Lords Sitting of 12 March 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 Rochester.

American Bases in Britain
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in the light of Dr. Gilbert's statement in the House of Commons on 20th July 1977 (col. 608) that US forces had defence facilities at more than 100 locations in this country, they will reconsider the answer given by the Lord Belstead on 3rd May 1983 (col. 62) that Lord Jenkins of Putney had "thought up" this figure.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): No, my Lords.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that the figure of more than 100 locations described by his noble friend Lord Belstead—who I am glad to see in his place—was a figure given by Dr. John Gilbert when he was Minister for Defence? Therefore, it was not, as the noble Lord, Lord Belstead, said, a figure plucked out of the air. Neither was it a false allegation because I draw the noble Lord's attention to the fact that, since then, the Commander-in-Chief of the United States Army Air Force told Congress in 1982 that there were 112 United States installations in the United Kingdom. Therefore, is it not the case that it would be courteous and in accordance with the customs of the House if the noble Lord, Lord Belstead, were to decide to withdraw the allegations that he made?
Lord Trefgarne: My Lords, I think that my noble friend was as much at a loss to decide from where the right honourable gentleman had obtained his answer as he was regarding the noble Lord.
Lord Jenkins of Putney: My Lords, but this is not a matter which can easily be brushed aside. What is being done here—
Noble Lords: Question!
Lord Jenkins of Putney: My Lords, is it not the case that the questioner is being pilloried in this case? It is being suggested that the questioner invented the figure. Is it not the case that I have proved that the figure was not invented, that it was quoted by the Government on a previous occasion, and that it has been quoted by a General in the United States Air Force? I am prepared to give chapter and verse on that. In those
480
circumstances, is it not right that the suggestion that the figure was invented should be withdrawn?
Lord Trefgarne: No, my Lords, I do not think it is right at all. If the noble Lord will study again the remarks of my noble friend he will see that my noble friend was as much at a loss, as I said just now, as to the answer from the right honourable gentleman, Dr. John Gilbert, as he was about the observations of the noble Lord.
The Earl of Lauderdale: My Lords, does my noble friend agree that there is a critical difference between the word "installations" and the word "locations"; both used by the noble Lord opposite to confuse?
Lord Trefgarne: My Lords, I am sure that my noble friend is right. That may be the cause of one of the noble Lord's misapprehensions.
Lord Jenkins of Putney: My Lords, may I trespass further upon your Lordships' time. I should like to point out—
Noble Lords: Question!
Lord Jenkins of Putney: My Lords, I should like to ask whether it is not the case that if the difference between us here is a matter of nomenclature then that should be said and the veracity and the accuracy of the questioner should not be put in doubt?
Lord Trefgarne: My Lords, the noble Lord is entitled to his point of view, but I am afraid I do not agree with him.
Lord Cledwyn of Penrhos: My Lords, I wonder whether the noble Lord, who is always fair in these matters, would give rather more assistance to my noble friend? Would the noble Lord agree that it is a fair Question and refers specificially to "100 locations in this country"? Is it the case that there are 100 "locations", or is it the case as the noble Earl, Lord Lauderdale, said, 100 "installations"? Will the noble Lord the Minister be good enough for the benefit of the House to clarify the position beyond peradventure; otherwise my noble friend cannot be satisfied with the Answer?
Lord Trefgarne: My Lords, I have in fact provided one, or perhaps two, Written Answers to the noble Lord, Lord Jenkins of Putney, giving him the detail of the matter. As the noble Lord opposite may not be aware, we have answered on several occasions that there are about 64 of these facilities.
Lord Jenkins of Putney: My Lords, is it not the case—
Noble Lords: Oh!
Lord Jenkins of Putney: My Lords, I am sorry to trespass upon the House, but we must be accurate. Is it not the position that the 112 installations described by the United States General to Congress do exist in this country and that the noble Lord, in suggesting that that is not the case, is merely juggling with the figures?
Lord Trefgarne: My Lords, the position is as I and my noble friends have told the noble Lord on a number of occasions.

Fatal Accidents in the Home
2.40 p.m.
Lord Auckland: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many fatal accidents in the home were brought to their notice in the years 1975–83; whether a majority of such accidents occurred in multi-occupation properties; and whether they are satisfied that relevant legislation currently in force is being observed.
Lord Lyell: My Lords, for the years 1975–82 the total number of fatal accidents in the home in the United Kingdom was 39,348. The figures for 1983 are not yet available. Only in the case of deaths from fire is the type of building known. In 1982 in the United Kingdom deaths from accidental fires in dwellings were, as far as single occupancy dwellings are concerned, 420; for multiple occupancy, 234; and for others and unspecified, 13. The Government are in general satisfied that the current legislation is being observed, but in the case of consumer legislation we see scope for more effective enforcement. The Government expect to announce proposals before long.
Lord Auckland: My Lords, I thank my noble friend the Minister for that Answer. In declaring a non-financial interest as an honorary vice-president of RoSPA and also chairman of the all-party Home Safety Committee when it existed, may I ask my noble friend whether he is aware that this Question is not discriminating against multi-storey, multi-occupation homes? Is he aware that there are instances of unguarded electric fires and oilstoves still being used in some homes, which is illegal under the Home Safety Act? Will he do his best, hearing in mind his Answer, to expedite legislation on this very important issue?
Lord Lyell: My Lords, the answer to my noble friend's first supplementary question about nondiscrimination is, yes. I am very grateful to him for offering me that chance to put the record straight. I would ask him to await comments on the survey which I mentioned in my main Answer. I cannot promise to bring legislation forward. We shall have to see what are the results of the survey.
Lord Graham of Edmonton: My Lords, is the Minister aware that fire is the prime cause of fatalities in houses in multiple occupation? Is he further aware that the greatest number of such houses lie in Greater London and the metropolitan counties? Would the Minister care to tell us what special steps he and his colleagues in the Government are taking to ensure that when those authorities are abolished, not only will their responsibilities be passed to the appropriate local councils but those councils will have sufficient resources and the will to carry out the additional responsibilities?
Lord Lyell: My Lords, I think that the main thrust of the noble Lord's supplementary question goes a little wide of the Question on the Order Paper. But I can assure the noble Lord and all your Lordships that it has traditionally been felt justifiable, because the actions of one occupier in a house in multiple occupation may put another at risk—and the noble Lord has pointed out the danger of fire—to apply statutory measures designed to ensure that satisfactory means of of escape are provided in the event of fire. The noble Lord will be aware that all these measures are spelt out in the various Housing Acts from 1961 right through to 1980.
Lord Ennals: My Lords, in the context of consumer safety, is the noble Lord the Minister aware of the serious problem of small children being poisoned by the ingestion of household products such as bleach, turpentine, weed killers and a number of other products? Do the Government have under consideration the report of the Working Party on Child-Resistant Closures73X2014;of which I happen to be a member—which proposes that they should be compulsory for a small range of poisonous household substances which have been the cause of poisoning in the case of a number of small children?
Lord Lyell: My Lords, I am afraid that I was not aware of that report. I shall certainly study it. I assure the noble Lord that the Government are studying the problem of consumer safety, as I said in my main reply. I stress that, in the period set out in my noble friend's Question, the percentage of fatal accidents caused by such things as non-medicinal products and children taking tablets and similar things, which the noble Lord mentioned, is less than 10 per cent. Of the total number of fatalities.
Lord Ennals: My Lords, will the Minister accept that, even though the number of deaths from such poisoning is very small, the number of children admitted to hospital is substantial? Only a small proportion of such accidents may result in death, but does the noble Lord not agree that the number of deaths is not an adequate way of determining danger?
Lord Lyell: My Lords, I think we are straying a little wide of the Question on the Order Paper. I am grateful to the noble Lord for drawing our attention to the matter, and we shall study his remarks carefully.

Experiments on Animals: Inspection
2.46 p.m.
Lord Auckland: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many visits the Home Office Inspectorate made during the past five years to establishments where experiments on live animals are carried out; and how many prosecutions have taken place as a result of these visits.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the latest five years for which figures are available are the years 1978 to 1982. In 1978 inspectors made 6,410 visits to departments within 573 registered places. In 1979 they made 5,791 visits to 578 such places. For the remaining years the numbers of visits and places, respectively, were 6,574 and 559 in 1980; 6,743 and 527 in 1981; and 6,316 and 518 in 1982. No prosecutions were instituted as a result of these visits.
Lord Auckland: My Lords, is my noble friend the Minister aware that that Answer will give a great deal of satisfaction to those of us who do not like the idea of animal experiments, even though in having to combat malignant illness there is really no other alternative? Can he give an assurance that these inspections really are random? Does he agree that, despite the fact that there have been no prosecutions—which is an encouraging sign—there is still a need for there to be a large number of random inspections, particularly in respect of the less well known pharmaceutical companies, and possibly more than are at present carried out?
Lord Elton: My Lords, indeed the number of visits is, I think, reassuring. The inspectorate has proved an effective means of ensuring that experiments are carried out in accordance with the terms of the Act. I can assure my noble friend that inspectors make unannounced visits and that licensees know that they can be inspected at any time.
Lord Avebury: My Lords, is the Minister aware that the slaughter of dogs and monkeys in order to study the effects of bullet wounds is repugnant to the vast majority of people in this country, and that the attempts to cover up what is happening in Ministry of Defence establishments are viewed with contempt? Is there much point in having the Home Office Inspectorate when these things are allowed to occur?
Lord Elton: My Lords, the Ministry of Defence Chemical Defence Establishment is registered under the Cruelty to Animals Act 1876 for the performance of experiments. Like all other such establishments, it is regularly visited by a Home Office inspector. Licensees at the establishment comply with all the requirements of the 1876 Act, and there is no attempt to cover up the practices there.
Lord Somers: My Lords, does the noble Lord consider that there is room for a slight tightening of the legislation on this subject—for instance in the actual number of experiments?
Lord Elton: My Lords, we do in fact intend to look into this. There will not be a Bill this Session. If room could be found in the 1984–85 parliamentary timetable, we should certainly be ready for it. We should be ready for it, but because of the pressures of other candidates for the legislative programme, the Bill may not be ready until later this Parliament.
Lord Mishcon: My Lords, following upon the question that was put by the noble Lord, Lord Avebury, may I ask whether the noble Lord the
484
Minister is aware of the real concern and horror that many sections of the public felt when they heard about animals being subjected to bullet experiments? Would the noble Lord the Minister care to comment generally as to whether the Royal Society for the Prevention of Cruelty to Animals is satisfied that everything is being done by the Home Office Inspectorate, not only on inspections but on prosecutions?
Lord Elton: My Lords, of course I cannot answer for the Royal Society for the Prevention of Cruelty to Animals. I can only answer for Her Majesty's Government. The inspectorate does conduct a very large number of inspections. I have already said that those inspected do not know when they are going to be inspected and they know that they may be inspected at any time. The minimal use of prosecutions does not mean that the legislation is not in force because the removal of a licence is a final stroke which any erring experimenter is anxious to avoid. Your Lordships should not infer therefore that the legislation is not firmly enforced, because it is.
Lord Mishcon: My Lords, would the noble Lord the Minister care to comment on the first half of my question which related to the horror with which most people heard of experiments with bullets on live animals?
Lord Elton: My Lords, all normal people dislike the infliction of pain. That is why we have legislation to prevent it being wantonly used. It can only be used for a proper purpose, and it can only be used under anaesthesia. Of course there is repugnance—I do not think we need to be reminded of that, it is shared universally—but I do think that the protection of human life and the assistance to human beings to recover from a wide range of malignant diseases and profit from organ transplants—which is wider than the concern which the noble Lord has expressed, but nonetheless relevant—is something of which we ought not to lose sight.

Local Government: Proposed Reorganisation
2.53 p.m.
Lord Jenkins of Putney: My Lords, on behalf of my noble friend Lord Molloy, and at his request. I beg leave to ask the Question standing in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what representations they have received concerning their proposals to abolish the GLC and the metropolitan county councils.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, we have received a large number of responses, making many detailed comments on the proposals in our White Paper. In due course, we shall make available a summary analysis of the main points.
Lord Jenkins of Putney: My Lords, when the Government make this analysis and publish it, is it

485
possible that they will reconsider their decision in the light of the many comments they will be receiving?
Lord Bellwin: My Lords, we made a commitment to which we will adhere; but of course the observations and comments made will be analysed and reported. We shall see what they constructively may add to those proposals.
Lord Graham of Edmonton: My Lords, has the Minister had time to evaluate fully the Coopers and Lybrand Report? Will he now admit that it completely demolishes his case that the abolition of the GLC and the metropolitan county councils will save ratepayers' money?
Lord Bellwin: My Lords, the report does exactly the opposite: it confirms the opportunities that exist.
Lord Underhill: My Lords, does not the noble Lord the Minister recall the answer he gave to me recently, when I put a supplementary question as to whether the Government propose to make a response to the Coopers and Lybrand Report, and he said his right honourable friend the Secretary of State had issued a press statement? On reflection, does the Minister not consider that a press statement is a woefully inadequate response to a well thought out document, and would it not be helpful to everyone if there was a Government reply to all the details in this report?
Lord Bellwin: My Lords, it depends what the press statement says. I think the one that my right honourable friend put out was sufficiently succinct to make the point which we have made all along; namely, that you can in these reports get out many answers; it depends what you feed in and on the suppositions upon which you base the reports. I thought that my right honourable friend's response was a very full one.
Lord Avebury: My Lords, is it true that one of the options being looked at in the case of Greater London is the replacement of the GLC by another elected authority which will take over the remaining functions not to be transferred to the boroughs?
Lord Bellwin: Yes, my Lords, I have seen this put forward.
Lord Underhill: My Lords, I am sorry to ask the Minister again, but he said that the answer one gets to these reports depends on what one puts in. But surely he is aware that the report was not one compiled by the metropolitan county councils but it was compiled by very noted managerial consultants, Coopers and Lybrand.
Lord Bellwin: Of course, my Lords; but they themselves said the suppositions upon which they based their conclusions were varied in that they could not know what the decisions of the boroughs and districts would be at the time that they made those decisions as to what their spending would be in relation to the functions they were taking over.
Lord Leatherland: My Lords, would the Minister agree that since the war there have been far too many reorganisations of local government, and would it not be a good idea to let things go on as they are for a time?
Lord Bellwin: My Lords, I would have thought the last thing that would be a good idea would be to let things go on as they are at the present time.
Lord Cledwyn of Penrhos: My Lords, in view of the genuine doubts and objections which the noble Lord must accept exist throughout the country across the board and including all political parties, may I ask this. Does the noble Lord not believe that it would be right and proper within our system, before drafting legislation and presenting it to Parliament, to set up an inquiry of some kind, such as a Select Committee or even a Royal Commission, to look at all the arguments for and against this proposal? Is he aware that if this was done by the Government they would gain great support and respect from the general public?
Lord Bellwin: My Lords, the situation which the proposed legislation is to deal with is such that the Government feel that the matter cannot be left to an inquiry such as the noble Lord suggests which, he would be the first to agree, would take years to produce a report. The fact is that the situation cannot be allowed to go on as it is at the present time.
Baroness Seear: My Lords, given that we have had the Coopers and Lybrand Report—even if it does not totally please the Minister—would it not at least be possible to have a debate in this House in which the findings of that report could be discussed?
Lord Bellwin: My Lords, it is entirely up to the noble Baroness to do that through the normal channels.
Lord Jenkins of Putney: My Lords, is the noble Lord not aware that many distinguished Conservatives take the view that the consequences of the Government going ahead as they now propose would be more disastrous than if they were to leave well alone? In view of this and other matters which have come to light, as a result of inquiries by non-political bodies as well, will not the Government think again?
Lord Bellwin: My Lords, the Government think all the time.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend, Lord Trefgarne will, with the leave of the House, repeat a Statement that has been made in another place on MINIS and the development of the organisation of defence. It may be convenient to the House if I announce that the Report stage of the Telecommunications Bill will be adjourned for dinner at approximately 7 p.m. for approximately one hour, and during this adjournment the Appropriation (Northern Ireland) Order will be taken.

Business of the House
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in his name on the Order Paper.
Moved, That, if the Consolidated Fund (No. 2) Bill is brought from the Commons, Standing Order 43 (No two stages of a bill to be taken on one day) be dispensed with for the purpose of taking the Bill through its remaining stages tomorrow.—(Lord Belstead.)
On Question, Motion agreed to.

Select Committees: Membership
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Baroness Seear be added to the following Select Committees of the House in the place of the Lord Byers, deceased:

Committee of Selection,

House of Lords' Offices,

Privileges,

Procedure of the House.—(Lord Aberdare.)

On Question, Motion agreed to.

Pensions Commutation Bill
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): 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 commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Glenarthur.)
On Question, Motion agreed to.

Telecommunications Bill
3.1 p.m.
Report received.
Clause 1 [The Director General of Telecommunications]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 1:
Page 2, line 7, at end insert ("together with a Council known as the Telecommunications Council (in the Act referred to as "the Council") of which the Director shall be the Chairman.").
The noble Lord said: My Lords, in relation to this complex Bill, which is of such great importance to British industry and indeed to the British economy generally, it is my privilege once again to bat first (if I may adopt the apt phraseology used by he noble Lord the Chancellor of the Duchy of Lancaster, when he addressed your Lordships at the Committee stage). This is a simple amendment which proposes that the
488
Secretary of State shall appoint a council to be known as the Telecommunications Council (in the Bill to be referred to as "the Council") of which the Director General of Telecommunications shall be the chairman. The Secretary of State will appoint the Director of Telecommunications, who will have such an important job, and the amendment proposes that the Secretary of State should then appoint the council.
My amendment contains a proposal of profound significance and potential assistance, both nationally and internationally, to the telecom industry. It has much support both inside and outside this House and in industry generally. Its inclusion in Clause 1 of the Bill could inspire much greater confidence in the finalising of the Bill and could overcome much of the present opposition.
I am somewhat reluctant to follow the cricketing analogy of the Minister the noble Lord, Lord Cockfield, but can assure your Lordships that today I am batting on a far better wicket, perhaps with a broader bat, and though the noble Lord has not yet joined our team, it appears that at any rate he now has greater sympathy for our proposals. In that connection, with the leave of the House, I shall later refer to Amendment No. 97, in which the Minister proposes the appointment of an advisory body somewhat on the lines of my proposal. If perchance the opening batsman on this amendment should stumble or be injured, I rather feel that the noble Lord the Minister may act as a runner for one of us, in view of the sympathy that he has shown for the general theme of the amendment.
With the leave of the House, I should like also to refer to Amendment No. 2.
Amendment No. 2: Page 2, line 14, at end insert—
("() In addition to the Director, the Council shall consist of representatives of local authorities, users, of telecommunication systems and apparatus, manufacturers, and trade unions associated with the telecommunications industry.").
Amendment No. 2 suggests the composition of the council. It is suggested in the broadest terms, giving the Secretary of State, and indeed the director, full flexibility to appoint the council. It will be an advisory council. It will have no executive authority. So we are not concerned with two tiers of government. It will be a useful body, to which the director general can refer, if he so desires. It has been agreed in this House and outside that the job of the director general will be not only very important, but terribly onerous, and one in which he will need all the help that he can get.
It is suggested in Amendment No. 2 that the council should consist of not only the director (who shall be the chairman) but also,
"representatives of local authorities, users of telecommunication systems and apparatus, manufacturers, and trade unions associated with the telecommunications industry".
The number and kind of representatives is left entirely to the discretion of the Secretary of State. It seems to me, and indeed to many of us, that the council should include representatives of local authorities. As your Lordships may know, British Telecom is at present considering apointing, for advisory purposes, representatives of what are called British Telecom territories. Details of those territories and the discussions on them have been published and therefore in my view it would be better to leave in

489
general terms the reference to local authority representatives; and that would be of importance and help to the council.
I should have thought that it would be obvious to the Government that it would be of great help and advantage to them in floating British Telecom, and later in allaying anxieties that are being felt about the future of British Telecom when it is privatised, to be able to say that members of trade unions associated with the telecommunications industry were members of the council.
It is true that in their Amendment No. 97 (to which I shall come in more detail later) the Government have proposed that the Secretary of State should appoint an advisory council. It is true that the Government refer to various areas, and in particular those relating to industry, from which representatives should be appointed to the advisory council. But the Government have entirely omitted any proposal that trade unionists should be among the members of the council. It is my belief that from a psychological point of view, as well as a public relations point of view, and indeed any other point of view—businesswise, or otherwise—that omission from Amendment No. 97 is a great mistake.
When I presented a somewhat similar amendment to your Lordships at the Committee stage, with the help of the noble Lord, Lord Bruce of Donington, I made one mistake. I suggested that an authority or a council should be appointed, but I made a mistake in that I said that first of all the council should have powers to appoint the Director General of Telecommunications. Having looked back at the speeches of many noble Lords who spoke at the Committee stage, having once again read through the proceedings in another place, and having consulted trade unions and members of the industry, I feel that it was a mistake on my part to have suggested that the authority that I was proposing should have one executive duty; namely, to appoint the director general. That suggestion has now been left out of my proposal, and so the amendment proposes merely that, after appointing the director general, the Secretary of State shall set up an advisory committee.
I do not know whether I can again tactfully refer to the analogy used by the noble Lord the Minister, but despite that mistake, I had a good score at the Committee stage because my amendment had 112 supporters, whereas the Government had merely four more, 116. It seems to me that it would be far better, as is proposed in my present amendment, that the Secretary of State should have full powers to appoint the council in the way that I have suggested.
I come again to the proposal of the Government to amend Clause 52 in such a way that an advisory council is set up by the Secretary of State. This amendment is tucked away in Part III of the Bill, entitled "Other Functions of Director". Therefore, the proposal is somewhat sullied, if that is the correct word, by being placed so deeply in the morass of the Bill, particularly in that part of the Bill dealing with other functions of the director. In the amendment, where the Government suggest who should be members of the advisory council that they propose, there is no reference to the trade unions or to represen-
490
tatives of local authorities. It seems to me to be a great tactical mistake on the part of the Government to have introduced an amendment of that kind in Clause 52 so deep within the Bill.
What the Government should do, if I may presume to say so, is to show not only to British industry but also to the world that they wish to make a great success of the Office of Telecommunications and that they wish to assist the Director General of Telecommunications who, as everyone agrees, has a most difficult job by including at the outset of the Bill, following the director's appointment, the appointment of the council consisting of representatives along the lines that I have suggested in Amendment No. 2. I appeal, therefore, to noble Lords opposite to consider how the real and sincere anxieties that exist in industry and in the public mind would be allayed by the inclusion of a proposal of the kind that I have suggested right at the beginning of the Bill. It would show, in my view, a sincerity on the part of the Government to help to make the Bill successful. I presume to say that with this amendment some help would be given to the Government in their approach for floating the company perhaps in New York and Tokyo where, as the Minister is no doubt aware, some anxiety is felt at the present time regarding the future success of the company.
Having appealed to noble Lords opposite, may I also make an appeal to noble Lords on this side of the House? At the Committee stage, many Members on this side became so enthusiastic that they went far further than I, as the mover of the amendment desired. I would therefore appeal to them, when they give what I hope will be strong support to the amendment, to confine their speeches to the precise words of my amendment in proposing the Telecommunications Council. I beg to move.
Baroness Macleod of Borve: My Lords, the noble Lord, Lord Lloyd of Kilgerran, is trying, as usual, to be very persuasive. The noble Lord usually persuades me, but I fear that he has not done so this afternoon. As he rightly says, the question of whether or not there should be a council was defeated in Committee by four votes. Today the noble Lord has called the body by many different names. In fact, I became rather lost. Sometimes it was described as an advisory body, sometimes a council, and sometimes an advisory council.
If one studies the amendments to Clause 52 one finds—I think that the noble Lord, Lord Lloyd, referred to this—that my noble friend the Minister has met the requirements that we wanted last time. Indeed, my noble friend has put into the Bill three categories of advisory body. One cannot have advisory bodies and a council. They are two completely different things. In view of the fact that my noble friend has, in my view, given, in amendments to Clause 52, everything that we asked for, I cannot see that the council suggested by the noble Lord is relevant at this time.
Lord Donaldson of Kingsbridge: My Lords, if I may reply on behalf of my noble friend Lord Lloyd of Kilgerran, there seems to me to be all the difference in the world between having three national bodies in

491
England, Scotland and Wales, as proposed in Amendment No. 97, and a general advisory council announced, as my noble friend says, as the second item in a Bill of 100 or more clauses. There is no conflict created in having a national council. It is quite different from provincial councils. With a national council, one normally has sub-groups that look after each particular area. There is nothing objectionable about that.
The difference between the proposal of the noble Lord the Minister and that of my noble friend Lord Lloyd is very slight. All of us, I think, on this side of the House believe that where this Bill is likely to go wrong is in its lack of attention to consumers, users and so on. I do not think that it is possible to over-emphasise our anxiety to make it clear that the Bill intends absolutely to see that people who are at the moment consumers, makers or distributors of apparatus will be no worse off than they are now. The general feeling is that they will be worse off. I do not believe that this can be proved through the Bill. However, one can suggest it. We shall be doing so from time to time. It seems to me that this would be a good opportunity for the Government to put this kind of fear out of people's minds at the very beginning of the Bill in the way that my noble friend has suggested.
Lord Somers: My Lords, there is one other point that needs to be emphasised. Although it is true that amendments have been made to Clause 52, which provides for advisory bodies, those bodies are ad hoc committees. They can be appointed by the director as he sees fit. They are not standing committees—and that is what we need.
Lord Morris: My Lords, I find it puzzling that the noble Lord, Lord Lloyd of Kilgerran, should suggest that because Clause 52 is Clause 52 and not Clause 2 this somehow diminishes its importance. The noble Lord knows as well as I do that Clause 102, tucked away at the back of the Bill—it is, in fact, the very last clause—is the commencement and extent clause. As such, it is an astonishingly important clause. I cannot see that the mere fact that a clause appears in the middle of the Bill rather than at the beginning or the end makes any difference at all. I do not think—although I may be wrong about this—that the cross-heading, "Other Functions of Director", forms part of the Bill anyway.
Lord Bruce of Donington: My Lords, we on this side of the House offer our support to the noble Lord, Lord Lloyd of Kilgerran, as regard the particular series of amendments that stand in his name and also in my name. This new Bill, ill-conceived though it may have been and proceeding on a very ad hoc basis as it has gone along in both another place and in this House, will have very wide repercussions indeed on the whole of the life of this country whether it be considered from the point of view of the residential subscriber or whether it be considered from the point of view of those millions of our population who still have no telephone and who therefore have to rely for this type of communication on public call boxes or equivalent facilities. We must also bear in mind the wide business community, the wide industrial community of the country, that will be very considerably influenced by
492
the whole of the development of the telecommunications system in the United Kingdom.
We have often been reminded, with some justification, that technical change proceeds not on the basis of a flat arithmetical progression. but very much on a geometric ne. It accelerates as time passes. Who knows how much further the technical processes—in which I am bound to say the existing British Telecoms organisation has participated so successfully, and has initiated—will go even in the next five or 10 years? We are not merely talking about the structure of an Act; we are not merely talking about the way in which Ministers will behave under its provisions; we are not merely concerned with the way in which the director of telecoms himself will behave: we are concerned with a fundamental development in our national life the prospects of which we can probably at this time only dimly apprehend. We do not know what progress lies ahead.
Under the Bill the director of telecoms has enormous responsibilities. Some of those responsibilities he exercises in conjunction with the Secretary of State. However, I would remind the House that one of the purposes of successive acts of privatisation has been to remove what is called the "dead hand of the state" from intervening in matters of this kind. So one can only assume that the interventions of the Secretary of State, notwithstanding the responsibilities which he has under the Bill, will be minimal. At least, if the noble Lord thinks that the Secretary of State will be very actively engaged throughout the whole of the proceedings, then he has been a little less than frank with the House when discussing the whole origins and raison d'être of the Bill itself.
So we come back to the director general. I am putting it to your Lordships that the director general will be a very lonely man. He will just have his staff—the Oftel staff. True enough, he will be supported by very able technicians and by executives. As the Bill proceeds we very much doubt whether the existing financial provisions in connection with the staffing of Oftel will be really adequate, but they still do not detract from the director's aloneness and his responsibilities.
The director's responsibilities are set out under Clause 3 of the Bill. He is responsible for the provision of the system itself, satisfying "all reasonable demands" of consumers. He is enjoined:
"to promote the interests of consumers, purchasers".
He is enjoined:
"to maintain and promote effective competition…to promote efficiency and economy";
to promote research and development; to ensure that the people engaged in research and development,
"establish and maintain a leading position in the field of telecommunications".
He is enjoined:
"to encourage major users of telecommunication services";
and he is enjoined:
"to maintain and promote outside the United Kingdom competitive activity on the part"
of all those who take part in the industry.
The director is entrusted with the issue of licences. He is charged with the whole question of licence

493
modification. He is charged with making quite sure that, in appropriate circumstances, references are made to the Monopolies Commission. He is charged also with making investigations to see whether such references are required. He is charged with the task of enforcing the various conditions of the licence, making quite sure that they are adhered to by all those who have been granted licences. He is required to approve contractors who contract for the supply of telecommunications material and also for installation and apparatus. He has a myriad of responsibilities—incidentally, far more than the Secretary of State now has in relation to British Telecoms itself. In fact, one may marvel that the Government have thought it wise, for totally different considerations, to have embarked upon such a complicated measure at this time, of no particular advantage to the community as a whole, but purely for the sake of privatisation.
But that is the Bill and, despite whatever modifications may be made in your Lordships' House and in another place in due course, we must assume that Oftel will be established and that the director general will be appointed. The question is: Should he be entrusted with this task alone? I venture to say to your Lordships that that is the question before the House at this time.
Members of public companies, and indeed other companies, know quite well that the appointment of non-executive directors to boards, who have little, if any, kind of control over the company's activities, are able to bring a new and fresh view to boards of directors or indeed to managing directors who may conceivably tend to become fixed in their ways. These non-executive directors proffer advice from their wider experience, their diverse experience, in what for them is the outside world. Those of your Lordships who have read the managerial press and—dare I say it?—The Times over the last two months will be well aware that there is a move, which is widely supported in British industry and which is even (if I may dare say it to the noble Lord, Lord Mottistone) supported by the CBI, of having more non-executive directors who can bring a certain degree of independence to bear. Not merely (and I do not use the word "merely" in any derogatory sense) because of the users, whose interests are to be covered by the other advisory bodies to which the noble Lord has referred, but in order to deal with the much wider spectrum with which the director general has to deal—including the investigation of complaints, not only of users but of contractors, of licensees and all those who are concerned—the director ought to have somebody to whom he can look for advice.
We on this side of the House are pleased to give support to the amendment moved by the noble Lord, Lord Lloyd of Kilgerran, but it is not support in any party sense at all. We do not seek to change the political convictions of those who are pleased to sit opposite, or who are pleased to sit on the Cross-Benches, or, indeed, who are pleased to sit behind us. We take the view, which we hope the House will take, that this is simply a matter of plain common sense. One of the things that might conceivably soften the blow of this Bill on the public interest generally is at any rate the knowledge that when it comes to plain
494
common sense in the framing of legislation—indeed, in the revising of it, which is part of the responsibilities of this House—this afternoon your Lordships may do the country and the Bill a signal service.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, as my noble friend Lady Macleod of Borve has said, we have been here before. In fact, this proposition now appears for the fourth time of asking. As the noble Lord, Lord Lloyd of Kilgerran, reminded us, it was first put forward during the Committee stage of the 1983 Bill, which was aborted by the general election. It was then defeated on a Division. Undeterred by this, the noble Lord, Lord Lloyd of Kilgerran, put the same proposition forward, but with a different name, as Amendment No. 1 during the Committee stage of the present Bill. That was also defeated on a Division.
The noble Lord, Lord Bruce of Donington, then put forward essentially the same proposition as Amendment No. 62 during the Committee stage of this Bill, and that amendment was withdrawn in the light of certain suggestions which I made to your Lordships, to which I shall return in a few minutes. The noble Lord, Lord Lloyd, has now brought the matter forward for the fourth time.
When we were discussing this in Committee, the noble Lord, Lord Lloyd, was perturbed by the suggestion I had made that his proposition was the same as that put forward by the noble Lord, Lord Bruce of Donington. I thought at the time that he was arguing that there were differences of substance, but I subsequently came to the conclusion that the noble Lord, Lord Lloyd of Kilgerran, was merely trying to protect his "intellectual property" in the idea—a subject which re-appears in Amendment No. 41 in his name on the Marshalled List.
However, to make quite certain that there is no confusion between his present proposition and those put forward before, the noble Lord, Lord Lloyd of Kilgerran, has now omitted the operative provision from his amendments. The result is that this council would have no functions. Despite the fact that it has no functions, the noble Lord has provided that it should make an annual report on the way in which it has discharged the functions that it is not given, and out of the generosity of his heart he proposes that the members should be paid for not performing the functions that they are not given.
The noble Lord started by referring to a cricket analogy that I had used in the debate during the Committee stage. Perhaps I may pursue that. What he is now proposing is that we have a cricket match with 22 players, but neither bat nor ball. Therefore, it is not likely to be a particularly interesting cricket match. In fact, the amendment is so defective that I really wonder why the noble Lord believes that it is necessary to move it. Nevertheless, despite this, I shall turn to the matters of substance which I realise are on the minds of a number of your Lordships. Both the noble Lord, Lord Lloyd of Kilgerran, and the noble Lord, Lord Bruce of Donington, have made the point that the director has a difficult job to do—which I entirely accept—and that it would be useful for him to have advice. I entirely agree with that, but it is not necessary

495
to have a special council of this kind to fulfil this function.
The Bill already contains wide-ranging provisions designed to ensure that the director has access to all the advice that he needs. The whole purpose of the provisions for the establishment of advisory bodies under Clause 52 is to ensure that this is so. Under Clause 52 we have specifically provided for the establishment of advisory bodies on those subjects where it appears to us the need for specialist advice is greatest. For example, we have the four national advisory bodies for consumer matters (and I shall refer again to these in a moment) and the advisory bodies on the disabled, the elderly and small businesses. The director is also given power under Clause 52 to establish such advisory bodies as he sees fit. In this way the director will be able to obtain advice on particular subjects from people particularly experienced in the field in which he is interested.
Another proposed role for a body of the kind put forward in the amendment is that it should act in a kind of supervisory capacity, overseeing the way in which the director performs his functions. I imagine that this is intended to provide the public with reassurance that the director is, in fact, being supervised. The basis of the regulatory system in the Bill is that the Bill sets out very clearly—for example, in Clause 3—the duties which govern the director in the performance of his functions. If anyone thinks that the director is failing to carry out any of these functions, then he can be challenged in the courts. I know that it would be exceptional for anyone to challenge the director in this way, but the fact that he can be so challenged is a very effective sanction. Further, if anyone thinks that the director is acting improperly, then that person can take it up with the Ombudsman. whose remit is specifically widened by this Bill to include the director. These two remedies provide a more effective sanction than any council which could be set up.
Finally, the director has to make an annual report to the Secretary of State, as provided in Clause 53. That report has to be laid before each House of Parliament. That is contained in Clause 53(3). This means that both Houses can debate the report if they so wish. Doubts were expressed during the Committee stage, particularly by the noble Lord, Lord Taylor of Gryfe, and they have been repeated in the debate this afternoon by the noble Lords, Lord Donaldson and Lord Bruce of Donington, and also by the noble Lord, Lord Somers, whether the interests of consumers are properly protected. The Government recognise that consumers would need to have some local body, other than the director in London, to which they can turn for advice and assistance in the first place. We have included provisions in the Bill to enable this to be achieved.
First, there is Clause 27, which enables the Secretary of State to continue to pay funds towards meeting the expenses of the various non-statutory consumer bodies that he recognises. We are here thinking particularly of the Post and Telecoms Advisory Committees, or PATACs as they are commonly known. But in addition we have the four national advisory bodies—one each for Scotland, England, Wales and Northern Ireland—which are established
496
under Clause 52 and to which consumers can turn. These arrangements will ensure very full facilities for representing the views of consumers.
Perhaps I might now turn to the general question of the advisory bodies established under Clause 52. The point has been put forward on a number of occasions that the role of the four national advisory bodies needs to be strengthened, and in particular that their function in paying regard to the interests of consumers should be underlined. It was this proposal that I was setting out to meet when I said that I would bring forward amendments to Clause 52 to strengthen the consumer role of the national advisory bodies established under that clause. Amendments to achieve this in fact now appear on the Marshalled List.
We shall have the opportunity of discussing this in greater detail when we come to those amendments, but there are two points that I should like to make. The first is that in deference to the views expressed both at Committee stage and this afternoon we have inserted the words:
"including, in particular, the special requirements and circumstances of consumers, purchasers and other users".
That is the first major point.
Secondly, in order to enhance the status of these four territorial bodies we now specifically provide in Amendment No. 97 that they should be appointed by the Secretary of State and not by the director. This is the answer to the point raised by the noble Lord, Lord Somers, that these might be transient bodies which would come and go. I believe that the amendments we have offered meet the real anxieties which were expressed on this matter.
There is one point made by the noble Lord, Lord Lloyd of Kilgerran, that I entirely accept, and that is that if these amendments are made to Clause 52 their appearance under a Part of the Bill headed "Other Functions of Director" is no longer appropriate, and we shall need to amend that title. That is a valid point, and I shall ensure that it is met. But when we come to the question of the appearance in order in the Bill I do not think that in the end it makes all that much difference. The Bill is set out in a logical form at present, and provided we alter that title it gives adequate weight to the importance of these advisory bodies.
In conclusion, the amendments that I have now tabled offer a more effective route to achieving the objectives that we all want to secure. I would hope, therefore, that your Lordships would choose the route that I am offering rather than the seductive but, if I may say so, unavailing proposal offered by the noble Lord, Lord Lloyd of Kilgerran. On that basis, I would hope that the noble Lord would be prepared to withdraw his amendment.
Lord Lloyd of Kilgerran: My Lords, I am grateful to those Members of the House who have spoken in this debate. I am grateful to the noble Baroness, Lady Macleod, for her kind words about me. I am sorry if I confused her by changing the name "council" to "authority" and back again. Perhaps it is some consolation to her that, like Shakespeare, I say, "What's in a name?" It is the fundamental theme behind the name which is of such importance. I am

497
also grateful to the noble Lord, Lord Donaldson, for his support, and also for the observations of the noble Lord, Lord Somers, from the Cross-Benches, because he raised a substantial point on which I shall not elaborate any further.
So far as the noble Lord, Lord Morris, is concerned, I always hesitate to say anything unkind about the noble Lord because he usually is so kind to me, but it seemed to me that he had not really been listening to what I had put forward. It is not merely that an amendment has been put in the depths of the Bill that I object to, and he could not have been listening to my argument to have made that attractive but irrelevant speech. The noble Lord, Lord Bruce of Donington, has, in his usual helpful way, recounted the difficulties and the problems which will face the director general. It is accepted that the director general will have a most difficult task, and the object of the council is to try to assist him.
The noble Lord, Lord Cockfield, was unusually dismal in the opening words of his comprehensive speech on this occasion. He referred to defeats—four defeats. But what has happened from what he calls defeats? They have produced at last an amendment which he says will now go all the way to meet the points that I have already put forward. I do not accept that submission, but in fairness to myself I feel that I should say to the noble Lord the Minister that really he did not quite get the right tone in relation to what I have submitted before.
This amendment has never been before your Lordships, either at Committee stage or at any stage. This is a new amendment which I am putting forward having studied all the answers and the comments made on previous amendments. It is as a result of that research, having regard to all the factors involved in this matter, that I come before this House with some confidence with a new amendment which has never been debated before the House. The noble Lord the Minister says that an advisory body, as it is quite clear this council should be, has no functions. Surely the word "advice", whether implied directly or indirectly in the words of this amendment, obviously gives this council some kind of function. Therefore, to say that advice does not constitute a function is an argument not worthy of the noble Lord the Minister so early in the afternoon as this.
I am not going to take up the time of your Lordships except to say that it seems to me crucial from a psychological point of view that the Government should make it clear that they would welcome advice from the trade unions in relation to the activities of British Telecom PLC, or in relation to the activities that are going on towards that. The amendment of the noble Lord, Amendment No. 97, makes no reference to the trade unions. I am tempted to ask why, in moving this Government amendment—which I admit comes quite a long way but not far enough towards the theme I am developing—the noble Lord should deliberately have left out from the list of members of his advisory body representatives of the trade unions. That seems to me to be a fundamental error. Therefore, as the noble Lord, Lord Donaldson, said so clearly and so persuasively, this council should be appointed early in the activities leading to
498
privatisation of British Telecom, and that is why it is of fundamental importance that it should come early in the Bill.
Again, the noble Lord indicated that there will be representatives from various regions in the United Kingdom on the advisory body that he is suggesting. But he names these by reference to the countries concerned. It would be much more helpful to refer to local authorities in a more general way. In my submission the Government have come quite a long way towards us on this side of the House in relation to this Bill. I would appeal to the noble Lord to come just that little further, put his amendments at the beginning and introduce trade unions as representatives of the council. Then it would show, in my view, the sincerity of the Government in designing an effective Telecom Act to achieve the commercial success nationally and internationally that they have promised the country. The Government will get great respect and support if they accept this amendment. I beg to move.
3.50 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents 91; Not-Contents, 102.

DIVISION NO. 1

CONTENTS

Amherst, E.

Kearton, L.

Ardwick, L.

Kennet, L.

Attlee, E.

Kilmarnock, L.

Aylestone, L.

Kinloss, Ly.

Beaumont of Whitley, L.

Lawrence, L.

Beswick, L.

Leatherland, L.

Bishopston, L.

Listowel, E.

Blease, L.

Llewelyn-Davis of Hastoe, B.

Blyton, L.

Lloyd of Kilgerran, L. [Teller]

Boston of Faversham, L.

Lovell-Davis, L.

Brockway, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

McNair, L.

Burton of Coventry, B.

Mais, L.

Caradon, L.

Mar, C.

Carmichael of Kelvingrove, L.

Mayhew, L.

Chitnis, L.

Milverton, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Collison, L.

Oram, L.

Cooper of Stockton Heath, L.

Peart, L.

Darling of Hillsborough, L.

Pitt of Hampstead, L.

David, B. [Teller.]

Plant, L.

Davies of Penrhys, L.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

Rhodes, L.

Delacourt-Smith of Alteryn, B.

Roberthall, L.

Denington, B.

Rochester, Bp.

Donaldson of Kingsbridge, L.

Ross of Marnock, L.

Donnet of Balgay, L.

Sainsbury, L.

Elwyn-Jones, L.

Seear, B.

Ennals, L.

Serota, B.

Ewart-Biggs, B.

Shinwell, L.

Fitt, L.

Simon, V.

Gaitskell, B.

Stallard, L.

Gallacher, L.

Stedman, B.

Gladwyn, L.

Stewart of Alvechurch, B.

Graham of Edmonton, L.

Steward of Fulham, L.

Grey, E.

Stoddart of Swinton, L.

Grimond, L.

Stone, L.

Hale, L.

Strabolgi, L.

Hampton, L.

Taylor of Blackburn, L.

Hanworth, V.

Tordoff, L.

Harris of Greenwich, L.

Underhill, L.

Hunt, L.

Wallace of Coslany, L.

Irving of Dartford, L.

Wedderburn of Charlton, L.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

Wigoder, L.

John-Mackie, L.

499

NOT-CONTENTS

Adeane, L.

Luke, L.

Alexander of Tunis, E.

Lyell, L.

Avon, E.

McAlpine of Moffat.

Bauer, L.

McAlpine of West Green, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Bellwin, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Bessborough, E.

Marley, L.

Broxbourne, L.

Maude of Stratford-upon-Avon, L.

Bruce-Gardyne, L.

Caithness, E.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Campbell of Croy, L.

Mo son, L.

Cockfield, L.

Morris, L.

Constantine of Stanmore, L.

Mottistone, L.

Cottesloe, L.

Mowbray and Stourton, L.

Crawford and Balcarres, E.

Murton of Lindisfarne, L.

Cullen of Ashbourne, L.

Northchurch, B.

Daventry, V.

Nugent of Guildford, L.

De Freyne, L.

Orkney, E.

Denham, L. [Teller]

Orr-Ewing, L.

Drumalbyn, L.

Pender, L.

Dudley, B.

Penrhyn, L.

Edmund-Davies, L.

Peyton of Yeovil, L.

Effingham, E.

Porritt, L.

Ellenborough, L.

Portland, D.

Elton, L.

Romney, E.

Ely, M.

St. Davids, V.

Enniskillen, E.

Saint Oswald, L.

Faithful, B.

Saltoun, Ly.

Feversham, L.

Sandford, L.

Gainford, L.

Sempill, Ly.

Glanusk, L.

Shaughnessy, L.

Glasgow, E.

Skelmersdale, L.

Glenarthur, L.

Somers, L.

Gray of Contin, L.

Spens, L.

Gridley, L.

Strathcarron, L.

Hailsham of Saint Marylebone, L.

Strathspey, L.

Sudeley, L.

Halsbury, E.

Swinton, E. [Teller]

Harmar-Nicholls, L.

Terrington, L.

Henley, L.

Teviot, L.

Hylton-Foster, B.

Thomas of Swynnerton, L.

Ilchester, E.

Torphichen, L.

Kaberry of Adel, L.

Trefgarne, L.

Killearn, L.

Trenchard, V.

Kimberley, E.

Trumpington, B.

Kintore, E.

Vaizey, L.

Lauderdale, E.

Vaux of Harrowden, L.

Liverpool, E.

Vickers, B.

Long, V.

Vivian, L.

Lucas of Chilworth, L.

Wilberforce, L.

Resolved in the negative, and amendment disagreed to accordingly.

Defence: Organisational Structure
3.58 p.m.
Lord Trefgarne: My Lords, with your Lordships permission, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Defence about the future development of the organisation for defence. The Statement is as follows:
"This Government have increased significantly the defence budget reflecting the priority we attach to national security. By 1986–87 defence expenditure is planned to be 23 per cent. higher in real terms than in 1978–79. The threat we face from the Soviet Union and the growing costs of defence technology fully justify this policy. At a time of rising defence expenditure, it is particularly
500
important that we satisfy the public—who bear the cost of defence—of our determination to ensure that the resources made available are put to best effect.
"We must ensure that the resources are applied to enhance the fighting effectiveness of our armed forces and there can be no place for unnecessary bureaucracy and overheads.
"As Defence Secretary, I introduced a new management information system—MINIS. Using this, I have carried out a review of the organisation of the Ministry itself and of staffs outside the front line. I have been much impressed by the quality of the staff, both military and civilian, working in these areas. But the organisation for defence foreshadowed in the 1963 White Paper has only partly been carried through: the Ministry has a more federal structure than envisaged then and lines of accountability are blurred. There is overlap between the Ministry and commands. As a result, the organisation is less economical than it should be.
"In judging the appropriate management structure for the department my overriding aim has been to strengthen the fighting effectiveness of our forces. Nothing must he done which would weaken the separate identities and traditions of the three fighting services. They play a vital part in the morale of our front-line units. Nor do I see any need to change the constitutional framework provided by the Defence Council and the three service boards. Within this framework, I wish in future to draw a clearer distinction between the central formulation of advice on defence policy, operations and resource allocation and the management of the services themselves.
"I intend to create a combined defence staff, responsible under the Chief of the Defence Staff and the Permanent Under-Secretary, for advising me on defence policy, military priorities and the conduct of military operations. This staff would incorporate the relevant parts of the naval, general and air staffs. I also intend that it should bring together my military and civilian advisers into an integrated structure.
"In resource allocation and finance, I wish to see stronger central determination of priorities and clearer budgetary control through the creation of an office of management and budget under the Permanent Under-Secretary. This would be coupled with clear financial delegation to identified managers through a system of responsibility budgets.
"Mr. Speaker, under my proposals the management of each service would be the principal concern of the single-service chiefs of staff, supported by the executive committees of each of the service boards. The boards and their executive committees would be responsible for administration rather than policy, as was indeed envisaged in the 1963 White Paper. I wish to see the maximum delegation of day-to-day administration to commands outside the Ministry itself.
"In future, I would look to the Chief of the Defence Staff and the Permanent Under-Secretary as my two principal advisers. The Chief of the Defence Staff would continue to be advised by the service chiefs of staff who would be responsible to

501
him: the Chiefs of Staff Committee would continue with its present membership. I also propose that the Chief Scientific Adviser and the Chief of Defence Procurement should in future be responsible to me through the Permanent Under-Secretary.
"Mr. Speaker, I have today placed in the Vote Office copies of a consultative paper which I am circulating in my department. It is my intention to improve efficiency and to achieve significant savings. I will report further to the House when I have completed my consultations."
My Lords, that concludes the Statement. Copies of the consultative paper are now available to your Lordships in the Printed Paper Office.
Lord Bishopston: My Lords, the House will he grateful for the Minister's repetition of the Statement which was made in another place and for enlarging on the progress made so far on the aspects which were envisaged in the Defence White Paper of 1983 on defence management and defence policy generally. The House will recognise the importance of the Statement, but clearly it is one which will justify a much closer look later on and, undoubtedly so, during defence and other debates which will be coming in the next few months. We recognise that with such substantial spending—the figure of 23 per cent. has been mentioned as the increase between 1978–79 and 1986–87—it is essential to ensure maximum efficiency and economy. Other important aspects are those concerning defence procurement because the administration is only one small but necessarily vital part of defence spending.
In the Statement which the Minister has made and in aspects of defence procurement and other defence policies it is important to look not only at the monetary aspect but also at the economic, the social and the manpower aspects. In defence procurement, this could have its effects on procurement policy in relation to the entire future of the British aerospace industry. Also, the House may be tempted to ask the Minister what kind of savings he envisages may be made as a result of the system which is intended to provide greater efficiency and economy—what this may result in in terms not only of cash but also of manpower.
Another important aspect is to ensure not only the minimum amount of spending, the minimum amount of resources and the minimum amount of manpower, but also the better use of these things, especially on the manpower sector. I believe that the House will want to study the Statement in greater depth. We welcome the work of the Select Committee which has already expressed some comments on the background of the Statement and we welcome the Minister's openness in coming forward with these matters. It involves enormous spending and accountability at a time when all our resources and demands in other sectors are so telling upon our economy.
Lord Mayhew: My Lords, is the noble Lord aware that no doubt there are savings to be made and useful administrative improvements from this kind of centralisation of the Ministry of Defence? But is he not also aware that there is a great danger?—the danger
502
being that the centralised structure may seek to impose on one of the three services an operational role which that service, with its superior, specialised knowledge, feels to be unfeasible. The noble Lord referred to 1963 when a similar step towards centralisation was made. Does he recall that on that occasion we had a perfect example of what I have said when the new centralised structure attempted to impose on the Navy the task of maintaining a presence East of Suez throughout the 1970s and into the 1980s with no seaborne air power, scrapping the carrier fleet? Is he aware that now no one will not say that, on that occasion, the Navy was right in resisting that role and that the centralised structure was wrong to try to impose it on the Navy?
May I ask the noble Lord what safeguards the Secretary of State has devised for preventing this from happening again? In particular have the single service chiefs still the right of access to the Prime Minister? I recall that in 1963 the then Chief of Naval Staff exercised his right of access to the Prime Minister to explain his service's view that what the Cabinet were trying to impose on the Navy was unfeasible. He was right; and he was right to exercise his right in that respect. I ask, and I believe that both sides of this House should ask, the Government for assurances on this very important point.
Lord Mottistone: My Lords, before the noble Lord sits down, may I ask whether his recollections of events of 1963 were not, in fact, of events of 1966?
Lord Mayhew: My Lords, I was referring to the reforms carried out in 1963, reforms which had traumatic effects in 1966.
Lord Trefgarne: My Lords, I am grateful to both noble Lords for their reception of this Statement. In answer to the noble Lord, Lord Bishopston, I must say that it is not yet possible to state the precise amount of savings that will flow from these proposals either in terms of money or in terms of manpower. At this stage, these are outline proposals only which are submitted for consultation purposes. The consultation process during the coming months will put flesh on the bones of these ideas. After that process, it will be possible to make a more accurate estimate of the savings that will flow from them.
Turning now to the remarks of the noble Lord, Lord Mayhew, I can tell him that the specialist knowledge, which we agree is absolutely essential for taking decisions of the kind he has referred to, will in future reside in the central staff organisation to which I have referred. At the same time I can assure the noble Lord that the service chiefs will retain their special access to the Prime Minister.
Viscount Trenchard: My Lords I wonder whether my noble friend can tell me whether the role of other Ministers will be mentioned in relation to this centralisation, including such things as the centralisation of defence procurement? Are they mentioned, and how do they fit in with the apparent absolutely central staff relationship? Secondly, may I ask him whether the central staff will be in addition to the staffs of the three services or whether, if I understood him correctly, this is a movement of the individual services staff to the centre?
Lord Trefgarne: My Lords, if I may answer the last question first, the single service staffs will continue as before but with a rather different role and not necessarily in the same form as at present. This is one of the things which will emerge from the consultation. I hope I have answered my noble friend's point.
Viscount Trenchard: My Lords, would my noble friend answer my first question?
Lord Trefgarne: My Lords, I apologise for omitting to answer my noble friend's first question. The ministerial responsibility in the Ministry of Defence, as in any other departments, resides in the Secretary of State himself. The position of other Ministers is that they carry out such tasks as he may delegate to them, and that position will remain. I should add also that Ministers will retain their membership of the Defence Council and, I think, of the service boards.
Lord Kennet: My Lords, would the noble Lord not agree that while the general thrust of the Statement seems very sensible, it is rather hard to make out exactly what is and what is not new in the situation he has outlined? The Statement says:
"I intend to create a combined defence staff under the Chief of Defence Staff".
We have had a Chief of Defence Staff for a good many years now. I assume therefore that we have had a defence staff of which he has been chief for a good many years. How much of the single service staff manpower is going to be moved into the new defence staff? Am I right in assuming that under each of the service chiefs there will continue to be a general staff, a naval staff and an air staff? How much smaller will they be than the new Central Defence Staff, and in what respect is the latter new?
Secondly, the Statement says that the chief scientist and the defence procurement boss will report to the Secretary of State through the Permanent Secretary in future. Through whom did they report to him before now?
Lord Trefgarne: My Lords, if I may again take the last point first, the personnel to whom the noble Lord refers have hitherto reported direct to the Secretary of State and not through the Permanent Under-Secretary. The answer to his first question is that the new central staff will be a greatly enhanced body, with a new advisory and consultative role with regard to my right honourable friend.
Baroness Vickers: My Lords, may I ask my noble friend whether the royal ordnance factories and the naval dockyards are to come under this review? I ask that because there is considerable anxiety now about their future role, and especially over the closing of Chatham Dockyard, so that they really do not know at the moment what jobs they have to do in each dockyard.
Lord Trefgarne: My Lords, the royal ordnance factories, of course, are the subject of legislation which is currently going through Parliament and which will no doubt come to your Lordships' House before long. The dockyards will remain part of the Navy Department as before.

Telecommunications Bill
4.15 p.m.
Consideration of amendments on Report resumed.
[Amendments Nos. 2, 3, 4, 5 and 6 not moved.]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 7:
After Clause 1, insert the following new clause:
("Levy
.—() There shall be paid by each telecommunications operator licensed under this Act a levy to meet the costs and expenses of the Director of Telecommunications referred to in section 1(6) above.
() The levy shall be based on a percentage of the gross annual operating receipts of each operator. Such percentage shall be fixed from time to time by the Secretary of State by Order subject to annulment by either House of Parliament.
() The proceeds of the levy shall be paid into the Consolidated Fund.").
The noble Lord said: My Lords, I beg to move Amendment No. 7 standing in my name and the names of my noble friends. Your Lordships will see that the proposal is that a levy shall be paid by each telecommunications operator licensed under this Bill, that it shall be based on the annual gross operating receipts of each operator and that the proceeds of the levy shall be paid into the Consolidated Fund.
As the Bill stands, so far as one can gather, Oftel will be a drain on the taxpayer. So far as I can see, there is nothing in the Bill which states otherwise. My noble friends and I believe that this really cannot be right because the regulatory authority under the director general is an imposition on the taxpayer, who is at present quite content with the situation as it stands. There has been no great public demand for privatisation of British Telecom. Indeed, the public, so far as one can ascertain, are either opposed to the Bill or bored to tears by the Government's doctrinaire approach to a public undertaking which has served them well for nearly 100 years without any regulatory body such as is proposed in this Bill. The public have not raised their voices to the heavens asking for privatisation, because they have been perfectly satisfied over a very long period of time with the present situation. And well they might be, because over a very long period of time the telecommunication service and Post Office Telephones have served them very well indeed.
Talking to many people—I am sure other noble Lords will have observed this, too— one finds that the public were probably more satisfied with the telephone system when it was part of the Post Office, administered by a Postmaster-General and answerable directly to Parliament, than they have been since 1981—in fact, since 1968, when Post Office Telephones became a public corporation. Indeed, there is a great hankering for the days when we had a Postmaster-General who could be questioned in Parliament and who was answerable to the public through properly-elected representatives.
Of course I realise that we have moved on since then, but certainly when I worked as a youth in training in the Post Office telephone service the whole ethos of the organisation was orientated towards giving the public a first-class service at a reasonable cost, while ensuring that the Post Office telephones were not

505
a charge on the taxpayer in any way. Everything that I ever learned during the short perod I worked for the Post Office telephone service taught me that public service was paramount and that if you had a breakdown on Christmas Day, for example, then it was your duty to respond to a call to restore the telephone service just as soon as you possibly could. In fact, there was no need to worry, in those circumstances, as to whether directory services would be provided or whether rural subscribers would receive equal treatment; it was all taken as a matter of course. That ethos was inherited by British Telecom, and they know the public duty that they have to administer.
However, under this Bill, which is bound to put profit above service to the customer—that is what it is all about—apparently it is necessary to superimpose a regulatory organisation to protect the public from exploitation, to preserve services which have been enjoyed by the public over a very long period of time and to ensure that the integrity of the national telecommunications network is not undermined by irresponsible, fly-by-night, cowboy operators. That the taxpayer should be asked to fund directly such a regulatory body is completely unacceptable, especially as it is impossible at this stage for the Government to give a realistic estimate of the total cost of Oftel. A staff of 50 has been mentioned, but it is quite unbelievable that a staff as small as that will be able to perform efficiently and properly the duties laid upon them by this Bill.
I do not intend to go right through that list of duties which is imposed on Oftel by this Bill, because my noble friend Lord Bruce of Donington went through it when he was speaking to the last set of amendments. But there is no question that it is a formidable list of duties and some of us find it quite unbelievable that a staff as small as 50 will be able to perform those functions efficiently. In fact, I shall be interested to know whether the Government have given further consideration to the total cost of Oftel since the Committee stage, and whether they are now able to give a reasonably accurate estimate of it. But, in any event. I hope that I have been able to convince the House that the industry itself should share the cost of Oftel, and I shall certainly he very interested to hear the comments of the Government on the amendment. My Lords, I beg to move.
Lord Lloyd of Kilgerran: My Lords, while rising to support this amendment, I have been wondering whether it goes far enough. I feel, as the amendment proposes, that the costs and expenses of the Director of Telecommunications should be paid for as referred to in Clause 1(6), but that subsection is limited largely to staff and associated expenses of the telecommunications directorate. It does not say anything about the cost of advisory bodies. In view of the fact that these advisory bodies will certainly have a great deal to advise about I think that they should have been included generally and that the costs of people advising should also be paid by this means.
Lord Cockfield: My Lords, we had a most interesting account of the world as seen by the noble Lord, Lord Stoddart of Swindon, through the rose coloured spectacles of his youth when he was an
506
employee of the Post Office, but few of the customers would recognise the glowing account that he gave. Let me leave such matters on one side, however. So far as the amendment is concerned, it is already covered by Clause 7(5)(b), which reads as follows:
"conditions requiring the rendering to the Secretary of State of a payment on the grant of the licence or payments during the currency of the licence or both of such amount or amounts as may be determined by or under the licence".
Therefore full provision is made to do precisely what the noble Lord wishes. The fees will in fact be set at a level which will not only recover the costs of setting up and running Oftel, but will also secure an appropriate contribution from licensees to the cost of United Kingdom membership of international telecommunications bodies. In fact, we have covered the full field.
In general, fees will be fixed by reference to turnover, which is what the amendment proposes, but some variation of this may be both right and necessary. For example, it may be desirable to provide for both minimum and maximum fees, and in the case of simple general licences it may be right and proper to provide a modest fixed fee rather than have a fee related to turnover. But the matter is, in fact, dealt with under the Bill as it stands and provisions will be included in the licences issued to give effect to the provisions of Clause 7(5)(b). I hope that with that explanation the noble Lord will be prepared to withdraw his amendment.
Lord Bruce of Donington: My Lords, we are greatly obliged but a little disappointed that the noble Lord should have replied in that sense, because if he will refer to Clause 7(5)(b) he will find the insertion of the word "may"; that is to say, it gives the Secretary of State power if he wishes to do so. But your Lordships will observe that in the amendment moved by my noble friend the operative word is "shall"—"There shall be paid". That is the principal difference as well as determining the basis upon which it shall be paid.
The noble Lord described the impression given by my noble friend Lord Stoddart of Swindon of the services of British Telecom as viewing through rose coloured spectacles and he hinted that that view might not be shared by the consumers at large. It is customary for all of us to make complaints from time to time, but our satisfaction or dissatisfaction with a service is entirely relative.
The fact of the matter is that the general satisfaction of the consumers in this country in regard to the telephone system is measured by the efficiency of the system already established and being operated by British Telecom, compared with the system in other countries. The noble Lord was quite right in drawing our attention to that. The fact of the matter is that although, in common with other systems in the world, our own system of telecommunications is not perfect, nor is our service perfect, they measure up very favourably indeed to the systems in most other parts of the world.
I was very glad that the noble Lord did not echo the word used by his noble friend behind him in the course of the Committee stage, when he described the personnel of British Telecom as being "tainted". Nevertheless, the fact of the matter is that, as my noble

507
friend said, there has been no popular demand at all for the privatisation of British Telecom. It is a matter that has been pursued by a mixture of ideological resolve and the desperate need of the Chancellor of the Exchequer to get some immediate funds in relief of what he calls "public expenditure". That is the principal reason for the Bill.
In those circumstances, it is reasonable to assume that this great industry, which, according to the party opposite, will be released from the shackles imposed on it by the state, will be imbued with new enterprise, vigour, initiative and all the rest, should pay into the Consolidated Fund certain sums in order that it can bear the costs of this very abstruse operation which is being so unnecessarily carried out.
If the new companies are to derive such benefits as will enable them to invest in this new enterprise, at whatever price it may be ultimately sold to them, it is quite right that they should pay into the Consolidated Fund the amount that the taxpayer (if I may use that term) will have to pay for the establishment and maintenance of the regulatory mechanism that is set out so tortuously in the various sections of the Bill. There is nothing wrong with that, and there should not be any "may" about it.
"May" gives discretion to the noble Lord. The noble Lord is a very benevolent person. A cross word very rarely passes his lips. He is not known to be a mean person. No doubt these various hard-pressed companies, who are sufficiently financed, apparently, to take over the whole enterprise, will come to the noble Lord or to his right honourable friend the Secretary of State and say, "Although you are allowed to make a levy on us for the cost of the operation of Oftel, we are not doing very well; therefore, we request that you do not use your discretion to impose a levy upon us". My noble friend's amendment says "shall". If the noble Lord is prepared at Third Reading to insert, at Clause 7, the appropriate "shalls" instead of "mays", we might be prepared to give the matter sympathetic consideration. I fear, however, that the noble Lord is not of that mind this afternoon. Therefore, I hope that all sides of the House will support this very necessary amendment for the protection of the British taxpayer.
Lord Cockfield: My Lords, I am very sorry that the noble Lord, Lord Bruce of Donington, does not share my view that in the last few years British Telecommunications have made great improvements in the service that they offer to their customers. I do not in any way associate this improvement with the fact that the noble Lord, Lord Stoddart of Swindon, has left the employ of the Post Office, because that would be to commit the fallacy of post hoc, ergo propter hoc. But I cannot see that it advances the noble Lord's case to denigrate the degree to which British Telecommunications have improved their services, to which I pay full tribute.
If I may dispose of that point and turn to the amendment, all that rests between us, so far as I can make out, is the use of the word "may" instead of the use of the word "shall". We have used the word "may" because there will be circumstances in which we believe it might not he appropriate to charge a fee. I mentioned the case of general licences. There may be
508
circumstances where, instead of charging a modest flat rate fee, it might be appropriate not to charge a fee at all, and one would not want one's hands tied to that extent. I assure the noble Lord that it is our intention to ensure that the full costs of operating Oftel, including the ancillary costs which fall on the Secretary of State and the costs of international representation—two matters which are not covered by the noble Lord's amendment—should be met out of the fees charged for licences. In this respect the noble Lord will he well aware of the pressures under which departments come from the Treasury. It would be most improbable to suggest that the Treasury would let the Secretary of State off the hook in this respect.
There is also Parliamentary scrutiny. Every year a Vote has to be put to another place. If there were a deficiency on this account, it would be a matter which the other place would be fully entitled to raise.
All I can say in conclusion is that to insert the word "shall" would unduly tie our hands in circumstances in which, as the noble Lord recognises, we would wish to be reasonable. It is because we wish to be reasonable, not unreasonable, that we are using the word "may". However, I assure the noble Lord that it is our full intention to recoup the cost to which he refers.
Lord Stoddart of Swindon: My Lords, I am not usually accused of looking at things through rose-coloured spectacles. I can assure the noble Lord that my recollections of the Post Office are very good. As he says, the Post Office has made great progress over the years. One has to say that that progress has been made without any privatisation Bill from this Government. I am quite sure that, without the Bill, British Telecommunications, released from the threat which hangs over them, would be making even greater strides now than they have made in previous years.
I am very pleased that we put down this amendment as to a levy. I believe it has made it clear that the Government intend to ensure that the full costs of Oftel, not merely the ones referred to in the amendment, will be paid for and will be met in full—perhaps even overfull, judging by the noble Lord's last remarks about the Treasury—by the people operating telecommunications systems. In the light of the very strong assurances that the noble Lord has given, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Abolition of British Telecommunications' exclusive privilege]:
4.37 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 8:
Leave out Clause 2.
The noble Lord said: My Lords, this amendment seeks to delete from the Bill Clause 2. At first sight it might be thought that this is in the nature of a wrecking amendment. It is nothing of the kind. It is moved in the hope that if your Lordships see fit to delete the clause, it will give another place cause to reconsider the progress of the Bill when it is returned to them.
It has been made quite clear in your Lordships' debates that the Bill has been very hastily cobbled together, without any real philosophy behind it, other than the necessity to raise money and the pursuit of the purely ideological exercise that all private enterprise must be superior to public enterprise. Therefore, by the deletion of the clause, which refers to the appointed day and to the declaration by the Secretary of State when British Telecommunications no longer exists, this Bill ought to go hack to another place for reconsideration.
Those of your Lordships who have had the opportunity to examine the proceedings in another place, in particular those which relate to Part V and Schedule 5 to the Bill, will realise that the public at large are unaware, as yet, of the enormity of the cost to the British public of passing the Bill. If one reads the Explanatory and Financial Memorandum, which is printed in front of the Bill which came originally to your Lordships' House, one finds that the costs to the Secretary of State of setting up Oftel are, as my noble friend has already correctly reminded the House, £1·5 million. But this excludes, of course, the other costs that will have to be borne by the British taxpayer.
I refer your Lordships to page ix of the Explanatory and Financial Memorandum attached to the Bill as it came to your Lordships' House, which states:
"Any conversion into equity of the successor company's liabilities to the Secretary of State in respect of loans to British Telecommunications will result in payments of principal and interest under the loan obligations concerned no longer being receivable".
That is a very modest way of expressing the financial consequences of the Bill so far as the British taxpayer is concerned because, as your Lordships will be aware, the amounts owing to the Secretary of State in terms of principal and interest by British Telecom amount, over the years, to about £6,000 million.
It is quite true that under the terms of later clauses in Part V of the Bill these loans will be converted into debentures which will be held by the Secretary of State in exactly the same way as the loan obligations were credited to him in the accounts of British Telecom. What the Bill is silent about, except for the insertion of the word "transfer" in an obscure paragraph in Schedule 5, and what is not known, is that those debentures will be transferred by the Secretary of State back to British Telecom for the satisfaction of excepted liabilities which on British Telecom's balance sheet at present are stated as a liability of £1,125 million and which, after taking indexation into account, will probably be a much greater figure.
Therefore, as a consequence of this Bill there will be an alienation from the British public, an alienation from the Government, of some £3,000 million against which, of course, will be set the receipts which the Government hope to get by reason of the sale of their share in British Telecom. This loss is nowhere shown. Indeed, the clause appropriate to Schedule 5—Clause 39—which expresses this transfer and which, I repeat, means a direct loss to the public Exchequer of a very valuable asset in the form of a debenture, is nowhere set out in the explanatory notes on Schedule 5, either. So the British public are to pay a very heavy bill in this respect. True enough, it may be deferred. True enough, all it is parting with is a right of the Exchequer
510
to receive principal and interest in the future. But it is a very significant sum indeed. On reading through the proceedings in another place, one wonders whether they could have been aware of this particular provision and the consequences of it when they dealt with the Bill.
Therefore, having in mind these new considerations which will be debated at a later stage of our Report proceedings when the amendments to Part V of the Bill and Schedule 5 are considered, it would be wise if another place, on getting this Bill back, re-thought out whether the whole exercise is really worth while; whether it is worth providing the Chancellor of the Exchequer with immediate funds in exchange for a public asset and at the same time incurring additional liabilities which are nowhere discussed and which have so far not formed part of any public pronouncement by any Minister of the Crown, either here or in another place.
If we eliminate Clause 2 here, the other place, after hearing all the arguments deployed, could obviously restore it, if it so wished. When it comes back to your Lordships, House, in the terms of convention it would be no part of our duty to frustrate the will of the elected people's representatives in another place. Therefore, what this amendment is designed to do, after all the facts are known and have been argued about, as they have not so far been argued about in terms of the financial consequences of this ridiculous Bill, is to give the other place another chance to reconsider the clause. After all, there is by no means unanimity on the Benches of the party opposite in another place, and they could decide, after all, whether it is worthwhile doing this wretched privatisation exercise.
I repeat, there is no desire in this House and certainly it is not the desire of those who sit on these Benches to challenge the Government's will in the matter. If this Bill is sent back to another place without Clause 2, the other place has every right, and might be persuaded by Ministers, to reinstate it. On the other hand it might not. As I said, there is no unanimity in the Conservative Party in another place any more than, in reality, there is here that this Bill is at all necessary. There is certainly no view in the country as to its necessity. I therefore ask the House to support this amendment, not as a wrecking amendment but as an opportunity to give another place a further chance to consider the whole matter in a depth which, owing to its particular nature, it has not yet had the opportunity of doing. I beg to move.
The Deputy Speaker (Lord Nugent of Guildford): My Lords, the amendment is to leave out Clause 2, so the Question is, That Clause 2 shall stand part of the Bill?
Lord Cockfield: My Lords, with respect, is not the amendment to leave out the clause, because we are on Report?
The Deputy Speaker: The Question will be put positively although the amendment is to leave it out.
Lord Bruce of Donington: My Lords, may I move, That the House do now resume, in order that the Government may assemble their thoughts?
Lord Cockfield: My Lords, I fear there are some procedural difficulties. We are not in Committee and, therefore, a Motion that we resume the House equally has no meaning. There was a little local difficulty that we were trying to resolve for the mutual convenience of your Lordships. There is nothing more to it than that.
It is, of course, a well-known rhetorical device to claim that you are not doing that which most plainly you are setting out to do. Clause 2 is one of the main pillars on which the Bill is constructed. To suggest leaving it out is, therefore, a wrecking amendment. Clause 2 provides that the exclusive privilege of British Telecom of running telecommunications systems should cease to exist. This paves the way to two things. First, it will increase the competition which exists, or should exist, in this area and, secondly, it will ensure that British Telecom is placed on an equal footing with all other providers of telecommunication services.
Before I go into that in more detail, perhaps I may be forgiven if I allow myself to be diverted by the noble Lord, Lord Bruce of Donington, to certain points that he raised on Part V of the Bill, paticularly relating to Clause 60. The NFL loans which will be extinguished under Clause 60 are required to be replaced by debentures so there is no conceivable loss to the Exchequer as a result of that transaction. The reason for it is to prevent an undue tax advantage which would otherwise accrue to the successor corporation. I should have thought that that would be a goal that both the noble Lord and I shared.
If we may come back to the main purpose of Clause 2, the proposition that the exclusive privilege should be removed is, quite frankly, that it is no longer appropriate to the world of telecommunications as it is developing. A revolution is occurring in telecommunications. A new approach to the industry is needed. A monopoly supplier, and in some cases purchaser, is not the body best suited to respond to the dramatic changes required. I do not in any way decry BT. In fact, on the contrary, I have paid tribute to the progress that it has made in recent years. Nevertheless, a monopoly is inappropriate and inadequate to deal with the circumstances and needs of a rapidly changing industry.
The problem with a monopoly is that the consumer is denied a choice. In short, there is no competition. But if there is no competition or choice, there is no incentive to improve the quality, efficiency and range of the services provided since the organisation has captive customers. It is this that we are trying to change. We wish to promote freedom of choice both for industry and for individual consumers, and where possible to ensure that industrial and commercial decisions are taken in a market-place and not by the state.
Lord Stoddart of Swindon: My Lords, I have been listening with great interest to what the noble Lord has been saying. He says that a monopoly is not appropriate in the field of telecommunications, but does not the Bill merely convert a public monopoly into a private monopoly, and shall we not still have a monopoly?
Lord Cockfield: No, my Lords. The noble Lord is taking much too narrow a view of what the Bill does.
512
It very greatly extends freedom of choice in the provision of apparatus and in the provision of ancillary services. There is a second national network in Mercury and two additional national cellular radio networks. The argument that the noble Lord is putting forward, which finds some echoes on the Benches behind me, is that we have not gone far enough in providing effective competition for BT. If that is his argument, I find myself in some difficulty if my noble friends behind me who wish to extend the field of competition even further are to have the powerful support of the noble Lord, Lord Stoddart of Swindon.
Lord Stoddart of Swindon: My Lords, I was not putting forward an argument. I was merely trying to set on record the facts and to point out that, although the noble Lord said that a monopoly was not appropriate, that is precisely what will prevail, but it will be a private instead of a public monopoly. We are basically and diametrically opposed to a private monopoly. Furthermore, this Bill was not necessary to provide competition in certain appliance fields. That was done in the 1981 Act, and of course Mercury was set up under that Act as well.
Lord Cockfield: And, my Lords, this Bill considerably extends the field of competition in these particular areas. I am well aware of the noble Lord's views. I do not accept them. They are not accepted by my noble friends. I do not believe that the arguments which he is putting forward are well justified either on the facts or otherwise.
There is a very big improvement which has already taken place as a result of the stimulation of competition. The noble Lord says quite correctly that we started down this path in 1981. That has produced significant results. We expect to see further improvements when this Bill, of which Clause 2 is an integral part, comes into full effect.
If I may give the noble Lord two examples of this, first, the number on waiting lists for a telephone is now down to 1,500. As recently as March 1980 it was 262,000. This has taken place under the stimulus of competition. Seventy-three per cent. of residential orders are now being met within 12 working days, and this compares with 50 per cent. as recently as 1980.
Lord Weinstock: My Lords, does the noble Lord consider that that has nothing at all to do with the fact that there are a great many more people unemployed now than there were then and thus the demand for new telephones may not have risen at the same rate as previously?
Lord Cockfield: No, my Lords, I believe that the primary explanation is an improvement in the efficiency of BT. That improvement has taken place under the stimulus of competition. The more competition we can provide in this field, the better the service that is likely to be available.
It has been claimed that British Telecom—
Lord Weinstock: My Lords, I am sorry to interfere in what is rather a private matter between the two Front Benches, between which I am sandwiched, but I should like to ask the noble Lord whether he can

513
expand a little on this competition which he thinks has resulted in a better line of supply of telecommunication apparatus, and whether he knows, for example, how many of the telephone instruments supplied to people who were previously waiting have come from BT and how many from other sources.
4.58 p.m.
Lord Cockfield: My Lords, the noble Lord, who is much involved in the manufacturing industry, is probably in a better position to answer that than I am. What has happened in this field is on the record and is perfectly clear. Under the stimulus of competition very substantial improvements have been made. We hope to—
Lord Weinstock: My Lords—
Lord Cockfield: My Lords, I am very sorry. The noble Lord has already had two attempts at this. If he wishes to make a speech, which we will listen to with very great interest, he is always entitled to do so, but there are certain limits of procedure when we come to the Report stage of a Bill.
It has been argued repeatedly from the Benches opposite that the concept of a public service goes hand in hand with a public monopoly. We do not accept this at all. On the contrary, what we are doing is firmly in the interests of consumers and will result in a better public service. I have already described the improvements that BT has made in response to consumer demand. This seems to me a much better service available to the public than existed before. I expect this process to continue and British Telecom to become even more responsive to the wishes of its consumers.
It is also claimed that BT will concentrate on business consumers and neglect the less profitable residential user. This argument I also reject. I fully expect BT to improve its services to business customers and I hope very much that it will do so, but this does mean that it will neglect the residential customer. We have included special safeguards to this effect and indeed we have strengthened them in the Bill, as a result of the arguments that were put forward at the Committee stage.
But of course, apart from this, it is very much in BT's own commercial interests to look after its residential customers. One of its most valuable assets is the 19 million people connected to its system, and of this total no fewer than 15.6 million are residential connections. This is a huge customer base and a very great advantage to British Telecom. Its interests are best served therefore by responding to the demands of these residential customers and encouraging them to use the service as much as possible. Indeed, it is said that the system is in fact under-utilised and one would expect BT to exploit every opportunity of expanding the extent to which the system is used.
Having said this, I come back to the simple point that Clause 2 is an integral part of the Bill; and while of course it is perfectly proper for the noble Lord to move that it should now be left out, to do so would be contrary to the view taken by your Lordships when the
514
House gave this Bill a Second Reading. I therefore hope that on this basis your Lordships will reject this amendment.
Lord Donaldson of Kingsbridge: My Lords, we have listened from these Benches with fascination to two long arguments of a Second Reading kind about the virtues and vices of privatisation. We are not even faintly convinced by the Government's version of this argument; but we are convinced that this is too near a wrecking amendment for us to support it.
Lord Bruce of Donington: My Lords, I take note of the remarks which fell from the lips of the noble Lord, Lord Donaldson of Kingsbridge, which I regret. I would, however, point out to the House—I think the House will recall—that when the noble Lord was explaining to me the operation of Clause 60 and was defining, quite correctly, how the amounts owing to the Secretary of State were going to be substituted by debentures—and therefore there being no loss on that account, either on capital or on interest account—what he was careful not to do was to answer the assertion that I made.
I repeat that now: there will be a net diminution of assets in the possession of the Treasury, and therefore of the taxpayer, to the tune of anything up to £3,000 million arising from the operation of paragraph 39 of Schedule 5, from which, as the noble Lord knows quite well, even though it is omitted from his explanatory notes, the Secretary of State will then transfer those debentures, or such proportion of them, from his own possession on behalf of the British taxpayer, to the remaining rump of British Telecom in order to enable it to discharge a pension liability that is already stated on British Telecom's balance sheet of £1,125 million and which is being eliminated from the balance sheet for the purposes of the private takeover. Perhaps the noble Lord would like to deal more with that because to the best of my recollection it was not dealt with in any of the debates in another place and has not so far been dealt with in detail here.
Lord Cockfield: My Lords, as the noble Lord, Lord Bruce of Donington, and I have both been reproved by the noble Lord, Lord Donaldson of Kingsbridge, for making Second Reading speeches, perhaps it would be more appropriate if we discuss Part V of the Bill when we come to Part V, instead of endeavouring to discuss it on Clause 2. We do of course have a complete answer to the points that the noble Lord is making; but I do not think that it would be right to go into detail in a discussion on Clause 2 on matters which are relevant to Part V.
Lord Donaldsonof Kingsbridge: My Lords, with respect, the noble Lord should have asked the leave of the House.
Lord Cockfield: My Lords, according to the Companion, a Minister may speak in reply. I read the rules very carefully before I came here. Nevertheless, if the noble Lord feels I should have asked permission—and I was really only paying him a tribute; I am sorry if he felt that that was out of order—I now repair the omission and ask for permission.
5.5 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 68; Not-Contents, 114.

DIVISION NO. 2

CONTENTS

Ampthill, L.

Kaldor, L.

Ardwick, L.

Kearton, L.

Beswick, L.

Lawrence, L.

Bishopston, L. [Teller.]

Leatherland, L.

Blease, L.

Listowel, E.

Blyton, L.

Llewelyn-Davies of Hastoe, B.

Boston of Faversham, L.

Longford, E.

Bottomley, L.

Lovell-Davis, L.

Brockway, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mar, C.

Burton of Coventry, B.

Mulley, L.

Caradon, L.

Oram, L.

Carmichael of Kelvingrove, L.

Peart, L.

Cledwyn of Penrhos, L.

Pitt of Hampstead, L.

Collison, L.

Ponsonby of Shulbrede, L. [Teller.]

Cooper of Stockton Heath, L.

Darling of Hillsborough, L.

Rhodes, L.

David, B.

Ross of Marnock, L.

Davies of Penrhys, L.

Sefton of Garston, L.

Dean of Beswick, L.

Serota, B.

Delacourt-Smith of Alteryn, B.

Shackleton, L.

Shinwell, L.

Denington, B.

Stallard, L.

Donnet of Balgay, L.

Stewart of Alvechurch, B.

Elwyn-Jones, L.

Stewart of Fulham, L.

Ennals, L.

Stoddart of Swindon, L.

Ewart-Biggs, B.

Stone, L.

Gaitskell, B.

Strabolgi, L.

Gallacher, L.

Taylor of Blackburn, L.

Graham of Edmonton, L.

Underhill, L.

Hale, L.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wells-Pestell, L.

Irving of Dartford, L.

White, B.

Jeger, B.

Wilson of Rievaulx, L.

Jenkins of Putney, L.

Wootton of Abinger, B.

NOT-CONTENTS

Ailesbury, M.

Gainford, L.

Airey of Abingdon, B.

Glanusk, L.

Auckland, L.

Glasgow, E.

Avon, E.

Glenarthur, L.

Bauer, L.

Grantchester, L.

Belhaven and Stenton, L.

Gray of Contin, L.

Bellwin, L.

Gridley, L.

Belstead, L.

Hailsham of Saint Marylebone, L.

Bessborough, E.

Boyd-Carpenter, L.

Halsbury, E.

Broadbridge, L.

Henderson of Brompton, L.

Broxbourne, L.

Henley, L.

Bruce-Gardyne, L.

Holderness, L.

Caithness, E.

Home of the Hirsel, L.

Campbell of Alloway, L.

Hornsby-Smith, B.

Campbell of Croy, L.

Hylton-Foster, B.

Cathcart, E.

Kaberry of Adel, L.

Chelwood, L.

Killearn, L.

Cockfield, L.

Kinloss, Ly.

Constantine of Stanmore, L.

Kintore, E.

Cottesloe, L.

Lauderdale, E.

Cross, V.

Liverpool, E.

Cullen of Ashbourne, L.

Lloyd of Hampstead, L.

Denham, L. [Teller.]

Long, V.

Drumalbyn, L.

Lucas of Chilworth, L.

Ebbisham, L.

Luke, L.

Ellenborough, L.

Lyell, L.

Elton, L.

McAlpine of Moffat, L.

Enniskillen, E.

McAlpine of West Green, L.

Faithfull, B.

Mackay of Clashfern, L.

Fanshawe of Richmond, L.

Macleod of Borve, B.

Fraser of Kilmorack, L.

Mancroft. L.

516

Marley, L.

Sandford, L.

Marshall of Leeds, L.

Selkirk, E.

Maude of Stratford-upon-Avon, L.

Sempill, Ly.

Shaughnessy, L.

Merrivale, L.

Skelmersdale, L.

Mersey, V.

Soames, L.

Milverton, L.

Somers, L.

Molson, L.

Spens, L.

Morris, L.

Stamp, L.

Mottistone, L.

Strathcarron, L.

Mowbray and Stourton, L.

Strathspey, L.

Murton of Lindisfarne, L.

Sudeley, L.

Nathan, L.

Swinton, E. [Teller.]

Northchurch, B.

Terrington, L.

Nugent of Guildford, L.

Teviot, L.

Orkney, E.

Teynham, L.

Orr-Ewing, L.

Thomas of Swynnerton, L.

Pender, L.

Torphichen, L.

Penrhyn, L.

Trefgarne, L.

Peyton of Yeovil, L.

Trenchard, V.

Porritt, L.

Trumpington, B.

Portland, D.

Vaux of Harrowden, L.

Rankeillour, L,

Vickers, B.

Romney, E.

Vivian, L.

St. Davids, V.

Westbury, L.

Saltoun, Ly.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 2 agreed to.
Clause 3 [General duties of Secretary of State and Director]:
5.15 p.m.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 9:
Page 2, line 38, leave out ("Part II or Part III") and insert ("all Parts of this Act save Part IV").
The noble Lord said: My Lords, with the leave of the House, in connection with Amendment No. 9 I wish also to refer to Amendment No. 16.
Amendment No. 16: Page 3, line 14, leave out ("Part II or Part III") and insert ("all Parts of this Act save Part IV").
I am sure that the noble Lord the Minister will be able to clarify this point very quickly, so that I shall not take up much of your Lordships' time. The point is that Clause 3 of the Bill is intituled,
"General duties of Secretary of State and Director".
Clause 3 goes on to say that the duties of the Secretary of State and the director are related to Parts II and III only. That is my interpretation; that the clause refers to the fact that there are duties of the Secretary of State and the director only in Parts II and III. Clause 3 then sets out what are those duties.
As I pointed out at the Committee stage, that is wrong because the director is referred to in several other clauses under different parts of the Bill. At the Committee stage I therefore suggested that the reference in the clause to Parts II and III of the Bill should be entirely omitted, but I was told by the Government Minister that Part IV should be included. Although Part IV relates to cable and, as was explained on that occasion, is in due course to be excised, it was felt necessary to retain the reference to it.
So I cannot understand—though it may be entirely my fault—why the duties of the Secretary of State and the director do not apply to all the parts of the Bill, and not just Parts II and III, where the Secretary of State and the director are referred to. I do not propose to go

517
through all the provisions where the Secretary of State or the director is referred to. I shall mention only two. The Secretary of State is referred to in Part VIII (in Clause 88) and his functions are referred to in Part V (in Clause 62). I should have thought that it would be far better if the reference to Parts II and III were cut out of Clause 3, so that the director's duties as defined in the clause apply to all parts of the Bill where he is referred to, except Part IV, which relates to, "Cable programme services". I understand that in due course Part IV will be excised or otherwise not dealt with under the Bill. I beg to move.
Lord Lyell: My Lords, I am sure that the House will be aware that the noble Lord introduced a very similar amendment at an earlier stage when he sought to apply the Clause 3(2) duties to the whole Bill. After the noble Lord moved that amendment the Government replied that we felt that it was unclear whether he had considered in detail what would be the consequences of his blanket amendment. I believe that the same question arises in the context of Amendment No. 9, as well as Amendment No. 16, to which the noble Lord was also kindly speaking, because it seems that the only concession that has been made to the arguments that we produced on the earlier occasion has been to except Part IV of the Bill from the proposed scope of the Clause 3 duties. This afternoon in mentioning Part IV the noble Lord has reiterated what I said at an earlier stage when we discussed Part IV and the cable provisions.
I hope that I shall not take your Lordships over too much of the ground over which we earlier trod, but I should like to point out, by reference to one example, why we still regard the approach of the noble Lord as unacceptable. The noble Lord, Lord Lloyd, also referred to Part V of the Bill, which was the subject of some comment when the matter was raised at an earlier stage. As your Lordships will be aware, Part V confers a number of powers on the Secretary of State in relation to the transfer of the assets of British Telecom to the successor company, in relation to the flotation, and also in relation to his position as a residual shareholder in the successor company. We believe that it would run quite counter to one of the key objectives of the policy of privatisation to require the Secretary of State to manage his shareholding by reference to the duties that are set out in Clause 3.
I am sure the noble Lord will accept that those duties represent the Government's view of where the public interest lies in telecommunications—as does the separate decision to privatise the corporation. One of the reasons for taking that decision was our perception that British Telecom needed to be freed from interference by the Government, so as to act as a commercial company, subject to the normal commercial disciplines. The result of applying the duties set out in Clause 3 to the Secretary of State in this context would be effectively to guarantee a continuation of the constraints and the second guessing which over the years have hampered the operations of British Telecom, as they have in some degree all the nationalised industries. Looked at in that light, we think that Amendments Nos. 9 and 16 would deny a major element in the Government's overall policy towards telecommunications.
518
I should like to turn to just one other subject and ask your Lordships not necessarily to accept Amendments Nos. 9 and 16. In reply to the noble Lord, Lord Lloyd of Kilgerran, at an earlier stage on this subject, I implied that there might be a case for examining whether particular functions at present outside Parts II and Ill of the Bill should be brought within the ambit of the duties set out in Clause 3. It was at that stage that my noble friend Lord Morris drew our attention in particular to the merits of making what is now Clause 93, which gives the director a power to require information, for example in the context of enforcing licence conditions or investigating complaints, subject to the duties in Clause 3.
We looked again at this point in the light of the debate that arose on the amendment of the noble Lord, Lord Lloyd. We think that there is a case for moving Clause 93 into Part III of the Bill, which would achieve the result. There may be a case for bringing forward certain of the other clauses in Part VII for the same purpose. I think, however, that the selective and discriminating approach is the correct one. With the leave of the House, we propose to put down the necessary amendments for your Lordships' consideration when we reach the relevant clauses later in our proceedings. On the basis of that undertaking, I hope that I have been able to explain to the noble Lord, Lord Lloyd, why we do not agree with his amendment.
Lord Bruce of Donington: My Lords, we on this side of the House would like to associate ourselves with the noble Lord, Lord Lloyd of Kilgerran, on these two amendments. I was a little surprised to hear that the Secretary of State would find it extraordinary if he was required to exert the responsibilities that still lie with him in holding on behalf of the public at large, the taxpayer, some 49 per cent. of the shareholding of the new PLC. If the Government dispose, as is their intention, of some 51 per cent. of the holding in the new PLC, that will still leave them with 49 per cent. On the assumption that closely follows those that have so far been made officially by the Government, that the shareholding in the new PLC will be widely diffused—although I venture to suggest that the effect of that can be exaggerated—it will be clear that even after disposing of some 51 per cent. Of their holding in the PLC shares, the Government will still he left, in effect, with control lying with the 49 per cent. The Government will still he left with the responsibilities.
Alternatively, is the noble Lord saying that the Government holding of 49 per cent. is to be so absolutely passive that all the duties associated with shareholdings are to be completely negatived? If so, it would appear to negative the entire theoretical reason that lies behind privatisation. If the Government say that all the functions of the shareholder are to do nothing, where are the advantages of transferring ownership from one party to another? It has long been our case that the actual ownership in shareholding terms will exercise very little impact at all on the whole running of telecommunications. The noble Lord knows full well that, in the world of commerce outside this House and outside Westminster, a 30 per cent. shareholding in a PLC is very often sufficient to ensure control.

519
All that the amendment really seeks to do is to say that when it comes to exercising their responsibilities as the controlling shareholder of the PLC the Government shall exercise them in a manner that is governed by the whole spirit and content of the earlier parts of the Bill: in other words, they shall behave in exactly the same way as they are enjoining, by regulation, everyone else to behave. Surely, there can be no objection to that. The noble Lord, Lord Lyell, has already indicated that there are certain specific clauses that the Government may feel inclined to include in the category to which the noble Lord, Lord Lloyd of Kilgerran, has referred. That being the case, why should there be any resistance to the provisions of this part of the Bill, Part I and particularly Clause 3, being regarded as all pervasive? Why should the Secretary of State not be bound to them in his actions in regard to any part of the Bill, aside from those specifically mentioned?
The noble Lord, Lord Lloyd of Kilgerran, has presented his case very reasonably. We are gratified by some of the remarks that fell from the lips of the noble Lord, Lord Lyell. We believe, however, that the Government would be well advised to go the whole way; otherwise, all that they are really saying is that the change of ownership of shares in the company has no effect whatever on the conduct of its affairs. This is very largely, it must be admitted, giving us the case that we have propounded from the very beginning.
Lord Morris: My Lords, it would be most uncharitable if I was not to say how grateful I am to my noble friend for the fact that the Government are considering the impact of Clause 3 on Part VII of the Bill, the miscellaneous and supplemental clauses to the Bill. I am most grateful to my noble friend and also to the noble Lord, Lord Lloyd of Kilgerran, whose stimulating arguments at an earlier stage made me consider this point. It would never have occurred to me until he spoke. Yet again, the noble Lord has been a goodly influence upon me, and I am most grateful to him.
Lord Lyell: My Lords, if I might reply briefly to the noble Lord, Lord Bruce of Donington. I think that his concluding remarks made my case. The noble Lord accepted my remark that we believe that a selective and discriminating approach to the problem is best. I hope that I have explained to the noble Lord, Lord Bruce, and also to the noble Lord. Lord Lloyd. why we feel that the broad brush approach, especially in relation to Part V, would be wrong in this instance.
I would certainly not wish to follow the noble Lord, Lord Bruce. once again down the avenue of the arguments on privatisation and about what constitutes effective control. I wonder if the noble Lord, Lord Bruce, himself would not agree that he is deducing far too much from my reply as to what does or does not constitute effective control. The main thrust of my first reply to the noble Lord, Lord Lloyd of Kilgerran, was that we believe that Parts II and III are the relative parts of the Bill that should be adduced in respect of the director's duties and the powers here. To go outside that to Part V is, we believe, far to broad.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the Minister for his succinct reply on this occasion.
520
When I last raised the matter in Committee there was considerable confusion over what I thought was quite a simple matter. I am also grateful for the statesman-like way in which the noble Lord, Lord Morris, has approached this matter and has precipitated the Government into making some observations which go some way towards the points that I was making. I will read what the Minister said in Hansard; but if I understood him correctly, he was considering whether a selective and discriminating approach was best in regard to the activities of the director in this matter. In view of the Minister's observations, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.31 p.m.
Lord Cockfield Lord Cockfield moved Amendment No. 10:
Page 2, line 43, leave out from ("services") to end of line 3 on page 3.
The noble Lord said: My Lords, with permission, perhaps it would be convenient if I move Amendment No. 10 and speak also to Amendment No. 47:
Amendment No. 47: Page 10, line 16. leave out from ("against") to ("and") in line 20 and insert ("particular persons or persons of any class or description (including, in particular, persons in rural areas) as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs (whether in respect of the charges or other terms or conditions applied or otherwise)").
Amendment No. 10 is essentially a paving amendment for Amendment No. 47 in the sense that it simply omits certain words to leave the way clear for better words later on. That is the only effect of this amendment. But the effect of the two amendments taken together is to give effect to the wishes of the House when noble Lords passed Amendment No. 24 in Committee on 13th February.
It was admitted by the supporters of that amendment at the time that its drafting might be defective—thus, the noble Lord, Lord Taylor of Gryfe, at col. 22: the noble Lord, Lord McIntosh of Haringey, at col. 32; and my noble friend Lord Alport at col. 21. Other noble Lords drew attention to possible pitfalls into which the amendment as then drafted could easily fall—for example, the noble Lord, Lord Somers, at col. 20, quoted with approval by the noble Lord, Lord McIntosh of Haringey, at col. 32. Other noble Lords suggested that we should take the amendment away and rewrite it in more appropriate language on Report—for example, the noble Lord, Lord Lloyd of Kilgerran, at col. 31 and the noble Lord. Lord Weinstock, also at col. 31.
The doubts expressed by noble Lords in all parts of the House about the drafting of the Committee stage amendment have proved to be correct. It is difficult to say what the courts would make of the words inserted by that amendment; it is even more difficult to say what the effect of the amendment in practice would be. However, I would not wish to delay your Lordships with a dissertation on those matters. What your Lordships intended was perfectly clear and what we have set out to do in the amendment that I am now proposing. taken with Amendment No. 47, is to give effect to those intentions.
There were two main strands in the argument. The first was that charges, whether for installation,

521
maintenance or use, should not discriminate against rural areas because they were rural areas. The second strand was that the protection should be written in the Bill. The course we have adopted is to build on Clauses 8 and 9 which, incidentally, are proving to be a very willing workhorse. Clause 9 provides for the status of public telecommunications operator; and Clause 8 sets out the special obligations applying to public telecommunications operators. The term "public telecommunications operator" embraces all those who will he operating the major telecommunications networks—not only British Telecom, but Mercury and Hull as well, and the two cellular companies. This then defines the group of operators with which we are concerned.
The debate in Committee concentrated on British Telecom, but I think that your Lordships will agree that the rather wider coverage proposed in the amendments in my name is of advantage. Clause 8(1)(d) prohibits "undue discrimination against," or "undue preference to", any person or classes or descriptions of persons in respect of any service provided or connections made, and so on.
The amendments we are now proposing in effect do two things. First, Amendment No. 47 proposes inserting the words:
"including, in particular, persons in rural areas".
That makes it abundantly clear that the prohibition of "undue discrimination against" applies in particular to persons in rural areas. That was the nub of the complaint made by your Lordships in the debate on 13th February. Secondly, we propose inserting the words:
"in respect of the charges or other terms or conditions".
That is to make it abundantly clear that the obligation not to discriminate unduly applies not only to the provision of the service but also to the charges made for the service. In this respect the coverage I am proposing goes wider and the protection is better than now proposed by the noble Lord, Lord Bruce of Donington, under his Amendments Nos. 11 and 12.
The use of the description:
"service provided, connection made or permission given"
makes it quite clear that these provisions apply, as the House wishes, to installation, maintenance and usage.
Finally, by incorporating these new provisions in Clause 8 we ensure that the protection appears in the Bill itself and is not relegated to the licence. I should say something further about "undue discrimination". It might be argued that all discrimination should be prohibited. In the popular sense of the term "discrimination" that, broadly speaking, is what in fact we are doing. But if the words were incorporated simpliciter in statute, they could be strictly interpreted. As a result, perfectly reasonable and acceptable practices would be held to offend against the law. For example, I can make a telephone call from Westminster to Lambeth for the same price as for a call from Westminster to Ealing. As Ealing is further away than Lambeth this, technically, is discrimination: but of course it is perfectly sensible. Similarly, British Telecom have recently introduced lower unit charges on the most used trunk routes. Technically, this too is discrimination; but it is perfectly sensible and no one
522
would wish to see it stopped. That is the reason we have adopted the phrase already in the Bill about "undue discrimination",
On installation, the first 100 hours of work is included in the fixed charge. This again is technically discrimination in favour of difficult connections and discrimination against easy connections. All these practices are perfectly normal, and indeed beneficial. The qualification "undue" is inserted simply to allow these normal, sensible arrangments to continue. In this respect the way in which the Government propose dealing with the matter does in fact give the consumer better protection than would be the case under the amendments of the noble Lord. Lord Bruce of Donington.
I believe therefore that we have fully met all the points which were raised in Committee. I hope on that basis your Lordships will accept these amendments. I formally beg to move Amendment No. 10 to insert the words which appear in the Marshalled List.
Lord Bruce of Donington: My Lords, in his presentation of this amendment the noble Lord, Lord Cockfield, has been at his most seductive. In point of fact he has sought to produce a reasoned explanation for overturning an amendment, admittedly imperfect in its text, that passed through your Lordships' Committee with quite a substantial majority against the Government on the last occasion.
The noble Lord, Lord Cockfield, expresses himself to be suitably contrite about the text of the original Bill as it came from another place, which your Lordships, against the wishes of the Government, amended in Committee. He now says, of course, that he really accepts the general sense of the Committee; that he has taken account of the great feeling that was behind that acceptance of the amendment that we proposed; that he has given it very careful consideration indeed and does not intend in any way to try to overturn what your Lordships decided in Committee; and that what he is really trying to do, with his usual helpfulness, is to make it even more effective than your Lordships' Committee sought to make it when we made that decision. This is a most pleasant approach, and is characteristic of the way in which the noble Lord approaches these matters. Unhappily. of course, there are certain pitfalls in it.
If your Lordships will go back to Clause 3 of the Bill you will see that Clause 3 imposes a duty on the Secretary of State and the director. It is expressed in these terms:
"The Secretary of State and the Director shall each have a duty to exercise the functions assigned or transferred to him by or under Part II or Part III of this Act in the manner which he considers is best calculated
(a) to secure that"—
and paragraph (a) includes the non-discriminatory provision that your Lordships' Committee inserted against the wishes of the Government on the last occasion.
The noble Lord says that there are much more effective ways of doing that, and that they will put all the operative parts in Clause 8, which, of course, relates to the licence. Let us just take that on its merits for the moment. The one thing about Clause 3, which charges the Government with a complete

523
responsibility, is that it cannot he amended at all without a new Bill being introduced to amend the Act. But licences can be changed, and they can be changed under the provisions of Clause 12. Unless the noble Lord can persuade me that it is not possible in any way to get round Clause 8(1)(d), as now amended, by a subsequent change in the licence, I shall seek to persuade your Lordships' House that the protection offered by him is rather illusory.
My, own impression—and I speak subject to correction—is that a licence issued under Clause 7 can, in fact. be amended by Clause 12. I am very anxious to avoid a situation where, after a time, certain operators find the provisions of their licence a little too arduous. I am rather nervous, particularly in view of the noble Lord's generous disposition, that he might be persuaded to give way to them and sympathise with them, and in fact agree to a licence that contains less than what was required by the original amendment to Clause 3.
However, even on the assumption that Clause 8(1)(d) has the full force of the equivalent amendment to Clause 3, there are certain further pitfalls. The noble Lord has been good enough to refer to them. Of course, paragraph (d) of Clause 8(1) reads as follows:
"not to show undue preference to, or to exercise undue discrimination against".
That is not quite the same wording as Clause 3 unamended, which provides that they shall secure that, in charging, there is no discrimination on the basis of any geographical location.
The words used here are "undue preference" and "undue discrimination". The noble Lord was quite right in pointing out that there is a certain legal connotation attached to both those words. Indeed, I have the cases before me, to which the noble Lord may wish to refer, where some of the effects are outlined. There is the case of British Oxygen Co. Ltd. v. South of Scotland Electricity Board in 1959, which is reported in Volume 1 of the Weekly Law Reports at page 587. He will see that in that case it was decided that the cost to the producer is a relevant consideration in determining questions of undue discrimination and undue preference.
That is precisely the point to which the original amendment to Clause 3 was directed. It was designed to avoid a situation in which, because of the extra costs incurred in installing telephones in rural and other non-urban areas, there would be a discrimination, that there would, in fact, be an unfairness, as between the rural communities and the town communities. The prohibition of undue preference or undue discrimination would not. therefore, protect the rural users in the same way as our original amendment to Clause 3 would, because in any case alleging that there had been undue preference or undue discrimination the noble Lord could cite in reply the case of British Oxygen Co. Ltd. v. South of Scotland Electricity Board. Indeed, there is a whole host of other precedents which, under those circumstances, entitle him to charge more for a comparable installation in the country than he would in the town without being outside the law. That is the problem.
There is no real protection (in the same sense as we originally incorporated it in our amendment to
524
Clause 3. which the noble Lord now seeks to overturn) in the words that he has chosen to use in his amendment to Clause 8 of the Bill. As I say, the case law is quite clear, and the noble Lord can refresh himself on it. The insertion of the words,
"not to show undue preference to, or to exercise undue discrimination against",
is no protection for the consumer where the costs to the supplier are, in fact, more. For this reason, I sincerely hope that the House will not agree to the amendment that the noble Lord has moved.
Lord Lloyd of Kilgerran: My Lords, I entirely agree with what the noble Lord, Lord Bruce of Donington, has said: that the wording of Amendment No. 47, to which the noble Lord the Minister has referred, does not protect the consumer or the persons in the rural areas in the way in which he is suggesting. I understand that the Minister is saying that there is something defective in relation to the amendment that was passed by your Lordships at the Committee stage, and that he is seeking to put that right. But, with respect, the wording of Amendment No. 47, at any rate alone, does not do anything except add words to an already very large Bill. It is a cosmetic amendment, and adds nothing of value to protect consumers or the persons in rural areas.
5.50 p.m.
The Countess of Mar: My Lords, I would agree with the noble Lords, Lord Bruce of Donington and Lord Lloyd of Kilgerran. I do not think that Lord Cockfield's amendment goes anywhere near far enough to protect rural customers. We must remember that rural industries and people living in the country are just as valuable to our society and to our business well-being in this world as people who live in towns and cities. To discriminate against them because they happen to live in the country—perhaps they are producing food; perhaps they have a small factory in a rural area providing work for people who live in the country—is wrong.
I know that at the present moment if a customer wants a special type of data circuit, for example, and his telephone exchange does not have the right relay set he is asked to pay the extra money to provide that relay set. If a customer lives in London or Glasgow and wants any sort of special equipment he can get it at a standard charge. If we can abolish that discrimination, we will have done very well.
Lord Donaldson of Kingsbridge: My Lords. I am not happy about this. When the Minister was speaking I thought that he really was trying to meet the amendment, but when I look back at the amendment I cannot see that he has improved it. He has put it somewhere else and, as the noble Lord. Lord Bruce of Donington, says, being the licence it is amendable without an Act of Parliament. He has not included the main part of the original amendment which was on the basis of the geographical location of the installation. That is what the amendment was about. That is what the Committee carried. In spite of the fact that I feel that the noble Lord and his advisers have had a shot at doing this. I do not think they have done it well enough, and the noble Lord ought to take it away, as he sometimes takes away our amendments, before we turn it down.
Lord Mottistone: My Lords, something I did not quite follow in Lord Bruce's statement was when he said that licences can be amended. But they obviously cannot be amended contrary to Clause 8, because every licence must comply with Clause 8. Therefore any amendment that is put in, if it was originally in accordance with the new wording in Amendment 47, would have to continue to be in accordance with that.
I should have thought that my noble friend the Minister is perfectly right in saying that what he is proposing to put in covers all the ground that the Committee at Committee stage wanted in paragraph (a) of Clause 3, and have put it in another part of the Bill. It is just as important and as binding on the licensee in Clause 8 as it would have been binding on the Secretary of State and the director in Clause 3. In fact, in some ways it is better where my noble friend has it because it specifically requires that there should not be discrimination in the extended meanings given in Amendment 47. I think that noble Lords opposite are making rather a meal of this, and that we can well accept my noble friend's argument as being a good way—indeed, better way—of putting in what the Committee at an earlier stage thought should be added to the Bill.
Lord Somers: My Lords, I hesitate to differ from my noble friend Lady Mar but I think that an instance such as she suggested could be described legally as undue discrimination. I cannot see a situation like that occurring without legal protest. I think that what the noble Lord, Lord Cockfield, has said about maintaining the word "discrimination" simply for purely hypothetical purposes is quite correct. This amendment, so far as I see it, is perfectly satisfactory.
Lord McIntosh of Haringey: My Lords, the noble Lord Lord Cockfield, made great play with the admitted defects of the original amendment. Since he mentioned my name in connection with those apologies to the Committee at that time about the defective wording I looked back at the nature of those defects as we saw them and the arguments put forward successfully to the Committee at that time.
It seems to me that there were two kinds of defect referred to by noble Lords and by myself. The first was about installation. A number of noble Lords expressed ignorance about British Telecom's current practice on installation. It was only towards the end of the debate that it became clear to all noble Lords taking part in the debate that British Telecom has a rule that there may be additional installation charges when the time taken for the installation exceeds 100 man hours. It seemed to us, and to the Committee at that time, that this was an acceptable form of pricing which did not constitute discrimination against rural areas. That was the basis on which the Committee accepted that form of words. Therefore those apologies for defective wording, I submit, now fall.
The second case of defective wording was on the question of discrimination on usage. It is true that there is a difficulty. The difficulty is that British Telecom already discriminates in favour of certain customers on the basis of the cost of usage. It is already the case that the London telephone area is much larger than telephone areas in other parts of the country, and
526
therefore that London telephone users get a better, more widespread, and more effective use of local call charges than people in other areas.
It is also the case that on certain trunk routes, mainly to and from London—but also, according to my information, between about 10 or 15 other cities—there are preferential rates available to users living in those cities. Therefore, there does not seem to be much doubt that British Telecom does discriminate on the basis of charges for usage between people living in one geographical area and another. It is for that reason that my noble friends and I have put down Amendments Nos. 11 and 12, which omit the word "usage" from the amendment that we proposed at that time. Amendments Nos. 11 and 12 remove the only other defect in the wording of the amendment which was carried in Committee.
The noble Lord, Lord Cockfield, proposes that the combination of Amendments Nos. 10 and 47 now provide adequate coverage of the points that your Lordships were trying to achieve with the amendment carried in Committee. This is far from being the case. This is not just a matter of the wording of Amendment No. 47, which is more limited than the wording of Clause 8, which at the moment applies to
"discrimination against, any person or persons of any class or description".
But it is also the fact that Clause 8 is extremely restricted in its scope. Clause 8 is not saying that all licences shall contain these provisions against undue discrimination. What Clause 8 says is that where there are certain requirements on licensees in a licence, then in subsections (3) and (4) there is the right that notice should be given and that objections should be heard. That is all that Clause 8 says.
The only concession which the Government are purporting to give to the House is that where there is thought to be discrimination against subscribers in rural areas there shall be the right of a notice, and there shall be the right of objection before the licence is approved. That is far from the intention when the amendment was moved in Committee. I put it to your Lordships that there is no reason for a single Member of this House who voted for the amendment in Committee to vote in favour of the Government amendment now. If your Lordships will forgive me, I will repeat what I said when I moved the amendment at that time:
"If we are told that Conditions 17, 25, and 26 of the licence provide the protection that is required, why cannot that protection be written into the Bill? That is what noble Lords were asking for and that is what the Government should concede. If they gave any indication of that, I should be the first to say, 'Let us consider the Government's own proposals at Report stage'. Failing that I fear that I have no alternative but to ask the Committee to support the amendment".—[0fficia/ Report, 13.2.84; col. 32]
The Government have not in any way responded to the wishes of the House at Committee stage and they have not in any way made a case for the amendment now being proposed.
Lord Weinstock: My Lords, I feel obliged to intervene as I supported the amendment which now appears in the Bill against the Government at Committee stage on the grounds that the Government seemed impervious to suggestions coming from all sides of the Chamber that the matters of which the

527
amendment was cognisant should be taken into account. It seems to me that the proposals that the noble Lord, Lord Cockfield, has now put—as the noble Lord, Lord Bruce of Donington, has said with considerable generosity—remove the need for those who doubted the Bill in its present form to vote for that amendment. I will support him in the amendments he now proposes.
Baroness Macleod of Borve: My Lords, I, too, was one of those who voted against the Government last time; but I submit that this amendment now put before us by my noble friend the Minister covers everything that we wanted. Indeed, I think he has gone even further. He is not only dotting the i's but crossing the t's, and I would vote for the amendment.
Lord Spens: My Lords, I also supported the amendment last time, and I will continue to do so because I think the point made by the noble Lord, Lord Bruce of Donington, that anything in Clause 8 can be modified by Clause 12 is valid, particularly if one reads Clause 12(7) which says:
"References in this section…do not include references to modifications relating to the application of the telecommunications code".
That is a specific exclusion and I suggest that because it is specific that means that any other general clause could be included in the modifications. Unless the noble Lord, Lord Cockfield, can say that he will include in Clause 12(7) a reference to Clause 8, I shall have to support this amendment—
Noble Lords: Oppose!
Lord Spens: My Lords, yes; I am sorry.
Lord Cockfield: My Lords, I wonder whether I might reply briefly to the points that have been made. I am most grateful to my noble friend Lord Mottistone and to my noble friend Lady Macleod of Borve as well as the noble Lords, Lord Somers and Lord Weinstock, for their support for the proposals that the Government have put forward. We have genuinely tried to meet the wishes of the House in this matter. There was hardly a noble Lord who spoke on the last occasion who accepted that the amendment as drafted in Committee stage, that is Amendment No. 24, had been satisfactorily drafted. We were trying to get the words right and to put it in the right place.
I am a little surprised at the noble Lord, Lord Bruce of Donington. I realise that he was scratching around trying to find an argument. I am surprised that he should accuse me of trying to overturn the decision of the House, because the person who is trying to overturn the decision of the House is the noble Lord, Lord Bruce, who proposes in a subsequent amendment to remove altogether the protection of people in rural areas against undue discrimination on user charges. What I have done, as I explained, is to offer much better and more comprehensive protection than noble Lords opposite have proposed.
May I deal with why this provision is in Clause 8 and also with the point raised by the noble Lord, Lord Spens. Clause 3 is of general application and it applies to every licence issued, including licences to operate local mobile radio services. For many of these an
528
obligation of this sort would be completely inappropriate and might, in fact, stop such local services operating altogether. It is difficult to say what the impact of the words as they appear at present in the Bill would have on the operation of local mobile radio services.
We have put this in Clause 8 for the simple reason that Clause 8 deals with those very large network operators, who were the people to whom noble Lords were primarily referring—namely, British Telecom, Mercury, the national cellular systems, and so on. It is simply not possible to get around the amendment I am proposing to Clause 8.
The condition imposed under the amendment I am proposing could not be amended in a way that would avoid the requirement, because if it were amended in a way which avoided the requirement I want to put into Clause 8, the operator would cease to be a public telecommunications operator under Clause 9. But he dare not be put in that position. Therefore, by putting this in Clause 8 we give a complete safeguard. It is entrenched in a way that there is no other means of doing. This is why in introducing the amendments I said that one of the important things was that I had written this, or proposed that it should be written, into the Bill itself, so the safeguard is there. In practice it cannot be avoided. I hope very much on this basis that your Lordships will agree with Amendment No. 10, which will carry Amendment No. 47 with it in due course.
6.7 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 116; Not-Contents, 93.

DIVISION NO. 3

CONTENTS

Airey of Abingdon, B.

Fortescue, E.

Auckland, L.

Fraser of Kilmorack, L.

Avon, E.

Gainford, L.

Bauer, L.

Glanusk, L.

Belhaven and Stenton, L.

Glasgow, E.

Bellwin, L.

Glenarthur, L.

Belstead, L.

Gormanston, V.

Bessborough, E.

Gray of Contin, L.

Birdwood, L.

Gridley, L.

Boyd-Carpenter, L.

Hailsham of Saint Marylebone, L.

Brabazon of Tara, L.

Brougham and Vaux, L.

Halsbury, E.

Broxbourne, L.

Henley, L.

Bruce-Gardyne, L.

Home of the Hirsel, L.

Caithness, E.

Hornsby-Smith, B.

Campbell of Alloway, L.

Hylton-Foster, B.

Cathcart, E.

Kaberry of Adel, L.

Chelwood, L.

Kinloss, Ly.

Cockfield, L.

Kintore, E.

Coleraine, L.

Lane-Fox, B.

Colwyn, L.

Lauderdale, E.

Constantine of Stanmore, L.

Lawrence, L.

Cottesloe, L.

Lindsey and Abingdon, E.

Craigavon, V.

Liverpool, Bp.

Cullen of Ashbourne, L.

Long, V.

Daventry, V.

Lucas of Chilworth, L.

Denham, L. [Teller]

Luke, L.

Drumalbyn, L.

Lyell, L.

Ellenborough, L.

McAlpine of Moffat, L.

Elton, L.

McAlpine of West Green, L

Enniskillen, E.

Mackay of Clashfem, L.

Faithfull, B.

Macleod of Borve, B.

529

Mancroft, L

Selkirk, E

Mar, C.

Sempill, Ly.

Marley, L.

Shannon, E

Marshall of Leeds, L.

Shaughnessy, L.

Maude of Stratford-upon-Avon, L.

Simon of Glaisdale, L.

Skelmersdale, L.

Merrivale, L.

Somers, L.

Mersey, V.

Stamp, L.

Milverton, L.

Strathcarron, L.

Morris, L.

Strathspey, L.

Mottistone, L.

Sudeley, L.

Mowbray and Stourton, L.

Swinton, E. [Teller]

Murton of Lindisfarne, L.

Teynham, L.

Nathan, L.

Thomas of Swynnerton, L.

Northchurch, B.

Thorneycroft, L.

Nugent of Guildford, L.

Torphichen, L.

Orkney, E.

Tranmire, L.

Orr-Ewing, L.

Trefgarne, L.

Pender, L.

Trenchard, V.

Penrhyn, L.

Trumpington, B.

Peyton of Yeovil, L.

Vaux of Harrowden, L.

Portland, D.

Vickers, B.

Rankeillour, L.

Vivian, L.

Renton, L.

Weinstock, L.

St. Davids, V.

Whitelaw, V.

Saltoun, Ly.

Windlesham, L.

Sandford, L.

NOT-CONTENTS

Airedale, L.

Kennet, L.

Amherst, L.

Kilmarnock, L.

Ampthill, L.

Kirkhill, L.

Ardwick, L.

Leatherland, L.

Attlee, E.

Leathers, V.

Aylestone, L.

Listowel, E.

Beaumont of Whitley, L.

Llewelyn-Davies of Hastoe, B.

Beswick, L.

Lloyd of Hampstead, L.

Bishopston, L.

Lloyd of Kilgerran, L. [Teller]

Blease, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davis, L.

Bottomley, L.

McGregor of Durris, L.

Brooks of Tremorfa, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

McNair, L.

Burton of Coventry, B.

Molloy, L.

Carmichael of Kelvingrove, L.

Mulley, L.

Chitnis, L.

Ogmore, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Phillips, B.

Darling of Hillsborough, L.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

Rhodes, L.

Dean of Beswick, L.

Sainsbury, L.

Delacourt-Smith of Alteryn, B.

Seear, B.

Denington, B.

Sefton of Garston, L.

Diamond, L.

Serota, B.

Donaldson of Kingsbridge, L.

Shackleton, L.

Elwyn-Jones, L.

Simon, V.

Ennals, L.

Spens, L.

Gaitskell, B.

Stallard, L.

Gallacher, L.

Stedman, B.

Gladwyn, L.

Stewart of Alvechurch, B.

Graham of Edmonton, L. [Teller]

Stewart of Fulham, L.

Stoddart of Swindon, L.

Grey, E.

Stone, L.

Grimond, L.

Strabolgi, L.

Hale, L.

Taylor of Blackburn, L.

Hall, V.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Harris of Greenwich, L.

Wells-Pestell, L.

Howie of Troon, L.

White, B.

Irving of Dartford, L.

Wigoder, L.

Jeger, B.

Wilson of Rievaulx, L.

Jenkins of Putney, L.

Winterbottom, L.

John-Mackie, L.

Wootton of Abinger, B.

Kaldor, L.

Young of Dartington, L.

Resolved in the affirmative, and amendment agreed to accordingly.
[Amendments Nos. 11 and 12 not moved.]
6.16 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 13:
Page 3, line 5, after ("services") insert ("directory enquiry services free at the point of use").
The noble Lord said: My Lords, I beg to move Amendment No. 13 standing in my name and in that of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey. This amendment seeks to ensure that directory inquiries are provided free at the point of use; and it is coupled with several others which do not provide that they should be provided free at the point of use. I believe it is essential that this service is protected for the sake of all subscribers; but certainly and in particular for those subscribers who are blind and disabled in many ways. Those who are blind and disabled will be particularly disadvantaged; and they will be confused and most unhappy if they have to pay one way or another for directory inquiry services.
On 13th February, in Committee, we had a long discussion on the question of providing directory information services, and the noble Lord, Lord Lyell, referring to the situation as it would be under the licence, said at column 45:
"Put simply, this means that either they will not have to pay a charge"—
and he was referring to blind, dyslexic or other disabled people—
"or an appropriate means of compensating them will be established. I hope that answers the concern that has been expressed by your Lordships, particularly by the noble Lord, Lord Lloyd of Kilgerran".
Then, in column 47, when further pressed, the noble Lord, Lord Lyell, said:
"For one section of the law I am partially sighted".
He was referring to his own particular disability, I believe. He went on:
"I have been given some instructions. I understand the licence will stop charges for directory inquiries until the director is satisfied about the refund arrangements".
I believe that we have taken a very large hammer to crack what is a relatively small nut. I would remind your Lordships that at present directory inquiry services are free at the point of use; and, because they are free at the point of use, nobody is confused or disadvantaged. The blind, who have great difficulty in finding numbers, can simply lift up the telephone and telephone directory inquiries by dialling three digits, and they get the answer. The same is true of all other disabled people. Indeed, it is true for all of us. It seems to me that it would be right and proper that we should write into the legislation that this particular service, above all, should continue to be provided free at the point of use.
Again, in column. 43 of the Official Report on 13th February, the noble Lord, Lord Peyton of Yeovil, summed up the matter very well indeed. If he does not mind, I will read the relevant passage from his speech on that day. He said:
"If I may now address my noble friend the Minister, I would say this. I do very much wonder whether the successor to British Telecom would not want to make its services available as easily as possible to the largest number of people. I cannot believe that it is not now in their contemplation to offer this service free. I would be rather suprised, I must say, if the Government did not feel inclined at least to take this amendment away and give it careful thought. I

531
cannot think that it would add to the load on the successor, those who are going to operate the telephone services in this country, if an undertaking were given in their name now by the Government and even put into the Bill to offer such a service as directory inquiries free of charge".
I think that really puts the matter very ably and succinctly, and I am sorry the noble Minister has not felt able to listen to his noble friend and to bring forward a relevant amendment to say that the directory inquiry service would be free at the point of use.
As I say. I believe this is a very large hammer being used to crack a very small nut and that the service ought to continue to be free. It really is absurd—is it not?—that people who have to make an inquiry to use a service provided by an undertaker should have to pay for that information. I find that most odd and most strange. If I, as a customer of Marks and Spencer, want some details of their products and I go to their information counter, the young lady behind the desk does not say, "Ah, but we will have to make a charge". If I go to British Rail and ask for the times of their trains, they do not say, "Hand over 10p and we will tell you the times of our trains". Of course they do not; they want us to use the trains.
In many cases the only way that people can use the telecommunications service is by making an inquiry about the number of the person they wish to contact. If we want to get on a bus, whether it is London Transport or anywhere else, we do not expect to pay for information as to whether and where and how those buses run—whether they go to this part of the country or this part of the town. I honestly cannot think of an undertaking, private or public, which charges people for answering inquiries about the use of their services.
Therefore, I hope that the noble Lord will understand that this amendment is really trying to help him. He would do himself and the Government a lot of good if he would accept this amendment, because I am quite sure that the ordinary members of the public see it as reasonable that they should be able to make inquiries free of charge. I feel quite convinced that your Lordships will see the sense of that and therefore, if the Government will not accept it, will come into the Lobbies and support it.
Lord Mottistone: My Lords, if this were not about directory inquiry services, I might think it something that one could support, but this particular service is the most obviously inefficient of all those services that British Telecom currently provide to us. Furthermore, it has got very much worse since 1969, when the Government which noble Lords opposite used to support made British Telecom independent of its Civil Service position. I admit that before that time it was much more efficient, and to that extent I agree with what the noble Lord, Lord Stoddart, was saying earlier.
I fear that this amendment—and even, I fear, my noble friend's next amendment—will have the effect of continuing the extraordinarily inefficient service that we get at the moment. The most important thing for the bulk of us is that this must be made efficient. I would support special arrangements being made for blind people and those who suffer from other forms of
532
handicap—that is not really in issue. The fact is that we can on1), get this going by making the directory inquiry services around the country competitive as between themselves. I think it is most important that they should be. Whether it is necessary to pay or not is another matter. It might be that that would be a way of making them competitive, but I do not say that it definitely is. This sort of area as to whether one should pay for this or that service must surely be left to the operator. We cannot write that sort of detail into the Bill. The noble Lord, Lord Stoddart, is quite right to the extent that the directory inquiries service gets more business for the operator and so of course it is a good thing for him and he should make it easier for people to use.
However, the key thing for all of us is that the service must be made efficient. Anyone who has had experience in this connection overseas will be well aware of the fact that efficient. currently. it certainly is not. I believe that putting this service into Clause 3 of the Bill gives it a position that it does not deserve, as it is at the moment, and it risks the soggy, inefficient treatment that we currently get being continued. I hope for that reason that not only will we resist this amendment but that my noble friends on the Front Bench will take serious thought and tell me whether there is a risk of the inefficiency continuing.
Lord Donaldson of Kingsbridge: My Lords, this is just the sort of thing that made us nervous of privatisation. Here we have a service. The noble Lord says it is inefficient. I use it perhaps 10 times a week, because I am lazy and do not always have a telephone book. I am asked: "What town?" and I usually know what town it is. I say, for example, "Norwich". They say, "What name?" I say: "Tom Smith". I am then given the number in a flash. If that is inefficient, then let us stay inefficient! It simply is not inefficient. It may be inefficient on international calls, but I never make any, and that is not what we are talking about.
As I said, this is what we all feared would happen. We have a service and in many ways it is not half bad. It is a great deal better than it used to be. We used to have great fun in this House over the telephone service. There is hardly any fun in criticising the service now. We have a service which is for everybody, the poor as well as the rich. The first thing that happens when we have a Bill of this kind is to make everybody inevitably pay more for this kind of service. That is what the noble Lord says should be left open. It is the one thing I want to prevent. I want to prevent the desire to make profits, which is an inevitable and perfectly respectable part of privatisation, from hurting the ordinary customer. Therefore, I hope that your Lordships will support this amendment, which was extremely modestly and clearly put forward by the noble Lord, Lord Stoddart. It is exactly the same as British Rail, with the difference that British Rail do not always answer the telephone whereas the telephone people always do.
6.30 p.m.
Lord Peyton of Yeovil: My Lords, the noble Lord, Lord Stoddart, has eloquently reminded me of what I said on this subject at an earlier stage of the Bill. I am bound to say that I had no idea that I had delivered myself of so cogent and eloquent an argument; at least,

533
it sounded very good coming from his lips. I should like to say to the noble Lord, Lord Donaldson, that I entirely agree with him on the question of the improvement of service. If I may say so to my noble friend Lord Mottistone, it seems to me that he is relying too much on memory which stretches back too far into a remote past. But my own personal experience from use of the service is that over recent months and years it has very greatly improved, in terms of both the courtesy with which it is given and the speed. I have certainly noticed that improvement and I am rather surprised to hear my noble friend so denunciatory in his opinion of it.
But any suggestion that it is easy to get information—whether from private or public sources, whether paid for or not—is very ill-founded. It is often exceedingly difficult to obtain even the most rudimentary information about a service offered by either public or private sources. So I am driven to the conclusion that the mere fact of payment or not may not alter the situation drastically.
The fact that influences me at the moment is that British Telecom in its present guise—spurred on, as I believe, by the prospect of privatisation—has provided and continues to provide an improving service and that service is free. I now revert to the very simple view which I expressed before, and which the noble Lord, Lord Stoddart, has repeated, that anyone who seeks to provide a service for money must be unusually daft in a fairly crazy age not to make that service available as freely, as easily and as widely as possible to anyone who wishes to use it. Therefore, I conclude that were it not for this amendment, the idea would never have occurred to British Telecom to make a charge for this service—I do not know.
I hope that my noble friend in answering the debate will not simply rely upon the argument that this amendment would fill up this Bill with unnecessary and unreasonable content, because during the time that I have been in Parliament I have very rarely met with a Bill which was not filled up with unnecessary and unreasonable provisions. So this comparatively innocent amendment—it is merely a nudge to British Telecom not to forget its common sense, which I am sure it will not do—could not really do all that much harm to anyone.
I am slightly horrified by the fact that I should be on my feet arguing in favour of a Bill being made longer, even by so much as a line. Nevertheless this particular line has the quite unusual merit of being easily comprehensible. So I hope that my noble friends—whoever is to answer this short debate—will feel that they will not be going too far in just letting common sense be expressed in one line of the Bill. It would not make all that much difference, and certainly I could not possibly bring myself to oppose such an amendment.
Lord Molloy: My Lords, it seems to me that the Government must now take full cognisance of the speeches made by the noble Lords, Lord Donaldson and Lord Peyton, which supported absolutely the superb submission made by my noble friend Lord Stoddart of Swindon. In a way, they must totally reject the argument submitted by the noble Lord, Lord Mottistone. Even if what he said is correct, that at this
534
moment this aspect of British Telecom's services is inefficient, it will, according to his argument, remain like that so nobody will have anything free, when we have been told time and time again how everything will be much more efficient and how everything will be much more improved, except for this service.
The only thing that can give us some heart is the fact that, as the noble Lord, Lord Donaldson, said, it is a nice service as well as an efficient one. The experience of every noble Lord, except the noble Lord, Lord Mottistone, is that the people who work on that service are extraordinarily helpful, and that is also the opinion of the general public. If the noble Lord's argument is correct, the Front Bench opposite have been leading us up the garden path, because they have been telling us that everything will be much more efficient and better. So they must make very certain that the noble Lord, Lord Mottistone, understands that this service will not only be free, but that, because of the poignancy of the submission made by my noble friend with regard to all sorts of people who are disabled in some way or other, it must be free.
It does not matter who is asking for information. People are seeking information so that they can make paid use of the telephone service of British Telecom. I should have thought that all the nation would support that. But to Britain's great joy, they will be able to pick one figure out of the entire British Isles who is opposed to it, and that is the noble Lord, Lord Mottistone. But he still has time to withdraw his banality and join those of us who wish this service to continue in the way it has done and, if necessary, even in a more efficient manner. I would only add that the people who work on it cannot improve much on the nice manner in which they work for the general public.
The Countess of Mar: My Lords, I must heartily support this amendment from a purely practical point of view. At the Committee stage, I asked the noble Lord, Lord Lyell, how much it would cost to find out who was blind, who was dyslexic and who was disabled. It would involve people going to visit. I know that the RNIB have certified blind people in their association, but nobody certifies someone who is dyslexic and nobody certifies someone who is disabled and cannot turn the pages of a telephone directory. It would involve a huge visiting staff to decide that they could not cope with an ordinary telephone directory and it would be unfair to penalise them because they could not do so by charging them for the service. It might amuse the noble Lord, Lord Peyton, if I say that when 1 had one of my first interviews with British Telecom I was asked what were my thoughts on charging for directory inquiries and I gave exactly the same reasons as I am giving now. The sheer cost of administering the refund of charges to people who are unable to use telephone directories would be too immense.
Baroness Macleod of Borve: My Lords, very briefly I wonder whether my noble friend Lord Mottistone is having so much difficulty—which I certainly have not had—because he lives in the Isle of Wight. Am I right in suggesting that it is the piece of water between us that is responsible? I am afraid that I cannot agree with him, and I agree with other noble Lords who think that

535
it is a very courteous and a very good service. But when we are discussing this service we are not necessarily discussing disabled people. Obviously, the blind might not be employed if their employer had to pay a charge because they had to ask for a telephone number through directory inquiries every single time they made a call on behalf of their employer. That is one of the arguments. But surely this applies to everybody. Everybody has enjoyed this facility, which is not free. We are not charged for this facility but it is included in the charges that British Telecom have always made and is swallowed up in them.
There is no reason why this charge for directory inquiries, for the reason which the noble Lord, Lord Stoddart of Swindon, gave, which seemed to me to be very apt indeed, should be made by British Telecom. We should encourage British Telecom to let everybody have this service. As I have already pointed out, this service has never been free but it should not be charged for. I hope that when the Minister replies he will be able to clear up that point.
Earl Attlee: My Lords, I do not believe that anybody has made the point that if you can find a telephone directory it will be A to D when you require it to be S to Z. And if the telephone directory you require is there, the chances are that the page you want has been torn out. I was in Oxford Street a short time ago and could not find a single telephone box which contained even one telephone directory. If the telephone service can supply all the directories, which would fill up a rather large room, I see no reason why people should not pay for this service. However, since that is impossible, I agree with the noble Lord that this service should be made free of charge. I trust that your Lordships will have noticed that I am the first person who has not taken the noble Lord. Lord Mottistone, to task for being the only person in your Lordships' House who has not found the telephone directory service to be fast, efficient and courteous.
6.42 p.m.
Lord Lyell: My Lords, we have had a lengthy debate on the subject and we are in danger of going over some of the ground that we covered at an earlier stage. I hope that I shall not repeat myself. I hope, too, that we shall not have a repetition of the noise which accompanied the concluding remarks of the noble Lord, Lord Lloyd of Kilgerran, during the previous stage of the Bill, when there was some confusion.
The House may agree with me that the amendment is not dissimilar to that which has been tabled by the noble Lord. Lord Lloyd of Kilgerran—Amendment No. 15—and to the Government's amendment. Amendment No. 14, to which I hope we shall turn later. I would suggest to your Lordships that Amendment No. 13 goes extremely wide—we believe too wide—and I shall try to explain why we take this view.
First, I will deal briefly with the first half of the amendment, which is designed to ensure that the Secretary of State and the director general should be under a duty to secure the provision of directory inquiry services. We do not have any quarrel with this part of the amendment. We believe that it should be done but that it can be done better by our amendment,
536
Amendment No. 14. However, the second part of the amendment causes us some difficulty. It seeks to place a duty on the Secretary of State and on the director general to secure the provison of directory inquiry services,
"free [of charge] at the point of use".
While we understand what the noble Lord, Lord Stoddart of Swindon, is trying to achieve, we believe that the amendment is misconceived. First, perhaps I may spell out its deficiencies.
As the amendment is drafted, the duty of the Secretary of State and of the director general would apply to all systems and to all directory inquiry services. I do not know whether that is what the noble Lord had in mind, but that is what his amendment would achieve. It would also mean that anybody who wished to provide an inquiry service for the value added network services or an inquiry service for Telex numbers would have to provide those services free of charge. We do not believe that that is desirable. It would mean that any initiative in providing new inquiry services would never have a chance of getting off the ground.
We do not believe that that is what the noble Lord. Lord Stoddart of Swindon, or those of your Lordships who spoke in support of the amendment want or have in mind. We believe that those who have spoken this evening are seeking to ensure that British Telecom continue their present practice of not levying a specific charge for calls made to directory inquiries for information about telephone numbers. This point was beautifully made by my noble friend Lady Macleod of Borve. She pointed out that the service is not free. She said that it is "swallowed up". The noble Lord, Lord Stoddart of Swindon, will agree that the attractive young lady at Marks and Spencer who provides one with information does not provide that service free of charge. Again it is swallowed up or subsumed in the general overheads of the business.
If I may deal with calls made to directory inquiries for information about telephone numbers, if we dial 142 or 192 we are not charged for those calls. However, the Government do not believe it to be appropriate to place a blanket prohibition upon British Telecom at no stage in the future to introduce a charge for that service. Our view is that it is a matter for British Telecom's own commercial management. My noble friend Lady Macleod of Borve made the point that no specific charge is made at present; the costs of the service are borne by all customers. Therefore it can be argued that it might be better if the costs were borne by those who use the service. However, we do not believe that we should impose a total prohibition. We believe that it is better to leave it to the judgment of British Telecom.
The noble Lord, Lord Molloy, referred to one area—an area in which my noble friends Lady Macleod of Borve and Lady Lane-Fox both have an interest—where we believe that it is right to intervene; namely, over the provision of directory information to those who cannot use the normal printed directories. In this connection I think in the first instance of the blind. However, I have in mind other people who, by reason of disability or illness, cannot use the ordinary printed directory. We appreciate the concern which has been expressed: that if British Telecom were to

537
introduce charges for directory inquiries, these people would be put at a financial disadvantage. That is why we have included a condition in the draft licence. Condition 34 ensures that if British Telecom were to decide to introduce charges for directory inquiries, the blind and those who, for various reasons, cannot use the printed directory should not be put at a financial disadvantage. In advance of any such decision by British Telecom, we cannot say exactly how this would be done, but the effect of Condition 34 is that British Telecom will be unable to introduce charges unless the director general is satisfied that British Telecom will not put the blind at a financial disadvantage. I hope that this provision meets the major concern about charges for directory inquiries. I should add that the Government intend the licences to be granted under the Bill for Mercury and Hull to contain a similar provision.
I should like to reply briefly to the two points raised in his introductory remarks by the noble Lord, Lord Stoddart of Swindon. There is no point in providing, as British Telecom already provide, free directories to subscribers as well as free directory inquiry services. I am sure your Lordships will agree that it is far cheaper for all except those who are blind or otherwise disabled and unable to use the printed directories.
We take the point made by the noble Earl, Lord Attlee, on the mutilation of directories and where, at various points of public access, the directories do not exist at all. It is far cheaper for subscribers to consult the directories. I have a note here that most people do so; but some people are idle. I had doubts about stating that until the point was made for me by the noble Lord, Lord Donaldson of Kingsbridge. The noble Lord probably has a point in that it is far swifter to obtain information rather than search through the directories. However, even the noble Lord, Lord Donaldson, will agree that where printed directories are provided they should be used.
I believe the best way to proceed would be to include a reference to directory information in Clause 3(1)(a), and this is achieved in Amendment No. 14, which I hope we shall come to, and to include, as I explained, a provision in the British Telecom licence of the sort that I have spelled out. We hope this provision will ensure that the blind and other disabled people are not put at a disadvantage by charges. To take possibly hypothetical charges for such services, we do not think that a blanket prohibition, as the amendment seeks to impose, is the right way. For that reason, I would not accept the amendment straight away.
Lord Donaldson of Kingsbridge: My Lords, the noble Lord suggested that the words "directory enquiry" can apply to all sorts of other things apart from asking for a telephone number which is what we are all talking about. I see that the conditions do not take that view. Condition No. 34.1 states:
"If the Licensee introduces charges…with directory enquiry services",
which means exactly what we all mean. I believe that the refutation of the amendment is absolutely wrong and should not be accepted. The real reason for the amendment is perfectly clear. It is the last reason that the noble Lord gave. They do not want to interfere with the right of an independent company to make
538
what profits it can in whatever way it likes, but we do in this particular case.
6.53 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 92.

DIVISION NO. 4

CONTENTS

Airedale, L.

Kinloss, Ly.

Ardwick, L.

Kirkhill L.

Attlee, E.

Lawrence, L.

Aylestone, L.

Llewelyn-Davies of Hastoe, B.

Barnett, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Lovell-Davis, L.

Beswick, L.

McGregor of Durris, L.

Bishopston, L.

McIntosh of Haringey, L.

Blease, L.

McNair, L.

Boston of Faversham, L.

Mar, C.

Bottomley, L.

Milner of Leeds, L.

Brooks of Tremorfa, L.

Molloy, L.

Bruce of Donington, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Napier and Ettrick, L.

Chitnis, L.

Nathan, L.

Cledwyn of Penrhos, L.

Ogmore, L.

Collison, L.

Oram, L.

David, B. [Teller]

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Diamond, L.

Rhodes, L.

Donaldson of Kingsbridge, L.

Seear, B.

Elwyn-Jones, L.

Sefton of Garston, L.

Ennals, L.

Segal, L.

Fitt, L.

Serota, B.

Gaitskell, B.

Shaughnessy, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L.

Spens, L.

Gregson, L.

Stallard, L.

Grey, E.

Stedman, B.

Grimond, L.

Stewart of Alvechurch, B.

Hall, V.

Stewart of Fulham, L.

Hampton, L.

Stoddart of Swindon, L.

Hanworth, V.

Stone, L.

Hooson, L.

Strabolgi, L.

Houghton of Sowerby, L.

Taylor of Blackburn, L.

Howie of Troon, L.

Tordoff, L.

Hylton-Foster, B.

Underhill, L.

Irving of Dartford, L.

Wells-Pestell, L.

Jeger, B.

Whaddon, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Wigoder, L.

Kaldor, L.

Winterbottom, L.

Kilmarnock, L.

NOT-CONTENTS

Airey of Abingdon, B.

Drumalbyn, L.

Avon, E.

Elton, L.

Bauer, L.

Enniskillen, E.

Belhaven and Stenton, L.

Fortescue, E.

Bellwin, L.

Gainford, L.

Belstead, L.

Glanusk, L.

Boyd-Carpenter, L.

Glasgow, E.

Brabazon of Tara, L.

Glenarthur, L.

Bruce-Gardyne, L.

Gormanston, V.

Campbell of Alloway, L.

Gray of Contin, L.

Cathcart, E.

Gridley, L.

Chelwood, L.

Hailsham of Saint Marylebone, L.

Cockfield, L.

Coleraine, L.

Henley, L.

Colwyn, L.

Home of the Hirsel, L.

Constantine of Stanmore, L.

Hornsby-Smith, B.

Cottesloe, L.

Kaberry of Adel, L.

Craigavon, V.

Kimberley, E.

Craigmyle, L.

Kintore, E.

Cullen of Ashbourne L.

Lane-Fox, B.

Daventry, V.

Lindsey and Abingdon, E.

Denham, L. [Teller]

Liverpool, E.

539

Long, V.

Portland, D.

Lucas of Chilworth, L.

Rankeillour, L.

Luke, L.

Renton, L.

Lyell, L.

St. Davids, V.

McAlpine of Moffat, L.

Saltoun, Ly.

McAlpine of West Green, L.

Sandford, L.

Mackay of Clashfern, L.

Selkirk, E.

Marley, L.

Sempill, Ly.

Marshall of Leeds, L.

Skelmersdale, L.

Maude of Stratford-upon-Avon, L.

Somers, L.

Strathspey, L.

Merrivale, L.

Sudeley, L.

Mersey, V.

Swinfen, L.

Molson, L.

Swinton, E. [Teller]

Morris, L.

Thomas of Swynnerton, L.

Mottistone, L.

Thorneycroft, L.

Mowbray and Stourton, L.

Torphichen, L.

Murton of Lindisfarne, L.

Tranmire, L.

Northchurch, B.

Trefgarne, L.

Nugent of Guildford, L.

Trenchard, V.

Onslow, E.

Trumpington, B.

Orkney, E.

Vickers, B.

Orr-Ewing, L.

Vivian, L.

Pender, L.

Whitelaw, V.

Penrhyn, L.

Windlesham, L.

Resolved in the negative, and amendment disagreed to accordingly.
Lord Denham: My Lords, I think that this is probably the moment when we should adjourn. While I move that further consideration on Report be now adjourned. I think that it would be fair to tell your Lordships that we shall not reconsider the Report stage of the Telecommunications Bill before eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Consolidated Fund (No. 2) Bill
Brought from the Commons endorsed with the Certificate from the Speaker that the Bill is a Money Bill; read a first time, and to be printed.

Appropriation (Northern Ireland) Order 1984
7.2 p.m.
Lord Trefgarne Lord Trefgarne rose to move, That the draft order laid before the House on 21st February be approved.
The noble Lord said: My Lords, on behalf of my noble friend Lord Mansfield, I beg to move that the draft Appropriation (Northern Ireland) Order 1984, which was laid before your Lordships' House on 21st February, be approved. This order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. The purpose of the draft order is to appropriate the 1983–84 Spring Supplementary Estimates and the 1984–85 Vote on Account of Northern Ireland departments.
Part I of the schedule covers the issue of some £43 million out of the Consolidated Fund of Northern Ireland in respect of the Spring Supplementary Estimates of Northern Ireland departments and appropriates this sum for the purposes shown in the schedule. This sum is in addition to some £2,729 million which was approved by your Lordships' House during 1983 for the 1983–84 financial year and brings the total Estimate provision for 1983–84 to just over £2,772 million.
Part II of the schedule gives details of the issues for which the Vote on Account of £1,226 million for 1984–85 is required. This provision is necessary to enable those services to continue until the 1984–85 Main Estimates are debated and approved later in the year. I should point out that the sums required on account are based on a standard calculation of 45 per cent. of the total provision for the current 1983–84 financial year, except where it is known that the pattern of expenditure will differ significantly in the incoming year. However, the final Estimates for 1984–85 will be framed within the total provision set out in the Government's White Paper on Public Expenditure which was published last month. Detailed information about all the provisions sought in this draft order can be found in the Spring Supplementary Estimates volume and the booklet Statement of Sums Required on Account, copies of which have been placed in the Printed Paper Office.
Before I say a few words (as has been customary) about economic prospects for Northern Ireland in the coming year, I am sure your Lordships will be pleased to hear that my noble friend Lord Mansfield is progressing satisfactorily and hopes to be out of hospital very shortly.
There are clear and indisputable signs of continuing economic recovery in the United Kingdom, and we have made great strides in reducing inflation, with prices in the United Kingdom in 1983 on average only 4½ per cent. higher than a year before. It is our aim to create conditions which will enable Northern Ireland to share in the effects of this recovery which we believe will be seen as local firms meet increased demand and the flow of internationally mobile investment projects increases.
Of course, Northern Ireland, because of its unique combination of circumstances, has suffered a more severe impact from recession than other areas, particularly in the field of employment. The Province has been hard hit in maintaining levels of employment, and hardest hit have been manufacturing and construction. It has to be said, nevertheless, that while, as in the rest of the United Kingdom, the trend in unemployment as a whole is still upward. there are signs that the rate of increase is moderating. But we must be realistic. The way ahead is not going to be easy, but there are now encouraging signs that the recovery is broadly based, with most sectors now displaying stability or even some improvement. All the signs from our own. and indeed the CBI's, industrial surveys are that firms are regaining confidence, and it is as a result of this that we hope to see a continuing improvement in the employment situation. The Government will continue to promote a climate favourable for the nurture of this revival in Northern Ireland. Not least in their attempts to provide the right atmosphere are the plans for public expenditure in the Province which were contained in the recent White Paper, Cmnd. 9143. As in previous years, the provision for the industry, energy, trade and employment programmes has continued to be accorded a high priority in the allocation of resources.
The Industrial Development Board and Local Enterprise Development Unit will be afforded every encouragement in their drive to create jobs. The new incentives package is giving a boost to this drive and

541
reflects the Government's determination to attract and stimulate new investment. Your Lordships will, I am sure, have been delighted to hear of the recent major orders won by Northern Ireland's two largest manufacturing firms, Harland and Wolff and Short Brothers. My own department has awarded another contract to the Belfast shipyard to replace the Royal Fleet Auxiliary aviation training ship "Engadine", which is now too small for our needs. The contract is worth some £30 million to Harland's and will provide work for 1,000 men for about two years. The Belfast shipyard has recently completed work for the Ministry of Defence on the Falklands floating port and the refit of the "Rangatira". I can say that Harland's excellent performance on these two contracts helped influence our decision in awarding this further work to the company, which was won in the face of stiff competition and is a mark of its increased competitiveness.
The Short Brothers order is from the United States Air Force. The initial contract is for 18 Sherpa aircraft to service United States Air Force bases in Western Europe and for the provision of logistical support. It is worth some £115 million and will generate around 550 addition jobs. The United States Air Force has an option for a further 48 aircraft, which would take the full value of the contract to £460 million. The Sherpa, a freighter version of the successful SD.330 commuter aircraft, was chosen on the basis of its technical and commercial merits. Its selection will hopefully lead to increased sales opportunities from other defence organisations and perhaps from third world countries. These orders are good news for both companies, which over the past few years have faced difficult times, and they are a very welcome boost to the Province's economy.
I should like now to highlight another aspect of the Government's drive to improve conditions in Northern Ireland. Your Lordships will note that provision is being taken in the Supplementary Estimates for receipts from the European Community under the Urban Renewal Regulation. This measure enables 100 million European currency units—approximately £60 million—to be paid from European Community budgets for the years 1983 to 1985 for urban renewal in Belfast.
The Urban Renewal Regulation is a material indication that the European Community shares the Government's extreme concern to alleviate Belfast's long-standing social and economic problems. The order before us makes provision for the receipt of the bulk of the first tranche of aid relating to the Community's 1983 budget—this tranche amounts in full to some £18·7 million approved by the European Commission on the 23rd December 1983. The money has been earned on 69 publicly funded infrastructure projects in the Greater Belfast area, and has enabled the Government to increase their planned expenditure on urban renewal including housing. I should point out that Estimates conventions mean that the actual sums received cannot always be shown on the face of the Estimates. However the explanatory prefaces to the relevant Votes show in full the actual receipts which fall in the following classes—1, 2, 4, 6, 7, 8 and 9.
Your Lordships will be relieved that I am not going to deal with each of the estimates in turn but supplementary provision has been necessary on most classes of Northern Ireland Estimates. The main items requiring supplementation include functioning of the labour market and miscellaneous support services of the Department of Economic Development, essential maintenance on the public roads network and housing services. In addition, further provision is required to meet the higher cost of teachers' salaries and other educational requirements; and on the health front, provision is sought to meet increased costs of and demand for family practitioner services—particularly pharmaceutical services.
These are only some of the items contained in the order. Your Lordships will wish to raise those topics in which you have a particular interest and I hope that you have found these opening remarks helpful in understanding the main features of this draft order. I beg to move.
Moved, That the draft order laid before the House on 21st February he approved.—(Lord Trefgarne.)
7.11 p.m.
Lord Underhill: My Lords, in thanking the noble Lord for introducing this order, I think all noble Lords will be pleased to have the good news which he has given of his noble friend Lord Mansfield, and I am certain all noble Lords will wish to send the noble Earl our best wishes and our deepest sympathy.
After the last appropriation debate, the noble Earl sent me a very detailed letter, for which I am very grateful, in which he dealt with quite a number of points which I raised during that debate. I must again say that it is rather unfortunate that the Northern Ireland debate—particularly an appropriation—has to take place during the dinner break. I recognise that it must be fitted in somewhere: but I am certain it will be noticed that Northern Ireland always seems to be dealt with when we have the minimum of attendance. I know that the report can be read in Hansard, but there is nothing like noble Lords hearing a debate on this issue.
As the last appropriation debate was only on 13th December, I will raise only a limited number of points. On that occasion I referred to the question of unemployment. Then it was 120,000 or 21½per cent. I understand the figures for 9th February have risen by a further 2,500, so that we have 22 per cent. of the work force unemployed. Taking it in human terms, this means one in five are out of work—and this excludes 19,000 people who are on temporary employment and training schemes. The figure is worse than the highest figure in the rest of the United Kingdom. I understand that it is the highest ever February figure, and only once before has a monthly figure been higher.
On that previous occasion, I referred to the shocking unemployment level in Strabane. When one recognises that the male unemployment in that area is 55 per cent and in three other areas male unemployment is over 40 per cent, one can understand the feeling of hopelessness that there must be arising among many of the people in those areas. It is tragic that nearly half have been out of work for a year or more; 27 per cent. for over two years; and no

543
fewer than 17 per cent—that is a little over 20,000 of the men and women of Northern Ireland—have been without work for three years. These are the economic and social factors which we have to confront.
In the previous debate I quoted from the last published annual report of the Northern Ireland Economic Council. While the noble Earl, in his reply, dealt with a number of points, there were no comments on this: public sector employment, including the nationalised industries in Northern Ireland, accounts for some 45 per cent. of the working population. Without that public employment and public expenditure, the position would be disastrous in Northern Ireland. The economic council passed a comment that public expenditure is an important determinant of the level of economic activity in the Province.
Turning to the supplementary appropriations, in Class II, Vote 3 for miscellaneous support services I see that under heading C8 there is provision of almost £10,500,000 for repayment of European Regional Development Fund assistance—and I quote the words in the notes to the supplementary document:
"paid in respect of two major industrial investments which subsequently failed".
The supplementary booklet does not give details, but I understand that this relates to De Lorean and Courtaulds at Campsie. All the noble Lords will know about De Lorean, but will the Minister give some further details about Courtaulds and say whether any public money was also involved? Also under this Vote, can the noble Lord say what is the latest position of the Lear Fan with regard to the certification of airworthiness of the type 2100 aircraft, and the possibility of orders for that aircraft?
Vote 3 also refers to aircraft and shipbuilding. As the noble lord has said, everyone will apprecite what the orders obtained by Shorts and by Harland and Wolff mean to Northern Ireland. The contract of £30,000,000 for Harland and Wolff is an illustration of the importance of public expenditure. I must ask this question: if public expenditure for the conversion of a roll-on—roll-off ferry into an aircraft training vessel is acceptable—and we are all delighted with it—what is wrong with public expenditure on items such as on Britain's infrastructure, as has been advocated for the whole of the United Kingdom? There has been some talk of taking Shorts out of the public sector—presumably because its future looks bright. I hope that the Minister will be able to make an emphatic denial and that Shorts will be left where it is.
Turning to Vote 5, under this same class, I see that there is a token supplementary estimate of a £1,000 for training and employment services. Under heading A2, there is reference to Enterprise Ulster. In answer to a question that I put on the last Appropriation debate, the noble Earl, Lord Mansfield, stated that the terms of Enterprise Ulster had been extended until 31st March 1986. Can I ask what is the intention after that? That is only two years ahead and 1,200 jobs are involved under the Enterprise Ulster scheme.
I should like to raise a few points under the same Vote, relating to the various aspects of training. It is very encouraging to see the increased grant for apprentice training: 3,400 young persons will have apprentice training compared with the 2,500
544
originally provided for. Also there is the small increase for community employment, the demand being greater than was anticiatpted. Again, there is £250,000 for the faster intake under the young workers' scheme. That is more than had been anticipated.
But there must be concern that these grants are offset by decreases under three heads: the uptake on youth community projects is only 500 places against the 800 provided for, so there is a decrease of £1 million in the appropriation. There is a nearly £2,500,000 decrease under the youth training programme for lower than anticipated uptake of places for trainees placed with employers: and finally, under the sub-head D6, there is a slower than anticipated uptake of places under the youth training programme, a saving of nearly £500,000. The references that I have made are from the supplementary booklet. Therefore they are facts and not just figures that I have invented from the air.
Under Class V, Vote 1, I was at first encouraged by the increase of over £10 million in the grant to the Northern Ireland Housing Executive, but the notes state that that is mainly accounted for by some £8.7 million for higher loan charges. Can the Minister explain this, because it looks like taking from one pocket and putting into another?
Under Class VIII, in Vote 4, there is a token provision of £1,000 in respect of education and library boards. On 14th December I asked a supplementary question about the dilemma facing Belfast area board, which has either to leave all 21 local libraries in being with much reduced services, or cut the number by half, which would be mainly among those in the central areas. The noble Earl, Lord Gowrie, kindly wrote to me on 24th February, and if I may, I shall quote from his letter:
"The allocation of resources is a matter for the Board, which will make decisions in the light of its assessment of local priorities; however, you may like to note that, when earlier proposals for restrictions in service were put forward in March 1983, they were rejected in favour of a reduction in the library book fund."
There seems to be a dilemma facing the Belfast Library Board. Would it not be tragic if library provision in the deprived central areas has to be taken away, leaving particular problems for the aged and school children? Is this not a case for increased financial provision?
Under Class IX, Vote 2, there is increased provision of over £12 million for medical practitioner and other services. This, too, appears encouraging, but under subhead A3 it seems that most of the increase of £8½ million is in respect of drugs. Can the Minister say whether this is due to increased prescriptions for drugs or to higher costs charged by the pharmaceutical firms?
Finally, we shall be able to debate the appropriations for 1984–85 at a later date, but perhaps I may put two questions to the Minister. I believe that the first will relate to Class II. I noticed in the Irish Times of 15th February a report about a major study of Irish borders by the EEC's Economic and Social Committee. It referred to proposals for an industrial development zone to be promoted by a new cross-border agency, backed jointly by the IDA in the Republic and the Northern Ireland Industrial Development Board, with financial support from the

545
EEC. It was suggested that the industrial development zone would be the area comprising Londonderry, Strabane, and Letterkenny.
There were also other proposals in the report, as well as reference to a matter raised by the noble Viscount, Lord Brookeborough, who, I note, is unfortunately not here this evening. In a debate on European road haulage quotas, the noble Viscount raised a question about delays at the border which were causing considerable hold-up of lorries, time and time again. The report in the Irish Times to which I have referred said that the commission's committee is recommending a streamlining of customs clearance facilities on that main road to remove what the report called,
"a major bottleneck to EEC trade".
Can the noble Lord say whether the Government have considered the report and what is their viewpoint on the various proposals?
I come to my last question. Under Class XI of the appropriation for 1984-85 there is, naturally, provision for expenditure relating to the Northern Ireland Assembly. I wonder whether the noble Lord can say what is the present position regarding the assembly and what are the hopes for its future. With those points, I conclude my remarks.
7.25 p.m.
Lord Hampton: My Lords, I. too, should like to thank the noble Lord for standing in and introducing the order, and from these Benches we should like to send our best wishes to the noble Earl the Minister for a speedy recovery. Just for the record, perhaps I may say that the noble Earl's request for advance notice of questions, dated 28th February, reached me only this afternoon, too late for any action on my part.
I had been going to ask about the position in relation to Lagan College. However, I was delighted to hear last week from the Minister in charge of educational matters that it had been approved that the college should be recognised as a grant-aided, maintained secondary school, with effect from 1st April next. I have heard the college described as "a joyfully successful endeavour", and this success in bridging in education the gap between the two communities is splendid. I am sure that the noble Lord, Lord Dunleath, must feel justified pride.
I should now like to turn to Class II, item 3, in both parts of the schedule, where we read:
"For expenditure by the Department of Economic Development on the Local Enterprise Development Unit, aircraft and shipbuilding industries, support services and capital grants".
We must all congratulate Harland and Wolff and Short Brothers on their recent new orders. Can the noble Lord give us rather more detail of how the £8 million and the £46,600,000 are to be spent? The noble Lord, Lord Underhill, touched on this point. I, too, should like a statement that Shorts will not be privatised.
This is an opportunity for a more general approach to this whole subject and it is difficult to be original, but it is better to be consistent and not seek extravagant and unrealistic new initiatives. I do not believe that at this stage the Government can alter course in any dramatic way, though, as the noble Lord, Lord
546
Underhill, has said, the economic situation is clearly extremely grave. It must be up to the people of the province themselves to determine what happens, and they cannot escape that ultimate responsibility. I shall be very interested to listen again to our friends from over the water.
It cannot be said too often that there must be compromise between the two communities and some concession by each to the other. The spirit of good-will seems all too often to be lacking behind a sorry spectacle of hatred and fear.
It will be a matter of great importance whether the New Ireland Forum, speaking from a nationalist viewpoint, is prepared to start the dialogue in this mood; and then to see whether there is any meaningful response. Otherwise, it will only serve to emphasise once more the harsh divisions that separate the two sides. In Ireland the real division is not across the border, but in the hearts of men.
I favour the European Parliament taking an interest in the affairs of Ulster. Europe has handed over some £400 million in the last 10 years and is entitled to ask what has been done with it; and the interest and support of such people as Mr. Nils Haagerup takes some of the sting out of the utterly false argument that we are holding on to Northern Ireland as some kind of last colonial outpost. At the end of last year his report stated categorically that he believed that a united Irish state cannot he brought about in the forseeable future. I believe that that is the truth, and false optimism otherwise—supposing one believes it to be desirable—does little but maintain the excuse for the terrorist to terrorise and the gunman to gun down.
Stability is, I believe, the first essential in the North. Paradoxically. I believe that the path to unity at a later date might be smoothed if for now the Republic were to remove from its constitution its claim to control of the Six Counties in the North. At a time when here is so much unemployment, the burning down of a successful factory is nothing less than viciously stupid and evil.
Church leaders in Northern Ireland are often criticised for being open only to one point of view. Perhaps I may just remind your Lordships of the fine words of Bishop Cahal Daly on his installation to the see of Down and Connor. He said:
"Each community must come to accept the other, not as we want them to be, not on condition that they accept our self-definition; but as they define and identify themselves. Mutual recognition in each community of the complete legitimacy and legality, the equal dignity and rights of the other community with its own self-defined identity, its own sense of loyalty, its own aspirations, as long as these are peacefully held and peacefully prompted is a Christian task to which we are all called at this time. To work for this is a true work of reconciliation, a beginning of forgiveness, a hope for a new future".
In human terms, I believe that there is no answer to the problems that bedevil Ireland. It needs a miracle, but I believe that miracles sometimes happen. I would have made some reference to the Hennessy report on the Maze breakout, but that is to be debated on Thursday, when my noble friend Lord Donaldson will speak for the Alliance. I was encouraged to receive only a little time ago the latest annual report of the Advisory Commission on Human Rights in the Province. The British, I believe, are not afraid to face fair criticism. That is something that our less

547
sympathetic critics are apt conveniently to forget. The Prime Minister of the Republic, Mr. Garret Fitzgerald, writing in The Times of 23rd December after the Harrods bombing, spoke of it as being
"a moment of solidarity across the Irish Sea".
He went on:
"It is the duty of political leadership now to ensure that enduring good comes out of these tragedies."
We must all pray that that may be so.
7.31 p.m.
Lord Dunleath: My Lords, I, too, should like to thank the noble Lord, Lord Trefgarne, for having presented this draft appropriation order, and, like the noble Lord, Lord Hampton, apologise for the fact that I was unable to reply to the letter inviting points that I might raise in the debate this evening. I, too, only received the letter on Saturday. I was delighted to hear what the noble Lord had to say about the improved health of the noble Earl, Lord Mansfield. We in the Agriculture Committee of the Northern Ireland Assembly sent him a message of good wishes. Now, on behalf of that committee and on behalf of the Northern Ireland Assembly, I should like to say how delighted we are to hear that he is improving, and we hope it will not be long before we see him back in his place. I can give him an assurance that the next time that he is addressing the Agriculture Committee he will receive an even easier ride than he normally does.
The noble Lord referred to the two most gratifying orders that have been won by Harland and Wolff and by Short Brothers. As is known, Her Majesty's Government have ploughed a considerable amount of public funds into these two major manufacturing industries over the last years. In my view, it is becoming apparent that that was not money well spent: it was money well invested. I sincerely hope that this is just the start of the dividend and the capital appreciation to be seen from that investment.
I also sincerely hope for two other things: first, that even more defence contracts will be steered in the direction of Belfast; and, secondly, that the performance of both the shipyard and the aircraft factory, with their labour relations record second to none, will attract further outside investment. If I may dare to say it again, I would hope that having an empty, purpose-built car manufacturing and assembly factory, the ex-De Lorean factory, available at Dunmurry, Belfast, means that Her Majesty's Government will persuade, or try to persuade, Nissan to go there for its new enterprise. I know that there may be difficulties about the area that it requires. But this is a purpose-built factory, almost brand new. I hope that it may be possible to do something in that direction.
The noble Lord, Lord Hampton, referred to Lagan College and the news received a week before last which was some of the most thrilling that has been heard in Northern Ireland. Again, this will be a good example of investment of public funds; I have no doubt at all about that. I thank the Minister responsible for education, and his department. This decision vindicates the voluntary subscription and voluntary effort that was put into Lagan College to get it off the ground in the first place and to develop it to the stage at which it has now reached. Particular tributes should
548
be paid to the teaching staff and the parents. Both groups know perfectly well that had the college not been awarded grant-aided status it would almost certainly have had to close at the end of the current financial year.
The teaching staff could well have said, "Our jobs hang in the balance; we had better apply for other positions while there is still time". But, no, they did not bail out: they kept going. Their enthusiasm in teaching is infectious. This is clearly reflected in the pupils. The parents might have said, "This college is not likely to last beyond July; we had better find other places for our children". But, no; instead of doing that they did their utmost to try and improve and maintain the standard of excellence of the college at minimum cost by turning up in their own time to help with school meals and to do other voluntary work. It is in no small measure as a result of this effort that the college has progressed to the extent that it has.
In Class III of Part II. Votes Nos. 1 and 2 refer to the gas and electricity service. Some months ago, in the Northern Ireland Assembly, I made a suggestion following the announcement that Kinsale gas was going to be brought to Northern Ireland. If I put that suggestion again, I do not think that I shall he repeating myself in your Lordships' House. One of the difficulties about sitting in two places is that it is hard to remember what you have said where, and where you have said what. My suggestion was that if the major undertaking of digging a trench all the way from Dublin to Belfast, and perhaps even further, to accommodate the gas pipeline, is going to he funded, would this not be the opportunity to use that trench for other services as well? I have particularly in mind electricity.
Your Lordships may recall that we had an electricity interconnector that was blown up several times in the early 1970s, and that has been inoperative since, I think, about 1975. It is regrettable that there has not been the determination to restore the interconnector. However, it was overground and considered to be too much at risk. Would this not be the opportunity to put the main cable linking the supply sources north and south of the border underground? We have been told that it will not be easy to blow up the gas pipeline. Equally, presumably, it would not be easy to blow up the electricity cable if it was underground.
Furthermore, I would suggest that, when the trench is dug, fairly large diameter, heavy gauge pipe might be put in that could convey other services such as telephone lines, cable for cable televisions and perhaps water and anything else that need to be conveyed. It might also relieve the Irish landscape of some ghastly pylons, as well as providing for greater security.
Again in Part II, Vote 1 of Class XI relates to the Northern Ireland Assembly. In the absence of the noble Earl, Lord Mansfield, I am perhaps the only Member of your Lordships' House who can report first-hand on the Assembly. The work of the Assembly continues usefully, and sometimes even constructively. Scrutiny is carried out and useful suggestions are made. Some of those suggestions are accepted by Her Majesty's Government. We have one or two very interesting suggestions coming up in the near future. I consider that the Vote to maintain the Assembly is again money well invested.

549
However, what suprises me, and what in my view is not constructive, is that there are Members who have withdrawn from the Assembly and who still take their salaries. What I find particularly reprehensible is that there are two vice-chairmen of statutory committees who have accepted their salaries for doing a job for which they are specifically paid but which they have not done since 22nd November. Some of those Members in another place actually voted against this appropriation order, which seems, in my humble view, hardly logical.
But we in the Alliance Party are grateful for Her Majesty's Government's continued support of the Assembly. We shall continue to do all in our power to persuade the Official Unionists and the SDLP to return, and we shall continue to exercise our every endeavour to make it a constructive body which can move towards devolution.
There is another matter for which I could not find a directly relevant Vote. If I am not in order in raising this matter. I am sure that noble Lords will not be slow to draw it to my attention, as they have so helpfully done on occasions in the past. It would be most helpful if we could have a completely independent complaints procedure for all the security forces. This has been suggested in respect of the police. I would humbly put it to your Lordships that there would be an independent complaints procedure which would cover not just the police but also the army, the UDR and the prison service. I suggest this for two reasons. Indeed, my party put forward a suggestion in 1971 and a submission in 1974 on this topic.
The reasons are that not only would it be a greater protection for the public but also—and perhaps even more important—it would be a protection for the members of the security forces themselves. Whenever there is an incident which is the subject of dispute and which may involve a fatality, and there is an internal investigation carried out, those who feel themselves aggrieved are quick to allege that investigators wearing the same uniform as the investigated will do a bit of a cover up. A completely independent body right from the start—not just an appeal body but a body that would be responsible for investigating any complaint against the security forces from the time the complaint is made—would help to stabilise the situation considerably.
I thank Her Majesty's Government for the presentation of this order and for their continued support of Northern Ireland, which is certainly appreciated by my party even if the appreciation of some other parties might, at times, seem slightly qualified.
7.44 p.m.
Lord Hylton: My Lords, I start tonight from two basic principles that concern Government expenditure in Northern Ireland. First, there is no way by which politically-motivated violence can be overcome solely by security or police measures. Her Majesty's Government recognise this, but unfortunately not all the local political parties do so. One can only hope that they will study the history of the 1930s, the 1950s and the period since 1970. They may then see that violence
550
can be contained for a time, but that it only breaks out again later.
The second principle is that security, and social and economic life and political progress stand or fall together. A setback in one sector is a setback for all. Here I should like to mention two hopeful signs. Last year the "Two Traditions Group" made itself publicly known. This group asserts that two traditions have long existed in Northern Ireland. They are, on the one hand, the unionist tradition and, on the other hand, the nationalist tradition. Each has social, cultural, political and religious manifestations. In so far as it is law-abiding and non-violent, each tradition is equally legitimate. Each is worthy of respect and only through mutual respect will a peaceful future be achieved.
A second hopeful sign was the address given by the Roman Catholic Bishop of Connor and Down—which, incidentally, includes Belfast—on New Year's Day 1984. That was a more recent speech than that quoted by the noble Lord, Lord Hampton. In it the Bishop called for a complete change of heart on the part not only of the two local traditions, but also of the British people and the United Kingdom Government. I suggest that such a change of heart is a necessary starting point for unlocking the present deadlock. Periodically we hear calls for new initiatives, such as took place in the past at Sunningdale, or in the Convention, or in the Assembly, or in the Forum now sitting in Dublin. These initiatives have tended to fail either because too few people agreed, or because the leaders agreed and then were unable to carry their followers with them. That, I suggest, is why the change of heart needs to he general and why Britain and Ireland should both change their ways and wholeheartedly seek for local consensus.
The new initiative that is called for is therefore one of forgiveness. Forgiveness can be understood at at least two levels. At the secular level there is willingness to forgive and to start afresh, a spirit of tolerance and a desire to invent processes and structures that lead to agreement and life in common. At the religious level there is full-blown Christian forgiveness leading to repentance and to the love of former enemies. Both sorts are clearly necessary.
Forgiveness gives us the strength to take responsibility for the past even through we were not personally involved in historic crimes. It removes the lingering guilt and the ancestoral fears that leave people trapped in their own history. Forgiveness enables us to recognise the painful truth about ourselves. As an ex-terrorist friend of mine wrote some six years ago:
"I was a hypocrite. In injuring human beings, I did not cure injustices, I created new ones.".
Britain, and England in particular, has to face its own past behaviour in Ireland—both North and South. As the architect of the Northern Irish state, it has to ask itself, what was wrong and what can be put right? No longer can we say that the Act of 1919 and the treaty of 1922 provided a solution to the "Irish question". We should try to see ourselves as one of the parties to the imbroglio—and not as some kind of impartial referee of a little local conflict. We should try to distinguish between economic and other interests, which may, perhaps, he negotiable, and, on the other hand, cultural and religious values about which there

551
can be few bargains, if any. We English and Scots should give a lead in shedding our illusions. Then, perhaps, the unionists and the nationalists and the Southern Irish will begin to shed theirs.
Government and public expenditure are much concerned with institutions. It seems clear that in Northern Ireland the institutions inherited from the past have not served us very well. Some indeed have already been abolished. Our task is to create new ones. In doing so we should not overlook, but on the contrary should continue to build up, the considerable existing inter-communal co-operation in Northern Ireland so well described in Dr. John Oliver's PEP pamphlet of 1978 entitled, "Ulster Today and Tomorrow". We should take account of the achievements of the many centres for reconciliation, of which perhaps the best known are Corrymeela, Glencree and Rostrevor.
Aided by these stepping stones, I hope that we shall come to see that what are needed are institutions that take account of the two very distinct traditions, two identities and two kinds of national affiliation. To this understanding one may perhaps add that in circumstances such as those prevailing neither tradition can hope to attain 100 per cent. of its desired objectives.
It is common knowledge that at present the British Government guarantee the constitutional integrity of Northern Ireland. This guarantee is single or unilateral. Tonight I should like to suggest that a double or bilateral guarantee might be more satisfying to all concerned. Let me illustrate the point. The Lebanese state might be very much more secure if its integrity were to be guaranteed by both Syria and Israel. The Falkland islanders might be better off if their civil and human rights were guaranteed by both Britain and Argentina. Similarly, the people of Gibraltar might benefit from joint guarantees on the part of Britain and Spain. The essence of such guarantees is not to enhance the power of the guarantors, but to uphold the dignity and wellbeing of those guarantees.
I am therefore suggesting that both Britain and Ireland should guarantee the civil and human rights of the people of Northern Ireland. These guaranteed rights must clearly include the two distinct cultural and religious identities which have sprung from the two traditions. The proposed double guarantee could well be buttressed by a Bill of Rights, for which many in Northern Ireland have long been calling, or by the entrenchment of the European Convention on Human Rights in the land of the law. It would be of great value if, in such a double guarantee as I have outlined, the Republic of Ireland could convince Northern Protestants that they would never be obliged to accept laws and practices which are against their convictions and consciences. Similarly, the nationalist community in Northern Ireland would be very greatly reassured if it understood that Britain would never allow that community to be treated as second-class citizens.
In 1990 there occurs the three hundredth anniversary of the Battle of the Boyne, a famous battle which settled the future of the whole of Ireland for many generations thereafter. In the past this anniversary has been celebrated in a one-sided and triumphal manner. I suggest therefore that we should use the coming six
552
years to make sure that the tercentenary is commemorated in unison by members of both traditions which are by now thoroughly native in Ireland. Let us use this time to provide Northern Ireland with institutions appropriate to its unique character. If this debate helps to further that process, it will have been most worthwhile.
I think that we should say to the people of Northern Ireland, and say it in company with men of goodwill in the Republic, on the Continent and in the United States. "Do not be afraid; from now on give to the world an example of how two completely disparate cultures can live together creatively". Meanwhile, I appeal to Her Majesty's Government to apply the full force of their minds to the constitutional question. Both in the past and still in the present, this is a matter for which people have shown they are willing to give their lives. It is a terribly divisive question, as can be seen from the conduct of each election that is called in Northern Ireland. I believe that it urgently needs to be settled, and I suggest that the longer we shy away from this question, the longer evil may be able to continue.
7.55 p.m.
Lord Fitt: My Lords, I only wish that I had as much faith in human nature as the noble Lord, Lord Hylton, has just indicated to the House. However, living in Northern Ireland, as I have done for many years, I am afraid that I cannot be optimistic about its future. I am quite certain that in 1990 we shall probably be speaking in much the same vein as we are speaking today.
The appropriation order in respect of Northern Ireland has always been used as an occasion for a full-dress debate on both the economic and the constitutional problems of Northern Ireland by its elected representatives in another place. As one who was in another place for many years and who is still finding it a little difficult to adjust to this atmosphere, I tend to attend a little in the other place. When the debate on this appropriation order took place there I listened to some of it and I read the rest of it. I must say that anyone listening to it or reading it will not have been inspired with confidence about the future of Northern Ireland.
The vast majority of elected representatives in another place—15 out of the 17—are all Unionists of one hue or another, and throughout the course of the debate on this appropriation order they were demanding that, through the Secretary of State for Northern Ireland, the British Government should do something to give them victory—that the British Government should use all their energies, financial and otherwise, to support and to uphold the Unionist cause. In my estimation that is not a realistic demand to make, because no British Government, of whatever hue, will take that particular stance. Northern Ireland has many economic problems, but although the economy was a matter for discussion in that debate it was very clear that it was the constitutional position which was receiving priority in the minds of those elected representatives.
We had demands for changing and changing again the name of "Derry" to "Londonderry". In this House one might think that that is a rather petty and simple issue which should not even be discussed, but in

553
Northern Ireland it is of major importance. Only last week, once again, I despaired when I saw the unveiling of yet another classic week in Northern Ireland. At the beginning of last week we had the majority of the Northern Ireland Catholic population hanging their heads in shame at the brutal, callous murder of the prison officer. Bill McConnell. I am quite certain that the Northern Ireland Catholic population wanted to divorce themselves from anything connected with the IRA.
Then at the weekend we had the demonstrations in Derry by the other side of the religious and political divide, and we saw the scenes on our televisions and the threats that were being hurled at the minority community. That Catholic population, which had been so alienated from the IRA at the beginning of the week, were right back in that camp because they felt that the IRA were the only people who could defend them if and when an attack was made on them by the Loyalist population. Here we have the classic to-ing and fro-ing by both sets of extremists who need each other to keep themselves in existence.
The noble Lord, Lord Dunleath, has quite rightly said that he hopes the Northern Ireland Assembly will continue to exist. I honestly believe that that is the only hope—if there is, indeed, any hope—for Northern Ireland as a political entity. I believe that this must grow from the political structures which have been created around that Assembly. I do not believe that you can begin to find any solution to the Northern Ireland problem in Dublin. Washington. Strasbourg or Brussels. The only hope for any resolving of the Northern Ireland problem has to take place in Northern Ireland, and particularly in Belfast.
The sentiments to which we have listened this evening from the noble Lord, Lord Hylton, are reasonable in this House. They are ultra-reasonable and sensible, but when they are listened to, or read by the majority Protestant community in Northern Ireland they will be, as we say in Northern Ireland, like a red rag to a bull, because it will appear that he was advocating joint sovereignty in Northern Ireland. I do not believe that there is any section of unionism of any description, be it of the Paisleyite kind, the official Unionist kind. or the Alliance Party kind, that will for a single second tolerate the idea of two flags in Northern Ireland. While the speech we have listened to from the noble Lord, Lord Hylton, is eminently reasonable in this House, faced with the realities of the divisions and passions which exist in Northern Ireland it is just not a runner.
Having said that, I shall be expected to say what is a runner. What is the possibility of any political structure being created that will be accepted by the whole community? I do not want to be unduly pessimistic, but, being honest with myself, I think I have to be. I do not want to give false hopes of a false dawn. There will be some people who will say, "You shouldn't say that, because you may precipitate it". But, with the exception of Belgium, in any country in the world where there have been religious, cultural and ethnic divisions one side has always achieved victory.
We do not hear much talk now about Cyprus. Cyprus is not very much on the front pages of the world. The United Nations and everybody else tried to make the Turkish and Greek communities live
554
together in that island. It did not work. There was not any success. The reasons why we do not read about Cyprus every morning on our front pages is because the Turkish army went in and drew a dividing line. They effectively partitioned the island of Cyprus. On the one side of the line you have the Turkish Cypriot community, and on the other side the Greek Cypriot community.
An attempt was made at that solution in 1920 in Ireland when Ireland was partitioned, but whereas in Cyprus there are only 1 or 2 per cent., if indeed that many, Turks in the Greek Cypriot sector or Greeks in the Turkish Cypriot sector, Northern Ireland was different. We were left in Northern Ireland with a 35 per cent. Catholic and ethnic minority and a 65 per cent. unionist majority. Anyone with two eyes to see must have understood that it was inevitable that at some time in the future a clash between those two cultures was going to come. That clash has come now. That clash is with us every day, 24 hours a day.
The noble Lord, Lord Hylton, in the course of his remarks this evening made an appeal to the population of Northern Ireland not to be afraid. I wish that they would hear that appeal, but again the reality is that everybody in Northern Ireland is afraid. The Protestant majority population are frightened that their national identity is going to be taken away from them. The Catholic minority population feel that they have been a minority for too long in their own island, and that now is the time when they should assert their position so that they can become part of the majority in a unified Ireland.
Here you have the clash of the cultures. I cannot see any early resolving of this particular problem. It is going to be a long, hard slog in the Northern Ireland situation. I believe that the British Government have to be commended for the resolution they have shown in staying in Northern Ireland, and trying to prevent what would undoubtedly be a bloody civil war if there was any attempt at a premature withdrawal of the British army or its forces from Northern Ireland. A succession of Governments here, both Labour and Conservative, are to be congratulated on the resolution they have shown.
This order could be used for a full-blown constitutional debate. I had not intended even to speak at the length I have, but there are a few other remarks which I think relate to the appropriation order itself. First, there are 123,000 admitted unemployed in Northern Ireland. In fact that figure can be inflated because there are many people who are unemployed but who do not qualify for social security benefits, and therefore do not sign the register. It is my estimation that there are at least 150,000 people unemployed in Northern Ireland. That is an appalling figure by any standards. Again in this rarefied atmosphere it is hard to take in and to understand just what that figure means in poverty and social deprivation.
In another place a spokesman for the Opposition said that 56,000 of that 123,000 admitted figure had been unemployed for over a year. This evening we heard from my noble friend on the Front Bench that 2,000 or 3,000 have in fact been unemployed for more than three years. When I was a Member of another place I put down a set of Questions, which were answered, and they are to be found in Hansard. That

555
figure of 56.000 people unemployed for more than a year does not tell the whole story. The reality is that a big percentage of that 56,000 have been unemployed for one, two, three, five, 10, 15, 20, 25 or 30 years. These were answers I received when the Questions were put down.
There are people who have been unemployed all their lives. They left school in Strabane, Newry, and other parts of Northern Ireland and have never had a job. Now they are 25 or 30 years of age and trying to rear a family. One must think of just what type of mentality the unemployed in Northern Ireland have. Again I cannot see any resolving of that problem within the foreseeable future. Northern Ireland is a special case.
Again to give honour where it is due, I think that every elected representative who has the interests of Northern Ireland at heart will congratulate this Government on sending a defence order to Harland and Wolff, and for helping in whatever way they could in Short Brothers getting the American order. That was a gleam of light at the end of a long tunnel when we heard those announcements. In fact your Lordships will be aware that when I heard that announcement I had down for debate next Thursday an Unstarred Question on the Maze Prison. Rather than muddy the waters, rather than say something which could cause ill-feeling in Northern Ireland, I withdrew that Question. The announcement was made about Short Brothers and about Harland and Wolff and I came in here and withdrew the Question because I did not want to say anything that could cause ill-feeling in Northern Ireland. But I was not to know that on the day that I withdrew that Question the IRA were planning the murder of Bill McConnell, a Deputy Prison Governor in Northern Ireland, so we are to have a debate on that issue on Thursday of this week.
Again, reference has been made to the fact that the Bairnswear children's clothing factory in Armagh was bombed by the IRA. I think we should all understand that the IRA and those who support it, indeed many of the people who vote for Sinn Fein candidates, are not concerned about economic deprivation or poverty in Northern Ireland. Their whole being is gauged towards changing the constitutional position and they do not care how many people sign the unemployed register.
When I was a member of another place, I had quite a lot to say on housing, because at that time I lived in Belfast. I had a constituency surgery and every day when I was in Belfast people came to me and told me about their housing problems. It is now four months since I have been to Northern Ireland. It is the longest time I have ever been out of Northern Ireland since I was a very young man over 35 years ago. When you are removed and see the statistics and figures relating to the housing problem in Northern Ireland it does not create the same urgency within you, because there is a vast difference between reading statistics and figures about waiting lists and sitting in an advice centre and listening to homeless people telling you in their own language in every graphic detail about the problem as it affects them. I cannot speak now with any great authority except to say that the figure of 123,000 on the waiting list is a figure which should cause everyone concern.
556
There are only two issues which brought me to my feet here tonight: both are concerned with education. In West Belfast—and the other little school straddles North and West Belfast—it is a question of the cuts in education. My successor as the Member of Parliament for West Belfast does not attend the other place. I do not think he makes representations in this connection. Therefore the people of West Belfast are not represented. They write to me and 'phone me. I feel it is incumbent upon me to try to voice their concerns, even though that be in this place and not in another place. I hope the Minister will listen to what I have to say on their behalf because they do not have an elected representative from West Belfast, the minority representative in the Assembly at Stormont or in this House. I know that it is a convention not to criticise people in another place and it is not my intention to do so. All I would say is that the voice of the minority in Northern Ireland, a significant minority, is rarely heard in another place. I believe that the minority representative in that place should avail himself of the opportunity to speak on behalf of the minority in Northern Ireland.
I speak now of a little nursery school on the Shankhill Road which is not a nationalist or a Catholic area. The little nursery school has 75 children with two teachers. Because of the cuts taking place across the board in Northern Ireland it has been decided that this school shall be closed and removed to another building. All the parents in that area and all the teachers are very concerned that this should happen. For the sake of whatever economies may be made I do not think it is right that such disruption should he caused. I believe that the Minister in charge of education in Northern Ireland has said that changes would not be brought about if they were not involved in the educational sense. The reasons that the board has given in Northern Ireland for closing this school are totally financial. It says that the heating and the costs of the school would amount to £13,000 and that is the reason it is being closed down and transferred to another place. I believe it is causing great concern and I ask the noble Minister to make representations to his colleague in another place to see whether this can be prevented.
But much more important—I am not gainsaying the fact that that is not an important issue—is the problem of St. Louise's comprehensive college in the Falls Road. This college was brought about at the instigation of the Department of Education in Northern Ireland. Instead of having two schools there was one, as I say, created at the instigation of the Department of Education. Throughout all the years of its existence under the inspired and dedicated leadership of Sister Genevieve it has filled a void in Northern Ireland, not only the academic sense but on all the other issues where the dedicated teachers in this school have given of their services voluntarily outside their academic teaching hours without any consideration about wages. They have given a good service to the community in that West Belfast area under the inspired leadership of Sister Genevieve.
Now, because of the cuts, the Department of Education has said that there will he a reduction of eight of the teaching staff in that school. This reduction will create an awful problem in the whole surrounding

557
area where there is such massive poverty and social deprivation. The teachers in that school do not go home at four o'clock or half-past three when they have finished teaching their pupils. They have rendered a service to the whole community. One has only to know about Northern Ireland to know of such areas as Ballymurphy and Turf Lodge and all the other deprived areas and to know just how necessary it was to have such a number of dedicated people.
I appeal to the Minister to make representations to his colleagues in another place to have another look to see whether it would not be possible to keep those eight teachers employed. It is not only a question of keeping eight teachers in employment, but we shall be ensuring that whatever hope there is of overcoming the problems in Northern Ireland will not be weakened by the sacking of those eight teachers in that school in West Belfast.
8.17 p.m.
Lord Blease: My Lords, I wish to be associated with the sentiments expressed by the Minister and other noble Lords about the illness of the noble Earl, Lord Mansfield. I join in inviting the Minister kindly to convey to his noble friend the feelings of this House and our best wishes for his speedy recovery to full health.
I will not be tempted to go down the road that has been presented to me by the noble Lords, Lord Hylton and Lord Fitt. The two traditions are very interesting—one which I support with some accommodation to be met, but this is not the time. It may be of some assurance to the Minister that although I have a sheaf of pages here and my eye on the clock, I know that the Whips are pushing him around to get on with the business.
I rise to support my noble friend Lord Underhill on the issues that he raised concerning this appropriation order. Particularly I wish to support the noble Lord's criticism of the procedural arrangements in this House for dealing with the important business arising from these Northern Ireland appropriation measures. I came from Northern Ireland this morning and the eyes in Northern Ireland are on these debates. I would be failing the people of Northern Ireland if I did not attempt to raise the real issues facing them about jobs, employment and housing, as have already been mentioned.
The noble Lord, Lord Fitt, mentioned that some 12 days ago, on 1st March, this order was debated in another place for six and a half hours. During that time some 20 Members took part and the order was approved following a division. Apart from the convention, which I fully recognise, it is not my intention to quote from the speech of the right honourable Mr. Enoch Powell, but I suggest that Mr. Powell's speech is worthy and deserving of close study by all interested in the measures afforded by both Houses here at Westminster to deal with Northern Ireland business.
Mr. Powell seriously questioned and challenged the efficiency of the parliamentary procedures and machinery effectively to perform the necessary scrutiny of these appropriation orders and the financial policy implications. These orders are vital to
558
the people of Northern Ireland and there should be an opportunity to deal with them in some concerted and orderly manner. I think it is a charade to go on dealing with them piecemeal in the manner in which they are presented.
In this connection, the Northern Ireland Assembly and, particularly, the report of the Northern Ireland Assembly on Public Expenditure Priorities, which was published last year, in July 1983, have proven beyond doubt the contribution by its officials, Members and staff to the task of identifying the priorities for public expenditure and the choices and decisions required which affect the people of Northern Ireland. The noble Lord, Lord Dunleath, has already mentioned this, but I feel I should like to stress that certainly here is an elected Assembly, here the persons elected are near to the people. Their report contributed much to the government of the Province, as to what ought to be done in connection with the affairs of Northern Ireland. I pay tribute to that Assembly and to what it is attempting to do.
I draw attention—and many noble Lords will be aware of it—to the excellent work in promoting mutual understanding and partnership between Parliament and industry that has been achieved by the Industry and Parliament Trust here at Westminster. I am convinced that Northern Ireland Assembly Members and Northern Ireland industry could benefit greatly from a similar type of arrangement instituted in the Province. I had a brief word with the noble Lord, Lord Irving of Dartford, who is chairman of the Industry and Parliament Trust. I understand he would be prepared to give help and advice if such a scheme were proposed for Northern Ireland. I have had an opportunity to talk to the Minister, who, in a deputy position, is to respond this evening. I would not expect a reply tonight, but may I ask him whether he will draw this matter to the attention of his Northern Ireland Government colleagues (perhaps under the C.5 heading) and ask whether something of this nature could be instituted in Northern Ireland? I believe that it would benefit industry greatly.
We have had the good news—and the Minister mentioned it—about the orders for Harland and Wolff and Short Brothers. These were won by hard competition in many respects, by good delivery dates and by consultation between the management and the men. I think it is important, as far as the future of Northern Ireland is concerned, to examine why these orders came to Harland and Wolff and Short Brothers. Certainly there may be aspects of subsidy and Government aid involved, but they were certainly selling a product which was needed; and they were selling it in the face of competition.
I am sure that Members of this House will understand that amidst the tragic happenings of vile murders and blatant destruction that we continually face in Northern Ireland the announcement about job prospects in Northern Ireland comes like a ray of sunshine through the dark and heavy storm clouds. Although the clouds of high unemployment still darken many areas of Northern Ireland, I am pleased to say that rays of hope and encouragement shine wider even than simply for Harland and Wolff and Short Brothers.

559
I do not want to detain the House for very long, but I think it would be wrong if I did not mention the fact that there are a number of areas in which there are present those rays of sunshine, in the sense of job hopefulness. There is a new fish processing plant at Portavoga which hopes to provide 90 jobs, and I think that Lord Dunleath knows something about that. There is a £3 million development at Fermanagh for the Erne hospital, which should provide much needed employment and facilities. In Larne, the Northern Ireland Paper Mills are to complete a £4 million joint capital investment programme which will secure the present employment and create 15 new jobs. There is a new shipping and freight service between Belfast and Heysham which should provide 16 new jobs. There is a quarter of a million pound investment in new instrument landing equipment at Aldersgrove airport, which should be completed within the next 12 months and which will take Northern Ireland into the forefront of international airports.
At Saracens, the Lurgan textile firm, there are plans for a £3 million modernisation or plant development which will secure the jobs of 400 workers there and, it is hoped, promote job prospects in the area. There are some 10,000 Northern Ireland farmers who will benefit from special grants jointly funded by the Government and by the EEC for the less-favoured areas. In East Belfast, a spinning mill which ceased production last year has been purchased by the Belfast Development Agency for conversion into workshops and small industrial units. The Belfast Development Agency is a partnership of city councillors, business representatives and trade unions. It is hoped that these small efforts at job creation will help throughout the Province. And there are areas where I think the Bills which are flowing through the other place (and which will eventually come here) about corporate development and projects of this nature should help.
May I make a plea to the Minister coming under the heading of Class VIII, item 3? It is a plea for the Northern Ireland Educational Guidance Service for Adults. In Northern Ireland, this service is run independently. It does a tremendous job and has been supported by Labour administrations and by the present Government. There is an urgent need for the appointment of a deputy organiser. For an additional expenditure of £15,000 I think the return would be tremendous so far as the Province is concerned.
I have a lot more that I could say, but in the interests of decorum in this House as far as debates on Northern Ireland are concerned, I do not want to labour the various points: I should like to hold the sympathy of this House so far as Northern Ireland is concerned.
I think that the Minister in his remarks said that the problems are not going to go away. I should like to finish on that note by saying that the economic problems facing the people of Northern Ireland are frightening but there is no reason to regard them as irreversible. Improvements will not come about simply by waiting for "something to turn up". The real scope for action lies in the Province with whatever external assistance one can get from the United Kingdom Government or through persuading European agencies to take part in initiatives themselves. Many of these initiatives must be by local
560
people in the Province. I could deal with some of them—with competitiveness, cost effectiveness, reliability; but,, principally, I know that with Harland and Wolff and Short Brothers it came from active co-operation and a meaningful dialogue between the management, the trade unions and the employees. I think that it is from there that the results will come. There is an absence of stability in Northern Ireland on many fronts. Unless there is stability, it is inevitable that those companies with productive and employment producing projects will not be attracted to Northern Ireland.
I will close by saying that we hope that the Northern Ireland Office and the Assembly will take the action required to give the necessary leadership; and that that leadership may help to activate the necessary actions that are required at this stage to promote hope for the future industrial and social issues in Northern Ireland.
8.29 p.m.
Lord Trefgarne: My Lords, this debate has ranged widely over many of the key issues which are vital to Nothern Ireland, and your Lordships have raised a number of points of specific concern. As noble Lords will appreciate, I come new to most to the topics covered in this debate and I should like to record my thanks to those noble Lords who have been able to give me advance notice of some of the points that they were proposing to raise this evening. Time is marching on, and we are now much later than had been anticipated, or at least later than I had anticipated. I hope, therefore, that your Lordships will forgive me if I do not deal in detail with the large number of points that have been raised. I promise faithfully to browse through the pages of Hansard and to make sure that all the points raised are covered in replies which will be sent to the noble Lords concerned as soon as possible. The replies will be sent either by me or by one of the Ministers in the Northern Ireland Department.
I think I ought to deal with the point which was raised by the noble Lord, Lord Hylton, and what he called "joint sovereignty". The Government have repeatedly made it clear—
Lord Hylton: My Lords, if the noble Lord would be kind enough to give way, I did not mention "dual sovereignty" or "double sovereignty". I spoke very carefully of a joint or dual guarantee, and I think there is a difference.
Lord Trefgarne: My Lords, if I misheard the noble Lord, I apologise. I believe he is right in correcting me on that. He did indeed refer to what he called "the double guarantee", and I misinterpreted that. It is another indication, I am afraid, of my inexperience in Northern Ireland matters. The Government have repeatedly made it clear that there can be no question of altering Northern Ireland's constitutional status as an integral part of the United Kingdom without the freely-given consent of the majority of its people. We are committed to the principle of self-determination, enshrined in Section 1 of the Northern Ireland Constitution Act 1973. To proceed on any other basis would be wrong in principle and disastrous in practice, in the Government's view. It is beyond doubt that a clear majority of the people in Northern Ireland favour the retention of the union.

561
I do not think it would he appropriate for me now to dwell on all the detailed points that have been raised. As I have said, I will ensure that noble Lords receive written answers as soon as may be.
On Question, Motion agreed to.

Telecommunications Bill
8.32 p.m.
Consideration of amendments on Report resumed.
Lord Lyell Lord Lyell moved Amendment No. 14:
Page 3, line 6, after first ("services") insert ("directory information services").
The noble Lord said: My Lords, I hope that your Lordships will permit me, in moving Amendment No. 14, to speak also to Amendments Nos. 28, 32, 33 and 34.
Amendment No. 28: Page 4, line 5, after ("section") insert—
(""directory information service" has the meaning given by section 4(2) below;").
Amendment No. 32: Page 4, line 37, leave out ("a service consisting in—(a)") and insert ("any of the following, that is to say—
(a) a service consisting in")
Amendment No. 33: Page 4, line 41, at beginning insert ("a directory information service, that is to say, a service consisting in").
Amendment No. 34: Page 4, line 45, leave out ("or (c)" and insert ("and (c) a service consisting in").
All these amendments hang together. Before our dinner break your Lordships rejected the previous amendment for two reasons. First, as I endeavoured to explain earlier, we believe that the drafting is deficient. Secondly, we believe that the provision for charging would be very difficult, if not impossible, to implement in practice. I should like to elaborate briefly on both points, if I may.
As to the drafting, I explained when speaking to Amendment No. 13 that the words "directory inquiry services" are unqualified in any way. These would go far wider than what is intended; namely, to give the ability to obtain information about telephone numbers. I believe this problem could be overcome by Amendment No. 14. This refers to "directory information services", which is defined in Clause 4 as:
"a service consisting in…the provision by means of a telecommunication system of directory information for the purpose of facilitating the use of a service … and provided by means of that system".
In other words, if Amendment No. 14 is agreed to we shall find in Clause 3(1)(a) that it will require the Secretary of State and the director to secure the provision by telephone systems of telephone directory information for the use of those systems.
There is another way in which the amendment improves the earlier drafting. I think we all understand what "directory inquiry" normally means. As has been explained, it means information which is obtained for numbers in London by dialling 142 and, for numbers outside London, by dialling 192. However, I do not think that goes quite far enough, for example, in some parts of the country, to cover information about STD codes. Your Lordships may recall that at the last stage the noble Lord, Lord Kaldor, and I had a vivid discussion about the codes all over the United Kingdom. Information about these
562
STD codes is essential before some calls can he made. In some parts of the country this information is provided not by the directory inquiry service but by the operator: in other words, you obtain this service by dialling 100. This service is included within the wording of Amendment No. 14. We understand that there is considerable doubt as to whether it would be covered by the wording of the previous Amendment, No. 13, or by that of Amendment No. 15, if the noble Lord, Lord Lloyd of Kilgerran, will allow me to trespass briefly on to the next amendment.
I should like now to turn to the second problem; namely, whether or not the directory information service should be the subject of a charge. I want to make it quite clear that the Government fully accept that those who, by reason of blindness or disablement, do not have the alternative of using printed directories should not have to pay for directory information which is provided over the telephone. That was a wish shared by virtually everyone who spoke on the last amendment, and they want a provision written into the Bill. The problem is how to put this wish into effect in the Bill.
One way, as in the last amendment, is to place a blanket prohibition on all charges for directory information services provided by all operators. That, of course, is not just British Telecom, Mercury and Hull, but all the many operators of private telecommunications systems as well. I think your Lordships would agree that this is not appropriate, for a variety of reasons; and that is why the Government proposed that the blind and the disabled should he safeguarded against these charges through conditions in the licence which is granted to British Telecom and also to Hull, Mercury and possibly others.
However, I appreciate the view which was expressed by your Lordships on all sides of the House that there is something to be said for including some formal provision in the Bill to ensure that the blind and the disabled are not charged for directory information which they cannot obtain by reading a directory. I can therefore give the House an undertaking that if something suitable can be included without the disadvantages and the pitfalls which I sought to explain on the previous amendment, we shall bring forward an amendment on Third Reading. In saying this, I can make no promise that we shall be able to succeed, but I assure your Lordships that we shall consider the possibilities very carefully indeed. With that assurance, I hope that your Lordships will see fit to accept Amendment No. 14. I beg to move.
Lord Lloyd of Kilgerran: My Lords, it would be churlish not to thank the noble Lord the Minister for his cogent explanation and for putting forward this amendment. I produced an amendment at the Committee stage to the effect that directory services should be particularised in Clause 3(1)(b), together with things like emergency services, public call-box services and so on, for which all reasonable demands should be satisfied.
As the noble Lord the Minister indicated earlier this evening, there was some noise at the end of my speech and I did not hear the Minister saying that he would take the matter back, so I went off again full steam ahead until I was told that the Minister had agreed to

563
take it back. The Government have now come forward with this amendment which uses the words "directory information services". But the titles in Conditions 3 and 34 in the licence refer to "directory inquiry services". The only cavil I have is: is there any difference between "directory information services" and "directory inquiry services"? That was the subject of my amendment at the Committee stage and it is the subject of my next amendment, No. 15. Otherwise, I entirely agree with what the Minister has said.
Baroness Macleod of Borve: My Lords, I am grateful for what my noble friend the Minister has said. I wonder whether when he speaks again he could answer this question. If British Telecom wishes in the future to charge for the information, and if it abides by the licence which I understand will have included in it that it should not charge disabled people or people who cannot see the written word, how are people who suffer from these ailments to know?
Lord Morris: My Lords, I believe that I can help the noble Lord, Lord Lloyd. The term "directory inquiry services" refers not so much to the service as to the request fur a service. The term "directory information services" refers more directly to the result of that inquiry and, as such, is an improvement in pure drafting terms. It describes the service rather better, and certainly more roundly, than a reference to the actual question in the first place.
Lady Saltoun: My Lords, I wonder whether the noble Lord, Lord Lyell, can clarify a point. He referred to services obtainable by dialing 100. I did not think that directory inquiry or information services were obtainable by dialling 100. I thought that those were services which one required if one's telephone call had gone wrong, and one was unable to get the number that one had dialled.
Lord Stoddart of Swindon: My Lords, like the noble Lord, Lord Lloyd, I do not particularly want to look a gift horse in the mouth and I certainly do not wish to be churlish about the olive branch that was held out by the noble Lord, Lord Lyell, following the vote on the last amendment. Furthermore, of course, I cannot now pursue the argument about a free service, since the House has just defeated that. But I should like to say that we have not yet had—and we did not receive one earlier on in our deliberations—an explanation from the noble Lord as to how we would define people who were disabled and what would be the administrative costs of so defining them.
It could very well be that the administrative costs of finding out whether a person came within the meaning of "blind" would be great. Also, it could be difficult to define a person who was dyslexic or to decide whether a person who was disabled could handle a telephone directory, and I have to confess that I think the noble Lord will have some difficulty in writing it into the Bill. Nevertheless, having said that, because it is these people in particular that the House is most concerned about, I hope that by the time Third Reading comes around the noble Lord will have been able to exercise
564
his own mind and will have received advice from other minds, both around him and in the Civil Service, that will enable him to bring forward an amendment which is acceptable to the whole House.
Lord Lyell: My Lords, if I may briefly try to answer some of the points that have been raised as a result of my first oration in moving this amendment, my noble friend Lady MacLeod asked, as did the noble Lord, Lord Stoddart, how we would be able to define disabled and blind people. I am afraid that all I can say tonight is that we are working out how blind people and disabled people can be recognised. This is something that will come under the heading of these matters which as I said earlier we shall be considering very carefully indeed. As regards what the noble Lord, Lord Lloyd, and my noble friend Lord Morris said, I understand that the term "directory information services" is wider in scope and we shall be changing the draft licence to use the term "directory information services". I hope that that will satisfy the inquiring mind of the noble Lord, Lord Lloyd, who picks out these points.
The noble Lady, Lady Saltoun, mentioned the problem of dialling 100, I hope I said that it is the STD codes that are sometimes obtained by dialling 100—not in all areas. I understand that telephone numbers of individual subscribers are, in almost all cases, obtained by dialling from the parts of Scotland which the noble Lady and I frequent by dialling 192: and possibly 142 when we are in London. If I am wrong on this matter of obtaining subscribers' numbers by dialling 100, then I shall certainly write to the noble Lady. But I understand that it is STD codes which are obtained by dialling 100 and, of course, the noble Lady will agree that it depends upon where you live. Finally, may I thank the noble Lord, Lord Stoddart, for his kind remarks about the olive branch. I hope that this amendment will meet the concern that has been expressed on all sides of your Lordships' House.
On Question, amendment agreed to.
8.48 p.m.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran had given notice of his intention to move Amendment No. 15:
Page 3, line 6, after second ("services") insert ("directory enquiry services").
The noble Lord said: My Lords, in view of the number of poignant and moving letters that I have had since the Committee stage, when I proposed in my amendment that directory inquiries should be particularised in Clause 3, I should like once again thank the noble Lord the Minister for introducing Amendment No. 14. In those circumstances, this amendment is not moved.
[Amendment No. 15 not moved.]
[Amendment No. 16 not moved.]
The Earl of Halsbury The Earl of Halsbury moved Amendment No. 17:
Page 3, line 22, leave out ("effective competition between") and insert ("a free and fair competitive opportunity for").
The noble Earl said: My Lords, this is a modest little amendment and paragraph (b) of subsection (2) is so

565
short that perhaps, with the leave of the House, I may read it as it will he if it is amended. It reads:
"to maintain and promote a free and fair competitive opportunity for persons engaged in commercial activities".
and so on. This is just the introduction into the Bill or the concept of what is fair, and if it is not introduced at this point I do not know at what other point in the Bill it should he introduced. The concept of fairness was first introduced into the Cable and Broadcasting Bill in Amendment No. 19 by the noble Lord, Lord Campbell of Alloway. It had a lot of support from both sides of the House but was narrowly defeated on a Division, not on the grounds of what was fair but because of a Government concession upon where consultation was requisite. The prejudice in favour of what is fair will, I feel, receive as much spontaneous support in the context of this Bill as it received in the context of the Cable and Broadcasting Bill. It is in terms of this that I justify the amendment.
Unamended, subsection (2)(b) insists upon what is effective, and no more. A lot of things are effective but not fair. Industrial espionage is an extremely effective form of competition but I would not regard it as fair. I hope that the Government will be sensitive to this point. In recent weeks they have had to endure quite a number of reverses. To employ a phrase that Aeschylus uses in The Agamemnon, I hope that they have learned wisdom through suffering and that they will receive my suggestion for incorporating the concept of what is fair into the Bill. I beg to move.
Viscount Trenchard: My Lords, I support the amendment. The concept of fair competition is very important, particularly in the context of this Bill, because of the size of one of the main operators. It is more appropriate for a government to use their best endeavours—which is what, in my view, the introduction in subsection (2) to the various paragraphs, in this case paragraph (b), really means—to ensure a free competitive opportunity than to maintain and promote effective competition. I do not know whether the Government are in a position fully to promote and maintain effective competition. In the case of an enormously powerful single operator this is a very important point at which the word "fair" should be included.
I am not sure why there is reluctance to accept the phrase, "a free and fair competitive opportunity". We have fair trading offices. There is the concept of fairness in competition in many other areas. At this stage I shall not talk about the European Community, a question which arises in later amendments in relation to Clause 3(2)(h). The term "effective competition" begs the question whether the effect is a big one, a little one, a vast one or a minuscule one. I looked at my rather old copy of the Oxford Dictionary for a definition of "effective". It did not help me very much. It says "having an effect". It gave as an example "range of weapon", which is not very appropriate. When I looked at "to effect", the Oxford Dictionary said "Bring about or accomplish, bring about competition or to accomplish competition". Again it does not say how much competition, or what sort of balance is required. I suppose that the Romans could have claimed when they let the Christians go into the arena with the lions that the competition was likely to
566
be effective, if for no other reason than that the effect on the lions would be to stimulate their appetite. "A lair competitive opportunity" clearly is a case which many courts and lawyers would argue about for a long while on a particular issue, but, in terms of actual words, I should have thought that in this situation "fair" has a much more precise meaning than "effective". The word "opportunity" is more appropriate to what a Government and a director general can practically set out to do.
There is an obvious query in the amendment as to whether "a free competitive opportunity" is a possibility in relation to the whole of the Bill—that is, in relation to the network—because the Government have made it quite plain that their policy is based upon a limited competitive situation within the network in the United Kingdom. I have read it many times in order to see whether the licensing obligations and the declared objective of the Secretary of State and director general would be overtaken by the amendment, if agreed to. I am not sufficient of a lawyer on statutes to be able to give an answer to that question. If, however, the answer were that this would cut across the limited opportunity for competition within the network in the next five or six years, a relatively simple alternative would at least have been to stick to providing "a free and fair competitive opportunity" but at some point in clause 3 putting in the proviso, "subject to the limitations on competition in the network in the next five years". With that reservation, I very much hope the Government will see fit to support the amendment.
Lord Lloyd of Kilgerran: My Lords, I, too, support the amendment. Throughout the Bill I have found it difficult to understand the full meaning of the phrase "effective competition between". It arises, I suppose, from a kind of professional blindness, as most of my life is concerned with competition matters in the European Community context, the research and development activities of various firms and anti-trust matters. It seems to me that the words "a free and fair competitive opportunity" are an improvement.
Lord Shaughnessy: My Lords, I should like to support the amendment and to endorse what has been said by the noble Earl, Lord Halsbury, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Lloyd of Kilgerran. The concept of the words "free and fair" is so important in the context of a Bill of this complexity, which has far reaching implications for all people in the United Kingdom, that it is beyond question, I believe, that this amendment, which has proper implications for the carrying forward of this great enterprise, should be agreed to by your Lordships.
Lord Campbell of Alloway: I, too, support the amendment. The object of the Bill is to abolish exclusive privilege and to lead us, in the long run, network or no network, into the arena of competition. The Secretary of State and the director are enjoined to maintain and promote effective competition at all stages as the Bill stands, but unless a free and fair competitive opportunity is provided at source there can be no true competition in any real sense. The source of such competition, the source of such

567
competitive opportunity, is the grant or refusal of the licence, an opportunity which must surely be free and fair. In other words, in a phrase, there must be fair play for the applicant. This is not only wholly in accordance with the general intendiment of the Bill but is relevant to its due administration.
This question of fair play for the applicant is germane to the Bill and to the Cable and Broadcasting Bill. The question of consultation by mandatory provision is now disposed of, as Section 5(4) of the Cable and Broadcasting Bill is now to be supplemented at Report by a new section, 45, to impose reciprocal statutory duties. But already, as some of your Lordships may well know, there is a serious measure of concern and discontent on the part of applicants who did not succeed in obtaining the grant of provisional cable licences. It is therefore of the greatest importance that all decisions as to the grant or refusal of licences should he seen as right and fair. This means that, quite apart from this question of consultation, some reasoned explanation as to the grounds for the decision must be given; for such is the main source of discontent today on the provisional licences.
It also means that an applicant should be given a free and fair opportunity of knowing the substance of the case against him, so as to enable him to make out his own case in support of application. Both considerations to which I have referred have been held by the Appellate Committee of your Lordships' House to constitute the fundamentals of natural justice. It is surely important that this measure of concern and discontent which has arisen in the past should not arise again on the grant of substantive licences under either of these Bills. There is really no problem because the specific exclusion under Clause 3(2)(b) only comes into play at the request of the Director-General of Fair Trading. This is of no consequence as it lies within the remit of the Director-General of Fair Trading to ensure fair play for applicants. In the absence of any such request, the provisions of the proposed amendment would take effect to secure precisely the same result.
If there is a case for other specific exclusions or derogations, let them be stated as such: for example, if special measures of an exceptional short-term nature are required for the protection of the investment in Mercury; if there are special considerations for the short term protection of the network. Here I would gratefully borrow the helpful concept of my noble friend Lord Trenchard that this should be dealt with by way of a specific proviso. The hope is that the principle of this amendment will be acceptable not only as affording a safeguard for due administration but because it is in accordance with the general intendment of the Bill as expressed in its Long Title.
9.3 p.m.
Lord Morris: My Lords, this amendment worries me somewhat in that I cannot see that there can possibly be a true legal test for "a free and fair competitive opportunity". It begs the question: free and fair unto whom? On the other hand, the original wording of "effective competition between" is capable of legal test. If successful commercial endeavour,
568
which means the provison of services and apparatus at a price which the customer wishes to pay, is the result then it is effective competition. But I remain to be convinced about how one can possibly test "free and fair competitive opportunity".
Lord Glanusk: My Lords, I am afraid that I cannot agree with my noble friend Lord Morris. For the past 30 years I have been a salesman in the telecommunications industry. As such I have been responsible for submitting several thousand tenders in my time. Time and again I have met examples of extremely unfair—if not to say dishonest—opposition in the form of other tenderers, but that has been extremely effective tendering in that they won the tender from me. However, it was certainly not fair and reasonable. I sincerely hope that we do not intend to instruct the director to carry out "effective" competition as opposed to "fair" competition.
Lord Spens: My Lords, I support this amendment but I want to tackle it from a different point of view. In Committee my noble friend Lord Mottistone introduced Amendment No. 42 to this subsection and which asked for the prevention of uncompetitive practices. I supported that amendment but I was told by the noble and learned Lord, Lord Mackay of Clashfern, that it was all covered under Clause 49 and that all we had to do was leave it to the Director of Oftel to exercise his functions under that clause. The noble and learned Lord, Lord Mackay of Clashfern, even went on to explain that this particular subsection would anyway be outside the scope of the Director of Oftel because of a little paragraph, Clause 3(3)(b), which takes away from the Director of Oftel any rights when exercising his competitive powers under Clause 49.
I think that this is the time to warn your Lordships that I have in fact tabled a manuscript amendment to delete that subsection, which is the first two lines of page 4, and I hope that that amendment has by now reached the Front Benches and will be dealt with in due course. The point about this is that Clause 49 gives the Director of Oftel the ability to exercise the functions of the Competition Act and the Fair Trading Act. Functions under the Competition Act, as far as I can see, do not produce any duties.
I have looked through the Competition Act. It is a very difficult one to interpret straight away. The last thing that it appears to do is to give the director anything. It talks about what will happen to various people who will be investigated and so forth, but the only provision in the Act which I can find which gives the director a possibility of doing something is in Section 3(1) which reads:
"If it appears to the Director that any person has been or is pursuing a course of conduct which may amount to an anticompetitive practice, the Director may…carry out an investigation".
That is the tone of the whole Act—"the director may". Nowhere is there any statement that the director "shall". That is what I believe we want to get at.
In supporting this amendment, I also hope that in due course your Lordships will support my manuscript amendment to remove the first two lines on page 4 of the Bill so that the director shall have the duty to act

569
in accordance with his own considerations on matters of competition, and the matter would not be left to Clause 49 where the director has only a function but no duty.
Lord Glenarthur: My Lords, this amendment tries to make a fairly radical change to the Bill. There is no doubt about that. As drafted, the Bill reflects the Government's policy of encouraging competition among suppliers. If suppliers compete effectively the customer and other users obtain great benefits. They are given a choice of services and of apparatus. With effective competition, market forces will ensure that prices are reduced, quality is improved and there is greater available choice. These benefits are possible only if there is effective competition. It is no good introducing ineffective competition where prices are agreed and new products arc kept out of the market place by collusion among suppliers.
The amendment as drafted would delete the reference to "effective competition" so that the Secretary of State or the director would no longer be required to have any regard for competition, effective or otherwise, and its benefits for the consumer and user. Instead it would require the Secretary of State and the director to promote what is called:
"a free and fair competitive opportunity".
I have listened with care to the various explanations put forward about what "fair" means. Despite the way that it has been explained by my noble friends who sit behind me and by the noble Lord, Lord Spens, I am afraid that I cannot accept the word. The difficulty with it in this context is that it inserts what amounts to an evaluation element into the calculation of what is desirable at the wrong stage. The clause requires the relevant authority to achieve certain concrete ends. Those are to be balanced against each other. The word "fair" introduces a vague extraneous standard of evaluation. The point really is that it is the clause itself which is the standard of fairness.
The amendment would have no effect on the way that the director would process applications. I really cannot agree with my noble friend Lord Campbell of Alloway that it would. By introducing vagueness into Clause 3 we should do great harm to the Bill. I entirely agree with what my noble friend Lord Morris has said. Furthermore, the amendment as drafted would wreck a major part of the Bill. The purpose of Clause 3 is to give a clear framework for what goes into the licences granted to BT and others. It does not provide guidance on procedures, and nor is it intended to. The arrangements for fair and open procedures which the Secretary of State and the director must follow are in Clauses 8, 10, 12 and 15.
The noble Lord, Lord Spens, went on to describe how he proposes to deal with a manuscript amendment in due course. I hope that he agrees that it may be best to respond more fully to that when he moves his amendment. The proposers of the amendment are perhaps trying to ensure that the Government look after the interests of business men, including those like British Telecom PLC which will be engaged in running the public networks and others which manufacture apparatus for use abroad. I understand from what they have said that that is certainly the principle that lies behind the
570
amendment. But as far as they are concerned, their interests are dealt with later in the Clause. In paragraphs (a), (b) and (c) of Clause 3(2), they look after the interest of consumers and users; paragraphs (d) to (h) look after the interests of businessmen. I see no advantage in removing the protection for consumers and users, which is generated by effective competition and replacing it by a provision which, as I have said, has no clear meaning and is vaguely of benefit to businesses. We shall of course have the opportunity to discuss the interests of businesses when we come to the amendments on paragraphs (e) and (h).
The concept of what is fair or unfair, in the way that has been advocated by those who have spoken to this amendment, would complicate the clause; they would do it and the Bill considerable harm, and I hope that with that difficult and rather tortuous explanation of what "fair" may or may not be, the noble Lord will not press this amendment,
Lord Spens: My Lords, before the noble Lord sits down, may I ask whether he would agree with me that if subsection (3)(b) is left in, that a director of Oftel will not be able to operate under subsection (2)(b) that we have been debating? That deals with effective competition and surely that must be covered by Clause 49.
Lord Glenarthur: My Lords, with the leave of the House, so far as Clause 3(3)(b) is concerned—and I know we are going to debate this at length later on—the noble Lord is concerned about its dis-application, in particular when the director acts under Clause 49. The reason for this is that when he exercises functions under the Fair Trading and Competition Acts, the director is guided by a different set of guidelines which are set out in Section 84 of the Fair Trading Act. These deal specifically with competition issues and are the same guidelines as govern the Director General of Fair Trading when he acts under the Fair Trading and Competition Acts. I hope that will satisfy the noble Lord.
Lord Spens: No, my Lords, it does not because he has not answered my question. Can the director of Oftel in fact operate subsection 2(b)?
Lord Glenarthur: My Lords, not when he is operating under Section 49.
Lord McIntosh of Haringey: My Lords, it is very tempting for us to leave this matter to the spiritual side of the House. I think what we have here is in effect a theological discussion rather of the sort of the mediaeval disputation of how many angels can dance on the head of a pin. Does it make any difference whether we use the words "effective" or whether we use the words "free and fair" when the whole tendency of the Bill, as the noble Lord, Lord Glenarthur, has made it clear, is not a liberalisation Bill at all? If the Government had accepted the Beesley Report then we might he discussing free and fair competition; but in order to do that, the Government would have had to obdure restrictions on resale.

571
It is true that British Telecom would have had the right to specify the prices for the use of private circuits and would he able to compete freely itself in the market, but there would never be any of this complicated licensing procedure. Instead, Beesley said that there should he no constraints on pricing and financing of telecommunications operations, and certainly that we would have had complete liberalisation in the international sphere, which, in view of amendments which are coming later, we may yet have in some form or another. But as the Bill is drafted at the moment, this is not a liberalisation Bill and what we call it here makes no difference whatsoever to the real content of the Bill.
Lord Mottistone: My Lords, if I could just quickly ask my noble friend a question, he made a lot of statements but did not produce much argument, with the greatest possible respect to him. I know how difficult it must be, particularly if you have a brief which is dogmatic, even if you arc not dogmatic yourself. But to say that putting "fair" into this subsection wrecks the Bill or seriously alters its entire tenor is really going too far. I do not know whether the House would agree, but I think that if it were possible for him to say something more explanatory rather than dogmatic, then maybe we could understand what he says. But for me, it means nothing, and I trust that my noble friends who put this amendment down, will, if they do not take this to a Division, return to the charge at Third Reading, at which time I trust that any noble Lord on the Front Bench will he properly briefed to make an explanation.
The Earl of Halsbury: My Lords, with the leave of the House, the noble Lord the Minister has not really answered the main points that I made. He says that this is a radical change. In some ways it is, because it replaces a meaningless expression with a significant one. The phrase "effective competition" is tautology, rather like saying, "a dead corpse". When you say that an object is "a corpse", you do not add anything by also saying that it is "dead". If competition is ineffective, it would not be competition. So the phrase "effective competition" is like the phrase "a dead corpse", because "effective" does not add anything whatsoever to the word "competition".
On the other hand, "free and fair competitive opportunity" may be an expression which requires construction, but at least it forces one to think. The words "free and fair" are not contained in the word "competitive" in the way that a predicate is contained in its subject, as in an analytical proposition. Therefore, my amendment imports significance into subsection (2)(b), which at the moment stands merely in support of competition as such. In those circumstances I cannot oblige the noble Lord by withdrawing the amendment. Whether it will go to a Division is another matter.
On Question, amendment negatived.
9.22 p.m.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 18:
Page 3, line 28, after ("techniques") insert ("and new products")
The noble Lord said: My Lords, this is a modest amendment to add the words "new products" after the words "new techniques". As your Lordships will recall, in Clause 3(2)(d) the Secretary of State and the director are to take action best calculated,
"to promote research into and the development and use of new techniques".
Surely that is not enough: and in this amendment I have suggested that there should he research and development in regard to not only new techniques but also new products. Therefore, my amendment seeks merely to add the words "new products" to the words "new techniques" in the clause. I beg to move.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, the noble Lord, Lord Lloyd of Kilgerran, moved an amendment with much the same intention at the Committee stage. I think that the noble Lord has decided to move his point of attack to slightly later in the Bill from where he previously attacked. I am sure that I could refresh the noble Lord's memory in that regard if he wishes me to do so. Of course I have no difficulty in agreeing with the sentiments which lie behind the amendment since, as I explained in answering the noble Lord's amendment at the Committee stage, they fully reflect the Government's policy, one of the objectives of which is to keep United Kingdom telecommunications at the forefront of technological developments. We want to encourage both research and development and, most importantly, the application of the fruits of research and development to both new services and new products, and also to new ways of providing existing services and products. That is what the present drafting achieves, because it refers to,
"research into and the development and use of new techniques".
In our view that amply covers in a very general way the whole field that the noble Lord wishes to cover. I believe that the amendment is really unnecessary. I know that the noble Lord is fertile in producing new ideas, but the more general the phraseology the more likely it is that the new ideas are already covered: and that is what I say has happened here.
Lord Lloyd of Kilgerran: My Lords, I am very grateful to the noble and learned Lord for that explanation. What I understand is that the Government have decided that "new techniques" includes "new products". That is certainly a great advance in new technology which I have never heard about before. However, in view of the very positive way in which—I understand that the noble Lord, Lord Bruce of Donington, wants to speak. I was winding up, but perhaps the noble Lord wishes to intervene.
Lord Bruce of Donington: My Lords, all that I wanted to ask the noble Lord—I shall not detain him for as long as he has been detained from other quarters behind him on this matter—is why he assumes that use of techniques must result in the production of commercial products as distinct from pure experimentation? You can use techniques not necessarily in the production of new products but even in future research and development. I do not think that one necessarily follows from the other. This is, I suppose, pure tautology so far as the noble and learned

573
Lord is concerned. If he gives the House the assurance that he intends to cover products, it is all right by us without any further argument.
Lord Mackay of Clashfern: My Lords, with the leave of the House, I am content to leave it at that and stop the tautology.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble and learned Lord for including new products within the meaning of techniques. In these circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Viscount Simon): Before calling Amendment No. 19, I have to inform your Lordships that, if Amendment No. 19 is approved, I shall not he able to call Amendment No. 20.
Lord Orr-Ewing Lord Orr-Ewing moved Amendment No. 19:
Page 3, line 29, leave out paragraph (e).
The noble Lord said: I should like to take with this, Amendment No. 21.
Amendment No. 21: Page 3, line 37, leave out from ("Kingdom") to end of line 41 and insert—
("() to enable persons providing telecommunications services in the United Kingdom to compete effectively in the provision of such services outside the United Kingdom;
() to enable persons providing telecommunication apparatus in the United Kingdom to compete effectively in the supply of such apparatus both in and outside the United Kingdom").
There is no great merit or demerit in paragraph (e). It seems to be rather ineffective and not very constructive. On the other hand, the two paragraphs that we aim to put more or less in its place are effective. The Telecommunications Equipment Manufacturing Association, representing largely the manufacturing portion of the electronic industry, feels strongly that the Bill would be better with these two paragraphs included. I see the association's point absolutely. The words have been carefully chosen so that they do not offend or transgress the Treaty of Rome. This has been done since the Committee stage. I shall speak briefly partly because I want to speak at greater length on the next amendment and therefore do not wish to bore the House, and partly because I think that the case is clearly made out in the substance of the proposed paragraphs.
I think that the manufacturers understandably feel that, on the whole, a country like France and the French Government do their industry rather better than we do ours. All they ask is that the industry is treated just as fairly as industries in France and Scandinavia, no better or worse. The manufacturers are confident that this will he helped by the two paragraphs and that the result would he better for industry and for everyone with jobs in that industry. I beg to move.
Lord Cockfield: My Lords, I do not know whether it would assist our proceedings if I say that I would be prepared to recommend that the House accept both these amendments.
Viscount Trenchard: My Lords, I think that there are other amendments that cover the same point. I had
574
understood my noble friend would suggest that we make any points we wish on those amendments now. Clearly, if the amendment before the House is passed, which, as my noble friend has made clear, will he the case so far as the Government are concerned, it would not be possible, as I see it, to move Amendment No. 23 nor an amendment that has nothing to do with me, Amendment No. 24. I am delighted that we now have an amendment that my noble friend has confirmed would he acceptable to the Government directed towards the main aim of an amendment, Amendment No, 52, that I moved at Committee stage. I used then, and I use now in Amendment No. 23 which stands in my name and that of other noble Lords, the phrase which we have just debated; namely:
"a free and lair competitive opportunity",
rather than enabling industry to maintain effective competition, While I am delighted that we share the same aim, I find it extremely strange, as the noble Earl, Lord Halsbury, said when discussing his amendment a moment ago, that we have had no real comment on the point that he and I think four other speakers made that, while interpreting what is lair is already the subject of courts—special and general in many eases—interpreting what is effective is quite a different matter. The effect can be in more than one direction, of more than one kind and of more than one degree.
The word "effective" does not seem to be appropriate. I personally would have thought that it would be less acceptable to EEC circles in that if we are trying to make sure that British industry is effective it could be argued that we are trying to make sure that it succeeds whether it has an over-lair opportunity or not, which was never any part of the amendments that I have sought to move.
I have been encouraged by a number of noble Lords on all sides of the House to discuss the matter more fully in relation to Clause 3(2)(h) and if my noble friend on the Front Bench would agree, 1 should like him to give the I louse the benefit of his views as to whether this would in fact be a more appropriate way of providing a lair international competitive opportunity. As I read it—and I have been reinforced in this view by various legal opinions—it does not in this case override the problems of limited competition in the network because the amendment refers to competition "on an international basis" which was the purpose of (h) as originally drafted and is the purpose of either of the two new (h) paragraphs. I should have thought it more acceptable, more definite and more of a guarantee to British industry not that a Secretary of State and a director general can he certain of succeeding, but that they will do their very best to ensure that British industry, in a market which we are partly liberalising, does not have to compete against other industries which, in many cases, are not liberalised at all.
Lord Denham: My Lords, I wonder whether my noble friend will forgive me? My noble friend Lord Orr-Ewing moved his amendment and my noble friend the Minister left a certain amount of time for other noble Lords to join in. Nobody did so, and therefore he made his reply accepting my noble friend's amendment. We are at the Report stage and I think it is right that if any noble Lord wishes to speak

575
on a certain point he should do so before my noble friend the Minister replies, otherwise we are going to get very much out of order. My noble friend Lord Orr-Ewing, having moved the amendment and my noble friend the Minister having accepted it then, strictly within the rules of the House, that should be the end of the matter.
My noble friend left a definite pause waiting for noble Lords to come in, and my noble friend Lord Trenchard did not come in at that point but has now made what I may say is not too long but rather a long speech. Therefore, if my noble friend replies to that, he has to do so with the leave of the House. So could we possibly get more within the rules of order of the House?
Lord Weinstock: My Lords, with the leave of the House—
Lord Orr-Ewing: My Lords, may I perhaps explain? I was entirely wrong. I had agreed to move the other amendments but as I knew the Chief Whip was anxious to get to a certain point I am afraid I took a short cut and I was incorrect. My noble friend picked up an error on my part, but I equally thought that—
Lord Denham: My Lords, I must tell my noble friend that on Report he is out of order to speak again.
Lord Orr-Ewing: But on a point of order—
Lord Weinstock: My Lords, with the leave of the House, it seems to be rather a pity that the House does not avail itself of the generous offer of the noble Lord, Lord Cockfield, to accept these amendments. One of the difficulties which industrialists and other people have in dealing with Acts of Parliament and other fomal documents is to know precisely what the words in them mean. The words as at present drafted in the Bill are not particularly clear. The words proposed in the amendment are much clearer and although we have just had the noble Earl, Lord Halsbury's, definition of the tautologous nature of the "dead corpse", these amendments include the words "effective competition" or "to compete effectively", and I understood that to mean that the Secretary of State will help us to compete effectively with foreign competition. That is something which I welcome.
If the noble Lord is prepared to accept the amendment. I should have thought that the House should be grateful to him and that we should have left it there.
On Question, amendment agreed to.
[Amendment No. 20 not moved.]
Lord Orr-Ewing Lord Orr-Ewing moved Amendment No. 21:
[Printed earlier: col. 573.]
On Question, amendment agreed to.
9.37 p.m.
Lord Orr-Ewing Lord Orr-Ewing moved Amendment No. 22:
Page 3, line 37, at end insert (";and
() to ensure that the available civil radio spectrum is efficiently used.").
The noble Lord said: My Lords, I am sorry we got into a slight confusion over the previous amendment. Out of a total of 136 amendments, 80 are Government amendments, and the last ones were tabled so recently that we have not all had time to do the preparation which we should have liked and which the Bill deserves. As I have spoken to this House for only two minutes in three days of debate so far, being absent for the other three days, I only wonder what would happen if, according to the Labour Party's policy, this House were abolished: because if a guillotine were to fall in another place a great deal of any Bill would go undiscussed and would presumably go straight onto the statute book. I think that by the number of amendments we have dealt with and by the care we have taken over them, we have underlined just how important it is that there is a second Chamber to look at Bills which have been heavily guillotined.
Noble Lords, particularly on this side of the House, will know that in the 1979 manifesto, in the 1983 manifesto and in all policy statements this Government have said that they believe very strongly that the growth points in the economy will come from small—mainly small, anyhow—private sector businesses and particularly, of course, from those in the service industries. It is in the service industries that job growth is quickest and equally effective. In the manufacturing industries it takes rather longer to construct factories, to install the tools, to train the people, to produce the product and the like.
Nowhere is the growth faster than in the electronics industry. Having spent some 50 years in that industry, or associated with it, I am absolutely staggered at the manner in which the breadth and conception of this industry has changed in the last three decades. The Prime Minister underlined this point in a recent speech at Marconi, at Frimley, where she made the point that it was in the electronics industry that growth and jobs will be most quickly created. In the course of this speech I hope to show one of the really substantial bottlenecks which are preventing 47 companies in the private sector from expanding as they deserve and as they could do if they were allowed that freedom.
Last Friday, in answer to a Written Question, the Prime Minister made some very appropriate remarks on this issue. She said:
."We shall continue to transfer industries from the public to the private sector where they will be subject to competition".—[Official Report, Commons, 8/3/84; col. 664.]
I am only sorry that in this Telecom Bill the competition will be very strictly controlled, in that, as a result of Government measures, two immense duopolies are being created. The first one is in trunk lines, where 97 per cent. of the market will remain with British Telecom and 3 per cent. will go with Mercury, and the other is in the mobile radio field in the 900 MHz band, where Racal will have approximately 50 per cent. of the market and British Telecom with Securicor will have another 50 per cent. of the market.
That is the scenario in which we are desperately trying to create a reduction in public sector borrowing requirement, and in which, of course, the privatisation in the autumn of British Telecom will play a considerable part. I must say that in our manifesto I did not read much about reducing the public sector borrowing requirement, but I read a great deal about introducing competition, and that is the theme of what I am continuing to preach tonight.
In the private sector there have been 47 mobile radio companies operative. They have provided services for businessmen, doctors, taxis, and all sorts of other manifestations of industrial and civil life. Incidentally, three of these should not be described as local companies. The majority are local, it is true, but three had national coverage long before British Telecom came into this field. The biggest ones were founded some 25 years ago, and it was only 10 years ago that British Telecom decided to compete with their mobile radio.
In several areas the initiative of these small companies created not only communications from cars but also, of course, paging. All that was pioneered by the private sector. These 47 companies provide their service on the VHF band—the very high frequencies, for those who are blind on these points—around 160 MHz. Again for those who are blind, that is two metres. This is a good mobile band and it is reserved on an international basis for such operations.
The existing Radio Regulatory Department has, sadly, had a pretty chequered career. It has changed its name and its Ministry man times, and it has not had a terribly good track record. As I say, the name has changed and of course the people have changed. But since 1921 we, as a country, have had a pretty nasty record about making frequencies available. Of course I am talking about the civil field. In the defence field the matter must be decided by the Cabinet Office. They must look after the overall co-ordination and make sure that our defence services have an adequate number of frequencies to help to defend our country, and to see that our allies are looked after as well.
Defence has tended to be a little greedy. I was once responsible in the Royal Air Force for frequencies, and I know that in those wartime days one held on to every channel one conceivably could because one thought it might help one's service in the long run, and I just wonder whether some of that habit has carried on. It should be pointed out to our defence chiefs that if we do not have a prosperous civil infrastructure to our country with a high manufacturing and high export capability in electronics, they are not going to get any weapons or money at all, because that is where the earning capacity of our country comes from. The DTI must look after all the other fields, but in fact we have a fragmentation of the control mechanisms.
The department concerned is the Radio Regulatory Department, and it was moved from the Home Office in 1983 to the DTI. The DTI has some divided responsibilities in this field. First, there is the Civil Aviation Authority, where they have a responsibility for securing the frequencies. Incidentally, the Radio Regulatory Department is relatively small, with 234

579
people, so we are not talking in terms of 10,000. The DTI has responsibilities in the civil aviation field; the telecommunications division; it has the Radio Regulatory Department, or the bulk of it, and that is concerned with allocating frequencies; and it has the directorate of radio technology. The Home Office has held on to part of RRD; it looks after broadcasting frequencies for the BBC and all the competitive schemes; it looks after the Directorate of Telecommunications, which means radio frequencies for the prisons. It also looks after the police and the fire service. But, as I said before, the Cabinet looks after the co-ordination. It is my submission that it is time that we had a better system for running our systems. I suggest that Oftel is the natural place in which to put these limited radio responsibilities.
It is always argued, and it has been for 80 years, that no frequency is available. Many of your Lordships will remember "Radio Caroline" which had a tremendous listening public in the 1950s. We were told that there were no medium frequencies available for it and it was putting the sea traffic and aeroplanes at risk. Incidentally, that is exactly the same excuse given in 1921 when the Marconi Company from "2 Emma Tocle (Writtle)", broadcasting experimentally for half an hour a week, was told that it was putting ships and aircraft in the air at risk. It must have been the same excuse, from the same pigeonhole, given in 1951, 30 years later.
Now we have 40 local radio stations with frequencies available for all of them. We listen to two or three in London, we listen in the Chilterns, We listen all over the country. Of course it was perfectly possible all the time. There were frequencies available without interference and they now provide a service, and the same applies to mobile radio. There are frequencies available, but there must be somebody who is responsible and we must not have the responsibility divided among many Ministries.
The facts are that 112 channels on VHF have been allotted to BT, with 8.000 clients. The biggest of the private companies, Air Call, has 17 channels, also with 8,000 clients. That is hardly the fair and free competition we have been debating in recent amendments. All the 47 companies share between them 49 channels, yet they have 20,000 clients, two and a half times as many as BT, and look at the difference there! Is that fair and free competition? Since it clearly is not, who will look after the allocation in the future and make sure that it is better controlled? I suggest that Oftel is the only possible organisation.
In nine months' time, at the end of this year, the whole of Band 3, which is adjacent to the VHF band used for mobile radio, will become available. The Government will put a paper before us. I hope in a few weeks. Five weeks ago it was promised that it would be available in five weeks. The frequencies between 174 and 210 MH3 should he available and I hope many of these will go to mobile radio. Those channels have been cleared because the BBC and the ITA have been occupying them with 405-line black and white television all these years.
Racal never had a mobile service and BT has built up a service in competition with the private sector, but
580
Racal and BT are moving these on to 900 MHz, which is what the licence was given for. That is a cellular radio system. That will again leave many of the frequencies available to be redeployed. One hundred extra channels could create several thousand extra jobs. It would prevent some of these smaller local companies from going bust and having to reduce the number of people and the jobs that go with them.
I wanted to say a word about the amendments.
Noble Lords: Hear, hear!
Lord Orr-Ewing: My Lords, surely it is fair to give the background. If the RRD is perfect, and I have sought to show that it is not, there would be no point in moving it. I have had to show that it has had a very bad track record in order to say that it is worthwhile giving this responsibility to Oftel. Together with the amendment that was called, I should like to consider two other amendments on the same subject. They are Amendments Nos. 94A and 95, which is a Government amendment.
Amendment No. 94A: Clause 50, page 47, line 27, after ("involved") insert—
("including advice for the purpose of ensuring that the administration, allocation, licensing and use of civil radio frequencies are effectively co-ordinated within a single administrative unit or government department").
Amendment No. 95: Page 47, line 30, at end insert—
("() The Director shall, in exercising his functions under Part II or Part III of this Act, have regard to such of the principles applied by the Secretary of State in exercising his licensing powers under section 1 of the said Act of 1949 as may from time to time be notified to the Director by the Secretary of State for the purposes of this subsection.").
I think I have dealt with the content of Amendment No. 94A in my speech. Amendment No. 95 seems to suggest that all will be well: it is not necessary to accept this amendment, they argue (and I shall listen with care to my noble friend developing it) because this is all taken care of under the Wireless Telegraphy Act 1949.
To start with, if it was, I still would not necessarily accept that an Act which was passed 35 years ago in totally different circumstances had to be swallowed hook, line and sinker in 1984. I have a copy of Section 1 of the WT Act of that date. This is referred to in the amendment. I can find in it absolutely no reference to frequencies whatsoever. It comprises three quite simple pages and copies are in the Library so that my noble friends could go and see it. There is no reference at all. I shall listen with interest to what my noble friend says to find out just what he has in mind and why he thinks that his amendment is better than the one I am putting before the House.
I should like to say finally that it has been argued that America does this better than we do. I would endorse that 100 per cent. It is sometimes said that we are more crowded than they are. This is not true. In the areas of Washington, New York City and Boston, a high density eastern seaboard area of America, they have the same problem about frequency; but they have 10 times as many mobile radios in that area—with over 45 million people, they manage with the same frequency bands that we have here.
My noble friend may say in answer that we may be creating a bureaucracy under Oftel if we follow this amendment; but I would make the point that it should he self-regulatory and industry accepts that probably they are the best people to make sure by monitoring these channels that they are properly used. At present, a number of people get channels and they sit on them. We found one not too long ago which was given to a trawler in the Pool of London. The trawler had been sunk three years ago, but the channel was still allocated to it.
Somebody must make sure that valuable national assets are properly utilised because, if they are not utilised, we are forgoing jobs which would otherwise be created. I would say to my noble friend that, for the sake of the jobs, it is important to release the maximum number of channels so that these companies and many other small companies could expand and give worthwhile employment in all parts of our country. If your Lordships vote against this amendment—and I would remind those sitting opposite who feel as keenly as I do about this—your Lordships would be cold shouldering jobs.
Several Lords: Oh!
Lord Orr-Ewing: These are valuable assets and I am sure that they would want them to be efficiently used nationally. I am sure that they want to see the growth of companies. If they do not want to see the growth of companies, then they do not want to see the growth of jobs. It is as important as that. High technology jobs go with small service companies. That is why I move Amendment No. 22.
9.54 p.m.
Lord Peyton of Yeovil: My Lords, my noble friend Lord Orr-Ewing is very knowledgeable in this complex field but at the same time I have to say, with deep regret, that he lost me fairly early on in his argument. But in so far as I may have guessed aright and he is troubled about the confusion of Government departments and their activities in this field, then I very much hope that my noble friends on the Front Bench will agree to take a serious look at that; because that is one of the problems which habitually plague our affairs. Beyond that, I should like to say that I wish so much—and of course that is why I am on my feet—to enjoy the good opinion of my noble friends on the Front Bench. Therefore I would say to them that I very much hope they will reject Amendment No. 22, because, try as I may, I cannot attribute to it any meaning whatsoever.
Lord Mottistone: My Lords, perhaps I may be able to help my noble friend Lord Peyton. My noble friend Lord Orr-Ewing explained, I thought very thoroughly, how important the civil radio spectrum is to industry, which is developing at all times. It is important to telecommunications, not only in the sorts of areas he mentioned, but it is used extensively by British Telecom at the moment for ordinary linkage. The point at issue is that it is absolutely vital that the radio frequencies are allocated fairly in respect of all those seeking to use them so as to develop this great resource for the benefit of all of us in the future.
582
It is absolutely true that this particular feature of the efficient use of the radio spectrum is the one area which is not covered at the moment by Clause 3(2). This particular feature is one which experience, as my noble friend Lord Orr-Ewing said, has shown to be one which has been very slowly, reluctantly and carefully handled by the people who have been responsible for it for almost the last 100 years.
My noble friend said he had experience when he was responsible for frequencies in the Royal Air Force. I had experience when I was in the Royal Navy some 20 years ago, and it was quite painful to see how carefully the frequencies were held on to. Fortunately, over the years the technology of communications generally has improved quite dramatically, and it has been possible to be much freer with the allocation of frequencies than it was, say, some 20 or 30 years ago.
The people responsible for this, initially in the Post Office and then, as my noble friend said, moved from one department of state to another, have been overcautious in restraining people from having their fair share of the frequencies. So the point at issue is whether it is reasonable to include Amendment No. 22 within the general heading of Clause 3(2); and, because of its particular, peculiar importance, I strongly recommend to your Lordships and to my noble friend Lord Peyton that this is a subject which requires particularly picking out as one in which the Secretary of State and the director will take it as their special duty to see that the available civil radio spectrum is efficiently used. I strongly support this amendment and I trust that my noble friends on the Front Bench will accept it. I also trust that, if they do not, the rest of the House will support it.
Lord McIntosh of Haringey: My Lords, I do not know whether this is a family quarrel or whether anybody else can join in, but I yield (as do other noble Lords, I am sure) to the technical knowledge of the noble Lord, Lord Orr-Ewing. I just wonder whether the wording he has here will achieve his objectives. I say that for two reasons. First, it seems to me that he is throwing in his hand when he uses the word "available", because the Government are simply going to accept the word "available" and use it in a different sense. Secondly, if his complaint is about the Radio Regulatory Division, that is now in the Department of Trade and Industry—
Lord Mottistone: My Lords, the word "available" is there because we are talking about the civil use of the radio spectrum, and there are an enormous number of frequencies which are held by the Ministry of Defence—also, I think, unreasonably. But it has to be there for that reason.
Lord McIntosh of Haringey: My Lords, I was never in doubt about what was in the mind of the noble Lord, Lord Mottistone. What I suspect is that the Government could accept the word and mean something very different by it. That would be my only comment at this stage. The other concern that I have about the wording is that it uses the word "efficiently". I heard a number of noble Lords on the Government Benches attacking the use of the words "efficiently"

583
and "effective". They are not all that different in this sense, as one could check from the Oxford English Dictionary. After a demolition job on the word "effective", the way that they accepted it so readily in Amendment No. 21 took me somewhat by surprise, and I wonder whether they are digging a hole for themselves in the wording of this clause. Like the noble Lord, Lord Peyton, I wonder whether this amendment means anything, and I shall await with interest the Minister's reply.
Lord Weinstock: My Lords, the amendment may or may not be suitable to achieve the result which the mover, the noble Lord. Lord Orr-Ewing, desires. But what is certainly the case is that there has been difficulty in obtaining frequencies for civil use. If the frequencies which could be made available are not made available to those who wish to use them in free and fair competition, the degree of fair competition will be limited in ways which the Bill does not contemplate. I therefore commend to the Government, whether or not they accept the amendment. that this is a matter which is worth their consideration.
Lord Glenarthur: My Lords, the Government of course appreciate the need for efficient use of the radio frequency spectrum, and the need for both the Secretary of State and the director to have due regard for this when exercising their respective functions. Indeed, I suggested in Committee that it might be sensible to make this clear on the face of the Bill, possibly by way of amendment to Clause 3. After very careful consideration, we have concluded that the right place for an amendment to give effect to this point in the way that my noble friend wants is in Clause 50.
The Secretary of State exercises his wireless telegraphy functions under the Wireless Telegraphy Act, as my noble friend explained. He does not do so under the powers proposed in the Bill. The considerations to which he has to have regard include national security, safety of life, international obligations and a great many others, including efficient use of the spectrum. It would be quite wrong to state these in Clause 3 of this Bill. This Bill does not, and could not, properly apply to the exercise of the Secretary of State's functions under the Wireless Telegraphy Act. But so far as the functions of the director are concerned, which may involve wireless telegraphy, these matters are, of course, exercisable under this Bill, and it seems right to ensure that in exercising them the director should, in cases involving the use of radio, have regard to the same considerations as the Secretary of State.
When my noble friend spoke to this amendment, he indicated that he would speak about Amendment No. 94A and about our proposed Amendment No. 95, so I am doing the same as he. In particular, when offering advice to the Secretary of State under Clause 50 the director must be able to take account, on the one hand, of the considerations which are specifically relevant to telecommunications licensing, which are listed in Clause 3, and, on the other hand, to those considerations to which the Secretary of State must have regard when issuing wireless telegraphy licences. They are two separate points.
584
That is what our proposed amendment. Amendment No. 95, seeks to achieve. Its effect is to require the director, when exercising his functions under Part II or Part III of the Bill, to have regard in appropriate cases to such of the principles applied by the Secretary of State as may from time to time be notified to the director by the Secretary of State. One such principle is the need for efficient use of the spectrum. But it is not the only one, nor can it always be the overriding one. The Government therefore do not feel, on reflection, that it should be singled out for special mention.
My noble friend Lord Orr-Ewing explained how he saw the spectrum being correctly used. May I explain to your Lordships how it is planned and administered and where the functions are at present located. The allocation of frequency bands to various uses is largely determined by international agreements which are the work of international conferences like the 1979 World Administration Radio Conference at the International Telecommunications Union. Since the transfer last June of the Radio Regulatory Division from the Home Office to the Department of Trade and Industry, the responsibility for United Kingdom representation at these international gatherings has been brought together under my right honourable friend the Secretary of State for Trade and Industry, who is also responsible for telecommunications policy.
The line to be taken at such international gatherings and, subject to the outcome of those international negotiations, the allocation of the spectrum in the United Kingdom—that is to say, decisions on which frequencies should he made available to what types of user—are a matter for collective Government decision. Such decisions must rest with Ministers, since they often involve conflicting considerations of national security, safety of life, broadcasting, Government administration, international obligations, avoidance of interference, enforcement, and generally the effective use of the spectrum as well as the commercial needs of users. For example, aeronautical and marine needs have to be weighed against those of mobile and fixed land users. As the spectrum becomes more and more crowded, so the planning and administration become more and more complex if maximum use of the spectrum is to be achieved. This planning and administration is the responsibility of my right honourable friend the Secretary of State for Trade and Industry. He is also responsible for licensing all civil radio uses other than the broadcasting ones to which my noble friend referred. Those are a matter for my right honourable friend the Home Secretary.
The Government of course expect the Director General of Telecommunications to play a very important role in advising my right honourable friend on the exercise of his duties relating particularly to fixed and mobile land services. In particular, the Secretary of State will seek the director's advice on the use of Bands 1 and 3, which have so far been used for 405, line television transmitting but which become available from the beginning of next year for land mobile services. The director will advise on the number, size and variety of service providers to be licensed in those bands so as to achieve effective

585
competition in the provision of the widest range of radio services. He will also advise on the selection of operators.
There is an additional Government amendment, tabled to Part VI of the Bill, Amendment No. 126, which will further enable the director to assist in other ways, such as perhaps receiving and evaluating applications from potential operators on the Secretary of State's behalf and possibly issuing licences on his behalf. However, to ensure that all the necessary considerations are taken into account, the Government consider it essential that the actual assignment of frequencies should remain co-ordinated in one place under the responsibility of my right honourable friend the Secretary of State for Trade and Industry. He must also be responsible for setting the technical specifications governing such matters as power transmissions and the avoidance of interference, since he is responsible for ensuring that no undue interference is caused to countries overseas, national security, safety and life, and a host of other important services as well.
I have tried to explain to my noble friend's satisfaction that with the recent transfer of the Radio Regulatory Division to the Department of Trade and Industry radio regulation is now co-ordinated by a single Secretary of State who is also responsible for telecommunications policy. I have also explained the important role that the Government hope to see the director play. My noble friend's Amendment No. 94A, to which he referred, would imply an involvement of the director in organisational and machinery of government matters, which would be totally inappropriate.
Therefore, in the light of the assurances I have given and with the explanation of the ways in which the various amendments relate—the Government amendment to Clause 50 and the amendment to Part VI—I hope that my noble friend will not press the amendment.
10.11 p.m.
Lord Mottistone: My Lords, before my noble friend sits down, he mentioned Amendment No. 95. When we come to that amendment I hope we will be debating it fully. Can he reassure me on that point?
Lord Glenarthur: Yes, my Lords.
Lord Lloyd of Kilgerran: My Lords, I am not quite sure whether the question put by the noble Lord, Lord Mottistone, was an answer to the one that I was about to put. However, I put my question to the Minister before he sits down, to use the normal formula. I understood that the noble Lord, Lord Orr-Ewing, was saying that Amendment No. 95, with its reference to Section 1 of the 1949 Act, was in no way an answer to his amendment to ensure that the available civil radio spectrum would be sufficiently used. He was in effect saying, as I understood him, that the 1949 Act is irrelevant now to this matter. I should like the Minister to say either yes or no to that position.
Lord Glenarthur: My Lords, with the leave of the House, the wireless telegraphy Acts are long and
586
complex as well as 35 years old. They are another subject. To charge the director with the duties that this amendment seeks to do would be quite inappropriate because the director himself will not be responsible. The whole allocation of radio matters under the terms of the wireless telegraphy Acts embodies a completely different set of circumstances; but as I have said, the director general will have the interests, which I explained when I spoke to the amendment.
Lord Orr-Ewing: My Lords, before the noble Lord sits down, there is a difference between granting a licence and granting a frequency on which to operate it. These come quite separately. One gets a licence to do something and other people allocate a frequency on which to carry it out. There is no mention of frequency in Section 1, to which the amendment refers, of the Wireless Telegraphy Act. There is no mention of the frequency side which could easily be allotted by Oftel and monitored by Oftel.
Lord Glenarthur: My Lords, with the leave of the House once more—and I am not sure how often I can return to the Dispatch Box—the noble Lord is quite right. The Wireless Telegraph Act does not mention frequencies but nor does it mention many of the other considerations which apply and which of course any Secretary of State or responsible person must take into account when trying to allocate frequencies which are a scarce resource and which can conflict, by interference, in the way I have described.
Lord Orr-Ewing: My Lords, subject to what my noble friends in the group will think, I have to say that I am not very contented by the manner in which this matter has been shelved but we are to have a full scale debate later on Amendments Nos. 94 and 95. I only mentioned it because I felt it was not a good excuse. I still think we have the best solution, and I seem to be supported in that by the noble Lord, Lord Weinstock; and there is no other who has a greater knowledge of this subject in this House than he. It seems a shame that the Government have not been more forthcoming since I have for the past year told them that this is one of the key points if the private sector is to survive. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey had given notice of his intention to move Amendment No. 24:
Page 3, line 38, leave out paragraph (h) and insert—
("() to maintain and promote the interest in the United Kingdom and overseas of persons producing telecommunications services of United Kingdom origin in a manner that, within the restraints imposed by international obligations, encourages the competitive abilities and development of the United Kingdom telecommunications manufacturing and service industries and reflects the positions that obtains between overseas network operators and their indigenous suppliers.")
The noble Lord said: My Lords, I appreciate that most of the paragraph that the amendment refers to has already been removed and has been replaced by other wording, and also that the wording in Amendment No. 21, which has been accepted by the

587
Government, is an attempt to achieve the objective which a number of individuals and groups in the House have been striving to achieve. But I believe that the wording in Amendment No. 24 has a number of advantages in terms of its explicitness, honesty and objectivity over some of the other alternatives that have been put forward.
Amendment No. 24 refers to:
"Telecommunications services of United Kingdom origin",
and:
"the United Kingdom telecommunications manufacturing and service industries",
rather than to:
"persons providing telecommunication services or … apparatus in the United Kingdom".
It was the understandable wish of the noble Lord. Lord Weinstock, among others, to see that we were talking about the British telecommunication industry and not simply about those companies,
"providing telecommunication services or … apparatus within the United Kingdom".
Secondly, it would have been better had the Bill actually said that what we were doing was contained:
"within the restraints imposed by international obligations".
I assume that the wording of Amendment No. 21 is an attempt to achieve that: but I think it would have been better to have been explicit and open about it.
Thirdly, although no doubt I should have said this on Amendment No. 21,I find it difficult to see how the Government or the director can even use their best efforts to enable anybody to compete effectively outside the United Kingdom. We have been told by the Government before that the provision runs in the United Kingdom and not in other countries, yet here we have two additional paragraphs being accepted which purport to encourage the director to enable things to happen outside our natural boundaries. I find that slightly less than consistent with the arguments which have been put forward.
However, by one means or another we have reached a conclusion on the matter and the proposals have been accepted by the House. On that basis, I think that it would be inappropriate for me to move the amendment.
[Amendment No. 24 not moved.]
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 25:
Page 3, line 41, at end insert—
("; and
() to prevent discrimination between any users on the basis of the geographical location of the installation in respect of charges for the connection of users to their local exchange for voice telephony and the supply and maintenance of telephone lines for that purpose and for the conveyance of voice telephony messages within a local charge area.").
The noble Lord said: My Lords, this is a most important amendment directed to safeguarding the interests of persons living in rural areas. It specifies the particular charges for which geographical uniformity is desirable—in other words, that charges for the specific apparatus and installations to which I shall refer should not be increased merely because of geographical position.
I shall take your Lordship through the text of the amendment. Its substance will be clear from the way in which I shall analyse it. The intention is:
"to prevent discrimination between any users on the basis of the geographical location of the installation in respect of charges for the connection of users to their local exchange for voice telephony".
That is one class—
"the installation … for the connection of users to their local exchange for voice telephony".
The amendment continues:
"and the supply and maintenance of telephone lines for that purpose".
That is another area in which no geographical discrimination should arise. That is,
"the supply and maintenance of telephone lines for that purpose".
Lastly,
"and for the conveyance of voice telephony messages within a local charge area".
There are three specific areas where particular charges should not give rise to discrimination because of their local situation.
The noble the Lord Minister will be aware that this kind of limitation may be introduced in the licence and in fact it does follow the wording of Condition 24 of the draft British Telecom licence. That section of the licence of course sets out the famous RPI-minus-X formula. It is felt from these Benches that it would be more satisfactory to include the wording that I have indicated in this amendment in the Bill rather than to keep it in the licence. I beg to move.
Lord Bruce of Donington: My Lords, we on this side of the House would wish to support this amendment. We do not consider that the explanation given by the noble Lord, Lord Lloyd of Kilgerran, needs any further explanation from us. In fact, we entirely agree with the whole line he has taken in the matter and cannot do better, so we would just support it.
10.22 p.m.
Lord Cockfield: My Lords, I would equally just oppose it. I spoke at great length on this specific subject in detail in moving Amendment No. 10. That amendment was approved by your Lordships by a large majority. There is really nothing for me to add to what I said on that occasion or to add to the verdict of your Lordships.
Lord Lloyd of Kilgerran: My Lords, I understand from what the noble Lord the Minister is saying that he accepts this amendment because I have not so far heard any amendment moved—perhaps it has been spoken to—to protect the interests of people living in rural areas on the lines that I have done. It may be that the noble Lord has made some speeches about this on many occasions: but this is the first amendment that has been moved in this House in relation to the protection of persons in rural areas for the charges which I have set out in my amendment.
Lord Cockfield: My Lords, I started by saying that I would oppose the amendment, and I thought I had made that quite clear. If I did not, perhaps I might repeat it. The second point is that when I spoke on Amendment No. 10, with permission I spoke also at

589
great length on Amendment No. 47 because Amendment No. 10, as I then explained, was a mere paving amendment to make way for Amendment No. 47. Amendment No. 47 does in fact specifically refer to rural areas. The noble Lord's Amendment No. 25 does not, in fact, refer to rural areas at all. It refers to all users; but I had gone much further than the noble Lord, and in Amendment No. 47 I said "including, in particular, persons in rural areas". This was done to make it absolutely clear that I was meeting the point which had been raised by your Lordships at Committee stage.
If the noble Lord insists, I am perfectly prepared to go through all the arguments again, but I felt it would be for your Lordships' convenience, as I had done this once in extenso, and the matter has been taken to a Division and the House reached a verdict on the matter by a substantial majority, if I did not go over the same ground again.
Lord Lloyd of Kilgerran: My Lords, before the noble Lord sits down, I have not yet heard any argument put by the Government in relation to this specific amendment. As the noble Lord said, rural areas are not mentioned in my amendment, but they are mentioned in another amendment to which he referred; namely, Amendment No. 47. I am talking about geographical areas. I apologise if I have misunderstood the noble Lord, but so far he has put forward no specific points as to why my amendment cannot be accepted. I agree that he has spoken at length in relation to Amendment No. 10, and I listened to him very carefully when he mentioned aspects of Amendment No. 47. But the amendment now before the House is a totally different one. It deals with charges associated with Condition 24 of the licence, and I am on record, I hope, as saying once again that so far I have heard no criticism of the amendment of any substance at all.
This is a late hour, and I do not want to become involved in a tangle on procedure with the noble Lord the Minister at this stage. I do not know whether he wishes to make any coment on what I have said before the matter is decided.
Lord Cockfield: My Lords, I shall do so if the noble Lord presses me. He says that there was no reference to geographical location, but indeed there was. The whole point of Amendment No. 10 was to remove, among other things, the words, "geographical location", because that is what gave rise to the difficulty in the case of usage charges. I said specifically that under the present system operated by British Telecom—and it is a very good system; I do not want the noble Lord to think that I am criticising BT—I could put through a telephone call from Westminster to Lambeth and have to pay the same amount that I should have to pay for a telephone call between two other places. It is that kind of discrimination which in fact at present exists, but it is a perfectly proper and legitimate form of discrimination, and I really do not see what objection there is to it.
In fact, the difficulty with the noble Lord's amendment is that it would make the operation of the telecommunications system as it at present exists quite impossible. It would not be possible, for example, to
590
have a uniform telephone charge irrespective of distance, which in fact we have at present over quite large areas. We also have a system under which certain highly used trunk lines—perhaps "trunk" is not the right word—or highly used lines are charged, relatively speaking, at a lower rate compared with lines which are not very intensively used. That form of discrimination is perfectly legitimate. It takes place at present and we should want to see it continue.
We have the same kind of problem over installation charges. The first 100 hours of work are charged at a uniform rate, and this is a discrimination as between those people who can easily be connected to the system, where less than 100 hours' work is required, and those people who are involved where the connection is a difficult one and where, therefore, they get more value for money or for the charge that is imposed upon them.
The effect of the noble Lord's amendment would be to impose a straitjacket which bears no relationship to the perfectly legitimate practices that British Telecom now indulge in and always have indulged in; and one would expect to see BT continue these practices. They are generally regarded as being in the interests of the subscribers. I explained at considerable length why in Amendment No. 47 we were proposing that there should be banned, not all discrimination but undue discrimination, because that was intended to reflect precisely what happens at present. Frankly, I believe that the amendment to which I was speaking when I moved Amendment No. 10 in fact achieves the objective that the noble Lord seeks and that it achieves it in a more effective and more acceptable manner. I hope, on the basis of this much longer explanation, the noble Lord will be prepared to withdraw his amendment.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble Lord the Minister for his explanation, and particularly for the assurance he gave in almost the last sentences, when he said that his Amendment No. 47 will achieve more effectively the objective that I have in mind in my amendment. At this late hour I do not wish to become involved in a procedural wrangle with noble Lords on the Government Front Bench. I shall read in Hansard what the noble Lord has said and consider whether it is a matter that should be taken up on Third Reading. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 26:
Page 3, line 41, at end insert—
("() to promote the need to protect the well-being of employees in the telecommunications industry").
The noble Lord said: My Lords, as noble Lords will see, the amendment standing in my name and that of my noble friends Lord Bruce of Donington and Lord McIntosh of Haringey is to the effect that we wish to underline the need to protect the well-being of employees in the telecommunications industry. I make no apology for returning to this subject at this stage of the Bill. I wish to reiterate that, although protection is given, quite properly, in the Bill to many interests, the interests of employees have been

591
singularly neglected. Employees in the industry continue to be concerned about their future terms and conditions, about the level of consultation, and, above all, about the rumours mentioned by the noble Countess, Lady Mar, at Committee stage that up to 65,000 people in British Telecom might lose their jobs. That is a legitimate area for people to have concern.
There is no doubt that people within British Telecom believe that this large number of jobs is under threat. There is nothing in the Bill to reassure them that they will be consulted or that their interests will be properly looked after. Under those circumstances, people working in the industry face an unknown future—and there is bound to be fear of the unknown. That fear is also hound to be exacerbated by the knowledge that the Bill is being promoted and forced through Parliament by a Government who have shown scant regard for the rights and well-being of workers in many industries and, in the case of GCHQ at Cheltenham, have removed those rights without proper consultation and without regard for the individual liberty of the subect. It is little wonder that people working in British Telecom get more, rather than less, concerned as time goes on about what is occurring and what is likely to occur as a result of the Bill when it becomes an Act.
At Committee stage, the noble Lord, Lord Glenarthur, referred to Section 46 of the Companies Act 1980. In our view, this gives little or no real protection to employees in the way that we see the need for such protection. Furthermore, unless Clause 18, which we shall probably reach next Monday, is amended in the way that we suggest, telecommunications workers will be in a worse position than employees in other industries. There is also the question of consultation. In my experience, employers, particularly when there are 3,200,000 people unemployed, are reluctant to consult in any meaningful way. I have had a certain amount of experience of this through my service in the electricity supply industry at a power station. There—as I mentioned during the Committee stage—it was written into the law that there should be consultation on health, welfare, safety and efficiency.
The employers—who in actual fact had previously been private owners of an electricity undertaking—did not mind consulting about health. They certainly did not worry about consulting about welfare; they were quite prepared to provide us with a sports club, bowling green and what have you. They were a little less inclined to consult about safety. However, when we wanted to consult about efficiency there was a word coined which was always thrown at the faces of the workers in the industry whenever they wanted to suggest anything that might be more efficient, or that would make the undertaking work better. If they queried the financial management of the industry, they were always told. "Ah, yes; you might have the right to discuss efficiency, but you know really all these matters are the managment's prerogative." That is simply not good enough.
As I have said from this Dispatch Box before, if we really want British industry and the telecommunications industry to work well, if we really want it
592
to be efficient, and if we want it to be staffed by people who are concerned about that undertaking and who will give their best to that undertaking and to the public generally, then they have to be treated as human beings who count. There is nothing in this Bill which will give them that assurance. That is why we are trying to write in this amendment, which will give them certain rights to decent conditions of service and, above all, the right to be consulted about matters which affect their industry and which, therefore, affect them.
I do not want to repeat the long speeches that have been made from the other side of the House. But before I sit down and in case I am told that there is no precedent for this sort of thing. I want to refer to the Broadcasting Act 1981, which was passed by a Conservative Government and which, under Section 25, lays down conditions about wages, the settlement of disputes and training which shall be followed by the programme companies. So, in that Act of 1981, which was a consolidating Act, a Conservative Government did put conditions upon the IBA to ensure that the operating companies take the interests of their staff into account in many different fields, and also laid down ways in which disputes should be settled. So there is, in fact, a precedent.
I believe this to be a sensible and reasonable amendment to which the Government simply cannot object in any way, but which would reassure the workers in the industry and perhaps make them more ready to accept other aspects of the Bill. I beg to move.
The Countess of Mar: My Lords. I agree with the amendment of the noble Lord, Lord Stoddart. I was talking to one of my ex-colleagues only the other day, and he described to me the exodus from British Telecom as "rats deserting a sinking ship". There are young men of 25 to 29 years who are taking early redundancy. They had hoped, nine or 10 years ago, to make a lifetime's career in British Telecom. I think that noble Lords in the Government will find that a great many men and women have spent a lifetime working for the Post Office and for British Telecom. The uncertainty that is pervading not only British Telecom but the industry generally, with the lack of a definitive statement from the Government about the employment prospects of the employees in the industry, is causing a great deal of concern. I hope that noble Lords in the Government will accept this amendment in the spirit in which it is intended. The Government say that they care for people. Please let us see that.
10.41 p.m.
Lord Glenarthur: My Lords, there is absolutely no difference between the Government and the noble Lord, Lord Stoddart, and the noble Countess, Lady Mar. who has spoken in support of this amendment, on the desirability of promoting the well-being of all those employed throughout the telecommunications industry. The issue between us is how it ought to be done. Although this amendment goes wide, the noble Lord, Lord Stoddart (and he made this perfectly plain), sees it as being addressed in particular to the employees of British Telecom. Once again, that is a

593
matter that we shall be debating on a later amendment.
As regards the relevance of the Broadcasting Act 1981, that is something that I shall happily study, but, as I have said, it is a point to which I shall return on a later amendment. However, the question we have to address now is whether it is desirable or appropriate to add to Clause 3 a duty on the Secretary of State and the director in carrying out their various functions to:
"promote the need to protect the well-being of employees in the telecommunications industry".
There is no doubt that there is a fundamental difference of approach between those of us on this side of the House and the noble Lord opposite. We believe—and he anticipated what I would say—that matters like this are much better handled between employers and employees against the background of the minimum statutory framework and with as little interference as possible by government. Yet the party opposite still cherishes a much more interventionist role in these matters.
The question I ask is how it would be possible to give effect to this amendment without imposing on the Secretary of State and the director a duty positively to interfere in the internal affairs of individual companies. I see no justification whatever for this approach. The general law sets out the limits of government involvement in this area; for example, in relation to terms and conditions of exmployment, health and safety at work, and so on. In addition, I made clear in Committee—and the noble Lord, Lord Stoddart, again referred to this—that Section 46 of the Companies Act provides that, among the matters to which the directors of a company are to have regard in the performance of their functions, are the interests of the company's employees generally as well as the interests of its shareholders. This reinforces my point that it is for employers and employees to deal with this matter, and not for the Secretary of State or the director. I hope that the noble Lord will withdraw his amendment.
Lord Bruce of Donington: My Lords, we on this side of the House are a little sorry that the noble Lord should take this attitude. If the noble Lord looks at the Bill as a whole, he will find that it has been designed specifically to protect, above all, the interests of the future shareholders of British Telecom. They are of some importance. Everybody's interests are being looked after because it says:
"to promote the interests of consumers, purchasers and other users … to maintain and promote effective competition".
Once again, all these things are complete intervention. You will not find that an ordinary company has to function within any of these particular constraints. This Bill has been devised to protect a particular section of the community.
What I am surprised about is that the noble Lord knows perfectly well that, apart from buying the shares that will become available, the shareholders of British Telecom will make no contribution whatever to British Telecom. They will buy its shares. If they are fragmented, nor will they exercise any particular control over its management. But they are going to be looked after, and the balance sheet is going to be recast and restructured to make it more attractive to
594
investors. So far as Her Majesty's Government are concerned, these are the only people who matter.
What the noble Lord does not realise is that no telecommunication system will function without the dedication of people working in it day by day. Not in the Stock Exchange, not in the banks, not in the investment institutions, but in the actual installations that they make; in the installations that they maintain and repair; and in the other general services that they provide. They are the people of real importance.
My noble friend Lord Stoddart of Swindon made it clear that it was not merely a question of welfare within the concept that the noble Lord understands that, if indeed he understands it. It is treating people as though they matter, and that is what is meant by wellbeing. Well-being is not merely seeing that the workplace is properly ventilated; that it is properly heated: that there are proper conditions of work on the bench. It is making people feel that they matter. This is the larger sense of well-being. This is why my noble friend correctly brought in the whole question of consultation which makes the noble Lord so dismayed.
These are matters that are far better left to the management itself. If all these things are far better left to the management, it is far better to leave British Telecom alone altogether rather than bring it within a Bill of this kind. If he is going to intervene, as he is intervening with this Bill, in a living organisation composed of living individuals who are giving this country very good service at the moment—
Lord Mottistone: Not good enough.
Lord Bruce of Donington: "Tainted", my Lords, as the noble Lord, Lord Mottistone, was kind enough to put it at the Committee stage, without withdrawal. If this is going to be the noble Lord's attitude towards the employees of British Telecom, then I warn the noble Lord that both he and his government are riding for disaster. You can drive people so far, but, if you try to drive them too far, beware of what will happen: the British people are known to be long-suffering, to be tolerant, but if they try to push them over the edge the Government will reap the whirlwind.
I should have thought that a Government composed of people who really and truly wished to look after the interests of the whole of the nation and not merely one section—and in particular the monied section—of it would have taken on board the simple responsibility of at any rate putting in as a pious aim, if nothing more than that, that those who do the real work to run the system should have their well-being studied by the director and by the Secretary of State as a responsibility under the Act.
10.48 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 19; Not-Contents, 44.

DIVISION NO. 5

CONTENTS

Airedale, L.

Lloyd of Kilgerran, L.

Attlee, E.

McIntosh of Haringey, L.

Bishopston, L. [Teller.]

Mar, C.

Bruce of Donington, L.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Simon, V.

Halsbury, E.

Spens, L.

Hooson, L.

Stoddart of Swindon, L.

John-Mackie, L.

Tordoff, L.

Kilmarnock, L.

Underhill, L.

Lawrence, L.

NOT-CONTENTS

Airey of Abingdon, B.

Mackay of Clashfern, L.

Avon, E.

Marley, L.

Bauer, L.

Marshall of Leeds, L.

Belstead, L.

Maude of Stratford-upon-Avon, L.

Brabazon of Tara, L.

Bridgeman, V.

Morris, L.

Cockfield, L.

Mottistone, L.

Coleraine, L.

Murton of Lindisfarne, L.

Craigmyle, L.

Norfolk, D.

Denham, L. [Teller.]

Orr-Ewing, L.

Elton, L.

Peyton of Yeovil, L.

Glanusk, L.

Rankeillour, L.

Glenarthur, L.

Renton, L.

Gray of Contin, L.

Saltoun, Ly.

Hailsham of Saint Marylebone, L.

Sandford, L.

Skelmersdale, L.

Home of the Hirsel, L.

Swansea, L.

Hornsby-Smith, B.

Swinton, E. [Teller.]

Liverpool, E.

Trefgarne, L.

Long, V.

Trenchard, V.

Lucas of Chilworth, L.

Trumpington, B.

Lyell, L.

Vaux of Harrowden, L.

McAlpine of West Green, L.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
10.56 p.m.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 26A:
Page 3, line 41, at end insert—
("() to ensure that the charges for the installation and maintenance of apparatus for voice telephony, in respect of premises connected by a single line, and for the conveyance of voice telephony messages within a local charge area, in respect of premises connected by a single line and of public call boxes, are not increased more often than annually and then only by a percentage not exceeding the percentage increase in the Retail Price Index since the last increase in such charges.").
The noble Lord said: My Lords, this is a probing amendment which I can introduce to your Lordships quite shortly. In the monopoly situation which arises as a result of this Bill, the intention of the amendment is to ensure that the charges for installation and maintenance of apparatus for voice telephony in certain circumstances set out in the amendment are not increased more often than annually, and then only by a percentage not exceeding the percentage increase in the retail price index since the last increase in such charges.
The noble Lord the Minister will no doubt recognise that this is also an attempt to put into the Bill what is intended to be included in the RPI minus X formula, to be included in the licence. In order to save time this evening and to avoid complexity, I have assumed for
596
the purpose of my submission that X in the formula will be zero.
I have not recited in this brief speech the particular aspects in relation to which charges should not be increased, as the amendment states. I beg to move.
Lord Glenarthur: My Lords, the noble Lord moved his amendment very shortly and very swiftly. I am bound to say that I was expecting to reply at rather greater length, but I shall avoid the temptation to do so. I have to say to the noble Lord that his amendment is inappropriate, I am afraid, and undesirable, but I appreciate the efforts he has made to draft his amendment carefully so as to remove some of the main problems associated with the earlier amendment tabled at Committee, which addressed the same subject.
I must make it clear that the essential problem remains. We do not believe that it is desirable to have such a limitation on price increases embodied in statute. What this will mean is that for as long as this Bill, when it becomes an Act, remains in force, anyone, public or private operator alike, who provides voice telephony services within the description in this amendment will never be able to increase prices of any individual service by more than the rate of inflation. The same would apply to any private firm which installed or maintained apparatus for voice telephony. This would have serious implications for any new firm entering into the market. Would it, for example, be allowed to charge any prices where it had not made any charge before? There would also be implications for the more complex apparatus now coming on to the market. This will take more man hours to install, but the amendment would stop firms charging more for the increased work they do.
I could go on at length to give other reasons as to why this amendment is unacceptable, but in saying what I have said I hope I have made it as clear as I need that we cannot accept this amendment. I hope that the noble Lord will withdraw it.
Lord Bruce of Donington: My Lords, I am very surprised that the noble Lord should have taken this attitude. One of the earlier statements made by the noble Lord's right honourable friend the Secretary of State was to the effect that the RPI minus X factor was one of the most commendable parts of the whole process of privatisation. It was intended to be a reassurance.
The noble Lord will recall that when the Bill was being discussed in the country at large, when the whole intention to privatise British Telecom was first bruited, there was wide public doubt as to whether this would do anything other than increase charges to the consumer. The noble Lord's right honourable friend sought to allay these fears by making the most emphatic statement in a letter which he wrote to the Economist, to which I can refer the noble Lord if he wishes. It was a quite unequivocal statement, made by letter, to the effect that the RPI minus X factor would be in operation.
What the noble Lord has said this evening is not only that it is inappropriate—the term "inappropriate", of course, is always used by

597
governments in regard to any proposal they find inconvenient because "inappropriate" is a far better term—but that it is undesirable. Is it undesirable that the pledges given by his right honourable friend should not be carried out? How can it be undesirable, the DTI having given the undertaking that this would be the case, for this to be incorporated into the Bill? It only goes to show that for all the talk and the bluff that has gone on, the Government do not believe in fact in what they themselves have promised. They know perfectly well that privatisation will result in increased prices to the consumer unless they are restrained. And so the promises that were given are so much eyewash, so much complete eyewash.
The noble Lord may think he can ride away with it on a short explanation. I have not taken up very much of your Lordships' time in contributing to this debate, but I deplore the whole attitude of the Government towards this very reasonable proposal, which, after all, assumes the X factor to be nil—which I am bound to say is as far as the noble Lord, Lord Lloyd of Kilgerran, could go. If the Government will not accept that, what asurance can they give to the public that the privatisation of British Telecom will not result in increased charges to the consumer in respect of these various services that are specified in the amendment? I do not think the noble Lord can give any such assurances, and therefore the promises and undertakings by the Government in regard to this are so much eyewash, and the Government's attitude towards this amendment shows it.
Lord Peyton of Yeovil: My Lords, I hesitate to address your Lordships' House at this hour of night but the word "eyewash" brought me to my feet—coming, as it does, from the noble Lord, Lord Bruce of Donington. I know of no-one who is a greater specialist in the art.
Lord Bruce of Donington: My Lords, I am grateful. The noble Lord compliments me.
Noble Lords: Order!
Lord Lloyd of Kilgerran: My Lords, I suppose it is my fault, really, in trying to save time, that I led the noble Lord the Minister into something of a trap, so that he therefore felt that he should abbreviate his reply much more extensively than he otherwise would have done. At this late hour I do not want to bring the noble Lord the Minister to his feet again. I will consider what little he has so far told the House in reply to this amendment.
It is a little upsetting that no assurances have been given, and that the fears of people with apparatus of this kind have in no way been allayed, so I reserve the right to raise this matter at a later stage of the consideration of this Bill. It is with regret, therefore, and with some reluctance, that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.5 p.m.
Lord Spens Lord Spens moved manuscript Amendment No. 26B:
Page 4, leave out lines 1 and 2.
The noble Lord said: My Lords, I apologise for having put down this manuscript amendment, but it covers a point which is worrying a number of members of our group. The effect of the first two lines on page 4 is to exclude subsections (1) and (2) of Clause 3 from the functions assigned to the Director of Oftel, in so far as they relate to competition which is covered under Clause 49. We believe that the prevention of anti-competitive practices is a vital part of the duties of the Director of Oftel. I regret to state that they are happening at present in certain respects and we have no reason to believe that, with the passing of this legislation, there will be any real lessening of those practices.
Clause 49 transfers to the Director of Oftel the functions under the Competition Act 1980 which he will exercise concurrently with the Director General of Fair Trading, but nowhere in the Competition Act 1980 is there any mention of the word "duty". The nearest that I have been able to get to it, in looking at the Act, is in Section 3 which states, "the Director may"; and that, to my mind, is not a duty. If these words remain in Clause 3, the Director of Oftel will specifically not have any duty to deal with anticompetitive practices, because there is no duty given to him under Clause 49. Therefore, I should like to see these words deleted, so that the Director of Oftel will have the duties which everyone thinks he has, particularly in relation to Clause 3(2)(b) which we debated earlier,
"to maintain and promote effective competition between persons engaged in commercial activities".
There is no duty now on the Director of Oftel to do that, unless these words are taken out of the Bill. I beg to move.
Lord Glenarthur: My Lords, the purpose of the noble Lord's amendment is to ensure that the director general's powers exercisable under Clause 49 are subject to the duties set out in Clause 3. I believe that this proposal is founded upon a misunderstanding of the structure of the Bill. Clause 49 makes provision to enable the Director General of Telecommunications to exercise certain functions of the Director General of Fair Trading, under the fair trading and competition legislation, in the telecommunications field. It is important to appreciate that Clause 49 provides for these powers under that legislation to be exercised in different ways according to the subject matter. Subsection (1) requires the Director General of Oftel to exercise the functions of the Director General of Fair Trading under Part III of the Fair Trading Act. Subsection (2) and subsection (3), on the other hand, confer a concurrent jurisdiction on both directors general in relation to monopoly situations and anticompetitive practices.
I hope that the noble Lord will appreciate that whichever director is exercising these functions in this field—and the choice as to which it should be will no doubt depend on convenience in each case—the same powers must be exercisable by reference to the same criteria. The basic idea of the clause is to ensure that as a long stop, so to speak, telecommunications operators and others with telecommunications related businesses are to be subject to general competition law. It is obviously desirable that if, in the main areas

599
of competition law, Oftel has useful relevant knowledge and experience it should carry on the function of the OFT.
In the light of that explanation, I hope that it will be apparent to your Lordships why it would be wholly inappropriate to subject the Director General of Oftel to the Clause 3 duties in exercising these powers which are conferred by different Acts and which are complete in themselves. The considerations by reference to which the Fair Trading Act and Competition Act powers are to be exercised are set out in Section 84 of the Fair Trading Act, which defines the public interest for the purposes of merger and monopoly references, and in Section 2 of the Competition Act, which defines an anti-competitive practice for the purposes of that Act.
Much that is in Clause 3 of this Bill duplicates the considerations set out in these two Acts but much is inappropriate, being designed with a view to the licensing system. It would in any case be quite in-appropriate to attempt to overlay the fair trading legislation in this way. It would also lead to radical distortions, according to which director general was exercising the relevant powers. If I may put it as simply as this, you cannot have two policemen operating different laws in the same town.
I hope that it is clear from these remarks why I must advise your Lordships—while I fully understand the wish of the noble Lord, Lord Spens, to improve the Bill—not to accept the amendment. If I could put my main point again in a nutshell, you cannot have a procedure where, if the Director General of Telecommunications is seized of a case, but not if the Office of Fair Trading is, he is subject to one set of duties at his stage of the proceedings but once it gets into the hands of the Monopolies and Mergers Commission, and after that the Secretary of State, those duties do not apply but a wholly different set of statutory objectives become relevant. After that explanation of a fairly tortuous piece of legislation, I hope the noble Lord will be able to withdraw his amendment.
Lord Spens: My Lords, I am not at all happy with that explanation. I have said that there are no duties under the Competition Act 1980; yet the noble Lord the Minister began to talk about duties under that Act. There are functions, yes, but there are no duties. I want to see imposed upon the Director General of Oftel the duty to take positive action against anti-competitive practices. At this late hour I do not propose to divide the House; but I propose to have another look at whether or not I can bring back at a later stage of the Bill the point that I am making. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.15 p.m.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 27:
Page 4, line 4, after ("10(3)") insert ("or (7A) or (Power to give assistance in relation to certain proceedings)").
The noble and learned said: This amendment obliges me to refer to a whole sequence of related
600
amendments to Clauses 10 and 16 and to the new clause which we propose to insert after Clause 50. The amendments concerned are Amendments Nos. 51, 53 to 59, 74 and 96.
Amendment No. 51: Clause 10, page 12, line 1, leave out from beginning to ("in") in line 2 and insert ("subject to such exceptions and conditions as may be included").
Amendment No. 53: Clause 10, page 12, line 16, leave out ("(5) Any condition falling within subsection (4) above") and insert ("and any condition falling within this subsection").
Amendment No. 54: Clause 10, page 12, line 27, leave out from ("of") to end of line 29 and insert ("the exceptions and conditions subject to which he proposes that the code should have effect as so applied").
Amendment No. 55: Clause 10, page 12, line 32, leave out ("to specify") and insert ("that the code as so applied should have effect subject to").
Amendment No. 56: Clause 10, page 13, line 5, leave out from ("of") to ("and") in line 7 and insert ("the exceptions and conditions subject to which the code has effect as so applied").
Amendment No. 57: Clause 10, page 13, leave out lines 10 and 11 and insert ("the code as so applied has effect subject to those exceptions and conditions").
Amendment No. 58: Clause 10, page 13, line 11, at end insert—
("(7A) Where the Secretary of State has granted a licence under section 7 above which applies the telecommunications code to a particular person in relation to any part or locality of the United Kingdom, he may—

(a) with the consent of that person; or

(b) if it appears to him requisite or expedient to do so for the purpose mentioned in subsection (4) above,

modify the exceptions and conditions subject to which the code has effect as so applied.
(7B) Before modifying the exceptions and conditions subject to which the telecommunications code has effect as applied to any person in relation to any part or locality of the United Kingdom by a licence granted under section 7 above, the Secretary of State shall publish a notice—

(a) stating that he proposes to make the modifications and setting out their effect;

(b) stating the reasons why he proposes to make the modifications; and

(c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,

and shall reconsider his proposals in the light of any representations or objections which are duly made and not withdrawn.
(7C) If the Secretary of State, on reconsidering in pursuance of subsection (7B) above any proposals specified in a notice under that subsection, modifies the exceptions and conditions subject to which the telecommunications code has effect as applied to any person in relation to any part or locality of the United Kingdom by a licence granted under section 7 above, he shall on making the modifications publish a further notice—

(a) stating that the modifications have been made and setting out their effect; and

(b) stating the reasons why the modifications have been made.").

Amendment No. 59: Clause 10, page 13, line 12, leave out ("subsection (6) or (7) above") and insert ("this section").
Amendment No. 74: Clause 16, page 20, line 44, at end insert—
("(8) References in this section to conditions of a licence do not include references to conditions relating to the application of the telecommunications code.").
Amendment No. 96: After Clause 50, insert the following new clause: Power to give assistance in relation to certain proceedings.
(" .—(1) Where, in relation to any proceedings or prospective proceedings to which this section applies, any actual or prospective party to the proceedings (other than the telecommunications operator) applies to the Director for assistance under this section, the Director may grant the application if he thinks fit to do so—

(a) on the ground that the case raises a question of principle; or

(b) on the ground that it is unreasonable having regard to the complexity of the case or to any other matter, to expect the applicant to deal with the case without any assistance under this section; or

(c) by reason of any other special consideration.

601
(2) This section applies to any proceedings in which there falls to be determined any question arising under or in connection with—

(a) the telecommunications code as applied to a telecommunications operator in relation to any part or locality of the United Kingdom; or

(b) any exception or condition subject to which that code has effect as so applied.

(3) Assistance by the Director under this section may include—

(a) giving advice;

(b) procuring or attempting to procure the settlement of the matter in dispute;

(c) arranging for the giving of advice or assistance by a solicitor or counsel;

(d) arranging for representation by a solicitor or counsel, including such assistance a is usually given by a solicitor or counsel in the steps preliminary or incidental to any proceedings, or in arriving at or giving effect to a compromise to avoid or bring to an end any proceedings;

(e) any other form of assistance which the Director may consider appropriate,

but paragraph (d) above shall not affect the law and practice regulating the descriptions of persons who may appear in, conduct, defend, and address the court in, any proceedings.
(4) In so far as expenses are incurred by the Director in providing the applicant with assistance under this section, the recovery of those expenses (as taxed or assessed in such manner as may be prescribed by rules of court) shall constitute a first charge for the benefit of the Director—

(a) on any costs or expenses which (whether by virtue of a judgment or order of a court or an agreement or otherwise) are payable to the applicant by any other person in respect of the matter in connection with which the assistance is given; and

(b) so far as relates to any costs or expenses, on his rights under any compromise or settlement arrived at in connection with that matter to avoid or bring to an end any proceedings.

(5) A charge conferred by subsection (4) above is subject to—

(a) any charge under the Legal Aid Act 1974;

(b) any charge or obligation for payment in priority to other debts under the Legal Aid and Advice (Scotland) Acts 1967 and 1972; or

(c) any charge under the Legal Aid. Advice and Assistance (Northern Ireland) Order 1981,

and is subject to any provision in any of those Acts or that Order for payment of any sum into the legal aid fund.
(6) Any expenses incurred by the Director in providing assistance under this section shall be paid out of money provided by Parliament; and any sums received by the Director by virtue of any charge conferred by subsection (4) above shall be paid into the Consolidated Fund.")
My explanation falls into two parts, but there is an underlying theme, which is that the Government recognise the concern expressed during the Committee stage of the Bill that there should be adequate safeguards to ensure that the environment is protected and that operators do not abuse the privilege that will he conferred on some of them by being able to install their apparatus under the provisions of the telecommunications code. As your Lordships know, our view is that these environmental protections are best applied through exceptions and conditions incorporated in the licences which apply the code. Part 5 of the draft British Telecom licence gives some idea of the kind of conditions that will be included in licences.
Unfortunately, however, as the Bill is currently drafted, the necessary flexibility only exists when the initial licence conditions are being set. When that is done, Clause 10 requires the Secretary of State to publish a notice of his proposals to apply the code to an individual operator and to reconsider his proposals in the light of any representations or objections made. But once the licence is granted no modification is
602
possible. Clause 10 was not drafted in this way because of any oversight. Rather it was thought that the licence modification procedures devised in relation to what I shall call the commercial licence conditions were inappropriate for dealing with the environmental matters which would be of concern in connection with the code. We took the view that these matters transcended the public interest in telecommunications and that decisions on them should be left with the Secretary of State. It was also felt that the Monopolies and Mergers Commission, with its commercial and business orientation, was not an appropriate body to make recommendations about the operation of the telecommunications code and whether associated licence conditions should be modified.
We still believe that it would be unacceptable to empower the director to initiate changes in code-related licence conditions or to give a role to the Monopolies and Mergers Commission. But at the same time we have also concluded that if our approach of safeguarding the environment is to carry complete conviction, there must be a power to modify the initial licence conditions, not least to ensure that any restrictions or qualifications can be strengthened should experience indicate that in their original form they are inadequate. On that basis I shall seek the approval of the House for Amendment No. 58, which seeks to give the Secretary of State a power to modify the exceptions and conditions subject to which the code was applied. He would not have an unfettered discretion to make modifications. He would be able to make modifications where he obtained the agreement of the licensee or, even if such agreement was not forthcoming, where he was convinced that the modification was necessary in order to protect the physical environment, or to ensure that there was no greater damage to streets than was absolutely necessary, or that funds were available for meeting any liabilities which might arise from the exercise of code powers. In other words, he would be guided by the objectives already set out in Clause 10(4). I hope I have said enough to convince your Lordships that this is a desirable amendment.
I should like now to turn to the other amendments I mentioned at the opening of my remarks. The substantive ones are Amendments Nos. 74 and 96. The effect of these amendments is easily perceived. The first is designed to remove telecommunications code conditions and exceptions from the ambit of the director's powers of enforcement through the making of orders. The second seeks to give the director a new power in certain circumstances to assist any person contemplating or taking action against an operator in connection with an alleged failure to comply with a code-related exception or condition either by giving advice or by attempting to get the dispute settled or, if that fails, by arranging legal help.
So far as the present amendment is concerned, as I have said, the House has already accepted the principle that the Clause 3 duties should not apply in relation to matters affecting the application of the telecommunications code. That appears from the words that we were considering just a short while ago. This is because it would not be appropriate to subject the protection of the environment to duties which, for example, refer to the promotion of competition. The

603
environment is of crucial importance and needs to be considered on its own merits. That is the explanation for this amendment and the others to which I have spoken. I beg to move.
Lord McIntosh of Haringey: My Lords, these are extremely complex matters. I am grateful to the noble and learned Lord for his explanation not only of this amendment but of the consequential amendments. I confess that before his speech I had not fully appreciated the full complexity of the relationships among the different clauses and amendments and indeed the telecommunications code. As your Lordships know, there are a considerable number of amendments to Schedule 2 in the names of myself and my noble friends which are concerned with the adequacy of the code to protect the physical environment. I have a suspicion that the noble and learned Lord is going three-quarters of the way round the house in order to come somewhere near the place that we want to be.
In the absence of complete certainty and in the presence of his undoubted, and several times repeated, concern for the environment, I think it is better that we do not challenge the amendment at this time but read very carefully what he said and continue to press the amendments that we have down to improve the explicitness of the code in the protection of the environment.
Lord Lloyd of Kilgerran: My Lords, I also find these amendments complicated. I do not want to delay the House any longer, but I should like to a ask the noble and learned Lord a question in regard to Amendment No. 96. It is a simple question. The amendment proposes to give power to the director to give assistance in relation to certain proceedings. Can the noble and learned Lord say whether the ordinary terms of the Legal Aid Acts will apply in regard to the proceedings contemplated in the amendment?
Lord Mackay of Clashfern: My Lords, as I would understand it, the need for the director's help and assistance would arise possibly in a situation where the person who might otherwise seek to enforce the condition was not eligible for legal aid. This is really an additional method of assisting a person over and above the ordinary provisions of legal aid, as I would see it.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble and learned Lord.
On Question, amendment agreed to.
11.22 p.m.
Lord Lyell Lord Lyell moved Amendment No. 28:
[Printed earlier: col. 561.]
The noble Lord said: My lords, this is part of the group of amendments to which I spoke when I moved Amendment No. 14. I beg to move.
On Question, amendment agreed to.
Clause 4 [Meaning of "telecommunication system" and related expressions]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 29:
Page 4, leave out line 21 to 25 and insert—
("(1A) For the purposes of this Act telecommunication apparatus which is situated in the United Kingdom and—

(a) is connected to but not comprised in a telecommunication system; or

(b) is connected to and comprised in a telecommunication system which extends beyond the United Kingdom,

shall be regarded as a telecommunication system and any person who controls the apparatus shall be regarded as running the system.").
The noble and learned Lord said: My Lords, together with this I should like to take Amendments Nos. 31, 35, 36, 128 and 130.
Amendment No. 31: Page 4, line 33, leave out from ("use") to end of line 36 and insert—

("(a) in transmitting or receiving anything falling within paragraphs (a) to (d) of subsection (1) above which is to be or has been conveyed or switched by means of a telecommunication system; or

(b) in conveying or switching, for the purposes of such a system, anything falling within those paragraphs;").

Amendment No. 35: Page 5, line 9, leave out ("has been or is to be") and insert ("is to be or has been").
Amendment No. 36: Page 5, line 13, leave out from ("use") to ("energy") in line 16 and insert—

("(a) in transmitting or receiving anything falling within paragraphs (a) to (d) of subsection (1) above which is to be or has been conveyed or switched by means of that system; or

(b) in conveying or switching, for the purposes of that system, anything falling within those paragraphs;

and references in this subsection to anything falling within those paragraphs shall include references to").
Amendment No. 128: Clause 99, page 89, leave out line 11 and insert ("subsection (1) of section 4 above (read with subsection (1A) of that section)").
Amendment No. 130: Schedule 4, page 126, line 19, leave out from ("by") to end of line 20 and insert ("subsection (1) of section 4 above (read with subsection (1A) of that section)").
Your Lordships may remember that there were some criticisms made of Clause 4 at the Committee stage. One or two noble Lords—and your Lordships will be very surprised at this—expressed some difficulty in understanding Clause 4. To try to assist, we have seen whether we can change the system a little. It looks as though the complications of Clause 4(1) will fall away if we treat as separate telecommunications systems in their own right any items of apparatus which are connected to any one or more telecommunications systems but are not comprised within any of them. This approach would also deal with the problem which we think will cause increasing regulatory difficulties in future when single items of apparatus become more complex. As technology develops, more and more functions are being included within single telephone instruments, some of which now include video screens, storage facilities, memory devices and switching functions. It is hard to say that such items of apparatus are not systems in their own right. On consideration, we think it would be best not to rely on what may be a fundamentally blurred distinction between what constitutes apparatus and what constitutes a system.
The first part of Amendment No. 29 therefore says that telecommunication apparatus in the United Kingdom which is connected to a telecommunications system without actually being comprised within a system is to be treated as a telecommunication system in its own right. It will need to be licensed accordingly. This is simpler to understand and we think that the

605
existing general licence granted by BT in respect of apparatus connected to the public networks already makes this assumption.
This arrangement does however not deal adequately with apparatus connected by wireless telegraphy to systems extending beyond the United Kingdom. Such apparatus as a satellite ground station is connected by wireless telegraphy to an orbital satellite and comprised in a system which extends beyond the United Kingdom. Similarly, a radio telephone transceiver could be connected by wireless telegraphy to a radio telephone system in France or Ireland. In both cases the apparatus might not be connected to any other apparatus in the United Kingdom. The result is that individuals would be able to control such items of apparatus and to connect them to systems outside the United Kingdom without any licensing controls applying. Such controls are, however, needed for international relations reasons and to protect British operators whose commercial operations could be undercut. We have decided therefore that apparatus which is comprised in a system which extends beyond the United Kingdom should be treated as if it was a telecommunication system in its own right and therefore subject to licensing.
Amendments Nos. 31 and 36 tidy up an ambiguity. The definitions in Clause 4(2) and (4) of "telecommunication apparatus" and of the circumstances when such apparatus is "connected" to a system assume that they are used for transmitting, conveying, switching or receiving messages for the purposes of a telecommunications system. We have considered this question in the light of discussions earlier and counsel has advised that technically apparatus which transmits or receives may not transmit or receive for the purposes of a system; it merely transmits messages which are to be conveyed by a system or receives messages which have been conveyed by a system. As amended, Clause 4(2) and (4) will apply to apparatus which is used or connected for the use to transmit or receive messages whether or not the transmission or reception is for the purposes of a telecommunication system.
Amendment No. 35 makes subsection (3) consistent with subsections (2) and (4). Amendments Nos. 128 and 130 are purely consequential. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 30:
Page 4, line 29, leave out from ("services") to ("apparatus") in line 30 and insert (", the supply or export of telecommunication apparatus and the production or acquisition for supply or export of such").
The noble and learned Lord said: My Lords, this is a small but important amendment to remedy a defect that has recently been spotted in the definition of "commercial activities connected with telecommunications" in Clause 4(2). As drafted, it does not include the acquisition of apparatus for supply, either in the United Kingdom or abroad. This is, of course, an activity that is an important part of British Telecom's operations. It should therefore be covered in the definition of "commercial activities" in Clause 4 and this amendment does just that. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 31
[Printed above.]
The noble and learned Lord said: My Lords, I have already spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment Nos. 32 to 34:
[Printed earlier: col. 561.]
The noble Lord said: My Lords, Amendments Nos. 32, 33 and 34 were all spoken to by my noble friend Lord Lyell when he spoke to Amendment No. 14. I beg to move these amendments en bloc.
On Question, amendments agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 35:
[Printed above.]
The noble and learned Lord said: My Lords, I have already spoken to this amendment, and I beg to move.
On Question. amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 36:
[Printed above.]
The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 6 [Exceptions to section 5]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 37:
Page 6, leave out line 29 to 32 and insert ("in the case of which every conveyance made by it is either—

(a) a transmission, by wireless telegraphy, from a transmitting station for general reception of sounds, visual images or such signals as are mentioned in paragraph (c) of section 4(1) above; or

(b) a conveyance within a single set of premises of sounds, visual images or such signals which are to be or have been so transmitted.")

The noble Lord said: My Lords, perhaps with this amendment it would be convenient also to take Amendment No. 38.
Amendment No. 38: Page 7, line 14, at end insert ("(whether run by a broadcasting authority or by any other person)")
Both these amendments are technical amendments to the exemptions from licensing in Clause 6. Amendment No. 37 concerns the exemption from licensing for the broadcasting authorities. What we wish to do is to ensure that they are exempt from licensing when they are engaged in activities which are strictly broadcasting, but are not exempt from licensing in respect of other activities. As drafted, the exemption is defective in that in some circumstances it appears too wide and in others too narrow.
In particular, it is too wide because it covers some activities which we do not wish to exempt; for example, where the broadcasters run links from their studios to their transmitters, and from outside broadcast locations back to their studios. In addition, the exemption is too narrow because there is a doubt whether it covers, as we think it should, the relay stations run by the broadcasting authorities. These are stations which boost broadcast signals by receiving them off-air and then rebroadcast them.
Amendment No. 37 deals with both these problems. The new paragraph (a) provides an exemption from licensing both for transmissions made from the originating broadcasting station and for those which are made from broadcast relay stations which transmit for general reception. The new paragraph (b) provides an exemption for any conveyance within the premises on which any of these stations (that is, the originating broadcasting station and the relay station) are situated.
Amendment No. 38 to the tailpiece of subsection (2) is purely for clarification and is designed to aid understanding of the Bill. It has always been the intention that a radio or television set should be exempt from licensing when it is connected normally by wireless telegraphy, to either a United Kingdom broadcasting station or a foreign broadcasting station. However, this provision has been read by many to imply that connection of a radio set to a foreign station was not exempt. Amendment No. 38 removes that implication and makes the intention clear. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 38:
[Printed above.]
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 39:
Page 7, line 16, leave out ("purpose") and insert ("purposes").
The noble Lord said: My Lords, this amendment merely corrects a typographical error. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 39A:
Page 7, line 18, leave out from ("system") to end of line 19.
The noble Lord said: My Lords, I should like to suggest that with Amendment No. 39A we take also Amendment No. 39B.
Amendment No. 39B: Page 7, line 20, leave out subsection (4).
These are probing amendments, which result from the answers given to a question from my noble friend Lord Boyd-Carpenter by my noble friend Lord Cockfield following this particular matter being raised at the Committee stage. The reply given by my noble friend Lord Cockfield is most unsatisfactory and adds nothing, or very little, to what was said by my honourable friend Mr. Kenneth Baker in his statement on 17th November last.
Perhaps I may make a few quick remarks about what was said and why we think that it is inadequate, in order that the Government might perhaps consider giving us a rather fuller and more satisfactory explanation of their policy, which would take us a little further than the statement of 17th November. I should say first of all that at this stage there is no chance of resale of complete circuits, as was mentioned in an earlier debate; that is to say, buying bulk circuits from BT or Mercury and then renting them out as individual circuits to third parties. So we can forget the question of resale, which was gone into in some detail in my noble friend's reply.
The business customer wishes to have the right to have private circuits linking him with other businesses
608
not owned by him; for example, as in the case of a motor manufacturer, with his dealers. Where both businesses have networks of private circuits, the need is for the networks to be interlinked. This does not involve connection to the public network, which is stated in the answer to be the main problem. The problems of signalling and transmission limit of circuits linked in tandem are well understood by those who operate private networks and they do not require the proposed further study by BT and the Government. In fact, since the public are not involved, the business network operator feels that such paternalism is unwarrantable interference in his affairs. If BT would concentrate on improving faint speech and noise on calls across London over the public network, it would be much more to the point.
The only parties affected in this arrangment are BT and the business network operator. The businessman wants the facility in order to make his business more efficient. He is not selling telephone calls to anyone. If he is avoiding calls on the public network he is doing so by making better use of national resources for which he is paying a fair price, surely something to be encouraged. In resisting this entirely logical development, BT has no real grounds for complaint and is only seeking to preserve its monopoly stranglehold for as long as possible.
Nothing in my noble friend's statement disputes the logic of allowing complete freedom for the provision of private circuits between unrelated companies and the linking of private networks. The Government could announce now that this will be permitted. I hope that my noble friends will take that point.
It is recognised that connection between public and private networks could lead to resale of telephone calls for profit and that the Government have decided that this is not to be encouraged just yet. I had hoped that the statement might have permitted the connection of private circuits and private networks to the public networks in order to allow businesses to transfer customers calling-in to other company locations, and for their private network calls to be extended to their own staff at home. No question of payment arises in such transactions and business efficiency is greatly increased. It seems to me to be a failure if the Government cannot find a suitable formula to permit this desirable arrangement to operate while preventing resale of calls on a commercial basis at this stage.
I hope that my noble and learned friend will be able to give an answer that takes some account of the points I have made. If he cannot do so at this stage, perhaps we can have yet another and more explicit statement from the Government before the Bill leaves this House. I beg to move.
11.38 p.m.
Lord Mackay of Clashfern: My Lords, may I say first and possibly quite briefly, that it does not appear to me that the amendment that my noble friend proposes would, in fact, effectuate the purpose that he had in mind in the discussion that followed. So far as statements are concerned, I think that if I have learnt anything from the Committee's proceedings, it is that it would be most unwise for me to promise any further statement, and I do not propose to be unwise on this occasion.

609
I shall certainly undertake that my noble friend's remarks will be the subject of study by my colleagues and myself. Further than that, it would not be appropriate for me to go this evening. I am sorry that I cannot assist my noble friend further, but I think that he will understand the situation.
Lord Bruce of Donington: My Lords, the noble Lord, in his statement, said that conversations were proceeding with British Telecom on this and associated questions. We are reassured to some extent that this is taking place. We would express our agreement with the noble and learned Lord in resisting the amendment put forward by the noble Lord, Lord Mottistone, and his group.
Lord Mottistone: My Lords, as I said, my amendment was a probing one. I hope that my noble and learned friend will perhaps go a little further in view of the fact that the next day for the Bill's Report stage is not until next Monday. Possibly, before Third Reading, there can be a more explicit statement taking into account the points I have just made. Is my noble and learned friend able to go that far?
Lord Mackay of Clashfern: My Lords, while I should be glad to give any assistance that I properly could to my noble friend, it would be unwise for me to go further than I have already gone.
Lord Glanusk: My Lords, before my noble friend sits down, there is one question that I should like to ask him. It is said that the complexity of the issues means that the Government, BT and Mercury must consider what is to be done with care. Is there no opportunity for the businesses involved in these paragraphs, of which there are several hundred, being involved in those talks? It will seriously affect them, and to have just three very biased people talking together seems unreasonable.
Lord Mackay of Clashfern: My Lords, as I have already said, I am very happy to draw to the attention of my colleagues, as well as studying myself, what my noble friend Lord Mottistone has said. If the interests to which my noble friend has referred, wish to make representations on these matters, then of course they will be very carefully considered.
Lord Mottistone: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39B not moved.]
[Manuscript Amendment No. 39C not moved.]
Clause 7 [Power to license systems]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 40:
Page 8, line 24, after ("any") insert ("telecommunication").
The noble Lord said: My Lords, I beg to move Amendment No. 40 and perhaps it would be convenient to take also Amendment No. 40A:
Amendment No. 40A: Page 8, line 30, after ("any") insert ("telecommunication")
Both of these amendments are simply designed to ensure consistency throughout the Bill. Elsewhere in
610
the Bill references to a telecommunications system are spelt out in full to avoid any possible misunderstanding. But it has recently been spotted that in Clause 7(4)(a) and (b) the reference is only to "any system". These two amendments ensure consistency by inserting the word "telecommunication" in both places. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 40A:
[Printed above.]
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 41:
Page 8, line 32, at end insert—
("; and
() the use of the relevant intellectual property rights").
The noble Lord said: This is a probing amendment in relation to the powers to license systems and to ask whether the licence to be granted, particularly in relation to subsection (4) of Clause 7, will also include the granting of the use of the relevant intellectual property rights.
I am very glad to see the noble Lord. Lord Peyton, in his place, because I have been encouraged to put down this amendment in view of the observations of the Prime Minister in the introduction to a Green Paper which was issued in December last and entitled, Intellectual Property Rights: an Innovation. To paraphrase the words of the Prime Minister in her introduction to this important document, she refers to intellectual property rights as a subject often overlooked. It may be therefore that it would be helpful to draw attention to such rights if they exist in the grant of licences.
I fully appreciate that when we look at Clause 7, subsection (5) says:
"A licence granted under this section may include—
(a) such conditions as appear to the Secretary of State or the Director to be requisite or expedient having regard"—
and now come the words which I am not quite sure cover the point I have in mind—
"to the duties imposed on him by section 3 above".
I am really seeking assurance, no doubt from the noble and learned Lord who is glancing at me and nodding, I suppose, that he approves of my submissions; but we shall soon hear whether or not that is so. I want to know whether I can have an assurance from the Government that relevant intellectual property rights fall within the scope of the powers of the Secretary of State who, after consultation with the director, according to Clause 7(1)(a), can grant these licences. I beg to move.
Lord Mackay of Clashfern: My Lords, I do not think that the noble Lord, Lord Lloyd of Kilgerran, has shown precisely how his amendment would work in this connection, but perhaps I may just go to the substantive point that he makes. I think that his concern is that there should be power to deal with problems relating to intellectual property rights that might arise in connection with the operation of the licensing system.
So far as we understand the provisions and position, we intend, through the terms of British Telecom's and

611
other public telecommunication system operators' licences, to interpose the director between the licensee and users or competing suppliers by providing, first, that the licensee shall not require any connectable telecommunications system, apparatus or service to he run in a way that necessitates use of any product subject to industrial or intellectual property rights, or of any other industrial or intellectual property, unless this is available on terms which the director considers reasonable; otherwise there would be a real hamstringing of freedom in this context; and, secondly, that the licensee shall not require any connectable telecommunications system, apparatus or service to he approved or comply with any standard or test except where this has been approved by the Secretary of State or the director. In this way we intend to provide a flexible means of control over the intellectual property issues relating to telecommunications which we know to be of concern to users and manufacturers, without conflicting with the existing industrial property rights legislation. The detailed licence conditions obviously require to be discussed with the interests directly concerned, but I hope that this sufficiently explains our intention to assure the noble Lord and, of course, it would do so without conflicting with the existing regime, through the Comptroller of Patents and so on, for the regulation of intellectual property rights.
Lord Lloyd of Kilgerran: My Lords, before the noble and learned Lord sits down, in order to clarify my mind on what can be a very important subject for industrialists at any rate, when the noble and learned Lord says that "he intends", what does he have in mind? Is he proposing to put terms in the licences? Is that what he means by "intending" to do something?
Lord Mackay of Clashfern: My Lords, the intention is that, to have the effect which I described, the terms would go in the licences of British Telecom and other public telecommunications systems operators.
Lord Lloyd of Kilgerran: My Lords, I am very much obliged to the noble and leaned Lord for this cogent explanation. I am not completely satisfied. Nor do I quite understand the scope of his answer at this stage, and I reserve the right to raise the matter again if need he at a later stage of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.48 p.m.
Lord Glenarthur Lord Glenarthur moved Amendment No. 41A:
Page 8, line 34, after ("conditions") insert ("whether relating to the running of a telecommunication system to which the licence relates or otherwise)").
The noble Lord said: My Lords, this is purely a technical amendment and is designed to remove a possible ambiguity in the powers to include conditions in licences. Licences are granted for the running of telecommunications systems and may include conditions which are thought necessary, having regard to the duties imposed on the Secretary of State and the director under Clause 3. These duties relate to all commercial activities connected with telecommunciations systems.
It is clearly necessary for licences to include conditions about the supply of apparatus or the provision of services. It has, however, been argued that Clause 7(5)(a) permits the inclusion in licences of conditions which relate only to the actual running of the system concerned and matters directly connected, and would not permit the Secretary of State to impose conditions about the manner in which BT supplied apparatus. This amendment removes that doubt. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 42:
Page 8, line 40, leave out first ("amounts") and insert ("amount").
The noble Lord said: My Lords, this amendment simply corrects a typographical error. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 42A:
Page 9, line 8, at end insert—
("() A licence granted under this section shall include conditions to prevent—

(a) monopoly situations within the meaning given to that expression by section 5(3) of the 1973 Act;

(b) such practices as are mentioned in section 78(1) of the said Act;

(c) anti-competitive practices within the meaning given to that expression by section 2 of the 1980 Act.").

The noble Lord said: My Lords, this amendment is in parallel with the manuscript amendment of the noble Lord, Lord Spens, in that, with regard to competition, it seeks to strengthen both Clause 3(2)(b) and also Clause 49, neither of which seem to he firm enough, and require duties and action as opposed to just being. in their present form, somewhat advisory. The Fair Frading Act 1973 and the Competition Act 1980 were enacted, in part at any rate, to allow us to carry out EEC obligations under the European treaties with regard to the subjects concerned. From that your Lordships will be aware that where a licensee acts in a matter contrary to treaty regulations the Commission are empowered to call upon a member state to stop the action.
Indeed, the Commission are empowered to insist under Article 90 of the treaty that the member state takes statutory action. The object of this amendment is to provide the safeguard for the Government to ensure that this legislation is in accordance with the treaty at this stage of the game, because it could be that a licensee—and I am not specifying which one—might he found to have special powers that were outwith the Treaty of Rome. It is really to safeguard the Government more than any other purpose that I beg to move this amendment.
Lord Mackay of Clashfern: My Lords, I must say that so far I have not quite understood why it is thought that these provisions are required to be inserted in the Bill as proposed in this amendment in order to assist the Government to deal with the European Economic Community and its laws and requirements. I do not think I have much to add to what my noble friend Lord Glenarthur said in answer to Lord Spens' manuscript amendment, which appears to cover very much the same ground as this amendment. This situation is covered by the provisions of Clause 49, and the relationship between

613
Clause 49 and the rest of the Bill has been plainly explained.
It may be that there is more to this amendment than I have understood, in which case it is my fault that I have not understood my noble friend's explanation fully. It may be that we could explore that with more profit outside the Chamber.
Lord Mottistone: My Lords, I think that would be as well, because it is much too late to go into a long and complicated argument. Basically—and I think the noble Lord, Lord Spens, feels the same—it seems that Clause 49 is not strong enough in this area, whereas the Government think it is. Perhaps we can discuss it outside the Chamber, and if your Lordships agree I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glenarthur Lord Glenarthur moved Amendment No. 43:
Page 9, line 24, leave out from ("as") to ("appropriate") in line 25 and insert ("the Secretary of State or the Director considers").
The noble Lord said: My Lords, this is simply a tidying up amendment and replaces the word "grantor" in Clause 7(7) by the words "the Secretary of State or the Director". This follows an earlier change to Clause 7(5)(a), where the word "grantor" was also replaced by those words. The effect is to give flexibility to enable the director to publish a licence granted by the Secretary of State. This might be appropriate, for example, in the case of the branch systems licence, but no decision has been made about proceeding in this way. I beg to move.
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 44:
Page 9, line 43, at end insert—
("() A licence granted under this section shall apply to all parts of the telecommunication system so licensed that are used for conveying or switching the service.").
The noble Lord said: My Lords, I beg to move Amendment No. 44, and with the leave of the House I should like to speak to Amendment No. 45.
Amendment No. 45: Page 9, line 43, at end insert—
("() The rights conferred upon a telecommunication system provider operating under a licence granted by the Secretary of State under this section or under section 15(1) of the British Telecommunications Act 1981 shall not be infringed by the privileges conferred upon a public telecommunications system operator").
These are two probing amendments, and I must apologise to the House because this will take some little time. I had not anticipated that these amendments would not have been reached earlier. They relate to what are known as VAN licences. In seeking to liberalise and introduce an element of competition into telecommunications the Government have, in the 1981 Act, provided for the Secretary of State to grant licences to persons wishing to provide telecommunication systems for the provision of services as defined in that licence. Many of these licences have already been granted and it is, apparently, the intention to continue to grant such licences under this Telecommunications Bill.
In particular value added network licences are granted. These are known as VAN licences. By way of
614
explanation, it may be helpful if I say that a value added service is broadly one that uses telecommunications to convey and to switch the service, but adds an additional service to the pure act of carrying or switching. Examples are telephone answering, view data and protocol conversion services. There are many others that your Lordships may be aware of in industry and which can be cited in the generic term VAN licences.
An anomaly exists where the detailed licence granted to British Telecom, or other public system operators, may appear to give them the right to convey or switch services within the networks operating under a VAN licence. Therefore it can be seen that the VAN licence is a simple statement of authority to operate a telecommunications service. It does not go into technical detail in such a licence, for it would be quite inappropriate.
I was advised that a serious matter arises in certain cases. There are cases where a public telecommunications system operator seeks to exploit this situation by claiming that the VAN licence which he is being granted may only communicate the service he is offering over those parts of the telecommunications system that themselves generate or provide the service. Other parts of a licensee's telecommunications system, which a licensee requires to convey or to switch the service, are held to be excluded from the licence.
I apologise about the complexity of this matter so late in the evening, but I assure your Lordships that these are matters of considerable commercial interest. I am glad to see that the noble Lord, Lord Morris, who is always watching me very intently when I am speaking, is nodding his head in agreement with me. At least one Member of the House has not been put to sleep so far by my speech.
By claiming this the public system operator seeks to maintain a monopoly situation which the Bill intends to remove, though not totally because it will be limited by the new licensing arrangements. That is the crunch situation, that the public system operator will be seeking to obtain a monopoly situation which in fact it appears the Bill intends to remove.
The proposed amendments prevent the monopoly continuing. Without these amendments if would appear that the operators of services covered by these VAN licences will find their telecommunications systems impossible to operate economically because of the need to convey signals repeatedly in and out of public systems when a telecommunications operation is required and that is not specifically providing the value added service.
I am sure it is obvious to all noble Lords that the intentions of the Bill are to provide for the Secretary of State to license the whole telecommunications system over which the service is carried; but unless this is specifically stated, there will be those who will gain by opposing it. To allow them to do so will inhibit seriously the spread of information technology in this country by those who offer value added services to those who would benefit from them.
I am now coming to the conclusion of this matter. These two amendments would establish the right of the holder of a telecommunications system licence issued under Clause 7 to operate that system and sell

615
applicable services over the whole of his telecommunications system which conveys or switches the service. The amendment also seeks to include those licensees who are already licensed under Section 15(1) of the 1981 Act so that they do not have to reapply for licences in order to obtain the benefits conferred by Clause 7 of the new Bill. Again, I apologise for the length of my speech. I have been very good so far this evening. This is an important industrial matter for certain commercial users relating to VAN licences. I beg to move.
Lord Mackay of Clashfern: My Lords, the noble Lord has explained his amendment very clearly. If I am going to answer, I am afraid that I shall have to do so at some length. I should be happy if he would think it appropriate for me to write to him with the explanation; but, if he would prefer that I give it now, I am very willing to launch into it.
Lord Lloyd of Kilgerran: My Lords, I am in your Lordships' hands. I want to reduce the time taken on many irrelevant matters in this Bill, as your Lordships no doubt will have noticed by my attitude towards many things during the course of this Bill. If it will be more convenient for the noble and learned Lord to write to me, then I am willing to accede to that on one condition: that I get his letter fairly soon so that I can study it with my advisers on this matter.
Lord Mackay of Clashfern: I would hope to be able to give it to him almost immediately. The answer is that we believe that the points he makes are already covered in the provisions of the Bill and the amendments are unnecessary. But I will give him a slightly more elaborate answer than that in writing, if he will agree to that.
Lord Mottistone: My Lords, will my noble and learned friend send me a copy of the letter that he will write to the noble Lord, Lord Lloyd of Kilgerran?
Lord McIntosh of Haringey: My Lords, I was going to make the same request but I wonder whether we have a constitutional precedent here. Do we have a Minister reading something into the Congressional Record, now?
Lord Mackay of Clashfern: My Lords, I think not. I would not wish to set up such a precedent. I was giving my answer to both amendments. They are unnecessary. I shall elaborate that for those who wish it. If the noble Lord, Lord McIntosh of Haringey, wishes to join in this, by all means.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble and learned Lord. I hope that I have not tempted him to do something which is unconstitutional at this late hour in the morning. But, having regard to what he has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 45 not moved.]
The Deputy Speaker: My Lords, I should inform your Lordships that, if Amendment No. 46 is agreed to, I shall not be able to call Amendments Nos. 47 and 48.
Clause 8 [Special provisions applicable to certain licences]:
12.3 a.m.
Lord Morris Lord Morris moved Amendment No. 46:
Page 10, line 1, leave out subsections (1) and (2).
The noble Lord said: My Lords, I have no intention at all of shooting down Amendments Nos. 47 and 48. This amendment must be read with (and, indeed, I shall speak to) Amendment No. 49.
Amendment No. 49: Page 11, line 5, at end insert—
("4A) This section applies to any licence granted under section 7 above to a particular person which includes conditions requiring that person—

(a) to provide such telecommunication services as are specified in the licence or are of a description so specified;

(b) to connect to any telecommunication system to which the licence relates, or permit the connection to any such system, of such other telecommunication systems and such apparatus as are specified in the licence or are of a description so specified;

(c) to permit the provision by means of any telecommunication system to which the licence relates of such services as are specified in the licence or are of a description so specified;

(d) not to show undue preference to, or to exercise undue discrimination against, any person or persons of any class or description as respects any service provided, connection made or permission given in pursuance of such conditions as are mentioned in the foregoing paragraphs; and

(e) to publish, in such manner and at such times as are specified in the licence, a notice specifying, or specifying the method that is to he adopted for determining, the charges and other terms and conditions that are to be applicable to such services so provided, such connections so made and such permissions so given as are specified in the licence or are of a description so specified.

() It is immaterial for the purposes of subsection (4A) above whether the licence also includes conditions requiring the person to whom the licence is granted to refer for determination by the Director such questions arising under the conditions mentioned in paragraphs (a) to (e) of that subsection as are specified in the licence or are of a description so specified.").
The purpose of this amendment is very simple. It is purely a drafting amendment to Clause 8 and, as such, your Lordships will no doubt agree that it is an impertinence; because Clause 8 is designed in such a way that the very long subsections (1) and (2) of the clause comprise the application of the clause. Subsection (3) comprises its purpose. I believe that in the interests of clarity—and this Bill will not be read by lawyers alone—it is much easier to understand if one reads, first, the purpose of the clause and, second. the application of the clause. It is only in this spirit that I move this amendment. The mere fact that it has been designed in this way has meant that to date this clause has caused considerable confusion. No doubt the Government have achieved their purpose with regard to this clause, but now that we are at a later stage of the Bill it would help if the clause were to be properly designed.
I will accept the point that subsection (1) of Clause 8 contains certain substantive points. That is in the sense that there is an implication that these conditions will be contained in the major licences. However, it jars very strongly indeed in my heart that a clause

617
should be designed whereby you put the application of the clause before the actual purpose of the clause. In terms of pure drafting style, it does somewhat offend. I beg to move.
Lord McIntosh of Haringey: My Lords, I do not know whether it was the intention of the noble Lord, Lord Morris, but he has really let the cat out of the bag—has he not?—with this series of amendments. He has confirmed very precisely why Amendment No. 10 is inadequate and why No. 47, which is about to be moved, is inadequate. A number of your Lordships clearly failed to realise, unlike the noble Lord, Lord Morris, that the substance of Clause 8 is in subsection (3) and that the substance consists only in a requirement that the Secretary of State or the director shall give notice that he proposes to grant certain kinds of licences and the reasons why those certain kinds of licences are to be granted, and in providing for the possibility of objections to licences.
In other words, Clause 8 and its essence, subsection (3). are not what the noble Lord, Lord Cockfield, claimed to your Lordships when he moved Amendment No. 10 and when he took away the right of telephone subscribers living in rural areas. It is not the case that the amendments proposed to Clause 8(1)(d) provide any effective security for the rights of telephone subscribers living in rural areas. Unfortunately, it has taken the consistent and wise intervention of the noble Lord. Lord Morris, to make that clear more effectively than I was able to do on an earlier amendment.
Lord Mackay of Clashfern: My Lords, I think it must be the lateness of the hour, but I certainly do not see the cat. I think it is an invisible cat so far as most of us are concerned and exists only in the imagination of the noble Lord, Lord McIntosh of Haringey, because, of course, the purpose of Clause 8(1) is to define a particular type of licence, namely, one which includes certain conditions; and then it applies to that type of licence the procedural requirements of subsection (3). I must say that appears to me to be a very logical and reasonable way of doing it. I would not, myself, think that subsection (3) is more substantial or more purposive than (1).
Of course, the other point the noble Lord, Lord McIntosh of Haringey, has to take account of is that Clause 9 requires conditions such as are specified in Clause 8(1) to be in a licence before it can be a public telecommunications system licence. Therefore it is an essential qualification of a public system that it should have conditions in its licence of the type specified in Clause 8(1). So the basis on which my noble friend Lord Cockfield was proceeding when he spoke to Amendment No. 47 before is perfectly sound and satisfactory; and no doubt at the appropriate time and in the appropriate place—when Amendment No. 47 is again called—he will be able to make that even plainer.
Lord Morris: My Lords, if I had gone the whole hog, I think I should have tried to redesign the Bill in the sense that I think Clause 9 is actually in the wrong position. I am talking only about matters of pure style and nothing else. The implication that the noble Lord, Lord McIntosh of Haringey, read into this, of course,
618
has no relation whatsoever to my intention. I was merely suggesting that it would be easier and more clear for the people using this Bill to understand the provisions of Clause 8(1) if it was switched round the other way. However, in the light of the explanation given by my noble and learned friend, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Cockfield Lord Cockfield moved Amendment No. 47:
[Printed earlier: col. 520.]
The noble Lord said: My Lords, I spoke to this amendment when moving Amendment No. 10, which commended itself to your Lordships on a Division. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 48:
Page 10, line 30, leave out from ("whether") to second ("to") in line 31 and insert ("the person to whom the licence is granted is required").
The noble Lord said: My Lords, this is a technical amendment. Clause 8(1) sets out the sort of conditions which must be included in an operator's licence before that operator is eligible for designation as a public telecommunications operator. The purpose of subsection (2) is to give flexibility to the form these conditions may take, but not to their subject matter, which is governed by subsection (1).
This is because, in some circumstances, the Secretary of State may want to include conditions which, while following the principles and content laid down in subsection (1), in fact leave certain matters arising to be determined by the director in the light of prevailing circumstances. A licence condition which does this does not represent any lessening of the director's role in licence enforcement, but it does enable him to tailor his enforcement role more closely to what is actually happening.
The purpose of subsection (2) of Clause 8 is to enable conditions of this form to be included in respect of the matters listed in subsection (1). But it has recently come to light that subsection (2) is slightly defective and may not fully achieve its intended purpose. There would, therefore, be a risk of an operator becoming inadvertently ineligible for public telecommunications operator status, and this amendment is simply designed to put this right and to remove such a risk. I beg to move.
On Question, amendment agreed to.
[Amendment No. 49 not moved.]
Clause 9 [Public telecommunication systems]:
12.13 a.m.
Lord Cockfieldmoved Amendment No. 50:
Page 11, line 12, at end insert—
("(1A) An order under subsection (1) above shall not come into operation until after the end of the period of 28 days beginning with—

(a) the day on which copies of the order, and of the licence to which section 8 above applies, are laid before each House of Parliament; or

(b) if such copies are so laid on different days, the last of those days.").

The noble Lord said: My Lords, this amendment gives effect to an undertaking that I gave in Committee

619
to ensure that there would be effective parliamentary scrutiny of British Telecom's licence. I then said that it was important also to ensure that the arrangements made preserve the independence of the director general in carrying out his regulatory functions, and equally preserve the flexibility of the licence modification procedures. I proposed, therefore, that we should proceed by huilding on the procedures in Clause 9 under which a system, the running of which is authorised by a licence to which Clause 8 applies, can be designated as a public telecommunications system and the licensee as a public telecommunications operator.
We have done this by providing that any order made by the Secretary of State under Clause 9, for the purposes of designating as a public telecommunications operator an operator authorised to run his system by a licence to which Clause 8 applies, must be laid before Parliament for at least 28 days before it can come into effect. This means that the privileges and powers that follow from public telecommunications operator status will not be available to British Telecom until the order takes effect at the end of this 28-day period. The amendment also provides that the order cannot come into effect until at least 28 days after the licence to which the order relates has been laid before Parliament.
Our aim is to lay the British Telecom licence and the order together, but if for any reason it proves necessary to lay the order and the licence separately, then this amendment ensures that the 28-day period runs from after the last to be laid. This amendment therefore provides an effective way for Parliament to scrutinise the British Telecom licence. All orders subject to the negative resolution procedure can be debated, if it is sought to annul the order. This amendment ensures that your Lordships will have an opportunity to look at and study the licence before it comes into force.
If the licence is thought to be unsatisfactory in the form that it is laid, it will then be possible to pray against the order. In that eventuality, the Government will grant an opportunity for a debate on the order which will, in effect, be a debate on the licence. I very much hope we will he able to produce a licence for British Telecom which will generally be regarded as satisfactory; but if for any reason this did not prove to be the case, Parliament could defeat the order. In that event, we would then have to come back to the House with a new order and a new licence meeting the objections which had been raised.
I should now like to say a few words about the timing of the laying of the order. There are two time periods which will start from the day the order is laid and run concurrently. The first is the 28-day period in this amendment before which the order cannot come into effect. The second is the normal 40-day period in which orders subject to negative resolution can be prayed against and annulled.
It may well be asked why we have not provided that both periods should be the same. I quite appreciate this point, and it is a matter to which we did give specific consideration. We do not favour 40 days for both periods because we wish to avoid undue delay not only with British Telecom's licence but also with the various other licences to which Clauses 8 and 9 will
620
apply. We think it desirable that the licensing arrangements and other measures to put British Telecom on an equal footing with its competitors should be brought in as soon as possible.
In providing a 28-day period, we believe we are providing a reasonable and sensible period of consideration before the order takes effect. But I can give your Lordships a firm assurance that we will lay British Telecom's licence and the order designating British Telecom as a public telecommunications operator while Parliament is sitting and that the 28-day period will also run while Parliament is sitting. It would be our intention that if noble Lords were to indicate that they wished to debate the order and the licence, such a debate would, business of the House permitting, also take place during the 28 days. I beg to move.
Lord Mottistone: My Lords, this amendment has been moved in response to an amendment moved by me in Committee, and I should like to thank my noble friend very much both for the amendment and for the careful explanation that he has given of how it meets the requirements we then sought. May I also say that POUNC support the amendment, as do many others.
On Question, amendment agreed to.
Clause 10 [The Telecommunications code]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 51:
[Printed earlier: col. 600.]
The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 52:
Page 12, line 5, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, I beg to move Amendment No. 52 which stands in my name and those of my noble friends. No doubt many noble Lords will have received correspondence from the Association of County Councils and other local authority associations which makes it clear that they are concerned that in drafting Clause 10 of the Bill which, together with Schedule 2, creates the telecommunications code, the Government have included only a permissive power rather than a duty for the Secretary of State to take into account environmental, highways and financial matters in imposing conditions on licensed operators.
The objective of the amendment is to convert "may" into "shall". We had a debate in Committee as to what "may" and "shall" mean. These matters, referred to in paragraphs (a), (b) and (c) of subsection (4) on page 12, involve questions relating to the physical environment, to damage to streets and highways and interference with traffic on streets and highways and also to the financial status of firms which carry out work on the environment and on the highways and byways of our land. I think it would be as well, and certainly helpful, before I proceed any further—I do not want to take up the time of the House at this hour of the morning—if we could perhaps have an explanation as to whether "may" in this context actually means "shall". I beg to move.
Lord Glenarthur: My Lords, I shall not go into a lengthy explanation but will merely accept the amendment.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 53:
[Printed earlier: col. 600.]
The noble Lord said: This amendment has also been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 54 to 59:
[Printed earlier: col. 600.]
The noble Lord said: These amendments have already been spoken to. I beg to move them en bloc.
On Question, amendments agreed to.
Clause 12 [Modification of licence conditions by agreement]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 60:
Page 15, line 24, after ("modifications") insert ("of conditions").
The noble and learned Lord said: My Lords, this is a minor drafting amendment. I beg to move.
On Question, amendment agreed to.
Clause 14 [Reports on licence modification references]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 61:
Page 18, line 29, at end insert ("for bringing the report to the attention of persons likely to be affected by it").
The noble and learned Lord said: This amendment fulfils an undertaking I gave to my noble friend Lord Morris, who tabled a similar amendment during the Committee stage. I beg to move.
On Question, amendment agreed to.
Clause 15 [Modification of licence conditions following report]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 62:
Page 19, line 28, leave out ("2") and insert ("3").
The noble and learned Lord said: My Lords, this is a minor drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Denham: My Lords, I think we have now reached the stage when it is generally agreed that we should adjourn for the evening. In moving that consideration on Report be adjourned, I should like to thank your Lordships for the forbearance shown in carrying us through to this stage tonight. I beg to move.
Moved accordingly, and, on Question, Motion agreed to.

Metals Society Bill [H.L.]
The Examiner's Certificate that the further Standing Order had been complied with was ordered to lie on the Table and the Bill was committed to an Unopposed Bill Committee.

Education (Amendment) (Scotland) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-four minutes past midnight.