Lords Sitting of 9 February 1984

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

Airline Privatisation: CAA Review
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made concerning the review being conducted by the Civil Aviation Authority on the implications and development of the British airline industry consequent upon the proposed privatisation of British Airways; and when they expect to receive this report from the Civil Aviation Authority.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, the Civil Aviation Authority wrote on 19th December to representatives of the British civil air transport industry and its users asking for their views by 31st January on the implications of privatisation for competition and the sound development of the industry. This is clearly a complex matter which will take some time, and I cannot forecast precisely when the review will be completed.
Baroness Burton of Coventry: My Lords, would the Minister agree that, in view of the emphasis now being placed by British Airways, British Caledonian and other airlines on the routes transfer issue, this must be one of the key matters and probably the most important of all in any review now taking place?
Lord Trefgarne: My Lords, certainly the matters to which the noble Baroness refers are among the very important issues that the CAA will be considering, but there are other issues as well.
Earl Amherst: My Lords, can the Minister tell us if, after privatisation, British Airways is to be known as the national flag carrier? Further, if there is to be a reallocation of routes, do the Government contemplate a renegotiation of the governmental bilateral air agreements?
Lord Trefgarne: My Lords, I could not anticipate the outcome of the review which the CAA is presently undertaking, but doubtless the sort of matters to which the noble Earl refers will emerge from it.
Lord Underhill: My Lords, I am sure that the noble Lord will have read the British Airways response. Did he note that in the response they made it quite clear that the question of privatisation is completely irrelevant to the question of competition and the development of the airline industry? In the light of this, will the Government reconsider their plans?
Lord Trefgarne: My Lords, the British Airways contribution to the Civil Aviation Authority on this matter is one of no fewer than 67 submissions, but it will be studied carefully like all the rest. The view to which the noble Lord refers is, I know, the view of British Airways, but there are other views as well.
Lord Taylor of Gryfe: My Lords, may I anticipate the report just a little and ask the Minister whether the Government are still committed to the principle of competition as a means of achieving efficiency in this as in other industries?
Lord Trefgarne: Yes, of course, my Lords.
Baroness Burton of Coventry: My Lords, while appreciating that the Minister cannot say when this review will be completed, may I ask him this question. Would he agree that it is vital for the state of the civil aviation industry that it is made as soon as possible and, pending its completion, does it mean that there is no question of any routes being transferred to any other airlines in this country?
Lord Trefgarne: My Lords, the question of the transfer of routes is one that I have no doubt will be considered by the CAA in the course of its study. There are certainly no plans for the sort of steps that the noble Baroness has in mind.
Lord Leatherland: My Lords, when the Minister said that the Government would have to give a lot of consideration to this, is it not rather a pity that they did not give a lot of consideration to these matters before promising wholesale denationalisation?
Lord Trefgarne: My Lords, I did not say that. It is the Civil Aviation Authority that is giving consideration to this matter. They will make their views known to my right honourable friend in due course.
Lord Ezra: My Lords, would not the noble Lord agree that a great deal has been achieved in British Airways under the chairmanship of the noble Lord, Lord King of Wartnaby? Furthermore, and following a previous supplementary, would he not agree that this demonstrates that the question of ownership is largely irrelevant to the success or failure of an enterprise?
Lord Trefgarne: My Lords, I certainly agree that under my noble friend's chairmanship British Airways has made a remarkable turnround.

Mobility Allowance: Expenditure
3.4 p.m.
Lord Gainford: 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 has been the increase in spending, in real terms, on the mobility allowance since 1978–79.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, expenditure on mobility

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allowance has risen by 259 per cent., in real terms, since 1978–79.
Lord Gainford: My Lords, I thank my noble friend the Minister for that encouraging figure. May I ask whether he has the figure for the number of people in fact drawing mobility allowance?
Lord Glenarthur: Yes, my Lords. There are currently about 305,000 people in receipt of mobility allowance. The estimated annual cost of the benefit is approaching £300 million. This Government brought the 61 to 64 age group into mobility allowance in 1979, earlier than had been planned previously, helping 30,000 more people.
Baroness Jeger: My Lords, can the noble Lord tell the House when we might hear the Government's response to the Oglesby Report, which dealt, inter alia, with the question of mobility allowances? Secondly, can he tell us whether there has been any improvement by way of reduction in the delay between an application for a mobility allowance and the granting of it, which has caused great concern?
Lord Glenarthur: My Lords, the report has been received and has been circulated to interested organisations for comment. The recommendations made in the report will be considered in the light of the comments which we receive. As far as delays are concerned, it might appear that there have been delays but that has been due to the fact that there have been many more claimants, rather than because any claim has been held up for other reasons.

Heavy Lorries: Noise
3.6 p.m.
Lord Belhaven and Stenton: 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 has been taken to reduce the noise of heavy lorries since 1979.
Lord Lucas of Chilworth: My Lords, a three decibel reduction in the permitted noise from new lorries—that is, from 91 decibels to 88—was implemented last year, and a further reduction of around two decibels will result from the implementation in 1985 of a more onerous noise test procedure. The European Commission have made proposals to reduce lorry noise by an additional four decibels from 1989, and these proposals are being discussed in the Community.
Lord Belhaven and Stenton: My Lords, I thank my noble friend for that Answer. Can he tell the House what measures the police are taking, and with what success, to enforce the limits? Can he say, further, whether the Government are taking any other steps to reduce the noise from these vehicles?
Lord Lucas of Chilworth: My Lords, I can tell my noble friend Lord Belhaven and Stenton that vehicles are checked at the roadside and also in HGV testing stations. Vehicles with faulty exhaust systems are prevented from being used until the fault is corrected. The police have brought about 11,000 successful prosecutions a year involving vehicles of all types emitting excessive noise.
In so far as concerns the steps which the Government are taking to help in the reduction of noise, I can say that the Government announced in December the launch of a collaborative programme costing £10 million, shared equally between Government and industry, to produce a number of quiet lorries. This is called the QHV(90) scheme. Research is continuing to develop effective in-use noise tests, and both the Transport and Road Research Laboratory and the Motor Industry Research Association are engaged in these researches.
Lord Underhill: My Lords, the Minister referred to roadside tests. Can he say whether any arrangements are being made for the compulsory annual testing of heavy goods lorries to include the testing of noise from engines and exhausts?
Lord Lucas of Chilworth: My Lords, we do not have a practicable method of doing this in the confines of a heavy goods vehicle station. The noise-testing procedure is quite complex, requiring a great deal of space and a lot of very sophisticated machinery. However, while the annual HGV test does not include a specific test for noise, it does include inspection of the exhaust system. We are satisfied that that is adequate at this time.
Lord Paget of Northampton: My Lords, is there perhaps a rather simpler method of reducing the noise of heavy lorries, and one with certain spin-off advantages—that is, to drive them rather slower?
Lord Lucas of Chilworth: No, my Lords, that is not a factor. Lorry noise emanates from a number of sources: road noise, engine noise, combustion noise, fan noise, intake noise, exhaust noise, wind noise, transmission noise and many other noises.
Lord Somers: My Lords, would the noble Lord not agree that the majority of the noise from heavy lorries is not exhaust noise but purely mechanical noise from the engine?
Lord Lucas of Chilworth: No, my Lords, I could not agree. It is a combination of a number of factors, the subject matters of which I have tried to describe to your Lordships in my last answer.
Lord Fanshawe of Richmond: My Lords, is my noble friend aware that many of the residents who live along the side of the narrow and winding South Circular Road suffer great disruption from heavy lorries? Would he give an assurance that when responsibility for this road is passed from the GLC to the transport department heavy lorries will be banned on this road and will be diverted on to the now M.25?
Lord Lucas of Chilworth: My Lords, I cannot give my noble friend that assurance. I do not have to hand details of that piece of road construction. If he cares to put down a Question, I shall be delighted to answer it.
Lord Elwyn-Jones: My Lords, could the noble Lord the Minister enlighten the House as to what the QHV(90) scheme may be? May not at least a partial solution of the decibel-producing, heavy-lorry nuisance be elminated by requiring these vehicles to keep away from the centres of our cities and towns?
Lord Lucas of Chilworth: My Lords, the QHV(90) scheme is the Quiet Heavy Vehicle (90) scheme. So far as removing vehicles from our city centres is concerned, the noble and learned Lord will appreciate that it is these lorries which probably take his meat and vegetables to the market place where he may buy them and it is essential that they go there. Removing the noise from the perception of the pedestrian or others is not just a question of imposing a screen between the lorry and that person.
Lord John-Mackie: My Lords, would the noble Lord the Minister care to do something about the appalling noise of two-stroke motor-cycles, which are worse than heavy lorries?
Lord Lucas of Chilworth: My Lords, that is quite a different Question.
Lord Constantine of Stanmore: My Lords, will the noble Lord the Minister bear in mind, in making these statements regarding decibel intensity, that 60 decibels is the intensity of normal speech and that when one talks about reducing sound by two or four decibels one is not really talking about any significant figure?
Lord Lucas of Chilworth: My Lords, I regret that I am not able to agree with my noble friend. Although these reductions of two or four in numbers of decibels to which I have referred sound rather small, the explanation is technical. The decibel scale is based on a physical measurement of sound pressure. Low numbers on the scale, from 0 to 10, are at the threshold of hearing; the highest numbers, from 130 to 140, correspond to noise so loud that it will cause pain and damage to the ear. Tests have shown that a 10-decibel reduction in the conditions which I have described corresponds broadly to what people perceive as halving the noise.
Lord Kennet: My Lords, when answering the noble Lord, Lord Paget, the Minister read out a list of bits of a lorry which make a noise as it goes along. Can he tell the House which of those bits make less noise at a moderate speed than at a high speed?
Lord Lucas of Chilworth: No, my Lords, I cannot do so without detaining your Lordships for the best part of the afternoon. I said that it is a combination. If I isolated one from another it would put a different accent upon the other.
Lord Underhill: My Lords, in reply to my earlier supplementary question the Minister said that because of the complicated nature of the machinery it was not
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practicable to have the annual testing in the testing stations include the testing of lorry noise. How is that complicated, heavy machinery random tested along the kerbside? If that is impracticable does it mean that there is no proper testing and enforcement in regard to heavy lorry noise?
Lord Lucas of Chilworth: My Lords, I did not say "heavy". I said complex and complicated machinery. There is, we believe, an adequate roadside check and an adequate annual testing check on exhaust condition. I said earlier that the noise from heavy lorries is a combination of a number of factors, exhaust being only one. One can normally visually examine the exhaust system which will indicate excessive noise from that area of the lorry.
Lord Constantine of Stanmore: My Lords, will the noble Minister bear in mind that 120 decibels is the threshold of pain at any level?
Lord Lucas of Chilworth: My Lords, I am much obliged to my noble friend for reminding me of that.

Nuclear Weapons
3.16 p.m.
Lord Jenkins of Putney: 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 are aware that there are now over 47,000 nuclear weapons in the world of which only 17,400 are owned by the USSR and whether they will ask the United States Government why they consider that it is necessary to continue to increase the numbers, variety and lethality of their nuclear weapons.
Lord Trefgarne: My Lords, as I have made clear to your Lordships on many occasions, it is the policy of all members of the NATO Alliance, including the USA, to prevent war through the strategy of deterrence. In October 1983 NATO Ministers endorsed a programme to reduce the number of the alliance's nuclear warheads in Europe to the lowest level for 20 years. And at the START talks the United States made a proposal for substantial reductions in warheads on strategic ballistic missiles.
Lord Jenkins of Putney: My Lords, would not the noble Minister agree that, while both sides have made specific proposals for reducing certain categories, as the discussions have been going on the totality of weaponry has increased and that, since I put down the Question on the Order Paper, the latest averages which I have calculated from the various international organisations suggest that the totality of nuclear weapons in the world now exceeds 50,000 warheads? In these circumstances, while the discussions have been going on the weaponry has been increasing, and is it not the case that there is no purpose in this increase because either side can eliminate the other with less than half of its existing weaponry? Will the noble Lord therefore not suggest to the United States that they are engaged in a fruitless exercise and should

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they not make some gesture, which I believe would bring a response from the other side, whereby it would be possible to make a start on bringing the weapons down instead of increasing them—increasing them all the time?
Lord Trefgarne: My Lords, I, too, would like to see a reduction in the number of warheads. That is why I hope that the Soviet Union will return to the negotiating table.
Lord Cledwyn of Penrhos: My Lords, as the House is aware, the resumed meeting of the United Nations Disarmament Conference met yesterday in New York. Disregarding the rhetoric which emanated from there on the first day, could the noble Lord say what initiatives Her Majesty's Government have got to make so that some progress may be made in disarmament? Secondly, could he say whether there is any prospect of the START meetings being reconvened, since, as he recalls, there was some thought in Stockholm that the START Conference could be reconvened fairly quickly? Is this likely?
Lord Trefgarne: My Lords, as I recall having mentioned to the noble Lord before, we hope that the Soviet Union will return to the START negotiating table, but they have not yet agreed a date.
Lord Cledwyn of Penrhos: My Lords, I wonder if the noble Lord will deal with my question about the resumed United Nations Disarmament Conference in New York, which reopened yesterday. I asked him what initiatives, if any, Her Majesty's Government are likely to take. I think this is an important point. Secondly, on the START talks, there was a clear indication in Stockholm that these talks would be reconvened. Could the noble Lord be a little more positive on that?
Lord Trefgarne: My Lords, the initiative to resume the START talks now rests with the Soviet Union. It is they who are considering the date upon which they can return. As for the other talks to which the noble Lord refers us, the noble Lord will understand that the main protagonists in this area are the main superpowers, the United States and the Soviet Union. But the United Kingdom, of course, stands ready to make whatever contribution we can.
The Earl of Lauderdale: My Lords, would my noble friend agree that there is a distinction here between warheads and weapons? Is it not the case that where warheads are concerned the Soviets are well ahead of the West?
Lord Trefgarne: My Lords, the precise number of warheads possessed by either side is not a matter which is readily ascertainable, but my noble friend may well be right.
Lord Mayhew: My Lords, is the noble Lord aware that it is possible to agree entirely with the need for a nuclear deterrent and yet to say that there is now extensive nuclear overkill on both sides? Do not the Government accept that this is so?
Lord Trefgarne: My Lords, I certainly agree that there is scope for mutual and balanced reductions by both sides, and that is why, as I said in answer to the first supplementary question this afternoon, we hope that the Soviet Union will come back to the negotiating table so that that may happen.
The Earl of Onslow: My Lords, is it not naïve to think that just because we throw something away the Russians will follow suit? Surely the perfect example has been chemical and biological weapons, which are outlawed by treaty and which the West does not have, and this has not stopped the Soviet Union building them up. If one could think that one could trust them, all right, let us do it; but we cannot trust them. This has been shown time after time and Her Majesty's Government are absolutely right to try to negotiate disarmament from strength rather than weakness.
Lord Trefgarne: My Lords, I think that my noble friend is suggesting that verification ought to be an important feature of any new agreement, and I quite agree.
Lord Kennet: My Lords, would the Government consider throwing their weight behind amalgamating the START and the INF talks on the principle that if two groups of people are negotiating about what to have for dinner, there is not much point in negotiating about the first course in one room and about the main course quite separately in another?
Lord Trefgarne: My Lords, that is certainly one of the possibilities that has been canvassed. But it is perhaps worth saying that difficulties have arisen in both of the separate talks that have been proceeding so far, and it is not immediately clear that those difficulties would automatically disappear if the talks were merged.
Lord Bishopston: My Lords, would the Minister accept that the reduction in the weapons to which he referred is really a reduction in numbers of weapons which are less effective and their replacement by much more lethal weapons than ever? Will he accept that if the Government continue to go towards parity in some ways this is leading to escalation, and the only hope is to pursue the policies which my noble friend Lord Cledwyn has just referred to in the negotiations?
Lord Trefgarne: My Lords, perhaps the noble Lord has forgotten that the replacement of a few SS.4s and SS.5s by SS.20s has been just the process he has described.
Lord Denham: My Lords, at a convenient moment after—
Lord Jenkins of Putney: My Lords, before the noble Lord intervenes, may I ask the noble Lord to correct his noble friend behind him by pointing out to him that in warheads, as well as everything else, the West has a substantial lead?
Lord Trefgarne: My Lords, I do not think it falls to me to correct my noble friend.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Lyell will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on Scott Lithgow. This will be followed by my noble friend Lord Belstead who will, again with the leave of the House, repeat a Statement on the Council of Agriculture Ministers 6th to 7th February 1984.
It may be for the convenience of the House if I announce that dinner will be available at the usual time this evening. The Committee stage of the Telecommunications Bill will be adjourned at approximately 7 p.m. for a short period. During this adjournment the Fishing Vessels (Financial Assistance) Scheme 1983 will be taken.

Prayer Book Protection Bill [H.L.]
Lord Sudeley: My Lords, I beg to introduce a Bill to provide for parishioners of any parish to require certain forms of service to be used in the parish church. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Sudeley.)
On Question, Bill read a first time, and to be printed.

Criminal Trespass Bill [H.L.]
The Earl of Onslow: My Lords, I beg to introduce a Bill to make it an offence in England and Wales in certain circumstances to enter as a trespasser any building in which a person has his home or other living accommodation, or any part of such a building. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Earl of Onslow.)
On Question, Bill read a first time, and to be printed.

Telecommunications Bill
3.15 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Cockfield.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [The Director General of Telecommunications]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 1:
Page 2, line 3, at beginning insert—
("( ) The Secretary of State shall appoint an Authority known as the Telecommunications Authority (in this Act referred to as "the Authority").
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( ) The Authority shall comprise not more than seven persons.
( ) The appointment of a person to the Authority shall not be for a term exceeding five years and such person shall not be eligible for re-appointment.").
The noble Lord said: It falls to me to have the privilege of moving the first amendment to this complex Bill which is bound, if and when it is passed, to have profound effects on British industry nationally and internationally. With the leave of your Lordships, I shall also speak to Amendments Nos. 2, 8 and 9.
Amendment No. 2: Page 2, line 3, leave out ("the Secretary of State") and insert ("the Authority").
Amendment No. 8: Page 2, line 10, at end insert—
("( ) The Authority shall from time to time publish information regarding matters referred to it by the Director.").
Amendment No. 9: Page 2, line 10, at end insert—
("( ) The Director shall in his discretion consult the Authority regarding disputes which have arisen or appear likely to arise relating to the administration and performance of the functions assigned or transferred to him under this Act.").
The purpose of the amendment is quite a simple one, but it is an important matter in view of the anxiety among the public, among members of the industry and among people in public life as to the way this Bill is being treated by the Government. The object of having an authority is that it should be composed of members selected by the Secretary of State and chosen from constituent elements of the industry, including, of course, the trade unions.
This authority should have merely two functions. First of all, it should appoint the new Director General of Telecommunications, a most important post. Its second function is an advisory function: to be there as a group of wise men and women behind the scenes to whom the director general, in his discretion—it is not mandatory upon him—may refer any of the difficult matters which are bound to arise in the course of his duties. It is not mandatory upon the director general to accept the advice of this authority in any way.
Having an authority of that kind appointed by the Secretary of State would help to reduce anxiety about the functions of the Secretary of State. At the present time, in the Bill as it now stands, the Secretary of State alone appoints the director general. Of course, the Secretary of State will hold a number of consultations behind the scenes, but it seems to me that it should be a more open affair. He should have this authority of wise men and women, expert in this industry and in trade union affairs, who should make that first and important appointment. I should have thought that the Secretary of State would find that an attractive proposition to agree to. My amendment refers to the number comprising this authority. I have suggested in the amendment that there should be seven. There is nothing magic about the number seven.
Then it must be understood that this authority has no executive authority whatsoever. Perhaps the title "authority", or the title "Telecommunications Authority", are not the correct titles. Perhaps the word "authority" could be changed and it could be called a council. It could be called an advisory body; but in no way would this authority interfere with the executive action of the director general.
Consider the position of this director general dealing with profound and difficult matters. Would it not, I ask rhetorically, be of great use to that man to have a number of wise men and women behind the scenes to

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whom he could go for advice if he wanted to? He is not compelled to go to them, but in his discretion he can present matters to this body, ask their advice, and then be free not to accept their advice if he, as the senior executive officer, feels that that would be appropriate.
The second amendment I am proposing is that, instead of the Secretary of State appointing the director general, it should be done by this so-called authority. Amendment No. 8 is quite formal. The authority would, of course, publish information from time to time regarding matters that have been referred to it by the director. It would be very useful for the authority to provide certain publications from time to time. The last amendment, No. 9, is the one that I have summarised. The director shall, in his own discretion—it is not mandatory—ask for advice from the authority, which he may or may not accept.
These seem to me to be simple and practical amendments. They would dilute a great deal of anxiety that is felt about the operation of this Bill. The director general would be appointed not by the Secretary of State but by a group of wise men and women who are in the background. That is the only positive action that they would take. They would then be available to give advice to the director general.
Amendment No. 1 is partly concerned with the tenure of these persons on the authority. I have indicated that each person who is a member of the authority shall be appointed for five years. Again, there is no magic in five years, but the amendment states that such persons shall not be eligible for reappointment after that five-year period. I say that because this is a technological industry of the highest order, and an authority or advisory council such as I have suggested would need to have men and women coming on to it and keeping in touch with developments, but not having the job for more than four or five years. It seems to me that this is a very practical suggestion. I know that it has support outside your Lordships' House from large numbers of institutions and parts of the industry. I beg to move.
Lord Taylor of Gryfe: I rise to support the amendment moved by my noble friend Lord Lloyd of Kilgerran. In the Second Reading debate I said that the difficulty about this Bill is that it seeks to impose a private enterprise pattern on a natural monopoly. What emerges is a private monopoly, and a private monopoly, like a public monopoly, creates certain anxieties and apprehension. I know of no other measure on which I have been so professionally lobbied as I have been on this Bill because of the proper anxieties of the parties who are affected by it.
First, the trade unions are apprehensive about their position in the new private enterprise set-up. Secondly, the consumers and the consumer protection body are naturally apprehensive about an organisation whose main purpose will be to secure profits for investors in the new enterprise. The groups who are concerned with social responsibilities—the people who are concerned about the disabled, the groups which are concerned about other groups in the community, such as the poor people who do not have a telephone in their home and who are dependent upon public telephone kiosks, and so on, all of which will be a cost
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on the new company—and, not least, the manufacturers who are suppliers to this industry, have great anxieties because it is within the power of the director general and the Secretary of State, under the procedures laid down in the Bill, to affect all of them quite dramatically. Consequently, we feel that there ought to be some authority, council or body which provides some degree of accountability or, at least, public awareness of what is going on.
On reading this Bill your Lordships will see that the powers of the Secretary of State and of the director are immense. So I believe, and my friends on these Benches believe, that the establishment of an authority of this kind would, at least, give the whole set-up some degree of credibility and perhaps even a little accountability.
I am attracted to think about this in relation to other private monopolies. I was thinking this morning about the role of the IBA. The IBA issues licences to private enterprise companies, which provide our private enterprise television network, under certain conditions that are laid down in the statute. But there is no question of these companies not being accountable to the IBA. In fact, the IBA, as a separate body, makes sure of the conditions of the licence and ensures that the parties affected and the public have some kind of oversight. The suggestion in this amendment is that this new authority might perform a somewhat similar function. In the case of the IBA, the system works and the public believe in the IBA. They feel that there is a degree of oversight and accountability.
Under this Bill there is an immense concentration of power in the hands of the Secretary of State and the new director general, whoever he may be, but he will be a somewhat remote figure from the 6 million or 8 million people who use a telephone. I believe that there should be some accountability, or some degree of responsibility, to all the groups that I have mentioned—the consumers, the manufacturers and the trade unions—who want to feel that under the constitution there is some body to which they could make some reference and over which they believe that they could have some kind of influence, rather than feel that a remote civil servant and a Minister are the people who will be responsible for discharging this immense public duty. Consequently, I support the amendment.
Lord Molloy: I, too, wish to support this amendment for a reason that has not yet been mentioned, and I should also like to support the submissions made by both the noble Lords who have spoken. It seems to me that, if there is anything that the Government ought to do, it is to accept this amendment. They are talking about privatisation and, as I understand it, there are departments of big organisations to look after specific interests. They do not just leave it to the chairman or the managing director. There is a plexus, a hierarchy, which seems to work, and I assume that the Government approve of that system. That being the case, then, to be logical, they will have to approve the amendment moved by the noble Lord, particularly in view of the poignant submission that has been made by both noble Lords with regard to the 8 million or 9 million people who are hard of hearing, blind or disabled.

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This is something which is not yet in the licence—I hope to speak on that later—and which ought to be put in immediately. I understand that in another place a promise has already been given to put this in the licence, so I should have thought that the representatives of the Government in the other place and the representatives of the Government in this place would stop some of their bickering, quarrelling and fighting which has been going on over the last few weeks, as we have all read in the newspapers, and come together on a special issue like this.
We are not arguing on behalf of one party or another. It seems to me that the submissions of both noble Lords in introducing the amendment were primarily made on behalf of those of our fellow citizens who are deprived in one way or another—because they have no sight, or are purblind, or because they are hard of hearing or deaf, or because they are disabled in some way. I should have thought that it would be a magnificent gesture by the Government not to leave this solely to the hit or miss vagaries of the market place where, as we all know, men gather together to cheat each other. I hope that they will show genuine concern and understanding for these people. I do not believe that the blind, the disabled and the hard of hearing want sympathy and compassion all the time; but what they do want all the time is understanding. That could be provided if an authority were created which included one member who was given special responsibility for the disabled.
Finally, may I ask the noble Lord, Lord Cockfield, to pay some attention to the fact that during the past 15 years we have seen enormous advances in telecommunications. Almost miracles have been performed in this technological industry. Many of the technical and technological advances which have been made can assist the disabled, as will the results of the research which will be carried out if the Bill becomes law. The licence ought to contain a condition that somebody will have responsibility, under the director general, for making sure that all aspects of technological advance which have not yet been thought of will be used to assist the disabled. The disabled should be given special consideration. If we start along that road with the submission made by the movers of the amendment and carry it forward into the future, we shall do good for those who are the disabled now and for those who we know for certain will be disabled in the future.
Lord Glenkinglas: I have a certain amount of sympathy for the mover of the amendment and for the way in which he moved it. I shall listen carefully to what my noble friend has to say, but my worry is how to get this off the ground and functioning. One knows that if one tries to achieve the type of body which I believe he wants to set up, consisting of six, seven, nine or more very distinguished people whom the Minister has to consult only when he wants to do so and to whose advice he does not have to pay any attention, it may well be that after 18 months or so they will all resign because they find the occupation not very well worth while. Having thought about the amendment, my only consolation is that these people will have the power to publish at fairly regular intervals the advice they have given and whether or not the Minister has
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accepted it. As soon as one does that, it seems to me to be a little naive to say that the Minister does not have to pay any attention to it.
Baroness Phillips: I should like to support the noble Lord who has just spoken. I have sympathy for the amendment. However, having for many years been concerned with bodies which have been set up by governments, it seems to me that it is virtually impossible for them, in the end, to be independent of government. I was on the National Consumer Council. Perhaps it is not in the same distinguished category as this authority. Nevertheless, this body was set up by government. It was noticeable that at each change of government those who were sympathetic towards the Government were immediately put on to this body, while the others were displaced. The Secretary of State will appoint the authority. What certainty shall we have that the authority will be so impartial and so august that it will not be influenced by any change of government? One of the unknown rules in the art of government is, "When we're in we put our friends in, and when they're in they put their friends in". How we are going to change this I shall be very interested to hear. I do not believe that the amendment carries sufficient weight to achieve that end.
Lord Ezra: In rising to support the amendment so ably moved by my noble friend Lord Lloyd of Kilgerran I should like to suggest that the Government ought to be very pleased by this proposition. The Bill contemplates the unique transfer of a massive concentration of industrial and technological might from the public to the private sector. It is a totally new venture, and in carrying it out we need to exercise extreme caution. The appointment of a single official, with his very large and wide-ranging powers, to try to regulate this operation virtually on his own, with the Secretary of State coming in behind him as a supervisor, does not seem to me to provide the reassurance which the public will be looking for. Therefore we need to devote some attention to the kind of body which should be set up. Whether it be precisely in the terms proposed by my noble friend or in some other way could be debated, but that there ought to be some body of people who are skilled in the various aspects of these matters and who could have a supervisory role over the whole operation seems to me to be highly desirable. That body must clearly be separate and distinct from government. It should be a body in which the public can feel that regular supervision is being exercised and that there is not an undue concentration of power in the hands of one man in this unique transfer of industrial power from the public to the private sector.
The Countess of Mar: I rise to support the amendment of the noble Lord, Lord Lloyd of Kilgerran. Nothing has yet been said about the tremendous complexity of the telecommunications industry. It covers almost every single aspect of our lives and it will take a superman to be able to cope with it all. This man will need somebody whom he can use as a sounding block, if not as a statutory adviser. If he were on his own I should not give him long before he had a nervous breakdown.

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A great deal has been said about the disadvantaged. There are plenty of them. However, we must not forget that there are hundreds of thousands of ordinary domestic telephone subscribers who will also suffer under the Bill and who will need somebody to whom they can turn. They need to be reassured that it is not a question of just one man, who can wield his power in whichever way he likes and whenever he likes to do so. Therefore I support the amendment.
Lord McIntosh of Haringey: We wish in general terms to support the amendment moved by the noble Lord, Lord Lloyd of Kilgerran, for very much the same reasons as he put forward. It is quite clear that the job to be done by the Director General of Telecommunications will be complicated. By the way, I wish that the noble Countess, Lady Mar, would not refer all the time to this person as "him"—or, as I hope that it might be, her. The complication of the task to be undertaken by the director general is clearly very great. It is not just a matter of monitoring the activities of British Telecom and other operators. The range of interests to be covered includes not only the operators but the manufacturers and in particular the consumers, to whom other noble Lords have already referred. It is impossible to expect the ability to cover all these diverse interests to be subsumed in the shape of one person.
The Department of Industry, in a statement issued in July of last year, referred to the task of the Office of Telecommunications as being to see fair play being done in telecommunications. What better way is there of achieving that than to have a body of people forming an authority, a council, or whatever it may turn out to be, who can represent the diverse interests involved and who can more readily approach the task of seeing that there is fair play than could a single person?
I will not make any adverse reference to particular appointments but if one takes it from the point of view of the Secretary of State himself, the risk of a political appointment to a position of this kind is very great; the risk of having somebody whose qualifications are those of a party loyalist rather than those of someone having a real understanding of the industry is very great. Nothing can do away with that risk. Nothing can do away with the responsibility of the Secretary of State supported, as we will propose in future amendments, by Parliament to make such an appointment. But the way in which that appointment is made and the way in which the powers are executed can be made more democratic by the support of an authority.
In general terms, then, we support the amendment. The only qualification we would have—but it will not stop us from supporting the noble Lords who moved this amendment as far as they want to go—would be on the degree of parliamentary control. Later amendments in our own names ask for greater parliamentary control and so go against Amendment No. 2, to which the noble Lord, Lord Lloyd of Kilgerran, has referred already. That qualification is not enough to detract from our support for the principle of some authority or body coming between the Secretary of State and the director general.
Lord Morris: Arising out of the remarks made by the noble Lord, Lord McIntosh of Haringey, I am concerned that he will be "his-ing" and "her-ing" all the way through the Committee stage of this Bill. The noble Lord knows as well as I do that even in law "male" embraces 'female".
Lord McIntosh of Haringey: We might as well start off right.
Baroness Carnegy of Lour: Before deciding what we should do with this amendment, we need to be clear exactly what it is that the amendment is saying. Is the amendment proposing an "Authority" with a capital "A" to whom the director general will be responsible—which is what the noble Lord, Lord Ezra, seemed to be talking about; or is the amendment proposing an advisory committee which will not be executive at all, except that it will have one enormously important executive act to perform—the appointment of the director general? The latter is what the noble Lord, Lord Lloyd of Kilgerran, was suggesting. We have heard two completely different suggestions from the noble Lords proposing this amendment and a variety of proposals from noble Lords backing them. We need to be clear what it is that has been suggested.
Baroness Macleod of Borve: I agree with the principle of the amendment because I believe that this job is too big for one man to assume. The noble Lord, Lord Taylor of Gryfe, alluded to the Independent Broadcasting Authority, of which I was a member for five years. He was absolutely correct, as far as I know, in saying that many other organisations were appointed when the local radio stations, for instance, came into being. They were completely separate, but there was still the authority—which was appointed by the Secretary of State. Nevertheless, the independent radio stations were very independent and I doubt very much whether the Secretary of State had much to do with the running of the Independent Broadcasting Authority.
Having said that I approve of the principle of this amendment, I humbly suggest that the number of persons comprising the authority may be varied from the seven proposed in the amendment, either one way or the other. Also, the proposal that an appointee shall not be eligible for reappointment after five years seems to me to be a mistake. One must have continuity; otherwise, one may not get fluid reasoning behind all the work that is done by the authority. I disagree with that provision, but I certainly agree with the principle of the amendment to establish an authority.
3.56 p.m.
Lord Cockfield: May I first congratulate the noble Lord, Lord Lloyd of Kilgerran, for being first in to bat on the Committee stage of this most important Bill. I only wish that it could have been possible for me in due course to congratulate him on knocking the first ball to the boundary—but I fear that will not be so. I hope that in due course I will be able to say that the noble Lord has been caught and bowled.
Like the noble Lord, I propose addressing my remarks to this group of amendments because they do

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stand together. I appreciate the spirit in which the noble Lord has moved this amendment because I am sure his intention is to facilitate the smooth and effective working of the Bill. But I must say, frankly, that I do not believe it would have that effect. It is not a proposal that would sit at all happily with the structure for the regulatory system which is included in the Bill itself.
The amendment, as my noble friend Lady Carnegy of Lour pointed out, is very limited in its scope. The noble Lords, Lord Ezra and Lord Taylor of Gryfe, seemed to suggest that it might be rather wider in its scope than it is. Certainly I appreciate that the noble Lord, Lord McIntosh of Haringey, would like to see its scope wider than it is. But I propose taking the amendment as it stands on the Marshalled List.
The body proposed in the amendment would not in fact exercise the executive functions which the Bill itself confers on the director general. It would not do that at all. It would be quite unlike a body such as the Civil Aviation Authority, if I may quote that as an example. In fact, it would have two functions. The first would be to appoint the director general. The second would be to advise the director general. Let me take those two functions. Under the terms of the Bill, the director general is appointed by the Secretary of State. That follows the practice which is pretty universally adopted in this field. The nearest parallel is the Director General of Fair Trading, who is also appointed by the Secretary of State, but there are numerous other examples which may be quoted.
There is a very good reason for that procedure. It is that the Secretary of State is answerable to Parliament, and what he does can be called into question in Parliament. At later stages in our discussions, noble Lords will no doubt be pressing for there to be greater parliamentary involvement. One of the principal reasons that the Bill provides for the Secretary of State to appoint the director general is to achieve that chain of parliamentary responsibility.
I will turn now to the advisory function. There is provision in Clause 52 for advisory bodies to be set up. That is mandatory in the case of advisory bodies for England, Wales, Scotland and Northern Ireland. There are amendments on the Marshalled List which would provide for the creation of other advisory bodies. Quite apart from that, the real point is that the Bill very clearly defines what the functions and duties of the director general and the Secretary of State are to be. In the last resort, the director general can be challenged in the courts by somebody who is aggrieved by a decision he has taken. It would sit very ill with a chain of responsibility of that sort to attempt to interpose an advisory body—particularly if one bears in mind the fact that the body would only advise if the director general asked that body to do so. The intention, I quite accept, is that the body should act as a guide, a comforter and a support for the director general. But it just does not fit in with the pattern of the Bill, which is one of establishing legal duties and, therefore, legal rights.
There is also the point that I might make that the director general is obliged to produce a report every year, and that report could be debated in Parliament under the normal rules, so there is supervision exercised by Parliament in that direction. The
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Secretary of State, of course, is also subject to examination and challenge in Parliament. Provision is also made in the Bill in certain circumstances, where there is a disagreement between the director general and a licensee over the terms of a licence, for the director general to go to the Monopolies Commission. So in that broad area there is a channel for a second opinion to be obtained.
The simple position, quite frankly, is that the Bill makes ample provision for the exercise of the powers given to the director general—and they are very great powers; I do not in any way dispute that. There is ample provision for the supervision of the exercise of those powers by Parliament, and ample provision for people to challenge his decisions in courts of law. While, therefore, I entirely appreciate the sentiments underlying the amendment, I frankly could not advise your Lordships to accept it, because it would not be consistent with the general pattern of the Bill and it would not in fact add any protection which does not exist at present. Nor would it make it possible for Parliament to exercise any greater control than it can exercise already through the Secretary of State.
Lord Bruce of Donington: I am sorry the noble Lord finds himself unable to agree with this very moderate and well-argued amendment put forward by the noble Lord, Lord Lloyd of Kilgerran. The noble Lord waxed almost ecstatic over the virtues of parliamentary control. Perhaps it might occur to him that the general powers conferred on the Secretary of State under Section 6 of the Telecommunications Act 1981 are working very well, thank you, and that there is adequate parliamentary responsibility there.
It rather seems to me that this is a Bill that is cast over a very wide field and in very wide detail. What is now happening is that there is being given to a specific individual, the Director General of Telecommunications and Oftel, detailed powers that would seem to cut right across the noble Lord's ideological concept of freedom for private enterprise to go about its own work without detailed interference by the state. The argument seems to be contrary.
This Bill differs from most other Bills of its type in that it deals essentially with the privatisation of a very well known and very well respected public service. Here it breaks new ground, and there is widespread anxiety, which the noble Lord must know, all over the country, not confined to any one party, as to the steps being taken. There is a degree of nervousness, and the noble Lord must take account of it, that very wide powers should be concentrated at this moment in the hands of the Secretary of State, who certainly cannot be described as a political neutral in the party struggle. He is a well-known, respected and partisan politician. There is perhaps a feeling, of which the noble Lord ought to take account, that there has to be a little check here.
If one takes the analogy of what goes on in private industry, the noble Lord is well aware that there are such things as non-executive directors on the boards of companies, and they mainly serve the purpose of acting as a sounding board for the managing director to express his views. They offer their own free and independent views to him, although they do not take an active part in the management of the company. I do

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not want to put words into the mouth of the noble Lord, Lord Lloyd of Kilgerran, but I think that is the kind of non-executive function he has in mind for this particular authority. I think that wise, and I think the country may think it wise, in an important appointment of this kind covering a very wide field, embracing not only the fortunes of manufacturers, the fates of those who provide the service and the whole nature of the machinery of plant and service techniques involved, but also the fate of the individual customer. Remember that over 80 per cent. of British homes have telephones at this time. It ought not to be left to the sole determination of the Secretary of State to make this very important appointment. We shall refer to other characteristics of the appointee, as we see him, later in the debate.
I think the terms of the amendment are very moderate. I think that perhaps at a later stage, if the amendment were fortunately carried, some work would have to be done before the Report stage in order to carry the full implications into the Bill. But it is a provision which I think would command very wide respect throughout the Committee, and I sincerely hope your Lordships will support it.
Lord Ezra: In his very reasoned reply to the amendment the noble Lord, Lord Cockfield, referred to Clause 52, which makes provision for the establishment of certain advisory bodies. The weakness in Clause 52, I submit, is that those advisory bodies would be appointed by the director himself; he would appoint them if he wished, and he would nominate their members. It seems to me that this is a very weak alternative to the independent advisory body my noble friend has proposed.
Lord Weinstock: Would the noble Lord, Lord Cockfield, perhaps agree that the strongest argument against this amendment is that it makes no material difference to what is basically a rather unsatisfactory Bill?
Lord Molloy: I wonder whether the noble Lord, Lord Cockfield, would be prepared to consider the arguments that have been submitted. I did not think that his arguments were moderately put, but I thought we had a faint ray of hope that the Government might like to consider some aspects of the points made by the noble Lord, Lord Lloyd, and later by Lord Ezra.
When the noble Lord, Lord Cockfield, says that the director general has all these powers and is answerable to the Secretary of State, it seems to me that this runs quite contrary to any normal business function of any big company or any big organisation. There always seems to be a team with special responsibilities, and that is what we are asking for. What we do not want, whether or not advisory, is extra people appointed with responsibility. I believe that in this country we have always set our face against the principle of authoritarian dictatorship. That is what seems to be written into the Bill, and that is what we are asking the Minister to change.
My final point is this. Every member of this Committee knows full well that the Secretary of State has a massive band of support behind him. He has
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massive Civil Service support, and some of the civil servants are very eminent people in particular fields who have special responsibilities. We all know that in the Foreign Office there are many eminent people, eminent scholars with special knowledge of certain parts of the world, and so on. All that we are asking is that the director general should also be equipped with a team which has special responsibility because it is such a large organisation, similar to a small department of state or a large private enterprise undertaking. In so far as this aspect seems congruous I hope that the noble Lord, Lord Cockfield, will at least say he will take the amendment and consider it.
Lord Donaldson of Kingsbridge: I hope that the noble Lord will pay attention to what my noble friend Lord Ezra said. The reason I favour this amendment is that this is the first place in the Bill where the consumer can get any attention at all, and I agree with the noble Lord, Lord Weinstock, that the position is in many ways entirely unsatisfactory. We have amendments tabled on Clause 52; but as my noble friend Lord Ezra pointed out, the committees with which we should have to fiddle about to get some proper consumer representation would be appointed by the director general, which is quite clearly not the right way to appoint consumer representation.
I ask the noble Lord not just to refuse this amendment but to look at it again and see how it can be brought in so that the things that the whole Committee, without a single exception, has said are desirable but which may not be in quite the right form, can be considered and perhaps brought back by the Government later.
The Countess of Mar: The noble Lord, Lord Cockfield, said that consumers would have recourse to the courts. At present, if consumers have a complaint against British Telecom they can write to the Council of Post Office Unions, to their MPs, to the general manager of the telephone area concerned, or to the director of the region concerned and in every case when such a letter is received it is marked as a flag case and dealt with very promptly. Although consumers might not get financial reimbursement, the cases are dealt with very sympathetically and rapidly. I wonder whether the noble Lord realises that "grannie in the glen", as the noble Lord, Lord Ferrier, always describes her, is probably terrified of the courts and probably cannot afford to use them. What recourse has she?
Viscount Trenchard: I wonder whether the movers of this amendment would accept that my noble friend's answer in relation to the appointment of the director general by the Secretary of State really is unarguable. If the Secretary of State is to be responsible to Parliament for the activities of this vitally important area, he must have the usual right to appoint the director general. Perhaps the movers of the amendment would like to consider whether the advisory functions, which are in the other part of the amendment, should be strengthened in a different form of amendment. That would seem to me to be a subject well worth further discussion.
Lord Lloyd of Kilgerran: We have had a long and interesting debate on this important matter and I am grateful to all who have spoken, if I may presume to say so. I was very grateful to the noble Lord the Minister because he came a long way towards me, at least in so far as my sentiments are concerned. I felt that the theme, as it were, behind my amendment touched him and he was kind enough to say a few words about me personally.
The noble Baroness, Lady Carnegy of Lour, referred to a point that is worrying her and touched on the kernel of the matter. I could not call the authority an advisory body because its first function is to appoint the director general. Therefore, in that aspect it is taking a positive action which is not an advisory matter. Subsequently, its whole career, if that is the right way to put it, would be advisory where the director general could use its talents as he so wished. Of course, if the authority found that the director general did not accept its advice, its members could resign. But what of that? Many a body has advised a Secretary of State and the advice has been rejected. But the sanction behind the authority is that it can regularly publish the reasons why the director general did or did not accept the advice.
May I presume for a moment to analyse the real objections by the Government to my proposals. The noble Lord said—and I hope I have noted his words correctly—that in the Bill there is ample provision for the exercise of powers by the director general. I agree with him. But I am not in my amendment affecting in any way the executive position of the director general or any of his duties. Therefore, the first point made against my amendment by the noble Lord, Lord Cockfield, falls to the ground. He said that the amendment was not consistent with the pattern of the Bill. Those seem to me to be only words. What is the pattern of this complex Bill? The first thing is that the Secretary of State is to appoint the director general. That is the pattern of the Bill and my amendment is directed towards that.
The noble Baroness, Lady Phillips, was worried about whom should be appointed and that it might be political, with the chap changing from one government to another. May I assure her, as she well knows, that there is no justice in this world Surely it is better that an authority, a group of men and women, should appoint this man rather than the one politician—the Secretary of State. I see that as the noble Baroness is nodding her head in agreement she has accepted my argument that there is no problem in this matter as outlined by her.
The Minister referred to the fact that anyone in dispute with the director general could go to the Monopolies Commission or the Office of Fair Trading. That would inevitably lead to a delay of about two years; and, as the noble Countess, Lady Mar, said, it is an expensive matter to go to the courts.
My final point is that here is an amendment for which, if I may presume to say so—because many members of the Committee have said this—there is general sympathy. There are perhaps certain general procedural matters that can be sorted out later; but there is general sympathy for it. Because of the immense power behind the director general, the great
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importance of the Bill and the great anxiety there is on this matter, why not alter the practice of the past? Therefore, I wish to press my amendment.
4.19 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 112; Not-Contents, 116.

DIVISION NO. 1

CONTENTS

Airedale, L.

Jenkins of Putney, L.

Alport, L.

John-Mackie, L.

Amherst, E.

Kaldor, L.

Ardwick, L.

Kearton, L.

Attlee, E.

Kennet, L.

Aylestone, L.

Kilmarnock, L.

Banks, L.

Kirkhill, L.

Barrington, V.

Kitchener, E.

Beswick, L.

Lawrence, L.

Birk, B.

Leatherland, L.

Bishopston, L.

Listowel, E.

Blyton, L.

Llewelyn-Davies of Hastoe, B.

Boston of Faversham, L.

Lloyd of Hampstead, L.

Briginshaw, L.

Lloyd of Kilgerran, L.

Brooks of Tremorfa, L.

Longford, E.

Bruce of Donington, L.

Lovell-Davis, L.

Buck master, V.

McGregor of Durris, L.

Burton of Coventry, B.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

McNair, L.

Carver, L.

Mais, L.

Chelmsford, Bp.

Mar, C.

Collison, L.

Mayhew, L.

Dacre of Glanton, L.

Mishcon, L.

David, B.

Molloy, L.

Davies of Penrhys, L.

Nicol, B.

Dean of Beswick, L.

O'Brien of Lothbury, L.

Delacourt-Smith of Altervn, B.

Oram, L.

Peart, L.

Denington, B.

Phillips, B.

Diamond, L.

Plant, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L.

Donnet of Balgay, L.

Porritt, L.

Edmund-Davies, L.

Rathcreedan, L.

Elystan-Morgan, L.

Rea, L.

Evans of Claughton, L.

Richardson, L.

Ezra, L.

Rochester, L.

Fisher of Rednal, B.

Segal, L.

Fitt, L.

Simon, V.

Gaitskell, B.

Stamp, L.

Gallacher, L.

Stedman, B. [Teller.]

Galpern, L.

Stewart of Alvechurch, B.

Gladwyn, L.

Stewart of Fulham, L.

Gormley, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Stone, L.

Grey, E. [Teller.]

Strabolgi, L.

Hale, L.

Strauss, L.

Hall, V.

Taylor of Blackburn, L.

Hampton, L.

Taylor of Gryfe, L.

Harris of Greenwich, L.

Taylor of Mansfield, L.

Hatch of Lusby, L.

Tordoff, L.

Hooson, L.

Underhill, L.

Hunt, L.

Wallace of Coslany, L.

Hylton-Foster, B.

White, B.

Ilchester, E.

Willis, L.

Jacobson, L.

Winchilsea and Nottingham, E.

Jacques, L.

Jeger, B.

Wootton of Abinger, B.

NOT-CONTENTS

Adeane, L.

Belhaven and Stenton, L.

Alexander of Tunis, E.

Bellwin, L.

Atholl, D.

Belstead, L.

Auckland, L.

Bessborough, E.

Avon, E.

Boyd-Carpenter, L.

1287

Brookes, L.

Luke, L.

Bruce-Gardyne, L.

Lyell, L.

Caccia, L.

McAlpine of West Green, L.

Campbell of Alloway, L.

McFadzean, L.

Campbell of Croy, L.

Mackay of Clashfern, L.

Carnegy of Lour, B.

Margadale, L.

Carrington, L.

Marley, L.

Cathcart, E.

Marshall of Leeds, L.

Clitheroe, L.

Massereene and Ferrard, V.

Cockfield, L.

Maude of Stratford-upon-Avon, L.

Constantine of Stanmore, L.

Cork and Orrery, E.

Merrivale, L.

Croft, L.

Morris, L.

Cullen of Ashbourne, L.

Mottistone, L.

Daventry, V.

Mountgarret, V.

Davidson, V.

Mowbray and Stourton, L.

De La Warr, E.

Murton of Lindisfarne, L.

Denham, L.

Northchurch, B.

Dilhorne, V.

Onslow, E.

Drumalbyn, L.

Orkney, E.

Ebbisham, L.

Orr-Ewing, L.

Eccles, V.

Pender, L.

Effingham, E.

Pennock, L.

Elles, B.

Polwarth, L.

Elton, L.

Portland, D.

Enniskillen, E.

Rodney, L.

Faithfull, B.

St. Davids, V.

Fanshawe of Richmond, L.

Saint Oswald, L.

Ferrers, E.

Saltoun, Ly.

Fraser of Kilmorack, L.

Sandford, L.

Gainford, L.

Sempill, Ly.

Gisborough, L.

Shaughnessy, L.

Glanusk, L.

Skelmersdale, L.

Glasgow, E.

Somers, L.

Glenarthur, L.

Spens, L.

Glenkinglas, L.

Strathcarron, L.

Gormanston, V.

Sudeley, L.

Gowrie, E.

Suffield, L.

Greenway, L.

Swinton, E. [Teller.]

Gridley, L.

Terrington, L.

Grimthorpe, L.

Teviot, L.

Hailsham of Saint Marylebone, L.

Teynham, L.

Thorneycroft, L.

Harvington, L.

Torphichen, L.

Henley, L.

Trefgarne, L.

Hives, L.

Trenchard, V.

Home of the Hirsel, L.

Trumpington, B.

Hornsby-Smith, B.

Vaizey, L.

Jessel, L.

Vaux of Harrowden, L.

Kinnaird, L.

Ward of Witley, V.

Lane-Fox, B.

Weinstock, L.

Lloyd, L.

Whitelaw, V.

Long, V. [Teller.]

Windlesham, L.

Lucas of Chilworth, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
Lord Glenarthur: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Scott Lithgow: Acquisition Negotiations
4.27 p.m.
Lord Lyell: With the leave of your Lordships, I shall now repeat a Statement which has been made by my right honourable friend the Secretary of State for Trade and Industry in another place in reply to a Private Notice Question. The Statement is as follows:
"Yesterday the Government were informed that British Shipbuilders and Trafalgar House had reached a conditional agreement on the acquisition of Scott Lithgow. Negotiations are still under way.
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Final agreement requires Government approval. In the meantime it is still open to other parties which have expressed interest also to pursue the matter with British Shipbuilders. The Government have, of course, been kept fully informed of the terms of the conditional arrangement between British Shipbuilders and Trafalgar House and we are currently examining these."
My Lords, that concludes the Statement.
Lord Bruce of Donington: My Lords, we on this side of the House should like to thank the noble Lord for having made that Statement. We of course have very little information about what is going on behind the scenes and have to rely very largely on reports that appear in the press—notably in the Financial Times. We are therefore relieved that the Government are keeping an open mind on the question, and that other firms are to be permitted to tender. But that deals with only one aspect of the matter.
The noble Lord will recall that on 20th December last his noble friend Lord Cockfield made a Statement about the Britoil contract with Scott Lithgow and said that there would be a six-week delay while negotiations took place between the parties to see whether some satisfactory arrangement could be made to resolve the differences that arose between Scott Lithgow and Britoil. Can the noble Lord say whether there is any connection between the negotiations that have taken place with Britoil and the apparent sudden spate of offers, to which the Government have given no discouragement, from a number of outside firms for the acquisition of a company which, according to the noble Lord's noble friend the noble Lord, Lord Cockfield, was involved in rather considerable litigation? Can the noble Lord throw some light on that aspect of the matter? Will he bear in mind that there is some anxiety lest the action by Britoil against British Shipbuilders has to some extent been overshadowed by what appears to be a connected bid from outside firms—as it were back-door privatisation of the company? Perhaps the noble Lord can make some comment on that.
Lord Taylor of Gryfe: My Lords, we, too, on these Benches should like to thank the noble Lord for repeating the brief but hopeful Statement regarding the outcome of the negotiations at Port Glasgow and Greenock. The House will be relieved by the prospect of the 4,000 redundancies announced some time ago perhaps being offset a little by the possibility of Trafalgar House taking over the yard and employing at least a large proportion of the people who a few weeks ago seemed to have no hope of further employment in the yard.
We have been told that at the moment the details of the terms of the take-over cannot be given, and I should like to ask the Minister whether, when the terms are agreed and spelled out, he will return to the House and tell us a little more about the detail of this interesting transaction. I assume, and I gather from the Statement, that the workforce is to be fully involved in the negotiations on the take-over. Without the workforce's full co-operation the whole take-over could be frustrated.

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We should also welcome at the end of the day some comment on the new responsibilities of Trafalgar House in regard to the Britoil contract. It is somewhat surprising that a private company can come in and negotiate a contract to take over this particular liability when it did not seem to be within the powers of British Shipbuilders so to do, and perhaps at some stage we may be given an explanation of the new situation which has arisen which makes that possible.
However, with what might be termed as those qualifications, we very much welcome the Statement that has been made, and we sincerely hope that it will relieve the gloom just a little at the tail of the bank of the Clyde.
Lord Galpern: My Lords——
Lord Lyell: My Lords, I look forward to hearing the noble Lord, Lord Galpern, in a few moments, but first I should like to reply to the two other noble Lords. I wish to thank the noble Lords, Lord Bruce of Donington and Lord Taylor of' Gryfe, for their welcome of the Statement which I have repeated this afternoon. I should also like to thank the noble Lord, Lord Bruce, for the publicity for the Financial Times, that admirable organ that helps to inform me, too, and I think a great many other Members of your Lordships' House. The noble Lord wondered whether there was any connection with the comments made by my noble friend Lord Cockfield on 20th December last year. I would not be able to give the noble Lord very detailed information on any connection between anything that my noble friend said on that date and the news that I have been able to give your Lordships today.
I stress to the noble Lords, Lord Bruce and Lord Taylor, that the details of the agreement which we hope will be reached between Trafalgar House and British Shipbuilders have yet to be settled, and I am sure that your Lordships will agree that for commercial reasons they must remain confidential. However, I assure your Lordships that the Government will be examining the details in depth to ensure that the deal is a sound one in the best interests of the taxpayer.
The noble Lord, Lord Bruce, referred to what he called back-door privatisation. I certainly refute that suggestion. The noble Lord also asked about legal action. If any satisfactory arrangement is reached, then clearly the current legal disputes between Britoil and British Shipbuilders will be settled. I stress to the noble Lord, Lord Bruce, that we believe that a new start for the yard, under new ownership, offers a real chance—the best chance—of long-term survival for the yard and for everybody who has an interest in it.
I am particularly grateful to the noble Lord, Lord Taylor, for his kind words in describing the Statement as "hopeful". I appreciate his local connection and note the way in which he used the attractive term "the tail of the bank"—which I seem not to have heard since 20 years ago when I was working in Glasgow—which showed the noble Lord's local connection. I cannot promise to give the noble Lord, nor your Lordships, the terms of the particular deal, but I hope that subject to the confidentiality aspect in a commercial sense, we shall be able to give as much information as we possibly can on that score.
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The noble Lord, Lord Taylor, asked two other questions. First, I stress to the noble Lord that full agreement on what was mentioned in the Statement will of course depend on Britoil being satisfied on both commercial and technical grounds that the new operator can successfully complete its rig as well as on the full co-operation of the workforce. I understand that discussions between British Shipbuilders, Trafalgar House, and Britoil, and in a parallel way between Trafalgar House and the representatives of the workforce, are in hand at this moment.
Lord Galpern: My Lords, only a few weeks ago the workforce in the shipyard decided to carry on despite the fact that the contract with Britoil had been lost. Today the workforce has come out on strike and left the factory as a protest against the method of handling the transfer of the effects of the shipyard to Trafalgar House. Bearing that in mind, will the noble Lord ensure that British Shipbuilders will be instructed to invite tenders for the transfer of the Scott Lithgow shipyard and that the period of time for lodging tenders will not be unreasonable? I particularly ask about that because already in Scotland in the instances of the transfer of the technical college at Hamilton and the sale of the Robroyston Hospital great bargains were offered, and in one case that was due to the fact that tenders were not even invited. Therefore will the noble Lord see to it that a reasonable opportunity will be given to anyone who is interested in submitting a tender?
Lord Polwarth: My Lords, will not the noble Lord agree that rather than carp at the details of the proposed transaction we should warmly welcome the only possible solution to keeping open this famous shipyard and maintaining some employment in shipbuilding on the Lower Clyde, as well as the hope that possibly it will restore the yard to the high state of efficiency which it enjoyed prior to nationalisation?
Lord Lyell: My Lords, first I should like to thank the noble Lord, Lord Galpern, for his interest in the Statement. Of course we would expect his interest, since he is a firm supporter of everything that goes on in and around Glasgow. I am afraid that I could not follow the noble Lord down the line regarding Hamilton and Robroyston, and while I accept the principle of what he says, I could not necessarily accept it in relation to this particular operation so far as Scott Lithgow is concerned.
I stress to the noble Lord, Lord Galpern, and to your Lordships, that a number of other companies besides Trafalgar House have expressed interest. One of the other companies is Bechtel, and only yesterday Howard Doris expressed an interest in tendering for the completion of the Britoil contract. I hope that this little snippet of information will be of some comfort and value to the noble Lord, Lord Galpern, and to your Lordships.
I am immensely grateful for the sturdy support of my noble friend Lord Polwarth and, indeed, his support for what we hope will be the ability to complete this contract. My noble friend has considerable experience, both from this position and outside, of these operations. We are all the more grateful to my noble friend for his forthright support.

EC Agriculture Ministers: Brussels Meeting
4.40 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, with the leave of the House, I shall repeat a Statement being made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement is as follows:
"I represented the United Kingdom Government at the Council of Agriculture Ministers, together with my honourable friend the Minister of State. The council had a first discussion of the commission's proposals on agricultural prices for 1984. These were presented by the commission with the earlier proposals for changes in the common agricultural policy. The council had a detailed exchange of views but no decisions were taken. Officials will be carrying forward the work between now and the next council at the end of the month.
"The council reached agreement on an import quota for 1984 of 50,000 tonnes of beef and veal for the processing industry. This is an important source of raw material for the processing industry. Given the opposition of some member states to these imports, it was a very satisfactory outcome to have reached this agreement so early in the year.
"Because of the continued opposition of some member states, there was no progress on new long-term arrangements for imports of New Zealand butter.
"In a discussion of the commission's new structure proposals, it was evident that a great deal more work is needed before decisions can be taken. No agreement was possible on the terms for a rollover of the existing directives.
"My agriculture colleagues and I recognise that producers cannot be left in a continuing state of uncertainty about claims and applications under the schemes concerned. I am, therefore, delighted to be able to inform the House that payments of the 1984 hill livestock compensatory allowances will begin immediately; and that we shall also begin approvals of outstanding and new applications under the Agriculture and Horticulture Development Scheme, the Farm and Horticulture Development Scheme, the Agriculture and Horticulture Co-operation Scheme for forage groups and the Farm Structure (Payment to Outgoers) Scheme".
That concludes my right honourable friend's Statement.
Lord John-Mackie: My Lords, in thanking the Minister for repeating the Statement I think I should offer my condolences to him for having to read such a disappointing one. Frankly, as a politician and as a farmer—I must declare my interest—the Statement is very disappointing indeed, although the last paragraph, which announces that payment of compensatory allowances for livestock schemes is to start at last, will be welcome news to hill farmers in all three countries who have been awaiting the money for a considerable time.
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Can the noble Lord say what the Statement means when it says:
"We shall also begin approvals of the outstanding and new applications."?
Does this mean payments, or only approvals? Will the low ground men have to wait for their payments? I should be glad if the Minister can clear up this matter. The import quota for 1984 of 50,000 tonnes of beef will certainly please the processors. Is there any distribution of this quota to various countries, or is it a case of devil take the hindmost? What is to happen?
On the New Zealand butter arrangements, I had thought that under the 1972–73 negotiations we would continue to import butter with steady reductions until finished, with no new negotiations to take place. I wonder whether the Minister can clear up that point.
On the whole, there is little information in the Statement. In fact, one almost has to go to the Financial Times for information. I have been chided in the past for quoting the Financial Times too much. Its account is even more depressing than the Statement. The headline yesterday was:
"EEC farm ministers fail to bridge gap on reforms and prices".
It is worse today. The headline reads:
"Brussels fears farm row will wreck summit".
I do not know whether the Minister agrees. It is rather alarming to read the remarks of M. Rocard, the French Minister. The report states:
"M. Rocard said after this week's two-day meeting of Farm Ministers that the summit may well have to break their impasse. The Commission believes that this risks dooming it to failure under the weight of technical detail and disagreements which sank the Athens summit in December.".
That, as we know, is exactly what happened.
One recalls all the complications in the regulations, prices and so on. Believe me, as a member of your Lordships' sub-committee on EC agriculture I know only too well the detail that is involved. If this issue is to go to the summit, will we have to wait until after the end of March when we have been repeatedly promised that a settlement will be made? It makes life difficult for farmers when negotiations continue, in some cases, right up to December before the issue is decided.
I appreciate the attitude of the Germans when they see that their incomes may drop by 15 per cent. I have before me the annual review of agriculture in this country, issued yesterday, from which I see that farm incomes are likely to drop by nearly 18 per cent. I can see Ministers' difficulties from a political point of view if figures of this sort are to be realised in all 10 countries. I feel that it is a very disappointing Statement. The Minister must be very disappointed, as well as everyone else. Let us hope that the slight optimism in the Statement will come to pass.
Lord Gladwyn: My Lords, in the regrettable absence of my noble friend Lord Mackie of Benshie it falls to me to thank the Minister for repeating the Statement. It is, admittedly, a very disappointing Statement. Not being very conversant with many of the details of the matters discussed by the agriculture Ministers. I simply take note of the apparent fact that no decision was taken by them in respect of the obviously necessary reform of the common agricultural policy. I

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inquire whether there is any prospect of agreement on this very difficult and important subject being forthcoming at the next meeting of Ministers, which is to take place, I understand, at the end of the month. If not, does the Minister agree that everything will depend on the next summit meeting, which will, I believe, take place at the beginning of March?
In the absence of detailed compromises worked out by experts, as regards which there appears to have been little or no progress—I would ask the Minister to confirm that this is so—are we really to suppose that the heads of state and government will, by themselves, in a few days, be able to reach the agreement that is now essential for the very continuance in being of the European Economic Community? In the meantime, we can be thankful for small mercies; namely, the payment of 1984 hill livestock compensatory allowances, which are to begin immediately, and a few other matters mentioned in the Statement.
Lord Belstead: My Lords, both the noble Lord, Lord John-Mackie, and the noble Lord, Lord Gladwyn, are correct in saying that it is the Government's prime objective, or one of their prime objectives, that the growth in agricultural guarantee spending should be markedly less than that of own resources. It is on that vital point that agreement was not reached at this last agricultural Ministers meeting. When the noble Lord, Lord Gladwyn, asks, "What are the next steps?", the answer is that negotiations on CAP reform are now proceeding in the context of the commission's proposal for agricultural prices for 1984–1985. We shall have to come to these matters again in the agricultural council and see if we can make better progress.
Indeed, so far as progress is concerned, because of the Government's decision to take action—the decision of my right honourable friend together with his right honourable friends the Secretaries of State for Scotland, for Northern Ireland and for Wales—my right honourable friend's payments of the hill livestock compensatory allowances and, indeed, other remaining grant schemes at least now sort out the fact that grants will be paid to those who are awaiting payment. The noble Lord, Lord John-Mackie, asked whether it was only to be for those who are in the hills and whether it would leave those who are not in the hills out in the cold. The answer is, No; immediate arrangements are being made for first payments under all the schemes that I mentioned and that means that those schemes will now be going ahead.
The noble Lord also asked me about how the distribution of the import quota for beef and veal works out. It works out by individual applications made by this country to the pool of 50,000 tonnes of beef and veal for the processing industry which has now been agreed. It means, if I may slightly change the noble Lord's expression, that it is first come, first served.
The noble Lord asked me about the very important question of New Zealand butter. The present state of play is that for January and February the Community is continuing to take in butter from New Zealand, based on a notional quota for this year of 83,000 tonnes. I repeat that this is for the months of January and February, pending agreement. That is another
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reason why it was so necessary to get agreement. The Commission has proposed a long-term arrangement which would run over a period of five years with degressivity from year to year of 2,000 tonnes each year, starting from 83,000 tonnes. I would simply say on behalf of the Government that it looks as though there could be a basis for some agreement there. But it is the view of Her Majesty's Government that any agreement ought to start from 87,000 tonnes, and that is certainly the basis upon which we shall be negotiating. I think that I have answered the individual points which noble Lords put to me on my right honourable friend's Statement.
Lord Mottistone: My Lords, is my noble friend aware that the approval of the meat imports for processing will be much welcomed by the food processors in this country? I only hope that they will get their fair share in the first come, first served race, and that they will note quickly the need for that.
Lord Belstead: My Lords, I am grateful to my noble friend Lord Mottistone. All I would add is that, as I understand it, the procedures for applications will be exactly the same as they have been previously.

Telecommunications Bill
4.53 p.m.
House again in Committee on Clause 1.
[Amendment No. 2 not moved.]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 3:
Page 2, line 3, after ("appoint") insert ("following an examination of the candidate by the House of Commons Select Committee on Trade and Industry").
The noble Lord said: I beg to move Amendment No. 3 which stands in the names of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey and myself. I listened very carefully to the previous debate which showed very clearly that there was great concern at the lack of accountability in this particular Bill. That was expressed by the noble Lord, Lord Lloyd of Kilgerran, and other noble Lords from all parts of the Committee, and the vote—which was a very close run thing for the Government—showed just how concerned noble Lords are about the Bill.
We on this side of the Committee are very concerned about parliamentary accountability. Indeed, many later amendments to make the actions of the Secretary of State subject to parliamentary approval show how concerned we are. I am glad to say that we are joined in that concern by the noble Minister who, in arguing against the previous amendment, felt that parliamentary accountability might be weakened if it were passed. Under those circumstances I hope that he will welcome this amendment, which I am sure he will agree will strengthen parliamentary accountability and certainly not weaken it.
We are also concerned with the abolition of the Post Office Users' National Council. That body has looked after the interests of telephone consumers over a very long period and has done so very satisfactorily indeed.

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The advisory bodies to which the noble Minister referred, and which are mentioned in Clause 52 of the Bill, are not of the same status as POUNC, and nor indeed will they have the same authority. Further-more, because British Telecom will cease to be publicly-owned, the ability of Parliament and individual Members of Parliament to probe, to question and to some degree protect the customer will be severely circumscribed by the Bill—if not eliminated altogether.
The fact is that we are about to convert British Telecom from a public monopoly into a private monopoly. One of the reasons for the proposal to set up a Director General of Telecommunications is to do the job which the Post Office has been doing over the last 70 years, and that is to provide a satisfactory service to the consumer, and indeed to protect the consumer. Now we have to have all sorts of bodies to do the job that the Post Office itself, and subsequently British Telecom, have been doing over a very long period. This amendment is, therefore, part of our endeavour to retain a role for Parliament in the new telecom set-up which will be created when the Bill becomes law.
Those of your Lordships who have read the amendment will I am sure agree that it is a very modest one—a very modest one indeed. It seeks only to give the Select Committee on Trade and Industry (I understand that it is now called the Select Committee on Industry and Trade) the opportunity to have a meeting with the Secretary of State's nominee, to question him if necessary and, of course, to hear from him his ideas about the role of the director general and how he intends to discharge that role. There is no suggestion at all in the amendment that the appointment be subject to the approval of the Select Committee. There is no suggestion that the Select Committee should be able to say to the Secretary of State, "Oh no! you can't have this fellow; we don't approve of him". There is no suggestion like that at all. So this is a modest amendment. It might not go far enough for some, but we believe that it is an amendment which should secure wide support in your Lordships' Committee this afternoon.
I am not at all sure whether such an amendment has ever been moved before in this House or in another place, but certainly to my knowledge one has never been carried before and, therefore, this afternoon the Committee has the opportunity to make parliamentary history in a unique way. However, the question of parliamentary involvement in making appointments of chairmen of nationalised industries has certainly been discussed. It has been discussed previously by the House of Commons Select Committee on Nationalised Industries, Sub-Committee E, during the Session of 1978–79 when they investigated the relationships between Ministers, Parliament and the nationalised industries. As noble Lords know very well—and some noble Lords have been involved in them—those relationships are very important. The Select Committee took evidence which was published, but unfortunately it was unable to report due to the intervention of a general election in May 1979. Of course, following that election, the Commons Select Committee system was altered and
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the Select Committee on Nationalised Industries was not reconstituted.
However, the evidence makes interesting reading and, although some members of the Select Committee had more radical ideas than those which are contained in this amendment, the replies to questions put to the then chairmen of nationalised industries were instructive although divided. Some chairmen were happy about Select Committee involvement in appointments; others were not. For example, Sir Arthur Hawkins had no objection at all; the Electricity Council had no objection at all. Sir Henry Marking was certainly against, as was the Nationalised Industries Chairmen Group—the bosses' trade union. The noble Lord, Lord Boyd-Carpenter (who is sitting in his place), had serious reservations. I think that I put his view properly but no doubt, if I have not, he will have something to say later on. What was encouraging was that this novel concept—that is, for this country—was not rejected out of hand by all the chairmen, all of whom incidentally treated the suggestion with the utmost respect and were firm in their adherence to ultimate parliamentary accountability.
But, of course, we are not here discussing the appointment of a chairman of a nationalised industry. Instead we are discussing the appointment of a director general whose duties will be manifold, diverse, and largely regulatory. We should, of course, prefer that there was no proposal to appoint a director general at all, as we believe that the Secretary of State should continue to be the regulating authority over a completely publicly-owned British Telecommunications body. However, I rather fear that the Government intend to have their way in converting British Telecommunications from a publicly-owned monopoly to a privately-owned one. With that we have to accept the eventual appointment of a Director General of Telecommunications.
However, as I have already said, the director general's powers will be very wide-ranging. For example, under Clause 3 of the Bill he has to secure the provision of telecommunications throughout the United Kingdom and to satisfy all reasonable demands for them; he has particular responsibilities to ensure that certain services are preserved. He has the duty to promote the interests of telephone users in the United Kingdom in respect of prices, quality of service and apparatus. He has to promote efficiency, economy and research. He will be responsible for granting licences under certain circumstances, and indeed for policing them; and, if he sees fit—again under certain circumstances—he will be responsible for modifying those licences.
In Part III of the Bill, the director general has the duty to keep telecommunications under review and in so doing will, to a greater of lesser extent, be a policy-maker. That, too, is important for Parliament and parliamentry control. In Clause 51 he is charged with the duty to investigate complaints, and in Clause 52 he is given the power, though not the duty—and note that—to establish advisory bodies. He is, therefore, intended to be a promoter, a regulator, a dispenser of privilege, a customer watch-dog, a manufacturer watch-dog, and he has the power to decide for himself whether or not he invites advice from outside his own

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office. He is a very powerful person indeed. We shall need a veritable Solomon to fill this post. Those are indeed formidable powers and duties, and in the exercise of them, one way or another, the director general will be impinging on the everyday lives of 80 per cent. of our citizens who enjoy a telephone service.
The director and the Office of Telecommunications are, of course, new situations for the Government. Indeed, for any government this will be a unique set-up in Britain, although, of course, it is not unique in other countries, especially in the United States of America where regulatory authorities abound. The new body will be created by this Bill's becoming an Act of Parliament: the body will be created by an Act of this Parliament. In my own view, and that of my colleagues, it should be viewed as an arm of Parliament rather than an arm of Goverment. That is particularly important for consumers.
Of course, in the United States of America, where, as I have said, regulatory bodies abound, the Senate has a very positive role to play—not in the actual appointment of the presidential candidate, but in vetting that candidate and, in the last analysis, in preventing his or her appointment. Certainly this procedure in the United States has been successful in showing up weaknesses in the ability of candidates to perform the functions of the proposed office, has been a protection against political graft and patronage, and also against the appointment of criminals to high office. In this amendment there is no suggestion of adopting the United States system here, and I cite their system merely to underline that what I am suggesting is not a red revolutionary concept—not a bit of it—but is, in fact, an idea and, indeed, a practice that operates in a free, democratic and open society like that of the United States of America.
In this sense the amendment is not partisan; certainly it is non-party political. It is not exclusive to the Labour Party to desire more parliamentary influence on a range of matters. I believe that all noble Lords—indeed, all Members of this Parliament—wish to see proper parliamentary accountability and, where it is necessary, to extend parliamentary advice and in some cases control of the Executive. We do not claim in any sense that the Labour Party is exclusive in desiring more parliamentary influence on affairs and in particular on the appointment of the director general.
Of course, in respect of this particular appointment we believe that it is even more important that there should be a parliamentary input, because the director general's duties and his office will impinge upon the everyday lives of individual citizens. In my view, it is an amendment which is perfectly respectable and acceptable to all sides of this noble Committee. Indeed, it may very well be acceptable to the Government and, as I said earlier, even be welcomed by them. They may wish to support it and adopt it as their own, bearing in mind their sponsorship of and support for the new system of House of Commons Select Committees, a system on which I supported them, and indeed spoke for them, in another place. From the Government's point of view, there would certainly be merit in adopting this amendment, for by doing so they would be confirming in a tangible manner their support for the new Select Committees
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by asking them to assist the Government in this appointment, where the powers and duties of the office so directly affect people's lives.
I commend the amendment to noble Lords. I hope that they will consider what I have said and appreciate that I am sincere in wanting to extend, to some degree, parliamentary control, particularly over this office. I hope for the widest possible support in the Division Lobbies—that is, of course, if the Government feel unable to accept the amendment. I beg to move.
5.10 p.m.
Lord Boyd-Carpenter: I fully share the feelings of the noble Lord, Lord Stoddart of Swindon, in favour of very full use of the Select Committee system in another place, and indeed of bringing not only the chairmen of nationalised industries but other persons holding high office in the public sector before these Select Committees. I could hardly do otherwise, having myself been chairman of the most ancient, and perhaps the most powerful, of all Select Committees: the Public Accounts Committee of another place. But I do not think that that feeling which I fully share with the noble Lord concludes this matter.
It is a somewhat delicate operation for this House to seek to impose upon a Select Committee of another place an additional duty. This may have some bearing on that curious, sensitive and very interesting subject, the relationship between the two Houses. But that, no doubt, could be overcome by consultation.
What I find unattractive about this proposal is the blurring of responsibility which it involves. As I understand the amendment, and what the noble Lord said in most lucidly explaining it, the "candidate"—a curious word to use in this context, but I take it that it means the person whom the Secretary of State is contemplating appointing—should be examined by the Select Committee on Trade and Industry. As he admitted this has a curious transatlantic whiff about it, although the basic difference between this procedure which the noble Lord suggests and that adopted by the select committees of Congress and the Senate is that they examine the candidate and they also decide whether to approve him or not. The noble Lord's amendment does not propose that. It leaves the appointment with the Secretary of State.
Let us think for a moment about how that would work. Suppose the "candidate", as he is described in the amendment, has a bad time in front of the Select Committee, as many witnesses and many people appearing before Commons Select Committees, as your Lordships, may have had——
Viscount Trenchard: Hear, hear!
Lord Boyd-Carpenter: I hope my noble friend is not drawing on a personal reminiscence! But let us suppose the candidate has a bad time. What is the Secretary of State to do? Is he to say, "I personally think he's a perfectly good chap, but he has had a rough time in front of the Select Committee and I had better not appoint him", That means that the Select Committee has taken upon itself quite a large degree of the responsibility for making or not making the appointment. Or the Secretary of State may

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say—though no Secretary of State would use this language—"In my view, to hell with them, I am going to appoint him!" Then the unfortunate chap starts on his, we all agree, very important appointment with the great handicap of having been knocked about and damaged before a Select Committee of the House of Commons. As your Lordships know, these Select Committees generally sit in public. It would be a very great handicap to start with his moral authority battered as a result of a rough handling before the Select Committee.
Therefore, I hope your Lordships will feel as I do that what is proposed in this amendment is neither one thing nor the other. I am not saying that it is right or that I would support it but it is not taking the comprehensible line of saying, "Let us adopt the American procedure in full and make this a parliamentary appointment". There is an argument for that. There is an argument for doing what the Bill says and making the Secretary of State responsible, with no excuses, for the appointment that he makes. This is neither one thing nor the other. Either the Secretary of State will be pushed, as a result of the bad treatment of his candidate before the Select Committee, into not making an appointment which he himself ex lypothesi thinks right or he will make the appointment in circumstances of the utmost disadvantage for the candidate because for reasons I have already mentioned—I will not weary the House by repeating them—he has been subjected to adverse publicity and harsh treatment before a parliamentary committee.
I cannot think of a more unsatisfactory way of making a public appointment. I speak with some experience because I have held offices in my time which involve the very difficult task—as any of your Lordships who have had the same experience know, the extraordinarily difficult task—of assessing people whom one is to appoint to a public appointment of this kind. Therefore, though I fully share the noble Lord's wish to assert parliamentary control as much as possible, I am quite sure that this is the wrong way to do it.
Let the Secretary of State make the appointment. If he makes a bad one give him no excuses. Do not put him in the position of being able to say, "Oh well, the Trade and Industry Committee liked the man"; and do not give him the excuse, if something goes wrong, of saying that the Trade and Industry Committee damaged the man. Let the Secretary of State stand with clear-cut responsibility for appointing the right man.
After the appointment has been made, by all means let the Trade and Industry Committee, the Public Accounts Committee or any committee of this House—if it be your Lordships' wish—examine him on the conduct of his office, but do not let us muddle up the responsibility for the making of quite an important appointment.
Lord Lloyd of Kilgerran: Before the noble Lord sits down, having regard to his great experience in these matters, can I ask him this: if the potential candidate gets so badly knocked about before a Select Committee of the House of Commons and really
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cannot manage that committee, is it not obvious that he is an unsuitable candidate to be a director general?
Lord Boyd-Carpenter: With respect to the noble Lord, I think that question reveals a certain confusion of thought on his part. First, this job and other jobs of this kind are not necessarily ones for which parliamentary abilities—including the ability to handle a Select Committee of the House of Commons or this place—are required. I have known persons of immense practical ability who have been thoroughly bad in the House of Commons (dare I say it, even in this House) and different qualities are not always to be found in the same man.
Secondly, a Select Committee itself is quite a difficult thing to handle. Those of us who have been Ministers of the Crown in another place have all had rough handling from the House of Commons itself on occasion. We have never felt that that was a conclusive argument that we were unfit for our jobs. On the contrary, we have thought that the capacity to survive, however battered in those circumstances, was a good thing. I am afraid I disagree entirely with the noble Lord. The qualities required are not always in the same man. They may be totally different. It would be a superficial judgment to throw out a first-class administrator merely because he had been knocked about by a number of Members of another place.
Lord Beswick: I am bound to say that I do not follow the noble Lord, Lord Boyd-Carpenter. He makes the case that there is a blurring of responsibility in this amendment. But I should have thought that the Bill were an exercise in the blurring of responsibility. The whole thing is a mishmash of responsibilities. We have heard talk about the duties of the director general. He has to be a wide-ranging character with immense, almost judicial powers. We have heard about the necessity of the Secretary of State to have unblurred responsibilities in his appointing. We have heard also about the need for parliamentary responsibility; the chain of responsibilities, said the noble Lord, Lord Cockfield, must be unbroken.
At the back of my mind I seem to think that there is a gentleman who will be the chairman of British Telecom. I wonder where he is going to come in. He is going to have the responsibility of running an immense organisation and yet he is liable to come up against this director general on quite important matters so far as his responsibilities are concerned.
I read in the newspapers that the chairman of British Telecom is not wholly adverse to this Bill. I can understand his reasoning. I think that if anybody has to run a large organisation, the thought that he might have the Secretary of State ring him up to tell him that he should do this or do that is not always conducive to initiative and to sound administration. But if that is the basis of the present chairman's disposition towards this Bill then I think he will be disappointed. I think that he is going to find things very different. I think that there is going to be much more prospective frustration as a result of this set-up than there is at the present time.
And all of' this leads me to think that the appointment of the director general is going to be a very important appointment. The noble Lord, Lord

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Boyd-Carpenter, said that you might have someone who is a good administrator and yet he will not be a good performer in front of a Select Committee. I can understand that perfectly; but here, in the person of this director general, you have got to have more than just a good administrator. As my noble friend said a little earlier, you have got to have a Solomon. Whether the Select Committee can weed out the Solomons, I do not know. But I am inclined to think that it may be that their judgment in these matters will be as useful as that of the quite unqualified decision of the Secretary of State.
It is going to be a most important appointment. I can see in this whole field a whole set of confusions and frustrations and counter-interests developing. It is most important that we have in the person of this director general—if we cannot have the sort of authority that was talked about earlier to advise him—a person of political judgment (if you like) because a lot of the matters which are going to come up before him will involve a political element. I suggest to the Committee that there is more merit in this amendment than the noble Lord, Lord Boyd-Carpenter, suggested.
Lord Morris: I think that this amendment is an extremely dangerous amendment for three very simple reasons. Two of them are reasons spoken to by my noble friend Lord Boyd-Carpenter; but I believe that there is another one. The whole purpose of this Bill is to ensure that control of the environment for healthy growth in this industry lies with government and not with one or a series of companies in the public or the private sector. It is critically important, as the noble Lord, Lord Stoddart said, that this man be a man of immense ability, in no way deterred by the thought of a third degree in another place.
We have all the figures in the world, through the American experience, of those men and women who have been appointed to high public office in the United States of America; of how well they have done before the committee, and of how well they have done in holding down their particular jobs. What we do not know of are the hundreds and thousands of men and women who are very seriously deterred even from contemplating a position when they saw no reason why they should go through an extremely severe public examination. It is critically important that the right may be found. I think that it will make the life of the Government extremely difficult if we go through with this suggestion. Of course, I agree entirely with my noble friend Lord Boyd-Carpenter in saying that it is certainly not the business of this House to suggest to the other place what it should or should not do.
Lord Donaldson of Kingsbridge: This House lost by a very narrow majority—by four votes,—an attempt to introduce more influence of Parliament to this appointment and to this whole Bill. I have enjoyed disagreeing with the noble Lord, Lord Boyd-Carpenter, for many years very much and I am embrarrassed to find it very difficult to disagree with him in what he says. The truth is that the proposed Select Committee is in the first place, a political appointment. There will be a majority of the party in power on the Select Committee; so it is not non-
1302
political and it will not be a non-political examination. Secondly, it is put forward as if all the candidates were before the committee as for an appointment; whereas, in fact, it is an examination of something that has already been done.
I think that it is a muddled approach and a wrong approach fundamentally and in the end. But, as the noble Lord, Lord Cockfield, who is to answer for the Government, with great politeness rejected by a very narrow majority our first attempt to introduce parliamentary responsibility, I do not feel that I can do anything but support the second attempt, however little I think it will lead to a satisfactory solution. I think that the right thing for the noble Lord to do this time is what he did not do last time—which is to take the thing away and say, "I see what you are trying to do. It does not quite work out but I shall put up an alternative suggestion".
Lord Cockfield: The noble Lord, Lord Stoddart of Swindon, ranged very widely in moving this amendment. He started by referring to the results of the previous Division as a close-run thing. I am sorry to have to remind him of the implications of that phrase. The words were used by his Grace, the Duke of Wellington, when referring to his victory at the Battle of Waterloo over the defeated Emperor Napoleon—and I am somewhat surprised to find the noble Lord, Lord Stoddart, casting himself in the role of the Emperor Napoleon. He then proceeded to quote in his support procedures in the United States. Of course, the most important thing in the United States is that telecommunications are in the private sector and not the public sector. Whether the noble Lord's reliance upon United States precedents means that he has now seen the light of day, I do not know. But at any rate it would be a most helpful conversion.
He then refers also to proceedings in another place. I am always somewhat reluctant to pray in aid proceedings in another place in support of what we want to do in your Lordships' House. But I feel bound to remind him that, while this precise amendment was not moved in another place, another amendment providing for very widespreaad consultation was moved, was debated for five hours and was defeated on a Division. So that, as far as the proceedings in another place are concerned, they really do not help the noble Lord.
My noble friend Lord Boyd-Carpenter speaks with immense knowledge and wisdom on these matters. What he says ought to influence your Lordships very greatly. I was delighted that his experience was so vigorously supported by the noble Lord, Lord Donaldson: it was only that I was somewhat disappointed in the lack of nexus between his argument and his conclusion. I agree entirely with my noble friend Lord Morris that what we must have is a man of immense ability. He needs to be independent because this is the role in which the Bill casts him. This means that the process of selecting him must be undertaken with very great care.
The proposal in the present amendment is an entirely novel one, and it is out of line with procedures which are normally adopted in this country in relation to appointments in the private as well as in the public sector. Quite frankly, candidates attach great

1303
importance to confidentiality, and the need to consider a wide range of suitable candidates, the need to allow for flexibility in discussions and the need to ensure discretion in approaching individuals who are already in employment all argue against a procedure of the kind envisaged in this amendment.
As the amendment is drafted the results of the examination of a candidate would not bind the Secretary of State. Nevertheless, he would find it difficult to appoint a person who had failed to win the support of the Select Committee, even if that failure to win support had nothing to do with the competence of the individual to meet the requirements of the post. Equally, as my noble friend Lord Boyd-Carpenter has said, if despite the view of the Select Committee the Secretary of State decided to appoint the candidate, that in turn would lead to considerable difficulties of its own.
Given the conventions which govern public appointments in this country, I have no doubt that many potential candidates would be put off seeking the job at all if they thought that there would be a public, or semi-public, consideration of their appointment. At best it would delay the appointment of the director general; at worst it would ensure that the kind of first-class individual the Government are seeking simply would not come forward.
The fact that a process of examination by Select Committee is not required in relation to other similar appointments only serves to make the amendment more unacceptable. If there were a case to be made for the proposal—and, frankly, I do not think there is—it would be a case that would have to be made generally and not in relation to this particular post. There is no Select Committee involvement in, for example, the appointment of the Director General of Fair Trading or, if I may be forgiven for quoting the example, the chairman of the Civil Aviation Authority, and I have not heard any arguments to suggest that the Director General of Telecommunications should set a precedent in this respect.
We have given assurances that we are looking for somebody of the very highest calibre to appoint as director general. That is absolutely essential. Quite frankly, this amendment would hamper us in that task. On that basis, I would ask your Lordships to reject it.
5.34 p.m.
Lord Bruce of Donington: I am sorry that the noble Lord has taken what I can only term a rather narrow attitude towards this important and reasonable proposal. I must take exception—well, not take exception, but I must take issue with the noble Lord, Lord Boyd-Carpenter, concerning his observations on the functions of Select Committees. I myself was also a member of the Select Committee on Public Accounts in another place for a couple of years or so. In my experience the only people who had to bother overmuch about appearing before the Select Committee were people who did not know what they were talking about and who had a confused idea of the brief that may or may not have been handed to them by their civil servants.
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So far as my experience is concerned—it may have differed from that of the noble Lord—it is not a question of appearing before a Select Committee to "handle" it. You are not in front of a Select Committee to "handle" the committee. The committee's members normally ask reasonable, but sometimes unreasonable, questions, as the case may be. But a competent, self-possessed person who knows exactly what he is talking about does not seek to bluff the committee into assuming that he knows something that he does not know. If he knows his own limitations he has nothing to fear from any Select Committee at all. The idea that it should be a qualification to "handle" a committee is quite wide of the mark.
The noble Lord, Lord Donaldson, seemed to think at one time that this proposal came into operation after the appointment. Of course, in terms of the amendment the appointment is made following an examination of the candidate by the House of Commons Select Committee. The Minister is able to see just how this person measures up to the sometimes skilled, sometimes unskilled, sometimes technical, sometimes overtly political—whatever it may be—questions that are asked of him.
I repeat that no person of the competence, breadth of mind, powers of leadership, personality, endurance and enthusiasm which are certainly required of the person who is going to become the Director General of Telecommunications would bother overmuch about a Select Committee. He might even have read some of the observations by very senior ex-civil servants on the general competence of Ministers in their offices. In fact, he might be tempted, if he were very unwise, to be rather more indulgent of the Select Committee than afraid of it.
Certainly there is no reason why the Minister, when he makes this appointment, should not have the advantage of seeing and noting the response of the candidate to a wide variety of questions put to him, and assimilate the general impressions of the Select Committee itself. As the noble Lord said, the Minister need not be bound by the impressions he gets of the impressions derived by the Select Committee. He need not be bound; but he can take them into account. There is no reason why he should not take them into account. It may well be that the questioning of certain members of a Select Committee rather indicate that they disapprove of the candidate. The Minister, if he is a good Minister, knows exactly how to deal with that. A Minister is quite capable of assimilating the abilities of a Select Committee, or should be.
In regard to Lord Boyd-Carpenter's observations about the position of another place, of course from time to time your Lordships' House ventures to give an instruction to another place when it refers back amendments to Bills that have come from there. It does it in that way. But there is no suggestion here of this place trying to dictate to another place at all. This Bill has come before your Lordships. We are entitled, if we so wish, and if the majority so decide, to return it to another place for their consideration. There is certainly no constitutional principle involved in that.
The importance of the appointment cannot be overestimated. Nor, I might say in sympathetic reply to the noble Lord. Lord Cockfield, do I underestimate the

1305
difficulties that the Secretary of State is going to have in obtaining a person of the qualities obviously required by the responsibilities laid upon him, and upon the Secretary of State, by the Bill.
The noble Lord will remember that when the Government were seeking a chairman of British Steel—to use the immortal words of Sir Keith Joseph—they scoured the boardrooms of England. They eventually hired headhunters in order that they could obtain a person whose qualities, although very considerable, were certainly not as far-reaching as the qualifications required here. Finally, as your Lordships know, the headhunters found Mr. MacGregor already lurking on the board of a nationalised industry, British Leyland. But that is entirely beside the point.
The fact of the matter is that the Secretary of State will have difficulty, and I should have thought it was far better for the Secretary of State to be able to assess the abilities of candidates on the basis not only of his own personal assessment, which in the final analysis is the most important and determinate, but of having in front of him a person who has already been before a Select Committee of the other place.
Above all, we do not want—I am sure your Lordships will agree—in an important matter of this kind affecting the entire conduct of a very important public service, which is already being successfully conducted, any taint of political appointment. I say that because there are one or two recent experiences that give some colour that party politics are not always out of these matters. I refer to the recent appointments of the Governor of the Bank of England, the Director of the Property Services Agency and some of the regional health authorities. We do not want that kind of thing here and I am quite sure that nobody on either side of your Lordships' House would want there to be any taint of political patronage in this appointment.
The appearance before a Select Committee of another place is one guarantee of that, even though the Select Committee in its composition is bound to be dominated by the party of Government—it always is. But as the noble Lord well knows, Select Committees have a perverse inclination—for example, as their reports on unemployment and monetary control have indicated—for scrutinising their own Government or the majority on it. This is a very sensible arrangement. I cannot for the life of me see why the noble Lord, Lord Cockfield, cannot adopt it, put it in his own armoury and even claim credit for it.
Lord Weinstock: The amendment puts forward an extremely attractive idea which the noble Lord, Lord Boyd-Carpenter, has demonstrated to be quite impracticable. But even if it were not so, there is another reason why I suggest that your Lordships should not accept this amendment. Anybody who can be thought of as applying for this appointment is almost certainly unfit to discharge it. I cannot imagine a situation in which a queue of applicants was forthcoming who would be suitable and who could be put before a Select Committee in the way suggested. Furthermore, it would give a further disincentive to a suitable person, if such exists—which I rather doubt—if he was required, prior to his appointment by
1306
the Secretary of State, to appear before a Select Committee in another place.
Lord McIntosh of Haringey: I have no wish to rehearse arguments already made, but I wish to express my gratitide for the comforting reassurance by the Minister that he adheres to the venerable principle that nothing should be done for the first time. He told us that the proposal here was entirely novel, and indeed it is, and he said that if it were to be adopted then it would have to be applied to, for example, the office of the Director General of Fair Trading, and no doubt to other offices as well.
Indeed, if the proposal of an examination before a Select Committee of another place were to be adopted and were to be successful, it would be for consideration whether the same procedure should be adopted for other offices, such as the Director General of Fair Trading. But unless we try we shall not know, and unless we try something for the first time on some occasions we shall never make any progress whatsoever. I think that your Lordships have generally misunderstood the nature of the appointment and why it would be appropriate for this appointment, but certainly not appropriate for other appointments.
We are in the presence of at least three distinguished ex-chairmen of nationalised industries and my knowledge of your Lordships' House is so short that there may be others. Those gentlemen and their former colleagues were appointed for managerial abilities and I would not suggest for a moment—and I do not think my noble friend Lord Stoddart would suggest for a moment—that one can assess managerial ability before a Select Committee of another place.
But we are talking here about a quite different kind of appointment—in the Government's own words, which I have already expressed, somebody responsible for fair play. If somebody responsible for fair play cannot stand up to being examined in public by a Select Committee, then he will not be a very effective advocate of fair play when he comes to exercise his functions. That is the reason why in this case, but not necessarily in other cases, it is an appropriate move—it is, at least, a gesture—towards a more open form of government and that is why I support my noble friend's amendment.
Lord Cockfield: I shall not detain your Lordships for more than a few minutes. There is very little that I can add to the words of wisdom uttered by the noble Lord, Lord Weinstock. I listened with great fascination to the description given by the noble Lord, Lord Bruce of Donington, of the qualities that would be required by a candidate appearing before the Select Committee. The person who would best meet those qualifications is a distinguished lawyer, a politician or a television personality, and it does not seem to me that any of those three would be outstanding candidates for this post.
So far as the arguments put forward by the noble Lord, Lord McIntosh, are concerned, they seemed to me largely to destroy the very reasonable case that had been put forward by his noble friend Lord Stoddart, because the effect of his arguments would be to politicise a wide range of appointments in this country.

1307
That is one of the reasons why I was very dubious—I do not want to pursue this too far—about accepting the argument of the noble Lord, Lord Stoddart, about American precedents. One of the troubles in the United States is that so many of their appointments are political appointments, with people going in and out of office with changes of government, and that is not the sort of thing that we want in this present case.
I approach this question on the very simple basis of asking whether the amendment would help or hinder us in selecting an outstanding candidate for this most difficult appointment. My own opinion is that the amendment would hamper us and it is on that basis that I would advise your Lordships against it.
Lord Beswick: May I ask the noble Lord one question? On two occasions on two different amendments the noble Lord, Lord Cockfield, has gone out of his way in his most emphatic manner to express his admiration for the wisdom of the noble Lord, Lord Weinstock. I wonder whether he could go a little further and say that he accepts the wisdom of the noble Lord, Lord Weinstock, so far as the Bill itself is concerned.
Lord Stoddart of Swindon: If I may reply—and I shall certainly do so very briefly, because many points that I would have made in reply have already been made by my noble friends—the noble Lord, Lord Cockfield, said that we had to decide whether this amendment would help or hinder us. The fact of the matter is that it would help him. One of the problems with the Bill is that it has undermined public confidence. Therefore to have the candidate for the director general interviewed by a select committee of parliament would assist in rebuilding public confidence, which has already been shattered by the publication of the Bill. If therefore the noble Lord were to accept the amendment, he would help the Bill in its passage through the Committee. That may be against me. Nevertheless, I happen to think that it would help the noble Lord to reassure public opinion about the bad effects of the Bill.
There are two other points that I want to make. First, the noble Lord, Lord Boyd-Carpenter, was rightly concerned about the position of the candidate when he appeared before a select committee: He might be a rather shy man, or he might be an administrator. But he might also have other weaknesses which it would be as well for the public to know about before he was appointed. Our major duty as parliamentarians is not to protect an individual, who may have been selected by the peculiar procedures which governments use for selecting chairmen, but to protect the public—in this case the public and the consumer.
Finally, I accept Lord Donaldson of Kingsbridge's concern that there could be a political majority in the select committee which would detract from good consideration of the candidate, but may I say to him that my quite long experience of select committees is that they do not work in that way. They are excellent bodies. All sides, of whatever political party, work together for the good of the select committee and, indeed, for the good of the departmental subjects that they are covering.
5.52 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 79; Not-Contents, 128.

DIVISION NO. 2

CONTENTS

Airedale, L.

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Attlee, E.

Kaldor, L.

Aylestone, L.

Kearton, L.

Banks, L.

Kennet, L.

Beswick, L.

Kilmarnock, L.

Birk, B.

Kirkhill, L.

Bishopston, L.

Leatherland, L.

Blyton, L.

Llewelyn-Davies of Hastoe, B.

Boston of Faversham, L.

Lloyd of Kilgerran, L.

Bruce of Donington, L.

Longford, E.

Burton of Coventry, B.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

McGregor of Durris, L.

Collison, L.

McIntosh of Haringey, L.

David, B. [Teller.]

Mishcon, L.

Davies of Penrhys, L.

Molloy, L.

Dean of Beswick, L.

Nicol, B.

Delacourt-Smith of Alteryn, B

Oram, L.

Peart, L.

Denington, B.

Phillips, B.

Diamond, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L. [Teller.]

Donnet of Balgay, L.

Elwyn-Jones, L.

Rochester, L.

Elystan-Morgan, L.

Seear, B.

Ennals, L.

Segal, L.

Ezra, L.

Stallard, L.

Fisher of Rednal, B.

Stedman, B.

Gallacher, L.

Stewart of Alvechurch, B.

Galpern, L.

Stewart of Fulham, B.

Gladwyn, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Stone, L.

Grey, E.

Strabolgi, L.

Hale, L.

Taylor of Blackburn, L.

Hampton, L.

Taylor of Gryfe, L.

Harris of Greenwich, L.

Taylor of Mansfield, L.

Hatch of Lusby, L.

Thurso, V.

Howard of Henderskelf, L.

Tordoff, L.

Jacobson, L.

Underhill, L.

Jacques, L.

Wallace of Coslany, L.

Jeger, B.

NOT-CONTENTS

Adeane, L.

Croft, L.

Airey of Abingdon, B.

Cullen of Ashbourne, L.

Alexander of Tunis, E.

Dacre of Glanton, L.

Alport, L.

Daventry, V.

Atholl, D.

Davidson, V.

Auckland, L.

De La Warr, E.

Avon, E.

De L'Isle, V.

Belhaven and Stenton, L.

Denham, L. [Teller.]

Bellwin, L.

Drumalbyn, L.

Belstead, L.

Dundee, E.

Boyd-Carpenter, L.

Ellenborough, L.

Brabazon of Tara, L.

Elles, B.

Brookes, L.

Elliot of Harwood, B.

Brougham and Vaux, L.

Elton, L.

Bruce-Gardyne, L.

Enniskillen, E.

Caccia, L.

Faithfull, B.

Campbell of Alloway, L.

Ferrers, E.

Carnegy of Lour, B.

Fraser of Kilmorack, L.

Carrington, L.

Gainford, L.

Cathcart, E.

Gisborough, L.

Cockfield, L.

Glanusk, L.

Coleraine, L.

Glenarthur, L.

Colwyn, L.

Gowrie, E.

Constantine of Stanmore, L.

Gray of Contin, L.

Cork and Orrery, E.

Greenway, L.

Craigavon, V.

Gridley, L.

1309

Hailsham of Saint Marylebone, L.

Orkney, E.

Orr-Ewing, L.

Halsbury, E.

Pender, L.

Harvington, L.

Pennock, L.

Henley, L.

Peyton of Yeovil, L.

Hives, L.

Polwarth, L.

Home of the Hirsel, L.

Portland, D.

Hornsby-Smith, B.

Rodney, L.

Hylton-Foster, B.

St. Aldwyn, E.

Ilchester, E.

St. Davids, V.

Killearn, L.

Saltoun, Ly.

Lane-Fox, B.

Sandford, L.

Lawrence, L.

Sempill, Ly.

Lindsey and Abingdon, E.

Shannon, E.

Loyd, L.

Shaughnessy, L.

Long, V.

Skelmersdale, L.

Lucas of Chilworth, L.

Soames, L.

Luke, L.

Somers, L.

Lyell, L.

Spens, L.

McAlpine of West Green, L.

Stamp, L.

McFadzean, L.

Strathcona and Mount Royal, L.

Mackey of Clashfern, L.

Macleod of Borve, B.

Swinton, E. [Teller.]

Mancroft, L.

Terrington, L.

Mar, C.

Teynham, L.

Margadale, L.

Thorneycroft, L.

Marley, L.

Torphichen, L.

Marshall of Leeds, L.

Trefgarne, L.

Massereene and Ferrard, V.

Trenchard, V.

Maude of Stratford-upon-Avon, L.

Trumpington, B.

Tryon, L.

Merrivale, L.

Vaizey, L.

Morris, L.

Vaux of Harrowden, L.

Mottistone, L.

Ward of Whitley, V.

Mountgarret, V.

Weinstock, L.

Mowbray and Stourton, L.

Westbury, L.

Murton of Lindisfarne, L.

Whitelaw, V.

Northchurch, B.

Windlesham, L.

Nugent of Guildford, L.

Wynford, L.

Onslow, E.

Resolved in the negative, and amendment disagreed to accordingly.
6 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 4:
Page 2, line 3, after ("officer") insert ("with a detailed knowledge of the telecommunications industry and telecommunications consumer interests").
The noble Lord said: I beg to move the amendment standing in my name and those of my noble friends. The amendment is designed to lay down some parameters, albeit of a very general kind, for the appointment of the director general. It does so in circumstances where there has been a focus for some time upon the politicisation of public appointments. There is a very wide measure of agreement throughout your Lordships' House that this is not a case where an amateur, however able, can be appointed.
I was a little sorry that during the course of the discussion on the last amendment the noble Lord, Lord Cockfield, in his reference to the histrionic abilities of actors, cast an indirect reflection thereby upon the President of the United States. The qualities required for a post of this kind do not include any acting ability. They include, above all, some very considerable knowledge of the whole perspective of the telecommunications industry and of the impact of telecommunications on the individual.
The director has to be able to look at consumer interests and to protect the consumer—not only formally, in legal terms, but by having an intimate knowledge and perspective based on the assimilation
1310
of much of the data that are available. That means that he must appreciate the impact of the existing telephone system on the ordinary person of this country in possession of a telephone, rather than be someone who takes a telephone for granted. To some extent, therefore, he has to be a humanist in the sense of realising the impact of services provided or denied to the individual consumer. It follows that the he must have a perspective of the present effects and of the likely effects in the future of technology as it advances and as services become extended. The director must have a perspective of the impact on the consumer whose interests he is empowered to safeguard.
Under this Bill, his responsibilities go much wider than that. One has only to look at particular subsections of Clause 3, which we shall be discussing at a later stage, where responsibilities are laid upon the Secretary of State and upon the director general in respect of a whole series of matters. Those matters cover even frequency bands and the fair allocation of frequencies, and the future prospects of British Telecom's equipment manufacturers. He even has to be knowledgeable of the economic impact of telecommunications and of the detailed overseas negotiations which go on, in determining the absorption or rejection by various countries of telecommunications equipment. He has to be knowledgeable not only in the ordinary telecommunications sense but also in respect of the economic interplay of telecommunications throughout the world: the effects of their greater or lesser commercialisation, and the consequences of state control in one country and of no state control in another. The director general has to be able to assimilate the consequential effects of the imposition of tariffs and of the imposition of quotas by other countries against various types of telecommunications equipment. He has to be conversant with the whole spectrum of the telecommunications industry and its effect abroad, and between other countries and ourselves.
All this does not ask that the appointee should of necessity be a technical engineer as such and have a detailed knowledge of the working of circuits, to be able to design circuits himself and do things of that kind. But it does mean that he must know how the equipment performs, what its capabilities are, what its capacity is, and what its potential for development in the several departments of British Telecom and its prospects for the future are likely to be. He must therefore be a person to whom telecommunications becomes, in regard both to its present technical and capacity aspects and to the inter-relationship between it and other forms of equipment in the future, a dominant part of his life and philosophy.
Those are not stringent conditions. There must be people in the United Kingdom who can offer capabilities of that kind and who do not need "headhunters" to search them out. In making an appointment, one always to some degree sets certain parameters which cannot be satisfied, because nobody is perfect. Above all, the person selected, in having a knowledge of the telecommunications industry, and having responsibility for the enforcement and amendment of licences and other matters of that kind, must also have a knowledge of how to deal with people. One is talking not only of consumers but also of approximately

1311
230,000 people who are employed by British Telecom itself, and another 100,000 approximately, who are employed in the telecommunications manufacturing and service industries.
It is with overwhelming emphasis on the more technical aspects of the matter that this amendment is designed to secure, as a qualification, the parameters within which the appointment should take place. Above all, the Committee does not require a political appointment or an amateur appointment. It requires a person dedicated to the present and to the future of telecommunications.
Lord Morris: It will come as no surprise to the noble Lord, Lord Bruce of Donington, that I look at this particular problem in a totally different way. Given the correct man with the wit, the will and the skill to learn, his ignorance of the particular subject becomes an extremely important qualification. The reason I say that is because this point reminds me of a comment made by an extremely distinguished surgeon—namely, Sir Ralph Marnham—when a Member of your Lordships' House suggested to him a particular way of carrying out a certain surgical procedure. Although Sir Ralph was a little upset by this, he took the point on board, suggesting at the same time that experience is nothing other than entrenched prejudice. If a person has training in a particular field of endeavour there is no question about it they have very fixed and rigid ideas on this that or other subjects.
I would have thought that to restrict by law the Government's appointment of a man in this critical, important position is a very dangerous thing to do. I am not trying to plead the cause of the enthusiastic amateur. I am no lawyer myself, but any lawyer who has cross-examined the soi disant expert witness in the box will almost certainly agree in saying, "Lord deliver me from an expert".
Lord McIntosh of Haringey: I wonder whether the noble Lord's story does not rebound against his own argument. What he is describing is advice given by a Member of your Lordships' House to a surgeon, in other words, he is describing a position comparable to the advisers of the director general or as it would have been if the first amendment had been passed the authority. The director is in the position of the surgeon. Is the noble Lord suggesting that he would be happy to have been operated on by the distinguished Member of your Lordships' House?
Lord Morris: The noble Lord, Lord McIntosh, has just broken one of the cardinal rules of cross-examination: never ask a question to which you do not know the answer. The person who gave the advice to Sir Ralph Marnham had been an extremely distinguished surgeon himself.
Lord Campbell of Alloway: This is the age-old argument, very briefly, of the specialist against the administrator. There are hundreds of specialists; there are a handful of administrators. What is needed is a good administrator. It is a question of status. I oppose this amendment.
Lord Cockfield: I of course understand the concern that has been expressed both in this debate and earlier this afternoon that the director general should be a person who has the kind of knowledge and experience that will fit him to do what will be a job of outstanding importance and indeed of difficulty. We intend to appoint as director someone both with relevant experience and with authority who will measure up to the most exacting standards. I entirely agree with what my noble friend Lord Campbell of Alloway said, that this is another illustration of the old argument about the merits of specialists and generalists. But of course the amendment goes very much further than that. Contrary to what the noble Lord, Lord Bruce of Donington, said when he described the amendment as one which set down parameters of a very general kind, the fact of the matter is that the amendment creates a statutory straitjacket, and this is the kind of thing which is wrong.
Obviously, knowledge of the telecommunications industry and of the requirements and needs of consumers is very relevant and important: but it is not the only qualification which would suit a person for appointment to this post. For example, we know that the accounting systems of British Telecommunications leave very much to be desired and that considerable development in this field is needed. An outstanding and distinguished accountant—and I hope the noble Lord, Lord Bruce of Donington, will forgive me introducing this example—might very well be a good candidate for this post. All I am saying is that we ought to look at the full field and that we ought not to start by limiting our field of choice. Recognising that we must select the best candidate who is available, we must look for a whole range of qualities and experience and we must balance the strengths and weaknesses of potential candidates in forming a judgment about the right individual for the job.
This amendment would in fact hamper us in that task, because it would restrict the field of candidates and could well exclude some who were nevertheless ideally suited for the job. I think it has been valuable to air these problems and difficulties; but the arguments point, I submit, quite decisively against the amendment.
Lord Taylor of Gryfe: Having heard the statement of the Minister, which was a fair job description of the man sought for this important post, having at the same time accepted the concern expressed by the noble Lord, Lord McIntosh, I hope that having been given the assurance of the kind of man the Government have in mind the noble Lord will consider not pressing this amendment to a Division.
Lord Bruce of Donington: I am grateful to the noble Lord for having taken on board the burden of the argument that I adduced in favour of this amendment. The amendment does not of course seek to restrict the qualifications of the appointee merely to have this knowledge. Quite clearly he or she must have many other qualities. This amendment was put down to ensure that this was included as a vital quality among those others to which the noble Lord referred.

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I am very sorry indeed that the noble Lord cannot take it on board, but I sincerely hope that sufficient has been said on both sides of the Committee today to make it quite clear to Her Majesty's Government that this is not a case where a political appointee would in any way be suitable. I gathered from reading within the context of what the noble Lord has said that the Government have no such intention; that they do have the intention of searching as widely as they can, with or without the aid of head hunters, as in the case of Mr. MacGregor; that they do intend to take very great care about it indeed and that they do intend to treat this exceptional appointment as one that merits the services of quite an exceptional individual. On the basis of what the noble Lord and other noble Lords have said in the course of the debate, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Spens Lord Spens moved Amendment No. 5:
Page 2, line 7, at end insert ("and such other relevant functions as the Secretary of State may from time to time assign.").
The noble Lord said: I think it is appropriate that, as chairman of our liberalization group, I should put myself down to open the batting for them, although my usual place in the team was at No. 6 or No. 7 when the shine was off the ball and I could swing my bat a little. Our group consists of more than 20 members, of all Parties other than the Official Opposition, but acting in their personal capacities, and not necessarily every member of the group agreeing with every amendment that has been put down in our name. In order to try to identify the amendments which our group is sponsoring, I have put my name down on as many amendments as I can. Even so, there are one or two to which my name is not attached but which are still included in those sponsored by our group.
We have had five meetings and we have taken evidence—if I may call it that—from six trade associations and from some other bodies. Therefore, very few of the amendments tabled are our own. I know there are one or two which are, and I have one myself, but the majority of the amendments in my name have been recommended to us by responsible trade associations and we have accepted them after discussion with their representatives.
Turning to Amendment No. 5, the problem that we see is that the director general has to have the functions—almost all-powerful functions—to cover every eventuality. As we read Clause 1(1) there appears to be a limitation on the power of the Secretary of State to assign functions to the director general to cover situations which do not exist at the moment but which might exist in future. Who is to know what might suddenly crop up with the speed of development in these highly technological industries? All sorts of different ways of communication may happen. For example, before we know it, we may be using light waves, or something of that nature, to communicate with each other. Whether the Secretary of State can give additional functions to the director general, I do not know, so this is a probing amendment. I beg to move.
Lord Campbell of Alloway: With the greatest respect to the noble Lord, Lord Spens, at whose invitation I
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have decided to intervene, and to the members of the group, may I come straight to the merits of this amendment. It could be truly said that this amendment might induce the very obscurity which it was designed to remove. The words "relevant functions" as drafted in the amendment could induce much argument as to whether the Secretary of State, in assigning such functions, was or was not acting ultra vires. The drafting of the clause is wholly clear and could be rendered specific by the traditional method of reference to the body of the statute. It is in traditional form and, with the utmost respect to the noble Lord, I think the amendment might serve to confuse rather than clarify.
Lord Lloyd of Kilgerran: As a member of the liberalisation committee may I take the opportunity of congratulating the noble Lord, Lord Spens, for the objective way in which he conducted the proceedings. He said that the group was sponsoring all these amendments, but this is one amendment which I was reluctant to sponsor for the very reason given by the noble Lord, Lord Campbell of Alloway. I was also worried about the words "relevant functions". They would be difficult to define. As the noble Lord, Lord Spens, indicated, this is a probing amendment but if it were moved to a Division I could not support it.
Lord Mottistone: I think my noble friend Lord Campbell of Alloway was a little hard on the noble Lord, Lord Spens, because the noble Lord did say that it was a probing amendment and the technicalities of the law are not really a matter to be exposed under those circumstances. The point of this amendment moved by the noble Lord, Lord Spens, as our excellent leader—I am privileged in being included in his group—is that it is terribly important that there should be scope for future expansion of the duties of the director general as the telecommunications industry works on. I hope that my noble friend will be able to tell us that this is very much in the Government's mind.
I make only one other comment. So far as I am concerned, the amendments I have tabled are my amendments. The fact that we may have had advice from some people is, at this stage of the game, totally irrelevant.
Lord Campbell of Alloway: Before my noble friend sits down, may I explain that far from seeking to be hard on the noble Lord, Lord Spens, and far from seeking to rely on words or to pick on words, my reference to words was only intended to illustrate the problems and the principle at stake.
Lord Orr-Ewing: As honorary secretary of the group perhaps I could intervene very briefly.
A Noble Lord: Late on parade.
Lord Orr-Ewing: Yes, I was late on parade, but having heard three Labour Front Bench spokesmen on the previous amendment I imagined that that would be repeated for the rest of the amendments. I was wrong, and am delighted that I was wrong.
As this is my first speech perhaps I should declare no further interest than I declared on Second Reading. I

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am, in fact, a non-executive director of a public relations company. I have had no contact with any of the company's 40 or 50 clients. What I say and do in this place is in no way connected with my position as a non-executive director or with any of the clients.
I feel that it is difficult on this Bill, which was heavily filibustered in another place, for the Committee to make a proper consideration of a very complicated and long measure. It is a very important measure, wherever we may sit. My noble friend did well to bring us together from all parts of the Committee because it would be grossly unfair if various people who wanted to make representations—namely, the trade associations—whose future is at stake, had to apply to individuals all over the place; to little groups here and little groups there.
We did a service in having the opportunity of, as we did, taking evidence from six trade associations all of them very closely connected with this industry. We saw the user group. We saw the Telecommunication Managers' Association, which contains some of the natural clients of Mercury. We saw the Telecommunication Users' Association and we saw the Mobile Radio Users' Association. That is three user trade associations. Of course, we have also taken note of what POUNC, and others, had to say and also the Consumers Association. On the manufacturing side we asked three manufacturing trade associations to give evidence to us. That was BETA (the Business Equipment Trade Association) and TEMA (the Telecommunications Engineering and Manufacturers' Association). Incidentally, its members have £1·2 billion annual turnover and 50,000 employees, so they are not small people. The other organisation was the Electronic Engineering Association whose members have £2·2 billion annual turnover and employ 100,000 people. I was president and chairman of that association in 1970 so I know it fairly well.
What I wanted to say on this amendment is that, because it is a complicated measure we have come together but we are not carbon copies of each others' thoughts. We sit in different parts of the Committee and have differences of opinion, which is only natural. Incidentally, that is something which this place demonstrates superbly well and cannot be duplicated in another place. I want to quote the need for flexibility. In his admirable opening speech on Second Reading my noble friend said:
"We believe in allowing market forces to operate to the fullest extent possible".
Many of us on this side believe in that but it has not been possible, for various reasons, for market forces to operate very widely or very thoroughly. My noble friend continued, referring to the Office of Telecommunications:
"The director's function therefore is both to protect the consumer and to ensure fair competition".—[Official Report, 16/1/84; col. 843.]
Our amendments—and there is a whole series on Clause 3—will seek to make fair competition. The only person we can see who can possibly judge that the competition is fair is the director and Oftel. In their individual capacities, our amendments seek to get justice, not necessarily and always for British Telecom, which will get justice anyhow. It will dominate the
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market, with its 97 per cent. No one has to look after British Telecom's interests very much; it has the advantage. But we want to see justice for the smaller people and an element of competition. A series of amendments will come which deals with the strengthening of Oftel's functions. We do not think that it is a perfect solution, but there is no other in sight. Politics is the art of the possible. That is why we seek to improve the Bill in these respects.
Endorsing what my noble friend Lord Mottistone said, I think the important thing is the flexibility. None of us can be wise enough to see what the future holds, and no other area of technology and science is expanding more rapidly than information technology. Therefore, I particularly commend to noble Lords, wherever they may sit, this small amendment which adds that flexibility which I think will improve the Bill.
6.31 p.m.
Lord Cockfield: I entirely accept the point made by the noble Lord, Lord Spens, that this is intended to be a probing amendment. It is on that basis that I deal with it. Clause 1(1) says that the director general shall be appointed:
"for the purpose of performing the functions assigned or transferred to the Director by or under this Act".
The Bill sets out a whole list of functions in Clause 3 and in very many subsequent clauses. In every case it indicates whether those functions are to be formed by the Secretary of State or the director, or may be delegated by the Secretary of State to the director, and so on.
The amendment raises two points. The first is a purely legal point and the second is more a point of substance. So far as the legal point is concerned I could not possibly improve upon the explanation given by my noble friend Lord Campbell of Alloway and by the noble Lord, Lord Lloyd of Kilgerran, both of whom are distinguished lawyers. As a matter of law, you simply cannot have a reference to something which is merely "relevant" without defining what the word "relevant" means. No one would really know what it was intended to convey, and it would open up room for argument. It would also give an enormously wide and, I suspect, undesirable degree of freedom to both the Secretary of State and the director to expand the functions that they were undertaking. The general pattern of this Bill has been to define those functions rather strictly.
My noble friend Lord Mottistone indicated that there might well be developments which he had in mind which ought to be performed by the director. There are amendments which appear in the Marshalled List which would extend the field of activity of the director. If there are such fields of activity, the right thing is to include them in the Bill. Having done that, they would then be covered by the specific phrase in the Bill:
"assigned or transferred to the Director by or under this Act".
I hope that this explanation will lead the noble Lord, Lord Spens, to feel that he now understands what in fact is intended by those specific words in subsection (1).
Lord Bruce of Donington: We on this side of the Committee are happy to sustain the noble Lord, Lord Cockfield, in his interpretation of the amendment and its effects. At the same time, we are extremely grateful to the noble Lords, Lord Spens and Lord Orr-Ewing, for the engaging manner in which they have informed the Committee of the various people with whom they have consulted and who have sought their aid as to the forms of policy that they wish to see put before your Lordships. When we come to consider later amendments which deal with these functions more specifically in the manner suggested by the noble Lord, Lord Cockfield, we shall at least now know the interests, and the extent of them, that lie behind the amendments. We are obliged to the noble Lords for that.
We note as a matter of compliment that as the official Opposition we were not approached and have not been associated with this august body. We would straightaway say that we as the official Opposition have received a number of representations from all kinds of bodies, not only those representing manufacturers and other specialised firms engaged in manufacture but, above all, those representing consumers and the great bulk of the population who are in the possession of a telephone.
We think that the adoption of the amendment would dangerously extend the Secretary of State's powers. On the assumption that he could survive the legal hurdle which was referred to and which was put more specifically by the noble Lord, Lord Campbell of Alloway, he would have more powers than we on this side of the Committee would be prepared to give him. He might stray considerably outside the scope of the very considerable powers that he already possesses. We do not think that would be good for the Government or the country. I am afraid that we oppose the amendment.
Lord Taylor of Gryfe: I confess to having been a part-time member of the group which was set up on the initiative of the noble Lord, Lord Orr-Ewing. We are indebted to the noble Lord and his group for their very detailed examination of the Bill. The results of that examination will no doubt emerge in subsequent amendments. I find the noble Lord, Lord Cockfield, in his most engaging and persuasive mood tonight. He has persuaded me that this is an unfortunate amendment. The noble Lord, Lord Spens, having expressed the view of the group, I hope he will be induced to withdraw the amendment.
Lord Spens: I am grateful to noble Lords for their kind expressions. I should like to remind the noble Lord, Lord Bruce of Donington, that at the very end of my speech on Second Reading I issued an open-ended invitation to any noble Lord in your Lordships' House to join the group. I think that that invitation was picked up by one or two noble Lords.
I have a guilty conscience over the word "relevant", which I myself inserted into an amendment which I thought otherwise would be too broad. But I am not quite happy with the explanation given by the noble Lord the Minister. He is still referring to functions which are set out in the Bill. What I am after is to make sure that in the future the director general will be
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assigned any additional function which may crop up through the effect of new inventions, which cannot therefore be foreseen at this time and which will therefore not be in this Bill.
However, I said that this was a probing amendment and I do not propose to pursue it now, though perhaps my group will have another look at it before the Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.40 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 6:
Page 2, line 9, after ("years") insert ("and subject to termination within the first six months of the meeting of a new Parliament")
The noble Lord said: I beg to move Amendment No. 6, which stands in the names of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey, as well as my name. As has already been said, in discussing the appointment of the director general we are considering a unique appointment. He will be responsible for all the matters that we have mentioned so far, as well as all those not yet mentioned but which nevertheless are contained in the Bill. He will be responsible for policing the licences and for protecting consumers' interests. It will be a very important public appointment which could have a crucial bearing on the efficiency and indeed the public image of any government.
The appointment will touch people closely every day. The cost of people's telecommunications services will to a very large degree be governed by the appointment, and it will affect the kind of telephone system they have. It will also affect, for example, whether people have modern telephone extensions in their homes and whether they will be able to shop by telephone, which will be of particular importance to people who are disabled. The appointment will also affect the question of whether or not rural areas are properly protected and whether they are deprived of services which urban areas already have, or will have. As I have said, it will be one of the most important public appointments that a government will make.
Our amendment suggests that a new government coming into office should have the right within six months of a new Parliament being elected to reappoint the person who has been appointed by the previous government. I believe that that is a perfectly reasonable proposition to put forward. It must surely be understood by everyone that an incoming Labour Government—which I trust will be the case after the next general election—may very well not wish to be in the hands of someone who has been appointed by the present Conservative Government.
Let us suppose, for example, that the present Government appointed someone such as Mr. Ian MacGregor. I do not wish to be unkind to Mr. MacGregor in any way at all. In fact, I am sure that he is a perfectly nice, reasonable fellow when one meets him face to face and in his personal life. But he is anathema to the Labour party. We simply do not like the way he operates. Your Lordships may say that that is disgraceful, but I am telling your Lordships what we honestly believe of Mr. MacGregor because of the actions that he has taken in certain industries—the

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steel industry, and now the coal industry—with which we completely and utterly disagree. I have made it perfectly plain that we have no quarrel with Mr. MacGregor as a personality. But in the Labour Party we believe that the policies which he is pursuing—no doubt at the behest of the Government, but nevertheless pursuing—are harmful to the industries concerned and are therefore harmful to the economy of the country.
The point that I am trying to put over is what might happen with regard to Mr. MacGregor in the case of an incoming Labour Government. I do not know who would be involved in the case of an incoming Conservative Government—perhaps it would be Mr. Ken Livingstone. But the incoming government may wish to appoint someone else, and I suggest that it is perfectly reasonable that they should have the opportunity to change the director general.
I have no doubt that I shall be told that the director general will ostensibly be non-political. But as I have already explained, by its very nature the job is bound to have significant political overtones. For example, one of the director general's duties is to promote competition, and it is very likely that an appointee of the present government will be wedded to the philosophy of competition and will probably be an arch privatiser.
Clearly such a person would not be acceptable to a Labour Government, especially if that government wished, as they may very well wish, to return British Telecom to public ownership, where we think it belongs, and from which we do not believe it should be removed. Under those circumstances a Labour Government might find it very difficult to have a director general who would be a veritable hindrance and an obstruction to their policies, which would have been put before the electorate and, if the party had been elected, would have been approved by them.
What I am suggesting is perfectly reasonable and perfectly constitutional. If for any reason at all the appointment of the director general by a Tory Government took place just before a general election—and this, too, is an important point—as the Bill now stands without the amendment, a Labour Government would be saddled with that director general for the whole of their term of office. Similarly, a Labour government making an appointment just before a general election would saddle a Conservative Government with an appointee with whom they did not agree, and who might very well be working against their own particular interest. I consider that that would be quite intolerable.
Even if a Labour Government did not wish immediately to return British Telecom to public ownership, they would want a director general with whom they could work and who would put forward the ethos and the policies of that particular Labour Government. We would want to see a man who would operate in the interests of the public who had elected the government.
Therefore I believe that this modification is needed to ensure that an incoming government have the flexibility and the means to carry out the policy which has been put before the electorate in a manifesto. So
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far I have mentioned only two parties, but this applies to them all. The modification would give an incoming government the flexibility to do what they felt was right for the public, for their constituents; and, indeed, for the country. I beg to move.
6.50 p.m.
Lord Thorneycroft: I hope that the noble Lord, Lord Stoddart of Swindon, and other noble Lords who are moving this amendment will not press it to a Division. I do not believe that there is much difference between both sides of the Committee in this respect at least—that we want the ablest possible man we can find to take on an appointment of enormous difficulty. In the years to come, that man will sometimes be appointed by a Conservative Government and no doubt sometimes appointed by a Labour Government——
Lord Donaldson of Kingsbridge: Or by the Alliance.
Lord Thorneycroft: I am confident that both Governments would do their level best to find the ablest man possible for the job in question. To introduce this amendment would militate considerably against finding such a man. Within the short period before an election was due, it would prove almost impossible to find someone whose term of office was not three or four years but might be a few months. Put yourselves in the position of someone taking this job. It would be quite a big decision to take, anyway. It would probably mean—if he was any good at all—that he had to give up some considerable appointment he was already holding. I do not think that anyone would be found to take a job where, within a short time, on the mere quirks and changes, and ups and downs, of politics, his whole position would be put in jeopardy again.
This idea of changing everyone on change of government is an American idea. It is not a British idea. I am absolutely confident that the noble Lord, Lord Bruce of Donington, and others are as anxious as I am and the Government Front Bench are to find a good man for this job. I do not believe that the amendment will help, and I hope that it will not be pressed.
Lord Somers: We have had a good deal of conversation on what type of man we want for this job. We have discussed the need for a person of wide experience, skilled in administration and possessing technical knowledge, and so on. One thing that he will not be is a party politician. I hope sincerely that his appointment will not be made on a party basis. The whole thing is entirely apart from politics. What has the appointment to do with politics? It is to do with telecommunications. If we get the right man, for goodness sake, let him go on for his full term of office. It may be for five years. It is possible that he might be reappointed. That depends upon what we decide. But his position should not be affected, as the noble Lord, Lord Thorneycroft, says, by the ups and downs of government.
Lord Bruce of Donington: The noble Lord, Lord Thorneycroft, and I myself are in substantial agreement in many respects. We have been in politics

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for a long time. We have both served or supported governments that have accepted the validity, to a large extent, of consensus politics. In other words, the Government of which he was a distinguished member under Mr. Macmillan did not vastly disturb the actions of their predecessors. For a long time, ever since the end of the war, it has been the policy of successive governments not to take violent action in securing the reversal of appointments made by their predecessors.
We are now dealing with a different kind of Government that believes in confrontation. In reply to the noble Lord, Lord Somers, who said that this was not a political appointment, it ought not, of course, to be a political appointment. But this is a highly political Bill. Its whole purpose, when stripped down, is to provide finance for the Chancellor of the Exchequer. It has nothing to do with the purported objects of the Bill which are to improve British Telecom. My noble friend Lord Stoddart of Swindon was in effect saying that, after the return of a new Government, active steps will be taken to restore British Telecom to where it properly belongs in the public sector. In those circumstances, it is only proper that we should give notice that we might find it necessary to make changes in the office of the director of Oftel.
I am convinced that as the debates in this place unfold in Committee, on Report and at Third Reading—on the assumption that there is adequate coverage in the press of what transpires in your Lordships' House, which is often questionable—the more the public will become disenchanted with the whole of this wretched Bill. Its only purpose, as I have said before and as I propose to prove, is to raise money for the Chancellor of the Exchequer to use for future tax reductions prior to a general election. Within that political context, we must obviously take a different attitude.
I agree with the noble Lord, Lord Thorneycroft, that we should not go towards the policies of the United States in making political appointments so that when one president comes in, a whole lot go out and another lot come in. The amendment will not be pressed to a Division. However, we thought that the House and the country should hear our views on this matter. Those who seek to ram down people's throats confrontational politics should know that ultimately there is a resolve to counteract that in the most suitable and public form.
Lord Taylor of Gryfe: I am glad that the noble Lord, Lord Bruce of Donington, is not to press this amendment to a Division. It will avoid the embarrassment of the Alliance failing to subscribe to a point of view that has been expressed from the Opposition Front Bench. I subscribe to a good deal of what was stated by the noble Lord, Lord Thorneycroft, except that he limits the possibility of alternative government to one party—a rather limited view, I would naturally and respectfully suggest, of future prospects in British politics.
In relation to what was stated by the noble Lord, Lord Bruce of Donington, I think that this is a bad Bill. I believe that the British public will join with him in regretting the passing of the Bill. All my experience of this kind of operation in other countries fortifies that
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view. At the same time, the Alliance will not enter into a commitment that everything that is privatised in this period of Government will inevitably be re-nationalised when we get an alternative Government. That is the way to economic chaos. This country has suffered from it in the past. That is why we have an Alliance in this House and in the country.
Everyone has subscribed to the view that this is a unique appointment in which tremendous power is vested. To that extent, we have the responsibility to get the best man. The best man will not accept an appointment if he is liable to be dismissed within three months of a change of government. That is not the way in which public appointments should be made in this country. I should like to say in the presence of the noble Lord, Lord Peyton of Yeovil, that, during his distinguished period as a Minister he never at any time practised political discrimination in the appointments that he had to make from time to time. I speak from some personal experience of his Ministership.
We must get a unique and a powerful man. How can we attract him if we start surrounding the appointment with these type of limitations and constraints? The man who is appointed has his terms of reference laid down in the Bill and to that extent they are not politically biased one way or the other. He is asked to do a particular job within the Bill and he has a responsibility to the Minister for carrying out his appointment.
If this type of provision were included in the Bill, it would certainly affect the prospectus of the company. If one has to write in that the director general may be dismissed within three months of a change of government, it is bound to be considered a factor to be taken into account by any investors in this new organisation. I suspect that if we are anxious to get the best price—and all right, I am against the Bill—for the taxpayer in the flotation of the Bill, we must not surround the appointment with these types of political constraints. I would normally be on the same side as the noble Lord, Lord Bruce of Donington, as regards the principle of the Bill, but in this particular case the Alliance and I are opposed.
Lord Peyton of Yeovil: I should like to acknowledge what the noble Lord, Lord Taylor of Gryfe, was kind enough to say about me just now. Let me also very briefly express my agreement with my noble friend Lord Thorneycroft and at the same time my perhaps naive surprise that the noble Lord, Lord Bruce of Donington, did not see fit to remind his noble friend that he had only recently made the voyage, as I have myself, from down the corridor. What the noble Lord, Lord Stoddart, said was, if I may respectfully say so, vintage House of Commons stuff in a not very good year!
I do not want to repeat the arguments which have already been very well put, but I do not think that we would be well advised, whatever the merits of the Bill, to add to the uncertainties of an appointment to a post which is already surrounded with very considerable difficulties. The Secretary of State is enabled under the Bill to dismiss for either incapacity or for misconduct. Those surely are adequate grounds. To engender into this matter as the noble Lord, Lord Stoddart, has

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attempted to do, a degree of political acrimony of this kind, is very unfortunate, and to launch from such a speech an attack on Mr. Ian MacGregor, whom he declared to be anathema to the Labour Party, and then to go on to say that he had no quarrel with him, was in my view regrettable.
Viscount Massereene and Ferrard: I should like to reply to the noble Lord, Lord Bruce of Donington. It is very dangerous—
Noble Lords: Order!
Lord Molloy: Fair play cuts both ways. This debate could have been terribly acrimonious, but it was not. I have listened to it very carefully. However, one question must arise. It is not impossible for the Secretary of State to appoint a director general who, after a few months or even a year in that post, was found to be unsatisfactory. I ask the noble Lord, Lord Cockfield, whether the Secretary of State would have the power to rid himself of the person whom he has appointed. That question needs answering. I am very glad that my noble friend Lord Bruce of Donington has probed deeply with my noble friend Lord Stoddart into this matter.
I should like to comment briefly on the question of Mr. MacGregor. There was nothing quite like it in the history of this country. I do not suppose that many people know who is the director general or the chairman of the BBC, or any of the great publicly-owned industries. There is grave apprehension—not merely in the Labour Party but outside as well—about the fact that someone could be appointed who might be as notorious as Mr. MacGregor—he may not think so, but in the view of tens of thousands of people he ruined the steel industry and is proceeding to ruin the coal industry. If the Bill becomes law and the whole process is set in motion and by some terrible quirk the Secretary of State makes a mistake and the wrong type of person—and this has nothing to do with politics—is appointed, would the Secretary of State have to come to Parliament to get rid of the director general or would he have the power to get rid of him himself?
Lord Beswick: One or two noble Lords opposite have seen fit to make some almost personal comments about the speeches made from this Front Bench; they have spoken about the quality of their contribution to this discussion. Let me remind noble Lords opposite that my noble friends are now talking within the context of a Bill which we believe to be utterly bad. I do not believe that noble Lords opposite really understand the feeling in the country about the motivation and the administration behind this type of legislation. It is being brought forward in a way, in a spirit and for a purpose, which we believe to be wholly contrary to the wellbeing of this country.
If there are speeches and amendments that, in the context of the more august and leisurely proceedings in the other place and the way in which they courteously bandy forth arguments in the other place, are a little surprising to the noble Lord who has just arrived here—and if the noble Lord finds that this place is much more acid in its debating than the place
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from which he has just come—then let me remind him that we are now faced with a situation in this country which is different. We have legislation coming before us which excites the most critical and the most feeling——
Viscount Trenchard: Will the noble Lord give way? Does he not realise that the Bill for the nationalisation of British Aerospace was, to many of us, just as emotive as this one? What we are talking about is whether, within the context of this Bill, we can revise it sensibly. In those terms we should remember that the noble Lord, Lord Beswick, continued his contract with British Aerospace under a Conservative Government. We thank the Labour Government for Sir Michael Edwardes, whose appointment I think started under that regime. We also had Dr. Richard Beeching (as he then was) from the same stable. I will not go on. Sir Arthur Cockfield (as he then was) got his second term in charge of the Price Commission under a Labour Government. Let us keep politics out of these Bills.
Lord Beswick: I quite understand the noble Lord's contribution. I am prepared to debate with him at some length the difference between the process which brought the aviation industry in this country under one ownership, and the motivation behind this transfer from the public sector, with all the tradition that there is behind the public activity in this sector. It is a completely different operation and the noble Viscount should try and understand that.
It was said earlier—and, indeed, it was even said by the noble Lord, Lord Taylor of Gryfe—that we have to try and make the prospectus, when it comes out, as plausible as possible. I could not accept that view. When this operation goes to the City it will be a flop. People will understand that there is a great deal of uncertainty behind it. I do not think that it will be successful. This doubt about its success is one more reason why we should have brought it forward in a much more careful way and much more reluctantly than the present Government have brought it forward in this Parliament.
Lord Cockfield: The noble Lord, Lord Stoddart of Swindon, made it perfectly clear that his amendment was based on purely political motives. So far as that is concerned, the matter was settled on 9th June last year in the general election, and it is quite unnecessary for me to add anything to that.
The real issue now involved is the one advanced by my noble friend Lord Thorneycroft, supported by my noble friend Lord Peyton of Yeovil and by the noble Lord, Lord Somers; namely, that we now have to find the best possible man to do this job. The effect of the amendment would be to create doubt and uncertainty. The public interest requires that once this Bill is enacted, as it will be, and implemented, as it will be, the industry should then be free to develop and expand, subject only to the regulatory framework that we have provided.
A crucial element in this is that the director general should be a man of independence, who will carry out his important functions without political bias. This is essential if he is to win the trust and respect of the

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industry and the public. The director general will have a vitally important task in overseeing the transformation of the telecommunications market in this country and ensuring that there is free and fair competition. We are looking for someone with an established track record. Such individuals are unlikely to be encouraged to take on such burdens as will be imposed by this Bill if the amendment were to be adopted.
Potential candidates would see immediately that, far from being certain of their future, they would be at the mercy of party politics, which is something which ought to be avoided in this field. That would be entirely wrong in relation to the appointment of the head of a non-ministerial government department, which is what Oftel will be. In this respect the Bill follows the precedent of the Fair Trading Act, which sets a maximum of five years to the term of office of the Director General of Fair Trading. We ought to follow that precedent, not to depart from it.
The noble Lord, Lord Molloy, will find the answer to his question in subsection (3) of Clause 1 of the Bill, copies of which are available in the Printed Paper Office. I am glad to note that the noble Lord, Lord Stoddart, does not propose to press his amendment.
Lord Stoddart of Swindon: I should like to say just a few words in reply to the debate, although I think that the major points were made by my noble friend Lord Bruce of Donington. I have been accused of being political. Of course I am being political; and the reason I am being political is that over a period of four to five years we have seen some highly political actions being taken on the other side. Since 1979 there has been a political revolution, albeit a Right-wing one, and it has been carried out to some degree by appointments made in publicly-owned industries.
The present Government have not hesitated to move politically against people with whom they do not agree and who will not serve their purposes. For example, I well remember that there was a wholesale massacre of the chairmen of regional health authorities, including my own in the south-west region—an area also represented by the noble Lord, Lord Peyton, who I was extremely pleased to hear make a contribution. Although my own contribution was not necessarly (and I did not mean it to be) vintage House of Commons, I thought that the noble Lord's contribution tonight was vintage Peyton, and I enjoyed it very much.
We have agreed to withdraw this amendment, but it needs thinking about. The present Government need to think about it because there are worries about the sort of appointments that are being made. It would have reassured this side of the Committee, and it would certainly have reassured the public, if the Government had had the courtesy and sense to have accepted either Amendment No. 1 or Amendment No. 3 this evening. That would have given us the safeguards which would have brought about the continuation of that consensus which, as the noble Lord, Lord Thorneycroft, well knows—he was part of it, and a very distinguished part of it—was enjoyed between 1945 and 1979. We did not need to move such amendments as these then; but unfortunately the political situation has changed to the extent that we
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now need to move them because we fear what is being done. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Denham: I think that this is probably a useful point at which to adjourn the Committee stage of this particular Bill. Before I move that the House do resume, it might be helpful to your Lordships who are interested in this Bill to know that we shall not return to it before 8 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Fishing Vessels (Financial Assistance) Scheme 1983
7.17 p.m.
Lord Belstead: My Lords, I beg to move that the Fishing Vessels (Financial Assistance) Scheme 1983 be approved.
This statutory instrument provides for grants to promote the adaptation of the fishing fleet to take best advantage of our future fishing opportunities. I know that the House has followed closely the negotiations on the European Community's common fisheries policy, which were successfully completed last year. The decisions reached in that negotiation have set down a framework, including national quota shares of fish stocks, conservation regulations and enforcement mechanisms, which provide the broad context within which our industry will be able to plan and operate for a generation ahead.
We have always recognised that one of the key elements of the fisheries policy must be measures to ensure that the fleet is well fitted to take the opportunities which are available to encourage the fishing industry to restructure the fleet.
The relevant Community legislation was approved by the Council of Ministers on 4th October and this statutory instrument is the evidence that we have taken immediate action to ensure that the industry is able to take full advantage of the grants offered by the Community.
Our policy for the structure of the fleet has three elements, two of which are the subject of the statutory instrument we are debating this evening. The two elements covered by this order are to reduce fishing capacity, either permanently or temporarily, where necessary; and to help the industry to investigate new fishing opportunities. The third element is the important aspect of encouraging the modernisation of the fleet. I shall just say a few words about that, but it is not part of the order.
The instrument provides for the reduction of capacity by means of decommissioning grants and laying up subsidies. The aim of the decommissioning grants is to assist the process of necessary structural change by encouraging the owners of vessels which, for one reason or another, are not viable in current

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circumstances, to remove these vessels permanently from the fishing fleet.
Laying-up grants will be available for owners who fish their vessels for fewer days than in the past. The payment will be based on the cost or insured value of the vessel and will depend on how much the vessel owner is prepared to reduce his time spent at sea. This should be an important source of help for owners of vessels which have a long-term future in the fleet, but for which current fishing opportunities are limited.
Grants for exploratory voyages will be available to encourage vessel owners to investigate potential new fishing opportunities. They will apply for vessels of 24 metres and above and are designed to make up the expected financial deficit of an approved voyage. They will be available for approved projects both within and outside the Community's 200-mile fishing limits.
There are also grants for joint ventures involving the transfer of vessels to fish in waters off countries of West Africa and in the Mediterranean basin. The grant will vary with the tonnage of the vessel and the length of time it is away from Community waters. The terms of all these four grants generally reflect the terms of the Community legislation, which enables the Government to reclaim from Community funds 50 per cent. of payments made.
We have however widened the eligibility rules of the Community legislation, at the industry's request, to include vessels down to 10 metres in length and of any age under the decommissioning and laying-up grants. Payments for these smaller and older vessels will be financed completely from national funds. The grants provided for by the statutory instrument will be open for applications until 1986, and the Government will be seeking financial provision of £27.1 million. If the full provision is taken up as provided in our estimates, about £12 million of this sum should be reimbursable from the Community.
May I end by saying a word about grants to modernise the fleet, even though they are not part of this order. These are a most important element of the Government's structural policy, and are already in place. The legislation approved by the Council of Ministers in October included grants from the European Commission for the construction and improvement of vessels of nine to 33 metres in length; and we intend to maintain alongside that scheme our own national grants which are administered by the Sea Fish Industry Authority. Both these schemes will assist owners to replace old vessels and improve their existing vessels, in order to fish economically and effectively.
The effect of these grant schemes should be to enable the industry to achieve a better balance between fishing capacity and fishing opportunities. I should emphasise that adaptation must come about as a result of the decisions of individual vessel owners; it is they who will determine the future shape of the fleet, operating within the parameters of the common fisheries policy and the necessary management measures following from it. However, while it is not an appropriate role for government to determine the precise structure of the fleet, it is a proper function for the Government to assist the industry in its process of adaptation.
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We believe that the measures in this statutory instrument will indeed enable the fishing industry to adapt, and thereby strengthen its long-term future yet further. I commend the instrument to your Lordships, and beg to move.
Moved, That the scheme laid before the House on 20th December be approved.—(Lord Belstead.)
Lord John-Mackie: My Lords, we are obliged to the noble Lord for putting down this instrument today and also for saying a word about the structure of the industry as well, although that is outside this particular instrument. We are glad that it is proceeding, and I am sure that it will do a lot to restructure the industry and help our fishermen. We were talking earlier about grants to farmers, and we get a lot of stick for receiving these grants. I am glad that fishermen do not seem to get that stick because they do a hard job, often a dangerous one, and I am sure that the British public does not begrudge them the grant they receive.
Perhaps I may look at the instrument for a moment. The laying-off grant, which is the first portion of the scheme, takes a boat out of use for a stated time based on the number of days it has been fishing during that period in the year. The instrument goes into great detail about how this will be carried out, the payment and everything else. If it is a small boat with a crew of three, I should like to ask the noble Lord whether there is anything to be done for the crew. Would they be given a share of any of the laying-off grants?
The other matter concerns the cost, and how it is checked. As we all know, there are difficulties in these schemes, and the cost of such a scheme is something that can be criticised if it is not properly checked to see that the payments are correct.
Then, I think "decommissioning" is a dreadful word. I am sure the noble Lord could have found a better one. Nevertheless, the decommissioning grant is there, and it is a pity that these boats have to go out of action. But they are probably idle, perhaps rotting, and the skippers and the crews do not know what to do. It is good for them to get some money into their hands, perhaps to start off on something different. But, again, does any redundancy payment go to the crews?—because they will be losing their jobs completely, not just for a certain time, as in the laying-off period.
There is another point. It is not difficult to disguise a boat. Under the regulations a boat can leave the country, it can be scrapped, transferred to a third country or assigned,
"to a purpose other than fishing for profit in Community waters".
I would think that this would need to be policed very carefully, particularly as a vessel could go out of fishing, could be disguised and could come back into fishing at a future date. I shall be glad to hear what the noble Lord says there.
This will be the most expensive part of the scheme, looking at the payments system, where a 50-tonne vessel at £400 a tonne will receive £20,000. I do not know how this was assessed, and whether that is the correct figure, but it seems a high figure, particularly as the boat does not have to be scrapped. The owner can sell it or do what he wishes.

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The other two parts of the scheme, the exploratory voyage and the joint venture grants, are interesting grants and should be encouraged. The formula for payment is intriguing. One has to look at this instrument, then go to the legislation contents—I forget what number it is—find the section there and make calculations. I hope that the fishermen will work their way through all these regulations to find how much they will be paid. I found it difficult to follow them.
However, as the noble Lord said, this is a scheme to try to reduce over-production and to help those people who, through no fault of their own, have to go out of fishing; and it is also to help in these joint ventures and exploratory fishing voyages to find better fishing areas or improved fishing ideas, and so on. Together with the noble Lord, we very much commend the order to the House.
Lord Belstead: My Lords, I am grateful to the noble Lord for his reception of this order. I am also grateful to him for giving me notice of the questions he intended to ask. The noble Lord first asked me about whether any provision was made for redundancy payments for the crews of boats which are decommissioned or laid up. There is no provision for Community finance under the common fisheries policy package for payments to men who are laid off. Therefore, if this was to be provided for, it would have to be a purely national measure. I am aware that this is a point which concerned honourable and right honourable Members of another place when the order was debated recently. I should like to draw to the attention of my right honourable friend the fact that the noble Lord, Lord John-Mackie, has repeated the point this evening. I ought to add to that that I am really talking here about decommissioning. I think that, so far as laying up is concerned, that is a slightly different matter and ought to be a matter, I should have thought, which would be a subject of the contract between the owner and the crews; because laying up could be for a comparatively temporary time.
Lord John-Mackie: My Lords, I was about to ask the noble Lord—and I think he mentioned the fact that £12 million of the £27.1 million would be likely to come back from the Commission£whether the national government could use that money for redundancy payments?
Lord Belstead: My Lords, I think that here again I ought to draw it to the attention of my right honourable friend that the noble Lord has said that. That is supposed to be, of course, the FEOGA reimbursement for these grants, and would not be supposed to be for that particular purpose. I do not think I can go any further on this point this evening except to acknowledge that it is a point which has troubled Members of another place and that clearly is of concern to the noble Lord.
The noble Lord also asked me how both the decommissioning and the laying-up grants would be placed. I would say that checks on the eligibility of applications are made by the Fisheries Department's inspectors of sea fisheries using their local records of vessels, together with documentary evidence and
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personal visits, if necessary, to inspect vessels. This procedure would enable departments, for example, to monitor the laying up of a vessel. From his experience as a Minister, the noble Lord may be familiar with this procedure. There are controls in the administrative procedures for the decommissioning grants to prevent vessels from returning to fishing. First of all, if a vessel is not to be physically scrapped, it will be a condition of approving the grant that the fishing capability of the vessel should be removed, for example, by destroying fishing gear and machinery on the vessel. Secondly, the vessel will lose its licence to fish if it is to be decommissioned. Thirdly, if despite these controls, as the noble Lord has suggested, a vessel is found to have returned to fishing, then the grant paid can be recovered under the scheme. In case of fraud, prosecution of the owner may be appropriate.
The noble Lord, Lord John-Mackie, further asked me about the costs of the decommissioning grant and said that he felt that when we were talking about £400 for each gross registered ton we were talking about a lot of money. Because the noble Lord was good enough to give me notice of this, I thought that he might like a couple of examples of how it will work out in practice. For a small commercial vessel of 40 feet the grant might be of the order of £10,000—not, perhaps, such a large sum to be ending a career in fishing. For an 80 foot vessel, for instance, employing, say, six men, the payment, I would guess, would be of the order of £40,000—and I am talking about decommissioning grant.
Finally, the noble Lord referred to the grants for exploratory voyages. I am sorry that it was difficult to find one's way round the papers which are relevant. I am advised that it is not legally correct to repeat the terms of a European Community regulation in a statutory instrument. This is why the reference is made in the statutory instrument to a document which I know the noble Lord tried to get and which I think he did get just before we started the debate.
May I say that the main rules of the exploratory voyage scheme are these. First of all, vessels must be over 24 metres long (that is to say, 80 feet). Secondly, the exploratory voyage must be at least 30 fishing days in one or two trips; and, thirdly, the grant will be the actual financial deficit on the voyage up to a maximum of the estimated loss which was approved before the voyage began. The Government say, before the voyage begins: "That is your estimated loss. We will underwrite you to that ceiling and if the actual loss is even higher than that then that actual, extra loss would have to be stood by the owner".
I hope that that reply answers the questions which the noble Lord asked me. If I may say so, I think that the noble Lord and I join in one thing. We appreciate the difficulties which the fishing fleet around our shores has had to face; that it is quite right that these grants should be made and that it is quite right that the United Kingdom Government should implement these grants quickly. That, through this statutory instrument, is what they are doing.
On Question, Motion agreed to.
The Earl of Swinton: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.36 until 8 p.m.]

Telecommunications Bill
House again in Committee on Clause 1.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 7:
Page 2, line 10, at end insert ("for a further term not exceeding four years.").
The noble Lord said: It is a great pleasure for me to resume from the acrid atmosphere of party controversy in the still, calm waters of this simple little Amendment No. 7 that I am about to move. The object of this amendment is to try to limit the tenure of the director general in office. He can be first appointed for a term not exceeding five years. Then Clause 1(2) says:
"but previous appointment to that office shall not affect eligibility for re-appointment".
Therefore, in theory he could go on for at least another year, and then be re-elected again and find himself eligible. I should have thought that five years was getting on for a long time, and I have suggested in my amendment, which is a probing amendment, that if the fellow wants to be considered for a further term, that further term should not exceed four years. He might be appointed for only three years to start with, but he would never be able to serve more than seven years then. As your Lordships are aware, it often happens that a young man, of perhaps 51, might be appointed and go on and on until retiring age of 70. Why does he go on like that? It is because the people do not want to throw him out. They feel, "Well, he has done some good work in the past, and we will allow him to go on".
Although I do not deplore age in any way, in an area of this kind, with a director general with such responsibilities in a field of high technology where things are changing so rapidly, there should be a limit to the total tenure of office. In my amendment I have said that he should not be eligible for a term of more than four years after having been in office for any period before. There is no magic in the term of four years. I would have preferred perhaps to have two, but that might be considered to be too short. I beg to move.
The Countess of Mar: I wish to support this amendment. The office of director general is going to be an extraordinarily arduous one. Any man after perhaps a maximum of nine years' service would be exhausted. He might well have got things under his belt by that time, but at the same time he would be getting stale.
Another reason why I support the amendment is that we have had a lot of talk about the bias of the director general. He might be pro-customer, pro-manufacturer, or pro the supplier. If he is in office for only a limited period of time then the risk of him being accused of bias is much less than if he was there for a
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long term. I do not wish to prolong the evening, but I wish to support the amendment.
Lord Cockfield: As the noble Lord, Lord Lloyd of Kilgerran, says, this amendment seeks to achieve two things. First of all to ensure that a period of reappointment should not exceed four years as opposed to the five years provided in the Bill, and that there should not be more than one re-appointment, making a total of nine years in all. While it might well be that the individual concerned would not want to serve any longer than that period of time, I could not entirely accept the noble Countess's argument that after nine years anyone would be exhausted by the arduous nature of this job.
We have Members of your Lordships' House who have been active in public affairs for considerably longer than nine years. I recently celebrated the 50th anniversary of my first entering the service of the Crown. I do not think that we ought to regard nine years as necessarily the limit to a man's active life, even in an arduous occupation of this kind. The more important matter is that if the director proved to be an eminently suitable man and was doing the job to general satisfaction and doing it well, it would be unfortunate if the option to allow him to continue to serve had been cut off.
The present Bill, by making reappointment necessary every five years, gives the degree of control over this appointment which, I agree with the noble Lord, Lord Lloyd, is necessary. However, I do not think that we ought unduly to hamper ourselves by a provision of the kind proposed in the amendment.
Lord Lloyd of Kilgerran: I am grateful to the noble Lord the Minister for his reply. He brought himself into the arena, and as the noble and learned Lord sitting alongside him knows, if even a person of the greatest authority pulls himself into the arena, he is liable to be attacked. On this occasion I shall not make any comment about the personal observations that he made about his longevity and his long period in office. But the noble Lord the Minister is really not in tune with the facts of life in regard to this industry. Why should he, with all his experience, know anything very much about industry except on the fringe?
His argument that a man should stay in office for 15 years in this area of high technology and of great and rapid advance is not being "with it". I am sorry to be so blunt because the noble Lord the Minister was so gracious to me earlier in the evening; but I had hoped that even if I did not score a boundary, as he suggested, with my first amendment I at least would have scored one run on this occasion. However, I do not want to delay the proceedings. I see that the noble Lord, Lord Stoddart, is making signals to me. I do not know whether he wants to say something before I withdraw this amendment.
Lord Stoddart of Swindon: The Committee should seriously consider what the noble Lord, Lord Lloyd, has said. While I appreciate everything that the noble Lord the Minister has said, and while I must say that after his 51 years——
Lord Cockfield: Only 50.
Lord Stoddart of Swindon: He looks remarkably well on it and I congratulate him; and I sincerely trust that he will have at least another 50 years active life. But we are not really discussing anything here that we already know about. We are setting up a new organisation. The director general's post is a new post. What is more, it is a post which is in an industry which, if there is an industry of the future, this is it. Communications is one of the industries that will thrive for ever and a day, and over the next 20 or 25 years there will be enormous strides and great new technologies. For that reason, this post may very well be different from other posts, and we may very well need younger people who are in touch with this white-hot, technological, new telecommunications system which we shall have.
There is also a danger. I listened to Professor Galbraith speaking about bureaucracy and administrative inertia. He feared that, all too often, director generals and all sorts of other people in organisations clone themselves, so that you get a series of the same people going on and on into perpetuity. In this sort of industry we simply cannot afford to have a clone. We need somebody who has ideas of his own, who is in touch with modern developments, who is prepared to get up and go and take advantage of this new technology which is advancing and improving all the time. For example, this country is involved in the European space project and communications such as radio will be important. Therefore, we need the opportunity to appoint those people who are young, who are "with it", who can get up and go and who are not clones of a previous establishment.
Bearing all those points in mind, I hope that the Minister will consider this to be a serious amendment. Although I understand that it is to be withdrawn, I hope that the Minister will take note of the debate before Report stage. It may very well be that he will change his mind and bring forward his own amendment.
8.12 p.m.
Lord Lloyd of Kilgerran: The noble Lord, Lord Stoddart, has put the case far better than I could have done. In view of that speech, I am sure that the noble Lord the Minister will want to take this matter back and think about it again before Report stage. I am sure that that would be an easier and more gracious way to deal with it. The example that I gave of a man being appointed at the age of 51 was a bad one. It is quite likely that a man may be appointed at the age of 30. He may be very successful and go on until he is 35. He is then eligible for reappointment and goes on until he is 40. But by that time he will probably be completely out of date about activities in this field.
It is all very well to say that the director general will be a very good administrator, but being a good administrator in an advancing field of technology like this is very disadvantageous in industry. Therefore, I hope that I can encourage the Minister, with the help of the noble Lord, Lord Stoddart, to think again and come back with something on Report. I am tempting the Minister to say something, but he does not propose to make any observations.
Lord Bruce of Donington: I was hoping that the noble Lord the Minister would respond to the very cogent arguments of my noble friend Lord Stoddart. I shall not detain the Committee long, but one thing is certain. The person who occupies this office will be a very powerful person indeed. He will have enormous powers over various sections of the industry, and over various sections of the service. This person will not be supported by any kind of authority to which he is responsible—he will be responsible only to the Minister—and in those circumstances it is wise that some time limit should be put on his appointment, not because of any inference against his own personal or professional qualities, but simply on the principle that one person wielding that power for so long is not healthy in public life. I sincerely hope that the noble Lord, Lord Lloyd of Kilgerran, will test the view of the Committee upon this amendment, in the absence of any satisfactory assurance from the Minister that it will be further considered.
Lord Cockfield: I was in course of rising to my feet when the noble Lord, Lord Bruce of Donington, kindly interrupted me and I gather that he would have preferred that I had not given way to him. Having listened to his speech, I share that view. The answer to the noble Lord, Lord Stoddart, lies in exactly what he himself said. He said, "You may well need younger people". Of course, you may well need younger people, but it does not follow that an individual who has served with complete satisfaction and with great distinction should necessarily have his term of office brought to an end. This is the whole point.
The term set in the Bill is one of five years. At the end of that time the Secretary of State, whoever he may be, is then able to consider all the circumstances and decide whether to reappoint the man. He does not then have to reappoint him for five years; five years is the maximum period provided. The reason, and the only reason, why I oppose this amendment is that it introduces an unnecessary element of rigidity into a system where what we need is a degree of flexibility. It is on those grounds that I hope the amendment will not commend itself to noble Lords.
Lord Lloyd of Kilgerran: I am very grateful to the noble Lord the Minister for what he has said. I can cnly repeat, if I may say so quite bluntly, that he has no very clear idea of the circumstances under which this man would work, and of what an advantage it would be somehow to limit the term of office of any man who is appointed, along the lines that I suggest. But it is no good my trying to press this amendment any further. I shall think about what the Minister has said and perhaps raise the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 8 and 9 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 10:
Page 2, line 18, leave out first ("may") and insert ("shall").
The noble Lord said: Perhaps we might now move from the director, who has absorbed us for so long, to his staff. I suggest that it is essential that the Oftel staff are adequately qualified and experienced. It is too difficult to write into a Bill what that means and this

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amendment is in the nature of a probing amendment. I hope my noble friend the Minister will be able to tell us that he appreciates the point that I shall be making; that he hopes that the director is suitably advised and that, if this staff are engaged before he arrives, these rules will then be followed. With Amendment No. 10, I should like to discuss Nos. 11 and 12 which are consequential upon it:
Amendment No. 11: Page 2, line 18, ("such") insert ("suitably qualified").
Amendment No. 12: Page 2, line 18, after ("stall". insert ("in adequate numbers").
The point which I want to make about the staff is two-fold. First, we want to make sure that the staff have not been too closely associated with the one major firm in the industry, which is British Telecom, or with the major telecommunications suppliers. A large number of telecommunications experts have been trained and have spent their working lives within, or as suppliers to, British Telecom. Their thinking, their attitudes, their spontaneous reactions are monopoly orientated and their working procedures reflect the stability and predictability of the environment in which they grew up.
In addition, administrators (who include officials in the Departments of State principally concerned) who have worked with and have been advised by these experts have inevitably become tainted. Few, if any, from these groups can be ideally suited to staff Oftel, where they would find it difficult to combat and control their friends and erstwhile colleagues in British Telecommunications. The initial staffing of Oftel will not be easy, but there are sufficient qualified and experienced people around, among the users of telecommunications and in the armed forces, and among consultants. I believe it to be terribly important that the staff of Oftel should not be tainted with the 70 years of monopoly control of the telecommunications industry that the Post Office and its successors have had. Above all, it is most important that the people who will be in Oftel should be as independent as they can be of that kind of attitude of mind.
Another point which concerns me relates to the financial effects of the costs of the director and his staff. The notes on pages viii and ix of the Bill tell us that the costs of the director and his staff in discharging his functions, the additional costs of the Monopolies and the Mergers Commission and additional expenditure by the Secretary of State will be £1,500,000 per annum. From page x, we see that the effects of the Bill on public services manpower indicate that the staff of Oftel will be about 50. That is small enough, in all conscience. If, say, one-quarter of the total costs are apportioned to running the function and the overheads on salaries are set modestly at 100 per cent., the average salary will be £11,250. This does not augur well for the quality, qualifications and experience of the staff who will have to be attracted from an already tight market.
Therefore, I put two questions to my noble friend: first, can he give me some kind of undertaking that the point I have made, about having a staff which is as free from the effects of having been part of British Telecom for a generation as is possible, will be aimed at by the Government and that advice accordingly will be given
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to the director when he is appointed? Secondly, can my noble friend provide clarification about the kind of salary levels which it is foreseen will be offered to these people in order to make sure that people of a reasonable standard can be attracted to this very important office? I beg to move.
Lord Bruce of Donington: We on this side of the Committee are most grateful to the noble Lord, Lord Mottistone, for having come clean as to exactly what is meant by the amendment. It appeared to be, on the face of it, quite innocuous, but the noble Lord has made its purpose very clear indeed. I am not a member of the Post Office Engineering Union. I am not, and never have been, engaged in any way with British Telecom, apart from being able to rent their lines on either a business or a residential basis. However, I am bound to say that I resent the inference, as many noble Lords from all sides of the Committee will have resented the inference, contained in the noble Lord's words "tainted by 70 years' experience or tradition of British Telecom", the inference being quite clearly that what the noble Lord wishes is that the offices of Oftel should not in any way be influenced by any personnel from British Telecom being employed by Oftel, because they would not be bringing to Oftel the competitive, naked, cash nexus tradition of the people whom the noble Lord represents. To them, money means more than anything, and progress is measured in terms of cash. The noble Lord wants Oftel to be manned by people with that kind of mentality rather than by those whose whole life has been dedicated to public service.
Lord Mottistone: If the noble Lord will give way, I want Oftel to be manned by people whose main interest is in the expertise and quality of their work, which has not been demonstrated across the board by the Post Office during the past 30 years.
Lord Bruce of Donington: The noble Lord protests too much. The Government which he supports, in bringing forward this Bill are trying desperately to reassure the public, by the legislative provisions which it contains, that it will be laid down by law that the service to the consumer will not be less efficient than the service they have received from British Telecom. That is all. It has nowhere been suggested by the Government and by the noble Lord, Lord Cockfield, opposite that as a result of the passing of the Bill the consumer will get a better deal. In fact, the bulk of the political stance of the Government has been to try desperately to reassure people that things will be just as good as they were before.
The noble Lord referred, perhaps fortuitously, to personnel from the armed services. Presumably the Royal Signals would be a likely source of recruitment into British Telecom. May I tell the noble Lord that in our communications affairs in the United Kingdom the role of the Royal Signals would not have gone very far without the recruitment of its personnel from British Telecom, the organisation to which he has referred in such derisory terms, and that in practice it has precisely been the close association between the military telecommunications side of our affairs and the Post Office, later British Telecom, which has made

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the signals communications system in the United Kingdom one of the finest in the world. The noble Lord can accept my assurance on that point. In suggesting, therefore——
Lord Mottistone: The noble Lord said that I referred to these things, but I did not refer to any of them. The noble Lord put all those words into my mouth. When I speak again, perhaps I can clarify what he is trying to say.
Lord Bruce of Donington: I am quite content to rely on the printed version, when it will be seen tomorrow in Hansard that the noble Lord used the word "tainted". The word "tainted" means only one thing to me. It means exactly that—tainted. The noble Lord referred to the personnel of British Telecom within that context. I do not believe that the Government should have a bias against the personnel of British Telecom. Because of their experience in public service as distinct from participating in private pelf, they are more entitled to serve the nation, if serving in Oftel would provide that opportunity, than the people to whom he refers and the people to whose aspirations he is so firmly wedded. That is my view, and I believe that is what the public view will be.
I was very glad—and I must congratulate the noble Lord for being so frank—to learn of the motives which lie behind the liberalising group of which he is such a distinguished member. We now know what we are in for, and I am grateful to the noble Lord. I hope that the Committee will reject his amendment.
Lord Molloy: In fairness, it ought to be stated quite clearly that in my own experience in another place—which is not inconsiderable—of dealing with both the Post Office and British Telecom, as well as with our military forces, the liaison and contribution of both the Post Office and British Telecom has been the subject of sincere and genuine praise from Ministers of all Governments. Indeed, this is the first and only time in 20 years that I have heard a perhaps not unpleasant but irritating remark about the people involved in British Telecom such as that which I have heard tonight from the noble Lord, Lord Mottistone. I am sure that when the noble Lord reads Hansard, he will come back to this Committee and withdraw his comment about the personnel in British Telecom.
I am bound to say that the Government Front Bench have acknowledged in this Committee today the remarkable contribution which both the Post Office and British Telecom have made in their close and devoted liaison with the forces of our country.
As I believe they may now make a further contribution, they ought not to be stained by any frivolous mention in this Committee. I am sure that the noble Lord the Minister will make it very clear that it is not the Government's view that these people are in any way "tainted" and will join with us in rejecting the amendment.
Lord Spens: I feel that I must at this stage talk a little about our liberalisation group. The noble Lord, Lord Bruce of Donington, has put a slur on our group which I do not think is acceptable. To start with, I do not believe that the noble Lord, Lord Mottistone, ever
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mentioned the armed forces. I have listened to the whole of his speech and I do not think that the armed forces were mentioned at all.
We in our group are trying to prevent the appearance of a "big brother" in 1984 in the Orwell style. We are faced with British Telecom, who are going to take over 97 per cent. of the industry as a private firm, which I call very much a monopoly. If we have also to accept that the majority of the director's staff will be ex-members of British Telecom, then that to my mind is exactly the kind of "big brother" situation we want to avoid. It is for exactly those reasons that the noble Lord, Lord Mottistone, has moved these amendments, which I support very strongly.
The Countess of Mar: As one of those people to who the noble Lord, Lord Mottistone, referred as being "tainted", and despite the fact that I left British Telecom two years ago, I must register my regret that he said it. On behalf of all my ex-colleagues, I hope they will understand that the noble Lord, Lord Mottistone, does not, perhaps, understand them as well as many other noble Lords do.
I have a little sympathy with this amendment; not very much, but a little. In connection with suitably qualified staff, the noble Lord, Lord Mottistone, did make a mention of members of the armed forces; I heard it. Doubtless there are suitably qualified staff in the armed forces, but they could be no less biased than people who have been with British Telecom.
One point about which I am very concerned is an adequate number of staff. We have heard several comparisons made with the Office of Fair Trading. I understand that in 1982, the staff there numbered 295. I would think that the duties being placed on the director must be fairly comparable with those of the director of the Office of Fair Trading, but if the director of Oftel has to manage with 50 staff, he will not be able to do a very efficent job.
Lord Campbell of Alloway: As a member of no group but as an ordinary Back-Bencher, may I be forgiven for asking how an amendment which seeks to substitute a mandatory obligation for a permissive power can give rise to such discussion as we have had?
Lord Glanusk: If I may return to what the noble Lord, Lord Buce of Donington, was saying, may I suggest that the travels around the country and see how many Strowger exchanges are still in daily use. I am sure that my noble friend Lord Mottistone was not referring to the staff of engineers and technicians who maintain those Strowger exchanges. But we do maintain that those Strowger exchanges should have been replaced 20 years ago when they were already redundant.
Lord Beswick: Clause 1(5), states:
"The Director may appoint such staff as he may think fit"—
and I believe there is an argument for using the word "shall" instead of "may" without all the other connotations which I understand arise here in association with the explanation given by the noble Lord, Lord Mottistone, in moving the amendment. The question I wish to ask is this: do I gather from all

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this that the director will have to consult the Treasury over every appointment to his staff that he makes? If he wants to appoint another secretary or shorthand-typist, or a lady to make the tea, will he have to go to the Treasury and obtain their approval?
8.37 p.m.
Lord Cockfield: I wonder whether on the wider issue I may make just one comment, which I hope will be acceptable on both sides of the Committee. However good an organisation is, there is always room for improvement. British Telecom is better and more efficient today than it was three years ago; one would expect that. We hope that it will continue to be more efficient in the future than it has been in the past. Perhaps I may leave the matter on that basis.
So far as the amendments themselves are concerned, we do not consider that they are either necessary or that they will have any real effect. We agree that the director should have sufficient staff with the right qualifications and experience in order to ensure that he can carry out the difficult tasks assigned to him under this Bill. Having said that I consider the amendments to be unnecessary, perhaps I may take them in turn and explain my reasons in a little more detail.
The first amendment seeks to place a duty on the director to appoint staff by replacing the word "may" with "shall". In practice, it will be for the director to judge what staff he needs in order to perform the various tasks assigned to him. Since the amendment, quite rightly, does not qualify that discretion by removing the words,
"as he may think fit"
the amendment is unnecessary.
Turning to the question of suitably qualified staff, the Government are sympathetic to the proposition that the director should have available to him the expertise that will be clearly necessary if he is to be successful in regulating the telecommunications industry. But again, the words "suitably qualified" add nothing to what is already in the subsection. In considering the staffing needs of Oftel, the director will obviously have to look for particular skills among his advisers in, for example, accountancy, law, economics, or the technological aspects of the telecommunications. The clause needs no amendment to achieve that effect since without suitably qualified staff he will be unable to do the job properly. Obviously, in searching for suitably qualified staff the director ought not to exclude from consideration suitably qualified staff from every quarter.
A similar argument to the one I have already put forward applies in relation to the number of staff in Oftel, one of the specific points raised by the noble Lord. He asked whether the 50 staff mentioned in the Financial and Explanatory Memorandum would be sufficient. The Government of course are pledged to maintain firm control on the size of the public sector; but at the same time within those constraints we are determined to ensure that the director has the resources he needs to carry out his functions. The initial allocation is quite justifiable on the grounds that a small tightly knit unit is likely to be more effective
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than a large and less well integrated organisation. Nevertheless, I can assure Members of the Committee that we shall keep matters under review, and if in the light of the developments an increase in complement is called for it will be considered very sympathetically.
So far as the point raised by the noble Lord, Lord Beswick, is concerned, the approval of the Treasury is standard procedure in matters of this kind. The same phraseology appears in the Fair Trading Act under which the Director General of Fair Trading was appointed. What is required is the approval of the Treasury as to numbers and as to terms and conditions of service. The people in Oftel will be civil servants and broadly speaking they will be remunerated on normal Civil Service levels. This of course is the answer to the other point raised by my noble friend; namely, the question of the cost of Oftel, which he seemed to think was extremely modest in relation to the number of people employed. But when one is looking at an overall figure, one needs to bear in mind that in addition to the highly qualified people there will also he clerical staff, typists and others, whose level of remuneration is obviously less than that of the highly qualified technical people.
All I want to say in conclusion is this. The director will be bound to keep all of the matters which have been referred to under review because unless he has sufficient suitably qualified staff he will not be able to meet his various obligations under the Bill. I hope that in the light of this statement of the Government's position my noble friend will feel able to withdraw the amendment.
Lord Orr-Ewing: Before my noble friend sits down, could he elucidate a little? When he said that the staff of 50 would be civil, servants working under Civil Service conditions, I hope this does not bar Oftel from recruiting on a two-or three-year contract bright young people who would like to serve there for two or three years and who probably do not have a tremendous future there on a long-term basis. I hope that that freedom will be left, because these are the types of young people who ought to be there if they are going to carry out the sophisticated duties which will be essential in this case.
Lord Cockfield: I entirely take the point. There would be no bar on the recruitment of staff on specific short-term contracts. I was talking in general terms, and I used what I thought was a suitable qualification by saying that generally they would be remunerated on Civil Service levels. There would be no obstacle of the sort my noble friend refers to.
Lord Mottistone: I think my noble friend for those closing remarks. On that point, I hope that there will be no inhibitions about how much the director should be paid. I am sure we are all agreed that we want the very best person, and I would hope that the Government will feel free to pay him whatever is necessary for the task.
However, I seem to have stirred things up. I must make it clear before I conclude my remarks that I am sorry for the people in British Telecom, as indeed I am sorry for all people in monopoly organisations wherever they are, whether they are owned by the state

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or anybody else, because the people in monopoly organisations get soggy. I am sorry, but it must be so. They are not subjected to the disciplines of the market and the pressures of having to make the books balance in the sense that people in private industry do. I am certain that my noble friend Lord Glanusk was very helpful in pointing out that it is the managers we are talking about, because it is the managers who will be part of these 50.
The point is that those in these organisations, without those pressures, do not achieve what they could do if they were not. We shall no doubt have other amendments later when one will be able to show just exactly what this means. I am sorry for all the people concerned, but they are not really suitable for competitive industry and they are not suitable to administer it, either. Having said that, I take the points that my noble friend has put. I accept that the Government will do their best in this area. I beg leave to withdraw the amendment.
Lord Beswick: Before the noble Lord withdraws the amendment, I wonder whether he would clarify something. He says he does not appreciate the experience of those who work in a monopoly; he likes the influence of the market. He would appear to be suggesting that the influence of the market, and all the initiative that he would require, and I should like to see, will be found in the office of the director general. But if you have an office which is limited to 50 by Act of Parliament, if the Treasury have to agree who is appointed, if you have the terms and conditions of service approved by the Treasury, how then does the operation of the market come into it?
Lord Cockfield: Of course the number of 50 does not appear in the statute; it is merely an estimate given in the Explanatory Memorandum.
Lord Beswick: It may well be.
Lord Mottistone: If I may take the noble Lord's point, I am talking about the mentality of the people who operate within this Office of Telecommunications. It needs to be that which understands the market place. It is not well served if its people have come from a 70-year old monopoly. It is an attitude of mind that is needed, and in order to do the job properly within Oftel they need to have come from the hard world of the market place. I have withdrawn my amendment.
Lord Taylor of Gryfe: The noble Lord may withdraw his amendment but he does not withdraw his remarks. I was wondering how the noble Lord would reconcile his general support in this Bill for the creation of a public monopoly when he says that the incentives to inventiveness and enterprise cannot be contained within the structure of a monopoly system. I am afraid the noble Lord himself is rather far-removed from the market place and does not understand that there are other incentives to service in the community rather than purely the profit motive, and that some people in the Post Office over the years have taken a pride in the creation of the institution which has served this nation well. I am rather doubtful whether in the new circumstances, in an organisation
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that is devoted primarily to the profit nexus, we shall have an organisation of which we can be equally proud.
Lord Home of the Hirsel: A number of us might have attempted to speak, but I understand that the noble Lord has withdrawn the amendment.
Lord Donaldson of Kingsbridge: With respect, if any noble Lord wishes the amendment not to be withdrawn, we have the right to continue the conversation.
Lord Molloy: As I was about to say before I was interrupted, when the noble Lord, Lord Mottistone, talks about the purity of the market place it might be worth his while exercising his mind to realise that of the 4 million people that we have on the dole, many are unemployed today because of this form of activity of the free market place—a little asset stripping here and there which has resulted in thousands losing their jobs. A few takeover bids and the fact that many people——
Lord Spens: May I intervene? We are not talking about the 4 million unemployed. We are talking about some very specialist people who are required in the office of the director of British Telecom.
Lord Molloy: Noble Lords may not be talking about the unemployed, but I am. Many people are unemployed because of the market place that the noble Lord, Lord Mottistone, has been lauding. I mentioned asset stripping and takeover bids. I will also mention that people find it distasteful working for organisations where the profits that they have helped to create are salted away in some tax haven. That is part of the free market. We all know—at least we do on these Benches—that much of what has been created to assist the disabled, the blind and the deaf was done by ordinary people working within the Post Office and thinking of those things not to make a profit or to make money out of it but to contribute to the disabled. That is the society that we believe in on this side of the Committee.
Lord Mottistone: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
[Amendment No. 12 not moved.]
8.51 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 13:
Page 2, line 18, after ("staff") insert ("following consultation with the appropriate trade unions")
The noble Lord said: I move this amendment in the name of my noble friends Lord Bruce of Donington, Lord McIntosh of Haringey, and of course in my own name. If I had any doubts at all as to whether this amendment should be moved before I heard the noble Lord, Lord Mottistone, speak, then those doubts no longer exist. In the light of what he said, his attitude towards the employees of British Telecom and the

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people who worked for the Post Office before British Telecom was set up, it is clear that the staff of British Telecom need protection. Certainly they need protection from the noble Lord, and they also need protection from the present Government, as I shall seek to show. Moreover, the future employees of Oftel need protection. The clause states:
"The Director may appoint such staff as he may think fit, subject to the approval of the Treasury as to numbers and as to terms and conditions of service".
The noble Lord the Minister said that they will be appointed on Civil Service terms. I wonder whether that is entirely acceptable. How are we to know, because this is a new body, that Civil Service terms and conditions are appropriate to the new body and to its duties? It seems rather quaint that the director and the Treasury alone should be fixing the salaries and terms and conditions of service without, apparently, any reference to anyone with any outside experiece of the telecommunications industry. Certainly there will be no reference to the trade unions themselves. I am not pretending—and indeed I am not moving the amendment with this intention—that trade unions should approve the appointments; but we believe that there should be consultation, and the director should consult the trade unions about these conditions of service, salaries—and, indeed, numbers—because numbers are going to be very important to the efficient running of this organisation if it is to protect the consumer and do the myriad other jobs which it is set to do under this Bill.
I have to tell your Lordships that the trade unions in British Telecom are seriously worried about this Bill. They are seriously worried about the Government's intentions towards themselves, let alone to an industry which is not to be privatised but monopolised in a different manner. Their experience has led them to fear what the Government have in mind for them in the new arrangements for telecommunications. The Minister will be well aware that for many years within the Post Office—I know this from my own experience—there was extremely good consultative machinery. It was one of the finest sets of consultative machinery that has ever existed; and it worked. It was satisfactory both to the people who worked in the industry and to those who managed it. It worked very well for very many years. Indeed, there was a valuable element of consultation within the industry; but that, unfortunately, was put to death by the present Government in the 1981 Act.
The Government will say that they are not against trade unions, that they are quite happy for people to belong to trade unions, and that there should be trade union organisations. But when the Government take any action at all those actions make it clear that they consider the trade union movement to be an obstruction to the policies, economic and otherwise, which they wish to pursue. Throughout the past four or five years the trade union movement—not only in the Post Office but in many other fields—has felt the full force of Government legislation against it. In this Bill we see nothing which will reassure the trade unionists working in British Telecom that the Government will protect them, their interests, salaries, conditions of service, pensions, and so on, let alone allow them to
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have some say on how this new organisation is to be set up.
For example, we have had discussions in this noble House about industrial democracy. As far as I know there is no one in the House who is against better relationships within industry. Indeed, everyone calls for better labour relationships, better consultation between management and workers, and better worker involvement in industry. That is something which all sides want. That is what they had in the Post Office. The workers in the old Post Office had representation and consultation at every level right up to board level. In fact, they had people serving on the board of the Post Office at one time, until the Government took those rights away. Therefore, the trade unions are most concerned, I am very concerned, and so is this side of the House concerned, that there is nothing in the Bill that in any way gives assurance to the trade unions.
Some people will say that this is a new organisation, why should they have a say? In the long run they are the people who will have to do the work of administering the new organisation of Oftel under the director general. It is they who will have to undertake the myriad tasks placed upon the director and the Office of Telecommunications. Is it not right that they should be consulted as to the numbers? There are to be only 50 staff to administer all the functions contained in the Bill. Would it not be better, in the first place, to have some consultation not only with the trade unions inside the present British Telecommunications set-up but also with other trade unions, perhaps those with experience in manufacturing industry, to see exactly what the job will involve? That would start up an organisation which from the beginning will be able efficiently to discharge the functions which Parliament will give to the new director and the Office of Telecommunications.
This amendment, which asks for consultations with the appropriate trade unions, should find favour on all sides of the Committee. As I have said, I think that we all want better relationships within industry. We have the opportunity here to start as we mean to go on; to bring the trade unions in from ground level, to make them part of the organisation and to give them the opportunity to build up that organisation. If they are involved right from the beginning, they are likely to have a better loyalty to the organisation for which they work.
There are all sorts of things that they might want to discuss. The noble Lord, Lord Orr-Ewing, suggested that the Office of Telecommunications should not be tied to full-time Civil Service posts. There is something in that, I would not necessarily disagree with short-term appointments; but in my experience in industry, short-term appointments can often cause difficulties and friction. Before we embark upon short-term contracts, it is as well to get the agreement—having discussed it with them first—of the trade unions. That is just one reason why the trade unions should be taken into consultation at an early stage.
During the previous debate the noble Lord, Lord Glanusk, mentioned out-dated telephone exchanges using Strowger equipment. It seemed to me that he was blaming the workers in the telecommunications

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industry for that. I hope that he was not. If he wishes to intervene, I shall be glad to give way.
Lord Glanusk: I certainly was not. I was doing exactly the opposite. I was saying that the staff who maintain Strowger exchanges are first-class, but the Strowger exchanges should not be there in the first place. They should have been replaced many, many years ago.
Lord Stoddart of Swindon: Yes, indeed. I am most obliged to the noble Lord for putting me right on what he said. He is absolutely right. The staff of British Telecom are first-class, and have been maintaining old-fashioned equipment, which I was working on in 1945. The exchanges should have been replaced a long time ago. But, of course, it is not the fault of, originally, the Post Office, nor, indeed, of British Telecom, that they have not been replaced. It is largely due to the manufacturing industry, which went along the wrong road of developing new equipment. It has also had something to do——
Lord Weinstock: Will the noble Lord give way?
Lord Stoddart of Swindon: Yes; I thought that the noble Lord might wish to intervene.
Lord Weinstock: I do not want noble Lords to think that I rise merely to the challenge, but a great deal is being said about who is responsible for what without any evidence whatever to support it. It is not in fact the case that suppliers supply what they want to supply to customers. Customers buy what they want. The suppliers sold to British Telecommunications and to the Post Office, its predecessor, what they insisted upon having, and not what the industry dictated to them that they should have.
9.5 p.m.
Lord Stoddart of Swindon: The Post Office certainly laid down particular specifications, and I am quite sure that private industry tried to live up to those expectations. But at the same time I understand that at least the Post Office, and subsequently British Telecom, found that the manufacturers were not as co-operative as they might have been, because they had other fish to fry.
Lord Weinstock: I am grateful to the noble Lord for giving way a second time. There were no other fish to fry. As a result of the insistence by the Post Office, and susbsequently by British Telecom, on the equipment which they specified, all our other fish were drowned or lost at sea. We lost our export markets because, as has been said by noble Lords on both sides of the Committee, we did not have modern equipment to sell; and we did not have modern equipment because British Telecom and its predecessor would not buy it. At the point when it decided to stray from Strowger, which was some years ago, it changed to a system called TXE 4, the relay electronic exchange, which was not really electronic but was another electromechanical exchange. That was not saleable in overseas markets, and none was sold. That decision was made between British Telecom and one of its
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suppliers—not the company which employs me, but another one. The change from Strowger to TXE 4 did not make an appreciable impact upon our possibility to export. There was no question of manufacturers having other fish to fry. We always fry the fish that our customers demand of us.
Lord Stoddart of Swindon: I am most obliged, and I am sure that the Committee is most obliged, for that explanation from the noble Lord, Lord Weinstock. However, I must tell him that it is not an explanation that would be universally accepted, and I am sure that if he reads the minutes of the Select Committee on nationalised industries, which investigated the matter, he will find that there are two points of view on it. I have put one point of view this evening, he has put the other, and perhaps we shall have a discussion about the matter at much greater length outside the Chamber.
However, what the noble Lord will probably agree with me is that over a period of time the Post Office and subsequently British Telecom have suffered from financial interference by the Government. The Post Office has been unable to proceed to provide new equipment because of Government financial restrictions, not knowing from one year to the next how much it would have to spend on rejigging exchanges and on new equipment. Certainly that is one of the reasons why Strowger equipment is still being used in so many exchanges up and down the country—though, I may add, in many instances quite efficiently.
I sincerely hope that the amendment will be carried. I trust that we shall press it to a Division because I believe that it is important in the interests of people who will work for Oftel, and in the interests of the organisation itself and therefore the customers and users of telecommunications services.
Lord Donaldson of Kingsbridge: I wish to make only two remarks. I think it an awful pity that it should take 20 minutes to move an amendment so obvious as this one. I think it also a great pity that not a single amendment from the centre Benches on this side of the Chamber has been moved in less than 15 minutes. Having said that, I believe that what the amendment proposes is perfectly reasonable. The only answer that there can be to it is that what it proposes is already included in the Bill, or the Government are to do it, and the whole matter could very well have been dealt with in three minutes.
Lord Cockfield: I do not propose to follow the noble Lord, Lord Stoddart, down the tangled paths that he has been traversing. Therefore I shall stick to what the amendment itself deals with. Let me start by saying that there is an entirely legitimate field in which staff should be consulted, and where appropriate this should be done through trade unions, though not exclusively so. But having said that, it is clear that this amendment is intended to go very much further.
We are talking about Oftel, an organisation which is to employ 50 people. We are not talking about the whole of the telecommunications industry. In establishing Oftel our aim is to create an independent regulatory body staffed to carry out an important and

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specialised function in relation to telecommunications. If trade unions in the industry feel that they have valuable suggestions to make to the director on how his office should be staffed, they are always free to draw them to his attention, and I should expect them to do so. But a formal obligation to consult the trade unions or indeed anyone else on these matters would be quite wrong, as it would imply that the trade unions should have some right to approve either the individuals to be appointed, or if not the individuals, the types of individuals, or their numbers.
The amendment could well have another undesirable effect, because it could be interpreted as requiring the director to set up special arrangements for consulting the Oftel staff about manning levels and terms and conditions of service. Oftel's staff will in general be civil servants, and there exist long-established procedures for consultation on such matters. Terms and conditions of service, including salaries, are agreed centrally, and as the noble Lord well knows, are normally the subject of much discussion and negotiation with the unions concerned. To add a further level of consultation would not only be unnecessavry, but would also undermine existing procedures. On all those grounds, I ask the Committee to reject the amendment.
Lord McIntosh of Haringey: I feared, when the noble Lord, Lord Donaldson, said it was an obvious amendment, that he was too sanguine. My fears have been proved right. It seems that the Government have misunderstood virtually every aspect of what my noble friend said, and have misunderstood the purport of the amendment almost entirely. It is not the intention of the amendment—it does not say so, and it does not mean it—that there should be negotiations exclusively with the appropriate trade union. Of course there will be other people likely to be involved. It is not the intention of the amendment that the trade union should be involved in deciding what individuals should be appointed. I cannot think how the Minister reads that into the words of the amendment.
It is not the intention of the amendment that the consultation that is requested should replace the existing consultation procedures within the Civil Service. Indeed, it is the very fact that there is this consultation procedure within the Civil Service that makes necessary an amendment of this sort now. Not only has the Civil Service a tradition of consultation on levels of pay across the unions through the Council of Civil Service Unions, as well as with individual unions: there has also been consultation historically about such issues as the devolution of Civil Service officers from London to other parts of the country—and very properly so. It is impossible to see how these moves could have been made as smoothly as they have been made without that consultation. That inevitably involves consultation about staff numbers and manning levels. That is very proper.
As an organisation that is to be paid and managed, as we have heard from the noble Lord, Lord Cockfield, on Civil Service lines, it should be extended to Oftel. The experience of government in trying to ignore what seem to myself and to the noble Lord, Lord Donaldson, these rather obvious truths has not been
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terribly satisfactory. What consultation, for example, took place on the level of pay of the Audit Commission? It was found, only after the commission had started to employ people at significantly higher salaries than those they were supposed to be auditing, that there would be a great deal of trouble and unrest, and a feeling that a group of people there to save money in local government were spending money on a large scale themselves on their own salaries.
Is the experience of the GCHQ a good example? I am not going into the merits of the case, but at least it can be accepted that there has been a lack of consultation, even within the Cabinet, if not on a wider level. The history of government attempting to go ahead with new organisations without consulting the people who will be involved is not a good one. My noble friend needed to make those points, as evidenced by the Minister's reply.
Lord Donaldson of Kingsbridge: The noble Lord referred to my saying that the amendment was obvious. It is obvious that before you make appointments you consult trade unions. It is not obvious that you put it in the Bill.
9.17 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 62.

DIVISION NO. 3]

CONTENTS

Airedale, L.

Lawrence, L.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Beswick, L.

McIntosh of Haringey, L.

Birk, B.

Mar, C.

Bishopston, L.

Mishcon, L.

Blyton, L.

Molloy, L.

Bruce of Donington, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Northfield, L.

Collison, L.

Oram, L.

David, B.

Phillips, B.

Davies of Penrhys, L.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Donaldson of Kingsbridge, L.

Seear, B.

Gallacher, L.

Shackleton, L.

Graham of Edmonton, L. [Teller.]

Stewart of Alvechurch, B.

Stewart of Fulham, L.

Jeger, B.

Stoddart of Swindon, L.

John-Mackie, L.

Taylor of Gryfe, L.

Kagan, L.

Underhill, L.

Kaldor, L.

White, B.

NOT-CONTENTS

Abinger, L.

Davidson, V.

Airey of Abingdon, B.

De L'Isle, V.

Avon, E.

Denham, L. [Teller.]

Bellwin, L.

Elliot of Harwood, B.

Belstead, L.

Elton, L.

Boyd-Carpenter, L.

Enniskillen, E.

Brabazon of Tara, L.

Gardner of Parkes, B.

Brookes, L.

Glanusk, L.

Brougham and Vaux, L.

Glenarthur, L.

Bruce-Gardyne, L.

Gowrie, E.

Caithness, E.

Gray of Contin, L.

Campbell of Alloway, L.

Greenway, L.

Carnegy of Lour, B.

Hailsham of Saint Marylebone, L.

Cockfield, L.

Coleraine, L.

Hives, L.

Cork and Orrery, E.

Home of the Hirsel, L.

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Hornsby-Smith, B.

Orr-Ewing, L.

Long, V.

Peyton of Yeovil, L.

Lucas of Chilworth, L.

Polwarth, L.

Lyell, L.

Rodney, L.

McAlpine of West Green, L.

Saltoun, Ly.

McFadzean, L.

Shaughnessy, L.

Mackay of Clashfern, L.

Skelmersdale, L.

Macleod of Borve, B.

Spens, L.

Marley, L.

Swinton, E. [Teller.]

Massereene and Ferrard, V.

Torphichen, L.

Maude of Stratford-upon-Avon, L.

Trefgarne, L.

Trenchard, V.

Morris, L.

Trumpington, B.

Mottistone, L.

Weinstock, L.

Murton of Lindisfarne, L.

Whitelaw, V.

Orkney, E.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.25 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 14:
Page 2, line 19, after ("Treasury") insert ("and affirmative resolution of each House of Parliament").
The noble Lord said: I beg to move this amendment standing in my name and those of my noble friends. This amendment is designed to secure greater parliamentary control over expenditure, and it provides that the matters that are discussed in Clause 1 in regard to staff and numbers, in addition to being approved by the Treasury, should be approved by an affirmative resolution of each House of Parliament.
In the course of the debate on the last amendment we learnt of the Government's reluctance to enter into consultations—at any rate, on formal terms—with the appropriate trade unions in regard to establishment size. This amendment is tabled to make quite sure that someone somewhere exercises some control. The Government have a tradition going back many years in regard to setting up new kinds of organisations. Although they may have been reluctant to consult with trade unions, there has been no reluctance to consult with consultants, particularly American consultants.
That is evidenced by the restructuring of the National Health Service, which was carried out on the advice of American consultants, which is now admitted to be a disaster, and which has had to be reformed. Another example was the restructuring of local government, once again on the advice of consultants. A third one was in the setting up of the recent Audit Commission, once again on the advice of consultants.
This time one wants to make quite sure that when the establishment is set up and staff numbers and qualifications are finally determined, there is some control before Oftel is brought into operation. The reason for this lies in the ambiguity of the Government's own Explanatory and Financial Memorandum on this matter at pages viii and ix of the Bill, where they set out the financial effects of the Bill, and a little later on at page x where they anticipate an increased number of 50 to man Oftel.
At the moment, and in view of the vagueness of the figures that are given in the Explanatory and Financial Memorandum, I regard it with mild disbelief, more particularly after looking at Clause 3 of the Bill, which
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lays down not only the responsibility of the director of Oftel and, therefore, of Oftel staff, but also of the Secretary of State himself. Noble Lords will note from Clause 3, when we reach it, that the Secretary of State and the director have the same responsibilities—the one becomes interchangeable with the other. One of the delightful characteristics of this ridiculous piece of legislation is that two different people have identical reponsibilities with the result, of course, that there is bound to be some overlap. Is it to be thought that the Secretary of State's part in carrying out all the principles of the Bill in accordance with those laid down in Clause 3 will be done without any increase in his own staff? Is he going to exercise those responsible powers of Clause 3 sitting in his own office by himself without any extra staff in his office? This becomes inconceivable.
Even after a cursory look at the Bill, let alone a detailed examination of all its implications, right through to the advice that the Minister will be required to give and the decisions he will have to make later under Part V of the Bill—if Part V of the Bill ever gets past your Lordships—it is inconceivable that all this can be accomplished by a staff of merely 50 at Oftel, if this is to be done properly.
Perhaps it will not be done properly. Perhaps the whole of the provisions of this part of the Bill are an elaborate facade designed to lull City institutions into investing in shares in the new company, once its liabilities have been suitably written down to an acceptable figure to investors. Perhaps there is no real intention. Perhaps it will be a charade; but if it is to be a serious operation it will require more than this. But in any event, notwithstanding the Government's previous history in matters of this kind, will there be another new Government quango, by a Conservative Government dedicated to the assassination of quangos? It will not even receive parliamentary approval before it moves ahead. This amendment gives the noble Lord an opportunity of elaborating rather more extensively on the total costs and projected structure of this operation than has so far been given. The explanation itself bears all the stamp of having been cobbled together for the purpose of lending some degree of plausibility to the appropriate clauses in the Bill as they pass through the House. We want something a little more than that. We want closer financial estimates. We want closer numbers, increases in terms of the Ministry as well as Oftel. Unless the Minister can do better than that at pages viii, ix and x of the Bill there will remain a degree of dissatisfaction and unease.
In my respectful submission, the only way of exercising some parliamentary control over this from the outset, so that we can avoid previous mistakes such as those which occurred in the days of the troubles resulting from consultants, which everybody knows about, is for Parliament to be in on it from the beginning to give appropriate approval to the establishment, to any increases thereto, and to the total expense projected. I beg to move.
Lord Cockfield: Once the Bill is enacted, the director will be charged by Parliament with carrying out certain onerous duties. It follows from this that he must have freedom to appoint the individuals he

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considers appropriate to the task of running his office at Oftel. In practice Parliament will exercise control over staff costs through the normal procedures of voting expenditure. Separate approval by affirmative resolution procedure would be a major innovation, would greatly interfere with the director's freedom to manage Oftel, and would considerably delay the setting up of that office. There is no such requirement for the Director General of Fair Trading to obtain parliamentary approval.
We have already discussed on a previous amendment the suitability of the staff in respect of their knowledge and experience. Safeguards about the suitability of the staff in other respects and their terms and conditions of service are provided by the fact that, in general, they would be civil servants. They will therefore be subject to centrally-negotiated and agreed terms and conditions of service, including salaries.
The Treasury will ensure that the director does not exceed the number of staff that the Government consider appropriate to enable him to perform his functions properly and that he pays them neither more nor less than their equivalents in other Government departments. The question of the number of staff is a matter which, as I have said before, will be kept under close supervision. We shall be discussing later the extremely important question of parliamentary control in major matters. The present amendment, I suggest, is not the place for that major discussion. I hope that on this basis noble Lords will not accept this amendment.
Lord McIntosh of Haringey: Once again I accept that we have made some progress with the statement from the Minister. It is necessary for the Committee to be told explicitly about the nature of the control through the control of expenditure. But that does not answer the points made by my noble friend. The example that the noble Lord, Lord Cockfield, gives of the Office of Fair Trading is not particularly reassuring. I am not now talking about the functions of the Office of Fair Trading but about the fact which was referred to by the noble Countess, Lady Mar, on an earlier amendment that the Office of Fair Trading at the end of last year had a staff of 295. I am prepared to assert that, at the time the Office of Fair Trading was set up, the figure expected by Government was nothing like 295. In other words, the Office of Fair Trading, because it has only the financial control on its budgets and because it lacks the possibility of direct questioning of the Secretary of State on its activities, has grown in size, and therefore grown in cost to the taxpayer.
I am not making any judgment now on whether 295 is the right figure or the wrong one. I am saying that there is a lack of precision in the Bill which is not reflected in the Financial and Explanatory Memorandum. It is not good enough for the Bill to say
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nothing precise about the nature of the Office of Telecommunications and, outside the orbit of statute, for estimates to be made which are simple assertions. They have nothing in any way to back them up either on the costs or on the numbers involved. Somebody just pulled a figure out of the air; there is no attempt to justify it and it is not subject to parliamentary scrutiny because it is not part of the statute. The answers that the Minister has given are simply not satisfactory at this stage and it will be necessary for us to find other ways of probing the cost and protecting the taxpayers' interests.
Lord Cockfield: I wonder whether the noble Lord could quote me any case where the staffing complement of an office of this kind has been laid down in statute. I am quite unaware of any such instance. If I may take the noble Lord's argument in general, what he is saying is that one ought to learn from experience. I am entirely prepared to accept that; and that is the basis of the argument that I put to your Lordships. What I am saying—and said on one of the earlier amendments—is that one ought to start with a tightly-knit organisation. Our belief is that we could effectively staff this office with 50 people. If experience shows that the director cannot carry out his duties with 50 people, the staffing level will be reconsidered; and I said specifically that it will be sympathetically reconsidered. But neither side of the Committee would want us to staff the office beyond what the requirements of the job are. What we are trying to do is to get the right number.
Lord McIntosh of Haringey: I apologise to the Committee for rising again, but I was directly challenged. I agree with the noble Lord that it is not desirable to have actual numbers laid down by statute, but the necessity for us to ask for parliamentary scrutiny here arises because we have a quango being set up and because the Minister cannot be directly questioned on its activities.
I agree with the noble Lord that it is desirable to have a tightly knit group. I agree that it is desirable to have the expenditure kept to a minimum. We are at one on that. But I am worried when the Minister says that it should be tightly knit at the start, because in saying that he is implying that there is going to be the necessity for increase afterwards. It is the divorce from parliamentary control that is implicit in the quango status which makes it necessary for us to seek these assurances. It is not that we are asking for any control which is not available over the Civil Service, but simply that the Office of Telecommunications should not be freer from control than any other organisation.
On Question, amendment negatived.
[Amendments Nos. 15 to 18 not moved.]
Clause 1 agreed to.
Schedule 1 [Director General of Telecommunications]:
9.43 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 19:
Page 86, line 6, at end insert ("subject to approval by resolution of each House of Parliament").
The noble Lord said: Perhaps it will be for the convenience of the Committee, and to the delight of the Government Chief Whip, if I ask the leave of the Committee to take amendments Nos. 19 and 20 together as they involve the same principle.
Amendment No. 20: Page 86, line 16, after ("him") insert ("subject to approval by resolution of each House of Parliament").
This asks that the salaries of the new director general, and indeed of any compensation that may subsequently be paid to him under certain circumstances, be subject to approval by a resolution of each House of Parliament. The reason for this is simple. I do not want to rake over old coals too much but one does not have to go very far back to recall to mind the instance of the appointment of Mr. MacGregor to the steel board and the compensation terms that were agreed to be payable to his firm in certain circumstances and subject to certain reviews.
I do not want to rake over the more controversial aspects of that again. However, I think I am within the recollection of both sides of the Committee, and of the public at large when I say that this appointment and the amount of compensation were denounced in most national organs of the press, whether they were Conservative, Liberal, or Labour—although there are very few of those, if any. Indeed they created widespread disquiet in another place and, if it is admitted, here also. That was, first, because the amount of the remuneration was considered to be out of all proportion to the value of the services performed, while the compensation terms were described, in sections of the media which are very favourable to the Government, as being ridiculous and in one case as scandalous. If there is any doubt about that, the press records of the time are available for inspection.
In a case of this kind we want to avoid a situation where, out of sheer desperation or because of lack of initiative and (to use the felicitous terms of Sir Keith Joseph) after scouring all the boardrooms in the United Kingdom, the Government are induced to offer wholly ridiculous terms as distinct from reasonable terms of engagement to the director general. I am one of those who believe, and believe firmly, that a person taking on onerous responsibilities should receive proper and adequate remuneration. Of this I am in no doubt, and I do not cavil at it in the slightest, although whether or not it should approximate to salaries and remunerations of the kind to which we agree in the European Economic Community is an entirely different matter. One hopes that the terms will not approach that kind of level, particularly on the taxation side. They were exceeded only by what happened on the appointment of Mr. MacGregor.
I think that the Committee would be well advised to put its foot down quite firmly and ensure that ridiculous arrangements are not made in the same way as they have been made before (possibly and very largely owing to the personal power and prestige of the Prime Minister, who succeeds in cowering most of her Ministers when she wants anything) and should make certain that any arrangement that is made carries the approval of Parliament. I repeat that nobody would object to a proper remuneration, allowances, compensation and everything else being paid. There is no desire to be mean on it, or anything of that kind; but in the light of the experiences that we have had, and for the sake of accountability, we think that in this instance an exception should be made because the circumstances are wholly exceptional. The occasions for appointment under this ridiculous Bill are very exceptional. The least that Parliament should be offered is some opportunity of preventing grossly excessive expenditure, and grossly extortionate terms of compensation, if these are envisaged.
I repeat that we are quite prepared to support the Government at any time on any reasonable arrangement they make to fill this very onerous post, in the full knowledge that it requires exceptional dedication and an exceptional ability to deal with a Government who are not always frightfully easy to deal with, bearing in mind their oft-expressed contempt for the Civil Service generally.
Lord Cockfield: The point of principle raised by these two amendments is precisely the same as the one that we were debating on Amendment No. 14: namely, the extent of parliamentary control over matters of this kind. These are not, I suggest, the kind of matters which ought to be the subject of detailed individual parliamentary control. The director general is a Crown servant, and the salaries of other Crown servants are not fixed by Parliament in the way that this amendment would propose. The salaries of people who occupy comparable posts—for example, the Director General of Fair Trading—are not fixed by Parliament. There is no reason why the Director General of Oftel should be picked out and dealt with in any other manner.
The noble Lord, Lord Bruce of Donington, and the noble Lord, Lord McIntosh of Haringey, raised the point that this particular body is a quango and is not subject to proper scrutiny by Parliament. Neither of these statements is true. This body is not established as a quango. It is what is technically called a non-ministerial department, as illustrated by the fact that the people in it will normally be civil servants and it is possible for Parliament to scrutinise the affairs of Oftel in the way that has been described in detail by Ministers in another place.
There are plenty of orthodox ways in which the affairs of Oftel will be subject to parliamentary scrutiny. For example, apart from questions to Ministers, committees of either House could investigate the affairs of Oftel. The estimates procedures provide a mechanism for questioning expenditure and, finally, the director's annual report has to be laid before Parliament and can be debated.

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Turning to the second amendment which deals with compensation, its purpose is simply to deal with the case where, for some reason, the director general might leave office prematurely and there might be circumstances which then justify the payment of compensation for loss of office. This follows normal procedure elsewhere. The compensation may be a matter determined under the terms of the contract, or it may be agreed on the basis of negotiations at the time of the event. It would be unprecedented to involve Parliament directly in matters relating to the payment of compensation to an individual person, and I have heard no arguments which would persuade me that the Director General of Telecommunications should be singled out for peculiar treatment.
In all of these instances the Bill makes provision for Treasury approval, and the complaint normally made is not that Treasury approval is too readily given but that the Treasury exercises a very tight control over these matters. On all of these grounds I would advise your Lordships against accepting the amendment.
Lord Lloyd of Kilgerran: Earlier this evening the Committee heard a very powerful submission from an ex-chairman of the Conservative Party, Lord Thorneycroft. He said how exceptional this post of Director General of Oftel is and that it is important to find an exceptional man for an exceptional post. Therefore, I was interested in the Minister's statement that the director general will be a Crown servant. He went on to say that there are comparable posts. The post with which he compared that of the Director General of Oftel was the Director General of Fair Trading. He said also that the fixing of the salary of the Director General of Oftel would be on the same basis as that for the Director General of Fair Trading.
I do not know how the Treasury fix salaries. I wonder whether the Minister could be more precise and tell us, either now or on a future occasion, how he envisages that the salary of this very important, experienced man will be determined. Is the noble Lord the Minister saying that the salary of the Director General of Oftel is to be comparable with that of the Director General of Fair Trading, since he referred to it as a comparable post? In the case of comparable posts comparable salaries are, no doubt, paid.
Lord Cockfield: The noble Lord is not entitled to place that interpretation upon what I said. I am not saying that this post would necessarily be paid at the same level as that of the Director General of Fair Trading. I am making no statement of that kind. I was comparing the nature of the post, which is that of a Crown servant, with the nature of the post which is held by the Director General of Fair Trading. Obviously, when it comes to fixing the precise salary of the individual concerned there is a very wide range of factors to be taken into account—not least the onerous nature of the duties concerned.
Lord Lloyd of Kilgerran: I wonder whether I may press the Minister further, because he has said that the post of the Director General of Oftel is comparable with that of the Director of the Office of Fair Trading.
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That is not consistent with what we have heard all the time during this Committee stage and Second Reading; it has been stated that this is an exceptional post. I do not understand how the noble Lord can use the word "comparable" in relation to the work of the Director General of the Office of Fair Trading.
Lord Taylor of Gryfe: May I, too, press the Minister because he has indicated throughout that the man concerned and his staff will be Civil Service staff. The salary range in the Civil Service is well established, from Permanent Secretary downwards. If they are to be regarded as Civil Service staff, then obviously they will be contained within that salary range. It is not a commercial department such as the coal board or the steel board where they pay the market rates in order to get the man concerned. But if this new department is to be related to Civil Service grades, then I am afraid that it will not be possible to attract the kind of man who can exercise the vast authority and powers which are vested in him in this description.
Lord Molloy: Before the noble Lord, Lord Cockfield, replies, I wonder whether he can help us with another aspect of the submission made in the amendment. As he has already stated, it is perfectly true that the Treasury will be involved. The speech made by the noble Lord, Lord Thorneycroft, gained the approval of all parts of the House, and in that speech he got near to saying that the appointment of the director general of this new organisation is almost unique in history.
If that be the case, it is not unreasonable to assume that we have to look at this matter in an exceptional and special way—which we have not done hitherto. The noble Lord, Lord Thorneycroft, has immense knowledge of public affairs and has held the highest offices of Government in this country. We should not lightly dispense with what he had to say with regard to this particular post. The submission made by my noble friend Lord Bruce of Donington is at least worthy of examination by the Government. If the Government cannot reach a conclusion tonight, then they should be willing to examine the point.
There is one other aspect of concern. I do not know whether the noble Lord, Lord Cockfield, can provide any guidance—and perhaps it is not fair to ask him—but it is a point that is certainly in the minds of ordinary people. Were the Treasury concerned, when they appointed a person to a very senior position in the coal board and in the steel board, that he was not a British National? Do we want a British national in charge of this new authority? The Bill does not say so. That is my first point. Secondly, were the Treasury concerned about the fact that when they appointed Mr. MacGregor, they had to pay a foreign nation a vast amount of money for borrowing him? Are they going to do that in this case, or may we have an assurance that there will be no need for that sort of thing to happen?
If there are indeed genuine apprehensions, the only way to overcome them and for us all to be safe, irrespective of where we sit in this Chamber, is to accept the principle of the amendment. If, having listened to the arguments, the Government cannot get

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up and say that they accept them now, then will they at least be prepared to acknowledge that a number of valid and important points have been made and that they will reply to them later?
Lord Cockfield: The noble Lord, Lord Molloy, has strayed very far from the substance of this amendment. I certainly do not propose, as far as this is concerned, to enter into a debate on the salaries paid to the chairmen of nationalised industries. With regard to the point made by the noble Lord, Lord Taylor of Gryfe, the staff of Oftel will in general be Civil Service Staff and will be paid on Civil Service scales. The director general I have very carefully described as a Crown servant. I have made no statement one way or another about the level of his remuneration, which is clearly a matter to which a great deal of thought has to be given. I hope noble Lords agree that it is hardly appropriate for me to be entering into a salary negotiation in your Lordships' Chamber this evening.
10 p.m.
Lord Bruce of Donington: We are grateful to the noble Lord. I entirely agree that it would certainly be inappropriate for this House to enter into detailed discussions of amounts or anything of that kind. I think, with respect, it is largely the fault of the noble Lord that the misunderstanding has occurred. I think anybody reading the report in Hansard tomorrow will support the construction that the noble Lord, Lord Lloyd of Kilgerran, put upon what the noble Lord the Minister said, particularly in the light of the remarks that fell from the lips of the noble Lord, Lord Thorneycroft.
I have no desire to prolong this debate further. I do not conduct the business from the Opposition side for the convenience of the Government; the business I conduct for the Opposition is on the Opposition's behalf. I hope that the noble Lord will give this matter further consideration, because it is one which has obviously aroused anxieties on all sides. Everybody wants something done which is reasonable; but in the light of our previous experience of extraordinary appointments of this kind, the noble Lord will note, we at any rate have learned the lesson which the Government have not. With the leave -of the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 20 not moved.]
Schedule 1 agreed to.
Clause 2 [Abolition of British Telecommunications' exclusive privilege]:
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 21:
Page 2, line 30, after ("order") insert ("subject to approval by a resolution of each House of Parliament").
The noble Lord said: This amendment looks fairly innocuous in its form, in that it seeks on the face of it only to amend Clause 2 by getting the appointed day fixed subject to the approval of each House of Parliament. Clause 2 gives the Secretary of State power, in effect, to abolish British Telecom as from a
1358
given date. I think this is a very dangerous clause as presently worded for the Committee to agree to. It is not yet certain—indeed it is far from certain—that the proposals of the Government as set out in this Bill, even though passed by both Houses of Parliament, will ever materialise in practice.
The whole purpose of the Bill is to raise money for the Chancellor of the Exchequer. On all sides of the Committee there is anxiety—both on the form of the Bill and the statements of Ministers—whether the services at present being performed by British Telecom on behalf of residential and business consumers—more particularly residential consumers—will be carried out with the same efficiency, thoroughness, and the same regard to the public interest as at the moment those duties and functions are performed by British Telecom as it is now.
The services provided for the people of this country by British Telecom are comparable with those in most other nations in the world, and cheaper than in most of them. They are already performed voluntarily, as a matter of public duty, by British Telecom, responsible only to the Minister under Section 6 of the British Telecommunications Act 1981. There may be people who say that its services are not all that should be desired and that they are not perfect. But they are very good and compare with those in any other nation in the civilised world, including the United States, more particularly since the United States telecom system has been made, I shall say in parenthesis, subject to regulation.
There is sufficient anxiety, not only on both sides of the other place but also in this House and in the country, that safeguards need to be put into the Bill at later stages to ensure that the Government's general undertaking of continuity of service and the holding of the prices of the services provided under the famous RPI minus X principle are to materialise in practice. If the Government succeed in writing these appropriate safeguarding clauses into the Bill they will make it very difficult for the new British Telecom PLC to achieve its profit-making objective within the percentage required by invested capital unless a very drastic change in its capital structure is made ab initio.
As the Bill goes through the House we shall see, when we come to Clause 5, what extinguishment of liabilities at a cost to the British taxpayer are made by the Government in order to ensure an appropriate capital structure which will be attractive to the City of London. We shall then see whether this issue will succeed or not. If adequate safeguards are put into the Bill to protect the interests of consumers, thereby circumscribing British Telecom's ability to increase its charges to the customer, and if it is repugnant to the House that British taxpayers' money—yes, I use the term "British taxpayers' money"—should be used to extinguish liabilities on British Telecom's balance sheet so that the City will take up the shares, then a situation could arise where there will be no wish to privatise British Telecom anyway. If the shares cannot be sold, and the City does not take them up, the whole basis of the privatisation scheme is then defeated.
In short, this amendment permits both Houses and the public to have time for reflection. The Bill may pass, the Government may spend a few million

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pounds on promotional expenditure, a prospectus, and everything else that their City advisers suggest in trying to raise the money for X per cent. of its own shareholdings in British Telecom, but there is no guarantee that they will succeed. Indeed, if noble Lords opposite had spent some part of their time, not reading papers of the remote Left—if, indeed, there are any—but studying at some length over the past few months the extremely cogent articles in the Financial Times and the Economist (which are certainly not favourable towards the party that I have the honour to represent) they would know that there is very considerable anxiety as to whether the privatisation can go ahead at all on the basis of the existing structure proposed by the Minister.
Nobody is deceived. All that is happening is that a public monopoly which was susceptible to parliamentary pressure through the Secretary of State and which performed its duties admirably is now to be replaced by a private monopoly whose only safeguard ultimately resolves into detailed legislation with a combination of licences and everything else under the sun. That is all so that the City and institutional friends of the party opposite may take their share as rentiers from the profits generated by British Telecom.
Over the next few months as this Bill goes through this House—and we shall go through the Report stage—on the assumption that the entire British press is not Murdochised, objective reports will get through to the public as to what occurs. Even though the Bill passes, there may be disenchantment with it and the issue may fail, thus defeating the whole purpose of the Chancellor of the Exchequer in realising capital assets—selling the family silver to pay for the weekly food, which is not reckoned to be the best housekeeping. Sooner or later the public will realise this.
The reason why the amendment has been put down is so that, after the parliamentary battle has died down and the Government think everything is perfectly all right, the public will begin to become aware that the whole thing is a complete fraud on the taxpayer and on everybody else. The amendment would at least give both Houses of Parliament, and in particular your Lordships, an opportunity to say "No" when the appointed day comes to be named by the Minister. It is, of course, a wrecking amendment. It is meant to be. It is a wrecking amendment for a wretched Bill. I sincerely hope that, when it takes counsel of itself and of its sanity in dealing with matters of this kind, the House will say that this at any rate is a final chance for the nation to regain its sanity and leave British Telecom exactly where it is at the present time, giving a perfectly good service to the British public. I beg to move.
The Lord Advocate (Lord Mackay of Clashfern): The noble Lord towards the end of his remarks succinctly explained his amendment as a wrecking amendment. I propose to deal with the amendment rather than with the remarks that preceded that particular comment, because indeed it is a wrecking amendment. That is its only purpose. If the House has
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gone through the Bill and approved it, I am sure that the last thing it would want to do is to approve a wrecking amendment.
Clause 2 provides that Parts II, III and IV of the Telecommunications Bill should come into force by a commencement order made by the Secretary of State. No parliamentary procedure is generally necessary for commencement orders because they apply provisions in Bills which have been debated and agreed by both Houses of Parliament. The effect of the amendment would be to cause unnecessary delay to the policy which I expect to be agreed by Parliament, and to reopen issues which have already been, on the assumption that the Bill is passed, decided in accordance with the constitutional process, in which of course the noble Lord is playing such a distinguished part.
In the case of this particular Bill, by the time that it is passed, Parliament will have debated it very extensively indeed, and I see no reason for it to do so again in order for it to be brought into effect. I, therefore, believe that this amendment is undesirable and the issues which will be debated and decided on the Bill should be concluded by these discussions and not reopened in this way. I hope that your Lordships will not agree to this amendment.
On Question, amendment disagreed to.
Clause 2 agreed to.
10.14 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 22:
After Clause 2, insert the following new clause:
"(Abolition of British Telecommunications' limitation of liability.
The limitations of liability described in section 23 and elsewhere in the British Telecommunications Act 1981 shall cease from the appointed day.")
The noble Lord said: I shall be brief. This is a probing amendment. Perhaps I may tell my noble friend the Minister that I am aware that in Part I of Schedule 7 to the Bill Section 23 of the 1981 Act is repealed, but it is not quite clear to me where within the Bill this is stated and it is not clear whether the other limitations of liability that are left with British Telecom in the 1981 Act have themselves also been repealed.
This matter arises because I have been informed by a company named Air Call that it made a complaint to the Office of Fair Trading regarding predatory pricing by British Telecom in the radio paging field. The complaint originated in March 1981, it hotted up when the 1981 Bill became an Act in the summer of 1981, and it went on and on through 1982 and into 1983, and all the time British Telecom caused delays, did not respond, and did not give the information that the Office of Fair Trading required in order to take action.
Eventually, in March 1983, an appeal was made to Mr. Peter Brooke, a Member of Parliament, for the matter to be referred to the Ombudsman, and concurrently with that the Office of Fair Trading was informed that the company would take legal redress. In June 1983 the Ombudsman reported that he did not consider that the issue fell within his jurisdiction because the matter was one of British Telecom's

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failure to act in a commercial transaction; and at roughly the same time the company was told that because of the terms of the 1981 Act, because of the no-liability clauses within the Act, it had no legal right, either.
This is a long story of two-and-a-half years of prevarication in which British Telecom was totally protected by the law at the time. The object of my amendment is to follow up a speech that I made in moving an amendment to the British Telecommunications Bill on 18th May 1981, as reported at cols, 800 to 802—of which I have informed my noble and learned friend—in which I sought to amend the Bill so as to remove the unreasonable freedom-from-liability clauses. At that time my noble friend Lord Trefgarne insisted that they should be retained. I did not think that that was sensible; and now we find that a company has in fact had anticompetitive measures taken against it over a two-and-a-half year period, totally unreasonably, because British Telecom has been able to delay any action on its part. I trust that my noble and learned friend will be able to reassure me that all those no-liability clauses are in fact now being removed. I beg to move.
Lord Bruce of Donington: If the noble Lord, Lord Mottistone, will look at Schedule 7 to the Bill, he will see that Sections 11 to 23 of the Act are to be repealed——
Lord Mottistone: I began my remarks by saying that I had looked at Schedule 7, and I explained that this was a probing amendment.
Lord Bruce of Donington: Therefore, my inquiry is a probing inquiry, and I am most grateful to the noble Lord for having afforded me the opportunity to make it. Evidently while British Telecom was operating under the old regime, under Section 23 of the 1981 Act, it was thought fit to impose certain limitations on the right to sue British Telecom and, indeed, the right to sue its employees under certain circumstances. I am afraid that one cannot pass any judgment on the instance mentioned by the noble Lord regarding a firm named Air Call and British Telecom, and it is a cause of some anxiety that these matters can be referred to here ex parte without evidence being available from either side.
However, I should like to ask the Government what their intentions are with regard to the new British Telecom PLC. Is the new company to be liable in tort, or is it to receive the same kind of protection that the old British Telecom had under Section 23 of the 1981 Act? I should imagine that prospective investors in British Telecom PLC will be very interested in the response to that question.
Lord Mackay of Clashfern: If I may take the last question of the noble Lord, Lord Bruce of Donington, first, I think that he answered it himself in his introductory remarks when he pointed out that the limitation of liability in Section 23 of the 1981 Act is repealed by Schedule 7 to this Bill, to which he drew attention. My noble friend Lord Mottistone, in his remarks, made it clear that he was aware that that had happened. The position is that the repeal of Section 23
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of the British Telecommunications Act removes the only immunities that British Telecom has in tort. It has no statutory immunities in contract.
The other point that I think I should make in relation to my noble friend's reference to the Office of Fair Trading is that under Part II of Schedule 5 to the Fair Trading Act 1973 telecommunications were removed from the remit of the Director General of Fair Trading. That part of the schedule is, however, repealed by Schedule 7 to this Bill at page 198, about line 13. The functions in relation to that area are by this Bill directed by Clause 49 to the Director General of Fair Trading and Oftel. There are provisions there that I am sure my noble friend has seen.
If I may take up the second part of the speech of the noble Lord, Lord Bruce of Donington, he asked about the reason for this limitation of liability in tort. I think the reason is that British Telecom does not provide services to the ordinary customer under contracts but under arrangements known as a scheme. The power to do this is contained in Section 21 of the Act of 1981. I shall not now go into the reasons for this arrangement; suffice it to say that the reasons are largely historical.
Because British Telecom does not provide services under contract it has no contractual liability, but equally it has no means of limiting its liability. Given the nature of the network and the number of messages transmitted, it is inevitable that faults and delays will occur. If British Telecom faced unlimited liability for consequential loss it would have to carry heavy insurance at substantial cost to its subscribers, the great majority of whom would receive no discernible benefit. Section 23 of the Act, which my noble friend Lord Mottistone is primarily concerned about, granted British Telecom certain restricted limitations on its liability in tort. These limitations relate to loss or damage suffered by a subscriber where British Telecom fails to provide service and not to death or personal injury, or anything of that sort, where there is no limitation of liability.
This is the situation as it exists at present. But, as your Lordships will see, it is the policy of this Bill that in future British Telecom is placed as far as possible on an equal footing with normal commercial companies. Therefore, British Telecom's ability to provide service under schemes should come to an end and, in future, like all normal companies, it should provide service under contract. Therefore, not only does Schedule 7 repeal British Telecom's present ability to make schemes but Schedule 5 provides that, as from the appointed day, all existing schemes are deemed to be contracts. In future, British Telecom's customers will have a normal contractual relationship with British Telecom and the usual rights of redress under the terms of the contract.
As regards liability, British Telecom, in common with normal commercial practice, will be able to limit its liability in the contract, but, again in accordance with normal commercial practice, such limitation will be subject to the Unfair Contract Terms Act, just as in the case of other people. I believe that this is an important step forward in consumer protection. I hope that I have been able to answer the questions that noble Lords have put to me. I assume from what my

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noble friend says that he does not intend to press the amendment.
Lord Mottistone: I thank my noble friend very much for his careful and full explanation. It seems to me absolutely as I had hoped, and I beg leave to withdraw the amendment.
Lord Bruce of Donington: I shall not detain the committee much longer. I should, however, like to ask the noble and learned Lord a question, because he has made an extremely important announcement; that is to say, that a future British Telecom PLC will have to take out its appropriate insurance at considerable cost against any breaches of contract that might result should the existing scheme, as he put it, be automatically converted into a contract.
I should like to ask the noble and learned Lord a second question. In view of the other assurances that have been given by the Government, will the contracts that are assumed to be in place when the scheme is abandoned, contain provisions about the holding of charges in accordance with the RPI minus X factor which has been made much play of by his right honourable friend Mr. Baker both in the Economist and in another place? These are very important matters and I am most grateful to the noble Lord, Lord Mottistone, for having given the noble and learned Lord the opportunity to say what he has said.
Lord Mackay of Clashfern: If I understood aright what the noble Lord said a moment ago, he has not fully understood what I said earlier. I said earlier that, under the arrangements that have existed up until now, British Telecom worked under schemes, and therefore unless one had a limitation of liability, one would require the kind of insurance to which the noble Lord has referred. Where one has contractual freedom, one has the possibility of limiting one's liability under the contract, subject always of course to the unfair contract terms legislation which regulates everybody else. I do not know whether the noble Lord wishes to make some intervention, but I am trying to explain to him the position as I see it and he has not quite understood what I said on the last occasion. No doubt it is my fault for not making it plain. However, I was explaining the reason for the existence of the limitation of liability under the present Act, the 1981 Act, and I have explained—or tried to explain—that the reason for that limitation is removed by the altered arrangements which we contemplate in this Bill for the future, where British Telecom will have contractual freedom and will not operate under these so-called schemes.
Lord Bruce of Donington: There is one matter that I should like the noble and learned Lord to clarify. I am sorry if I have misunderstood him; but, as I understand it, the situation will be that British Telecom will be under a contractual obligation, expressed in contract form, to provide certain services for the customer in exchange for the receipt of certain sums of money. In other words, there will be a contractual relationship. Can the noble and learned Lord inform me whether that contractual relationship
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gives a right to the customer under the contract to claim any damage for a breach of contract in the event of non-performance (for a variety of reasons) over a period of weeks?
Lord Mackay of Clashfern: Obviously, that will depend upon the terms of the particular contract which British Telecom operate. Of course, the terms of the contract will no doubt be reflected in the payments that are made under it. One would possibly get better guarantees, the more expensive the services.
Amendment, by leave, withdrawn.
Lord Denham: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-eight minutes past ten o'clock.