Lords Sitting of 17 July 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 Liverpool

Grenada: Intelligence Advice
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
[To ask Her Majesty's Government what action they are taking over the assertion by the Commons Foreign Affairs Committee that the Foreign and Commonwealth Office based "its reaction entirely on the advice received from Washington, which in the end proved to be unreliable advice" in the days leading up to the invasion of Grenada.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, our reply to the Second Report from the Select Committee on Foreign Affairs was published as a White Paper (Cmnd. No. 9267) on 20th June. The White Paper explains why we do not accept the criticisms in the report of our actions during the Grenada crisis.
Lord Hatch of Lusby: My Lords, is the noble Lord aware that this is an all-party Select Committee and that its all-party membership found that in the days before the invasion of Grenada Her Majesty's Government had:
"been reacting passively to the events unfolding in the Caribbean and basing its reaction entirely on the advice received from Washington, which in the end proved to be unreliable advice"?
Can Her Majesty's Government state whether they accept that criticism, and if not, why not, considering that it comes from some members of their own party?
Lord Trefgarne: My Lords, I am not certain that the fact that this was the report of an all-party committee, as the noble Lord rightly says, necessarily gives it a monopoly of wisdom on the matter. But I can say that in the Government's view the committee's description of the process of assessing information and formulating policy in a fast moving situation is oversimplified and relies heavily on hindsight.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the House fully understands that he has to defend the department against the committee's charges? But is he also aware that in the report it was stated that the United States Government recognised that it would have been better if they had consulted the British Government much earlier? Can he therefore say what steps have been taken to improve the consultative procedures between the two countries so as to avoid that sort of thing in the future?
Lord Trefgarne: Yes, my Lords, the noble Lord is quite right that the Americans have indicated that it would have been better if we had been consulted earlier. We are of course in constant touch with the
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United States on a whole range of matters. It was unfortunate that on this occasion we were not consulted more fully at an earlier stage. But the United States is our principal and closest ally, and I am not sure that the wide-ranging review, which I think that the noble Lord is calling for, is necessary.
Lord Paget of Northampton: My Lords, does the noble Lord agree that we owe quite a few of our victories in history to having received and acted on the wrong information? Is this not another example? Should we not be grateful that we did not get the right information or we might have frustrated one of the West's few successes?
Lord Trefgarne: My Lords, I am not sure whether the noble Lord has it entirely right. The actions that the Government took at the time are not ones that we would now wish to have changed, even with the benefit of hindsight.
Lord Sainsbury: My Lords, does the Minister agree that many of the smaller islands in the Eastern Caribbean welcomed the American action because they feared possible revolts against their own governments by extreme Left-wing Marxist groups?
Lord Trefgarne: My Lords, the noble Lord is right to suggest that there was a wide range of views as to the merits or otherwise of the American action. If I may say so, I think that it is in our interests in maintaining the two-way flow between our countries that not only do we seek to persuade the Americans of our views, but we listen to their views as well.
Lord Cledwyn of Penrhos: My Lords, may I put one further point to the noble Lord which concerns intelligence sources in the Caribbean? As he recalls, there has been considerable criticism of the way in which we have neglected to develop, or to continue, the intelligence contacts that we had in that area since most of the territories gained their independence. Can he say whether we have improved our intelligence contacts in the area?
Lord Trefgarne: My Lords, it is, I fear, the case that a country such as ours and of the size of ours is not able to have the facilities in every part of the world for which the noble Lord is calling; but we take what steps we can to ensure that the arrangements are the most appropriate that we can make.
Lord Cledwyn of Penrhos: My Lords, I apologise again, but may I ask whether it is not the case that this is an area where we have particular interests and where we still maintain close relationships? In those circumstances, is it not a retrograde step to neglect our intelligence contacts?
Lord Trefgarne: My Lords, I certainly agree that it is a retrograde step to neglect intelligence matters anywhere. But, having said that, there is a limit to what we can do. I hope that the noble Lord will forgive me if I do not go into details.
Lord Hatch of Lusby: My Lords, does not the noble Lord agree that in this case the lack of intelligence was

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not lack of intelligence in Grenada but lack of intelligence between the Foreign Office here and Washington? That is where the intelligence link was needed. I do not cast aspersions on the noble Lord, but is he not aware that he has been briefed to give answers which give the impression of a great deal of complacency? Is it not the case that our Queen was Queen of the island of Grenada, yet a foreign power, albeit an ally, invaded the Queen's territory without her knowledge? Is this not a very grim commentary on the advice that the Foreign Office was able to give to Her Majesty's Government and that Her Majesty's Government gave to Her Majesty? How did it come about that on 24th October, less than 24 hours before United States paratroopers landed on the island of Grenada, the Foreign Secretary was able to tell Members in another place that no United States invasion was imminent?
Lord Trefgarne: My Lords, I can assure the noble Lord that we do not for a moment wish to be complacent about these matters, as the noble Lord suggests. We were informed in advance of what was proposed; but, as I said just now in answer to an earlier question, we certainly would have wished that the consultation had been earlier and more full.
Lord Hatch of Lusby: My Lords, if Her Majesty's Government were informed in advance, how did it come about that the Foreign Secretary, less than 24 hours before the invasion, told Members of the other place that no invasion was imminent?
Lord Trefgarne: My Lords, that seems to be a matter of elementary arithmetic.

The Telephone Service: Waiting List
2.45 p.m.
Baroness Sharples: 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 is the current length of the waiting list for the installation of telephones and how this compares with the situation in 1979.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, the waiting list on the accepted definition has been reduced from 196,154 as at 31st March 1979 to 337 as at 31st May 1984.
Baroness Sharples: My Lords, I thank my noble friend for that very satisfactory reply. Can he say whether the rural services will continue to be maintained? Can he also say whether telephone kiosks, even if they prove uneconomic, will also be kept throughout the country?
Lord Cockfield: My Lords, specific safeguards both for public call boxes and for rural areas are contained in Sections 3 and 8 of the Telecommunications Act and effect to these safeguards is given in Conditions 2
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and 11 of the British Telecom licence, which will be the subject of debate in your Lordships' House tomorrow week.
Lord Somers: My Lords, is there any method of protecting telephone kiosks from the attacks of vandals?
Lord Cockfield: My Lords, I am afraid that that is quite a different question from the one which appears on the Order Paper, but nevertheless an important one.
Lord Bruce of Donington: My Lords, would the noble Lord agree that the reply he gave to the original Question reflects very great credit indeed on this publicly-owned enterprise? Would he confirm that if a Question is put down in similar terms 12 months from now it will be answered by Her Majesty's Government?
Lord Cockfield: My Lords, so far as the first part of the noble Lord's supplementary question is concerned, he will recall that on a number of occasions during our debates I paid tribute to the progress which had been made by British Telecom. This has been due, at least in some measure, to successive Acts of Parliament passed during the lifetime of the present Government which have done so much to induce a spirit of enterprise in the case of British Telecom. As regards answering Questions in the future about the activities of British Telecom when it becomes a private limited company, that will be subject to the general rules of your Lordships' House which will be found, inter alia, in the Companion to the Standing Orders.
Lord Molloy: My Lords, can the noble Lord comment on a point which is genuinely irritating many people? Is he aware that they would like to know how many nationals of foreign countries will now play a dominant role in the control of what we now know as British Telecom?
Lord Cockfield: My Lords, this is going far wide of the Question on the Order Paper, but this matter was discussed at great length in the course of the debates on the Telecommunications Bill, as it then was, and I refer the noble Lord to what was said then.
Viscount St. Davids: My Lords, does the noble Lord have in mind the protections which were put into the Acts on the subject of railways, which finally resulted in those disgraceful vehicles which became a public joke—the parliamentary train? Will the noble Lord take great care that we do not have, as a further modern joke, the parliamentary telephone box?
Lord Cockfield: My Lords, I am not an authority on the history of the early railways in the way that the noble Viscount is.
Lord Ferrier: My Lords, does the noble Lord agree that at this moment there is an element of transition about the whole practice of operating telephones?
Lord Cockfield: My Lords, I do not entirely follow the point that my noble friend has in mind, but if there

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is a specific point to which he wishes to draw my attention I should be only too glad to discuss it with him.
Lord Glenamara: My Lords, will the noble Lord say whether he considers it a gain or a loss to democracy that British Telecom should become answerable to a body of shareholders rather than to both Houses of Parliament, as it is today?
Lord Cockfield: My Lords, I think that the noble Lord misunderstands the position when he refers to British Telecom being answerable to both Houses of Parliament. The fact of the matter is that all experience shows that when an enterprise of this character is transferred to the private sector, its efficiency of operation improves.
Lord Glenamara: My Lords, will British Telecom, when it is privatised, report to Parliament, and will Members of Parliament be able to ask questions about it?
Lord Cockfield: My Lords, the noble Lord's question has nothing whatever to do with the Question on the Order Paper.
Lord Glenamara: My Lords, will the noble Lord nevertheless answer it? It has great bearing on the noble Baroness's Question and on her supplementary question.
Lord Cockfield: My Lords, if the noble Lord wishes to ask a question of this kind, perhaps he will place it on the Order Paper.
Lord Glenamara: My Lords, then the answer is no.

Treasure Trove
2.52 p.m.
Lord Gainford: My Lords. I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what criteria the Treasure Trove Reviewing Committee makes an ex-gratia reward to finders of treasure trove.
Lord Cockfield: My Lords, it is the job of the Treasure Trove Reviewing Committee to ensure that the valuation made by the British Museum of any hoard of treasure trove to be retained by a public museum corresponds to a sum that might be paid for it at an open market sale by a willing buyer to a willing seller. Where finds have been promptly and fully disclosed to the authorities, the sum will be paid to the finder as an ex-gratia reward, but in cases where finds have been concealed, decisions on whether or not a reward should be paid, and on the size of any such reward, are made by my right honourable friend the Chief Secretary to the Treasury.
Lord Gainford: My Lords, I thank my noble friend the Minister for that Answer. Arising out of it, what is
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the simplest and easiest way for members of the public to find out whether or not something that they may have found is treasure trove?
Lord Cockfield: My Lords, a find that is a find of treasure trove should be reported to the coroner. Usually, the easiest way of doing this is to report it to the police. Press notices were in fact issued by the Treasury on this matter on 20th June this year; and a further press notice was issued on the same day. I shall let my noble friend have copies of these if he is interested.
Lord Bruce of Donington: My Lords, in order that the zest of those seeking treasure trove may continue unabated, will the noble Lord, from his great knowledge of the matter, confirm whether any payments will be free of all taxation?
Lord Cockfield: Yes, my Lords, in the normal way, the payments would be free of tax. But, of course, if subsequently they formed part of a deceased's estate, they might in that respect then be liable to capital transfer tax.

Salmon Fishing
2.54 p.m.
Lord Gisborough: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to introduce a salmon tagging scheme and to ban monofilament and drift nets for salmon.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the examination by officials of salmon tagging, which I announced in reply to a Question from my noble friend Lord Ridley on 1st March, is being pursued in consultation with representatives of a number of interests, including salmon farmers and traders who would be significantly affected. A number of problems have been identified and are being investigated urgently.
The use of monofilament nets and drift nets for salmon fishing around the coast of England and Wales is strictly controlled by the water authorities. They have powers to make by-laws prescribing the type and construction of nets which may be used in their areas, depending on local circumstances.
Lord Gisborough: My Lords, I thank my noble friend the Minister for that full reply. Would he agree that the maintenance of salmon stocks for anglers is vital for the rural economy in many parts of the country? Will he, in particular, look into the position of the Yorkshire Esk, where salmon have been virtually wiped out by armed and masked gangs of illegal netsmen?
Lord Belstead: My Lords, I agree with my noble friend about the importance of preserving salmon stocks, which underlies his Question on the Order Paper. I do not think that I should give a reply to my

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noble friend's second supplementary question. I believe I am right in saying that a public inquiry opened on 9th July into the question of the Yorkshire Water Authority making a by-law on the Esk. My right honourable friend the Minister of Agriculture, Fisheries and Food is in the position of having to give a final decision in the matter.
Lord Grimond: My Lords, can the Minister state the up-to-date position in Scotland? Will he tell the House what are the arguments for allowing monofilament nets to be used at all?
Lord Belstead: My Lords, so far as the first part of my noble friend's Question is concerned, which the noble Lord, Lord Grimond, asks me about, we feel strongly that the question of whether or not we can achieve a salmon tagging system is a Great Britain matter. I am happy to be able to report to the House that whereas, after I replied to my noble friend Lord Ridley on 1st March, working groups of interested parties were set up separately for Scotland and for England and Wales, those working groups have come together in a Great Britain working party. I am sure that this is the right way to proceed.
So far as the second part of my noble friend's Question is concerned, to which the noble Lord refers, I think I am right in saying that it is already unlawful in Scottish waters to fish for salmon with drift nets, of whatever material, set from a boat. It has proved difficult to enforce that ban, and my right honourable friend the Secretary of State for Scotland will be considering use of the enabling power in the Inshore Fishing (Scotland) Act 1984 to make an order prohibiting the carriage of monofilament nets in fishing vessels.
Lady Saltoun: My Lords, can the noble Lord say how many fishery protection vessels we now have patrolling our coasts?
Lord Belstead: My Lords, I must apologise to the noble Lady; I do not have that answer with me. I wonder whether I may write to her on the point.
Lord Cledwyn of Penrhos: My Lords, the consultative paper on this subject was, I understand, published in July 1981—exactly three years ago. Can the noble Lord say when a definitive statement is to be made by his department on the question of tagging and on the nets, in view of the time that has passed since the report was published? Secondly, can he tell the House what would be the effect on fishing enterprises of banning these nets? I understand that there are complications here, and I should be grateful if he would enlighten us upon them.
Lord Belstead: My Lords, if I may take the second point first, I have just replied to the noble Lord, Lord Grimond, about the situation in Scotland, which clearly falls to my right honourable friend the Secretary of State. As to the use of monofilament nets by those who are catching fish in England and Wales, this is really a matter for the water authorities. As the noble Lord will know, the Welsh Water Authority has seen fit, in parts of its area, to ban the use of monofilament nets in relation to salmon fishing.
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The noble Lord is, of course, absolutely right in saying that the Ministry of Agriculture reported on the matter of tagging in 1981. It is fair for me to say that it was not until last year that the salmon sales group of the former National Water Council came out with a definite recommendation for tagging. We really have tried to move as quickly as possible since then. I shall not go over the ground that I have explained in the last few minutes, but there is just one point that I should put to the noble Lord; I am sure that he is well seized of it. The really difficult point confronting us, and all the various salmon interests, is what on earth to do about imported fish, if one has tagging. It is this that we are very much hung up on at the present time.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will, with the leave of the House, repeat a Statement to be made in another place on GCHQ.
This will be followed by my noble friend Lord Gray of Contin who, again with the leave of the House, will repeat a Statement on the rate support grant for Scotland 1984–85.
It may be for the convenience of the House if I announce that dinner will he available this evening at 7.30.

Overseas Trade
2.59 p.m.
The Lord President of the Council (Viscount Whitelaw)The Lord President of the Council (Viscount Whitelaw) rose to move, That a Select Committee be appointed to consider the causes and implications of the deficit in the United Kingdom's balance of trade in manufactures; and to make recommendations.
The noble Viscount said: My Lords, the suggestion that the House should appoint a Select Committee on overseas trade was first put forward by the noble Lord, Lord Ezra, in the course of a debate on an Unstarred Question on 10th November last year. Discussions through the usual channels have shown that there is widespread support for the setting up of such a Committee. I have accordingly tabled the Motion in my name. If the House agrees to this Motion, it will be for the Committee of Selection to meet and to propose the names of noble Lords to serve on the Committee. A further Motion will then be brought before your Lordships appointing the Members of the Committee and giving them the necessary powers. It is hoped that the Committee will be able to hold one meeting before the summer Recess and that the whole of the Committee's inquiry will be completed within a year. I beg to move.
Moved, That a Select Committee be appointed to consider the causes and implications of the deficit in the United Kingdom's balance of trade in manufactures; and to make recommendations.—(Viscount Whitelaw.)
Lord Hatch of Lusby: My Lords, may I for one moment draw to the attention of the noble Viscount the Leader of the House the fact that on many occasions, including that which he mentioned—the debate on the Motion of the noble Lord, Lord Ezra—a

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number of us have drawn special attention to the connection between the deficit in our manufacturing trade and trading relations between this country and the third world market, which at present is virtually closed. Can I ask him, when he is giving a remit, as I imagine he will be, to this Committee, to bear in mind especially the relevance of this aspect of the subject?
Viscount Whitelaw: My Lords, I can answer the noble Lord best by saying that, very naturally, how the Committee proceeds will be a matter for the chairman of the Committee and its members, bearing in mind of course the terms of reference which will be set down for them.
Lord Wigoder: My Lords, on behalf of my noble friend Lord Ezra I should like to say how much he appreciates the care, courtesy and reception that has been given to his suggestion.
On Question, Motion agreed to.

Building Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.
Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Parliamentary Pensions etc. Bill
3.3 p.m.
Viscount Whitelaw: My Lords, I beg to move that this Bill be now read a second time.
I should make clear at the outset that the Parliamentary Pensions etc. Bill is of very limited direct relevance to Members of this House. It is mainly concerned with the pension benefits and contributions from salary to be provided for Members of the House of Commons, and it has been drawn up to meet the needs of members of an elected chamber. The Bill does however also make changes to the supplementary pension scheme for Ministers and office-holders, and is therefore of importance to noble Lords who are Ministers—or hope to become Ministers—and who choose to join the scheme.
The proposed improvements to pension benefits derive from the Twentieth Report of the Top Salaries Review Body, published in May 1983. These recommendations were adopted by resolution of the House of Commons in July last year, with the exception that the rate of contributions to be paid by Members should be 9 per cent. of salary instead of 8 per cent., as the review body had recommended.
During the preparation of the Bill, the trustees of the Parliamentary Contributory Pension Fund, and other interested Members of the House of Commons, made a number of suggestions for modifications of the scheme to take account of the special character of a
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parliamentary career, many of which my right honourable friend the Lord Privy Seal has been able to include in the Bill. The Bill therefore represents the result of a long process of close consultation.
The parliamentary pension scheme is at present embodied in two principal Acts, the Parliamentary and Other Pensions Act 1972 and the Parliamentary Pensions Act 1978. These Acts have been amended on several occasions, and the present Bill consists largely of further amendments; hence its apparent complexity. I would be happy to make available the Notes on Clauses to any noble Lord who would like to have more detailed information.
I turn now to a brief description of the main provisions. The Bill proposes an increase in the contributions paid by Members of the House of Commons and Ministers and other office-holders from 6 per cent. and 5 per cent. of salary respectively to 9 per cent. A contribution of 9 per cent. is more than double the national average for pension schemes in the private sector, and is clearly in line with the policy—announced in the 1983 manifesto—that members of public sector pensions schemes should pay realistic contributions towards their index-linked benefits. The increase in contributions will be implemented in annual stages so that the full rate of 9 per cent. will come into force in January 1987, when the final increase in the pay of Members of the House of Commons, agreed last July, is implemented.
Secondly, the Bill aims to provide a rate of accrual which will yield benefits appropriate to the career of a Member of Parliament. The pension accrual rate is to be increased from one-sixtieth of annual salary per year of service to one-fiftieth.
The TSRB recommended that it would not be appropriate to apply the improved accrual rate retrospectively to past service. This is in accordance with the long-accepted principle that improvements in pension scheme benefits should apply only to the future service of current members of the scheme. In order to provide a degree of flexibility to Members of the House of Commons in planning their pension arrangements, however, a limited facility is being made available for current Members to convert their back service to the new accrual rate at 40 per cent. of the cost to the fund. This facility is not open to Ministers or office-holders in this House.
Another area which has given rise to concern is the arrangements for early retirement. As your Lordships will know, it is not always as easy to plan the date of one's retirement when one is a Member of Parliament or a Minister or office-holder, as it is in other employments.
Lord Stoddart of Swindon: My Lords, the Minister can say that again.
Viscount Whitelaw: In particular, a career may come to an end at the dissolution of Parliament.
Lord Ennals: Or before, my Lords.
Viscount Whitelaw: My Lords, the Bill therefore contains certain provisions intended to give flexibility for those who retire before the age of 65, whether by choice or of necessity. I can explain these provisions more fully if any noble Lord wishes.

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The other provisions of the Bill include the abolition of the qualifying period of service necessary to receive benefits; an increase to the maximum permitted by the Inland Revenue in the lump sum which may be obtained by commutation of part of a pension; the provision of pensions for the widowers of female Members or office-holders on the same basis as those for widows; and various other minor changes.
The Bill also contains provisions which are not directly connected with the parliamentary pension scheme. One of these gives United Kingdom representatives to the European Assembly severance grants on the same basis as those payable to Members of the House of Commons, on a scale set out on page 18 of the Bill.
Clause 13 is of especial interest to certain Members of this House. It provides for Ministers and other office-holders in this House to receive a payment of one-quarter of final salary on ceasing to hold office. This implements a 1983 recommendation of the Top Salaries Review Body. I indicated to the House on 25th July last year the Government's intention to bring forward legislation on this matter. As the TSRB recognised, loss of office can come suddenly to a Minister in either House. Unlike his counterpart in another place, a Minister in this House has no salary as a Member of the House to fall back on in such circumstances, and he may have difficulty in resuming a former career at short notice.
The TSRB recommended a payment equivalent to three months' salary in order to ease the process of adjustment to loss of the income that goes with office, and the Government have accepted that recommendation. As I indicated to noble Lords last July, for the Chairman and the Principal Deputy Chairman of Committees, the recommendation to make severance payments to Ministers and office-holders could have been implemented without legislation. Nevertheless, in order to avoid possible complications should questions arise at some future date over the aggregation of periods of office as Minister and Chairman or Principal Deputy Chairman of Committees, it is proposed to cover them all in the legislation.
It is inevitable that the arrangements Parliament makes for its own pay and conditions will attract a good deal of publicity, and perhaps it is almost equally inevitable that whatever is proposed will be criticised. There is however a legitimate and justifiable public concern that Parliament should be seen to be responsible and circumspect in proposing improvements in our own conditions. The Government believe that the present Bill acknowledges the unique character of a parliamentry career and at the same time reflects the cautious approach towards improvement which the public expects. I therefore commend it to your Lordships and ask the House to give it a Second Reading.
Moved, That the Bill be now read a second time—(Viscount Whitelaw.)
3.11 p.m.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Viscount for so succinctly explaining the
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purposes of the Bill. As the noble Viscount said in his introductory remarks, the Bill as it stands is of little relevance to Members of this House, but there is a great deal of interest in the Bill by Members of this House, particularly by those Members who were formerly Members of another place. Indeed, one of the faults of the Bill will be seen by many to be that it does little, if anything, for those who are now in this House and who were previously Members of another place.
Let me say in opening that we give a general welcome to this Bill and to the improvements in the pension scheme proposed by the Bill. However, one regrets that the Bill does not go further. Part of this of course is accounted for by the fact that the full proposals of the Top Salaries Review Body were not implemented, with the effect that MPs' salaries are lower than proposed in the review body's report and that has the consequential effect that the proposed pension will be lower than envisaged in the report. The proposal to increase the amount of pension contributions over a period of years rather than bringing it in immediately, is inevitable in view of the decision which was taken in another place about the level of MPs' salaries, and it is obviously the only practicable solution to this particular problem. But of course it will result in a lower pension at the end of the day.
As I said, we generally welcome the proposals but of course anomalies will still exist, and as the noble Viscount has said there is a particular concern about the position of a Member who achieves the 20 years' service and retires before the age of 60, as opposed to the Member who achieves his service after the age of 60. All Members, as of right, should receive their pension at the age of 60 irrespective of whether they have achieved the 20-year qualifying period for the full pension to be paid immediately.
The noble Viscount rightly pointed out that Members of another place have difficulty in fixing their retirement date. This of course is a particular problem for those who find themselves compulsorily retired under the age of 60. A Member in his late fifties will find difficulty in finding an alternative job. The Bill provides for a Member who has retired forcibly at any age over the age of 50 to receive an actuarially reduced pension. But that actuarially reduced pension will be a very substantially reduced pension, and one raises the question of whether such a Member should be entitled, for example, after the age of 55, to receive a full pension, rather than an actuarially reduced one.
The rate of accrual for pensions at one-fiftieth instead of one-sixtieth per year of contribution is welcomed. But as the noble Viscount said in his opening remarks, this is not something which can be back-dated prior to the date of the last election. So for all former Members of Parliament with service before the last election the one-sixtieth principle will apply to their pension as opposed to the one-fiftieth provision. Again, this is something which is causing concern to Members of this House who draw pensions or who will have the right in future to draw pensions because of service in another place. Could we not look at whether there could be some element of retrospection with regard to the basis upon which the pension is calculated?

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There is also the problem of those Members of Parliament who retired before 1964 and before the introduction of these particular arrangements. I know that some special arrangements were made in the past for those who had given considerable service in years gone by to receive a pension, or perhaps I should say a nominal grant. That grant is now £1,000 a year which of course is subject to tax, which means that those former Members of Parliament with considerable service will be receiving something slightly over £10 per week as a pension. One would not have thought that that was a particularly generous payment to them. One would have thought that there was a case for being considerably more generous in this particular area.
I know that many noble Lords think that they are being treated or have been treated in a way that makes them feel that their successors in another place are being treated far more generously than they have been, and that there should be more recognition of the past service of MPs. Another factor of which the Bill, as drafted at present, does not take account is the situation with regard to Members of the European Parliament. As we now have two elected assemblies, it means that people can, and indeed do, follow parliamentary careers both in the United Kingdom Parliament and in Europe. As I understand it, it is the intention that the pension scheme for MEPs is to be brought into line with the pension scheme for MPs. It would seem right that the two should be linked together so that in each scheme membership of the appropriate assembly would count towards total service, and that the benefits of having achieved a full pension after a 20-year qualifying period could be obtained from service in both assemblies added together. Alternatively, perhaps this could be achieved if there were transferability of rights between the two schemes.
As the noble Viscount said in his closing remarks, inevitably what Parliament does with regard to pensions will achieve a good deal of publicity. But that is not to say that we should not do the right thing by those who have rendered service in Parliament, whether in this House or in the other House, and that is something of which the Government should take account. I look forward to an interesting Committee stage.
3.1 p.m.
Lord Diamond: My Lords, as an ex-Member of the other place, and as one whose office and responsibilities were terminated sharply and involuntarily both as to membership of another place and as an office-holder, let me first of all declare that unhappily I have no interest whatever. I am grateful, as we all are, to the noble Viscount for having introduced this Bill and to the noble Lord, Lord Ponsonby, for having gone into it in a certain amount of detail.
However, I find it difficult to think of more than one point which is appropriate for Second Reading. We shall have a Committee stage and all the problems that arise will arise at that stage. On Second Reading one simply has to direct one's mind to the prime question of whether or not it is proper that the other place—because by and large this affects the other place
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—should have an increase in its level of pension entitlement.
Anyone who knows the problems of providing for increases in remuneration or in pension entitlement in another place will know that the barriers are so great and the problems of public opinion so appalling that it is quite impossible to enable Members to have adequate remuneration, adequate services or adequate pension rights. Therefore, in my view, none of your Lordships can have the slightest doubt but that these increases are well merited and still leave Members of another place well behind the kind of remuneration and pension rights that they would receive if they were applying their minds in commerce or professional activities.
Having said that, and looking forward to the details of the Committee stage, I repeat my thanks to the noble Viscount and conclude with the words that Mr. Gilbert might well have used:
"I see in this one for thou and one for thee, but never oh never a one for me".
3.22 p.m.
Lord Bottomley: My Lords, I should like to ask the noble Viscount the Leader of the House a question. Quite rightly, much has been said about those in another place who, unlike many of us, have not benefited. A plea has been made on their behalf and I hope that something can be done for them. Under Clause 12 of this Bill, is it not possible for something to be done to assist them?
Lord Beswick: My Lords, I was asked whether I would intervene for just a few minutes because, as my noble friend Lord Ponsonby said, there are anomalies in this Bill, and it is obvious from the voices that were raised behind him, and indeed from the other side of the House, that there is considerable agreement for the criticism which he was implying. There are those (I think these are the people whom my noble friend Lord Bottomley has in mind) who served in the other place up to 1964, when the pension provisions were first instituted. I believe that it is worthwhile thinking again about the conditions under which some of them entered the House just after the war. It was not a motivation that was prompted by financial considerations. I believe that the salary was £600 and that it rose to £1,000 a year. There was no question of any pension at all.
However, we have gone beyond those days and we are now thinking in terms of pensions. This Bill is about improvements to the provisions that have already been made. I know that some provision has been made to the pre-1964 Members, and I support what my noble friend Lord Bottomley was saying. I wonder whether something more might be done for them. Of course, it is possible for them to appear before a body and to receive an allowance on the ground of hardship. Those people can plead their case. But the sort of people I have in mind and the sort of people who have spoken to me are not given to pleading, and I do not think that we should leave them in that position.
It is not my intention to go into the details as regards the sort of individuals I have in mind, but before the Committee stage perhaps the noble Viscount might give one or two of those concerned the opportunity to

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see him and discuss the matter with him. I am sure that he would view their case with some sympathy, and conceivably something might be done.
Lord Glenamara: My Lords, I do not wish to delay the Second Reading of this Bill. But as someone who served for 25 years in another place and for eight years as a senior Minister, and who was Leader of the House in the other place, I should like to support the point made by my noble friends Lord Beswick and Lord Ponsonby. Up and down the country I suppose that there are upwards of 200 ex-Members of Parliament, some of them in your Lordships' House, who are living in straitened circumstances, and increasingly so. It was difficult to accumulate any savings in those days, but such savings as they have, because of inflation, are worth almost nothing.
I think that it is an affront to such people that we should allow public servants to live in this way. I know that they can go and submit themselves to a means test before a committee and then may receive a small allowance. I do not think that that should be the case. The noble Viscount made the point about retrospection and I encountered the same point from the Civil Service Department when I was working on the same problem. However, the noble Viscount has already breached the retrospection principle in what he has said by allowing Members of Parliament to buy-in previous years' service.
I would make a plea to the noble Viscount (although I do not think it will be dealt with under this Bill) to look at the problem of Members of Parliament who retired before 1964 to see whether, as of right, something can be done to help them, because they should not be subjected to a means test. They are a diminishing number. They are all getting on in years, and many of them are very hard up.
Lord Dean of Beswick: My Lords, I rise very briefly to support the point that has just been made by my noble friend Lord Glenamara and by the two previous speakers. I think it should be made quite clear that not all the Members who retired before 1964 receive that sum of £1,000. Whether such a Member receives it depends on a strict means test and some receive nothing, which is the insulting part about it. In this day and age, if we cannot put that right, there is something entirely churlish about our society, and I hope that this issue will be looked at as a matter of urgency.
Lord Ross of Marnock: My Lords, there is just one other point which I would ask to be taken into consideration. I completely support what has been said on this side of the House about former fellow Members of the House of Commons who retire fairly early. The point I wish to raise is the point about the availability of pension at the age of 60. Would it not be advisable to leave some scope for a certain amount of flexibility?
A colleague of mine who came to Parliament in 1935 was compulsorily retired in 1970 after 35 years' service. His was not the best of constituencies because it was probably the furthest away from London and one of the most difficult constituencies in the country—namely, the Western Isles. He served for 35 years in the House of Commons, was compulsorily retired and at that time was not entitled to a single penny of pension. He had come to Parliament at the
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age of 21 or 22, but he was far away from pensionable age, so when he retired he was completely without resources. No one would argue that the salaries in 1935 were at all adequate, any more than they were in 1945. Could the noble Viscount look at this matter to see whether a little flexibility could be included in the Bill to cover what would inevitably be an exceptional case?
3.29 p.m.
Viscount Whitelaw: My Lords, I am grateful to noble Lords who have spoken, and particularly to the noble Lord, Lord Ponsonby, for the detailed points that he made. I hope to write and answer many of the points that he made before the Committee stage so that we may see where we stand before we reach that stage. If I can help in that way, I shall certainly do so. Equally, I am grateful to the noble Lord, Lord Diamond, for the important points that he made.
The noble Lords, Lord Bottomley, Lord Beswick, Lord Glenamara, and Lord Dean of Beswick, raised the question of the pre-1964 Members of the House of Commons. The noble Lord, Lord Ross, raised a slightly different point. As one who was a Member of that House for nine years before 1964, who was Chief Whip of a party for six years and Leader of the House for another two, it would be absurd to pretend that I did not have a good deal of knowledge of many of the issues that the noble Lords have raised and of many of the individual problems that were put forward. I do not think that it would be right for me to take the time of this House in dealing in detail with some of those points, because obviously a limited number of us are present today who are particularly concerned with this.
Lord Beswick: My Lords—
Viscount Whitelaw: My Lords, I am about to try to help the noble Lord, if he will allow me. Perhaps he will not.
Lord Beswick: My Lords, I want to help the noble Viscount. He reminded us that at one time he was Leader of the House. I had the feeling that, had he not been transported to Ireland, the deputation that I was going to lead to him at that time might have been very favourably received.
Viscount Whitelaw: My Lords, it would be dangerous for me to say that it would have been any better received than it was by my successor. I have nearly always found that all my successors in the different offices I have had have done it better than I did, and probably he did to.
It is important to remember in these cases that, as there was no pension scheme before, none of these former Members in fact ever had the chance to contribute to a pension scheme. They have not been contributors, and that raises a particularly difficult problem so far as their position under a pension fund subsequently established is concerned. Of course I shall be prepared to discuss this with the noble Lords concerned, but up to now that has been the major problem.
I understand, on the question of hardship raised particularly by the noble Lord, Lord Glenamara, that the Bill provides for much greater discretion to the

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trustees of what used to be called—I think it still is—the Members' Fund to deal with such cases, as he and I would know, and there is much greater discretion now. But I have to accept that much greater discretion to deal with hardship raises the problem that the noble Lord, Lord Beswick, put forward, that many of the people concerned do not like having to plead cases of hardship. I think one must accept that.
I should be pleased to discuss this detailed point but I have to come back because I may not be able to succeed in helping as much as my own instincts would like me to do. As the pension fund schemes have come up subsequently, and as these people have not paid contributions, this raises some formidable problems of how to deal with them successfully. But I shall be very pleased to try to see whether I can help in any way.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Health and Social Security Bill
Lord Denham: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Health and Social Security Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Read a third time.

GCHQ Cheltenham
3.32 p.m.
Viscount Whitelaw: My Lords, with permission, I shall repeat a Statement which is being made by my right honourable friend the Prime Minister in another place on the subject of GCHQ.
"Mr. Speaker, with permission, I should like to make a Statement on GCHQ.
"Following the judicial review of the Government's action in respect of GCHQ, Mr. Justice Glidewell, in giving his judgment in the High Court, on four of the five grounds on which the Council of Civil Service Unions had based their case found in favour of the Government.
"The judge confirmed that the Minister for the Civil Service has the right to vary the terms and conditions of service of civil servants so as to exclude membership of trade unions and that an instruction may be given under Article 4 of the Civil Service Order in Council 1982 to this effect.
"Nevertheless, the judge concluded that, because of the lack of prior consultation with the unions concerned, the instruction given in this instance was invalid. His finding did not affect the certificates issued by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs under the Employment Protection Act.
"In view of the implications of this judgment in the field of national security, the Government are appealing against it and are applying to the court later this afternoon for an early hearing of the appeal.
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"The judge indicated that the status quo should be maintained at GCHQ pending consideration of an appeal.
"As the Government will be lodging an appeal later today, it would be inappropriate for me to make any further comment."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount the Leader of the House for repeating the Statement. As the House will appreciate, it raises extremely grave issues. The High Court ruling shows again how important it is that the Government should not ride roughshod over those who are affected by their policies. The necessity to consult is vital, and in this case the judge has ruled that the Government had ignored the rules of natural justice, and that Ministers exercising the royal prerogative through Orders in Council should he subject to the same scrutiny and control by the courts as if statute law were involved.
It is well to bear in mind that after the ban itself was announced unilaterally by the Government the unions offered a basis for a reasonable settlement, the so-called "no strike agreement". At the time, this formula was widely approved, but the Government, imprudently in my view, rejected it out of hand, thereby making confrontation inevitable and casting doubts upon the loyalty of the people employed at GCHQ.
In his ruling the judge gave some good advice when he said:
"I am confident that Ministers will give proper consideration to any further representations to them, and I cannot be sure that they will inevitably arrive at the same decision as before.".
While we note that the Government are to lodge an appeal, and that therefore there are extensive matters with which one cannot deal today, does the noble Viscount not agree that the opportunity now exists to enter into negotiations with the civil service unions forthwith in order to arrive at a sensible and acceptable arrangement, and to avoid protracted and expensive legal proceedings? If they do this it will be to their credit as well as that of the unions concerned, and very much in the public interest.
Baroness Seear: My Lords, we on these Benches would wish also to thank the noble Viscount the Leader of the House for repeating the Statement. I personally must make my apologies for not being in my seat when he began his speech, but I had seen the previous legislation come on the screen and assumed that the Statement was not going to be made immediately.
We recognise that there is an appeal and that therefore this matter is sub judice, but the fact that it can be said in a court of law that the Government have acted contrary to natural justice is something which all of us must deplore. It should be assumed, surely, that any Government would fall over backwards to make certain that no such criticism could possibly be levelled against them.
We on these Benches could hardly be described as the poodles of the trade unions, and yet when this decision was made in the case of GCHQ we urged strongly that the Government were mistaken in the

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way in which they were acting, and we would certainly have urged that joint consultation at least should take place, as the judge has now said, before the decision was taken. The effect on industrial relations can only be deplorable, especially in dealing with a union which has a highly responsible record.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord and the noble Baroness for their response to the Statement. May I first make my apologies and those of my noble friend the Chief Whip to the noble Baroness, Lady Seear, for the fact that we did not warn her in time before the Statement was made? The fault was entirely ours. I hope we shall not be accused of discourtesy. I do not think that either of us has the habit of being discourteous, and I apologise to the noble Baroness.
On what the noble Lord and the noble Baroness have said, I am advised very strongly that, as some of the matters that they have raised are likely to be the basis of the appeal that the Government are going to make, it would be highly improper for me in these circumstances to reply to their particular criticisms. I think it would also be right for me to say that, because I am not going to reply to them for that reason, it is not necessarily the case that I accept them.
Lord Dean of Beswick: My Lords, is the noble Viscount aware that on each occasion when the question of GCHQ has been raised in the Chamber from this side of the House it has been raised by me? As recently as a fortnight ago I brought to the notice of the Government that they had been found guilty by a committee of the ILO of breaking agreements to which we have been long-time signatories. They have now been found guilty, at present—though the appeal may decide otherwise—of being in breach of the law of this country. Does this not appear to be a case where the Government are in agreement with the referee so long as he always blows the whistle in their favour? I would urge the noble Viscount, who I know is a fair-minded man, that the best way to resolve this situation is not in the courts, but by arriving at an agreed solution with the trade unionists involved. That would avoid the appalling damage that would linger for a long time if the matter were decided in the courts in an adverse manner to those people.
Viscount Whitelaw: My Lords, I think it would be fair for me to say that since the Government feel that this judgment has substantial implications for national security, they are exercising their right to appeal, as I am sure has been the case with all Governments. The noble Lord would not deny that the Government have the right to appeal, just as the unions exercised their right to go to court. That is the position, and it is not unique in any way.
Lord Mottistone: My Lords, would my noble friend not agree that after the clever men of the Civil Service unions had unwisely involved GCHQ in their selective strikes at the beginning of the last Parliament, the action that the Government took in relation to trade union representation was inevitable? Does my noble friend not agree also that in the circumstances any
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preliminary discussion with trade unions would have led to unnecessary argument in a very sensitive area of national security?
Lord Elwyn-Jones: My Lords, while there is far more latitude in regard to the application of the sub judice rule to proceedings in the Court of Appeal, nevertheless the rule does apply especially to the desirability of avoiding sharp statement of facts that are in dispute in the case, as the noble Lord is now endeavouring to do.
Viscount Whitelaw: My Lords, I shall answer my noble friend as neutrally as I felt I had to do in the case of the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, and, indeed, the noble Lord, Lord Dean. It would he improper to do more, in view of the appeal; in this I am supported by no less an authority than the noble and learned Lord, Lord Elwyn-Jones. In the circumstances it would be wrong for me to comment either way on these matters.
Lord Diamond: My Lords, while thanking him very much indeed, may I ask the noble Viscount for his assurance that when the further proceedings are terminated—not necessarily in the court to which they are going at the moment—there will be at least an opportunity for further discussion, by way of a Statement being made, though with possibly a greater opportunity than that?
Viscount Whitelaw: My Lords, I can do no more than commit myself to the noble Lord, Lord Diamond, and to the fact that there will inevitably be a Statement at that stage. I expect that it will be at least a Statement, though probably it will amount to considerably more.
Baroness Phillips: My Lords, may I ask the noble Viscount the Leader of the House a very simple question? He stated that the judicial inquiry had found in favour of the Government. Why, then, is it necessary to appeal?
Viscount Whitelaw: My Lords, the noble Baroness will appreciate that while the judge found in favour of the Government on four of the five counts, he did not find in favour of them—in fact he found against them—on the lack of prior consultation with the unions concerned.
Lord Mountgarret: My Lords, may I ask my noble friend whether the Government in general and the Prime Minister in particular took legal advice on this matter before considering the propriety or legality of the situation which has now arisen? If they did, what was the advice so given; and if they did not, why not?
Viscount Whitelaw: My Lords, it would be wrong of me to reply to that, except to say that I cannot imagine any Government that I have ever been in not taking some legal advice on all their actions very properly from their law officers.

Health and Social Security Bill
3.43 p.m.
Consideration of amendments on Third Reading:
Clause 1 [Supply etc. of optical appliances]:
Lord Mottistone Lord Mottistone moved Amendment No. 1:
Page 2, leave out lines 29 to 32 and insert—
("(3D) No order under subsection (3A) above shall be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.").
The noble Lord said: My Lords, I move this amendment on behalf of my noble friend Lord Cullen of Ashbourne, who had down a similar amendment on Report; but, in the event, when the amendment was called by my noble and learned friend on the Woolsack, my noble friend Lord Cullen was stranded at the Table, having very nearly won a Division on the previous amendment. My noble friend Lord Cullen had not told me that he was proposing to move this amendment and I presumed, wrongly, that he had made some arrangements with my noble and learned friend the Lord Chancellor. In the event that was not so and thus I thought it appropriate to move this amendment on behalf of my noble friend who, your Lordships I am sure will be sad to hear, is not able to be with us because he has been stricken with pleurisy. However, he told me on the telephone this morning that he was getting better.
The purpose of this amendment is to make sure that the very important regulations which will be introduced in this part of the Bill receive a very full airing. The kind of things that will go in the regulations to which it applies are not very clear to us at this stage, and it is thought that it would be helpful if my noble friend on the Front Bench could give us an indication as to what will be done before the order is laid. For example, will there be any opportunity for interested parties, in particular professional opticians, to discuss what is to be laid before in fact it is laid? If my noble friend could give us such an assurance, it would be extremely helpful, and the need to make sure that the resolution becomes an affirmative one would not then be quite so important. In the event that it will go blind before the House as a negative order without, in the usual nature of things, very much time to pray against it, then it would be preferable if it could be an affirmative order. I beg to move.
Lord Ennals: My Lords, having been associated with the noble Lord, Lord Cullen, on the original amendment to which the noble Lord, Lord Mottistone, has referred, I strongly support this amendment. I hope that the Government will be able to give a conciliatory and co-operative answer, because the issues covered by this—which I shall not go into in any detail, as they have been dealt with in detail by the House—are of great and grave importance and have caused considerable concern to many organisations and individuals. This is one of those cases where an affirmative resolution of both Houses of Parliament would be appropriate. I want to give my full support to this amendment.
The Earl of Caithness: My Lords, as I am sure my noble friend Lord Mottistone will remember, notwith-
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standing what happened on Report, this amendment is identical to one that was moved at the Committee stage. He spoke on that amendment, which was in the name of my noble friend Lord Cullen. The affirmative resolution procedure is by no means the usual method of parliamentary scrutiny. The vast majority of orders or regulations are subject to annulment in pursuance of a resolution of either House. It has been suggested that the affirmative resolution is inappropriate in this case because the necessary safeguards for the consumer would be contained in these orders. That is the case, but I fail to understand why a vote to annul orders should be inferior to a vote to approve them.
In both cases the essence of scrutiny is in the debate and in whether, during the course of the debate, opponents of the proposals can persuade other Members to their way of thinking. The quality of the argument is surely the important factor, not the terms of the Motion before the House. As my noble friend Lord Cullen said at Committee stage, they would have to be examined carefully, and we welcome that. We are still working on the proposed orders governing unregistered dispensing of optical appliances, but we hope to let interested bodies see them in the near future.
I can assure my noble friend that there is consultation going on and that we are consulting with optical consumer bodies and other groups on the contents of the order. I suspect that, like the Bill itself, they will go too far for some noble Lords and perhaps not far enough for others. It is nice to see the noble Lord, Lord Northfield, in his place. Doubtless, he will say that we are not going far enough. The orders will certainly specify what appliances can be sold; they will require that frames are not made from dangerous materials and that lenses accord to a prescription within the tolerances required by the British Standards, together with a variety of other matters aimed at ensuring safe and serviceable glasses.
These orders will have to come before your Lordships' House and be debated if noble Lords feel that they are not appropriate. This surely is safeguard enough. Acceptance of this amendment would also make future updating more difficult. For example, these orders will invoke the British Standard for spectacle lenses. British Standards are updated in the light of technological change and the orders should reflect such changes. Non-controversial technical amendments to the original orders of this sort should not be discouraged because of the need to find parliamentary time for an affirmative resolution debate. To require the affirmative resolution procedure in this instance will merely add delay to changes which the public clearly want to see and I cannot believe it is necessary or desirable. I hope that in the light of this my noble friend will agree with our noble friend Lord Cullen who withdrew his amendment at Committee stage.
Lord Mottistone: My Lords, I am grateful to my noble friend for giving me the assurances that I sought that there is consultation with the interested parties including the professional opticians in the run up to the production of the order. I would say one other thing. It is that I agree with my noble friend that, providing one is alert enough to spot it, a negative

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order, by being prayed against, can be handled in much the same way as an affirmative order; but there is one qualification. That is that if it is a prayer it tends to find its way into business at a time when the House is not necessarily as full as it is at other times. I got one on a Friday. Affirmative orders tend to be either in the main business or possibly in the dinner hour when there are a lot of people around; so that if you have something special to say you get more people to listen. That is an important point. However, I am most grateful to my noble friend for saying that they will give this matter full consultation. I trust that that will continue and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Use of titles]:
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur) moved Amendment No. 2:
Page 5, line 16, after first ("the") insert ("taking or").
The noble Lord said: My Lords, it may be convenient to your Lordships if in moving this amendment I speak to Amendments Nos. 3, 4, 6, 7, 8, 9, 10, 11 and 12.
Amendment No. 3: Page 5, line 16, at end insert ("(either alone or in combination with any other words)").
Amendment No. 4: Page 5, line 20, after ("he") insert ("took or, as the case may be,").
Amendment No. 6: Page 5, line 20, leave out ("not have been reasonable") and insert ("have been unreasonable").
Amendment No. 7: Page 5, line 22, after ("his") insert ("taking or, as the case may be,").
Amendment No. 8: Page 5, line 37, after ("the") insert ("taking or").
Amendment No. 9: Page 5, line 37, at end insert ("(either alone or in combination with any other words)").
Amendment No. 10: Page 5, line 41, after first ("it") insert ("took or, as the case may be,").
Amendment No. 11: Page 5, line 41, leave out ("not have been reasonable") and insert ("have been unreasonable").
Amendment No. 12: Page 5, line 43, after ("its") insert ("taking or, as the case may be,").
In the course of the debate at Report, my noble friend Lord Mottistone suggested a number of very similar amendments. Several points were raised suggesting why the clause should take further the protection offered to the title, "optician". No doubt we shall return to these arguments when we discuss Amendment No. 5 in due course. Suffice it to say at present that we have not been persuaded to make any substantive change to the clause. However, in the light of my noble friend's remarks and those of others, we have given further consideration to the helpful suggestions on drafting that were made at Report stage.
On reflection, we now see merit in the new subsection added to Section 22 of the 1978 Act being drafted in a similar style to those of the existing section. Otherwise, we see a danger in future that those who have to interpret the statute may look for substantive reasons lying behind the different wording used in different places of the section when none exists. I hope your Lordships will find the Government's change of heart on this matter, albeit at a late stage, acceptable and helpful. I beg to move.
Lord Mottistone: My Lords, I am grateful to my noble friend the Minister for having taken up what we did at Report stage and for improving on the wording in a very small ways and otherwise doing very much the same thing. If it would be for the convenience of your Lordships, I should like now to speak also to Amendment No. 5.
Amendment No. 5: Page 5, line 20, after ("title") insert ("with the addition of the word "unregistered" as a prefix and in combination with no other words, and").
I put down this amendment as a safeguard in the event that my noble friend did not do the right thing. I am going to be very happy not to move it, and to welcome very much what we have. I thank my noble friend for what he is doing.
Lord Ennals: My Lords, it always seems to me that if one thanks the noble Lord for what he has done, he is more likely to do something when one is about to make a request. Let us recognise that the Minister listened very carefully to what was said on both sides of the House and has made a considerable improvement. With that expression of thanks to him, I shall reserve my further words for what I want him still to do.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 3 and 4.
[Printed above.]
On Question, amendments agreed to.
[Amendment No. 5 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 6 to 12:
[Printed above.]
On Question, amendments agreed to.
Clause 7 [Professional remuneration in National Health Service]:
Lord Ennals Lord Ennals moved Amendment No. 13:
Page 13, leave out lines 1 to 8.
The noble Lord said: My Lords, this is the occasion for me to ask the noble Lord to respond to the generosity which I showed on his generosity. The noble Lord, Lord Kilmarnock, and I seek to amend Clause 7 by deleting the last subsection. This is the retrospective element of the clause. We believe that there are very important issues at stake here and I would beg your Lordships to hear me for a few minutes on the subject. First, I must welcome the letter which the noble Lord, Lord Glenarthur, wrote to the noble Lord, Lord Renton. He kindly sent a copy to me, which I received recently. The letter showed that putting in a few commas and a few "a"s and "b"s, at least, sought to make rather greater sense of a clause which at its worst was gobbledegook and now, at its best, is at least comprehensible. That does not mean that I am satisfied with it. The fact that its wording is now comprehensible does not mean that, having comprehended it, one therefore approves of it. Nevertheless, as before, we must be grateful for small mercies, and one of the small mercies is to have before us something which those who read it will be able to understand—something which none could in its original form.
The first issue was the question of the actual text. The second issue that I should like to raise concerns the propriety of maintaining the subsection in view of the case pending before the Court of Appeal. I argued at Report stage and in Committee (although only in its latter stages) because I think that we were in some doubt then—and the Minister was in even greater doubt—as to where we stood legally. The House will recall that the Pharmaceutical Services Negotiating Committee challenged the Government's interpretation of the existing regulations. They did so because retail pharmacists are unhappy about the Government's declared intention to claw back some £37 million of discounts received by pharmacists on medicines purchased from wholesalers.
This proposed clawback would stretch back nearly four years to October 1980. As I have said, the PSNC has questioned the Government's right to take back money in this fashion, and the Court of Appeal has still to rule on this question. No doubt in law, the Secretary of State may alter the drug tariff prospectively; and the courts have ruled to that effect. But it has never been conclusively decided in the courts that the Secretary of State is entitled to alter the drug tariffs retrospectively; that is to say, to take back money earned in the past. It is for this reason and the inevitable feeling of your Lordships that retrospective legislation has grave principles involved—
Lord Morris: My Lords, I just wanted to say to the noble Lord, Lord Ennals, that surely taxation is retrospective? It is not prospective, and that is a perfectly acceptable practice.
Lord Ennals: My Lords, if I may say so, taxation has been with us for a very long time. This is not a Bill to introduce a form of taxation, income tax or any other form of taxation. This is a Bill which is instituting measures which would retrospectively authorise the Government to do something which the courts have questioned, or rather which is still questioned by the courts, as to its legality. I would submit that there is no similarity at all.
I used the word "conclusively" because, although the Government won their case in the High Court, the case is pending before the Court of Appeal. It would be very nice if there were a case before the Court of Appeal about whether taxation is permissible or not—and perhaps the noble Lord would care to take the matter to court. Moreover, the judge in the High Court, Mr. Justice Mann, expressed his doubts as to the legality of the retrospective alteration of the drug tariff. He did not actually decide the case in that sense, so the Government won on a technicality and not on the main issue of the case which was never in fact decided, but no doubt will be decided when the matter is brought forward for appeal.
In considering the propriety or otherwise of the subsection, I would ask your Lordships to bear in mind all the facts. I regret to say that the Minister's account of this affair was perhaps not as clear as it might have been during the Report stage. It is true that the PSNC pursued legal proceedings after the Government had announced their intention to add Clause 7 to the Bill. The Government announcement came after another group of pharmacists, the so-called
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"post-1980 pharmacy contractors" had instituted legal proceedings against the Government on the issue of the retrospection proceedings which were subsequently taken over by the PSNC.
The noble Lord, Lord Glenarthur, referred obliquely to the post-1980 contractors, but he did not spell out the obvious fact that the Government were afraid that the law was not clear, that the pharmacists' challenge might succeed, and that this would deprive the Treasury of a large amount of money. He might even have feared that it would deprive the DHSS of a large amount of money if the Treasury were not able to get it back themselves. Why else did the Secretary of State stop clawing back the discounts? Why is he right now not clawing them back? It is because he has doubts as to whether it is legal.
Therefore, although the issue is before the courts, this clause is seeking to make legal something already carried out which was questionably legal and which is still questioned in the courts. Of course, all governments must be assiduous in their handling of public money—it does not take an ex-Minister to know that—but that does not detract from the necessity of governments to deal fairly with their contractual partners, in this case the pharmacists of the National Health Service and also another profession which I mentioned at the Report and the Committee stages but not so far today; namely, the opticians. The Government would have behaved with more propriety if they had waited until the current law was clarified by the courts before changing the law by means of this Bill.
The third and last issue I would like to consider is the familiar one of the general principle of retrospective legislation. We have debated this before, and I shall therefore be extremely brief, but I believe that the principles are very important indeed. Most, if not all, retrospective legislation is undesirable. That does not mean that retrospective practice is necessarily undesirable, because that is the method by which payment is made by the DHSS to some of the contracting organisations—the pharmacists and the opticians in this case. I would submit that it is an abuse of power all too familiar, if I may say so, in the current legislation still before your Lordships' House and it is, I believe, unworthy of an upholder of the rule of law.
Perhaps I can illustrate my point by referring to the opticians. The profession dislikes the last subsection of Clause 7. The opticians are worried that the £6 million withheld from their arrears of fees for the period 1978 to 1983 will be denied to them by the Government once the Bill becomes law, as payment for the discounts received by opticians from their suppliers.
It is, I would submit, simply not fair. It is only with this Bill, in particular with the rest of Clause 7, that the Government are introducing for the first time two completely new elements into the remuneration arrangements for opticians: these elements of discounts on material costs, and the provison for retrospective adjustment of their remuneration to take account of such discounts. My point is this, finally. The changing of the rules providing for the future retrospective adjustment is acceptable to the opticians, and I think it would be acceptable to your Lordships. What is not acceptable is to take back money legitimately earned before today, which is the last date

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on which this piece of legislation will come before either House of Parliament. This Bill, if passed in its present form, would allow the Government to deprive opticians of their £6 million, and perhaps more. I would submit that this subsection of Clause 7 is opaque, improper, and I believe it is inopportune. I beg to move that it be deleted from this Bill.
Lord Kilmarnock: My Lords, I simply want very briefly indeed to support the noble Lord, Lord Ennals, on this. He has set out the position with great clarity. He has mentioned the sum involved, and the amendment he has moved would remove the retrospective character of the clause and prevent the Government from making retrospective adjustments of remuneration to take account of discounts.
It seems to me that the strongest argument of all is that the present state of the law is still clearly confused. There was this case before the High Court which was brought by the PSNC, representing the retail pharmacists, concerning the Government's right to recover from pharmacists amounts said to have been overpaid to them as discounts on medicines in previous years. But as the noble Lord, Lord Ennals, has reminded us, the case has gone to appeal and that appeal has not yet been heard. Thus, the present state of the law concerning the clawing back of discounts is far from clear. If the Government win the appeal, then it would seem to me that Clause 7 is quite simply unnecessary. But what is improper is to introduce this clause into a Bill prior to the decision of the Court of Appeal.
The Government are in effect seeking to pre-empt the decision of the court, seeking to protect themselves in advance against an adverse decision of the court. That, I must say, by any standards seems to me to be the height of impropriety. I stongly support the noble Lord, Lord Ennals, in his amendment.
Lord Mottistone: My Lords, I should like extremely briefly to support the noble Lord, Lord Ennals, and the noble Lord, Lord Kilmarnock, on this point and to support the detail of the points that they and we made earlier during previous stages of the Bill. I think this amendment is important and it is one which I trust my noble friends will see their way to accepting or, at least, if they cannot do that, to modifying.
4.9 p.m.
Lord Glenarthur: My Lords, I appreciate the generous remarks of the noble Lord, Lord Ennals, when he started his speech in support of this amendment. I am afraid I shall, to some extent, have to disappoint him. To deal first of all with the drafting point, Clause 7 puts beyond argument the existing long-standing remuneration arrangements—and they are long-standing—for the four NHS contractor professions. The amendment seeks to delete this subsection of Clause 7 which provides a general validation of the established remuneration arrangements and is, I am afraid, rather technical.
During the debate at the Report stage a number of your Lordships commented on this point. At that time I gave an assurance that I would ask the draftsman to look again at the subsection, and I have done so, as the
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noble Lord, Lord Ennals, described. Unfortunately, we have come to the conclusion that there is little that can be done materially to simplify the position. The real stumbling block for most of the readers who find difficulty in understanding it is probably the double hypothesis in lines 6 to 8 on page 13. If we could stop short at the words "validly made" in line 6, that difficulty would be removed, but it would give the Government a blank cheque which would rightly be unacceptable to the professions. An essential safeguard for them is to restrict the validating effect of the relevant subsection of Clause 7 to determinations of remuneration which could have been authorised by regulations if the powers now to be conferred by the provisions inserted in the National Health Service Act by subsections (1) to (3) had been in force at the time.
Some difficulty, however, comes from the form of the particular subsection. Its appearance as a solid chunk of text makes it more difficult for the reader to see the relationship if it is passed. That could be remedied by using paragraphing to break it up in the way described by the noble Lord, Lord Ennals. I am advised that could be done without the need for a formal amendment, and so it will appear in this version (that is to say, with the paragraphs broken up) when the Act is finally printed. I hope that will be acceptable to the noble Lord. I believe that when the subsection is split up in that way, the change of format will help to make it more easily intelligible.
I now turn to the substantive points in the noble Lord's speech, and in the speeches of my noble friend Lord Mottistone and the noble Lord, Lord Kilmarnock. At Report stage I explained at length the Government's reason for introducing the clause into the present Bill, and I do not think it would be useful to repeat all those arguments, except to say that the usual, and understandable, objections to retrospective legislation do not apply in this case. All the present clause does is to remove recent legal doubts about long-standing arrangements between ourselves and the professions and, in particular, to ensure our ability to implement an agreement that we had with the pharmacists' negotiators last year.
The noble Lord, Lord Ennals, referred to the appeal which is pending, which we have also dealt with in the past. The appeal pending before the Court of Appeal does not raise the question of the legality of the clawback. The proceedings before Mr. Justice Mann did not raise any question of clawback, because the High Court, in view of the announced intention of the Government to add Clause 7 to the Bill, had allowed the case to go forward on the question of whether deduction of discount was legal, but not on the question of whether the rate of discount may be increased to claw back a previous over-payment. That question was not at issue before Mr. Justice Mann; it was not decided by him, and it will not be at issue in the Court of Appeal.
As custodians of the taxpayer's interests, the Government cannot abandon their right to recover the very substantial sums of public money which are involved here. As I have already explained to the House, we are currently seeking to negotiate with the pharmacists improved arrangements which will ensure that reviews take place more frequently and on a regular basis, so avoiding the accumulation of large

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under-payments and over-payments. For these reasons, I commend the clause to the House and I hope that the noble Lord will not feel it necessary to press the amendment.
Lord Ennals: My Lords, I am grateful to the noble Lord for his explanation. I shall not press the amendment to a vote, but I wonder whether he can say a little more about the negotiations and what he hopes to propose, because I made very clear to your Lordships that the principle of retrospection, to a limited extent and over a limited period, has been recognised over many years as part of the system of payment, as the noble Lord said, in terms of taxation. Much of my objection during the various stages of this Bill through your Lordships' House has been based on the point that four years is an intolerable period of time. If the noble Lord is to propose that it should be a shorter period of time, I wonder whether he will say something about that, which would be reassuring to the profession and to your Lordships, since I cannot be the only noble Lord (and I am less noble than most) who has been worried about a situation in which retrospection would be carried through for four years. This really is a very serious situation for those who are seeking to carry out an honourable business, in contract with the National Health Service, seeking to serve the needs of their patients. I hope that the noble Lord can perhaps say something that will be helpful to the contractors as well as reassuring to your Lordships.
Lord Glenarthur: My Lords, with the leave of the House, I do not think I can go very far; but one of the major reasons for the present position, as I have already described, is that the agreed discount inquiry was delayed by the pharmacists themselves, and when the results eventually became available the sums owed b), pharmacists were extremely large. In an effort to avoid a repetition of such a state, negotiations have commenced, as I have said, on a new form of contract with the pharmacists. One of the major features of the new contract is expected to be negotiations to set an annual timetable, linked to regular and frequent inquiries, thus avoiding for the future the build-up of large over- and under-payments. I do not really think I can go much farther than that, but I hope it is some comfort to the noble Lord.
Lord Ennals: My Lords, indeed it is. I have said before that a year is a reasonable period of time to reach a calculation, and if that can be worked out, I shall be very satisfied. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 [Transitional]:
Lord Mottistone Lord Mottistone moved Amendment No. 14:
Page 28, line 28, leave out subsections (2) and (3).
The noble Lord said: My Lords, this amendment is similar to one moved earlier. When we last tackled it the time was 11.15 p.m. We had been up late the night before and I am afraid I made one or two harsh remarks, for which I should now like to apologise, in particular to my noble friend Lord Caithness. But I thought it ended on an unsatisfactory note because, it being late, I did not really say as much as I should have
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done in order to make the matter clear; and so I should like to take this opportunity just to add to it.
The problem is this. Under the 1958 Act, opticians have become highly qualified professionals, with all the pride in their profession that is acquired by similar specialists, such as doctors, lawyers, and others. They also have the problem that the Act requires them to be traders, with special restraints on how they trade. A similar, but certainly not identical, problem arises with pharmacists, but I shall not bother your Lordships with that now.
Dealing with the opticians, what sticks in their gullets about Clause 28(2) and (3) is that in circumstances in which, as my noble friend Lord Glenarthur has agreed, competition is not relevant, their professional standing is in a way being impugned. They have accepted that there must be more competition in the open market in the future; and indeed the very few amendments of both myself and my noble friend Lord Cullen at Report stage which were proposed by the optical bodies are proof of that acceptance.
The opticians are, however, proud of the professional skill which they happily use in serving the National Health Service and, as I indicated at the Report stage, they see themselves as on a par with other contractors providing family practitioner services, such as doctors and dentists.
Clearly it is thought—and certainly I have the impression that some noble Lords believe it—that all these people are simply overcharging traders. It might be thought that it was presumptuous of such people to view themselves as professionals, on a par with doctors and others. However, as I said earlier, the 1958 Act seems to have sought specifically to create that kind of pride. I suggest that the public has greatly benefited over the years from the dedicated service which professional pride has engendered in nearly all of its practitioners. As to being thought of as overcharging traders, the way in which these professional persons do their business is itself a creation of the 1958 Act and it is not fair to judge them by it.
So I hope that my noble friend might be able to say something with regard to subsections (2) and (3) of Clause 28—ideally, that he will accept my amendment. But if not, perhaps he can give me some reassurance to make the point that I have been seeking to make to your Lordships, that this is an important dedicated professional body whose status and spirit of dedication should not be eroded by the legislation that is before us. I beg to move.
Lord Glenarthur: My Lords, of course I fully understand and accept my noble friend's earlier remarks. He need not worry that offence was taken. It was late at night and it is also fairly late in the parliamentary year. Everybody tends to get rather exhausted at that time of night—
Noble Lords: No!
Lord Glenarthur: Noble Lords and noble Baronesses opposite look very happy with that and I am delighted to see it. But as I said on two earlier occasions, the intention of subsections (2) and (3) of this clause is to carry into the public sector the wider

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choice which Clause I introduces into the private sector. I do not intend to go over all those arguments again now; but, as your Lordships will appreciate, our ultimate aim is for a system of financial grants for those on low incomes which will enable them to make their own choice of appliance and of supplier.
However, for an interim period we intend to continue to provide adults on low incomes or in need of complex lenses with glasses through the General Ophthalmic Service. These plans apply to children also but the glasses cannot be supplied by the unregistered contractor. During this temporary phase we cannot give those on low income a wider choice of appliance. They will be limited to the National Health Service range. We can however give them a wider choice of supplier.
There is of course no question of competition between GOS contractors in terms of price. There will be fixed national charges to patients. However, there is no reason why we should not introduce competition in terms of service. If new GOS contractors are to take any share of this business, they will have to outperform the existing contractor in terms of such things as opening hours, speed of service and customer responsiveness. This stimulus to better service seems a wholly desirable objective. As I have pointed out on earlier occasions, the permitting of unregistered contractors may also help to ensure the availability of sufficient contractors should some registered opticians not wish to continue to provide this service.
My noble friend Lord Mottistone suggests that this step is an attack—that is not quite the word he used, but he knows what I mean—on the professional standing of the optical profession. Nothing is further from our minds. We have the highest regard for the profession and for the standards of excellence which it pursues. We are as a Government against restriction and for competition. If in applying this policy to optical services it has seemed at times that we are anti-optician, then I should like to take this opportunity to put the record straight and I hope my noble friend will appreciate that.
We hope that we can look forward to rebuilding a constructive relationship with the profession, both on the continuing sight testing service and on the residual dispensing service, because we share the ultimate aim: that is, the optical well-being of the public. Finally, I would emphasise, as I have on earlier occasions, that those we allow to become GOS contractors will be expected to perform to the same standards and to operate under the same terms of service as the registered opticians. There will be no double standards. The same disciplinary arrangements will apply.
At Report stage, my noble friend Lord Mottistone suggested that this could not be because patients would pay the full cost of lenses to the optician and there would be no remuneration due to withhold. I think I ought to point out to him that the vast majority of future GOS patients will be those who get glasses free or have part of their charge remitted, so there will indeed be remuneration to withhold. The same complaints procedure and the same penalties will apply.
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The provisions of this clause will enable us to extend the principle of competition into the public sector provision of glasses for as long as this lasts. Provided that contractors are subject to the same terms and conditions, this will be fair competition. Competition should produce incentives to serve the public better. I believe that the profession can rise to this challenge and that we should therefore have nothing to fear from competition. Customers won in fair competition will reflect more credit to the profession than customers directed to them by the law. I hope that with that explanation and, to some extent, reassurance of the regard that we have for the profession of opticians, my noble friend will feel satisfied.
Lord Ennals: My Lords, I am glad that the noble Lord the Minister used the term "rebuilding the relationship". I hope he recognises that that is a task he will have to fulfil, because as a result of this measure which will pass through your Lordships' House today a great deal of damage has been done to the relationship between the noble Lord's department and the opticians, as well as other professions. A great deal of damage has been done not only to the opticians as contractors, but to individuals who gain benefit from the services provided by opticians.
I just want to read two brief extracts that have come into my hands only today. One is from a letter to the noble Lord, Lord Glenarthur, himself, so he has no doubt read it, from John Mayo, Director of Help the Aged. If the noble Lord has not seen it, then it is a jolly good job that I am reading it to him, because it says:
"Pensioners form the majority of users of these highly expensive lenses"—
he was referring back to the concern and alarm created by the most recent statement of Mr. Kenneth Clarke, the Minister of Health, on the subject of financial assistance for users of complex lenses—
"often requiring a frequent replacement service to cope with deteriorating cataracts or glaucoma. Pensioners will be in the forefront of those facing a new financial burden when those not on supplementary benefit will be required to pay a charge that reflects the cost of the lenses under the GOS. Such plans can only lead to an increase from the present maximum fee of £31 to unprecedented new charges of between £60 and £100. In a previous letter Mr. Clarke assured me that 'If there is an identifiable group who need help, the answer is to find a specific solution'. The group has been identified and I now urge you"—
says Mr. Mayo—
"to do all within your powers"—
Lord Glenarthur—
"to impress upon the Minister"—
the Secretary of State—
"his moral obligation to find that specific solution".
It is sad that this Bill will have passed through the House without that specific solution having been found. We have had assurances that it is going to be found. I think that it ought to have been found before the Bill passed through its final stage in this House.
The second quotation before I sit down—and this came to my attention only today—is from an ophthalmic optician and orthoptist, Mr. Whycer. I am certain that he will not object to my quoting him. He comes from Enfield and he says:
"The dispensing of spectacles is not a simple commercial task but requires a technical background involving considerable training.

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This training is naturally part of the undergraduate teaching at the university departments where ophthalmic optics is studied and in dispensing optics there is a two year professional course at two colleges in the UK which has to be followed by a further year of pre-registration training before the dispensing optician can practise on his own account. How can the Government sacrifice this high level of training, which protects the public, purely and simply on the grounds that competition will bring charges down? In fact, those of us who know the situation see charges rising not falling, since eventually it is proposed that subsidies now paid by the Department of Health in respect of Health Service spectacles will disappear and he replaced by some other scheme, not covering cases where the prescription means costs will be high."
That was just an optician. I have quoted these two letters because the Minister says that it is his hope that the opticians will rebuild their relationship with the service. That will have to be done. It is a task of some urgency because many of those who are practising in the field are very unhappy indeed, and many of those who receive their services are equally unhappy.
Baroness Phillips: My Lords, I support my noble friend Lord Ennals. I have listened intently to the deliberations on this amendment but I am still not clear about why dispensing opticians in the National Health Service will be treated in the same way as suppliers of optical appliances who are not dispensing opticians. To my simple mind, this suggests that people will be able to buy spectacles without first having been to a dispensing optician who will have given them a prescription for lenses. This is the point which people are concerned about. The Minister did not explain the difference between the two. If there is no difference, why is it necessary to include in the Bill a clause of this kind?
Lord Northfield: My Lords, I hope I may say to the noble Lord, Lord Mottistone, that in so far as any of us have been critical of aspects of the profession it is because of the difficulty under which opticians are placed by the 1958 Act. I have tried studiously not to make very many criticisms of opticians but, rather, to refer to the consumer. In so far as I have said anything, it is because the Act puts the optician in an impossible position, as I tried to say way back in 1958.
The optician was at that time, and the same has been true ever since, striving quite rightly for professional acceptance. The profession had not been adequately regarded before that date. The Act gave opticians the chance to reach for and to achieve acceptance and a real profession. I am not attacking their professional status and professional dedication. However, the Act put them in a ridiculous position, because at the same time they were also suppliers of a commercial service; namely, the sale in particular of spectacle frames.
I tried to point out in 1958 that the allegation would be made that opticians would not be subject to proper rules of competition on this purely commercial side of their activity. I suggested that it would lead to abuse and to prices which ought to be reduced. I suggested, too, that it was not in accordance with normal practice in the commercial activities of our community. Therefore, I tried to foresee all this and to warn. I moved amendments to this effect in 1958. For example, I moved an amendment that the General Optical Council should give guidance on prices of frames in order to stop profiteering and in order to
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prevent these allegations from being made. Every one of my amendments was turned down, on the lines, "You can leave it to the opticians; they will not in any sense abuse their monopoly power".
Although I agree that we have now got to learn by all this experience, I do not believe that we should apologise too much about what is contained in the Bill. The point I would make to the noble Lord, Lord Mottistone, is that even with the passage of time the opticians have not been their own best friend. They have resisted, resisted, resisted. They resisted even the display of prices on their premises. After a good deal of pressure, this was finally forced through by only one vote in the General Optical Council. Therefore, years after opticians had obtained their professional status and should have been content with it, proud of it and secure, they were still trying to hide behind their professional status this purely commercial activity, without any real sign of competition.
Therefore, we cannot apologise too much for being fairly rough now and saying that we have got to grasp this nettle, as the Bill does, in order to create some real competition in the way that the Government propose. Nevertheless, I return to what I have already said. I hope that none of my remarks will be taken as degrading or impugning the integrity of the optical profession.
Lord Mottistone: My Lords, I am grateful to my noble friend for what he had to say and for the fact that he clearly recognises the importance of the professional standing of opticians, notwithstanding how their professional standing is being altered—one cannot get away from it—by the Bill. I hope that every effort will be made not only by my noble friend but by his colleagues in the Department of Health and Social Security to ensure that the high standing which has been achieved is not eroded in the future.
I am grateful to the noble Lord, Lord Ennals, for his support on that general theme. I am also grateful to the noble Lord, Lord Northfield, for making it clear that he was not seeking in any way to impugn the high standard, skill and professionalism of the optical profession in the various battles he has been fighting ever since 1958 when, in a different environment, I was commanding a ship at sea in the Far East Fleet.
It is interesting, if the noble Lord, Lord Northfield, will forgive me, that, having said, as I said, that the reason that there is a difficulty is because the 1958 Act creates an artificial trading situation, he should then go on to say a few things, which he could not avoid saying, which epitomised exactly what I was seeking to counter in this amendment. The noble Lord said that the opticians have got their high professional standing but that they are not really trying to compete. The noble Lord put it in the kind of way that I was seeking to override. But we cannot go on about this all day and all night. The Bill will be passed, and I hope that it will work; I hope that it will not do too much damage; I hope that it will be successful, but I have grave doubts. With that, I beg leave to withdraw the amendment.
Baroness Phillips: My Lords, before the noble Lord withdraws his amendment, one of the fascinating features of this House is that, although members spend a great deal of time thanking one another for their

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courtesy and efficiency, one very rarely gets a straight answer when one puts a straight question. The noble Lord, Lord Mottistone, referred to the noble Lord Lord Ennals, and to the noble Lord, Lord Northfield, but I asked a straight question which I think deserves an answer. My question was: what is the difference between a dispensing optician under the National Health Service Act 1977—I am not referring to 1958—and a supplier who is not a dispensing optician?
Lord Glenarthur: My Lords, with the leave of the House, I was looking for a moment to stand up to give an answer to the noble Baroness. The situation is that dispensing opticians contracted to the General Optical Service under the National Health Service Act are those who are registered with the General Optical Council. This clause will allow those who sell glasses privately without being registered to supply them also as National Health Service contractors. Sight testing is the role of ophthalmic opticians. Nothing in the Bill affects who can test sight—I am sure the noble Baroness is aware of that—or who can test sight under the National Health Service. I hope that that explains the point which the noble Baroness made. We are talking about two slightly different matters. When she reads what I have said, I hope that it will make sense to the noble Baroness.
Lord Mottistone: My Lords, I beg leave to withdraw Amendment No. 14.
Amendment, by leave, withdrawn.

Rate Support Grant: Scotland
4.29 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, with the leave of the House I shall now repeat a Statement on local authority expenditure and rate support grant in Scotland which is being made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows.
"With permission, Mr. Speaker, I shall make an announcement about local authority expenditure and rate support grant in Scotland.
"Scottish local authorities are planning expenditure in 1984–85 which is some £114 million or 4.2 per cent. above the current expenditure guidelines that I issued to them. When I met the Convention of Scottish Local Authorities on 22nd June I said that I was disappointed that authorities were not much closer to the expenditure provision made in the rate support grant settlement. Having considered the budget returns of authorities I said that I had decided not to take selective action to reduce the rates of any individual local authority this year, although I will not hesitate to use the power again if an individual authority plans excessive and unreasonable expenditure.
"However, since there was only marginal improvement on last year in the general level of expenditure I made it clear that there would have to
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be a substantial general abatement of rate support grant. It is apparent that the abatement which I imposed last year was not sufficient to impress upon authorities the very real need to bring their spending into line with Government guidelines.
"In my consideration of the level of abatement required I was very aware of two arguments which the convention and individual authorities had raised with me.
"First, the distribution of the abatement. Previously grant reductions for excess over guidelines bore no relation to the level of excess over guideline. Authorities were penalised in proportion to their share of grant rather than on the basis of their degree of overspend. This, I acknowledge, was not fair. During the parliamentary proceedings on the Rating and Valuation (Amendment) (Scotland) Act 1984 it was made clear that I intended to use my powers under the Act to ensure that the amount of reduction for each authority was directly related to the extent of its overspend.
"Secondly, COSLA has for a number of years represented to me the unfairness of a system which did not recognise reductions in overspend at outturn and thus gave no incentive to respond to an abatement by economies in the current year. This year, I have decided that the amount of the grant reduction will be adjusted when information is available about actual expenditure in 1984–85. Any authority whose expenditure at outturn is below guidelines will have its grant penalty cancelled. An authority which, while still above guideline, reduces its expenditure at outturn will have its penalty reduced. Conversely, of course, an authority which increases its excess will find its penalty on outturn increased.
"In the light of these two significant improvements to the system which have removed the basic unfairnesses which have previously existed, I have had to consider whether to seek a grant reduction equal to the full amount of the overspending of £114 million.
"I have decided, however, that a penalty of this scale would be too steep an increase on last year's total penalty of £64 million. I have decided that for 1984£85 the appropriate reduction would be £90 million. I will lay the necessary rate support grant order shortly and grant reductions will start on 1st August. I have today placed in the Library a paper showing how the abatement will affect each local authority, and letters of notification to them are being posted today.
"I accept that this penalty will be regarded as severe. At the same time the new system will allow authorities to reduce their penalty in part or in entirety by taking positive action now to bring their spending down. The solution lies in their hands. In the interests of their ratepayers and of the economy as a whole, I hope that this opportunity will not be missed."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, we are grateful to the Minister of State for the Statement which he has repeated here. It is all very predictable. In fact, the only

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question was: which of the battery of powers that the Secretary of State has taken would he use? Would he use his general clawback powers? Would he apply it to individual authorities that had sinned against the whole spirit of the Scottish Office today? Would he use his general or individual rate-capping power? That was the only mystery that certainly for me was concerned. He used his latest power; the power that was given in, I think it was, Clause 1 of the last Act that we had in this respect during this Session of Parliament.
He has decided that he will cut local authority expenditure. It was £114 million above the guidelines, but he will not cut it by that amount; he will cut it by £90 million. That was predictable too, because anyone who had looked at rate support grant would have seen that, although rate support grant went up in this coming year as compared to last year by 2·6 per cent., that was without taking account of inflation so that in real terms the local authorities were getting less. There was a reduction in the Government support because the actual rate support grant—the relevant expenditure—had been cut by the Government.
The Government decide everything here. It is the Government who decide the guidelines; the Government decide aggregate expenditure rate support grant; and the Government decide what amount of support they will give to the local authorities. Of course, that was cut too. The central Government share of relevant expenditure was cut by 1·6 per cent. It is now just over 60 per cent. When I was Secretary of State—believe it or not—it was 75 per cent. or 76 per cent. So you can well understand that, although local authorities have held their expenditures pretty well, the Government, by cutting their share of that expenditure, have forced rates up. That is why, although expenditure has been held fairly well as the result of the cutting of the Government support of that expenditure, they have forced up rates in Scotland by about 133 per cent.
Of course, they have been found out in this. We are dealing here with budgets that were drawn up, not by the councils who are in power now, but the councils who were in power prior to the district elections which were held in May of this year. Indeed, in view of their choice of this particular form of penalising local authorities, it is interesting to note that, if the Government had chosen from the selection of individual authorities, the authority they would have had to choose for having the highest increase or excess in expenditure over the guidelines would have been Edinburgh; Edinburgh on a budget drawn up by the Tories, a budget of which the excess was over 14 per cent.
As to the reality of these guidelines, we had no sanctity in relation to guidelines until we got this last Act. Time and again the Secretary of State said, "The guidelines are there only as a guide; you do not have to keep strictly to them"—a bit above and a bit below did not matter. Then suddenly they became part of statute.
Thanks to the delays that have been caused by other necessary Bills and the way we do things here, I have been able to get a list of the local authorities who have sinned against the Scottish Office and the Boy George. It is interesting to note—it might have been embarrass-
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ing for the Minister of State himself, who I think belongs to Inverness—that Inverness's excess of expenditure is 10.03 per cent. Every single Scottish local authority is in excess. Honourable mention should be made of Sutherland—0.78 per cent. I think the Western Isles is even lower than that, it is 0.72 per cent.
But, generally speaking, with the districts there is a considerable increase of expenditure above what the Government expected. That was inevitable because the guidelines were unrealistic. They did not even take account of the increase in inflation costs and to that extent I think the reduction from £114 million to £90 million is just not good enough. Even if he wanted to apply his own system, I think he should have taken the proper inflation rate and applied that to that particular figure. It would probably have further reduced it from £90 million below.
There is the other point. Reducing the support that the Government themselves gave to 60.2 per cent., or 60.1 per cent., cost the Scottish local authorities £48 million in total compared with the previous year. That, too, should have been taken off if the Government were working their own system fairly—with which I do not at all agree. It should be a matter for local authorities to determine what they want to spend, and it should be a matter for their electors to deal with them.
We have just held the elections. Who lost out all over the place? The Government did. They lost Edinburgh—the jewel in the Tory crown of local government. In Glasgow, the Government have only four or five seats left. It is hard to find a Tory councillor in Glasgow. The same applied throughout the whole of Scotland. The Government are out of step with the Scottish ratepayers and certainly with the Scottish people.
What will happen now? I calculate that Glasgow's increase was less than that of Edinburgh—about 12 per cent.—and yet Glasgow will lose about £8 million. I understand that Edinburgh itself will lose about £4 million. Strathclyde, with the biggest problem of all and containing about half the population of Scotland, will lose £38 million. I believe that some 70 per cent. of local government expenditure in the regions is spent on education. This development will mean fewer teachers in Strathclyde. It will mean, no doubt, more unemployed school cleaners. It will mean a cut in the services in respect of transport, concessionary fares, and ferries. I believe that only about £56 million of rate support grant was given for the whole of Scotland, and Strathclyde reckoned that its need, if it was to be realistic in the provision of services, was alone more than £50 million. This is the kind of thing that is happening to local authorities, by the unrealistic application of now legislatively-sanctioned and empowered guidelines.
I am sorry about this because it means that the gap between Scottish local authorities and the Government widens and widens. Negotiations no longer exist; there is just a ritual meeting and there is nothing constructive about it. The Government tell us in the Statement how they will pay attention to how they will apply the general claw-back. We know all about that. It was in the Act of Parliament whose passage started even before the noble Lord opposite came properly into this House.

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One further question arises. Has there been complete agreement by local authorities in respect of the distribution formula? Under the new formula which was introduced using, as the Government told us, a client-based system (which nobody understands), the distribution has changed considerably. Therefore, there may be a change in the incidence of penalties imposed on local authorities. Has that aspect been agreed?
Secondly, the Minister stated that he is seeing COSLA. Has he seen the individual local authorities which will be hardest hit, or is he hoping to see them? I do not see why he should not do so, because he has plenty of time. I am placing greater importance now on budget proposals, which are struck before the start of the financial year, and less on the outcome: what people say they are going to spend and what they actually spend are very different matters. I agree that the Government have sorted that out slightly. If the local authorities make savings within the year, then they will not be penalised so heavily. But there is an unreality surrounding this whole subject, which stems from the Government's original unfairness in drawing aggregate guidelines and then individual guidelines for local authorities which hear no resemblance to reality.
I remember Hector Munroe in another place complaining that Dumfries and Galloway had kept very well to their guidelines in the previous year despite increases in costs and all the rest of it, yet they were being cut by £3 million in the coming year. We have only to look at Dumfries and Galloway now to see that they, too, have exceeded the guidelines. It is inevitable, but the system is unfair and this shows how out of touch the Government are with local authorities.
There was only one copy in the Library of the document I now have before me, and I am sorry that I had to take it. In future, when the Government are drawing up a list, will they provide me with a personal copy, and include in that list the proportion of expenditure of each local authority that is paid by way of rate support grant? I wish to know the percentage. The general expenditure for Scotland is just over 60 per cent., but I know that Glasgow is only about 33 per cent.; there was a time when the figure was 41 per cent. That itself is a 14p rate poundage reduction caused by Government action. It will be helpful if we can see exactly how each of these local authorities are helped. Not the 60 per cent.—I know that the highlands authorities and Orkney and Shetland receive a very much higher figure, but such information would provide an indication of the reality in that respect.
Lord Grimond: My Lords, we, too, are most grateful to the noble Lord the Minister for repeating the Statement. Is he aware that we are indeed impressed with the importance of economy by local authorities, and is he aware also that we do not believe he will ever achieve such economy under the present method of allowing local authorities to fix their budgets and then attempting rate capping? The solution is to reform the system of local government finance, so that instead of a wholly capricious rating system which many people do not pay, or pay in full, the local electors are much more responsible.
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Secondly, may I ask the Minister if he will stop loading on local authorities miscellaneous duties which involve them in greater expenditure on staff? May I ask him also if he will remove his mind from the warmth of London and take it back to the misty uplands of Ross and Cromarty? He will be well aware that the climate in the north is very different from the climate here. Local authorities there have to deal with widely-scattered constituents, with high transport costs, and so forth. Has any notice been taken of that in the present proposals?
I also draw the Minister's attention to the fact that the highland authorities are being heavily penalised. As I understand it, the figure in respect of Ross and Cromarty itself is 81·44. The same applies in respect of Inverness, Caithness and Shetland. I should like to know whether special attention has been paid to the special difficulties and expenses which the Minister well knows those local authorities inevitably face.
4.58 p.m.
Lord Gray of Contin: My Lords. I am grateful to both noble Lords, Lord Ross of Marnock and Lord Grimond, for their comments on the Statement. I will begin by saying how glad we all are to see the noble Lord, Lord Ross of Marnock, with us. Today, he sees through a glass darkly—but we feel sure that before long he will be restored to full vision. I believe that I speak for everyone on this side when I say how delighted we are that his illness does not appear to have affected his persistence in criticising any measures we put forward.
In his criticism of the general attitude we are developing in this Statement, the noble Lord, Lord Ross of Marnock, suggested that the fact of the matter is that local authorities will receive less. I remind him that local authorities are still planning to spend more in 1984–85 than they did in 1978–79. At constant prices, their budgets are 2·6 per cent. above their spending in 1978–79. In cost terms, which shows much more clearly the cost of local authority services to the economy, the increase is 12 per cent.
Therefore, I fully defend what my right honourable friend is seeking to do in persuading local authorities that they really must reduce their spending. There is no alternative to that, and it is in their interests and everybody else's that they achieve what we are asking them to achieve.
The noble Lord suggested that the guidelines were unrealistic. That is not so. Fifteen local authorities have managed to stay completely within the guidelines. Indeed, one-third of all the local authorities in Scotland have managed either to remain within the guidelines or not to exceed them by 3 per cent. It is not right to suggest that what we are asking local authorities to do is by any means beyond them.
The noble Lord, Lord Ross of Marnock, mentioned Glasgow. I remind him that last year Glasgow wasted £5 million of housing capital expenditure because it would not raise rents. That is what we are up against at the present moment.
Lord Ross of Marnock: My Lords, are we including housing now? Has housing anything to do with the Statement? I thought we were dealing with rate

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support grant. Housing does not come within rate support grant—or does the noble Lord not know that?
Lord Gray of Contin: My Lords, I remind the noble Lord that, when he is arguing with me, he never ceases to bring in any factor which he thinks will improve his argument. I reserve the right to do the same when I am replying to what he suggests.
In addition, last year that authority suggested that the penalty with which it was faced would cause massive cut-backs in services. Instead, by disciplining itself to a certain extent, that authority managed to have a surplus by the end of the year. It used that surplus this year to keep its rates down. The fact that that happened to be in an election year was probably coincidental. But that does not matter. It did it, and we all applaud what it managed to do.
The noble Lord asked whether there has been agreement with local authorities. There has been discussion with local authorities on what is proposed. I am not in a position to say whether there has been complete agreement. I should be surprised if there was complete agreement with COSLA on that matter, but there has certainly been discussion. I have not seen COSLA. As the noble Lord will be aware, this is not one of my day-to-day responsibilities in the Scottish Office, but a Scottish Office Minister has seen COSLA. Indeed, my honourable friend the Under-Secretary of State had a meeting with its representatives in Edinburgh only this morning.
The noble Lord asked me whether I could let him have a list of the expenditure and the percentages. I shall certainly do that. I shall ensure that what he seeks is given to him as quickly as possible.
I now turn to the noble Lord, Lord Grimond, who made a number of comments about authorities in the Highlands region. Like him, I know most of those authorities very well indeed. I remind him that one of the Islands authorities within his former constituency was one of those which managed completely to keep within the guidelines. Indeed, two other authorities have not exceeded the guidelines by very much.
I take the points that the noble Lord made about the difficulties that Highlands authorities are involved in because of their geographical position. Of course, in discussions with those authorities those difficulties are considered and taken into account.
From their point of view noble Lords made a fair criticism of our proposals. I am grateful to them for participating in our short discussion.
Lady Saltoun: My Lords, may I ask the noble Lord whether copies of the figures that he is sending to the noble Lord, Lord Ross, will be placed in the Library?
Lord Gray of Contin: My Lords, I am grateful to the noble Lady for that comment. I should have said that of course I shall make them available in the Library for the benefit of any noble Lords who wish to see them.

Health and Social Security Bill
5.4 p.m.
Consideration of amendments on Third Reading resumed.
Schedule 6 [Protection of pensions]:
Lord Morris Lord Morris moved Amendment No. 15:
Page 53, line 33, after ("above") insert ("but excluding any part of such excess which represents increases in the guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the guaranteed minimum which accrued prior to the 31st December 1984;").
The noble Lord said: I think that it will be for the convenience of the House if I speak also to Amendment No. 16.
Amendment No. 16: Page 56, line 4, after ("above") insert ("but excluding any part of such excess which represents increases in the earner's guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the earner's guaranteed minimum which accrued prior to the 31st December 1984.").
It is certainly not my intention to go over old ground, but I believe that at this stage it is important to clarify any misunderstandings that have occurred in previous stages of the Bill. As your Lordships will recall, this amendment would prevent some people having their present pension entitlement reduced, which will certainly be the effect if the Bill goes unamended as it stands. Indeed, I find it somewhat ironic that the pensions of some people will be reduced when there is a cross-heading to Schedule 6 which reads, "Protection of pensions".
In response to my inquiry at the previous stage of the Bill, which was:
"how many of the country's 20,000 contracted-out pension schemes are at present in surplus?",
my noble friend replied:
"My noble friend asked how many of the 20,000 contracted-out schemes are in surplus. All, if they are contracted-out, must be able to meet the contracting-out liabilities. They may or may not be in surplus, but they certainly cannot be in deficit.—[Official Report, 10/7/84; col. 866–7.].
Let us be quite clear. That did not answer my question. If I may, I shall just ask that question again, carefully and slowly. How many of the 20,000 contracted-out schemes are in surplus; or, if my noble friend prefers, how many are in deficit? I ask him not to be shy. If he does not know the answer to the question, he should say so. I do not want an answer to another question.
The reason I ask that question is that my noble friend told me in his letter that many schemes would be able to meet the cost of retrospective change out of surpluses arising from investment conditions in recent years. That is not true where the terms of an insured scheme are such that any benefit that inures to the insurance company will not necessarily inure to the fund. That is a separate point.
There is a second point. My noble friend's original answer, no doubt inadvertently, contained an important factual inaccuracy. He was correct in saying that all contracted-out schemes,
"must be able to meet the contracting-out liabilities",
and that they may or may not be in surplus. However, he was incorrect when he said that they, "cannot be in deficit".
I have had that point carefully checked with a leading firm of consulting actuaries. There is nothing to prevent a deficit in respect of the liabilities over and above the contracting-out liabilities. It is in just such cases that hardship is most likely to be caused to pension scheme members as a result of the retrospective element in Schedule 6.
At a previous stage of the Bill the noble Baroness, Lady Jeger, asked for an assurance that the legislative changes would not result in anyone's pension being reduced. I think that noble Lords will recall that she was far from reassured, if I may put the thought into the mind of the noble Baroness. The answer, at column 224 of the Official Report at Committee stage reads, somewhat cynically, I cannot help thinking:
"If the scheme is not properly funded, then all will suffer".
The point goes beyond that. At Report stage I gave an arithmetical example showing how people's pensions could be worsened, even if the scheme is at present properly funded. To argue, as did the noble Lord, Lord Glenarthur, at column 869, that,
"Pensions can only be reduced if the scheme rules permit them to be reduced",
is like saying that a bankrupt company must pay its creditors even if it has insufficient assets so to do.
I ask my noble friend Lord Glenarthur another question. If anyone's pension can later be shown to have been reduced as a result of the terms of Schedule 6, do the Government have any intention of restoring the pension to its original level? At the same stage, I think it was the noble Lord, Lord Banks, who suggested that franking—and he was quite right—could be likened to robbing Peter to pay Peter. If we take Paul as the early leaver and Peter as the late leaver, in this legislation it is a question of robbing Peter to pay Paul. I suspect that my noble friend will say that that will not be the case, but that is precisely what the case will be in certain circumstances.
My noble friend Lord Glenarthur put up another red herring at the last stage. I believe that it is very important to consider this. He suggested that the effect of the anti-franking legislation would take years to build up if this amendment were passed. I quote what he said—and he somewhat over-egged the pudding:
"We will be faced with thousands and thousands of early leavers receiving pensions from their schemes of no more than the guaranteed minimum pension. Yet they would have paid in contributions rightly expecting to receive benefits on a much larger scale. They would have been better off to stay in the State scheme and not be members of an occupational scheme at all."—[Official Report, 10/7/84: cols. 866–7.]
I suggest that the amendments tabled do nothing other than build up more gradually the anti-franking legislation. Incidentally, I am advised that in practice many schemes will choose to make their change retrospectively, if they can afford it, even if my amendment is passed, because it would be administratively convenient for them to do so. Thus, my amendment will not set back the building up of anti-franking legislation as much as my noble friend Lord Glenarthur fears.
Where a scheme cannot afford the effect of this legislation, however, my amendment will give genuine protection to the people who remain in that scheme until pension age. It is not true that if my amendment is passed many thousands of early leavers will have been better off to have stayed in the state scheme and not be members of an occupational scheme. In any case, they are guaranteed that they will be no worse off in the occupational pension scheme. They may be better off, and many will be, but they cannot be worse off.
Many will have contributed to the occupational scheme but they will have received a compensating reduction in their state scheme contributions. In no sense can they be worse off than they are now if the amendment is passed. I beg to move.
Baroness Jeger: My Lords, I shall be brief. We support the amendment and the noble Lord was certainly reading my mind correctly in saying that I was not satisfied by the noble Lord's reply to my previous question at an earlier stage about the absence of any worsening under the provisions of Schedule 6. I remain unassured.
I think it is extraordinary, and rather ironic, that earlier this afternoon when we were talking about the Parliamentary Pensions Bill the noble Viscount, Lord Whitelaw, referred to the difficulty of retrospective provision. Now we seem to be at the opposite end of the argument. What we object to in Schedule 6 is that retrospective legislation can give rise to additional commitments which could not have been foreseen earlier during the strategic planning. That is exactly the difficulty. Perhaps I should not say "exactly" but it is very nearly the difficulty to which the noble Viscount, Lord Whitelaw, referred in connection with another Bill; but I must not stray beyond the rules of order in that connection.
We also had an earlier debate on the problem of retrospection in the drug tariff for pharmacists and there is a case now before the Court of Appeal in that connection. Therefore, I am sure that all parts of the House must feel that Schedule 6 is not a very satisfactory provision. I am not going in to the matter of the abolition of franking because I think that this question of retrospection and the problem of people who might suddenly find themselves in a worsening position because of Schedule 6 are the important elements. That is why we support the noble Lord, Lord Morris.
Lord Banks: My Lords, at the two previous stages of the Bill I supported the noble Lord, Lord Morris, on this point and he has not yet had a fully satisfactory reply to the very cogent points he has raised. Neither he nor I are against the abolition of franking. I have made clear that we on these Benches welcome it but we recognise the fact that if franking is abolished it will mean that some early leavers are going to have higher pensions than they otherwise would have done. We recognise that that will cost more. In so far as that refers to future years, it can be funded over the future, but in so far as it refers to past years, it puts an immediate burden on the fund. Provision has to be made immediately by those who are running the fund in order to make sure that the fund is solvent. Therefore, there is the danger that with some funds this retrospective part of the proposal could put them into insolvency or could mean that some members who have stayed and not retired early will have lower pensions than they otherwise would have done. I shall be most interested to hear whether the noble Lord is now in a position to give the assurance either that that would not happen or, if it does happen, that the Government will put it right, as the noble Lord suggested.

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It is the retrospective element which we believe to be wrong. People who have been applying the practice of franking—whatever we think of it—did so quite legitimately over these past years. It is not right that they should be penalised for something which was in accordance with the rules and regulations as they stood at that time.
Lord Glenarthur: My Lords, I am sorry that my noble friend Lord Morris feels it necessary to raise this matter again. For the benefit of your Lordships who may have forgotten, if they were here when some of the issues were discussed, I think I ought to make one or two things plain.
First, it is the Government's intention, as soon as possible, to abolish franking as practised by occupational pension schemes. I need say no more than that, basically, franking is a practice where the early leaver or person who retires before state pension age may find himself receiving a lower rate of pension from a scheme than he might have otherwise expected by the erosion of other benefits in excess of the guaranteed minimum pension that may be due to the eventual pensioner. Yet the provision of that guaranteed minimum pension and its revaluation have been allowed for in the national insurance contribution rebate received by contracted-out employers and employees since April 1978. Therefore, schemes which practise franking are being over-compensated.
There is, I accept, and as the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks said, no difference between us or between my noble friend Lord Morris and myself on our attitude to franking. We agree that it should be stopped. However, he and others object to the retrospection implicit in the Government's proposals. The noble Baroness to some extent prayed in aid remarks made earlier in the day by my noble friend, but I do not think I shall follow her down that road as I was not here and did not hear them.
Retrospection does not affect past early leavers, but it protects the benefits of future early leavers. That retrospection is really quite crucial. I go back and develop the theme I made, to which my noble friend referred. It is quite crucial if thousands of future early leavers are to be protected from a potential loss; a loss which no one wants to see. Let us consider the effect if my noble friend's amendment were agreed to. All future early leavers would be protected from franking but only in respect of their benefits which have accrued from 1st January 1985 and not in relation to their past guaranteed minimum pension which had accrued since 6th April 1978.
On average, that guaranteed minimum pension could amount to £310 a year and its statuory revaluation to state pension age could mean that if at the time of leaving the member had benefits in excess of guaranteed minimum amounting to £1,600 a year, then up to £30 a week could be taken away from the future early leaver when he eventually drew his pension. Those figures are fairly staggering. This can have the result that, at that time, he would only be able to draw his guaranteed minimum pension. This is not an extra benefit that we are requiring to be provided.
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The scheme promises him an amount based on final salary and a pension not less than guaranteed minimum pension.
It is our wish that if, at leaving, he is entitled to benefits in excess of his guaranteed minimum, that excess should be preserved and not eaten away as a result of franking. If a member who has been in a contracted-out scheme ends up with a pension that is only equal to the guaranteed minimum, then his scheme contributions have been of no benefit whatever. He would have done just as well to be in the state scheme and not a member of an occupational scheme at all.
When we last discussed the matter, my noble friend suggested that the effect of all this would be that 3 per cent. for each potential early leaver would be required immediately the legislation came into effect. I think that I should refer to this point now, although he did not specifically go into it. The arithmetic is not quite so straightforward as my noble friend indicated at the time. Not every early leaver will qualify for preservation and not all will have six years in the scheme. Not all will have earned entitlement to benefits in excess of the guaranteed minimum pension. On average, there are hundreds of thousands of early leavers each year who would have five years' service. My noble friend indicated that there may be schemes that would be unable to meet the new requirements and would be forced to reduce benefits to existing pensioners. That, I suggest, is a highly unlikely consequence. Benefits in payment in most schemes have top priority over and above all other claims. All contracted out schemes must be funded to meet their priority liabilities, including the guaranteed minimum and pensions in payment. It will be some considerable time before any payments are due as a result of the anti-franking legislation. The leaver must reach state pension age before the proposal in the Bill will benefit him.
I accept that there may be some small schemes which will wish to consider the best way to meet their new liabilities. The Government accept that anti-franking and the early leaver legislation announced on 11th June by my right honourable friend the Secretary of State will impose costs, and I suggest that all involved will wish to consider how best to meet the new requirements. For some, both the employer and the employee may be willing to pay extra contributions. Others might adopt a restructuring of scheme benefits. Ultimately it may be decided to discontinue the scheme. If so, the anti-franking legislation, as I explained at Report, does not apply if the scheme is closed before that legislation is effective.
Alternatively, in future, one might, in extreme circumstances, see the scheme winding up, in which case the anti-franking legislation again would not apply. There is a third possibility—that if the scheme ceases to contract out before the legislation is effective, again the Bill would impose no new requirements. We have therefore, I suggest, incorporated several safeguards and emergency exits in the legislation to cover the kind of situation that my noble friend Lord Moms has postulated. He asked me a number of questions. He asked for the number of schemes out of 20,000 that were either in surplus or in deficit. The number in surplus is not known. But the answer really is that none can be in deficit if they are contracted out,

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as I understand it. They are subject to the Occupational Pensions Board in relation to their contracting out liabilities.
The noble Baroness, Lady Jeger, asked about the effect of anti-franking on existing pensions. We cannot get to the stage of pensions actually being reduced, because the scheme would have wound up first. If there was to be any deficiency in the guaranteed minimum pension as a result of all this, the Government would make good, on the winding up, if the scheme could not meet all the GMP liabilities. I hope that that is some reassurance for her.
On principle, we all object to retrospective legislation. I do not make any apology for repeating what I said at Report. In the case of franking, the Government believe that it would be wrong if it was not retrospective. It is the only way to protect the individual from losing out in the future. My noble friend's amendment would drastically reduce the effect of abolishing franking, and it would take much longer before the benefits became significant for future early leavers. The Government have embarked on a programme of reforms of occupational pension schemes. We have invited consultation not only on the franking legislation but also on the other proposals currently outstanding. There are, however, certain fundamental principles what we must bear in mind. A fair deal for all members of occupational pension schemes must be our aim. For too long, stayers have benefited at the expense of leavers. If the Government were faced with a choice that one or two schemes might decide to close, as opposed to a measure that will benefit thousands of early leavers, I have no doubt as to the way that the legislation should act.
The Government must protect the interests of the individual, the future early leaver, who, as I say, could lose an average of £30 a week by the time that he reaches state pensionable age. It is, I think, a matter of great regret that we cannot make any improvement for those who have already left. We believe that we have incorporated adequate safeguards for existing schemes. I assure your Lordships that retrospection in this case was not a decision entered into without careful consideration. Throughout the debates on this part of the Bill, on one thing we have been unanimous—that it is an extremely complicated subject. I know that my noble friend Lord Morris shares that view. I hope, however, that with this further explanation of this rather tortuous business, he will see fit to withdraw his amendment.
Lord Morris: My Lords, again I am grateful to my noble friend for his comprehensive answer. I should like to deal quickly with his final point. He came out with a quite astonishing contradiction in terms—
Lord Glenarthur: My Lords, did I?
Lord Morris: My Lords, yes. He referred to the early leaver reaching state pensionable age. If anyone reaches state pensionable age he ceases to be an early leaver, I should have thought. Or have I got this completely wrong?
Lord Glenarthur: My Lords, I think that my noble friend has got it wrong. Such a person will eventually reach the age known as the state pensionable age.
Lord Morris: My Lords, thank you. I shall not pursue that matter on the good grounds that I do not understand it. My noble friend also suggested that one of the evil consequences that I had tried to argue would result from the implementation of Schedule 6 was that Peter would be robbed by Paul and that the early leaver would rightly benefit but that if there were not funds in the scheme, then money could only come from the long stayers. To put it another way, my noble friend used a different term. He called it restructuring scheme benefits. What do noble Lords think that this means? That is exactly what will happen. The Government will not pay. The fund cannot pay if it has not got the money. Does anyone think that insurance companies will stump up? You have to be joking.
My noble friend talked at the last stage rather darkly of future legislation. I sincerely hope that when I come back to him, as I will, I am afraid, year in and year out, and when the result of this is monitored, he will look at the matter very closely. If the late leavers in a scheme that is very closely funded are harmed, I hope that my noble friend will reconsider this case as the years go by. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
5.28 p.m.
Lord Glenarthur: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Glenarthur.)
Baroness Jeger: My Lords, this Bill seems to have been with us for a very long time. It is right that this should have been so because it is a Bill that affects hundreds of thousands of people in this country. It is right that your Lordships should have given careful and close consideration to its varying proposals. I welcome the end of this unwelcome muddle of a Bill—the end at least until the next Labour Government takes it all to pieces again and puts things right. We await four promised reports on the social services. We can only hope that there will be maximum public involvement and Treasury involvement and that we shall be able to look more closely at the wider aspects of the health and social security provisions within which the provisions of this Bill play a comparatively small part.
In earlier stages we have made our views perfectly clear. We are seriously disturbed about some of the provisions of the Bill. I will summarise them briefly. There are complications about the sections dealing with the opticians and eye services, and I think that the Minister, who speaks with the best will in the world—which we all appreciate—has not made the position absolutely clear in all respects.
We are glad that the Government have insisted on a professional diagnosis before people can take their prescriptions to get them filled. Filling a prescription,

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reading a prescription, is a skilled job, and to think that any shop person—I was going to say shop girl—can, over a counter, take a complicated prescription, particularly if it is involving different prescriptions for different lenses, and take the lenses out of boxes, as if she were selling a pair of tights and getting size 10, seems to us very dangerous. It seems to me—and I speak as an old doctor's wife; perhaps I should say a doctor's old wife—to be similar to a doctor giving a prescription to a patient and the patient does not have to take it to a pharmacist; he or she can take the prescription to a high street shop. Although this would be logical, I hope very much that the Government are not going to go down that road.
It is necessary to have considerable experience and knowledge, not only to diagnose the eye problems but to make sure that the glasses fulfil the prescription. It seems to me that while there is no professional body supervising the sale of these spectacles the customer will have no redress. The customer could get home and find that the lenses do not fit very well. He could take them back and the shopkeeper could say, "Well, you bought them yesterday, and that's the end of the matter". I think this is going to cause a lot of problems. I hope that those who sell spectacles will try to be sympathetic and helpful. It is easy to buy a pair of spectacles in a shop and then, when one gets home, find that, come the night time and one is trying to read by artificial light, they are not so good.
The other complication in this part of the Bill relates to the question of complex and expensive lenses. We have had considerable discussion about this. I go back and use as my text a statement made on the Second Reading in the other place, on 20th December, when the Secretary of State said, at col. 297:
"there are those with the very poorest sight who need complicated and more expensive lenses, and I am certainly prepared to consider the evidence on that to see whether they can have continued access to NHS glasses".
At a previous stage of the Bill here the noble Lord assured us that special consideration would be given in these cases. But we find some difficulty in working out what this special consideration is to be. I know that it is difficult to make these assessments across the Floor of the House, but I thought that the noble Lord, Lord Ross, made his situation very clear, and I have his permission to explain his difficulty. I thank the noble Lord the Minister for sending me a copy of a letter which he sent to Lord Ross; and I have Lord Ross's permission to use that.
In parenthesis, may I say that I think that sending letters to each other is very courteous, but it does not help the public to know what is going on. How are the patients to know that they have these rights and these possibilities of help if this is a matter of correspondence across the Floor of the House? At Report stage, some of us asked why, if the Government were going to help people who needed these complex glasses and had specially difficult eyesight, this could not be written into the Bill for everybody to see.
Lord Glenarthur: My Lords, I am sorry to interrupt the noble Baroness—it is the last thing I want to do—but the fact is that other Members of your Lordships' House have not had the benefit of reading all that this letter contains. The fact is that it deals with
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other legislation. That is why the point that the noble Lord, Lord Ross, raised was not strictly relevant to the Bill before your Lordships, although it was relevant to his particular circumstances. If any of your Lordships, or anybody else, has a particular problem because the National Health Service is not meeting its statutory responsibilities, I should be the first to take that up with the health authority concerned, whether it be in Scotland or in England. But I do not think it is strictly relevant to the Bill before the House.
Baroness Jeger: My Lords, I thank the noble Lord. I cannot see why it is not relevant to the Bill before the House when a large part of this Bill concerns eyesight, the preservation of eyesight and the endangering of eyesight. If the noble Lord thinks it would be fairer of me, I will read out the whole letter. I see that he is shaking his head. Of course, I know that Schedule 12 to the National Health Service Act 1977 applies. I have been around a long time and I, too, know that.
The problem is that there seems to be great diversity, according to which hospital one happens to be in or which Minister or which Government are in charge. I hope the noble Lord will not think that I am unfairly extracting odd sentences from his letter, but that is the only alternative to reading out the whole letter. In regard to eye operations, he says:
"We intend that the present arrangements for such patients will continue. Their immediate post-operative needs are usually met by glasses loaned by the hospital. After that, practice varies but we intend to make no changes to the present arrangements whereby post-operative patients pay for the first pair dispensed after refraction but whilst their eyes stabilise the cost of replacement pairs is met by the authority."
I have to ask the noble Lord why he thinks that,
"post-operative needs are usually met by glasses loaned by the hospital."
I have not been able to find anybody who has had this happy experience. If it is the case that they,
"are usually met by glasses loaned by the hospital",
then it means that, unusually, there must be people who do not get glasses loaned by the hospital. If the practice does vary from hospital to hospital and from region to region I hope the Minister will try to see that there is some uniformity of practice.
It seems to be very unfair that if one has one's eye out in one region one gets some help with glasses, and if one has it out in the next-door region, one does not. It is very unfair for the Government to accept that the practice varies but then say that they do not intend to alter it. That means that the Government are accepting the variability of treatment. That is one of the aspects of this Bill which worries us. I know that the Minister will tell me again that it has not to do with this Bill. But there could have been something in this Bill to put this matter right and provide for people who need these specially complex and difficult lenses to be helped, even if it meant an amendment to earlier legislation.
I should keep your Lordships here too long if I went on about all the failures of this Bill and why we think it is such a wretched piece of legislation. It leaves out any question of long-term benefit for the long-term unemployed, though this had been recommended by the Social Security Advisory Committee. It does not restore the link for uprating of pensions to average

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earnings, which many of us think is the best way to deal with poverty in old age. It does not provide anything to help the blind with their supplementary allowance. It brings in some provisions which make some of us feel very worried about the nation's eyesight, and we hope these will be monitored carefully.
The supplementary allowance for the blind was set at £1·25 in November 1969. If it had kept pace with inflation, it should be £8·25. But the noble Minister told me on 9th July that the present purchasing power of the blind allowance is now 25p. That is a disgrace to the whole House, and especially to the Government.
Under the Bill we have reduced the child dependency allowance by 15p a week. I know that the nation is hard up, but to take 15p a week off the child dependency allowance seems to me unfair and unrealistic. At the same time, the child benefit has in real terms gone up by only about 10p a week since 1979. I understand that at least 425,000 children will lose under this mean clause.
We have discussed—and I shall not go into it in detail again—the severe disablement allowance. Whatever changes there may be—and some might be helped and some might not—there are 16,000 people at present receiving benefit who will be excluded under the Bill because of the alteration in the provisions.
Clause 14 treats occupational pensions as earnings for taxation purposes. I should not have thought that it was really within the Conservative philosophy that people who have saved and who have put their money into their pensions should then find that their earnings, on which they have probably already been taxed, are now to be taxed again as income.
I hope that I have said enough to make it clear that we do not think much of this Bill. We wish that the Government had waited until a wider review of the whole of what is usually called the welfare state and the social security arrangements had been prepared. This is just another piecemeal bite at a very big problem. Therefore, I am not happy, That the Bill do now pass.
5.42 p.m.
Lord Banks: My Lords, I should like to thank the noble Lord, Lord Glenarthur, and the noble Earl, Lord Caithness, for the manner in which they have presented their case throughout the different stages of this Bill, even when we have strongly disagreed with that case. We are grateful to them, too, for supplying the information which we needed for our discussions. I should like particularly to thank the noble Lord, Lord Glenarthur, for arranging the discussion on the severe disablement allowance, which was very valuable indeed. On the Opposition side of the House, from the Opposition Front Bench the noble Lord, Lord Ennals, forcefully assisted from time to time by the noble Baroness who has just spoken, has made a considerable contribution and so have other noble Lords, not least my noble friends Lady Robson and Lord Kilmarnock.
I still believe that a degree of qualification on the part of those who are called upon to dispense spectacles is desirable. I am still concerned about the effect of the proposals for optical appliances on those
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on comparatively low income. I regret that, although the household duties test is to be abolished, the severe disablement allowance will still indirectly discriminate against married women.
My unhappiness remains about the failure to match the abolition of the child dependency additions with a sufficient increase in child benefit. Finally, I am concerned that the Government did not show greater understanding of the effect of retrospection in the otherwise welcome proposals which we have just been discussing to abolish franking. We on these Benches will certainly wish to monitor very closely the working of the Bill's provisions in practice.
Lord Ferrier: My Lords, the speeches that we have just heard make clear that this Bill was not wrongly described as a "rag-bag of a Bill". It would not serve any useful purpose for the House to divide over its passage at this juncture, but from what your Lordships have heard in the last two speeches it is clear that there are a number of features of the Bill which have caused me and others to described it as a rag-bag of a Bill.
As the debates in this House have shown, it has been astonishing to many of us that the DHSS decided to merge in one Bill certain measures about opticians, which some regard as extremely dubious measures, with regulations in connection with social security. In case any of your Lordships wonder how it comes about that I am concerned with social security, I would remind your Lordships that it is a matter of importance to all of us on whichever side of the House we may sit.
More than a quarter of a century ago I took part in a debate in which Lord Pethick-Lawrence and Lord Beveridge also spoke. It might interest your Lordships to know that from that debate stemmed an alteration in the wording from the then current term, "national assistance", to "supplementary benefit". As matters stood at that time, the words "national assistance" stuck in the gullets of some proud old people who refused to "go on the parish". That has been overcome by the words "supplementary benefit", which have a much wider connotation today than they had at that time. I mention this matter because it has been suggested from the other side of the House that Peers on this side know nothing about the problems of poverty or destitution. But that type of criticism is of course only material for a party political knockabout.
As for this Bill, in my view the Short Title appears misleading. It does not cover all the ground. Along with other noble Lords, I was very sorry to hear from my noble friend Lord Mottistone that my noble friend Lord Cullen is unwell. I hope that my noble friend Lord Mottistone will convey our good wishes to my noble friend Lord Cullen for his early recovery, because he has great knowledge of this matter which he has applied to assist our discussions. My noble friend Lord Cullen said at col. 780 on 10th July that he could not help commenting:
"that in the not too distant future the Government may well wish that they had not gone down this road."
That comment rather confirms what the noble Baroness, Lady Jeger, has been saying. Perhaps it would have been much better to wait. In fact this afternoon there have been indications from various speakers that this legislation has been premature in

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regard to taxation, in regard to pharmacists and the like.
The question of the timing of the Bill seems to be very mistaken. I do not know to what extent noble Lords studied The Times leader on 12th July. It referred to the Institute of Fiscal Studies publishing a report on that day on the reform of social security. That leader mentioned a pamphlet Action on Welfare published on that same day by the Social Affairs Unit, which also referred to the need for reform. Could we not have waited? In my view the speech made by the noble Lord, Lord Ennals, on Clause 4 has a bearing on this very matter, but we need not pursue that now.
Be that as it may, my heart has gone out to the hard-working Ministers who have had prematurely to propel this Bill through the House despite the appeals that have been made to the contrary. I think that it was the noble Lord, Lord Wallace of Coslany, who begged the noble Lord to withdraw his Bill and to bring it up next Session, and I think that the noble Baroness, Lady Jeger, cried out, "Good idea". However, here we are.
From what I have said, noble Lords will have gathered that I am not content that the Bill should be passed, but I hope that what I have said will be on the record and will be taken into consideration. My noble friend Lord Cullen may well be right that it will not be long before we have to go over all the ground again with, let us hope, the problem of the opticians separated from that of social security.
5.50 p.m.
Lord Kilmarnock: My Lords, I should like to associate myself with my noble friend Lord Banks in thanking the two Minsters on the Government Front Bench for the way in which they have handled the Bill and for the courtesy that they have constantly shown to us, although in the end we have not managed to make very much impression on the Bill.
It was the optical clauses which received perhaps the greatest amount of debating time and I certainly do not want to go back over all that ground again. However, there is still one loose end for which we must put down a marker. It has been mentioned several times this evening, and I make no apology for mentioning it again. It is the question of the complex prescriptions. The noble Baroness, Lady Jeger, quoted the Secretary of State at Second Reading in another place, but we have much more recent quotations available to us from the noble Earl, Lord Caithness, who, on 10th July in this House at col. 799, in response to an amendment which I moved, said:
"It does, however, give me the opportunity to confirm to the noble Lord, as he has already pointed out, that the Government are concerned about this and we are making very serious efforts to get this particular point right".
A little later in the same column he said:
"We believe that the most vulnerable members of our society ought not to have a financial barrier placed between them and the glasses they require".
In the following column he went on to draw our attention to the provision in the schedule, which allows the Government to make arrangements for a person:
"of such other description as may be prescribed".
We shall look with great interest at these regulations when they are brought before your Lordships' House,
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because we do not think that the Government have yet met us on this point, despite a number of promises, half-promises and indications that they might. The real question here is whether or not severe visual impairment is a matter for the National Health Service—that is, the general optical service. In effect, the Government say that it is not a matter for the National Health Service and, therefore, should be means tested. Our view is totally opposite to that. That is a point on which we are not satisfied and on which we shall certainly want to keep a beady eye when the regulations come before us.
On the question of the family practitioner committees, the road that the Government have gone down is the opposite road to the one which we on these Benches would have wished to follow. We particularly dislike the excessive extension of patronage in the hands of the Secretary of State, which enables him to make something like 3,000 direct appointments to family practitioner committees up and down the land. We believe that this is an unhealthy development. But I must say that in this part of the Bill we secured virtually our only success; we persuaded the Government to recognise the rationality of allowing nurses to have direct representatives on family practitioner committees. We won the argument and in this case the Government listened to the argument and agreed to the necessary amendment. Therefore, that is a minor, but I think significant, success about which we can be pleased.
With regard to the severe disablement allowance, many of us are still rather unhappy about the discouraging effect that Clause 11 may have on the young disabled, because it may discourage them from continuing with education and training with a view to securing a job. That is worrying. Some of us are still extremely worried about the effect of the method of testing mental handicap and mental illness. We had some conversations about this and we understand that a code of practice will be drawn up for the particular area of mental illness.
Finally, I very much agreed with the noble Lord, Lord Ferrier. While we have been debating this Bill, a number of reports of considerable interest—in fact, of great interest—have appeared advocating a thorough reform and simplification of the whole system. The most thoroughgoing was the report by the Institute of Fiscal Studies, to which the noble Lord referred, which describes the social security system in this country as:
"a patchwork quilt falling apart at the seams".
On the same day The Times summed it up by saying:
"Britain's social security system is in a mess. It is inefficient in relieving poverty, disruptive of the labour market, difficult to understand and costly to administer. There is widespread agreement that it needs to be reviewed and then reformed".
This Bill only highlights that necessity. Of course, we are aware of the areas of inquiry initiated by the Secretary of State, but let us hope that when the Secretary of State next introduces social security legislation into Parliament it will be not a dog's breakfast similar to this Bill, but a comprehensive attempt to deal with the fundamental problems.
5.56 p.m.
Lord Northfield: My Lords, I should like to say how grateful I am to the Ministers on the Government

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Front Bench for their courtesy in responding to the campaign which I and others have been waging during consideration of this Bill for greater freedom than the Bill actually offers for those purchasing spectacles. Despite my compliment, may I chide the Ministers for their inconsistency. On the one hand, they said to the noble Lords, Lord Mottistone and Lord Cullen:
"The consumer can be trusted to look after himself in judging the quality and service of sellers of spectacles";
on the other hand, they said:
"The consumer cannot be trusted to look after himself in having himself tested regularly for glaucoma".
I hope that this inconsistency in their attitude will bear in on them as the years go by, and that we shall finally get away from that restriction on freedom to which this provision amounts.
I am glad that at last—and this is the milestone that this Bill represents—the professional and commercial activities of opticians are being separated. Alas! competition has to be pressed and enforced in all commercial activities. We cannot rely on a high degree of self-denial from monopoly activity in our society. It was right that real commercial competition should be introduced into the actual dispensing of these items, many of which, of course, are fashion items rather than simple appliances. I hope that my noble friend Lady Jeger on the Front Bench will allow me to say that even today opticians do not let the girl serving at the counter go into the back room and start making up spectacles. That task is performed by a highly specialised professional company for all opticians.
Baroness Jeger: My Lords, I must not let that comment go on the record. I said absolutely nothing of the sort. I was talking about what would happen after this Bill comes into effect.
Lord Northfield: My Lords, yes. Perhaps I can rephrase the remark in a way which does not upset my noble friend. She implied that after the Bill becomes law someone serving at a shop counter, who has very little knowledge, will go into a back room and start making up spectacles. That is no more likely to happen after the Bill becomes law than before, because in this trade this task is performed by a highly professional, separate company which does it for many opticians. It is a highly skilled task that nobody pretends to do in a back room.
In future, under this Bill, first, consumers will be armed with their prescriptions, which the Minister says opticians will have to hand to them. Secondly, the consumer will receive restrained but helpful advertising of the service that unregistered dispensers and others can offer. So the consumer will have greater choice of where he can go and a greater indication of where he can get the best buy.
Thirdly, I hope that the consumer will then shop around. I hope that he will reflect on the value of the standard made-up spectacles that are available and which can save him a great deal of money, particularly if he does not need very much of a correction in his eyesight. All this will increase competition. I hope that it will have its effect on prices and that it will be good for the whole opticians' trade. It is now up to the opticians and these new unregistered dispensers to
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make the competitive system work, and I am pretty sure they will.
Lord Mottistone: My Lords, having already made a few remarks, I should like briefly to thank my noble friends for the courteous way in which they handled the whole of this Bill—at least the part in which I was interested. Although they did not give a great deal, they at least helped us to resist anything worse from people like the noble Lord, Lord Northfield, and the noble Lord, Lord Rugby. I hope that the result, which is a kind of compromise, will be successful in all its work. I am also grateful for the fact that my noble friend Lord Glenarthur, in accepting an amendment today which I had proposed before, recognised that it was sensible to have some amendments which we could feel recognised the importance of the opticians. I hope that the relationship between them and the DHSS will be splendid in the future. Unlike my noble friend Lord Ferrier, I wish the Bill a good passage.
Lord Stallard: My Lords, may I delay the House for a few seconds. I too should like to thank the noble Lords who have been responsible for the passage of this Bill so far through the House for the courtesy and gracious manner in which they have dealt with the various amendments that I and others have tried to have passed. I also agree with those noble Lords who have described the Bill as a "ragbag". It is a ragbag, and that is a reasonable thing to call it. It was at least two separate Bills, if not more. We were all sad that the Government felt it necessary to roll them all into this one omnibus measure.
I would be wrong if I did not say that I have been disappointed that the Government were unable to accept an amendment that I should have loved to have had carried. That is the amendment on the introduction of the severe disablement allowance. I shall not go into the details any more but I fear that that will introduce more problems than it will solve. The introduction of a new criterion for disablement, the 80 per cent. criterion as well as inaccessibility for work, and so on, will create more problems than it solves. I was sorry that the Government were not able to do more about that, particularly on the housewives' NCIP.
The invalid care allowance is something else I was keen on. I know that noble Lords and noble Baronesses on the Government side who spoke on this share the concern we have felt for a long time. Again, I hope that the Government will be able to give that further consideration as a result of experience following the passage of the Bill. I was more than disappointed, having twice moved an amendment to increase the age allowance from 20 to 25, and then a reasonable compromise from 20 to 23, when the Government were unable to meet us even on those modest attempts to amend this, and make the Bill more palatable and acceptable certainly to the congenitally handicapped who would benefit from that kind of concession.
One of the things I am pleased about is the promise that the noble Lord gave us during the course of one of the amendments that there would be a monitoring process of the Act. That is important so far as I am concerned. I will take every opportunity to pursue this

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question of the monitoring, and keep a close watch on it and use whatever parliamentary devices are available to me to make sure that the points we have raised in the past may be covered by that monitoring arrangement. With those few, I hope constructive, criticisms I too join others in thanking the Ministers again. We shall watch the Act closely and its implementation.
Lord Somers: My Lords, just before we conclude, from these Benches, I also should like to thank the noble Lords on the Front Bench for the way they have manoeuvred this Bill to its final close. I feel that any criticisms which one might have of the Bill are, at this stage, rather like bolting the stable door after the horse has gone, so I shall leave it at that.
Lord Ennals: My Lords, just a few final words from this side of the House before the Bill passes. The only matter I want to defend the Government on is having a miscellaneous provisions Bill. It makes it a ragbag, but there are times when there are good things which one wants to do and one puts them all in a bag and brings them forward. The trouble is that there are not any good things in this bag. That is why at the beginning I called this a "ragbag". As one plucks out each little bit from the bag one realises that there is not a single item which it was necessary to bring forward at this stage or in this form. But we have made some advances, and therefore I too thank the Ministers on the Government Bench for their courtesy and helpfulness.
We have plucked a few things from our debates. One is on the special disability allowance. There is much more understanding of what the Government have in mind. We shall look carefully at the new code of practice, or code of assessment, when it is drawn up. The Government now recognise clearly what our concerns were. We have a nurse on the family practitioner committee, as was said by the noble Lord, Lord Kilmarnock. We have a few extra commas, colons, and brackets as a result of the re-formulation of a paragraph on which I moved an amendment earlier in the day. As the noble Lord, Lord Mottistone, said, we also have a modest concession on the title of optical practitioners.
One of the good things about the debate is that it has been non-partisan. I would say that in the sense that there has been as much wisdom spoken on both sides, and I would cap that by saying that there has been as much nonsense spoken on both sides of your Lordships' House. I am glad to see that my noble friend is still with us in heart and spirit and smiling upon us. It is perhaps helpful that this should be the atmosphere in which we conduct the debate.
When I look through it, it is a shoddy Bill. I am not going to go through it all because we have said it all before. I am just going to finish up with a question. Having thanked the Minister, I want to get something clear. If he cannot answer it now, will he write a letter? I want to know who is right. I want to know whether he is right or whether the Minister of State is right. Of course he has to say that the Minister of State is right. This relates to our dear friend Lord Ross of Marnock and other people in his position. I am quoting from the
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noble Lord, Lord Glenarthur, regarding Schedule 1, paragraph 7, line 1 of the Bill, when, he said:
"Post-cataract patients will be able to get their glasses from the hospital, because the glasses have to be changed regularly over a period of years until the eyes settle down. The same arrangements will be maintained. There is no reason, therefore, for people to fear that because they have had a cataract operation they will have to go to enormous expense to keep their eyes correctly focused. Their glasses will continue to be dispensed by the hospital. This arrangement will continue for the length of time that the eyes are settling down."—[Official Report, 10/7/84; col. 791.]
That was jolly nice, but that was not at all what Kenneth Clarke said in answer to a letter sent to him by the Royal National Institute for the Blind with a particular interest in this. He said:
"In the case of post-operative patients we have no intention of altering the present arrangements whereby their immediate post-operative needs are met by the loan of glasses".
As my noble friend said, we would find it difficult to find anyone who has had any loaned glasses.
"Nor do we propose to alter the existing arrangements whereby patients pay the appropriate charge for their first pair of glasses."
When the noble Lord, Lord Glenarthur, in column 791 made his assurance, I intervened to say,
"My Lords, is this point made clear in the Bill which is before us? If it is, it is a very encouraging reassurance."
The noble Lord said at column 792:
"I am unable to find it in the Bill at the moment".
Perhaps, having had the opportinity of reflecting on this, he will clear this up because it is an important point which affects many people who are post-cataract patients, and it will affect many people in the future. Apart from that question, I just want to say that perhaps that part of it is part of the most raggedy part of the bag.
Lord Glenarthur: My Lords, I am the first to recognise that this is a wide-ranging Bill. I do not think it would he appropriate for me to detain your Lordships at this stage for yet another detailed exposition of its contents or even of what its contents might have been had the noble Baroness, Lady Jeger, had her way. I was chided by the noble Lord, Lord Kilmarnock, to the effect not that it was a ragbag of a Bill (which my noble friend Lord Ferrier said) but that it was a dog's breakfast. All I can say is that if it had had the various additions which the noble Baroness, Lady Jeger, had wanted, the dog would have done very well in the morning.
I should like to refer briefly to those areas which have attracted most attention. A good deal of the debate on the Bill has centered on the provisions in Clause 1, which are concerned with increasing competition in the private market and ending state involvement in the provision of glasses. We believe that as a result most people who wear glasses will in future have a wider choice and their glasses will be cheaper. I appreciate that there are those who would have liked us to have gone even further down the path of liberalisation. The noble Lord, Lord Northfield, as we all know, has tirelessly pursued this aim over the years, and so I am glad that at least some of his wishes have been realised, as indeed have been some of those of the noble Lord, Lord Rugby, who has also pursued the matter with a great deal of vigour in your Lordships' House.

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But we remain convinced that we have struck a sensible balance by retaining the present link between sight testing and the sale of glasses and by ensuring that all glasses sold shall accord with a recent written prescription. We also believe that while ending general NHS supply, we have made sure that no one need be denied access to glasses on financial grounds, and I hope that these safeguards at least will find support from my noble friends Lord Cullen and Lord Mottistone.
I, too, share the wish that has been expressed that my noble friend Lord Cullen will soon be back with us again. I know only too well what a powerful advocate he has been for his cause over the years.
Before we leave the subject of glasses, I wonder whether, in reply to the noble Lord, Lord Ennals, I may try to remove some of the murk that appears in the water over the question of hospital patients and their glasses. If I do not manage to do it now, I shall probably have to write to him yet again to try to elucidate it. The fact is that loaning glasses after operations is accepted practice. While the patient is still an in-patient, his eyes are unsettled and it is not appropriate to test them. The hospital will, therefore, loan glasses which will be of some help, but that will not meet the full optical needs. Once the eyes have settled, and while he is an out-patient, the postoperative patient has his eyes tested and the glasses dispensed. He pays for the glasses, but because the eyes will adjust in the fullness of time, he does not pay for subsequent pairs until the eyes settle, and when frequent changes of glasses are not required.
The procedures perhaps vary from one region to another because the clinical practice of ophthalmologists is different, and it is a matter for local health authorities to check the performance of the regions looking after their hospitals. Even more it is a question principally of the clinicians meeting their patients' needs. There is no evidence that patients anywhere are less generously treated than I have described. The noble Lord asked me whether this was written into the Bill. It is not written into the Bill because it refers to the hospitalised service, and that comes under the National Health Service Act 1977, I think. If either the noble Lord, Lord Ennals, or the noble Lord, Lord Ross, has any evidence of specific cases where it is going wrong, I can only suggest that the noble Lord brings it to my attention and I shall have it looked in to. I hope that that will satisfy them.
I turn to Clause 5 and its related schedule. Changes in the status, accountability and structure of family practitioner committees will provide a firm focus for the provision of family practitioner services. They represent an essential plank in our strategy of ensuring that primary health care continues to be responsive to community needs. I am particularly grateful to my noble friend Lady Cox, the noble Baroness, Lady Robson of Kiddington, and the noble Lord, Lord Kilmarnock for their contributions to the debates on these provisions. I am pleased that we have been able to accept their amendment to give community nurses statutory representation of FPCs.
In our discussions on Part II of the Bill, we have profited from particularly informed and constructive
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debates on our proposals for the introduction of severe disablement allowance. I am grateful to the noble Lord, Lord Banks, for his comments in this respect. I trust that my noble friend Lord Caithness and I have succeeded in alleviating a number of the main concerns that have been expressed.
I think I can safely say that there is now a broad measure of agreement on all sides of your Lordships' House that severe disablement allowance does indeed represent, if not a perfect solution to a difficult problem, a least a step in the right direction and a significant improvement on the present position.
Much of the debate on the provisions in the Bill which will put beyond doubt the arrangements for professional remuneration in the family practitioner services, and which will produce a better deal for future early leavers from occupational pension schemes by abolishing the now discredited practice of franking, has concentrated on the retrospective aspects of those clauses. Indeed that was reflected in amendments which we discussed earlier this afternoon. While I understand the concern which has been expressed, I hope that I have convinced your Lordships that in these particular instances retrospection is not only necessary, but also desirable.
I thank all those who spoke on the Motion that the Bill do now pass for their kind remarks about both my noble friend and myself. In conclusion, it only remains for me to express my appreciation of the thoughtful, constructive and thorough manner in which your Lordships have considered the diverse provisions of this Bill. I am grateful for the constructive approach adopted, particularly behind the scenes, by the noble Lord, Lord Ennals, and the noble Baroness, Lady Jeger. In particular, I should like to thank my noble friend Lord Caithness for this admirable assistance to me in what has been his first venture into the complex, even tortuous, field of health and social security legislation. I am most grateful to him; and at least he has been spared discussion on the subject of franking.
On Question, Bill passed, and returned to the Commons with the amendments.

International Tropical Timber Organisation (Legal Capacities) Order 1984
6.16 p.m.
Baroness Trumpington Baroness Trumpington rose to move, That the draft order laid before the House on 15th June be approved.
The noble Baroness said: My Lords, the International Tropical Timber Agreement is part of the UNCTAD integrated programme for commodities. The main element in the agreement is the establishment of an International Tropical Timber Organisation; an effective focus, it is hoped, for co-operation and consultation between tropical timber producing and consuming countries. The agreement was laid before the House on 5th June. It was signed by the United Kingdom on 29th June.
The International Tropical Timber Organisation will seek to promote the expansion and diversification of world trade in tropical timber. The organisation will propose, approve, and seek finance for research and development projects in tropical timber, and will

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encourage forest industry and management. Furthermore, it will provide a forum for the dissemination of market information among producers and consumers.
The agreement contains no economic provisions, and the organisation, therefore, has no power to intervene in the market in order to influence the price of tropical timber.
The International Tropical Timber Agreement requires that the organisation be granted legal personality by all participating members, and that is the sole purpose of the draft order before your Lordships. It grants no other privileges, nor any immunity to the organisation. It is however, a necessary step towards enabling us to ratify the agreement.
The draft order before your Lordships does not relate to a headquarters agreement. The United Kingdom has offered to host the headquarters of the organisation, which is still to be established. Although it is likely to be some time before a decision on the location of the headquarters is taken, we need to ratify the agreement before 1st October 1984, when it is due to come into force. Our ratification of the agreement will help demonstrate our commitment to international co-operation in this area. I very much hope that your Lordships will approve this draft order, thereby signifying your recognition of the important work to be performed by the International Tropical Timber Organisation. I beg to move.
Moved, That the draft order laid before the House on 15th June be approved.—(Baroness Trwnpington.)
Lord Oram: My Lords, this is clearly a desirable order since the organisation to which it gives legal powers is clearly a desirable organisation. Many a time in your Lordships' House I have called attention to the importance to third world countries of trade in raw and processed materials, and increasingly it is important that these countries should not only export commodities in their raw state but process them before export and thus get the benefit of the added value. It seems to me that this new international organisation is designed to help the third world countries in that regard.
If the International Tropical Timber Organisation is successful in achieving the objectives set out in Article 1 of the agreement under which it is established, there is little doubt that tropical countries will be able to extract increased wealth from their forests as a result of the work of the organisation. I am glad to see that both in the list of objectives to which the noble Baroness referred and in the description of the projects which it is expected that the organisation will undertake, the development of forests and reafforestation take their place together with such activities as harvesting, logging and wood utilisation. I am also glad to see that one of the three committees of the organisation will be concerned specifically with reafforestation and with forest management.
I could not help feeling as I read through the agreement that the work of the organisation is going to be more concerned with cutting trees down and sawing them up and shipping them abroad than it will be with growing more trees and preventing the denuding of forest lands, which is a serious problem. I have seen it
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estimated that an area of forest the size of Austria and Albania combined is being lost every year and that, at this rate, by the year 2000 the forest land in the tropics will have shrunk by some 10 to 15 per cent. Therefore, that side of the problem to which the organisation will need to turn its attention is very important. This problem needs as much attention and as much research as does the problem of finding more efficient methods of utilisation and processing.
I hope—and I think we can expect—that a proper balance will be kept between the two aspects of the work of the organisation. I should therefore like to ask the noble Baroness for an assurance concerning the relative priorities that are likely to be given to different kinds of projects. This matter is dealt with briefly and in general terms in paragraph 8 of Article 23 of the agreement, but I wonder whether the noble Baroness can assure the House that it is likely that as much priority will be given to projects for reafforestation as is given to projects for harvesting, wood utilisation and processing. I hope that a balance will be struck between those two kinds of activities.
That is the only note of hesitation that I need to strike in connection with this order which, as I said at the outset, is a desirable order and one to which from this side of the House we give our general support.
6.25 p.m.
Lord McNair: My Lords, we too, welcome this draft statutory instrument as a step towards ratification of the International Tropical Timber Agreement which I understand will take place in August. If I may, I will dwell on the agreement rather than the order itself which merely gives that legal personality to the organisation which Article 17(1) of the agreement requires. As the noble Baroness has said, the agreement is part of the UNCTAD integrated programme for commodities. Previous agreements in this series have included those on rubber, tin, cocoa, coffee and jute. Unlike previous agreements, with the exception of jute, this one does not include any provision for buffer stocking in order to stabilise the market. It is very largely a non-interventionist agreement.
However, we agree with its objectives and particularly those dealing with reafforestation (to which the noble Lord, Lord Oram, rightly attached such importance), the conservation of tropical forests and the maintenance of ecological balance in those regions. We welcome the provision of an effective framework for consultation and co-operation on this matter between the producer countries and the consumer countries and we hope that this cooperation can be extended to cover wider aspects of world economic policy, as we feel that such cooperation is quite essential for the future wellbeing of the planet we happen to live on. On a slightly less important note, we very much hope that the invitation to set up the headquarters in this country will be accepted; and we rather like the suggestion of the honourable Member for Hamilton that it should be in Edinburgh where the Forestry Commission have their headquarters.
There are, however, one or two questions that I should like to ask. First, do the Government intend to make a voluntary contribution to this special account;

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and, if so, how much? And will it come out of the existing overseas development budget? Secondly, can we assume that the non-interventionist nature of this agreement meets with the full approval of the producer countries? If so, presumably it will be on the grounds of practicality. Lastly, what other steps, if any, are the Government going to take to try to bring about a more stable commodity trade to the benefit of North and South alike, such as, for example, a speedy renegotiation of the sugar agreement?
Viscount Massereene and Ferrard: My Lords, before my noble friend answers, might I point out that we do give quite a lot of help for reafforestation through overseas aid, for instance, in Malawi and that most of our aid actually goes to afforestation. I have been all over the forests there. They are extremely well managed. I quite agree with what has been said, that reafforestation, especially in the tropics, is extremely important.
Baroness Trumpington: My Lords, I thank both the noble Lord, Lord Oram, and the noble Lord, Lord McNair, for their welcome for this measure. In answer to the particular question of the noble Lord, Lord Oram, the decisions on priorities will be taken next year after the agreement enters into force. The United Kingdom considers reafforestation to be one of the most important aspects of the agreement and will certainly be pressing for projects in this area to be given as much priority as those in the other areas mentioned by the noble Lord.
The noble Lord, Lord McNair, asked a question about the siting of the headquarters. London is one of the seven candidates being considered for the location of the headquarters of the organisation. If our offer were accepted, we should need to negotiate a headquarters agreement with the organisation. This is common practice, as the noble Lord will know.
With regard to funding, funding for the implementation of the agreement is expected to come largely from the second account of the common fund when this comes into operation. The direct cost to the United Kingdom will be confined to the annual membership contribution to the administrative account. Provisions have been made for this contribution, estimated at less than £20,000 per annum, by Her Majesty's Government through the DTI.
I thank the noble Viscount, Lord Massereene and Ferrard, for his comments about reafforestation. I am sure I have already made clear to your Lordships the importance which, naturally, we as a country attach to this measure throughout the world. I note the remarks of the noble Lord, Lord McNair, on buffer stocking. I feel it would be difficult for me to answer any other remarks because it would be premature before the organisation is set up, but I feel sure the producer countries are in agreement, because they stand only to benefit.
On Question, Motion agreed to.

Companies Acts (Pre-Consolidation Amendments) (No. 2) Order 1984
6.31 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the draft order laid before the House on 25th June be approved.
The noble Lord said: My Lords, since 1948 there have been four major Companies Acts—in 1967, 1976, 1980 and 1981—which have introduced into company law new and radical concepts. Inevitably, such a body of law contains a number of anomalies, anachronisms and inconsistencies. The distinguished retired parliamentary draftsman working on these Acts came to the view that a satisfactory consolidation could not be affected within the normal consolidation procedures.
The orthodox solution to this problem would have been a programme Bill to make the necessary pre-consolidation paving amendments. However, this alternative, because of the pressure on legislative time, would have delayed the introduction of the consolidation probably for a number of years. This was not considered acceptable because the Government had accepted the urgent need to consolidate. This was keenly felt by practitioners and those concerned with company law. Therefore, the Companies Act of 1981 provided that amendments could be made by order, and we are now considering the second order made under this procedure.
This draft order is a very small part of the preliminaries to the consolidation of the Acts. It has been considered by the Joint Committee on Statutory Instruments, which made no comment. The purpose of the order is to make further amendments to the Companies Acts in addition to those already made in the first Pre-Consolidation Amendments Order earlier this year.
The amendments made in this and in the earlier order are desirable to enable a satisfactory consolidation to be produced. The power to make the amendments derives from Section 116 of the 1981 Act and it can be exercised only on the basis of recommendations of the Law Commission and the Scottish Law Commission acting jointly.
As with the previous order, a report by the two Law Commissions in Command Paper 9272, making joint recommendations, was presented to Parliament last month when the draft order was laid. The report explains the need for and the effect of each amendment. If the order is made, the amendments will come into force only with the Consolidation Acts and the Section 116 power will then lapse.
As my honourable friend the Minister of State for Industry explained in another place, we have had to defer introducing the legislation to consolidate the Companies Acts until next session. The complexity and subtelty of the subject matter is unusual, and in view of what I have said about the scale of the project, it has taken longer to prepare the legislation than we had hoped.
However, we have sought to put this extra time to good use. Continuing work on the legislation and further research on some of the points which emerged when the previous order was under consideration have

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brought to light several points which might usefully be resolved by the present procedure. The necessary amendments are contained in the present draft order. These proposed improvements to the legislation can be put forward now because of the willingness of the two Law Commissions to deal with the points in time to meet the constraints of the parliamentary timetable. I should at this stage like to thank them very warmly for all their work.
My Lords, I commend the draft order and beg to move the Motion standing in my name.
Moved, That the draft order laid before the House on 25th June be approved.—(Lord Lucas of Chilworth.)
Lord Bruce of Donington: My Lords, I should like to thank the noble Lord for having presented the order with the lucidity and clarity to which we have become accustomed. We on this side of the House see no reason why these orders should not be made. As the noble Lord has said, they cover four different Companies Acts, all of which are due for consolidation in due course.
One of the Acts concerns Scotland, and, being a Scot by descent myself, I am happy to report to the House that the noble Lord, Lord Ross of Marnock, has been kind enough to delegate to me the overseeing of this part of the order which relates to Scotland.
As I have already said, the orders are quite unexceptionable and there is no reason why I should detain the House further upon them. There is, however, just one query of which I gave the noble Lord notice earlier on today. It concerns the consolidation process itself. We are given to understand that following the Cork Report we are due to have a Bill presented to us some time before Christmas which substantially amends the law of insolvency, which, as your Lordships are aware, is very largely enshrined in the Companies Act of 1948.
What I should like to know from the noble Lord, if he is in a position to inform me, is whether the whole process of consolidation has taken into account the fact that any Act to amend the insolvency law is likely to make further quite large-scale amendments to the Companies Act 1948. Perhaps the noble Lord can give us some information on that point, because it is in the interests of the legal and accountancy professions, as well as of the companies themselves, to know just how this programme is going forward. It is a matter of very considerable interest.
The noble Lord said he had received a fair wind from the Law Society and various other organisations concerned with the law. I just wonder whether he has had any communication at all from the CCAB, the Consultative Committee of Accountancy Bodies, as to whether they had given it a fair wind as well. I assume that they have, since I, in common with other noble Lords, have had no representations from them. Aside from those observations, I am very pleased to give the order a fair wind.
Lord Lloyd of Kilgerran: My Lords, the noble Lord the Minister has summarised the contents and purpose of this order in his usual concise and efficient way and I would like to join in thanking him for once again fulfilling his task so well before us.
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The contents of the order have some significance to many businesses, business firms, accountants and lawyers. I, of course, would not presume to make any comments at all on those items which deal with Scottish law, though I had hoped that the noble Lord, Lord Bruce of Donington might be able to explain the social significance arising from Paragraphs 2 and 3, where there is now an amendment of the Criminal Procedure (Scotland) Act to enable the courts not only to put people into prison but also to fine them.
I was also interested in Paragraph 6 which has clarified some points, including one perhaps of not great importance but which has caused a little trouble to practitioners: that is, the meaning of the word "transaction" in the Companies Act. Now in Paragraph 6 it says that it is associating the word "transaction" with "or arrangement"; and that will clarify the position to some extent.
However, I was a little unhappy about the observations of the noble Lord the Minister regarding the progress being made for the consolidation of the Companies Acts. As he said, we have four major Acts and we will soon have two orders. Your Lordships have heard on many occasions about the desirability of consolidating the Companies Acts as soon as possible. It is not quite clear to me when the Minister anticipated that this work would be completed. He said, "perhaps in the next Session", but I am not clear what that means in the way of time.
As I have said before in your Lordships' House, it is very difficult for industry and their advisers to follow the many Acts that exist in their present form, and thus to give adequate advice. I hope that the Government will still press on very seriously with producing a consolidated Act in as convenient a form as possible and as cheaply as possible. My Lords, I support this order.
Lord Renton: My Lords, I, too, should like to support this order. I am sure that all those who would like to see an improvement in the statute book must welcome the method which has been used again on this occasion. The importance of progress in consolidation cannot be under-estimated and I am sure that most of us would like to see even more of it, although there has been improved progress in recent years. But the very strict statutory requirements affecting consolidation have undoubtedly been a hindrance to progress. They have caused delay sometimes because of the sheer complexity of trying to consolidate a mass of previous legislation which may be conflicting, and to do so while still adhering to the statutory requirements.
Of course, the method used on this occasion enables mistakes to be rectified. It should I think be used very freely in order to delete provisions which, even in a relatively short space of years, may seem to have become obsolete or redundant as well as conflicting with more important provisions. So this order, as an example of the method, is to be welcomed; but I should like to see the method extended.
I hope it is not irrelevant for me to mention that the Statute Law Society, of which I have the honour to be president and of which the late the right honourable Sir George Baker was chairman (and we deeply regret his passing) recently had a working party on consoli-

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dation of which he was a member, which recommended that the pace of consolidation should be and could be increased by the greater use of methods of this kind. I hope before long to have copies of this report to send to those members of the Government who are interested, and perhaps to others too.
Turning briefly to the amendments that are proposed here, they are technical and limited; they are not likely to arouse controversy. But I should like, in particular, to point to paragraphs 2 and 3, which, for Scotland, appear to correct what can only have been regarded as a mistake in the previous legislation, the 1975 legislation. That is a plain example of what I was saying just now and of the desirability of it.
The fact that sometimes these matters will be technical and understood only by experts like the noble Lord, Lord Lloyd of Kilgerran, should not alarm those of us who are not so expert but who are responsible for legislation, because really this is a matter in which the relatively few people who have the experience, the training and, I may add, the intellect to deal with these matters, must be allowed a certain amount of freedom. I would say that, for example, the amendments set out in paragraph 8 are of that kind. It is, for example, the accountancy bodies to which the noble Lord, Lord Bruce, so properly referred, which have the experience and which have discovered the defects which can arise and which should be cured in the process of consolidation, rather than perhaps waiting for many years for a fresh major Bill.
Lord Lucas of Chilworth: My Lords, may I thank the noble Lord, Lord Bruce of Donington, the noble Lord, Lord Lloyd of Kilgerran, and my noble friend Lord Renton for their welcome to this measure. May I also thank them for their response and for their very useful comments.
Perhaps I might just say, in response to my noble friend's remarks, that I do not know how he was able to exclude himself from the learning which he applied to the noble Lords, Lord Bruce of Donington and Lord Lloyd of Kilgerran, because it is I who have the alarm. Neither he nor other noble Lords who are engaged in this profession have any alarm at all, of course. But I am very much encouraged by what my noble friend said in his welcome for this procedure. There is no doubt that all those concerned will be watching how this procedure is used and what its effect will be.
There may very well be, as I think the noble Lord, Lord Lloyd, said, some disappointments that consolidation has been delayed for so long. However, it was fairly considerable and I have to say that when the Consolidation Bill is presented to Parliament, I fear it is going to be some 600 pages long with 700 or so clauses in it. That I think explains some of the complexity.
The noble Lord, Lord Lloyd, also asked about the timetable on this. We plan to introduce the Bill at the earliest possible opportunity in the next Session, and it is intended that it shall be done in sufficient time for it to come into force no later than 1st July 1985.
The noble Lord, Lord Bruce, asked two specific questions, and he gave me notice of one of them for
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which I am most grateful to him. He asked in particular how the Cork Committee, the insolvency law review, was going to be handled. As he will know, there are a number of proposals currently under discussion, with some implications for the consolidation legislation: the Gower report, the European Community's Seventh Directive on group accounts and the Third Directive on mergers of public companies. In particular, so far as the Cork Committee's report is concerned, a White Paper was issued in February, as he will recall. The proposals contained in it will be enacted in separate legislation which, subject to the pressures of other parliamentary business, the Governmment intend to introduce in the next Session of Parliament. So they will form a separate piece of legislation. Therefore, dependent upon whether the main Bill has to be amended before it comes to Parliament, to take care of what would appear to be a shorter piece of legislation dealing with the Cork Report—
Lord Bruce of Donington: My Lords, I want to be quite sure that I have understood the noble Lord correctly. As I understand it, legislation on insolvency will be introduced first. On the assumption that it proves sufficiently non-controversial not to cause the party managers any difficulty, it ought to be available some time before Christmas. The question that I have to ask the noble Lord is: will that then be consolidated along with the rest or will it rest on its own feet?
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord for making his question quite clear to me. It will rest upon its own feet, but I could not possibly commit my right honourable friends in another place as to whether it will appear before Christmas. Certainly, it will be early in the Session. The noble Lord asked me about consultation. As your Lordships will probably recall, there was quite extensive consultation prior to the first report of the two Law Commissions which led to the first pre-consolidation amendment order earlier in the year. As I indicated in my opening remarks, the circumstances surrounding the second report and this order are different. The two Law Commissions have had to act most expeditiously to produce the report in the time available and there was simply not time to undertake the normal type of consultation that we conducted previously. However, we have no reason to think that there is any disagreement with the proposals contained in the order.
I think that that answers all the noble Lords' questions. I am quite sure that this order will pave the way for a better consolidation—a development to be welcomed by all those concerned with company law. I am most grateful to noble Lords for their support.
On Question, Motion agreed to.

Pedal Bicycles (Safety) (Amendment) Regulations 1984
6.53 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move the draft Pedal Bicycles (Safety) (Amendment) Regulations 1984. These regulations have been laid in

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draft under powers contained in the Consumer Safety Act 1978. If approved, the regulations will amend the Pedal Bicycles (Safety) Regulations 1984 which, as noble Lords may recall, were introduced into your Lordships' House in February this year by myself. These regulations make it an offence from 1st August 1984 to supply a new bicycle if it does not comply with the British Standard for Cycles, BS 6102. That standard lays down safety requirements for all basic bicycle components. As sometimes happens with new standards, defects in the drafting have come to light. The British Standards Institution have issued an amendment—AMD 4627 dated 31st May 1984. Without this amendment, the standard would prohibit protrusions on bicycles, such as lamp brackets, rear gear change mechanisms and so on. Clearly, that was not the intention. The amendment also clarifies provisions on chain guards and markings.
As noble Lords will note, the draft regulations are commendably short and very simple. If approved, they will incorporate the amended standard in the 1984 Bicycle Safety Regulations. This will ensure that manufacturers and retailers are not put at risk of enforcement action. Some manufacturers say that their bicycles comply with the original standard, so the amending regulations have been drafted in such a way as to give manufacturers the option of supplying bicycles conforming both to the original standard and the amended standard. Although this is a very small change, it is nevertheless important to some bicycle manufacturers, including our own Raleigh. The change certainly does not compromise safety in any way at all. Manufacturers will still have to build bicycles to very high standards, and to the basic standard set down. I commend the draft regulations to your Lordships.
Moved, that the draft regulations laid before the House on 22nd June be approved.—(Lord Lucas of Chilworth.)
Lord Underhill: My Lords, we are grateful to the noble Lord the Minister for bringing this order from some obscurity into brightness. I do not think that any of us had much idea of what the order was about. But it is obviously an order of common sense and to the benefit of both the users of bicycles and the traders, and we give it a warm welcome.
Lord Beaumont of Whitley: My Lords, I too should like to thank the noble Lord for his exposition. I have no comments or questions on the main point of the order, but I am afraid that it gives me a chance to raise a question which I have raised previously in your Lordships' House and which, although I have not yet had an answer, has puzzled a great many people to whom I have spoken and who have read the Hansard containing the speech in which I raised it. I apologise for not having given notice to the Minister of this question and I will understand if he is not able to answer immediately, although I should be extremely grateful if I could have a written explanation.
I refer to the whole question of warning devices on bicycles, particularly bells which, when most of your Lordships were young, were absolutely compulsory. This matter arose when we were discussing the question of the blind and the roads and paths which were to be segregated for them. I wondered what
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would happen in areas where both bicycles and pedestrians were allowed to travel. There is a growing feeling that it is a very great pity that warning devices on bicycles are no longer compulsory.
I managed to get hold of the BS which is referred to in this order and I see that Section 17 says:
"A bell or other suitable warning device may be fitted".
That is not very helpful. It might just as well be left out. A bell may be fitted or it may not be fitted.
There seems to be a fairly strong feeling among some people, not least the blind, that it is a great pity that bells on bicycles are not compulsory any longer, and there is some mystification as to how it happened that this has been left out of regulations. I understand that one of the reasons was that the Pedestrians' Association, in a moment of less than its usual perspicacity, offered no objection at the key time—a situation of which it now repents and is reconsidering. But it is a reasonably important matter. As I said, I apologise to the Minister for not giving him notice, but since this was an opportunity to raise the point in your Lordships' House I thought it was worth taking it.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord Underhill, and the noble Lord, Lord Beaumont of Whitley, for their comments in respect of this draft order. I do not think that I need to make any response to the noble Lord, Lord Underhill, whose experience of bicycling and bicycling matters enabled him, notwithstanding his denial, to understand the regulations exactly on first sight.
I am grateful that the noble Lord, Lord Beaumont of Whitley, accepts the draft regulations. He raised a point which I know is very near and dear to him. I recall that during the debate on somewhat different regulations concerning cycling he dealt with the interests of the blind and the disabled. The noble Lord is quite right when he says that paragraph 17 on page 5 of British Standard 6102 says:
"A bell or other suitable warning device may be fitted".
I cannot agree with the noble Lord when he says that that may very well not have been written down. The British Standards Institution have thought it necessary to give this piece of advice in the regulations.
Lord Beaumont of Whitley: My Lords, what is the advice which the noble Lord the Minister thinks is contained in that particular sentence? It does not appear to contain any advice at all. It is just a statement.
Lord Lucas of Chilworth: My Lords, it certainly is a statement. It does not say "BS advise X, Y, Z", or anything else. It just says:
"A bell or other suitable warning device may be fitted".
Lord Beaumont of Whitley: My Lords, may be.
Lord Lucas of Chilworth: My Lords, may be. Being a very simple reader of regulations, I should myself have thought that this was a piece of advice proferred to those who manufacture bicycles to certain standards. The noble Lord reminded us that the Pedestrians' Association and others were at one time opposed to mandatory requirements. The

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Government preferred at that time, and still do, to leave the option open. One has to think in these cases of the practicalities of a possible infringement, were a warning device made mandatory. One has to accept that some things are possible and that others are not.
I have to say—I do not say it in any spirit of jocularity—that the sounding of a bell is not always going to help a blind person. A blind person will not necessarily know from which direction a bicycle is approaching, nor whether he should move left or right. He could get himself into a good deal of trouble. I should have thought that the Government could provide far better for the safety of blind people and other disadvantaged people using the roads and/or pavements if they were able to persuade bicycle users to have greater consideration for the users of pavements. I do not believe that I can help the noble Lord any further on that matter.
On Question, Motion agreed to.

Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order 1984
7.3 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 14th June be approved.
The noble Lord said: My Lords, I beg to move that the draft Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order 1984, which was laid before your Lordships' House on 14th June of this year be approved. I have to say at the outset that this legislation is of crucial importance to the community in Northern Ireland, which continues to suffer vicious criminal attacks from terrorists. Exceptional powers are still necessary to deal with those attacks and to protect the people of the Province.
Your Lordships will be aware that on this occasion the issue of renewal is being put before Parliament against a background of a comprehensive and independent review of the emergency legislation. Sir George Baker's report was published in April of this year. I am sure that all of your Lordships wish to join me in paying tribute to Sir George's work, and will have been very saddened, as I was, to learn of his recent death.
The review of the emergency provisions legislation was the last public duty of Sir George. It reflects the outstanding qualities of humanity and fairness that marked all his work. His report will, I am sure, stimulate and prompt the most wide-ranging debate both in your Lordships' House and throughout the community. I hope that there will be an opportunity to debate Sir George's detailed conclusions and recommendations thoroughly, in due course. The Government will, I assure your Lordships, take careful note of everything that is said in framing their comprehensive reply.
Most of Sir George's individual recommendations have legal and operational implications which will require a great deal of study and consultation, and some can be considered only when the Police and
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Criminal Evidence Bill has reached the statute book. However, I can say that the Government are in broad agreement with both the tone of Sir George's report and most of his conclusions and recommendations. Our starting point has always been that we are committed to removing all emergency measures from the statute book as soon as improvements in the security situation allow. But, as Sir George makes clear in this report, there is no scope at present for making wholesale changes to the emergency legislation which currently applies in the Province.
I think your Lordships will agree that events since the last renewal of the Emergency Provisions Act have underlined this conclusion. Since 1st December 1983 there have been 51 deaths arising from the security situation in the Province; 28 of these were civilians, seven were officers of the Royal Ulster Constabulary, six were members of the Regular Army, and no fewer than 10 belonged to the Ulster Defence Regiment. Your Lordships will, I am sure, be aware that two of the Ulster Defence Regiment members who died were tragically killed by a land mine as recently as last Saturday. Until the end of June of this year 311 people have been injured in security incidents, and 124 of them were members of the security forces. Over the same period there were 122 different shooting incidents and 133 explosions.
I am sure that the whole House will appreciate from these appalling statistics just what violence confronts the whole community in Northern Ireland, but I am bound to say that the resolve of the Government and of the security forces remains absolute. We are committed to enforcing the rule of law, which is absolutely essential in any civilised society, and we are committed to doing it according to the highest standards of impartiality and justice.
Initial responsibility for implementing this policy falls, of course, on the courageous and dedicated members of the security forces. I believe that we owe a heavy debt to the high standards of professionalism and, above all, devotion displayed by the security forces in carrying out their duties under the law.
I think your Lordships will agree that it might help if I were to give some figures in order to illustrate some of the success which the security forces are having in tackling terrorism. From the beginning of December until the end of June of this year, 325 people were charged with terrorist-type offences, including no fewer than 77 with murder and attempted murder, and 109 with firearms and explosives offences. Over the same period, more than 7,300 pounds of explosives were found and a large number of devices containing over 4,000 pounds of explosives were neutralised.
The security forces know that they have the Government's full support in the discharge of their dangerous tasks. The most tangible expression of this support is in the resources which the Government have made available to the chief constable and the GOC to ensure that their men have what is necessary to carry out their work effectively. For example, we have recently authorised an additional 500 posts for the RUC, and it is hoped that these fresh vacancies will all be filled before the end of this financial year.
However, the security forces also need the support of the community. They will never be able to eliminate

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terrorism without the wholehearted backing of the people they are there to protect. Terrorists and their supporters know this, and they attempt to undermine public confidence by smear tactics and propaganda campaigns.
One such propaganda campaign is directed at the use of accomplice evidence. I would remind your Lordships that there is nothing new about this form of evidence in the United Kingdom, but the decision of some former terrorists to turn their backs on their colleagues has led to cries of, for instance, "betrayal" and, above all, to bitter attacks on all such evidence, no matter what the circumstances of the particular case. But it is for the independent Director of Public Prosecutions to assess the allegations of an accomplice and to determine their value against the background of any other evidence which can be presented. It is for the judge to determine how much weight should be put on that evidence, and he must give his reasoning when setting out his eventual judgment. This process is in the public interest and it is not a matter for Ministers or indeed for political interference.
In a sense, the community's support for the security forces and for the judiciary is expressed in the exceptional powers which Parliament has granted in the emergency legislation that is before us this evening. The Act contains additional arrest and detention powers for the police and the army, together with certain exceptional powers of search and seizure. The Act provides for the proscription of certain criminal organizations, and also provides for trial by a judge sitting alone for certain schedule offences, to counter the problems of jury intimidation and perverse verdicts. The Act does not of course alter the central principles of British justice in the Province. The onus remains on the prosecution to prove guilt beyond reasonable doubt. Also, accused persons have the right to take legal advice of their choice and to be represented by their own lawyers in open court, and there remains the right of appeal against conviction or sentence on matters of law and fact.
The Government fully recognise that emergency powers do not represent the answer to Northern Ireland's problems, and they will continue to do everything within their power to develop the political and economic fabric of the Province in order to reduce and eventually to eliminate the tensions and the problems which lie at the root of this violence. We look for assistance from every reasonable and responsible quarter to that end, both within Northern Ireland and elsewhere, and have been encouraged by the strength of the Republic's commitment to tackling the terrorist violence, which is as much a threat to them as it is to us. The close and effective working relationship between the two police forces on both sides of the border remains a valuable element in the fight against terrorism. We whole-heartedly approve this co-operation and are ready to look realistically at practical ways of developing it further.
Despite the efforts that are being made to remove the need for these extraordinary measures, I hope your Lordships will accept that, for the time being, the emergency powers must continue. They are still needed to sustain the confidence of the community in the rule of law and in the willingness of this
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Parliament, where the ultimate responsibility lies, to support the security forces and the courts who are upholding that rule of law.
I ask, therefore, that your Lordships agree that the powers in the Northern Ireland (Emergency Provisions) Act 1978 which are currently in force should be allowed to continue. My Lords, I beg to move.
Moved, That the draft order laid before the House on 14th June be approved—(Lord Lyell.)
Lord Underhill: My Lords, this six monthly opportunity to debate the renewal of the Emergency Provisions Act has always been taken to be an opportunity also to review the actual operations of the provisions. From these Benches we have always stressed that the emergency provisions must not carry on indefinitely, and, as the noble Lord, Lord Lyell, has mentioned, we now have before us the report of the review conducted by the late Sir George Baker. We would like to join in the expression of regret at his passing and pay tribute to his work. All may not agree with the conclusions and recommendations made by Sir George in his report, but the report indicates a task well done, and no one who reads the report can do other than see that it has a very personal style.
Before continuing I should like to join the Minister in a tribute to all sections of the security forces. The Minister referred to the fatalities and injuries during the last few months, but once again I should like to draw your Lordships' attention to the separate report which was presented to the New Ireland Forum on the cost of violence over the last 15 years. I shall not go into the details but the figures, frankly, are frightening, when one sees them. Both communities have suffered. In fact contrary to what some people generally believe, from the figures given it would seem that the fatalities of persons born in Northern Ireland have weighed more heavily upon the Catholic community than on the Protestant community. There is also to be considered the massive cost of security activities, compensation, and the adverse effect there is on industry.
May I say just a few words about RUC. The increase of 500 in the strength of the RUC, which was announced in April, would seem to be an indication of encouragement for more authority to be given to the police. That is all to the good. I note in the chief constable's annual report which was presented in March the emphasis that he makes on building closer ties with the community and developing greater contact between the police and the public. In fact in his own foreword there is a very encouraging statement when he mentioned that during the current year, 1984,
"steps will be taken towards establishing more formal and mutually beneficial links and relationships between the police at sub-divisional level, locally elected representatives, and other responsible organisations and groups, towards the enhancement of the quality of living and the reduction of crime and socially deviant behaviour".
I wonder if the noble Lord the Minister can make some comment, as we are now well over half way through the year, as to how that work which was intended to be carried out during 1984 is progressing.
This aspect is also emphasised in the report of the Standing Advisory Commission on Human Rights which was presented to Parliament in February. I see

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that Chapter 3 refers to aspects of the Emergency Provisions Act. Paragraph 10 states:
"Violence has now become recognised as endemic."
In the light of questions which were dealt with in your Lordships' House the other day, it is significant to read part of paragraph 10 of that chapter:
"A significantly greater burden of responsibility in combating acts of terrorism now rests with the police rather than the army and, although social and economic deprivation is not the root cause of terrorism in the Province, we are in no doubt that the security forces' task has been made that much more difficult by the increased deprivation which provides a fertile context in which terrorism can flourish.".
In a previous debate on a similar renewal order I referred to the activity on community relations carried out by the RUC. The chief constable's report outlines considerable work carried out in this direction. The activities appear to be very varied. I note that the 1,051 Blue Lamp Discos were attended by some 128,000 young people. Seven thousand participated in rambles sponsored by 24 district councils. One thousand attended 36 summer camps with a similar number at 111 follow-up weekend camps.
Could the Minister say how far all this activity is cross-community, or, if it is not practicable for it to be cross-community in that respect, how far does it involve young people of both communities; and is there any assessment of the benefits of this activity?
The Opposition, both in the other place and from this Dispatch Box, have stressed time and again the need for a review of the Emergency Powers Act. These pressures were resisted by the Government until 1982, when the Secretary of State announced the setting up of a review. But it was not until a year later that the Secretary of State was able to announce that Sir George Baker would be carrying out the review. As the Minister said, the report of the review was published in April. We did not necessarily expect that the Government would be able to make announcements on its decisions very quickly on all the recommendations, but in a Written Answer on 10th April, at col. 139 of the Official Report of the other place, when referring that day to the publication of the report, the Secretary of State said:
"The Government are giving careful consideration to the report's recommendations. Parliament will have opportunity to express its views, and the Government will take them fully into account, as they will views expressed elsewhere".
But there has been no debate in another place, and there has been no debate in your Lordships' House. But Parliament is now being asked once again to approve an order renewing the provisions without such a debate, and without any indication of the Government's attitude to the conclusions and recommendations contained in the report.
A few moments ago, the Minister said that the Government accepted most of the recommendations. There are many recommendations, and I shall be interested to know which they do not accept. The noble Lord said also that it is hoped to be able to debate the report in due course. On the last occasion we debated such an order, I said that I hoped that it would be the last time that we would have a renewal order presented to us without there being any changes arising from a review.
I must emphasise that the Labour Opposition—and
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certainly other oppositions—have always rejected terrorism and lawlessness; that is beyond any question. They have had total and complete opposition to violence to achieve political ends. But Parliament has been faced with a difficult choice. Should it once again approve an order for renewal without there being any changes, without any indication of whether there will be changes, and without any indication of what those changes might be? Or should it register a protest against continuance of the present provisions?
The Opposition in another place took the latter stance but appreciated that that could be misunderstood. In fact my honourable and learned friend Mr. Peter Archer said in a debate on this renewal order in another place that some Members would, no doubt, try to distort the Opposition's attitude as being unmindful of the victims of violence and an encouragement to those who engage in violence. There must be balance between the maintenance of law and order and the maintenance of civil rights. That view was expressed by the Secretary of State during that same debate, and the noble Lord, Lord Lyell, echoed those same sentiments this evening.
The Opposition do not propose a complete repeal of the Emergency Provisions Act. They recognise that Northern Ireland is not yet in a position to return to what we would regard as normality. But there is no doubt that some changes to the emergency provisions must be sought. That view is expressed also in the report of the Advisory Commission on Human Rights. In dealing with emergency provisions, paragraph 11 of that report states:
"We also agreed that these measures should remain in force only while strictly necessary in the exigencies of the situation, while they continue to be effective, and while their aims cannot be achieved by use of the general law. It is also important to ensure that emergency powers do not make unacceptable inroads into civil liberties and that effective safeguards exist to minimise the possibilities of abuse".
The commission also complain of the piecemeal review of special legislation: the Prevention of Terrorism Act; the review of the noble Earl, Lord Jellicoe; the Emergency Provisions Act, and the report which has not yet been debated; and also the likelihood of some of the provisions of the Police and Criminal Evidence Bill being enacted for Northern Ireland. Indeed, in its written evidence to Sir George Baker the commission urged the need for an authoritative statement of the law governing all the operations of the security forces in Northern Ireland.
This is not the occasion to open a full debate on a review of the Emergency Provisions Act, which this order is extending, or to debate any changes we might wish to see arising from Sir George Baker's review. And it is not customary for your Lordships to oppose an order approved by the other place. Therefore, I have not been placed in the position of having to decide whether we should support or whether we should oppose this order. But we must once again express the hope that another renewal order will not be presented in six months' time. We trust that before then, the Government will have announced quite clearly their attitude to the review report of Sir George Baker; that Parliament will have debated that review; and that we will know clearly what the Government's proposals are and what changes there should be.
Lord Donaldson of Kingsbridge: My Lords, curiously enough, the noble Lord opposite has sat on the Front Bench for a number of orders but this is the first time I have been here to put our side of the case to him. I want belatedly to wish him every success and to congratulate him on adding his name to that growing list of not wholly undistinguished Peers who have all served over there in their time. He is very welcome and I hope that he does not find the strains and stresses too great—I am sure he will not.
The noble Lord the Minister said that this order was of crucial importance. Of course it is. When the noble Lord on the Opposition Front Bench says that Parliament faces a difficult choice, I do not think that it is a difficult choice at all. I believe that anyone who did not agree at this particular moment to renew the emergency orders and the continuance of the Emergency Provisions Act needs his head examined. The very figures which the noble Lord has given makes that perfectly clear. It is fair to say that the figures were worse in my day—this was some 10 years ago—by about double. Even so, it is entirely intolerable that this should go on. As to the idea that one can do away with emergency orders, one could by all means possibly alter some of them. I agree with the noble Lord, Lord Underhill, when he says that we are looking forward to hearing what the Government have to say about the Baker report and to learning whether the Government think that modifications can be made which will do anything for the necessarily squeezed civil rights of people who live in conditions of regular violence.
I should like to add our appreciation of Sir George's work and our sorrow at his death. It is a very good report and I look forward to discussing it when the Government have considered it. I do not wish to rush them because the report is so important; and as it is obvious that most of the provisions must continue anyway, the Government could take a fairly long time to consider the report carefully.
The increase in the strength of the RUC is encouraging. I should like to ask the noble Lord the Minister whether this time—as is usually the case—that provision includes a decrease in the military support available. If he does not have the answer, perhaps he will write to me. In my day, whenever we increased the strength of the RUC we usually succeeded in reducing the Army support.
I was interested by the questions of the noble Lord, Lord Underhill, concerning discos and rambling, etc. which are of course extremely important. I can only tell him, at a slightly different level, that one cannot get off any golf course in Northern Ireland before 11 o'clock on a Saturday, and there is no obvious religious difference between the players. One finds Catholics playing golf and one finds Protestants playing golf without any particular trouble. I do not know whether the same is true of the larger groups of young people. They may congregate with their own people but I would have thought that they met one another. I have received no sign of the kind of fights which gangs do get into, and so it does not look as though that is very bad.
One question raised by the noble Lord, Lord Lyell, concerns what he rather politely described as "accomplices' information". I want to confirm the
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fact that however distasteful people who turn against their colleagues in crime and give information against them may be, no police force can work without them. No police force has ever tried. It is only new that that practice is being made a big thing of and that there have been a certain number of, as it were, multiple informers. Information of that kind is crucial to keeping the order and it is important that we should not let that area be whipped up into a campaign against the police and still more against the courts of justice.
Before sitting down, I should like to say that I have an engagement of crucial importance, which may mean that I shall not be able to stay for the last two orders. If I cannot do so, may I say now that I approve of both—and I am particularly pleased with the industrial training order. I am happy to support this measure.
7.29 p.m.
Viscount Massereene and Ferrard: My Lords, before my noble friend responds, may I say that the next six months is not the time to do away with or in any way to water down the emergency provisions? There are many other things to be done before we do that. For instance, I have a question for my noble friend, although I have not given him notice of it. Have the security forces made much progress lately in stemming the flow of arms into Northern Ireland, and have they found any more arms caches?
I should like to make another point regarding explosions. One can buy sodium chlorate from any agricultural merchant. I understand that one can buy other chemicals like that in Northern Ireland. It is easy for anybody to make a bomb with one of those materials. Are there regulations in Northern Ireland now so that certain chemicals, fertilisers and especially weedkillers cannot be bought, except on a permit? I can certainly make very nasty explosions with chemical and other materials that one can buy quite freely.
I shall not go on any longer. I should just like to support my noble friend very much and to wish him well in his task. I should also like to pay great tribute to the RUC. A lot of them are marked men. To join the RUC is a very brave thing to do. They deserve a great tribute.
7.32 p.m.
Lord Fitt: My Lords, in 1973 I represented the constituency of Belfast, West in another place. In that capacity I was a member of the Committee which discussed the implementation of the Act. The Committee stage lasted right through May and June 1973, and during that period I voiced many reservations about certain sections of the Act. I deliberately say, "certain sections", because no one realises more than I do that in the awful situation in Northern Ireland we must have legislation of some description to try to apprehend those engaged in the awful campaign of murder and maiming which has lasted for such a long time. It would be very foolish for anyone to say that an Act of this type is not necessary.
In opening the debate the Minister referred to the terrible tragedy of the murder of the two UDR people

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in Castlederg last week. My wife is from there and knows the families of those who were killed. She is able to describe, as only someone coming from a small village in Northern Ireland can describe, the atmosphere created when such murders take place, particularly—and I stress this—when it would appear that the landmine was detonated from across the border in the Irish Republic. That added element creates a great deal of fear, suspicion and hatred between the communities in Northern Ireland. That happened only last week. The Minister rightly referred to all the other killings that have taken place.
Throughout the original deliberations in Committee on the Bill I put forward what I considered to be constructive suggestions, which I believed would help in its implementation. I have an inherent distaste for emergency legislation of this type. I was born in Northern Ireland, and when I was born the notorious special powers legislation was already on the statute book. It was an Act of Parliament deliberately aimed at the Catholic minority community. All its clauses were deliberately aimed at keeping that community in subjection. I grew up in that atmosphere, where one felt a second-class citizen, hemmed in by that type of legislation, and I think that it is understandable that most people from the minority community in Northern Ireland have a distaste for such legislation.
That Act was abolished by the then Conservative Government and replaced by this Act. All those who took part in that debate—it was a Conservative Government and a Labour Opposition—said that they recognised the draconian aspects of the legislation and hoped that it would not stay on the statute book for a second longer than necessary. Indeed, that is part of the tragedy. Eleven years later we are still debating the effects of this legislation.
During the passage of that legislation I had reservations about the setting-up of the Diplock courts, where there would be only one judge to hear cases brought on scheduled offences. Before those courts were set up I instinctively knew that they would be open to a great deal of criticism because there would be only one judge. The honourable Member for Antrim, North, Mr. Paisley, who at that time had not long been a Member of Parliament, had the same reservations. He also felt that having only one judge would be open to criticism. He put down an amendment in Committee asking for two judges to be appointed. I had an amendment down asking for two assessors to accompany the judge, which would have taken away a great deal of the criticism. I was ever mindful of the fact that the special courts which they had in the Irish Republic were composed of three judges.
At that time a Labour Member, who is now my noble and learned friend Lord Elwyn-Jones, put forward an amendment which provided that the judge should be supported by two barristers who had at least 10 years' experience and other qualifications that he laid down. That amendment was carried. Mr. Paisley voted for it. That proves that right across the board there was a feeling that the provision of one judge sitting alone would be inadequate and open to criticism.
I have been in politics long enough to know that what people say in opposition they do not necessarily
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say when in government. That was in 1973. My noble and learned friend Lord Elwyn-Jones, in his then capacity, had put forward the proposition that the judge should be accompanied by two other persons. In a few months, from May and June 1973 to February of 1974, the Government changed and there was a Labour Government in power. I should have thought that he could then have influenced the Government to appoint two persons to help the judge in fulfilling the objectives he talked of when he moved the amendment in 1973. That did not happen. In 1974 the Labour Government did not take the opportunity to do what their spokesman had previously urged. The Labour Government was in power from 1974 to 1979, and there was a debate twice a year. As I say, what parties say in opposition they do not necessarily carry out when in government.
I think that this should be said. I refer first to the tragic death of Sir George Baker. I met him only briefly, but I have read his report. I certainly agree with those who say that a great deal of the man's humanity and compassion seems to have gone into the writing of that report. I hope that at the earliest possible moment both Houses have an opportunity to debate it, because at the moment we are debating the extension of this legislation in something of a vacuum.
I want to put on record something which I have just read in the debate which took place in another place on 5th July. Almost the concluding words of Mr. Nick Scott, the Minister replying to the debate—given at column 578 of Hansard—were:
"I hope that we shall soon be able to debate the Baker report in its entirety, but I do not decide the business of the House. As I understand it, had the Opposition wished to debate that report before the House rose for the summer recess, it could have been arranged. However, there was not that sort of pressure for the debate, which is why the House will debate it in the Autumn."
Therefore, I wonder whether the Opposition in another place really wanted a debate on the report of Sir George Baker. That is a question which should be answered, because I believe, as I have said, that we are debating this order in a vacuum. Many new recommendations have been put forward by the late Sir George and both Houses should have a debate on them at the earliest possible opportunity.
There are only three very small—they are not small; in fact, they are major—issues that I should like to bring to the attention of the Minister. The first is that there will be sustained criticism of Diplock courts unless and until there is an increase in the number of persons sitting in trial of scheduled offences. There are a number of cases that are now being heard before Diplock judges which have absolutely nothing at all to do with terrorism. People are being charged with nonscheduled offences before Diplock courts. The Diplock courts, set up as they were to deal with specific cases of terrorism, should not be asked to hear other cases which are completely out of that category.
It is a justifiable criticism that there are very long remands in Northern Ireland. When people are charged with serious schedule-type offences, they should be brought before the courts at the earliest opportunity. The Secretary of State said in another place that the average time spent on remand was 46 weeks. But 46 weeks is far too long, and that average does not tell the true story. People have been kept on remand for nearly two years before they have been

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charged. Where people are charged with such serious crimes the Government cannot afford to say that 46 weeks is not too long. It is far too long and, as I said, the average does not tell the whole story.
My next point arises from my knowledge of personal cases. I put forward such a case in 1973. Northern Ireland is a very small community. There is a tribal atmosphere—a majority tribe and a minority tribe. For example, if a young boy of 18 or 19 years of age is detained by the police on suspicion of having been involved in terrorist crimes he can be held for a week. Under this legislation it is three days, but an application can be made under the PTA to hold him for a week. If he is held for a week under emergency legislation, whether this legislation or the PTA, he is not able to go to his job for a week. Therefore, he is absent from his place of employment. If, on being released, he goes back to his place of employment and says that he was detained under emergency legislation at a detention centre but has now been released, knowing Northern Ireland as I do, I know that there is nothing which will erase from the mind of the employer the thought that there is no smoke without fire—particularly if the employer happens to be of the Protestant or Unionist tradition.
That young boy has been branded even though he has not been charged with any crime. His employer will think that the police were not able to get the evidence hut they would not have had him in a detention or interrogation centre for a week without cause. That young lad is left with a stigma. Within a very few weeks the employer will find an excuse —and excuses are not hard to come by in Northern Ireland—to dismiss that employee on the grounds that he could be a terrorist suspect. I said that in 1973, and in all the years that have elapsed since then I have come across perhaps a score of such cases—and I certainly do not need to exaggerate the number—of young men who were similarly caught up.
I believe there should be some means of compensation for those people for the week they were detained, even if they did not get the sack. Some means should be found to compensate those young men who have not been found guilty of any charge for the week they have been out of circulation.
That is one of the criticisms which I made then; the other criticisms related to the judges and the length of time on remand before trial. Those criticisms are as valid today as they were then. I urge the Government to look at those criticisms and to initiate as quickly as possible a full-scale debate on the recommendations of the late Sir George Baker. Only when we have done that will we be aware of what is the Government's real attitude to this legislation.
Lord Underhill: My Lords, the noble Lord referred to the debate on 5th July in the other place. I suggest he refers to Hansard, at column 567—I am not allowed to quote it—where the spokesman for the Opposition made it quite clear that the Opposition had repeatedly pressed for a debate and that the Leader of the House had said that there would be a debate but had never named the day.
Lord Fitt: My Lords, that is quite true. I think it is up to the Minister to reply to that.
Viscount Massereene and Ferrard: My Lords, may I say regarding employment that my family have always been Protestants in Northern Ireland—actually Unionists—but we did employ some Catholics. We also endowed the local Catholic Church in Antrim.
Lord Hylton: My Lords, we are debating this order at a time when Yorkshire and certain other Midland counties in England have been suffering from very severe public disorder. I am sure that all Members of your Lordships' House are concerned about these particular disorders and it is my very strong desire that every Member of your Lordships' House should also be concerned about the troubles and disorders of Northern Ireland. I say that if only because it is so essential that a democratic society should defend itself by democratic means.
The order we have under consideration is not one concerning the licensing of dogs or the better control of fish-frying. As the noble Lord speaking for the Government pointed out in introducing the order, it is very clear that this is a matter which concerns life and death. I therefore regret that it is being discussed in a thinly attended House at an unsocial time of day. I very much hope that it will gradually and eventually sink in, through the usual channels, that it is most desirable that the discussion of these orders should be promoted to what I might call prime parliamentary time.
There are at least six or seven strands of conflict which are going on all the time in Northern Ireland. One of these leads to attacks on the institutions and the personnel of government. I hope very much that the noble Lord, when he replies, will be able to point out, as Government spokesmen have pointed out on many previous occasions, that the maintenance of law and order and the prevention of terrorism are only a part of the Government's total response to the situation. There is a very great deal more involved than just this one aspect.
I should like to go on to explain why I consider that the subject matter of the order is of such importance. I do so because it seems clear by now that the whole sequence of events between the commission of a scheduled offence and the eventual release of a sentenced person has a very important bearing on community relations. It is, I think, a fact that the two sides of the community in Northern Ireland have rather different conceptions of justice. The majority has a tendency to look at it as merely the punishment of guilty persons. On the other hand, the minority tends to look at these matters in terms of fairness and equality between everyone. It is in this context that over the last five years or more there has been great interest in the whole subject of Bills of Rights and of the European Convention on Human Rights and the possibility of incorporating that convention into the law of the land.
My view is that these points which affect the rights of individuals are, of course, important but they are not the whole story. We are also concerned with the rights of minorities and of groups of people, as I attempted to point out in a letter in The Times on 13th July. We need, I suggest, the Protestant minority in the whole of Ireland and the Catholic minority in the North of Ireland to sit down, work out and make clear what they consider to be their vital interests.

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What are the things that need to be safeguarded in any situation in the future? It would be good if they could also consider at the same time whether these kinds of rights do not possibly entail corresponding duties. It would be good if we could be told what are the non-negotiable values of each minority and where they draw the border line between the values that they are not prepared to give up and those things they are interested in but are able and willing to discuss and bargain about.
Every speaker this evening has mentioned the major event of this year, which was the review conducted by the late Sir George Baker. I should like to join in the tributes that have been paid to him. All who are concerned about these matters, and particularly those who gave evidence to his review, will be grateful for the care that he showed and for the comprehensive nature of his recommendations. I was glad when I heard the noble Lord, Lord Lyell, say that there would be a debate and that the Government were in broad agreement with the recommendations. Can the noble Lord give any indication of when this debate might take place and what might be the Government's programme, timetable and intentions as regards the legislation that will be required to implement a number of Sir George's recommendations?
I should like briefly to welcome what Sir George had to say about reasonable grounds of suspicion for arrest, and, as the noble Lord, Lord Fitt, mentioned, the delays in bringing trials to court and the delays over inquests. I welcome also the recommendations about tape recording of police questioning and the descheduling or certifying out of certain offences, so that they can go forward for trial by jury. I should like to welcome what Sir George said about harmonising the Emergency Provisions Act and the Prevention of Terrorism Act and the need in Northern Ireland for something equivalent to the current British Police and Criminal Evidence Bill. I agree very much with Sir George's conclusion on young persons who are detained at the Secretary of State's discretion.
However, when we come to the matter of the future scrutiny of the two Acts, I would go so far as to dissent from the learned judge. He said, I think in paragraph 445, that Parliament is probably the best forum for scrutiny of the legislation. I would have thought that the very limited nature of the renewal debates that we have periodically, and the fact that it has been necessary to appoint two individual persons to review each of the Acts, show how unsatisfactory Parliament can be as a scrutinising body. I would much prefer the appointment of a small number of Privy Counsellors as a permanent review body for both these Acts as they affect Northern Ireland. If Privy Counsellors could be appointed in this way, they could receive classified information not available to ordinary people. They could listen to complaints from groups, rather than individuals, and they could consider issues that might be referred to them by Ministers.
If such a system had been operating in previous years, it might well have defused a number of well orchestrated campaigns that have been conducted on such divisive issues as detention, interrogation, the use of rubber and plastic bullets, prisoners' rights, shoot to kill, or the employment of super-grasses. These
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campaigns have, I think, had very wide, even worldwide ramifications. They have affected the thinking of many otherwise unprejudiced people.
I conclude with just three fairly brief questions. Can the Government say tonight that they will give the most serious thought to possible future convictions that may rely on the uncorroborated word of one person, whether this be the confession of an accused person, or the uncorroborated evidence of an accomplice? As to the use of firearms by the security forces, which is another thorny question, will the Government consider most seriously chapter 5 of the 1982–83 report of the Standing Advisory Commission on Human Rights? Finally, there is the important question of public and police liaison, touched upon by the noble Lord, Lord Underhill. Will the Government look at the committee system that has functioned on the whole extremely well over a long period of years in the city of Derry and see whether this could not be extended rather quickly to other police districts in Northern Ireland?
7.59 p.m.
Lord Lyell: My Lords, we are very grateful for the interest that has once again been shown in debating what are unique powers in the annals of our history, as pointed out by the noble Lord, Lord Fitt. Indeed, these are exceptional powers. No doubt, those of your Lordships who have been interested in these debates over the years will be accustomed to some of the answers that I shall give this evening. But I hope that I shall provide some spice and some variety in replying to some of the very interesting points that have been raised by your Lordships during the course of the debate. We are very grateful for the interest that has been shown by noble Lords who have spoken, as well as by those who merely have listened. I shall pass on to the usual channels the comments and the good wishes of the noble Lord, Lord Hylton, on the timing of these debates. I have no doubt that they will read his remarks in the Official Report.
The noble Lord, Lord Underhill, was the first to speak. We are very grateful for his support and for his kind words in relation to the late Sir George Baker. The noble Lord asked a number of questions. He, and I believe every one of your Lordships who spoke, asked about a possible debate on the recommendations, or the Government's views on the recommendations, in Sir George Baker's report. In the course of my opening remarks I stressed that the recommendations contained in Sir George Baker's report require continuous study and consultation. I am sure your Lordships will agree that some of these recommendations can be considered only in conjunction with the Police and Criminal Evidence Bill, and, indeed, can be considered only when it has reached the statute book.
Therefore, I could not give an undertaking—it would be wrong if I tried to do so tonight—as to when the Government will be able to give any response in detail to the report, let alone when any necessary legislation will be introduced. But I hope that before long there will be time to debate the report in your Lordships' House.
The noble Lord, Lord Underhill, asked one or two other questions. The first of these related to what he called cross-community work carried out by the Royal

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Ulster Constabulary. As he is aware, and as I have found in my short career so far in Northern Ireland, the Royal Ulster Constabulary spend much time—indeed, much of their own free time—and much effort in encouraging young members of the minority (the Catholic community) to take part in sports and all kinds of other leisure activities alongside children of the same ages, from the same areas, of the other religious persuasion—those from the majority community, the Protestant youngsters.
I am afraid that we do not have figures for this type of cross-community activity, but we are encouraged to think that the number of young Catholics involved is increasing steadily. I shall pass on to the Royal Ulster Constabulary the comments and the helpful encouragement of the noble Lord, Lord Underhill. I am sure they will be very grateful that their efforts, which of course are all part of their duties of policing and looking after the communities, are so much appreciated in your Lordships' House.
The noble Lord, Lord Donaldson, who was kind enough to pay me a brief tribute—I am very grateful for his remarks—had one query about the increase in the number of Royal Ulster Constabulary officers. I have to say to him and to your Lordships that the increase in the number of officers in the RUC will not be offset by a reduction in the number of troops. I would stress that over recent years there has been a steady decline in the number of troops. At present we are on a sort of plateau of just over 9,000 full-time troops. I stress to your Lordships that the situation is kept under constant review.
My noble friend Lord Massereene asked me two or three questions. In regard to the flow of arms, I am able to tell him that the security forces are working very closely with their counterparts on the movement of arms and explosives. I am pleased to be able to tell him that we are having increasing success. I have some statistics and figures which are quite encouraging as to the numbers; those are apart from the figures that I mentioned in my opening remarks. The statistics seem to show that we are having increasing success, above all in neutralising explosives and in discovering explosives; so that these types of crimes are cut out very much at source.
My noble friend asked about home-made bombs. My noble friend beside me was tempted to call these, "Massereene cocktails", but probably that would be libelling unreasonably my noble friend; perhaps his cocktails are better judged in the bars of your Lordships' House. The problem of the conversion of fertilisers into explosive materials—what we would call home-made explosives—is a major one. We are continuously examining this problem to see whether there can be any change in the composition of fertilisers on sale in Ireland to neutralise the harmful nitrogen element. I am not able to go into further detail on the chemical make-up of home-made explosives. Certainly I would not do so in your Lordships' House. I am not qualified to do it. Those of your Lordships who have heard me before have realised that in my time at school I was no chemist, and since then I have not progressed any further.
The noble Lord, Lord Fitt, raised the very sad case of the Castlederg murders. He will be aware, as will your Lordships, that that was not the only tragedy to
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strike at the families concerned, or, indeed, at that community. The noble Lord mentioned that his wife came from Castlederg, and those of your Lordhips who study the map will see that it is on the far side of Northern Ireland from Belfast. It goes to show that these terrible tragedies strike home all over the Province.
The noble Lord mentioned the deliberations in the 1973 debate about the possibility of providing judges with assessors. Your Lordships will be aware that Sir George Baker considered this, but for a variety of reasons he came down against the possiblity of assessors sitting with judges. I stress to the noble Lord and to your Lordships that this is a matter which we shall be considering in the context of Sir George's recommendations. We shall bear in mind what he has said, together with what was said by all the other fellow debaters of 10 (or was it 11?) years ago and by other honourable Members in other places.
The noble Lord asked about the interval between arrest and trial, particularly under the Emergency Powers Act. He will be aware, and your Lordships will be learning, that questioning under the Emergency Powers Act is limited to 72 hours. Of course, it can be increased to seven days under the quite separate Prevention of Terrorism Act. Whatever the period, there are no grounds for compensating young people who are reasonably held for questioning and possibly for charging. In these cases there is no question of improper behaviour on the part of the security forces. It would be very difficult—almost impracticable—to isolate this activity as one which might warrant compensation, and perhaps to disregard those who are prosecuted and subsequently acquitted after a period on remand. Your Lordship will be aware that in these cases the authorities are discharging their lawful duties.
The noble Lord, Lord Fitt, also asked me about the interval between arrest and trial. I take note of the long period which he mentioned, but I would stress to him that the period which he mentioned of approximately 46 or 47 weeks is not out of line with the period over the last five to six years. It varies and depends very much upon the level of terrorist activity and, above all, upon the number of cases which lead to arrests. I hope that the noble Lord will accept that we do take note of his comments, but I repeat that the figures are not out of line with what they have been in the past.
The noble Lord, Lord Hylton, who concluded the debate from the Floor of your Lordships' House—if I may put it that way—raised several very interesting questions. I shall try to answer the points which he raised—indeed, he was kind enough to give me notice of quite a few of them. The noble Lord mentioned the timing and I shall pass on his comments as regards that matter. He also brought up the question of a Bill of Rights. I do not have a very great deal of encouragement to give him this evening, but we do not have a closed mind on this particular issue. However, there are several important, practical and formidable constitutional difficulties in introducing a Bill of Rights—and as regards those difficulties, we only have to consult my noble and learned friend the Lord Chancellor. There is the question of whether there should be a Bill of Rights for Northern Ireland alone, or indeed, for the United Kingdom as a whole. The

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Government have yet to be convinced that, bearing in mind the extensive safeguards which have been introduced in recent years to protect human rights in Northern Ireland, a Bill of Rights is really necessary.
The noble Lord also mentioned various other problems one of which concerned reasonable suspicion, of which he was kind enough to give me prior notice. The noble Lord will be aware that this matter, like all the other recommendations, is under careful consideration. But I draw the noble Lord's attention to Recommendation 40 of Sir George Baker. This suggests that "reasonable suspicion" should replace "suspicion" in Section 14. We believe that there are difficulties in making a change of this nature, but we shall continue to consider what the noble Lord has said and we shall try to deal with this particular point.
The noble Lord also raised the question of firearms and mentioned Chapter 5 of the Report of the Standing Advisory Commission on Human Rights. The noble Lord will be aware that the commission has recommended that the law should be changed to make it absolutely clear what conditions must be satisfied before a firearm is used. Of course, it would be very difficult to cover all situations where the use of a firearm would be justified. One would end up with a very long list, or alternatively we would omit certain situations and that might make it an offence to open fire when such action would, in all the circumstances, be reasonable.
I would stress to your Lordships that the present test applies to all civilians, police officers and, indeed, soldiers throughout the United Kingdom. We believe that it is an important test and it is this. A person may use such force as is reasonable in the circumstances in the prevention of crime or in effecting or in assisting in the lawful arrest of offenders or suspected offenders or, indeed, of persons unlawfully at large. The noble Lord will be aware that every case differs and it is for the courts of law to assess the the reasonableness of the action in the light of each individual's personal circumstances. I am sure that the noble Lord would accept that Parliament had the interests of all parties in mind when it decided that this was the most appropriate arrangement.
The noble Lord also asked about police liaison committees. The Royal Ulster Constabulary is very much aware of the need to carry out its duties with sensitivity and it puts a great deal of time and effort into its corn munity relations projects—projects similar to those which the noble Lord, Lord Underhill, mentioned. These are always carried out at local level and a number of police liaison and local security committees are in existence in Northern Ireland to which local representations can be made. I think that the noble Lord also raised a question in connection with corroboration. I do not think that I shall be able to answer the noble Lord this evening and so, if he will forgive me, I shall write to him on that particular matter.
I hope that I have covered all the points that have been raised by your Lordships in this piece of continuing legislation. Of course, it is not entirely desirable that we should have emergency provisions year after year. But those of your Lordships who have
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listened to my opening statement will be aware of the dreadful statistics of violence. We do not live in a perfect world, but we do believe that the order that we have before us this evening is in all the circumstances necessary, and, therefore, in the light of that, I beg to move.
On Question, Motion agreed to.

Industrial Training (Northern Ireland) Order 1984
8.17 p.m.
Lord Lyell: My Lords, I beg to move that the Industrial Training (Northern Ireland) Order 1984, which was laid before your Lordships in draft on 24th May this year, be approved.
The purpose of this draft order is to provide an updated and comprehensive basis of legislation for industrial training in Northern Ireland. It will consolidate existing legislation dealing with industrial training boards in Northern Ireland and harmonise some of the powers of the boards in the Province more closely with those in Great Britain. The principal purpose of the draft order is, however, to establish a new body, to be known as the Northern Ireland Training Authority, in place of the existing Northern Ireland Training Executive.
The existing legislative framework for industrial training in Northern Ireland is mainly embodied in the Industrial Training Act (Northern Ireland) 1964. A feature of that Act was the creation of the Northern Ireland Training Executive to provide common administrative and secretarial services to industrial training boards. By agreement, the executive has also developed certain cross-sector training facilities for the boards. Following a review of industrial training arrangements in Northern Ireland in 1982, which paralleled a similar review in Great Britain, and in view of the encouraging support for the proposals, the Government decided that eight of Northern Ireland's nine training boards would remain and that it would be the policy to encourage on an ongoing basis voluntary training arrangements in sectors of industry both within and without the scope of the boards.
In addition, following a decision taken earlier in Great Britain, the financing of board operating costs out of Exchequer funds ceased at the end of September 1982 and the responsibility for such financing was returned to the employers. Finally, it was concluded that the proven role of the Northern Ireland Training Executive should be redefined and extended and, in recognition of this enhanced role, it would be called the Northern Ireland Training Authority.
It is the Government's intention, in setting out the functions for the proposed authority, to create a dynamic body to develop and provide advice on training in Northern Ireland. The authority will continue the executive's functions of providing central administrative and financial services for all boards and cross-sector training services. Beyond this it will have, broadly speaking, four additional functions. First, will be an obligation to keep under review all training needs, in the statutory and non-statutory sectors and to report to the Department of Economic

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Development, as well as to the sectors concerned, on its findings. The second function will be that of encouraging both cross-sector training and voluntary training arrangements in sectors of industry not within scope of a board. The authority will have the power to provide training generally, including the provisions of courses and other facilities and the payment of grants, fees and allowances. The third function relates to the field of new techniques of training and training in new technology. The authority will have responsibility for the development and promotion of and the provision of advice to the boards and others on such training. The fourth function will be to develop and maintain links with public sector training and to co-operate in the provisions of relevant training when it is requested.
The membership of the authority will reflect its enhanced role and the close relationship with the industrial training boards. It will consist of a chairman, the chairmen of the industrial training hoards as ex-officio members representing their boards, three representatives of employers, three representatives of employees, three persons with expertise in training or education, and one representative of the public sector.
There will be three sources of funding for the proposed authority. First, boards will pay for common services on a pro rata basis. Secondly, some income will be derived from the sale of services to non-statutory and public sectors. Thirdly, Government will contribute towards the costs of carrying out functions which would have a wider purpose than meeting the direct training needs of those sectors, whether statutory or voluntary, using the services of the authority, for example, monitoring training in the private sector generally, encouraging appropriate cooperation with public sector training, and encouraging key training activities in the interests of longer term development. Initially pump-priming funds will also be available to help the authority become established. The actual provisions for the Northern Ireland Training Authority are included in Articles 3 to 13 and Schedule 1.
I wish to turn briefly to the provisions relating to levies and levy remission. It should be noted that while the provisions with regard to boards, with which I shall deal later, are or, as a result of this order, will be broadly similar in Northern Ireland and Great Britain, the proposals for levies differ from the Great Britain system, which is that of exemption from paying levy through the issuing of exemption certificates. The draft order proposes to write into legislation the present administrative system of remission of levy which has been operating successfully in Northern Ireland. Individual employers who undertake training of the required standard set by an industrial training board may normally obtain permission of all or part of the remissible part of the levy depending on the range and quality of training carried out. This system is favoured by the Northern Ireland boards as it encourages regular contact between the firms and the boards on training matters, which in turn helps to ensure the quality and quantity of training being carried out. The levy remission system is particularly suited to the Province where the smaller scale of industry, along with geographical proximity, facilitates close working relationships between the boards and firms. The
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provisions for levies and levy remission are set out in Articles 23 to 26.
While the main purposes of the draft order are to set up the new training authority and to revise the provisions for levies for the industrial training boards, the opportunity is also being taken to consolidate existing legislation, with certain amendments, in order to harmonise some of the powers of the boards in Northern Ireland more closely with those in Great Britain. The remainder of the draft order is, therefore, in the main a re-enactment of the Industrial Training Act (Northern Ireland) 1964 with certain amendments.
In conclusion, I consider this to be a most important order for Northern Ireland. Not only does it bring certain aspects of industrial training arrangements into line with those already existing in Great Britain, but also it creates a new training authority which will draw together representatives from both sides of industry and from the educational sector to give a firm and dynamic lead on industrial training matters in the Province. It is a particularly important aspect of industrial policy that the workforce should be effectively trained to help it grasp the opportunities which are continually being presented by new technologies. I beg to move.
Moved, That the draft order laid before the House on 24th May be approved.—(Lord Lyell.)
8.25 p.m.
Lord Underhill: My Lords, I am grateful to the noble Lord the Minister for explaining this order. As my noble friend Lord Prys-Davies said last night when speaking to the education order, once again we have an order of 34 pages, 35 articles and four schedules—in effect, a parliamentary Bill—which is unamendable and which we have no alternative but to approve. Naturally, we wish to see the best possible schemes of training and retraining, and we must always keep in mind that after training there must be jobs. At the present moment unemployment in Northern Ireland is running at the rate of 21·6 per cent. Is there any indication that the new authority will be, to use the words of the Minister when the order was introduced in the other place, "a dynamic body" or is it to be mainly advisory, with power resting with the advice it gives to the department?
It is clear that it is a considered view of the Government that training should be left to voluntary action by industry. This is made clear in the consultative document, Training for the Future, which was issued in June 1952. It is also made clear that it is the Government's view that operating costs should be borne by industry, whether the eventual arrangements for training are voluntary or statutory. That is an assumption that emkployers alone know best what is required. It overlooks the fact that statutory training boards came into being because many employers made little or no provision for training. In fact, the Northern Ireland Committee of the Irish Congress of Trade Unions made that quite clear in its written evidence to the Northern Ireland Assembly, which considered the draft order, when it said that the ITB structure exists because of the shortcomings of employers in providing training directly.

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The committee sets out various reasons why many employers did not introduce training schemes, and hence the industrial training board scheme was introduced. Training is not a matter solely for determination by employers. Employees are involved and so are consumers—they have interests. The document to which I have referred points out that, contrary to the general desire of the Government, all but one of the present industrial training boards want to maintain their statutory position. This was also made clear in the ITB's annual reports. Neverthless, I am pleased that the Government have recognised these views and have decided that all but one of the boards shall continue. The order also contains provision for the establishment of other ITBs.
Generally, the existing boards are of the opinion that the Government should continue to meet the costs. Regrettably, the Government decided to pass these costs, which they took over in 1975, back to industry and this is included in the order. Although the order is unamendable, and although we are getting near a late hour with other business with which to deal, there is no point in discussing the order unless certain defects or criticisms can be ventilated.
I see that the membership of the authority, as set out in Schedule 1, is to include one representative of the public sector. But whereas there is consultation in connection with all the other categories, there is no provision whatever that the department shall consult with anyone regarding the person who should represent the public sector or whether one representative of the public sector is sufficient in the light of the fact that something like 46 per cent. of the working population of Northern Ireland is covered by the public sector. Incidentally, I was interested to note paragraph 5.3 in this particular document, which stresses that already a considerable amount of training provision is undertaken within the public sector.
Written evidence to the Northern Ireland Assembly was presented by the present training executive and they referred to the power in the order to be given to the department to invite other Government departments each to appoint one person to attend meetings of the authority and its committees. The present training executive has expressed the view that this power to be given to departments should not be exercised, at least without prior consultation with the authority, and preferably only at the request of the authority. That view of the present training executive appears to be a reasonable one. Membership and other matters regarding the industrial training boards are set out in Schedule 2. One sees that the chairman of each board is to be appointed by the department. Is there any case of any one of the existing boards ever having had other than an employer chairman? When that question was asked of the department officials when they met the committee of the Northern Ireland Assembly they replied that it was traditional for the chairman to be an employer.
Paragraph (2)(c) provides that,
"one or more persons … shall be apointed after consultation with the Department of Education".
Surely it would have been preferable for the number to have been defined? "One or more" is far too open.
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There is also provision in Schedule 1 that persons to be appointed to the authority shall he appointed after consultation with the Department of Education. But there is a qualification that such persons shall have "expertise in training or education". Yet I note that that qualification is not inserted with regard to the person to be appointed to the industrial training boards after consultation with the DoE. Is that an oversight, or is there some reason for it?
I have referred to the report of the Assembly in its consideration of the order. I am pleased to note that that consideration was given. I know that the noble Lord the Minister is not responsible, but it is unfortunate that only written evidence was requested of the CBI and of the Northern Ireland Trade Union Committee. It appears that the only oral evidence given to the Assembly committee was that of officials of the department, and naturally, as to be expected, they reflected the Government's views as set out in the draft order.
I note that the CBI in general supported the draft order, but the Northern Ireland Trade Union Committee were critical of a number of aspects. First, they expressed scepticism of the Government's belief that voluntary arrangements could replace the existing statutory machinery. They were concerned about the change from the present balance on the training executive to a pro-employer balance on the new training authority. I note that questions were asked of the department officials when they went before the Assembly committee, particularly by the deputy chairman. It was pointed out that, if all the chairmen of the boards were employers, only three of the 19 members of the training authority might be employee members.
The Northern Ireland Trade Union Committee are also highly critical of the proposal that industry should take over the costs. They are critical, too, in regard to the point that the non-remissible part of the levy is to be kept to a ceiling of 0·2 per cent. of the payroll. On this latter point, although an ITB may submit to the department proposals for the levy to meet costs, approval rests with the department. It is clear by Article 23 that at the end of the day it would be the department which had the last word on the order for the particular levy for a board.
Articles 25 and 26 relate to the remission of the levy where the department is satisfied that an employer is making arrangements for direct training of its own employees. The employees would appear to have no opportunity to express their views to the department. There would seem to be no provision for the new training authority to be consulted. Surely if the new training authority is to have any influence, it should have a view, and be able to express it, on an employer's proposals for training. It should be able to express a view to the department as to whether that training is satisfactory, and yet there is no provision in the order for this to be done.
Article 14 lists various bodies which the department must consult before making an order for the establishment of a new industrial training board. If the training authority is to be given any teeth at all, why is it not to be consulted? That particular point was criticised by the Assembly committee. It may be argued that one of the articles provides that the department may consult

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other bodies as it thinks fit, but surely that is not good enough. If the training authority is to be given any real power, any real exercise of authority, surely it ought to be consulted regarding the making of an order for the establishment of any other industrial training board.
I am surprised, in consulting Schedule 2, to find in paragraph 8 that the employee representatives on an industrial training board are to be excluded from voting on any aspect relating to the levy. The decision on such matters is to be left solely with the majority vote of the employer representatives. The trade union committee strongly complained about this, and I am doing so at the present moment.
Article 29 lays down that the employers in an enterprise zone are not only to be exempted from payment of the levy, but will not be obliged to provide information as may be required by either the authority or any industrial training board. The Northern Ireland Trade Union Committee disagreed with both these exemptions. Although the CBI support the exemption of the employers from payment of the levy, they also thought that firms in the enterprise zone should not be exempted from supplying the required information. Unfortunately on both these matters the Assembly report is somewhat weak. They merely express hopes that the training will be carried through by the employers in enterprise zones.
Those are just some of the points which I raise on this order, which I recognise is unamendable. The situation again shows the difficulties in which your Lordships and Parliament are placed by having the present administrative machinery run by way of orders. That is all we can have at the moment until the situation changes. The Minister may be able to reply to my points, but at the end of the day the order has either to be accepted or not accepted, and obviously we only approve orders which are passed by the other place.
8.37 p.m.
Lord Fitt: My Lords, I rise for only a few seconds to congratulate my noble friend Lord Underhill on his detailed and constructive criticism of this order. I do not myself have the research facilities which I formerly had in another capacity. Therefore I was not aware in any great detail of what was contained in this order, but having listened to my noble friend, I believe that he has asked a number of valid questions.
In relation to the Assembly discussion of the order, it is a matter for real regret that one of the major political parties in Northern Ireland, the SDLP, is not represented in that Assembly. I am certain, from my knowledge of that party, that there are a few of its members who have a working-class background and a knowledge of trade unionism. They could have given of their services to the Assembly and made it more aware of this type of legislation.
Having said that, I would be churlish if I were to disregard the order, or treat it with disdain, I think perhaps the motivation for it was well-intentioned, but Conservative Governments are not particularly widely known throughout the world for their innate interest in industrial matters. It may be that they want to project this order, but I can understand that they may not be aware of the whole of the working-class apparatus in
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Northern Ireland. I know—and it was referred to by my noble friend—that the Northern Ireland trade union movement is one of the most responsible sections of the trade union movement to be found anywhere in the world, and certainly in these islands. I should think that any criticisms that were made by that body should be taken into account by the Government.
This brief discussion that we are having on the order makes us aware, even after the discussion we had on the emergency powers, that life still goes on in Northern Ireland, and we are still trying to create a society in which there will have to be some hope and some future for the thousands of our young people who are unemployed. If the order, as at present constituted, makes some provision for training for these young people who are so desperately in need of it, then certainly it must be welcomed.
Lord Lyell: My Lords, once again we are grateful to those of your Lordships who have stayed on and who have contributed to the debate on this very interesting order. I stress to the noble Lord, Lord Fitt, that we believe that this is a very important aspect of life for young people in Northern Ireland. As he will know, and your Lordships will accept, in Northern Ireland there is a great pride in education, learning and in what we used to call trades, which have now expanded into what I was explaining: information technology, business studies and finance, which are essential to all aspects of business. We were grateful for the detailed scrutiny which the noble Lord, Lord Underhill, gave to this order and the studies of the new authority taking the place of the executive.
I shall try to reply to the points raised by the noble Lord, Lord Underhill. I shall attempt to reply to them all. If I fail I guarantee that we shall use information technology—our own eyes and our own talents—to comb what has been said tonight. We shall hope to pick up any points which I might miss.
We see the new body as being dynamic and more than purely advisory, because we believe that the functions put forward in the order for the authority, particularly the new functions, will provide the basis for that leadership and industrial training for the statutory and, above all, the non-statutory sectors which Northern Ireland will need if it is to meet the challenge of the future above all in this aspect as in the future technologies of five and 10 years ahead. Your Lordships will have noticed that the provisions in the order emphasise the importance of industry providing adequate training. That is a point which we stress.
Whether this training is achieved under voluntary or statutory arrangements and the recognition of the transferability of the many skills between the varying sections, the order emphasises the importance of the new techniques of training, especially the training in what I have to say about the new technology. The membership of the authority, including the chairmen of the industrial training boards, will ensure that all the main sectors of the Northern Ireland economy are represented. With this in mind it will ensure that the authority has full powers to provide relevant training and leadership.
The noble Lord, Lord Underhill, raised the question of the chairmen of boards normally being employers.

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There is one chairman of one board who is a retired trade unionist. Another is a retired gentleman from the education sector. We value their contributions and the variety that they bring to their chairmanship of these boards. The board chairmen were not members of the training executive, but an important feature of this new authority that we have introduced this evening is that the chairmen of all the boards will be ex officio members. This will ensure that the views of individual hoards, which will include representatives from both sides of industry, will be repesented on the authority. I stress to the noble Lord that the chairmen will be appointed to the authority to represent their boards and not any other organisation or interest with which they may be connected.
In the past board chairmen have tended to be employers, but trade unionists and educationists, as I have pointed out, may be appointed as chairmen. Your Lordships will have appreciated that the authority will comprise three representatives from the employers, the employees and the education and training interests, together with one representative from the public sector. Your Lordships will see that the new authority will have up to 19 members. To increase this size further by additional representatives would, in our view, make it more than a bit unwieldy.
The noble Lord, Lord Underhill, asked about voluntary training arrangements and hoped that the order might give the authority a duty to promote arrangements in the statutory sector. My right honourable friend in another place said in September 1982, when he announced his decision on the review of industrial training in Northern Ireland, that all the boards, except the Manmade Fibres Producers' Industrial Training Board and the footwear sector of the Clothing and Footwear ITB, would be retained. But he made it clear that he remained anxious to encourage voluntary arrangements wherever possible. We stress that. I am sure that the noble Lord, Lord Underhill, would accept it. So far as possible, we need voluntary arrangements and we are continuing to look sympathetically at all the proposals for voluntary action from many of these sectors. There will have to he basic criteria against which the proposals can be judged.
I hope that I have covered the question of trade union representation. The noble Lord also raised the question of the levy order being made against the wishes of those organisations who have been consulted. Any of these circumstances may be an exception, but if we could take one example: if a board wished to carry out training in a specific area—let us suggest new technology—this would not be supported by the majority of the industry because of the cost. We would then find the department might consider that a breach of this 0.2 per cent. ceiling of the non-remissible levy or the 1 per cent. ceiling for total levy would be justified. But I stress to the noble Lord, Lord Underhill, who asked this question about the 0.2, that it is a ceiling. In the vast majority of these cases the remissible levy will be certainly under that.
The noble Lord will be aware that there is a document called The Outlook on Training, which was published as far back as July 1980—four years ago. This considered the workings of the Employment and Training Act 1973. This estimated that for most of the
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boards in Great Britain operating costs amounted to 0.2 per cent. of the annual pay roll of firms within the scope of that particular board. After due consideration we thought that this was a feasible target by the Northern Ireland boards to cover certain costs including the operating costs. I am told that most of the boards are now within the 0.2 per cent. ceiling.
The noble Lord, Lord Underhill, also raised a question about no consultation under Article 14 with the new boards. Under Article 14 the department may consult anybody that it considers fit. It is the intention that the authority would be one of the bodies and it would be involved at an early stage.
The last point made by the noble Lord, Lord Underhill, that I can reply to this evening deals with the representatives of the public sector. A senior representative from the department of finance and personnel has been appointed. I understand that his appointment has been welcomed and we are looking forward to his contribution on the board.
I thank the noble Lord, Lord Fitt, for his contribution. I stress to him that we regard this project of industrial training as being of extreme importance to Northern Ireland, and above all to the youth. I hope that he will believe that this Government are not hardhearted on this aspect. We have training, above all, training for the future, very much at heart. I hope that I have covered most of the points that were raised by the noble Lord, Lord Underhill. I have already promised that I will comb for anything that I missed.
On Question, Motion agreed to.

Financial Provisions (Northern Ireland) Order 1984
8.51 p.m.
Lord Lyell Lord Lyell rose to move, That the draft order laid before the House on 29th June be approved.
The noble Lord said: My Lords, this is a further order in a series which has been enacted at intervals of one or two years to deal with miscellaneous matters of a financial nature, the previous one in the series being the Financial Provisions (Northern Ireland) Order 1983. The main purpose of these orders is to increase as necessary, statutory limits imposed by Northern Ireland legislation on certain financial transactions and to deal with other matters with a financial content. The orders do not deal wih appropriation of cash for public services.
I shall now deal briefly with the content of each of the main articles. Article 3 deals with issues which may be made from the Northern Ireland Consolidated Fund in respect of expenditure by the Northern Ireland Housing Executive. The issues have a statutory limit placed upon them which presently stands at £1.3 billion—and I am using the American style, representing £1,300 million; and it is anticipated that this limit will be reached by August 1985. It is estimated that the proposed new limit of £1.6 billion will accommodate expenditure in this field until early 1987.
Article 4 deals with another statutory limit and proposes an increase from £25 million to £30 million in the aggregate amount of loans and grants which may be made to harbour authorities by the

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Departments of Economic Development and Agriculture for harbour works. The present limit is likely to be exhausted by spring 1986 and we feel that it is prudent to seek a revision now as the next Financial Provisions Order may not be proposed until mid-1986.
Article 5 deals with the NI health and social services hoards, which make loans to general medical practitioners to assist in the provision, improvement and equipment of premises in which they conduct their practices. The Department of Finance and Personnel guarantees the repayment of principal and payment of interest on these loans. The present statutory limit on the aggregate amount of principal which may be guaranteed by the Department of Finance and Personnel in this field is £1.2 million. As a result of a sustained high rate of applications in recent years, it is anticipated that this limit could be reached in the current financial year of 1984–85. The proposed revised limit of £2.5 million should accommodate expenditure until late 1986.
Finally, Article 6 makes provision for the Department of Finance and Personnel to offer loans at variable rates of interest to local authorities. It is envisaged that such rates of interest would be reviewed at three-monthly intervals. At present, loans can be made only at a fixed rate of interest. This proposal will bring Northern Ireland into line with practice in Great Britain. For the third time this evening, I commend an order to the House.
Moved, That the draft order laid before the House on 29th June be approved.—(Lord Lyell.)
Lord Underhill: My Lords, the noble Lord the Minister and other noble Lords will be delighted to know that I will not use this opportunity to discuss in detail the proposal of the three services to which three of the articles relates. The proposal for the increase is seen as common sense and acceptable and we are particularly pleased to see that the variable rates of interest are to be brought into line with the position in the United Kingdom as regards the local authorities. Therefore, this order is one to which we shall give our support.
Lord Lyell: My Lords, I am grateful to the noble Lord, Lord Underhill. I, too, have some interesting views on the variable rate. I understood that neither the department nor the local authorities seemed to win too often one against the other. It depended upon the rise and fall of interest rates. Doubtless, the noble Lord and I will be able to study closely the Financial Times and the marvellous LIBOR (the London Inter Bank Offer Rate), which is the base for the variable rates. We are very grateful for the noble Lord's interest and for the interest shown generally by noble Lords.
On Question, Motion agreed to.

Housing Defects Bill
8.56 p.m.
Lord Skelmersdale: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
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Moved, That the House do now resolve itself into Committee.—(Lord Skelmersdale.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL CATHCART in the Chair.]
Clause 1 [Designation of defective dwellings]:
Lord Stallard Lord Stallard moved Amendment No. 1:
Page I, line 15, leave out from ("which") to ("is") in line 16 and insert ("is a building in a class designated under this section and where defects attributable to "the qualifying defect" have become evident and are substantial").
The noble Lord said: I beg to move, on behalf of my noble friend, the amendment standing in our name on the Marshalled List. It seems to us that the clause as it stands is far from clear. If anything, it would mean in our view exactly the opposite to what it ought to mean. The present clause—and it is worth reading it—says,
"Any dwelling which a building in a class designated under this section consists of or includes is referred to in this Act as a 'defective dwelling'; and in this Act in relation to such a dwelling"—
and so it goes on. That would appear, in our view, to mean that any building in a class designated under this section would qualify. Our amendment would make it clear that local authorities are expected to give assistance where the dwelling is actually defective and not simply because it is in a class designated as defective. It is quite a different interpretation. We feel that if this amendment is not made, local authorities will be inundated with applications even though no defect has yet emerged and there is no need yet for assistance.
Under the Bill as it stands resources would be directed to dwellings where little or nothing is wrong with them at the expense of other priorities. In our view, the amendment is consistent with Government's thinking. Ministers in another place and here have said that defects may not emerge for as long as 10, 20 or even 30 years and they have said that local authorities will be able to spread the financial burden over a number of years. This being the case, no assistance should be given until it is necessary to give it.
If the Ministers remain concerned about those owners who wish to move—and that may be in the Minister's reply—but where the class of dwellings is unmortgageable, then we should be invited to make a further amendment which makes it clear that the assistance is for reasons of mobility and not because of the defects. I hope that the Minister will consider that point. If the Government consider that to be the case then a further amendment should be forthcoming from the Minister himself to say that these provisions are being made for reasons of mobility, because then repurchase could be undertaken by the local authorities with full compensation if that were the case.
It seems to us perfectly reasonable to move an amendment couched in the terms that we propose to clarify the situation, as I said at the beginning, because it seems that otherwise local authorities will be in real trouble far earlier than necessary. I beg to move.
Lord Skelmersdale: No, my Lords. I am afraid that I must tell the noble Lord, Lord Stallard, that this amendment is not consistent with Government

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thinking on this Bill. Indeed, the amendment undermines the fundamental purpose of the Bill. It is true that the prefabricated reinforced concrete dwellings with which we are concerned in this Bill may well not show visible or evident signs of structural defects for perhaps 20 years or more and that the dwellings will continue to provide good housing during the intervening period. In terms of structural stability and safety there is no immediate problem. But the amendment closes its eyes to the cardinal point that there is nevertheless an immediate problem for owners of these dwellings.
The findings of the Building Research Establishment indicate that the houses which use prefabricated reinforced concrete load-bearing components—which we have said we intend to designate under the Bill—are all subject to deterioration which will inevitably lead to serious structural damage well within the period of further life which the building societies require if they are to lend on mortgage. The effect is not overnight to render the dwellings unsafe, but to reduce overnight substantially their value. This is the problem which faces the owner and which the Bill is designed to deal with.
It matters not that the damage has not yet appeared; the owners of these dwelling will have bought them in good faith from the public sector on the basis of a defect-free value. Often they will have sunk all their resources into the venture, and indeed will have committed themselves for the next 20 years or so in terms of mortgage repayments and so on. They now find their homes are worth substantially less than they paid for them because of the discovery of those defects in their design and construction. The houses are unmortgageable, certainly at anything like their defect-free value. For people who are required to sell their homes, perhaps to move to another area for employment reasons, it is nothing short of disastrous; they either cannot sell their homes or only at a defective value, incurring a considerable loss on the price they originally paid and—I say it again—through no fault of their own.
In this Bill the Government, on behalf of the public sector which originally sold the dwellings, are recognising their responsibility towards these people who purchased in good faith. The Bill provides that the basic criteria should be that the dwelling is defective by reason of its design or construction in that its value has been substantially reduced, as a result of the defects becoming generally known. Having said that, I must say that this is my first reaction to the noble Lord's amendment, and I shall most certainly want to read carefully what he has said in moving it.
Lord Stallard: I am very grateful to the Minister for his last statement. Until then I thought I had opened the Committee proceedings on a reasonable note by saying that I thought I understood the Government's thinking. I obviously did not. I had hoped I understood any reasonable Government's thinking. If they were saying the defects would not appear for 10, 20 or 30 years, why then erect a panic situation where people will be demanding their compensation long in advance, perhaps, of its being necessary? Would it not have been far more sensible had the Government been thinking, as I anticipated or accused them of
1426
thinking—God help me!—that it may have been easier to allow local authorities and tenants to plan this matter on a phased basis, or some other basis, but certainly not to rush in on a panic basis and create what could well be a chaotic situation so far as local government finance is concerned?
I shall have to read carefully what the Minister said; he read it fairly fast, and I am not criticising him for that, but I got the impression that there were a number of contradictions in his reply in relation to the clause and amendments. I would certainly want to read his reply and I reserve my position for the next stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stallard Lord Stallard moved Amendment No. 2:
Page 2, line 38, at end insert—
("() No designation or variation or revocation of a designation shall take place under this section unless there has been full and proper consultation with the local authority Associations and such other persons and bodies as the Secretary of State thinks fit.").
The noble Lord said: This amendment seeks to insist on or enforce some consultation with the local authority associations and such other persons and bodies as the Secretary of State thinks fit before any designation or variation or revocation of a designation takes place. Again, it would seem to us a very sensible thing to do, because at least 90 per cent. of the defective dwellings are in local authority ownership, and in some cases many more. Only 10 per cent. of these dwellings have been sold, and therefore it is the local authorities who are most aware of the extent of the defects and the necessary remedial works.
With regard to the prefabricated reinforced concrete dwellings which the Secretary of State has announced he is designating under this Bill, there has been no formal consultation with local authority associations, nor, therefore, with the local authorities themselves. We have not been given the opportunity either inside or outside this House to say whether the dwellings should be so designated. The Building Research Establishment has conducted a random sample of these dwellings, but this is small in relation to the total number and takes little account of the relative priority of these dwellings compared with other types in local authority ownership.
Local authorities are, of course, extremely worried about future designations; of course, there is no certainty that the Building Research Establishment will undertake any sort of survey on any new types. Whether or not this work is done by the BRE, we feel on this side of the Committee that it is essential that local authorities are consulted and allow the opportunity to give details of the extent of the defects of the dwellings in their ownership and of those that they have recently transferred.
Surely, to make a designation without consultation is not only unreasonable, it is almost verging on the irresponsible, because the Association of Municipal Authorities, in reports both in 1983 and in 1984 which noble Lords will have read, examined this situation and came to the conclusion that a more thoroughgoing and comprehensive study is now needed.
Having listed a whole number of faults and defects that local authorities had found in existing structures, I felt that this was a case needing urgent consultation. The local authority experience, the experience of thousands and thousands of tenants, the consultations that have taken place with those tenants and residents and their organisations and with the voluntary organisations, Shelter and other people who have been involved in this, must be tapped. There must, in our view, be consultation if we are to get the best solution possible for everybody concerned. Therefore, before any further dwellings are designated, we think it is a perfectly reasonable thing to have this kind of consultation. I beg to move.
Lord Graham of Edmonton: In order to be helpful to the Minister, who I know wants to be helpful to the Committee and to those who are concerned, may I make an additional comment to augment those made by my noble friend Lord Stallard? What we are worried about in this clause, and also in these amendments, is, quite frankly, the dilemma which faces not only the Government but particularly local authorities. We made the general case at Second Reading that the designation places an unfair burden on local authorities. We shall have arguments and perhaps more news about that later. The dilemma for local authorities, quite frankly, is this. While they are not looking for trouble, when people are in trouble—like the Minister on this particular point—they are anxious to try to meet the case.
Perhaps I may remind the Minister of the case that I raised on Second reading in respect of my honourable friend Mr. Terry Davis, the Member for Hodge Hill. This was about the Smith houses, and the fair point that was made by the Minister. Not only were they not designated, but, in order to merit, one also has to be satisfied that there was not only a local circumstance but a national circumstance, or certainly more than a local circumstance. I want to say that, in the diligent way in which my honourable friend Mr. Terry Davis goes about his work, he draws my attention to a Question for Written Answer that was put down in the other place on 5th July by a political friend of the Minister, Sir Reginald Eyre. He asked the Minister to list the constituencies in which Smith houses have been reported to have defects. The constituencies that were listed then were: Birmingham, Hall Green, Hodge Hill, Northfield and Yardley, Ashfield, Amber Valley, Leicester East and Cardiff West. That is a fair geographical spread: it covers Birmingham, the Midlands, and down to Cardiff. My honourable friend Mr. Terry Davis also mentions the constituency of Aldridge-Brownhills, if that is the right designation. The point I want to make is that there is a dilemma and a maximum need for consultation in that particular way.
In addition, I should like to ask the Minister to take on board the question for consultation, because I have a letter here, written by the Deputy City Housing Officer of the City of Birmingham, referring to the problems facing an authority in this matter. The letter was written to my noble friend Lady Fisher, who had intended to be present, but unfortunately has suffered a broken ankle—she is out on a limb, not for the first
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time—otherwise she would have been taking part in the debate. However, she has sent on her letter, and this is what Mr. Clive Pickering wrote to her:
"In many ways, what is more alarming, is that many other properties, not classified so far by the Secretary of State, are in the same, if not worse, condition than those which have been recognised. For example, the Bill ignores what, to us in Birmingham, is a far greater problem—that of Smith's Construction houses. There were 1,525 of these properties built in Birmingham, of which 550 have been sold. The properties are constructed of concrete blocks"—
And then he goes into details of the construction, of which we are well aware. The letter then continues, giving a list of what the City of Birmingham Housing Department would like. It certainly wants consultation but it wants,
"The ability of the Local Authority to classify properties as being defective and described within the Bill and to receive the same funding arrangements as identified in the Bill."
They also want:
"Additional capital resources allocated separately by the Government to enable Local Authorities with such structurally defective properties to effect repairs in the same way as is envisaged for owner occupiers."
I can assure the Minister that we shall spend some time on a limited number of these amendments and others we shall skate through: but this is a crucial point. There is satisfaction, from the local authority's point of view, that the HIP allocations in the future take fully on board any additional burden which flows from their obligations to complete the Bill. Those are the points from Birmingham.
Earlier this evening I was speaking to my honourable friend Mr. Jack Dormond, the Member for Easington. He was immediately agitated in the knowledge that your Lorships were discussing this Bill. When I was in another place, I spoke on the new towns for the Opposition, and that context I was made well aware of the enormous problems which have come to new towns as a result of defective buildings over the 1950s and 1960s—houses built by new town corporations which, when the transfer of properties took place, meant that they were saddled with enormous burdens. I can say that the Minister's honourable friends in another place recognised part of the problem, but new towns have got a major burden.
My attention as been drawn to a body that goes under the pseudonym of PROBE (Private Residents Overlooked by Easington). I do not know whether "overlooked" means a geographical location or whether it means that their views are not taken fully into account. These residents in fact are in the same kind of circumstances. I also plead in aid the problems of owner occupiers whose houses are not designated, and the houses that we are talking about in that case are called Skarne Pre-cast Reinforced Concrete—not yet designated, but the problem might come. I know many members of the Easington District Council and I know they are very diligent, very concerned and anxious to help; but they have their own problems and their own priorities. The Chief Executive, Mr. Conyers Kelly, has written to Mr. Dormond, and he says:
"In recent months the Council have had a number of letters from owner/occupiers in Peterlee again asking if any form of financial help can he offered."
As your Lordships know, the council cannot offer any help. In the supporting document, Mr. Kelly says:
"In recent times the bad design and construction problems have been aggravated by the discovery of asbestos in a large number of

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houses. The cost of the removal of the asbestos alone will average 1,500 per dwelling. Again no special financial help has been offered to either the Council or owner/occupiers."
Another paragraph reads—and this is most important for the Minister and his advisers, so I should like them to take particular note—
"With the continuing high unemployment in the area and the Council embarking upon its approved programme of remedial works to its own properties, the inability of some owner/occupiers to afford to carry out remedial works has quite apart from the financial plight of owner/occupiers created a visually detrimental effect in the Peterlee New Town."
I am asking for the understanding of the Minister when the HIP allocations are made. I hope that the Minister will understand, by the care we have taken to draw these illustrations, the need for consultation. Whatever there has been in the past—and we are making no point about that—it is crucial in the future. The Minister should consult before adding to his list, which will be an easement to owner/occupiers, but a burden to the council and the generality of the ratepayers and other tenants. We are simply asking the Minister in these two amendments: please take on board consultation with the proper associations and recognise that, if a further burden is to be laid upon local authorities, the money must be provided, or there must be access to the money over a period of time, in order that they may discharge their responsibilities.
Lord Skelmersdale: I should like to start by conveying the Committee's regards to the noble Baroness, Lady Fisher, and regretting that on this of all subjects she is not here to join us in our deliberations today. I should also like to make the general point that the Government, as represented on this occasion by myself, have no horror at all of consultations with the local authorities. I do not want to make political points on this subject any more than the noble Lord, Lord Graham, does, but I have said before, and I am quite ready to say it again, that we are prepared to consult on any occasion with anybody who wants to consult with US.
It is a little unfair for the noble Lord, Lord Stallard, to say that there has been a lack of consultation so far on the provisions of this Bill or on the subject with which it deals. Throughout the preparation of the Bill—and in setting up the discretionary scheme of assistance for owners of Airey houses which preceded this Bill—there have been continual and I must say constructive consultations with the local authority associations and others.
I refer in this connection to the consultative document issued to all local authority associations on 10th November 1983, and the outcome of the responses from this consultation paper is the Bill before your Lordships today. The proposals themselves were put to the local authority associations following the Government's announcement. To illustrate to your Lordships that this consultation has not merely been a matter of form, I point out that the Exchequer contribution in repurchase cases of 75 per cent., as the Committee will know, of the difference between the price paid to the owner and the defective value of the dwelling was introduced only after
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representations by the associations. Our original intention was that there should be no Exchequer contributions in repurchase cases.
There have been meetings between Ministers and representatives of the local authority associations on the question of resources—these were very properly referred to by the noble Lord, Lord Graham—and the Committee will be aware of the Government's discussions with the Building Societies Association and the National House Building Council.
So far as the specific problems of HIPs are concerned, the noble Lord, Lord Graham, knows as well as I do that HIPs are based on the planned spending of local authorities. Of course, there is always argument between what the local authorities as a group want and what the Government as a provider of resources are prepared to give in any one year; and this depends, of course, on the general economic situation.
But where local authorities already had definite plans for spending on these houses and on other defective dwellings, such as some Bison schemes, the department's regional controllers took these into account in distributing the local discretionary element of HIP resources at the regional level. We have said that when we know exactly what local authorities want to do—and we will know this only as a result of consultations with them—we will take account in our future HIP provisions of the planned spending that they intend to make. I really cannot go any further than that.
While I am answering the noble Lord, Lord Graham, I should say that, so far as Smith houses are concerned, I cannot at this moment stand at this Dispatch Box and say that they will be added to the list of 28 houses which I mentioned in my Second Reading speech on this Bill. But the noble Lord knows, because I said it on Second Reading, that we are considering this matter urgently with that possible end in view.
Lord Graham of Edmonton: Shortly.
Lord Skelmersdale: Exactly. The noble Lord has a good memory, as well as being able to read. I have given examples of what the Government have done so far by way of consultation in the preparation of the scheme. This illustrates the importance which we attach to the co-operation of all interested parties in the operation of the scheme. It is our intention to continue along the path we have already taken in this respect. I cannot give an absolute, categorical assurance that there will be discussion with all parties on every aspect of a particular designation, simply because there are occasions when central Government not only can move with the speed of light, but actually do move with the speed of light. It might well be appropriate to have a special, urgent designation where there simply is not time for consultations. However, apart from that, consultations will continue to be entered into.
Lord Stallard: I have listened very carefully to what the noble Lord the Minister and my noble friend have said. We are at cross-purposes. My amendment seeks

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consultation, but not on a general basis. I accept that there has been some consultation, but we are asking for consultation before the designation of any new classes or before any revocation of a designation under this clause. That is slightly different. The Minister said at the end of his remarks that he could give no guarantee. He mentioned that the Government sometimes move at the speed of light. Not many people would agree with that statement. The speed of light has certainly slowed down, according to the Minister's interpretation, unless he is referring to GCHQ, where the Government move at a much faster pace than they do in local government.
I am far from satisfied with the Minister's assurance. He has not assured me that there will be what we consider to be essential consultation with the people
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most directly involved; namely, the local authorities and the associations representing the tenants and the thousands and thousands of people who will remain in these kinds of dwellings, irrespective of what happens to the Bill.
I do not intend at this stage to go down the road the Minister travelled in connection with financial resources. These are the subject of further amendments, and I have no doubt that my noble friend Lord Graham of Edmonton will return to that aspect. I shall consider what the Minister has said. He has not moved in any way towards the kind of consultation we are seeking before any new designation or variation is made under the Bill. Therefore, reserving again my position for the future stages of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.23 p.m.
Lord Stallard Lord Stallard moved Amendment No. 3:
Page 2, line 38, at end insert—
("() No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate.").
The noble Lord said: I beg to move the last amendment in a group of three amendments. It refers to the resources which were touched on by the Minister in his reply; but he did not reply specifically to this amendment. According to our reading of the Bill, it is based upon the assumption that only 28 types of prefabricated reinforced concrete dwellings will be designated. The Government have estimated that the cost to local authorities will be £250 million. During the Second Reading debate I mentioned that this is not the general understanding of the Association of Metropolitan Authorities and others. The problem will be much bigger than that. In this connection may I quote from Shelter's document which deals with the Bill. They say:
"Even within its own terms, the Bill is partial. The Government says, that 16,500 owners will be eligible for assistance—suggesting that it sees the Bill's provisions as limited to 26"—
I assume they mean 28, but I am not quite sure—
"house types it has already named as potentially defective. Yet the Association of Metropolitan Authorities has identified 167 house types dating from the same period (the 1940s and 1950s) which could also suffer from design and construction faults. Will these other house types be excluded?
They continue:
"In all, the number of 'non-traditional' and industrialised dwellings in the country has been put at 1·5 million. Over 300 different types of construction technique are involved. Although not all these dwellings may be defective, the figures give an indication of the scale of the problem. If the Housing Defects Bill is only to deal with 16,500 dwellings, its impact on the defective housing problem will be minimal. The Government must back up the Bill with adequate resources and special measures to help tenants as well as owners".
The Bill, however, deals only, as has been said, with 16,500 dwellings in private ownership and then does not deal with the costs of repairing the dwellings once they have been transferred back to the local authorities, which is another major problem. The costs therefore only refer to the giving of the reinstatement grants and the cost of the limited repurchase grants to local authorities. We shall develop that in further amendments.
However, there will still be 150,000 prefabricated reinforced concrete dwellings remaining in local authority ownership and probably most of the 16,500 currently in private ownership will be transferred back to local authorities. On this assumption, therefore, and using the Department of Environment's own figures for the cost of reinstatement, local authorities will incur expenditure of no less than £1.5 billion in the future as dwellings deteriorate and need to be repaired. The very existence of this Bill is a recognition of the central role played by all governments in the development of these dwellings and an acknowledgment of the problems that were so created. I enlarged on that at Second Reading. I do not intend at this stage to rehearse the way in which these problems were created and the kind of encouragement that governments gave to local authorities to embark on
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these programmes. But it must therefore be reasonable in the light of all those circumstances to accept the case for adequate financial assistance to be made available to local authorities confronted with these problems. The discrimination in this Bill therefore cannot be justified.
Unfortunately this Bill is being discussed at a time when housing investment has been put under even more stringent control. The noble Lord the Minister mentioned HIP. He did not say that these programmes are being quite drastically cut in many instances and subsidies are being reduced. We know that rate capping has been introduced to make the situation worse still, so much so that—as we pointed out in Second Reading—many local authorities are experiencing great difficulties in funding the cost of repair and remedial programmes of existing stock within their HIP allocation. We gave examples again from research documents supplied to noble Lords on that score.
The Association of Municipal Authorities has estimated that the cost of dealing with defects in the post-war housing stock will be at least £10,000 million. Bearing in mind the prefabricated reinforced concrete dwellings built before 1960 will cost at least £1.5 billion, our estimate is unlikely to be excessive. Therefore we know that more and more designations will have to take place under this Bill in the future. That is perfectly obvious to all of us who have discussed these matters with local authorities and have some experience of the problems that have existed and have been created. It is almost certain that more and more dwellings will have to be designated. But the Bill fails to acknowledge the size and enormity of the problem. Obviously we on this side are extremely concerned that the provision has only been made for £250 million (and that is not absolutely certain; there seems doubt about that sum) but it may ultimately entail much greater expenditure for which no provision has been made. This amendment would therefore make the provision of such resources a statutory responsibility. I beg to move.
Viscount Hanworth: I think on the whole I would support this amendment. Our problem today is that we just do not have enough money to do what we would like in the housing field. It is no use preferring one section of housing people to another. This amendment is really saying that if a local authority cannot afford to cope, and the situation is not extreme, and the Government are not willing to help, then perhaps one cannot undertake this at that moment at all. That is what I understand by this amendment. If I am right, then I think the amendment is reasonable.
Lord Skelmersdale: The noble Lords are quite right. We can justify at the moment only 28 types, to which I have already referred, but the Bill is deliberately drawn wide enough to include others, if necessary. The other side of the Committee have asked, "How do we know that funds will be available for this purpose?". I have explained already that HIP funds cannot be made available until there is a planned expenditure by local authorities; not before then will the matter be considered and will my honourable friend the Minister for Housing take it to his other Government colleagues.

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I know that at the moment discussion is going on. I have no idea what will be the result. It might be appropriate (and I know that my honourable friend is very much of this view) that the general needs index of local authorities should be revised to take account of the problems we have just been discussing in this Committee. I can give absolutely no clue as to how that consultation is progressing. I can say that consultation is progressing, but obviously I cannot prejudge the outcome, even if I knew what it was.
I take the basic point. The basic point of Amendment No. 3 is not for the Bill at all; it is for any extra work that local authorities may have to undertake for any purpose. It might not be through a designation of central Government. It might be a sudden crisis with their own housing stock, which has absolutely nothing to do with central Government.
The real question is this: in those circumstances, can the local authorities afford it? I have already referred to the special notice we are taking of the need for extra resources under this Bill. So far as the Bill is concerned, I cannot go any further than the Bill does. But the noble Lords are absolutely right when they say that this is a matter for general discussion, and it is being taken forward.
Lord Stallard: I am again grateful to the noble Lord for his reply and I am glad to hear that this matter is being taken forward. However, I was a little worried by his remark that there may well be another 50 or more types, "if necessary". He said that it might be necessary to designate another 50 types.
Lord Skelmersdale: I am sorry, but the noble Lord really did mishear me. I said that we can justify only 28 types at the moment, but that the Bill is deliberately drawn wide enough to include others, if necessary. I did not mention a figure; not one, not 50, not 80.
Lord Stallard: That makes it worse. The figure could be anything up to 187 types, or 300 types, necessary to be designated. When the noble Lord uses the words "if necessary" I assume that they mean, if the Treasury agrees. In the previous amendment the noble Lord seemed to pour cold water on the consultative process with local authorities and to reserve the right for simply the Secretary of State and, no doubt, the Treasury to deal with the question of further designations.
Again, for the noble Lord to say that it would give local authorities carte blanche is, if I may say so with respect, to misunderstand the amendment. The amendment is quite specific. We propose adding to the end of Clause 1 the words:
"No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate".
That is fairly specific.
We are saying that there ought not to be further designations until the resources are available. That again is a perfectly reasonable expectation to those of us who understand local authorities and how they function. To say the least, it is irresponsible, and
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certainly unreasonable, to expect local authorities to do otherwise than see that the resources are available before they embark, or are forced to embark, on massive works of the nature specified by the Bill.
In withdrawing the amendment, I again express my disappointment. I shall read carefully what the Minister has said and, if necessary, raise the matter again at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Eligibility for assistance]:
9.35 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No 4:
Page 3, line 25, at end insert—
(" (3A) A person who holds a relevant interest in a defective dwelling is not eligible for assistance in respect of the dwelling at any time when that interest is subject to the rights of a person who is a protected occupier within the meaning of the Rent (Agriculture) Act 1976 or a statutory tenant within the meaning of that Act.").
The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 18, 19, 20, 21 and 22 in Clause 8.
Amendment No. 18: Clause 8, page 13, line 31, leave out from ("tenancy") to ("and") in line 33.
Amendment No. 19: Clause 8, page 13, line 42, leave out paragraph (b).
Amendment No. 20: Clause 8, page 14, leave out lines 9 and 10.
Amendment No. 21: Clause 8, page 14, line 13, column 2, leave out from ("Act") to end of line 14.
Amendment No. 22: Clause 8, page 14, leave out lines 16 and 17.
As the Committee will be aware, certain agricultural workers enjoy protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976. They are usually associated with their terms of employment.
As drafted, the effect of the Bill would be, in the case of a repurchase of such a dwelling by a housing authority, to remove the protection offered to such occupiers by the 1976 Act. On the other hand, the housing authority would be obliged to offer them a secure tenancy. But the terms of the secure tenancy (especially as regards rent) are likely to be less advantageous than those enjoyed under the 1976 Act—in particular, the rent might be much higher without any necessary compensating increase in wages—and there could be complications involving other terms of the worker's employment, with which we do not think it right that we should interfere.
It is also clear that the farmer who has let a dwelling as tied accommodation has done so for the purposes of a business. Our purpose in the Bill is to assist the owner-occupier, or his trustees or personal representatives, and not businesses.
We propose, therefore, that owners of dwellings which are subject to protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976 should not be eligible for assistance under the Bill. It would of course still be open to a farmer who owned a defective dwelling as an individual, and not through, for example, a limited company, to obtain assistance under the Bill if he obtained vacant possession of the dwelling in question: for example, by

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providing alternative tied accommodation for his employee. Other solutions would, as I have said, be very much more complicated.
I hope that I have managed to explain the purpose of these amendments. I beg to move.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 5:
Page 4, line 36, leave out paragraph (b).
The noble Lord said: The amendment seeks to place a tenant in a position on all fours with the owner-occupier of a house which could very well be designated by type, so that the tenant of a council house would have the same rights to reinstate his house to a satisfactory condition as the owner-occupier. This is another route to get rid of the disparity that exists between the 16,500 owner-occupiers who will benefit from the Bill—and we do not cavil at that—and the generality of council tenants.
I must admit that the amendment is a device for a short debate and an invitation to the Government to express their views in respect of tenants' rights. At present, tenants are entitled to improvement grants, although it is acknowledged that relatively few exercise that right. In my view, a reinstatement grant is similar in concept. There is no justification for specifically excluding council tenants from that entitlement.
We recognise that the Bill deals specifically with assistance to private owners and that the deletion of the subsection will not achieve our aim of making reinstatement grants generally available to tenants. But, before we let this clause pass, we want an explanation from the Government. In many instances a tenant may live next door to an owner-occupier whose house may be reinstated with public money. The council tenant will therefore be put in what I would say is an invidious position. I beg to move.
Lord Skelmersdale: The amendment in itself would be of little benefit for the purpose which the noble Lord, Lord Graham, has in mind; and he explained it to the Committee. It would, if accepted, make only very few local authority tenants eligible for assistance under the Bill—those who are secure tenants and who fulfil the conditions of Clause 2(8) of the Bill. There are probably very few such cases, but it is possible for them to arise in the case, for instance, of certain leases terminable on death where the tenants have not purchased their interests.
The noble Lord, in moving the amendment, has made a case for extending the Bill for those who have remained as tenants of these defective dwellings. It is an issue which has already been debated at some length in another place and it is an issue we touched upon at Second Reading. I must again repeat that there is no need in this Bill to take steps to provide assistance for local authorities, or their tenants, or indeed other public sector tenants who live in buildings of a designated class. Such tenants and the buildings in which they live are the responsibility of the landlord authorities. There is no reason why such authorities should not continue to maintain these buildings through regular and considered programmes. I have already said that considered
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programmes are the basis for the HIP allocation. Repeated assurances have been given on the availability of resources in determining the overall total for housing capital expenditure and individual HIP allocations. As I have said, the Bill is designed to deal with a quite different problem.
I know that this theme is going to recur throughout the Committee stage and perhaps it may save a little time if I say now that the Government are fully seized of the problems and the points that have been made by noble Lords as far as HIP allocations are concerned with respect to defective dwellings. It will only weary the Committee if I go on again and again saying that when we have the properly formulated plans of local authorities that will be the time to consider increasing the HIP allocations for this purpose.
Lord Graham of Edmonton: I am grateful to the Minister for repeating that more than once. I promise I shall try to avoid the necessity for him to do it again. It is interesting that the authorities we consult say that although when discussions take place their point of view is taken on board, they are baffled when the allocations are made. They are unable to identify within the global sums allocated to them a figure which takes account of any particular circumstance.
For example, I am prepared to believe that there would be sympathy when the authorities say that there are so many thousands of houses they wish to take account of and they look at each individual council's needs and requirements and they make their plea. There are generalities in allocation and there is great difficulty in the authority being able to arrange precisely that there is built into their global figure a precise overlay to take account of a special problem. In fact, what happens, as the Minister knows, is that each local authority is given its global sum which is made up on assurances and programmes and it is up to the local authorities to decide how much to spend on improvement grants, how much to spend on buying land, how much to spend on building houses and how much on improving council estates, and so on. We are fearful that, in order to meet this additional obligation, some of those other heads will suffer.
I am satisfied with the Minister's reply at this stage and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3 [Entitlement to reinstatement grant or repurchase]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 6:
Page 4, line 42, after ("below") insert ("and section [modification of Act in relation to shared ownership leases](3) of this Act")
The noble Lord said: This amendment is a minor paving amendment to the new clause to be inserted after Clause 16 (Amendment No. 49) to which with the leave of the Committee, I shall address my remarks. There are also two consequential amendments to Clause 17 (Nos. 50 and 52).
Amendment No. 49: After Clause 16, insert the following new Clause—
("Modification of Act in relation to shared ownership leases.
—(1) The Secretary of State may by regulations provide for this Act to have effect, in its application to any case in which a

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person is eligible for assistance in respect of a defective dwelling and his interest in the dwelling is either—

(a) a shared ownership lease, or

(b) the freehold acquired under the terms of a shared ownership lease,

subject to such modifications as may be specified in the regulations.
(2) Regulations under this section may (without prejudice to the generality of subsection (1) above)—

(a) require an authority receiving an application under section 3 of this Act by a person who—

(i) is eligible for assistance in respect of a defective dwelling, and

(ii) holds an interest falling within paragraph (a) or (b) of subsection (1) above,

to determine under that section that he is entitled to assistance by way of repurchase, and
(b) make any provision that may be made by an order under section 3(6A) of this Act.
(3) An authority shall not entertain an application under section 3 of this Act by a person whose interest in the defective dwelling concerned falls within paragraph (a) or (b) of subsection (1) above unless regulations under this section are in force at the time of application in respect of that interest.
(4) In this section "shared ownership lease" means—

(a) a shared ownership lease within the meaning of Part I of the Housing and Building Control Act 1984,

(b) a lease of a dwelling-house granted otherwise than in pursuance of that Part which contains provision to the like effect as that required by paragraph 3 of Schedule 3 to that Act,

(c) a lease of a description specified by the regulations, or

(d) a lease determined, or falling within a class determined, by the Secretary of State to be a shared ownership lease;

but where a lease becomes a shared ownership lease by virtue of regulations under this section or a determination under paragraph (d) above, that shall not affect the operation of the provisions of this Act in relation to a person who is eligible for assistance in respect of a defective dwelling if application for assistance in respect of the dwelling has previously been made by him under section 3 of this Act.
(5) Regulations under this section may make different provision for England, Scotland and Wales and for different descriptions of shared ownership lease.")
Amendment No. 50: Clause 17, page 21, line 1, after ("order") insert ("or regulations")
Amendment No. 52: Clause 17, page 21, line 7, at end insert—
("(2A) A statutory instrument containing regulations under section (modification of Act in relation to shared ownership leases) of this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
The purpose of the new clause is to enable the provision of the Bill to be applied in cases where the owner of a defective dwelling who is eligible for assistance in fact holds a shared ownership lease of the dwelling or has acquired the freehold by means of shared ownership leases and where the acquisition of shares in that lease has straddled the cut-off date. The Committee will recall from our recent consideration of what was then the Housing and Building Control Bill, the complexities of provisions dealing with shared ownership leases.
As the Committee would imagine, it would be very complicated to tailor the Bill to provide for a solution where the form of assistance is by way of reinstatement grant, and we believe the appropriate solution would be that, like owners of flats, owners of shared ownership leases should be assisted only by way of repurchase. Where such dwellings are repurchased, the provisions of the Bill will need to be adapted, for example, to relate the purchase price to the fact that some shares may have been purchased at defective value and others not, and, given the complicated
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nature of the modifications required and the likelihood that very few, if any, shared ownership leases of PRC houses will have been granted, we propose that the Secretary of State should be given a power to adapt the provisions of the Bill by order subject to negative resolution as and when cases of this kind emerge, which we fully expect to be very rare.
In the circumstances, I am sure that this is the right way to approach the complex question of shared ownership leases and the application of the Bill in such unfortunate cases. I beg to move.
On Question, amendment agreed to.
9.46 p.m.
Lord Stallard Lord Stallard moved Amendment No. 7:
Page 5, line 19, leave out sub-paragraph (ii).
The noble Lord said: The reasons for the amendment are simple. We say that sub-paragraph (ii) should be deleted because it is impossible for a local authority to say that an individual acquiring a freehold would be likely to be able to arrange a mortgage. Building societies are outside the control of local government and local authorities. As we know, they have been reluctant to lend on any of these properties. Certainly, local authorities have no control over building societies.
As we know—the Minister has already referred to this in reply to a previous amendment—some discussions have taken place between the building societies and Department of Environment officials. There have also been discussions, I understand, with the National House Building Council. However, what the Minister did not say was that those discussions had failed to produce any agreements. It would seem to us that the Government are therefore now attempting to put the onus onto local authorities in this regard. In view of the fact that local authorities will be completely unable to say that an individual is likely to arrange a mortgage, most private owners will be able to insist that the local authority repurchase the dwelling under the provisions of Clause 3. If this subparagraph remains, the vast majority of tenants will be able to insist on repurchase, and the cost to local authorities of repurchase and subsequent improvements will rise substantially.
The only way, in our view, that this matter can be resolved is through an agreement with the building societies at national level. It is therefore a matter on which the Minister and the Government should take the initiative. In the meantime, in our view, this subparagraph should be deleted. I beg to move.
Lord Skelmersdale: The Committee will be aware that it is not the Government's intention to encourage the re-acquisition by the public sector of houses sold into the private sector. I am sure that it is right that, wherever possible, these houses should remain in the private sector; that is what the great majority of owners will want, provided that they can be sure that when repaired, their houses will be saleable at full value and hence become mortgageable for the new owners. We have therefore decided that the main form of assistance under the Bill should be grant-aided towards the cost of reinstating the defective dwellings wherever the dwellings concerned can be satisfactorily repaired.

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Equally, noble Lords will be as aware as I am that the key requirement, if reinstatement is to be an effective means of assistance, must be to ensure that the owner of the house can sell it at a defect-free value once the repair is completed. Without this, the problem which confronts the private owner—namely, the devaluation of his asset—will remain, and the primary purpose of the Bill will be frustrated.
We have therefore provided in paragraph (b)(ii) of subsection (4), which the amendment which we are discussing seeks to delete, that, unless the authority making a grant is satisfied that the reinstatement work to be grant-aided is likely to make the house mortgageable in the private sector, it shall purchase that house. That seems to me a perfectly reasonable provision.
The noble Lord also misunderstood the onus on the local authorities when he said that they had to decide whether individuals were unlikely to arrange a mortgage. Clause 3(5) provides for the local authority to repurchase the house where it is unreasonable to expect the owner to arrange or wait for reinstatement; in other words, what I was talking about earlier this evening, and indeed on Second Reading—that the need to move is much more a criterion than the possibility of arranging a mortgage. It is this assessment which the local authority has to make.
Viscount Hanworth: I oppose this amendment. It seems to me that the Opposition is really tumbling over to help the local authorities. Surely we have got to strike a balance between their interests and those of the tenant. In this case I should have thought that the Government are right in what they have said, and we should give the benefit to the tenant. Therefore, this amendment should not be accepted.
Lord Graham of Edmonton: We are not talking about a tenant; we are talking about an owner-occupier. If we are concerned about the interests of tenants, then, of course, we are concerned about the local authority, because the people we are concerned with in this Bill are people who once were tenants. They exercised their right to buy. They did so in the knowledge of caveat emptor—let the buyer beware. They find that the property they bought, which at the time was valued at £20,000 but which they bought for £10,000, by virtue of the discounts, has now got defects which neither they nor the authority knew about at the time.
The Bill provides a very satisfactory outcome to the dilemma they have come across as owner-occupiers, not as tenants. They have ceased to be tenants. I take to heart what the noble Viscount, Lord Hanworth, said about the need to be concerned about tenants. In this situation the tenants are the tenants of the authority who, on the margin, will have to bear some of the cost of helping to bale out the previous tenant, who becomes an owner-occupier. To that extent, I am grateful for the support which the noble Viscount has given us on this point.
Lord Stallard: I, too, am grateful for what the Minister has said, and for the remarks of the noble Viscount, Lord Hanworth. I can assure him that we are very conscious of the need to maintain this balance. As my noble friend Lord Graham has pointed
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out, we are very much concerned with the owner-occupiers, and, of course, with the tenants, and therefore with the local authorities. In view of the reply the Minister has made, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 8:
Page 5, line 45, at end insert—
("(6A) The Secretary of State may by order amend subsection (4) above (whether as originally enacted or as previously mended under this subsection) so as to modify any of the conditions there mentioned or to add or substitute for any of those conditions other conditions; and an order under this subsection—

(a) may make different provision for different classes of case,

(b) shall not affect the operation of this section in relation to applications made under this section before the order comes into force.")

The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 51.
Amendment No. 51: Page 21, line 3, at end insert—
("(1A) No order shall be made under section 3(6A) of this Act unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.")
These two amendments are designed to provide a sort of safety net against unforeseen circumstances in the operation of the scheme of assistance provided by the Bill. Entitlement to reinstatement grant under the Bill is normally to be dependent on the conditions set out in Clause 3(4). There are particular cases in which these may not produce the intended result; in particular, they may lead to money being spent on reinstatement grant when it is not a sensible use of public money.
For example, where a compulsory purchase order has been made which affects the defective dwelling, an application for assistance, if pursued, could lead, under the existing conditions, to the conclusion that reinstatement was the means of assistance, but such reinstatement would entail expenditure if compulsory acquisition was to take place within a relatively limited period thereafter. This problem could be overcome by amending the conditions provided for in Clause 3(4) for such circumstances.
We think, therefore, that it would be prudent to take a power to amend the conditions by order so that we can take steps to make the scheme work more effectively in those cases. We have provided that such an order should be subject to affirmative resolution of both Houses, so that the closest scrutiny can be given to any proposals the Secretary of State may have in mind to amend the conditions in Clause 3(4). I should have thought that that would be something that would be welcomed by your Lordships. I beg to move.
Lord Graham of Edmonton: I shall be brief and I do not expect the Minister to reply. I certainly take the point not that we are covering uncharted territory, but that there will be circumstances which the Minister and his colleagues anticipate and some which they do not anticipate. I listened very carefully to the Minister when he said that there may well be cases in respect of which matters will not work out as they intend. I asked the Minister for an illustration and he gave the illustration of the compulsory purchase order where the follow through was not the purpose for which the Bill

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was designed. Therefore, what we are being asked to approve here is that, in the light of the need to seek variations, the Minister will come forward with an order which will need to be argued in the light of the then experience, in which case we shall have the opportunity of recognising that it is fair and equitable. In those circumstances we shall certainly not oppose the amendment.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Reinstatement grant]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 9:
Page 9, line 11, leave out subsection (6).
The noble Lord said: I beg to move Amendment No. 9 and, with the leave of the Committee, I should also like to speak to the new clause which the Government propose should be inserted after Clause 12, and that appears as Amendment No. 25.
Amendment No. 25: After Clause 12, insert the following new Clause:
("Reinstatement of defective dwelling by appropriate authority
.—(1) Where a relevant interest in a defective dwelling has been disposed of by a public sector authority, then (without prejudice to any of their other powers) the appropriate authority may before the end of the period within which a person may seek assistance under this Act in respect of the dwelling enter into an agreement with any person holding an interest in the dwelling or any person who is a statutory tenant of it to execute at his expense any of the work required to reinstate the dwelling.
(2) For the purposes of subsection (1) above, a disposal by or under any enactment of an interest in a dwelling held by a public sector authority is to be treated as a disposal of that interest by the authority.
(3) In this section "statutory tenant" is to be construed in accordance with section 2 of the 1977 Act or, as the case may be, section 3 of the 1971 Act.")
Clause 5(6) of the Bill already provides that the local authority may by agreement do works for a person entitled to assistance at his expense. But there will be cases where the owner of a dwelling which is a defective dwelling under the Bill is not entitled to assistance, or where there is a statutory tenant of the dwelling, and it would be in his interest for the authority to be able to do works on his behalf by agreement at his expense. We have received representations on this issue from a number of Members of Parliament—including the honourable Member for Pontefract and Castleford, whom noble Lords opposite will know well, and also from local authorities. There are doubts in the minds of some authorities about their powers to do such works.
The new clause puts the question beyond doubt and provides that local authorities may undertake works by agreement as agent on any defective dwelling so long as the agreement is made before the end of the period during which owners may seek assistance under the relevant designation under the Bill. The present Clause 5(6) therefore becomes superfluous and is deleted by Amendment No. 9. I beg to move.
Viscount Hanworth: In general we must be thankful to the Government for having shown flexibility in this Bill, which is not always apparent. However, having said that, I think that one can draw only two
1444
conclusions: either that there was inadequate consultation or thought by the Government beforehand, or that those whom they consulted did not give serious consideration to the matter beforehand, because we should not really have this amount of change at this stage of the Bill. Nevertheless, I hope that that does not spoil my congratulations to the Government for at this stage being flexible enough to alter the Bill in this way.
Lord Graham of Edmonton: Like the noble Viscount Lord Hanworth, we consider this amendment helpful, but I wonder whether we can pursue the possibilities? I am very much concerned with the opportunity for a council's direct labour organisation to be involved in these matters. Can the Minister and his advisers address themselves to the situation of a council which has a direct labour organisation which is carrying out work to one of its own properties which is next to a council house which comes within the provisions of this Bill—in other words, which has been sold and which requires reinstatement work to be carried out? Can the Minister deal with that situation?
As I understand it, the power to carry out work as an agent clearly envisages the possibility of a council's direct labour organisation being involved in these matters. The Minister is aware of the prohibition currently on councils' direct labour organisations to undertake work which is not part of their own work—in other words, it is private work, and as I understand it, outwith the powers.
If we can be assured that the point which was raised by Mr. Lofthouse is fully met by this amendment we shall be satisfied. As a result of a little research, my information is that the illustrations which bothered Mr. Lofthouse in another place and which caused the Minister and his advisers to see whether the point could be met, are not fully met. I should be grateful if the Minister could help me.
Lord Skelmersdale: Perhaps I can encapsulate the answers that were given on this subject in another place, because I understand that it is somewhat complicated. The rule about direct labour organisations is that they can do anything which the local authority has power to do itself. This Bill gives them the power to operate under certain circumstances. Therefore, if the circumstances are fulfilled, the direct labour organisation in the case cited by the noble Lord can do the work.
On Question, amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Repurchase]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 10:
Page 10, line 20, after ("Act") insert ("(except paragraph 3B)")
The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 11, 54 and 59.
Amendment No. 11: Clause 7, page 11, line 41, leave out ("paragraph 4") and insert ("paragraphs 3A and 4")
Amendment No. 54: Clause 20, page 24, line 30, after ("21") insert ("and paragraph 3A of Schedule 2")

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Amendment No. 59: Schedule 2, page 30, line 34, at end insert—
("Effect of acquisition.
3A.—(1) Where an interest acquired in pursuance of section 6 of this Act is or includes a dwelling in relation to which a grant has been paid under Part VII of the Housing Act 1974—

(a) any conditions imposed under or by virtue of that Part of that Act as conditions of the grant shall cease to be in force with respect to the dwelling with effect from the time of disposal of the interest, and

(b) the owner for the time being of the dwelling shall not be liable to make in relation to the grant any payment under section 76 of that Act (repayment of grant on demand following breach of condition) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above—
"dwelling" has the same meaning as in the Housing Act 1974; and
"owner" has the same meaning as in Part VII of that Act.
3B.—(1) Where an interest acquired in pursuance of section 7 of this Act is or includes a house in relation to which a grant has been made under Part I of the Housing (Scotland) Act 1974—

(a) observance with respect to the house of any of the conditions specified in section 9 of that Act (conditions to be observed with respect to a house in respect of which a grant has been made) shall cease to be required with effect from the time of disposal of the interest and paragraph 7 of Schedule 2 to that Act (requirements as to records when observance of conditions ceases to be required) shall apply as it applies in the case there mentioned; and

(b) the owner for the time being of the house shall not be liable to make in relation to the grant any payment under Schedule 2 to that Act (consequences of breach of conditions) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above—
"house" has the same meaning as in the Housing (Scotland) Act 1966; and
"owner" has the same meaning as in Part I of the Housing (Scotland) Act 1974.").
There will be cases where a person who has received a repairs, improvement, or intermediate grant under Part VII of the Housing Act 1974 in respect of a dwelling is eligible for assistance by way of repurchase of that dwelling under the Bill. The authority making the grant may under Part VII of the 1974 Act impose certain conditions relating to the use of the dwelling, for example, on availability for letting. Breach of such conditions may render the owner for the time being liable to repayment of the grant: this liability runs with the land and could arise, say, if the house were sold again under the right to buy after repurchase and repair.
The purpose of these amendments is to provide that, upon acquisition under the Bill, any such conditions shall cease to have effect and to prevent any liability to repayment from arising (by reason of a demand made after the acquisition) in respect of a breach of the conditions before acquisition. The amendments operate on both Clauses 6 and 7 reflecting the different repurchase provisions applying in England/Wales and Scotland. I beg to move.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Repurchase in Scotland]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 11:
[Printed above.]
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 12:
After Clause 7, insert the following new Clause—
("Purchase of certain land by authority possessing compulsory purchase powers.
.—(1) In any case where—

(a) there was a disposal of an interest in a defective dwelling, being an interest held by a person (in this section referred to as the "owner") who immediately before the time of disposal was eligible for assistance in respect of the dwelling,

(b) the disposal was made to an authority possessing compulsory purchase powers otherwise than in pursuance of section 6 or 7 of this Act,

(c) on the disposal, the authority acquired an interest in any affected land, that is to say, the defective dwelling and any garage, outhouse, garden, yard and appurtenances occupied with and used for the purposes of the dwelling or any part of it, and

(d) the amount paid as consideration for the disposal did not include any amount attributable to the owner's right to apply for assistance in respect of the dwelling,

the owner is entitled, subject to subsection (4) below, to be paid by the housing authority the amount (if any) by which ninety-five per cent. of the defect-free value exceeds the amount of compensation for the disposal.
(2) For the purposes of this section, the amount of compensation for the disposal is—

(a) the amount that would have been the proper amount of compensation for the disposal (having regard, where any relevant determination has been made by the Lands Tribunal or the Lands Tribunal for Scotland, to that determination), or

(b) if greater, the amount paid as the consideration for the disposal,

but excluding any amount payable for disturbance or for any other matter not directly based on the value of land; and in this section the "defect-free value" means the amount that would have been the proper amount of compensation for the disposal (excluding any amount so payable) if none of the defective dwellings to which the designation in question related had been affected by the qualifying defect.
(3) For the purposes of this section—

(a) it is to be assumed that the disposal occurred on a compulsory acquisition (in cases where it did not in fact do so), and

(b) where the compensation for the disposal fell to be assessed by reference to the value of the land as a site cleared of buildings and available for development then, for the purpose of determining the defect-free value, it is to be assumed that the compensation did not fall to be so assessed,

and, for the purposes of subsection (1) above, the amount of compensation for the disposal shall be reduced by the amount of any payment made in respect of the defective dwelling under section 30 or 60 of the Housing Act 1957 or section 30 of the Housing (Scotland) Act 1974.
(4) A housing authority are not required to make a payment to any person under this section unless he makes a written application to them for the payment before the end of the period of two years beginning with the time of disposal.
(5) Where a housing authority refuse an application for a payment under this section on the grounds that the owner was not eligible for assistance in respect of the defective dwelling at the time of the disposal, they shall give to the applicant a notice in writing stating the reasons for their view.
(6) Any question arising under this section as to the amount of compensation for a disposal or defect-free value shall be determined by the district valuer if the owner or the housing authority so require by notice in writing served on the district valuer.
(7) Before making a determination in pursuance of subsection (6) above, the district valuer shall consider any representation by the owner or the authority made to him within four weeks from the service of the notice under that subsection.
(8) A person serving a notice on the district valuer under subsection (6) above shall serve notice in writing of that fact on the authority or, as the case may be, the owner.
(9) In this section—
"authority possessing compulsory purchase powers" has the same meaning as in the Land Compensation Act 1961 or the Land Compensation (Scotland) Act 1963;
"district valuer" has the same meaning as in paragraph 3(1) of Schedule 2 to this Act; and
"housing authority", in relation to a defective dwelling, means the housing authority in whose area the dwelling is situated.
(10) In this section—

(a) references to the owner include a reference to his personal representatives; and

(b) the reference to appurtenances occupied with and used for the purposes of a dwelling or any part of it is, in Scotland, a reference to pertinents belonging to or usually enjoyed with the dwelling or any part of it.")

The noble Lord said: I hope that in moving this amendment I do not get the same side swipe from the noble Viscount, Lord Hanworth, as I did on a previous one. With the permission of the Committee, I should also like to speak to the consequential amendments, Nos. 26, 27, 29, 31, 32, 33, 41, 43 and 45.
Amendment No. 26: Clause 13, page 18, line 10, after ("1(6) ") insert ("(Purchase of certain land by authority possessing compulsory purchase powers) (6) ")
Amendment No. 27: Clause 14, page 18, line 32, after (" 1(6) ") insert ("Purchase of certain land by authority possessing compulsory purchase powers (6) ")
Amendment No. 29: Clause 15, page 19, line 6, after ("authority") insert ("(a)")
Amendment No. 31: Page 19, line 9, at end insert—
("or
(b) in making any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act.")
Amendment No. 32: Page 19, line 13, leave out ("as the case may be")
Amendment No. 33: Page 19, line 14, after ("completed") insert ("or in which the payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act was made, as the case may be")
Amendment No. 41: Page 19. line 27, after ("given") insert ("or payments made")
Amendment No. 43: Page 19, line 39, leave out ("and")
Amendment No.45: Page 20, line 5, at end insert—
("and
(c) in the case of any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act, the amount of the payment")
The purpose of the new clause, which is to be inserted after Clause 7, is to make provision in the Bill for cases where defective dwellings are acquired by compulsory purchase or by agreement where a compulsory purchase order would otherwise have been made. As the Bill and the relevant compensation provisions stand at present, the terms on which properties are acquired compulsorily would mean that the owner of a defective dwelling will be compensated on the basis of the defective value of the property, and, wherever the value element of the compensation is less than 95 per cent. of defect-free value, the intervention of purchase under the compensation code would have the effect of depriving the owner of assistance under the Bill. These amendments are designed to protect that owner's position. I am sure that within the general
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framework of the Bill, which I have already outlined, the Committee will approve of them. I beg to move.
On Question, amendment agreed to.
Clause 8 [Secure tenancies]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 13:
Page 12, line 10, leave out ("with") and insert ("immediately before").
The noble Lord said: Amendments 13, 24 and 57 are all pure drafting amendments—if you can have such things.
Amendment No. 24: Clause 11, page 16, line 38, leave out ("or grants").
Amendment No. 57. Schedule 2, page 29, line 11, leave out ("the landlord's") and insert ("pay for outstanding").
I beg to move.
On Question, amendment agreed to.
10.6 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 14:
Page 13, line 8, after ("shall") insert ("except where the circumstances fall within paragraph 2 of Schedule (Alternative accommodation) to this Act,").
The noble Lord said: With this amendment I should like to take also Amendments Nos. 15, 16, 17 and 61.
Amendment No. 15: Page 13, line 8, leave out from ("be") to first ("the") in line 10.
Amendment No. 16: Page 13, line 11, leave out from ("period") to end of line 14 and insert ("and where the circumstances fall within that paragraph shall be another dwelling-house which, so far as is reasonably practicable in the case of that authority, affords accommodation which meets the requirements for suitability set out in paragraph 3 of that Schedule.")
Amendment No. 17: Page 13, line 21, at end insert—
(" (7A) An authority receiving a request under subsection (7) above shall, as soon as it is reasonably practicable to do so, give notice in writing to the person making the request stating—

(a) whether or not in their opinion the circumstances of his case fall within paragraph 2 of Schedule (Alternative accommodation) to this Act, and

(b) if their opinion is that they do—

(i) which of the Cases specified in that paragraph is applicable to those circumstances, and

(ii) the effect of subsection (6) above and Schedule (Alternative accommodation) to this Act.")

Amendment No. 61: After Schedule 2, insert the following new schedule.

ALTERNATIVE ACCOMMODATION
Interpretation
1. In this Schedule—

(a) "dwelling-house" has the same meaning as in section 8 of this Act,

(b) "prospective tenant" means the person who is to be granted a tenancy under that section, and

(c) "current dwelling-house" means the dwelling-house which, on the assumption that the circumstances do not fall within paragraph 2 below, would be required to be let to the prospective tenant under that section.

Cases where change of dwelling-house is necessary
2. Circumstances fall within this paragraph if either of the following Cases is applicable to them—
Case 1
By reason of the condition of any building of which the current dwelling-house consists or of which it forms part, the dwelling-house may not safely be occupied for residential purposes.
Case 2
The appropriate authority intend, within a reasonable time of the completion of their acquisition of the interest concerned—

(a) to demolish or reconstruct the building which consists of or includes the defective dwelling in question, or

(b) to carry out work on any building or land in which the interest concerned subsists,

and cannot reasonably do so if the current dwelling-house remains in residential occupation.
Suitability of accommodation
3. The suitability of accommodation is to be assessed by reference to the following matters, that is—

(a) whether it is similar as regards extent and character to the accommodation afforded by the current dwelling-house;

(b) whether it is reasonably suitable to the means of the prospective tenant and his family; and

(c) whether it is reasonably suitable to the needs of the prospective tenant and his family having regard to proximity to place of work and place of education.")

These amendments are, in part, in response to a point made in the proceedings on the Bill in another place by the honourable Member for Norwood about the extent of local authority discretion contained in the Bill. They are also intended to clarify the position of the owner in repurchase cases and the criteria to which the authority must have regard when granting him a secure tenancy under Clause 8 of the Bill.
As drafted, Clause 8(6) gives the authority discretion as to whether the secure tenancy should be of the dwelling of which the applicant is the occupier or of another dwelling, and discretion as to what constitutes a suitable alternative dwelling if that route is chosen. These decisions could not be reviewed in the county or sheriff court under Clauses 13 or 14 respectively. Normally, we would expect the repurchased dwelling to be suitable for continued occupation for a number of years, and assuming of course that the applicant wishes to take a secure tenancy—he may well opt to buy in the private sector with his proceeds of sale—he should normally be allowed to remain in that dwelling.
In most cases it will have been the family home for a number of years. We propose therefore that the applicant should be granted a secure tenancy of the repurchased dwelling-house except where, first, the state of the defective dwelling is such that there is a risk to the life or limb of the occupier in question and other persons living in the dwelling; or, secondly, the appropriate authority intends, within a reasonable time of repurchase under the Bill, to demolish or reconstruct the defective dwelling, or to carry out work on that defective dwelling being acquired under the Bill, and cannot reasonably do so with a tenant in possession of the defective dwelling under a secure tenancy.
If the applicant is to be granted a secure tenancy of another dwelling, that other dwelling should be, as far as practicable, similar in extent and character to the house being purchased, and be reasonably suitable to the means of the person to be granted the tenancy and of his family, and to his needs and those of his family as regards proximity to place of work and education. In other words, the ex-owner and new tenant is to be in circumstances as similar as previously as the wit of man and the local authority can devise. I am sure that this is fair all round. I beg to move.
Lord Graham of Edmonton: There is only one point I should like to raise. Will the Minister recall the illustrations I gave of the Southcote Residents' Association in Reading, who have been in touch on a range of matters? I am sure that they will have seen some relief in this Bill. I recalled, as the Minister was speaking, that one of the points they raised dealt with the situation of a person who has to leave a property while it is being reinstated and the costs he faces through having to leave. It may well be that the person would be housed in some other council accommodation, but even if he were, consequential costs could fall on him. The Minister is painting an attractive picture to the effect that if a person buys a £20,000 house for £10,000 and finds it is defective, under the Bill he is entitled to plead with the authority for either reinstatement or repurchase. The Minister is saying that in certain circumstances a person having lived in a reasonable house ought to be reasonably well looked after.
Are the Minister and his advisers saying that there is any element in the understanding—it may be part of the Bill, or an interpretation of it—whereby the additional but not punitive costs legitimately incurred, and which can be validated by an occupier who is an owner-occupier who is in this transitional period, can be met by the council, by the Government, by a grant or in some other way?
Lord Skelmersdale: Whenever one moves house, whether from a rented dwelling to a rented dwelling, from a rented dwelling to an owned dwelling or vice versa, costs are inevitably incurred. The consequential costs mentioned by the noble Lord, Lord Graham, are not included in this Bill because it would be unfair to do so. On this occasion, it is unfair to the local authority to do this at the expense of other occupiers of property, whether owner-occupiers or tenants, who would not have the same resource to draw upon.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 15 to 17 en bloc.
[Printed above.]
On Question, amendments agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 18 to 22 en bloc.
[Printed earlier: col. 1436.]
The noble Lord said: I spoke to these amendments with Amendment No. 4.
On Question, amendments agreed to.
Clause 8, as amended, agreed to.
Clause 9 agreed to.
Clause 10 [Designation under local schemes]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 23:
Page 16, line 12, at end insert—
("(10) Where a designation has been made under this section by a housing authority and subject to (6)(a) and (b) above the Secretary of State shall make available to the housing authority an additional contribution to expenditure under Clause 14 of this Act.")
The noble Lord said: Local authorities may designate classes of dwelling within their own area as defective, but, in so doing, should be able to ensure that the appropriate resources are made available by central Government. I do not want to go over the allocation argument. The Minister has satisfied me that it is his intention that that be done.
Central Government have already agreed, by virtue of this Bill, to make available resources for the PRC dwellings. Therefore, if they accept that local authorities can designate further types as defective, they should also be willing to meet the costs. It should be borne in mind that under Clause 10(6), the Secretary of State has the right to veto a local authority's designated scheme within 28 days. Therefore, if he does not accept that a local authority is acting reasonably, he can take appropriate action. In other words, if the local authority does not wish to designate for a multitude of reasons—which can all be summed up in the one word "money"—then the Minister can take action. We are therefore only asking for additional financial help in circumstances where the local authority is seen to be acting reasonably by responding to defects in its own area. This could be the circumstance of the Smith houses and others that we referred to. I beg to move.
Lord Skelmersdale: To cut my response short, the question at issue is whether the Secretary of State should contribute towards the cost of repurchasing dwellings designated locally under Clause 10. The question is the proper balance of responsibility. The power of local authorities to make local designation under Clause 10 is designed to enable them to give assistance to owners who have bought dwellings which are now found to be defective by reason of design or construction faults that are peculiar to dwellings in that authority's area or in the area of only a few authorities—in other words, where there is no national problem. It must follow that those faults are the results of decisions taken at a local level as to the design or methods of construction of particular dwellings. In those circumstances, it is right, in principle, that the costs of giving assistance to owners to help them with consequences of those local decisions or practices should be borne locally and should not fall on the central taxpayer. It is this principle that is reflected in Clauses 10 and 15 in the Bill as drafted. I do not think that we should depart from it.
As a matter of fact it would be consistent with this basic principle if the Secretary of State were not to make the contributions under Clause 15 towards reinstatement grants given under local schemes made under Clause 10. We are not pressing that principle to that point and propose to take power in Clause 15 to make contributions towards expenditure on giving grants under local schemes. Reinstatement grants under this Bill have a family relationship with repairs grants under the Housing Act 1974 generally. In view of that, we think it right that we should not try to distinguish between reinstatement grants given in pursuance of a designation under Clause 1 and those given in pursuance of a designation under Clause 10.
Where grants are given under Clause 10, the Secretary of State will make a contribution to the local
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authority's expenditure at a rate of 90 per cent. This is a generous arrangement. If, as we hope, reinstatement is the main means of assistance under the Bill, the Secretary of State will contribute substantially to expenditure incurred as a result of local designations. As I said at the beginning, we do not believe it to be right for the central taxpayer to bear the entire responsibility for decisions taken at a local level. I hope the amendments will be withdrawn. If not, I must invite your Lordships to reject them.
Lord Graham of Edmonton: The noble Lord tempts me at this time of night. But I have been round the tea rooms quietly and there are more of them than there are of us—and there are very few of them. It is an interesting proposition that many local authorities who genuinely accept the equity of the need to designate where the Minister has not designated will be literally torn in their discussions as to their need to look after their local people and the additional burdens that will be borne upon them. The Minister rests on this on the premise that the houses that have the defects were taken on a narrow local basis, and therefore the local people, 20 or 30 years later, as the general taxpayers in need of housing, will have to pay more of the burden. It is rather sad and it is one of the unhappy aspects, because although the right to designate locally is provided for in the Bill, because of the need to look after other interests as well as the shortage of money I forecast that very few authorities will add that additional burden to the load they are already carrying. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Notices]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 24:
[Printed earlier: col. 1448.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 13.
On Question, amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 25:
[Printed earlier: col. 1443.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 9.
On Question, amendment agreed to.
Clause 13 [Jurisdiction of county court and rules of procedure]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 26:
[Printed earlier: col. 1447.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 12.
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Jurisdiction of sheriff in Scotland]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 27:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Secretary of State's contribution to expenditure]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 28:
Page 19, line 4, leave out ("may if he thinks fit") and insert ("shall").
The noble Lord said: Clause 15 begins:
"The Secretary of State may if he thinks fit"—
there are draconian powers and there is real power—
"in any case contribute towards the expenditure incurred".
We really want to probe the Minister. May I remind the Minister that, in discussions that we had with him outside the Committee, I was concerned to understand fully the circumstances in which the Minister, if he thought fit, would withhold his permission. What we are seeking here to do is to say that the Secretary of State shall in any case contribute; because, as we are under the impression, once a designation has been made and once the conditions under which the reinstatement grant or the repurchase can take place are fully met by the authority and the prospective seller of the house to the council, there ought to be no circumstances in which the Secretary of State is capable of withholding his authority.
We shall be satisfied if the Minister can tell us that this is a stop-gap, one cannot envisage any circumstances in which it would take place. But we certainly want the Minister to tell us under what circumstances, when his draftsman drafted this amendment, he could see it was possible for the present statutory right to be varied so that the Secretary of State would exercise his discretion.
We really want to know whether there is any need for this amendment and whether the Minister would assist the local authorities and others to help him to carry out the provisions of the Bill and certainly ease the minds of prospective sellers of houses. People may be advised that they conform in every circumstance, but some estate agent or solicitor, or some council, may say, "Well, it's all very well; you have gone as far as you can; but it is quite possible that the Secretary of State, for some reason that we don't know, might withdraw this power". We really want to know under what conditions that could occur.
Lord Skelmersdale: This is an issue which occurs in practically every Bill which comes before your Lordships, albeit in not quite such a form. I remember in the past having voted on such Bills as the Bees Bill to turn "may" into "shall", and I am sure we shall be doing the same sort of thing again.
Clause 15(1) provides that the Secretary of State "may if he thinks fit" make a contribution towards expenditure incurred by local authorities under the Bill. The noble Lord has expressed concern that this contribution should not be left to the discretion of the Secretary of State but should be mandatory; and this of course is the effect of the amendment, as he said.
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I have already explained to the noble Lord outside the Chamber, and I am happy to do so today, that Clause 15(1) is drafted in the form of a discretionary power, but this is the customary form of such provisions. The drafting is based on Section 78(1) of the Housing Act 1974, which I need hardly remind the Committee was enacted by a Labour Government and which gives the Secretary of State power to contribute towards expenditure by local authorities in making grants under Part VII of that Act. Indeed, in response to an earlier amendment, I mentioned that same Part VII.
I am happy to give the noble Lord the assurance I believe he is seeking from the Government this evening, namely, that it is the Government's firm intention that the Secretary of State should make contributions under Clause 15 towards expenditure incurred by local authorities under the Bill. In view of this, I hope the noble Lord will be able to see his way to withdrawing the amendment.
Lord Graham of Edmonton: I am most grateful to the noble Lord. I picked up very carefully that it is the Government's "firm intention", and I understand that the noble Lord is unable to accept the amendment because it changes the very nature of the commitment from being discretionary. But in effect the Minister has defined "discretionary" in such a way that I am sure those outside the Committee will understand that there will be very rare exceptions, if any at all, under which an exception would be involved. I am not putting words into the Minister's mouth; I am using those words myself. I am very happy indeed to accept the reassurance that the noble Lord gives, that the fears which have been expressed to me may very well be groundless. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 29:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
[Amendment No. 30 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 31 to 33.
[Printed earlier: col. 1447.]
On Question, amendments agreed to.
10.25 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 34:
Page 19, line 19, leave out ("and")
The noble Lord said: In moving this amendment, I think it would be appropriate if I confessed to a sin. I am frequently asking your Lordships not to ask me to pre-empt decisions and discussions that are being made by my colleagues in Government, and I regret that inadvertently I have pre-empted remarks which may or may not be made by the noble Lord, Lord Graham, and indeed by my noble friend Lord Sandford. In speaking to this amendment I think it would be appropriate if I spoke also to Government Amendments Nos. 35, 36, 38, 39 and 40.
Amendment No. 35: Page 19, line 20, after ("repurchase") insert ("or of any payment under section (purchase of certain land by authority possessing compulsory purchase powers) of this Act, being a case in which there has at any time been a disposal of a relevant interest in the defective dwelling concerned by the housing authority or any authority being their predecessor")
Amendment No. 36: Page 19, line 20, at end insert— ("and
(c) in any other case of repurchase or payment under that section, 100 per cent.
Amendment No. 38: Page 19, line 21, leave out ("either case") and insert ("any of those cases")
Amendment No. 39: Page 19, line 23, leave out ("or any class of assistance") and insert ("or payments, or any class of assistance or payments")
Amendment No. 40: Page 19, line 24, after ("given") insert ("or made")
I also think it would be helpful to the Committee if, with this group, we could discuss Amendments Nos. 44 and 46, standing in the name of the noble Lord, Lord Graham of Edmonton.
Amendment No. 44: Page 19, line 43, leave out from ("Act") to the end of line 5 on page 20.
Amendment No. 46: Page 20, line 5, at end insert— ("and
() in the case of repurchase of dwellings owned previously by a public sector authority, not being the present housing authority or predecessor to that authority, the price paid for the acquisition of the interest concerned, together with any amount reimbursed under section 9 of this Act.")
All these amendments are concerned with the operation of the percentage of expenditure incurred by local authorities to be met by the Exchequer under Clause 15.
As I have said, I do not wish to anticipate what noble Lords may wish to say in speaking to their amendments, but I would hope that they might see their way not to move them, in the light of what the Government amendments propose.
Under Clause 15, subsection (5) limits, the Exchequer contribution to local authorities' expenditure in cases of repurchase would be a contribution equal to 75 per cent. of the price paid to the owner, less the defect value of the dwelling repurchased. The amendments tabled by noble Lords opposite seek to remove the defective value of the dwelling repurchased from the calculation of the Exchequer contribution: in other words, they seek to make that contribution 75 per cent. of the amount paid to the owner.
The first Opposition amendment, No. 44, would apply to all cases of repurchase and the second amendment only to repurchases of dwellings not sold originally by the housing authority: for instance, a house originally provided and sold by the National Coal Board.
The Government cannot accept these amendments. In both cases they ignore the fact that the housing authority will be acquiring an asset worth the defective value of the dwelling they repurchased. While that asset is retained, it will usually be capable of gaining rent without anything having to be spent on it for some years. It is right, therefore, that that value and stream of income should be taken into account in deciding the appropriate scale of the contribution by the taxpayer.
I would also remind the Committee that where the housing authority originally sold the dwelling, they
1456
will often have received a capital receipt from the sale. We do accept, however, that this will not have happened in those cases where they are purchasing dwellings originally sold by another public sector body. I quoted earlier the example of a National Coal Board house.
We feel that a strong case was put to me on Second Reading and subsequently followed up in discussions between myself, the noble Lord, Lord Graham, and representatives of the Association of Metropolitan Authorities and the Association of District Councils. We feel that this has great merit. The Government amendments have been brought forward in the light of those discussions. They provide that, where housing authorities are obliged under the Bill to repurchase a dwelling which was originally sold by another public sector body, the Exchequer contribution under Clause 15 will be 100 per cent. of the difference between the amount paid to the owner and the defective value of the dwelling repurchased.
I think the Government have gone some considerable way towards meeting the concern of local authorities in this matter, and I hope that noble Lords will recognise that where the local authorities put up a genuine and reasoned case they will be listened to. I hope that noble Lords opposite will agree that we have taken a reasonable attitude and, as I have suggested, will not move the amendments tabled in their names. But I shall be most interested to hear their reactions to what I have just said in moving my amendment.
Lord Sandford: Before the noble Lord, Lord Graham, indicates what he wishes to do with his amendment, may I say, on behalf of the Association of District Councils, that we welcome the Government's recognition of the special case that arises where the local authority is having to deal with houses which were provided in the first place by other public bodies such as the National Coal Board, the Atomic Energy Authority and so on?
In those cases, there really is no case for the local authority having to meet any part of the cost, and I was glad that my noble friend did not claim to have gone all the way to meet us, because if he had done so he would also have accepted the case that there is for the local authority being paid a fee for dealing with these particular houses. There are cases, in mining towns in particular, where these properties, which were provided in the first instance by the Coal Board, have to be dealt with quickly, because this is an urgent matter in the case of private owners. They cannot be part of the local authority's planned expenditure, because the houses have nothing to do with their housing stock. They have to be dealt with while there are other houses designated as defective, and therefore felt by their tenants to be defective, which cannot be dealt with because the authority is acting as agent in respect of these houses provided by other public authorities. I am sorry that my noble friend was not able to go that far, because this still leaves the housing authorities with something of a problem. But he has met the main point, which is that there should be 100 per cent. grant in these cases, and we are grateful to him for that.
Lord Graham of Edmonton: I want to say immediately that I fully share the satisfaction of the noble Lord, Lord Sandford, with the manner in which the Minister and his colleagues have sought to go a considerable way on this aspect of the Bill. I think it has been done genuinely, on the basis of looking at the special inequity that would flow to authorities who, through no fault of their own—not having bought the houses, and not having had any capital receipts—are faced with what we consider to be some of the liabilities.
I am very grateful to the Minister for Housing himself, who took a special interest in this matter and who arranged for very fruitful discussions to take place with the Association of District Councils and the Association of Metropolitan Authorities, together with the Minister and myself. The outcome of those discussions was the move towards the present situation. When I look at the authorities which are likely to be assisted, I see that some will be assisted considerably. For example, when I look at the document which was issued by the department last November (the blue book) I see, so far as the known extent of the problem is concerned, under the heading "Owned by other Public Bodies" that in Leeds there are 210, in Rotherham 361, in Wakefield 230, in Mansfield 144, in Colchester 130, and in Huntingdon 462. There are other statistics which clearly indicate that some authorities will be substantially benefited by the movement that the Minister has made.
Therefore I am not inclined to be churlish—I am certainly not churlish at any time—or to be dog in the mangerish about some other matters for which we should have liked to see some easement. The Minister has satisfied many people, not least the authorities and the councils that they represent. Certainly, he has assisted the passage of the Bill and therefore we are very pleased indeed not to move our amendments. So we are very grateful to the Minister for the action he has taken.
Lord Skelmersdale: I am most grateful to both noble Lords. I am reminded of Pooh, who always wanted more honey, of Oliver Twist, who asked for more, and of the young girl who went home and assured her mother that she had not gone all the way. So far as a fee to local authorities is concerned, which was raised by my noble friend Lord Sandford, this would involve a precedent which I have a feeling local authorities themselves would not like in other parts of their relationship between local and central government. So it might be appropriate at this moment if we left the discussion there.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 35 and 36:
[Printed above.]
On Question, amendments agreed to.
10.35 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 37:
Page 19, line 21, leave out ("other") and insert ("higher").
The noble Lord said: If the Minister can reassure us on this matter, we shall be happy to withdraw the amendment. We are talking in terms of the percentages which are applicable and are saying that page 19, line 21, of the Bill should read:
"or such higher percentage as (in either case) the Secretary of State may with the consent of the Treasury by order specify".
We are uncertain about the percentages which will be engraved upon the hearts of borough treasurers and individuals who seek advice and guidance. If there is no intention to reduce the figure, we are saying that if there is a variation it can only be increased. In times of financial stringency, or for any other reason, we should not want there to be a watering down or a dilution of the benefit which appears on the face of the Bill. I beg to move.
Lord Skelmersdale: I have already given half of the assurance for which the noble Lord was looking on a previous amendment. I can assure the Committee that the Government have no intention of reducing the percentage contribution from that stated on the face of the Bill.
Lord Graham of Edmonton: With that assurance—which I accept is very fair and clear—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 38 to 40:
[Printed above.]
The noble Lord said: I beg to move Amendments Nos. 38, 39 and 40 which were spoken to with Amendment No. 34.
On Question, amendments agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 41:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 42:
Page 19, line 30, at end insert ("provided that such provision is at all times higher than that described in subsection (3) above")
The noble Lord said: I beg to move Amendment No. 42 which gives to the Minister the opportunity to repeat the assurance which he gave on Amendment No. 37: that there is no intention to do other than give effect to what appears on the face of the Bill. I should like to hear the Minister say that again, because the words are lovely‡
Lord Skelmersdale: To save time, perhaps I might say "Ditto".
Lord Graham of Edmonton: I beg to leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 43:
[Printed earlier: col. 1447.]
The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.
On Question, amendment agreed to.
[Amendment No. 44 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 45:
[Printed earlier.]
The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.
On Question, amendment agreed to.
[Amendment No. 46 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton had given notice of his intention to move Amendment No. 47:
Page 20, line 5, at end insert—
("and
() in all cases of repurchase, the cost incurred by the housing authority in rectifying the qualifying defects and associated works; the costs incurred in design, supervision and administration; and all other reasonable costs.")
The noble Lord said: In rising to say that I do not intend to move this amendment, I should point out that this is part of the HIP allocation syndrome. We are saying that councils should have reimbursed to them the cost of repairs after repurchase. However, the Minister has satisfied me that the intention is to make provision for this, and that the money required for the purpose will be taken into account when the HIP allocations are made. All I wish the Minister to do is to raise his eyes and nod his head. He has done so and the record will show that the Minister has indicated that my understanding is at one with his.
[Amendment No. 47 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton had given notice of his intention to move Amendment No. 48:
Page 20, line 16, at end insert ("save that for the avoidance of doubt it is hereby declared that payment by the Secretary of State under this section shall be payable notwithstanding that the Housing Revenue Account of the recipient authority is not in deficit.")
The noble Lord said: This amendment is on a par with the earlier amendments. Therefore I do not intend to move it.
[Amendment No. 48 not moved.]
Clause 15, as amended, agreed to.
Clause 16 agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 49:
[Printed earlier: col. 1439.]
The noble Lord said: I spoke to this amendment with Amendment No. 6. I beg to move.
On Question, amendment agreed to.
Clause 17 [Rules and orders:]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 50:
[Printed earlier: col. 1439.]
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 51:
[Printed earlier: col. 1442.]
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 52:
[Printed earlier: col. 1439.]
On Question, amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18 [Expenses]:
Lord Stallard Lord Stallard moved Amendment No. 53:
Page 21, line 15, at end insert ("and the expenses incurred by the Secretary of State under this Act and any increase attributable to this Act shall be in addition to the Housing Investment programme allocation made available to local authorities for 1984–85 and additional to the published expenditure plans for future years").
The noble Lord said: Notwithstanding the atmosphere that has prevailed for the past few minutes, I think that I ought to move this amendment, however briefly, in the hope that the noble Lord the Minister will repeat some of the assurances he has already given us. In moving this amendment it is appreciated that it can never be certain that any monies made available through the housing investment programme are genuinely additional.
However, the clause as it is worded gives us no assurance whatsoever that the money incurred by this Act will in any way be additional. Indeed, on the investment programme allocations for 1984–5, and those proposed for future years, the Government have continued to cut the housing capital programme, and the money provided for defective dwellings is simply having to be made available by local authorities from the expenditure which would have gone on other heads. We have already mentioned a number of these aspects in previous amendments. Unless additional resources are made available therefore other areas of housing activity will suffer. Bearing in mind that housing investment programmes have already been cut by the present administration by 45 per cent. since 1979 in real terms local authorities are simply unable to cope with any additional responsibilities without additional resources.
We know already that new housebuilding has suffered and suffered quite dramatically in many areas. Council repair programmes have been sadly neglected and the results of this can be seen in any inner city; and certainly in London. Great areas in London stand neglected because of this. In the present 1984–5 HIP negotiations I understand that the Government have shown a willingness to redistribute resources between authorities, and that is completely different to giving additional monies. As I understand the situation, it is simply a redistribution of the existing monies between local authorities.
But the Association of Municipal Authorities have found in their discussions with local authorities that authorities with known large defects problems have actually received a decrease in allocations. In other words, this redistribution has resulted in some authorities with huge problems receiving less in their HIP allocation than they are entitled to. Our purpose therefore in moving this amendment is to ensure that not just a redistribution takes place but more additional resources outside the existing framework is necessary if local authorities are going to have to take on the extra duties and burdens provided for in this Bill. I beg to move.
Lord Skelmersdale: There is really very little, if anything, that I can add on housing investment

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programme allocations and the local authorities' expenditure which has not been said before. What I think I can say is that I am horrified—and I am sure the noble Lord, Lord Sandford, who regrettably has left the Committee—by the suggestion—I think it was originally from the noble Lord, Lord Graham—that there should be divisions into sections of the global HIP. I cannot believe that any sane local authority would want this because it would mean that they were not able to transfer the money to where they very properly feel it needs to be used in their own area after the HIP allocation has been given to them.
I do not believe that this is appropriate. If I was the Minister for Housing—noble Lords will welcome the fact that I am not, and I rather think that I might join them—then I should say that this was a non-starter. When there is something that I can add to what I have said on HIPs—not just in respect of this matter but generally—then either I or my noble friend Lord Bellwin will come to the House and tell your Lordships.
Viscount Hanworth: There is only one thing that can be said about this. It seems that the Government are introducing legislation—the Housing and Building Control Bill was another instance—which requires extra expenditure, all of which presumably comes out of the same Vote in the end, without any guarantee that this Vote will be increased. One must point this out again and again and again.
Lord Graham of Edmonton: May I respond to what may very well have been a misunderstanding arising from my earlier remarks? When the HIP allocation is made, the Ministry (which means the officials) need to be satisfied what it is that the bid is designed to meet. There may be a bid of £10 million, for instance. They will need to ask, "What do you intend to spend the money on?" The council may reply that it has a problem with three big council estates which need completely rewiring, and that together with work on two other estates, £6 million is needed for that. The council may also have a need to take account of other repairs and to build certain houses. In this instance, the council may need to take account of the fact that it has so many houses which are defective. The council may need £15 million for those purposes. In addition, it may need to make allowance for improvement grants.
One of the problems in Birmingham which I well recognise is that there is an enormous backlog of improvement grant demands. When the council in Birmingham calculates its needs, it has to ask, "How do we satisfy the needs of a growing list of people who want legitimately to tap a legal source of public funds to improve their houses?" One of the problems which Birmingham will have to face is that there will be an additional head under which to start to built up the council's case for the global sum involved.
The Ministry then has to make a decision in the light of its overall restrictions. It will say, "Here is an authority that needs £15 million and which has a case for £15 million. But we are going to allocate £9 million because that is fair in our view". What I am really saying is that of course it is right that the Ministry do not have to allocate that sum and say that £4 million
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is for one purpose and £3 million is for another. An authority is free to exercise virement across the board. It has the £9 million and can spend it all on one of its needs rather than on another. But we are saying that the authority needs to be satisfied that there is a sum of money which has been clearly given, and which is understood by both the authority and the Ministry as being designed to meet this additional burden.
Having said that, a local authority might very well decide that it was not going to meet its commitment under a certain head because, as I believe the Minister said, no one has an absolute right to insist that the authority shall give them a reinstatement grant, et cetera. All we are saying is that the Minister should take on board the problem that an authority which wishes to meet all its obligations has; that there will be a further problem in addition to all the problems it has now.
Lord Skelmersdale: Yes, but what I was saying was that if the local authorities go too far along that road, as the balance, if one likes, there will have to be a direction from central government that the local authority will at the end of the day spend that money on those particular projects. It is that which I suggest is not in the interests of local authorities. But I take the point that the noble Lord has made.
Lord Stallard: I have listened to the Minister. We have repeated in a number of the amendments the question of the HIP allocations. I do not doubt that we shall return to that at a later stage of the Bill. I think that it represents one of the two most controversial elements—the discriminatory nature and partiality of the Bill and the lack of adequate resources. The noble Viscount, Lord Hanworth, underlined that fact perfectly well. The Government seem intent on introducing new measures at a time when local authorities are probably suffering the most stringent financial controls that they have ever suffered. We have listed the restrictions, cuts and restraints on local authority expenditure. As I have said, I have no doubt that we shall return to this issue at later stages of the Bill. For the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 agreed to.
Clause 20 [General interpretation]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 54:
[[Printed earlier: col. 1445.]
On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 agreed to.
Clause 22 [Short title, commencement and extent]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 55:
Page 26, line 40, after ("appoint") insert ("but not earlier than 1st April 1985").
The noble Lord said: This amendment may well have been overtaken by earlier amendments and particularly the concession that the Minister has given

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us, for which again I express our appreciation. In this amendment we are concerned to try to rationalise the period that the authority will need before beginning operations. For instance, an allowance cannot possibly be built into the HIP allocation for the current year to take account of that. The Bill will go from this place to another place, and then receive Royal Assent. One assumes that within a matter of weeks after that it will be enacted; the appropriate orders will begin to flow, and then the moneys to be made available by central government and the local authority will need to be found.
We seek to make the Bill effective from 1st April next year, when an HIP year begins. If the Minister can tell us that, if the Bill comes into operation before that, there is a mechanism built-in, if not retrospective, at least for next year's allocations, to make provision to meet the financial obligations, I am sure that that will satisfy those outside who asked me to put forward the amendment. I beg to move.
Lord Skelmersdale: I can tell the noble Lord that the first alterations that may be necessary to HIPs are already under discussion. Indeed, the few dwellings that will be involved in the remaining months up to 1st April have already been taken into account in setting this year's HIPs, so we are in advance of the situation that he warns us of.
Further than that, as I have said again and again, the real point of the Bill is to help poor, unfortunate people who are in this position through absolutely no fault of their own. The sooner that we can get it onto the statute book, the sooner they will be helped.
Lord Graham of Edmonton: I appreciate that. When a local authority asks me where it is to get the money from. I shall answer, "You have already had it." If it was built into this year's HIP and it was possible to forecast the extent to which it was needed then, in effect, local authorities have already had in this year's HIP a notional figure based on a hypothesis. Let us hope it was right. In that circumstance there is no need for this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 agreed to.
Schedule 1 agreed to.
Schedule 2 [Repurchase]:
10.56 p.m.
Lord Stallard Lord Stallard moved Amendment No. 56:
Page 28, line 32, at end insert (", less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned.")
The noble Lord said: It appears that the amendment as printed on the Marshalled List contains a typographical error in that the word "than" after "less" should not be there. In other words, the amendment should read:
"less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned".
The word "than" should not be in the amendment, as it gives it totally the opposite meaning.
I think the purpose of the amendment is reasonably obvious. We say that the discount should be repaid. It was given in the first instance to encourage tenants into owner-occupation and if they return to rented premises, the discount should be returned. It seems perfectly reasonable to suggest that.
The cost-flow provisions of the Housing Act 1980 and the second discount entitlement provisions of the Housing and Building Control Act 1984 are not adequate protection against financial exploitation, particularly if the dwelling is repurchased in the future by another member of the household. We shall develop that point in a number of other discussions.
We suggest, too, that if the amendment is successful—and I hope the Minister will accept it—perhaps the Minister himself might move a further amendment to allow a tenant a completely new and unfettered discount in the fresh circumstances on any new or subsequent purchase. I would also point out that this amendment will give an incentive to the present owner to buy another house and remain in owner-occupation, rather than exercise his easy option of becoming again a tenant paying rent. For those obvious reasons, I beg to move.
Lord Skelmersdale: I must say I am rather surprised by the amendment moved by the noble Lord, Lord Stallard. It is so uncharacteristic of him. It is sniping at a small section of those people who have exercised their right to buy which has been given to them after, I should be the first to admit, quite a struggle in debates in Parliament on two occasions—in 1980 and again this year.
What the noble Lord is seeking to do is to disadvantage the ex-owner of the defective house which is repurchased by the local authority at the expense of another owner who is very much better off and who can sell his non-defective house, which he has bought under the right to buy, on the open market and then apply to become a tenant again. Obviously he will not go into a high position on the council waiting list, but there is no earthly reason why he should not get on to the council's waiting list and start the process again, if that is his wish. In this I think that the noble Lord's amendment is, as I said, disadvantaging the ex-owner of a defective house as against somebody in the open market. I do not think that is what the noble Lord intended.
Lord Stallard: I certainly had no intention of sniping. That is not our intention, but I take the point the Minister makes. In the amendment that I shall be moving in a few seconds' time, the motive will perhaps be clearer. In the meantime, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 57:
[Printed earlier: col. 1448.]
On Question, amendment agreed to.
Lord Stallard Lord Stallard moved Amendment No. 58:
Page 29, line 22, at end insert—
("(f) that a reduction in value be made where, in accordance with section 2(3)(c) of this Act, the price for disposal took some account of the presence, or latent presence, of the qualifying defect.")
The noble Lord said: This is a slightly different argument. I am sure that the noble Lord the Minister will notice the difference without my making a long speech. Where the original disposal has taken some account—even though it may not be adequate—of the defective nature of the type of dwelling, that part should be reimbursed. This is a fairly straightforward amendment. If the price was reduced to some extent by the public sector authority because of the defects, the value upon repurchase should be reduced by a commensurate amount. I beg to move.
Lord Skelmersdale: As the noble Lord explained, although not quite so specifically as I shall, Clause 2(3)(c) provides that one of the conditions of eligibility is that the price paid by the owner should not have taken any, or any adequate, account of the defect. It is theoretically possible that an owner will be eligible for assistance and that the price paid by him took some account of the defect. I say "theoretically" because I think that that is so rare a possibility that one can for all practical purposes discount it.
The condition in Clause (2)(3)(b) provides that the owner must have been unaware of the defect when he purchased the dwelling. If he knew of the defect he is not eligible, so I see no scope for abuse of the provision. We have, however, included the provision in Clause 2(3) (c) to cater for the possibility that the price may have been agreed at a level which reflected, to some extent, the existence of, perhaps, what was considered to be superficial damage but in reality has emerged to be a serious structural fault that we have been talking about throughout our consideration of the Bill. The reduction in purchase price would obviously be totally inadequate to deal with that major defect. Obviously, in such cases, it would be right to reduce the repurchase value under the Bill.
I think that we have covered, albeit in a slightly different way, the point that on this occasion has been worrying the noble Lord. I hope that in those circumstances he will feel able to withdraw the amendment.
Lord Stallard: I am grateful to the noble Lord for that reply. When he says that these will be exceedingly rare circumstances and, therefore for that reason he cannot accept the amendment, I would have thought that if they are to be that rare he could equally accept it. I am prepared to read what he says and take advice on it because he has covered different ground. Perhaps we shall then come back to the matter at the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 59:
[Printed earlier: col. 1445.]
On Question, amendment agreed to.
Lord Stallard Lord Stallard moved Amendment No. 60:
Page 31, line 1, leave out paragraphs 5 to 9.
The noble Lord said: This part of the schedule—the start of the word "schedule" would be pronounced as
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"sk" where I come from, but that is another matter—runs entirely contrary to all established practice and imposes an unacceptable obligation on local authorities to discharge all existing charges that would have been created by the private owner. All of us know the existing situation and that local authorities have never been expected to accept this burden previously.
In normal circumstances, when a purchaser is buying a house, it is up to the existing owner to discharge his responsibilities for mortgages, legal expenses and so on, whereas this Bill expects local authorities to take such responsibility. While the owner would retain a personal liability, the local authority would have to pursue this against him without any security at all. This runs contrary to all existing practices and procedures that have lasted for a long time. With those few remarks, I hope that the noble Lord the Minister will be able to accept our proposal. I beg to move.
Lord Skelmersdale: The noble Lord, at the last moment of tonight's Committee stage, has hit upon a very complicated problem. I hope therefore that he will not mind if I spend a little time on my answer. The purpose of Part II of Schedule 2 is to ensure that an interest in land acquired by an appropriate authority is unencumbered by any charge—typically a mortgage—to which that interest was subject immediately before its acquisition. Many of the dwellings acquired in pursuance of Clause 6 will be mortgaged. Some bought under the right to buy will also be subject to a charge to secure the repayment of discount. Where an interest in land subject to a mortgage or other charge is being sold, there are two possibilities: either the mortgagee or the chargee can release that interest from the charge, on payment of the sum due, before the sale takes place, or the interest passes to the new owner subject to the mortgage or charge which binds the interest in the hands of the new owner.
Further, where an interest in a defective dwelling is acquired in pursuance of Clause 6, it could as a result of various actions by the owner he mortgaged for an amount which exceeds the price payable under Part I of Schedule 2. In such a case the mortgagee or chargee—or more than one of them if there are several charges—may not on the sale be able to recover all the money owed to him. The purpose of Part II of the schedule is to ensure that a mortgagee cannot prevent or delay an acquisition in pursuance of Clause 6, that an interest in land acquired under Clause 6 is free of any such charge in the hands of the appropriate authority, and that the purchase price is applied in paying off the charges according to their priority.
It is possible that, where a mortgage or charge is discharged by virtue of these provisions, a mortgagee will find that the interest in land is discharged from his interest and that he receives less than the sum due under the mortgage. However, the mortgagee will have received more money than he could have expected had he exercised his power of sale; and, indeed, more money would be available for the redemption of charges than the security is actually worth. Even after the charge on the interest in land has been discharged, the mortgagee would still have an action to recover the debt against the mortgagor on his contract.

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In a conventional sale of a dwelling-house under English law the mortgagee is represented when the transaction is completed, and on payment of the sum due to him he releases his charge on the land. Nothing in Schedule 2 will prevent this happening where agreement can be reached. Paragraph 8 of the schedule preserves the position in this respect.
Paragraph 6 of Schedule 2 secures the discharge of an interest from a relevant charge. Paragraph 7 ensures that the purchase price is paid to the mortgagees for the purpose of redeeming the charges rather than to the mortgagor, so the mortgagor cannot simply disappear with the money; and if the authority do not either apply the money in redeeming the charges or pay it into court under paragraph 9, the charge on the land is not discharged. The effect of paragraph 8 has already been described. Paragraph 9 deals with the case where it is difficult to ascertain how much is payable, or to whom, in relation to any charge; in such a case the money or part of it may be paid into court.
These provisions are complicated, as I said, but I hope the Committee will agree that the policy is desirable and that they do justice in a case where there may not be enough money to go round. The provisions are not unprecedented—surprise, surprise‡ There are similar provisions in the Leasehold Reform Act 1967 relating to the discharge of charges on the landlord's interest.
Part II does not apply to Scotland. Instead, Clause 7(3) requires that the seller offers a good and marketable title to the defective dwelling. This is the normal conveyancing position in Scotland and it is not necessary to devise similar provisions for Scotland.
I do not possibly expect noble Lords opposite to take a decision tonight on this matter, but I hope they will read very carefully what I have said; and, if necessary, I shall come back to them in correspondence.
Lord Stallard: I am grateful to the noble Lord the Minister for that explanation. He will not be surprised if I say that I expected him to say that. I daresay that all noble Lords present will have understood completely and totally the burden of his reply. Certainly we will read with great care what the Minister has said; and no doubt, as he will accept, we will return to this at later stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2, as amended, agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 61:
[Printed earlier: col. 1448.]
The noble Lord said: I spoke to this amendment with Amendment No. 14. I beg to move.
On Question, amendment agreed to.
Schedule 3 agreed to.
House resumed: Bill reported with the amendments.

Dartford Tunnel Bill [H.L.]
Returned from the Commons with amendments; the amendments considered and agreed to.

Shrewsbury and Atcham Borough Council Bill [H.L.]
Returned from the Commons with amendments; the amendments considered and agreed to.
House adjourned at ten minutes past eleven o'clock.