HL Deb 20 March 1984 vol 449 cc1191-216

Consideration of amendments on Report resumed.

[Amendments Nos. 128BS to 128BV not moved.]

Lord Glenarthur moved Amendment No. 128BW:

[Printed earlier: col. 1172.]

The noble Lord said: My Lords, perhaps I may speak to Amendments Nos. 128BW, 128BX and 128BY together.

[Printed earlier: col. 1172.]

These three amendments are consequential upon an earlier amendment and I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 128BX.

The noble Lord said: My Lords, this amendment is consequential with Amendment No. 128BY. I beg to move these two amendments en bloc.

On Question, amendments agreed to.

Lord Lyell moved Amendment No. 128BZ:

Page 101, line 22, at end insert— ("(5A) For the purposes of proceedings under this paragraph in a county court in England and Wales or Northern Ireland, section 63(1) of the County Courts Act 1984 and Article 33(1) of the County Courts (Northern Ireland) Order 1980 (assessors) shall have effect as if the words "on the application of any party" were omitted; and where an assessor is summoned, or, in Northern Ireland, appointed by virtue of this sub-paragraph—

  1. (a) he may, if so directed by the judge, inspect the land to which the proceedings relate without the judge and report on the land to the judge in writing; and
  2. (b) the judge may take the report into account in determining whether to make an order under this paragraph and what order to make.
In relation to any time before 1st August 1984, the reference in this sub-paragraph to section 63(1) of the County Courts Act 1984 shall have effect as a reference to section 91(1) of the County Courts Act 1959.").

The noble Lord said: My Lords, at Committee stage of this Bill on 20th February my noble friend Lord Kinnoull tabled Amendment No. 85LB. That amendment sought to provide that persons whose agreement is dispensed with by the court under paragraph 5 of the Telecommunications Code would have the option of requiring that the financial terms of the court order should be determined by the Lands Tribunal.

When I was replying to that amendment, I suggested that the essence of my noble friend's argument was that if difficult cases were to arise in this particular area it might be desirable to call upon expertise in the valuation field. I acknowledged then that there was some force in that argument. I went on to add that, having considered the matter, the Government had concluded that it would be appropriate for the court to have access to relevant expertise in the valuation field so as to assist the court in coming to a conclusion on the terms that would have to be included in the order. I gave my noble friend Lord Kinnoull an undertaking that we would come forward with the necessary amendment at Report stage to ensure that a county court judge would be able to summon an expert assessor and authorise him to inspect the relevant land and to report back to the court as to the terms that should be included in any order.

I went on to point out that we considered that that particular action would be a significant improvement in the jurisdiction under the code as it stands at present; moreover, an improvement which would not involve any of the procedural inefficiency associated with a reference in any particular case to the Lands Tribunal.

This amendment represents the Government's reply in response to the undertaking I gave. The only point I would add by way of explanation—which I am sure will make my noble and learned friend happy—is that no amendment is needed to Scottish enactments because in our country (in Scotland) the Sheriff Court already has a complete discretion to determine its own procedure in this kind of matter. I hope that I have been able to set at rest any doubts which my noble friend Lord Kinnoull may have had. I beg to move.

On Question, amendment agreed to.

[Amendment No. 128BZA not moved.]

Lord Glenarthur moved Amendment No. 128BZB:

[Printed earlier: col. 1172.]

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 128BZC to 128BZG:

[Printed earlier: cols. 1171 and 1172.]

The noble Lord said: My Lords, Amendments Nos. 128 BZC to 128BZG are consequential. I beg to move these amendments en bloc.

On Question, amendments agreed to.

Lord Glenarthur moved Amendments No. 128BZH and 128BZJ: Page 102, line 2, leave out ("agreement") and insert ("order"). Page 102, line 9, leave out ("agreement") and insert ("order").

The noble Lord said: My Lords, this amendment is a drafting amendment together with Amendment No. 128 BZJ. These amendments have been referred to earlier. I beg to move them en bloc.

On Question, amendments agreed to.

[Amendment No. 128BZK not moved.]

Lord Lyell moved Amendment No. 128BZL:

Page 102, leave out lines 13 and 14 and insert— ("(A) In determining what terms should be specified in an order under paragraph 5 above requiring an amount to be paid to any person in respect of—

  1. (a) the provisions of that order conferring any right or providing for any right to bind any person or any interest in land, or
  2. (b) the exercise of any right to which the order relates, the court shall take into account the prejudicial effect (if any) of the order or, as the case may be, of the exercise of the right on that person's enjoyment of, or on any interest of his in, land other than the land in relation to which the right is conferred.
(2) In determining what terms should be specified in an order under paragraph 5 above requiring an amount to be paid").

The noble Lord said: My Lords, this amendment is designed to clarify what is already implicit in paragraph 6 of the code and involves no change in policy. Your Lordships will see that paragraph 6 deals with the terms as to compensation which the court includes in the order when it is dispensing with an agreement needed by a telecommunications operator in order to install apparatus on private land. The need for the amendment arises because it has been suggested to us that the mere existence of paragraph 16 of the code casts doubt on the ability of the court to make provision in an order for compensation in relation to any prejudice—I think that is the legal term—caused by the installation of apparatus to a landowner's interest in neighbouring land as well as the land on which the apparatus is actually installed.

It never was our intention that paragraph 16 of the code, which is a general provision requiring operators to pay compensation for what is fascinatingly called injurious affection to neighbouring land, should have this particular effect. The amendment makes clear that there is no constraint on the court in this particular regard. I should like to stress that in moving this amendment I want to indicate to your Lordships that in considering the various questions asked by the noble Lord, Lord Grimond, at an earlier stage we now recognise the necessity for further amendment in relation to the compensation provisions of the code.

The difficulty that is presented to us arises in the context of paragraph 11. I am afraid we have not been able to frame the necessary provision in time for today's proceedings, and we shall be obliged therefore to bring it forward at the next stage of the Bill. With that, I beg to move.

On Question, amendment agreed to

[Amendment No. 128BZM not moved.]

Lord Glenarthur moved Amendment No. 128BZN: Page 102, line 47, leave out ("an") and insert ("any person or any").

The noble Lord said: This is a consequential amendment. I beg to move.

On Question, amendment agreed to.

The Deputy Speaker (Lord Aylestone)

My Lords, in calling Amendment No. 128BZP I have to tell the House that if this amendment is agreed it will not be possible for me to move either of the following two amendments.

Lord Glenarthur moved Amendment No. 128BZP:

[Printed earlier: col. 1155.]

The noble Lord said: Before I formally move this amendment perhaps I could elaborate a little on what I said in relation to my earlier remarks in connection with the primary amendment, so to speak, on Schedule 2, to which we referred a little earlier. I spoke in relation to the comment of the noble Lord, Lord McIntosh of Haringey, about the National Trust. What I said then was that the second half of the amendment was addressed to that particular concern. I should like to confirm that we have discussed with officials of the National Trust the effect of the amendments that we are moving. I am advised that they are content on the basis of assurances given about certain matters to be dealt with by way of licence conditions that Schedule 2 as modified by our amendments will be adequate to meet their concerns. I hope also that they will be adequate to meet the concerns of the noble Lord, Lord McIntosh of Haringey. I beg to move.

Lord McIntosh of Haringey

My Lords, I do not know whether I should declare an interest as a life member of the National Trust for Scotland. In any case I express my gratitude to the noble Lord, Lord Glenarthur, for the assurances that he has given. I take it that, if the National Trust for England and Wales is satisfied, the other bodies to which we have referred—in particular local authorities because those are by far the most numerous bodies referred to in my amendment—will also be satisfied with the assurances.

On Question, amendment agreed to.

The Deputy Speaker

I cannot call either of the next two amendments on the Marshalled List. The next amendment is Amendment No. 128CA.

[Amendments Nos. 128BZQ and 128C not moved.]

Lord Glenarthur moved Amendment No. 128CA: Page 104, line 10, after ("apparatus") insert (",or keep telecommunication apparatus installed.").

The noble Lord said: My Lords, this is a drafting amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 128D not moved.]

[Amendment No. 128E had been withdrawn from the Marshalled List.]

8.55 p.m.

Lord McIntosh of Haringey moved Amendment No. 128EA: Page 104, line 35, leave out paragraph 10.

The noble Lord said: My Lords, I introduce this amendment with the intention of seeking suitable assurances from the Government which, from their previous statements, I believe may be given. The question of flown lines is of course one of very great importance for the environment. As the paragraph stands, it appears to allow lines to be flown over property provided that does not affect access or the business of the premises. There is also wording about whether the lines are three metres above ground or within two metres of a building and are not connected to a bracket or pole.

I understand that BT's practice—I may say a somewhat undesirable practice and sometimes very undesirable—is to have what it calls a maypole of telephone wires going from a single telegraph pole. Clearly this is by no means as satisfactory as what the noble Lord calls "undergrounding"; but it is important that there should be the maximum discouragement for this kind of flown line and the maximum encouragement for BT and any other operator to reach a suitable agreement for placing the lines underground. I ask the noble Lord to give assurances that the licence does make it possible for the operator to be leant on in that way.

Lord Glenarthur

My Lords, perhaps I should start by saying that when I first met this Bill in its very early form I was a practising pilot and was probably the last person to understand how a line could possibly fly. However, perhaps I may explain that the code itself does give operators the right to fly lines—that is, to hang wires from a post or other fixing on one piece of land so that they pass, or fly, over other land without the consent of the person owning or occupying the second piece of land above which the lines pass.

The need to fly lines in this way arises in two principal circumstances: when a line is strung between poles along a road, such a line passes over adjoining land where the road bends, and where a line is strung between a pole in the street and a subscriber's house, for example, the line may pass over the corner of a neighbour's garden. This is similar to the power which British Telecom has always had under the powers of the Telegraph Act to fly wires. Its continuation is essential in two important respects. One is concerned with environmental protection and the other the cost of providing telecommunication services.

From an environmental point of view, the ability to fly lines in the circumstances I have described greatly reduces the number of poles that may be required to suspend a particular line. That is obviously desirable on environmental grounds alone, since in an ordinary residential street a single pole may provide a service by means of flying wires to a dozen or more subscribers—the maypole effect to which the noble Lord referred. The absence of such a power would also seriously delay the provision of services if in every case where a wire has to fly over the corner of neighbouring land the consent procedures have to be followed. A further very serious consequence of removing the power would be to increase significantly the cost of installing apparatus, particularly in rural areas.

I hope, therefore, that the noble Lord will not wish to press his amendment. There certainly are specific safeguards to ensure that the power is not used in such a way as to damage the interests of individuals. The headpiece of paragraph 10 provides that the owners and occupiers of land must give their consent in any case where the flying of a wire appears likely to obstruct access to their land. Apart from that specific requirement, occupiers and owners are protected in the following ways. Most importantly, they can object to the installation under paragraph 17 of the code. Secondly, the wires must be placed at a height of at least three metres and must not obstruct any business carried out on the land. Thirdly, the operator is required to alter or remove them if the occupier or owner wants to develop his land. But beyond those specific protections, paragraph 10, just as any of the other powers contained in Schedule 2, can be used by an operator only if his licence authorises him to do so. Whenever a licence applying code powers is granted, the Secretary of State will consider whether it is appropriate for the particular operator to have the particular powers in the code and, if so, whether their exercise should be qualified by particular conditions. I hope, therefore, that the noble Lord will be able to withdraw his amendment.

Lord Morris

My Lords, if the amendment were passed, another deleterious effect would be that it would undoubtedly upset the bird population considerably.

Lord McIntosh of Haringey

My Lords, I fear that I shall have to rely on the last sentence of what the noble Lord. Lord Glenarthur, said and his statement that the Secretary of State may under suitable circumstances—clearly only if there are major abuses taking place; I quite understand that point—intervene to ensure that licences and the practices of operators take account of this quite serious environmental point, even though it may cause amusement to the noble Lord, Lord Morris. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 128F not moved.]

9.2 p.m.

Lord Glenarthur moved Amendment No. 128FA:

[Printed earlier: col. 1172.]

Page 111, line 4, leave out ("paragraph 2(3)") and insert ("paragraph 2(1A)(b) or (d)").

The noble Lord said: My Lords, this is a consequential amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 128FB not moved.]

Lord McIntosh of Haringey moved Amendment No. 128G: Page 111, line 34, after ("completed") insert ("altered").

The noble Lord said: My Lords, with the leave of the House, I should also like to speak to Amendments Nos. 128H, 128J and 128K. Amendment No. 128H: Page 111, line 36, leave out ("at a height of 3 metres or more"). Amendment No. 128J: Page 111, line 39, after ("completion") insert ("or alteration"). Amendment No. 128K: Page 11 I, line 40, after ("in") insert ("or has a legal right of access to").

There is a significant point about Amendment No. 128G. This is simply that the paragraph as at present worded provides for objections after the completion of installations, whereas, as we all know, in practice protection is required when existing apparatus is altered, particularly by being replaced with something which is larger, more obvious or designed differently from the original. Although I appreciate that the Government have these concerns generally in mind, I seek some assurance that it is their intention to see that the legislation also covers this sort of alteration. I beg to move.

Lord Lyell

My Lords, I can assure your Lordships that it is the Government's intention to allow the objection procedures provided for in paragraph 17 to be available not only when apparatus is first installed but also when it is significantly altered. I hope that that takes care of what the noble Lord spoke of earlier when he mentioned the maypole. I must say that it is something which I have not yet seen, but we shall doubtless look forward to it at a later stage in the year. We believe that the existing draft of the paragraph already achieves the noble Lord's objective.

Your Lordships will have observed that the paragraph is stated (by sub-paragraph (1)) to apply, where the operator has completed the installation … of any telecommunication apparatus". This does not merely refer to the first occasion on which any apparatus is placed on a piece of land; it refers just as much to every other subsequent occasion when any apparatus is installed or placed on a piece of land.

It is true that paragraph 17(3) provides that the objection procedure will not be available when any apparatus merely replaces existing apparatus which is not significantly different or which is not in a significantly different position. I believe that your Lordships would not wish the procedure to have to be gone through again simply because a telegraph pole at the end of its useful life has been replaced by another pole a few feet away. It is almost impossible to put the new pole in exactly the same spot. It may be a matter of only one foot, as we would have it, although my noble friend Lord Orr-Ewing, may take us to task on this-33 centimetres or thereabouts. Technically it is difficult to fit a new pole in exactly the same spot. However, if there is a significant change in the apparatus or its positioning, the exemption in subparagraph (3) will not be available to the operator and the installation of the new piece of apparatus will open up the possibility of objection under paragraph 17.

I hope that that somewhat convoluted argument will have been the cause of at least some amusement if it is not to the entire satisfaction of the noble Lord.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord. I think that that explanation meets the point with which I was concerned—a larger or more offensive installation. If it is true that completion of an installation covers that point, I am happy to seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 128H, 128J, 128K, 128L, 128M, 128N, 128P, 128Q and 128R not moved.]

9.8 p.m.

Lord Stoddart of Swindon moved Amendment No. 129:

Page 114, line 19, at end insert— ("() The operator shall pay such reasonable costs of the lopping as may be incurred by the occupier of the land in question.")

The noble Lord said: My Lords, I beg to move Amendment No. 129 standing in my own name and the names of my noble friends Lord Bruce of Donington, Lord McIntosh and the noble Lord, Lord Lloyd of Kilgerran. It will be obvious to the House what I am seeking to do because it appears to me that unless this amendment is passed there will be an injustice and indeed an anomaly. When telephone installations, telephone wires and what have you are place along a road it may very well be that when they are constructing, there is no obstruction by trees at all, but, during the course of a number of years, then of course trees grow and obstruction may occur. That is perfectly reasonable and understandable. Basically, it is not the fault of the occupier of the land, whether he be a householder or any other sort of occupier, that the trees go on growing. Of course it is perfectly reasonable that they should be required to lop them, preferably with consent.

But it can be a very expensive business to lop trees, and even in one's own garden there may very well be a large tree that is obstructing a telephone wire. It might require expert assistance to lop that tree in a proper fashion, certainly without damage to the property and without damage to the telephone lines. In the case of some trees, the expense could run into perhaps some hundreds of pounds in rare exceptions. I think it will be clear to your Lordships that this could cause great hardship to many people. Ordinary householders on normal wages—certainly pensioners—would be caught unless the amendment, either as I have written it or perhaps altered by the Government at a later stage, is carried.

There seems to be an anomaly too, because if noble Lords will examine the paragraph closely, they will see that an operator may serve a notice on an occupier of land, requiring him to lop the trees. As the paragraph stands, if the occupier does the lopping, he will do it at his own expense. If he does not resist the notice and he does not lop the trees, then the operator may go in and lop the trees, which he will do at his own expense. If the occupier resists the notice and the matter is decided by the court in the favour of the operator—in other words that the trees are to be lopped—the court can also design that payment shall be made by the operator for the cost of lopping the tree and also the payment of any compensation for damage done by the tree lopping.

It may very well be that I am misreading the paragraph. I do not think I am, but I hope that I have been able to persuade the House that there is an anomaly here and injustice could be caused. I therefore hope that the Government will either be prepared to accept the amendment, explain to me that I am wrong, or, if I am not wrong and the amendment is not in good order, then I hope that they will come forward with their own amendment to put this anomaly and injustice right at Third Reading. I beg to move.

Lord Lyell

My Lords, the noble Lord, Lord Stoddart, moved his amendment with customary grace. I think he will agree that certainly I am not a lawyer. I do not know that he is. I think I quote him correctly, and I suspect he was reading from subparagraph (1) of paragraph 19. He will see—and perhaps your Lordships may see—that after we have disposed of sub-paragraph (1)(a) and (b), we can see that the paragraph reads: The operator may by notice", et cetera, require the tree to be lopped". I think that differs in a slight degree from what the noble Lord was suggesting, which was that the poor occupier should have to risk life and limb doing it himself. But I hope that in the course of my remarks I may put the noble Lord's mind at rest, and indeed any possible risk to occupiers who would interpret sub-paragraph (1) of paragraph 19 in meaning that they, the occupier, would have to carry out the lopping of the tree. I think that the paragraph is quite specific. It requires the tree to be lopped, so as to prevent the obstruction or interference". I assure the noble Lord. Lord Stoddart, and your Lordships that there is no difference at all in policy between the Government and the noble Lord. I stress that our intention is that if a telecommunications operator, for any reason, wants to have a tree lopped, he should pay the occupier any costs that he incurs in the lopping. I stress to the House that that is what Paragraph 19 achieves, though the draftsman has not expressed it in the terms of this amendment, for reasons which I shall venture to explain.

Your Lordships will see that Paragraph 19, which is so artistically headed, "Tree lopping", provides that if an operator seeks to have a tree lopped, he must serve a notice on the occupier of the relevant land. The occupier is not compelled to agree, for obvious reasons; to give operators of telecommunications systems an untramelled right to lop trees would be quite unacceptable. Thus, if there is an objection by the occupier, the only way in which the operator can pursue his objective is if he is able to secure an order from the court. I think that the noble Lord, Lord Stoddart, would agree that that is a vital safeguard, and it determines the entire structure of the paragraph.

If we look at the foot of page 114 of the Bill, we see sub-paragraph (5). This makes clear that on application by the occupier, the court will order the operator to pay him (that is the occupier) such expenses as it thinks fit; in other words, the reasonable costs referred to in the amendment of the noble Lord, Lord Stoddart. It may be thought that that appears to be unsatisfactory because it obliges the occupier to apply to the court to recover his expenses. I stress to the noble Lord, Lord Stoddart, that that is not so because in practice what will happen is that the occupier will say to an operator of a telecommunications system who for some reason wants to have a tree lopped, that he will agree only if the operator agrees to pay the costs.

If the operator is serious in his intention, he will comply with that reasonable request because he will know that if he does not comply, the occupier can object by serving a counter-notice, and that he (the operator) will then be faced with the expense and inconvenience of having to obtain a court order so as to be able to proceed with perfectly reasonable tree lopping to prevent undue obstruction or damage to the telecommunications system. Even if the operator were so obtuse or foolish as to proceed in that way, the court itself would have regard to the tailpiece of subparagraph (5) in making an order. I would argue that the amendment is unnecessary in order to achieve the effect that is so eloquently argued by the noble Lord, Lord Stoddart.

I should like to refer briefly to the drafting. We think that the amendment would have undesirable results because it appears to sever the connection between the costs of the lopping and the compensation for any loss or damage suffered as a result of the lopping of the tree. For instance, in the case of a rather exotic species there may be some damage to the tree. In our view both the costs of the lopping and the compensation for any loss or damage are important and it is right that the occupier should be compensated in both respects. I hope that the noble Lord, Lord Stoddart, will agree that that is certainly the aim of sub-paragraph (5), and we believe that that is what it achieves. I hope, too, that in the light of that explanation the noble Lord, Lord Stoddart, will feel that his fears are unfounded in regard to the lopping of trees which may be growing in someone's garden.

Lord Stoddart of Swindon

My Lords, I thank the noble Lord for that explanation, which I think makes the position clearer. It certainly makes clear that occupiers are in fact on an equal footing and that they can recover the costs or that the work will be done by the operator himself. I think that the noble Lord has satisfied me completely on that point. There is only one aspect which worries me. Let us consider an old person who suddenly has served on her a notice from an operator. The notice might say nothing about the operator being liable for the costs. Therefore, the old person may be extremely worried and concerned when she receives a notice from what she thinks is a statutory undertaking, saying "Your trees are damaging our lines; you must have then lopped". Being a good citizen, she will not want to hurt anybody and so off she goes and gets somebody to lop the trees. That will be the end of the matter; but of course she will be put to expense because she does not know the law. She will not have read Schedule 2 paragraph 19 of the Telecommunications Act 1984.

If there was some way in which we could get over the problem, I would be very much happier. Clearly my amendment will not achieve the purpose which I sought and I will certainly withdraw it. But if the Government can think of any way to get over the problem which I have just outlined, I would be extremely obliged and so, I am sure, would almost all occupiers of land.

9.20 p.m.

Lord Donaldson of Kingsbridge

My Lords, what is the difficulty in adding to paragraph 19 where it says: the operator may by notice to the occupier of the land on which the tree is growing require the tree to be lopped so as to prevent the obstruction or interference". the following words: and will be liable for any expenses"? What is the problem? Why not add those words?

Lord Lyell

My Lords, with the leave of your Lordships' House, perhaps I can try and explain the position to the noble Lord, Lord Stoddart. I understand that any licence conditions for a telecommunications system will ensure that the occupier's right to serve a counter notice—or indeed any of the other rights available to the occupier—will be fully explained in any notice served by an operator. So if an old person who was not too well acquainted with official forms were to receive a notice from an operator, we would hope that the licence conditions would ensure that the rights of the occupier were clearly and fairly simply stated.

I hope that my explanation on the query raised by the noble Lord, Lord Stoddart, also satisfies the query raised by the noble Lord, Lord Donaldson. I hope that the explanation that I have been able to give has persuaded your Lordships that any expenses incurred in the lopping of trees would be met by the operator at no cost to the occupier.

Lord Stoddart of Swindon

My Lords, before the noble Lord sits down, I wonder whether he would go a little further in relation to the licence? He said that he hoped that the licence would cover this situation. Can he go a little further and say that the licence will cover it—not that he hopes it will cover it, but that it actually will do so?

Lord Lyell

My Lords, by leave of the House—and I would not want to stretch the rules of your Lordships' House further—my instructions are that licence conditions will ensure the occupier's rights; I understand that there are nodding movements to my left.

Lord Stoddart of Swindon

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Glenarthur moved Amendment No. 129ZA:

[Printed earlier: col. 1172.]

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 129A:

Page 118, line 6, at end insert—

("Denial of access to a telecommunication system

—(1) Sub-paragraph (2) of this paragraph shall apply where the court must have regard to the principle that no person should unreasonably be denied access to a telecommunication system under paragraphs 5(3), 8, 13(4), 14(4), 17(8) and 20(4) above.

(2) It shall not be unreasonable to deny access to a telecommunication system where the access can be given only by causing undue damage to the physical environment and the access is not essential for the safety or reasonable welfare of the persons requiring it.").

The noble Lord said: My Lords, this is a very difficult subject and I appreciate that one is always at risk in seeking to change one word for another word meaning almost the same thing. As your Lordships will know, I have been critical of other noble Lords who have been playing that game with words at earlier stages of the Bill. But the case here does justify such an attempt because we do have six references in the telecommunications code to the conditions under which: no person should unreasonably be denied access to a telecommunications system". Nobody wants to deny access to a telecommunication system unreasonably, but there must be some sort of a balance somewhere, and the attempt that we make here in the second part of this amendment is to say that a balance must be struck between, causing undue damage to the physical environment and the access", when it is not essential, for the safety or reasonable welfare of the persons requiring it". The wording may not be acceptable; it may not be wording that lawyers or draftsmen would like. But I think that noble Lords will understand what it is we are trying to do.

We are trying to recognise that unreasonable denial of access to a telecommunication system is not absolute, that damage to the physical environment is not negligible, and that some way must be found of giving some emphasis—some weight—to the physical environment in these difficult considerations. In that sense, the amendment is a probing amendment hoping that the Government will find some way of assuring us that a reasonable balance is possible. I beg to move.

Lord Glenarthur

My Lords, we considered amendments at an earlier stage which referred to the concept of undue damage to the physical environment. I made the point then that it was very difficult to provide a meaningful description of what "undue physical damage" constitutes. I think that the noble Lord has probably recognised the validity of the criticism which was levelled then, for this amendment apparently qualifies the concept by reference to "safety or reasonable welfare". However, these refinements make matters worse rather than better. I do not have too much difficulty with the concept of safety, but "reasonable welfare" is a matter on which views might differ considerably.

Perhaps I may illustrate the latter point. Ten years ago, or perhaps even five years ago, I think that we might all have agreed that reasonable welfare in this context could relate only to the technology of the telephone. And I suspect that that is what the amendment is really trying to say: reasonable welfare requires reasonable access to a telephone. But recent developments and the Government's policy are designed to encourage the growth of a wide range of other services which will be provided via the telecommunication system. This, for example, is what lies behind our promotion of broad-band cable systems: the hope and expectation that people will be able to benefit not just from a wider range of entertainment, but also from the development of interactive services.

That is an important consideration, but there is a more profound objection on our part to introducing a test of this kind into the telecommunications code. The background to that objection has been explained in our responses to the other related amendments which have been moved by the noble Lords opposite. Perhaps it would be helpful if I summarised it. What it amounts to is that we have developed proposals which are designed to fit into the existing statutory framework for the protection of the environment through the planning legislation, supplementing that with provisions in the Bill explicitly designed to secure that the environment is fully protected. We have devoted a great deal of effort to ensuring that the arrangements we have proposed will work in the context of a revision of the general development order proposals for which have recently been published. Licence conditions will be framed against the background of the GDO in its final form after the various representations have been considered, and they will be framed only after full public consultation in each case.

This and related amendments can only have one of two objectives: either to tear up this approach and start again, or to superimpose on to that approach a quite separate set of requirements designed to achieve the same results. I assume that the noble Lord opposite does not have the first objective in mind since presumably he would have come forward with rather more numerous amendments both to the Bill and the code. But even if that was his objective, I have to advise your Lordships to resist it for two reasons.

First, environmental protection is a matter of too much importance to be the subject of such a radical change of approach at this late stage in the Bill. I do not say that the approach suggested by the noble Lord could not be made to work in any circumstances, but I do say that it would require a far greater restructuring of the telecommunications code than he appears to contemplate, and that is something we could not possibly undertake with any certainty of success at this stage of the Bill's progress. However, even if these suggestions had been put forward at a much earlier stage, the Government would, I think, have sought to argue against them for a second reason. This is that, while statutory provisions in the code may be thought to guarantee that the environment will be protected, in practice that guarantee could only be achieved by introducing very severe restrictions which would stifle telecommunications development. It would be necessary to do that from the outset in order to take account of the difficulty of finding parliamentary time to modify the relevant statute in the event that experience showed it to be too lax. It is that ability to respond flexibly to our experience of these matters in the new era of telecommunications which is such a powerful justification for the approach we have been advocating.

I think we all share a common objective. My basic point is that we should bend our efforts to ensuring that the structure already in the Bill is perfected. I hope that our amendments in this area, our ready acceptance of the amendment proposed by the noble Lord, Lord Stoddart, on the first day of the Report stage to place a statutory duty on the Secretary of State to frame licence conditions designed to protect the environment, and our willingness to consider further amendments in the light of the debate yesterday on Clause 19 are ample demonstration of our goodwill. I hope that the noble Lord will not press his amendment.

Lord McIntosh of Haringey

My Lords, I am deeply unimpressed and unconvinced by the detailed arguments of the noble Lord, although I have no doubt about his goodwill. We have proposed both in Committee and Report a number of detailed amendments designed to strengthen the telecommunications code. A number of these have been withdrawn, or not moved, on the basis of assurances that have been given. We are grateful for those assurances and believe that the situation is not as bad as it was before. But the noble Lord has not answered—except to say that it is too late to move this kind of amendment—the major point that I was trying to make.

There is a strong imbalance between the heavy restrictions on unreasonable access to a telecommunications system—and remember that a telecommunication system does not now consist only of telephony: it may consist of a whole number of data and cable entertainment services which could not necessarily be thought to be important for the safety or reasonable welfare of subscribers—and any concern expressed here in the code for the physical environment. But it is certainly true that, having not succeeded with earlier amendments, it is a late stage in the Bill to attempt to move them. We shall have to read what the noble Lord has said, see whether there are any crumbs of comfort in it, and consider our position on that basis. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey had given notice of his intention to move Amendment No. 129AA:

[Printed earlier: col. 1023.]

The noble Lord said: My Lords, on the basis of the assurances given yesterday by the noble and learned Lord the Lord Advocate in columns 1025 and 1026, I believe that it is not necessary to move this amendment.

[Amendment No. 129AA not moved.]

Lord Glenarthur moved Amendment No. 129AB:

[Printed earlier: col. 1155.]

The noble Lord said: My Lords, this is consequential on 126B. I beg to move.

On Question, amendment agreed to.

9.33 p.m.

Lord McIntosh of Haringey moved Amendment No. 129B:

[Printed earlier: col. 1021.]

The noble Lord said: My Lords, again we have made considerable progress towards the achievement of codes of practice for telecommunication installations. There have been some indications that there will be some uniformity in the wording designed to protect the physical environment in licences for public telecommunication operators. On that basis perhaps the issue is less black and white than it might otherwise have seemed.

However, it is worth at least making the point that it is possible to have a code of practice which would be applicable to all telecommunication operators. The code of practice we propose in this amendment is based on condition 5 of the draft BT licence and on paragraph 69 of the explanatory notes on the draft. It extends that to some extent and it is necessary to show that such a code of practice is possible and could be made generally applicable without collapsing into absurdity.

The second point that is worth making, and the reason I move this amendment, is the issue of the code of practice being independent of British Telecom or of negotiation with BT or any other individual operator; that is why we are proposing that such a code should be prepared, published and kept up to date by the British Standards Institution. This is not a radical departure. There are a number of examples where the British Standards Institution performs this function, or comparable functions, for the Government when there are regulatory problems.

I believe that it would be possible for the Government to show some indication that they value the formulation of uniform, readily understandable, well-tested, well-prepared, professionally prepared codes of practice which could apply to all operators and could be readily known to members of the general public. On that basis, I beg to move the amendment.

Lord Lyell

My Lords, if I may I shall seek to calm some of the concern in the mind of the noble Lord, Lord McIntosh of Haringey, and indeed that of his noble friends and any other of your Lordships who might worry about the code of practice in the Bill and whether this is the relevant area in which we should be seeking to insert a code of practice.

I deal first with the structure of the Bill. We do not think that it is right or appropriate to graft a provision of this kind on to the telecommunications code itself. The telecommunications code is concerned with conferring powers on operators of telecommunications within the framework of specific procedures which are designed to protect the rights of individuals which may be affected by the exercise of these particular powers. The main code applied under Clause 10, which is expressly intended to give effect to the code, can only be applied by licence except when the Secretary of State or a Northern Ireland Government department is proposing to run a telecommunications system. Otherwise only the Secretary of State can grant a licence applying the code. When he does so, he is obliged—I stress that word—as a result of an amendment which has already been accepted by your Lordships, to include in the licence conditions and exceptions designed to secure the objective set out in Clause 10(4).

I focus your Lordships' attention on subsection (4)(a) and (b), which refer to the protection of the physical environment and, above all, the need to ensure that no greater damage is done to streets or interference caused to traffic than is reasonably necessary.

I want to make it clear that it makes no sense to have Clause 10 setting the framework for licence conditions designed to deal with the kind of matters referred to in the amendment and then, quite separately, to refer to them again in the way that this amendment proposes to do in Schedule 2.

Certainly the main thrust of our argument is that the Government have made it quite clear that the British Telecom draft licence represents the minimum requirements that will be placed on any operator. In considering one example, the licensing of local systems, tighter restrictions may be imposed in the light of local representations.

The concept of a code of practice is a flexible one and it may even turn out that all the matters which are considered for inclusion in a BT code of practice could be better and more practicably dealt with by means of individual licence conditions in the licence itself. In view of the concern expressed by the noble Lord, Lord McIntosh, and by your Lordships about the need for an easily accessible set of rules governing the installation of telecommunications apparatus, it may be that this is something that we should look at again.

We believe that there is a slight misunderstanding in the mind of the noble Lord. Lord McIntosh, which underlies some of the details in the amendment. First, on the argument that has been deployed by the noble Lord in moving the amendment, that it could bring the relevant control to the attention of those who might be interested, we do not think that this would survive any undertakings we have given to amend Clause 10 so that operators will be required to make their licences and any codes of practice available in the locality they serve.

The second point—and I hope that I have not replied at too great length, but I am sure that Lord McIntosh would agree that it is a detailed point—in my argument is that the first part of the noble Lord's amendment appears to reflect a belief, rightly or wrongly, that the licensing arrangements will not be independent. The amendment refers to a code of practice to be drawn up by the British Standards Institution on the grounds, we presume, that the BSI is a respected independent body. We would not quarrel with that. But we would question whether the BSI has the resources or the experience to become involved in an area where one of the main objectives is the protection of the physical environment or whether it has been consulted on the matter by those who are interested in the matters raised by the noble Lord.

So far as we are aware, we have taken the view that the protection of the environment and the other matters which have to be considered in the context of applying the telecommunications code were of such importance that they should remain in the hands of the Secretary of State rather than be delegated to the Director General of Telecommunications. So far as the code of practice is concerned, there is no question of leaving it to be determined by BT or any other operators, though it makes sense for BT to do much of the preliminary work. We believe that they have a good record in these matters and they have a great deal of experience.

As Part 5 of BT's draft licence is drafted, it is clear that the terms of any code of practice are as much under the Secretary of State's control as any of the other licence conditions. Condition 5 says that the licensee shall prepare and, in consultation with the Secretary of State—and I think it is very important that the licensee must consult the Secretary of State—shall comply with a direction from the Secretary of State to follow that code of practice. The Secretary' of State will not issue such a direction unless he is satisfied that the code of practice is adequate. I emphasise once again that the conditions of the licence will be determined by the Secretary of State.

I have been a little detailed. I hope I have not over-egged the pudding; but I feel sure that the noble Lord, Lord McIntosh, will see fit to sample what I have set before him.

Lord McIntosh of Haringey

My Lords, I think that my response to that must be modified rapture. There are a number of substantive points which I believe to be helpful. I believe the exposure of these arguments in debate will encourage further improvement. First, may I recognise that the amendments which have been made so far at Report stage have improved the publicity given to the detailed conditions of licence and have made it more possible for objectors, or potential objectors, to understand what it is they are having to deal with. The whole concept of the local availability of the register is a valuable one, and I am grateful to the Government for that.

Secondly, I am grateful to the noble Lord, Lord Lyell, for what he has said about the strength of licences other than the BT licence. He gave the valuable assurance this evening that other licences will not in any way be weaker than the BT licence in this respect. BT have indicated that for cable operators, for example, they could be stronger or more onerous on the operator. That is a valuable undertaking and one it would be unreasonable for us to ignore.

The noble Lord also expressed the hope that further improvements would be possible in the future. I do not know what he considers to be the future—whether he is thinking about Third Reading or whether he is thinking about amendments to be proposed in another place. That, too, although it falls short of an undertaking, is not unwelcome. I do not believe that in his response we have achieved the uniformity and universality we were looking for in the amendment, but I do believe the debate has indicated their importance and that the Government recognise that. On that basis, I beg leave to withdraw the amendment.

Amendment by leave, withdrawn.

Lord Glenarthur moved amendment No. 130:

[Printed earlier: col. 604.]

The noble Lord said: My Lords, this is consequential on Amendment No. 129. I beg to move.

On Question, amendment agreed to.

Lord Lyell moved Amendment No. 131: Page 132, line 20, at end insert—

("The Cinematograph Act 1909.

In section 1(3) of the Cinematograph Act 1909 (provision against cinematograph exhibition except in licensed premises) for the words from "distributed" to the end there shall be substituted the words "programmes included in a cable programme service which is, or does not require to be, licensed under Part IV of the Telecommunications Act 1984".").

The noble Lord said: If I may move both amendments Nos. 131 and 132, I will speak to the two together, my Lords. Amendment No 132: Page 182, line 38, at end insert—

("The Cinematograph (Amendment) Act 1982.

In section 1 of the Cinematograph (Amendment) Act 1982 (extension of Cinematograph Act 1909 to certain other exhibitions of moving pictures) for the words from "distributed" to the end there shall be substituted the words "programmes included in a cable programme service which is, or does not require to be, licensed under Part IV of the Telecommunications Act 1984".").

These are consequential amendments and I am glad to tell your Lordships, particularly looking at Amendment No. 131 that these were spotted after a computer search—which goes well with the Cinematograph Act of 1909—as a result of the inclusion of Part IV (Clauses 54 to 57) of the Bill before us on licensing of cable programme services which replaces and updates provisions in the Post Office Act 1969. The Cinematograph Act 1909 and the Cinematograph (Amendment) Act 1982 at present include references to the licensing of programmes under the 1969 Act and these amendments simply update these to refer to Part IV of the Bill. The amendments will only have a limited life since, as with the whole of Part IV, they will be taken over by the Cable and Broadcasting Bill when this comes into force—the point raised by the noble Lord, Lord Mottistone, and I hope this will be of some interest to him. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Clashfern moved Amendment Nos. 131ZB and 131ZA:

[Printed earlier: col. 1160.]

The noble and learned Lord said: Perhaps your Lordships will agree to take on en bloc amendments Nos. 131ZB and 13IZA. Both have been spoken to already with Amendment No. 126 F. I beg to move, my Lords.

On Question, amendments agreed to.

9.50 p.m.

Lord McIntosh of Haringey moved amendment No. 131A: Page 149, line 36, leave out sub-paragraph (2).

The noble Lord said: In moving this amendment I should like to speak also to amendments Nos. 13IB and 131C, my Lords. Amendment No. 131B: Page 153, line 27, leave out ("In"). Amendment No. 131C.: Page 153, line 28, leave out from ("Telecommunications)") to end of line 33 and insert ("shall cease to have effect.").

The argument in all three cases is extremely simple. The Bill provides for taking away the planning Act exemptions which British Telecommunications has now and which are in the future intended after it is privatised. In this amendment we see no reason why the removal of these exemptions should not be implemented straight away. In other words, that is during the interim period before BT PLC comes into being. I beg to move.

Lord Mackay of Clashfern

Very shortly, the reason is that it is intended to cover this matter in a general development order. The general development order will cover this matter and other matters. It is very much hoped that it will be ready in time to take over; but because of the range of matters covered we cannot be certain of that; and that is the reason for this provision, my Lords.

Lord McIntosh of Haringey

I am grateful to the noble Lord. That seems to be a reasonable alternative. I beg leave to withdraw the amendment, my Lords.

Amendment, by leave, withdrawn.

Lord Lyell moved Amendment No. 131AA: Page 150, line 27, leave out sub-paragraph (7).

The noble Lord said: This is a technical amendment which deals with the repeal of a section in the Town and Country Planning Act of 1971. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 131B and 131C not moved.]

Lord Lyell moved Amendment No. 132:

[Printed above: col. 1209.]

The noble Lord said: I spoke to this a few moments ago. I beg to move, my Lords.

On Question, amendment agreed to.

Schedule 5 [General transitional provisions and savings]:

Lord Glenarthur moved Amendment No. 132A: Page 185, line 42, after ("(1)") insert ("Subject to the following provisions of this paragraph,").

The noble Lord said: It may be convenient if, with this amendment, I took amendments Nos. 132B, 132C and 132D, my Lords. Amendment No. 132B: Page 185, line 46, leave out (", subject to sub-paragraph (3) below,"). Amendment No. 132C: Page 186, line 5, leave out from ("send") to end of line 22 and insert ("to the Secretary of State—

  1. (a) in the case of each of those licences which is contained in a single document, that document or a copy of that document or of such parts of it as contain the provisions of the licence; and
  2. (b) in the case of each of those licences which is not so contained, a bundle of documents consisting of either the original or a copy of, or of the relvant part of, every document in the possession of British Telecommunications which is capable of being relied on as evidence of, or of any provision of, that licence.
(3) Where a licence has effect by virtue of sub-paragraph (1) above as if granted by the Secretary of State under section 7 of this Act—
  1. (a) sections 7(7) and (8) and 19(2) of this Act shall not apply in relation to the licence;
  2. (b) any provision of that licence made, or having effect as if made, by virtue of section 15(4) of the 1981 Act, being a provision under which any amount would fall to be paid after the appointed day to British Telecommunications, shall have effect as if it required that amount to be paid to the Secretary of State;
    3. 1211
  3. (c) the Secretary of State may revoke that licence at any time before the end of the relevant period and any provision of that licence under or in accordance with which the licence may be revoked by British Telecommunications shall be deemed to be omitted; and
  4. (d) the licence shall expire at the end of the relevant period unless before the end of that period it has either been revoked under this paragraph or expired in accordance with its terms.
 (4) Before revoking a licence under this paragraph the Secretary of State shall give notice—
  1. (a) stating that he proposes to revoke the licence;
  2. (b) stating the reason why he proposes to revoke the licence; and
  3. (c) specifying the time (not being less than 28 days from the date of the giving of the notice) within which representations or objections with respect to the proposed revocation may be made,
and shall consider any representations or objections which are duly made and not withdrawn. (5) A notice under sub-paragraph (4) above shall be given—
  1. (a) in the case of a licence granted to a particular person, by sending a copy of the notice to that person; and
  2. (b) in any other case, by publication of the notice in such manner as the Secretary of State considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them.
 (6) Any sums received by the Secretary of State under this paragraph shall he paid into the Consolidated Fund. (7) In this paragraph "the relevant period" means the period of two years beginning with the appointed day or such other period beginning with that day as the Secretary of State may by order prescribe for the purposes of this paragraph."). Amendment No. 132D: Page 186, line 46, at end insert ("and, in its application in relation to such an approval, the reference in section 22(12)(a) to a copy of the approval shall have effect as a reference to a copy of the particulars so sent to the Secretary of State").

In the interests of brevity, essentially what we wish to do with these amendments is to update and replace existing licences so that they reflect the provisions of the Bill. These amendments enable that to be done. Amendment No 132D simply corrects a mismatch between paragraph 2 of Schedule 5 and Clause 22(12). I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 132B:

[Printed above.]

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 132C and 132D:

[Printed above.]

On Question, amendments agreed to.

Lord Glenarthur moved Amendment No. 133: Page 189, line 42, leave out ("which") and insert ("and").

The noble Lord said: This is purely a drafting amendment. I beg to move, my Lords.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 134: Page 190, line 38, leave out ("or") and insert ("for").

The noble Lord said: This is also a drafting amendment, and I beg to move, my Lords.

On Question, amendment agreed to.

Lord Bruce of Donington moved Amendment No. 135: Page 194, line 8, leave out ("with the approval of the Treasury") and insert ("subject to an affirmative resolution (which shall set out specifically the nominal value, issue price and remaining interest to maturity of the transferred debentures) of both Houses of Parliament").

The noble Lord said: This, my Lords, refers to paragraph 39 of Schedule 5, which has been mentioned by the noble Lord, Lord Cockfield, and myself earlier on in the course of the debate. Noble Lords will recall that, under the earlier part of the Bill, when the transfer of assets and liabilities of British Telecom to the successor company takes place there are certain excepted liabilities that remain, and remain within British Telecom itself. So when that operation takes place, all that British Telecom has are the excepted liabilities. These liabilities comprise the liability stated in the last balance sheet of British Telecom in respect of the pension fund. As at 31st March 1983 that figure was put at £1,125 million. As from the date when the transfer of assets and liabilities, except the excepted liabilities, takes place, the liability in respect of the pension fund formerly assumed by British Telecom will remain there.

Also, under the provisions of the earlier section, debentures were created in place of the existing liability of the old British Telecom to the Government, by virtue of which the Government find themselves in the possession of debentures in place of their entitlement to the previous loans. To use a vulgar expression of today, they merely hang on to them. However, in effect, they assume responsibility for the payments that are due under the pension fund and this is accomplished under paragraph 39 whereby, from time to time, assets are transferred from the Secretary of State to British Telecom in order that it can satisfy its liability under this head.

It is therefore important—and I think it is a wholly desirable arrangement—that the state should, in effect, resume responsibility for the liabilities to these pensions, the details of which I shall not go into any further because they are not material for the purposes of my argument. What is important, however, is that the public at large should know exactly what has happened on the privatisation. The first point is that the successor company is relieved of that liability, and therefore the equity in British Telecom that is taken over is worth at least £1,125 million more than it was before the transfer took place. It is hoped that those who eventually purchase the shares, as and when a prospectus turns up, will pay a sum for the Government's shares that reflects that increased value in the equity. Opinions differ as to whether a really adequate price will be received by the Government in respect of the up to 49 per cent. of the equity holding that is held by them.

The other thing that it is important to realise is that from time to time the Government will part with a public asset, the public asset being the debentures which have been handed to them in place of the liability previously owing to them. In other words, every time a transfer is made—to use the term in subparagraph (2) of paragraph 39—the public assets in the possession of the Government are lessened thereby. As I have said, I have no argument with the arrangements, so long as the public know what is happening and that there has been a diminution in the assets in the hands of the Government.

The purpose of Amendments Nos. 135 and 136, which in view of the time I should like to take together, is to make quite sure that Parliament and the public know exactly what is happening so that these transactions, which otherwise might prove to be a little mysterious, are not covered up in any way and Parliament knows all the time what assets are flowing from the Government in satisfaction of these various liabilities which in effect they have assumed by the terms of privatisation. One wants to keep control of it—hence the wording of Amendment No. 135. During the transitional period it is important that the Secretary of State should prepare and submit to Parliament a full account of exactly what has happened, showing in particular

  1. "(a) the nominal value, issue and interest ordinarily receivable to maturity of all debentures transferred under subsection (2) above; and
  2. "(b) the excesses and deficiencies arising under subsections (4) and (5) above".

The purpose of the amendment is quite straightforward. There is nothing, to use a term, "up my sleeve". My only hope in submitting the amendment is that the Government will accept it, thus showing that they do not want anything up their sleeve, either. I beg to move.

10.2 p.m.

Lord Cockfield

My Lords, these are accounting matters. They need, therefore, to be dealt with, with care. May I first explain why the deed of covenant obligation, referred to in the Bill as "the excepted liabilities", is to remain with the statutory corporation and the method by which the obligation will be met. The deed of covenant obligation is to make payments to the BT and Post Office pension funds in respect of deficiencies relating to the service of Post Office employees before 1969. It would be incongruous for such an obligation to form part of BT PLC'S balance sheet. Anxieties were also expressed by the staff about this liability being left with the successor company, and fears that the pension rights of existing members might be prejudiced if for any reason the new company could not or did not meet the obligation under the deed of covenant. The solution adopted, of not transferring the liability to the new company but leaving it with what is called the shell company, with special provision in pargraph 39 of the fifth schedule that the liability would be met, was designed to meet both points of view that I have described above.

Against this background, the specific response I would make to the amendments is that they would have little practical effect. The purpose of Amendment No. 135 is to require parliamentary approval for the details of the debentures assigned to the corporation —that is, to the shell company. But the deed of covenant obligations are fixed, and that effectively determines the amount of the debentures that will be required. Thus, Parliament could hardly reject the assignment of debentures to BT—that is, to the shell company—without undermining the whole basis on which the deed of covenant obligation is to be met.

As to Amendment No. 136, which would require the Secretary of State to report to Parliament on his transactions with BT, the shell company under this paragraph, I believe that the information which the noble Lord is concerned about will be adequately covered by the existing sub-paragraph (6) of paragraph 39. That requires BT to keep proper accounts, to report to the Secretary of State at the end of each financial year, for the Secretary of State to consider the report and to lay copies of it before each House of Parliament. So the transactions will be completely open, and the report on the transactions is required to be laid before each House of Parliament.

Having dealt with the specific effect of the amendments, may I now turn to the point which I believe underlies the concern which has been expressed by the noble Lord and others on this matter; namely, the belief that the assignment of debentures to BT to meet the deed of covenant obligation will involve a loss of debt owed to the Exchequer. This is not so at all. Under Clause 60, British Telecom has to issue debentures to the Government in satisfaction of the NLF loan.

It would have been perfectly feasible for the same course to have been followed in the case of the excepted liabilities. That is, British Telecom could have been required to issue debentures to the Secretary of State equivalent to the liability under the deed of covenant. This would then have meant that the new company—British Telecom PLC—would have started life with a debenture debt in round figures of approximately 0,000 million for the NLF loans and £1,250 million for the deed of covenant. These are not intended to be exact figures; I give them for purposes of illustration, but they are of the right order of magnitude.

Obviously, the total of those two figures would not represent the full value of the business. Therefore, under Clause 59 the Secretary of State could and would require the new company—that is British Telecom PLC—to issue securities to him. These securities could take the form of equity capital, debentures, or any other securities. We should then have a company with so much equity and so much debt—all of it together constituting the capital of the new company. The balance between debt and equity might not, however, be right in terms of a desirable capital structure. It would then be open to the Secretary of State to rebalance the total as between debt and equity by using his powers under Clause 59 and Clause 61.

Rather than have this complex route for dealing with the excepted liabilities—and frankly I confess that, presentationally, it would have had some advantage to have gone all the way round that way—the Government have put themselves in the position of being able to go directly to the final answer by not providing for the issue of debentures specifically to cover the covenant debt and by relying upon their powers under Clause 59 to achieve both the right total capitalisation and the right balance between debt and equity.

The course adopted in the Bill is a simpler, more direct route. The end result is precisely the same. This, of course, is what really matters. It is important—and here I entirely agree with the noble Lord, Lord Bruce of Donington—that on privatisation the capital of the company should be fixed at a proper level and that a proper price should be secured for the shares. On this I agree. It is our intention to ensure that that is so.

I hope that what I have said does make the position clear and that. in the light of the full explanation I have given, the noble Lord will be willing to withdraw his amendments.

Lord Bruce of Donington

My Lords, I am greatly obliged to the noble Lord the Minister for his very full reply. I immediately concede that what I sought to achieve by Amendment No. 136 is in fact achieved by paragraph 39(6). Therefore, the disclosure particulars are satisfactorily provided for.

I must join issue with the noble Lord on one point because there is still a marginal difference between us. The fact is that in assuming the liability formerly held by British Telecom, the Government are taking on a liability which they are discharging in the process of time. One must bear in mind—and I shall not question the noble Lord on this—that it may be that this liability under the deed of covenant will be rather larger due to the indexation provisions, so that the £1,250 million may prove to be an under-estimate. But there can be no doubt that public assets will be depleted to meet that.

On the other hand, the only countervailing balance will be the extra amount that will be received by the Government on the sale of shares in the company in which there is now a greater equity by virtue of the fact that the £1,250 million is taken out. Whether or not that will be sufficient to cover this liability which is quite properly assumed by the Government is another question altogether. One sincerely hopes that it will.

My purpose is discharged by having this matter aired quite publicly and openly so that people know what is happening. I am greatly obliged to the noble Lord for having assisted the House and for having assisted myself in learning his complete views on the subject. I am greatly obliged to the noble Lord and I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 136 not moved.]

Schedule 7 [Repeals]:

Lord Mackay of Clashfern moved Amendment No. 137:

[Printed earlier: col. 1160.]

The noble and learned Lord said: My Lords, with the leave of the House I will take Amendments Nos. 137, 138, 139 and 140 together.

[Printed earlier: cols. 1160 and 1161.]

These are all consequential on Amendment No. 126F, to which I have already spoken. I beg to move.

On Question, amendments agreed to.

Lord Glenarthur moved Amendment No. 141:

[Printed earlier: col. 1152.]

The noble Lord said: My Lords, last but not least I move this amendment, which is consequential on Amendment No. 126A. I beg to move.

Lord Bruce of Donington

My Lords, perhaps this would be a convenient opportunity on behalf of my noble friends on this side of the House to thank the noble Lord, Lord Cockfield, and his associates for the very courteous way in which they have dealt with all these matters on this Report stage.

Lord Donaldson of Kingsbridge

My Lords, I should like from these Benches to be associated with those sentiments.

Lord Cockfield

My Lords, on behalf of myself and my noble friends, I am most grateful for what the noble Lords have said. We have appreciated the very fair way in which the arguments have been conducted.

On Question, amendment agreed to.

House adjourned at fourteen minutes past ten o'clock.