to communicate his reasons if I merely limit the exception to "public policy".
The noble Lord the Minister instances in his letter the fact that there might be other criminal investigations pending which would make it not very sensible for the Secretary of State to make the communication; or there might be matters of security being investigated. One has to make a judgment on balance in this matter. Your Lordships may agree that in 99 per cent. of cases it must be right and just that a prisoner languishing in some foreign gaol, having had his repatriation refused, should know the reason for that refusal so that he might achieve justice by being able, possibly, to answer those reasons very effectively—as against the 1 per cent. (and I imagine it must be less than 1 per cent.) of cases where the Secretary of State is not even protected by public policy. There are some weird and wonderful things that might just come outside the realm of public policy.
I myself would have thought that the words "public policy" are so wide that whether it is a question of thinking that somebody might be involved in a security risk or that there are other criminal investigations pending, "public policy" would cover the situation. But if the noble Lord the Minister can in his ingenuity think of words to add to "public policy" which would cover the Secretary of State in this connection, I am sure that my noble friends and I would be content. I leave my discussion of this amendment at that stage and look with hope at the noble Lord.
4.5 p.m.
Lord Avebury: My Lords, there are two questions which need to be considered. The first concerns whether or not the decision not to allow a prisoner to come home should be communicated in writing. The noble Lord the Minister has indicated in the letter to which the noble Lord, Lord Mishcon, referred why there may be some difficulty here; that the matter is not entirely in the hands of the Government, and that such a decision would have to be conveyed to the prisoner in a foreign gaol by the authorities which have control over the arrangements there. This is something which the Minister or his colleagues at the Home Office could not deal with. But as I have pointed out on a previous occasion, the convention is absolutely clear. It does say that the sentenced person shall be informed in writing of any decision taken by either state on the question of his transfer. Therefore there is in the convention an obligation on the Government to try to convey such information to the prisoner, even if they are dependent upon the good offices of another state for the final delivery of that communication.
Whether or not the words in the amendment are exactly right as set out on the Marshalled List, we should make certain that the obligations undertaken in the convention are properly reflected in this Bill. This is something which I have been concerned to do all the way through our proceedings in your Lordships' House. I believe that the Minister probably agrees, in view of the fact that his objection to this part of the amendment is a purely practical one, that we should at
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least try to say in another place that the Government should use their best endeavours to notify the prisoner in writing of any refusal to allow his application for a transfer.
The second question concerns the explanation which the prisoner is given—or, rather, is not given, as the Bill presently stands—in certain circumstances. The very fact that we decline to give reasons to the prisoner is enough to show him that he is under suspicion of having committed a criminal offence or of having violated national security. I have thought very carefully about this matter. If it is a fact that we are declining to accept a British citizen back into one of our prisons because of some criminal activity in which he has been engaged, or because he poses some threat to national security, what are the implications? He returns here and serves the same length of sentence in a British prison as he would have served in Saudi Arabia or Thailand. If it is the intention of the authorities to have him prosecuted for some other offence, then surely they can more readily do so if he is in Parkhurst than if he is in Jeddah. I cannot fully understand why the presence of suspicion of serious criminal activities in the mind of the Government should be a barrier to his repatriation.
Similarly, if one thinks about the national security implications, again one assumes that proceedings would be taken against the individual if the Government find that there is sufficient evidence to justify doing so. If that individual remains abroad and is outside our jurisdiction, then he will escape the justice which would otherwise have been meted out to him in the English courts. Is it not better that he should be brought back onto the territory of the United Kingdom, and that refusal is not based on suspicion of the activities in which he has been engaged?
The second point that occurred to me is that if the person concerned is guilty of these criminal offences or breaches of national security he is obviously conscious of the fact. He does not need to be tipped off by the refusal of his application for a request for a transfer to know that he has done something wrong. Nor is it likely that the only indication that he has of the fact that he has come under suspicion would arise from a refusal to agree to his request for a transfer. Therefore, I think that, on reflection, I am not even sure in the long run—I put this on record simply for our friends who have to consider these matters in another place—whether the noble Lord, Lord Mishcon, and ourselves were right in limiting this amendment as it is so that we have the words "contrary to public policy". On reflection I am not altogether sure that I have accepted the Government's arguments on criminal activities and breaches of national security as sufficient reason for not having an obligation to give reasons, in any case whatever, to the prisoner for refusing his request for a transfer.
Lord Campbell of Alloway: My Lords, with the greatest respect to the noble Lords, Lord Mishcon and Lord Avebury, surely it is not really a case of just filling the gap with something to add. The question is whether the principle is broadly correct. I am not trying to pick at the drafting—I take the point made by the noble Lord, Lord Avebury—but I am trying to deal with the broad question on its merits irrespective

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of any drafting. The problem as I see it, although I may be quite wrong, is that there are some, or may be some, cases where the Secretary of State may properly wish not to give reasons, apart from questions of public policy or security. Surely the fact that one cannot envisage that type of case, every type of case and every type of situation in advance is a reason for leaving the administrative discretion as it stands.
Lord Elton: My Lords, on Report I undertook to consider whether an amendment on the lines proposed would be acceptable to the Government. This we have duly done and I wrote, as the noble Lord, Lord Mishcon, was kind enough to acknowledge, to the noble Lord on 5th April setting out our views. We see no difficulty about the Secretary of State's decision to refuse to agree to a transfer being given in writing and in the prisoner's own language. As I have previously made clear to your Lordships it will clearly be necessary for the Secretary of State's decision about a request for transfer to be given in writing anyway so that it can be communicated to the other state.
With regard to the language in which the Secretary of State's decision is to be notified to the prisoner, we see no difficulty about ensuring that this is the prisoner's own language, either. Given that we are here concerned with requests for transfer to the United Kingdom, the language required would normally be English. If there was difficulty in ensuring that a written communication reached a prisoner, our consular staff would in any case normally at least ensure that the decision was notified orally in the prisoner's own language.
However, we do see a possible problem about ensuring that a written decision, in whatever form, actually reaches the prisoner—which is the intention of the noble Lord's amendment. Under Article 4 of the Council of Europe Convention, as the noble Lord, Lord Avebury, has helpfully pointed out, there will be an obligation on both states concerned to ensure that prisoners are informed in writing of any decision by either state on a request for transfer. Even under that agreement, however, the Secretary of State could not be held responsible for the action—or, indeed, the inaction—of the authorities of the other state. It is, therefore, not appropriate for the Bill to make the Secretary of State responsible by placing on him the duty of ensuring that a prisoner in a foreign prison receives his decision in writing. The noble Lord, Lord Avebury, has placed on record a request that we should consider placing on the Secretary of State an obligation that he should do the best he can. Obviously that is something to be considered later. However, I think that the proper way to do this is to seek to ensure that bilateral and multilateral international arrange-ments other than those in the convention contain a provision similar to that in Article 4 of the Council of Europe Convention. We shall certainly have this very much in mind in our negotiations with other states.
That said, let me emphasise that, where it was in doubt as to whether the prisoner was going to be properly informed by the authorities in the country in which he was being held, our diplomatic representatives would be aware of the circumstances and would be expected to seek to convey the message themselves. Whether they succeeded, of course, would depend on
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the authorities and not on the Government. Once again, therefore, I do not think that we should legislate but that we should put it in the arrangements.
Turning now to the main purpose of the noble Lord's amendment, this is to require the Secretary of Stale, where he refuses to agree to a transfer, to give the reasons for his refusal unless he considers it would be contrary to public policy to do so. I am grateful to my noble friend for his help in this. I am afraid that we do not consider it advisable to impose this duty upon the Secretary of State even with this qualification. As I mentioned to your Lordships on Report, the danger in a qualified obligation to give reasons is that a refusal to give reasons could in itself be sufficient to give away, for example, the fact that investigations were in hand concerning criminal activities or matters of national security involving, may I emphasise to the noble Lord, Lord Avebury, people other than the prisoner and possibly powers other than Great Britain.
The noble Lord, Lord Mishcon, may well think that such an occasion will be rare. I agree, it would be very rare indeed. It might be as little as the 1 per cent. that he thought it could perhaps reach. However, the point is that the rarer the occurrence the more noteworthy it will be and the clearer the signal to an interested and perhaps clandestine and hostile observer that something is up, that a case is under investigation and that his cover is about to be blown or his sources exposed.
Lord Avebury: My Lords, I must say something that is almost equally important to this argument. If the circumstances in which a request for repatriation is refused are rare the very fact that the prisoner is refused will indicate to him that he is under suspicion. If he is part of some foreign international spy network and his application to the Secretary of State is refused, he is tipped off and so are those hypothetical friends with whom he is in league.
Lord Elton: My Lords, it depends how alert they are and how complicated is the case. I am always afraid of going too far down hypothetical lanes into constitutional mazes. I take the noble Lord's point, but I would not wish to be a Home Secretary obliged to blow the gaff on an undercover operation in order to let someone know that he was not being repatriated because of his involvement in something about which I hoped those concerned did not know I was interested at all.
I regret, therefore, that on this one point I must remain resolute and resist the proposed amendment. I can, however, reaffirm that cases in which the Secretary of State withholds his consent to transfer can be expected to be extremely rare. We are, of course, considering transfers to the United Kingdom. Almost always, therefore, it will be the transfer of a British citizen; and a British citizen will have the right to enter the United Kingdom on his release from imprisonment abroad. This is a consideration which will weigh heavily in judging whether possible objections to a transfer to a British prison to complete his sentence are strong enough to justify the Secretary of State withholding his consent.

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Furthermore, in view of the presumption that the Secretary of State will normally agree to a request for transfer and the rarity of cases where refusal is considered necessary, your Lordships can be confident that all aspects of such cases will be subject to the most rigorous scrutiny before the Secretary of State decides to take the exceptional step of withholding his consent. The possibility of an error in criminal records arising from mistaken identity is a factor which obviously justifies exceptional care to ensure that the Secretary of State's decision is based on correct information. I hope that your Lordships will, therefore, accept that there will be ample safeguards against any injustice occurring through mistaken identity and consideration of erroneous information.
Lord Mishcon: My Lords, what I fear is this. If the Minister is adopting the argument that not to give reasons makes it apparent that there is something which is of vital importance by way of security or for other reasons, and that it would be a dangerous thing to do, I fear that the result will be that the Secretary of State will never give reasons. Once he does that, and does it by custom, if he fails to observe the custom there is the indication. Therefore, there would be no way in which a prisoner could correct an error.
We have had the debate in your Lordships' House. It was right that we should. We had it at Report stage and now here at Third Reading. The obviously sensible thing is, that debate being upon the record, another place will be considering the Bill and I hope that it will take into account those debates. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Expenses]:
4.20 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 3:
Page 10, line 29, after ("regard") insert ("either to the particular circumstances of the case or").
The noble Lord said: There was a third matter to which your Lordships' attention was drawn in regard to this Bill. Indeed, again it has considerations of justice attached to it. Your Lordships were invited to consider very seriously the question of whether the transport costs of a repatriated prisoner would impede the chance of his release if the payment of those charges was made a condition of the release. Your Lordships at Report stage heard speeches that were made in that context and I believe that you were very concerned with the problem.
On an amendment which had my name attached to it and the names of the noble Lords, Lord Donaldson and Lord Avebury, and I think of my noble friend Lord Melchett, the debate then widened as sometimes happens in your Lordships' House, and we suddenly found ourselves discussing what considerations ought to be in the Secretary of State's mind in waiving the requirement of the payment of the transport fees or charges. We found ourselves wandering into an area which had nothing to do with the question of means. The power was given to the Secretary of State to waive the requirement where it was hopeless to pursue the claim because the prisoner just did not have the money and was never likely to have it.
Your Lordships were invited by my noble friend Lord Melchett, in particular, to consider the case which might be on all fours with that of the hostages who were taken in Iran and who were American subjects and the many other cases where your Lordships would not consider that a British subject had been justly convicted or any crime according to our principles had been committed by that British subject. It was thought that it would be very wrong to insist upon transport charges in a case of that kind.
Having discovered that the debate was wider than the ambit of the amendment, I ventured to say that a proper amendment should be put down at Third Reading. Now your Lordships have it before you and will see that reference is made in it to,
"the particular circumstances of the case",
and then the word "or" precedes in the Bill the question of means; so one has covered the question of means and one has covered the particular circumstances that might arise in connection with any case which would then allow the Secretary of State to use his discretion and waive the transport charges.
I have seen a copy of a letter which the noble Lord the Minister very kindly sent to my noble friend Lord Melchett. I know that a copy was also sent to my noble friend Lord Donaldson, and I have no doubt to Lord Avebury too, who I am also honoured to call my noble friend. Lord Melchett has asked me to tell your Lordships how sorry he is that he is unable to be here this afternoon, but he did appreciate that communication. I hope that the Minister can carry what I think is a very simple amendment into the area of agreement, and not disagreement, and that we can now write these words into the Bill. I beg to move.
Lord Campbell of Alloway: My Lords, I support this amendment. It is surely somewhat repugnant to carry the concept of a means test, however fragile, into this context. I hope that my noble friend the Minister may be able to give favourable consideration to what, after all, is a fair widening of administrative discretion.
Lord Elton: My Lords, there was a suggestion at the previous stage that the new subsection (3) limits the Secretary of State's discretion to the consideration of the prisoner's means and the practicability of recovery from the prisoner or from any other source, and that that was too narrow a restriction. The question therefore is whether the Secretary of State's discretion should be widened. The example of the American hostages in Iran quoted by the noble Lord was a very telling one, although the circumstances, of course, were quite different from those in which we expect prisoners to be dealt with under the provisions of this Bill. None the less it was a very good way of creating in the minds of your Lordships the image of circumstances in which it would be beneath the dignity of the Government to charge for a return passage.
The suggestion has given us pause for thought. I said in the letter that has been referred to that we could see there might be justification for widening the discretion to some extent. I said that we would certainly look at that possibility very carefully before the Bill was considered in another place. In the light of this debate and the thought that we have been able to give to the matter in the past day or two, I can now say that the

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Government accept in principle that the Secretary of State's discretion under Clause 7(3) should be widened. However, further thought needs to be given to the form which this should take and to the precise drafting.
I recognise the frustration that that must cause, particularly to the noble Lord, Lord Mishcon, who has the amendment down in his name. I understand that there is a shadow of doubt about the acceptability of the terms he has chosen. There really is not time to be certain that we have it right before the Bill leaves this House. I hope that he will take that firm undertaking that the discretion should be widened as sufficient reason to withdraw his amendment, whereupon we shall work out an appropriate amendment for tabling in another place. In the process we shall take full account of what has been said most helpfully by your Lordships on this issue throughout our proceedings here.
Lord Avebury: My Lords, are there sound practical reasons for doing it this way round rather than the other way, that is to say, accepting the amendment of the noble Lord, Lord Mishcon, and, if the doubts that the Government have prove to be well founded, then to put down an amendment—which will be necessary in any case in another place to give effect to the principle—to redraft what has been done by your Lordships this afternoon?
Lord Elton: My Lords, I do not think that I have that within my discretion in the time that we have available to us. I am not sufficiently familiar with the mechanisms of arriving at conclusions in another place. It is sometimes necessary both to speak and to listen at the same time. What I heard confirms what I was saying. It is better to do it this way round. It always offends the purist to put in something which is defective in this House which has the reputation of being a careful House of revision. I hope therefore that the noble Lord, Lord Mishcon, will be content with the emblazoning of his name and those of his colleagues on the record against this idea and my undertaking that it will be pursued elsewhere.
Lord Mishcon: My Lords, I get fonder and fonder of the noble Lord, Lord Avebury. I am sure I would not have had the initiative to put forward that suggestion, as he did; but of course in the circumstances I am more than happy to accept the undertaking of the noble Lord the Minister. Indeed, I should like to express—and I am sure I am speaking for all those associated with this amendment—my deep gratitude to him for the way in which he has received it.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Lord Elton: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.— (Lord Elton.)
Lord Mishcon: My Lords, this is always an appropriate moment at which one very shortly expresses one's contentment or despair at a Bill that goes from your Lordships. In this case, we are happy to express our contentment, I think, from all parts of
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the House. As has been said many times, it is a very humane and a very good measure, and one hopes that however few be the cases year by year, they nevertheless will show that your Lordships' merciful consideration of this Bill has brought some relief to some languishing prisoner somewhere who belongs to our islands. It is also usually an opportunity of paying a tribute to a Minister. Sometimes one does it with a certain amount of reluctance but obeys the traditions of your Lordships' House. However, when it happens to be the noble Lord, Lord Elton, one never does it with reluctance, one does it with wholehearted sincerity, and I do it. He has been most helpful—as indeed I am sure have those who have advised him—in considering amendments before your Lordships and, where he could, agreeing to those amendments if he thought they bettered this Bill. I think that this Bill has been bettered by the consideration of your Lordships to it.
Lord Donaldson of Kingsbridge: My Lords, just to add a word of tribute, I spent a year during the war negotiating with the Russians, getting aid to Russia through Tehran. Of course we were both trying to do exactly the same thing and it worked like a dream. Since then our interests have not been identical and it has not worked so well. But this particular Bill has felt like getting aid to Russia because with the Minister we are working towards the same thing, whereas so often we find that the interest of the Government is against what we are suggesting. It has been a great pleasure to work in this way, and I hope that when the Minister replies he will refer to the last letter which he wrote to me which has a couple of very important points in it.
Lord Avebury: My Lords, may I echo what has been said by my noble friend Lord Mishcon and my noble friend Lord Donaldson, and in particular to say how extraordinarily grateful we are to the Minister for the care and attention that he has given to the amendments which have been moved by your Lordships on all sides. It really has been an example of inter-party co-operation, and of the efforts of your Lordships to put on to the statute book a Bill which probably has the approval of 99.9 per cent. of the people of this country. It is a model of the sort of legislation that Parliament ought to be enacting.
I think that we should take the opportunity of pointing out that the Council of Europe has done an extremely good job in producing this convention, which is the model on which the legislation is based. It is a convention which is not only to be adhered to by the nations which belong to the Council of Europe, but which also provides for us a model for bilateral arrangements for prisoner repatriation with countries as far a field as Thailand. The noble Lord will be aware, and it has been mentioned in the proceedings, that we are already embarking on negotiations with those countries which will enable our prisoners who are incarcerated in conditions which are not entirely the same as they would expect in a British prison—I have to be cautious in what I say here—even though our standards could be raised also, to be repatriated to serve their sentences in conditions which are more in accordance with their backgrounds and cultures. So I think that this is a really humanitarian measure which not only has the support of everybody in your

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Lordships' House but the warm approval of the British public at large.
We are most grateful to the Minister and the Home Office for their co-operative reception of our amendments. I think we ought also to say here again how grateful we have been to our advisers on the National Council for the Welfare of Prisoners abroad, not only for the assistance that they have given in drafting amendments and in providing us with background information on them, but also for the humanitarian work they do on behalf of British prisoners who are incarcerated in many countries all across the world.
Lord Campbell of Alloway: My Lords, as an erstwhile repatriated prisoner serving an indeterminate sentence, may I also, with all sincerity, be allowed to join in the round of congratulations and appreciation for this humanitarian measure?
Lord Elton: My Lords, your Lordships have been extremely kind and I should like to say at once that it has been a great pleasure on this side of the House also to find myself so frequently in agreement with noble Lords opposite. In fact, the only thing that gives me cause for concern is to my mind the sinister burgeoning friendship between the noble Lord, Lord Mishcon, and the noble Lord, Lord Avebury, because that implies tactical difficulties at a later stage! When at the same time Lord Avebury's closest ally describes me as being not unlike the Russians, I think that the future bodes perhaps a little ill! But I know that he meant it extremely kindly and I take it in that spirit.
May I refer to one other matter not already discussed today, which I undertook at the Report stage to consider further? During consideration of Amendment No. 27 at Report stage, the noble Lord, Lord Melchett, expressed considerable concern about the provision in Clause 7 of the Bill for the possibility of recovering a prisoner's travel costs from some source other than the prisoner himself. It is not entirely clear why the noble Lord should have suspected some ulterior motive on the part of the Government; but I hope that the letter I wrote to the noble Lord following the Report stage and copied to others of your Lordships has convinced them that there is no sinister intent behind that provision. It is not a question of putting pressure on relatives to pay the costs. The provision is merely intended to enable the Secretary of State to accept payment, or an undertaking to pay. from the prisoner's relatives or friends, or from some other source such as a charitable organisation, if the prisoner arranges for this to be done or if any such person or organisation offers to pay. We are conscious that several noble Lords still have some anxiety about the provisions in Clause 7 relating to recovery of prisoners' travel costs. We accordingly intend to give further thought to the possibility of these provisions being made somewhat more explicit in the Bill. At this stage, however, I must reserve our position on the merit and feasibility of this.
I think our discussion today has served to tie up the loose ends of the Report stage. I should like to thank your Lordships for the careful consideration you have bestowed on this Bill for the benefit not only of those
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who are eagerly awaiting the possibility of transfer under the arrangements that the Bill will make possible; but also those who will be able to take advantage of its provisions in the years to come. I think I would be right to say that no detail has been too small for your Lordships' attention. I am grateful to your Lordships for your patient consideration of the Bill, and I know that your Lordships are grateful to those who have helped all of us in its preparation and improvement behind the scenes.
On Question, Bill passed, and sent to the Commons.

Fish Farming (Financial Assistance) Scheme 1984
4.38 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the Fish Farming (Financial Assistance) Scheme 1984 provides the back-up grants which are necessary before fish farming projects can qualify for aid under the 1983 FEOGA measures for aquaculture, contained in Council Regulation (European Economic Community) No. 2908/83.
The 1983 FEOGA measures were adopted following settlement of the revised Common Fisheries Policy and followed the earlier interim aid schemes, first introduced in 1978 and renewed each year since then. The 1983 FEOGA measures provide, as did the interim aid schemes, grants of 25 per cent. of capital costs approved by the European Commission for fish and shellfish farming projects. The 1984 scheme also makes provision for the first time for back-up grants for projects approved under the final interim aid scheme. For convenience the 1984 scheme extends to projects approved in earlier years as well, and we have therefore revoked the Marine Fish Farming (Financial Assistance) Scheme 1981.
The rules of the 1983 FEOGA regulation are largely similar to those of the interim aid schemes. However, there have been two important improvements. First, the council regulation provides for a longer-term scheme; and, secondly, it allows the Commission, for the first time, to provide funds for aquaculture projects in fresh water, in addition to salt or brackish waters, as in the interim aid schemes, if appropriate projects come forward.
Perhaps I may say a few words about the details of the scheme. Its scope is limited to providing back-up grants for FEOGA aid. In consequence, grant will be paid only in respect of expenditure approved by the Commission. The rate of back-up grant will be 5 per cent. of approved expenditure, paid in addition to the 25 per cent. FEOGA grant, except where the project is also being grant-aided by other public funds, if that takes it above the 5 per cent. in which case there is always a cut-off point at 5 per cent.
Back-up grant will generally be paid to applicants at the same time as the FEOGA aid is paid. This will help to ensure that the grant is paid properly. As is customary in such schemes administered by the Ministry of Agriculture, the 1984 scheme contains provisions for revoking approval of grant and recovering grant paid.

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FEOGA awards made since 1980 for fish and shellfish projects under the interim aid schemes have totalled £223,466 in England, £49,145 in Wales and £818,251 in Scotland. That is the level at which this kind of aid for fish and shellfish farming has been running. I hope that this measure will be welcome and will ensure that British fish and shellfish farmers are able to benefit from Community aid. My Lords, I beg to move.
Moved, That the scheme laid before the House on 14th March be approved— (Lord Belstead)
Lord John-Mackie: My Lords, we are grateful to the noble Lord, Lord Belstead, for explaining the scheme. One thing that must be said about any of these schemes is that there is never a lack of paper on the subject. It is a good thing that now, as the noble Lord has told us, fresh water fish farming comes under the last scheme. I remember that when it was brought in I asked a question. The grant was to relate to salt or brackish waters (I think they were called) and I asked whether or not the grant would be made where someone pumped brackish water up into an inland lake or reservoir. As far as I recall, I did not receive a reply to that question, but now I do not need a reply because fresh water fish come under the scheme.
However, I wish to raise one or two points. This is a scheme which "tops up" (I think that is the expression) the FEOGA scheme by not more than 5 per cent. Regardless of whether or not the scheme is completely separate—this is a separate instrument, anyway—it states that the expenditure (of 5 per cent., one presumes) has to be approved. Does that mean that there have to be two approvals, which would seem to be a waste of time? I hope that the noble Lord has some information for us that that is not to be the case.
Also, if the total is 5 per cent.—of course, it could involve quite a sum of money on a big scheme—to suggest that the overall 30 per cent. should be paid in instalments seems slightly ridiculous. But if the schemes go together and the approvals are handled together, then the points that I am raising would not arise. However, I should be glad if the noble Lord would clear up those queries. We are pleased that there is to be further assistance under the scheme, because there is no doubt that, though it does not add tremendously to the overall supply of fish, fish farming provides a lot of work, particularly in areas such as the Highlands, and we welcome it very much indeed.
Lord Tryon: My Lords, before we pass this measure—and I am certainly not opposing it—I should like to sound a word of warning about the possibility of the overdevelopment of fish farming in fresh water and in river valleys, in particular in the south of England, where it is most prevalent. Many of the water authorities and millions of people who fish for pleasure are becoming increasingly worried about the relatively uncontrolled development of table fish farms, which often take out a large part of the water from a river and put it back at a different point, as well as about some of the pollution that is caused below them in some cases. I spoke about all of this during the Second Reading of the Diseases of Fish Bill last year, and I shall not go over it again.
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I should like to confine myself to five brief questions, which cover the main points that seem to worry the water authorities and the fishermen in the rivers. I see that under paragraph 3(6) of the scheme the Minister has wide powers to seek information from any applicant for a grant, and therefore I should like to ask the Minister, if I may, whether the applicant will be asked to satisfy the Minister on the following points.
First, has the fish farmer, or potential fish farmer, consulted his water authority to be advised of the problems that his development may cause downstream? At the moment this does not seem to happen very often. Secondly, is he fully aware of the proper use of chemicals in the treatment of his fish if they contract disease? Again, there are worries that the use of certain antibiotics and such like on the fish may go down into the main river systems and cause trouble.
Thirdly, can the applicant assure the Minister that the abstraction involved will not affect the ecology of the main river system on which the farm is situated? This covers the point I mentioned earlier, where the water may be taken out at one point, put through to a fish farm and put back at another point, leaving the river virtually dry—to be absurd—in between those two points.
Fourthly, has the fish farmer taken the fullest precautions so as not to interrupt the movement upstream or downstream of migrating fish? This causes considerable worry to fishermen, with the grids that are put in above and below fish farms. Lastly, has the fish farmer taken proper precautions to ensure that the fish cannot escape from his farm and infest the waters below it? This is not always welcome to other people in the river systems.
I think that if the Minister can ask questions of that kind of fish farmers, or potential fish farmers, applying for grants, it would go some little way to alleviate some of the worries that water authorities and fishermen have, though we may well hear more about this on another occasion.
Lord Belstead: My Lords, I am grateful to both noble Lords for their reception of this statutory instrument, though I must say that the noble Lord, Lord Tryon, has asked me some rather searching questions. I wonder whether I may first answer the two questions that the noble Lord, Lord John-Mackie, asked of me. The first question the noble Lord asked was: does the fact that there is a back-up grant as well as the FEOGA 25 per cent. grant mean that there will have to be two approvals? The answer to that question is: no, it is not necessary. Grant will be paid only in respect of projects that have been approved in advance by the Community. But when the fish farmer has completed the work, he will apply to the appropriate fisheries department for his grants. If his application is satisfactory, it will be forwarded to the Commission for approval of the FEOGA grant payment, and that payment will be made through the fisheries department. Further, as I think I said in my opening remarks, the back-up grant will be paid simulta-neously and automatically through the United Kingdom authorities. Therefore, there is in fact only one approval involved.
The noble Lord's second question was: does paragraph 3 of the instrument mean that small

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instalments will be paid on what is, after all, a very modest back-up grant of 5 per cent.? I think that where there is a project which is particularly large, payments may be made as and when self-contained parts of the project are completed; and that is why that provision is included in the statutory instrument.
The noble Lord, Lord Tryon, asked me about pollution and the dangers of pollution from fish farms. Responsible fish farmers can and do adopt sensible procedures to prevent problems, and the water authorities may use their powers over discharges to control fish farm effluents. In response to the Government's consultation paper on the review of inland and coastal fisheries in England and Wales, a joint working group on the avoidance of pollution from fish farms was established by the National Farmers' Union and the water industry, and the Ministry of Agriculture, Fisheries and Food and the Department of the Environment were represented. The group considered guidelines on good husbandry practices for, and the safe use of chemicals by, fish farmers, and standard discharge consent conditions for water authorities. Those documents are now being produced. If I may say so, the reply which I have just given to the noble Lord, Lord Tryon, does deal with the question which the noble Lord asked me about the proper use of chemicals in the treatment of disease.
The noble Lord, Lord Tryon, also asked me about the extraction of water in order to feed the fish farm and whether proper powers are available and being used to safeguard the ecology of river systems. I hope that the noble Lord will forgive me for saying that that really is a question for the Department of the Environment, and although I am answering on behalf of the Government, I think that I must take advice on that matter.
Indeed, I must also take advice as regards the other three detailed points which the noble Lord raised. The noble Lord asked: when information is needed so far as grant-aid is concerned, will all the right questions have to be asked? The answer clearly is, yes; but I would like to put something down on paper for the noble Lord. The second question which the noble Lord asked me, and which I cannot answer, concerned consultation for the fish farmer with the water authority. The third and fourth questions which the noble Lord asked me, and which I find difficulty in answering, concerned, first, leaving the river clear for migration purposes—which again, of course, is a water authority question—and, secondly, proper precautions against escape. I know that there have to be licences against the escape of exotic species which are being fish farmed. But I must admit that the noble Lord has bowled me out as regards giving him an answer in respect of the escape of fish which are native but which are in fish farms.
I hope the noble Lord will not feel that my reply is too unsatisfactory when I ask if I can write to him on the four questions that I have been unable to answer. If the noble Lord will allow me to write to him on those questions, then I shall now ask that this statutory instrument be agreed.
Lord Mackie of Benshie: My Lords, before the Minister sits down, does he appreciate how
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unsatisfactory his replies are to the noble Lord, Lord Tryon? It is a fact that all kinds of circumstances arise from intensive farming whether it be as regards fish or agriculture. I can give a very good example from agriculture. The growers of winter barley take great precautions aginst mildew, but if they did not grow winter barley in the same district as those who have been growing spring barley for years, the spring barley growers would not be forced to take the enormously expensive measures that they have to take simply because other people are in intensive practice as regards winter barley.
The points made by the noble Lord, Lord Tryon, must be very relevant. If there are fish farmers on a river carrying out intensive care and chemical control of disease—which they must do if they have very large number of fish in small areas of water—and they then release downriver the water the fish live in, which again they must do, it raises very large questions as to the future viability of that river for angling, which in most cases is worth far, far more to the area than the fish farming in pure commercial terms.
I hope that the noble Lord will take very careful note of the questions raised by the noble Lord, Lord Tryon, because they appear to me to be vital to very large areas of Scotland and to the tourist industy; whereas the actual sale of a few tonnes of fish might mean very little.
Lord Belstead: My Lords, I apologise for being unable to reply to several of the questions which were asked by the noble Lord, Lord Tryon. But it does so happen that the noble Lord, Lord Mackie of Benshie, who is always very fair in all that he says, on this particular occasion has been uncharacteristically rather unfair by picking the particular question to which I had in fact given an answer. I had made it quite clear to the House that a joint working group on the avoidance of pollution from fish farms was recently established by the National Farmers' Union and the water industry, and both the Ministry of Agriculture and the Department of the Environment were represented. The group considered guidelines on good husbandry practices for, and the safe use of chemicals by, fish farmers and standard discharge consent conditions for water authorities. If I may say so, I think that that does answer the question, the importance of which the noble Lord, Lord Mackie, is underlining.
Lord Mackie of Benshie: My Lords, I think the noble Lord did say that the documents were still to be issued?
Lord Belstead: My Lords, that is true. However, those, I am afraid, are circumstances over which I have no control.
Lord Tryon: My Lords, before the noble Lord sits down, I should like to thank him for answering two of my six questions. I am sorry that I bowled him over as regards the other four. I suspect that one of the problems here is that this is one of those matters that fall between the Ministry of Agriculture and the Department of the Environment. However, I will be happy to talk to the Minister about this matter outside the House.
On Question, Motion agreed to.

Roads (Scotland) Bill [H.L.]
4.57 p.m.
Lord Mackay of Clashfern: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Roads (Scotland) Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Mackay of Clashfern.)
On Question, Bill read a third time.
Clause 32 [Snow gates]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 1:
Page 23, line 15, after ("road") insert ("in his opinion").
The noble Lord said: My Lords, we now come to what shall ever after be known as "Mackay's monstrosity". This is the second Scottish Bill that we have had before us today. We have already had the Rent (Scotland) Bill, which was a consolidation measure. I hope that the noble and learned Lord the Lord Advocate will convey to those responsible for that Bill our congratulations and our thanks for a very effective and good piece of legislative consolidation, unlike the piece of modernised mix-up that we have before us now in the form of the Roads (Scotland) Bill.
As helpful as ever, I have been trying to come to terms with some of the difficulties that this Bill will pose for the local authorities who will have to operate it and get used to all the new terms. Amendment No. 1 arises at page 23, line 15, where, after the word "road", we propose to insert "in his opinion". I think that it might be for the convenience of your Lordships if we also deal with Amendment No. 2, which is consequential to this amendment.
Amendment No. 2: Page 23, line 25, leave out lines 25 and 26.
These amendments involve some rearrangement which in my view would be much more effective and far better than the way in which the Bill is worded at present. If I remember correctly, page 23 deals with snow gates and the question of opening and closing snow gates. If one closes a snow gate, or indeed having closed it reopens it, it may well be that one will subject people to certain dangers. If we do not properly cover the chief constable or the constable who is acting under him who effects the opening and closure, it may make such people liable to claims for damages. I think that that is recognised by the Government when they say later on:
" 'engaged in the provision or restoration of essential services' means in the opinion of a constable so engaged".
I cannot think of any uglier or more inconvenient way of including that. It would be far easier to do as I suggest and, after the words "until the road" insert the phrase "in his opinion". Then we would not need these extra words later on.
I am trying to be helpful and to help the draftsmen. I think that the draftsmen have been heavily employed on other work. When I saw the perfect specimen of the
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consolidated Rent (Scotland) Bill I was led to believe that we must have had a second XI on this Bill. This has meant that there has been a little more work for us to do. I suggest that this is a very sensible amendment as, indeed, is the consequential amendment. I beg to move.
Lord Mackay of Clashfern: My Lords, I am extremely grateful to the noble Lord for being so helpful; he has expressed his helpfulness in his usual way. The method that has been adopted in this clause to deal with the matter has been adopted to cope with a point with which his amendment, as expressed, does not appear to cope. As it stands, the clause ensures that the decision as to when snow gates should be shut and the decision as to when the road is safe again for traffic can be taken by different constables. Furthermore, the opinion of the person who decides to let through a particular piece of equipment which is:
"engaged in the provision or restoration of essential services"
is another matter to be judged by a constable. But in the nature of things it would not always be the same constable. The person who decided that the snow was very bad on the Grampians and that the gates should be shut may well have gone off duty by the time the circumstances have changed and it is necessary or desirable to re-open the gates.
It is in order to cope with that problem that we have adopted this particular system of drafting. I agree that the noble Lord's amendment is simpler and more elegant than our form of drafting. But his amendment seems to have the effect of saying that the opinion required for opening is the same opinion as was required for closing—that is, the opinion of the same person—and also the same opinion as was required in relation to the provision for the restoration of essential services.
Having said that, I am grateful to the noble Lord for putting this point to us and we certainly would not wish to close the matter today. I shall consider whether we can improve on this. In fairness to the draftsmen, I should say that they were by no means a second XI; they were extremely accomplished, thorough and conscientious draftsmen. In my discussions with them it was pointed out to me that the only way in which to cope with this problem completely would be to divide the subsection into the various stages—the closing, the opening and, again, the question of the restoration of services. That seemed to be an unnecessarily long way of doing it. Therefore, those are the reasons which have prompted us to take this course. In the light of these considerations, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Ross of Marnock: My Lords, I do not entirely accept what the noble and learned Lord the Lord Advocate has said. On a proper reading of this we have "chief constable", who is defined elsewhere in the legislation as a "constable". The chief constable is a constable. But whether it be the chief constable or anyone acting for him. it does not mean to say that it is the same person acting for him all the time; it could be a different person. I think that the noble and learned Lord appreciates the awkwardness of this. The legislation does not flow properly when one has to stop and redefine in this kind of way; it should be done within the clause itself.

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I appreciate that the number of amendments which the noble and learned Lord the Lord Advocate has produced at the various stages has proved rather embarrassing. I notice that he has tabled no amendments at this particular stage. I do not blame him for that; it is pretty embarrassing for us all as Scots to see a piece of legislation like this. I suggested that between this place and another place the noble and learned Lord should lose the Bill altogether. We should not lose anything very much. It may well be that between this place and another place the noble and learned Lord will discover a few more amendments—I shall be very surprised if he does not. Within that consideration I hope that he will take another look at this particular clause. In fact, he has said that he will do so.
Some second XIs are pretty good. I withdraw the remark that the draftsmen are a second XI. It may well be that they have been playing too many games and became rather tired when they came to this one. However, it is not a very good Bill; it is not very well drafted. In view of what the noble and learned Lord has said—that he will give further examination to this particular clause and the way in which it has been drafted—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.)
Clause 33 [Clearance of snow and ice]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 3:
Page 23. line 28, after ("reasonable") insert ("in all the circumstances").
The noble Lord said: My Lords, the object of this amendment is, again, to ask the noble and learned Lord the Lord Advocate to look very carefully at the whole question of the clearing of ice from public roads for pedestrians and vehicles, realising that a public road also embraces the pavement.
At an earlier stage I mentioned the problem which I foresaw of the roads authority having a great deal of difficulty and working round the clock to keep traffic flowing on the roads. In all the circumstances it might be quite impossible for the authority also to clear the fronts of commercial and domestic premises unless something stronger than the word "reasonable" is included in the Bill. We suggest that the phrase "in all the circumstances" may be enough to enable the roads authority to say that it was so busy just trying to keep traffic moving that it could not clear the way to every little shop or house in the area. Therefore, that would be understood and the authority would be protected if the clause were strengthened.
Secondly, the phrase "in all the circumstances" could also raise the matter of the money involved for the local authority. If it has to take on the duty of clearing all the pavements to make them fit for pedestrians, the money involved might be considerable, particularly as most of the work will be carried out at overtime rates or perhaps new machinery may be required in order to deal with the narrower and different contours of pavements as against carriageways. So the circumstances may be
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such that the local authority does not have the money to carry out the snow-clearing.
Therefore, in order to get elucidation on these points, and also in order to give extra protection to the roads authority, we propose that the clause should read:
"A roads authority shall take such steps as they consider reasonable in all the circumstances to prevent snow and ice
endangering".
I beg to move.
Lord Mackay of Clashfern: My Lords, in our view this clause as drafted also includes the thought which the noble Lord, Lord Carmichael, has put forward. The standard of reasonableness implies that one must look at the circumstances to see what is required. It is not a standard that is laid down absolutely. It is a standard that has to be determined in the light of the circumstances as they apply. I should have thought that it is reasonably plain that the clause as drafted has that effect.
In view of what the noble Lord has said on this general matter, I should say that this obligation does not go beyond what is presently required of roads authorities at common law. The situation in certain of the cities is of course different. There are local enactments providing for the clearing of snow by frontagers in Aberdeen, Edinburgh, Glasgow and in Greenock. There is a bit of dubiety about the proper application of the Glasgow provision, but these local enactments are in any event scheduled to fall at the end of this year under the local government legislation.
Elsewhere the onus is on the roads authority to take reasonable steps to prevent snow and ice endangering the safe passage of traffic over public roads, including pavements, under the common law. Indeed, the question of pavements was the subject of a particular case which illustrates the difficulties under the present law of being sure of the extent of various obligations. In Thomson v. Angus County Council, the council responsible was the Angus County Council, and they could not think of any better answer in the circumstances than to blame the Forfar Town Council, saying that it was their duty as the local authority to clear the pavement where the road itself was the responsibility of the county council. But that submission was rejected on the view that the pavement, or the footway, is part of the road, and accordingly this obligation is no more than the obligation at common law.
So far as the financial situation is concerned, obviously, of course, the cost of the operation is a relevant circumstance to be taken into account in deciding whether it is to be done, and one has to take account of the cost as against the dangers which are likely to arise if the operation is not done. Accordingly, I entirely accept the sense of the amendment and believe that it is covered by the clause as drafted, and I hope that in the light of that the noble Lord will feel able to withdraw this amendment.
Lord Ross of Marnock: My Lords, the purpose of the amendment was to get from the noble and learned Lord the Lord Advocate exactly what the position will be. It is a pity that he mentioned the private Acts, because he knows that we dealt with the private

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Acts—and certainly put a time limit on them—when we dealt with local government legislation, and also particularly with the civic government Act. One of the difficulties here is that the noble and learned Lord mentioned the city of Edinburgh. But he knows that there is no such thing now. It is a district of the city. The same applies to Glasgow; so that their jurisdiction has gone way beyond their original area.
It may well be that these new areas have not been properly considered. Certainly there would be new jurisdictions or new rights and responsibilities in respect of the districts in some of these areas which were in the countryside before. If you are going to apply the same kind of principle of clearing snow from pavements and footways—you have to be careful because footpaths are not on the roads; footpaths are in parks and places like that; we shall come to that later in the definitions—it means that there could be a considerable additional responsibility placed upon district councils. That means that the question of finance arises.
We had what is laughingly called by the draftsmen a "precipitation and accumulation" of snow around the 19th January in Scotland, certainly in the west. I remember spending a glorious six hours in a police station while they tried to clear the way between Glasgow and Ayr without snow gates, although I believe that the chief constable, or someone responsible to him, was very busy that night. For the whole week in certain of the towns you could barely make your way along the pavements. According to this clause here the local authority—I must not say "highway", as that is another dirty word; they are no longer highways in Scotland; they are no longer streets; they are only roads—or the roads authority is given the responsibility of clearing these, not just in relation to vehicular traffic but also pedestrians, so they stick you on to the pavement.
I saw people falling all over the place. Was it reasonable or not that these were not cleared? I do not know whether the noble and learned Lord appreciates it, but there was a case during this past winter when there was one particular part of Scotland where nothing was done in respect not just of pavements but of roads as well. There was no sanding or gritting at all. The place was a skating rink. Was it reasonable for them to do nothing?
There is a liability within this responsibility. If they put forward an objection to doing it because there was no money available, because it was too late at night, or something, is that reasonable? If they say that they have not the money, that the Government have not provided additional money to do it, is that reasonable? I want to make clear the extent of the liability of the roads authority in respect of this new responsibility, and whether or not they are covered in certain aspects of it in respect of private civic legislation.
We want to make absolutely plain to the local authorities what the responsibilities are. Can they come along and say that the Government have cut the amount of grant that is being given to them in respect of that? Would that be construed in court as reasonable if they did nothing in respect of clearing snow from a pavement? The local authorities themselves are concerned about this business. They want to know the extent of their liability.
Lord Morris: My Lords, I am grateful to the noble Lord, Lord Ross of Marnock, for giving way. When he saw these people falling about in Glasgow, was it by any chance on Friday night?
Lord Ross of Marnock: My Lords, Friday night is not a good night for what the noble Lord has in mind, Saturday night is a far better night, and the chances are that they would not have fallen about if the snow and ice had not been there, because we do not take ice with it in Scotland. But the noble and learned Lord knows what I am getting at. I want a clear statement from him as Lord Advocate as to the responsibilities and liabilities. We know what the responsibilities are, but what would be the liabilities of the roads authority if they did not, for some reason or other, clear the snow?
Lord McCluskey: My Lords, I wonder whether I might rise to support this amendment, principally in order to ask the noble and learned Lord the Lord Advocate whether he could make clearer to me the meaning of this particular clause. What the road authorities are required to do is to take "such steps as they consider reasonable". That, on one reading, imposes a duty to take steps, and the discretion that is given to them is to determine what steps are reasonable. So on one view it is a duty to take steps, and then they have a discretion to determine what steps are reasonable and what might be unreasonable. Therefore, if, as the noble Lord, Lord Ross of Marnock, suggested, no steps were taken at all, would that automatically be deemed to be a failure in a duty to take such steps as are considered reasonable?
Lord Mackay of Clashfern: My Lords, with the leave of the House, may I say that the noble and learned Lord, Lord McCluskey, has pointed to one aspect of this matter. I think that it might well be that in some circumstances it would not be reasonable; in other words, that there were no steps that were reasonable to take in the particular circumstances. But I should have thought on the whole that that would be rather unlikely, and that faced with snow and ice endangering the safe passage of pedestrians and vehicles over public roads one would expect there to be some steps that the local authority could take over time which it would be reasonable for them to take.
Certainly if the picture that the noble Lord, Lord Ross of Marnock, has painted of what he was seeing in the middle of January was to obtain for any length of time—I can see that for a short time it might be possible to say that it was reasonable to allow people to be endangered in that way, falling about as if on a skating rink—I should have thought that it would be reasonable for the local authority to take some steps to prevent the snow and ice endangering the safe passage of pedestrians; for example, by sprinkling some sand or something of the kind on the road and pavement. But this responsibility creates a liability if the duty is breached. That is as clearly as I can put it.
Lord Carmichael of Kelvingrove: My Lords, we are grateful to the Lord Advocate, and to all those who took part, for clarifying to the public the problems arising in this clause. Having heard the explanation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 4:
Page 63, line 9, leave out ("street").
The noble Lord said: My Lords, as my noble friend said, this is just up my street. We have spent so much time on this Bill, and so have the draftsmen trawling through all the Scottish legislation to get rid of the word "street", that is now so offensive to us. In Schedule 8 we find reference to the Public Utilities Street Works Act 1950, which we all remember. By the time we have finished amending that and getting rid of the word "street", the only time "street" is mentioned will be in the title of the Act. This is the kind of absurdity which has been raised by the Bill. Helpful as ever, I spotted two items where we could get further rid of "street".
With permission, I think we might take Amendments Nos. 4 and 5 together as they raise exactly the same point:
Amendment No. 5:
Page 79, line 1, leave out ("street").
On page 63, line 9 we come back to something familiar to those who have followed Scottish legislation over the past three years because we came across it in the Civic Government (Scotland) Act where we were plagued with street traders. We do not need to call them street traders now because here we find:
"street trading under and in accordance with a street trader's licence".
All we need is:
"trading under and in accordance with a street trader's licence".
The word "street" is unnecessary. Getting rid of it will give a few more hours' sleep to some meticulous draftsman who has spent so long trying to get rid of the word "street" from all pieces of legislation from the year 1829 right through and up to date.
We no longer have any "highways" in Scotland. They are all roads. The only thing that will bear any relevance to legality in Scotland is something that I have questioned and to which I have not yet had an answer. What do we do with the Highway Code? I know that is nothing to do with the amendment. But I have still not had an answer from the Lord Advocate. He really should answer that before we depart. We have got rid of "highway" as an offensive, out-of-date term, along with turnpikes and the rest of it.
We must explain to the people why we stick to this antiquated term "Highway Code". By the time we get through this Bill and it comes into operation no one will remember what a street or a highway was. They will all wonder what this term is in Scotland. It is all right in England so my noble friend should not get worried about it. We shall still have highways in England but not in Scotland.
It is sensible in the two instances I have mentioned in Amendments Nos. 4 and 5 to get rid of the word "street" because if the trader is trading under a street trader's licence, that is enough. One does not need to call him a street trader. I beg to move.
Lord Mackay of Clashfern: My Lords, there may be a slight misunderstanding which seems to have persisted—no doubt it is my fault for not being able to remove it—that the idea of this Bill was to remove the word "highway" from the Scottish vocabulary.
Lord Ross of Marnock: My Lords, no, I did not say the vocabulary—even that is not within the power of the Lord Advocate; from the legal vocabulary, yes.
Lord Mackay of Clashfern: My Lords, maybe I should correct myself. The misunderstanding is that the Bill attempts to withdraw the word "highway", for example, from the Scottish legal vocabulary. There is no such intention. The intention of the Bill is to provide a structure for roads legislation so that if in a statute the word "road" is used it will be used consistently and people will be able to tell exactly what it is referring to. If one cares in ordinary or legal language to refer to it as a "highway", one may be introducing a certain element of confusion. In the statutory provisions the desire is to create a system under which the basic structure is that of a road. As I pointed out on the last occasion, by far the majority of Scottish roads authorities use that expression for their departments. Lothian is the authority that is different from the others in using the word "highway" to describe its department.
There is no intention of outlawing the word "highway", and if anybody wishes to describe the volume which is published under the authority of the Road Traffic Act as the Highway Code I do not think anyone would be any the worse for that. There is nothing in this legislation to cast any doubt on that practice which the noble Lord, Lord Ross of Marnock, would like to see continued. I have no objection to that.
The reason that this person is described as a street trader in this provision is because that is the way in which the statute under which this is set up—the street trading licence system—so describes him. That statute is the Civic Government (Scotland) Act 1982. From that we see that a street trader does not need to be trading in anything that could properly be described as a street. This is another example of the way in which technically one has to enlarge the content. Street trading means trading, hawking or the like in a public place whether a thoroughfare or not. This is not limited to an activity carried on in a road and it would therefore be quite inappropriate to use the word "road" in this context. "Street" is the description used in the 1982 Act to cover public places in general for this purpose. In the definition section of the 1982 Act, for example, public place, that is places to which the street trading rules apply, means:
"any place (whether a thoroughfare or not) to which the public have unrestricted access and includes… the doorways or entrances of premises abutting on any such place"—
so it is street trading to set up a stall in somebody's shop door. The definition continues:
"any common passage, close, court, stair, garden or yard pertinent to any tenement or group of separately owned houses".
It is a comprehensive term, it is a fairly well-recognised term, and for my part I should like to continue to use that term. It does not in any way conflict with the philosophy of the Bill or the structure we are seeking to set up. I hope that in these circumstances the noble Lord will feel able not to press this amendment.
Lord Mackie of Benshie: My Lords, may I say that I find the Lord Advocate's reply deeply unsatisfactory. The important point appears to me that "street

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trader's licence" describes the activity quite happily. A street trader could be carrying it on in a roadway, highway or doorway. Therefore the noble Lord, Lord Ross of Marnock, has a very good point when he says that the street trader's licence describes the whole thing, whereas "street trading" might mean that it applies only in a street, although it applies to other places.
Lord Mackay of Clashfern: My Lords, with the leave of your Lordships, of course the noble Lord, Lord Mackie of Benshie, will see in the definition in Clause 95(6) that,
"street trading" has the same meaning as in section 39 of the said Act of 1982"—
that is the section dealing with street traders' licences. If one is going to be precise about it, then one has to use the phrase which is used in the Act which sets up this whole thing—and that is in Section 39 of the 1982 Act. If you do not do that, then you run very serious risks that you will not cover properly the activities that are covered by that particular section.
Lord Ross of Marnock: My Lords, this just shows you the difficulties that you get into when you start mucking about with something in which previously there was no confusion. We all knew what street traders, street walkers, street lighting and all the rest of it was, without all this confusion of roads. Look at that section and at the number of Acts of Parliament in which the word appeared—and yet you now get rid of the word "streets" and call them "roads"; it was quite unnecessary. That is the whole point about this Bill. It has created confusion rather than anything else. I was just having a little bit of fun, and I beg leave to withdraw the amendment and not to move the next one.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
Clause 144 [Interpretation]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 6:
Page 93, leave out lines 14 and 15.
The noble Lord said: My Lords, I beg to move Amendment No. 6 and at the same time to speak to Amendment No. 7.
Amendment No. 7: Page 93, leave out lines 18 to 20.
In page 93 is part of Clause 144, which is the interpretation clause. I thought that interpretation was something that was meant to be helpful. In lines 14 and 15, if anyone ever had any difficulty about it, is the interpretation of a "snow gate" which is described for our enlightenment as follows:
" 'snow gate' shall be construed in accordance with Section 32(1) of this Act".
So that instead of being helpful it takes us right back to what we have already read. Clause 32(1) reads:
"Gates (hereafter in this section referred to as "snow gates") may be provided and maintained by the roads authority for the purpose of temporarily closing a road to vehicular traffic on any occasion when snow is rendering or has rendered that road unsafe for such traffic".
Well, I understand that. But why do we need an interpretation of it? That adds nothing. It is really pointless.
The same thing goes for the next one. I have always complained about the expression "special road". We are modernising statutes. That is what we are supposed to be doing with this pig's breakfast of a Bill. I have asked before if any noble Lord being new to this Bill could tell me what a "special road" was. Nobody could answer. And you would not be able to answer when you read this interpretation. The interpretation is:
" 'special road' means a road provided or to be provided in accordance with a scheme under Section 7 of this Act".
Section 7 of this Act is helpful, very helpful indeed, to interpret. It says:
"special roads, being roads provided in pursuance of a scheme made under Section 1 of the Special Roads Act 1949".
That is all.
So we have an interpretation which goes back to the beginning of the Bill and that takes us back to the Special Roads Act of 1949. So we are no wiser. That is not being helpful. Of course, we discovered that mainly special roads are motorways, but they are not only motorways. If you told people that special roads were motorways it would make more approximate sense than the designation "special road". I hope that between now and another stage of the Bill the Government will look at this one and see whether they can do a little better. I looked at the Rent (Scotland) Bill, a consolidation Bill, that we dealt with today. The interpretation there was helpful and there was very little of this reference back to the use within an earlier section and then that earlier section throwing one back to an Act of 20 or 30 years before in order to find it. It really is not good enough. I do not call this modernising statutes. I beg to move.
Lord Hughes: My Lords, I should like to support my noble friend on his Amendment No. 6. If anybody reading Clause 32(1) about snow gates had any doubt as to what "snow gate" meant and if he were a lawyer, for instance, and was asked, "What is a snow gate?" his answer would be that there would be an interpretation of "snow gate" somewhere in the Act. So he would turn to the interpretation clause. He wants to find out what is a snow gate in terms of Clause 32(1). When he gets to the definition he finds that it says that it is what it says in Clause 32(1). Having said it first in Clause 32(1), why do we need, later on in the Bill, to say to somebody, "Look back to 32(1) to find out what is a snow gate"? I think that this is a case which may be perfectly sound from a lawyer's point of view, but from a layman's point of view it seems to be utter nonsense.
Lord McCluskey: My Lords, before the noble and learned Lord replies, may I say that I support this amendment for slightly different reasons from the reason given by my noble friend Lord Ross of Marnock and a similar reason to that given by my noble friend Lord Hughes. The point I am making is this. I do not believe that an interpretation section is designed to be helpful. It is designed to give precision to words used in the statute. But there is no point in defining the words "snow gate" in the interpretation clause if they are not used anywhere else in the Bill except in Clause 32. If they are used but once—as I think they are—in Clause 32, and are defined in that clause, there is no need to put them in the

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interpretation clause at all. If the noble and learned Lord the Lord Advocate tells me they are used elsewhere, I would not then support the deletion of the words from the interpretation clause of the Bill.
Viscount Massereene and Ferrard: My Lords, we have Bills drafted to give employment to lawyers who otherwise would be unemployed. If you take the word "reasonable", that is absolute Heaven to lawyers. You can argue about it for hours and hours. I quite agree with the noble Lords opposite.
Lord Mackay of Clashfern: My Lords, now that I have the opportunity to do so, I was wishing to say that I will accept the amendment. The reason I accept it is this. When this Bill was originally introduced, the words "snow gate" came in another clause; but we have been able to simplify that and to delete it as a result of suggestions made to us by noble Lords opposite at the earlier stage. The position is that "snow gate" appears only in Clause 32, and therefore, as the noble and learned Lord, Lord McCluskey, has said, it is not necessary to have it. Therefore, I accept the first amendment.
The second amendment is in a different case because "special roads" comes in a whole lot of clauses and therefore we have to make sure that you have a reading section to which you refer. Perhaps I could make one passing reference to what my noble friend has said. It is not my understanding that the purpose of passing Bills is to give employment to lawyers. There are much higher motives than that in passing Bills of this kind. Obviously, we wish to use words which are reasonably precise and yet not too precise for the situation. My noble friend criticised the use of the word "reasonable". I should like to hear him describe what he would like to put in place of, for example, the obligation to do what is reasonable in snow clearing. The other alternative to saying that you do what is reasonable is to lay down all the circumstances in terrific detail about precisely what you should do in every possible circumstance that you can think of. One can imagine that the result of that exercise would be to make an even longer Bill than the present one. "Reasonable" is a word which I think is perfectly intelligible but is capable of different applications in circumstances, and it is a question of what the circumstances are when you decide what is required.
Lord Hughes: My Lords, if I may speak again, the noble and learned Lord the Lord Advocate said it is not the purpose of legislation to provide work for lawyers. I think we must accept that, but he must admit that it has a frequent side effect, working that way.
Viscount Massereene and Ferrard: My Lords, I was only going to say that I had my tongue in my cheek then.
Lord Ross of Marnock: My Lords, I do not know about lawyers, but this has provided a lot of work, unpaid, for laymen; occasionally we help the lawyers. We have to be convinced that what is being said is reasonable. I did not like the easy definition of the noble and learned Lord of "reasonable".
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"Reasonable" is never there on its own. It is usually, for example, something, "reasonable to the chief constable in relation to the snow gates aspects" or something that, "in the opinion of the Secretary of State is reasonable", and that gives the get-out to the bureaucrats. It is not what anyone else thinks is reasonable, but what perhaps the Secretary of State thinks is reasonable. That is the importance of that particular phrase which constantly creeps in.
We are very grateful for this earth-shattering amendment now being accepted by the noble and learned Lord. It shows once again—and he may excuse the phrase—that occasionally he is a reasonable man, or maybe he is just belatedly seeing reason. However, we are grateful for that. In view of that, I wish to hear it being put, and we shall see crowds of people coming into the Chamber to oppose the noble and learned Lord because he has taken leave of his senses and accepted an amendment from this side of the House!
On Question, amendment agreed to.
[Amendment No. 7 not moved. ]
5.43 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 8:
Page 94, line 18, leave out ("(3)") and insert ("144A.")
The noble Lord said: My Lords, this is another amendment which will be accepted because we are still on the interpretation Clause 144. I am sure that those people who have not provided themselves with the necessary hymnbooks for this important piece of our service today will not know that Clause 144 is interpretation—which is supposed to mean interpretation. I suggest what we have in these lines is not properly interpretation because subsection (3) begins:
"This Act does not confer any power or impose any duty"—
as regards something or other. That is not interpretation. This really should be a new clause, and that is why I suggested Clause 144A. I am not quarrelling with what is here—
"being a footpath only, is a public path created …"
Then:
"being a footpath only, forms part of a long-distance route the proposals for which have been approved by the Secretary of State",
and so on. That is not interpretation. Do not confuse us. Just put it on its own. Give it a new title, but do not confuse us with interpretation here, which refers to the powers imposed or not imposed, as the case may be. I beg to move.
Lord Mackay of Clashfern: My Lords, the purpose of this provision that the noble Lord Lord, Lord Ross of Marnock, seeks to separate out from Clause 144 is in fact to explain that certain roads do not attract the powers and duties contained in the Bill. The provision is a consequence of the committee under the noble Lord, Lord Stodart of Leaston, who recommended that footpaths in a recreation area should be the responsibility of the district council rather than the region. In view of its explanatory nature, it is right that it should be contained and remain in the interpretation clause. The question is obviously open to different points of view, but it seems appropriate to have it here as explaining the extent of the earlier provisions.
Lord Carmichael of Kelvingrove: My Lords, I can see the purpose of the explanation of the noble and learned Lord the Lord Advocate; but as a layman—and perhaps this is why one should always get legal advice—I can see myself looking at a footpath and taking the major definition that is within the interpretation clause and not going further on, whereas if the explanations given under subsection (3) were referred more immediately to certain sections within the interpretation clause, then to someone like myself, a layman, the interpretation clause would be more understandable. There is a genuine confusion for someone like me in finding that something was not picked up earlier, which appears to have been added at the end. I agree that it removes any danger of doubt but, as my noble friend Lord Ross of Marnock said, we are not disagreeing with the substance, but merely with the placing within the Bill of these particular clauses.
Lord Ross of Marnock: My Lords, I am disappointed that the noble and learned Lord the Lord Advocate did not go further in accepting my amendment and suggest that subsection (2) as well should not be an interpretation. The noble and learned Lord conceded one point because, if I remember rightly, Clause 145 was part of the interpretation and it does make nonsense when you confuse things by putting in this question of powers and non-powers in respect of footpaths "owned or managed". With all due respect, it is not interpretation. So between now and another place, if it is going to travel the whole road, I hope the noble and learned Lord will look at this, think again, and give us something much more sensible from the point of view of Scottish legislation.
I am very glad to see that we have so many noble Lords from other parts of Britain here today to help us in respect of this. We are very proud of Scottish legislation and we must demonstrate to them our concern that these matters are being properly looked after. I will not speak on the next stage of the Bill. We have said enough about this Bill and the noble and learned Lord knows how I feel about it. It has been a waste of effort, and I will not go over it again. But he has time between now and the next stage, which I hope may be fairly prolonged, to look into the matter again and see whether the Government can improve this. I can assure him there is considerable room for improvement. I beg to withdraw the amendment.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Lord Mackay of Clashfern: My Lords, I beg to move that this Bill do now pass. In doing so I should like to take the opportunity to thank those noble Lords who have contributed to the deliberations on this Bill. It would be invidious perhaps to try to single out those who have particularly participated, but certainly I would like to make clear my gratitude to the noble Lords, Lord Ross of Marnock, Lord Carmichael of Kelvingrove, Lord Hughes, Lord Mackie of Benshie, and to the other noble Lords who have taken part. My noble friend Lord Selkirk has taken a great interest in the Bill and has contributed to its improvement. I must not forget that my noble friends Lord Stodart of Leaston and Lord Drumalbyn have also taken an interest. Last but by no means least, I should like to
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mention the right reverend Prelate the Bishop of Norwich who illustrated the interest others outside Scotland have in promoting suitable legislation for Scotland.
This Bill represents a considerable and long overdue improvement in the statutory provisions relating to roads in Scotland. I believe this Bill provides a single comprehensive measure which gives a logical and clear structure to the Scottish statutory provisions relating to roads. I should like to thank those behind the scenes who have assisted in drawing up this legislation. The noble Lord, Lord Ross of Marnock, made one or two different references to them at different stages; their work has been conscientious and very hard and, I believe, very well worth while to another place with your Lordships' good wishes.
Moved, That the Bill do now pass—(Lord Mackay of Clashfern.)
Lord McCluskey: My Lords, the noble and learned Lord the Lord Advocate, in making those remarks, has failed to appreciate the innerness of the contributions made by my noble friend Lord Ross of Marnock. He gave a clue to what that meaning was when he referred to noble Lords in other parts of Britain. I think what the noble Lord, Lord Ross of Marnock, was pointing out essentially is that had we had devolution in Scotland the Bill would never have reached this House and your Lordships would not have had to listen to this kind of debate on matters that we have had today. I did not think of putting that forward as an argument for devolution at the time, but now I wish I had done.
On Question, Bill passed, and sent to the Commons.

Tenants' Rights, Etc. (Scotland) Amendment Bill
5.51 p.m.
Report received.
Clause 1 [Calculation of discount and period of occupation]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 1:
Page 1, line 8, leave out paragraphs (a) and (b).
The noble Lord said: My Lords, this is the Bill that confers new rights on secure tenants in Scotland, and indeed in paragraph (a) it grants to secure tenants who have been in a house for two years the right to purchase their house and to get a discount of 32 per cent. Paragraph (b) extends the discount for people who qualify, as having been for over 20 years secure tenants for a discount up to 60 per cent. So far as I can see, when we were at Committee stage concern was expressed, not just from this side of the House, over the generosity of the Government in compelling a local authority to give away its property—and it really amounts to giving away property—unwillingly to tenants who may have had as short a stay in a house as two years. There can be no justification for conferring a right on someone who has been two years in a house automatically to get the right to purchase that house and automatically to get the right to a discount of 32 per cent. of its value.
We had quite a debate yesterday about local democracy and local authority, and the Government were proclaiming their belief in the freedom of local authority but here they are telling the local authority: "You will sell that house and you will give a discount of anything from 32 per cent. to 60 per cent." What right have the Government to do this? All my political life I have listened to Conservatives talking about people in subsidised houses not paying rents that were high enough. The noble Lord, Lord Drumalbyn, will remember that from the debates that we had in another place over many years. He will remember his colleagues that I spoke about earlier talking about "shiftless council tenants"—second-class citizens, because they accepted council houses and got subsidised rents. But suddenly they become not shiftless council tenants but hard-working, rent-paying tenants, and the Secretary of State says: "Well done, thou good and faithfull secure tenant; you have paid your rent for all these years now and you can buy you house with a discount of 60 per cent., paying only 40 per cent. of the value."
I want to know why they are doing it. They are so anxious to get rid of local authority houses. They are a liability to the local authority, according to the Secretary of State, and they are a liability to the state if they have to pay continued grants in respect of each local authority house. It was bad enough when it was three years and 33 per cent. discount, with the maximum discount at 50 per cent. after 20 years. I think it is going beyond all reason. Why are the Government doing it? I think they are doing it because they have not been successful in Scotland in respect of the sale of council houses. There is every indication that there is now a lag. The people who rushed in to buy have been mainly—this is proved by a survey which has been done in Scotland—those who are entitled to the highest subsidy. They are not going to feel very happy if they know that if they had waited just a couple of years or so they might have got 60 per cent.
The raising of the discount at one end of the scale and a lowering of the qualifying period to two years at the other end is an illustration of the anxiety of the Government to have these houses sold—just telling a local authority to do it. There is a bit of tyranny and a bit of dictatorship about that. Remember, my Lords, that the houses belong to the local authority: they put them up and incurred the debts in respect of that. The local authority have had to maintain them, and the Government's contribution has not been all that much. As a matter of fact, figures have been produced time after time that it is the rent contribution from the tenants and the rate contribution from the local authorities that have been the mainstay of the building and maintenance of these houses.
It is because I think it is unreasonable and unfair, not purely from the point of view of how you deal with property and how you sell and handle property, but also in respect of the people who are in the houses and waiting for better houses. It is the better houses that are being sold: that is an actual fact. I am worried about it from the point of view of older people who are in houses that are too big for them and who had hoped to be able, within a short time of retiring, to get hold of
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a smaller local authority house. The more of these other houses are sold, the less chance there is going to be for that. But that comes in another amendment.
I am offended by the principle of a government telling a local authority, first, "You will have to sell"; and, secondly, the same government denying the local authority the free bargain with the tenants and telling them the extent of the discount they will have to give. It is unfair to local authorities and is certainly not consistent with claims to be concerned with local government and the freedom of local authorities. I beg to move.
Lord Mackie of Benshie: My Lords, I rise to support this amendment, as I have supported similar efforts to make the Government see sense before. The noble Lord was kind enough to write to me when I asked how many more houses would have to be sold to make up the same money, I think the reply was that another 740 houses would make up the difference in cash caused by the bigger discounts. I think, quite frankly, for purely practical reasons that the Government will not get their other 740 houses. The people who will buy their houses are the better off, the more sensible, the more saving and the more longheaded of the tenants, and if they will not buy at 50 per cent. nothing will make them buy at 60 per cent.
This is a ludicrous, panic measure, and one which indicates a lack of any business sense, which one would not normally find lacking in the noble Lord, Lord Gray of Contin, if he were acting in a private capacity instead of as a Government Minister. It is a very mistaken measure. It seems quite wrong that legislation should be so ill thought-out that it must be changed for a bigger bribe only a couple of years later. It is not logical, it is not businesslike, and this amendment puts once more to the Government the sense of what we have been saying all along, through all the stages of the Bill. The Government should be sensible and accept it, because they will not sell a single more house with their extra 10 per cent. of discount than they have sold in the past. Anyone who will buy at 50 per cent. will certainly not need 60 per cent.
As for the argument that it is right and proper for a good tenant to get it, we had a long session on what was a good tenant and what was a bad tenant. Eventually, the Government were forced to admit that the bad tenant would get the concession in exactly the same way. It is a fact that for years and years rents in Scotland were far too low, and the Government said so. I agree with them, not about the bad tenants but about the foolishness of charging too little for houses in Scotland. But I do not know why the Government should use the argument that, because of that, they should give the houses away at exaggerated discounts. I do not regard this as a sensible measure, and, for once, I agree with the Labour Party that if this amendment were agreed to it would be a very much better Bill.
6.2 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I am grateful to the noble Lord, Lord Ross of Marnock, for setting out so clearly his view on this matter. I note also the remarks of the noble Lord, Lord Mackie of Benshie, and I am surprised to some extent that he is in such full

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agreement with the noble Lord, Lord Ross of Marnock, on this occasion. I had not realised that his party were quite so adamant about their dislike of selling council houses to the benefit of the tenant, as he has made clear tonight—
Lord Mackie of Benshie: My Lords, I am all for selling council houses. I am not for selling them at less than could be obtained.
Lord Gray of Contin: My Lords, I take the noble Lord's comment, but it still does not change my view that he is saying quite clearly, however much he may try to disguise it, that he is opposed to the additional discount which is being offered to council tenants, who—as I hope I shall be able to convince the House in due course—have a very reasonable right to expect that they will be given such terms.
The noble Lord has explained that the amendment would delete from the Bill the provisions in Clause 1 which are designed to reduce the qualifying period for the right to buy from three years' tenancy to two years' tenancy, and to increase the maximum discount from 50 per cent. after 20 years' tenancy to 60 per cent. after 30 or more years' tenancy. As such, the amendment is similar in effect to amendments which were debated during the Committee stage of the Bill. On that occasion your Lordships rejected the amendments, and I do not think that the noble Lord has said anything today which would justify the Government in taking a different view now.
Having said that, I should like to deal first with the proposal to reduce the qualifying period from three years to two years. I should like to remind your Lordships that the right to buy applies only to secure tenants. Secure tenants are people who have been granted the tenancy of a house on a long-term basis. They will be entitled to remain in that house for the rest of their lives, if they so desire, and in some circumstances the tenancy will pass on to their successors. When a dwelling is let on a secure tenancy, therefore, the landlord authority must expect, and accept, that the tenant to whom the tenancy is being granted may be there for a very long time indeed. It is only that category that has the right to buy. And if such a tenant chooses to exercise that right, all that happens is that instead of occupying his home as a tenant, he occupies it as the owner, and that is surely a desirable state of affairs.
When the right to buy was introduced in 1980, the three-year qualifying period was not fixed as a result of some magic formula; it was a more or less arbitrary figure designed solely to establish that the right to buy applied only in cases of bona fide tenants. The noble Lord has asked why we have decided to reduce the qualifying period to two years now. The answer is simple. We think that three years is too long. What is the practical effect of our proposals? We estimate that the change to two years will be of immediate benefit to some 30,000 tenants who will be entitled to buy at the new basic discount of 32 per cent. I do not believe that to be at all a bad thing. The noble Lord has not explained why he believes those tenants should be required to hang on for another year. It seems to me perfectly reasonable that they should have this advantage.
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I turn now to the proposal to increase the maximum discount from 50 per cent. after 20 years' tenancy to 60 per cent. after 30 years. This proposal stems, as I indicated at Committee stage, from our belief that the existing discount scale does not adequately recognise the position of one particular group of tenants; namely, tenants whose period of tenancy stretches over more than 30 years. At present, they get no discount in respect of their period of tenancy in excess of 20 years, even although such tenants will generally be well on in their working lives—often approaching retirement, if not indeed already retired—and the amount of their discount entitlement may be crucial to their decision whether or not to buy. We have therefore decided that, in order to enable more tenants of long-standing to buy at a price which takes fair account of their tenancy record, and of the resources likely to be available to them, the maximum discount should be increased from 50 per cent. to 60 per cent.
As I indicated at Committee stage, we estimate that between 350,000 and 400,000 tenants will benefit from the increased discount if they choose to buy. It is, of course, not possible to predict accurately the number of tenants who will be encouraged to buy by the increased discounts who would not otherwise have done so. In broad terms, however, we expect the effect on the capital receipts accruing to authorities to be neutral, since any reduction in receipts from those sales which would have taken place in any case—as a result of the increase in average discount—will be offset by additional receipts from sales which would not have taken place had the discount not been increased to 60 per cent. Indeed, as I indicated, and as the noble Lord, Lord Mackie, confirmed when I wrote to him following our deliberations in Committee we estimate that authorities will require to increase the number of houses which they sell in a year by only about 5 per cent. to recoup the effects of the additional discount.
In other words, we believe that the increased discounts will enable more tenants to satisfy their desire to become home owners, while at the same time not reducing the net receipts which accrue to authorities from sales, and hence the amount of resources available to authorities under the net capital allocations system for expenditure on the modernisation and improvement of the rest of their housing stock.
In conclusion, I should like to stress that the changes which the Government are proposing in the qualifying period and in the discount scale are fully in line with the main aim of our housing policy, which is to extend freedom of choice in housing. There is a substantial demand for home ownership in Scotland and we are anxious that people should be able to realise their aspirations. Over one-half of Scottish households at present rent their homes from a public authority. Only one in three is an owner-occupier. For Great Britain as a whole, this pattern is broadly reversed. Your Lordships' House has recently approved similar changes in the right to buy rules in England and Wales in the context of the current Housing and Building Control Bill. While I would not wish to suggest that something should be done in Scotland simply because it has been done in England and Wales, I believe your Lordships would agree that on a matter such as this it

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would be wrong to treat Scottish tenants in any disadvantageous way. With that explanation, I trust that noble Lords might be prepared to withdraw their amendment.
Lord Carmichael of Kelvingrove: My Lords, we went through all this in Committee. The Minister has spoken about freedom of choice. I must come back to the point that for many thousands of people in Scotland freedom of choice does not exist because the Government have starved local authorities of capital for building local authority housing. By this measure the Government are encouraging people to take houses out of the housing stock of local authorities. Therefore, they are making the possibility of the homeless obtaining housing even more difficult than it is at present.
The noble Lord spoke about the difference between Scotland and England in terms of the number of houses which are in owner occupation. This matter was discussed at great length in Committee. There are many historic reasons for this situation. It has got nothing to do with lack of gumption of the Scots over buying their own homes. The noble Lord did not answer the case put by the noble Lord, Lord Mackie of Benshie, who referred to the increase in the discount and explained what this would mean in terms of the extra number of people buying their houses. The Minister said that 30,000 houses would be sold, but he did not make clear to me whether that meant that an additional 30,000 houses would be sold as a result of the increase in the discount from 50 per cent. to 60 per cent.
The Minister said that there is unwillingness on the part of local authorities to sell council houses and suggested that the Labour Party is opposed to the sale of council houses. In an earlier debate I made it clear that we have no doctrinaire objection to the sale of council houses but that we do object to local authorities having no choice, when organising their housing stock, over whether to sell or not to sell. The tenant has the right to buy his house and can demand that he be allowed to buy it from the local authority. The benefits to the local authority are much less the greater the reduction in the housing stock because of sales to tenants.
The noble Lord spoke at some length about those people who have the right to buy. He said that anybody who had been in a local authority house for two years became a secure tenant. This is a very wide category. Such tenants have hardly settled themselves into their homes before they are able to buy them. The noble Lord made great play of the fact that the 60 per cent. rebate of the cost price valuation would apply only to those who had been in their homes for a very long time and that therefore there would be little chance, anyway, of those houses coming back into the general housing stock. But this is not the case. A local authority will normally pass a house on, once it is rented by a family, to a member of the family who is still living in the house. Thereafter that house will normally go to somebody who is on the waiting list.
We are trying to make it still possible for those who are on the waiting list for houses, particularly in the more desirable areas, to obtain such housing. All that
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the increase in the rebate to 60 per cent. does is to make it slightly less likely that those who have been waiting patiently for a very long time will ever be given the opportunity to live in a house in an area which they consider to be better. Therefore, the answers which the noble Lord has given provide very little comfort for many people who are living in parts of Scotland from which they would very much like to move. If he does not accept these amendments, the noble Lord, by taking flexibility away from local authorities, will make the lot of those who are unable, unwilling or for some other reason unlikely to be houseowners that much more difficult.
Lord Drumalbyn: My Lords, may I ask my noble friend a question which has been puzzling me for quite a time. What is the future of these arrangements expected to be? If a person has been a secure tenant for two years, he will be able to buy his house and will obtain the benefit of the reductions specified in paragraph (b) of subsection (1). Will the position remain exactly the same in the foreseeable future, or will there be a time limit within which this choice can be exercised? How do the Government envisage the situation developing over the years? What is the level of house purchase likely to be? At what level will it be running in five years' time or 10 years' time? Do the Government have in mind a figure which, in their view, would provide a proper balance between council houses and owner-occupied houses which had previously been council houses?
This question may perhaps be irrelevant, but mention has been made of the fact that in Scotland there are three times as many council houses as houses in owner-occupation. What is the correct balance which the Government will seek? To a large extent circumstances will obviously dictate this balance, but the Government must have in mind what they regard as not only the likely but the favoured outcome of this legislation. Could the Minister deal with this point? It would help me to understand how the Government foresee future developments.
Lord Gray of Contin: My Lords, by leave of the House, I shall try to deal with some of the points which have been raised. The noble Lord, Lord Carmichael of Kelvingrove, said that there is some difficulty over understanding exactly what is meant regarding the figure I mentioned of 30,000 tenants. I said that we estimated that the change to two years from three years will be of immediate benefit to some 30,000 tenants who will be entitled to buy at the new basic discount of 32 per cent. I went on to say later that, as I had indicated at Committee stage, we estimate that between 350,000 and 400,000 tenants will benefit from the overall increased discount, if they choose to buy.
The noble Lord also suggested that the fact that council houses would be sold at a high discount would in some way have a disadvantageous effect on those who are seeking houses. He suggested that because of the Government's control of local authority spending there were not the number of houses being built, and that by selling off houses we were therefore further reducing the housing stock. I would point out to him that by selling off houses to sitting tenants we are selling off houses which would not have become

1089
available for a considerable length of time, anyway. The selling of council houses to sitting tenants does not in any way affect the housing stock in the short term or in the longer term—in the very long term perhaps, but not in the short term or the medium term.
My noble friend Lord Drumalbyn asked what I thought we might expect in the future. Let me say to him that the Government's anticipation is that the desire of council tenants in Scotland to own their own homes will continue. As I mentioned earlier, at the present time only one person in three in Scotland owns his own home. That situation is one about which we as a country should be saddened. We are doing everything that we possibly can to encourage people to become the owners of their own homes. This applies very largely to council tenants. At present, some 46,000 council houses have been bought by tenants in Scotland. This is a small number compared with the vast number of council houses which exist in Scotland, but in the short period in which we have been exercising this policy, it represents a very encouraging start.
I hope that, with the attractive discounts which are being offered, this trend will continue but obviously it will take some time to build up. I do not believe that we can look forward to major developments in the short term but that it will be a gradual process. It is one that we shall do all we can to encourage.
Lord Mackie of Benshie: My Lords, can the Minister tell me whether my memory is correct in recalling that the Government's supposition was that another 740 houses a year would be sold because of the extra discount?
Lord Gray of Contin: My Lords, I should have mentioned this point in connection with the comments of the noble Lord, Lord Carmichael, because he asked at what discount the 740 additional houses are to be sold to cover costs. The authorities would require to sell an additional 740 houses at the average discounted selling price. That is the answer to the question asked by the noble Lord, Lord Carmichael. The noble Lord, Lord Mackie, is correct in respect of his figure of 740 houses.
Lord Ross of Marnock: My Lords, we have it clearly: "Attractive discounts—come and buy". No choice, because you can only buy the house you are in, if you are a secure tenant. There is not very much choice about that. Let us forget the flannel and ask: by what right have the Government adopted this new principle under which they can sell other people's property? These houses do not belong to the Government; they belong to the local authority. The responsibility for these houses is that of the local authority. It is a travesty of justice and democracy that central government can tell a local authority to sell its property whether it likes it or not, and then further, to sell that property at what the Minister of State has called "attractive discounts".
The Minister should know, statistically, how many of the 45,000 houses which have been sold would have fallen to the local authority for rehousing. That is quite an easy statistical exercise to accomplish; to work out how many local authority houses are available for
1090
reletting in any one year. The fact that houses are no longer available for reletting means that there is a reduction in the housing stock.
We already know from the surveys that it is the best houses which are being sold. As the noble Lord, Lord Mackie of Benshie, can testify, somebody complimented me the other day on how proficient Aberdeen County Council has been in developing small groups of council houses in rural areas. Whoever planned those houses fitted them well into the local background. That kind of house is very' appealing at the "attractive discounts" which are being offered. But that is the very kind of house to which people who are retiring in a rural area hope to move but which will be denied to them—short term or long term. It may be the dashing of someone's hopes in the short term but of a great many people's hopes in the long term.
In the minds of noble Lords opposite, and in the minds of some honourable Members of another place, there has always been a distaste—in some cases, something even stronger than that—for local authority housing. That distaste is still there—they want rid of it. I am concerned about what the people of Scotland need and about the housing conditions there. If one takes the figures which have been given to us by Shelter, I believe that 153 houses are still needed. They are not going to be newly-built. People will be denied the kind of house they want out of the existing stock because that housing stock is not only being depleted in quantity but is being depleted in qualitative terms as well.
The noble Lord got into a bit of a fankle last time about tenants, and all the rest of it, in trying to justify his generous discounts. I do not think they can be justified. The simple fact is that it does not matter how long one is going to live; if one is a secure tenant, one is a secure tenant from the day one gets the tenancy. What is a nonsense is that suddenly the Government discover that after two years a person is entitled to a discount of 32 per cent.
There is no person sitting on the other side of this House who would tackle their own business on that basis or offer a discount on that basis. Why do the Government not bring in a Bill to force private landlords to sell their tenanted property in exactly the same way and lay down also the discounts for such a scheme? The noble Lord would never do so because it would not be fair—so why does he do it in respect of local authority housing? The explanation has been so bad that I am afraid that we must resolve this matter in a Division.
6.28 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 58; Not-Contents, 89.

DIVISION NO.1

CONTENTS

Attlee, E.

Boston of Faversham, L.

Aylestone, L.

Bottomley, L.

Beaumont of Whitley, L.

Bruce of Donington, L.

Birk, B.

Caradon, L.

Bishopston, L.

Carmichael of Kelvingrove, L.

Blyton, L.

Collison, L.

1091

David, B. [Teller]

Molloy, L.

Davies of Penrhys, L.

Monson, L.

Ennals, L.

Mulley, L.

Fitt, L.

Nicol, B.

Gaitskell, B.

Phillips, B.

Gallacher, L.

Ponsonby of Shulbrede, L.

Galpern, L.

[Teller]

Gladwyn, L.

Raglan, L.

Glenamara, L.

Rhodes, L.

Gregson, L.

Rochester, L.

Grimond, L.

Ross of Marnock, L.

Hampton, L.

Stallard, L.

Hughes, L.

Stedman, B.

Irving of Dartford, L.

Stoddart of Swindon, L.

Jacques, L.

Stone, L.

Jeger, B.

Taylor, L.

Kagan, L.

Taylor of Blackburn, L.

Kilmarnock, L.

Taylor of Mansfield, L.

Kirkhill, L.

Underhill, L.

Lloyd of Kilgerran, L.

Wallace of Coslany, L.

Lockwood, B.

Wells-Pestell, L.

McCluskey, L.

White, B.

McIntosh of Haringey, L.

Winstanley, L.

Mackie of Benshie, L.

NOT-CONTENTS

Ailsa, M.

Loudoun, C.

Alexander of Tunis, E.

Lucas of Chilworth, L. [Teller]

Avon, E.

Lyell, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Bellwin, L.

Mar, C.

Belstead, L.

Margadale, L.

Brookes, L.

Massereene and Ferrard, V.

Brougham and Vaux, L.

Maude of Stratford-upon-

Bruce-Gardyne, L.

Avon, L.

Caccia, L.

Merrivale, L.

Cairns, E.

Montgomery of Alamein, V.

Carnegy of Lour, B.

Morris, L.

Cathcart, E.

Mottistone, L.

Chelwood, L.

Mountevans, L.

Colwyn, L.

Mowbray and Stourton, L.

Cork and Orrery, E.

Munster, E.

Crathorne, L.

Murton of Lindisfarne, L.

Crawford and Balcarres, E.

Onslow, E.

Cullen of Ashbourne, L.

Orkney, E.

Daventry, V.

Portland, D.

Davidson, V.

Rankeillour, L.

De L'Isle, V.

Renton, L.

Donegall, M.

Ritchie of Dundee, L.

Drumalbyn, L.

Rochdale, V.

Dundee, E.

St. Aldwyn, E.

Elliot of Harwood, B.

St. Davids, V.

Faithfull, B.

Saltoun, Ly.

Fanshawe of Richmond, L.

Sandford, L.

Fortescue, E.

Sandys, L.

Geoffrey-Lloyd, L.

Shannon, E.

Gisborough, L.

Sharples, B.

Glanusk, L.

Skelmersdale, L.

Glasgow, E.

Spens, L.

Glenarthur, L.

Strathcona and Mount Royal,

Gray, L.

L.

Gray of Contin, L.

Strathspey, L.

Hayter, L.

Sudeley, L.

Henley, L.

Suffield, L.

Hunter of Newington, L.

Swinfen, L.

Hylton-Foster, B.

Teynham, L.

Ingrow, L.

Tranmire, L.

Kinloss, Ly.

Trumpington, B.

Lane-Fox, B.

Vaux of Harrowden, L.

Lawrence, L.

Vickers, B.

Long, V. [Teller]

Whitelaw, V.

Lonsdale, E.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 2 [Additional classes of persons providing dwelling-houses tenancy of which counts in determining the qualifying period for right to purchase and calculation of discount]:
6.37 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 2:
Page 2, line 9, at end insert—
("( ) In subsection (1) of section 3A which was added to the 1980 Act by the Tenants' Rights, Etc. (Scotland) Amendment Act 1980—

(a) after the word "are" there shall be inserted the word
"not"; and

(b) the word "and" shall be deleted and the word "but"
inserted.").

The noble Lord said: My Lords, in this amendment I seek to amend the Tenants' Rights, Etc. (Scotland) Amendment Act 1980. This again deals with the vexed question of houses for elderly people. The effect of the amendment may not be immediately apparent, so I shall read it. At present the section concerned reads:
"This section applies to a dwelling-house which has facilities which are substantially different from those of an ordinary dwelling-house and which has been designed or adapted for occupation by an elderly person".
I seek to change that to read:
"This section applies to a dwelling-house which has facilities which are not substantially different from those of an ordinary dwelling-house but which has been designed and adapted for occupation by an elderly person".
The present definition by the Government limits very considerably, to minuscule proportions, the number of houses which are allocated to elderly persons. The target for sheltered housing in Scotland is 50 per 1,000 people; that is to say, 95 per cent. of elderly people are not catered for by sheltered housing. What has happened in Scotland over the years, and much more in recent years, is the realisation that we needed one-apartment ana two-apartment houses to be specially built for elderly people. They are not special houses, because not all elderly people require special houses, but they do require small houses. They might require them in particular areas that are sheltered and quiet. They might require accommo-dation on the ground floor. However, because the houses are not "substantially different" from ordinary dwelling-houses the local authority has got to sell them at the behest of a secure tenant.
The actual facts are—I think the figures have been given—that between 1971 and 1981 there has been an 8 per cent. increase in the number of elderly persons in Scotland: I repeat, 8 per cent. That amounts to about 850,000. The figures have been given by the Minister of State. About half the households in Scotland are in local authority housing. The biggest proportion of the people in that local authority housing are the elderly; that is true. Many of them are not in the most suitable houses. They have brought up their families in these houses, and are still there. I spoke to a couple just last week. The husband will retire in two years' time. They do not want to stay in the house in which they brought up their family of three. They hope that they will get a smaller house, more suitable for elderly people. They will not go into sheltered accommodation, because there is none. Very few local authorities in Scotland have met even the minimum target, and some have none at all.
The Scottish Office has been responsible for this. After the war we decided that we did not want to build one-apartment and two-apartment houses because these houses would become overcrowded in no time. Young people wanted houses, and they would have

1093
families. One of the curses in Scotland was overcrowding. We built bigger houses. Many local authority houses occupied at the moment by elderly people are too big for them. Latterly, in the 1960s and 1970s, we realised that there was a need for housing for single persons, some elderly and others not, and for elderly couples, so we again resorted to one-apartment and two-apartment houses to meet that need. It was a change in population statistics.
The houses that we are talking about are not specially designed. They are just dwelling-houses, but dwelling-houses suitable for elderly people. We do not want to see them being sold off. If they are sold off, two things will happen. Young people may move into them, and before many years pass they will be overcrowded. Secondly, they will be denied to the people who, like the couple I spoke about, are looking forward to moving out of bigger houses. I gather that at the moment in places like Ayr, which I know reasonably well, before we started indiscriminately selling houses it was a matter of three to four years before a person could move into such a house. That is all wrong from the point of view of properly planning for and meeting housing needs. I have therefore made this suggestion: that the exemption from sale should be applied to houses which are not substantially different from ordinary houses but which have been used for elderly people. It is as simple as that. Most people who know something about the population statistics of Scotland and about the people who occupy and are likely to occupy local authority houses, I think, would accept this amendment. I beg to move.
Lord Gray of Contin: My Lords, I am grateful to the noble Lord for moving his amendment so succinctly. We have been round this course once already and have heard most of the arguments. He rightly briefly refreshed our memories with the leading arguments that he has developed in the past. I agree with him regarding the different types of housing. There is sheltered housing in Scotland, and the basic feature of such housing is that it is provided with an alarm and a warden service. Sheltered housing may be built in a complex, although that is not always the case. I agree that there are not nearly enough sheltered housing complexes in Scotland. But sheltered housing has been excluded from the proposals from the outset. It has never been the Government's intention to sell sheltered housing.
In addition, there are many elderly people, who while they do not require an alarm or a warden service, need special housing consideration. Local authorities will have a stock of houses which, while they are not sheltered houses, have been specially built or adapted to meet the needs of these elderly people. Typically, they will be one-apartment or two-apartment houses built on a single level, and will be provided with special features which may include grab rails, special bathroom fittings and sometimes whole house heating. Such housing is known by local authorities as amenity housing. Clearly local authorities need to maintain a stock of such houses sufficient to meet the needs of elderly people in their areas. It is not so clear that such houses should never be sold; for example, the sale of such a house is not going to undermine the viability of
1094
other houses in a group. Essentially, the decision on whether there is a continuing need to retain a particu-lar house is one for the local authority.
In these circumstances, local authorities have a choice under the Scottish legislation. They can agree to a sale but impose a pre-emption condition under Section 4(4) of the 1980 Act, so that the local authority must be given first option to purchase in the event of the re-sale of the house. This was the point raised by the noble Lady, Lady Saltoun, in our earlier Committee discussion. Alternatively, if a local authority does exercise an option to re-purchase, then the price will be decided by the district valuer, as an independent third party, based on the current market value, less some or all of the discount given on the original sale, if the re-purchase takes place within five years.
I turn now to the noble Lord's amendment. I have explained that a local authority which does not wish to go down the route of imposing a buy-back condition may alternatively apply to my right honourable friend for consent to refuse to sell the house, provided it has facilities which are substantially different from those of an ordinary dwelling-house and that it has been designed or adapted for occupation by an elderly person. This description is sufficient to cover amenity housing for elderly people, as local authorities understand the term. The noble Lord's amendment provides that an authority might apply for consent to refuse to sell where a house has features which are not substantially different from those of an ordinary house but which has been designed or adapted for elderly people. With respect, I do not think that this amendment wholly makes sense. If a house has been specially designed or adapted for elderly people, then it does have features which are substantially different from an ordinary house. I have described some of those features; for example, the provision of special bathroom fittings or of grab rails. They may not be expensive to provide, but they are sufficient to distinguish the house as one which is intended for elderly people. This distinction is well understood by local authorities, and I believe that the description in Section 3A, as it stands, is perfectly adequate.
I have spent some time on this amendment because I was genuinely anxious to clear up what I believe may have been a misunderstanding. I sympathise with the view that local authorities should be empowered to retain a stock of dwellings for elderly people. I have explained that the Scottish legislation was in the past more widely drawn in regard to local authorities' powers to retain such houses than the comparable English legislation; indeed, the changes which your Lordships have made to the English Bill will now bring the English legislation exactly into line with what has always been the position in Scotland. The Scottish legislation gives local authorities certain choices when faced with the sale of an elderly person's dwelling. I believe that its provisions are working satisfactorily, and there has been no suggestion from the local authorities themselves that they require to be changed. In the light of this explanation and of the assurances that I have given, I trust that the noble Lords, Lord Ross of Marnock and Lord Carmichael of Kelvingrove, may consider withdrawing their amendment.
6.50 p.m.
Lord Mackie of Benshie: My Lords, may I say that I have been very impressed by the reply that the noble Lord has given in one respect: he has given a clear indication that regarding the smaller houses the one or two-bedroomed houses, if they have fittings in the bathroom, such as grab rails and so on that are meant for elderly people, then they are clearly designated as houses for a special purpose for old people. This is an extremely valuable tip or hint to the local authorities, and I think it is a very valuable concession for the Government to make.
Lord Drumalbyn: My Lords, I entirely agree with the noble Lord opposite, and I think that my noble friend is to be complimented on a very satisfactory answer; but it inevitably does not answer all the questions. In fact, it does not answer the particular examples, as I understand it, that the noble Lord, Lord Ross, gave.
All I can say on that is that you cannot do everything at once. It would probably be desirable to see how this works out and then to extend it to meet the sort of cases that the noble Lord, Lord Ross, had in mind. Going back to the time when I was in the Commons, I remember time and again explaining that often older people with large and fairly highly-rated houses were anxious to get out of them. However, if there was no particular market for those at the time, and if they took the advice that they were given and moved into a small council house, then they would be saddled with the rates as well; or if they moved into a small private house they would be saddled with the rates as well; and this was probably more than they could manage. This problem has always existed there, and as circumstances change we want to deal with them to make certain that people in that position release the larger houses. As the noble Lord, Lord Ross, quite rightly said, obviously the houses that secure tenants will go for will be the best houses from the point of view of purchase.
But there ought to be a means of enabling people who cannot or will not or do not want to buy their houses because they are too big, maybe too costly and too inconvenient to run, to get out of them and to go into appropriate accommodation. We cannot perhaps do that in this Bill at the present time, as it probably adds a complication which, as the legislative programme stands at the present time, might be very difficult to overcome. But I would ask the Government to keep this particular consideration fairly closely under review because it is not one that arises purely out of this Bill, it is a continuing process. It is a human process. Many of your Lordships will have met this position as far as housing is concerned, as I have. When your family have gone away you may find your house is much too big for you, and therefore you move into a smaller one. But it is not so easy for people who have no funds, no savings, to be able to spend to enable them to get into suitable accommodation. They might not be able to furnish accommodation if suitable accommodation such as we have been talking about was let to them by the local authority.
I hope that the Government will continue to study this matter because in my experience it is a need which I identified many years ago, and then it came round to
1096
me and so it goes on in the cycle of life. So that I hope my noble friend will bear that in mind.
Lord Ross of Marnock: My Lords, I think that it is very disappointing that the noble Lord should get up and read the brief that he read, probably not quite so well, the last time we were round. As I say, we have discussed this very often. He is practising. We have another stage to go so he had better put in a little more practice during the recess.
Lord Gray of Contin: My Lords, I am practising.
Lord Ross of Marnock: My Lords, practice does not always make perfect, but he can get fairly near to it. However, would not it be very much easier to ease his mind of all this practice in front of him just by accepting the amendment? He forgets the history of the section that I am amending. It was not in the original Act of 1980. Noble Lords who have come more recently to this place will remember the flap that there was in another place when, on an English Tenants' Rights Bill—I think it was just about the last day of the Session—we passed an amendment which completely altered the attitude of the English authorities to the sale of houses for old people. There was a tremendous furore that went on in another place. Discussions were held between not so much the usual channels as the respective housing and shadow housing Ministers, and they eventually came up with a solution and promised that something would be done in Scotland as well. In the same year as they passed the original Act they passed the Amendment Act. So we had an extension from the exemption for sheltered housing to this one.
When the Minister of State reads this he will see that there is this right to refuse to sell in respect of a dwelling-house which has facilities which are substan-tially different from those of an ordinary house. That is not the kind of house that I propose should be covered. I put in the words: "are not substantially different". But it goes on:
"and which has been designed or adapted for occupation by an elderly person whose special needs require"
it. So there are two hurdles, first, the special facilities substantially different; and, secondly, the design, and the rest of it. I have knocked out one of the hurdles, and by knocking out only one of the hurdles it means that you widen the number of elderly persons' houses which come into this right of refusal to sell to the local authority. The noble Lord the Minister did less than justice to the simple ingenuity of my amendment when I changed the word "and" to "but" so that I kept that second hurdle.
I have not been asking for a great, sweeping change but I think it was one that was in accord with the feelings of this House when we made that original change in the Tenants' Rights Act of 1980 in respect of England and Wales. It was at the last minute, and it was forced by this House and we got this amendment. The time is right now for a move ahead, as the noble Lord, Lord Drumalbyn, rightly says. These things change and our attitudes change. I have noticed the attitude of this House change. I have noticed the attitude change in respect of these over-generous discounts. I thought that the noble Earl, Lord Perth,

1097
might have been putting down an amendment to reduce the 32 per cent. discount to about 15 per cent. or something like that. But he probably could not even justify that and decided to leave the matter alone. I toyed with that idea. There has been a change of mood in this House in respect of that aspect, and I am sorry that the Government have not measured up to what I see as the change. I do not think I will take this amendment to a Division, but I think that we really ought to have it recorded that we shouted against it rather than just withdrawing the amendment.
The Deputy Speaker (Lord Cullen of Ashbourne): Is it your Lordships' pleasure this amendment be withdrawn?
Lord Ross of Marnock: My Lords, no, I want this amendment put to the House.
The Deputy Speaker: The Question is that this amendment be agreed to. As many as are content will say, "Content"; to the contrary, "Not-Content. "I think the Not-Contents have it.
On Question, amendment negatived.
7 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 3:
Page 2, line 34, at end insert—
("(10A) In respect of dwelling-houses purchased by secure tenants who claim discount by virtue of this section, that portion of the discount attributable to such occupancy shall be repaid to the landlord by the Secretary of State".").
The noble Lord said: My Lords, this amendment is prompted by the further generosity of the Government in extending the number of people who can qualify for these over-generous discounts. The Tenants' Rights, Etc. (Scotland) Act gave a list of the people who could count qualifying service, and now in this Bill we have another list of them. The amendment proposes:
Page 2, line 34, at end insert—
("(10A) In respect of dwelling-houses purchased by secure tenants who claim discount by virtue of this section, that portion of the discount attributable to such occupancy shall be repaid to the landlord by the Secretary of State".")
In other words, it is the Secretary of State who is laying down the conditions for sale. It is the Secretary of State who is laying down the discount. We have a new, extended list of people who can count their occupancy towards the aggregation of their discount. The list includes people covered by the Mental Health (Scotland) Act, and there is reference to,
"any hospital provided under corresponding legislation in England and Wales".
The list then refers to,
"the Commissioners of Northern Lighthouses"—
I do not think that any local authority really has a responsibility for that. Then it mentions,
"the Trinity House"—
That has nothing to do with Scotland, anyway; but certainly a local authority in Scotland should not accept the financial liability in respect of that. Following that, the list refers to,
"the Secretary of State, where the dwelling-house was at the material time used for the purposes of Her Majesty's Coastguard".
What has, say, the local authority in Glasgow got to do with that, so that it should provide generous discounts?
The list then refers to,
"the United Kingdom Atomic Energy Authority".
Can it not make its own provision for its own people? Next comes,
"the Secretary of State, where the dwelling-house was at the material time used for the purposes of any function transferred to him under"—
the Defence Act 1964.
If these people are to be given the right to buy and with it generous discount terms, then why not make the Secretary of State, who is giving them the right and who is laying down the generous discounts, repay to the landlords the discounts for which at present they must foot the bill?
Then, under paragraph (u), the Bill states,
"such other person as the Secretary of State may by order prescribe".
Who on earth does he have in mind? This is the second go he has had at this long list. Who else is to come? We do not know. We are never going to see, we are never going to know. But it is certainly not someone for whom the local authority has a responsibility or a liability. If the Governmment are going to be so generous, let them foot the bill. That is the simple reason for the amendment. It is a matter of simple justice that the local authority should not be asked to foot the bill; it should be the Government, who so decree that these people should have the right and that the generous terms, ranging from 32 to 60 per cent. discount, shall be theirs as a result of occupancy.
Another thing worries me about this matter. It is said that if a person has retired from the Coastguard service, having been freed from a type of tied house, he should surely have a right to a local authority house. But if such a person took with him into a local authority house an occupancy period of, say, 20 years, that may take him to a discount of 50 per cent. or over. Remember, the local authority is under no obligation to give such a person a house, and so the likelihood is that the authority will say, "No; we will take someone from our own housing list, who at least has some residential qualification that can justify it".
It may well be that to include these people in the list of those who may carry over their period of occupancy of another type of house into this free-for-all, sale of the century at the new emporium of the noble Lord, Lord Gray, will harm the prospects of these people obtaining a secure tenancy from a local authority, which would be bringing this liability upon itself. It is for those reasons that I think it would be far better to make it quite clear that a local authority would be glad to give these people a house which they want and to grant them a secure tenancy which would carry benefits, if the discounts that would accrue were paid by the Secretary of State. I beg to move.
Lord Mackie of Benshie: My Lords, I must say that this is an absolutely splendid amendment. I wish that I had thought of it myself because it really puts the onus purely on the Secretary of State. If all that we have heard from the noble Lord the Minister is correct—about how it would be so much better for people to own their own houses, how good it would be for the country, how much money it would save, and how much more pride people would have—then he

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could not do better than accept the amendment. Certainly every council would then be the most splendid agents for the Government in trying to sell houses. We could then put the money to really good use by supporting housing associations in all kinds of noble and proper works, and I feel that the Government must look upon this as a most acceptable amendment. It is promoting their policy, it is bringing the councils on to their side, and it is advancing a great social step forward. I must say that I look forward to the noble Lord's reply to this most ingenious and, I believe, excellent amendment.
Lord Drumalbyn: My Lords, before my noble friend replies, I should like to ask who exactly is covered by the provision and what liabilities remain. There is a reference to the Commissioners of Northern Lighthouses. Have they not always had houses for those people they employ? Do they in fact have a duty to provide retirement houses for those people they have employed, and is it not the same with the other cases mentioned? What is the justification for allowing those who, for the purposes of their work, are in tied houses to occupy them indefinitely? This problem exists in so many walks of life, not least, for example, in the Church.
I am doubtful whether it is right to place for ever a liability on those departments and other bodies which have to provide houses for those who are employed by them, simply by allowing the houses to be purchased by the employees sitting there at the present time. But if that is to be done, surely some provision must be made in the form of a payment for a house to be provided for the next person who is to be employed in the particular task in succession to the secure tenant, who is allowed to purchase the house at a large discount.
Lord Gray of Contin: My Lords, I cannot accept this amendment. I have not been persuaded by what the noble Lord, Lord Ross of Marnock, has said. But I do congratulate the noble Lord on the ingenuity of the argument which he has advanced in support of his amendment. I shall try to explain why I cannot accept the amendment, and I hope that I may be able to convince the noble Lord.
The noble Lord, Lord Mackie of Benshie, says that he wishes that he had thought of this amendment himself. By the time that I have finished explaining why I cannot accept the amendment, I hope he will feel relieved that he did not think of it himself. I shall pick up the point made by my noble friend Lord Drumalbyn a little later on, but I say to him at this stage that local authorities are under the same obligation to house ex-tied tenants as any other applicant on their waiting list. Local authorities must, of course, publish their allocation policies. There is no evidence at present that local authorities are reluctant to house people because they have been tenants of other bodies and there are already many on the waiting list.
The noble Lord, Lord Ross of Marnock, was arguing that, since an element of the discount relates to the tenancy record of the purchaser, it is in some way unfair to the local authority to require them to grant
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discount in relation to the purchaser's occupacy of another house. To avoid this the noble Lord suggests that the Secretary of State should be required to reimburse the portion of the discount attributable to such occupancy.
There are a number of objections to this line of reasoning and to the precise terms of the amendment tabled by noble Lords opposite. In the first place, the noble Lord's amendment goes further than I think he really intends. Section 1(5)(b) of the 1980 Act provides that a tenant who is exercising the right to buy is entitled to an additional 1 per cent. discount in excess of the basic amount for each year of occupation of a house or a succession of houses provided by any of the bodies mentioned in Section 1(10). The list in Section 1(10) therefore covers all bodies the occupation of whose houses counts towards discount, including the three "right to buy" landlords—and this relates to the question that was asked by my noble friend Lord Drumalbyn—that is, the district and islands councils, new towns and the Scottish Special Housing Association, and not only non "right-to-buy" landlords such as the Ministry of Defence and the Lighthouse Commissioners. The noble Lord's amendment would therefore require my right honourable friend the Secretary of State to reimburse all discount granted on right to buy sales, since all discount granted under the right to buy is attributable to occupancy of houses provided by bodies mentioned in Section 1(10).
It may be that the noble Lord would regard this as an acceptable outcome, But the Government certainly would not do so. Even with high discounts, the balance of financial advantage to the authority lies firmly with selling rather than with retention of the house for renting. Where an authority retain a house, they continue to have all responsibility for management and maintenance—and, as noble Lords are aware, the costs of housing authorities are not fully covered by rents.
Nor do I think that the more limited reimbursement intended by the noble Lord would be appropriate. The right to buy gives tenants of public housing authorities the right to purchase their homes—homes which have been provided with public funds—and we consider that such a tenant's entitlement to discount should be based on the whole of his previous tenancy of houses provided with public funds, and not simply on his length of tenancy in houses provided by the authority, from which he is purchasing his present house. Thus when my right honourable friend the Secretary of State sells a house which he owns—for example, a prison service house—to the sitting tenant, he grants discount in respect of periods which the tenant has spent as a tenant of another public body, such as a district council. He does not expect—and indeed would not consider it appropriate—the district council to repay to him the discount given in respect of occupation of one of their houses; and he would similarly consider it inappropriate for district councils, new towns and the Scottish Special Housing Association to receive reimbursement of discount given in respect of occupation of a house provided by another public sector body. I hope that, in the light of these comments, the noble Lord will be prepared to withdraw his amendment.
Lord Carmichael of Kelvingrove: My Lords, the noble Lord the Minister has given a long explanation. He did not, however, cover the very important point that was made by my noble friend; namely, the question of whether local authorities would be likely to look favourably upon someone coming from one of the occupations detailed in Clause 2(1), paragraphs (o) to (U). It may very well be, as the Minster suggested earlier, that local authorities do not receive full reimbursement of their expenses, including maintenance, from rents. That is something about which we could argue. But many local authorities will feel that they have a big social responsibility primarily to their own people—to the people living in their particular area.
As was said by my noble friend Lord Ross of Marnock, the likelihood is that local authorities will be very reluctant to give up particularly good houses. No one coming from a house owned by the Commissioners of Northern Lighthouses or the UKAEA will take just any local authority house; they will almost certainly want one of the better houses. They will probably have been used to a fairly good standard in their old tied house, and they will almost certainly want something fairly good when they move to the local authority house. Thinking of the areas that I know, it is unlikely that a local authority would be willing to give such a property to someone who has suddenly come in from another part of the country and to whom they feel no basic obligation to rehouse.
So there is a very strong possibility that, as my noble friend said when moving the amendment, by including this right we may be doing a grave disservice to some people who in other circumstances may have been able to get a local authority house. I believe that many local authorities will feel that they have a social reponsibility to their own waiting list. They will also have councillors who will be watching very carefully. The Minister knows very well, having had experience of this, that there is a great deal of jealousy when it comes to someone getting a highly desirable house. There is a great deal of legitimate anxiety as to whether there was any irregularity, because by the nature of things there are frequently several people on the waiting list who are on the verge of being rehoused and if one gets rehoused before the other additional tension is created in the community, and the local councils are very much aware of this fact. So I can certainly envisage local councillors and councils as a whole shying clear of giving away some of their best stock to people who are coming into the area. I am sorry that the Minister did not deal anything like as fully with that point as I would have liked, because in my view it is extremely important and valid. Perhaps even now he may be able to give us a further explanation?
Lord Gray of Contin: My Lords, with the leave of your Lordships' House, I should like to say that I did touch on that point, but the noble Lord may have missed it because I dealt with it along with a number of other matters. Local authorities are under the same obligation to house ex-tied tenants as any other applicant on their waiting list. Local authorities must publish their allocation policies, and as far as we can see at present there is no particular reluctance on the part of the local authorities to house people because
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they have been tenants of one of these bodies. I can give as an example ex-servicemen or people from the armed forces who have been in Ministry of Defence houses, or indeed people from any of the other groups that we have mentioned. So far as that matter is concerned, the local authorities have an obligation and they seem prepared to live up to it. I am sorry if I had not made that quite clear at the outset. I hope that now the noble Lord might be prepared to withdraw his amendment.
Lord Mackie of Benshie: My Lords, I should like to make one comment. I still fail to understand the logic of giving large discounts to people who have in one way or another been provided with houses by the Government. The Minister has said that in fact the rent does not cover, and never has covered, both the capital and running costs, and therefore the balance of advantage lies in the council selling a house at whatever price. It seems to me to be illogical. I repeat: I cannot understand the logic of allowing large discounts to people who for years have been causing the Government to let houses at a loss.
Lord Ross of Marnock: My Lords, as I understand it, the Minister of State's first objection to my amendment was that it seemed to cover many more people than I had originally thought. I thank him very much for that, because I believe that all the financial responsibility for this should rest with the Secretary of State. It is not the local authorities which asked for this to be done, be it in respect of their own tenants or tenants of other houses elsewhere—whether it be,in England, Ireland or anywhere else—who return to Scotland, get on a housing list and obtain a secure tenancy. They are given the right by the Government. It is the Government who say to the local authority, "You shall sell"; and it is the Government who say to the local authority, "You shall sell at such a discount".
Therefore, if, inadvertently, in my simple-minded way, I said "Section 10" instead of "subsection (10)", or, in my shorthand, I failed to list paragraphs (a) to (u), as I had once thought of doing, and thought I would do very quickly, which was very unwise—I slipped into the business of covering the whole of subsection (10), though I did not really cover the whole of subsection (10) because I used the word "section" when it should have been "subsection"; but suppose I had been able to correct that to "subsection"—I do not think I would have worried very much because I believe that the financial obligations should rest upon the Government. It is they who determine who shall have the right to buy, and it is they who determine just exactly what the discount shall be.
This high-handed way of dealing with someone else's property never ceases to amaze me. The Government think that no one should question it. What right have the Government to sell local authority property, or to order it to be sold? Originally all they provided was a subsidy towards the building, and that subsidy was automatic, on the demand that the local authorities provided at least a quarter.
Then, come 1970, despite the fact that local authorities had borrowed money to pay off the cost of these houses for, in the first instance, over 40 years and later 60 years, the Government reneged on their

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bargain and did not pay the 60-year subsidy. They changed the system altogether. But these houses were built by the local authority and the obligation for payment of debts on them rested on the local authority. We talk of them as local authority houses because they were. By what right have the Government to say to a local authority, "Sell that house; sell it to that man, and sell it at this price"?
That is not democracy as I know it, or as I have been brought up to know it. Therefore, by this amendment, if I strayed into the paths of further widening the responsibilities of the Government for actually meeting the bill of discounts, then I am very glad of it. I have not been convinced by anything that the Minister of State has said. He has not convinced me as to why the local authority should meet commitments in respect of the Northern Lighthouses, Trinity House or anybody else, and this crowd of people about whom we know nothing—
"such other person as the Secretary of State may by order prescribe".
There is no end to this man's generosity. The Boy George is giving money away to tenants, but not his money—local authority money. It is just not good enough. I think that I shall test the opinion of the House.
On Question, amendment negatived.
Clause 4 [Secretary of State's power to authorise refusal to sell certain dwelling-houses required for educational purposes]:
7.26 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 4:
Page 3, line 25, leave out ("Secretary of State") and insert ("sheriff").
The noble Lord said: My Lords, I move Amendment No. 4 and, with it, I should like to speak to Amendments Nos. 5 to 9.
Amendment No. 5: Page 3, line 27, leave out ("Secretary of State") and insert ("sheriff").
Amendment No. 6: Page 3, line 32, leave out ("Secretary of State") and insert ("sheriff").
Amendment No. 7: Page 3, line 45, leave out ("Secretary of State") and insert ("sheriff").
Amendment No. 8: Page 4, line 1, leave out ("Secretary of State") and insert ("sheriff").
Amendment No. 9: Page 4, line 9, leave out ("Secretary of State's") and insert ("sheriff's").
This is a small amendment, and it concerns dwelling-houses of the Western Isles and the island authorities which were originally designated for educational purposes. The Bill says that if a local authority is served notice by a tenant that he wishes to buy the house, the local authority must be able to have exemption from the Secretary of State to refuse to sell the dwelling-house if it has been built for or used for educational purposes.
At an earlier stage of the Bill we suggested a way out of this. To say that the Secretary of State should be the person who has the power to authorise refusal is taking the matter away from the local area. It is taking it to someone in St. Andrew's House, who possibly is not at all familiar with the real situation in the district.
Therefore, in the name of the Secretary of State, the person, in St. Andrew's House—who might have all sorts of other good qualities, but one of them would not be a close intimacy with, responsibility for or accountability to the actual area in which the house is situated—would have the power to make this decision to refuse to sell or, with the present mood of the Government, to agree to sell almost anything that came forward.
The amendment merely seeks to suggest that instead of the Secretary of State (which we all know would be delegated responsibility) it should be the sheriff, who will be familiar with the area, who will deal with people on a daily basis from some parts of that area and who will be able to find out at a different level from the Secretary of State whether or not refusal should be granted. I hope the Minister will realise that this is an advance on the much more cumbersome procedure of deciding that the only person who should have right of refusal should be the Secretary of State. I beg to move.
Lord Mackie of Benshie: My Lords, I should like to support this amendment. My noble friend Lord Grimond, who is extremely familiar with the affairs of the islands and who cannot be here due to a prior engagement, would also like to support it. The amendment would, indeed, short-circuit a great many troubles, and the sheriff with his local knowledge is obviously a sensible person to handle any appeals. The island councils certainly appear to be a little unhappy with an appeal to the Secretary of State, and would much rather it was dealt with by the sheriff. Common sense also appears to support this. I am sure that the Minister must look favourably on this series of amendments.
Lord Gray of Contin: My Lords, the noble Lord has explained that these amendments would provide that an islands council which wishes to refuse a request from, for example, a teacher to buy his house in a remote area should have to apply to the sheriff for permission to refuse to sell rather than to my right honourable friend the Secretary of State, as is proposed in the present Clause 4.
As I explained, when we debated the principle of this in Committee, to leave the islands councils sole judge in their own cause would have no precedent in the 1980 tenants' rights' legislation and the Government do not believe it would be fair to the tenant. What is needed however is an independent, but quick and simple judgment. We think this can best be achieved by settling the matter in dialogue between the local authority concerned and my right honourable friend, as has worked successfully elsewhere in the 1980 legislation. I do not think it is necessary or appropriate to set up an elaborate legal procedure, with all the attendant expense and inevitable delays, as this amendment proposes.
I have explained that the Government accept that there are houses which local authorities provide in connection with employment with the council and which those authorities need to retain. The 1980 tenants' rights' legislation contains a provision that where an employee is required to occupy a particular house as a part of his contract of employment, then that employee does not have the right to buy. This

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gives councils a substantial and adequate safeguard against having to sell houses which they need for operational purposes.
A particular problem arises with teachers' houses in the islands, however, because although the councils say these houses are let in connection with the tenants' employment as a teacher, it is nowhere in the teachers' contracts of employment that they must occupy that particular house. The Government initially took the view that the obvious course was to renegotiate the teachers' contracts of employment, to put them on the same basis as other council employees; under the 1980 legislation the teachers would not then have had the right to buy.
I am not saying that the islands councils would act unfairly in this matter; I accept that they are reasonable bodies. Nevertheless, they would be left in the position of judging their own case and the tenant would not have any voice in the matter. We did not think that this was acceptable from the tenant's point of view. On the other hand, the number of cases arising are likely to be few and it seemed both unnecessary and inappropriate to construct an elaborate and expensive machinery of court procedures and appeals. We wanted therefore to keep whatever procedure we devised as simple, speedy and inexpensive as possible.
I believe that we have gone a very considerable way to meet the islands councils' concerns. I make no bones of the fact that we would have preferred to find some other solution to their problem, which would have avoided the need for this legislation altogether. However, we have accepted their assurance that no other solution was possible. We are prepared to trust the islands councils to make reasonable use of the provisions in Clause 4 and only to submit applications where they have strong reasons for needing to retain a particular house. In return, I hope that the islands councils will trust that my right honourable friend will be sensible and fair in his decision as a result of those cases submitted to him. I think that the principal factor which has influenced us in not going for the sheriff as opposed to the Secretary of State is that we could inadvertently be creating considerable expense to those who are involved, and we believe that the Secretary of State is the appropriate person to do this. A Secretary of State of whatever political colour has regular dealings with the local authorities concerned, and we believe that he is the most suitable person to carry out this function. In view of that explanation, I wonder whether noble Lords opposite would consider withdrawing this group of amendments.
Lord Ross of Marnock: My Lords, I get more than a feeling that the Secretary of State or those acting for him have never really understood the concern of the islands authorities. Time and again I have heard the Minister say that if he departed from this it would leave the islands authorities sole judge in their own cause. He keeps on saying this. The first amendment I produced last week was frankly an amendment supplied to me by the Western Islands authority. It gave the right of appeal to the Lands Tribunal.
As the noble Lord knows, in the original 1980 Act—I have it here; I do not want to weary the House with all it says—where a tenant was aggrieved it was the Lands Tribunal to whom he went, so it was natural
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to put in this right of appeal to a Lands Tribunal. But no, said the noble Lord the Minister, that would be creating a new, elaborate authority and another stage in the proceedings. What does he think is bringing in the Secretary of State? If you leave out the Secretary' of State and replace him by the Lands Tribunal, that is not another stage in the process. That is replacing one with another.
There is another thing the noble Lord said that shows to me that he does not understand what the Bill actually says. He used the phrase, "The tenant will have no voice". Will he look at his own clause? Will he tell me where the tenant has a voice there? I am asking the noble Lord a direct question—and the cavalry had better get ready to produce the answer. What voice has the tenant got in it? None. All it says here is,
"Where an application to purchase a dwelling-house is served on an islands council"—
and so on—
"the landlord may, within one month of service of the application to purchase…instead of serving an offer to sell on the tenant, make an application to the Secretary of State for authority to serve a notice of refusal".
It goes direct to the Secretary of State.
The Secretary of State does not listen to anybody. The voice of the tenant is not there. Am I right? The noble Lord keeps talking about the voice of the tenant. I think it is the voice of the turtle that is being heard in the land, certainly not the voice of the tenant. That has nothing to do with it, because the question goes to the Secretary of State and the Secretary of State makes a decision.
The whole concern of the islands council has been that they should make the decision, not the Secretary of State. It is not an appeal to the Secretary of State. It is the decision of a Secretary of State. He virtually makes the decision, not the islands council; not the education authority; not the housing authority, because in the islands they combine these functions. That is what the islands authority are concerned about.
Who is the Secretary of State to make a decision about this? What does he know about the remote island that may be concerned? Absolutely nothing. The body which should make the decision should be the islands authority. Having made that decision they are prepared to give the right of appeal. The suggestion was to the Lands Tribunal. They are not asking to be judge and jury in their own case. They are prepared to give this right of appeal. It was turned down by the Minister of State on the Committee stage. So far as the islands authority are concerned he certainly did not do justice to their cause.
When the noble Lord said that so far as he could see the islands were quite happy about it, they were not. They had written to the Secretary of State about it. They had discussed it with the local EIS and they had agreed with them. Although the noble Lord said that the teachers were quite happy with the position, the teachers too want the decision to be left to the islands authority. They are prepared—and it was in the original amendment—that it should be to the Lands Tribunal. This is just an alternative I put in of cutting out the Secretary of State and putting in the sheriff, but I am not happy about the sheriff making the decision. I think the decision should be made by the islands

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authority and an appeal against that should go to the aggrieved tenant. But even my amendment does not say that because I adopted the wording of the original Bill in which the voice of the tenant is not heard. The case would not arise if it did not come from the tenant, but the only thing we get from the tenant is an applica-tion to buy: simply that. I do not think that this is satisfactorily concluded yet. We are getting near the end of the discussion on the Bill and before we reach the Question, That the Bill do now pass, we should have another look at this matter. I should be grateful if the Minister would consider this again.
What they are concerned about is not the Secretary of State making the decision—that is quite wrong. The decision should be made by the local authority. They know all the facts. They know all the people, which is sometimes more important than other aspects, and they are satisfied that there ought to be an appeal. The appeal could be to the Lands Tribunal or to the sheriff, but to take something like this to the Secretary of State is nonsense.
I was Secretary of State for eight years and I was constantly astounded by reading in the papers of decisions that I had made that I had never heard of. They were made by a bureaucrat. Sometimes they told me—
Lord Drumalbyn: Or an Under-Secretary, my Lords.
Lord Ross of Marnock: My Lords, I have known times when even Under-Secretaries did not know about it. That can be confirmed by the noble Lord, Lord Drumalbyn, who was an Under-Secretary at the Scottish Office. I remember him and the late Lord Brooke on a certain Town and Country Planning Act that was applied to Scotland because it was purely academic. He will remember the occasion in Committee Room No. 10 on that Bill.
It is nonsense that this kind of thing should go to the Secretary of State. As the Minister says, there will be a dialogue between the islands authority and the Secretary of State. He really must be joking. I know that kind of dialogue which is nonsense. The Secretary of State is not required to make a decision of this kind. It should be made locally. If someone wants to put in an appeal and the islands authority is prepared to have an appeal, the appeal should be to the Lands Tribunal as it already is in the tenants' rights Bill or, failing that, the sheriff. He is on the spot, knows the people and he probably knows their language as well, which I am sure that the Secretary of State will not know. I hope that the Minister will consider this again between now and the next stage of the Bill. It is not all that important or shattering that the Government could change their minds about this and give way. It would be common sense.
I believe that published today there is the report of a committee of inquiry under Sir David Montgomery into the functions of the islands' authorities. I wonder what his attitude would be to this, whether these local authorities can be trusted to make a simple decision such as this and have it subject to appeal, as they are prepared to do. I do not think that the Government are
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being very sensible about this, and the Minister of State is not being fair to himself when he is so obdurate on this matter.
Lord Drumalbyn: My Lords, may I explain briefly how I venture to view this problem. Here we have a right given to purchase a house: a qualified right, qualified by the public need. If in the opinion of the local authority there is a need for the house to remain in public ownership so that it may be occupied by a school teacher, or whatever, that is a qualification on the main right. The problem then becomes the difference between the rights of the individual and the rights of the public, of the community which needs a teacher.
It does not seem to me that that is a matter of no importance at all. The noble Lord, Lord Ross of Marnock, referred to the fact that I was in charge under the Secretary of State for Education in Scotland for a time. At that time we had the business of having to close some schools, but the protection to the schools was great and the Secretary of State always gave his assent to the closure of a school. That generally meant that as Under-Secretary I had to discuss it with him and he agreed or disagreed as the case may be. But that is a real protection for both sides. I do not see any objection to this power of the Secretary of State to agree to a refusal to sell.
Lord Ross of Marnock: My Lords, the noble Lord will of course see this as important; but that protection was taken away by the present Secretary of State two years ago. It is only available now, not to ordinary non-denominational schools, but to Catholic schools. The local authority can close any school it likes and there is no reference or appeal to the Secretary of State. There is only an appeal to the Secretary of State when he proposes to do that for Catholic schools. If they can trust the local authority with that—in fact the decision is final—why not trust them with this simple matter of a house with an appeal to another body, be it the Lands Tribunal or the sheriff?
Lord Drumalbyn: My Lords, I must concede that that is a plausible argument, but the fact remains that there is a difference of interest here to be solved by a third party; why not the Secretary of State?
Lord Ross of Marnock: My Lords, in that case it should have been solved in respect of non-denominational schools, but that has been taken away.
Lord Drumalbyn: My Lords, we ought not to be having a dialogue.
Noble Lords: Hear, hear.
Lord Drumalbyn: My Lords, I think that these are not the same case.
Lord Ross of Marnock: My Lords, one is more important than the other.
On Question, amendment negatived.
[Amendments Nos. 5 to 9 not moved.]
Clause 7 [Right to carry out repairs]:
7.48 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 10:
Page 5, line 4, leave out ("may be regulations") and insert ("shall").
The noble Lord said: My Lords, Amendment No. 10 is a paving amendment which makes way for the remaining amendments on the Marshalled List.
Amendment No. 11: Page 5, line 13, leave out from ("sums") to ("as") in line 15.
Amendment No. 12: Page 5, line 16, at end insert—
(" (1A) A scheme under this section shall be made by regulations contained in a statutory instrument which shall not come into force until approved by both Houses of Parliament.").
Amendment No. 13: Page 5, line 25, after ("for") insert ("the manner of determination of").
Amendment No. 14: Page 5, line 26, leave out from ("scheme") to ("and") in line 27.
This is laying on the Secretary of State a duty to,
"make a scheme entitling a tenant under a secure tenancy, subject to and in accordance with"—
the conditions below. The scheme shall be such that the tenant will have the right of repairs and to recover from the landlord the amount of these repairs.
If the Minister will look at the number of amendments that have been put down he will see that Amendment No. 11 attempts to leave out from the word "sums", the words,
"(not exceeding the costs that would have been incurred by the landlord in carrying out the repairs)".
The amendment seeks to exclude these words because a much clearer definition or explanation is required as to why the costs should not exceed the costs that would have been incurred by the landlord in carrying out the repairs. For instance, who will determine what a fair price would be? The landlord may say that he could have done the repairs much more cheaply and therefore will pay only 50 per cent. of the cost. We do not know how the landlord may have carried the repairs out, in what condition he may have left the property after he had carried out the repairs, who he would have got to carry out the repairs or whether he would have done them himself. Therefore, the idea of merely putting in "not exceeding the costs which would have been incurred by the landlord in carrying out the repairs" is begging a great many questions and makes it difficult for the tenant to know exactly where he stands if he has the repairs carried out himself.
A very important thing is that, as Amendment No. 12 suggests:
"A scheme under this section shall be made by regulations contained in a statutory instrument which shall not come into force until approved by both Houses of Parliament".
This is a very old argument that we frequently have in this House, but it is something that is so important that there should be a positive resolution of the House before the scheme is completed and before the scheme is made. I hope that in the first instance the Minister will deal with this group of amendments particularly explaining where he can help the tenant by defining more closely the costs which would have been incurred by the landlord if he had carried out the repairs, and what possibility the tenant has to question this cost. I beg to move.
Lord Gray of Contin: My Lords, perhaps I could clear up a point with the noble Lord, He referred to Amendments Nos. 10, 11 and 12. Are we discussing these together? Is that acceptable to the noble Lord?
Lord Carmichael of Kelvingrove: My Lords, yes.
Lord Gray of Contin: My Lords, I am grateful to the noble Lord. I did not want to embark upon another amendment if we were not in fact talking about it at the same time. Amendment No. 10 provides that the Secretary of State shall make a scheme giving a secure tenant a right to carry out repairs and to be reimbursed. It seeks to make the requirement to set up a scheme mandatory. The present provision in the Bill is, by contrast, an enabling power, and it quite properly provides therefore that the Secretary of State may make a scheme by regulations. We believe that tenants should have this right, as we made clear in our manifesto at the general election last June, and we are at present consulting on the details of how such a scheme would operate. But until we have worked out the details of the scheme, it seems right that the power should be an enabling one.
Amendment No. 12 provides that regulations setting up a right-to-repair scheme would be subject to affirmative resolution rather than negative resolution, as at present proposed in the Bill. We discussed this matter in Committee also, and since then I have considered it further; and I have listened very carefully to the arguments which the noble Lord has put forward today. I accept that the regulations, when we bring them forward, should be subject to scrutiny and debate, but I suggest to the House that this is best done before the regulations are formally laid before your Lordships' House so that the Government have an opportunity to listen to the comments of interested parties and to amend the draft regulations, if this seems desirable, before they are brought before your Lordships. I would remind your Lordships that when the regulations are formally laid, whether the procedure is negative or affirmative, there is no further opportunity to amend the proposals; they must be either approved or rejected in their entirety.
I have to say that, on careful reflection, I still do not believe that it would be appropriate to make the regulations setting up the right to repair subject to affirmative resolution. Affirmative resolution procedure is, by convention, restricted to cases where the powers are concerned with the alteration or definition of the extent of a statute, or with the levying, application or management of public money. None of this holds in the present case. Of course, I appreciate that this is only a convention, and obviously there can be exceptions. Negative resolution procedure is, however, the normal procedure for regulations of the present type. It means that the regulations will be laid formally and there will be a debate if, but only if, your Lordships pray against the regulations. Rather than having an automatic debate, therefore, it is a decision for your Lordships as to whether or not your Lordships' House debates the regulations. That is the only difference between the procedures. Under neither of the procedures can the regulations be amended.
With regard to Amendment No. 11, I appreciate that the purpose of this amendment is probing, and I hope to be able to answer the noble Lord fairly briefly.

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We have considered the possibility of amending the right-to-repair clause in the way suggested by the noble Lord; but we have concluded, in the light of the responses which we have received to our consultation paper, and in the light of the discussions which our officials have had with the Convention of Scottish Local Authorities, that it would not be appropriate to amend the clause in the way suggested. The consultation paper which we issued last year setting out our proposals for the scheme suggests that where a landlord fails to respond within the prescribed time limit to a tenant's application to carry out a repair, the tenant will be entitled to carry out the repair and to recover his own costs in full, provided that they fall within the cost limits of the scheme. The cost limits suggested in the consultation paper were a minimum of £20 and a maximum of £200 subject to a ceiling of 100 per cent. of what it would have cost the landlord to carry out the repair himself.
I am aware that my right honourable friend the Secretary of State for the Environment has brought forward an amendment to the English Bill similar to the present amendment which would enable a tenant, where a landlord fails to respond to his application, to go ahead with the repair and to claim his costs in full, provided that it otherwise comes within the scope of the scheme—even if these costs are in excess of what it would have cost the landlord to do the repair himself. Following consultations with the local authorities and others, we are proposing a slightly different approach in Scotland. We are suggesting that in similar circumstances a Scottish tenant should be able to claim his costs in full provided that they do not exceed what the landlord considers he would have had to spend in carrying out the repair himself. In practice, I expect the number of cases where a landlord totally fails to respond to an application and the tenant goes ahead on his own initiative to be very few. In view of the explanation which I have given, I hope that the noble Lord might be prepared to withdraw the amendment.
Lord Ross of Marnock: My Lords, my noble friend has been very generous in trying to take all these matters together. I would have been happier if we had talked first of all simply about the scheme. We keep hearing about the scheme that we will be discussing with the local authorities. One group of people who do not know anything about the scheme are the legislators. Is it not about time that we knew about the scheme? We occasionally get little bits of information about what would be the likely minimum and what the maximum; but we simply have not had a clear explanation of what the scheme is or is likely to be, or the stage of negotiation. This is what I should like to have absolutely clear.
I have seen the original paper, of course, but I have no idea of what is going to happen. It is very complicated. Noble Lords have never heard the Government arguing as to what it means or what it does not mean. Then I think of the possibilities for delay in this; of getting an application form. Who is going to provide the application form? Is it the Government? Is it the local authority? Have they to print the application forms and make them available? You will remember that there have been difficulties
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previously about application forms with unwilling local authorities, or with what the Government have said were unwilling authorities. Are the forms to be available in the post office, so that tenants will be able to use the facilities there in respect of them? I am sure that the Minister of State must be conversant with all that has gone on. He should be able to tell us this simple matter.
Then, of course, it goes to the local authority, who get replies within 21 days. Then there is another 21 days—I think it is 21—after he submits his bill. How many people in local authority houses are going to wait and do the work themselves, or have it done for them? How many people expect that the person they get to do it will wait for about 42 days at least before they can be paid?—because that is the time it will take before the money is reimbursed by the local authority, according to this scheme that we have not yet seen. I hope the noble Lord the Minister appreciates that we deserve to be treated with a certain measure of concern, and that we want to know what is happening.
On Second Reading I expressed my concern about this, and said I thought this will be a bureaucratic sort of scheme which people will not understand, and only the most persistent people and people with some money will be able to take advantage of it. We will not get what we all want, which is a far better scheme for providing necessary repairs for the local authority tenant. It is no good the noble Lord the Minister saying, "We will see". The first thing he says is that this was in their manifesto, but until we get the scheme it is only an enabling power. Why does not the noble Lord the Minister give us credit for believing what they want to do? Why does he not do with the new right of repair what was done with tenants' rights in respect of the right to buy?
Look at page 1—the word "shall"; look at page 2—the word "shall": the word "shall" goes right through. The Government are going to do it; now they only "may" do it. We have heard a new justification today. They cannot say "shall do it" until such time as they have finished all their consultations. They are going to do it, so why do they not change the wording to "shall"? Why does not the noble Lord the Minister come clean and between now and the next stage of the Bill give us a report in writing telling us what details are agreed with the local authorities, and the stage this scheme is likely to be at? What is the minimum? Is it between £20 and £200?
There are a lot of people in local authority houses who cannot afford to do repairs themselves for £20 but who, unless they do these repairs themselves, or get them done, are not going to get them done for a long, long time, so there might be objection to that. What does it cost to put in a pane of glass?—not far short of £20. I think many noble Lords here will have had experience of the kind of damage that is done if jobs like this are neglected. What about the justifiable excuses of the local authorities in the scheme for not doing the repairs? One excuse is, "It is not worth doing". Another is, "It does not need to be done" or, "The kind of repair suggested is not right". Also, "Well, we are going to do it later ourselves, and it would interfere with the priorities of planning of repairs over an area". We have heard nothing about that in this House.

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I am beginning to wonder if the word "may" is there because we may never have a scheme, because the Government will find it so complicated, so bureaucratic, that it is not worth while introducing it. This is what I want to discuss in respect of this scheme, and why I insist that we have the word "shall", because on this side of the House we want an effective repair scheme. If the tenant has to do it himself he will be reimbursed to 100 per cent. of his cost. If the local authority fairly and justly say, "Well, the job is done; the job had to be done and the job has been well done", it is unfair to leave it to the point where they come along and say, "Ah, but we could have done it cheaper".
The fact of the matter is that the opportunity is there to do it within 21 days, and they did not do it. It is quite wrong unfairly to take money from the tenant which he has expended in doing a particular job. There are all sorts of things worthy of discussion here. We have not had the opportunity of discussing them. Scottish Ministers get away with murder on that Bench. Look at the Bill we started the other night at half past eight, and look at us again tonight. Look at the hordes of English noble Lords around here—and an Irishman—
A noble Lord: And a Sassenach.
Lord Ross of Marnock:—saying, "I wish these Scots would hurry up". I wish this lot would hurry up and tell us what we want to know. I am very surprised at the noble Baroness, Lady Elliot today. There she is, sitting in patience. I cannot believe it; she has not said a word all day. Let it be so recorded. Scottish business, and she has not said a word. It will be different, I expect, on Thursday, when we come to even more important matters.
This is the point the Government should take us a little into their confidence as to where they are in relation to this particular scheme. I have covered the other point about the actual sum. There is no reason why there should not be special recompense for the tenant. I am glad to think that because the English have made some amendments, the Scots are thinking of making some amendments, too, but not exactly the same ones, although they will probably print it in Gaelic just to make it different.
Because time is pressing, they have been fortunate in that we have not been able to go into the whole question of tenants' rights as regards repairs. As a House we have not done justice to the importance of the subject. I do not think the needs of the tenants in respect of essential repairs will properly be met; and the fault will be ours because we did not take up the cause of the tenant.
In so far as statutory instruments are concerned. I have been dealing with such things for well nigh 40 years. The same thing applies to the noble Lord, Lord Drumalbyn. It is no good for him to come along and tell us it is only related to so-and-so, that we get these affirmative motions. It is not exactly true. I will find him two or three exceptions by tomorrow morning if he wishes.
The noble Lord said something about a draft that would be fully discussed. That is an entirely different
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procedure, but that is not the procedure which is in the Bill. Does the noble Lord the Minister really mean that? Does he really mean that there is going to be a procedure for producing a draft and laying it before Parliament? Did he mean that, or was it just a slip of the tongue? Did he ally two lines of his brief and get it wrong? Because it came along very strong on the basis that it will be negative procedure, which means we will never see it again in this House. It will be dealt with in another place, and once dealt with there, it will not be dealt with here. This is important.
The noble Lord the Minister is asking us to say, "Well, it is just enabling; we are busy with the local authorities. We have not had all the discussions yet, but trust us and maybe we will produce a scheme. If we do, you will never see it again to be able properly to discuss it". This is what this noble House will deserve if we are prepared to accept this kind of thing from this kind of Minister. No one will take us seriously.
I hope that the Government will think again about this and about this series of amendments. There is one other amendment which has not been mentioned. May I mention it, please. I hope our noble Deputy Speaker will not rule me out of order. I am referring to the last two. These are purely drafting, by the way. I can tell the noble Lord the Minister it is worthwhile accepting these because they make more sense than what has been provided in this particular clause.
Lord Gray of Contin: My Lords, I answered the noble Lord during the Committee stage on almost all the points he has raised again during the Report stage. He knows as well as I do what the procedure is. I explained it fully at that time, but just to refresh his memory I shall tell him that consultations are taking place and have been taking place. In due course drafting regulations will be compiled after account has been taken of the representations which are being made to the Government, rightly, by the various bodies which are being consulted.
At that time the noble Lord will certainly have the opportunity of seeing the draft regulations. There is no question of those draft regulations being the regulations which are actually submitted. Of course not: the draft regulations may be amended by the Government in due course after they have been commented upon by the various parties who will be consulted about them. Therefore, when we come to the question of negative resolution the noble Lord has suggested that, knowing negative resolutions, this House will never see them. It is entirely in the hands of this House whether your Lordships discuss a negative resolution or not; because, as the noble Lord knows only too well, if the negative resolution is prayed against there is the opportunity for it to be debated. So it really is hardly fair of the noble Lord to say that would be the end of it and this House would never see it again. It is entirely up to this House to decide whether it wants to see a negative resolution again or not.
But the consultation over the draft regulations is going on very well indeed, and in due course the noble Lord will have the opportunity to see the draft regulations when they are compiled.
Lord Ross of Marnock: My Lords, may we have the assurance that these regulations are going to be produced and printed as draft regulations? Is that so?
Lord Gray of Contin: My Lords, the noble Lord is very crafty. He is always trying to get me to put a rope round my neck, and I am not going to do that for the noble Lord.
Lord Ross of Marnock: My Lords, I do not want to put a rope round his neck.
Lord Gray of Contin: My Lords, the noble Lord will have the opportunity of seeing the draft regulations; that assurance I can give him. The last two amendments which the noble Lord mentioned are those which he rightly says are drafting amendments. I have looked at those amendments and I am sorry to tell the noble Lord that I cannot accept them. We had thought that a drafting amendment to the Bill should be reasonably clear and easy to undertand—much more so than in the case of many other Bills we have to deal with—very complex Bills indeed.
Certainly my noble friend Lord Selkirk praised the drafting of the Bill during Second Reading when he indicated that he considered the Bill to be infinitely better drafted than the corresponding English Bill and suggested that one could—here I quote:
"read it very nearly with pleasure".
That is significant. We are always ready to listen to suggestions, and particularly those from the noble Lord, Lord Ross of Marnock, who has such a wealth of experience so far as drafting legislation is concerned.
I am sure that not many of us here would like to have been a draftsman in the Scottish Office while the noble Lord was Secretary of State. I am sure it must have been quite a frightful experience to have the noble Lord, as Secretary of State, scrutinising every piece of legislation which one prepared. But on this occasion, with respect, I do not believe that the noble Lord's amendments would be an improvement. Although the noble Lord did not actually move his amendments, if he does move them, I regret that I shall not be able to accept them.
Lord Carmichael of Kelvingrove: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 11, 12, 13 and 14 not moved.]

London Regional Transport Bill
Brought from the Commons; read a first time, and to be printed.

Recreational Gardening Bill [H.L.]
8.15 p.m.
Report received.
Lord Gisborough Lord Gisborough moved Amendment No. 1:
After Clause 1, insert the following new clause:
("Duties of council.

.—(1) The council shall lay down rules and standards to protect visual amenity, hygiene and such other matters as they consider appropriate.

(2) The council shall keep a register of allotment holders and shall ensure adequate control of the transfer of allotments from one holder to his successor.").

The noble Lord said: My Lords, I put this amendment down for clarification because, as many of us know, many of the allotments around the country—and allotments are exactly the same as recreational gardens so far as I can see—are frequently covered with a mass of multi-coloured huts, higgledy-piggledy. Some are made of wood and some of corrugated iron, and often pigs are kept in some of them. While of course there are many recreational gardens which are extremely well run, there are many old ones which have got into a very rough state. I know of one in particular and there are many others I could think of.
I wonder whether there is sufficient control or incentive now on the part of the council to ensure that these allotments which do not rise to a good amenity scene should be got into a better state. I think that councils should ensure that their allotments are visually acceptable and hygienic, so that the pigs, poultry and so on do not attract rats and are not a menace. I am not aware that there is adequate cover for this aspect already but, if there is, it is not adequately enforced.
The second paragraph of the amendment relates to a register of allotments. I understand this has been widely discussed, but the real point of this amendment—and perhaps this can be answered—is adequate control. What happens in fact, whether one likes it or not, is that when an allotment-holder decides to give up his allotment as often as not he does not tell anybody but perhaps simply tells a friend that he can have it now, and perhaps a year later when the vegetables have been grown and the new man perhaps has even paid for the previous man's garage or lock-up, or whatever it may be, the authority will discover what has happened and it is too late by then for them to take it back. The authority probably could take it back but the pressure on allowing the new man to keep the allotment is very strong indeed. Therefore, I would hope that perhaps these two points could be explained. I beg to move.
Lord Wallace of Coslany: My Lords, first, I should like to welcome the sudden interest of the noble Lord, Lord Gisborough, in this Bill because, if memory serves me right, he did not take part in the Second Reading or at the Committee stage. However, I believe that the noble Lord is a private landlord holding allotments, and therefore, with due respect, he may have overlooked the fact that he should of course have declared an interest.
Lord Gisborough: My Lords, I am really referring to council allotments. It is true that I have an interest in my own allotments, and I have my own rules, but we are talking about council allotments.
Lord Wallace of Coslany: Yes, my Lords. I gathered that from the speech which the noble Lord made on 17th March 1976, to which I shall refer. The clause is unnecessary, because Section 28 of the Small Holdings and Allotments Act 1908 already enables allotment authorities to make such rules as appear to be necessary or proper for regulating the letting of allotments, for preventing any undue preference in such letting, and generally for carrying the provisions of the Allotments Acts into effect. In particular, the rules may define the persons eligible to be tenants of the allotments, the notices to be given for their letting, the size of allotments, the conditions under which they are to be cultivated and the rent to be paid.
In addition, the rules must make provision for reasonable notice to be given to the tenant of the determination of his tenancy. Such rules can, of course, provide that tenants shall not rent more than one or two plots, shall not keep pigs on them, and shall neither carry out car repairs nor undertake other extraneous activities on their plots. Indeed, it is quite usual for there to be a general prohibition on the use of an allotment garden for the purposes of any trade or business.
It so happens, as I said on Second Reading, that my daughter has taken on an allotment plot in the borough of Bexley for which she is paying £13·20 a year. On the back of the conditions of the contract of agreement, which are extremely detailed and have a large amount of print, there is even a further covering note about the use of bonfires. So that there is absolute control. In addition to that, I can assure the noble Lord that allotment holders who are keen will soon deal with anybody who kicks over the traces and breaks the rules.
Under Section 30(2) of the 1908 Act, failure to observe the rules at any time not less than three months after the commencement of the tenancy will render the tenant liable to forfeit his plot and will entitle the allotments authority to repossess the allotment after serving one month's notice to quit on their defaulting tenant. For many years up to 1980, the Department of the Environment published model rules as to allotment gardens, which contained rules on all the matters of concern to the noble Lord, Lord Gisborough; and, if the present Bill is passed, paragraph 1 of Schedule 1 will provide for this excellent practice to be resumed.
I shall come back to the 17th March 1976 debate, because the noble Lord ruled out car repairs and pigs, but did not rule out pigeons, and pigeons are a menace to the average allotment holder. Last year I lost the whole of my spring greens owing to being away for one week. The noble Lord's pigeons must have come down and gobbled up the lot. So I am very anti-pigeon.
The clause proposed by the noble Lord, Lord Gisborough, will also require allotment authorities to keep a register of allotment holders. However, under Section 29 of the 1908 Act allotment authorities are given the discretionary power to appoint allotment managers to administer the allotments on their behalf. It is now becoming increasingly the practice for allotment authorities to devolve the management of allotment gardens to a committee formed from among the plot holders themselves. An advantage of devolved management is that there is a reduction of local
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authority administrative costs; for example, in collecting rents and in site discipline. It also serves to stimulate the voluntary site committees and to encourage and sustain a community spirit among the plot holders, which helps the recreational and social side of allotment life. In those circumstances—and I have been quite reasonable to the noble Lord, even about his pigeons—I hope that he will withdraw this amendment.
Lord Gisborough: My Lords, I thank the noble Lord for that explanation and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Accounts and application of receipts]:
8.25 p.m.
Lord Gisborough Lord Gisborough moved Amendment No. 2:
Leave out Clause 2 and insert—
("Rents
. The council shall charge such rents for allotments as is necessary to ensure that there is no charge on the general rate and that the land shows a commercial return.")
The noble Lord said: My Lords, this is another amendment which cuts right across the noble Lord's Bill. It seems to me that, where allotments occupy land, that land should pay a proper return to the council—probably, at least, an agricultural return—and that, in addition, the costs of rent collection by the council should be covered by the rents. I do not see why the situation should be allowed to exist where ratepayers subsidise gardeners in their hobby. Many hobbies are subsidised—for example, sports fields—but, unlike sports, recreational gardeners can grow their own vegetables and get value out of their gardens, and it seems to me as if these gardens will continue to be subsidised by the ratepayer. There is much to be said for old-age pensioners getting cheaper rents and so on, and there is nothing to stop that, but I believe that overall these gardens should stand on their own feet financially.
There is another question which I do not think is covered in the Bill and perhaps I might have an answer to it. Very often, much to the disgust of the gardeners, allotments which are just outside the towns are sold for building. Over and over again, allotment land is sold for high prices and allotment holders are moved off somewhere else. The idea that this money should largely be put back into gardens is nonsense, and while the gardeners should certainly be re-sited in cases of this sort, they should not have more than they had before the moving. My Lords, I beg to move.
Lord Wallace of Coslany: My Lords, I am sorry but I may have to be a little longer than I took on Amendment No. 1. This clause, if added to the Bill, will replace the present Clause 2 with a provision to the effect that the hiring of allotments shall be regarded as a commercial enterprise and not as a recreation. This clause is totally contrary to the purpose and scope of the Recreational Gardening Bill, which, according to its Long Title, is,
"to confirm that allotment gardening has the status of a recreation".
One of the purposes of the clause is to implement the outstanding recommendations of the late Professor Thorpe. That is what Clause 4 of the Bill seeks to do.

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However—and this is quite important—I am not proposing in the Bill to amend Section 11 of the Allotments Act 1950, which provides that the loss that an allotments authority may incur shall be no more than the product of a 0.8p rate.
In the case of a small parish, there is a disability here. This can be quite a small sum and this provision prevents many small parishes from purchasing allotments in the first place. On the other hand, a large borough will never need to spend the product of a 0.8p rate on allotments. This is because, as the noble Lord, Lord Gisborough, himself said in our debate on 17th March 1976, at column 248 of the Official Report:
"For many years, allotment holders have suffered from being the first to have their land taken for development, being on the edge of towns. This has caused inconvenience bordering on distress".
The sale of allotment land as building land has meant that most of the larger authorities have been able to make a tidy profit out of their allotments, as the money spent on replacement plots has been very small in comparison with the sale proceeds from the former allotment land. That is why Clause 2, as presently worded, seeks to introduce an independent check that in fact authorities have provided sufficient replace-ment plots which are in a suitable state for spade cultivation to fulfil their duties under the Allotments Acts. That is all that Clause 2 seeks to do. If there is any slight disagreement about the wording, I am quite happy to leave it to another place to sort it out.
Section 10 of the Allotments Act 1950 enables authorities to charge a lower rent if they are satisfied that special circumstances exist which render it proper for a lower rent to be charged. A number of authorities make reductions for old-age pensioners. Some provide specially adapted plots on favourable terms for disabled persons. That should be greatly encouraged. And we must not forget that special powers were given by the 1931 Act to assist unemployed persons, of whom there are, unfortunately, a large number. I doubt whether many noble Lords would argue that disabled persons and pensioners do not deserve concessionary allotment rents.
However, leaving aside the question of concessionary rents, I doubt whether the cultivation of an allotment garden can ever show a commercial return. I would refer the noble Lord, Lord Gisborough, to an article in The Garden, which is the Journal of the Royal Horticultural Society, Volume 108, Part 12, December 1983, pages 485 to 490, where Dr. Malcolm Sargent, Lecturer in Horticulture Economics at the University of Bath, has tried to quantify the productive potential of an allotment garden. He concludes that if gardening for food production is regarded as a leisure-time activity, only then does it provide a worthwhile return on outlay. If, however, allotment gardening is compared directly with modern commercial horticulture, it probably cannot compete. Professor Thorpe was satisfied in paragraph 366 of his report that the net value of a 10-rod plot to the average allotment holder was £20 per annum—it is not much more now, although costs have gone up—and in many cases lower still. Even at 1969 prices this is a very poor return, bearing in mind another statement from Professor Thorpe's report in paragraph 380 that the average allotment holder with
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a 10-rod plot estimates that he spends between 400 and 500 hours per annum upon it. I therefore conclude that from the standpoint of the plot holder there can be no commercial return and that accordingly allotment gardening can be regarded only as a recreational activity.
If the noble Lord, Lord Gisborough, takes into account the 400 to 500 hours that the average plot holder works—and at times it is hard, though enjoyable and healthy work—for a commercial return the cost of that labour has got to be included. By the time he has bought his fertilisers and seeds and carried out all the work and the many other tasks, although he will get out of it a certain amount of satisfaction and some healthy vegetables for his family he will find that it is very uneconomic.
The noble Lord, Lord Gisborough, has tried to argue that low rents for allotments have encouraged the inappropriate use of allotment land and discour-aged the provision of new land. There is a contradiction here, as, if prospective allotment tenants are attracted by low rents, they would bring to the attention of their councils those plots which were being improperly used and would press for them to be let as recreational gardens. If the truth be known, it is that where rents are too high inappropriate uses of land become much more profitable than the traditional use of land for recreational gardening. It appears to me, therefore, that we should leave the allotment authorities to determine their own rent levels in the light of their own local circumstances. I do not find the noble Lord's new clause very helpful in that regard.
I do not intend to take up the time of the House; but a little while ago there was a case in the High Court in which judgment was given for the plot holders. I believe that it was the Reigate Borough Council which was involved, but I shall correct this statement if I am wrong. They increased the rent from £3 for a 10-rod plot to £10. My daughter was paying £13.20. The plot holders, thinking that their liberties were being dealt with unfairly, looked at the cost of tennis courts, bowling greens, swimming pools and other recreational activities and came to the conclusion that they were being dealt with unfairly, because the costs of those recreational activities had not increased by any means so much as the cost of allotment land. The High Court judge gave judgment in favour of the plot holders and awarded costs to them. Reigate borough council had to reconsider its position.
Therefore I appeal to the noble Lord to take into account the circumstances that I have explained. I am only concerned that if plot holders are displaced along the lines he mentioned there should be an adequate check that they are given reasonable justice by having land suitable for cultivation given to them in its place.
Lord Skelmersdale: My Lords, I am beginning to wonder whether this is a private fight or whether anybody can join in. I do not know whether the noble Lord, Lord Wallace of Coslany, was in the Chamber last night when we discussed the Rates Bill, but my noble friend most certainly was. He spoke for the Government. However, as the noble Lord, Lord Wallace of Coslany, has said—and if he was not in the Chamber last night I would that he had been, because we might have been in the same Lobby—my noble

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friend must realise that it is entirely up to local authorities to dispose of their income in any way that seems to them to be appropriate. That has been the position during the past 50 years and I very much hope it will be the position for the next 50 years.
My noble friend seeks to introduce through this amendment a change in the way in which local authorities are required to charge rents for allotments, to the extent that there is no charge on the general rate and the land shows a commercial return. It is the case that at present—I confirm exactly what the noble Lord, Lord Wallace of Coslany, has just said—authorities are required by Section 10(1) of the Allotments Act 1950 to let their allotments at such rents as tenants may be reasonably expected to pay, whether this is a commercial return or not, and where the authority is satisfied that there are special circumstances they may charge a lower rent. Thus, an old-age pensioner or an unemployed or disabled person can make representations that his circumstances are such as to justify a reduction in his allotment rent.
Apart from income by way of rent, an authority must finance its allotments undertakings from the general rate fund in the usual way, subject to the limitation imposed by Section 11(1) of the 1950 Act—that is, that it shall not incur a charge on the general rate greater than that produced by a rate of 0.8p in the pound, which, again I might remind my noble friend, is somewhat less than the emergency measures proposed by such things as relief from flooding or snow dangers, as we have had in my part of the country (and, I know, in his) over the past few winters. While we would expect rents to be in line with those charged for other recreational facilities generally, all this is very much a matter for individual authorities to decide, particularly in view of the circumstances where a lower rent might be applicable.
For these reasons, although I did not speak on the last amendment—because I concur absolutely with the noble Lord, Lord Wallace of Coslany, whose Bill, at the end of the day, this is—I could not possibly countenance the statutory obligations which the amendment seeks to impose, whether or not my view is adhered to, which is that the statutory obligations which the amendment seeks to impose are not relevant to the situation which we are discussing this evening.
Lord Beaumont of Whitley: My Lords, I am surprised that the noble Lord the Minister, who was undoubtedly in the House last night during the debate and presumably voted with his Government in the Division, is now rallying to the defence of the local authorities, to do what they like with their own money.
Lord Skelmersdale: My Lords, if the noble Lord will give way, it is the other way around. The noble Lord, Lord Wallace, in his speech just now, rallied to the cause of the Government, rather than me rallying to the cause of the Opposition.
Lord Beaumont of Whitley: My Lords, I do not think that is entirely so. Two separate questions arise out of this amendment. One concerns whether the councils should have a definite duty to charge a particular kind of rent. Here, I think it is absolutely
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right that they should have as much freedom as possible in this area. The second question concerns leaving out Clause 2, which in fact puts certain obligations on the local councils. They seem to me to be absolutely the right kind of obligations because they are obligations about preserving the capital value of the assets which are used by the allotment holders. I hope that the noble Lord, Lord Gisborough, will withdraw his amendment because I believe that both sides probably feel that the Bill is better left unamended although I realise the thoroughly admirable motives which the noble Lord has in trying to ensure that ratepayers are not in any way done down.
Lord Gisborough: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Publication of statistics about allotment gardens]:
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendments Nos. 3 to 6:
Page 1, line 23, leave out ("waiting lists") and insert ("registers").
Page 2, line 3, after (" 1976") insert ("(recreational facilities)").
line 7, after ("1972") insert ("(disability of members of authorities for voting on account of interest in contracts, etc.)").
line 10, after ("council") insert ("or").
The noble Lord said: My Lords, it may be for the convenience of the House, as these are purely technical drafting amendments relating to previous clauses and amendments carried in Committee, that I move Amendments Nos. 3, 4, 5 and 6 en bloc. I beg to move.
On Question, amendments agreed to.

Drug Costs
8.43 p.m.
Lord Molloy Lord Molloy rose to ask Her Majesty's Government whether steps will be taken to improve the relationship between the Department of Health and Social Security and the drug companies in relation to drug costs.
The noble Lord said: My Lords, I should first like to pay tribute—with which I am sure the entire House will agree—to all the scientists and researchers who have done so much for humanity, particularly since the last war, and starting possibly with penicillin. We all recognise what a wonderful thing that was. This trend has continued ever since to make its massive contribution to the easing of pain and, in some instances, to banishing disease from all mankind. But, regrettably, when the ogre of greed and cheating enters any form of profession, it leaves an odious mark on that particular element. All I want to do this evening is to outline that which I believe has to be eliminated in respect of the relationship between drug companies and Great Britain's National Health Service.
I will deal mainly with costs, advertising and, to some extent, the closed negotiations which go on between people representing the drug companies and the DHSS in a spirit which is totally alien to the whole concept of what I would call the British way and purpose. In 1982 the Public Accounts Committee published a report which was concerned primarily

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with the dispensing of drugs in the National Health Service. It was perfectly obvious then, and it still is perfectly obvious to anyone who has read that report, that all was not well in this sector of the National Health Service and in its relationship with the pharmaceutical societies. It was true when the committee submitted its report, and it is still true today, that the cost of drugs is linked to advertising, and this is linked to excess profits; and careless advertising is linked to real dangers to health and unnecessary deaths. This is a serious situation. We in this House cannot adopt the appalling attitude that we may only arrive at the frontiers of understanding when our own soul is stricken with grief; when someone close to us has died because an advertisement was not clearly read by a general practitioner, or by anyone else for that matter. No matter who is to blame, the result is that we have erred and someone has died.
I should like to take this opportunity to exonerate general practioners from many of the criticisms which have been levelled against them. It seems to me that, whatever goes wrong with the NHS, someone will find a way of putting the blame straight onto the ordinary GP. If anyone within the DHSS is totally innocent of the whole set-up in this particular respect, it is the general practitioner.
In November of last year the Secretary of State reported that he had reached agreement with the Association of British Pharmaceutical Industries that National Health Service medicines be reduced by 2.5 per cent. and prices frozen until 1st April 1984—just a fortnight ago. That was to save £25 million. I should like the Minister to tell the House tonight whether or not that saving has been achieved.
Drugs sales promotion alone costs no less than £150 million. It was officially regarded to stand at £130 million in 1981. Who are these pharmaceutical and drug companies tempting with their advertisements? Who can it be? This question has to be answered. We require an answer from the Minister—if not tonight, then at some later stage, when an opportunity is provided.
Another obnoxious practice, which was extant then and which is extant today, is a sweet little racket known as the export of drugs to Europe and their subsequent re-importation into the United Kingdom. None of the excuses which have been submitted holds any water whatsoever. It is because certain people are on the make; and when someone is desperately ill with a cancer or a cataract they think to themselves, "If we could only get another couple of hundred thousand people suffering from cancer, look at the pile of money we could make". That is the principle behind this appalling attitude.
Overcharging is causing great concern to many people in our country. The number of newspaper reports and specialist reports I have read—as well as reports in the newspapers of France, Germany and Italy—are indicative of the fact that overcharging exists on a very large scale, and we therefore have to take some cognisance of it.
In addition to the sending of British drugs to Europe and buying them back at a higher price, there is also the incredible variation in price for the same drug.
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What has come to be known in the trade as the "curious drug route", which I have just explained, costs the NHS roughly £50 million a year—and I believe that is a lot of money—simply for running British drugs around Europe and bringing them back at a higher cost. Certainly the DHSS has made efforts to curtail this evil practice. But—and I beg the House to listen to this—the DHSS has tried and has been told that the effort to end this distasteful practice breaks EC law. I am left with the conclusion that the current EC law is an ally of this form of racketeering. We must, therefore, take up this matter at a very high level because all this shows that there is much sense for what has been advocated on this side of the House by many Members on many occasions; that dropping the expensive drugs with brand names in favour of the cheaper but just as good generic medicines is a sane and sensible course.
As I have said, it is brutally unfair to tell GPs to keep their prescribing down. That is a hideous attitude to adopt in order to reduce prices. Long before any diktat is issued to the general practitioners in the NHS there is much more that can be done to reduce the massive cost of drugs to the DHSS. I believe that the DHSS and Parliament should apply pressure by forcing drug companies to reduce their promotion and distribution costs.
There is another element on which I want briefly to touch—the side effects of drugs. In some instances in doctors' journals the print has been so small that it can scarcely be read. Yet the law in this relation says that the print for these advertisements must be clear and legible. No one can argue with that. The argument comes over what I am about to say. I shall give one example, and there are many more. In one case the fine print warned that the drug in question could impair ability to drive or operate machinery; that it could cause aggressive outbursts and visual disturbance, and one or two other distressing side effects. However, when shown to two GPs and a radiologist they found it impossible to read that warning. They had to use magnifying glasses. A further test was made in the same hospital. Three young doctors and two consultants were also unable to read a single word without using magnifying glasses. I submit that this is a matter on which we should all be gravely concerned. The side effects are giving serious concern to people at the DHSS and to people within the NHS—the great professions; the doctors, nurses and consultants.
I believe that in so far as this sort of advertisement is already breaking the law there is no need to outlaw the practice but simply to implement the law. Any risk to life must aim to be minimal by the medical profession, and is aimed to be minimal, but the drug companies must have the same high standards. Therefore, that type of advert surely must be a candidate for law enforcement.
The Public Accounts Committee was highly critical of the prices charged. The DHSS has been taken for an expensive ride and ordinary people are paying the bill. The question is: how can this have gone on for so long—for almost two and a half years? Has the parliamentary watchdog been drugged as well? There is also the monopoly danger which needs investigating.

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The price negotiating system within the DHSS is in need of scrutiny. Parliament must assist Ministers, on behalf of the people, to rectify these wrongs.
In conclusion, I believe that from this brief adumbration I have given, if action is taken millions of pounds will be saved. The NHS needs an injection of honesty regarding all aspects of drugs. Let the DHSS go to work to protect this great service—the NHS—the people, the professions and the patients. I hope that the DHSS will take action. It has nothing to lose but its good name.
8.55 p.m.
Lord Winstanley: My Lords, there seems to be a melancholy law in your Lordships' House that the business set down on the Order Paper for your Lordships' consideration, whatever it may happen to be, inevitably expands to fill whatever time is available. Bearing in mind some of the business which your Lordships transacted a little earlier, and which took a great deal of the time available, I would merely say that my enthusiasm for a Scottish Parliament has redoubled. Nevertheless, I am very glad that sufficient time has remained for us to give proper consideration to this very important Question tabled by the noble Lord, Lord Molloy. It is a matter about which we should all be concerned. It is also, of course, a matter in which we are all concerned. The cost of drugs is a cost that is borne by us all as citizens and, as citizens, from time to time we all require drugs. Therefore, anything to do with their safety and cost is a matter which ought to be of concern to us.
The noble Lord, Lord Molloy, quite properly dealt at some length with matters relating to the safety of drugs whereas his Unstarred Question relates much more specifically to costs. I would rather concentrate my remarks on the costs rather than safety. With regard to safety I would merely say that if a therapeutic substance has potent therapeutic effects there is not the slightest doubt that it will also carry with it certain risks and dangers. The remedies of the old days never did anyone any harm, but nor did they do much good because many of those old remedies were, frankly, inert and had no effect.
We now have generations of very powerful therapeutic substances which have revolutionised medicine and changed the whole outlook on life for many citizens suffering from diseases, because these are very powerful drugs. It is right to emphasise, as did the noble Lord, Lord Molloy, that powerful drugs inevitably carry with them certain risks and certain side effects. We must never ignore those and never in any way cease vigilance in that respect.
As I said, I would rather concentrate my remarks a little more on the matter of costs. I should like to begin by saying that I believe it is high time we dispelled this widespread myth that in Britain we spend an enormous amount of money on drugs. We do not. Compared with other developed countries we spend little. I do not have the latest figures available, but no doubt the Minister will have the figures and at the end of this brief debate will be able to give them to us. The last figures I saw for Europe, prepared by the World Health Organisation, in a table giving the cost of drugs prescribed therapeutically per head of population,
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showed that Britain came about nineteenth in the league and not at the top as is so often thought. I think it is very wrong that so many people should constantly be tempted to use the nation's drug bill as the whipping boy for all the deficiencies which may occur from time to time in the NHS, and for its costs.
Having said that we do not spend a lot on drugs in relation to other nations, I should add that drugs are very costly and modern drugs are sometimes even more costly than the older drugs. But savings obviously should be made wherever possible. It is my belief that many savings could be made without detriment to the NHS or to the many patients who depend upon it.
Savings of that kind could be made by effective co-operation among the pharmaceutical industry, the Government, who are of course the main customer of the industry in this country, and the third party to this necessary co-operation, the medical profession. I underline the word "co-operation" because I believe that those savings can be effected only by co-operation. I do not believe that they can be effected by management by the Government, still less by the Government nationalising large sections of the industry. I do not want to go down that route too far save to remind your Lordships of this. In the Soviet Union they have a wholly state-owned pharmaceutical industry. That is a state which has made immense strides in general surgery, general medicine and many other branches of medicine. It has made great progress, and there have been many discoveries; yet throughout the whole of its existence the wholly state-owned pharmaceutical industry of the Soviet Union has not yet produced a single new therapeutic substance of any proven value.
I think it is right to say that the advances have come from the private enterprise industry. We have to accept that there may be certain dangers there that have to be looked at; but the competitive private enterprise industry has done great service to this nation and made progress which should be recognised. I say that savings can be made by co-operation, but if we assume that the structure of the industry remains as it now is, and we still have the same kind of relationship with the Government and the medical profession, let me perhaps give one or two examples of the areas in which I think savings could safely be made without detriment to the National Health Service or to the patients.
First, there is the matter which has been discussed at length in your Lordships' House at Question Time and on other occasions—generic prescribing; namely, the prescribing of drugs by the pharmaceutical name rather than by the brand name. That is something on which we really must make progress, but the best way to make progress is by co-operation and by education. I mean by that education of general practitioners and of doctors generally. It is not that they always want to prescribe named drugs. Often they do not know the names of the others or they have grown so used to the named drugs that I am afraid that they do not always co-operate to the extent that they should.
We must accept that in the present situation it cannot be economic for us to require pharmacists to stock on their shelves perhaps 60, 70 or 80 different brand named antihistamine drugs of one kind or

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another which are largely similar and perhaps 40, 50 or even more different iron preparations of one kind or another. It cannot be economic that the pharmacist should continue to have to stock that wide variety of preparations merely because perhaps somewhat conservative-minded general practitioners persist in prescribing the drug that they have always prescribed in the past and refuse to look at the new possibilities which could be obtained by prescribing in the pharmaceutical names.
The pharmaceutical industry can do much in that regard. I welcome the appearance of new drugs. Very often a new drug appears and is immediately of immense benefit to patients and to the public as a whole. But I should be a little more enthusiastic if the pharmaceutical industry was equally ready to phase out old drugs when their usefulness has disappeared. An old drug may once have been very useful. It may have been the best antihistamine or the best iron preparation of its day. When it has become superseded by something which is better, I am afraid that the company may not immediately stop manufacturing it but may continue to try to persuade people to prescribe it. The number in that particular group of drugs grows and grows constantly, with serious economic effects for the pharmacists, the Government who have to pay for the drugs, the patients and the rest of us who have to support the whole thing. That is an area in which I am quite sure that great savings could be made without detriment to anybody.
I shall now say a word about the immense cost of research and development in the industry. It is immense. A new antibiotic drug may have been discovered, properly tested, approved as safe and effective, finally marketed and prescribed by doctors. We should realise that when we have to pay for that new antibiotic we are also paying for many other antibiotic drugs which have never seen the light of day but which have been pioneered by a company and brought to a certain stage in order to see whether they will be effective. Many are never marketed for a moment. Some means has to be found to pay for those false starts, if I may call them that. At the moment the only way is for the company to put the cost of those onto the cost of the drug which they finally market. I wonder whether there is some way round that problem.
Many new drugs are discovered by accident in the course of laboratory investigations of one kind or another. A pharmaceutical company may discover one new drug, perhaps by accident. That company may not necessarily be the best company or the most ideally placed to manufacture or market that drug. Were there some means whereby that drug, when once proved of value, could be marketed and manufactured by the company best equipped to do so, savings could be made. But some means has to be found of paying the company which has pioneered it for its work and industry. I have seen many examples of this. It is difficult to pick out one company.
I remember a long time ago being in the laboratories of ICI's pharmaceutical division at Alderley Park near Manchester, where a whole division at one time of expert pharmacologists and pharmaceutical experts were busy working out new structural formulae of
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different sulfonamide products. They would work out the formula and merely pass it to another expert who would look at it and say, "Yes, that is interesting but I am afraid that it would cause cyanosis"—in other words, it would make the patient go blue. He would look at another formula, and say, "Yes, that is very good. That might be useful but it would make everybody sick". Suddenly he would say, "That might be all right. Yes, we will make that one".
The company might make that product and later might possibly try it. Sometimes by such means one company may stumble on a product which it might be very much better for another company ultimately to manufacture and market, because it concentrates in that area. I hope that some thought will be given to some means to pay for all these hidden costs in the pioneering and development of new drugs, without necessarily making each individual company have to recoup its research and development costs by marketing one drug when it is not marketing all the others.
I wanted to be brief and I shall now try to conclude. If we can do something in a co-operative way to educate people and companies, I am sure that we can make progress. We also have to do something to educate the public as a whole. The Health Education Council could perhaps do a little more in trying to reduce the national dependence on drugs as remedies. I am afraid there is a tendency for patients, whoever they may be—whether it is noble Lords sitting here—to feel that whatever the illness may happen to be that they must somehow or other go away from the doctor with a prescription. But many, many ailments for which patients very properly seek advice will get better with the expenditure of nothing more costly than time.
If only the general practitioner had time to explain to the patient, "Look this does not matter; it is not important. You do not need any special tests; you do not need any special treatment and if you go away it will be better within two or three days". If general practitioners did that, we would save a great deal of money. But it takes a lot of time. It takes hardly any time at all to say, "Yes, it is so-and-so", and to give the patient a prescription for some useless drug—and it may be a costly drug. It takes much longer to spend the time to persuade the patient that they do not need any treatment.
Here I come to something really important. I have in mind the noble Lord the Minister giving his attention to allowing general practitioners more time. I know the General Medical Services Committee is asking for doctors' lists to be reduced, perhaps to an average of 1,700 rather than 2,500 patients, if we could have more general practitioners. That would not necessarily cost more money because if more general practitioners had more time to spend with patients, persuading patients that they do not always need a powerful or expensive drug for every minor ailment, then I think the noble Lord would find that reducing the number of patients on doctors' lists and having more general practitioners would not be anything like as costly as perhaps the noble Lord's advisers might tell him.
I have said more than enough. I am most grateful to the noble Lord, Lord Molloy, for drawing attention to

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this important subject and, like other noble Lords, I look forward to hearing Lord Glenarthur's response.
Lord Chelwood: My Lords, I apologise—
9.10 p.m.
Lord Rea: My Lords, I am quite sure the noble Lord opposite could intervene now if he wishes to speak for just two minutes; but I have something to tell your Lordships which will take about eight minutes. I think the understanding between the pharmaceutical industry and the DHSS is a delicately balanced one. The National Health Service pays for 95 per cent. of the drugs prescribed in Britain. Surely we ought to be able to say, "He who pays the piper calls the tune"; but does he in fact?
I am going to cover three topics, briefly. First, the difference between the hospital sector, which gives rise to 20 per cent. of the drugs bill, and the community sector which provides 80 per cent. of the drugs bill. Secondly, the patent laws and their influence on the development policy of the pharmaceutical industry. Thirdly, ways of encouraging doctors to prescribe better and more economically—departing a little I think from the wording of my noble friend, Lord Molloy, but I hope to show that they are relevant.
The department sets limits on the average profits and at least for the hospital sector drives as hard a bargain as it can for the supplies of drugs, which are often obtained in bulk or on a contract basis. This is a contributory reason for a much smaller proportion of the national drug bill which has related to hospital prescribing. I should like to know how much more cheaply the hospital sector get its supplies of equivalent drugs than the community sector, but I do not want to press the Minister for an answer to that tonight because I have not warned him of this. National Health Service doctors working in hospitals can only prescribe drugs which have already been puchased by the NHS at economical prices, while in the community sector—that is the general practice sector—GPs can prescribe very nearly any drug. However, a few are restricted, and some have recently been withdrawn, some are drugs which many GPs have used safely for many years and it has left the GPs rather annoyed—I am talking about phenylbutazone. The GPs can even specify which company's product they want, regardless of the cost of that product.
The doctor does not pay the bill and nor does the patient: it is picked up by the taxpayer. I think this is rather a travesty of the market economy. There is no incentive for the doctor to prescribe economically. To save money in a cash limited budget, hospitals only supply out-patients with 14 days' supply of drugs—or less sometimes. If the treatment has to be continued after that, supplies have to be obtained from the GP in the community sector at a higher price because that budget is not cash limited. Surely this is an example of robbing Peter to pay Paul. The drug companies benefit, but we, the taxpayers, lose.
The patent laws allow a new product to be under licence for 20 years. In the pharmaceutical industry half of this time may be taken (as the noble Lord, Lord Winstanley, has pointed out) in developing the drug and testing it, leaving perhaps only 10 years of protected status once it is launched on the market. I
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think it is generally agreed that a product should cost more than its manufacturing cost during that time to cover the research and development costs, or to "reward" (if you like) the developer for his inventiveness and initiative. But in other areas of the economy at the end of that time ordinary market forces are normally allowed to operate. This happens in the hospital sector, in buying drugs in the National Health Service, but in the community sector the privileged status of the patented product is prolonged through the use of the well-known brand names, which the noble Lord has mentioned, such as Librium and Valium; and there are plenty of others that are familiar.
Another problem with the patent regulations is that drug firms may develop and patent new, slightly different forms of a drug just when an old patent is about to run out and promote the new product intensively, attempting to get doctors to prescribe the new variant; and we are all gullible—we want to believe that something new is better, rather than the same thing dressed up in new clothes.
How can doctors be encouraged to prescribe intelligently and economically? Much is already being done by the department with its three excellent publications evaluating and costing both new and old drugs. These are sent free of charge to all doctors. But this is not enough to outweigh the heavy barrage of promotional activity from the industry, now running at some £120 million a year, I gather. Further educational activities are needed to countermand this, and one with promise will be allowed by the computerisation of the Prescription Pricing Authority's data. All GPs will be given details of their prescribing costs and, as a recent study at St. Mary's Hospital has shown, this information can be used to alter GPs' prescribing habits. This is a significant change. The data on what doctors have been prescribing is fed back to them, and it is discussed afterwards. They often realise that they can alter their prescribing habits to the benefit of both their patients and the nation's drug bill.
This will be a major undertaking, and in any case it is not certain how sustained will be the effect. Generic substitution, which we have discussed in this House and in another place many times, is a practical and simple method of reducing costs. It is now practised in hospitals where the National Health Service buys directly. So far, despite the Greenfield Report's recommendations, there is no sign of the Government bringing into action the recommendation regarding generic substitution, although I think that the arguments against it are weak. We are told, "The doctors and pharmacists don't like it", apparently. The General Medical Services Committee of the BMA narrowly voted against it, although its chairman is strongly in favour of generic substitution; he was in fact one of the members of the Greenfield working party. In discussions with many other doctors I have not met one who would object greatly and certainly not one who would go on strike if this measure were brought in. If the Government want to economise, here is a ready, quick way to save between £50 million to £100 million. We do not know the exact figures; we have not been given them.

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But doctors, or members of any other profession, can be offered carrots to carry out Government policy. Doctors receive a fee for carrying out vaccinations and notifying diseases, in the public interest. Surely it is in the public interest that they prescribe effectively and economically. I would suggest that the department approaches the BMA to start discussions on a system of rewards for economy. I should like to throw out one possible suggestion: for every £1,000 of saving below a set norm, the GP could be offered perhaps an incentive of £100. The area is fraught with difficulties, but I think it is a promising field. If the pharmaceutical industry's profits are trimmed a little, it will not have so much for advertising. What a relief that would be to all the general practitioners in this country!
9.20 p.m.
Lord Chelwood: My Lords, I apologise doubly to the House, first for getting up before I should have done and, secondly, for the fact that I did not put my name down to speak. I hope that I may for a very few minutes make a contribution. I agree that this is a subject that needs an airing, and I am glad that the noble Lord, Lord Molloy, put down this Unstarred Question, although I am sure that he will not mind me saying that I thought that his speech lacked balance in certain respects.
I have some knowledge of the industry because in the 1960s I was a director of a well-known pharmaceutical company in this country. The pharmaceutical industry has, quite rightly, come under heavy pressure from governments of all complexions ever since the end of the war, in order to ensure that the customer—the patient—received value for money and that profits were not excessive. That is an entirely right and proper situation, and I have no criticism of it at all. I have no intention of whitewashing the industry, which has made its share of mistakes, I am a critic still of the occasional case of brash and costly promotion methods. They are very much the exception and very much not the rule. The ABPI has a strict code of advertising conduct, and I am sure that the more strictly it can enforce it the better pleased we shall all be on all sides of the House.
There are a great many good points about the industry which are apt to be overlooked and taken for granted. If we are hunting for some way in which, as the Unstarred Question asks, we can improve relationships with the Department of Health and Social Security, let us take careful account of the good points as well as the bad ones. Mention has been made by all three noble Lords who have spoken so far of research and development. All I wish to add is that it is not always realised that any pharmaceutical company that is worth its salt will spend up to 10 per cent.—and even more than 10 per cent.—of its annual sales on research and development. This is, indeed, their lifeblood, and without it they would lose out.
Do we take sufficient account of, and do we ever try to assess, the enormous saving to the taxpayer from the use of life-saving drugs—indeed, not only life-saving drugs, but drugs which have brought crippling illnesses and diseases under control? The saving to the taxpayer must be enormous, and I have never heard of anyone who has made any real attempt to assess it. As
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the noble Lord, Lord Winstanley, has said, there has been a revolution in medicine to which the pharmaceutical industry has made a major contribution. Who knows where the next breakthrough will come, and what its value will be? Perhaps it will come in connection with one of the cancers, arthritis or something else. The value of a breakthrough in such fields will be absolutely enormous: it will be incalculable.
Another matter which is rarely mentioned is the contribution that is made to this country's balance of trade. The industry's export record is quite remarkable. One cannot export unless one is competitive. The industry is competitive and, as far as the balance of payments is concerned, the industry has made a very big contribution indeed to this country's prosperity. Going still further down the same route, let us consider the foreign capital that we have attracted from the United States, from Switzerland and from Germany, which are perhaps the other three leading countries in relation to the pharmaceutical industry. Hundreds of millions of pounds have been poured into this country because it is a suitable base from which to operate, to manufacture drugs, to carry out research, and to export those drugs. That, again, is a matter which is not often mentioned but which ought to be mentioned much more.
Let us consider employment. Let us look at the employment that has been brought to this country—good and well-paid employment—by the pharmaceutical industry as a result of the attraction of foreign capital and the skill of some of our own British drug companies. These are all points which need emphasising. In my view the pharmaceutical industry really is an example of private enterprise at its best. I am indeed glad—and I hope it really is the case—that the threat of nationalisation, which crops up, roughly speaking in every two Labour manifestos out of three, appears to have been dropped. We were reminded what state control means, in terms of never finding a new drug, by the noble Lord, Lord Winstanley.
The pharmaceutical industry has been a political football for too long, and it is just about time that we stopped kicking it around. By all means keep up the pressure on prices to ensure that profits are not excessive, but do not press too hard or we will run the risk of damaging a highly successful industry of great value to the nation.
9.25 p.m.
Lord Ennals: My Lords, I am sure that the House is most grateful to my noble friend Lord Molloy for raising this matter, and I think that each of the contributions in the debate has come from people with a very great knowledge. It has been an extremely valuable debate. Of course, I agree that the drug industry is open to criticism and in a moment or so I shall make my criticisms of the industry. However, I want to take up the point put forward by the noble Lord, Lord Chelwood, because I believe that the value of the contribution of British-made medicines to the balance of payments—which last year was over £1,000 million—is enormous. This is one of the most success-ful industries in this country.
Although Britain consumes only 3 per cent. of the world's medicines by value, over 6 per cent. of

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pharmaceutical production, and more than 10 per cent. of pharmaceutical research takes place in Britain. As the noble Lord, Lord Winstanley, said—and it has been repeated by the noble Lord, Lord Chelwood—the value of the research which is carried out by the British pharmaceutical industry is very high indeed. Of course, there are always vocal lobbies which call for the withdrawal of drugs whenever there is a side effect. We must recognise that no drug is totally safe. If we thought that there ever was, no drug would ever go on the market and we would not have the great achieve-ment that we have. No drug is risk-free.
The pharmaceutical industry makes a very great contribution to the National Health Service and there is no reason whatever why the industry should not continue to make a major and growing contribution to health in Britain and the world as well as, as a major export industry, strengthening our economy. When I was Secretary of State for Social Services I was greatly involved in seeking to encourage inward investment to ensure that we had a strong industry in this country, which was the basis not only for good research here but for exports abroad.
As has been said by my noble friend Lord Rea, the fact that the pharmaceutical industry in Britain is so dependent upon the National Health Service imposes upon it a very heavy and very special responsibility. Sometimes I think that the industry is its own worst enemy.
Having paid my tribute, let me say that it has its weaknesses and that it ought to put its own house in order. It often incurs public criticism, either by insensitive actions or because it delays the withdrawal of drugs from the market—a point that was made by the noble Lord, Lord Winstanley.
My noble friend Lord Rea referred to the painkillers which are largely based on butozone. I must declare an interest here as I have often had to take butozone. However, from the Committee on the Safety of Medicines we have had evidence that 1,500 deaths have probably been associated with this brand of products over a number of years. If I had been in the pharmaceutical industry, I should have taken that drug off the market rather than simply wait for the Minister to intervene, and inevitably, therefore, create among the public a good deal of criticism.
Sometimes, in terms of advertising, they have also failed to observe the agreement which was drawn up at the time when I was able to negotiate the pharmaceutical price regulation scheme. Recently it was reported in the press:
"Persantin is given to thousands of patients in danger of suffering strokes and heart attacks.
"Advertisements show post-mortem specimens from patients who have had heart attacks and strokes with the slogan: 'When thrombosis threatens … Persantin 100 Anti-Thrombotic offers a real opportunity for prevention' ".
I have to declare another interest. I have had thrombosis and I constantly take medication for this condition. The article goes on:
"Under the Medicines Act, advertisements must adhere to the indications in the officially approved data sheet.
"The data sheet does not mention myocardial infarction, ischaemic heart disease, or strokes. The bulletin, sent to doctors under the auspices of the Department of Health, says:
'The association (between the pictures in the advertisement and the slogan) clearly suggests that the drug can prevent these conditions.
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'After many years of investigation there is no evidence that the drug, given alone, can do so.' ".
This is one clear example where the pharmaceutical industry ought to be putting its own house in order.
The committee, which was presided over by the noble Lord, Lord Sainsbury—and I had hoped that he might take part in this debate because he made a great contribution—published its report shortly before I became Secretary of State. We were looking then at the voluntary price regulation scheme which was designed to ensure that there was not excessive profit made by the pharmaceutical industry. The Sainsbury committee had concluded that the VPRS did not lead to effective price competition.
I wanted to have a much broader agreement with the Association of the British Pharmaceutical Industry which would cut back on the cost of promotional activities which could be included in the profit balance, which would reduce the profit margin and secure a self-regulating scheme to vet advertisements, and to ensure that all the necessary facts were included, including the contents of the formulations and any known counter-indications in ways that could be quite clearly read by doctors themselves.
We achieved such an agreement. We called it the PPRS—the Pharmaceutical Price Regulation Scheme—and it was not voluntary because I threatened legislation if a voluntary agreement was not reached, but we did have a major agreement which should have been the basis. I know that the PPRS is now being reviewed, and it is partly being reviewed because the bargain which was struck then has not been effectively sustained and adhered to, in some cases by the industry itself and in some cases by the Government. I mentioned some ways in which the industry itself has not done so.
Let me turn to the Government. May I give two examples of the way in which the Government have failed properly to implement the bargain. It was revealed by the Public Accounts Committee in their report in 1979–80—that was the first year after the change of Government in Britain—that the industry showed a profit of £252 million in relation to drugs that they supplied to the National Health Service. If one expressed that as a return on capital employed the returns of the larger companies averaged 22 per cent. in 1979, and 23.3 per cent. in 1980. Thus, in these two years alone the profits achieved by these large companies above their estimated targets totalled £33·2 million, of which the DHSS recovered only £1·7 million. This is very unsatisfactory indeed.
It was conceived that the task of the DHSS—and the facilities were made available—was to claw back excessive profits, and I fear that they gave way to the pressure of profit and deprived the NHS of much needed resources. In accordance with the Labour Government PPRS I think this clawback was an absurdly small clawback. Profit margins themselves have increased to about 5 per cent. above the return for United Kingdom industry generally. I believe that the DHSS have failed effectively to implement the agreement to reduce from 14 per cent. to 10 per cent. the chargeable promotion costs. No wonder the DHSS are now reviewing the PPRS which they have themselves allowed to be ineffectively implemented.

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I hope that when the Minister replies he will say something about the review of the PPRS and when we may expect to be able to see it. I am deeply concerned that the industry and the Government maybe have too cosy a relationship, and that this excessively cosy relationship means that the profits—and I am talking about profits over and above research, because research is a vital element in the industry's expenditure—have been at an excessive level at the expense of the National Health Service. I am not just talking about generic substitution—we will have further debates on that, because there are disagree-ments across the House about the extent to which the generic substitution may undermine clinical freedom.
As I have said, the Government have a cosy relationship with the industry; I want them to have an effective and useful relationship with the industry, but I do not want to see excessive profit, inevitably paid for by the taxpayer in terms of excessive costs to the National Health Service.
The Government, suddenly faced with the fact that they had to make cuts in 1983 and 1984, decided to clamp down on the pharmaceutical industry's profits not as part of a carefully worked out scheme such a we had worked out in 1977; it was done hurriedly. As far as I know it was done without consultation with the industry. The industry was told that, without any warning, it had to make the cuts that have already been referred to.
The Government seem unable to resolve this conflict of interests; on the one hand, maximum profit for an important private sector industry and, on the other hand, the need to restrain drug costs in the interests of the National Health Service. I hope that when the Minister replies he will give us some indication of the progress that has been made in cutting down the extent to which the NHS is financing, to an excessive extent, an already highly profitable pharmaceutical industry.
9.36 p.m.
Lord Glenarthur: My Lords, I am sure that we are all grateful to the noble Lord, Lord Molloy, for asking this Question this evening, even if he did so in his characteristically strident tone so late in the night after a lengthy debate on Scottish affairs. It will at least give me the opportunity to set the record straight on the fact that there are those who say that the relationship between the Government and the pharmaceutical industry is not good. I think it is better than the noble Lord believes it to be, despite the changes in the pharmaceutical price regulation scheme which were announced on 8th December last and which, as he knows, will reduce the profitability of that industry. Having said that, of course no industry likes to have its profitability forcibly reduced. And so the noble Lord is probably right if his Question means that the relationship between my department and the industry is not quite as good as it was, although that will please the noble Lord, Lord Ennals, who has said our relationship was probably too cosy.
I suppose that my department has something of a split approach in trying to adopt a balancing act in its dealings with the pharmaceutical industry. To query
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the department's honesty—I do not think that was the word, but it was something akin to it to which the noble Lord, Lord Molloy, referred—was not particu-larly fair. The NHS is the industry's main customer for its sales of prescription medicines in the United Kingdom. It is the sponsor of the industry, and it wants to see the industry continue to prosper. With other United Kingdom health departments it is also responsible for the regulation of its products. We have tried to achieve a balance between the interests of the NHS as customer and the interests of the industry. That is not particularly easy.
In 1982–83 drug costs for the National Health Service amounted to about £1,250 million. The noble Lord, Lord Winstanley, may think that this is just a little: so be it if he does. The fact is that it represents about 10 per cent. of the National Health Service budget. I am afraid I am not able to give him the position of the United Kingdom in the league of the Western world, but it is a fact that 10 per cent. of a budget of the size we are talking about is a lot of money. That is the basic cost of drugs, excluding fees and on-costs for chemists and dispensing doctors, or any credits for prescription charges.
With expenditure at that considerable level, we must do all we can to contain costs, and one of the ways of doing it is to reduce prices, or at least to contain any increases in prices. That is what we have tried to do. Last year, we reached agreement—and I stress it was an agreement—with the parmaceutical industry that from 1st August 1983 prices of prescription medicines should be reduced on average by 2½ per cent., and at the same time prices were frozen until 31st March this year. The noble Lord, Lord Molloy, asked if the £25 million had been saved. Final returns from every company have not been received, but we have no reason to believe that it will not be achieved.
In December, we announced that from 1st April this year the target profit rate for the industry would be reduced from a 25 per cent. to a 21 per cent. return on historic capital, as well as further limiting the tolerance allowed in certain circumstances when companies exceed their target rate. This is something to which the noble Lord, Lord Ennals, referred and made specific references. In addition, we changed the rules governing the amount of sales promotion expenditure we will allow in calculating drug prices. The existing limit will be retained at the present level for 1984–85, but companies exceeding the limit will have to repay to the department a sum equivalent to the amount of the excess. This is already encouraging companies to reduce their expenditure on sales promotion so as to avoid repayment.
From 1st April 1985 we intend to reduce the sales promotion expenditure limit to 9 per cent. of sales, and we will review the whole question again. All these changes are estimated to save £65 million in 1984–85 and over £100 million thereafter. We still have other things to do. A report by independent accountants on methods of dealing with transfer prices in the PPRS is being studied. Transfer prices are charged by multinational companies to their United Kingdom subsidiaries for raw materials and finished and semi-finished goods. We are also considering whether the margin that the pharmaceutical companies allow their

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wholesalers should be reduced from the present average of 12½ per cent. This might cover to some extent one of the points raised by the noble Lord, Lord Rea.
There is also some tidying-up to do with the details of the published scheme, which has remained unchanged since 1978. We shall be discussing this with the Association of the British Pharmaceutical Industry in the coming months. All the changes affect the industry in its dealings with the DHSS on prices. Some are bound to be unwelcome to the industry, but I believe that they accept that they cannot be exempt from measures taken to make savings in the National Health Service expenditure in order to make the service more efficient and provide better value for money for those whom it serves. Sponsorship is not forgotten. The industry as a whole provides jobs for over 67,000 people, many in high technology. It exported goods worth well over £1,000 million in 1983. This was a fact referred to by my noble friend Lord Chelwood and by the noble Lord, Lord Ennals.
The net surplus of exports over imports exceeded £600 million in this particular field. The United Kingdom industry is firmly within the top half dozen pharmaceutical exporting countries in the world and one of the major foreign currency earners in this country. This is an impressive record and one I am pleased to acknowledge. The industry spends millions of pounds on research and development—a point raised by Lord Rea—and the industry also spends much more on investment, so that it is good for "UK Limited" and for the individuals who benefit from its products. There have been many notable discoveries of new drugs in the United Kingdom since the end of the war. Recent world-wide successes have been Tagamet and Zentac, for which ulcer sufferers throughut the world have cause to be grateful.
That is one of the reasons why we have confirmed our support for the aims of the PPRS so that safe and effective medicines should be available on reasonable terms to the National Health Service but also that a strong, efficient and profitable pharmaceutical industry should exist in the United Kingdom. That is not a recipe for the cheapest drug prices possible but provides the balance to benefit everybody: the National Health Service, because it pays reasonable prices; the patient because the gets the best and most up-to-date products; the worker has a job in the industry, the industry itself gets a fair return on its investment and the nation at large benefits from all four.
I turn now to the question of advertising—an area in which the noble Lord appears to believe we do not exercise adequate control. In the United Kingdom advertising controls are provided by a mixture of statutory measures and means of various voluntary codes of practice. These arrangements have been found to work satisfactorily despite the fears of the noble Lord; and despite the competition involving promotional material for similar types of products, the Department has found that manufacturers generally display a good standard of ethics—
Lord Molloy: My Lords, they were not my fears that I was speaking of, but the fears of doctors, sisters, nurses and consultants. They were the fears that they
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have expressed to me which I thought were wise to express to the House.
Lord Glenarthur: Exactly, my Lords, and it was in that vein that I was replying to the noble Lord who was expressing the fears of all the people he had referred to.
These arrangements have been working satisfactorily, and despite the competition involving promotional material for similar types of products, the department has found that manufacturers generally display a good standard of ethics in their campaigns, and furthermore a welcome degree of responsibility. The main statutory powers are contained in the Medicines Act 1968, under which it is an offence to issue false or misleading advertisements or to make false or misleading oral representations. Advertising claims have to be consistent with the product licence and the Act empowers Ministers to make regulations for controlling the content of advertisements.
An advertisement can be sent or delivered to a doctor only if it is accompanied by an approved data sheet, or if a data sheet has been sent to him during the previous 15 months. The form and content of data sheets are laid down in regulations so that practitioners are provided with a uniform document containing the essential information about uses, dosage, adminis-tration, contra-indication, warnings, and so on.
The regulations embody the basic statutory controls. They provide a valuable framework within which much of the day-to-day supervision of pharmaceutical advertising is implemented by the industry itself in conjunction with the codes of advertising practice which have been drawn up. These are managed by the trade associations which represent the industry.
Where advertising to the professions is concerned—that is for prescription-only drugs—the Association of the British Pharmaceutical Industry operates a code of practice to which their members must subscribe. Most of the major pharmaceutical companies are members and companies not in membership are, nevertheless, invited to observe the requirements of the code. The code emphasises the importance of providing the medical profession with accurate, fair and objective information. To complement these arrangements, the DHSS investigates all complaints about advertisements and monitors advertisements for new products. If an advertisement is unacceptable, the company is contacted straight away to put matters right. Invariably companies comply with requests to change their advertising material. If the noble Lord, Lord Molloy, or any other noble Lord who has taken part has a particular product to complain about, I shall be happy to have it looked into, as I would be for any claims—and claims have been made—that deaths have occurred from misleading advertisements. If that is the case, the noble Lord can take it up with me.
Lord Molloy: My Lords, what I submitted was that there have been a number of instances where the medical profession know full well that people have suffered the side effects of drugs. I am simply appealing that in the name of all decency and of civilised behaviour we do not want another episode like Thalidomide. Ask any mother who has had a Thalidomide child, and she would be on my side.
Lord Glenarthur: My Lords, in that I am entirely on the side of the noble Lord, Lord Molloy, as well. The last thing anyone wants to see is that sort of threat repeated; but at the moment we have a satisfactory system. No doubt it is impossible for any of us to say that any system is perfect, and when it can be improved it will be; but the fact is that we are content at present that the system is working.
I can say to the noble Lord that I saw recently an article in the Sunday Times about the small print to which he referred being used to supply information for some drug advertisements directed to practitioners. Again in this connection I must tell him that all drug companies supplying general practitioners must supply each of them with a data sheet and a standard format, designed to give the essential particulars about a product. It would be quite wrong to conclude that practitioners are having to prescribe medicines without proper access to prescribing information.
We have found that the combination of legal requirements, official monitoring and self-regulatory voluntary codes of practice work well. The codes reflect the statutory requirements to which I have referred, but they are able to impose conditions in much greater detail and with much greater flexibility than could possibly be done if we relied on legal measures only. The Government are satisfied that we have an effective working relationship with the pharmaceutical industry in advertising, and I do not think I need dwell further on that.
However, I should like to touch on some other points raised during this debate. We have debated generic prescribing and generic substitution on more than one occasion in the past few weeks. On the question: why not generic substitution? I can only say what I have said before: when we consulted, we found there was no general support for it. The recommen-dation could not be implemented without the agreement of the medical profession. They objected to the element of compulsion involved because of the special relationship that doctors have with their patients. I am sure that the noble Lord will be well aware of that—probably more so than I. Having said that, we will do all that we can to encourage generic prescribing. That, again, is something I have touched on in the past. The whole question of generic substitution is a matter which, while not accepted from the Greenfield Report, will crop up over the years, and so it is impossible to say that generic substitution will never occur; but there are no plans to introduce it at the moment.
The noble Lord, Lord Molloy, asked about re-importation and about drugs exported from the United Kingdom and re-imported at a lower price. This can happen but it is only a small part of the trade known as parallel importing. The reason is usually, if the product was originally exported at the United Kingdom price, over the years price freezes in the importing country have kept the cost down. In the United Kingdom prices have been legitimately allowed to rise. I do not think I need dwell any further on other aspects of parallel importing because those will be facts of which the noble Lord is well aware.
The noble Lord, Lord Rea, asked about patents for drugs very similar to those already on the market.
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Such drugs must be sufficiently dissimilar; otherwise the Patent Office would not have granted a patent. That is a fact of life. They arise because more than one company is engaged in similar lines of research but only one can win the race. The rest do not want to waste research expenditure and therefore market similar products.
The noble Lord also asked about hospital prescribing. I can say that the hospital drugs bill amounts to about 20 per cent. of the NHS's total expenditure on Pharmaceuticals. The establishment of multi-disciplinary drug and therapeutic committees has done much in recent years to bring about the formulation of broad professional policies regarding selection, procurement and distribution of drugs. Such committees can make a significant contribution to the effectiveness of prescribing practices in the local situation. Our long-standing guidance to health authorities is that the quantity of drugs prescribed to an out-patient should not exceed what is needed for a period until either the hospital doctor or the GP can see the patient again. The noble Lord mentioned 14 days: that figure may be correct, but the principle is the same.
He also asked about information technology. I have seen myself that increasingly hospital authorities are turning to information technology to control their drug stocks, which helps to avoid wastage due to duplication, discarding date-expired materials, and so on. It also is a most useful means of informing doctors of the costs of their prescribing and of their prescribing policies. Here I am referring to repeat prescriptions.
I am pleased that the Government have been asking and will continue to ask health service managers to draw together the lessons learned from their experiences to manage the drug budget and to increase the efficiency of drug procurement and usage. So far as the purchase of drugs by hospitals is concerned, health authorities and some hospitals contract for drugs that they require. Prices are often less than agreed with companies through the PPRS, but then again many generic drugs are purchased.
If I may mention one point made by the noble Lord, Lord Winstanley, when he talked about general practitioner prescribing, the Government are exploring ways of educating doctors to become cost-effective prescribers, while exercising their very proper freedom to treat their patients in the best possible way. I agree with him that education is the best way forward and better than coercion. Doctors' prescribing is already monitored, and this is an important point to get across. An average cost per patient is calculated each month for each doctor and a summary is sent to him, together with the average cost per patient in the doctors' family practitioner committee area. DHSS regional medical officers visit doctors whose costs are substantially above the average, and visits are also made where individual items of exceptionally large quantity at high cost are prescribed.
This country, as we have heard, has one of the most advanced and successful pharmaceutical industries in the world, and that is something in which we all ought to take pride. I certainly join with others who have spoken in stressing that. So far as National Health Service consumption is concerned, that industry cannot be immune from our need to get the very most

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out of each pound spent on individuals within the National Health Service. Doctors must prescribe effectively and be mindful of cost; they should prescribe generically where possible; they should look critically at repeat prescriptions; they should think about cost, and we should all think about waste. The Government, in collaboration with the pharmaceutical industry, have their part to play in controlling public expenditure in a service as demanding as the National Health Service. Between the two a balance must be struck. I hope I have shown that, within the constraints that face us all, that balance is being maintained.

Norwich City Council Bill [H.L.]
Reported from the Select Committee on Unopposed Provisions with amendments.
House adjourned at three minutes before ten o'clock.