Lords Sitting of 13 February 1984

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.

Illegal Television Broadcasts
The Countess of Mar: 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, in view of the illegal television programmes being broadcast on the BBC 2 waveband in the Birmingham area, any foolproof method has been devised to trace pirate television broadcasts.
Lord Lyell: My Lords, the source of an illegal television broadcast can be traced by the use of radio direction-finding equipment. This can only be done, however, while the station remains on the air.
The Countess of Mar: My Lords, I thank my noble friend for his reply to my Question. May I ask him whether or not it is possible for a person or a group of people with fewer scruples than the recent pirates to use the same process to broadcast films of an unpleasant nature or for the purposes of political indoctrination, and whether it is possible for the broadcasting authorities to prevent such pirate broadcasts?
Lord Lyell: My Lords, of course what such people might broadcast is in the imagination of all of us. However, I am afraid that I am not able to go much further than stressing what I said in my original Answer. It is difficult to detect television transmissions of a pirate nature, especially if the broadcasts are for fairly short periods and take place at irregular intervals.

Scottish Museums and Galleries: Grants
2.38 p.m.
Viscount Mersey: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the level of grants paid to Scottish Museums and Galleries in 1982–83 and what is the projected figure for the current financial year.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, expenditure by Her Majesty's Government on the three national museums and galleries and grants to the local museums purchase funds and the Council for Museums and Galleries in Scotland was £5.97 million in 1982–83. The expected out-turn for 1983–84 is £6.23 million.
Viscount Mersey: My Lords, I am grateful to my noble friend for that reply. May I ask him whether that is symptomatic of the overall increase in spending by the Scottish Arts Council, which I understand went up some £7 million in 1978–79 to over £11 million in 1982–83? May I also ask him whether, without that increase, it would have been possible to open either the Burrell Art Gallery in Glasgow or the Scottish National Gallery of Modern Art which I believe is to be opened in August this year?
Lord Gray of Contin: My Lords, I am grateful to my noble friend for raising the matter. I can confirm to him that the additional funds available were of course very welcome indeed. Perhaps I could explain to him, however, that funds for the Arts Councils are provided by my noble friend the Minister for the Arts. Resources for museums and galleries in Scotland, on the other hand, are provided by my right honourable friend the Secretary of State for Scotland, who supports directly the national museums and galleries in Edinburgh. He has also, quite exceptionally, provided substantial funds to Glasgow District Council towards the construction of the Burrell Gallery. In both cases the Government have been able to provide some increases in overall funding at a time

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when the supply of resources had necessarily had to be restricted.
Lord Leatherland: My Lords, would the Minister agree that these Questions and Answers are indicative of the high intellectual and artistic standards of the Scottish people?
Lord Gray of Contin: My Lords, I am grateful to the noble Lord for his remarks; and of course I heartily endorse any complimentary remarks which he makes about the Scottish people.
Lord Glenkinglas: My Lords, would not my noble friend agree that the money expended on the Burrell collection has been long overdue and is very worthwhile indeed? My only regret, having been able to see it for the first time, is that it is "for free", whereas a small charge would be easily acceptable.
Lord Gray of Contin: My Lords, no doubt those responsible for those matters will take note of the remarks of my noble friend; and of course it is entirely for those who administer the galleries to make decisions on these aspects.

Seat-Belts: Release after Impact
2.41 p.m.
Lord Diamond: My Lords, I beg to leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government for how many seconds it is necessary to remain strapped in one's seat-belt after a heavy impact in order to secure the maximum benefit of this device.
Lord Lucas of Chilworth: My Lords, in a single head-on collision, less than one second; but it may be greater where the accident sequence is prolonged, such as when there is more than one impact or the vehicle rolls over.
Lord Diamond: My Lords, I am grateful to the noble Lord the Minister for that Answer. I would ask him whether he is aware that there is still considerable anxiety among those who support the general principle of seat-belts lest further and avoidable injury be caused by the delay in releasing the mechanism. In view of what the noble Lord has just said, would it not be reasonable to ask him to be good enough to direct at least part of the research effort of his department into manufacturing some reliable and simple timing device whereby a passenger or driver could be released after the worst effect of the impact?
Lord Lucas of Chilworth: My Lords, I take careful note of what the noble Lord. Lord Diamond, has said, and I can tell him that research is continuing both in Europe and in this country on automatic release systems; but these have not proved to be as effective as the conventional belt. The noble Lord may wish to know that in those accidents which have been the subject of intensive study it has been established that
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the people involved in the accident have in fact taken some 30 or 40 seconds to collect their thoughts after the accident and, at that time, to release themselves.
Lord Mow bray and Stourton: My Lords, if, as my noble friend has indicated, the second crash which takes place is more likely to be from behind, because, if you crash into the vehicle in front, the following vehicle is likely to crash into you from behind, will Her Majesty's Government consider neck rests to prevent the head from being thrown back because of the impact from behind?
Lord Lucas of Chilworth: My Lords, it is true that a secondary accident may be more damaging than the first accident, which normally takes place at about 30 m.p.h. Whether head restraints or neck rests, as my noble friend calls them, are entirely necessary is a matter which is still undergoing evaluation.
Lord Diamond: My Lords, does not the very important piece of information which the Minister has been good enough to give us—namely, that it takes on average 40 seconds before a person in a car gathers his thoughts sufficiently to release himself—make it clear that that period is quite sufficient for the person in question to be burned to death or drowned in a car which has fallen off a jetty or something like that? Therefore, ought not the Minister to use renewed efforts in terms of researching for some device which would automatically avoid this further disaster?
Lord Lucas of Chilworth: No, my Lords. That does not follow, because in the study of 3,000 accidents—and I refer to the Transport and Road Research Laboratory Report 811—only three occupants in the whole of the survey were in vehicles which caught fire and only one occupant was in a vehicle which was submerged in water. Of the three which caught fire, only one was trapped in his vehicle and, in fact, he had died before the fire started. In the case of the submerged car, the driver escaped and spent nine days in hospital before dying of a lung infection. The two do not follow.

European Investment Bank: Loans
2.45 p.m.
Lord Orr-Ewing: 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 total value of loans advanced to United Kingdom companies by the European Investment Bank since 1st January 1973.
Lord Lyell: My Lords, since 1973 the European Investment Bank has made available to companies in the United Kingdom loans to a total value of £554 million. This figure includes facilities, made available to banks and other financial institutions under global loan arrangements for on-lending to small firms, which are not yet fully utilised.
Lord Orr-Ewing: My Lords, I am most grateful to my noble friend for that information. Much of the help that we get from the EEC is not widely publicised in this country and that information will be widely appreciated. Can my noble friend form an opinion as to whether this investment is going into areas which badly need new jobs? Is it going to areas of high unemployment, and have extra jobs been created as a result of this investment?
Lord Lyell: My Lords, I thank my noble friend for drawing attention to this benefit from our membership of the European Community. I should like to draw to his attention, and to the attention of your Lordships, the fact that the decision to borrow from the European Investment Bank is essentially a matter for the company concerned. The European Investment Bank has responsibility under the Treaty of Rome to contribute to the balanced development of the Community. The bank grant these medium- to long term fixed interest loans to contribute to the economic development of regions in difficulty which, in the United Kingdom are the United Kingdom assisted areas and Northern Ireland. Secondly, these areas are of common interest to more than one member state. Thirdly, they involve, in certain cases, modernisation or conversion of undertakings or the creation of fresh activities. As for the number of jobs which have been created by the European Investment Bank's loans, I am afraid that I am not able to give an answer to my noble friend today, but I shall inquire and write briefly to him.
Lord Lloyd of Kilgerran: My Lords, so that the answer of the noble Lord the Minister can be complete, is he able to tell the House now or at a later date the amount of loans specifically directed to companies in Wales?
Lord Lyell: My Lords, I can do that at a later date and will write to the noble Lord.
Lord Cledwyn of Penrhos: My Lords, can the noble Lord say whether the Government are satisfied that the United Kingdom is receiving its fair share of the total amount lent by the bank and can he say what percentage comes to this country? Secondly, can he say what assistance is given by the Department of Trade and Industry to the small industries which make these applications? It is within my knowledge that, in certain cases, small industries have found it difficult to obtain advice about the ways and means of making these applications. Is he satisfied that full information is available to firms throughout the country?
Lord Lyell: My Lords, I would stress to the noble Lord that loans from the European Investment Bank are a matter for the companies themselves and it is for the companies to apply in the first instance. As regards the percentage coming to this country, I am afraid that I do not have the figures but I can find out for the noble Lord and will write to him. The noble Lord will be aware that the Department of Trade and Industry acts as a wholesaler in this matter of European Investment Bank loans. One of the retailers or agents for these loans is the Welsh Office, and the Welsh Development Agency is another arm of the Department of Trade and Industry.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord satisfied that small industries throughout the country—in the north of England, Scotland and Wales—are aware of this facility and of the way in which applications should be made? For example, can he tell the House how a small industry in the north of Scotland or in west Wales would go about getting information if it wanted to take advantage of this facility?
Lord Lyell: My Lords, in the first instance this is a matter for the small company, but I think that information on these loans and grants is available from the Scottish Development Agency and the Welsh Development Agency. If a small firm wished to have any assistance, then, in the first instance, it would normally go to its bankers. The clearing bank is the primary source of supply for small companies. It is usually this channel of communication which is available to the small company.

The Eastern Bloc: Government Attitude
Lord Jenkins of Putney: My Lords, I venture to raise the question of a Private Notice Question which the noble Viscount the Leader of the House has disallowed. The Companion to Standing Orders provides that if one wishes to do this, one must raise it in the manner which I am doing at the moment, and that in order to enable noble Lords to know what the issue is about, one must read the Question. I must make it clear that in reading the Question I am not asking it. I can only ask it if the noble Viscount changes his preliminary' opinion and permits me to do so, with the leave of your Lordships.
So that your Lordships may know what the issue is about, may I read the Question:
"To ask Her Majesty's Government if they will contrast their decision to refuse entry to this country to Hungarian and Soviet trade unionists with the Prime Minister's decision to visit Budapest and Moscow and say which is indicative of their attitude to the two countries and how the decisions can he reconciled with each other".
The reason I venture to question, with some trepidation, the decision of the noble Viscount is this: it seems to me that this issue is urgent in the sense that it should be raised and that it might be in the interests of the Government, as well as everybody else, that it should be clarified at this stage while the issue is in the public mind. The second reason I venture to put forward as to why your Lordships should agree to accept this Question and why the noble Viscount should change his mind, is because it seems to me that it is desirable that the issue should be determined, decided and made clear while the Prime Minister is in Moscow.
For those two reasons I venture to ask the noble Viscount whether he will reconsider his preliminary decision.
The Lord President of the Council (Viscount Whitelaw): My Lords, I am grateful to the noble Lord for putting this Question to my office and also for informing me that he might challenge the ruling which I have given. I thank the noble Lord also for what he has said, which I accept.

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First, I must say to the noble Lord that it would not be for me, in making this decision, to say what is or is not in the best interests of the Government. My decision must rest upon what, as Leader of the House, is in the best interests of this House. I judged, in accordance with the Companion, that this Question did not fall within the urgency which the Companion and the custom of this House over a period of time have demanded from a Private Notice Question. I still hold to that particular belief. I should be sorry if the noble Lord were to press his Question, for the reason that the decision as to whether or not something is urgent is difficult to make. If one conceded too easily the asking of Private Notice Questions, one could very quickly disrupt the proceedings of the House in a way which I am sure the whole House would not wish to happen. It was for this reason that I decided that this Question was not of the urgency necessary. That is why I took the decision I did, which I hope the House will feel was not inspired by anything other than what I thought was best for the House.
Lord Jenkins of Putney: My Lords, in view of the explanation which the noble Viscount has been kind enough to give and the evident support which he has from your Lordships. I beg leave to withdraw my request.

Business
Lord Denham: My Lords, 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. and will be continued next Thursday.
After 7 p.m. this evening the Third Reading of the Tourism (Overseas Promotion) (Scotland) Bill will be taken. This will be followed by the Report stage of the Inshore Fishing (Scotland) Bill, the Second Reading of four Private Bills and the second day of the Report stage of the Agricultural Holdings Bill.

Telecommunications Bill
2.54 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords. I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Cockfield.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 3 [General duties of Secretary of State and Director]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 23:
Page 2, line 42, leave Out ("or not reasonably practicable").
The noble Lord said: I beg to move Amendment No. 23 which stands in my name and those of my
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noble friends. By the amendment we are seeking to leave out the words "or not reasonably practicable". I think everybody understands what "practicable" and "impracticable" mean. What is puzzling many people is the term "reasonably practicable". How do you qualify "practicable" by "reasonable"? Either something is practicable or it is not practicable. We are very concerned as to exactly what "reasonably" means. We could probably have a very long debate on this question, in particular since there are so many noble and learned Lords who may have a point of view to offer. The Opposition does not want to embark upon obstructing the Bill, but we want to make reasonable amendments to it and ensure that the Bill makes reasonable progress, provided that the Committee is able to do its job properly by examining the various clauses of the Bill. Therefore, the amendment is in the nature of a probing amendment.
The Committee would like to know exactly what test of reasonableness is going to be applied to the word "practicable". What one person thinks is reasonable somebody else may believe to be completely unreasonable. Last Thursday evening some of the remarks which I made were, I thought, perfectly reasonable and absolutely on the ball, but other noble Lords, notably noble Lords opposite, thought that they were completely unreasonable and attacked them. And they were perfectly entitled to attack those remarks as being unreasonable. So even in this noble Committee last Thursday there was some discussion and dispute as to what was reasonable and unreasonable.
I can imagine people of a legal frame of mind being able to take right apart the word "reasonably". If there were a proposal to install a telephone box in a rural area, I could understand it if it was believed to be not practicable to put it there. There may be all kinds of reasons why it could not be done. There might be a little hamlet in a valley, with mountains all round it, to which it would not be possible to get the wires. I should perfectly understand it if it was thought, therefore, not to be practicable to provide such a service to a telephone box, or to a private subscriber's house, or to a business subscriber's business. But it would be either practicable or not practicable. I should find it difficult to agree with the Director General of Telecommunications about whether it was reasonably practicable.
We want to know, first, who is going to decide what is reasonable and what is not reasonable. Does it mean, for example, that something might be practicable but because it is costly and does not produce a reasonable rate of return, or the desired rate of return, it is not reasonably practicable? Does the term "reasonably" mean that it will be too costly? This noble Committee is entitled to know exactly what the Government mean by this term.
Also, we should like to know what will happen if there is a dispute as to whether something is practicable or is reasonably or not reasonably practicable. Who will make that final decision? Will it be the director himself, or will the customer be able to test whether something is reasonably or not reasonably practicable through the courts? There are many points here on which we are entitled to seek clarification. I will leave the matter there in the hope that the

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Government will be able to reassure me and my noble friends, and other noble Lords, as to exactly what is meant by the phrase, and that no real harm will be done to telephone subscribers.
Lord Lloyd of Kilgerran: I hope that noble Lords will think that my brief intervention is both reasonable and practicable, because had the noble Lord, Lord Stoddart of Swindon, intended to force this amendment to a Division then I would have voted for him, that these words should be eliminated. They only add unnecessary confusion, and should be deleted.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): May I first make it clear that the duty which this part of Clause 3 imposes is not in any way a let-out in the way that the noble Lord, Lord Stoddart of Swindon, seemed to indicate that it may be. The practicability qualification is necessary simply to make the duty which the clause imposes workable. There is the same qualification on British Telecom's present duty under existing legislation to provide a telephone service. Section 3 of the British Telecommunications Act 1981 states that it shall be the duty of BT,
"so to exercise its powers as to provide throughout the British Islands (save in so far as they are provided by other persons or the provision thereof is, in its opinion, impracticable or not reasonably practicable) such telephone services as satisfy all reasonable demands for them".
So there is nothing new about the words here.
The new way in which the duty will be fulfilled is through the inclusion of conditions in the licences—primarily, that of British Telecom. British Telecom's licence will contain obligations to provide, for example, services throughout the United Kingdom to satisfy all reasonable demands, in so far as the provision of such services is not impracticable or not reasonably practicable. Obviously British Telecom should not be required to provide services where it is impossible to do so. But it is also necessary to have the words,
"or not reasonably practicable"
to cover cases where, by virtually moving heaven and earth and committing a huge amount of resources (both in terms of finance and manpower), it would be physically possible to provide these facilities.
However, we may reasonably ask whether in such cases it is sensible for British Telecom to be under such an obligation. The heavy commitment of resources may mean that attention is diverted away from other tasks to the detriment of other consumers. I do not believe that the wording is unreasonable, but I realise there is concern that the limitation of reasonable practicability should not let British Telecom off the hook or away from their responsibilities in any case.
If I explain how we intend the limitation to work, I hope that it will serve to reassure the noble Lord, Lord Stoddart of Swindon. At present, if a customer requests service it is for British Telecommunications to judge whether the service requested is impracticable, or is not reasonably practicable. If BT decides that it is, then it can decline to provide a service and the customer has little comeback. However, if there is a dispute in future between BT and a potential customer as to whether service can be
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provided, it will be an independent third party—the director—who will decide in the first instance what is and what is not practicable or reasonably practicable. If he decides, contrary to what BT claim, that the service can be provided, then he can order BT to do so. In making that decision, the director will be guided by the licence.
Condition 42 of the draft licence sets out the sort of circumstances in which the Secretary of State believes that the provision of service is either impracticable or not reasonably practicable. Condition 42 clearly describes that the circumstances under which BT will not be obliged to provide service are strictly limited. They most certainly do not amount to a carte blanche on BT to decline to provide service. Indeed, the involvement of the director provides, as I have explained, a much stronger safeguard for consumers than before. I hope that with that explanation the noble Lord will understand why it is necessary that these words should remain in the Bill.
3.5 p.m.
Lord McIntosh of Haringey: We are entitled to ask the Government to be a little more precise about this matter. The noble Lord himself, in his reply, used the words "not impossible" in respect of British Telecom providing service. If he thinks that is a suitable phrase, then I am sure that my noble friends and I will be very glad to withdraw our amendment and allow its content to come up again in a Government amendment at Report stage; an amendment to the effect that instead of the words "reasonably practicable" there should be inserted "not impossible". I am sure all of us will be perfectly satisfied with that form of wording. But merely having it stated from the Government Front Bench is not enough for us, unless we can be assured that that will be the case.
These are not semantic arguments; these are not questions only of wording. They are questions relating to the directions which will be given to people who have to make decisions on the spot when requests for service arise. At the moment, British Telecom has a rule which lays down that if more than 100 man-hours of work is involved in the provision of a telephone service in a rural area then it becomes a matter for special negotiation. Then there is the possibility that service may not be offered to people in rural areas. Are the Government saying that that 100 man-hours rule will be continued? If they are saying that—and we would welcome it if they did do so—then why is it that they are talking about scales of charges after 1989 instead of the standard national pricing which is the protection of those who need unremunerative service at the present time?
It the Government were to answer both points satisfactorily—that concerning the words "not impossible" and my other point concerning the 100 man-hours definition—then my noble friends and I will be glad to reconsider.
Lord Molloy: I wonder whether the noble Lord, Lord Glenarthur, has taken it into consideration that if the words,
"or not reasonably practicable"
are eliminated, it would be to the advantage of everyone. It is possible that most folk will recognise

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what is "impracticable". Once one starts playing with different nuances of interpretation, such as,
"or not reasonably practicable",
one is inviting comment, argument, and so on. If one leaves it at "impracticable", that will leave a heavy burden on those responsible. They will have to satisfy the Minister, and perhaps even Parliament. Taking away the words,
"or not reasonably practicable"
will be to their advantage. They will know that they cannot get away with doing this, that or the other and that the provision of service has to be shown to be absolutely impracticable. That will be to the advantage of both themselves and the consumers.
Lord Edmund-Davies: I suggest that there is danger in eliminating the qualification in the alternative. If we adhere to "impracticable", and if that is to be regarded as the equivalent to physically impossible, we are in dangerous waters. If I had done my homework as I should have done and had had notice of this suggested amendment, I believe I should have been able to cull from many an Act of Parliament—particularly the Factories Acts, the Mines and Quarries Acts and other provisions of that kind—a similar phrase. The word "impracticable" ought not to be regarded as synonymous with "physically impossible". If that is wholly understood, then I have some sympathy with the suggestion that one can eliminate the alternative,
"or not reasonably practicable".
But if that is to be imported, then we do require the alternative.
It is quite impracticable that I should catch a train from Paddington at a quarter past three o'clock. It is reasonably practicable that I should catch a train from Paddington at four o'clock. But it is in my case reasonably impracticable for it would involve my cutting quite essential engagements which I have long undertaken. So in my case it is reasonably practicable that I should not get a train from Paddington at four o'clock.
There is a great deal of case law about the phrase "reasonably practicable". I repeat, if I had done my homework I should have been able to trot it along. Whether at the end enlightenment would endure is a matter open to debate. But I suggest that there is nothing revolutionary in the phrase "not reasonably practicable".
Lord Elwyn-Jones: It is with very great hesitation that I venture to disagree with my noble and learned friend Lord Edmund-Davies of all noble and learned Lords; but I do venture to disagree on this occasion. This is an important part of the Bill. When one sees the rest of paragraph (a) one sees to what it is in particular directed—namely, the provision of emergency services, public call-box services, maritime services and services in rural areas—which many noble Lords fear may be in peril as a result of this legislation. If one leaves out the words now sought to be omitted by the amendment there still remains the test of reasonableness in the demands for these services. The paragraph would read:
"to secure that there are provided throughout the United Kingdom, save in so far as the provision thereof is impracticable, such
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telecommunication services as satisfy all reasonable demands for them including, in particular, emergency services.".
And so on. So there is a test of reasonableness attached to the nature of the demand. I should have thought if the provision of services involved (to use the Minister's phrase) moving heaven and earth, that would be eliminated, as a demand that was impracticable to satisfy. Any weakening, it seems to me, of the positive requirement to provide such telecommunication services as satisfy all reasonable demands for them in these very important areas, any qualifying of it, a whittling away of it or a diminishing of the primary importance of it by inclusion of such words as "or not reasonably practicable", would be a defect and would in the circumstances be dangerous.
Lord Donaldson of Kingsbridge: Until the noble and learned Lord, Lord Elwyn-Jones, spoke, I was rather doubtful whether this amendment should be supported. But I think if it is necessary to put the same thing in twice, which is what the noble and learned Lord has pointed out, this does mean a deliberate attempt to weaken something, and we are all perfectly clear that that should not be weakened. So I feel more able to support the amendment than I was before the noble and learned Lord spoke.
Lord Lloyd of Kilgerran: It is with great temerity, even greater than that of the noble Lord, Lord Elwyn-Jones, that I venture to differ from the noble and learned Lord, Lord Edmund-Davies, particularly as when he was elevated to the Bench as a judge of first instance I took over his chambers and indeed the very room where he had performed with such distinction for many years. But I agree entirely with the submission of the noble and learned Lord, Lord Elwyn-Jones, in this matter that this phrase merely adds confusion and should be deleted.
Lord Bruce of Donington: The noble Lord the Minister, in reply to the arguments put forward by my noble friend, referred to the draft licence within which context he wished the proposal to be judged. We know perfectly well of course that the licence in its present form may not meet the requirements of all your Lordships, and may indeed be challenged at some points both as to the method of its treatment within the Bill itself and as to its content. But suffice it to say that the very clause cited by the noble Lord the Minister, Condition 42.2(b)(d) of the draft licence says that the licence shall not apply,
"(d) where the person to whom the Licensee would otherwise be under an obligation to provide any of those services requests a service at a place in an area in which the demand or the prospective demand for that service is not sufficient, having regard to the revenue likely to be earned from the provision of that service in that area, to meet the cost of the apparatus necessary to provide that service in that area, its installation and maintenance and of operating that apparatus so as to provide that service.".
Surely it is a little dangerous from the noble Lord's standpoint to cite that as being an area in which it would not be reasonably practicable to provide the service, because of course it is precisely the aim of the amendment to avoid situations of that kind.
The noble Lord referred to the Telecommunications Act 1981 and said that there was a similar provision as to reasonableness in that. The circumstances are

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totally different here. The circumstances under the 1981 Act laid certain duties on the Secretary of State in regard to his dealings with British Telecom and laid certain broad responsibilities upon the corporation itself, with the final check there being in Parliament. The fact is that under the old Telecommunications Act 1981 there were users' councils, a whole series of safeguards through which the consumer could protest or the prospective consumer could protest, either through Parliament or direct to the corporation; whereas these safeguards are denied here because the corporation or its successor are going to be under the straitjacket of legislation which the noble Lord is now laying down. This in our opinion raises a vital question of principle; and in the light of what the noble Lord himself has said we have no alternative but to divide the Committee on this issue.
Lord Glenarthur: I have listened with care to what noble Lords opposite have said. If I can first of all pick up the point made by the noble Lord, Lord McIntosh, about the 100 man-hours, that of course refers to charges; it does not refer to the practicability of provision. Nor does the amendment itself relate to reasonableness of demand, it relates specifically to the reasonable practicability, and those are separate things. I hope that the noble Lord, Lord Bruce, will accept that.
Lord Bruce of Donington: The noble Lord did cite Condition 42 of the licence himself; I only repeated it.
Lord Glenarthur: Yes. Condition 42 refers to one or two other things including reasonableness of demand. Lord Bruce's argument does not strictly relate to the condition of practicability, which the amendment specifically refers to.
Several of your Lordships have pointed out that the wording is in the 1981 Act. It is; so there can be no whittling away of any duties imposed on British Telecommunications in any way. It repeats line for line what is in Section 3 of the 1981 Act. These qualifications are designed to prevent, for example, the Secretary of State or the director imposing impossible or unreasonable demands on telecommunications operators through their licences.
Lord Bruce of Donington: If I may intervene, will the noble Lord bear in mind that Section 3 of the Telecommunications Act 1981 is specifically repealed by this Bill.
Lord Glenarthur: I do not think that is the point at all, if the noble Lord will forgive me. We are trying to put into the new Act exactly the same facts about reasonable practicability of physical provision as exist under the 1981 Act. So the situation is exactly the same; there will not be any particular difference as far as that is concerned.
Perhaps I may go on to say that, if the limitation of "reasonableness" were removed the Secretary of State would have to issue licences to require British Telecom and others to provide, for example, highly sophisticated data telecommunication services on demand in the remotest areas of the country even if the service were only required for a day. I do not think any
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Members of the Committee will feel that is essentially "reasonable" in any sense of the word at all. Therefore, I hope the noble Lord will not press this amendment.
Lord Spens: I am not at all sure that I understand what the noble Lord, Lord Bruce of Donington, was getting at in quoting Condition 42. Condition 42.2 begins:
"The obligations to provide telecommunication services other than voice telephony services under this Licence shall not apply".
and then refers to (a) and (11), and (b) was quoted by the noble Lord. That surely, means that voice telephony services would have to be supplied.
Lord Torphichen: Noble Lords have been arguing rather minutely the length to which the Government should go to compel British Telecom to provide services to the limit. But no matter how far they compel British Telecom to go there will always come a point where the service will not be provided. The Government could get round that difficulty very easily by simply amending another part of the Bill to ensure that, where British Telecom does not wish to, or cannot, provide a service, either the individual who wishes to use the service or a third party shall be empowered or licenced to operate such a service, and why not?
Lord Stoddart of Swindon: We shall press this amendment, but I should like to make this final point. I listened very carefully to the Minister and it seems to me that he has given the Opposition the case. The argument I made originally, and the arguments made by my noble friends and other noble Lords, has been that the words "not reasonably practicable" are inappropriate. What the Government seem to be saying is that that is true and what they really mean is not that it shall be "not reasonably practicable" but that it should be "not reasonably economic". That is what the argument is all about. Indeed, the noble Lord mentioned, and it was virtually his only justification for the words "not reasonably practicable", that it might impinge unreasonably on finance and manpower resources. It therefore seems that the wording the Government want is "not reasonably economic" and that is what we are quarrelling about.
Lord Glenarthur: Before we go any further perhaps I may explain that Condition 42.2, to which the noble Lord, Lord Bruce, referred and which the noble Lord, Lord Stoddart of Swindon, also mentioned, applies to services other than voice telephony services. I know that noble Lords opposite are concerned about the provision of a telephone—the basic instrument—and that is covered in Condition 42.1, which makes it perfectly plain that:
"The obligations to provide any voice telephony services under this Licence shall not apply: where the service requested cannot be provided on account of physical, topographical or other natural obstacles".
That amounts to impracticability or, indeed, possibly goes as far as impossibility. Therefore, I do not think that the noble Lord's two arguments necessarily follow.
3.24 p.m.
On Question, Whether the said amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 119.

DIVISION NO. 1

CONTENTS

Allen of Fallowfield, L.

Jacques, L.

Amherst, E.

Jenkins of Putney, L.

Ampthill, L.

Kagan, L.

Attlee, E.

Kaldor, L.

Aylestone, L.

Kearton, L.

Banks, L.

Leatherland, L.

Beswick, L.

Listowel, E.

Bishopston, L. [Teller.]

Llewelyn-Davies of Hastoe, B.

Blyton, L.

Lloyd of Kilgerran, L.

Boston of Faversham, L.

Lockwood, B.

Brockway, L.

Longford, E.

Brooks of Tremorfa, L.

Lovell-Davies, L.

Bruce of Donington, L.

McIntosh of Haringey, L.

Burton of Coventry, B.

Mais, L.

Caradon, L.

Mayhew, L.

Carmichael of Kelvingrove, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Peart, L.

Cooper of Stockton Heath, L.

Phillips, B.

Darling of Hillsborough, L.

Pitt of Hampstead, L.

David, B.

Ponsonbv of Shulbrede, L. [Teller.]

Davies of Penrhys, L.

Dean of Beswick, L.

Prys-Davies, L.

Delacourt-Smith of Alteryn, B.

Rathcreedan, L.

Rochester, L.

Denington, B.

Ross of Marnock, L.

Diamond, L.

Segal, L.

Donaldson of Kingsbridge, L.

Stallard, L.

Elwyn-Jones, L.

Stedman, B.

Ewart-Biggs, B.

Stewart of Alvechurch, B.

Fitt, L.

Stewart of Fulham, L.

Gaitskell, B.

Stoddart of Swindon, L.

Gallacher, L.

Stone, L.

Gardiner, L.

Strabolgi, L.

Gormley, L.

Taylor of Blackburn, L.

Graham of Edmonton, L.

Taylor of Gryfe, L.

Grey, E.

Taylor of Mansfield, L.

Grimond, L.

Tordoff, L.

Hale, L.

Underhill, L.

Hall, V.

Wallace of Coslany, L.

Hampton, L.

Wilson of Rievaulx, L.

Harris of Greenwich, L.

Winterbottom, L.

Hunt, L.

Wootton of Abinger, B.

Hutchinson of Lullington, L.

NOT-CONTENTS

Abercorn, D.

Denham, L. [Teller.]

Ailesbury, M.

Drumalbyn, L.

Alexander of Tunis, E.

Duncan-Sandys, L.

Allerton, L.

Eccles, V.

Alport, L.

Edmund-Davies, L.

Avon, E.

Effingham, E.

Belhaven and Stenton, L.

Ellenborough, L.

Bellwin, L.

Elliot of Harwood, B.

Belstead, L.

Elphinstone, L.

Bruce-Gardyne, L.

Elton, L.

Caccia, L.

Enniskillen, E.

Caithness, E.

Fanshawe of Richmond, L.

Campbell of Croy, L.

Glanusk, L.

Carnegy of Lour, B.

Glasgow, E.

Clitheroe, L.

Glenarthur, L.

Cockfield, L.

Gormanston, V.

Cottesloe, L.

Gray of Contin, L.

Craigton, L.

Gridley, L.

Crawford and Balcarres, E.

Hailsham of Saint Marylebone, L.

Daventry, V.

Davidson, V.

Halsbury, E.

De La Warr, E.

Hampden, V.

16

Hawke, L.

Onslow, E.

Hill of Luton, L.

Orkney, E.

Hives, L.

Orr-Ewing, L.

Home of the Hirsel, L.

Peyton of Yeovil, L.

Hood, V.

Porritt, L.

Hornsby-Smith, B.

Portland, D.

Howard of Henderskelfe, L.

Rankeillour, L.

Hylton-Foster, B.

St. Aldwyn, E.

Ilchestcr, E.

St. Davids, V.

Jessel, L.

Saint Oswald, L.

Killearn, L.

Saltoun, Ly.

Kimberley, E.

Sempill, Ly.

Kinloss, Ly.

Shaughnessy, L.

Kinnoull, E.

Sherfield, L.

Lane-Fox, B.

Shrewsbury, E.

Lauderdale, E.

Skelmersdale, L.

Long, V.

Somers, L.

Lovat, L.

Spens, L.

Lucas of Chilworth, L.

Stamp, L.

Lyell, L.

Strathcarron, L.

McAlpine of West Green, L.

Strathclyde, L.

Mackay of Clashfern, L.

Strathspey, L.

Macleod of Borve, B.

Swansea, L.

Mar, C.

Swinton, E. [Teller.]

Margadale, L.

Terrington, L.

Marley, L.

Teviot, L.

Maude of Stratford-upon-Avon, L.

Thorneycroft, L.

Torphichen, L.

Mersey, V.

Trefgarne, L.

Middleton, L.

Trenchard, V.

Mills, V.

Trumpington, B.

Milne, L.

Vaux of Harrowden, L

Molson, L.

Vickers, B.

Morris, L.

Vivian, L.

Mottistone, L.

Weinstock, L.

Mowbray and Stourton, L.

Whitelaw, V.

Northchurch, B.

Wynford, L.

Nugent of Guildford, L.

Young, B.

O'Neill of the Maine, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.33 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 24:
Page 2, line 43, after ("services") insert ("at charging rates to the customer for installation, maintenance and usage which do not discriminate between any customers on the basis of the geographical location of the installation").
The noble Lord said: We have tried to do it the easy way; now we shall have to do it the hard way. We tried to make it easy for the Government to concede the justice of the demands of the minorities in rural areas, of the disabled, and of all those who may suffer from the provisions of the Bill as it now stands. We tried to eliminate the equivocal words "reasonably practical" in order that the Government might have a better chance of defending the Bill as it stands and defending the needs of these minority groups. The Government have rejected those overtures. We shall now have to take each of those minority groups one by one, and we start with the needs of telephone and telecommunications subscribers in rural areas.
The Committee may think it strange that I, a dyed-in-the-wool metropolitan, should be pleading the cause of rural areas. I am a Londoner born and bred and I do not think I would ever willingly live the rest of my life anywhere else. But I shall hope to propose to other metropolitans that there are parts of urban areas which also need the protection of the amendment which is being proposed.
The amendment proposes to include charges for installation, maintenance and usage—in other words.

17
all charges which do not discriminate between any customers on the basis of the geographical location of the installation. The Government's first line of defence against that will be that there is provision in line 3 of page 3 for services, including services in rural areas. The first problem with that answer is that the Government themselves do not know what is meant by a rural area. In Hansard for another place, at Column 809, the Minister of State said:
"However, I still do not know how to define the word 'rural'. That is important, because we have made considerable play of the fact that we want to ensure that services are continued in rural areas".
The Minister can say that again. If he cannot define it, how is it that he is going to protect the subscribers in rural areas?
The second problem with the Government's defence comes back to the issue which I raised on the last amendments, that is, the question of the 100 man-hours. I accept, as the noble Lord, Lord Glenarthur, has said, that the 100 man-hours definition is about charging rather than about the actual physical supply, but of course to most people charging is indistinguishable from supply. If the telecommunications operator is allowed the possibility of discriminatory charging against those in rural areas then it is possible for that operator to set the scale of charges so high as to say that he is prepared to supply telephony or telecommunications services, but to do so at such a price that no such subscriber can possibly afford to take advantage of that offer; in other words, one cannot distinguish between charging and supply.
That is confirmed in the intentions of the Bill by the other fact which I referred to when speaking to the last amendment, which is that the standard national pricing policy, which is an essential part of the public service that British Telecom supplies at present, is to be replaced after 1989 by a scale of charges. I do not know what that scale of charges is going to be. I do not think the Government know what that scale of charges is going to be. I will listen very carefully if the Minister is prepared to assure me that there is nothing sinister intended in the use of the phrase "scale of charges" and the abandonment of the standard national pricing policy. If he can assure me, then, of course, one of the fears which not only noble Lords in this Committee but also many pressure groups throughout the country have expressed is not justified. As I say, I shall listen carefully to see whether that is the case.
The next problem about which the Government have to reassure us before we are going to be content to withdraw an amendment of this kind is what is going to be meant by telephone as opposed to telecommunications services and whether there is not the distinct possibility that there will be one service for people living in metropolitan areas, in urban areas, and another service for those in the less accessible, less remunerative areas. The fear that we have, and the fear that people living in rural areas have, is that there will be a first-class service for the few and a second-class service for the many.
I quote from the Guardian of last November, which in turn quoted from a confidential paper which, it claimed, came from senior officials in the department:
"By 2000, wideband services are likely to be available to perhaps half the population, mainly in urban areas. The rest will have to rely on the ISDN (Integral Switched Digital Network) and
18
broadcasting—which together will provide more than today but which must be limited by the radio spectrum. But the inequality will remain and Governments will have to decide how important it is to them to secure the introduction of the basic infrastructure into all areas on a uniform basis—as a PTT operating in the traditional way might do."
That puts in the mouths of the officials responsible for the legislation—and, again, if the Government choose to deny that, that will affect our judgment, though it has not been denied so far—the issue whether there is to be a first-class service for approximately 50 per cent. living within reach of cable services, in effect, as against a second-class service which will be available to the rest. I shall listen with great interest to the answer of the noble Lord the Minister on that point.
The next point is that which was raised by my noble friend Lord Bruce of Donington, when he quoted Condition 42.2(b) of the licence. It is quite true that that does not refer to all services, and telephony services are already excluded. But in our view it remains the right of those living in rural areas to have access to the full range of services, as would have been provided, as the Guardian suggested, by a PTT of the traditional kind. It will be necessary for the Government to assure us that not merely telephony services of the kind envisaged in Condition 42.1 of the licence, but all services, are to be available in rural areas.
It is not enough to be technical about this matter. It is necessary to say that the whole principle of a telephony service, which has been built up well over 100 years, is gravely at risk in the present legislation. It is at risk because the Government have resolutely refused to pay any regard to the representations which have been made to them by the various bodies represented, for example, in Rural Voice. Rural Voice has among its subscribers organisations representing over a million people, including the National Farmers' Union and the Country Landowners' Association, to name only two bodies which may strike a chord with your Lordships.
We have here the possibility of a turning point in the provision of public services in this country. We have maintained, and the Government to their credit have maintained, the principle that in many social services, including the National Health Service, there should be no discrimination against any group on the basis of geographical location. Yet why are the Government in this legislation so ready to remove the protection from those who are most in need? It is not as though the need for a telephone service was less important in rural areas; on the contrary, in rural areas it is more important to have a telephone service. People in rural areas are more isolated, and are more at risk from natural disasters and from inaccessibility to medical services and to help of all kinds.
I should have thought that, if any group were to be discriminated against, it should be those who have alternative sources of help. For people in rural areas a telephone is not a pleasant luxury, as it was in the early days. For people in rural areas, a telephone is now an absolute necessity, as is transport. Some tune ago your Lordships told the Government that you would not tolerate abolition of school transport in rural areas. To their credit the Government accepted that that not only represented the opinion of your Lordships, but

19
also reflected the view of the country: that those who live in rural areas, those upon whom we rely for a large part of our agricultural supplies—quite apart from any of the other reasons—should not be discriminated against in this way. Surely when it comes to telephone services the same argument applies as applied to school transport.
I said that I would refer to the matter as it affects urban areas as well. It seems that on grounds of geographical location there could be equal discrimination against some parts of urban areas. If one visits the more desolate parts of the city of New York, for example, one will find that there are no public telephone boxes. It is argued by the Bell Telephone Company that it is not economic to provide telephone services in those areas because of the threat of vandalism. Yet it is in those areas, where considerably fewer people have their own private telephones, that public telephone boxes are most needed. That kind of situation could apply in our cities. A private telecommunications operator could argue that because of the risk involved, as well as the financial loss, such services should not be provided in the more deprived areas. It is to protect those most in need in our cities, as well as those most in need in the rural areas, that we are moving this amendment. I beg to move.
Earl De La Warr: Before the noble Lord sits down, I should like to mention that he started talking about rates and charges, and I understand that that is what the amendment is about. He then strayed into the provision of broad band services, and he seemed to imply that those ought to go right through the country; and at that point I failed to follow his argument. Perhaps he can make quite clear what he was getting at.
Lord McIntosh of Haringey: I thank the noble Earl, and I apologise for not having made myself clear. I thought that I had said quite explicitly that it was not possible to distinguish between access and charges. It is possible by a policy of high charges for an operator in effect to deny access to services, even though the operator may not have the legal right to deny it. One cannot distinguish between charges and the legal right regarding provision. Both must be protected if, in turn, the subscriber is to be protected.
Lord Molloy: I think that the quintessence of the argument has been submitted by my noble friend Lord McIntosh, but I should like the Committee to examine a similar though not identical situation that existed just before the war. It was extremely serious, and it involved the supply of electricity to farmers, in particular hill farmers. For years they had asked for an electricity supply, but had had to manage on their own. Suddenly, as is always the case in times of great stress, in particular during wartime, the farmers became most important. The then private owners of the electricity industry argued, quite rightly, that from a profitability point of view they could not supply farmers with electricity. Of course, that could not be very well argued in wartime, just as one could not allow a private soldier or a sapper to say, "It is not
20
profitable for me to go and pick up a gun and defend my country". That would be an absurdity.
After the war the electricity boards were established, and places such as Battersea and the great Tir John power station in South Wales supplied lots of electricity, and power supplies were extended all over the country. The gravamen of my submission is that if one argued that under the law of diminishing returns electricity generated in Battersea should be very much cheaper for people living in Battersea than for those living in, for example, Ealing, an enormous bureaucracy would be needed to work it all out, and the whole affair would be an absurdity.
During my life I have noticed what has happened when services of national importance have been provided for every member of our island race. What would happen, for example, if the costs had to be worked out because someone who went into hospital with a broken leg had to pay for treatment, while someone who went in with cancer did not have to pay? That would be ridiculous. Instead, we have the great National Health Service. I believe that there lies the analogy with the present amendment.
My noble friend Lord McIntosh of Haringey has made the poignant point that the telephone is a lifeline. Of course it is. It is also not unreasonable to say that people living in rural areas have just as much right to be able to telephone friends and colleagues in other parts of the country as people living in the great urban areas of our land. The main submission made by the Opposition is that this Parliament where humanly possible should commit itself. One has to bear in mind that there will be all sorts of developments in telecommunications. The miracles that have occurred over the past 20 years will not stop in 1984. I hope therefore that the Government will take their courage in both hands and accept the amendment which means that they will not be able to abandon those Britons who live in rural areas. I would have thought that such a recommendation would be acceptable to this Chamber.
3.51 p.m.
Lord Somers: I sympathise with a great deal of what the noble Lord, Lord McIntosh of Haringey, said in regard to discrimination. I cannot help feeling, however, that the amendment, as it stands, might run us into difficulties owing to the fact that it includes the word "installation". Let us suppose that someone was to buy a remote island off the Orkneys. I happen to know a couple who have done that very thing. I do not know whether they already have a telephone. Let us suppose however that there was no telephone. Would they be able to claim that a telephone line should be run across from the mainland at no extra charge? That would be asking rather a lot at the public expense.
Baroness Macleod of Borve: I should like to follow the noble Lord, Lord Somers, down the road that he was taking. As we know, the Government have said they will give an assurance—the problem is that it is not in the Bill—that rural areas will not face higher charges than urban and suburban areas. Perhaps the Government are therefore able to accept this amendment dealing with charging rates which I would have thought is the same thing. I agree with the noble

21
Lord, Lord Somers, that installation is a problem. Where I live, there is a driveway about a mile long. I would not expect the telecommunications people, if I was without a telephone, to erect telephone poles to connect my home to the outside world completely free of charge. I would expect to pay a reasonable charge. However, I feel strongly, like the noble Lord, Lord McIntosh of Haringey, about maintenance and usage.
I have been a rural person all my life. I have never wished to live in London. I am aware of the problems of people who live in remote areas. They need a telephone service. It is a service, as this part of the Bill mentions five times. It is vital that such people should be able to contact the police, doctors and any available shops at no extra charge than those living in suburbia or the great metropolitan areas. It is important that this proposal on charging rates, other than for installation—that is where I quarrel with the amendment—should be accepted by the Government. I hope that they will accept it.
Lord Alport: I hope that the Minister will consider this amendment, in spirit at any rate, carefully. Those of us, as my noble friend Lady Macleod has mentioned, who live in country areas know of the great concern now building up within those areas regarding the dangers that seem to be ahead of us when this Bill goes through Parliament. If those fears are realised, it will be greatly to the disadvantage of people living in the remoter parts of the country. This is not merely a party political criticism of the Bill. It is not a fear drummed up by the propaganda of any particular organisation. It is something very real that is felt in the villages, certainly in my part of Essex. I hope that my noble friend will take the matter carefully into consideration.
If the Government find the amendment as it stands is not acceptable, I hope that they will consider putting down something on these lines at the next stage in the passage of the Bill through the House. I would have thought that the point made by the noble Lord, Lord Somers, whould be covered by the fact that it is probably not practicable, or at any rate reasonably practicable, to install a single line between let us say the west of Scotland and some remote island. If that is not the case, some wording might at least be introduced to make clear that this would not be envisaged. I hope that my noble friends concerned with the conduct of the Bill through the House will take this matter very much into consideration and will try to meet what I know are the wishes not only of many Members of the House but also large numbers of people who live in the country districts of these islands.
Lord Spens: I am sympathetic towards the amendment. It establishes, or attempts to continue, a fine principle that was established many years ago with the introduction of the penny post. The penny post was the only charge irrespective of distance. We need something of that kind in the Bill because, as the noble Baroness, Lady Macleod, said, there is no mention of charges in the Bill.
Lord Edmund-Davies: Some of us regard this amendment as a most attractive one. I confess my complete ignorance of the present situation in relation to installation charges. Can we be told? Is there any
22
difference in installation charges? If there is none now, I would want that perpetuated.
Viscount Trenchard: I wonder whether my noble friend, in replying to the amendment, can provide any information about the accuracy of the assumption that rural areas are perhaps the most uneconomic places for the extension of lines and the installation of call boxes as well as the other matters mentioned in the paragraph to which the amendment relates. I have in mind the appalling degree of vandalism in the towns. I have a feeling that, although the lines are longer, the actual economics relating to rural areas may not be as bad as so many of your Lordships fear.
I wonder also whether my noble friend can cover the financial arrangements envisaged in the licence following upon Clause 3(1)(b) which again assumes I think that there will be a strong economic bias against providing these sevices. I am not sure that that is accurate. I believe that if the Government carry through the licensing provisions that they have in mind, in the light of the draft licence, the incentive will not be so much against these services.
I believe that many technical improvements are possible and planned especially in relation to kiosks which can lead to a great lowering of costs. This will make it easier for the Government to meet the great sentiment, clearly expressed in the House, that these services should continue. I am fairly satisfied, with the Bill as it is and the licensing that is proposed, that these services will be maintained in the way that all of us want.
Lord Morris: I find it astonishing that the noble Lord, Lord McIntosh of Haringey, should have prayed in aid the fact that there has been, by means of a public service, a telephone system for over 100 years. When one considers that there are still people without a telephone; and that this is the only means of communication for the vast majority, I find it nothing other than a disgrace. This is precisely what the Bill is all about, to try to put that position right.
Lord Taylor of Gryfe: I hope that the Minister will respond to the anxieties that have been expressed from all parts of the Committee. If the amendment is perhaps either weak or defective in its drafting, at least the sentiment expressed in this Committee this afternoon is quite clear. A fundamental difficulty of the Bill is that we have lived within the tradition of a public service in the Post Office which, on the whole, has been found to be acceptable and we are now going to create a company which is to be floated on the market and which must attract shareholders on the basis of a prospectus which promises a certain return in profits. That profit-earning aspect of the successor company is where the problem arises.
Let us take Mercury as an example. It is operating only in areas of concentration of population and consequently it invites investors to invest in Mercury because, by operating such a tight arrangement, it hopes that it will be able to generate profit. But we are now considering the 97 per cent. of the telephone service which will be in the hands of the successor company and, naturally, with that 97 per cent., anxious to make profits for their shareholders, there

23
will be pressure on them all the time. There will be pressure on them, to be more efficient, which I accept is desirable. However, they will also be carrying a lot of other costs: they will be carrying a good deal more than their current borrowing from the Government; they will be paying the market rate for finance.
So there will be pressures on the company—considerable pressures—which may influence the board of directors of the new company to sacrifice some of the essential elements which have been part of a public service. I live in Scotland and I can speak with some authority about the importance of the telephone service to the outer islands and to the remote communities. I was for some time chairman of the Forestry Commission and I had some involvement in retaining a balance, a reasonable economy and a reasonable life-style in the rural areas. I suggest that, if this amendment is not accepted, there will be great anxiety that some of these elements of the public service will be sacrificed in the interests of the returns to the investors who are good enough to put the £4 billion or £5 billion into this share issue. I appeal to the Minister: please give us some reassurance in this regard.
Lord Glenarthur: The question of prices for rural services in the future is clearly a matter which particularly exercises many of your Lordships. The noble Lord, Lord McIntosh, described himself as a "dyed-in-the-wool inhabitant of the metropolitan area"—I think, that that is roughly right—and I suppose that I ought to declare myself as a dyed-in-the-wool inhabitant of a rural area. However, I hope that I shall be able to explain the proposals that are contained in the Bill a little more fully.
As I have said, the Government appreciate that there is genuine concern that people living in rural areas feel that they might be worse off as a result of the enactment of the Bill, and that prices of telecommunication services in rural areas will rise substantially—much more so than prices in urban areas. But I hope that I can explain that that fear is in fact unfounded. First, the value of British Telecom's network depends on the number of people connected to it and the use they make of their telephones. This was a point that was made by my noble friend Lord Trenchard just now. At present a vast number of people are connected—some 151 million residential subscribers—but in point of fact they make little use of their telephones. The Committee might be interested to know that the average telephone is used for less than 10 minutes a day. Therefore, it is clearly not in the interests of British Telecom to increase charges so as to discourage people from making telephone calls. Indeed, I should have thought that rather the reverse would be true.
Secondly, there is no evidence that the costs of providing services in rural areas are higher than those in urban areas, because at present British Telecom simply does not have the accounting information. Indeed, it is quite possible that in some rural areas costs are lower than in towns where cables cannot be strung overhead but must be laid underground. London is a case in point. It is reasonable to believe that the costs of providing services in London, where
24
cables must be laid under the streets, are much higher than in rural ares where wires can be "flown"—which I understand to be the technical term.
Thirdly (but by no means last), in due course the competition, which we are endeavouring to encourage by the Bill, will provide the best safeguard of all to customers. Competition is an effective means of encouraging better quality and variety of services and of restraining prices. However, because this will take some time to develop in all areas and we know that there is genuine uncertainty about the future, the Government intend to include conditions in the British Telecom licence to provide reassurance to customers in rural areas. The draft licence contains two conditions to which reference has already been made—Conditions 25 and 26—which are specifically designed to ensure uniform charges throughout the country for the next five years for two very important services to which my noble friend Lady Macleod referred; namely, maintenance and installation. Condition 25 is concerned with the maintenance charges. This term may have a slightly unfamiliar ring to it and so I shall explain it briefly.
At present, customers' bills have one charge for rental which at present stands at £14.15 per quarter for domestic users. This rental charge covers not only the supply and maintenance of the telephone instrument, but also the supply and maintenance of an exchange line and dedicated exchange equipment. The supply of apparatus is now open to others apart from British Telecom, and in order to ensure fair competition, the charges for telephone rental must be separate from the charges for the provision of the exchange line and equipment. So in due course customers' bills will show these charges for apparatus and exchange lines and equipment separately. I should like to emphasise that maintenance charges are not new charges; they have always been paid as part of rental charges.
As regards charges for apparatus, the level of prices will be set according to market forces brought about by the significant competition in this area. Nor are there any grounds for fearing higher prices for apparatus in rural areas. British Telecom will be required to supply a standard service on standard terms and conditions. If British Telecom tried to charge customers in, for example, rural areas more than those in urban areas for the same item of apparatus, it is likely that the director would consider this unfair discrimination; and that of course is prevented by Condition 17 of the licence.
Lord Molloy: Will the noble Lord allow me to intervene for a moment? He has just said that it is likely that the director will ensure that many parts of the British Isles will not suffer. I suggest that it is his responsibility and Parliament's responsibility to see that people are in no way disadvantaged. It surely must not be left to one man to make that decision—that is why Parliament exists.
Lord Glenarthur: If the noble Lord reads the Bill he will see that Clause 3 imposes a duty upon the Secretary of State and that duty is far stronger than anything which has existed hitherto. That was the point that I was going to make at the end of my remarks, but I have now made it rather sooner.

25
Concern has been expressed about maintenance charges, particularly by people who live in rural areas where lines may be knocked down in a storm—and I have seen plenty of evidence of that in the course of the past 48 hours—and clearly to put them up can be an expensive business. Therefore we have included Condition 25 which ensures that all customers, whether they live in a remote rural area or inner cities, will pay the same charge for maintenance. British Telecom will not be allowed to charge those who live in high cost areas more for the same basic service of maintaining their exchange line and exchange equipment. Similarly, Condition 26 provides for the continuation of uniform charges for installation. This is something to which I referred when speaking to an earlier amendment. As I think the Committee will be aware, at present British Telecom makes a standard charge for all installations throughout the country that take up to 100 hours to complete. This has generally been accepted as a reasonable arrangement, and Condition 26 ensures its continuance for the next five years.
The noble Lord, Lord Somers, referred in particular to the Orkneys. There are many examples—I do not have them to hand but I could easily produce them—of where there have been substantial charges to British Telecommunications for the provision of services in very difficult parts of the country. However, in fact, the charges which have actually been made to the customer have been extremely low in proportion to the actual cost of providing the service.
On the question of call charges and "usage charges", which is the actual phrase used in the amendment, I should point out that these are not standard now, even though they may appear so. The local call unit charge at off-peak rate is 5p for two minutes, but the size of the local charge unit—that is, the distance over which one can make a call at the local rate—differs in different parts of the country. For example, the local call area is larger in London than it is in many other areas. I do not see why variations similar to this should not continue.
Similarly, British Telecom has recently introduced lower unit charges on the most used trunk routes, which I also think is reasonable. I would not like to see such practices prevented, which is what this amendment would achieve. However, as with other charges, the variations in price across the country cannot be unreasonable or else the prohibition on undue discrimination comes into play.
I hope that I have said enough to convince noble Lords opposite why this amendment is unacceptable. I should also like to explain, briefly, why I believe it would be positively damaging. It seeks to ban all discrimination. Although we are opposed to undue discrimination, which will be prohibited under the terms of BT's licence, some discrimination is, indeed, quite reasonable. For example, the low-user rebate scheme is quite clearly discriminatory in that some customers pay a lower charge. But I think that all of us welcome that sort of help for, for example, the elderly who use their telephone only a little. I certainly should not wish to see such a rebate prohibited, which is what the amendment, if accepted, would do.
I return to what I said in answer to the noble Lord, Lord Molloy. Clause 3 of the Bill imposes a duty to
26
provide a service. This service has not been entrenched in a duty before, and that is why I ask your Lordships to reject this amendment.
4.13 p.m.
Lord Donaldson of Kingsbridge: I did not want to interrupt the noble Lord in his eloquence, but I should like to make a point about prices. At the beginning the noble Lord made a very curious remark. He said that British Telecom could not afford to increase prices because it would lose custom. Did I misunderstand the noble Lord? Because, if that is what he said, I would point out that every time anybody puts up prices anywhere—and this is a calculated risk—it is almost inevitable that for a short period that person does lose custom. One thinks it is worth doing in the end and so one does it. Therefore, as a description of why BT would not do it, with respect, that seems to me to be quite meaningless.
The noble Lord spoke about the value of competition in keeping down prices. Of course, there is no competition at all in the rural areas, with only 3 per cent. competition outside the rural areas.
Lord Glenarthur: On the first question which the noble Lord, Lord Donaldson, raised, the fact is that at the moment the service as such is under-used. I hope that I made that plain in my opening remarks in answering the amendment. At the moment telephones of residential subscribers are not used a great deal, and therefore it would not help BT, or anyone else, to increase charges in such a way that the system is used even less. I hope that that makes sense. Perhaps the noble Lord could remind me of the other point he raised because I have forgotten it.
Lord Donaldson of Kingsbridge: It concerned competition in rural areas.
Lord Glenarthur: The question of competition in rural areas is a matter on which I touched. The fact remains that, certainly for the foreseeable future, British Telecom will be the main provider of services, and competition will emerge in due course.
Lord Edmund-Davies: I would welcome enlightenment from the noble Lord in relation to his opposition to part of the amendment—the non-discrimination part. The noble Lord cited an example of a rebate. That has no relevance to the suggested amendment, which relates to discrimination on the basis of "geographical location of the installation".
However, the question which hangs over the whole opposition to the amendment is as follows. If what the noble Lord says is right—and naturally one imputes the utmost good faith in the matter—what is the real basis of opposing the amendment? Why not make points upon which people of varied political opinions are troubled? Why not make the matter beyond doubt by accepting the amendment en bloc?
Lord Hawke: I should like to ask my noble friend a question before we decide this matter. It seems to me that any safeguards which can he put in the Bill would make the Bill extremely difficult to work and would

27
possibly hamper its operation. The ultimate safeguard is a Question in Parliament. Once upon a time when we had a Postmaster General, such as the father of my noble friend Lord De La Warr, we used to be able to ask a Question if our mail was delayed. That was a wonderful means of keeping the Post Office on its toes. If a Question could be asked in Parliament to the effect that this organisation is exceeding the powers of its charter, that would greatly satisfy many people. If, on the other hand, we have to rely on one of the consumer councils—which, in the case of the nationalised industries, appear to be completely toothless and worthless bodies—then obviously we have to put more into the Bill.
Lord Glenarthur: Perhaps I may answer the noble and learned Lord, Lord Edmund-Davies, on his point about general discrimination. I would hesitate to argue if it is a very technical, legal point, but, as I understand it, in this amendment we are talking about general discrimination. I am advised that the amendment as written would have the effect that I described. For that reason, apart from anything else, I do not think that it would be sensible to allow the amendment in the form suggested. My noble friend Lord Hawke cited an example of being able to complain to the Postmaster General in the case of post not arriving. When this Bill becomes an Act my noble friend will have a contract of service, and I submit to him that that will be much more effective than what exists at the present.
Lord Alport: If my noble friend argues that in the future it will be counter-productive for British Telecom to raise prices because it will lose customers, why has the contrary happened when it has consistently raised prices over the last many years?
Lord Glenarthur: I think that the question of charges as they stand at the present time is a matter for British Telecom and not for me. But the principle of extending the use of a system in order to derive the best financial benefit from it is a perfectly sound one, and that is what the Bill will achieve.
Lord Stoddart of Swindon: What about electricity?
Lord Glenarthur: The question of electricity is entirely different and not a matter upon which I shall get drawn now.
Lord Bruce of Donington: I have been trying to follow what the noble Lord has been saying in reply to the debate. I found it difficult to discern when he was not supporting the amendment that is put forward. He seemed to be indicating that all the safeguards are perfectly satisfactory and that the aims that are implicit in the amendment are, in fact, his own aims. That being so, there would seem very little reason for his being unable to accept the amendment.
The noble Baroness, Lady Macleod, raised the matter of installation charges. The abuse of that part of it is surely covered by the fact that the Committee only a few minutes ago decided to retain the words "not reasonably practicable" in the Bill. Consequently, any kind of extraordinary expenditure that was not
28
reasonably practicable would of course now be out automatically in any event.
What we are dealing with is a question of geographical discrimination. The noble Lord has in many ways fogged the issue here. What we want to see, and I think what the Committee wants to see as well, is that regardless of the geographical location, leaving aside questions of crossing miles of water by cable or some other means—and even there probably a reasonably practicable case can be made—there should be no discrimination in these matters between those living in the rural areas and those living in the town areas. I should have thought that that principle would be generally acceptable.
The noble Lord has said, "Of course, it is the intention to put it in a licence if it is not already there, but in any case it is the Government's intention to ensure that this kind of thing happens in any event". Once again, if this be the case there can be no argument against the amendment itself. There is some difficulty because if the noble Lord will refer to Schedule 5 to the Bill—and I am sorry to have to bring him to this provision because there is the question of the variation of charges here—he will find, for example, in paragraph 12(3):
"British Telecommunications may make, as respects any of the services provided or apparatus supplied by it, a scheme for determining the terms and conditions which are to be incorporated in the contracts which, by virtue of sub-paragraph (1)(a) above, are to be deemed to have been made".
The Committee will recall that this matter was referred to by the noble and learned Lord, Lord Mackay, in the concluding stages of the debate last Thursday when we learnt that in place of the general scheme there was to be a contract in effect in law between each user and British Telecom.
The interesting thing is that Schedule 5 paragraph 12(5) says:
"A scheme made under this paragraph may—

(a) make different provision for different cases or classes of cases determined by, or in accordance with, the provisions of the scheme; and

(b) revoke or amend any scheme made under section 21 of the 1981 Act".

Therefore, the Government have retained power in the schedule to make variations in contract. It is no good saying that it is all going to be in the licence. The power is in the schedule here. I should have thought, that being so, the easiest way out of the difficulty in order to clear all reasonable doubts is to accept the amendment as it stands.
It is all very well for the noble Lord to try to extend it beyond the point we would wish. He tried to extend the discrimination into fields which, as the noble Lord was kind enough to point out, go right outside the ordinary definition of geography. The amendment means what it says: no discrimination on grounds "of the geographical location" of the subscriber. That is clear enough, and I do not think those in your Lordships' House in the legal profession would easily be able to dispute that.
It would be much safer for the noble Lord to accept the amendment. Everybody would be satisfied. But if the noble Lord declines to do so the Committee will have the clearest possible indication that it lies in the back of his mind that the independent successor

29
company which takes over from British Telecom will ultimately find commercial pressures upon it to pay dividends upon the subscribed capital, and so to reduce those losses already incorporated in the 1983 accounts, so to cut its costs and increase its revenue, as to do exactly the same as they have tried to do in the United States; that is to say, make discriminatory charges on a geographical basis, which are already causing widespread distress there.
The noble Lord, Lord Spens, referred to Rowland Hill and the original concept of the postal service. This in the United Kingdom should be our aim. Our aim should be to achieve in the shortest possible time, bearing in mind technological advances and the fortunes of our people, a situation in which the telephone in an ordinary home will be just as usual as having water and electricity laid on. This is why I invite the Committee to support this amendment.
4.26 p.m.
Viscount Trenchard: Am I right in assuming that the amendment as written would mean that it would literally have to be penny post: that is, that a trunk call would have to cost exactly the same as a local call? I am not a lawyer, but I would think that that could be an interpretation of this. I further should like to re-emphasise once again that we have not got a shred of evidence that, with growing automation in all areas, rural calls are going to be a greater cost. Finally, we have been assured on installation and maintenance that for the first five years the licence will make sure that there is no discrimination. I doubt whether we could press the Government to go further than that.
Lord Morris: My noble friend made clear in his original answer that the charges—I shall mention just one item of charge—for maintenance will be uniform. Paragraph 25.1 of the draft licence does not quite say that. It says:
"that scale of charges shall he uniform throughout the Licensed Area."
There is no reference within the draft licence as to precisely what "Licensed Area" means. Could my noble friend expand on that and let me know how many licensed areas there are going to be?
Baroness Phillips: May I point out to the noble Lord the curious argument he brought forward when he spoke about the outgoing calls. Surely the telephone is a means of communication, and if you live in a rural area it is your incoming calls which are of the greatest importance. I recall living on a farm for six years in the bad old days when it was under the Post Office when we had the telephone and no electricity, no water services, and certainly no gas services, but we were in direct communication, which was vitally necessary on a farm that was seven miles from the nearest town and two miles from the nearest village.
It was the proud boast of the Post Office in those days that anyone could have a telephone installed at the same price. If we are going to drive all our people into the conurbations because that is the only place where they are going to get the services, we are doing a great dis-service to the general population.
The Countess of Mar: I am concerned that in this discussion we do not seem to have made much distinction between the telephone service and the telecommunications services. We seem to have been talking just about the telephone service. In rural communities there are farmers who need to have special data-communication links, perhaps to measure milk and butter fats, for feeding their cattle, and that sort of thing. Another thing that comes to mind is water boards who use telephony circuits for measuring the level of dams, which can be extremely remote.
I am concerned that we have been talking only about telephone instruments and not the other services to do with telecommunications, and that perhaps the charges will be increased on these other services which are just as essential to the economic welfare of the community.
Lord Lloyd of Kilgerran: May I presume to follow the really devastating criticisms of the last part of the Minister's speech which came from the lips of the noble and learned Lord, Lord Edmund-Davies, and for a few moments try to analyse, for the benefit of all of us who have anxiety in this matter, what the noble Lord the Minister is really saying, because basically he is coming towards us on this side on certain aspects. He started by expressing genuine concern at this general anxiety, an anxiety which most noble Lords share. What were his arguments to satisfy us that there was no real anxiety worth talking about? His words were: "There are no unfounded fears", and he followed that with three points in support. One of them was that of course there is no incentive to increase costs, because that will only reduce the number of people using the services. The noble Lord, Lord Taylor of Gryfe, dealt with that adequately when he referred to the fact that in the future we shall be dealing with a public liability company out to get a certain amount of profit.
The second reason for supporting the fact that there was no unfounded fear was the most extraordinary that I have heard. He said, "There is no evidence that the cost of installations and all that kind of thing in the rural areas differs very much from that in the urban areas". He gave as his reason that the accounting system of British Telecom was in such a mess that one could not find out what was the difference in pricing. On reflection, I do not think that the noble Lord will wish to hang very much on that answer.
His third answer was that there would be competition. As has been pointed out, there is no real competition at the moment. He said "Competition will come". They are merely words and there is no real satisfaction to be earned from the words "competition will come" and that therefore there will be no discrimination between customers on the basis of geographical location.
The anxiety is based on this fact. The anxiety is that for various reasons, presumably commercial reasons, there will be discrimination between customers on the basis of geographical location. That is all we are talking about: the anxiety based on discrimination due to geographical location. He concluded by referring to Conditions 25 and 26 in the licence. Again he reiterated that on the basis of that, there is no

31
justification for this anxiety. I ask your Lordships to consider carefully that kind of argument. There is real anxiety. I wonder whether the Government might now consider taking back this amendment and saying that they will think about it so that the matter can be brought forward by the Government at the Report stage.
Lord Glenarthur: Your Lordships have raised a number of points. Perhaps I may start with the easy one first. My noble friend Lord Morris asked about the licensed area. I should refer him to Condition 44 of the licence where the interpretation is:
"the United Kingdom other than … Hull".
Incoming calls, to which the noble Baroness, Lady Phillips, referred, of course are important, because incoming calls generate income for British Telecom just as much as outgoing calls generate charges for the person making them. It is six of one and half a dozen of the other. It is the use of the system which is important. That was the point that I made earlier when answering my noble friend Lord Alport. I do not think that I can amplify much of what I have said.
There is one key point to which I shall come in a moment; but the fact is that BT will be free to introduce variations in charges after the five-year period is up, according to the costs of providing those services. However, there will be no sudden change. Any variation will be brought in gradually, because it is not in the interests of British Telecom to discourage the use of its network. The director will of course keep a close watch on matters in accordance with the duty imposed by Clause 3(2)(a) which I described earlier. If he thought that consumers were not being charged reasonable prices, it would be open to him to seek modification of the licence, for example, to impose a limit on the variation in prices throughout the country. The main objection to the amendment is the fact that it would prohibit discrimination totally, as my noble friend Lord Trenchard described. That is the effect of the amendment. If the amendment were to be agreed by your Lordships, the beneficial discrimination which I described earlier would be lost as well.
Lord Weinstock: I wonder whether other noble Lords are as puzzled as I am at the general drift of the argument that the Committee is taking. As I understood him, the noble Lord, Lord Glenarthur, accepted as valid the objects which the amendment strives for, and rejected it only on the ground that in some cases there was justification for discrimination. Does not the noble Lord consider that the Government are better placed to accept the principle put forward in the amendment and to consider altering the Bill in due course rather than drive noble Lords, who otherwise might vote against the amendment, to vote for it?
Lord Glenarthur: What I said when I started to speak earlier was that the Government recognise the concern that people have about the effects of the Bill on rural areas. What I have tried to do—and I may not have done it as successfully as I might have done—was to explain that they need not be concerned because, for the first time in legislation, Clause 3 imposes a duty to
32
look after those, like myself, who live in rural areas. I am as concerned as anybody to make sure that my telephone services are not made more complicated by the passing of the Bill. But the point is that that is a duty. There has been no duty up to now, and I hope that will reassure the noble Lord.
Lord Weinstock: With due respect to the noble Lord, I am sure his concern is very real; but some practical expression of it in the form of an undertaking that the Government will cover it in the Bill in due course would be very welcome.
Lord McIntosh of Haringey: I shall be very brief. I have listened with great care, particularly to the contributions from the Cross-Benches and from the Conservative Benches. I would be the first to acknowledge that the concern expressed by many noble Lords does not amount to 100 per cent. support for the wording of the amendment. That is quite clear from the words of the noble Lord, Lord Somers, who said that we were talking about charging rates and raised the question whether it would be right to have extremely isolated areas paying the same. It is clear from the words of the noble Baroness, Lady Macleod of Borve, who asked for Government assurances that there would be protection for rural reas. The noble Lords, Lord Alport and Lord Spens, and the noble and learned Lord, Lord Edmund-Davies (who asked about the existing position on charges, and so on), were asking for assurances from the Government that the well-meaning intentions which have been expressed in ministerial statements should be expressed in a way that could not be denied or got round. I have to say this: the Government have given us no indication whatsoever that they are prepared to make any significant concession on the amendment. We are not talking about a change in all licences. When we suggested that the British Telecom licence ought to be given statutory authority, the answer given by the Government was that there would have to be 3,000 of them. That is not the case here. Nobody except British Telecom will provide these services to the rural areas. It is therefore only the British Telecom licences that we are talking about.
If we are told that Conditions 17, 25 and 26 of the licence provide the protection that is required, why cannot that protection he written into the Bill? That is what noble Lords were asking for and that is what the Government should concede. If they gave any indication of that, I should be the first to say, "Let us consider the Government's own proposals at Report stage". Failing that I fear that I have no alternative but to ask the Committee to support the amendment.
4.40 p.m.
On Question, Whether the said amendment (No. 24) shall be agreed to?
Their Lordships divided: Contents, 118; Not-Contents, 106.

DIVISION NO. 2

CONTENTS

Adean, L.

Ardwick, L.

Allen of Fallowfield, L.

Attlee, E.

Alport, L.

Auckland, L.

Amherst, E.

Aylestone, L.

Ampthill, L.

Belhaven and Stenton, L

33

Beswick, L.

Kearton, L.

Birk, B.

Kinloss, Ly.

Bishopston, L.

Lawrence, L.

Blyton, L.

Leatherland, L.

Boston of Faversham, L.

Llewelyn-Davies of Hastoe, B

Briginshaw, L.

Lloyd of Hampstead, L.

Brockway, L.

Lloyd of Kilgerran, L.

Brooks of Tremorfa, L.

Lockwood, B.

Bruce of Donington, L.

Longford, E.

Burton of Coventry, B.

Lovell-Davis, L.

Caccia, L.

McCarthy, L.

Caradon, L.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

Macleod of Borve, B.

Cledwyn of Penrhos, L.

Mais, L.

Collison, L.

Mar, C.

Cooper of Stockton Heath, L.

Mayhew, L.

Darling of Hillsborough, L.

Milne, L.

David, B.

Mishcon, L.

Davies of Penrhys, L.

Molloy, L.

Dean of Beswick, L.

Molson, L.

Delacourt-Smith of Alteryn, B.

Mulley, L.

Oram, L.

Denington, B.

Peart, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Edmund-Davies, L.

Pitt of Hampstead, L.

Ellenborough, L.

Plant, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L.[Teller.]

Ennals, L.

Ewart-Biggs, B.

Prys-Davies, L.

Fisher of Rednal, B.

Rathcreedan, L.

Gaitskell, B.

Rochester, L.

Gallacher, L.

Ross of Marnock, L.

Gardiner, L.

Seear, B.

George-Brown, L.

Seebohm, L.

Graham of Edmonton, L. [Teller.]

Shaughnessy, L.

Somers, L.

Grey, E.

Spens, L.

Grimond, L.

Stallard, L.

Hale, L.

Stamp, L.

Hall, V.

Stedman, B.

Halsbury, E.

Stewart of Alvechurch, B.

Hampton, L.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stoddart of Swindon, L.

Hayter, L.

Stone, L.

Houghton of Sowerby, L.

Strabolgi, L.

Howard of Henderskelfe, L.

Strathcarron, L.

Hughes, L.

Taylor of Blackburn, L.

Hunt, L.

Taylor of Gryfe, L.

Hutchinson of Lullington, L.

Taylor of Mansfield, L.

Hylton-Foster, B.

Tordoff, L.

Jacques, L.

Underhill, L.

Jeger, B.

Wallace of Coslany, L.

Jenkins of Putney, L.

Weinstock, L.

John-Mackie, L.

Wilson of Rievaulx, L.

Kagan, L.

Wootton of Abinger, B.

Kaldor, L.

NOT-CONTENTS

Abercorn, D.

Eccles, V.

Alexander of Tunis, E.

Elliot of Harwood, B.

Allerton, L.

Elphinstone, L.

Avon, E.

Elton, L.

Bellwin, L.

Enniskillen, E.

Belstead, L.

Fanshawe of Richmond, L.

Boyd-Carpenter, L.

Fortescue, E.

Caithness, E.

Gibson-Watt, L.

Campbell of Croy, L.

Glanusk, L.

Carnegy of Lour, B.

Glasgow, E.

Clitheroe, L.

Glenarthur, L.

Cockfield, L.

Glenkinglas, L.

Coleraine, L.

Gormanston, V.

Cottesloe, L.

Gowrie, E.

Cox, B.

Gray of Contin, L.

Craigton, L.

Gridley, L.

Crathorne, L.

Hailsham of Saint Marylebone, L.

Croft, L.

Cullen of Ashbourne, L.

Hampden, V.

Daventry, V.

Harmar-Nicholls, L.

Davidson, V.

Hawke, L.

De La Warr, E.

Hemphill, L.

Denham, L. [Teller.]

Hives, L.

Drumalbyn, L.

Holderness, L.

34

Home of the Hirsel, L.

Onslow, E.

Hood, V.

Orkney, E.

Hornsby-Smith, B.

Orr-Ewing, L.

Kimberley, E.

Pender, L.

Kinnaird, L.

Peyton of Yeovil, L.

Lane-Fox, B.

Portland, D.

Lauderdale, E.

Rankeillour, L.

Long, V.

St. Aldwyn, E.

Lucas of Chilworth, L.

St. Davids, V.

Lyell, L.

Saint Oswald, L.

McAlpine of Moffat, L.

Saltoun, Ly.

McAlpine of West Green, L.

Sempill, Ly.

Mackay of Clashfern, L.

Shrewsbury, E.

Malmesbury, E.

Strathclyde, L.

Mancroft, L.

Strathspey, L.

Margadale, L.

Swinton, E. [Teller.]

Marley, L.

Terrington, L.

Maude of Stratford-upon-Avon, L.

Teynham, L.

Thorneycroft, L.

Melville, V.

Torphichen, L.

Merrivale, L.

Trefgarne, L.

Mersey, L.

Trenchard, V.

Mills, V.

Trumpington, B.

Morris, L.

Vaux of Harrowden, L

Mottistone, L.

Vickers, B.

Mowbray and Stourton, L.

Vivian, L.

Murton of Lindisfarne, L.

Whitelaw, V.

Northchurch, B.

Windlesham, L.

Nugent of Guildford, L.

Wynford, L.

O'Neill of the Maine, L.

Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.
4.48 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 25:
Page 2, line 43, after ("reasonable") insert ("needs and").
The noble Lord said: I think, after that, I can afford to be very brief on this amendment. I would simply ask whether, in the light of the text of Clause 3 as it now stands, the Government would feel that it was worth their while to resist this simple and non-controversial amendment, which simply seeks to take account of subscribers' needs as well as of their demands. Now that we have the principle of equality for all subscribers, whatever geographical area they live in, enshrined in the legislation, would it not be fair for the Government to accede gracefully to this minor further change? I beg to move.
Lord Glenarthur: This amendment would alter the duty imposed on the Secretary of State and the director under Clause 3(1) in a subtle but important way. The demand for telecommunication services can be measured with reasonable precision. For example, one can identify how many people are prepared to meet the extra cost of a more sophisticated and versatile domestic telephone. Our intention is that those licensed to run telecommunication systems should respond vigorously and efficiently to the demands of the market.
The need for telecommunication services cannot be measured in the same objective way. It is much more a subjective test. Of course, need can be assessed, but the assessment will always depend upon the person who carries out the assessment. It would be reasonable to predict that the Secretary of State, the director and the licensee of a telecommunication system would have different views of the need for telecommunication services although they could be expected to come to agreement on the demand for

35
those services. If this amendment were to be accepted, someone would have to judge the need for telecommunication services. If that judgment were made by the Secretary of State, he could impose his views on licensees only at the cost of considerable day-to-day interference with their activities, which is just the sort of interference that the Government are trying to avoid. If, on the other hand, the judgment of need was made by the licensee under the terms of his licence, the result could be an unsatisfactory service with many frustrated customers.
I think we all agree that telecommunications are essential to the future prosperity and well-being of our society. That is the fundamental reason why the Government embarked on this policy. The Government recognise that, because telecommunication services are so important, all people throughout the country should have access to them, including low-income users, about whom there has been certain comment from time to time. That is why Clause 3 of the Bill ensures that all persons throughout the country will continue to have access to a telephone. Clause 3(1)(a) imposes a duty which I described at length a few moments ago, and I do not think it is necessary to repeat it now. Under these arrangements, everyone who wants a telecommunication service will be able to obtain one, provided that the demand is reasonable and the provision is not impracticable. I hope that, without further ado, and in view of the short time that it took the noble Lord to explain his amendment, that will satisfy the noble Lord and that he will withdraw his amendment.
Lord Bruce of Donington: The reply given by the noble Lord exposes the whole weakness of this Bill. He referred to demand being essentially the demand of the market place; in other words, those who can afford to have it are going to have it. The whole concept of a public service is essentially to supply reasonably the needs of the people. This is exactly what the National Health Service was founded for and exactly the same principle was involved. The noble Lord is quite correct in saving that anybody can assess a subjective need, but the words "reasonable need" would be there. That is what the remainder of the Bill and certain of the amendments seek to do—to specify areas of need.
The noble Lord is trying to marry two things together and is finding it very difficult to do so. He is trying to combine the harsh reality of the market place with the necessity of providing a service for the population, and all that his arguments prove is the incompatibility of one with the other. Surely, it would be far better for the noble Lord to give up at this point and say, "We will try within this Bill to do progressively what British Telecom, under the normal British Telecommunications Act 1981, would have done had it been allowed to continue without this wretched drive to privatisation for the purpose of raising revenue for the Chancellor of the Exchequer", because there is nothing more in it than that. It would be far better if the noble Lord accepted that, because that is the way in which things would have developed had the British Telecommunications Act 1981 been allowed to continue undisturbed. It is the wretched
36
drive for privatisation that is giving the noble Lord the hiccups here. He might as well give up and accept the amendment.
4.54 p.m.
Lord Alport: I must ask my noble friend again whether he will consider this amendment. I suppose that I must declare an interest, because I imagine that I am almost the last of the lowest form of ministerial life which in past days was the Assistant Postmaster-General. In those days, we were greatly concerned with the efficiency of the telephone service, and I emphasise the word "service" because that is essentially what it was. It was intended to be providing for all sections of the community, so far as possible, through the public callbox and also the private telephone, a service. Need was very much taken into consideration at that time.
My noble friend has said that the criterion which will be used is demand, but, as the noble Lord, Lord Bruce of Donington, has pointed out, there is a fundamental difference between demand and need. Therefore, one must assume that if demand is to be the criterion, then it will not be considered as a service which responds to the needs of the communities, whether they be rural or urban. If this amendment is accepted and put in, then a further criterion will have to be considered by those concerned and it will bring the matter into the realms of being a service and not merely a commercial transaction. I think that the people in this country as a whole will be very worried and anxious, when the time comes, to find that the service to which they have been accustomed over many years is no longer a service, or considered in that shape, but is something which is merely provided by a commercial organisation on that basis of exigencies of the market place.
Lord Donaldson of Kingsbridge: The difference between "reasonable demand" and "need" is extremely narrow. I think that it would be wrong of the Government, having won an important amendment in our last session by four votes, and having lost this one by 12 votes, not to be a little gracious here. I cannot think of single case where the difference between "reasonable demand" and "need" would involve a major decision. I suppose that one could consider an old man living alone in a cottage miles from anywhere, with his friends and relations thinking that he ought to ask for a telephone but he is not taking the trouble to do so, although he clearly needs one. I suppose that that would be an example, but then I think that he should probably have it. So I am rather distressed at this rigid attitude over a difference which is so fine between the two, when so much opinion within the Committee has shown that this kind of change, this kind of emphasis on the service part in the future, is very deeply felt throughout.
Lord Boyd-Carpenter: I think that the noble Lord, Lord Donaldson, unusually for him, was guilty of a little confusion of thought with his reference to the lonely old man in the cottage. Of course I agree with him, and I think all your Lordships will agree with him, that that lonely old man should have a telephone. But you still come back to the question of how, and at whose expense, it should be provided.

37
There is always a temptation, with these and analogous subjects, to suggest that the supplier of the service should carry the cost of providing it for those unable to pay for it. As one who was once responsible for social security administration, I have, in general, been against that view. If someone is in need, it is the function of the social security services to provide him with the means of paying for the service, and not, I suggest to the noble Lord, Lord Donaldson, for the supplier of the service to do so. We get into the most terrible muddle if the idea of dealing with poverty by the provision of free services, as opposed to dealing with it by providing proper financial means, is adopted.
I should also like to take up the real confusion of thought of the noble Lord, Lord Bruce of Donington, when he compared the telephone service with the National Health Service. The National Health Service is a free service, providing a free medical service for the population as a whole. It has been accepted as such for very many years and many of us are very proud of it. The telephone service is not such a free service, though the word "service" is used. It provides, on commercial terms, a useful amenity; indeed, perhaps, a necessary help for life. But it is not and never has been a free service in the sense that the National Health Service has been free, which leads me to exactly the same point as I was dealing with in respect of the noble Lord, Lord Donaldson of Kingsbridge: that if we are going to deal with the need of people for a telephone—most of us, from our own experience, know of cases where a telephone is a necessity—we must face up to whether we are going to try to put the cost of providing the telephone on to the new British Telecom or whether we are going to do what I suggest is correct and ensure that the provision of "needs" stays where it should—with the Department of Health and Social Security.
Lord Alport: I have listened with great care to my noble friend's speech and comments. There is perhaps a good deal of confusion of mind in the Committee generally on this point. I myself may be confused. I did not regard the meaning of the word "needs" in this case as dealing with the question of the financial situation of the person who requires the telephone. I assumed that in this case the word "needs" was intended to cover the requirements of a scattered rural area as compared with the requirements of a high demand, highly congested urban area. I do not believe that the old gentleman to whom the noble Lord, Lord Donaldson of Kingsbridge, referred is the object of this amendment. Its object is generally to ensure that the policy contains some equity as between those who require the service but who do not provide the same volume of demand and those who provide a greater volume of demand but whose requirements are not so urgent as they would be, for instance, in rural areas.
Lord Boyd-Carpenter: If the word "needs" were as my noble friend Lord Alport interprets it, there might be somewhat less objection to the amendment, but I am waiting to hear my noble friend the Minister. It seems to me that when you put the two words against each other—"demands", which to any economist has a perfectly clear meaning (meaning the capacity to demand a service for which you are prepared to pay)
38
and "needs", which, if you have been involved, as I have, in social security administration, means, simply, the physical needs, the intellectual needs, the social needs either of an individual or of a community—there is a clear contrast. It would be very dangerous, with no more than the possibility of ambiguity at which my noble friend hinted, to put the word "needs" into the Bill. "Demands" is the effective word.
Lord Donaldson of Kingsbridge: It may be that before long I shall have to demand an apology from the noble Lord, but I shall not ask for payment. I do not expect to pay for it.
Lord Boyd-Carpenter: I am sure that I shall not need it.
Lord Kaldor: May I ask the noble Lord, Lord Boyd-Carpenter, whether he assumes that in a place where the provision of a service such as a call box is far more expensive than in some other place—say, in a village rather than in a town—that service should be provided only if a correspondingly higher charge is made for calls from expensive call boxes than is made for calls from less expensive call boxes? Otherwise it is not a question of whether people can or cannot afford to pay. It is simply a question of whether the new telecommunications service, under private ownership, should provide services which are necessarily loss-making because the cost to them is so much greater than the average cost of providing such services over the country as a whole.
Lord Boyd-Carpenter: The noble Lord is going back to the previous amendment which we considered at not inadequate length: whether there should be charges which vary in accordance with geographical locality. If the noble Lord wants to open up that question on a later amendment, I shall he very happy to express views which I suspect may not be those of the noble Lord. With respect, it has nothing whatever to do with this amendment.
Lord Kaldor: I am merely suggesting that the addition of the word "needs" is consequential upon the earlier amendment which the Committee adopted.
Lord Glenarthur: I shall be the first person to endorse everything which my noble friend Lord Boyd-Carpenter said in response to the noble Lord, Lord Bruce of Donington, and his comparison of this service with the National Health Service. I do not think I can add a word to what my noble friend said; he made the point admirably. I must also disappoint the noble Lord, Lord Bruce of Donington, and say that I am not going to give up; I am going to continue with it. Although the noble Lord, Lord Donaldson of Kingsbridge, referred to the difference between "needs" and "reasonable" as being very narrow, again that makes the case for not accepting the amendment very strong. In that case, I cannot see what is the point of pushing the amendment in the way in which noble Lords opposite seek to do. The fact remains that "demands" is measurable. "Needs", in the way that the noble Lord, Lord Bruce of Donington, and others have described it, effectively means an open-ended

39
demand. It could go on for ever; there would be no limit. This takes us back to the National Health Service question to which the noble Lord referred.
The fact remains that access generally to the telephone will in future be considerably strengthened. It is for British Telecom now to decide what is and what is not reasonable and practicable. In future, any customer who is denied service will be able to take up the matter with the director who will judge, guided by Condition 42 of the licence, whether or not British Telecom is under an obligation to provide service.
So far as Lord Kaldor's point about call boxes is concerned, it is another point which will come up again in due course. It is also germane to the last amendment, as my noble friend Lord Boyd-Carpenter said. This is an important and subtle amendment and it would have a very serious effect on the Bill if it were agreed to. Therefore, I must ask your Lordships to reject it.
Lord McIntosh of Haringey: I agree with the Minister that it is an important amendment. I owe an apology to the Committee for having moved it so briefly. I thought that the Government might be willing to consider it and place upon it the same value as I, my noble friends and other members of the Committee place upon it. We find ourselves in the position that "needs" is in some way an alternative to the subsequent amendments which relate to the top of page 3 of the Bill. They provide specific protection for directory inquiry services, telephone directories and so on. If the Government had been prepared to accept the amendment, their case for opposing the subsequent amendments would have been that much greater. If the Government are not prepared to accept the word "needs" as a criterion which the Secretary of State must take account of, we shall have to press each of these amendments which relate to the protection of individual services for the blind, the disabled and so on. We shall have to vote the Government down, as we voted them down half an hour ago. I regret it. I would rather have this dealt with in a tidy and logical way.
I would remind the Minister that the clause is already very adequately worded so as to provide the protection which the Government need. Let me remind the Minister that line 39 refers to the manner which the Secretary of State considers is best calculated to achieve these objectives. Let me also remind the Minister that at line 42 the Government have succeeded in persuading your Lordships to retain the phrase "or not reasonably practicable". What threat, then, does the addition of the word "needs" provide to the Government? What it does is to give statutory effect to the well-meaning statements which Ministers have made both here and in another place—not so much to the Members of the Opposition but to their noble friends and to noble Lords on the Cross-Benches who have expressed concern.
In the absence again of any movement of any kind towards acceptance of the principle behind the amendment, I am afraid that I have no alternative but to ask your Lordships to divide.
5.10 p.m.
On Question, Whether the said amendment (No. 25) shall be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 124.

DIVISION NO. 3

CONTENTS

Allen of Fallowfield, L.

Jeger, B.

Alport, L.

Jenkins of Putney, L.

Amherst, E.

John-Mackie, L.

Ardwick, L.

Kaldor, L.

Attlee, E.

Kearton, L.

Aylestone, L.

Kilmarnock, L.

Beswick, L.

Leatherland, L.

Birk, B.

Llewelyn-Davies of Hastoe, B

Bishopston, L.

Lloyd of Hampstead, L.

Blyton, L.

Lloyd of Kilgerran, L.

Boston of Faversham, L.

Lockwood, B.

Briginshaw, L.

Longford, E.

Brockway, L.

Lovell-Davies, L.

Brooks of Tremorfa, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mayhew, L.

Carmichael of Kelvingrove, L.

Mishcon, L.

Chitnis, L.

Molloy, L.

Cledwyn of Penrhos, L.

Mulley, L.

Collison, L.

Ogmore, L.

Cooper of Stockton Heath, L.

Oram, L.

Darling of Hillsborough, L.

Paget of Northampton, L.

David, B. [Teller.]

Peart, L.

Davies of Penrhys, L.

Phillips, B.

Delacourt-Smith of Alteryn, B.

Pitt of Hampstead, L.

Ponsonby of Shulbrede, L. [Teller.]

Denington, B.

Diamond, L.

Prys-Davies, L.

Donaldson of Kingsbridge, L.

Rathcreedan, L.

Elwyn-Jones, L.

Rochester, L.

Ennals, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Seear, B.

Fisher of Rednal, B.

Stallard, L.

Gaitskell, B.

Stedman, B.

Gallacher, L.

Stewart of Alvechurch, B.

Gardiner, L.

Stewart of Fulham, L.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Grey, E.

Stone, L.

Grimond, L.

Strabolgi, L.

Hale, L.

Taylor of Blackburn, L.

Hall, V.

Taylor of Gryfe, L.

Hampton, L.

Taylor of Mansfield, L.

Harris of Greenwich, L.

Tordoff, L.

Hayter, L.

Underhill, L.

Howie of Troon, L.

Wallace of Coslany, L.

Hughes, L.

Wedderburn of Charlton, L.

Hunt, L.

Wigoder, L.

Jacques, L.

Young of Darlington, L.

NOT-CONTENTS

Adeane, L.

Craigton, L.

Alexander of Tunis, E.

Crathorne, L.

Allerton, L.

Croft, L.

Avon, E.

Cullen of Ashbourne, L.

Belhaven and Stenton, L.

Daventry, V.

Bellwin, L.

Davidson, V.

Belstead, L.

De La Warr, E.

Bessborough, E.

Denham, L. [Teller.]

Boyd-Carpenter, L.

Drumalbyn, L.

Caccia, L.

Eccles, V.

Caithness, E.

Ellenborough, L.

Campbell of Alloway, L.

Elliot of Harwood, B.

Campbell of Croy, L.

Elphinstone, L.

Carnegy of Lour, B,

Elton, L.

Carrington, L.

Enniskillen, E.

Cockfield, L.

Faithfull, B.

Coleraine, L.

Fanshawe of Richmond, L.

Cork and Orrery, E.

Fortescue, E.

Cottesloe, L.

Gardner of Parkes, B.

Cox, B.

Gibson-Watt, L.

41

Glanusk, L.

Melville, V.

Glasgow, E.

Merrivale, L.

Glenarthur, L.

Mersey, V.

Glenkinglas, L.

Milne, L.

Gowrie, E.

Morris, L.

Gray of Contin, L.

Mottistone, L.

Gridley, L.

Mowbray and Stourton, L.

Hailsham of Saint Marylebone, L.

Murton of Lindisfarne, L.

Northchurch, B.

Halsbury, E.

Nugent of Guildford, L.

Hawke, L.

Onslow, E.

Hemphill, L.

Orkney, E.

Henley, L.

Orr-Ewing, L.

Hives, L.

Pender, L.

Holderness, L.

Peyton of Yeovil, L.

Home of the Hirsel, L.

Porritt, L.

Hood, V.

Portland, D.

Hornsby-Smith, B.

Rankeillour, L.

Howard of Henderskelfe, L.

St. Davids, V.

Hylton-Foster, B.

Saint Oswald, L.

Kagan, L.

Saltoun, Ly.

Killearn, L.

Seebohm, L.

Kilmany, L.

Sempill, Ly.

Kimberley, E.

Shaughnessy, L.

Kinloss, Ly.

Spens, L.

Kinnaird, L.

Strathcarron, L.

Lane-Fox, B.

Strathclyde, L.

Lauderdale, E.

Strathspey, L.

Lawrence, L.

Swinton, E. [Teller.]

Long, V.

Terrington, L.

Lucas of Chilworth, L.

Teynham, L.

Lyell, L.

Thorneycroft, L.

McAlpine of Moffat, L.

Torphichen, L.

McAlpine of West Green, L.

Tranmire, L.

Mackay of Clashfern, L.

Trefgarne, L.

Macleod of Borve, B.

Trenchard, V.

Malmesbury, E.

Trumpington, B.

Mancroft, L.

Vaux of Harrowden, L.

Mar, C.

Vickers, B.

Margadale, L.

Vivian, L.

Marley, L.

Whitelaw, V.

Maude of Stratford-upon-Avon, L.

Wynford, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.19 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey had given notice of his intention to move Amendment No. 26:
Page 3, line 2, after second ("services,") insert ("enquiry services, services providing information assistance,").
The noble Lord said: As a result of that vote, I shall not start in quite the same tone as that which I used when moving the last amendment. Amendment No. 26, now that I see the Marshalled List, seems to cover very much the same ground as the amendment proposed by the noble Lord, Lord Lloyd of Kilgerran, which is next on the Marshalled List. The amendment to which I am speaking now is, if anything, somewhat wider. On reflection, it occurs to me that one might run the risk of seeking to protect not only the most important information services, such as directory inquiries, but also the weather or (and dare I suggest that these are not of the utmost social significance?) test match scores. I believe it would be better to seek your Lordships' permission not to move this amendment.
[Amendment No. 26 not moved.]
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 27:
Page 3, line 2, after second ("services") insert (", directory enquiry services").
The noble Lord said: The purpose of this amendment is to insert the words "directory enquiry services" into the statements about the general duties of the Secretary of State and the director. In Clause 3(1)(a) there is a reference to the services which should be provided in satisfying demands for them. Then, at the top of page 3 of the Bill, the subsection goes on to particularise certain services which certainly should be given as follows:
"including, in particular, emergency services, public call box services, maritime services and services in rural areas".
As a matter of law, as a matter of construction of the Act, when you particularise items in a clause there is the danger that they may he excluding certain other very important matters. I would say with the greatest respect that the directory inquiry services are of the utmost importance not only in the rural areas but in town areas, and of the utmost importance not only for the people living in the rural areas, but for everybody: business people, for instance, in a hurry to get to an appointment find their car breaks down and they find a telephone box; they have not got the number with them. Therefore the directory inquiry service is of the utmost importance to business people as well as to the ordinary citizen. Accordingly, I would ask, in view of the importance of this service to industry and to the public generally, that these words be included in the particularisation which occurs at the top of page 3 in dealing with the general duties of the Secretary of State and the director.
Baroness Lane-Fox: As your Lordships are, I am certain, aware, directory inquiry services are especially necessary to people with impaired sight, also to those who are dyslexic and others whose physical handicaps make it very hard for them to use the dial or even the push button system. That the telephone is invaluable to such people I am sure is very well known, particularly to those of your Lordships who have ever been immobilised, and to make use of the telephone the directory service is all-important to the groups of people I have described. They are the ones who really rely on the telephone to keep them in touch. I know this may be asking a lot, but I regard it as so important that I very much hope the Government will be able to accommodate the gist of the amendment in the Bill.
Lord Somers: This amendment, which is perfectly logical, will not make the slightest difference to the character of the Bill or to its nature or purpose. I cannot see any reason at all why the Government should refuse it, except of course that it is not one of their own, which I think is an extremely unhappy and unsatisfactory reason. So I sincerely hope they will have second thoughts.
Baroness Macleod of Borve: I also should like to support this amendment. There are hospitals with telephones going from bed to bed, as I know very well, where they have not got telephone books. There are also, unfortunately, very many in our society who are still completely illiterate on leaving school. There are also those who come to our country and cannot speak or read our language adequately enough. They simply must have the directory services. I hope the Government will accept this amendment.
Lord Kaldor: May I say that this has two aspects—namely, the directory inquiry service concerning the United Kingdom and the service concerning foreign countries. At present the telephone system provides both services. Providing the service of finding the numbers of people in overseas countries, whether in Europe or elsewhere, is from a national point of view a very important matter. I hope we may have an assurance that the words "directory services" cover both aspects, national and international.
Lord Ardwick: I wish to support this amendment also. The service should not only be continued under the new system but should be very much improved. Perhaps because it is rather costly, it is the worst of the telephone services. One rings and then waits for a long time and one is lucky to get an answer; then there seem to be people of no very great skill at the other end. Furthermore, the directory inquiry service is concealed by the Post Office as much as possible. If you look through the books you find it very difficult to discover what number you should ring for these services. I think it is essential that these services should be continued and should be substantially improved.
The Countess of Mar: It is quite interesting that the following amendment is to provide free directories to all subscribers. I think if this amendment were not agreed to, everyone would want all the directories. Directory inquiries do generate their own calls; people ring the directory inquiry number and then they ring someone else and are charged for the call. The noble Baroness, Lady Lane-Fox, has already mentioned the disabled and people with difficulties. There are an awful lot of people who cannot read and people who cannot retain numbers, and they find directory inquiries very helpful.
Lord Peyton of Yeovil: Perhaps I may venture to say this. I was sorry to hear the noble Lord, Lord Ardwick, passing such adverse comments on the present service offered by directory inquiries. My recent experience has been that it has improved enormously—indeed, out of all recognition from the very moderate standards of only a few years ago.
If I may now address my noble friend the Minister, I would say this. I do very much wonder whether the successor to British Telecom would not want to make its services available as easily as possible to the largest number of people. I cannot believe that it is not now in their contemplation to offer this service free. I would be rather surprised, I must say, if the Government did not feel inclined at least to take this amendment away and give it careful thought. I cannot think that it would add to the load on the successor, those who are going to operate the telephone services in this country, if an undertaking were given in their name now by the Government and even put into the Bill to offer such a service as directory inquiries free of charge.
I am sure that Ministers in this place suffer from serious inhibitions as to the advice that they receive from government departments, but may I just put in a plea that not all the advice emanating from Whitehall is beyond blemish and that perhaps a suspicion of that may enter into my noble friend's mind before he replies to this debate?
Lord McIntosh of Haringey: The case has been very well put, and I am confident that the Government will respond sympathetically. I only want to ask the Minister one question referring to the British Telcom draft licence. It is true that the draft licence for BT does say that Oftel will require BT to continue to provide a service for people recognised by the director as being prevented by reason of blindness or other disability from using paper directories. But is it not true that the draft licence says that it shall be a free service or a service provided in return for appropriate and reasonable compensation? If that is the case, is not even the licence defective in protecting the needs of the blind and the disabled and the other groups to which this amendment refers?
Lord Torphichen: I fully appreciate why noble Lords would want this amendment, but the trend is away from using paper directories and manual means, and the voice at the end of the telephone. The French telephone authorities have tried it, and so, I am sure, have the Americans. The trend is towards supplying directory assistance through Prestel-type keyboard attachments. That is fine for the people who can read and whose sight is good but obviously if one cannot read a telephone directory neither can one read a computer attached to a telephone. The trouble with the amendment is that it only refers to "directory enquiry services". In due course a directory inquiry service might be quite a different animal from the one we are trying to protect today.
5.30 p.m.
Lord Lyell: I think it is rare in my career in your Lordships' House to have heard so many interesting points raised so swiftly and succinctly in the course of a mere 12 minutes, according to the clock—although it did not seem to be 12 minutes. Many interesting points were raised, possibly with justification. Indeed, I listened to all the points raised by my noble friends and from all sides of your Lordships' Committee. The noble Lord, Lord Lloyd of Kilgerran, in moving the amendment, spelt out very closely what he sought from the directory inquiry service and how important he felt this service was. Many noble Lords expressed their opinion on how vital and necessary are these services. I am not in a minority of one: I totally agree, and I shall seek to prove to your Lordships that in this instance we believe that its importance is recognised in the Bill as it stands.
Although we are on Clause 3, I draw the attention of your Lordships—and I am sure this will find favour with everyone who has spoken—to Clause 4. Clause 4 specifically mentions the directory inquiry service as falling within the definition of a telecommunication service. Indeed, your Lordships will find that contained in subsection (2)(b) on page 4 of the Bill. Perhaps your Lordships can study that at leisure while I continue to try to explain why we believe that the amendment is unnecessary. Directory inquiries are already covered by the duty in subsection (1)(a) of Clause 3. This requires the Secretary of State and the director general to exercise their functions so as to secure that all reasonable demands for telecommunication services—which, as I have already explained, includes directory inquiries—are satisfied.

45
In fulfilment of this duty the Government included Condition 3 in the draft licence for BT, which obliges BT to provide directory information, to facilitate these to the telephone service. In this way we believe that the directory inquiry service is secured even though I think that in reality there is very little likelihood that BT would wish to stop providing such a service, which encourages use of the network.
Very many noble Lords—indeed, I think every one of the first five speakers after the noble Lord, Lord Lloyd of Kilgerran—referred to the blind and the disabled. We fully appreciate how vital is a directory inquiry service for people such as the blind and, indeed, the dyslexic, who are unable to use the alternative of printed directories. I have mentioned that we have already taken steps in the draft BT licence to ensure that this service continues to be provided. I also draw your Lordships' attention to Condition 34 of the draft licence. This provides that should BT decide to introduce charges for the directory inquiry services, those people such as the blind or the dyslexic, who cannot use printed directories, should not be put at a financial disadvantage. Put simply, this means that either they will not have to pay a charge or an appropriate means of compensating them will be established. I hope that answers the concern that has been expressed by your Lordships, particularly by the noble Lord, Lord Lloyd of Kilgerran.
My noble friend Lady Lane-Fox, my noble friend Lady Macleod of Borve and the noble Lord, Lord Somers, asked me to confirm that the needs of the disabled are covered. I draw their attention to Clause 3(2)(a) on page 3 of the Bill. This states:
"Subject to subsection (1) above, the Secretary of State and the Director shall each have a duty to exercise the functions assigned or transferred to him … to promote the interests of consumers, purchasers and other users… (including, in particular, those who are disabled)".
Turning then to Clause 94(1) on page 82, we find that "disabled person" also covers the blind. My noble friend Lady Lane-Fox covered the problem of those consumers who are dyslexic. I hope that this brief explanation will show that the Secretary of State and the director general do have a duty to take particular care for the disabled.
The noble Lord, Lord Kaldor, asked about overseas directory inquiries. I am advised that this matter is covered in the same way as British directory inquiries are covered. The noble Lord, Lord Ardwick, said that it was fine to use directory inquiries once one knew which number to ring. Certainly as a consumer I very much agree with him. I will take that point on board, because the number is not always easy to find. In the printed booklet it states that the number for directory inquiries in the London area is 142 and for outside London it is 192—at least, it used to be, although I may be out of date. Once one has found what one thinks is the relevant number, one is then told, "No, you must ring another number". I agree with the noble Lord, Lord Ardwick, that there may well be a point there.
I agree with the point raised by the noble Countess, Lady Mar. As for my noble friend Lord Peyton of Yeovil, I take on board his views that the advice given to those of us speaking here is not always perfect. He should know, with his considerable experience in
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another place. My noble friend also referred to directory inquiries. Perhaps I may provide a brief illustration. I understand that directory inquiries these days are not necessarily carried out using easily traceable books. Indeed, one night when I was trying from Scotland to ring my noble friend Lord Campbell of Croy it took 22 minutes to find my noble friend's number since the operator who was helping me with my inquiries informed me that the information was carried on sheets which I think she called microfiches. Therefore, already the nightmare of my noble friend Lord Torphichen seems to have come to pass; certainly for some of us.
I hope I have assuaged some of the fears raised by my noble friends and by noble Lords in all parts of the Committee. I hope that in my first remarks I have set at rest the fears of the noble Lord, Lord Lloyd of Kilgerran, that directory inquiries and the services of directory inquiries to the disabled, the blind and the dyslexic are covered in the Bill as it stands.
The Countess of Mar: The Minister said that the licence will give British Telecom the power to charge, if it wishes, for its directory inquiries service. Can he tell me whether there has been a survey on the practicality of deciding who is sufficiently blind not to be able to read a directory; who is dyslexic; and what the cost would be of either certifying them so that they get their calls free in the first place, or giving them a refund, as opposed to having the directory inquiry service free as it is at present?
Lord Weinstock: As noble Lords will have noticed, in making his answer the Minister leaned heavily upon the licence or what he called the licence. I ask your Lordships to remember that there is no licence; there is only a draft licence. In the explanatory notes on the draft licence one reads that the draft is not the final text of the licence. I hope noble Lords will bear this in mind when we come to consider later amendments.
Lord Taylor of Gryfe: I am surprised that the Government should be resisting this amendment. The noble Lord, Lord Glenarthur, said earlier that the success of the company would depend on the extent to which people use the service, so that the whole purpose of a well-managed company will be to encourage people to make calls. One of the reasons that perhaps prohibits people from making calls is that they do not have the number and want to use directory services. Surely directory services are an aid to sales which would normally generate traffic for the successor company. Consequently I am surprised that this is not accepted as a reasonable proposition.
The noble Countess, Lady Mar, raised a point about the licence providing for taking care of the disabled, the blind, the dyslexic and so on. How does one discriminate at that stage? Have they to reclaim? How does one establish who are the people to get this special right to which they are entitled? Would it not make sense in any well-managed company to make it easier for people to make telephone calls? That is their revenue, that is their business, and the directory services are part of that service.
Lord Lyell: I should like briefly to answer the noble Lord, Lord Taylor. In the course of my remarks, which were long enough although I tried to keep them down, I stressed that we regard the directory inquiry service as being of particular importance. I do not think there was anything in my remarks which in any way discouraged the use of directory inquiries. The noble Lord is making a mild protest—perhaps I may be able to give way to him in a minute. I hope that nothing I said in the course of my remarks would in any way discourage people from using the directory inquiry service. I drew an example from my own activities of how difficult it was to use the new directory inquiries; things are not yet perfect. But I am sure that, notwithstanding the problems that have been expressed by my noble friend Lord Torphichen, the directory inquiry services will be able to provide the information which the noble Lord, Lord Taylor, and indeed all consumers, are seeking and that it will assist in greater utilisation of the telephone service.
The Countess of Mar: Will the noble Lord kindly answer the questions I asked about the practicality and the cost of reimbursing?
Lord Lyell: I am sorry; I am afraid I have no instructions at all as to how blind or how dyslexic one has to be, or any definition of disablement in these two particular areas, further than is set out in the definition clause which I invited your Lordships to look at. But I think we had better not go back to it at this stage. I will make inquiries and I would ask the noble Countess to raise it at a later state. I am sorry that I am unable to say at what stage one is blind or is classified as disabled by reasons of sight impairment or dyslexia. I am not able to help her any further this evening.
Baroness Fisher of Rednal: If the Minister asked one of the Ministers in another department he would learn that a clear definition of partially sighted and blindness is already laid down by the Government in relation to all kinds of allowances that are paid. So the information is there for the asking if he talks to one of his noble friends.
Lord Lyell: I am grateful to the noble Baroness. I will not tempt her further this evening, but I wonder if I am partially sighted since I simply cannot see without glasses car numbers from 25 yards or whatever is now the appropriate distance. Am I or am I not partially sighted for the reasons the noble Baroness explained? For one section of the law I am partially sighted. I have been given some instructions. I understand the licence will stop charges for directory inquiries until the director is satisfied about the refund arrangements.
Baroness Seear: Does the Minister, as a spokesman for the Government, receive instructions?
Lord Lyell: Strictly speaking, I am not a Minister, so I do receive instructions.
Lord Kaldor: Are we to understand from the noble Lord, Lord Lyell, that directory services have not been included among the services particularised in Clause 3(1)(a) only because they are so obviously covered that it is unnecessary to specify; or is it because they do not fall into the same category? I am not quite clear why
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this amendment is being resisted at all. From what the noble Lord, Lord Lyell, has said, it seems obvious that the Government are aware of the importance of providing directory inquiry services because they mention them again particularly in relation to overseas subscribers. No United Kingdom business could be expected to keep a full list of telephone directories, and surely no business could be expected to keep telephone directories for the 155 sovereign states of which this globe consists. Therefore, it is very much in the national interest that this should be provided. If it is not mentioned here, is it because it is so obvious that it does not need to be mentioned?
Lord Lyell: I hope the noble Lord, Lord Kaldor, will not classify me as being impudent, but I would say it is reasonably obvious. On page 4 of the Bill, Clause 4(2)(b) says that
"directory information for the purpose of facilitating the use of a service".
et cetera, is classified under "telecommunication service". Telecommunication service is already in Clause 3(1)(a), and everything I have said about the importance of directory inquiry services is included in the phrase "telecommunication service".
Lord Lloyd of Kilgerran: In his charming and eloquent speech the noble Lord the Minister has agreed with me and other noble Lords how terribly important are directory services. He has recounted how important they are to the blind and the disabled and he has taken us through this terribly complex Bill to explain that simple fact. He has found it necessary to quote from the Bill to justify that simple point on which we are all agreed, but he has missed entirely the main point of my argument. This is the whole thing. He tells us that directory services are mentioned in the Bill. How does he do this? He takes us very quickly to page 4, but I am used to people taking things quickly.
If I may say so with respect, I am sure a number of your Lordships may be a little confused about his argument. I do not want to be unkind to the noble Lord, but for him to say that directory services are mentioned in the Bill is really something of a gobbledygook. He starts off at the bottom of page 4 and says that here we have a definition of a telecommunication service and that it means:
"the provision by means of a telecommunication system of directory information for the purpose of facilitating the use of a service falling within paragraph (a) above".
We have only got the words, "directory information". Directory services may not be exactly the same as directory information. However, I shall not indulge in any semantics at this time of the evening.
Let us go up the page to paragraph (a). If we can find it—it is a little higher up—we see that it says,
"the conveyance or switching by means of a telecommunication system of anything falling within paragraphs (a) to (d) of subsection (1) above".
So we have not quite got there yet. We now have to go a little higher up the page, and in subsection (1) we find that it is stated:
"In this Act 'telecommunication system' means"—
and it goes through a number of points, such as:
"the agency of electric, magnetic, electro-magnetic, electro-chemical or electro-mechanical energy, of",

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and then we come to paragraphs (a) to (d). We see that directory information is to facilitate the use of a service falling finally into paragraphs (a) to (d), covering,
"speech, music and other sounds …visual images … signals serving for the impartation"
of this, that and the other, and,
"signals serving for the actuation or control of machinery or apparatus".
I apologise for reading that list so quickly; but it does not come down to directory services as such.
However, let us suppose that the noble Lord the Minister is right when he says that directory services are included in all that mass of words which I have read out. Let us suppose that he is right—and he may be. What is significant is that directory services are of great importance. Therefore as a matter of pure drafting directory services ought to be included in Clause 3, at the top of page 3, where the Bill particularises the important services.
The Government have already admitted that directory inquiries are of vital importance. I am not going to question whether they are more vitally important than the services which are particularised. The Bill particularises emergency services—obviously they are of great importance; public callbox services—which are of great value; maritime services—which are also of great value; and then services in rural areas. I would submit to the Committee that in their importance directory services fall in line with most of those other services particularised. All I am asking the Government is kindly to consider adding to the particularised list in the third line on page 3 the important service of directory inquiries.
I am prepared to say that perhaps as the result of all that the Minister read out from Clause 4 directory services may be included. That is not the point. The noble Lord the Minister has directed himself to a point that is totally irrelevant to my argument. My submission is simply that it is agreed that directory services are of such importance that they, too, should be particularised on page 3 at the end of the list of services that are already particularised. That is all I am asking. The noble Lord, Lord Peyton, expressed that view, and many noble Lords cannot understand why, having regard to the vital importance of this service, it should not be included. In a splendid, emotional speech the noble Baroness, Lady Lane-Fox, referred to the service, and I also draw attention to what the noble Countess, Lady Mar, said. The noble Lord, Lord Weinstock, pointed out that as yet there is no licence and said that we cannot rely on the point being included in some future licence. All I am asking for is greater particularity of the term "directory services", so that it becomes one of the items particularised.
Lord Lyell: In view of the tremendous eloquence displayed by the noble Lord, Lord Lloyd, I would say that my case rests. I believe that my case is fully justified. The noble Lord took us right up the page when he did not need to do so, since he will find "telecommunication service", which is what I was defining, at the bottom of page 4. Perhaps the noble Lord would not agree—but he is a lawyer. If I may finish my remarks, I would say that before there is any
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further comment we should agree to consider the amendment.
Lord Lloyd of Kilgerran: I wish that the Ministers on the Government Bench would lift their visors just a little, perhaps take off their helmets and sheath their swords, which have been somewhat blunted this afternoon, and adopt a more human, practical view of some of the amendments. I say to them that we are not trying to catch you out; we are not trying to trip you up. We are just asking on this occasion for a simple reference to directory services in the particularised list. I beg to move.
The Deputy Chairman of Committees (Lord Nugent of Guildford): The Question is that this amendment be agreed to. As many as are of that opinion will say, "Content"?
Noble Lords: Content.
The Deputy Chairman of Committees: To the contrary, "Not-Content"?
Noble Lords: Content.
Noble Lords: Not-Content.
Lord Lloyd of Kilgerran: It seems that my amendment has been agreed to by the Government.
Lord Donaldson of Kingsbridge: The noble Lord the Minister said quite clearly that he would consider it. I think that the noble Lord did not hear correctly.
Lord Lloyd of Kilgerran: I apologise to the noble Lord the Minister. In the general excitement of the praise that he was giving to my speech I missed the fact that he was going to take the matter back. I thought I heard him say that he was going to stand fast on something or other, but perhaps he is not standing so fast as I thought he was. I shall be very grateful to the noble Lord the Minister if he is going to take hack the matter. Clearly on the understanding that on this occasion I am right and that he will be taking back the matter, I shall not press the amendment, hut instead beg leave to withdraw it.
Amendment, by leave, withdrawn.
5.56 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 27A:
Page 3, line 2, after second ("services") insert ("the provision of free telephone directories to all subscribers.").
The noble Lord said: I think that perhaps this amendment might be dealt with relatively speedily since, I would suggest, the undertaking of the Minister to reconsider the preceding amendment might, without undue pain to the Government, be extended to this amendment. There is one particular reason why it should be given further consideration, and that is that the reference on page 4 which the noble Lord, Lord Lyell, found in regard to the preceding amendment, does not, as I understand it, apply to this amendment. Clause 4(2), in relation to the definition of telecommunication service, refers to:
"a telecommunication system of directory information for the purpose of facilitating the use of a service".

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Amendment No. 27A refers to free telephone directories, which it is our understanding—and the Government will correct me if I am wrong—means paper telephone directories, and therefore not a telecommunication system. But if the Minister is as understanding of the principle of free telephone directories as he is of a directory inquiry service, it will not be necessary for me to press the amendment. However, I ask the Minister to reply before I consider my position. I beg to move.
Lord Mottistone: Perhaps, briefly, I may say that surely noble Lords opposite do not really mean free. Nothing is free; somebody has to pay for it. We have to pay for the telephone directories which are at present issued to us without our being asked whether we want them. They are part of the automatic charge made to us, and this will happen again. So I think that the word "free" would be misleading to the public. The directories are not free; they have to be paid for by one's ordinary subscription. I believe that from that point of view the amendment does not deserve to be considered by the Government, nor by the Committee.
Lord Morris: The Americans put it even more succinctly than my noble friend Lord Mottistone: "There ain't no such thing as a free lunch".
Lord Howard of Henderskelfe: May I inquire whether this means that we are going to get—I am not sure how many telephone directories exist for the country—perhaps 157 directories each? If so, I suspect that the majority of subscribers will not have the shelves to sustain the great weight of these directories. If the amendment was confined to local telephone directories, there might perhaps be more reason to support it.
Lord Bruce of Donington: The real purpose of the amendment is to ensure that the practice that is now in force so far as British Telecom and its subscribers are concerned is continued under the new regime. It is possible that the wording needs to be changed in order to accomplish this. But there have been reports in the press which your Lordships may have seen—they may not be accurate—stating that the Government will hive off the printed directory service as something separate and distinct from the telephone or telecommunications system itself. I do not wish to give credence to those reports. I am not putting myself behind the assertion. But those reports have appeared. We want to be sure that the practice at present carried out by British Telecom of providing printed telephone directories to subscribers, probably on a local basis or whatever it may be, continues in the future. The Bill, at the moment, contains no provision for that. We should like to be reassured that the practice will continue without any extra charge to the subscriber. That is the purpose of the amendment.
Lord Lyell: I should like to reply briefly to the last point of the noble Lord, Lord Bruce of Donington. When he and I took our chartered accountants exams, we were always told that it was essential that candidates read the question. On reading the
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amendment, it seems in two major areas not to set out what was in the mind either of the noble Lord, Lord Bruce of Donington, or, possibly, the noble Lord, Lord McIntosh of Haringey. I think that those noble Lords who have spoken and indeed your Lordships generally would agree that this amendment hangs together with the provision of directory inquiry information already dealt with in Amendment No. 27. The amendment that we are now discussing is, I believe, designed to ensure the continuation of printed directories or at least directories printed, computerised or otherwise produced, but, above all, provided free. We accept the concern behind this wish, but I do not necessarily believe that the amendment is appropriate and that it will achieve what the movers hope. I shall try to explain why we believe the amendment will not meet the case.
As I pointed out on Amendment No. 27, the duty in Clause 3(1)(a) is confined to telecommunication services. These are defined in Clause 4. The provision of telephone directories is not a telecommunications service. We believe therefore that it is inappropriate to include it in Clause 3. Secondly, the amendment refers to all subscribers. In practice this would mean that in carrying out functions under the Bill, including the issue of licences, the Secretary of State would have to require all licensees to provide printed telephone directories. I do not think that that is what the noble Lord who moved the amendment had in mind. It would also mean that all BT subscribers, even those to the telex network, had to receive copies of telephone directories. I do not really think that this appears entirely sensible either. Thirdly, we note that the amendment refers to free telephone directories. As my noble friends Lord Mottistone and Lord Morris have pointed out, we do not deceive ourselves that the telephone directories are free now. There is no explicit charge for them but they are paid for out of the revenue received from other services.
Fourthly, I do not think that we want to constrain technology by the provision of printed telephone directories. Technology is advancing very fast. Who is to know what might happen in 10 to 15 years' time? By that stage, we might all have Prestel sets as a matter of course. It might be more convenient to provide directory information by that means. What we have done, as I hoped I had explained in our earlier discussion on Amendment No. 27, is to ensure that those who cannot use the printed word, such as the blind, the dyslexic and other disabled people, will be safeguarded by the continuation of the directory inquiry service. It would be wrong to constrain the printed directories.
Finally, but not least important, it is obvious that the provision of telephone numbers and directory information is a commercial service. No operator in his right mind would wish to deny subscribers the opportunity of being able to use the network to dial other subscribers. To do this, he must have access to a directory in some form. It is inconceivable that BT or any other operator would not wish to provide it. What we should not do, and I seek to persuade your Lordships of this, is to seek to constrain unduly the way in which such information is provided. I thank my noble friends Lord Mottistone and Lord Morris for their interest in the matter. The noble Lord, Lord

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Howard of—I was going to say Hendershelfe, but that is a little naughty!—Henderskelfe, suggested that a fairly large area was involved. The noble Lord clearly knows of the 175 directories available in your Lordships' House. This point was covered I think by the noble Lord, Lord McIntosh, who suggested that we might receive the directories as we receive them now. As to the remarks of the noble Lord, Lord Bruce of Donington, about comments in the press, I am sorry to say that I did not see them, and I cannot therefore follow him down that avenue.
Lord Taylor of Gryfe: I hope that this amendment will not be pressed. I had the experience the other day of requesting a telephone directory. I live on the outskirts of the city of Glasgow. I am provided with a telephone directory for the city but I requested one for the surrounding area and was duly charged £1 for the area directory. So, if you request another directory, you are charged under the present system. I am afraid that in our anxiety sometimes in the Bill we are trying to lay down the practice for the board of the successor company in too direct and minute a manner. I would imagine—I have stated this previously—that if the board is to maximise its revenues, it must provide the facilities to the subscriber to make telephone calls as easily and cheaply as possible. I regard the provision of a telephone directory as essential in the chain between the consumer and the provider of the service. Under these circumstances, I would tend to leave it to the good sense of the commercial board to decide that a telephone directory is an essential element in selling its particular product.
Lord McIntosh of Haringey: I owe the Committee and particularly the Lord Chairman an aplogy for the confused manner in which I sought to introduce the amendment. Secondly, I accept that there are deficiencies in the wording of the amendment. The noble Lords, Lord Mottistone, Lord Morris, and others, have pointed out what is well known: that nothing is free. The question only is whether an extra charge should be made. I suggest that the question of telephone directory availability without additional charge is a matter of great public concern. Your Lordships may remember that some time ago British Telecom tried to reduce the availability of telephone directories in London by restricting them to the borough in which the subscriber lived rather than having the whole of the London postal area available to all subscribers in the area. It may be necessary to provide rather more protection than the noble Lord, Lord Taylor of Gryfe, in his wise speech seemed to think was necessary. Nevertheless, in view of the deficiencies of the amendment as now worded, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendment Nos. 28 and 29 not moved.]
6.11 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 3, line 7, at end insert ("on a stable and long term basis").
The noble Lord said: I do not think that we need detain ourselves for very long on this amendment. We are talking here not only about the first few years of the telecommunications service under the new regime, but
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also about a longer period. The reason why it is necessary to move that the service should be provided:
"on a stable and long term basis"
is that there is provision in the Bill for a five-year introductory period and for a period after that when the rules of the game—if I may so describe them—will be changed.
What we are seeking in the amendment are assurances, which are not at the moment couched in statutory form or even in the form of the draft licence, as to the continuing restrictions which will exist after 1980 and how the consumer and the other subscribers, whom we are seeking to protect in amendments to this legislation, will continue to be protected. At the moment this is a probing amendment to discover the Government's intentions after 1989. I beg to move.
Lord Lyell: I thank the noble Lord, Lord McIntosh, for his brief, succinct and relevant explanation of the amendment. To summarise the position, we understand that the purpose of the amendment is to ensure that those who provide the telecommunication services under licences issued by the Secretary of State should be able to finance the long term provision of such services. The Government agree with that aim, but I hope I can explain to your Lordships that we believe that it is already covered by Clause 3.
The words "stable" and "long-term" which are contained in the amendment are implicit in the drafting of subsection (1)(b) in just the same way as they are implicit in subsection (1)(a), which concerns the provision of services. No one has suggested that the duty in subsection (1)(a) refers only to the initial provision of services and that the continued provision of services is not covered, because I think we have all understood that the duty is a continuing duty. We believe that the same argument applies to subsection (1)(b).
The drafting of Clause 3(1)(b) imposes a duty on the' Secretary of State and the director to secure the financing of services by those who provide them. This duty takes effect as soon as the Act comes into force and it continues for so long as the Act remains in force—indeed, that might be even after 1989 or the date that was mentioned by the noble Lord, Lord McIntosh. This in itself provides the stability which we believe the noble Lord's amendment seeks. For that reason we believe that the amendment is superfluous and, therefore, we would not agree to it this evening.
Lord Stoddart of Swindon: I have listened to the explanation given by the noble Lord, but we remain a little concerned about it. Our amendment seeks to add the words:
"on a stable and long term basis".
and we have moved that amendment for a particular reason; namely, that later on in subsection (2)(b) a duty is laid upon the Secretary of State and the director:
"to maintain and promote effective competition between persons engaged in commercial activities connected with telecommunications in the United Kingdom".
We were concerned about that paragraph because there are times when there are "winds of change" and so on, and a great pressure to have competition or,

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perhaps, public ownership for their own sakes. We wanted to be absolutely sure that the Secretary of State and the director were under an absolute duty to see that those who engaged in telecommunication operations, were people of the highest order who had the financial resources not only to be able to maintain telecommunications, but to develop them technically and financially as well.
Telecommunications is an infrastructure industry. It is not like, for example, an airline or the aircraft industry where an apparently reasonable type of fellow like Freddie Laker goes in, apparently financially quite strong, but nevertheless collapses. In the case of the airline industry it would not particularly matter. But in the case of an infrastructure industry it could matter a great deal. That is the reason why we felt that the addition of the words set out in the amendment would give additional protection to the telecommunications industry and the infrastructure throughout the country. I do not know whether the noble Lord would like to comment on that?
Lord Lyell: I shall certainly accept the noble Lord's invitation to comment, albeit briefly. I hope that I was right in thinking that he included subsection (2)(b) in his justification for this amendment. I also hope he will agree that the whole of subsection (2), and especially subsection (2)(b), is subject to subsection (1) where we find the paramount duty of both the Secretary of State and the director "to exercise the functions" et cetera and to provide the services. On that score the noble Lord, Lord Stoddart, and ourselves are very much on the same side.
However, I am advised that the duty to promote competition in Clause 3(2)(b), which was referred to by the noble Lord, is subordinate to the paramount duty in Clause 3(1)(a) and (b). Therefore, the Secretary of State cannot licence so many competitors as to put at risk the provision of services which are described in Clause 3(1)(a) and, indeed, the other services which are in Clause 3(1)(b). All the time it is the paramount duty to see that the telecommunications services are as healthy as they can be.
We accept the point which has been expressed by the noble Lord, Lord Stoddart, and the noble Lord, Lord McIntosh, but we believe that it is covered in Clause 3(1)(a).
Lord Kaldor: Since reference has been made to subsection (2)(b), can the noble Lord explain the meaning of "effective competition" as regards telecommunication services? Does it mean that we shall have half a dozen different companies serving London and that some subscribers will belong to one system and other subscribers will belong to another system? Does it mean that we will have to subscribe to various telephone companies in order to get connections? I can see that there may be different telephone companies for different areas of the country as in the days when the railways were privately owned. For example, we had the Great Western Railway serving the west and there was also the London, Midland and Scottish Railway. But that does not mean that there was effective competition between these railways, because they served different areas.
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Similarly, in America, when the monopoly of AT & T was broken up there were different companies serving local customers, and different companies owning trunk lines. But as these are complementary services and not competitive, there is no sense in speaking of effective competition between them. I simply do not understand what this is all about.
Viscount Trenchard: It seems to me that we are making a mouthful of this. Subsection (2) starts with the words:
"Subject to subsection (1) above".
Subsection (1)(a) and (b) make no mention of the director or the Secretary of State ensuring these matters on an unstable or short-term basis. They are charged to make sure that the services are provided, and it is not qualified by subsection (2). As I understand it, they are charged as long as this Act remains in force. Therefore, I suggest to noble Lords opposite that this amendment is not necessary.
Lord McIntosh of Haringey: The Minister has given us a great deal to think about. The relationship between the two subsections in this clause is complex and requires further thought. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 31:
Page 3, line 7, at end insert ("and also the research, development, supply and use of new technology and new techniques")
The noble Lord said: I think there is a substantial point here which is not covered in subsection (2) of Clause 3. The point is: who will be responsible for the research, development, supply and use of new technology and new techniques? I am sure that the Government do not wish there to be any diminution in the research, development, supply and use of new technology and new techniques. It would be quite fatal for any Government, operator or telecommunications system not to be continually looking for new technological advance. However, as the Bill is drafted, the reference to the research and development of new techniques in paragraph (d) of subsection (2) of Clause 3 is not an obligation on the operators who are providing the services, as it would be in subsection (1)(b).
It seems to us that it would be very undesirable indeed if the taxpayer were to take all the responsibility for the costs of research and development and for technological advance, either directly through Government grants or indirectly through participation in British Telecom as the only operator required to undertake research and development, and other operators were then to take advantage of this research and development without making a reasonable contribution towards the costs. This is a straightforward capitalist principle with which I am sure the Government will have sympathy.
Those of your Lordships who were present last Friday during the debate on advanced research and development will have heard from the Government Benches and from the Cross-Benches much insistence that research and development should be undertaken

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with industry, and that it is a responsibility of industry itself to decide on priorities for research and development. I believe that the amendment now proposed would achieve that by ensuring that the individual operators who are granted licences for the provision of services have that responsibility for research and development, and are not simply slipstreaming expenditure by the taxpayers. I beg to move.
Lord Molloy: I believe that the Government ought to accept this amendment because it is in the spirit of the entire Bill. I am sure that the Government do not want any stalling or hold-up of research in the telecom industry because previous debates have outlined the remarkable new inventions and new techniques which have been developed for the disabled and others, and for purposes of business efficiency. Therefore, in so far as the spirit of this Bill is that there shall be more private endeavour—and that is what it is really all about—I am sure that from a national point of view the Government will want to be concerned that there is no slacking on research and development in this particular industry and that it maintains the standards that have hitherto been achieved under public ownership. That is not only wise and necessary for those who will become shareholders, but it is also wise and necessary for consumers, and I believe that it is wise and necessary for the country as a whole. In that spirit I hope that Her Majesty's Government will be prepared to accept this amendment.
Lady Saltoun: Perhaps I am being very stupid, but is this amendment really necessary? I ask that because I thought it was already written into the Bill in subsection (2)(d) of this clause.
Lord Glenarthur: There is certainly no disagreement between us over the need for telecommunications operators to research into and apply new techniques. We all know that telecommunications is an extremely fast-changing technology, and it is essential for United Kingdom operators to keep in the forefront of technological developments and to reflect these in their services and apparatus. This is why subsection (2)(d) imposes a specific duty on the Secretary of State and the Director:
"to promote research into and the development and use of new techniques by such persons";
that is, by United Kingdom operators. However, I do not accept that there is any need to include financing of such activities in the paramount duty in subsection (1)(b). First, this subsection is concerned with the provision of the services mentioned in subsection (1)(a), but the noble Lord's amendment goes rather wider than this. Even if it were drafted more appropriately, I have to tell him that in our view it would still be unnecessary.
The duty in subsection (1)(b) covers the need for operators to be able to finance the services in subsection (1)(a) on a continuing basis, which implicitly covers future development of these services. There are those who indicate that the new competitive world of telecommunications will concentrate on short-term profits. That is not true, either. Just like any large company, BT will, of course, need to look ahead.
58
It will not just concentrate on, so to speak, the few inches in front of its nose, but will look to the future and possibly new avenues and techniques to explore.
At present it has a research establishment of the very highest calibre at Martlesham, which I visited last year, and I am quite convinced that it will want to continue with the excellent work that goes on at Martlesham. The amendment is unnecessary, and I hope that the noble Lord will not press it.
6.28 p.m.
Lord Bruce of Donington: The purpose of introducing this amendment at this stage is, as the noble Lord correctly apprehended, in order to ensure that the Secretary of State and the director:
"secure that any person by whom any such services fall to be provided is able to finance the provision of those services and also the research, development, supply and use of new technology and new techniques".
This is necessary because the history of private enterprise has not always been quite satisfactory in this regard. In fact, if I may say so that statement is one of the utmost moderation of which I am capable at this time.
One only has to cast one's mind back to the time when it became necessary for the nation to take national control and ownership of British Leyland. Those who have read the Ryder Report will know exactly to what I am referring. Little or no investment was made over a period of about seven years; everything was paid out by dividend; and the whole of British Leyland fell into a disastrous state. That was precisely because, out of £77 million profit that was made in some seven years, no less than £74 million was paid out in dividends to keep up share prices and to keep the shareholders satisfied, whereas the whole of the equipment fell into disuse and obsolescence, and that situation had to be rectified.
I do not want to rake over old sores about that, but we have a more recent example not on the same scale but embodying the same principle. At the time that British Aerospace was privatised the whole impulse behind it—and I have given the quotations to the House many times—was to free it from Government shackles to enable it to obtain the finance it needed on the free and open market without coming to the Government, and within the past four or five weeks it has been obvious that British Aerospace is now looking to the Government—precisely what privatisation ought to have prevented it from doing.
What we seek here, in the interests among other things of national security, is that the research processes that were commenced earlier in Dollis Hill and later at Martlesham—and I know the military value of some of those that were carried on at Dollis Hill prior to, during, and immediately after the war—are continued to some extent regardless of immediate commercial considerations and immediate commercial profitability.
Optical fibres, for example, were developed at Martlesham. They took a long time to develop and there was a certain degree of dubiety as to whether they were going to be commercially viable. I wonder whether if Martlesham had been privatised those developments would have taken place; or would they

59
have been regarded as something else that the privatised company ought to have gone knocking at the doors of the state for? We want to ensure that technology is carried out; that the development of new techniques continues with the same impetus as before; and we want to be doubly certain that those people who ultimately take over British Telecom—if the Bill ultimately results in that, which I doubt, but on the assumption that it does—are financially capable of sustaining the same degree of development in technique and technology that has been the case so far.
That is what the amendment is about. If the noble Lord tells me that the wording of the amendment is wrong, or needs to be reshaped, then we are of course quite willing to raise the matter again at Report. But I should have thought that it would be in the immediate interests of the Government to accept this without any difficulty whatsoever as not impinging on any vital principle on which the Government have set so much store up to now.
Viscount Trenchard: Would not the noble Lord agree that the noble Countess is absolutely right? Subsection (2)(d) requires the director and the Secretary of State:
"to promote research into and the development and use of new techniques by such persons".
which means those engaged in commercial activities. This is in the Bill already. Would the noble Lord comment on that?
Lord McIntosh of Haringey: It is not in the Bill in quite those terms. What we are seeking, in trying to amend subsection (1)(b) rather than accepting the assurance of (2)(d), is that those persons by whom any such services fall to be provided should be responsible for this research and development. That is not achieved directly in the way that the noble Viscount thinks.
Viscount Trenchard: The words, "persons engaged in commercial activities" must include that category of person.
Lord McIntosh of Haringey: There are other people engaged in commercial activities related to telecommunications. There are the telecommunications apparatus manufacturers, for example. I hope that they will continue to take the responsibility for research and development that they do now. What we are seeking here is something precise. We are seeking the continuance of Martlesham Heath on the same terms, with the same abilities to undertake fundamental research, with a longer period of payback than might be possible in commercial establishments in the future.
To that extent the Minister, in his reply, has paid tribute to the work of Martlesham Heath. He has to that extent reassured us, and I do not think it would be our intention to press this amendment, but the concern that we have arises from the pressure on Martlesham Heath now and in the recent past to take a lower payback period, a lower horizon: to undertake, as Mr. Peter Benton, recently the deputy chairman of
60
British Telecom said, projects which have to be paid back within 18 months.
That is too short a period, and the history of Martlesham Heath shows that there have been many projects such as, for example, work on optical fibres which did not have a payback period of 18 months, but which ultimately produced work of great profitability for British Telecom and the telecommunications industry. We shall carefully read the friendly words of the Minister about Martlesham Heath and consider whether any further strengthening of the position in the long-term future of Martlesham Heath is necessary in legislation. Meanwhile, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 32:
Page 3, line 7, at end insert—
("; and
( ) to ensure that the United Kingdom consumer is charged, in respect of any installation, rental, call or other charges made upon him, at rates which show no increase on those previously obtaining beyond that calculated by reference to the Retail Price Index at the relevant dates minus an amount to be determined by the Secretary of State and incorporated in a regulation made for this purpose.")
The noble Lord said: This is an important amendment designed to put into the statute in clear form, and to commit the Government to, the carrying out of their own promises in this regard. Your Lordships will remember that one of the most considerable anxieties about the privatisation of British Telecom lay in the fact that up until now British Telecom has operated as a public service, and has not been required to make profits of more than a stipulated return on net assets employed—the figure is approximately 6 per cent.—which it has consistently done over the last seven years, and the undoubted fact, which I think is not at all contested, that if this public utility, now turning into a private monopoly, is to operate on a basis where it can pay a satisfactory dividend to its new shareholders it would have to increase its charges; or, alternatively, would have so to restructure (I believe the delicate term is) its balance sheet, either by a mass write-off of assets or a diminution of liabilities, as to make its acquisition by investors a profitable operation.
The anxiety was expressed that this could not be done without increasing the charges to subscribers. On Second Reading I gave some quotations from the published accounts of 31st March 1983, which I shall not seek to repeat now, which suggested that British Telecom would have to raise charges in order to get the appropriate profit yield. This is even more important when one has to consider later in the Bill that it will be clear that British Telecom will be denied some other revenues.
For the moment, however, we shall take the Government at their word. They said in reply that they would have provision made that the charges to the consumer would not increase by more than a factor determined by reference to the retail price index less an X factor which can be determined from time to time by the Secretary of State. This means of course that they wish to convey to the people at large that, as a

61
result of all this, nobody's telephone charge is going to rise unduly, and if it does rise it will rise by significantly less than determined by the retail price index.
We on this side of the Committee venture still to express some scepticism; but who are we to question the assurances of the Government? When this was originally announced by the then Secretary of State—I believe Mr. Baker—in the course of reiteration of the Government's promise in the columns of the Economist, he did not say that this was to be only for a period of five years. Originally it was an open-ended commitment. Now it has become limited to five years and the Government say that it is all dealt with in the licence which, as the noble Lord, Lord Weinstock, has reminded us, is still in draft form and the Government are still not finally committed to it.
This is an important undertaking. In addition to making sure that there is no discrimination against subscribers on a geographical basis, the British public will not be satisfied with this act of privatisation of a public service unless they are convinced that the Government will be bound by their promises that charges will not be increased above what they themselves stipulated in their undertaking.
For this purpose it will not be sufficient merely to have assurances to that effect or merely have it put into a licence which is still in the draft. If the Government wish to be quite frank with the people of the country and the subscribers, there is no reason why they cannot put this into the Bill. It will then represent a formal statutory commitment upon which, if there are any variations, they will have to come back. I do not see any reason why they should not do it, if they mean what they say. If they prevaricate and go back on their original undertaking, if they try to limit it to five years (which was not the original undertaking) the British public will have every reason to be highly suspicious as to the whole purpose of the Bill and as to what will happen to subscribers after the Bill has been passed.
One way in which the Government can allay the considerable suspicions among the population at large—noble Lords opposite will bear in mind that there is not popular demand for this privatisation at any rate; it is one of the most unpopular things that the Government propose to do, as the Minister well knows—is to accept the amendment that will be more acceptable to the British public at large. I hope therefore they may feel disposed to agree.
Lord Boyd-Carpenter: In those parts of his speech in which the noble Lord, Lord Bruce of Donington, was referring to the amendment rather than to Second Reading—I believe they were a minority part of his speech—he showed, for him, unwonted tenderness for the consumer. I am sure that all of us welcome this, particularly from the noble Lord.
However, if the noble Lord is really concerned for the consumer the amendment is incomplete. If a statutory provision of this sort were to be imposed, it would be essential to have a parallel clause dealing with the remuneration of those employed in the industry. Your Lordships know well that organisations in the public sector have on the whole increased their prices to a far greater extent than those in the private sector. This has been due to the fact that they have
62
conceded very large wage increases—a good deal higher, in general, than those in the private sector. Therefore, if the noble Lord is really sincere, and wishes to pin by statutory provision the new telecommunications body or bodies to this kind of restraint, it will be essential that they should be similarly protected by a similar clause dealing with the remuneration of those in the industry. If your Lordships will allow yourselves a moment of slightly nostalgic reflection, it would be interesting to reflect on what might have happened if such a provision had been inserted in the statutes which nationalised the coal industry and the railways.
Lord Kaldor: I wonder whether the noble Lord would not object if some such clause were inserted in the Bill that would limit the rate of profit that the privatised telecommunication company is allowed to earn, similar to the legislation concerning the public utilities in the United States. The noble Lord has a point that if wages rise in the telecommunications services out of line with all other wages, one cannot expect that a private company will provide the service even though it makes a loss. However, at the same time, being a monopoly, surely there must be some restraint that it would not exploit the public and that that restraint can perfectly well take the form where a licensee, or whoever it is, is obliged to reduce prices whenever the rate of return on the capital invested exceeds X per cent. or whatever is considered a normal rate of return.
Lord Boyd-Carpenter: I am very much obliged to the noble Lord, Lord Kaldor, because he has taken my argument further. I argued that the amendment was incomplete because it did not include the provision in respect of wages, to which I referred, and which seemed to be quite attractive to the noble Lord, Lord Kaldor. He makes a reasonable point that it might also be a sensible provision to include yet another clause limiting the return to the shareholders. Whether that is a wise thing to do is a matter that we might debate on another occasion; but it is highly relevant to my submission to your Lordships that this amendment is hopelessly unsatisfactory because it is hopelessly incomplete.
Lord Bruce of Donington: If I may reply to the noble Lord, Lord Boyd-Carpenter, I am surprised that he should have criticised his Government so vigorously, because it is precisely his Government that have produced this proposal in the licence. When the Government gave the undertaking that prices would not increase except within this particular format, they made no such stipulation that the noble Lord may have in mind. They should perhaps have considered this prior to making the undertaking that they gave. All the noble Lord is now saving is that, in effect, the promise at the moment is only in the licence. After considering the remarks of what the noble Lord, Lord Boyd-Carpenter, may have thought wise, they make take it out of the licence. This is precisely why we want it in the Bill so that there can be no reneging on the promise.
Lord Boyd-Carpenter: The noble Lord, Lord Bruce of Donington, cannot get away with that, even with

63
that delightful appearance of frankness with which he comes to the Dispatch Box which always to me indicates that he realises he is on a thoroughly bad horse. The noble Lord is moving from the general indications of Government policy, to which my noble friend the Minister may refer if he wishes, into the position of a statutory provision. The only point of my speech was to point out that if it were thought right to translate general policies into a statutory provision of this sort, the particular statutory provision contained in the amendment is incomplete. I was reinforced in this view most agreeably by the noble Lord, Lord Kaldor.
Lord Glenarthur: This amendment is as the noble Lord, Lord Bruce of Donington, has described, an attempt to put into the Bill the RPI-minus-X limitation on price increases. I think that your Lordships will be familiar with the principle of this which the noble Lord, Lord Bruce, described, However, I shall repeat it: prices shall not be increased in any year by more than the increase in the retail price index less a certain amount known as X. This idea was first proposed by Professor Littlechild in February 1983. When his report was published, the Government announced that in principle they accepted his proposal. As a result, the RPI-minus-X limitation has been included in the draft licence in Condition 24, to which the noble Lord referred. I believe that the licence and not the Bill is the appropriate place for such a limitation, and for that reason and others I cannot accept the amendment.
However, I think I ought to take this opportunity to explain a little of our thinking behind Condition 24 in the draft licence. As I said earlier, a most efficient method of price restraint is the force of competition. Competition and the consumer choice it brings is the best way to increase efficiency, quality and variety and to restrain prices. However, we realise that competition will take time to develop in the supply of telecommunications services. In particular, for some time ahead the ordinary consumer will have no alternative but to use British Telecom. So in order—
Lord Kaldor: Can the noble Lord explain what he means by "competition"? What is the meaning of competition in telephone services? Will there be a large number of telephone companies offering alternaative systems to the subscriber? What does it mean, "competition"?
6.50 p.m.
Lord Glenarthur: I am absolutely certain that the noble Lord, Lord Kaldor, knows quite well what competition means, and I do not propose to be drawn into a lesson on economics with him when he knows far more about economics than I do. He knows, and so do his noble friends opposite, in general what will be achieved by the Bill.
Condition 24 of the draft licence sets out the obligation. It is necessarily written in rather complicated terms, as the noble Lord, Lord Bruce, will be aware, but the essential points are these. BT will be required to pass on to subscribers the benefits from lower costs that are expected in the future through the
64
improvements in efficiency that BT are making and as a result of the continued modernisation of their network. Where there is competition, the subscriber will benefit anyway. However, where there is no immediate prospect of effective competition, as with local services, subscribers will have an assurance that lower costs will be passed on. The effect of the limitation is to give an assurance to the average domestic telephone user that the charges for his basic services—rental plus call charges—will decrease in real terms for the next five years. That is a point that I am sure noble Lords opposite will approve of.
The services to which the draft condition refers—that is, the installation of the standard line to the customer from the local telephone exchange, the maintenance of that line, local calls and local calls made from a public call box—are all services provided by the local network, where there is unlikely to be any competition for some time. However, Mercury may take some time to bring into full operation its alternative national network, thereby introducing competition into trunk calls; and so the Government are also considering including trunk calls. I should—
Lord Molloy: I am grateful to the noble Lord for giving way. Can he indicate to us just who will be in competition with whom and in what parts of the country?
Lord Glenarthur: In due course, after a period of time other competitors may be licensed to take part in telephone communications throughout the country. That is the whole purpose of the Bill, and I am sure the noble Lord is fully aware of it.
Lord Kaldor: How can you assure that one subscriber who uses a telephone from company A can have access through his telephone to some other subscriber in another system? If you have a parallel system of telephones it will lead to the most terrible chaos. The telephone is a natural monopoly because all the lines have to go through some centre in order to be able to connect any person on any terminus with any other terminus.
Lord Glenarthur: This is a matter of a fundamental difference in approach as regards economics in general between the Government and the noble Lord opposite, so I do not really think we are going to get very far on the particular amendment which is before us now.
Lord Kaldor: That is why I asked the noble Lord (though I did not get any satisfaction) what the Government themselves mean by the word "competition". I know perfectly well what competition means and I know that with a natural monopoly there cannot be competition. If you maintain that there can be, we have every right to have explained to us what it is and how it works.
Lord Glenarthur: The noble Lord asked me whether I could tell him what competition is. Perhaps I may ask him whether he has read the Bill, because the parts with which he is concerned are perfectly adequately covered later in the Bill, and no doubt we shall reach them in due course.
Lord Molloy: I hate to interrupt the noble Lord again: I can see what he is driving at. Many of us have assumed that when these organisations are established under British Telecom there will be certain areas of the country which, for example, as in regard to Mercury, would be their particular concern. Is it not a fact that what the Government are really doing has nothing to do with competition? They are constructing a number of privately-owned monopolies.
Lord Glenarthur: I think the noble Lord is now embarking upon a subject which is so general that it ought to have been part of a Second Reading speech, but it is certainly wide of the amendment on the Marshalled List. Competition will be provided by Mercury, by cellular radio and by local cable systems. They will be interconnected and will not go through a central exchange. We shall be dealing with a separate amendment relating to that specific subject in due course. I should like to concentrate on the amendment tabled by noble Lords opposite.
I want to contrast the list of services in Condition 24 with those proposed in this amendment. As I explained, we intend the RPI-minus-X limitation to be a substitute for competition, but the effect of this amendment is quite different. As drafted, it would mean that all providers of all services would be subject to the limitation—not just BT but Mercury, Hull, the new radiotelephone companies and even the providers of value added network services. Moreover, that limitation would apply to all services—not just those to the domestic consumer but to businesses as well. It would apply not just to the voice telephony services but to the most advanced data telecommunication services also.
The result, quite simply, would be devastating. Telecommunications would become the most rigidly controlled market in the economy. Far from being the engine for growth, it would stagnate; innovation would be stifled and the benefits that it could bring could not materialise. If the noble Lord would like to intervene, I will give way.
Lord Kaldor: If all these horrors to which the noble Lord refers come about—the thing would stagnate and the service would be unsatisfactory—I would say that we have a telephone service now. It has worked reasonably satisfactorily. It is not perhaps the best service in the world but it is certainly not the worst. Why did these things not happen up to now? Why is he afraid of them for the future?
Lord Glenarthur: We are dealing with a specific amendment and not the general effect of the Bill, which is what the noble Lord seems to be dealing with. The noble Lord, Lord Kaldor, is prolonging this discussion unnecessarily I think when we are shortly to change to another topic. I hope that what I have said has at least helped to explain how the RPI-minus-X formula will work. I have already said that we find this proposal unacceptable because it covers all operators and all services. I cannot accept that to put the RPI-minus-X formula into the Bill or into regulations would be satisfactory. To do so would make the formula inflexible and unresponsive to market conditions. As I explained, the formula is intended as
66
a substitute for competition, and as this develops, the need for the formula will lessen. I think it is far preferable to put the formula in a licence condition, which would give the necessary flexibility and which also ensures that in proposing any changes the director is bound by the duties in Clause 3. I hope that the noble Lord will not press this amendment.
Lord Bruce of Donington: The Government in their reply have been most obliging. They have revealed to the public at large that the undertakings they gave in regard to this matter, which have been freely interpreted and which have been repeated many times, are not sufficiently reliable for them to be put into a statute. They still want some elbow room. The noble Lord has qualified many times what he has said. He has referred to a draft licence which has not yet been finalised. The public will understand from the Government's declining to accept this amendment that the promises which they made in far more generous terms are quite baseless, and that they have no intention, ultimately, of carrying them out. On those lines, I propose to divide the Committee and to ask noble Lords to support this amendment.
7.1 p.m.
On Question, Whether the said amendment (No. 32) shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 106.

DIVISION NO. 4

CONTENTS

Ardwick, L.

Kearton, L.

Beswick, L.

Kinloss, Ly.

Birk, B.

Lawrence, L.

Bishopston, L.

Llewelyn-Davies of Hastoe, B

Blyton, L.

Lockwood, B.

Boston of Faversham, L.

Lovell-Davis, L.

Brockway, L.

McCarthy, L.

Brooks of Tremorfa, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mar, C.

Carmichael of Kelvingrove, L.

Milner of Leeds, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Collison, L.

Molloy, L.

Darling of Hillsborough, L.

Oram, L.

David, B.

Paget of Northampton, L.

Davies of Penrhys, L.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Denington, B.

Ponsonby of Shulbrede, L. [Teller.]

Elwyn-Jones, L.

Ennals, L.

Prys-Davies, L.

Ewart-Biggs, B.

Rea, L.

Gallacher, L.

Ross of Marnock, L.

Gardiner, L.

Segal, L.

Graham of Edmonton, L.

Stallard, L.

Houghton of Sowerby, L.

Stewart of Alvechurch, B.

Hughes, L.

Stewart of Fulham, L.

Jacques, L.

Stoddart of Swindon, L.

Jeger, B.

Stone, L.

Jenkins of Putney, L.

Strabolgi, L.

John-Mackie, L.

Taylor of Blackburn, L.

Kagan, L.

Taylor of Mansfield, L.

Kaldor, L.

Underhill, L. [Teller.]

NOT-CONTENTS

Airey of Abingdon, B.

Bellwin, L.

Alport, L.

Belstead, L.

Auckland, L.

Bessborough, E.

Avon, E.

Boyd-Carpenter, L.

Belhaven and Stenton, L.

Broadbridge, L.

67

Broxbourne, L.

McAlpine of West Green, L

Bruce-Gardyne, L.

Mackay of Clashfern, L.

Caithness, E.

MacLehose of Beoch, L.

Campbell of Alloway, L.

Macleod of Borve, B.

Campbell of Croy, L.

Malmesbury, E.

Carnegy of Lour, B.

Mancroft, L.

Cockfield, L.

Margadale, L.

Coleraine, L.

Marley, L.

Colville of Culross, V.

Massereene and Ferrard, V.

Cox, B.

Maude of Stratford-upon-Avon, L.

Craigavon, V.

Craigton, L.

Merrivale, L.

Croft, L.

Mersey, V.

Davidson, V.

Molson, L.

De La Warr, E.

Morris, L.

Denham, L. [Teller.]

Mottistone, L.

Drumalbyn, L.

Mountevans, L.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Elphinstone, L.

Munster, E.

Elton, L.

Murton of Lindisfarne, L.

Enniskillen, E.

Northchurch, B.

Faithfull, B.

Onslow, E.

Feversham, L.

Orkney, E.

Fortescue, E.

Orr-Ewing, L.

Gainford, L.

Pender, L.

Gibson-Watt, L.

Peyton of Yeovil, L.

Glanusk, L.

Portland, D.

Glenarthur, L.

Rankeillour, L.

Gowrie, E.

Saint Oswald, L.

Gray of Contin, L.

Saltoun, Ly.

Gridley, L.

Sandys, L.

Grimston of Westbury, L.

Shaughnessy, L.

Hailsham of Saint Marylebone, L.

Sherfield, L.

Skelmersdale, L.

Halsbury, E.

Somers, L.

Hayter, L.

Spens, L.

Hemphill, L.

Strathclyde, L.

Henley, L.

Swinton, E. [Teller.]

Hives, L.

Thorneycroft, L.

Holderness, L.

Torphichen, L.

Hornsby-Smith, B.

Tranmire, L.

Hylton-Foster, B.

Trefgarne, L.

Killeam, L.

Trenchard, V.

Kilmany, L.

Trumpington, B.

Lane-Fox, B.

Vaux of Harrowden, L.

Lindsey and Abingdon, E.

Vickers, B.

Long, V.

Whitelaw, V.

Lucas of Chilworth, L.

Wynford, L.

Lyell, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

Tourism (Overseas Promotion)(Scotland) Bill [H.L.]
7.9 p.m.
Lord Gray of Contin: My Lords, I beg to move that this Bill be now read a third time. Our debates have served a useful purpose in highlighting the policy intentions behind the Government's proposals in this Bill. I believe that the Bill will leave this House, not simply with its provisions unamended but with the policy underlying them more clearly understood and, I would hope, widely endorsed.
This Government recognise—and welcome—the fact that Scotland has a distinctive and saleable identity overseas. We believe that sales of the Scottish "product" can be most effectively increased by allowing the Scottish Tourist Board to supplement the overseas efforts of the British Tourist Authority. To minimise the risk of overlap between the two categories, we propose that the Scottish Tourist Board's powers to carry out independent promotions
68
overseas should be subject to the consent of the Secretary of State. We also believe it self-evidently sensible that the British Tourist Authority, as the body with lead responsibility for the overseas promotion of Britain as a whole, should be consulted as of right on the Scottish Tourist Board's proposals.
The Government have also put money behind these proposals. Despite continued tight constraints on public spending, we have allocated an additional £200,000 each year to the Scottish Tourist Board to enable it, by its own assessment, to mount a cost-effective annual promotion programme for Scotland. We are therefore fully committed to the development of Scotland's tourist trade overseas.
The provisions in the Bill are intended to strike a fair and workable balance between the advantages of separate Scottish promotions abroad and the need for a co-ordinated approach to the overseas promotion of Great Britain as a whole. I believe that the Bill as it stands achieves this objective and I commend it to your Lordships.
Moved, That the Bill be now read a third time.—(Lord Gray of Contin.)
Lord Ross of Marnock: My Lords, the Bill was rather an anti-climax in Scotland. The Government came to the decision that a breakthrough had been made, following a very considerable amount of agitation in Scotland that Scotland should be able to project itself abroad in respect of tourism. Probably the climax was the report of the Stodart Committee, which declared, without any fluffing at all, that the Scottish Tourist Board should be able to project itself overseas and should be the sole organisation to do so. This great victory for the Boy George turned, I am afraid, rather sour when we looked at the Bill. The fact is that it represents grudging acceptance by the Government of what Scotland had claimed as its right. It is no use the Minister of State telling us that the Bill underlines the policy. Of course it underlines the policy. With the changes which we advised the Minister of State to make, it could have been less grudging and less mean and rightly could have been seen as a breakthrough for Scotland, although at the same time the British Tourist Authority regarded it as the thin end of the wedge.
To the extent that the Bill is something new and goes some way towards what we want, we shall not oppose it; but we must point out how grudging it is. There is insistence upon the word "only". This harks back to the Highlands and Islands Development Board. I would remind your Lordships that the 1965 Act which gave the original powers did not include the word "only". When the word "only" was included, a very different matter was being dealt with. The Highlands and Islands Development Board was given the power to promote companies and to take shares in companies. This was very controversial, and people—people who were on the opposite side of the House at that time—had to be reassured about it. Nobody in Scotland is opposed to giving to the Scottish Tourist Board the right independently to project Scotland overseas. Therefore I ask myself why subsection (3) of Clause I was included in the Bill. It says that this new power of the Scottish Tourist Board will make no difference to the powers of the British

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Tourist Authority. We are not amending that subsection of the Act, so we do not need subsection (3). There is no doubt about it. The use of the word "only" in subsection (2) and the inclusion of subsection (3) add nothing to the reality of the Bill and underline the reluctance and grudging timidity of the Government.
I had hoped that even at Third Reading we could have persuaded the Government to change their mind, but we have not put down amendments. It will be up to another place to put down amendments. To say that the consent of the Secretary of State is required after he has consulted the British Tourist Authority is quite unnecessary. The Minister of State said that it was self-evident that there would be consultation. If it is self-evident there is no need to put the word "only" into the Bill.
The person who will have to make this work is the Secretary of State. Evidently we cannot trust the Secretary of State to consult—to do something that is self-evident. We must put it into the Bill. That is why I accuse the Government of timidity and of grudging reluctance to accept the right of Scotland to do this on its own. Scotland is not another region of England. It is a country in its own right, with its own culture, attractions and identity, and it is pretty good at blowing its own trumpet. What is the British Tourist Authority afraid of? Is it afraid of Scotland? That may well be, but why should the Government give in to it? They should have been much more generous, even if they limited the power in the way they drafted the Bill. That is what we object to.
Lord Taylor of Gryfe: My Lords, from these Benches, I should like to support the Third Reading of the Bill. While, as the noble Lord, Lord Ross of Marnock, has said, it does not fulfil all the wishes of all the ardent Scots, it has gone some way towards doing so. When it was announced, I remember that one Sunday newspaper declared that Scotland had declared UDI on tourism. The Bill hardly goes that far, but it is a step in the right direction.
May I take this opportunity to make two points? First, when I spoke on the Second Reading of the Bill I quoted from a well-established and reputable newspaper, the Observer, two references to the activities of the British Tourist Authority in relation to Scotland. In current British Tourist Authority literature Barra was described, the Observer said, as an uninhabited Hebridean island. They also said that on British Tourist Authority maps the roads which lead north ended at Oban. There appeared, therefore, to be no provision made for motor transport north of Oban. Subsequently I received a letter from the chairman of the British Tourist Authority to the effect that both of these comments were unfounded. I checked the references in the Observer and there they stand. However, I have apologised to the chairman of the British Tourist Authority and said that I was simply quoting the Observer when this matter was under review. I am now making my official apologies to the chairman of the British Tourist Authority and to the BTA.
There is merit in close collaboration with the British Tourist Authority. Although we, as Scots, recognise the clear and independent identity of Scotland, this is not always recognised overseas. The references to
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England as "Britain" is evidence of that fact. I believe that there has got to be a great deal of co-operation with the British Tourist Authority in the promotion of the United Kingdom. As we said at Second Reading, not many people find their way to Scotland after having flown into London Airport, the major airport. There has to be a good deal of co-operation over the selling of Scotland by the British Tourist Authority as well as by the independent efforts of the Scottish Tourist Board. I checked with the Scottish Tourist Board as to their reaction to this degree of limited freedom. They appear to be happy with the steps taken so far. I believe we should be wise to watch how it works. I hope it fulfils all the expectations which the Minister has expressed in this House tonight.
Lord Gray of Contin: My Lords, by leave of the House, I should like to thank the noble Lords, Lord Ross of Marnock and Lord Taylor of Gryfe, for what they have said and for the welcome they have given to the measure we are taking in this Bill. I know it would be well nigh impossible for me ever to produce anything which will meet with the full approval of the noble Lord, Lord Ross of Marnock, so long as he occupies the position he currently occupies. He takes his duty—that of the critic of the Government—most seriously, as he should. Where there is even mild criticism, the noble Lord will always make sure it is voiced.
No Government should be afraid to take criticism. This Government are certainly not afraid to do so, because we believe that in this Bill we have made a significant step forward. We believe that the Scottish Tourist Board, in conjunction with the British Tourist Authority, will now proceed to extend overseas its ability to attract tourism to Scotland, and that it will work closely with the British Tourist Authority. That organisation has done excellent work in the past on behalf of Scotland. The Scottish Tourist Board will supplement that work, and I believe that will be to the very great benefit of Scotland.
Bill read a third time; an amendment (privilege) made; Bill passed, and sent to the Commons.

Inshore Fishing (Scotland) Bill [H.L.]
7.23 p.m.
Report received.
Clause 1 (General power to prohibit sea fishing in specified areas]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 1.
Page 1, line 5, after ("State") insert ("after consultation with representatives of the fishing industry.").
The noble Lord said: My Lords, I am sure that the noble Lord, Lord Gray of Contin, after the many discussions we had on the tourism Bill, and on the importance of consultations, will be only too glad to accept this safeguard in an almost minor amendment. The noble Lord, Lord Gray of Contin, himself said at the Committee stage of this Bill on 17th January (col. 966):
"I continue to see a place for local participation, and particularly for local advice to be provided".

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Later in the same column, the noble Lord stated:
"We believe that what we have in mind is a better solution than local management, hut we shall certainly listen to advice from within on how we proceed".
First, we should be happy to know what the noble Lord, Lord Gray of Contin, has in mind when he said that he has a better solution in mind than local management. Until he tells, us, we feel it is important that there should be a statutory requirement that the fishing interests in an area be consulted and that the Secretary of State consults them. We are not saying that he must take their advice but that he must at least consult them.
I am sure that the noble Lord has probably met the various fishing authorities. He will remember that the Clyde Fishermen's Association asked first for local management and regional preference. Then they were content to seek an advisory committee on the question of inshore fishing. All that has been either refused or side-stepped. Certainly it has not been granted. We are only asking now that the Secretary of State should consult interests, and the amendment clearly states this.
One of the other very important fishing organisations, to which the Clyde Fishermen's Association is affiliated, is the Scottish Fishermen's Federation. They are quite convinced that the only way in which the conditions in the Bill can be operated without having, as they put it, in one of their memorandums, "fisherman against fisherman", is for there to be a great deal of consultation and delegation by the Secretary of State. We believe that after such consultation the Secretary of State will almost certainly give a great deal of local autonomy and that within his overall powers he will allow local people, once he has consulted with them, to make a great many decisions themselves.
What really concerns us is that such an important measure for the fishing industry in Scotland should not be introduced and operated without there being consultation with local fishing interests. The noble Lord, Lord Gray of Contin, may well tell me that there is no thought of doing anything other than consulting local people. That may be very much the case; that no Secretary of State would not want to do so. But in that case, there should be no objection by the Government to inserting an almost innocuous phrase such as that proposed in the amendment.
Considering all that has been said during the previous Bill which has just passed through your Lordships' House, merely asking for consultation with representatives of the fishing industry should surely be incorporated in this Bill. It is not asking for too much. With great hope, I beg to move.
Lord Gray of Contin: My Lords, the effect of this amendment will be to place a statutory duty on my right honourable friend the Secretary of State to consult representatives of the fishing industry before he may make any order under Clause 1 of the Bill. Your Lordships will be aware from my previous statements on the Bill that I am not averse to the idea of consulting the fishing industry over the new regulatory regime to be established when the Bill is
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enacted. Indeed, the whole history of this particular piece of legislation demonstrates the Government's willingness to consult the fishing industry whenever possible.
The 1981 consultation document on which the Bill is based was circulated widely, and the views of those organisations who commented on it were carefully considered. We have circulated for comment also our initial proposals for static gear reserves and fish nursery areas. Comments on these are now being received and will be taken into account before any final decisions are made on the extent and location of the reserves and nursery areas.
I would expect similar consultation to occur in the future on any significant changes to the new regime. All this has been done in the absence of any statutory obligation on the Government, and I would question the need for such an obligation to be imposed. One of the key principles underlying the Bill is that it should enable the Secretary of State to respond flexibly and quickly to changing circumstances within the fishing industry. Including a requirement to consult the industry could, in my view, reduce the Secretary of State's ability to respond. I can conceive of circumstances where a fishery perhaps has to be closed virtually immediately. This might be for conservation reasons or, worse still, because of an escalating level of confrontation between fishermen in the area. In such a case rapid action by the Secretary of State might be essential, and the delay caused by a requirement to consult the fishing industry might effectively render him powerless in such circumstances.
This leads me on to a further difficulty I have with this amendment. It is not clear to me from reading it what form the consultations should take, nor who should be consulted. I know that the amendment refers to "representatives of the fishing industry", but that is a very general phrase which covers a large number of different organisations and people. Clearly one would expect to consult representatives of the fishermen most affected by a particular order, whether that be at a local or national level or both. There would still remain those fishermen not in any association, and other parts of the industry also, such as fish processors and salesmen, who might also have an interest.
Obviously this is a recurring problem in consultations between the Government and the fishing industry. In each case where it arises a decision has to be made on how widely a particular proposal should be circulated. These consultations are not, however, in response to any statutory obligation. My concern is that any order made under Clause I will be dogged by an element of uncertainty based on the possibility that it might be challenged on the grounds that the Secretary of State had not consulted everyone with an interest and thus failed to fulfil a statutory requirement. The alternative, to consult all and sundry, would greatly reduce the flexibility in the Bill for little gain.
For all these reasons, I am opposed to this amendment. I do not believe it is necessary. It will reduce the flexibility being introduced in the Bill and it will introduce an element of uncertainty into the new regulatory regime which would be better avoided.

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If I might add, there has already been a very considerable amount of consultation as far as this Bill is concerned; and contrary to what has been suggested by some of your Lordships there has been more than criticism; there has been criticism, I accept, but there has been significant indication of approval from other sources within the fishing industry. I believe that to accept the amendment which the noble Lord, Lord Carmichael, has outlined would not be in the best interests of the Bill, and I hope that noble Lords will feel able to withdraw it.
Lord Ross of Marnock: My Lords, I would find the Minister of State convincing if I had not listened to his arguments on the previous Bill, when he insisted that the Secretary of State must consult the British Tourist Authority despite the fact that, as he himself said, it was self-evident that he would. He insisted on having it in the Bill. It is all right for the Secretary of State to consult a body down south; but evidently there is all the objection in the world when insisting that the Secretary of State should consult the people who actually do the fishing and whose whole livelihood is concerned with the orders that he is going to make. This Bill does not suggest any single action that the Secretary of State is going to take. It gives him powers under (a), (b) and (c) to do all sorts of things in specified areas, and this House does not know; and this House will not see them again, because these orders are not going to be orders that can be prayed against; they are just going to be issued very quickly, or very slowly, by statutory instrument. Am I right in that? I am glad to have the approval of the Minister of State that I am telling the truth about that.
The Minister says there has been lots of consultation. Of course there has been lots of consultation; this started in 1970; there was the regulation of Scottish inshore fisheries, the Cameron Report of December 1970. Strangely enough, according to the front of it, that was sent to me although by that time I was no longer Secretary of State. The noble Lord knows quite well that you cannot have a review and a report of this size without consultation. In fact you have a list of all the people consulted. There was the paper that was sent out by the Government themselves—that was consultation—in 1980. There has been very considerable agitation about the result of that consultation and the extent to which the Government paid absolutely no attention to it to judge by the Bill as it was eventually produced.
It is very disappointing to get this change of attitude from one Bill to the next one. I do not accept what the Minister of State says, that consultation could hold things up in circumstances that were very urgent, in an emergency. One of the departments for which I have the highest regard in the Scottish Office is the fisheries department. They are very good; or they were very good—I do not know what has happened to them under the noble Lord, Lord Gray. It may be they are worried about the Telecommunications Bill. In an emergency all you have to do is lift a telephone. I found no difficulty in contacting the organisations. So let us not have that one. Bearing in mind the importance of many of these regulations that may be produced affecting the livelihood of people—it may be
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in one area or it may be in quite a number of areas throughout Scotland—I would have thought that the Government would have jumped at the chance to put right an omission in the Bill.
The noble Lord says that it will lead to doubts and difficulties. I accept that. I remember we had a Bill about education way back in 1946 which said that we had to consult the teachers. Then a noble Lord construed that in the Court of Session as consulting every single teacher. So you have to be careful. But I am perfectly sure that the Scottish Office can find the words: "In the opinion of the Secretary of State a representative of the interest affected". That is quite easy to do. Certainly the noble Lord, Lord Gray, has not been so long at the Scottish Office; but there are one or two people still there who know how to draft a difficult matter like this. If they fail, I will gladly do it myself.
So the noble Lord's arguments about the lack of flexibility and reducing the ability of the Secretary of State to respond quickly are all nonsense. What is important is that before you proceed to these orders you should be consulting the people most intimately concerned. I am sorry about the attitude that the Government have taken up on this. I hope one of these days the Minister of State will realise he is the Minister of State and he will accept an amendment, especially an amendment which is helpful. That is all we are trying to do. The noble Lord sent me a copy of their initial proposals. That was no sooner published than there was someone on the telephone to me to ask why he had not been consulted about the details of what was proposed in the order.
Surely it is far better to do it at that stage and produce an order rather than the way it has been done, causing the maximum of concern to the fishermen. That is a long way round to go about it. If the Minister was going to do that, it would have been far better to produce draft orders so that we could all see them. It is disappointing that a department that is efficient should go about it in this particular way. I hope the Minister will see the light before we reach Third Reading and think again about consultation.
Lord Gray of Contin: My Lords, with the leave of the House I shall respond to the comments of the noble Lord, Lord Ross of Marnock. Perhaps I may take his last point first. As regards the proposals which we have put forward regarding the nursery areas and static gear reserves, we have invited comments and, indeed, we are receiving comments all the time from fishing associations, groupings and from individual fishermen. We are very pleased to have them.
Lord Ross of Marnock: My Lords, that is not consultation.
Lord Gray of Contin: Indeed, my Lords, we had consultation at the very outset, before the proposals were published, when we were looking at areas in which we would be creating nursery reserves and static gear reserves. To give one example, as a result of representations from fishing organisations in the Western Isles to officials of the Department of Agriculture and Fisheries for Scotland we had a closer look at some of the areas which we were considering, and they

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were modified or extended according to the wishes of the local people. That has actually received favourable press comment in the area. We are more than willing to discuss with local fishing groupings—or individuals, for that matter, although it would be difficult to meet and talk with all individuals; but certainly with organised fishing bodies. However, any individual is at liberty to write in to the department with comments on what we propose, and we are very happy to receive them.
I take up an earlier point made by the noble Lord because I cannot let him get away with this one. His noble friend made the same point in his remarks. They asked why the Government were so keen on consultation in the Tourism (Overseas Promotion) (Scotland) Bill, but not in this Bill. That is quite a different situation. It was quite a different situation also for the Opposition. The Opposition were equally keen on not having consultation. In fact, the Government's record on consulting and on discussing problems with the fishing industry is second to none, particularly where there is no statutory obligation to do so. The common fisheries policy settlement, for example, is a prime example, where, throughout all the negotiations, the closest possible co-operation and discussion took place with the fishing industry. The representatives of the major Scottish fishing concerns were in Brussels when these talks were taking place, and frequent discussions were held throughout those meetings.
The recent discussions over the quotas is another example of where the same sort of thing occurred. There were discussions with the industry all the time. I believe that this is a very healthy situation, where discussions take place between Government officials, Ministers and representatives of the industry without any statutory requirement to do so. These consultations take place and they work very well indeed. We believe that they will continue to take place as far as this legislation is concerned.
There are difficulties and snags, and I am grateful to the noble Lord for acknowledging that there could be a difficulty in part of what his amendment suggests, but I believe that what we intend will work very satisfactorily. With respect to the noble Lord, it would be a mistake to try to write his proposal into the Bill.
Lord Carmichael of Kelvingrove: My Lords, I am sure that the Minister realises that his reply has been rather disappointing, and I only hope that there are second thoughts between now and the Bill going to another place. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.47 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 2:
Page 1, line 10, after ("may") insert ("(i)")
The noble Lord said: My Lords, this is a preparatory amendment to a further amendment, Amendment No. 4. With permission, I will discuss the two amendments together.
Amendment No. 4: Page 1, line 19, at end insert—
("(ii) in respect of any specified area delegate his power of
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regulating fishing given under subsection (1) above to a local area committee representative of local and other fishing interests, and approved by him:")
The proposal is that in respect of any specified area the Secretary of State may delegate his power of regulating fishing, given under subsection (1), to a local area committee which is representative of local and other fishing interests, and approved by him. So the full power is with the Secretary of State as to how much of his power he wishes to delegate and to whom he wishes to delegate it. He has full approval, so he is not letting anything out of his own grasp.
The intention is, of course, to bring back again the idea that in local areas there should be a local committee, approved by the Secretary of State, which can do the work of the Secretary of State. In many places that actually works. The Minister may say, "Yes, but it is not statutory". However, it is statutory in other countries where this has been done. I will concede that the Cameron Committee turned down this proposal, but the Minister has turned down the Cameron Committee on some other matters that we shall come to, so he should not be too powerful on that one.
I believe that many aspects of inshore fishing are local matters. Anyone who has had anything to do with this will appreciate the jealousies that exist in respect of fishing and people coming in, even though from another part of Scotland that is not all that far away, will appreciate the possiblity of conflict. Where it can be done best is with the agreement of the local people and those others coming in. It works, and it works well without conflict if it is done in this way. This does not tie the Secretary of State to setting up local committees in every area, but in "any specified area" in which he considers it would work. He does not need to use the power at all: he may or may not do so. However, I think that it would be a useful power for the Secretary of State to have.
It may be that the drafting does not suit the noble Lord. If that is all, we can put the drafting right with the help of his own experts. I think this is one of the best ways to proceed—with the agreement of all the local people who know all the local circumstances. They are probably by far the best people to do it, rather than have it done centrally. There is nothing worse than centralisation of powers in this respect, where every port and area varies. The traditions are different, but the people who know these traditions are the people who do the fishing and whose livelihood depends upon it. If the Government are prepared to take this power—I do not suggest they need to use it wholesale—they could use it in certain places where they are satisfied it will work. They do not need to use the powers in other places, but it would be a very useful power to have and it is the way I should like to see the Government proceeding. I beg to move.
Lord Grimond: I support this amendment. Surely it would be much better, where it was possible, to proceed by agreement on the matters with which this Bill deals, and where there are local area committees which have satisfactorily come to an arrangement between the different interests of fishing then it would seem sensible to allow them to proceed with it. Secondly, as has been pointed out, this is not

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mandatory; it merely gives the Secretary of State an additional power which may be useful but which he may not want to use in other cases where there is no local agreement. Thirdly, I hark back to a point which I have made on previous stages of this Bill. There is a demand in some places round the coast of Scotland for proper local management schemes. If this provision is written into the Bill and at some future time the Government have a change of heart on this matter, it will enable them to delegate to these management schemes powers under the Bill. To my mind that will be extremely useful and therefore I cannot see that the Government would lose anything by writing this power into the Bill. I can imagine circumstances in which it would be extremely useful.
Viscount Massereene and Ferrard: I find myself in some sympathy with this amendment. As the noble Lord, Lord Ross of Marnock, said, there are some animosities in the Western Highlands. I have known islanders referring to men on another island, perhaps only 40 miles away, as foreigners. I do not think the Government would lose anything by accepting this amendment. No doubt my noble friend on the Front Bench will trot out something of which I have not thought. As I am sure he knows, fishing is a very local activity. I want to say that unless my noble friend on the Front Bench can trot out something reasonably proper, I rather like this amendment.
Lord Gray of Contin: I shall try to satisfy the noble Lord, Lord Ross of Marnock, the noble Lord, Lord Grimond, and also my noble friend. That may be a difficult task but I shall embark upon it and hope that I may be successful.
My right honourable friend the Secretary of State and I are well aware of the importance of a regional dimension in the management of the fisheries in Scottish waters. We are perfectly willing to pay heed to the particular needs of local areas in formulating our management policies. That is one of the reasons why we have introduced in this Bill a system of regulation which is flexible enough to enable us to respond quickly to changing circumstances at local level. We have a duty, however, to manage the fisheries in the best interests of all the fishing industry in Scotland. That simply means that we are not able to go as far along the road towards local preference as some parts of the country would like. We must strike a balance between the sometimes conflicting interests of the different sectors of the fleet, between local and nomadic boats, between large and small boats, between one method and another. I believe this balance can best be achieved if control remains with the Secretary of State.
Your Lordships will not be surprised to learn therefore that I am unable to accept this amendment, which would fetter the Secretary of State in his efforts to resolve the conflicts which can occur between fishermen using mobile fishing gear such as trawls and those employing static gear methods such as pots and creels. As I have explained on previous occasions, the Government gave very careful consideration to this problem before deciding on the strategy of establishing static gear reserves. The arguments in favour of this approach were set out in the consultative document issued by my department in 1981.
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At that time it was recognised that there was a need to provide some measure of protection for the static gear sector of the industry, which was growing in importance, particularly in certain outlying areas. The proposal to close off large areas of inshore waters to mobile gear fishermen by retaining the prohibition on bottom trawling within three miles, and extending it to include pelagic fishing gear, was not considered to be a realistic or desirable solution. Instead it was felt that a total prohibition on mobile gear in specified areas would be more effective and more readily enforceable. These static gear reserves, it was believed, would provide a secure base for the smaller fishermen when other major fisheries made other grounds less safe.
Much has been made of the unanimity of the fishing industry in its opposition to static gear reserves. This is not a wholly true picture, since our proposals have been welcomed in the Western Isles, as I mentioned on an earlier amendment, and parts of the North-West. Little mention has been made of the lack of unanimity as to what should be put in place of our proposals. The various sectors of the industry do not seem able to agree on an alternative approach. Some advocate area management, including local control of the fisheries and local licensing. I have already explained why the Government do not feel this is appropriate. Others favour voluntary local agreements between fishermen. While I would certainly welcome the formulation of such agreements, particularly in those areas where there are no proposals to establish reserves, experience suggests that they are not the whole answer. Problems still arise, often as a result of the activities of vessels who are not party to the agreement. Nevertheless, I have said to the Scottish Fishermen's Federation that if they can come up with voluntary agreements which commend themselves to all the fishermen in particular areas, I shall reconsider the need for static gear reserves in those areas. But I must say frankly that I continue to believe that the concept of static gear reserves remains the better solution.
I have already emphasised the Government's intention to be flexible in their use of the powers in the Bill. A flexible approach is necessary if we are to achieve the proper balance of interests among the various sectors of the fishing industry, which is our aim. We have no desire to be partisan in our approach, or favour one sector to the exclusion of the others. Circumstances may arise, however, when one sector of the industry requires to be assisted in some way. To hamper the Secretary of State in his efforts to achieve the correct balance, both now and in the future, as this amendment would do, is in my view not in the best interests of the fishing industry in Scotland. I hope that on reflection noble Lords will feel able to withdraw their amendment.
Lord Ross of Marnock: I thought for a minute we were going to get halfway there, but the noble Lord stuck to his brief and went on to deny altogether the validity of what we suggest. I think he is quite wrong. I am not going to discuss static gear reserves because there is a later amendment concerning them. I hope we will not hear the same speech again from the noble Lord. We are dealing here not with something that is mandatory but a power that the Secretary of State can

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use if in any particular part of the country, any particular port, any fishing area, he thinks he can usefully do so. It does not tie the Secretary of State to anything. It is not an inflexible power. He can exercise it or not, and if he exercises it and finds it is not right he can take away that delegation of powers.
I do not know what the Minister of State is afraid of in this amendment. I believe that he is reading all sorts of things into it. We are trying to be helpful to the Secretary of State. I am, very glad to say that I have had some support from the opposition—from what I consider my opposition—and who more? When the noble Lord got up and supported me I thought. "That's it finished"; it's the kiss of death". Certainly I was grateful for what little life support he was prepared to give me. I was also glad to have the support of the noble Lord, Lord Grimond. No one knows more than he does about the feelings of fishermen in this matter.
Surely we are not going to get a third speech from the Minister. He can wait until we discuss static gear reserves later. Quite seriously, I think that the Government have misread the amendment. We are proposing a power that is not mandatory. It would be at the discretion of the Secretary of State, in respect of whatever area he chooses. It need not be all the powers, but only a particular power which the Secretary of State can delegate to a local committee; and he must approve of the committee as well. From my discussions with the fishermen it appears that they are prepared to have representatives of the traditional fishermen, as well as the nomadic fishermen in particular areas.
I am sorry about the attitude on the part of the Government that every Bill they bring forward in the Lords is absolutely perfect. There is nothing that we can persuade them to do. I am most lenient with the Government. I am not in the habit of proposing amendments unnecessarily, and I do not want to do so tonight; but if the Government are going to adopt this kind of obduracy and turn down such reasonable amendments as this one, we shall need to think again. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.1 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 3:
Page 1, line 16, after ("method") insert ("or from any vessel")
The noble Lord said: My Lords, this is a very important amendment. The Minister may perhaps be able to assure the House that the term "any method" would include any vessel, but I think it would be better if that were spelled out in full. I have had a number of representations from various fishing bodies, and they all seem to be very concerned about this particular question. One point that has been made to me is that in the Minister's earlier speeches and in the Bill generally there seems to be an overall-assumption that there are only two fleets in Scotland, the nomadic fleet and the static fleet, whereas, as has been pointed out, in the middle there is a very large group consisting of people who by and large return to their own ports after a day's or night's fishing. They require some kind of
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protection from the much more powerful nomadic fleets which go all around the coasts and which come from not only Scotland and England, but abroad as well. Therefore there is a strong feeling that there should be some restriction on the size of vessel used.
In the Firth of Clyde, for instance, the upper limit would be a 70-ft. bottom trawling vessel, though I must admit that in my discussions I have become slightly confused on the question of size and I wonder whether the Minister's experts can advise on it. Does the size of the vessel relate to the overall length, or would a combination of the horsepower of the vessel and its size be more appropriate than merely to specify length only? I understand that on the Clyde most of the vessels are 40-ft. long, and there are, I believe, only two which exceed 70 feet. Therefore, an appropriate limit would be understandable and perfectly acceptable in the Clyde and other estuaries. If there were no restriction, the vessels of limited size and horsepower would be subject to competition from vessels of unlimited size and horsepower, which would take most of the fish from the area. Competition would be quite unfair, and if there were not some kind of protection perhaps the local communities would die.
I hope that the Minister will see the amendment as a means of trying to give some protection to locally based boats. The question concerns not only the boats, but also the communities which depend on them. I have been asked to emphasise to the Minister the point that the boats with which we are concerned are not part of the nomadic fleet nor the static fleet, but are in between, and form a large group. Unless the Minister can assure us that the phrase "any method" would embrace both the type and the size of the vessel, I hope that he will accept some form of words incorporating a restriction on the size and/or power of the vessels involved in inshore fishing. My Lords, I beg to move.
Lord Gray of Contin: My Lords, if this amendment is intended to enable the Secretary of State to prohibit certain classes of vessels—for example, by groups according to size—from fishing in a particular area, it is unnecessary. The power to do so already exists in the Bill. The Secretary of State could prohibit vessels over, say, 70 feet from fishing in a particular area by making an order prohibiting fishing by all vessels except those under, say, 70 feet: that is to say, he would use the exception provision in the last line of Clause 1(2).
I can understand the motivation behind the amendment in that at present there exist certain by-laws which apply size restrictions to certain fisheries, in particular in the Firth of Clyde area, and those currently enjoying the benefits of such by-laws will wish to see their effect retained. I have explained how the effect can be retained if it is desired, though the Cameron Committee was not persuaded that the segregation of vessels by size was justified. Nevertheless, we shall give the matter every consideration before making any orders altering the present position.
In any event, the wording of the amendment would make it difficult to operate, since "any vessel" would have to be specified in the order; that is to say, all vessels in a prohibited class would have to be identified, presumably by name and registration

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number. The listing of individual vessels would be time-consuming and prone to error, so that orders would be brought into disrepute and possibly would be subject to legal challenge. Having outlined to the noble Lord my reasons for not being able to accept his amendment, I wonder whether he will consider withdrawing it.
Lord Carmichael of Kelvingrove: My Lords, I think the Minister has gone a fair way towards showing that the Secretary of State has powers, which is the point that we were trying to elicit from him by means of the amendment. I take note of his undertaking to look again at the wording. We have raised this question with the Minister because of the representations that we have received. In the light of the Minister's good faith in coming a little way towards meeting us, and bearing in mind his explanation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 5:
Page 1, line 19, at end insert—
("Provided that the Secretary of State shall not use the powers given in subsection (1) above to create reserve areas for the exclusive use of static gear fishermen.")
The noble Lord said: My Lords, now we come to the second major speech from the Minister of State on the subject of static gear, because this is the amendment which really gets to the nub of the static gear problem. One of the problems is that there is no mention at all in the Bill of static gear, even though the matter has been considerably highlighted by the fishermen, certainly in their letters to me. The Minister says that the Government have in mind that one of the powers they will exercise is to create static reserves. Despite what he says and the fact that he seems to have found some support somewhere, the overwhelming correspondence I have received and the discussions I have had with fishermen's associations point to the opposite view. For instance, the Scottish Fishermen's Federation is unanimous—that is seldom the case—in its opposition to the idea of creating reserves for the exclusive use of static gear fishermen. The federation thinks that this will heighten the tension and conflict between the different sectors of the fishing industry in particular areas. The Scottish pelagic fishermen say exactly the same. They maintain that large areas will be denied to pelagic and demersal fisheries. Effective conservation is all right but arrangements are needed between the sectors. They can see no result except conflict and interference, especially with the traditional fishing patterns of pelagic fishermen.
The West Coast fisheries leaders say that a system of reserving areas for static gear fishing would be most unsatisfactory for all sections of the industry. A more flexible system based on local control would be preferable. That is their view. They told the noble Lord, Lord Gray, this when they met him and when they responded to his paper. Mr. Nicholson, for the Stornoway Fishermen's Co-op, says that all arguments lead hack to the need for local management. To ban trawling within whole areas at all times would create resentment. There have been satisfactory local agreements over where different kinds of fishing
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should take precedence. This has worked successfully. Centralised control would be entirely the wrong way to proceed.
The Highlands and Islands Fishermen's Association takes exactly the same view. It is against static gear reserves, and has told the Government so. Control should return to the fishermen and area committees should be established. Mr. Colin Thorn, for the Mallaig and North-West fishermen, says that if static gear reserves were created, it is feared that the reaction of the trawlermen would be, "Don't step out of there or we'll tow your gear away".
That is what we want to avoid. The suggestion is that local arrangements, local concern and local agreement would be a far better way to proceed and that, if the static gear was properly marked and properly lit, there would not be the difficulties that some people imagine. There is not a great deal of difficulty at present. The Minister will say that fishing with creels and pots has grown over the years. That is why he pays no attention to what was said by Lord Cameron in what I think was paragraph 140 of his report. Lord Cameron knew that it was increasing and becoming more productive and more beneficial for the fishermen in this sector. You can go back to the Fleck Report, which draws attention to the increasing benefits from fishing with creels and pots and the importance of it.
We have to get down to what local fishermen say. The overwhelming body of fishermen, large and small, the individual area groups and the federation itself are unanimous that this is not the way to get rid of conflict, tension and difficulties and that to do this would mean that, instead of minimising it, you would maximise it. The whole policing aspect is quite terrifying. Once we get away from agreement and enter into the question of centralised policing, we face considerable difficulty. I hope that the Government will think again. I presume that we are going to listen to the same speech into which the Minister wandered when we discussed the previous amendment. I beg to move.
8.15 p.m.
Lord Gray of Contin: The noble Lord, Lord Ross of Marnock, is not going to hear exactly the same speech again. He is going to hear a variation on a common theme. If the purpose of the amendment is to prevent the Secretary of State establishing the static gear reserves which the Government have proposed, then I am afraid that it would not achieve that aim. It is intended that the areas in question shall be closed only to mobile fishing gear. They will remain open not only to fishermen using static gear such as pots or creels but also to passive methods of fishing such as drift nets. To that extent, they will not be areas for the exclusive use of static gear fishermen and will not therefore be caught by this proviso.
The noble Lord, in moving the amendment, mentioned that local agreements were working successfully. I do not deny this. There are some local agreements which are probably working successfully. But many local agreements are not. The Highlands and Islands Fishermen's Association was mentioned by the noble Lord. The association was the very first to complain when trawlers damaged static gear last autumn in contravention of a local agreement which

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was being held up as a model. There are other cases into which I could go but I shall not weary the House at this stage by doing so. It is simply not right to assume that all agreements work satisfactorily. So far as the creation of the static gear reserves and the nursery reserves which we propose are concerned, it is our view that those will have a very much better chance of success than if everything was left to local area management.
I would emphasise to noble Lords that this certainly does not rule out local area participation in an advisory sense. The Government are most anxious that there shall be local area advisory committees. There is nothing in the Bill that prevents this. Indeed, we would welcome this, so that the department would have the benefit all the time of local advisory committees to assess whether the static gear and nursery gear reserves are working satisfactorily or whether changes should be made. Once the order is made, that does not mean that it cannot at some future time be changed. If the pattern of fishing changes, then it is reasonable that static gear areas might require to be changed. For that reason, I believe that this amendment would not be satisfactory. I must hopefully request noble Lords to withdraw it.
Lord Ross of Marnock: I was interested to hear what the noble Lord said about local advisory committees. If I understand him correctly, he says that there is nothing in the Bill regarding local advisory committees and his next words were, "We would welcome it". If, therefore, I put down an amendment to have statutory local advisory committees, the Government would welcome it. If that is the case I shall gladly withdraw my amendment and put down one that meets the words used by the noble Lord. Silence, of course, means consent. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Use of mobile gear near fixed salmon nets]:
8.20 p.m.
Lord Craigton Lord Craigton moved Amendment No. 6:
Page 2, line 11, at end insert ("or boundary of a designated marine nature reserve").
The noble Lord said: My Lords, this amendment seeks to clarify one point. If a marine nature reserve is not in a nursery or a static gear area, can a trawler which is fishing in the six-mile area not covered by the Bill, be prevented from fishing over a marine nature reserve by a Nature Conservancy Council by-law, without there being a specific prohibition in the Bill? I beg to move.
Lord Grimond: My Lords, before the Minister replies, I should like to make one point in reference to this amendment and possibly the next one. I fully take the noble Lord's point. We are all nature conservationists to some extent today, and no-one wants to see the essential areas of the sea-bottom destroyed by trawling. But I daresay that the noble Lord would agree that the nature conservationists are
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in some danger of overplaying their hand. There is now considerable resistance from people who are very keen on nature conservation—and I speak with some knowledge of my own constitutency—if the matter is pushed too far. I am not accusing the noble Lord of doing that in this particular instance, but it must be borne in mind when considering this type of matter that already there are very large areas of sea which are denied to fishermen. For example, they are denied by oil installations. There is very limited fishing around those installations in some parts of my constituency, and there are considerable areas of sea which are fouled either by debris from the oil industry or by other causes. There is great anxiety in the industry in case for one reason or another their fishing grounds are further and further curtailed.
Therefore, while I do not attack at all the spirit of the amendment, there must be instances when one can trawl over a sea-bottom which possibly has some peculiar or valuable shrimp in it, without destroying that mollusc, or whatever it may be. I do not know what the Government will say to this amendment; but I hope in dealing with these questions of conservation, from the nature point of view—which, when they are reasonable, I again reiterate we are all in favour of—the Government will bear in mind that the industry has lost very considerable areas of sea, and that there is a danger of actually stirring up opposition to the nature reserves among people who up until now have been very favourably disposed towards them.
Lord Craigton: My Lords, I am not sure whether the noble Lord realises that this amendment refers only to marine nature reserves made under the 1981 Act.
Lord Gray of Contin: My Lords, I shall try to help my noble friend in explaining the answer to the question which he posed to me. But before I do so, I should like to say that I know that it would not have been the wish of the noble Lord, Lord Ross, to lead me down a path which it had not been my intention to travel. Therefore, before I deal with this amendment, I must say to the noble Lord that we are examining the role of local advisory committees very carefully indeed in the context of quota management and the restructuring of the industry. The final format of these committees has not yet been decided. I would not however—and I repeat, "I would not"—see them as statutory bodies, but rather as local groupings of fishermen giving advice to the Government. I emphasised the question of the advisory committees; I am sure that they have a very useful role to play but I certainly do not see them as statutory bodies.
Perhaps I may now deal with the question which my noble friend put to me. I understand that my noble friend's intention is to bring to your Lordship's attention the general question of marine nature reserves. Strictly, this is not a matter for me or for the Bill that we are discussing today. However, I understand that the responsibility rests with the Nature Conservancy Council to assess what areas are of sufficient importance in conservation terms to justify the creation of reserves; and, after a full informal consultation process with fishery and other interests likely to be affected by such reserves, to put

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proposals to my right honourable friend the Secretary of State.
If my right honourable friend is satisfied that the proposals should be taken further, then the further process would be one of advertising and the consideration of formal objections, including a public local inquiry, if necessary. Only after the completion of these due processes would the Secretary of State decide whether or not to designate the marine nature reserve and to confirm any by-laws proposed for its protection. No proposals have yet been made by the Nature Conservancy Council in respect of reserves in Scotland, but the council is no doubt actively engaged in the preliminary processes. My right honourable friend will consider very carefully any proposals which are put to him.
The noble Lord, Lord Grimond, commented on this amendment as well. I have to remind my noble friend that the noble Lord, Lord Grimond, pointed out to us that there is not any degree of unanimity in this matter, and that there are arguments always to be considered on both sides. This obviously must be part of the process which the Secretary of State carries out in considering these applications. But I hope that what I have said has clarified the situation for my noble friend. I know that he has stood at this Dispatch Box, but whether he has had occasion to deal with fishing problems I do not know. However, I hope that the answer which I have given him has reassured him for the moment.
Lord Craigton: My Lords, I find myself in a difficulty in which I never found myself when I stood where my noble friend is standing now, in that he has replied—and given me a most satisfactory answer—to the wrong amendment! So what I shall have to do is to make out, in about three minutes, the case that I was going to put forward, and he can then confirm to me that what he has just said is the answer to that case. He can then perhaps answer by saying, "No", or "Yes, it will apply" regarding my first amendment. I have moved the first amendment and the noble Lord has replied to the second.
I was going to make the very important point—and this applies also to the first amendment—that over 60 countries in the world already have statutory marine reserves. Britain has the power to create marine reserves in this country under the Wildlife and Countryside Act 1981. The Nature Conservancy Council have already identified seven sites. They did that in 1982. We are now in 1984 and there is not a single marine reserve. Why is that?
The stumbling block is the 1981 Act itself where, in relation to a marine reserve area, Section 36(6) of that Act gives precedence to by-laws affecting that area, whether existing or made later, over the by-laws required for the marine nature reserve. So without adequate powers the Nature Conservancy Council are experiencing extreme difficulty, as they have to arrange everything by persuading the by-law authorities—that is, the sitting tenants—to agree.
This amendment, to which the noble Lord has replied, puts the by-law powers of the marine nature reserve on an equal footing with the order made under Clause 1 which regulates fishing in the area. And, in
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practice, where the same area requires protection for both nursery and nature reserve purposes, there will be much common ground. So this amendment would not in any way frustrate the purpose of the Bill, as both parties have a broadly similar aim and can negotiate for the first time as equals. But the very fact of this amendment and the very fact of my noble friend's reply, will in effect—and this is the reason why I am here—give notice to all concerned including the Minister himself and all other sitting tenants, that Britain intends to have marine nature reserves and should be no longer content to lag behind 60 other nations.
The Earl of Swinton: My Lords, before my noble friend sits down, it might be for the convenience of the House were he to withdraw his Amendment No. 6 and formally to move his Amendment No. 7.
Lord Craigton: My Lords, yes, I shall withdraw my Amendment No. 6. The answer to this amendment is that what I wanted to add is not necessary. Then I shall formally move Amendment No. 7. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mowbray and Stourton: My Lords, I should like to say a few words on this amendment. I spoke at long length on the Wildlife and Countryside Bill on the marine conservation reserves and I shall not bore your Lordships again. My noble friend Lord Craigton has already spoken to the main points.
The Earl of Swinton: My Lords, is my noble friend speaking to Amendment No. 6, which has been withdrawn, or to Amendment No. 7, which has not yet been moved? Either way, he is probably out of order.
Lord Craigton Lord Craigton moved Amendment No. 7:
After Clause 2, insert the following new clause
("Marine nature reserve.
. Nothing in this Act shall vest in any person any new rights which would, pursuant to section 36(6) of the Wildlife and Countryside Act 1981, limit the powers of the Secretary of State under section 36 of that Act to designate any area as a marine nature reserve or restrict the powers of the Nature Conservancy Council to make bye-laws under section 37 of that Act.")
The noble Lord said: My Lords, I beg to move Amendment No. 7.
Lord Mowbray and Stourton: My Lords, I apologise to the House for my inadvertent eagerness to speak so briefly which probably makes things longer in the long run. We have agreed to marine conservation reserves in principle and, as my noble friend has said, we seem to be somewhat lagging behind the rest of the world over the provision of coastal fishery galleries. This seems to be a shame. I do not think that the noble Lord, Lord Grimond, should be alarmed, because these areas will only be designated after due consultation, but the principle is established.
My noble friend the Minister has already indicated that he does not mind the principle, because the areas would not be brought into effect without consultation. But let us give due credit to this idea and let us hope

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that sooner or later—and sooner, please—there will be some conservation areas which will not upset the fishing industry and from which in the long run the fishing industry as well as the country will indirectly gain.
The Deputy Speaker (Lord Hayter): My Lords, for clarification, let me make it clear that we are dealing with Amendment No. 7, moved by the noble Lord, Lord Craigton, inserting the new clause as shown on the Marshalled List.
Lord Gray of Contin: My Lords, I shall endeavour not to complicate matters any further. Inadvertently I have already answered on the last amendment most of the points which my noble friend raised with me, and I take note of what my noble friend added to the debate. I shall certainly read the record very carefully to make sure that the various contributions relate to the appropriate amendments and that my replies are similarly blessed.
Lord Craigton: My Lords, in view of what my noble friend has said—
Lord Ross of Marnock: My Lords, what has he said?
Lord Craigton: My Lords, he has said that he will properly consider any application by the Nature Conservancy Council for a marine nature reserve in Scotland. That is what we really wanted to hear. That is what the Nature Conservancy Council wants to hear and that is what the Underwater Conservation Society wants to hear. I am very grateful to the Minister. I am sure that matters will now go ahead for the first time in British history. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Powers of sea-fishery officers]:
8.35 p.m.
Lord Grimond Lord Grimond moved Amendment No. 8:
Page 2, line 37, after ("limits") insert ("in relation to which he has reason to suspect that an offence under this Act has been committed").
The noble Lord said: My Lords, I hope it is in order if I move Amendment No. 8. I intend to do so extremely briefly because I have made the point in earlier proceedings. Perhaps your Lordships would be kind enough to look at the fourth clause of this Bill, where you will see that extremely wide and rather savage powers are given to fishery officers charged with the duty of enforcing the legislation contained in the Bill. In fact, they have been given powers far wider than those possessed at the moment by any policeman investigating murder.
It seems to me that the fishery officer should assure himself that there is some evidence that an offence has been committed. Your Lordships will see from looking at the clause that the fishery officer can exercise his powers under the first four subsections of the clause whether or not he thinks that an offence has been committed. For instance, he can go on board any
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boat; he can require the boat to stop; he can do anything which will facilitate him boarding the boat, which incidentally I take to mean that he could order the boat to go to port. He can require the attendence of the master; he can make examinations and do anything:
"which appears to him to be necessary for the purpose of enforcing the aforesaid provisions."
He can examine fish and he can require any person on board any such boat to produce any documents which are in his custody, et cetra.
I must thank the Minister very much indeed for writing to me about this. With his usual lucidity, the Minister wrote me a most long and full letter and, as so often happens, he failed to convince me. He does not think that these powers should only be exercisable where the officer has reason to believe that an offence has been committed because, the Minister says, they are analogous to routine inspections which constantly take place on fishing boats. But they are not. Under this particular clause, the powers are related directly to this Bill. The fishery inspector is given powers to enforce the provisions of the Bill and to ensure that people do not fish in areas in which orders have been made forbidding them to do so.
Therefore, there is no question of routine inspections; no doubt the inspector sees a boat fishing or it is reported to him that there has been fishing in an illegal area. I really do not think that this is analogous to routine inspections. Nor do I think that the fishery officers would be deprived of any vital means of carrying out their task. However, I should have thought that a Government who were anxious and concerned about liberty would at least have thought that these officers should have reason to suppose that an offence had been committed.
I do not think that Clause 5 of the Bill is much help. I am simply saying that the fishery officers should have some reason to suppose that an offence has been committed, not only when they have to order a boat into port but as soon as they order documents to be produced and as soon as measures are taken to enable a fishery officer to go on board, and so forth. As I said, no policeman would be allowed to exercise similar powers for much more serious offences.
I shall not weary your Lordships any more. However, in spite of the great care which the Minister has taken in his letter to answer me I still believe that it would be an improvement to the Bill if the provision which is written into the fifth subsection were to be placed at the beginning of the clause, and thus controlled the activities of the fishery officers in all the powers which are given to them. I beg to move.
Lord Gray of Contin: My Lords, I realise that this amendment reflects some of the concern which the noble Lord, Lord Grimond, expressed during the Committee stage of the Bill. I am sorry if I have not been able to convince him by letter that some of his worries are unfounded. Nevertheless, I shall have another go this evening to see whether I cannot persuade him that this is so.
I said previously that the powers in Clause 4 of the Bill reflect powers already available to fishery officers in relation to other fisheries legislation. In my view, the

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clause as presently drafted is necessary if fishery officers are to enforce the provisions of the Bill. After all, it is a normal part of the duties of fishery officers to board fishing boats to carry out routine inspections so as to ensure that the boat is complying with all the relevant fisheries legislation. Such boardings do not imply that a boat is under suspicion, although where that is the case the fishery officer will obviously make a particular effort to board. This practice is adopted because of the practical difficulties of detecting fishery offences at a distance at sea. Cases have often arisen where an offence has not been detected until after the fishery officer has boarded and inspected the fishing vessel. There is also a valuable deterrent effect in dissuading fishermen from breaking the rules in the hope that, being out at sea, their misdemeanour will go unnoticed.
The noble Lord's first amendment would, I believe, unduly restrict fishery officers in carrying out their duties as it would require them to have grounds for suspicion before they could even board a fishing boat. While this might not pose insuperable difficulties for detecting boats fishing in a prohibited area, such as a static gear reserve, it would cause serious problems in enforcing orders prohibiting fishing for a specified species of fish, or for fishing by a particular method. Such orders can of course be made under Clause 1 and may prove desirable in the future.
In my view the Bill at present strikes a fair balance between the need for adequate enforcement and the rights of individual fishermen. Fishery officers are allowed to board and inspect fishing boats as a matter of routine, but they cannot use those powers which are likely to prove most disruptive to a fishermen; namely, seizing fish, nets or papers, or ordering the boat to return to port without some reason for suspecting that an offence has been committed.
I shall not comment in any detail on the noble Lord's second amendment, which is consequential on the first. In the circumstances I hope that the noble Lord can accept my explanation this time and will see his way to withdrawing his amendment.
Lord Grimond: My Lords, I am deply indebted to the Minister for one more explanation. May I finish by quoting a saying often heard around the coasts of Scotland: "It is no good arguing with Ailsa Craig". Therefore, I shall drop the attempt, and, meaning no offence, thank the noble Lord once again, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]

Aylesbury Vale District Council Bill [H.L.]
Read a second time and committed to an Unopposed Bill Committee.
Bournemouth Borough Council Bill [H.L.]
Read a second time and committed to a Select Committee on opposed provisions.
Charing Cross and Westminster Medical School Bill [H.L.]
Read a second time and committed to an Unopposed Bill Committee.
Derwent Valley Railway Bill [H.L.]
Read a second time and referred to the Examiners.

Agricultural Holdings Bill [H.L.]
8.44 p.m.
Further considered on Report.
The Earl of Caithness The Earl of Caithness moved Amendment No. 52B:
After Clause 7, insert the following new clause:
("Arbitrations.
. In section 77 of the 1948 Act for subsections (2) and (3) there shall be sbustituted the following:
"(2) The Lord Chancellor may by order make rules for the conduct of arbitrations under this Act and, in so far as it may be necessary for that purpose, may vary the provisions of the Sixth Schedule to this Act.
(3) The power to make orders conferred on the Lord Chancellor by this section shall be exercisable by statutory instrument (which shall be subject to annulment in pursuance of the resolution or either House of Parliament) and shall include a power, exercisable in the like manner, to revoke or vary any order made thereunder."").
The noble Earl said: My Lords, I beg to move Amendment No. 52B together with, by leave of the House, Amendment No. 73A, which is consequential.
Amendment No. 73A: Page 25, line 23, leave out subparagraph (6).
The procedure of agricultural lands tribunals is governed by rules made by the Lord Chancellor by order under Section 73 of the Agriculture Act 1947. These rules give general satisfaction and can, if necessary, be amended without primary legislation. The procedure for agricultural arbitrations, however, is governed by the Sixth Schedule to the Agricultural Holdings Act 1948, and any alteration can be made only by amending that schedule. The present procedure is, in a number of ways, unsatisfactory for dealing with the many matters now referred to arbitration under the Act.
For example, under paragraph 6 of that schedule the party who is in the position of a defendant has to deliver his statement of case without having seen that of the applicant. This may have been satisfactory when arbitrations dealt only with compensation or rent, but it is totally inappropriate to cases which arise under Cases D or E of Section 2 of the Agricultural Holdings (Notices to Quit) Act 1977, where possession is claimed on the grounds of the breaking by the tenant of the tenancy agreement. Such claims have been known to give rise to such questions as whether the tenant is estopped by his conduct from denying that he is an assignee of his father's tenancy and so bound by its terms. In cases like that—and there are many—proper pleadings are essential.
Again, there is no provision for the relaxation of time limits in any circumstances. By paragraph 6 the parties must deliver their statements of case within 28 days of the appointment of the arbitrator. Since the parties are confined at the hearing to matters alleged in that statement of case, any party who fails to deliver one in time is shut out from putting his case forward. So far as I know, no other court, tribunal or arbitrator is subject to such rigid rules.
Under Section 77 of the 1948 Act the Minister is empowered to make rules to make such provision as he thinks desirable for expediting or reducing the cost of arbitration, but since he is expressly forbidden to make rules which are inconsistent with the provisions of the Sixth Schedule it is perhaps not surprising that the power has never been exercised. The only proposal made in this Bill to deal with this situation is to increase the time for delivering the statement of case once more, this time to 35 days. This, I believe, is the wrong approach. Five weeks is too long for most arbitrations. What is required is more flexibility. Therefore, my amendments propose that the Lord Chancellor should have the same power to make rules for agricultural arbitrations as he has for agricultural lands tribunals, and by a consequential amendment the proposed extension of the time limit is deleted. I beg to move.
The Earl of Swinton: My Lords, when this was considered in Committee my noble friend Lord Belstead undertook to approach my noble and learned friend the Lord Chancellor to see whether we could adopt an arrangement on the lines proposed in this amendment. I am glad to say that agreement in principle has been reached on this with my noble and learned friend, and an amendment will be tabled as soon as possible. My noble friend's amendment now before the House has certain drafting defects, and I hope that in the meantime I can persuade my noble kinsman to withdraw this amendment.
The Earl of Caithness: My Lords, we have started very well this evening. I shall certainly withdraw it. I am grateful to my noble friend and kinsman on the Front Bench. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord John-Mackie Lord John-Mackie moved Amendment No. 53:
After Clause 7, insert the following new clause:
("Institutional landowners.
. Incorporated or unincorporated institutional landowners whose principal business is not agricultural shall make 90 per cent. of all agricultural land in their ownership available for letting to a tenant provided that this section shall not apply to a teaching or research institution connected with agriculture.").
The noble Lord said: My Lords, we are getting to the end of what I can only call this useless Bill. The noble Lord, Lord Belstead, has used great patience and skill, with a certain amount of charm, in resisting practically all amendments, with the result that he has achieved nothing. I therefore move this new clause, slightly restructured, in order to give to the Minister a last chance to do something that will produce some more tenancies, which is the object of the Bill.
My noble friend Lord Northfield made a vigorous plea for his amendment on the Crown lands at our last
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sitting, which, as he said, would, however few, give, at least some more tenancies to the already dwindling supply; but it fell on deaf or unwilling ears. I do not know which. What has the Bill done up to now that will produce any new tenancies, or, for that matter, stop the decline? Will Clause 1 do anything?
Some people say that Clause 1 may actually be a deterrent—I think it was the noble Earl, Lord Onslow, who said that—because as farmers were expecting (wrongly, in my opinion) that it will bring down rents, landlords will be unwilling to re-let. There is a slightly more sinister view that, because of the doubt in the wording—and there is grave doubt in the wording of Clause 1—and the fact that there is no section on the profitability of farms, rents can be kept up even in had times, and so this may tempt landlords to re-let. Noble Lords can take their choice. It is my opinion that Clause 1 will not bring one single extra farm on to the market to let.
Will Clause 2 do anything? It removes succession. We go back to life tenancies and little or no other changes are made from the 1948 and 1958 Acts. There is nothing in the Bill that will alter the steady decline in the let section of agriculture which started seriously just after the 1914 War with about 90 per cent. of the let land then and has continued on a more or less steady graph to this day. I have the graph here. I am not sure whether I am allowed to show noble Lords something, but there is the graph. There is a slight wiggle during the 1939–45 war. To satisfy the noble Earl, Lord Caithness, I include—but I am not sure that I was right to do so—the downward trend between 1976 and 1982. I then took the graph from the Northfield report which goes straight down to show that if it continues that way we shall be without any let land by just after the year 2000. The steady graph shows today's figure at between 35 and 40 per cent. and I can see nothing that has been done that will alter that graph.
I have had to say repeatedly and most other people have also said, that it is so difficult to get accurate figures. One has to glean them from wherever one can, but last year 40.8 per cent. of farms that came on the market were re-let one way or another. Of these 10.2 per cent. were let on a partnership basis, but 49 per cent. were either taken in hand or sold; 26.3 per cent. were sold and 22.7 per cent. were taken in hand and, for all I know, perhaps were sold in due course.
Another interesting figure that I have gleaned—and there are various estimates—is that not more than 30 per cent., although I saw one estimate of 15 per cent., of tenancies that come up for succession are taken up. That is an interesting figure: that 70 per cent. go on the market or are included in the figures that I have given before.
I quote these figures to show that the Bill will have no effect unless the Government are prepared to accept a clause such as that moved by my noble friend last week, or the one that I am moving now. We realise that based on the recommendation in the report of my noble friend Lord Northfield that it is good that any landlord should have some land in hand. That is why we have suggested in the new clause that we should be letting 90 per cent. instead of the 100 per cent. in the original clause that we moved in Committee. I quote

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again from the noble Earl, Lord Swinton, who thought that up to about 10 per cent. was right to have in hand. That would give the landlord a picture of what the farmer was doing and he could treat his tenants accordingly. That should apply to institutional landlords as well.
I gave the figures in Committee of how institutions were taking land in hand and I do not need to repeat that. But to give the total figure, 50 tenancies went from estates of 70,000 acres inside 10 years after the institutions bought the land. That is a high figure. The report of my noble friend Lord Northfield—which I shall quote though I know he will take me to task, but I am prepared to accept that—says at page 140, paragraph 347:
"It is our opinion that the primary role of the financial institutions in agriculture ought to be as long term investors in let land and not as farmers".
Admittedly on page 233 the report goes on to say "having rejected restrictions". Well and good, but I feel there should be a restriction. The report continues:
"Having rejected restrictions … the extent of in-hand farming land by landowners: institutions told us that, like private landlords, they were mainly interested in letting land. We should like to see general acceptance",
of that principle. Based on that we have put forward this amendment again.
If the Minister wants to do something definite—I say "definite" because everything else is philosophical, if nothing else—in the Bill; I quote the gracious Speech:
"to make more farming tenancies available",
he should accept this new clause on the principle of it. It may not be well drafted. That is always an excuse that Ministers use to get out of taking on anything; but he should accept the principle of it. I am sure the noble Lord will sleep more soundly tonight if he could say that he had done something concrete in this Bill at last. I beg to move.
8.57 p.m.
Lord Middleton: My Lords, I very well understand What noble Lords opposite are trying to achieve by this amendment, but I have some sympathy with them; though in his jaundiced view of this Bill and in the matter of the achievement of my noble friend Lord Belstead, I am in total disagreement with the noble Lord, Lord John-Mackie.
I believe that the agriculture industry will flourish best where there is freedom for private individuals and institutions within the private sector to buy and sell land, to let or not to let, without undue interference. One has to search fairly hard for common ground in this Bill with the party opposite, but I believe that I am on common ground with noble Lords opposite in saying that institutional investment in agricultural land provides a useful source of capital for farming, and that, as a rule, institutions maintain and create tenancies and only in a small proportion of cases do they farm themselves. But I do not believe that they wish greatly to enlarge their farming activities especially in the years ahead when farmers expect to experience a more rigorous economic climate. At this time institutions of all kinds own about 20 per cent. of the total let land in England and Wales, and the fact that they farm a small proportion of the land
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themselves means that they are providers of a substantial—not minimal nor appreciable, but substantial—proportion of land for tenanted occupation.
Despite the understandable suspicion with which they are held by part of the farming community, the role of institutions in land ownership is important, as was recognised by the noble Lord, Lord Northfield, and his Committee. I agree with that Committee's conclusion, to which the noble Lord, Lord John-Mackie referred, that their role should be as landlords, not as farmers. But I am sure that they should be allowed to continue to own land free from this kind of fussy attention. As a matter of detail—I have not taken advice on this—I am by no means sure that the word "institution" in the amendment would necessarily catch only those bodies that the mover intends should be caught. I am not sure that the definition of the word "institution" might not also embrace private farming companies.
The way to encourage the creation of tenancies is to make it a more attractive proposition than it is now. That is what the Bill is trying to do. The letting of farming land is not made attractive by hedging it about by unnecessary legislation. If we have not learnt that since 1976, we shall not learn anything.
The Earl of Onslow: My Lords, I should just like to ask the noble Lord, Lord John-Mackie, whether he is a subscriber to a pension fund. If he is a subscriber to a pension fund, the trustees of that pension fund will say, "We want the noble Lord, Lord John-Mackie, to have the best pension he can possibly have, and to do that we must farm 100 per cent. of the portfolio of the agricultural land that we have".
Lord John-Mackie: My Lords, the noble Lord, Lord John-Mackie, would say: "You have no business taking a risk with my money. You buy that land and you let it, which is a safe way to handle my money."
The Earl of Onslow: My Lords, the noble Lord, Lord John-Mackie, would be very unwise to say that, because the noble Lord may have invested in a pension fund where the trustees take that decision. If they take that decision, which they think is the wrong decision to take, they would reduce his pension. That seems to me an extremely draconian measure to take. It may be all right for the pension of the noble Lord, Lord John-Mackie, to be reduced: he may accept that. But there are thousands of other ordinary men and women who invest in pension funds—or they may invest in life assurance or in any other of the institutions—because they want a secure pension. The noble Lord, Lord John-Mackie, also resisted other attempts to secure a limited amount of short-term tenancy to increase the number of tenancies available. He resisted the inheritance provisions. Noble Lords opposite are trying, in a manner that only the noble Lord, Lord Wilson of Rievaulx, would normally try, to have it all ways, up and down and sideways as well. You cannot have it all ways. Either we release land for tenants or we do not. This is not going to release any land for tenancies. It is draconian, anti-libertarian, and against all the best traditions of the British landlord and tenant legislation.
Lord Northfield: My Lords, I got into hot water with my noble friend at Committee stage and so I shall be as inoffensive to him as possible tonight in the hope that I can persuade him that this is not a very good idea. The problem mentioned by the noble Earl is not so small as he made out in referring to a few thousand people. The point is that it is a figure of 23 million people who have invested in pension funds.
As I said at Committee stage, I do not see why anybody acting on my behalf in a pension fund management situation should be put in a worse situation than any private landlord in relation to making money out of land, rents or anything else. What we want to do, if we put on any limitations at all, is to put them on landlords as a whole. I shall not suggest that tonight, but certainly I do not see why I, as a part-owner through my pension fund of some of this land, should be put in a very had position as compared with the single owner of a farming estate. I think the matter is as simple as that.
However, I would go one stage further and say to my noble friend—I do not say that he is himself indulging in a campaign, but if this sort of campaign that has gone on outside against financial institutions in particular goes on much further we really shall have them being unwilling to invest in agricultural land at all. That would be a disaster for two main reasons, which I hope my noble friend will accept. The first point about the financial institutions—and I think he is really getting at them: he is really talking about pension funds, life assurance companies and property unit trusts (which, by the way, own only just over 1 per cent. of the land, so please let us be sure that we are not exaggerating this into a huge ownership)—is that the main hope they contribute to my noble friend's cause—my cause, our cause, the cause supported on all sides of the House—is that at the moment when a let estate comes on to the market very often they are the only purchasers who are prepared to buy that estate and leave it let. The danger, if you freeze these estates out of the agricultural land market is that many of them will simply be split up and sold off into owner-occupation. I am sure that my noble friend should be welcoming their interest in buying that let farmland, that let estate, and keeping units at a size of what we have long found to be the right unit for managing groups of farms.
It goes further than that, because I would guess that many friends of my noble friend are in a position where they find these institutions extremely useful for a second reason: namely, that they are a very good source of funds when a farmer wants to buy the farm next door on a lease and lease-back basis. Very often he goes to a pension fund and says: "I am willing to sell my farm to you if you will lease it back to me, because I then will have enough money to go out and buy the farm next door."
This is not a negligible proportion of the work of these funds. In fact when we conducted our inquiries, something like 30 per cent. of the annual expenditure on these farms was available to help in lease and leaseback situations. So these institutions are doing a good job in a second way for the farming community, acting as a source of funds for a lease and lease-back situation.
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The third thing I want to mention is that really a lot of the blame for the increases in land prices is put at the door of these institutions, whereas in fact they do not buy in the vacant possession market at all: only 5 per cent. of the land sold in the vacant possession market in any one year is bought by the institutions. So they are not the people who are forcing up those prices for vacant possession. That is another reason, please, to lay off this continuous criticism of these institutions.
I conclude by saying to my noble friend that I have enormous sympathy with what he is saying; but he was a bit unfair when he read out the section from our report which appears on page 233, I think, because what he did not read out was the fact that this was in the context where members of the committee has said that the right way to handle the problem was not by imposing restrictions on any body but by setting out guidelines for all agricultural landlords. That appears on page 233 and that is the right way to deal with the problem. Let us approach the private landlord and the institutions—all of them—and say that this is the right way to behave when you are in agricultural land.
Lord John-Mackie: My Lords, may I just say to my noble friend that his report came out in 1979? It is now 1984 and my graph shows that we still have a decline so that all his appeals to private landlords and institutions are of no avail.
Lord Northfield: My Lords, that may be so, but we took an estimate that there would still be a let sector of a certain figure in the 20th century. I do not depart from that and I do not think that the facts have changed. I do not think that my noble friend need be so alarmist. It will be very small and something could be done to make it better. But it will not be the minimal figure that he is suggesting, and we were suggesting that there should be guidelines to cover his point. I repeat what has been said from all sides, that you cannot impose restrictions on one kind of private landlord which you are not prepared to impose on them all. That is the simple commentary on his case. Let us move towards guidelines for all private owners, including the institutions, if that is what he wants.
Lord Hooson: My Lords, I share the fears of the noble Lord, Lord John-Mackie, that the result of this Bill may be that we do not have any more let land and no more tenancies and that the objects of the Bill will fail. But, in a way, that is almost inevitable in a world of inflation where the agricultural economic climate has been fairly good in recent times. Therefore, when land becomes free, it is inevitable that the landlord should seek to keep it in hand or to sell it when it comes on the market, unless he is very highly motivated to let. As I said the other week, the difference between a prudent landlord and a willing landlord is a contradiction in terms in the present economic context.
But this amendment is a most illiberal way of trying to deal with the situation and I do not think that it has anything at all to commend it. It is invidious to draw a distinction between institutional landlords and other landlords, and I do not think that the distinction can he drawn. It seems to me that, whatever the merits or

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demerits of the Bill, this amendment would add nothing to its merits and, certainly, from these Benches we will oppose it.
The Earl of Swinton: My Lords, I shall not be tempted to follow the noble Lord, Lord John-Mackie, and, to a certain extent, the noble Lord, Lord Hooson, in another Second Reading speech in this debate. I will just say that, as a result of the Report stage, the Bill is now studded with good amendments and improvements made to the Bill, due to suggestions by noble Lords on all sides of the House. The main purposes of the Bill remain. We are ending the iniquitous three-generation succession in Clause 2 and we now have a very good rent formula based on the good work of the NFU and the CLA.
But the goodness stops when we come to the noble Lord's present amendment. I do not think that there is very much I need to say. It has been said by my noble friends behind me, by the noble Lord, Lord Northfield, and by the noble Lord, Lord Hooson. Our financial institutions own no more than 5 per cent. of all agricultural land, and 70 per cent. of their holding is let. As my noble friends on this side pointed out in the previous debate, they are good landlords and should not be subjected to special rules which do not apply to the individual private landlord. To forbid institutions to manage their land as they wish would be an unacceptable intrusion on their freedom of choice. I think that it was my noble friend Lord Onslow who used the word "draconian", and I think that that would describe absolutely the Government's reaction to this amendment.
Lord Prys-Davies: My Lords, we are obviously disappointed, but not surprised at the Minister's response and at our inability to interest the House in the principle embodied in this amendment; that was our experience in Committee. However, we were right to return to the principle embodied in this amendment and I say that for two reasons. The noble Lord, Lord Middleton, has hinted at one of them. There is concern among some farmers, and I believe the TFA, about the role of the financial institutions in relation to agricultural land. It is there whether we like it or not, and if there is concern it is right that that should be voiced and reflected in Parliament.
Secondly, as my noble friend Lord John-Mackie has pointed out, this could be one source which could play a role in expanding the rented sector. Certainly, it is a small sector. About 1 to 2 per cent. of the owners of agricultural land are financial institutions and no more. It is our belief that this Bill will not reverse in any substantial way at all the decline in the rented centre. Therefore, this could be a source for expanding the sector. My noble friend Lord John-Mackie was absolutely right to go back to paragraph 347 of the Northfield Report. I do not propose to detain the House on it; but in fairness to my noble friend, I should like to quote another sentence from that paragraph because it is in this context that the sentence quoted by my noble friend must be seen. These are the critical words:
"The occasions when a financial institution should need to engage in direct in-hand farming should be few and the reason ought to be a compelling one, for example in order to gain practical experience
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of problem8UIs faced by their tenant farmers, or where an estate has been acquired which includes an in-hand 'home farm'.".
Although the Minister is not prepared to take the action that we suggest, which we believe is in line with the thinking in paragraph 347 which reflects the fears of many farmers about the role of the financial institutions, nevertheless we suggest that he or the department should keep a watchful eye on the role of the financial institutions in relation to agricultural land. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
Lord Prys-Davis Lord Prys-Davis moved Amendment No. 54:
After Clause 7, insert the following new clause:
("Smallholdings.
. No land held by a smallholding authority for the purpose of smallholdings shall be sold or leased by the authority for nonagricultural use unless the Minister of Agriculture, Fisheries and Food (or the Secretary of State for Wales in the case of Wales) is satisfied that in all the circumstances the land which the authority desires to sell or lease should be released from the authority's smallholding estate.")
The noble Lord said: My Lords, we on these Benches—and I am sure many noble Lords on all sides of the House—are concerned about the reports that, in general, county councils are continuing with their policy of selling off parts of their smallholding estate. In Committee we did not produce any figures to substantiate our belief, but since then I have been reading the annual reports submitted to Parliament. It is very clear to me that the county councils were selling their smallholding estates before 1979 and that it is continuing.
Since the publication of the Wise Report, which goes back to 1966, the number of smallholdings and the total acreage of smallholdings has been diminishing. Professor Wise and his committee recommended that the number and the total acreage should be reduced; but he also recommended that there ought to be a minimum total acreage of statutory smallholdings. We are now approaching the minimum total acreage that the Wise Committee considered necessary and desirable for the agricultural industry. However, the figures for 1981–82—I have not seen the figures for 1982–83—show that we are now below the total which was recommended by the Northfield committee, which was anxious that we should retain the 1979 area of smallholdings land. I believe that the Northfield Committee described this as the primary aim of the smallholding estate, but it has not been maintained.
In 1979, the smallholding estate in England, let as such, consisted of 144,540 hectares; but by March 1982—the last figures available to me—the total acreage was down to 140,000 hectares. In 1979–1980, 1,317 hectares were sold; and of the 46 county councils in England, 34 sold off part of their smallholding estate. In 1980–81, 2,088 hectares were sold. Again, 34 of the county councils were on the market. In 1981–82, 1,283 hectares were sold, and 26 county councils took part in the sales. Those figures are available in the Library.
As the professed primary aim of the Government, through the Bill, is to arrest the decline in the tenanted

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sector of agriculture, and as the total acreage of smallholdings is now down to the minimum recommended by two departmental committees, and is probably still diminishing, we do not believe that it is good enough for the Government to say that it is for the local authorities to decide whether or not to sell part of their smallholding estate. Smallholding land should not be sold on the say-so of the local authority. However, this can happen, even though there is a demand in the locality for smallholding estates, and even though there is a waiting list.
It may well be in the interest of local authority finances that chunks of the smallholdings estate are sold, but it may not be in the interest of agriculture, in the interest of the countryside, or in the interest of the country. We on these Benches believe that the primary aim ought to be to retain the existing smallholding acreage unless the agricultural Ministers are satisfied in the circumstances of the case that the land should be released from the agricultural portfolio. I beg to move.
Viscount Ridley: My Lords, I hope that I may be able to ask the Government to resist this amendment. I spoke on this matter at some length at Committee stage and I should not wish to repeat what I said then. But I believe that the noble Lord, Lord Prys-Davies, did not put a totally fair picture. He spoke about the Wise Committee, which recommended a certain number of smallholdings and that this number be reduced. But the Wise Committee recommended also that the size of smallholdings should be increased so that they were a viable economic unit. That is why the number has been reduced—because the acreage has been increased. One surely cannot have it both ways.
As I demonstrated at Committee stage, the existing smallholdings estate is extremely viable and much more economic than it used to be. It has meant a reduction in the number of smallholdings to that figure which local authorities consider can be economically let and supply the demand which exists for them.
Secondly, the noble Lord, Lord Prys-Davies, did not give any figures. I—alas!—cannot do so either but I know that there are such figures, and, given time, I could produce them. They show the number of smallholdings which have been developed from bare land during the period of which the noble Lord spoke. At a time of economic difficulties, that has not been too easy. Buildings have been created from scratch, existing holdings have been divided, and new holdings produced from land which is in the occupation or ownership of local authorities. They must be set against the number which have been disposed of.
The primary objection to this amendment must surely be, as I said at Committee stage, that the provision of smallholdings is not a statutory function placed upon county councils; it is for their discretion whether or not they produce smallholdings and whether or not they make them available. To deny them the right to buy or sell such land as they may have owned for the past 70-odd years since the smallholdings function started in 1908 will be to increase Government control over local authorities at the very moment when that is the least desirable thing to do. I hope very much that in that spirit the
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Government will have the confidence in county councils to do what they think is right for their smallholding tenants and will not accept this amendment.
Lord Northfield: My Lords, I have enormous sympathy with what my noble friend on the Front Bench is trying to achieve. I support strongly the aim of his amendment, although not its precise drafting. The noble Viscount is not being as frank as he normally is to the House, because although he knows well that some counties are selling simply to get rid of uneconomic units or for laudable purposes of management, others are not so enamoured of having smallholdings as we should all like them to be. I put that at its lowest in order to offend nobody. In other words, some county councils want to get rid of their smallholdings in principle, or at least to cut them down significantly. Or some parties on some county councils wish to do so. That is the kind of situation that this amendment is really aimed at—to keep a substantial volume of smallholdings.
I believe that we could return to this point at Third Reading in another form. If I may say so, what we proposed in the Northfield Report was probably the right way to go about it. We stated in paragraph 547:
"In the case of proposed sales of smallholdings land above a given size"—
and that would exempt the sale of small units, to suit the noble Viscount—
"local authorities would be required to notify the Minister or the Secretary of State for Wales of their intention to sell. He would then have the choice of designating the land for smallholdings use, allowing the sale to proceed without restriction, or of vetoing it".
What we said was, "All right; even in cases where counties want to get rid of substantial holdings, the Minister should have a right to say this should not pass out of the smallholdings system, and if you insist on selling you must find a purchaser, an institution, who will buy it and either lease it back or themselves run it as a set of smallholdings". I am sure that is the right way to proceed. If the Minister is going to resist this amendment because it is simply a ministerial veto without the refinement I am suggesting, I suggest we return to the matter, in the form in which I have outlined it, at Third Reading.
Lord Hooson: My Lords, we on these Benches would support this amendment. It is important that the smallholdings estate should be maintained. I do not appreciate the point made by the noble Viscount, Lord Ridley, who pointed out that this is a non-statutory duty imposed on a county council. That may be so, but the situation that would obtain if the amendment were passed would be no different from that which is required in regard to planning matters, where the Ministry of Agriculture has to certify in relation to agricultural land whether they are opposed to it passing out of agricultural use for planning purposes. It seems to me that on a like principle there is such an interest in maintaining the smallholdings estate.
When I was in another place I happened to represent a seat which was an old county, Montgomeryshire, which had the largest smallholdings estate in the country bar Cambridgeshire—certainly the largest in

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Wales, and the second largest in England and Wales. I know what a valuable asset that estate was. So many large farmers in my part of the world—we are not an area of large farms, but what passes there for large farmers—started in county council smallholdings. It is a very valuable stepping stone into agriculture. I really object to the reduction of these smallholdings, and I would support this amendment. I would go further and say that the words "for non-agricultural use" are not required in this amendment. I do not see why the permission of the Minister of Agriculture should not be required for the sale or lease for any purpose, whether agricultural or non-agricultural, in this context.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I recognise the concern of the noble Lord, Lord Prys-Davies, in moving this amendment, but I do not think, with respect, that it would work as it is presently drafted. The noble Lord is asking the Minister to identify which proposed sales would lead to the loss of the land to agriculture, and I do not think this is a forecast which my honourable friend could make.
With respect to the noble Lord, Lord Hooson, it is not on all fours with the information required from the Ministry of Agriculture so far as planning is concerned. There the Ministry is asked to give a view about the use of land, which they can give; they are not being asked to give a forecast. And it is only advice to the planning authority; it would not be a definite edict, which is what is being asked for in this amendment.
There are two other problems with the amendment. The first is one identified by my noble friend Lord Ridley: the question of freedom of local authorities to make their own decisions is at issue here. If the noble Lord, Lord Northfield, feels that he would wish to return to this at Third Reading, I think there will be a difference of view on this which would become evident if we pursued the matter further. Finally, I think my noble friend was right to say that the Wise Committee itself made the point that smallholdings should be able to rationalise in order to provide a better deal for their tenants in terms of holding size, accommodation and equipment. The noble Lord, Lord Northfield, is, I have no doubt, justified in saying that not in every case is that the reason why smallholding sales are made; but in many cases the sales of smallholdings are made in order to get a better deal for the tenant. Therefore, on those grounds—and not least, if I may say with respect to the noble Lord, because this amendment could not be put into practical effect—I must resist it.
Lord Northfield: My Lords, before the Minister sits down would he go one step further and be prepared to say that the Government do want smallholdings very broadly to be kept at their present acreage? Further, would he be prepared to offer guidance to county councils that they should seek the sort of solutions which we outline; namely, if they insist on selling considerable areas they should see that the land does not go out of smallholding use?
Lord Belstead: My Lords, of course I recognise the point made by the noble Lord, Lord Northfield. I have
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figures which show the reduction in acreage. They lead to some concern but not, I think, the need to go down the road which the noble Lord is trying to press on me.
Lord Bishopston: My Lords, the Minister has just said that the figures lead to some concern and we therefore have cause to urge him to reconsider this matter. The whole point about this Bill is to provide more land for letting, and therefore more opportunity for people to come into farming. In the many hours we have been considering amendments and the legislation generally there has been very little evidence that the Bill will make any difference to the present situation. Indeed, noble Lords sitting behind the Minister have been foremost in defending the status quo. We have a very short way to go before we can get any evidence of progress.
The amendment, which I shall briefly quote, is important, and it has no measure of edict, as the Minister put it. The amendment states:
"No land held by a smallholding authority for the purpose of smallholding shall be sold or leased…for non-agricultural use unless the Minister…is satisfied that in all the circumstances the land which the authority desires to sell or lease should be released from the authority's smallholding estate."
It is up to the Minister who, in the light of this Bill and the declared objectives of the Government, should be looking at every aspect to see whether a word of guidance is justified in order to increase the land for letting.
We are talking about a significant quantity of land. My noble friend Lord Northfield reminded us in Committee (col. 153, of Hansard for 13th December) that,
"smallholdings provide something like 15 per cent. of the opportunities for new entrants to come into the industry."
He reminded us that that is not a negligible figure.
The noble Viscount, Lord Ridley, has just spoken. I was reading his speech made on 13th December, col. 152, on the subject covered by this amendment. He defended the right of local authorities to decide, as he has today. On the giving of powers to the Secretary of State he said that,
"local authorities will regard this as a totally unjustified attack on their powers of decision."
He went on to say—and how right he was—that:
"Quite a lot of powers of local government have been removed by this Government when they came into office."
He can say that again! We have had council houses which some authorities did not want to sell but they have been told that they must do so. There is no choice there, on a much bigger issue. I shall not mention the abolition of the GLC and the metropolitan authorities. Abolition is a complete interference. I take his point that local authorities may not be very pleased about the Government having these powers, but they are not powers saying one shall or one shall not. They are powers which will be using the land in partnership with the authorities which now administer the smallholdings. In this, if the local authority can say that they want to rationalise their smallholdings estates—that, of course, is quite reasonable—then they are free to do so. That is not inconsistent with the amendment.

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The noble Earl, Lord Swinton, when he wound up the last debate on this Bill on 7th February, really gave the game away about the Government's policies. We were then debating about the Crown Estates Commissioners having land which the Treasury had in lieu of death duties, and so on. He said that the Government's policy in relation to land held by government departments is to dispose of it where it is not required for departmental purposes, often by sale to the existing tenant. That may be commendable, but it does not increase the amount of land for new entrants to come into agriculture and farming. Here again, the Government have said very clearly, in effect, that their doctrinaire reasons for selling land and
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realising all the money they can get is their policy and that is a priority over the aims of this Bill, which are to ensure that more land is available for letting.
I believe that at this late stage the Government should be prepared to look at all these aspects in order to see whether a change of policy can bring about the fulfilment of the objectives of this Bill, on which we do not differ. On the last amendment and earlier amendments my noble friends and I have all been anxious to ensure that more people get the opportunity of going into farming. I hope that the Minister will look at this amendment, with others, before the later stages of the Bill.
On Question, amendment negatived.
Clause 8 [Interpretation]:
9.37 p.m.
Lord Belstead Lord Belstead moved Amendment No. 55:
Page 11, leave out lines 19 and 20.
The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendments Nos. 56, 57, 58 and 59.
Amendment No. 56: Page 11, line 26, at end insert—
("( ) Unless the context otherwise requires, expressions used in this Act and the 1948 Act have the same meaning in this Act as in that Act.
( ) Section 87(1) and (2) of the 1948 Act (Crown land) shall have effect as if references to that Act included references to this Act (except paragraph 34 of Schedule 1).")
[Amendment No. 57: printed earlier; col. 1086.]
Amendment No. 58: Clause 9, page 11, line 29, leave out ("Part") and insert ("Schedule").
[Amendment No. 59: printed earlier; col. 1125.]
My Lords, all these are drafting amendments. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendments Nos. 56 to 59:
[Printed above.]
On Question, amendments agreed to.
Schedule 1: [Minor and consequential amendments]:
Lord Belstead Lord Belstead moved Amendment No. 60:
Page 13, line 10, leave out ("1948") and insert ("1977").
The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendment No. 61.
Amendment No. 61: Page 13, leave out lines 22 to 24 and insert—
("2.—(1) Subsection (4) of section 18 of that Act (cases where provisions of Part 11 of that Act do not apply) shall be amended as follows.
(1A) In paragraph (a), the following sub-paragraph shall be substituted for sub-paragraph (ii)—
"(ii) the Tribunal consented before that date to its operation;".
(1B) In paragraph (c)—

(a) in sub-paragraphs (i) and (ii), for the words "that Act" there shall be substituted the words "the 1948 Act"; and

(b) the following sub-paragraph shall be substituted for sub-paragraph (iii)—

"(iii) the Tribunal consented before that date to the operation of the notice;".
(1C) In paragraph (d), sub-paragraph (ii) and the word "or" immediately preceding it shall be omitted.
(1D) The")
Amendment No. 60 is a drafting amendment, and Amendment No. 61 is a technical amendment. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 61:
[Printed above.]
On Question, amendment agreed to.
Viscount Ridley Viscount Ridley moved Amendment No. 62:
Page 13, line 40, at end insert—
("( ) In paragraph (f), for the words from "and the" to the end of paragraph there shall be substituted the words "(whether the tenancy was granted before or after the commencement of the said Part III;".")
The noble Viscount said: My Lords, I hope we can dispose of this amendment as quickly as we disposed of the last two. The amendment has one sole purpose—to clarify the existing legal position as to the exclusion of succession where statutory smallholdings are concerned. At the Committee stage on 13th December we had a debate on an amendment which I moved, and I believe the Government were sympathetic to what I am trying to do. All I am asking is that it should be made quite clear beyond any possibility of doubt that the succession provisions of the 1976 Act do not apply to statutory smallholdings.
As I have said, I think that the Government are sympathetic. I am quite certain that in 1976, in their stated intentions regarding the Act at that date, the Government wished to exclude statutory smallholdings. There is doubt legally whether they did so in detail in that Act, and therefore I wish to make it clear beyond doubt that the present Bill will do so. I hope that the amendment is acceptable to the House. My Lords, I beg to move.
The Earl of Swinton: My Lords, I am most grateful to my noble friend Lord Ridley for proposing this amendment. I am sure that smallholdings within the meaning of Part III of the Agriculture Act 1970 should be excluded from the three-generation succession provisions of the Agriculture (Miscellaneous Provisions) Act 1976, and I am happy to accept the amendment.
On Question, amendment agreed to.
[Amendments Nos. 63 and 64 had been withdrawn from the Marshalled List.]
Lord Belstead Lord Belstead moved Amendment No. 65:
Page 16, line 1, at end insert—
(" .—(1) In section 18(1) of that Act, after "20(14)" there shall be inserted "and (15)".
(2) In section 20 of that Act, the following subsection shall be added after subsection (14)—
"(15) If at the expiry of the period of three months beginning with the day after the date of the death of a tenant there are pending before such a tribunal separate applications made under this section by any person, or (as the case may be) by each one of a number of persons, in respect of more than one agricultural holding held by the tenant at that date, then, subject to and in accordance with the provisions of any order under the said section 73(3), those applications (together with, in each case, any associated application made under the following section) shall be heard and determined by the tribunal in such order as may be decided—

(a) where those applications were made by one person, by that person;

(b) where those applications were made by two or more persons, by agreement between those persons or, in default of agreement, by the chairman of the tribunal;

and any decision made by the chairman under paragraph (b) above shall he made according to the respective sizes of the

107
holdings concerned so that any application in respect of any holding which is larger than any other of those holdings shall be heard and determined by the tribunal before any application in respect of that other holding.".")
The noble Lord said: My Lords, when read with the new subsection (3C) in Amendment No. 28, this amendment implements the second part of proposals put forward by the CLA and the NFU which had the objective that in the case of multiple succession an applicant should not succeed to more than one holding of "commercial unit" size. Amendment No. 65 adds to Section 20 of the 1976 Act a new subsection (15), which prescribes the order in which applications for succession are to be considered in cases where a tenant, on death, is in occupation of an agricultural unit which comprised more than one tenancy.
At an earlier stage of the Bill my noble friend Lord Sandys asked whether applications would be dealt with one at a time or separately. The answer is, separately, and the order as to how they will be dealt with will be chosen by the applicant, or, if there is more than one applicant, by agreement between the applicants, or, in default of such agreement, by the chairman of the agricultural land tribunal. However, if the choice rests with the chairman, he will be required to consider the applications by reference to the respective size of the holdings to which the tenancies relate in descending order.
The new subsection (3C) in Amendment No. 28 (which has already been taken) provides that once succession is granted by a tribunal, for the purpose of satisfying eligibility under the commercial unit occupancy test, the applicant is deemed to be in occupation. This is really the main change that we have made so far in the Bill in trying to attain the objective which I think all your Lordships share, and about which the noble Lord, Lord Northfield, spoke during a previous stage of the Bill: to try to see that multiple successions are prevented in undeserving cases. The effect of the two provisions together—that is, what is provided for in both this amendment and Amendment No. 28—is to restrict the holdings to which an applicant may succeed.
Details of the procedure to be followed by a tribunal in considering the applications will be provided by order made by my right honourable friend under Section 73(3) of the Agriculture Act 1947. All this will, I hope, ensure greater conformity with the spirit of the succession provisions of the 1976 Act, which were designed to limit succession, as far as possible, to tenants who were not already occupying commercial holdings. My Lords, I beg to move.
Lord Sandy's: My Lords, I am most grateful to my noble friend for his clarification of this important matter, and the details which he has given to your Lordships give some indication of the instructions which will be given to a tribunal. But let us suppose that the chairman of the tribunal is somewhat heedless of the instructions. I am wondering what there is in the Bill to prevent a tribunal from taking all the applications together—and we have within our knowledge cases where there are as many as 27 pieces of land in separate holdings in a situation of this kind.
Lord Northfield: My Lords, I, too, should like to say "thank you" to the noble Lord because this is a very important provision indeed. I am slightly surprised that the NFU in fact accepted it. I believe I can offer a further compliment to the noble Lord because, taken with Clause 2, it should mean more tenancies—it really should! It will mean that land that would otherwise be taken on by a successor will become available, and in the light of Clause 2 (relating to the limitation to one generation) the landlord will be more inclined to let the land than to sell it with vacant possession or to farm it in hand. With goodwill on all sides and full realisation of what this involves, I believe that this provision will probably do more to increase the number of farms available for rent than almost any other part of the Bill.
Lord John-Mackie: My Lords, we spoke in favour of this amendment earlier when it came forward. We have not altered our opinion. I believe, however, that my noble friend Lord Northfield is a little optimistic. I wonder how many multiple tenancies there are, which will make such a great difference. If it makes a difference, then the noble Lord, Lord Belstead, has something in his favour.
Lord Belstead: My Lords, I am grateful for what noble Lords have said. I should like to look at what my noble friend Lord Sandys said and, if necessary, write to him. I think that the wording at the top of page 4 of the Marshalled List making clear that we are talking about separate applications, which shall then be dealt with in the way set out in the rest of the schedule, answers my noble friend. I must admit, however, that I am not sure. It is certainly the intention that the applications shall be dealt with separately. It is certainly the procedure that they shall be dealt with in the way that I have explained. If I feel that I should add to that (I do not think that my explanation has been quite as satisfactory as it ought to be) may I write to my noble friend?
On Question, amendment agreed to.
[Amendment No. 66 not moved.]
9.47 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 67:
Page 17, line 24, at end insert—
(" .After section 1 of the 1948 Act there shall be inserted the following section:
"Exclusion for tenancies of allotment land of provisions of this Act and of the Agricultural Holdings (Notices to Quit) Act 1977
1A.—(1) Where in any contract of tenancy made after the commencement of the Agricultural Holdings Act 1984 land held by a local authority either for the purposes of the Allotments Acts 1908 to 1950 or as field gardens allotted pursuant to the provisions of the Inclosure Acts 1845 to 1882 is let to a tenant as an agricultural holding no provision in this Act other than those contained in section I above and no provisions in the Agricultural Holdings (Notices to Quit) Act 1977 shall apply to the said contract, tenancy or holding.
(2) For the purposes of subsection (1) above 'local authority' has the meaning given to it in section 270(1) of the Local Government Act 1972.".")
The noble Lord said: My Lords, at the Committee stage I introduced an amendment somewhat different

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from this which my noble friend, at column 219 on the 13th December, showed to be in error. The problem is to facilitate the use for general cultivation of allotment land not currently needed for allotments and which may go derelict if not used. The allotment authority has the choice of leaving it unused, paying from the rates to keep it decent, or allowing a local farmer to cultivate it. In the latter case, there are problems within the agricultural holdings law which I aired at Committee stage. I shall not bother your Lordships with that tonight.
A further problem to which I made reference was that this sort of situation occurs mainly in rural areas where the local authority is usually a parish council with a part-time unqualified clerk. They have difficulty in dealing with the complexities of the sort of law that agricultural holdings have built around them. At Committee stage, my noble friend kindly accepted the problem of the clerk and did so also in a letter. He gave a warning that, in the amendment as it then was, we had the risk of falling into the trap of the Landlord and Tenant Acts of 1927 and 1954.
I am grateful to my noble friend for the points that he made and for the fact that he has undertaken to make the procedures as unbureaucratic as possible. On examination, however, we feel that this is probably not enough. The defects of using ministerial consent are that the need for reapplications means that the farmer and the council cannot plan for a settled period of occupation; secondly, that the part-time clerk has to arrange for the reapplication and, on a change of clerk, the reapplication may be overlooked; and thirdly, the reluctance of either party to be involved in such procedures for a smallish piece of land.
Having taken the points made by my noble friend, the new amendment seeks to cure the difficulties simply by removing from the new arrangement for agricultural use of allotment land the protection of the agricultural holding code, leaving the land subject to the legislative codes prescribed for allotment land, thereby, in all essentials, allowing the farmer and the council to agree terms to their own satisfaction that regulate the whole period of the tenancy and its termination. It is important that these arrangements will take place at a very local level where both parties know better than anyone else what they wish to agree and where it is as important to avoid local ill will because one party has prayed in aid a statute that was not originally intended to apply as it is to ensure that the land does not become derelict. We have therefore sought to—
A noble Lord: Who are "We"?
Lord Mottistone: My Lords, "We" are my advisers, the National Association of Local Councils.
Lord Denham: My Lords, will my noble friend give way? My noble friend speaks for himself in this House and he may share the views of his advisers. But it is a rather important point.
Lord Mottistone: My Lords, "We" relates to thinking as opposed to putting the amendment. In conclusion, I hope that my noble friend will accept
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that this revised amendment of mine meets the Bill; steers clear of the problems of the Landlord and Tenant Acts; gets out of the problems of the bureaucracy; and does not create for my noble friend and his right honourable friend the difficulties of trying to organise his own local man to help in an area where perhaps it is better that the negotiations should be strictly between the farmer and the council. I beg to move.
Lord Belstead: My Lords, my noble friend is on to an important point, which is that surplus allotment land should be able to be let temporarily and easily. All Members of the House will know of the value of allotments and the difficulties which occasionally can be encountered if one has problems in letting allotment land. There is nothing more depressing than to see allotments falling into disuse which ought to be used productively and giving pleasure to those who should be tilling them. Therefore, my noble friend has plenty of sympathy coming from both me and from the Ministry at which I work. From looking at what my noble friend has written to me and also said in the House, we have brought in new procedures for Section 2 approvals which I hope my noble friend will feel will make his amendment unnecessary.
At the previous stage I gave my noble friend an assurance that we would issue specific instructions to our local offices—and, incidentally, I am talking about the Ministry of Agriculture when I say "our local offices"—to overcome any problems that might arise in connection with applications for Section 2 approvals for allotment land. I am pleased to be able to confirm to my noble friend that these instructions have been issued, and I have a copy of them with me. What they say in simple terms is that if there is a Section 2 application for allotments to be let for up to five years, then approval ought to be given.
However, my noble friend is concerned that the need for parish councils to seek a new approval every year might act as a disincentive on them and the farmers, to become involved in such relatively complex procedures for what will normally be small parcels of land. I have much sympathy with this view and this was one of the factors in our mind which led the Government to propose the next two amendments which we come to on the Marshalled List. Those amendments—Amendments Nos. 68 and 69—if accepted, would meet all of my noble friend's remaining concerns. They would permit the parish clerk to make one application, and one application only, for the Minister's approval for a letting of not more than five years. Both the council and the farmer concerned could plan ahead in the knowledge that occupation was certain. There would be no danger of a part-time clerk, who is busy with other things, omitting to re-apply, and the procedures would be as simple as possible.
I hope that the House will accept the need for Amendments Nos. 68 and 69, and I hope that my noble friend will feel that I am not being bureaucratic when I say that I think that there are dangers of applying a broad exemption to a Bill of this kind. For instance, I am advised that one would still have to look very carefully indeed at the drafting of my noble friend's amendment in order to be absolutely certain

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that some aspects of the legislation would not still apply. Therefore, we have tried to go about it in this other way. I hope that the explanation that I have given will persuade my noble friend that there will be no inconvenience for the smallholdings authority, for the farmer concerned or for the clerk concerned, and that we are setting up a situation which in genuine cases will mean that there can be lettings of up to five years at a time with no other problems connected.
Lord Mottistone: My Lords, I am indeed grateful to my noble friend for having gone such a long way to try to meet my particular problem. I have not been able to take advice on his Amendments Nos. 68 and 69. Therefore, I am not quite sure to what extent they completely fulfil the whole purpose of what we are after. But certainly I very much take my noble friend's own remarks as being his attempt to go as far as he can in that direction. I also accept the fact that the drafting of Amendment No. 67 may have loopholes in it that we have not been able to determine. I shall of course seek further advice and may possibly write to my noble friend if there is any other little loophole that we think might be helped by the wording being slightly changed. Perhaps that could be the subject of an amendment on Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.57 p.m.
Lord Belstead Lord Belstead moved Amendment No. 68:
Page 17, leave out lines 25 to 29 and insert—
("7.—(1) In section 3 of that Act (tenancies for two years or more, unless terminated by notice, to continue as tenancies from year to year)—

(a) at the beginning of subsection (1) there shall be inserted the words "Subject to sections 3A and 3B of this Act"; and

(b) at the beginning of subsection (4) there shall be inserted the words "Subject to section 3B of this Act".

(2) The following sections shall be inserted after that section—")
The noble Lord said: My Lords, I beg to move this amendment and to speak to Amendment No. 69.
Amendment No. 69: Page 18, line 9, at end insert:
("Exclusion of continuation of tenancy by agreement
3B.—(1) This section shall apply to any tenancy of an agricultural holding for a term of not less than two, and not more than five, years.
(2) Where, before the grant of any such tenancy,—

(a) the persons who will be the landlord and the tenant in relation to the tenancy agree that section 3 of this Act shall not apply to the tenancy; and

(b) those persons make a joint application in writing to the Minister for his approval of that agreement; and

(c) the Minister notifies them of his approval;

section 3 shall not apply to the tenancy if it satisfies the requirements of subsection (3) of this section.
(3) A tenancy satisfies the requirements of this subsection if the contract of tenancy is in writing and it, or a statement endorsed upon it, indicates (in whatever terms) that section 3 of this Act does not apply to the tenancy.")
I am indebted to my noble friend Lord Renton for the effect of this amendment which he spoke about in Committee. In essence, this amendment seeks to achieve the situation where the Minister can give his
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approval to a fixed-term tenancy for a period not exceeding five years. This approval will have to take effect in such a way as to exempt these tenancies from the provisions of Section 3 of the 1948 Act. Without this amendment Section 3 would convert the fixed-term tenancy into one from year to year, that is, a full agricultural tenancy at the end of the term.
After a good deal of thought since my noble friend Lord Renton spoke in Committee, we think that it would be entirely right to accept the spirit of what he was trying to do. The amendment that I now propose would permit the Minister to approve a letting of more than two and up to five years, which would not at the end of its term be converted by Section 3 of the Act into a full agricultural tenancy. In order to be sure that both landlord and tenant are fully aware of what is being proposed, they would have to make a joint application in writing—only one—to the Minister who will notify them both of his decision. Furthermore, the tenancy agreement will have to contain a provision or be endorsed to the effect that Section 3 of the Act does not apply to the tenancy. I beg to move.
The Earl of Caithness: My Lords, I should like to press my noble friend on two brief points. First, what happens when the tenant dies during the five-year term? Secondly, can my noble friend remind me when these provisions come into force?
Lord Belstead: My Lords, to answer the second question first, we are, of course, talking about Section 2 tenancies under the 1948 Act which exist now. I would make two brief points to my noble friend. First, when we originally introduced this Bill I made the point on behalf of the Government that we intended to lengthen the period of time of Section 2 tenancies to five years, particularly for two cases which we thought specially deserving. One is where there are trial tenancies for prospective tenants, and the other is where the son or daughter of a landowner will come back and wants to take the tenancy up at a later stage. But I have also gone out of my way on the previous amendment to say to my noble friend Lord Mottistone that I believe that Section 2 tenancies will be suitable so far as his case for smallholdings is concerned.
Section 2 tenancies exist now. All that Amendments Nos. 68 and 69 do is to make sure that, under Section 3 of the 1948 Act, Section 2 tenancies are not converted into fixed-term tenancies from year to year which end up being full agricultural tenancies at the end of the term. Therefore, landowners will not in any way be afraid of resorting to Section 2. As to what happens when the tenant dies, I assume that the tenancy will remain with the executors—and I see that my assumption is correct.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 69:
[Printed above.]
On Question, amendment agreed to.
The Earl of Swinton The Earl of Swinton moved Amendment No. 70:
Page 18, line 33, at end insert ("make")
The noble Earl said: My Lords, this is a drafting amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Onslow The Earl of Onslow moved Amendment No. 71:
Page 18, line 49, at end insert—
("(6) Any transaction entered into in contravention of subsection (4) of this section shall be void.")
The noble Earl said: My Lords, I regret that the noble Lord, Lord Renton, is on holiday and the noble Viscount, Lord Dilhorne, has been wafted away to Singapore suddenly, so I have been asked to move this amendment. Paragraph 8 of Schedule 1 provides a bar against assignment or subletting after the statutory request by landlord or tenant for inclusion of a covenant to that effect in a tenancy agreement. This is to avoid giving one or other of the parties the opportunity to evade the outcome of arbitration pending the arbitrator's award.
This further small amendment, which has been suggested by the Agricultural Law Association, would simply make it clear that in the event of such an assignment or subletting taking place, the transaction would be void. I beg to move.
The Earl of Swinton: My Lords, I am sure that my noble friend will be delighted to know that I am happy to accept this amendment.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 71A:
Page 19, line 28, at end insert—
(" .—(1) There shall be inserted in subsection (4)(a) of section 11 of the 1948 Act after "or", where it first occurs, the words "in cases where a valid notice of less than 12 months is given in accordance with section 1(2) of the 1977 Act".
(2) After subsection (4) of section 11, as so amended, there shall be inserted the following new subsection (5)—
"(5) The landlord shall not unreasonably refuse his consent to proposals by the tenant for the cropping of arable land during the periods of restriction mentioned in paragraphs (a) and (b) of subsection (4) above and any dispute arising as to the reasonableness of a refusal of consent shall be determined by arbitration under this Act."")
The noble Earl said: My Lords, subsection (1) of my amendment deals with Section 11(4)(a) of the 1948 Act, which at present reads:
"any period after he has given or received notice to quit which results in his quitting the holding".
This could refer to a period of less than 12 months where this is valid, or a period of more than 12 months; indeed, a period of years. The wording first appeared in Section 3 of the Agricultural Holdings Act 1906, which never came independently into operation but was superseded by the 1908 Act; and since then various attempts at interpretation of the wording have been suggested.
It would clearly be unfair if a landlord could give a notice to quit of some years' length, thereby restricting freedom of cropping and disposal for an inordinate time. The proposed amendment leaves unaffected the normal restriction during the last year of the tenancy, but provides that in a case of a notice to quit of less than 12 months in length the restriction will apply only for that shorter period.
Subsection (2) of my amendment relates to cases that arise from time to time where a landlord refuses consent to a tenant's cropping programme which covers the last year of the tenancy and the tenant considers this refusal unreasonable. At present the landlord can rely on Section 11(4), and the tenant has no means of challenging that refusal. The proposed amendment provides for arbitration under the 1948 Act in the event of a dispute which the parties cannot resolve by agreement. A refusal of consent would have substantial financial consequences for the tenant; and, therefore, I beg to move.
The Earl of Swinton: My Lords, I find this amendment very little changed from Amendment No. 69 moved in Committee by my noble friend Lord Dilhorne. As I explained on that occasion, the Government do not argue with the principle of what my noble friend is attempting to achieve, but there are flaws in the method that he proposes to adopt. The matter has been given a great deal of thought by the department and by parliamentary counsel, and it has not been possible to find a simple formulation which would be equitable to both sides. I hope that my noble friend will recognise that it is not desirable to add to the complexities of the legislation. I hope, in the light of these remarks, that he will withdraw his amendment.
The Earl of Caithness: My Lords, I do not want to add to the complexities; I was only trying to simplify matters. Since 1906 we have been trying to achieve a sensible definition. I appreciate the amount of work that my noble friend has put into this provision and I should like to take the amendment away and talk to my advisers. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.7 p.m.
Lord Belstead Lord Belstead moved Amendment No. 72:
[Printed earlier: col. 1125.]
The noble Lord said: My Lords, this is consequential on Amendment No. 50 and so is Amendment No. 73. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 73:
[Printed earlier: col. 1125.]
On Question, amendment agreed to.
[Amendment No. 73A not moved.]
Lord Belstead Lord Belstead moved Amendment No. 74:
[Printed earlier: col. 1007.]
The noble Lord said: My Lords, this amendment is related to the earlier amendment, Amendment No. 2, which we had on the rent formula. It simply moves the effect of the rent formula into Schedule 1 relating it to the 1976 Act. I beg to move.
[Amendment No. 74A not moved.]
[Amendments Nos. 75 and 76 had been withdrawn, from the Marshalled List.]
The Earl of Caithness The Earl of Caithness moved, as an amendment to Amendment No. 74, Amendment No. 77:
Line 4, leave out from ("tenant") to end of the amendment.
The noble Earl said: My Lords, this amendment is similar to one that I raised in Committee, which related to a different rent formula. The purpose is to put the succession tenant who will succeed by right on the same footing as a new tenant in so far as rent is concerned. During our discussions on this provision on 13th December my noble friend Lord Belstead said (at col. 229):
"At present, a succession tenant is treated as a sitting tenant for the purposes of rent". [Official Report, 13/12/83: col. 229.]
I believe my noble friend was again badly advised for that is not the case. The 1976 Act clearly states that on succession the tenant must pay the open market rent. Indeed this was confirmed on 8th April 1976 in Committee in another place, when in col. 1172 the record clearly shows that the noble Lord, Lord Bishopston, who alas is not in his place at the moment, but who was then Minister of State as Mr. Bishop said:
"The brief answer is that subsection (5) provides for the determination of the rent on a new tenancy on the basis of the open market, "Rent" is defined in section 8(1) of the Agriculture Holdings Act 1948. I mentioned in my speech that determination of rent would be made on that basis". [Official Report, Commons, 8/4/76; col. 1172.]
Clearly the Government are seeking to make a major fundamental change in the law relating to rent. I appreciate that the words "open market rent" have been replaced by a new formula, but this is not a sufficient reason to change the law. On first review I realise that Clauses 3 and 4 of the Bill will apply, but they should not apply on succession. I beg to move.
Lord Belstead: My Lords, I am sorry to have to disagree with my noble friend on this, because on so many aspects of this Bill we are in agreement. Basically, rent arbitrations on succession under the 1976 Act have always been treated the same as rent arbitrations for sitting tenants. My noble friend, of course, is quite right in saying that basis was the open market rent; but now that we are changing the rent formula from open market to the prudent and willing landlord and tenant formula, together with all relevant factors, the four particularly relevant factors and the consideration of comparables, which are all in the rent formula now in Clause 1, we really do have, in order to be consistent, to deal with rent arbitrations for sitting tenants in the same way as the rent arbitrations now to be set out in Clause 1.
My noble friend's amendment would mean that we should be asking arbitrators on a succession rent to determine what an open market bid might be without any specific reference to relevant factors, let alone any regard being paid to comparables. That would, of course, depart from the formula we have now got in Clause 1, which would mean that we should have two rent formulas for arbitrators to have to live by. I think this would be highly undesirable. I know that my noble friend does not agree with the conclusion I have reached, but I hope he may feel that my explanation is at least logical. Rent arbitrations on succession under the 1976 Act have been treated the same as rent arbitrations for sitting tenants, and that is what we are still doing.
The Earl of Caithness: My Lords, I am afraid I would query my noble friend's last statement. The evidence I have got clearly shows that when a tenant succeeds and the rent is not mutually agreed it is in most cases agreed between the landlord and the incoming tenant who succeeds by right—he has a right more than anyone else in the market to get hold of that tenancy. The cases that I have looked at clearly show that the arbitrator, if he is called into this situation, which he very seldom is, awards a rent higher than a sitting tenant rent. This is a perfectly good valuation exercise that valuers can undertake. I think we are here changing the law. I appreciate what my noble friend is saying, but I think that a tenant, if he can succeed by right to a tenancy and then have his rent assessed, taking into account appreciable scarcity and comparables, is being given two advantages. I believe that this is against the principle of the law as it stands. It is to be regretted and is totally inequitable.
On Question, amendment to the amendment negatived.
On Question, Amendment No. 74 agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 80:
Page 27, line 30, at end insert—
(" ( ) for the words "The Lord Chancellor may by order provide" there shall be substituted the words "The Lord Chancellor shall by order provide" ")
The noble Earl said: My Lords, this is rather a sledgehammer of an amendment which is intended to crack a very small nut. The Ministry and working party agreed in Recommendation 103/1 that, when a tenant has served a notice requiring arbitration upon the reasons stated in the notice to quit, the tenant, if he wishes to pursue the matter, must ensure that the arbitrator be appointed within three months. The Lord Chancellor had already issued Statutory Instrument No. 257 in 1978—Agricultural Holdings (Arbitration Notices)—under Section 5 of the Agricultural Holdings (Notices to Quit) Act 1977, which regulates arbitration procedures at this point. However, the Bill, in paragraph 42 of Schedule 1, does no more than enable the Lord Chancellor to amend the regulations, and makes no mention of the working party's recommendation of three months. Therefore, I ask my noble friend the Minister these questions. Can we put the working party's recommendation into the legislation? If we cannot, will he give me an undertaking that he will amend the statutory instrument and will do so between the passing of this Bill and the commencement thereof? My Lords, I beg to move.
Lord Belstead: I am sorry, my Lords. But I find it a little difficult to follow my noble friend on this amendment, because the statutory instrument which my noble friend talks about, giving the Lord Chancellor the enabling power to make certain provisions, has, so far as I know, been acted upon by my noble and learned friend and by my noble and learned friend's predecessors with one exception, and one only; that is, the power relating to sub-tenants. Therefore, unless my noble friend has a particular point which is worrying him about sub-tenants, I think that the Lord Chancellor has all the power that he needs and has, in fact, used it.
The Earl of Caithness: My Lords, I think that there may be a misunderstanding between my noble friend and myself. I said that the amendment was a sledgehammer to crack a nut. I was referring only to the specific issue of the working party's Recommendation No. 103/1. It was that point that I tried to get across, rather than go through the whole of the statutory instrument. I am afraid that, in that sense, the amendment was badly drafted. But perhaps it will be opportune for me to withdraw this amendment and talk to my noble friend about it between now and Third Reading. My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.17 p.m.
Lord Belstead Lord Belstead moved Amendment No. 81:
[Printed earlier: col. 1086.]
The noble Lord said: My Lords, this amendment is consequential on Amendment No. 30. My Lords, I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 82:
[Printed earlier: col. 1087.]
The noble Lord said: My Lords, this amendment, all nine pages of it, is consequential on Amendment No. 31. My Lords, I beg to move.
Lord Sandys: My Lords, I wonder whether I may raise a number of points with my noble friend on the new schedule. It will probably be for the convenience of my noble friend and of the House if I list a series of questions, to which I do not expect my noble friend to reply at any length now. First, I would refer my noble friend to the meaning of paragraph 2(1)(b) and ask him this question. If one brother fails, is the second brother or a close relative who is an applicant thereby unable to make a fresh application? The second question relates to paragraph 2(1)(c)(ii). Does this mean that, if there have already been two successions under the 1976 Act, there cannot be a further one on retirement?
I am sorry to weary your Lordships, but these are important matters on a whole new schedule. I wonder whether, with your Lordships' permission, I may pursue one point. In paragraph 7(1), there appears to be a mistake in the drafting. Where the tenant gives a retirement notice and then dies before the relevant time, it seems that the Government have overlooked the fact that applications have not been heard before the time has expired. The Government have assumed that any application will be heard before the terminal date, but, in the experience of certain professional bodies, where the application has not been disposed of before the relevant time there is considerable difficulty. I fear that this is a somewhat lengthy explanation, but these are important matters.
Lord Belstead: My Lords, I do not think that I can answer all my noble friend's questions, and I must apologise to him for the fact that he may have bowled me out. However, as to his question concerning whether the second brother can apply on death, the
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answer is, no, there cannot be a further application on death. I shall have to write to my noble friend on the first two questions he asked me.
This is a highly detailed schedule which puts into effect the agreement on voluntary retirement which was reached between the NFU and the CLA. We moved through it when we dealt with Amendment No. 31. I am perhaps guilty of not looking forward and realising that my noble friend would give mature thought to it and come up with some difficult questions, as he now has. I do not believe that the questions should cause any particular problems. I wish I now had the answers to the other two questions which my noble friend asked me. Because I do not, I should be grateful if my noble friend Lord Sandys would allow me to write to him so that we can move Amendment No. 82 into the Bill.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 83:
Transpose Schedule (Statutory succession by person nominated by retiring tenant) to after Schedule (Minor amendments with respect to statutory succession).
The noble Lord said: My Lords, this amendment relates to Amendment No. 81. I beg to move.
On Question, amendment agreed to.
Schedule 3 [Transitional provisions and savings]:
Lord Sandford Lord Sandford moved Amendment No. 84:
[Printed earlier: col. 1105.]
The noble Lord said: My Lords, on behalf of my two noble friends I beg to move Amendment No. 84. At the same time I wish to speak to Amendments Nos. 85 and 86. If the House agrees, perhaps we might take the amendments en bloc.
[Amendment No. 85: Printed earlier; col. 1105.]
[Amendment No. 86: Printed earlier; col. 1105.]
I spoke to all three amendments in the course of speaking to Amendment No. 35, which dealt with conservation. I have no more to say about the matter, except that the House might care to know that my noble friend on the Front Bench and I have agreed to meet on Thursday of this week to take further the extension of this concept to cover cases where management agreements refer not to conservation but to diversification on a farm. It is a matter upon which I hope we shall have made good enough progress by Thursday to have something to offer to my noble friend. Whether it will be in time for an amendment at Third Reading, or something that has to be pursued in the other place, remains to be seen. I thought the House would like to know that we are making progress. I beg to move Amendments Nos. 84, 85 and 86.
Lord Belstead: My Lords, on behalf of the Government I would simply respond to my noble friend on these three amendments by saying that, as he knows, the Government very much welcome these amendments, which complete the package of amendments which he started, together with his noble friends, by moving Amendment No. 35.
Lord Sandford: My Lords, as I was unable to be present last week when this group of amendments was taken, may I add my thanks to my noble friend Lord Belstead for the co-operative way in which the whole subject has been dealt with, and for the Government's very welcome acceptance of the projects.
Lord Bishopston: My Lords, may I add that, further to what was said in the last meeting of the House on Report stage, the noble Lord, Lord Sandford, has raised various points in regard to conservation. We recognise that conservation is of very great importance—as is good husbandry. I pointed out at the time that matters raised in the amendments proposed then, as in the amendments before the House now, were of very great importance.
I thought that on previous occasions the House had been a little dissatisfied in a way with the apparent lack of enthusiasm of the Minister with regard to conservation aspects. We recognise that, rightly, the Ministry require in the interest of good husbandry that certain constraints are exercised. That has some effect on the way in which land is used. One has in mind the tendency towards working larger holdings and the less profitable aspects which are sometimes necessary in the interests of conservation.
I rise only to say that while one is always pleased about the further discussions which are being held with the noble Lord, Lord Sandford, and others, and with the Minister, I hope that in the light of the fact that we are reaching the end of this Bill, and there is only one further stage before that point is reached, we shall be satisfied that all the safeguards we have been seeking will be realised and that the constraints placed on the industry will be accepted by those involved without any undue loss in terms of viability. These are very important aspects.
Basically, it is a matter of realising that conservation is not an extra. I have dealt with this point before, but it needs stressing. It is not an extra to be brought in as far as possible but is an integral part of good husbandry. One hopes that the Bill in its final stages will reflect that to the satisfaction of all those who, quite rightly, have been making representations on these important aspects.
On Question, amendments agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 87:
Page 32, line 38, leave out ("applies") and insert ("shall not apply")
The noble Earl said: My Lords, with the leave of the House, in moving this amendment, I should like to speak to Amendment No. 88 as well, because the two hang together.
Amendment No. 88: Page 32, line 40, leave out from ("Act") to end of line and insert ("; where such applications are made after the commencement of this Act the continuous three year period shall apply up to the date of that application.")
It is really a question of trying to incorporate into Schedule 3, and make it workable in the transitional period, the word "continuous", which it has already been agreed should be added in paragraph 34 on page 26 of the Bill. As presently worded, I found paragraph 15 of Schedule 3 very difficult to understand. I believe I have the gist of it, but these
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amendments would put it forward in slightly different language. I beg to move.
Lord Belstead: My Lords, Schedule 4 of the Agriculture Act 1958 gives power to the Agricultural Land Tribunal to direct a landlord to provide or repair fixed equipment needed by a tenant to carry out an agricultural activity so that he can comply with relevant statutory requirements. The proviso to Section 4(1) restricts this power when the activity in question has not been carried out on the holding
"for a period of at least three years immediately preceding the making of the application".
As the law stands, it is not clear whether this means continuously throughout the period or at any time in that period. The purpose of paragraph 34 in Schedule I of the Bill is to clarify the law by inserting in the proviso to Section 4(1) the word "continuously".
If I may, I will suggest to my noble friend that, as this is a matter of clarification and not a change in the law, it has been considered appropriate to provide in Schedule 3 a transitional provision which has the effect of making paragraph 34 bite on applications both before and after the commencement of the Bill. I would not have thought there was a reason to change that. I hope that my noble friend will feel that his amendment is not necessary.
The Earl of Caithness: My Lords, I will read with care what my noble friend says. I think he is right and I am wrong, which is more often than not the case on this Bill. I am very grateful for the considerable help he has given me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 88 not moved.]
House adjourned at twenty-nine minutes before eleven o'clock.