Lords Sitting of 28 January 1985

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

NHS Drugs: Pricing
Lord Hunter of Newington: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to alter the method of payment to the pharmaceutical industry for drugs supplied to the National Health Service.
The Earl of Caithness: My Lords, the Government have on several occasions endorsed the non-statutory Pharmaceutical Price Regulation Scheme as the preferred method of controlling the prices of medicines in the National Health Service.
Lord Hunter of Newington: My Lords, I thank the Minister for that reply, brief though it is. I ask him two supplementary questions. First, recognising that 50 per cent. of general practitioner costs are for pharmaceuticals, does he consider that the Binder Hamlyn Report should have been published, and why is there this indecent haste about a drug list? Secondly, does he believe that it will be possible for the industry to advertise unlisted drugs to National Health Service doctors?
The Earl of Caithness:My Lords, with regard to the noble Lord's first supplementary which referred to the Binder Hamlyn Report, I can add no more to the comment made to the House by my noble friend Lord Glenarthur on 4th November 1984. On the noble Lord's second point, I do not know what the regulations will contain. I do not see why the drugs that are not on the limited list cannot be advertised to doctors.
Lord Ennals: My Lords, is the Minister aware that the Secretary of State, by his constant changes in the Pharmaceutical Price Regulation Scheme, by his peremptory cuts in the drugs bill and now by his proposal, as referred to by the noble Lord, to introduce a limited list of drugs for prescribing by GPs, is threatening the research basis of the pharmaceutical industry in this country and has already deterred significant inward investment and damaged the export prospects of one of the most important and successful industries in Britain today?
The Earl of Caithness: No, my Lords, I cannot agree with the noble Lord. The final limited list, as he knows, is not yet complete because discussions are still taking place on the present list, but I gather that it is about 0.4 per cent. of worldwide drugs. I do not think that that will affect research in any way.
Lord Grimond: My Lords, will the Minister take this opportunity to clear up what I believe to be a misapprehension? Is he aware that there appear to be some people now in receipt of free drugs who are frightened that the Government intend either to deny them those drugs or to make them pay for them? Am I right in thinking that there is no such intention on the part of the Government?
The Earl of Caithness: My Lords, we have had a very good discussion on the limited list drugs. While I should like to answer the noble Lord, I think he is taking us wide of the Question on the Order Paper. His noble colleague, the noble Lord, Lord Kilmarnock, had a Question down on 15th January and also has an Unstarred Question on this specific point set down for 6th February.
Lord Northfield: My Lords, the drug industry is very sore at the unilateral actions of the Minister in recent months. In the case of the forthcoming discussions which the Minister proposes to hold about reducing profits to drug companies under the price regulation scheme, will the Minister give an assurance that on this occasion there will be full consultation with the industry rather than a unilateral decision? Secondly, will he assure us that the cost of research, which up to now has been funded under the agreement concerning the PPRS, will be taken into account?
The Earl of Caithness: My Lords, I can assure the noble Lord not only that there will be consultation but that there has been consultation.
Lord Kilmarnock: My Lords, can the noble Earl say whether or not it is the Government's intention to restrict the profit margin of the pharmaceutical industry to that normally applied for other Government contractors? If that is the case, can he say whether the Government have taken into account the industry's representations on the whole question of quality control?
The Earl of Caithness: My Lords, of course the Government take into account all matters raised. As the noble Lord might be aware, the report of the Review Board for Government Contracts, which was published in March 1984, recommended a return of 16·9 per cent. on historic capital employed for companies with non-competitive Government contracts. The return for the pharmaceutical industry is 21 per cent.
Lord Avebury: My Lords, is it the Government's intention to extend the restricted list of drugs to the prison medical service? If it is, can the noble Earl tell the House whether the prescribing of paraldehyde by prison medical officers will be allowed to continue?
The Earl of Caithness: My Lords, I am afraid that I missed the first part of the noble Lord's supplementary question.
Lord Avebury: My Lords, is it the Government's intention to extend the use of this restricted list of drugs to the prison medical service as well as to general practitioners? If it is, can the noble Earl say whether

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the practice of prescribing paraldehyde by prison medical officers will be allowed to continue?
The Earl of Caithness: My Lords, again, I am afraid that the noble Lord is taking us wide of the Question on the Order Paper—which was my reply to the noble Lord, Lord Grimond.
Lord Hunter of Newington: My Lords, can the Minister tell the House whether the Government are publishing a list of drugs which may be used in the National Health Service, or whether they are publishing a list, as has been reported in the newspapers, of drugs which may not be used in the National Health Service?
The Earl of Caithness: My Lords, again, I am afraid that we go back to the limited list. Until discussions are completed, which they will be at the end of this month, I cannot help the noble Lord further.
Lord Ennals: My Lords, is the noble Earl aware that I have not been pressing him on the limited list because there is an Unstarred Question down on that for, I believe, next week? However, I want to press him and ask whether he is aware of the seriousness of the situation? Is he aware that I can produce evidence not only of inward investment that is not now proceeding, but also of inward investment that has been cancelled by the drug industry, which is deeply concerned at the present situation? Does the Minister comprehend the importance of what is now happening as a result of these cutbacks?
The Earl of Caithness: Indeed, my Lords, we are concerned that the drug industry does not suffer. It is for that reason that we have held and will continue to hold negotiations with it.

Pound Coin: Colour
2.43 p.m.
Lord O'Neill of the Maine: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider giving a more golden colour to the pound coin, so that it ceases to look silver in artificial light.
Lord Brabazon of Tara: My Lords, this was considered before the £1 coin was selected. Unfortunately, additions to make the coin more yellow also reduce its tarnish resistance.
Lord O'Neill of the Maine: My Lords, I thank the noble Lord for that reply. May I ask him whether he appreciates that the Australians, whose coinage does not differ all that much from ours, have produced a golden dollar (which I now have in my hand) which is easily distinguishable from the rest of their coinage? It seems a pity that we did not follow in their footsteps.
Lord Brabazon of Tara: I must admit, my Lords, that that is the first I have seen of the Australian coinage, including the Australian golden dollar. The reason why we chose this mix of alloys to make the coin—and this was very carefully considered before the choice was made—was that, unlike the old threepenny bit which was more yellow in colour, the new coin would not tarnish. With handling over a period of time, the coin will take on a more matt, greenish-yellow colour.
Viscount Massereene and Ferrard: My Lords, is my noble friend aware that, apart from the fact that I asked a similar Question about two or three months ago, we had a very good debate just before the House rose for Christmas in which, as far as I can remember, eight of the 10 speakers were completely against this coin and even the bankers who spoke were not particularly in favour of it? If I may ask a further supplementary question—if my noble friend the Chief Whip does not want me to (which I gather from his turning round) I shall sit down.
Lord Brabazon of Tara: My Lords, I am well aware that we had an interesting debate, during which I was present thoughout. However, I must draw the noble Viscount's attention to the Question on the Order Paper, which is about the colour of the coin.
Lord Stoddart of Swindon: My Lords, does the noble Lord accept that I believe that the noble Lord, Lord O'Neill, has a very good point? I hope he will consider further what the noble Lord said. Further, does the Minister agree that it is not only the colour of the money that counts, but its value?
Noble Lords: Hear, hear!
Lord Stoddart of Swindon: Can the noble Lord say exactly what the Government are going to do about the catastrophic drop in the value of the pound abroad—
Noble Lords: Order!
Lord Stoddart of Swindon: —and the savage increase of 2 per cent. in interest rates today?
Noble Lords: Order, order!
Lord Stoddart of Swindon: Will he say what effect that 2 per cent. increase will have on our economy, and on local government in particular?
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 think that when we get to the moment when neither I nor the noble Lord, Lord Stoddart of Swindon, can be heard perhaps there is something wrong, and maybe the noble Lord is a little off the point of the original Question.
Lord Cottesloe: My Lords, does the Minister agree that the real requirement now is not for a £1 coin but for a £2 or even £3 coin?
Lord Brabazon of Tara: My Lords, that is another Question altogether. I shall certainly draw the attention of my right honourable friend to that point.
Lord Wallace of Coslany: My Lords, when the noble Lord—
Lord Stoddart of Swindon: My Lords, on a point of order, I asked two questions. Even if the noble Lord the Deputy Leader of the House feels that my second question was out of order, my first certainly was not, and I should be obliged to have a reply.
Lord Brabazon of Tara: My Lords, I wonder whether the noble Lord would remind me of the point of his first supplementary question.
Lord Stoddart of Swindon: Yes, indeed, my Lords. I was saying that the noble Lord, Lord O'Neill, had a very good point and that I hoped that, in view of what he said, the Minister would reconsider his Answer.
Lord Brabazon of Tara: My Lords, I cannot reconsider my Answer. As I said, a great deal of consideration went into choosing the material for the new coin, and I hope that I have given an explanation of why that choice was made.
Lord Wallace of Coslany: My Lords, when the noble Lord said that with the passage of time the £1 coin would become a greenish-yellow colour, are we to infer that it will become mouldy? Secondly, the noble Lord, Lord O'Neill, who put the original Question, is quite right, but he omitted one point.
Lord Denham: Question!
Lord Wallace of Coslany: My Lords, should we not be considering, in addition to the problem of artificial light, those who have poor eyesight—I do not mean blind people—who will therefore have a job in identifying this coin?
Lord Brabazon of Tara: My Lords, I am afraid I do not know exactly what the greenish-yellow colour that the coin will take on in time will look like until it comes about. As regards the problems of the blind, I understand that before the coin was introduced organisations for the blind were fully consulted, and the size, thickness and shape of the coin should help them.
Lady Kinloss: My Lords, may I ask the Minister whether he is aware of two incidents that occurred in public houses in Yorkshire? In the first, two 5p pieces stuck together and passed as a £1 coin. In the other, what was thought to be a £1 coin was given in payment and only afterwards was it discovered to be made of lead.
Lord Brabazon of Tara: My Lords, I was not aware of those two instances. All I can say is that the material that is being used is extremely difficult to forge. Certainly any vending machine will readily reject a fake.
Lady Saltoun: My Lords, can the noble Lord say whether the Australian dollar tarnishes?
Lord Brabazon of Tara: My Lords, as I said to my noble friend before, it was the first I had seen of the Australian dollar.

Heathrow Underground Station: Luggage
2.50 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the arrangements for passengers' luggage at the Underground station at Heathrow airport.
Lord Brabazon of Tara: My Lords, the details of these arrangements are the responsibility of London Regional Transport. Having seen them for myself, I am reasonably satisfied that they are appropriate in the circumstances. LRT plan to introduce a new ticketing system for the Underground as a whole over the next few years and I understand that this will remove the need at Heathrow for tickets to be shown at the barrier, which will make for easier access. But LRT do not intend to allow airport trolleys on to the platforms.
Lord Orr-Ewing: My Lords, is it true that now nearly 6 million travellers journey to and from London Airport by the Underground? Is my noble friend aware of whether the authorities are paying sufficient attention to the need to reduce the hassle, the frustrations, the noise and the delays on the ground before one gets into the air? Would he draw their attention to the fact that the Swiss have long used trolleys which can be used up and down escalators with safety, speed and ease, and that this design has some merit where an escalator is part of the travellers' normal facilities?
Lord Brabazon of Tara: My Lords, I shall certainly take note of what my noble friend has said. However, I can say that LRT have no intention at the moment of allowing trolleys on to the platforms. The reasons for this are, first, that there is always a danger of their falling on to the line. The difference between here and Zurich is that Zurich has overhead power, whereas on the London Underground system there is a four-rail system. The other reason concerns the nature of the Underground system itself. The great attraction is that it gives ready access to all parts of London, and in the centre it becomes very busy. If passengers were allowed to enter the system with more luggage than they could readily handle, there could be difficulties for themselves and other passengers, and delays to the system, when they are getting off. I also understand that LRT encourage such passengers to use the air-bus services which allow time for luggage to be unloaded at the destination.
Lord Jenkins of Putney: My Lords, is the noble Lord the Minister aware that what his noble friend has asked and said is a reflection of the fact that already

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too many people and too many aircraft use Heathrow? Will he bear this in mind in considering any development of airport facilities in the future?
Lord Brabazon of Tara: My Lords, that is another Question. However, as the noble Lord will know, consideration is at the moment being given to the inspector's report.
Baroness Burton of Coventry: My Lords, is the noble Lord the Minister aware that for many years we have had discussion on these matters without receiving any satisfaction from the Government of the day? May I ask him whether he realises that escalators are not the slightest use to passengers with luggage and that lifts are necessary? Furthermore, having seen how trolleys are conveyed at Frankfurt, where they can be taken down the escalators, and where I have not seen passengers throw trolleys on the lines in the way of the trains, I wonder whether it is not possible for such facilities to be looked at for Heathrow.
Lord Brabazon of Tara: My Lords, it is certainly possible that they could be looked at; but I very much doubt whether the result of looking at it would be any different from what I have already said.
Baroness Gardner of Parkes: My Lords, is my noble friend aware that some passengers arriving late at Heathrow due to delayed flights have no opportunity of using the air-bus? They are obliged to use the Tube only, as the bus services stop quite early, at about 10 o'clock. Is the noble Lord also aware that in using the Tube, even if passengers manage to get on at Heathrow, there is no way whatsoever of their getting off without inconvenience?
Lord Brabazon of Tara: My Lords, I am afraid that I was not aware of the time that the bus system closed down. However, on the other point, I know that LRT are trying to do something about arrangements at stations in central London; but of course it would be inordinately expensive if we were to try to redesign the whole of the Underground system.
Lord Underhill: My Lords, is the noble Lord the Minister aware that there is widespread concern about the point raised by the noble Lord, Lord Orr-Ewing? Those of us who use the Tube service to Heathrow know this only too well. Would the noble Lord not also agree that it was excellent foresight and planning by the airports authority, the GLC and the former London Transport Executive in proceeding with the extension of the Underground into the fourth terminal so that the Tube will be ready when the fourth terminal comes into operation? However, can he say whether improved arrangements for the handling of luggage will be carried out for the extension of the Underground to the fourth terminal?
Lord Brabazon of Tara: My Lords, I certainly agree with the noble Lord that it is good that the Underground service is going to be extended to Terminal 4. I understand that at that terminal there will be lifts in operation and that the access to the
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station will be on a gentle slope. There will be no escalators, but I am afraid that trolleys will still not be allowed on the platform.

Neighbourhood Watch Schemes
2.55 p.m.
Baroness Sharples: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made in setting up neighbourhood watch schemes.
The Minister of State, Home Office (Lord Elton): My Lords, progress has been made since I answered a similar Question from the noble Baroness in November 1983. The Metropolitan Police and 28 other police forces in England and Wales and three in Scotland are now operating neighbourhood watch schemes, under that or other names, and a further two are planning to do so. Although precise details are not held centrally, I understand that there are at present some 3,000 individual schemes in existence around the country.
Baroness Sharples: My Lords, I thank my noble friend for that extremely encouraging reply as to the situation since I last asked about this at the end of 1983. Can he confirm that a number of the schemes are not only in cities? Can he also say how many police are involved in the schemes and how many police would be involved in combating crime if the schemes did not exist?
Lord Elton: My Lords, the schemes exist in a wide variety of environments. I believe that my noble friend is right to infer that they reduce the calls on the police force in ordinary policing, as an evaluation of the Kingsdown scheme in Bristol showed a drop in overall crime of 22 per cent. However, I cannot give the detailed figures for which my noble friend asks.
Lord Cledwyn of Penrhos: My Lords, given the importance of this development, can the noble Lord obtain some rather more accurate statistics than those he now has? In his reply to the noble Baroness he said that there were some 3,000 individual schemes. Is it not important that his department should be fully apprised of the details of these schemes so as to enable him to give more accurate answers to the House?
Lord Elton: My Lords, I appreciate what the noble Lord is saying. However, I am not sure that I can entirely accept it, because these are operational matters for the chief officers of the police forces concerned. I can say that in London, where the Home Secretary is the police authority, there are over 1,150 schemes in existence. But to be more precise than the round figure I have given for the rest of the country would, I think, be misleading at the present stage.
Lord Cledwyn of Penrhos: My Lords, the noble Lord said that these are operational matters for the chief officers concerned, but, with great respect, they are matters of great interest to the country as a whole and certainly should be of concern to his department. I ask him seriously, on behalf of the House, whether he will consult his right honourable and learned friend in order to obtain more accurate information about these schemes, not only in London but also in the country at large?
Lord Elton: My Lords, I am sure that I can oblige the noble Lord and put a more accurate figure in the Library.
Lord Mowbray and Stourton: My Lords, is not my noble friend aware that back in 1936 the late Lord Willingdon, and another gentleman started a watch scheme of this kind which developed into what probably is now the biggest security company in the country? If we were to compare the night watch schemes which that company now operates commercially throughout the country, they would make the few thousand watch schemes which we are talking about pale into insignificance. I should like to have it confirmed by my noble friend that the number of group patrols being carried out are of enormous help to the police.
Lord Elton: My Lords, we are not discussing patrolling, which is done by the police, except on private premises, to which my noble friend refers. We are talking about arrangements whereby local residents in a particular area keep an eye open for anything unusual or amiss and, if necessary, arrange swiftly to inform the police, and also very often mark their property with the local post code.
Lord Avebury: My Lords, if the Minister can give figures for Bristol, which apparently show a very spectacular reduction in the level of crime in that city, surely he must be able to collect the equivalent kind of statistics from the metropolis, where his right honourable friend is the police authority. Does he not think that it is his obligation to do so, if the savings in police time and the reduction in public expenditure on combating crime are anything like as remarkable as they have proved to be in Bristol?
Lord Elton: My Lords, the figure that the noble Lord, Lord Cledwyn, asked me to give was a figure for the number of schemes. The figure to which the noble Lord, Lord Avebury, refers is a figure for the supposed reduction in crime. The latter is much more difficult to arrive at. But the Home Office does, of course, keep an eye on the direction in which this method is going to see whether it should be further encouraged.
Lord Morris: My Lords, may I ask my noble friend whether there has been any increase in police—Metropolitan or otherwise—or, indeed, Governmental endeavour to watch the watch schemes?
Lord Elton: My Lords, I am tempted, but I shall refrain from a terrible pun. We are watching it very closely.

Frigate Orders
Lord Denham: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lord Trefgarne will, with the leave of the House, repeat a Statement to be made in another place on orders for frigates.

Mineral Workings Bill
3.1 p.m.
Lord Skelmersdale: My Lords, on behalf of my noble friend Lord Avon, I beg to move that this Bill be now read a second time.
This is a short but technical Bill which has two purposes. Both purposes concern former mineral workings but are otherwise unrelated. The first purpose is to wind up the Ironstone Restoration Fund now that so few sites are being worked for ironstone in England and virtually all of these are under the control of the British Steel Corporation. The second is to make it possible for local authorities to get on to land quickly and to take remedial action where they believe that subsidence may occur because the surface has been made unstable by former underground mineral working.
I will talk first about the Ironstone Restoration Fund. That was set up under the 1951 Mineral Workings Act to deal with the growing dereliction in the Midlands ironstone field. Dereliction by the opencast working of ironstone became a problem from about 1914 onwards, when the shallower seams of ore began to be exhausted and operators were driven to work the deeper seams. Restoration of the deeper workings was, of course, a very much more difficult and costly operation and, sadly, many of the smaller, less responsible operators, simply took their profits and ran, leaving a trail of dereliction behind them.
The fund operates only within the ironstone district, which broadly corresponds to the Midlands ironstone field, and has three main functions: first, to meet the full cost of reclaiming land which had been left derelict or inadequately restored by 1950; secondly, to assist with the prompt restoration of future workings by contributing to the cost of levelling and spreading top soil; and, lastly, to help owners and occupiers of restored land to return it to agricultural or forestry use.
The fund has proved remarkably successful. Over the past 30 years, all the pre-1950s dereliction has been reclaimed and all but the most recent workings since that date have been returned to beneficial after use. It has almost, but not quite, completed its task. The problem now is that the fund is virtually bankrupt. Aside from a very small Exchequer contribution, the fund depends for its income on contributions made by the operators based on a levy of 7p (pence) per ton of ore extracted. The House will be aware that the demand for locally dug ironstone has reduced dramatically over the past 20 years. That has meant that the income to the fund has been drastically reduced at a time when an increasing number of quarry closures made accelerated demands on its resources.
The British Steel Corporation is now the only operator contributing to the fund. And, for a number of years, the fund has only been able to meet its

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commitments to private landowners, local authorities and others because BSC has voluntarily waived its own legal right to make often very substantial claims for the restoration of land which it had an operator's obligation to restore.
This year, even that has not been enough and BSC has had to make substantial voluntary donations of money—over and above the required operator's levy—in order to keep the fund afloat. It has already given £266,000 and will need to give more to meet claims expected to arise before 31st March 1985. Without BSC's assistance, the fund would already be insolvent and it is estimated that the statutory contributions from BSC and the Exchequer would have to be supplemented by a further £600,000 just to keep the fund afloat until 31st March 1987, which is the end of the current PESC period.
Clauses 1 to 3 and 6 contain provisions to wind up the fund, to transfer its assets to BSC and to make general housekeeping arrangements to tidy up its final account. Clauses 4 and 5 make transitional arrangements for the aftercare and afforestation of ironstone land in recognition of the fact that few owners, whose land will have been restored before the abolition of the fund, still have legitimate expectations from it in respect of the return of their land to agricultural or forestry use.
Clause 4 is intended to enable the Minister of Agriculture, Fisheries and Food to honour arrangements made with landowners under Section 20 of the 1951 Act to bring land to,
"a good state of cultivation and fertility",
so that it can be returned to agricultural use. His expenses in so doing are, under present arrangements, defrayed out of the fund. Clause 4 requires that those expenses shall be met, for a transitional period, by the British Steel Corporation. All the arrangements to which this clause applies will, of course, have had to be made before Section 20 is repealed. Where they relate to the aftercare of land restored before 1st January 1984, the arrangements may persist until completion or until 31st March 1990, whichever is the earlier. Where restoration was completed after 1st January 1984, the arrangements may persist for whatever period is specified in the formal agreement.
Clause 5 makes transitional arrangements for land which is to be returned to forestry. Under Section 25(1) of the 1951 Act, the Forestry Commissioners may make a special grant at an agreed rate to assist with the return of worked ironstone land to a condition suitable for forestry. Their expenses are currently defrayed out of the Ironstone Restoration Fund. Clause 5 will require BSC to reimburse the commissioners' expenses in making the special ironstone grant up until 31st March 1990, provided that the corporation and the Ironstone Royalty Owners' Association have been consulted about the rate at which the grant has been paid.
Those, then, are the ironstone provisions. In essence, they are very little more than a sensible regularisation of a situation which already exists. The Bill anticipates that the fund can be wound up and the new arrangements put in place in time for the British
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Steel Corporation to take on its new responsibilities at the beginning of the next financial year.
I turn now to the second purpose of the Bill, which is contained in Clauses 7 and 8. Those clauses give local authorities a compulsory power to enter land to survey, monitor and carry out reclamation works—without the owners' consent—where subsidence has occurred or is likely to occur as a result of former underground mineral workings.
Any proposal to introduce a compulsory power to intrude upon private land without the consent of the owner or occupier must be given serious consideration, and I owe it to the House to explain the position carefully. There are a number of areas which are underlain by old mineral workings. That is why we propose that these powers should apply throughout England and Wales. The most immediate need, however, arises in those parts of the West Midlands which are extensively undermined by old limestone workings. Noble Lords may recall that in 1978 subsidence over deep workings in Sandwell caused substantial damage to buildings on an industrial estate. Since then, there have been other less dramatic, but potentially dangerous, incidents. Inevitably, there is considerable concern in the area and action needs to be taken to restore confidence and avoid blight.
My Department, along with the Dudley, Sandwell and Walsall borough councils and the West Midlands county council, commissioned Ove Arup and Partners to carry out a comprehensive study to determine the nature and scale of the problem. Their report, published in 1983, identified a number of areas which were thought previously not to be at risk and highlighted the degree of uncertainty about the precise extent and condition of many of the workings. An action programme under the derelict land reclamation scheme is now under way. Obviously, the authorities need to have access to sites which may be at risk and the co-operation of owners and occupiers is needed. I have no doubt that this will be given in the vast majority of cases. However, some difficulty has already been experienced because of the natural reluctance or the absence of the person concerned.
Delay could put not only the owner's land at risk but also that of his neighbour. That is why, when and only when, urgent action is necessary in the interests of public safety, it needs the backing of the new power.
Clause 7 contains this power of compulsory entry. It only applies where a local authority have used, are using, or are considering whether to use, their power under Section 89(2) of the National Parks and Access to the Countryside Act 1949 to carry out works on any land for the purpose of reclaiming, improving or bringing into use land underlain by abandoned underground mining operations, other than coal. The clause contains elaborate safeguards for both owner and occupier of the land to which entry is needed. It also contains important provisions to compensate people for loss, damage or disturbance.
Clause 8 provides the power compulsorily to carry out works for the purpose of reclaiming, improving or bringing into use land under which underground mining operations have ceased. The House will have noticed that subsection (3) lists certain conditions which have to be met if the local authority are to be

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able to carry out those works without consent of all the persons interested in the land. The situation must be urgent; the surface must have collapsed or be in imminent danger of collapse; and the works have to be urgently necessary because of the risk of death or injury to persons or damage to other land or other property. As with Clause 7, there are safeguards for persons interested in the land, and compensation provisions are made for damage, depreciation, loss or disturbance. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Skelmersdale.)
3.12 p.m.
Baroness Birk: My Lords, first, I should like to thank the Minister for explaining this Bill so clearly and also so briefly. It is certainly not the type of Bill which is going to get high television ratings, but nevertheless its importance is very much greater than perhaps the interest displayed in it generally would appear to suggest. The Bill expresses an intention which all interested parties—these include local authorities, the British Steel Corporation, geological and environmental groups—support; and my colleagues and I on these Benches agree that, although some details may need to be clarified and perhaps adjusted, the Bill is one which should be widely welcomed.
As the noble Lord the Minister has explained, the purpose is two-fold. As he pointed out, the first part of the Bill concerns the winding-up of the Ironstone Restoration Fund which had been set up under the 1951 Mineral Workings Act. The decline in ironstone working has seen a concomitant fall in the income of the fund while the financial pressures of agricultural after-care and afforestation continue unabated. As the Minister has told us, the fund, as it was expressed on the Second Reading in another place, is teetering on the brink of bankruptcy, and without the contribution from British Steel it would indeed be bankrupt.
If, by transferring the assets of the fund to the British Steel Corporation, the continued improvement of land decimated by ironstone workings is secured, then that is a useful exercise. But of course any change in the system of financing is bound to worry those who benefit under the present system. Clauses 4 and 5, which the Minister spelt out, are intended to allay those fears by setting up transitional schemes to deal with existing arrangements concerning land being returned to agricultural use and to forestry.
During the course of the consideration of this Bill in another place the Government showed very welcome flexibility. For example, it was agreed that the level of payments of grants for afforestation should be subject to consultation with the Ironstone Royalty Owners' Association as well as the Forestry Commissioners and the British Steel Corporation. Can the noble Lord explain, therefore, why there can be no statutory provision for the annual review of these special grants, despite assurances in the other place that an annual review would indeed take place? This particular discussion in another place was on Report, on 9th January this year, as reported at col. 876.
We constantly have discussions and debates, on other pieces of legislation, about whether or not things
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should be on the face of the Bill. It does make a great difference. As I know the Minister and other noble Lords are aware, a report in Hansard carries no weight at all when it comes to the courts and any reference is made to it. All it does is spell out the inclination of the Government at that time. It does not have any value in law or in legislation. Either it should be on the face of the Bill or there should be some form of regulation or even a circular to make this absolutely clear. I do not think we are convinced that "subject to annual review" should not be included in the legislation. I should be grateful if the Minister would reply to that.
The transitional arrangements are due to end five years after their introduction—that is, in 1990—unless the restoration work happened not to be completed until after 1st January 1984. If this is the case, then the British Steel Corporation's financial liability can be extended by arrangement. But what I should like to ask is: what will happen if subsidence occurs in an ironstone area after 1990 and it is recorded that reclamation work had been completed before January 1984? Is this a gap which is being left and is it a trap which some people could fall into without being aware of it at the time? I wonder if it is something the Government should be looking at.
During the Committee stage in another place, the Minister's answer to that question was that there might be a longer-term problem which the Government and local authorities would have to work together to overcome. Can the noble Lord explain what sort of provision is to be made with regard to this potential longer-term problem? Will it involve, for instance, any financial burden on the local authorities? I would point out that the resources of local authorities are already wildly overstretched, and it is here that the situation will get worse and not better. Is it not true that the Bill as it stands has removed the right of local authorities to seek central Government reimbursement for reclamation work done on land left derelict since before July 1950? Schedule 2 repeals the sections which provide for central Government reimbursement to local authorities for the restoration of land left derelict before July 1950. This is of some importance. The repeals in Schedule 2 take away this right and then there will be nothing left to fall back on. I wish the noble and learned Lord, Lord Simon of Glaisdale, were here, because this is one of his particular subjects and I am sure he would be making this point far better than I can myself.
This was a point raised by the Member for Kettering in another place. It is causing great anxiety to the Northamptonshire County Council and to other county councils which are also concerned about it. As I understand it, the Parliamentary Under-Secretary is supposed to be visiting Northamptonshire today. If he is, then maybe it is too soon to get a signal from him. Perhaps the Minister can tell us if he is on his way there, if he is back, or if he has a further date if this one was not taken up. This is a very important part of the Bill and I think that Schedule 2 should be looked at very carefully once again. It always worries me when I see all these repeals. An awful lot of sections of the 1951 Act are wiped out and, if the Bill goes through, there will be very little left of it.
Clauses 7 and 8, to which the Minister has referred, embody the second intention of the Bill. Clause 7

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allows local authorities to enter land to survey, monitor or carry out reclamation works where subsidence has occurred or is likely to occur as a result of former underground mineral workings. Clause 8, which was introduced during Committee in another place, allows similar work to be carried out without the consent of the owner or occupier where it has been impossible, for various reasons, to obtain that consent. These important new local authority powers are rightly extended by the Bill to all areas and not only to the ironstone district set out in Schedule 1. This was opposed by some Members on the Government side in another place, but we on this side agree entirely with the Government that the powers are essential if the Bill is to be made to work properly.
However, it seems that what the Bill does not specify is the problem of Crown lands. These are not included at all. The Minister said in Committee in another place at col. 18 of the Official Report for 4th December 1984 that despoliation from tin mining on Crown lands would "have to be handled by separate arrangement". Will the Minister clarify the thinking of his department on this point, since it is of grave concern to areas such as Cornwall and Wales?
Finally, I should like to ask one further question. The Bill is quite specific: the first part deals only with the ironstone district and ironstone workings. Could the noble Lord look beyond the scope of the Bill before us and say what happens in the case of land despoiled by, for instance, limestone workings? Will there be any compensation related to the improvement of these areas? In other words, how does this Bill, which is quite a small Bill in itself, fit into what I describe rather highly as the Government's grand scheme of things or of life in this country, or, indeed of finance? How will they deal with it? Do they have a place for it? Do they expect it to be extended in other areas?
Having said that, and in the hope of obtaining answers to the points that I have raised, I should like to offer our support for this measure.
3.21 p.m.
Lord Lloyd of Kilgerran: My Lords, I wish to congratulate the Minister on the clear and competent way in which he presented the Bill. In order to save time, let me say that I should be interested to study the answers which will be given to most of the matters that have been raised by the noble Baroness, Lady Birk. In some respects this so-called short and technical Bill is exceptional from a drafting point of view and, perhaps, from a constitutional point of view, and I say that for the following reason. Its first six clauses deal with a very narrow power, but it then introduces two clauses which have far greater and wider powers. Therefore, as a matter of pure drafting, it is unusual. It is usual for a Bill to have general clauses at the beginning and for those clauses then to be followed by the narrow powers. But in this particular case the reverse is true. It is worth considering the powers that the Bill contains.
First, there is the narrow power to deal with problems arising in respect of one form of mineral extraction; namely, that related to limestone and iron workings and production in a narrow geographical part of the country. So narrow is the power that the
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areas concerned are spelt out parish by parish in Schedule 1 to the Bill. However, the second power arises in Clauses 7 and 8. It is much more general and applies to every area with underground mines throughout England and Wales, excluding coal mines. If I recall correctly, the noble Lord the Minister did not quite make it clear, at any rate to me, that this Bill is not concerned with the underground workings of coal mines. I may have misunderstood him, but I should like to emphasise that it has nothing to do with coal mines. I suppose it can be said by the Minister from a narrow legal point of view that, if one considers Clause 10, it could be inferred that the Bill does apply to the general power to which I have referred.
Clauses such as Clauses 7 and 8 introduce a new power to enter land. Such power, of course, is of obvious public importance and natural concern, and requires the most careful consideration. It is essential to safeguard the interests of all people relating to such land. When I read the Bill I must confess that I thought it was concerned only with ironstone workings. I consoled myself in having made that error by the fact that in another place the chairman of the All-Party Minerals Group (of which I happen to have the privilege of being a member), the Member for North Bedfordshire, felt that this Bill, when he first read it, was concerned only with ironstone workings. Therefore, it seems to me that one general aspect in relation to this Bill is that it should be made clearer that Clauses 7 and 8 apply to the whole of England and Wales.
I am not going to press this point, particularly as the Minister in the other place, at column 18 of Hansard for 4th December last year, explained why in his view it was essential to have this general power tacked on to the very narrow power in the first part of the Bill. He said:
"We face serious problems which affect many people and could affect a far wider franchise in this country. We could find that many millions of people are affected by former mineral workings. The predominant problem has been identified, but it could develop even further".
That passage may emphasise the point that was raised by the noble Baroness, Lady Birk, about the powers of compensation of local authorities.
I now turn to two or three small points in relation to the scope of Clauses 7 and 8. Clause 7 is the clause which deals with the power to enter former mining land. The point that I wish to make is this. When you study subsections (1), (2) and (3) of that clause, is the definition of "land" and also "relevant works" adequate for the purposes which the Government have in mind? It is a somewhat complex question, and in this context I have given consideration to the scope of Section 29 of the National Parks and Access to the Countryside Act 1949 and also to the Town and Country Planning Act 1971, particularly Section 290. I apologise to the noble Lord the Minister that I did not give him prior notice of this matter, but no doubt he will be able to deal with it—if he thinks that it is worth dealing with—later on.
The point is that where mining operations have taken place there will be surfaces of the land which have been used but which have not been directly undermined; that is, not in danger of collapse, as is emphasised so much in the course of the Bill. There

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may also be things like railway lines, ancillary buildings and places where extracted materials may have caused damage. In this connection, if we look at the definition in Clause 9 of "worked ironstone land", it says that that means:
"land which has been excavated in the course of winning and working ironstone by opencast operations, and includes land on which materials extracted in the course of such operations have been deposited".
Therefore, in so far as the definition of "land" is concerned, I ask whether the Government are satisfied that their powers under the Bill can be directed towards the land which has been otherwise used and has not been directly undermined. The same point arises under Clause 8(1), (2) and (3).
I turn to the question of compensation. As the Minister has stated, under Clause 7(11) compensation is given to the person interested in the land, and it is defined in the following way:
"Where in consequence of an exercise of the power to enter land conferred by this section any damage is caused to land or chattels, or any loss occurs in relation to chattels, the local authority authorising the entry shall pay …".
When one turns to Clause 8(9), which is the compensation subsection, one sees that to some extent the scope of compensation is different, because there it says:
"Where in consequence of the carrying out of works as mentioned in subsection (2) above any damage is caused to land or chattels, or any depreciation of the value of an interest in land occurs, or any loss occurs in relation to chattels",
and then the compensation subsection continues as before. In this part of the Bill, for compensation under Clause 8 there is inserted a power to claim compensation not merely for the damage caused or the loss in relation to chattels, but also for depreciation of the value of an interest in land. Therefore, I would tentatively suggest that an amendment might be considered to the effect that the words:
"any depreciation of the value of an interest in land occurs"
should also be included in the corresponding subsection dealing with compensation in Clause 7; that is, subsection (11).
I have not referred to another subsection which deals with compensation and which refers to disturbance arising from the enjoyment of the land or chattels. However, both the subsections in Clauses 7 and 8 are identical, whereas the words which I have quoted regarding the loss arising from depreciation in land have not been included in Clause 7(11).
As I understood him, the Minister was good enough to say that a survey had been made in relation to this problem. I have not had an opportunity to see it, but I wonder whether he would be able to say that the survey has dealt with some of the problems with regard to mining operations in parts of Wales. I have particularly in mind certain lead mines in areas in Cardiganshire, not far from Aberystwyth. It would be interesting to know as a matter of information whether that survey covers Wales.
3.34 p.m.
Lord Middleton: My Lords, I do not think I share the worry expressed by the noble Lord, Lord Lloyd of Kilgerran, about the fact that the provisions dealing
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with the powers of entry to come on to land where there are dangerous holes have been tacked on to the ironstone provisions. I propose to confine my very brief remarks to the ironstone provisions. As my noble friend has just reminded us, the main purpose of the Bill is to wind up the Ironstone Restoration Fund. This seems to be perfectly reasonable now that the working of ironstone in the ironstone district has virtually ceased.
Lord Lloyd of Kilgerran: My Lords, perhaps the noble Lord will allow me to interrupt him. If he is saying that the Bill is mainly concerned with the winding up of the fund and not with the very important powers given under Clauses 7 and 8, I should have thought that he would have had some sympathy with what I had to say.
Lord Middleton: My Lords, I was quoting from the Bill itself when I said that the main purpose of the Bill is to repeal the provisions of the two Acts. The Bill contains six clauses to deal with that and two to deal with the other matter. As we have heard, the fund was set up under the Mineral Workings Act 1951 to finance the restoration of worked land and to make grants for drainage and other works necessary to bring the land back into agricultural and forestry use. Contributions to the fund were made jointly by the landowners, the Treasury and the mineral operators. Technically, the restoration of land that had been stripped of its soil and then worked for iron ore presented owners with all sorts of problems, some of which, as I think the noble Baroness, Lady Birk, said, may not be fully overcome by the proposed cut-off date. Nevertheless, it is my understanding that the owners, while accepting that the purposes of the fund to which they have contributed over the years have broadly been fulfilled, have been anxious to ensure that the Government were fully aware of the inherently unstable nature of restored land.
When the Bill was introduced in another place and subsequently in Committee, certain proposals were made in order to ensure the fairest possible arrangements with respect to the funding of the aftercare of restored land. Here and now I should like to pay tribute to the very helpful and understanding way in which the Minister and his department have listened to these proposals.
Amendments have been made to the Bill and undertakings given, so that the Bill as we see it this afternoon disposes of the principal worries of the owners concerned. First, there has been what, in effect, is an extension of the transitional period during which grants for aftercare will be financed by the British Steel Corporation from five years to six and a quarter years for land restored after 1st January 1984.
Secondly, grants, while funded by the British Steel Corporation, will, in effect, continue to function through MAFF and through the Forestry Commission. Thirdly, by amending the Bill the Government have accepted that the rate of Section 25 payments—these are the afforestry payments—should continue to be reviewed under the existing system of consultation between the owners, the Forestry Commission and the BSC. The Minister has given an assurance that such a review will be an annual one.

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The noble Baroness would have preferred to have seen this assurance embodied in the Bill. I read what the Minister said at the Third Reading of the Bill in another place, and I, too, did not quite understand why he could not have included it in the Bill. He did not really explain.
I was interested when the noble Baroness said that there remains the question of instability of restored land in the future. For example, what happens when a drainage scheme installed before or during the transitional period becomes damaged by subsidence after the cut-off date of 1st April 1990? If Mr. Macfarlane is visiting the Corby area today, no doubt he will be able to see on the ground examples of the kind of problem which might arise under this heading. I shall wait with interest to hear later, if not today, what my noble friend can tell me on this remaining point, which is worrying the restorers of land which has yielded up its underlying raw material and which now must become productive again, and which must continue to be productive.
3.39 p.m.
Lord Beswick: My Lords, before the noble Lord replies, I wonder whether I might ask just one question. The noble Lord, Lord Lloyd of Kilgerran, said that certain parts of the Bill applied very narrowly. Nevertheless, there are parts of our country and certain counties that are very importantly affected, and the importance did not come over in what the noble Lord had to say.
I cannot understand why the Parliamentary Under-Secretary has chosen to visit the sites concerned on this very day of Second Reading. Why was this particular day chosen? Would it not have been better for the Parliamentary Under-Secretary to have studied the problems on site before Second Reading? Would not that have placed the noble Lord in a better position to answer questions? Alternatively, could we not have put back this Second Reading a day or two until the noble Lord had had the benefit of the observations of the Parliamentary Under-Secretary? I should be grateful if the noble Lord could explain the reasoning, and if he could assure us it was not an underestimation of the importance of these problems to the Northamptonshire County Council.

Frigate Orders
3.40 p.m.
The Parliamentary Under-Secretary of State for the Armed Forces (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 Royal Navy frigate orders. The Statement is as follows:
"As the House knows, I have been considering the results of a tendering exercise for two Type 22 frigates for the Royal Navy. Cammell Laird, Swan Hunter and Vosper Thornycroft were each invited to tender for these warships; one, the fourth replacement for warships lost in the South Atlantic, and the other an addition to the naval programme which I authorised in 1983.
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"The tendering process has been unusually protracted for several reasons. I have been concerned to obtain the best available prices and tauter contract terms than we have been accustomed to in this field of defence procurement. The earlier tender replies did not adequately contribute to this objective, and it was not possible to take a decision on the order before the validity of the tenders expired. A final round of tendering was initiated in late July last year. The results of this round met several of the concerns to which I have referred; and, as with the earlier rounds, showed that the competition had been close and keenly fought.
"The House will be aware that the decision on the orders for these frigates has important implications for each of the competing yards. I have considered these implications carefully in consultation with my ministerial colleagues.
"At this point, I should say that the deplorable and unnecessary industrial action which occurred last summer at Cammell Laird would, as I made clear at the time, had it continued, have excluded the yard from further consideration in the competition. The courage and determination shown by the moderate elements of the workforce at Cammell Laird, in the face of the intimidatory behaviour of their former work colleagues, has averted the almost certain closure of the yard at an early date.
"The cheapest solution from the point of defence procurement would be to place the order for both ships with one yard; but in the light of the wider and relevant factors involved, I have decided that an order for one Type 22 frigate will be placed with Cammell Laird and for the second with Swan Hunter, and I am prepared to authorise the necessary expenditure. This offers the prospect of survival of Cammell Laird as a major warshipbuilder; without such a contract the yard would have closed. I hope that the yard will succeed in obtaining other business in the short as well as the long-term.
"Swan Hunter, which is a much larger firm and is implementing a large redundancy programme at the moment, could face further substantial redundancies even with the order which I have just announced. The Government wish to do what they reasonably can to prevent this. Last autumn, we embarked on the construction of a new class of frigate, the Type 23, and negotiated a first order at Yarrow on the Clyde. I have decided to negotiate an order for the second Type 23 frigate at Swan Hunter as soon as this can sensibly be done, and subject to satisfactory agreement on price and other contract terms. I will expect the price for this frigate to reflect the economies obtainable with an order for two frigates rather than one and to be competitive. In order to establish this, tenders will be invited for the third Type 23 order in the same timescale from all United Kingdom yards capable of carrying out the work."
My Lords, that is the Statement.
Lord Graham of Edmonton: My Lords, may I thank the Minister for repeating in this House the Statement which has just been made in the other place. The

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Minister is aware from Questions which have been tabled by Members of Parliament with constituency interests of the continuing interest in both Houses as to the outcome. From these Benches may I say that in the two yards that will receive the orders it is a satisfactory outcome to what the Minister has said has been a protracted period. The Minister is aware that the considerations of employment are crucial. Although the Minister talks in terms of several reasons, I wonder whether he could tell us the extent to which regard was paid to the consequences of placing the orders in one place or another so far as employment is concerned?
The Minister in the Statement refers to "tauter contract terms". Do I understand that "tauter" is in fact another word for "tighter", and that in actual fact the scrutiny and the need to comply to specifications have been as tightly drawn as possible? Can the Minister tell us whether any corners have been cut in the precise specifications when that has taken place?
I note the strictures which the Minister lays—and I would have said fairly—on the performance at Cammell Laird during 1984. It appears to me that all concerned at Cammell Laird will breath a sigh of relief that they have the opportunity of a reprieve or a new opportunity in the light of what has taken place here. Coming from Tyneside, I certainly welcome the action of the Minister and his colleagues in placing one of the orders with Swan Hunter. Tyneside is an area which is deeply in trouble from unemployment and difficulties in the shipbuilding industry.
Is the Minister able to tell us anything further to the Answer that his Parliamentary colleague, the Under-Secretary in another place, gave to Mr. Dalyell on 11th January (at col. 561 of Hansard) where the Minister then said:
"The average cost of a batch 111 type 22 frigate is currently estimated at about £140 million"
and that there are other factors, too, making it in excess of 150 million. In a tauter specification and satisfactory terms are we talking about that kind of figure at this particular time?
Would the Minister care to say a little more about the causes for the delay? The Minister lays much of that on the inability to get proper specifications within a budget, and secondly on the conditions in the shipyards. I wonder whether it has anything to do with the escalating costs of the Trident programme and the need for the Minister and his colleagues to try to keep within their overall budgets?
Can the Minister assure the House that in no way will these frigates or any other vessel of a similar ilk suffer from the need of the Government to keep within the overall defence budget despite the escalating costs of Trident and other factors? Finally, may I say that this is perhaps one of the most benign Statements that the Minister will ever have the opportunity of presenting to the House; and so far as we are concerned on this side there is a great deal in it that we welcome. It is a satisfactory Statement.
Lord Mayhew: My Lords, is the Minister aware that my noble friends and I will have a more jaundiced view of his Statement than the noble Lord, Lord Graham? Would he say first whether these regrettable delays mean that the Government can only maintain
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the destroyer and frigate fleet at its promised level of 50 ships by keeping in service frigates which would otherwise have been retired? Will he answer a question about the phrase which refers to ordering "the second Type 23 … as soon as" the Government sensibly can? Does this mean that they will not order the second Type 23 frigate until after the normal period of testing of the first Type 23, the first of its class? Will he say in which years the second and third Type 23 will be ordered? Finally will the noble Lord tell us what progress the Government have made in their discussions for a standard NATO frigate design for the mid-1990s?
Lord Trefgarne: My Lords, I am grateful to both noble Lords. As for the questions put to me by the noble Lord, Lord Graham, I can tell him that the social considerations—if I may call them that—while not paramount, certainly loomed pretty large in our considerations of this particular contract, or these two contracts as they now are. I can confirm that we have certainly cut no corners in reaching the specification and the contractual terms of these two ships. That would certainly be a reprehensible action to take and we of course would have none of that.
As for price, the figure that the noble Lord offered of about £140 million is in the right ball park. I can confirm that. The noble Lord will know that we do not go into detail on the prices, but I can see no harm in confirming the approximate figure which he has put to me. I can confirm to the noble Lord that these contracts have no relevance to the Trident project to which he referred. That is a quite separate matter. Proper budgetary provision will be made for both these contracts and for the Trident programme.
In answer to the noble Lord, Lord Mayhew, I can tell him that we plan to place the order for the second and third Type 23 frigates about the beginning of next year: that will be before the first Type 23 frigate comes into service. That was ordered in October last year so we shall not have the benefit of the trials programme when we place the order. However, to have to wait all that length of time would put the date upon which we placed the order for the second and third Type 23s some further distance into the future. We would be very reluctant to do that. Those were the principal points put to me by noble Lords.
Lord Boyd-Carpenter: My Lords, in view of the delays that have taken place in the delivery of previous ships, can my noble friend say whether the tauter contract terms to which he referred include stiff penalties for failure to deliver to date? Secondly, can he tell the House what was the saving forgone—in my view, rightly—by placing the orders for the two Type 23 ships in different yards?
Lord Trefgarne: My Lords, my noble friend puts his finger on the principal point that we have sought to correct in seeking the so-called tauter terms in our contractual arrangements: that is, to get punctual delivery at the time, at the price and to the specification stipulated in the contract. There is a small sum involved in going to two separate yards rather than in placing the order for both ships at one yard. Perhaps my noble friend will allow me to write to him with the figure.
Lord Sefton of Garston: My Lords, may I add my thanks to those expressed by my noble friend on the Front Bench to the Minister for repeating the Statement which has been made in another place? More particularly, I thank the Minister for the fact that Cammell Laird will obtain one of these orders. This is not the time to debate the worthwhileness of giving Cammell Laird an order for a frigate. However, taken against the background of the problems that Merseyside has had, it is not surprising that occasionally there is industrial trouble there. An objective study of the industrial troubles on Merseyside by any fair minded person would show that it is not the only place which has industrial problems. Compared with some other places in the country, including the South-East, the record is pretty good. Having said that, it would be churlish, as a Merseysider, not to express my gratitude, which I am sure is echoed all over Merseyside today, for the placing of the order there. I am sure that the tribute paid by the Minister to the moderate element in Merseyside will be well justified and that Merseyside will return a good job on time.
Lord Trefgarne: My Lords, I am grateful to the noble Lord for that intervention. The efforts of the moderate elements in the workforce at Cammell Laird have indeed resulted in the placing of this order.
Lord Mayhew: My Lords, will the noble Lord answer the first question that I asked and reassure the House that these delays will not mean any threat to the Government's pledged fleet of 50 destroyers and frigates? Will he agree that this will not be maintained simply by keeping on ships that otherwise should retire from service?
Lord Trefgarne: My Lords, I can confirm that it remains the Government's policy to provide a fleet of about 50 destroyers and frigates, as the noble Lord knows. The orders that we have announced today, which we have foreshadowed for next year, will contribute to that fleet, and there will be more frigates and destroyers ordered in the future.
Lord Roberthall: My Lords, I wish to ask the Minister just one question. In view of the competition involved, am I right in thinking that these are contracts which will not be subject to reference to the review board on Government contracts?
Lord Trefgarne: I see no reason why they should be, my Lords.

Mineral Workings Bill
3.56 p.m.
Second Reading debate resumed.
Lord Skelmersdale: My Lords, I hope that the House will consider that it is appropriate to return to the Second Reading of the Mineral Workings Bill.
I have listened very carefully to all the speeches that have been made. I will read them equally carefully in the Official Report tomorrow. But I should start by agreeing with the noble Baroness, Lady Birk, that this
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small but important Bill will not hit many headlines, either visual or verbal. However this should not be seen as making it unimportant in any way.
The first purpose of the Bill which has been widely accepted is to wind up the Ironstone Restoration Fund and is a limited measure. We are all agreed that over the past 30 years the fund has made a valuable contribution to the reclamation of worked ironstone land in the Midlands field. I think however that most of us equally accept that, with the rundown of ironstone workings in this country, the fund has served its purpose and should now be wound up.
I was asked a number of questions and I shall run through them roughly in order. First, the noble Baroness, Lady Birk, asked me why there are no statutory provisions in the Bill for an annual review and whether there should be. There are technical difficulties about including statutory provision for an annual review in Clause 4. The purpose of the clause is to define the extent of the British Steel Corporation's responsibility. The insertion of an annual review provision would only have the effect of limiting BSC's responsibility, not of requiring that a review be conducted. I understand that the Ironstone Royalty Owners' Association has been given a written assurance from both BSC and the Forestry Commission that the rate of grant will be subject to annual review, so it is not just in the Official Report but the commitment will be in the papers of those two very important bodies.
Baroness Birk: My Lords, there are a number of points which I know the noble Minister has to answer before he goes on to others, but I should like him to deal with this because it was a point supported also by his noble friend Lord Middleton. We are now discussing this Bill in your Lordships' House but it started in another place. I ask the Minister to take this back to see whether it is possible to include this matter. We are all used to the technical reasons—I was trying to find a more felicitous word than "excuse", but that will do for a moment—for not including items on the face of a Bill. This is important. It does not involve putting in a special sum, but saying "subject to annual review". With great respect, assurance in writing to the Ironstone Royalty Owners' Association has, from my point of view, exactly the same small amount of impact as its being in Hansard. I am not accusing the Government of deciding maliciously to do or not to do something, but I should like to see it in the Bill. I should like to feel that this point will be considered again.
Lord Skelmersdale: My Lords, I should be the first to concede that a commitment by one Government is not binding on a successor Government. Most certainly I shall undertake, as I thought I had already, to consider and read most carefully the Official Report tomorrow and decide what action to take about the various points that have been raised.
The noble Baroness also asked me what would be the position after 1990 about subsidence. She is quite right. Where the position relates to the after-care of land restored before 1st January 1984 the arrangements may persist until completion or until 31st March 1990, whichever is the earlier. The cut-off date

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has been set at the end of March 1990; that is five years from the introduction of the transitional arrangements. In passing Section 5 of the Minerals Act 1981 Parliament has already accepted that five years is a reasonable after-care period. In this case we are being even more generous than we were in the Minerals Act 1981 by making it six years.
Several noble Lords raised the question of the visit today to Northamptonshire by my honourable friend the Parliamentary Under-Secretary who looks after these matters. My honourable friend's visit was arranged because of a commitment that he gave in another place at Committee stage that he would visit that part of the country to get an appreciation of the problems of people working limestone from old ironstone planning consents. He would like to look at hill and dale forestry restoration, too, and would like to see examples of subsidence. He has just, within the last hour or so, returned from his visit, and I should tell the noble Lord, Lord Beswick, that there is no sinister motive in any of this and, certainly, no disrespect to your Lordships' House or to Northamptonshire or any other council. It was in response to a question in Committee in another place, and today was chosen because it jointly suited both his hosts and my honourable friend's diary and was well before the usual channels had discussed the date of this debate in your Lordships' House. No ulterior motive should be assigned to this particular day.
Lord Beswick: My Lords, I readily acquit everyone concerned of sinister motives, but if it was fixed some time ago, would it have been beyond the wit of the planners of business here to have delayed the Second Reading until his report had been received?
Lord Skelmersdale: My Lords, I am sure that nothing would be beyond the wit of the usual channels, but the usual channels did not consider the noble Lord's point. If he had been in a position to make it earlier, no doubt it would have been considered. The noble Baroness, Lady Birk, asked about Crown land as it might or might not be affected by the provisions of this Bill. I have to tell her that Crown land is outside the scope of the Bill because it would be necessary to look at each case on Crown land if and when it arises; but it is likely that the spirit of the Bill will be followed in any case. It would sometimes, I suggest to her, be difficult to justify a power of compulsory entry to such as defence or prison lands. I see that the noble Baroness is nodding and I think that perhaps she understands that.
The noble Lord, Lord Lloyd of Kilgerran, asked me a number of questions. I must say that I wondered whether at one point he was not fishing a little. Of course, there is no harm in fishing so long as he is not using lead weights, which of course the noble Lord is not prone to do. He was asking about the differences in the compensation provisions of Clauses 7(11) and 8(9). I must confess that I may have been just a little at fault here in not providing notes on clauses quite as early as I might have done; but I can undertake that they will be in the Printed Paper Office for your Lordships' consideration tomorrow.
However, for now, before the noble Lord reads them, I think I should say that he was talking about
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two completely different cases. The power of entry under Clause 7 can be used where a local authority proposes to carry out works on any land for the purpose of reclaiming land under which relevant observations have been carried out, whereas under Clause 8 this is the compulsory carrying out of work. The noble Lord will readily see that these are slightly different.
The noble Lord, Lord Lloyd of Kilgerran, also asked about Wales. I should tell him that the derelict land survey of 1982 covered only England and so Wales is not included in this Bill. But we would perhaps be in a position to consider further whether it should be included at a later stage in the Bill.
My noble friend Lord Middleton made two points. First, I was delighted to hear from him that the owners accept that the conditions of the fund have been broadly carried out and that the Bill now meets the concerns of the owners. I accept my noble friend's point that one can never rule out the possibility that subsidence may recur on land restored after the opencast working of any mineral, although I am advised that the risk is slight. It is generally accepted that where subsidence may recur on land restored after the opencast working of any mineral, although I am advised in certain circumstances, with assistance in the form of grant from the Ministry of Agriculture. I am advised that the risk of subsidence on restored ironstone land is no greater than the risk on land restored after the open-cast working of any other mineral. As far as I can see, that covers the major points.
The noble Lord, Lord Lloyd of Kilgerran, asked me why we had, in effect, two Bills, with one part of the Bill very narrowly drawn to a specific geographical area and the other covering the whole country. The noble Lord well knows that the legislative window is extremely small and where a situation arises which should be dealt with urgently the Government will use such legislation as they have in mind to bring about those changes in the law which they see as desirable. As I have said, I think now three times, I shall look at the points raised today and I have no doubt that we can look forward to an interesting discussion in Committee.
Lord Lloyd of Kilgerran: My Lords, before the noble Lord sits down, may I say that I have had the opportunity of reading the Notes on Clauses and Schedules for this House. They were presented to me this morning by a Member of the other House; in fact, the chairman of the All-Party Minerals Group, of which I am a member. I have read them carefully and, as far as I can understand them, they do not affect my arguments in relation to compensation and the suggestion that the depreciation of land should form part of the compensation given under Clause 7. The noble Lord referred to Wales and said that the survey was limited to England. He said that this particular point would probably be considered in the course of the passage of this Bill. Was he there giving some kind of assurance that a survey of Wales will be done in relation to these matters, which can be of great importance?
Lord Skelmersdale: My Lords, the only undertaking I was giving was to consider any point that the noble

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Lord might bring forward on that subject at a subsequent stage of the Bill. So far as the Notes on Clauses are concerned, that only bears out the last point I made in this short wind-up speech: that we will have an interesting Committee stage.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

New Towns and Urban Development Corporations Bill
4.8 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon): My Lords, I beg to move that this Bill be now read a second time.
I know that many Members of this House have taken a keen interest and a justifiable pride in our new towns. Indeed, it was a committee under the late Lord Reith who laid the foundations for new towns. The first New Towns Act in 1946 followed closely the framework laid down by that committee. It provided for new town development corporations with wide-ranging powers to achieve the planned development of their areas. The aim was then, as it has remained ever since, the achievement of thriving, balanced communities, able ultimately to be treated in the same way as other towns. I am myself conscious of being a novice in this debate where every speaker has more knowledge than I and, indeed, most of them are leading experts. The main theme of this Bill is that final step for the new towns in England and Wales.
In Scotland, the pattern of progress foreseen by the Government is different, and this Bill does no more than make some minor changes in relation to the Scottish new towns. For English and Welsh new towns, however, it addresses squarely the question of what is to be done when the new towns approach maturity.
Eight new town development corporations have already been wound up and their remaining assets and liabilities transferred to the Commission for the New Towns. Another five are due to be treated in the same way in the course of this year. The three new town development corporations in the North-East of England were due to be wound up at the end of this year, but their future is currently under review and the Government are aware of the need for an early decision. Our conclusions will be announced as soon as possible. The Cwmbran Development Corporation, in Wales, is due to be wound up at the end of March 1988, and the target has been set for winding up the remaining four corporations in England in the late 1980s. Consideration now has to be given to precisely what date that should be. Now is the right time to look ahead and make the necessary legislative provisions for the final winding up of the new towns programme in England and Wales.
Before turning to the details of the Bill, I should like briefly to look at the history of the subject. Although there has always been a considerable consensus on the powers needed by development corporations and the way in which they should tackle their work, the same cannot be said about what should happen when they
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reach the end of that development task. Lord Reith's own committee was divided on that issue. Some say that the transfer of the assets and liabilities to the local authority for the area is the correct solution. Others saw objection to the idea of combining the role of the local authority with large-scale ownership of land in the town. These differences were reflected in the 1946 Act, which allowed a variety of outcomes, including even the sale of the assets.
By the late 1950s the problem was becoming more urgent as some of the new towns near London approached completion. The then Government decided it would not be right to combine local authority functions with widespread property ownership. As an interim solution they introduced the New Towns Act 1959. This created the Commission for the New Towns as the public body which would inherit the assets and liabilities of development corporations when they were wound up. As I mentioned, eight new towns have already passed to the commission, and five more are expected to do so this year. But even then the Government made clear that the commission was not in itself the final answer: that, it was argued, would emerge with the benefit of time and experience.
Nothing lasts like the temporary. After nearly 25 years the time has come to resolve this problem. The Government do not believe that there is a case for a continuing special public sector involvement in the new towns. Our policy has been aptly summarised as being to make the new towns as much like old towns as quickly as possible. The special involvement of the public sector through the ownership of land and buildings has been an important tool in promoting the growth of the new towns. But when that induced growth has been achieved and there is no need for further growth, the case for that special involvement ceases. We believe that the right solution is for the property which in other towns is owned by the private sector to pass into the hands of the private sector in this case. Within the framework of the New Towns Act, and with the modifications made by the Local Government, Planning and Land Act 1980, we have already seen steady progress in this disengagement. Some £500 million worth of commercial and industrial assets have already been sold to the private sector. This Bill provides for the continuance and completion of that policy.
Against that background I should like to turn to the first of the detailed provisions in the Bill. Clause 1 enables the commission to continue with the task of disengagement and normality—unlovely words, but they state clearly the basic aims of the policy. The clause picks up from the existing provisions the remit of "holding, managing and turning to account" the assets which the commission inherits from development corporations. It then restates and clarifies the powers of the commission to realise those assets as soon as it considers that expedient. By adjusting the existing provisions, the clause then goes on to provide the necessary controls over the commission's work, consistent with its main tasks.
Clause 2 gives the Secretary of State power to wind up the commission when its tasks are substantially achieved and makes appropriate provision for dealing with residual assets and liabilities. But the Bill can only

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set the general framework within which the commission can operate. Your Lordships will want to hear more about the way in which it is intended that these powers should be used. I draw particular attention to the passage in Clause 1 of the Bill which requires the commission, in carrying out its task, to have regard to:
"the convenience and welfare of persons residing, working or carrying on business there";
that is, in the towns for which they are responsible. This requirement qualifies the whole of the commission's activities, and I emphasise this because it shows the way in which the commission must approach their work.
The activities of the commission must vary according to the circumstances of the town. My honourable friend the Minister for Housing and Construction said in another place that it was not the intention that the activities of the commission in the towns where they are about to assume responsibility would be a carbon copy of what they are doing in the towns in the home counties where they have long had responsibilities.
The example of Corby is already enough to show that this is the case. The commission undertook responsibilities in Corby in 1980 when the development corporation was wound up. Corby was then faced with special difficulties because the steelworks that the new town was built to serve were closing down. The commission, as part of its programme agreed with my department, undertook, in conjunction with the local authority, a substantial development and promotion programme. I believe the general consensus is that it has been a success.
The commission's response will therefore be flexible, depending on the needs of the towns in which they are operating. Where it is necessary for them to undertake development and promotion they will be able to do so. We expect them to relate their activities of this kind specifically to the realisation of the assets which they will inherit; but to bring land intended for industrial development into full productive use will require support and promotion for developments. To sell industrial premises at a proper price will need the local economy to be in as good a condition as possible, and that again will involve more than simply auctioning off buildings for what they can get. In all this we shall of course expect the commission to act in accord with general Government policy for limiting public expenditure; and we shall hope to see reliance placed mainly on encouraging private investment.
New town development corporations have on the whole good relations with the local authorities in their areas. This is something we wish to see continue when the commission takes over. There are bound to be changes in two respects at least, for the local authority will be undertaking greater responsibilities. In the first place, public sector rented housing in the new towns will in most towns become the responsibility of the local housing authority. Everywhere we hope to see the local district council take over responsibility for the public open spaces and other facilities for the use of the community which have been provided and maintained by development corporations. We believe that we have reached an equitable basis for this transfer.
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I have already spoken about the arrangements at Corby. There the commission's input has been side by side with that of the district council. The Joint Industrial Development Committee there has done good work. The commission are setting up liaison committees elsewhere where it is taking over their responsibilities. They involve local district councils and representatives of the county councils, and the local business community can be brought in as necessary. Some of these committees have already started meeting. The reports I have suggest that the foundations are being laid for a helpful and cooperative approach.
I spent a fair time explaining the first proposals in the Bill. If I may, I will now deal more briefly with the rest. Clauses 3, 4 and 5 make some changes in the arrangements for housing transfers. Clause 3 simplifies the form of a housing transfer scheme. Clause 4 provides explicit statutory authority for the grants which are already being paid under the authority of the Appropriation Act.
Clause 5 provides that the Crombie terms of compensation will not be available to staff affected by any future housing transfers, including those about to take place. The Government's intentions on this were made clear by my right honourable friend the then Secretary of State for the Environment in May 1982.
With Clauses 6, 7 and 8 we come to the other main theme of the Bill. The new towns have always been financed mainly by borrowing. The expectation was that the development of the towns would create sufficient surplus to repay that borrowing. In the case of the first generation of new towns, that expectation has on the whole been fulfilled. In the case of the second and third generations, it has not. Circumstances have changed in many regards, and some specific decisions in the 1970s substantially increased the liabilities of the new town development corporations. The result is that the second and third generation new towns are unlikely to provide sufficient surpluses to service all the debt that they have incurred. The Bill therefore provides for financial reconstructions.
For the new towns where developments will continue for some time, their finances will be reconstructed by means of writing-off some of the debt and by providing grant for the provision of facilities such as roads and open spaces, which cannot be expected to pay for themselves. This will give these development corporations a new, clear remit for their remaining work. For the other new towns, part of the outstanding debt will be suspended while the assets are realised and applied to the redemption of the debt.
Finally, the House will have noticed that the Bill contains a reference to the urban development corporations. The sole provision in the Bill affecting them is an increase in the finance available for them. This is part of the regular system whereby programmes of this kind are made subject to parliamentary review. It gives an opportunity for a review of the activities of the corporations—an opportunity which your Lordships may have noticed was fully seized on Report stage in another place. For present purposes, I just want to say that the two urban development corporations are doing a magnificent job and that the

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provision of further resources for the regeneration of the Merseyside and London docklands is entirely justified.
Although this Bill contains some quite complicated provisions, its general purpose is simple: to enable the new towns programme in England and Wales to be brought to a satisfactory conclusion and to permit the urban development corporations' programme of regeneration to continue. Both purposes are fully justified. My Lords, I commend the Bill to the House and I beg to move.
Moved, That the Bill be now read a second time.—[The Earl of Avon.]
4.22 p.m.
Lord Campbell of Eskan: My Lords, when I was chairman of the Milton Keynes Development Corporation I had occasion, in the early 1970s, to discuss some development problem with the then—Conservative—Secretary of State for Industry. As I was leaving the Minister's room, he took me aside and said: "We are going to be difficult, but we are not going to be stupid." That seemed to me an admirable formula which I hope still applies.
To the extent that this Bill is designed to produce a more rational and businesslike system for those engaged in new town and urban development, to clarify the role of the commission and to assure the orderly completion of the new towns, it is to be welcomed. But I must say that I wish there was not such an air of unseemly and possibly even improvident haste in the process of winding-up. The building of new communities, of new towns, has by any standard been a success, socially, economically and in terms of generating new jobs in modern factories and offices, with up-to-date equipment in pleasant surroundings for living, working, travelling and retirement.
The real achievements of the new towns, socially and economically, have far outweighed their imperfections. They have also offered, although this may not entirely earn them good marks with our present Government, splended examples of the virtues of a mixed economy. Public investment got them going and on that foundation the private sector can progressively take over until the development corporation finishes the job.
I have never understood the contention that the renewal of old towns and the building of new communities are mutually exclusive. Generations in the past have built towns and cities appropriate to their needs. Today's old towns were once new towns and were built to satisfy the needs and standards of their times.
I want briefly to deal with three points. First, those development corporations which have not finished their work should be allowed—indeed, encouraged—to do so. The Government should see to it that their work is completed in a way which does not leave a long-term burden upon the areas which have provided the sites for these great schemes of British post-war development. And those who have invested their lives, their livelihood and their money in what was originally a paper plan, in the belief that the
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Government would see it through, must simply not be let down.
Milton Keynes, for instance, is only about half finished. Even The Times in a leading article on Christmas Eve last wrote:
"The development corporations (quangos that they are) have in most cases impressively fulfilled their tasks in building, letting and boosting. Is that job finished? In Milton Keynes, also in Peterborough and Telford, the answer is 'No': the Milton Keynes Development Corporation has work (performed at minimal net cost to the public purse because of the strength of its porfolio of assets) to last well into the I990s".
It is extremely difficult to find anybody outside SW 1 who does not think that it would be folly to change the management—to change the rules—now. The main effect would undoubtedly be to dry up the flow of private investment and to sell the towns short.
The great attraction of a new town to private housebuilders and to commercial and industrial investors is that the generation of jobs, the building of houses and the development of social services, education, transport, recreation and so on all go hand in hand. This is something that does not happen when there is no development corporation on the spot.
My second point is this. For the first time, sensible arrangements are being offered whereby grants, as against loans, may be made for certain categories of development expenditure. By all means let the Government be difficult, be tough, in the application of this new system, but I hope that they will not be stupid. For instance, where some comprehensive and balanced development has been approved by Whitehall, it should be unnecessary to insist on specific approval for every item of expenditure involved. I hope that the Government will not engage in quite unnecessary and expensive, in time and money, nitpicking, for the want of a more eloquent word. It is hardly unfair to say that, up to now, new towns have been built more in spite of than thanks to the rules, but often thanks to the good sense of the officials interpreting them.
My third and last point is this. Hitherto, when development corporations were abolished, as the noble Earl said, the commercial and industrial assets were handed over to the Commission for the New Towns, which retained powers and responsibilities for promoting the towns, for generating jobs, and for maturing the assets until they could be sold without detriment to citizens and investors. This was thoroughly sensible, for it recognised the need for, as it were, a transitional period. Is it now the Government's intention that the primary function of the commission should be to disengage from its role as commercial and industrial landlord, to minimise its promotional role, and to sell off the properties as soon as it can be rid of them? What can be more improvident than to jeopardise the full realisation of the capital and revenue value of public investment in new towns by turning off the tap before the culmination of its potential?
This Bill is said to be necessary to enable new towns to become self-sufficient communities, to discourage their special public sector involvement, and to bring the new towns programme to its completion. I find the last purpose sad, because I believe that the new towns programme has been a great British success story since

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the war. It has certainly been recognised as such abroad. But if the end must come, let it not be by scuttling. I hope that the noble Earl can undertake that the genuine completion of properly balanced communities with flourishing employment will be encouraged.
I should like to say a last word on employment. The generation of jobs is a crucial role of development corporations. New towns have proved themselves particularly successful in attracting foreign investment which might otherwise have gone elsewhere in Europe. With unemployment the bedevilling evil of our society today, no agency should be disbanded or discouraged that has proved its continuing capacity to provide new jobs.
4.28 p.m.
Baroness Stedman: My Lords, I accept that this Bill is not entirely unexpected, but neither is it wholly acceptable at this point of time. Those of us who have been involved with new towns knew that at some time or other those new towns would be wound up when the development corporations' job was completed and that the town would then be handed over, more or less, to the local authority. In the early days we thought that we were being practical and realistic—not idealistic—when we believed that as a general rule it would be right for the commercial and industrial properties to return to the community, because it would have been the community, the community activities and the amenities, that would have played the major part in increasing the value of the leasehold properties.
I still believe that the new town communities should benefit from the increment in the value of land. I am not opposed to local shopkeepers buying their own shops or to local industrialists being able to buy their own factories and warehouses, and I applaud tenants having the right to buy their own homes. But I am opposed to the commission being able to dispose of the properties on the open market, probably to faceless pension funds, insurance companies, multinationals and banks. If this is to be, then we need to ensure that there is not a sudden glut of industrial and commercial properties on the open market, with the result that a fair price is not obtained. We must realise fully the proper value of these assets and any forced sale of land, shops and factories would cause concern within the new towns.
On housing in the new towns, must all the rented accommodation be transferred to the local authorities? Cannot housing associations and co-operatives also be involved in managing some of this rented stock? There must be a sensible transfer of the housing stock and community buildings and enough time must be allowed for this to proceed smoothly. It must not be rushed, and any botched-up and ill-thought out schemes produced against a deadline date really must not be tolerated. I understand that Milton Keynes, which has been so excellently referred to by the noble Lord, Lord Campbell, Redditch and my own city of Peterborough have already established combined housing departments to administer both stocks of rented accommodation, that belonging to the city council and to the development corporation. This is good practice because it allows the housing
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department to assume those extra responsibilities in an orderly fashion. The district councils and the development corporation housing departments are unlikely to have been organised on exactly identical lines and it will take time for a proper system to evolve using the best standards of both.
I would hope that at least another five years, in the case of Peterborough, would be allowed from the public announcement of the date of winding-up, but if the local administrators—the city council and the county council—feel that perhaps three and a half years or four years might be more reasonable, then due consideration must be given to their views.
I hope the Minister will also be in a position at some stage in the course of our consideration of this Bill to give us more detail about payments for repairs and defects in the property handed over. If future defective property is handed over, or property which is found to be defective after it has been handed over, where will the money come from to meet such unexpected repairs? With the limitation of rates and the threats of penalties and of rate-capping, the existing districts will not be too anxious to take over a possible future burden without some guarantee of financial help from the Government where the case is proven.
I accept that the local authorities will be taking over the former special new towns grant, and in future that will be part of the housing subsidy. But that may still not be enough if serious defects occur later. Is the Minister satisfied that the subsidy on capitalised repairs will be adequate? If not, how will the local authorities obtain redress?
If the third generation of new towns are to be wound up, as the Minister hopes, in two or three years' time, will the commission be given a really positive role in promoting new towns until the sale of outstanding industrial and commercial land has been completed? I know this is a problem for my own new town of Peterborough and I have also received representations from people in Milton Keynes, but they have been much better covered by the noble Lord, Lord Campbell. The new town authorities believe that the commission will still have a very real job to do for some years to come.
Consultations are going on between the department and the authorities which are affected by the winding up of the development corporations and the future role of the commission. Will the Secretary of State have real regard to what those authorities want and feel is necessary? They will have to assume the responsibilities and their views must carry real weight in the decision about the timetable to be imposed on them. The year 1987 is the date in the mind of the Secretary of State for the winding up of the programme in Peterborough. I believe that the development corporation, the city council and the county council all feel that this is too soon. I personally should have thought that 1990 was a much more likely date. Will the views of the authorities count?
I want to turn now to Peterborough because I believe that their views would broadly coincide with the other third generation new towns. I was a member of the county council and of the development corporation until I had Front Bench responsibilities in your Lordships' House in 1975. In 1967 when the old

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Huntingdon and Peterborough County Council were in being they were considering the Government's proposals for our new town. They were given assurances that financial contributions would be made by the development corporation towards the cost of providing the local authority services so that local authority ratepayers would not bear an undue burden. That agreement covered the point that the main roads servicing the new town would be financed by the development corporation with a very limited county council contribution. The county council also received a graduated sizeable contribution over a number of years towards the cost of educational provision in the new town area. Over the years, after the 1974 reorganisation when we became part of Cambridgeshire, in spite of these agreements it became apparent that the scale and pattern of the development and its phasing was putting an "undue burden" on the local authority finances and on the existing ratepayers. This view was shared by other county councils with new towns in their area.
When I was a very junior Minister at the Department of the Environment, Cambridgeshire County Council and the other five counties involved came to impress upon the Minister that the financial burden was too heavy, and that new town development should not take place at the expense of their county ratepayers. The year 1976 also was a time of cutback in shire counties' spending. Our populations were growing in advance of our grants and, to their credit, the Labour Government of the day accepted our arguments. They agreed that the development corporations would make contributions to the county councils to alleviate the heavy financial burden associated with the rapid growth of population. Despite the continuing financial problems that growth brought to those counties—even with this agreement—the Conservative Government terminated that agreement and to this day I understand they have never produced a financial analysis in support of that change of heart. Then came the slowing down of the development of the new towns, resulting in county council facilities being under-used for longer periods than was expected when we entered into the commitments. Specialist facilities cannot be fully used until the designated area is fully populated.
Those local authorities with new towns have taken on these commitments at the behest of central Government. It was central Government who inspired the planned growth of the designated new towns and the Labour Government agreed that the development corporations should accept some financial responsibility in this matter so that the local domestic and business ratepayers did not carry this undue burden. Peterborough New Town is now established and is a great success, but there is still a need to maintain the momentum of work which is not yet completed, including the £6·2 million priority mainroad programmes not yet completed—indeed, deferred as a result of Government restraints. The prolongation of this programme into a period after the life of the development corporation could have adverse financial consequences for the county council
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unless special funding arrangements are made for them to be built later by the county.
The local authorities and the development corporation are jointly promoting at this time a Cambridgeshire-Peterborough international axis, as it were, to attract business and commercial firms into the area. That needs to be ongoing, and, with limited finance available to the local authorities today, I doubt if they can do it on their own. The expansion of Peterborough or of any new town is not going to cease on the day the development corporation is wound up. There has always been a move from the deprived inner cities, and the promotion of the development corporations over the past two decades or so has meant that that movement has happened in a balanced way because the development corporations have been superb job agencies at little or no cost to the local authorities.
Our marketing activities have been excellent—few people have not heard or read of the "Peterborough Effect"—and there must be the means of maintaining that adequate marketing capacity until and after the development corporation is wound up. What will be the real long-term promotional role of the commission? How do the Government see the role of the commission in supporting local amenities and social and cultural projects?
Looking ahead on another question, the Cambridgeshire structure plan is now being reviewed and rolled forward to provide a long-term planning framework beyond the period of the master plan. Will the Secretary of State be in a position to approve these revisions before the development corporation is wound up?
Then we return to the vexed question of penalties and targets. They do not take account of the financial consequences of population changes. Natural growth will continue and I plead with the Minister to see that the targets are not based on past spending but on up-to-date measures of spending need.
The real success of the new towns and the urban development corporations has been their ability to do some pump-priming. With the Dockland Development Corporation £200 million was pumped in in the initial cash and some £50 million to £60 million into Merseyside. An organisation which has proved to be good for dockland and for Merseyside should be good for other cities, too. The new towns have built up specialist teams with considerable expertise. They could do so much if they were kept together as teams to use their undoubted expertise, to become catalysts for growth in depressed areas in inner cities or even in regions. Is it not possible to develop some limited-life agencies on an inner-city or regional basis to do something similar to what the Scottish and Welsh Development Agencies are doing? Please do not let all this expertise go but try to use it in ways similar to those I have suggested.
Finally, by and large, the new towns have been a success. They have provided new jobs. They have provided new industry, good housing, a good social mix, better community facilities and a pleasant environment. We all owe a considerable debt to those who work in and for our new towns. We should be proud of their achievements and want to see them flourish in the future.
4.43 p.m.
Lord Sefton of Garston: My Lords, I did not put down my name for this debate because I did not intend to speak on Second Reading but it slowly dawned on me as the debate proceeded that there would be no opportunity for me to speak at the Committee stage because that essentially deals with the detail of the Bill and I do not want to deal with its detail.
I thought that the fundamental aims of the new town movement would be dealt with in the debate, but up to now I do not see it. As a past chairman of the Runcorn Development Corporation, before it was wound up and joined with Warrington New Town, I do not know how one measures the success of a new town. It would be wrong for me, still involved in the new town movement, to claim success for something of which I am a part. If dealing with unemployment and enabling the inhabitants to lead a fairly decent and tolerable life are an indication of the success of new towns, then certainly the new towns in the South-East of England have achieved their objectives and must be ranked as successes; but, to be perfectly frank, to talk about a success in the context of Runcorn, where there is still 14 per cent. unemployment, is not a bright prospect for me, coming from that area myself. Therefore, I hesitate to claim that we have been successful.
As I see it, one of the fundamental problems of the new towns is that we did not see the difference between the establishment of phase one new towns and phase two and what is left for the future. The aim of the new towns in the South of England was fairly clear. It could be seen and the need for them could be seen. It was to try to settle the massive problems that were occurring in the capital cities—especially the problems of congestion. We had quickly to get people into decent living accommodation and give them space to live. I think that, by and large, no one can deny that that has been achieved.
However, those of us in the North of England who were watching the new town movement in the South of England were beginning to say that the solution did not apply to us because our problem was not really congestion. While the new towns were being built in the South-East of England the northern cities were creating their own. Some of them could be criticised for the way in which they were created but one could not call Kirkby anything but a new town. The fact that Liverpool Corporation was compelled to build it but was not given the social powers to provide the infrastructure in Kirkby New Town cannot be blamed on Liverpool. Liverpool built a new town but it was restricted in its activities to within the boundaries of Liverpool, and that was wrong. It led to a tremendous number of failures in the achievement of a good environment at Kirkby, which are now beginning to be tackled.
The problem in the North of England is not the same as that in the South. One of the tragedies of the new town movement was that we did not close down some of the earlier first stage new towns earlier than we ultimately did. I believe that some of the resources going into new towns in the South should have been directed towards the North long before they were.
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What are the prospects for the future? I do not believe that the solution to the problems is just creating a new town that is a perfect new town in itself. I have always seen the new town movement as part and parcel of a national plan and that the purpose of new towns nationally was to develop places where we would have the good life, where people could live in tolerable conditions, with jobs and incomes in order to provide that decent life. If we keep on looking at new towns individually we shall never get to that situation. I make this plea to the Government: that the commission takes over the existing new towns.
The problem about the urban development corporations is somewhat less clear. If the purpose of the urban development corporations is to solve the massive problems in Merseyside I do not think there is any great limiting timescale to their existence because the job to be done there is too massive.
Reference was made to the success of the urban development corporations. I do not know whether the urban development corporations have been in existence long enough to have made a success at all. If they had been a success that success would have been in Merseyside. But can anyone say that Merseyside is a success, that Merseyside is an example of good planning, of prosperity and of where people are living a good life? It is not.
What is needed now is a fundamentally new approach—and I do not see it in the Bill—to the question of establishing new environments in that part of our kingdom that needs it. It is not, if I may say so, in the South-East but in the northern parts of this country. Unless we find some way of, first, establishing a partnership between localities in the North and the Government in the South and, secondly, making sure that the resources are shifted from the South, and the South-East in particular, into the North, we are never going to solve the problems.
What I should like to see is the commission's approach widened. At some time in the future it should be given more power. I do not suggest that this Bill is the right time to do that, but I think that the Government should give some attention to creating more powers in the commission and to making it longer term. It should be a tool by which central Government can devolve to the North some of the resources that are now in the South. Unless we do that, the urban development corporations are destined to fail. There is no way that the UDCs will bring the necessary number of jobs to the North of this land through private enterprise.
The Government must sit down and draw up a plan to move from the South-East all the jobs that need not be there. The Government Civil Service does not need to be in the South-East to the extent that it exists there now. I have said that inside the Chamber and outside it until I am getting tired of hearing it, let alone others. It is true to say that there is no long-term unemployment problem in the South-East but there is a congestion of jobs. One has only to look at the advertisements for job vacancies to realise that that is absolutely true. Private enterprise finds it very difficult indeed to find all the secretaries and administration personnel that it needs in the South-East because of the pressure that comes from the siting of Government

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offices in the capital. When this Government came to power they withdrew the proposals to devolve Civil Service jobs to the North. But there are jobs that can be shed from the South-East and moved to the North.
The commission, as an arm of Government, can be used in the effort to get jobs to places like Merseyside and the North-East of England. I make this plea: Let us not carry on looking at new towns as we have looked at them for the past 35 years. The job that needs to be done in Great Britain now is entirely different from that which needed to be done 35 years ago. Now we have to make sure that there is a fair crack of the whip for everybody in England. We must not develop Stansted, the Channel Tunnel and the London Docklands to the point that they strangle the rest of the country and deny the North of this land the resources that it really wants.
4.52 p.m.
Lord Graham of Edmonton: My Lords, I think that the Minister will be as grateful as I am to noble Lords on the Back-Benches on this side of the House for three excellent speeches. I make no point in that respect. We have not had merely the voices of politicians—although they are politicians—hut of practitioners. They have brought to the House the sum total of their experience in one new town development corporation or another in grappling with the problems. The words of the noble Baroness, Lady Stedman, the noble Lord, Lord Campbell of Eskan, and the noble Lord, Lord Sefton, are very valuable indeed. They speak not only from their experience, but also from their hearts. Those of us in this House and in another place with experience can sense when a person feels controlled passion for the subject about which he speaks. In my view, all three speeches were well worth listening to and I believe they augur well for the Committee stage of the Bill.
Some of us have travelled this road before. The Minister was fair when in his opening words he said that this was only part of the departmental responsibilities with which he was grappling. The new towns road is a long road, and it was always envisaged that it would have an ending. We are not tonight debating when the metamorphosis of the new towns will take place, but what we on this side of the House consider to be a number of unsatisfactory methods that the Government are using to complete the new towns programme.
Reference has been made to the programme. To be fair, the Minister acknowledged that the new towns per se were a success story. There have been problems and disappointments in one new town or another, but as an experiment in social engineering and planning we are entitled to say that it has been a success. Over a period of 40 years the new towns programme has had the support of the two main parties which have formed Governments. Although we do not need too many statistics to bolster our satisfaction, I think that one or two are well worth reading into the record. Over that period 400,000 new dwellings, 700 new schools and 5,000 new shops have been built; 1 million people have transferred into new towns, and 2 million are now living there. There are jobs by the hundred thousand. We are entitled to take some credit for that.
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The Minister quite properly spent most of his time on those parts of the Bill which deal with the new towns, but we must also remember that it deals with urban development corporations. The Minister said that, finally, in passing, he came to the urban development corporations. I intend to say a great deal more about them. They are crucial to the situation.
The creation of development corporations was also tagged onto legislation in 1980. When the Local Government, Planning and Land Bill emerged (which was already three Bills rubbed into one), along with it came the announcement that we were to get the enterprise zones—yet another Bill; so there were in fact four Bills rolled into one. I had the pleasure of serving on the Committee on that Bill. It was a pleasure. I learnt a great deal from Members on both sides.
My noble friend Lord Sefton treated the UDCs very seriously, as we should. He sees them as a counterweight to transfer resources. What do we have in this Bill? When introducing the Second Reading debate on the Bill in another place the Minister for Housing talked in terms of a new wonder ingredient to salve and to ease all pains. He talked of the magic of the market place. If it is rubbed on at night, all those nasty spots will disappear: take it whenever you are feeling down, and, bingo, all your troubles will be over! The Minister felt that the solution to most of the problems was in the magic of the market place. Such touching faith in such dubious remedies qualifies the Minister for a Which award—"The witch doctor of the year"!
There is much to be said for proclaiming that after 40 years of public subvention the time to call it a day may be at hand. Three generations of new towns have come and are going. We on these Benches have no quibble ultimately with the end. But, as the noble Baroness, Lady Stedman, and the noble Lord, Lord Campbell, asked, why is there this inordinate haste? Why is there this hurry? When there are people with the qualifications in situ, ready and able to continue satisfactorily to run down the machinery, why disturb a very good system?
Members of Parliament who represent new towns have been able to bring to Parliament first-hand experience of the problems facing their constituents. I refer to tenants, ratepayers and business men. It is all very well to announce the date for winding-up, but it is quite another thing to hand over the business of running the new town to a body which is in good heart, with the financial resources to carry forward the good work of the past 20 or 30 years.
Let us pause for a moment and look at the plight of tenants. Tens of thousands of them, glad to go to a new town, get a new home, obtain a job and live a new life, have had untold misery heaped upon them as a result of defective housing. Of course, defective housing is a minority of the housing that has been built but there is a great deal of it. It is one thing to hand over corporation housing to a local authority; it has been quite another for that authority to obtain the cash out of the department to remedy the structural defects in those houses.
As a direct question, I ask: what can the Minister tell the House on this matter? He will refer to Clause 4 in this Bill. But he will know that to talk, as does Clause

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4, of "accepted remedial work" is wholly inadequate. Many councils are lumbered with appalling situations, with thousands of houses needing to be made fit, but are denied the resources to do so because the Ministry has proved tardy in the extreme in recognising the size of the task. What has the Minister to say to those wretched tenants? I think particularly of Peterlee. It is estimated that £40 million is required to put in order development corporation houses that they have had to take over from the development corporation. They have received far less than half the sum of money required to put them right.
Then there are the owner-occupiers. Many occupy purpose-built houses; others have bought their own house. As ratepayers new town residents suffer more than most from the capricious nature of government rate support policies. Here I plead in aid the remarks of the noble Baroness, Lady Stedman, who speaks with knowledge on these matters. New towns are involved in many infrastructure costs, wholly disproportionate to normal towns of their size. The rates structure, with its exemptions and qualifications, fails abysmally to take into account the special characteristics of new towns. When the Government glory in—and I quote from the face of the Bill—
"the completion and subsequent winding-up of the new towns programme in England and Wales",
they completely fail to pay adequate attention to the problems this leaves for councils, residents and industrialists.
The Minister must know that there is much uncertainty and unease about in many towns. The failure to accept the very reasonable requests of my honourable friends, and the failure of the Minister of Housing in another place to give the local authorities affected some right to consultation, are shabby. I recall that the Minister in his opening remarks said that there were good relationships between development corporations and local councils. The Minister was absolutely fair in that way. Yet when my honourable friends in another place sought to amend the Bill to give local councils the right to consultation when disposing of assets, that was resisted by the Government. I wonder whether the Minister can say something about that here, or will he wait until Committee stage?
When we come to the economic wellbeing of new town communities moving into the unclear waters over the next few years, that is where I have the greatest sense of foreboding. I refer to the transitional period into which we are passing. I should like to plead in aid a communication I received from the Association of District Councils who obtained this information from the Wrekin Council. Wrekin has Telford New Town in its area. This is what they have told me:
"One of the major issues for the council is the future role and life of the New Towns Commission in terms of employment development and promotion and the future of land ownership.
"When the development corporation is wound up, its residual assets would pass to the Commission who will in turn be given the prime responsibility of disposing of those assets. They will have a promotion function which is presently London based with area teams located within individual towns after transfer. Given the local circumstances, it seems highly unlikely that this mechanism would prove to be adequate for Telford with the town so far short of its target size and if unemployment levels persist at present levels, as seems likely".
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Will the Minister address himself to that point, which was the point made by the noble Baroness, Lady Stedman, and the noble Lord, Lord Campbell, who said that the prospects of completing their programmes and the problem of unemployment were very worrying indeed?
I was grateful to the noble Baroness, Lady Stedman, for referring to the question of what is going to happen to the teams of people with skill, talent and experience who have been able to attract to the new towns firms from all over the world. On the face of the Bill there is talk in terms of 5,000 employees who will be distributed in one way or another. It says that some will be required by the commission, others will be required by the local authorities, and yet others will be required by private sector bodies and housing associations. The precise proportions cannot now be predicted. The Minister must be aware of the very serious worry and concern which exists among the staff at every level in the development corporations and in the commission. He really ought to say something to us tonight about that matter.
I turn to the situation in the urban development corporations. This was one of the bright ideas that were spatchcocked into the 1980 Local Government, Planning and Land Bill, just as it has been gratuitously tagged on to this one. We on these Benches opposed the concept of urban development corporations at that time and since then we have not learned to love it any more. Much common ground exists about the nature of the problem, the daunting nature of the task. It is when we examine the how, the when and the who of the problem that we come to grief. Members of Parliament representing riparian councils expressed a large body of agreement during debates in the other place.
First, whoever are clapping their hands at London Docklands developments, they are not those who live in the area and are in housing need. I read of properties selling for £200,000, £300,000 and more, built by the development corporation for Docklands. I also read of cheaper properties, of a variety of schemes. But I want to hear more about houses for rent. Those that are being built in the modest price bracket are snapped up by, among others, council tenants. However, how are the hundreds of thousands of tenants trapped in high rise developments to sell their flats? To whom can they sell them, and for how much?
Together with my noble friends Lady Denington and Lord Underhill and the noble Lord, Lord Airedale (who I see in his place), last week I had the pleasure of a visit to a number of developments that were built by either the GLC or councils in Southwark, Greenwich or Tower Hamlets. The purpose was not to discuss the Docklands Development Corporation. However, we saw the enormity of the problem that is facing these councils. We visited the Ferrier estate in Greenwich. We could see dockland developments all around us. On the Ferrier estate there are 74 blocks of houses—74 on the one estate. They are bereft of community assets. We were told that it would cost £35 million to put those properties right.
Again, I am indebted to my noble friend Lady Stedman for making the remark about the reneging by a previous Conservative Government on

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commitments that were made that moneys would be made available in order to put properties in good order, because we are on the verge of something comparable happening here. In the local government Bill to abolish the GLC there are in Clause 84(1) powers that the Secretary of State will take to revoke or amend the terms of the transfer orders once the GLC is abolished. When we are talking about the future happiness of hundreds of thousands of people who are affected by the urban development corporation for Docklands, we are entitled to say this. Surely the Government cannot possibly have insisted that Greenwich, Tower Hamlets, Lambeth and the other bodies take over these houses and that they have to put them right, and are now perhaps going to say, "The moneys that we said would be made available for you to put them right are not coming forward". I see the Minister looking somewhat puzzled and I appreciate that this may not directly be part of the brief.
If we are to say these things are taken into account in the housing investment programme allocation, then the councillors and the officers of those local authorities will be greatly relieved. They will be relieved that, despite Clause 84(1), their ability to pursue the undertaking that they have given to their tenants, in the light of the insistence by the Minister that the properties had to be accepted on those terms, is not going to be disadvantaged. If the Minister can give that assurance here or in Committee—because this will be a continuing process—I am certain that the councillors and the officers will be very happy.
I turn to aspects of the running-down or winding-up of new towns and the selling-off of commercial and industrial assets. Battles have been fought and water has run under many bridges. Original predictions were hurled at the Government by myself among others that forced sales to meet Treasury demands would result in bargain prices in a difficult market. The noble Baroness, Lady Stedman, also referred to these points. We argued that local, small, struggling businessmen would be done out of their shops and factories, that investment and financial interests would step in to buy up large blocks of real estate, and that company towns would be created. I have read with interest and fascination every word of all stages of the debates in another place. All those predictions appear to have come to pass, according to Members in another place, in greater or lesser degree. I do not raise the principle of privatising public assets by "flogging off' shops and factories, except to say that I am against it. But the Minister has a duty to assure the House that the fears that I have listed are not being fulfilled. I wonder whether he will do so today.
Finally, I refer to the words of my honourable friend Mr. Harry Cowans on Third Reading in another place. He noted that, as we have come to expect, no change of any significance to the Bill had been made during its passage through the Commons. He pleaded that when the measure comes to your Lordships' House it should be altered so that it becomes more reasonable and more constructive. We intend to give the Minister opportunity to do just that during the Committee stage. We shall table helpful, reasonable and constructive amendments. They will seek to inject greater local
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democratic involvement both in winding-up procedures and in the on-going programme of the urban corporations. They will have regard to the imperative to hang on to the skills and talents of workers in order to phase out successful developments with the minimum of hurt to local people. Above all, they will provide this side of the House with the opportunity to express its distaste for this avaricious, grubby little Bill, the prime purpose of which is to boost the coffers of the Chancellor in his desperate search for tax bonanzas and handouts. Let the Minister join us in improving this instrument for destruction and construct a better way of doing it.
Baroness Stedman: My Lords, before the noble Lord sits down, may I put the record straight in one respect? I did not want to interrupt the noble Lord while he was in full flood. The agreement to which I referred was not concerned with help for repairing defective properties; that had not arisen at the time. I was referring to 1976, when the six counties concerned came to the department to make the case for population coming in in advance of grants when we had to supply all the facilities and services for them. We had an agreement with the Labour Government for additional help, taking those points into account in preparing the rate support grant in one of its many evolutions. We managed to get help for the six counties, but it had nothing to do with defective property.
Lord Graham of Edmonton: My Lords, I am grateful. What the noble Baroness is saying is that we have always to be vigilant, whatever the issue and whatever the Government.
5.14 p.m.
The Earl of Avon: My Lords, as so often with new town measures, we have had a stimulating debate. I was moderately happy with some of the remarks that the noble Lord, Lord Graham, made until he called the Bill avaricious and grubby. Whatever else, it is certainly neither of those. The noble Lord, Lord Campbell of Eskan, mentioned improvident haste and asked for an assurance that there is no prospect of a sudden turning-off of the tap. I assure him that there is no improvident haste, nor will there be any sudden turning-off of a tap. The noble Lord almost led me astray on the definition of old towns and new towns and those that we shall come to next. I sympathise with the noble Lord. I do not think that I shall follow him along that line.
The noble Lord spoke about development corporations which have not completed their work and claimed that they should be allowed to do so. The Government have announced a target date of the late 1980s for these towns. This progress will take place in consultation—I stress this to the noble Baroness, Lady Stedman—with the the local authorities and the development corporations. We understand how vital it is to get these considerations right.
The noble Lord asked that we should not nit-pick on the rules for new grants. I remind the noble Lord that this Government have provided a radical simplification of the rules. These greatly simplify new

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towns' work. The same spirit, I assure him, will exist in relation to the new grants. The noble Lord also asked that the commission should not sell the assets before they are right. I have already stressed that the commission will vary its approach according to local circumstances.
In assessing the corporation's case at Milton Keynes the Government have concentrated their concern on giving the opportunity for further growth, taking into account whether it is essential to retain a development corporation to achieve that growth, and, if so, for how long, or whether the town should be sufficiently established by 1989 to grow on its own, with the market determining the rate of expansion, and whether it is necessary to keep all the powers and development functions of a corporation for a further decade to achieve this end.
The noble Baroness, Lady Stedman, in referring to a very liberal, I thought, SDP programme, reintroduced me to that lovely commercial for Peterborough to which I listen virtually every morning in my bath. All that I needed to hear was the tweeting of the birds that is part of that programme. The noble Baroness asked about forced sales. Ministers have repeatedly stressed that there have been no forced sales and no sales contrary to the best professional advice. Two-thirds of the commission's sales to date, I understand, have been to local interests. I have been asked whether all the housing has to go to the local authority. I would refer to an example in central Lancashire, where negotiations are now well advanced for transfer to housing associations. Elsewhere much depends on the view of local authorities.
Both the noble Baroness and the noble Lord, Lord Graham, spoke about grants for defects in transferred housing. The local authority taking over housing from a new town corporation receives, under the rules established by this Government, exactly the same resources as a new town corporation would have received if it had kept the housing. The noble Baroness also asked for an assurance that there would be no hurry in the winding-up process. Local authorities will wish to negotiate various aspects involved in winding-up and a deadline is sometimes necessary to produce satisfactory negotiations. I can assure the noble Baroness that we shall pay full regard to what the local authorities have to say.
The noble Baroness asked about the removal of new town payments to help with local authority tenders. The old system of these payments was related to the rate support grant system in force before 1981. With the change in the RSG system, the case for special payments was removed. This was done only after full discussion with the county councils' association. Special transitional arrangements were made. The department has written to the local authorities—the noble Baroness referred to Peterborough—asking what the authorities want to see done before the development corporation is wound up. We shall be discussing these views with them.
The noble Lord, Lord Sefton of Garston, referred to problems in the north. Of course, they are different, as the noble Lord underlined very ably. I stress that the response to the Commission for the New Towns will be flexible, depending on local circumstances. The development corporation approach has been applied
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to the problems of Merseyside. We are far from a point where it would make sense to think about what the circumstances will be when its programme is nearing completion. There have been some good achievements there, such as the success of the international garden festival, the restoration of the Albert Docks warehouses and the restoration of a water regime to part of the South Docks. The noble Lord will agree, I know, that there are other good examples.
The noble Lord, Lord Graham, mentioned Peterlee. Peterlee housing was transferred to Easington District Council in 1978, with a second transfer in 1982. The department has looked into other representations there. It is satisfied that the operations have been successfully handled. The noble Lord asked about the speed of winding-up the programme. Development corporations are set up with a specific task—that of inducing growth. Where that task is complete, the development corporation is no longer needed. The noble Lord also mentioned—
Lord Graham of Edmonton: My Lords, will the noble Earl allow me? I am grateful. We mentioned Peterlee and the winding-up. The Minister referred to the three North-Eastern towns, for which a date had been announced; that is, the end of this year. Representation has been made that this be varied. The Minister said an announcement would be made shortly. I respect that; an announcement will be made. But I wonder whether he would bear in mind that in the current situation in the North-East, where unemployment is desperate, the development corporations have a special role that they can play in the special circumstances. That ought to be a factor to be taken into account when he considers varying the date.
The Earl of Avon: My Lords, I am sure that the noble Lord, Lord Graham, is totally aware that that is the very reason why the decision is being reconsidered.
The noble Lord mentioned UDCs. I think much has already been achieved here. In regard to priority for council tenants, he mentioned that the LDDC's policy is to ensure that a substantial proportion of housing schemes on its land are within the means of people earning average London incomes. It is also, however, to ensure that it obtains a fair price for the land and that the prices are pitched at a level which does not tempt small numbers of tenants to make windfall gains. I am sure the noble Lord would agree with all that.
This Bill is of course particularly important because, unlike the previous measures, it deals specifically with the question of final wind-up and sets out how to bring the new town programme to a satisfactory conclusion. The Government are confident that this Bill provides the right framework. It allows the new towns development corporations and the commissions of the new towns to build on the progress they have already made both in taking the development of our towns forward to satisfactory completion and in disengaging from the assets created, at a sensible pace consistent with the market. Our object, as I indicated at the outset, is to make the new towns as much as possible like our thriving, successful, older towns.

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Before I close, I should like to say a word about the new town chairmen, their boards, and also the new town staff: the noble Lord, Lord Graham, mentioned this matter. We have discussed this afternoon a Bill which will take the new towns programme through to completion. But we should not have reached this stage—a stage where, whatever our political differences, we can all agree that the new towns have done a fine job—were it not for the commitment and dedication of all these people. The same applies to the urban development corporations. The noble Lord, Lord Graham, castigated me for not mentioning them enough. As these press ahead with their valuable work, the same can apply.
As Thucydides put it:
"It is men not wars which make a city".
I tried to find this in my Greek Bible, but could not. The development corporation staffs, the people who live in the towns and those who work there, all have a major contribution to make. Without them, our common aim of balanced, thriving communities could not be achieved. Our role, here and now, is to set up the right framework. We believe the Bill does that. I am confident that all the staff will keep up the good work and will steer the towns through the final phase with all the commitment and energy that they have shown through the years, and I look forward at Committee stage to seeing whether this House can improve the Bill in any way.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Charities Bill [H.L.]
5.24 p.m.
Viscount Colville of Culross: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Viscount Colville of Culross.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Submission of, and publicity for, charities' accounts]:
Lord Renton Lord Renton moved Amendment No. 1:
Page 1, line 5, leave out subsection (1).
The noble Lord said: I beg to move Amendment No. 1, and I suggest that, with it, we take Amendment No. 2 and Amendment No. 54, which will also be consequential.
Amendment No. 2: Page 1, line 17, leave out ("such a charity") and insert ("a local charity for the relief of poverty").
Amendment No. 54: After Clause 5, insert the following new clause:
Application of s. 43 of 1960 Act.
(" . Section 43 of the Act of 1960 shall have effect for the purposes of this Act as it does for the purposes of that Act.").
May I say that these amendments and others which I have tabled in my own name are mainly technical and drafting and have been drafted by a member of the Chancery Bar who is, so far as I know, one of the greatest experts on charity law? Amendment No. 1 is simply to leave out subsection (1). The reason that is suggested is that it is unnecessary, because all that is required in the making of new regulations, which of course would have to be made, is to apply Section 43 of the Charities Act 1960. I should like briefly to draw your Lordships' Committee's attention to it. I think I should read out subsection (2), which is so clear, so direct, so short, and, if I may say so, so beautifully drafted. It says:
"Regulations may be made for prescribing anything which is required or authorised by this Act to be prescribed".
It seems to me that to go into the detail which is set out in subsection (1) is quite unnecessary, in view of what is stated in subsection (2) of Section 43 of the 1960 Act.
Of course, I must deal with the point which no doubt will be raised in regard to re-writing or amplifying the Secretary of State's power. Subsection (1) says that it shall include power,

"(a) to prescribe the forms in which … statements are to be transmitted, and

(b) to require any such statements to include an itemised schedule … of all property currently held for the purposes of the charity, with an estimated value assigned to each item".

The Secretary of State has power to do that, if we apply Section 43 of the 1960 Act. For us to go into this quasi-administrative detail seems to be quite unnecessary. Therefore, I would suggest that subsection (1) should be omitted.
Before I go any further, I should acknowledge my indebtedness, and perhaps that of other Members of your Lordships' Committee, to the noble and learned, Lord Brightman, to whom last week I sent a note explaining the purpose of this amendment and my other amendments. With great alacrity and immense speed, and with his usual efficiency, he was good enough to send me a note. I think I should leave it to him to amplify the point of view which he expressed in that. But I want to say this. He referred me to paragraph 91 of the Report of the Select Committee upon which this Bill is based. If we refer to paragraph 91, we find this:
"The Committee recommend that requirements with regard to the content of the accounts be improved by a revision of the Charities (Statements of Account) Regulations 1960 so as to give greater authority to Charity Commission Forms AC(A) and AC(B)".
But then—and this is the particular point which I think should be stressed—the committee went on to say this:
"The Committee prefer not to prescribe the detailed provisions of such Regulations, which should be made at the discretion of the Secretary of State under s. 43 of the Charities Act 1960".
But they do recommend,
"that in the case of local charities for relief of poverty"—
which is what we are dealing with here—
"the Secretary of State should have power to prescribe the forms".
They also recommend the itemised schedule to which I have referred, which is in paragraph (b) of the subsection.
5.30 p.m.
It seems to me that the wishes and recommendations of the Committee would be perfectly well met if we use the power which is in Section 43. But there would have to be a minor consequential amendment (Amendment No. 2) and another consequential amendment (Amendment No. 54), to which I should quickly and briefly like to refer.
Amendment No. 54 appears at the bottom of page 5 of the Marshalled List. It says:
"Section 43 of the Act of 1960 shall have effect for the purposes of this Act as it does for the purposes of that Act".
I beg to move.
Lord Denning: I hope that your Lordships will not accept this amendment. It takes out one of the most important provisions of the Bill. When the Select Committee reported they showed how important it was that the existing lassitude should be remedied. They said that that was most urgent. They said at paragraph 90:
"The Committee … are satisfied on the basis of the evidence that there is an overwhelming need to remedy this state of affairs. They think that this can best be done by putting trustees of parochial and local charities for relief of poverty under a stricter duty with regard to the contents of accounts; creating a greater expectation that they be compiled and transmitted; and ensuring that they receive a wider dissemination".
Certainly I would agree with my noble friend Lord Renton that the Secretary of State has power already. If we construe Section 43 of the 1960 Act, we find the power is there. But it is very important to give the Secretary of State a prod, to tell him what he ought to do—in effect to tell him that his regulations should provide for these matters as is set out in Section 1. I have no doubt that if he were given that prod he would do it and therefore would carry out the recommendation which the Select Committee have put forward. I hope that your Lordships will not accept the amendment.
Viscount Colville of Culross: I entirely appreciate the reason why my noble friend Lord Renton has tabled this amendment, and certainly it would not be my wish to complicate the Bill any more than is necessary. There are, however—and were in the view of the Select Committee—certain possible defects which suggest that we ought to put this matter beyond doubt in very much the way in which the noble and learned Lord, Lord Denning, has just suggested.
In the first place, although the general power to make regulations appears in Section 43 of the 1960 Act, the power to require particular statements of accounts in fact appears in Section 8. Section 8 does not say anything about forms of account at all; it does not make it clear that the Secretary of State can apply his mind to the particular form of account that is necessary in order to provide the statistics which in all the deliberations of the Select Committee were found to be so woefully lacking or at any rate woefully out of date. If there is not a specific power to prescribe forms, it seemed to the Select Committee that it was worthwhile putting it in the Bill. I would also suggest to my noble friend Lord Renton that there is another technical reason, and this one may possibly appeal to him even more.
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My noble friend rightly referred to the fact that this clause relates to a limited selection of charities for the relief of poverty. Under the 1960 Act and the provisions which relate to regulations, there is no provision—as sometimes occurs in more modern legislation—that regulations could be made for different purposes and in different forms. In other words, there is no clear provision in the existing legislation for this particular small group of charities and, for all we know, for them alone (because there is no evidence whatever about what is needed for other forms of charities); there is no specific provision for the Secretary of State to be able to make regulations which apply only to them.
As I said to your Lordships on Second Reading, it is no part of this Bill to carry out a major reform of charity law as a whole. The target is a very specific one: the small charities. If there is any doubt about it, it seemed to my colleagues who sat on the Select Committee—and it certainly still seems to me, even though I have heard what my noble friend has to say—that it would be infinitely desirable to make it clear beyond peradventure that the Secretary of State has indeed the power to make this specific form of regulations for these particular charities. Therefore, if we leave this provision in the Bill, he will have it beyond a doubt. If we do not do so I think that there are legal reasons for it not to be absolutely certain that he can do what I believe all of us, including my noble friend, wants. So I would urge your Lordships not to accept this amendment. I hope that my noble friend will withdraw it for the reasons that I have given.
Lord Renton: I certainly do not intend to press this amendment. I take note of what has been said by the noble and learned Lord, Lord Denning, and by my noble friend Lord Colville of Culross. But I must make the following comment before I withdraw the amendment. I think that both of their speeches—and I say this with deep respect—reveal a woeful lack of confidence in the Home Secretary and his advisers, including the commissioners. It is a sad situation if Parliament is to go into quasi-administrative details in legislation, because that shows such a lack of confidence in those who have the responsibility of keeping an eye on this branch of the law or on any other branch of the law. However, having said that, and saying it I trust without rancour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Lord Renton Lord Renton moved Amendment No. 3:
Page 1, line 18, after ("annually") insert ("by the charity trustees")
The noble Lord said: This is purely a drafting amendment and I think that it is so self-explanatory that it needs no further explanation from me. I beg to move.
Lord Colville of Culross: It is so obviously correct that I have no hesitation in accepting it.
On Question, amendment agreed to.
Lord Renton Lord Renton moved Amendment No. 4:
Page 1, line 19, leave out from ("authority") to end of subsection (2) and insert ("as well as to the parish council or the chairman of the parish meeting as the case may be.").
The noble Lord said: The purpose of Amendment No. 4 is to ensure that parish councillors shall be given the right to receive the statement of accounts direct from the charity trustees. I understand that they have that right at present. If we are to make things clear in the Bill, then this is something that we should make clear beyond doubt. So often parish councillors are asked to appoint a trustee or trustees. In those circumstances, I suggest that it must be right for them to be given the accounts direct. Accordingly, I beg to move.
Lord Denning: For many years I was president of the National Association of Parish Councils. I have been president of the Hampshire Association of Parish Councils. They are the best possible people to overlook these charities and to ensure that things go well. I always told them that, like a judge, they ought to be independent of party politics. They were all very good; they were absolutely at the grass roots and able to look after their local affairs. Who better to receive the accounts of these small charities than the parish councils? They do not have too much to do. I learned what they had to do and they did it extremely well.
When we passed the Act about footpaths, they mapped out their footpaths; they look after the bus shelters and so on. Apart from that, they do not have enough to do or as much power as they ought to have. Why not let them be recognised? They are the grassroots people to supervise these little local charities. They take a great interest in them. Let them have the accounts direct. Let them have a voice in the matter. It will be good for them and good for the charities. I support the amendment.
Viscount Colville of Culross: This is a difficult point. I know that the National Association of Local Councils, which is the current body—
Lord Denning: Perhaps I may interrupt with a few words. That association produces an excellent magazine or periodical which is circulated to all local councils. So if publicity were to be given to this matter, all these people would know about it; it could be sent to all the parish councils. That is the point that I want to make.
Viscount Colville of Culross: I was simply about to say that I have received representations from that association. As a matter of fact, I did not reach the stage of becoming its president, but I was a vice-president for a time and so I have considerable sympathy with what the noble and learned Lord, Lord Denning, has said.
When deciding upon the drafting of the Bill the problem that faced the Select Committee was as follows. The whole object of this little piece of legislation is to try to make matters as easy as possible for the trustees. Under Clause 1(3) they have to send their statement of account to the appropriate local authority, which would probably be the district council. Of course, anyone else can ask for a copy and
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from the way in which the Bill is drafted, there is a great incentive for anyone, including a parish council or a community council in Wales, to ask the trustees for a copy of the accounts until they have carried out the obligation to send a copy probably to the district council, whereupon it becomes the repository and would be responsible for providing other people with copies.
The object of the whole exercise was to try to impose one simplified form of accountability upon the trustees and to make it in such a form that, if they once filed one set of accounts, thereafter they would not have to bother with the matter any more because people could go—and it is not usually very far—to the district council office and obtain a copy there. That seemed to us to be an incentive to them to do what, alas, is so often not done—to make locally available every year a statement of their accounts which everyone can look at.
Like so many of the matters in the Bill, this is an experimental provision. If, for one reason or another, it should turn out that the parish council or the community council is not succeeding in obtaining a copy of the accounts—either because it cannot get to the district council or perhaps because the trustees do not obey the law and provide a copy upon request—there are powers in subsection (3)(c) of this clause for the Secretary of State to make regulations which would allow him for instance, to require the trustees to send a copy to the parish council, because that is another local authority.
However, the Select Committee thought that it would try the simple way first. Very far from having no confidence in the Home Secretary and his advisers—which my noble friend Lord Renton suggested just now—we think that the Home Secretary would readily respond with alacrity to any widespread complaint that parish councils were not receiving copies of these accounts under the primary system that we have set out in the Bill. If that were to occur, he could make the regulations which would restore the present position whereby the parish councils are entitled to a copy.
Therefore, we thought that the best way was to try it empirically, to see whether this stick and carrot system, as it were, would work; then, if it did not, we had still provided a reserve power so that the parish council would be able to obtain its copy. I hope that that will satisfy my noble friend. We want to make matters as easy as possible for the trustees of the very small charities, so that at last we obtain public information on a sufficient scale to enable sensible judgments to be made on a matter which so far I am afraid is very obscure.
5.45 p.m.
Lord Maude of Stratford-upon-Avon: I very much agree with everything which the noble and learned Lord, Lord Denning, said and I can see my noble friend's point about trying to make the Bill simple. If this had been a case of something being included in the Bill which did not exist before, or if that is what my noble friend is suggesting in his amendment, I could understand it. But surely the Bill is taking away from the parish councils a right which they already have

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under the 1966 Act. That seems to me to be rather a heavy-handed thing to do. I really cannot see any justification for it, and I hope that my noble friend Lord Colville might think again about this.
Lord Renton: I, too, hope that my noble friend Lord Colville will think again about this. He acknowledges that parish councillors should have the right to receive the accounts if they wish. But he suggests that this admirable objective should be achieved by taking, so to speak, two bites at the cherry. The first bite is to leave them to ask the district council for a copy and, if that does not work in general, then the Secretary of State will be asked to make regulations, which will then have to be laid before Parliament. I suggest that that is a much more cumbersome way of establishing the right than for us to accept this simple amendment.
I should like to add just one remark. It was all right in the days when, for example, in my old constituency there were no fewer than nine district and borough councils; but now all those nine councils are covered by one district council—a great bureaucracy. I cannot feel confident that there will be quite the same opportunity for the many parish councils in that district—and there are about 60 of them—to obtain satisfaction from this large district council as there used to be under the old aegis. Therefore, I must ask my noble friend Lord Colville to think again about this matter and to bear in mind what has been said by the noble and learned Lord and by my noble friend Lord Maude of Stratford-upon-Avon.
Baroness Trumpington: Perhaps I may say a few words on behalf of the Government in order to get the Government's position clear. The Government believe that the effect of the amendment will be to place a further unnecessary administrative burden on the trustees of parochial charities by requiring them to send their accounts to two local authorities.
As my noble friend Lord Colville has already said, there is provision in the Bill for the Secretary of State, by regulation, to require the local authority which receives the accounts to send them to any other local authority specified in the regulations. We appreciate the concern that parish councils should be informed about the local charities in their areas, but we do not consider that this should be required by law. If, in the event, this view is mistaken, the situation can be remedied by means of subsequent regulations which, as my noble friend Lord Renton has said, would not be cumbersome.
Lord Renton: Had I known that my noble friend Lady Trumpington was about to intervene, I should not have made my second intervention. Having heard my noble friend, may I say again that I am surprised, because it is acknowledged, that, if they want them, these parish councillors should have copies. That is acknowledged by my noble friend Lady Trumpington. But that is not unnecessary duplication. Indeed, this amendment suggests that trouble would be avoided by simply requiring the charity trustees to do as they are obliged to do at present, and to send a copy of the accounts to the parish council. It does not seem to me to be very much to ask.
Lord Wilberforce: I just want to raise one point for clarification. I have probably completely missed the point and, if so, I ask the indulgence of the Committee. Clause 1 does not deal with parish charities; it deals with local charities. To find out what a local charity is one has to turn to Clause 6(1)(b)(i), and one finds that that is one which falls within an area. It has to be an area greater than a parish. It has to fall,
"within not more than 5 adjoining parishes".
Therefore, a local charity is not coincident with a particular parish. It may extend over several parishes.
I wonder whether that is not an argument for not imposing on the trustees the duty of finding out which is the relevant parish, of sending it to possibly two parishes, or three or four, which does seem to complicate their task, if I have the point right, but it may be that I have not understood the mechanism.
Lord Airedale: That was the speech which it was on the tip of my tongue to deliver.
Lord Brightman: May I say a brief word against this amendment? The trustees will already be required to send their accounts centrally to the Charity Commission. One single local filing centre would seem to be adequate for all reasonable purposes. The scheme of the Bill is to make the appropriate local authority the local filing centre. It seems to me that it is not really a necessary burden to impose on charity trustees that they have to file their accounts a second time locally. It should be sufficient for the parish council to ask the local authority for a copy of the accounts under Clause 1(4)(b).
Viscount Colville of Culross: I have listened carefully to this debate. The noble and learned Lord, Lord Wilberforce, and the noble Lord, Lord Airedale, are of course absolutely right. It could be a good deal more than one parish council which has to receive a copy of these accounts. What I should like to do is to see how effective has been the duty imposed under the present law. I do not know whether it is going to be possible to find out, but efforts could at least be made.
There has been a statutory duty now for 25 years for all these charities to file their accounts with the parish councils. The fact remains that whether they have done it or not the ignorance about the financial status of this sort of charity is absolutely staggering. It suggests to me that, whether or not the parish councils have had the power to receive the accounts, they have not enforced it. They just have not been using it, and they have not been requiring the local charities in their parish, or in their locality, to send in the accounts so that there is some idea of what is the sort of sum of money both in terms of capital and income with which we are purporting to deal. We thought that it was much more likely that the district council would be more firm about this and that it would make certain that these accounts were filed annually.
I should like to take this back, as my noble friend has suggested, and see whether it really looks as though it would add to the information collecting function of this Bill, which would greatly assist the Charity Commissioners as well, if we introduced this further duty on the trustees. I believe there is a balance here. I do not think that they should be overburdened or

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they will not fulfil the law, as I am afraid they have so often not done in the past. There is a point to be looked at here. If my noble friend will leave it with me, I shall make such inquiries as I possibly can before the next stage of the Bill.
Lord Renton: I am grateful to my noble friend for his constructive suggestion. I too should like to consider with care what has been said in this debate. Perhaps we can have a discussion about it between now and Report stage. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hooson Lord Hooson moved Amendment No. 5:
Page 2, line 3, leave out ("2") and insert ("12")
The noble Lord said: As regards the time during which local authorities must hang on to the statement of accounts sent to them under the provisions of Clause 1(3), it seems to me more sensible that this should be 12 years rather than two. The purpose of the local authority hanging on to the statement of accounts, among other things, is that the statement should be open to public inspection. There is no provision requiring the local authority at the end of the proposed two-year period to pass the accounts to the Charity Commissioners in the first place.
Therefore both nationally and in the local authority areas it will be desirable to monitor the results of this piece of legislation during the course of the next decade. It seems to me it would be more sensible to require the local authority to keep the accounts for 12 years rather than two. I cannot see that this would impose any burden upon them. I beg to move.
Viscount Colville of Culross: Again, this is very much a matter of judgment. The existing provision for the retention of accounts is in Section 32(2) of the 1960 Act, and at that time Parliament, in its wisdom, said seven years. The noble Lord, Lord Hooson, said 12, and we say two.
The real problem is to get the balance right between a retention of the accounts locally for a sufficient period of time perhaps to collect statistics in the way that the noble Lord has said, and any possible resource implications which might fall upon local authorities to add to their storing system, their files, their methods of retrieval, and that sort of thing, at a time when, as every single Member of this House will know, local authorities are under considerable financial stringency.
The noble Lord, in putting forward a 12-year period, would be adding something quite substantial, particularly in view of the point made by my noble friend Lord Renton that the district councils may now well have a largish number of these charities within their area. It is a matter for the noble Lord to weigh up.
If this matter is properly dealt with in accordance with the existing law and this Bill, there ought to be copies with the Charity Commissioners for at least seven years, which would enable research to take place, and not least if the Charity Commission could only get their computer. I wonder whether there is any additional advantage in making a requirement for it to
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be kept for yet a further period of years in a scattered form round the country in the hands of the local authorities. I have no strong views about it, but I think it could prove to be a burden that the local authorities would not welcome.
Lord Brightman: There is a statutory period for the retention of accounts by charity trustees, but I think I am correct in saying that there is no statutory period for the retention of accounts by the Charity Commissioners. I have been informed by the Charity Commissioners that in fact they retain accounts of charities indefinitely, and that they have never yet thrown away a set of accounts.
The result of that is that if any member of the public wishes to see the antique accounts of a charity he can always go to the Charity Commission and obtain a copy. It would therefore seem unnecessary for the accounts to be retained locally encumbering the warehouses of local authorities for a longer period than two years.
Lord Hooson: In the light of that information, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 6:
Page 2, line 5, at end insert ("and")
The noble Viscount said: These two are technical drafting amendments.
Amendment No. 7: Page 2, line 8, leave out ("and (c)") and insert ("(3A)")
What has happened is that, if your Lordships will look at subsection (3), you will see that at the present moment there are three paragraphs which make certain requirements. They begin at line 3 of page 2 with the words "during that period".
"during that period—
(a) the statement shall be open to public inspection at all reasonable times".
That is fine. And,
"during that period—
(b) the authority shall, on the request of any person, supply to him a copy of the statement".
That is fine. But I do not think it is sensible to require the Secretary of State to make any necessary regulations "during that period". He may want to make them at any time, for the sort of reasons we were discussing just now.
It therefore seems better to split up the subsection as it stands and turn it into two subsections so that what is now (c) will stand in its own right not qualified by any period of time during which action has to be taken. Therefore we should have (3)(a) and (b), and then we should have a new subsection which contains the present paragraph (c). I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 7:
[Printed above.]
On Question, amendment agreed to.
[Amendment No. 8 not moved.]
6 p.m.
The Deputy Chairman of Committees (Baroness Wootton of Abinger): I have to point out before I call Amendment No. 9 that if this amendment is agreed to I shall be unable to put Amendments Nos. 10 or 11.
Lord Renton Lord Renton moved Amendment No. 9:
Page 2, line 26, leave out subsection (5).
The noble Lord said: I will bear in mind what the noble Baroness the Deputy Chairman has just said about its effect on Amendments Nos. 10 and 11, but I think that your Lordships might wish to consider Amendment No. 9. The point that arises is that Clause 1(5) appears to be unnecessary as it is always open to anyone to make representations to the Charity Commissioners to the effect that charity trustees are in default.
This is an exploratory amendment. If your Lordships feel that the subsection should stand, if only to enable Amendments Nos. 10 and 11 to be discussed, I would not press it any further, but the subsection appears to be unnecessary. I beg to move.
The Deputy Chairman of Committees: The Question is that Amendment No. 9 be agreed to.
Lord Renton: With great respect, what we need to have put now is that the amendment is proposed. It is not a question of putting the Question just yet. I have moved the amendment: it is now for the Deputy Chairman to say, "Amendment proposed…".
Viscount Colville of Culross: May I proceed on the basis that that is what the noble Baroness the Deputy Chairman has done? When the Select Committee decided that subsection (5) should be included we did not overlook the point that my noble friend has made about the ability of everybody to make a request to the Charity Commissioners. The trouble about it is that on the whole they do not very much. The Charity Commissioners do not have the facilities to check for themselves whether the charity trustees have put in their accounts for the year. If the Charity Commissioners were to be asked about any one specific charity they would look up their files and would immediately and willingly say whether that was so. There is no question of recalcitrance on their part, but they do not make an automatic check every year to see whether trustees have submitted their accounts.
It seemed to the Select Committee that a number of people locally, with the interests that this legislation may, with luck, arouse, may wish to know the current situation. Therefore, it is to underline the power of members of the public to ask the Charity Commissioners whether the trustees are in default.
Of course, certain people can make a complaint—and that will be extended under another provision in the Bill—under Sections 18 and 19 of the 1960 Act, but we thought that this would reinforce the power of the public to try to put pressure on the trustees of a charity to ensure that they fulfilled their duty. We think that from the psychological point of view this is worth having in the Bill.
Lord Renton: I am most grateful to my noble friend, and in view of what he says I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Denning Lord Denning moved Amendment No. 10:
Page 2, line 26, after first ("to") insert ("the appropriate local authority or")
The noble and learned Lord said: As my noble friend Lord Colville of Culross said, in a way this clause is to enable some sort of pressure to be put upon the commission by individual members of the public to see that the obligations are fulfilled. The obligations are there to file the proper accounts and to prepare them, and for the local authority to receive them and make them available.
My amendment is designed to increase that pressure. It should not be left simply to any member of the public to take action. Surely the people to take action should be those who receive the accounts. These people are bound to receive them and to make copies of them available. They know whether the accounts are in order. Therefore, to put more pressure in the field of enforcing the accounts, instead of having only the phrase "open to any person", any member of the public, I should like to insert the provision that "the appropriate local authority" themselves may do it. They are the people who receive the accounts; they can see whether they are in order; and, if the regulations are not complied with, they can operate the system. Why not let them be in charge? It will give them an incentive. I make it optional by saying, "to the appropriate local authority or" any member of the public. This would make pressure available to the local authority which receives the accounts to see that the rules are complied with. I beg to move.
Viscount Colville of Culross: This is the amendment that I have been dreading most of all in the entire Marshalled List, because I have to tell the noble and learned Lord that, for a very good legal reason, his amendment is unnecessary. The point is that in the Interpretation Act 1978, in Schedule 1, it is said that "person" includes,
"a body of persons corporate or unincorporate",
and that includes all local authorities. So they already have the power under the provisions of the Bill as it stands.
I hesitate to make a point of that sort to a person of the stature of the noble and learned Lord, but I promise him that it is correct and I hope he will accept it.
Lord Denning: I recognise that it is unnecessary. It is already there by virtue of the Interpretation Act, but I believe we should make it a little clearer and provide the opportunity to bring pressure on the appropriate local authority, which knows all about it. That is the point of my amendment.
Lord Renton: I hope that my noble friend Lord Colville will not submit to the learned blandishments of the noble and learned Lord, Lord Denning. We must be well disciplined, if I may say so with deep respect, in everything that we do when legislating.

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These words really are unnecessary. I am sorry to have to say that. I hope that on this occasion my noble friend Lord Colville of Culross will stick to his guns.
Lord Denning: In the circumstances, I will not press my amendment any further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved]
Lord Renton Lord Renton moved Amendment No. 12:
Page 2, line 31, leave out subsection (6) and insert—
("(6) Notwithstanding subsection (4) of section 18 of the Act of 1960, the Commissioners may exercise their jurisdiction under that section in the event of default by the trustees of a local charity for the relief of poverty for a period of at least twelve months in complying with this section or the Act of 1960.").
The noble Lord said: This is a purely technical and drafting amendment. In discussing the previous amendment, my noble friend Lord Colville referred to Section 18 of the 1960 Act. Amendment No. 12 is a redrafting of subsection (6), but with a reference to Section 18 of the Act of 1960 which I think needs to be made. I do not wish to labour the matter. If noble Lords would be so good as just to look at the wording that I propose, I think that they may see that it has an advantage in it. I beg to move.
The Deputy Chairman of Committees: I have to point out that if this amendment is agreed to I shall not be able to put Amendment No. 13.
Baroness Trumpington: The Select Committee believed that the affairs of local charities should be conducted with greater openness and that trustees should be more accountable for administering their charitable funds. The proposal that anyone should be entitled, in the case of a charity in default in respect of accounts, to make representations to the commissioners was designed, I believe, to enable defaults to be brought to the attention of the commissioners when they might not otherwise have come to their attention. This seems to be a positive and reasonable reform.
Viscount Colville of Culross: I appreciate the reasons why my noble friend Lord Renton has moved this. I think that, to some extent, we are in a bit of a drafting muddle here, because there is no doubt that it would be very desirable to include a reference to Section 19 because the powers of the commissioners to act in the case of default are comprised in both Sections 18 and 19 and they might want to use one or the other or, conceivably, both.
For the moment, what I should like to do, if my noble friend agrees, is to see whether I can persuade the committee to accept Amendment No. 13, to see how that looks on paper and then. perhaps, just go back and look at his Amendment No. 12 to see whether there is any further improvement that could be derived from that. I should be extremely unhappy not to get in at this stage the reference to Section 19 that we have under the next amendment. I wonder whether we may do it in that way.
Lord Renton: I am most grateful to my noble friend. I think that he has made a wise and constructive suggestion, which I greatly welcome. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 13:
Page 2, line 36, after ("1960") insert ("or settle a scheme under section 19 of that Act").
The noble Viscount said: I have really just dealt with this. It extends the powers of the Commissioners under this Bill to deal with defaults under Section 19 of the 1960 Act as well as under Section 18. The point of it is this. At the moment there is a limitation on the sorts of people who can make application under these two sections. What we are doing in this Bill is to throw it open to anybody, including indeed the local authorities, as we have just been discussing. Therefore, it seems that they should have, at the invitation of anybody who has a justifiable complaint, the full range of powers to use as they think fit under the 1960 Act. I beg to move.
On Question, amendment agreed to.
6.15 p.m.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 14:
Page 2, line 36, at end insert—
("(7) This section does not apply to an exempt charity.").
The noble Viscount said: I wonder whether I may deal with the question of exempt charities all in one go without getting into the most staggering muddle. At the present moment, the Bill has in Clause 6 a provision which leaves out any possibility of the exempt charities benefiting from any of the provisions of this Bill. The exempt charities are listed in the second schedule to the Charities Act 1960. They include a great many people who, I am quite sure, will never want to take advantage of any of these powers. But representations have been made—for instance, by one or two of the universities—that when it comes to some of the powers to change the objects of charities (which is particularly relevant under Clause 3) they could very usefully employ the provisions that are now being put forward. Therefore the decision has been made to deal with exempt charities clause by clause.
This is the first provision of this sort and it has been thought that Clause 1 of the Bill should not apply to any exempt charity and that it should therefore remain as the original draft stood. However, when we get to Clause 2—and that is covered by Amendment No. 28(11)—there is a specific provision which has a slightly different effect. It withdraws again any application from an exempt charity or, indeed, from a charity which is a company or any other body corporate: in other words, it goes slightly further than the second schedule to the 1960 Act.
Under Clause 3, however, (which is where there has been a request for the use of the powers in this Bill) exempt charities, will, if they wish, be able to take advantage of these provisions unless they come under paragraph (g) of the second schedule. What comes under paragraph (g) in the second schedule is,
"any registered society within the meaning of the Industrial and Provident Societies Act, 1893, and any registered society or branch within the meaning of the Friendly Societies Act, 1896".

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The reason why they do not need to have any provision made for them in this Bill is because they already have their own registrar, who can deal with all matters that would be necessary in this respect. Then, when it comes to Clause 4—and this is covered by Amendment No. 49—the same applies to any exempt charity, except the ones in paragraph (g), to which I have just referred, would be able to use these powers of their own volition. Therefore, instead of having a blanket ruling out of exempt charities it has been dealt with bit by bit all the way through the Bill. This is the first occasion. Perhaps if I explain it in that way, it will save a little time, but we still think it right that exempt charities should not be able to be involved in Clause 1. I beg to move.
Lord Renton: I feel bound to point out that this question of exempt charities and the matters with which Clause 1 deals is even more complicated than one might have judged from listening to my noble friend Lord Colville of Culross. The definition of an exempt charity is in subsection (1) of Section 45 of the 1960 Act. That says that an:
" 'exempt charity' means (subject to subsection (9) of section twenty-two of this Act) a charity comprised in the Second Schedule".
Those in the second schedule are a very odd bunch and include the universities, university colleges, the British Museum, the Church Commissioners and all other kinds of very distinguished and select bodies. But when we come to Section 22(9) of the 1960 Act, we find this rather strange provision relating to a common investment fund. It states that it,
"shall be deemed for all purposes to be a charity, and the assets of the fund shall be treated for the purposes of this Act as a permanent endowment, except that if the scheme establishing the fund admits to participation only charities not having a permanent endowment, the fund shall be treated as a charity not having a permanent endowment;".
Then we find these words:
"and if the scheme admits only exempt charities, the fund shall be an exempt charity for the purposes of this Act".
The difficulty that I experience in trying to correlate those provisions with the provisions of the Bill is that I do not see how a local charity for the relief of poverty could be an exempt charity within the meaning of the definitions in the 1960 Act. Therefore, while greatly appreciating the constructive purpose and the thoroughness with which my noble friend has moved this amendment to leave out exempt charities, I just wonder whether it is necessary at all. He might care, between now and the Report stage, to consider the possibility that it is not necessary.
Viscount Colville of Culross: I think I agree with my noble friend that it is extremely unlikely that a body which he has described and which has the form set out in Section 22(9) of the 1960 Act would come under Clause 1. Therefore, there is no disagreement between us about the impact of the amendment that I am moving, because it is not changing anything in any way. The difficulty has been to find a formula, because in the case of Clauses 3 and 4 certain sorts of charities are thought, or could be thought, to profit from being able to use the provisions of the Bill. Therefore, one has to deal with exempt charities in the other clauses
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of the Bill where it is thought that they would not be able to profit.
We do not think they can profit under Clauses 1 or 2, so it is specifically being said in each case. Therefore, when you come to Clauses 3 and 4 you say which exempt charity may be able to use the provisions. That is the way that this has been done, and it is part of the pattern. Of course I will look at anything again; but I in fact believe that this is all right, although I would be the first to admit that it is extremely complicated.
Lord Renton: I appreciate what my noble friend means, and I appreciate what he is saying, but I really think that his purpose might be better achieved by having an amendment to Clause 6, which would then enable the application of exempt charities to the various provisions of this Bill in its various clauses to be clearly stated in one place, rather than picking out their application to individual clauses one by one, as it seems he is intending to do.
Viscount Colville of Culross: I will look at that. It was really exactly from that sort of formula that we departed in embarking upon this series of amendments. But, pending that, I should like to make it abundantly clear that exempt charities are not within the scope of Clause 1 and so I hope that this amendment could go into this Bill this evening.
On Question, amendment agreed to.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Baroness Ewart-Biggs: I should like to make one general point, but first I should like to apologise to your Lordships for the disappointment that you must be feeling that it is me at this Dispatch Box instead of my noble friend Lord Mishcon, with all his wealth of experience. However, he is out of the country today and so is unable to be here. All I can say is that I hope your Lordships will take advantage of the fact that I must be very representative of a lot of lay trustees who will be very much affected by the provisons of this Bill. Perhaps they can use me as a measuring stick as to how much comprehension will be inspired by the Bill itself. I think it is true to say that wide comprehension of this Bill is an essential criterion for its success.
Just on a very general note, I should like to stress that we on these Benches entirly support the provisions in the clause, which are there purely for the purpose of stimulating local interest in the local charities, which are there for the relief of poverty, and also to call attention to the charitable monies which are available and of which they may not previously have been aware.
Finally, of course we fully support the measures proposed to ensure a greater accountability on the part of local charities. Our only fear could possibly be, knowing the sensitivities of people who run charities and those who are the trustees of charities, that their sensitivities should not be upset by the greater accountability they are asked to give. There should be a balance between respecting the sensitivities and bringing greater accountability in respect of their affairs, which is clearly so necessary.
Viscount Colville of Culross: I am perfectly certain that I speak for everybody in this Committee when I welcome the noble Baroness to the Dispatch Box to speak on this Bill—and a very good point she has made. There does need to be a balance, and certainly the members of the Select Committee were very well aware of the susceptibilities of local charity trustees.
There is, however, the other point of view; namely, that they are handling what is effectively public money. As I think I said on Second Reading, if it is money which is derived from income they receive tax relief, so that it is public money which is being provided for at the expense of the rest of the taxpayers. I think that accountability, in these circumstances, is not something too unreasonable for which to ask.
As for the complexities of the subject, I am very pleased to see that the Charity Commission have already issued a sort of provisional pamphlet which explains what is in the Bill. It has been widely distributed; and I have no doubt that there will be other explanatory material coming forward if in fact the Bill is able to survive its parliamentary course. I welcome the noble Baroness's contribution very much indeed.
Clause 1, as amended, agreed to.
Clause 2 [Resolution by trustees of old charity to alter objects]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 15:
Page 2, line 37, after ("applies") insert ("subject to subsection (11) below")
The noble Viscount said: This is a paving amendment for the passage about exempt charities in Clause 2, and I have already explained it. I beg to move.
On Question, amendment agreed to.
Lord Hooson Lord Hooson moved Amendment No. 16:
Page 2, line 38, after ("poverty") insert ("or a registered charity (not being an ecclesiastical charity) of which the gross income in the preceding accounting period was £200 or less,").
The noble Lord said: As a mere common lawyer, I move very gingerly in the realm of charities. My purpose in moving this amendment is to discover why charities within the ambit of Clause 3 should not also use as an option the mechanics of Clause 2. Clause 2 at present applies only to poverty charities which are at least 50 years old. They can alter their objects in order to re-invigorate themselves. Clause 3, on the other hand, is not confined to poverty charities. There is no time limit but there is a financial limit: that is, an income of £200 or less in the previous year. However, the only right that Clause 3 gives is effectively to wind up the charity altogether by transferring its assets to another charity. I can think of no reason why they should not be given the option of going down the Clause 2 route of amending their own objects, rather than winding up. I have excluded ecclesiastical charities from the amendment. It seems to me on the face of it—and I am open to conviction the other way—that this would be an important and constructive change in the Bill. I beg to move.
Viscount Colville of Culross: I, too, looked upon it as being a constructive approach until I thought a little further and took some advice. The primary purpose of Clause 2 is to deal with the very obsolescent charities whose original donors had in mind some specific beneficiary of a sort which either does not now exist or does not cover adequately the provisions of poverty in an area. Therefore, it was particularly susceptible as a subject for changing the objects of the charity. That is why in Clause 2 one concentrates on this type of charity.
6.30 p.m.
It is perfectly true that there could well be other obsolete charities whose objects ought to be reconsidered. They can be, of course, under the existing law, because, although it is rather more difficult than the do-it-yourself scheme that the Bill produces, they can go to the Charity Commissioners who can make schemes and other alterations in accordance with the existing law. But the advice that I have been given really turns on the resource implications of what this would mean, because according to such calculations as can be made—and I agree that it is not entirely easy—there will be something like a seven-fold increase in the number of charities who will be eligible if this amendment is accepted.
The Charity Commission have been very cooperative about the preparation of this Bill, and I wish to pay full tribute to them. What they have said is that they have a very strict limit on the amount of resources that they could possibly spare in addition to what they are already employing. They think that they can just about handle the number of applications which would be likely to arise under Clauses 2 and 3 as they are at present drafted. But if one added seven-fold to the possibility of applications for trustees to change their objects under Clause 2, then I think we would run into a position where the Charity Commission would say that, alas! they could not cope.
The whole essence of this piece of legislation is that it has been constructed in conjunction with the Charity Commission and with the Home Office so as to lie within the bounds of possiblity of what they can cope with. I believe that unless we remain within those bounds we shall produce a measure which will not have the effect that we want and which, indeed, might draw criticism about the diversion of resources away from other things that may be thought more desirable. So although I very much take the noble Lord's point, I think that for that very important, and indeed sometimes central, practical reason of the amount of money that would be involved, I am afraid that I have to resist this amendment.
Lord Hooson: I very much regret that we are not taking advantage of this Bill. We always tend to have an over-cautious approach with regard to charities, and it would seem very sensible if we could incorporate this amendment within the Bill. But if there is an important resource implication which really cannot be met, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hooson Lord Hooson moved Amendment No. 17:
Page 3, line 3, leave out ("impossible") and insert ("impractical").
The noble Lord said: This is a very simple amendment. It seems to me that very little in this life is strictly impossible, and a change of word would mean a slight reduction in the number of formidable hoops through which trustees will have to go in order to get the remedy presented by this clause. It seems to me that the intention is to consider impracticality rather than impossibility, and the word "impossible" seems unnecessary here. I beg to move.
Lord Airedale: I wonder whether my noble friend will think that "impractical" is nearer in meaning to "lacking in usefulness" than to "impossible", and whether he might consider at the next stage of the Bill, if he thinks that "impractical" is a more elegant word, swapping "impractical" for "lacking in usefulness", rather than swapping it for "impossible".
Viscount Colville of Culross: There is another point. I hope that I shall not be accused of being flippant, but this was part of the evidence that was brought before the committee. One of the larger funds has taken over the administration of a charity which is for the benefit of the ladies of Paddington. The people who run this organisation have found it extremely difficult to define the ladies of Paddington—at least to the extent of avoiding trouble with the police. They have had to produce a device whereby in their accounts for each year they set aside a certain amount of money which could be provided for the ladies of Paddington if they ever found any—I think that the ladies of Paddington are described by some sort of adjective as well—and at the end of the year, because they have never found one, they distribute it among the other beneficiaries who are entitled. In that case, I think that the object is impossible and therefore there is some point in having this word in. If the noble Lord would like to consider changing "impractical" in the way that the noble Lord, Lord Airedale, suggested, I certainly would have no objection, but I believe that there are real cases of impossibility.
Lord Renton: If I may add one postscript to that, as I understand it, traditionally the powers of the court with regard to objects which have failed, for example, relate to their having failed, and they have failed because it is impossible to achieve them, not because it is impractical to achieve them.
Lord Hooson: The contribution of the noble Viscount, Lord Colville of Culross, seems to indicate that it might be impractical to find ladies of Paddington but surely not impossible. It seems to me that he underlined the very point that I seek to make; namely, that it would be better here to have the word "impractical" rather than the word "impossible", because very few things in this world are impossible of achievement. I shall bear in mind the suggestion of my noble friend that I should reconsider this matter before the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 18:
Page 3, line 15, leave out ("so set out") and insert ("of the charity").
The noble Viscount said: This is simply a drafting amendment. It clears up and makes a good deal more obvious what is meant by the text. I beg to move.
On Question, amendment agreed to.
Baroness Faithfull Baroness Faithfull moved Amendment No. 19:
Page 3, line 15, after ("charitable") insert ("and for the relief of poverty").
The noble Baroness said: Like the noble Lord, Lord Renton, I should like to thank my noble and learned friend Lord Brightman for his help with my amendments. The intention of this amendment is first, that a local charity for the relief of poverty with obsolete objects shall not alter its objects in such a way that the new objects cease to be for the relief of poverty; and, secondly, that where a small charity which desires to transfer its assets to another charity is a charity for the relief of poverty, the objects of the transferee charity must also be for the relief of poverty.
I quite realise that it could be said that under Clauses 2(3) and 3(2)(b) of the Bill as drawn this is explicit; that there is no need for this amendment and that it is written in that these charities shall be consistent with the spirit of the original gift. My amendment in no way alters the Bill, but it dots the "i's" and crosses the "t's".
Those of us who have attended parochial parish meetings and meetings of trustees know that if we are very anxious to have something it is possible to convince oneself and to turn something round in order to fall in with, perhaps, the spirit of the original gift. For example, there is one charity where the vicar is paid £5 for preaching a sermon and the churchwarden is paid 10 shillings for listening to it. Do they fall within the realm of poverty? The vicar, I am quite sure, and many churchwardens, will agree that they do. Therefore my amendment is simply to make it absolutely clear to everyone concerned, and to place beyond doubt, exactly what the Bill means. As I say, it does not alter the Bill; it just clarifies the situation. I beg to move.
Lord Brightman: I think that this amendment does reflect what was intended by the Bill and, if I may speculate, I think it is quite likely that the committee would have inserted those words if it had thought of them in time. Although it is perhaps not for me to support the amendment, I see no harm in it whatever.
Viscount Colville of Culross: My noble friend Lady Faithfull has entirely taken the point about the various safeguards that are provided in order to prevent the charitable money going away from the relief of poverty. There is the provision that there shall be no,
"unjustifiable departure from the intentions of the donor, or … the spirit of the gift",
and there is of course in particular the provision whereby the commissioners themselves have to look at the reasons why the trustees are proposing the change and the change to which they are proposing to go. They are not lightly going to let through something which diverts the fund away from poverty.

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I think there is one technical difficulty about the amendment. The definition in Clause 6 states:
"References in this Act to a local charity for the relief of poverty are to a registered charity … having the following characteristics—
(a) the sole or primary object of the charity is the relief of poverty".
The difficulty about my noble friend's amendment, even if we had thought in principle of putting it into the Bill, is that it leaves out the second half of the definition and confines a charity, which previously could have had a primary object and also a secondary object, to having only a primary object. Therefore even if the noble and learned Lord. Lord Brightman, is happy with the spirit of it, I am afraid that I am a tiny bit unhappy with the drafting.
I wonder whether that is something we could look at again so that we may be absolutely sure that it does not in fact restrict the ability of the trustees to transfer their funds to what they want rather than making sure that they do it in the right way. I wonder whether my noble friend will allow me to take advice on that, because I believe it is a technical matter which needs to be sorted out.
Baroness Faithfull: I am most grateful to the noble and learned Lord, Lord Brightman, and to my noble friend Lord Colville. Of course I will take note of what he says. I myself do not completely understand the legal situation and I also should like to look into it. Therefore, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hooson Lord Hooson moved Amendment No. 20:
Page 3, line 17, leave out subsection (3).
The noble Lord said: This is yet another probing amendment and I simply pose the question: does subsection (3) add anything to this clause? It seems to me that subsection (2) already covers this matter and that really this is a question of duplication. Is it not yet another example of the overcaution that is so often expressed when we are dealing with such things as charities?
I notice that at the end of subsection 2(b) the words,
"consistently with the spirit of the original gift",
are already there. In subsection (3) we have,
"departure from the intentions of the donor, or violate the spirit of the gift".
What really does subsection (3) add to the clause? I can see that it might provide infinite scope for trouble in the future. Of what assistance is it in the interpretation of this clause? I beg to move.
6.45 p.m.
Lord Renton: It seems to me that subsection (3) was an attempt to express the cy-prés doctrine. As to whether that is necessary or appropriate to do in this particular context, I must confess I have an open mind. I am not sure; but that seemed to be the effect of it.
Viscount Colville of Culross: I go back once again to the intention which underlies this piece of legislation.
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The purpose is to try to enable trustees without any substantial amount of professional advice to carry out certain changes—in this case, to the objects of their charity. One could of course achieve a certain amount through the doctrine of cy-près, to which my noble friend Lord Renton has referred, but the doctrine of cy-près—nobody is a greater expert on this sort of thing than the noble and learned Lord, Lord Brightman—is a fairly complicated and abstruse matter and can certainly be dealt with at the moment only through the Charity Commissioners or through the courts. It was the decision as set out in the Select Committee's report that, rather than tinkering with the doctrine of cy-près as it at present stands, as it has been built up by a long series of judicial decisions, it would be better to provide an easy bypass for the cy-près doctrine in its true sense. Therefore, if trustees are going to be invited to reconsider the objects of their charity, it was I think the view of the Select Committee that they need as much guidance about the sort of things that they ought to have in mind as it is possible to give them.
It is perfectly true that subsection 2(b) refers to the,
"spirit of the original gift",
but I think if I was a lay trustee and I was faced with the possibility of changing my objects to something away from what they were, I might welcome a little more guidance than that as to what is exactly meant by something being altered,
"consistently with the spirit of the original gift':.
It was because of the audience or the constituency, as it were, to which this legislation is addressed that it was thought fit to try to spell it out a little more in subsection (3). I know that to some extent there is a repetition, but it is intended to try to set them on the right lines so that they will be able to write out the reasons in the form that appears in the schedule in a way which is consistent with what the legislation is really intending to do and in a way which will satisfy the Charity Commissioners.
In those circumstances and given that object, although I can entirely see the noble Lord's point of view about tautology, we thought it was worth while to put in these extra words and I hope that on reflection he will think that they may do some good.
Lord Brightman: I would respectfully ask that this amendment be not agreed to, because subsection (3) is intended indeed to spell out what is meant by,
"consistently with the spirit of the original gift",
in simple language that trustees can understand without incurring the expense of going to their lawyers.
As was said on the Second Reading of the Bill, the whole purpose is to make things easy for trustees, to enable them to get their house in order as easily as they can themselves without any expense and without advice. If we rely only on the words,
"consistently with the spirit of the original gift",
I am afraid that some trustees may be nervous of invoking this clause, may incur the expense of legal advice and so forth. I would respectfully ask that subsection (3) be allowed to stand.
Lord Hooson: I shall certainly bow to the far superior knowledge of the noble and learned Lord,

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Lord Brightman, on this matter. As I said, this was a probing amendment, but he has satisfied me of the good reasons why this subsection should be allowed to remain in the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hooson Lord Hooson moved Amendment No. 21:
Page 3, line 26, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)").
The noble Lord said: This is not a probing amendment and, with the leave of the Committee, I shall also refer to Amendments Nos. 34 and 48 which stand in my name:
Amendment No. 34: Clause 3, page 5, line 17, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)").
Amendment No. 48: Clause 4, page 7, line 16, after ("unanimous") insert ("where there are four or fewer trustees but in other cases must be concurred with by not less than three quarters of the trustees (rounded up to the nearest whole number)").
The wording is identical in all three amendments, covering three separate clauses. I am told that in practice it is sometimes very difficult to get a decision out of a trustee who knows very little about the affairs of a trust which is in a semi-dormant state. Sometimes it is very difficult to get a decision from a very old trustee who, as it were, is reminded of the affairs of the trust and does not want to be bothered very much. I am told that inertia is often a real problem.
The temptation for me was to table an amendment which would mean that the requirement of unanimity should apply only where there were three trustees or fewer—three in favour being sufficient, in my view. However, in the event I have been a little more cautious and accepted that the three-quarter rule which I propose should be required only where there are four or more trustees. It seems to me that this is a sensible safeguard where everything points to the necessity for a change of mind by the trustees and they are held up perhaps by one person being excessively stubborn and not willing to bother about the matter. I beg to move.
Lord Brightman: The exercise of the unique powers given to the trustees by Clauses 2 and 3 is intended to be non-controversial. If the powers can be exercised by a majority of the trustees, perhaps against the wishes of a forceful minority, then controversy will be introduced into the exercise of those powers. If there is to be controversy, I suggest that it is more appropriate that it should be dealt with either through the courts or through the Charity Commission and not by the exercise of these rather exceptional powers proposed for Clauses 2 and 3. I suggest that it is not appropriate in the context of this legislation to allow a matter which may be in dispute between the trustees to be decided by a majority against perhaps a protesting minority.
Viscount Colville of Culross: I think this is a fairly important point. I bear in mind what the noble Baroness, Lady Ewart-Biggs, said just now about the susceptibilities of trustees. Underlying her point was
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that sometimes the activities of trustees in running their trusts in a small community can be a matter of very great interest and concern to members of that community. Therefore, it was one of the main safeguards built into the do-it-yourself provisions by the Select Committee, which are enshrined in the Bill, that we really ought to make sure that all the trustees agree because if there is to be a dispute, I believe that there would be the possibility of a very long-running and extremely divisive and unpleasant local row.
The accusation would always be, if anyone knew anything about it, that instead of acting on a majority, as the noble Lord, Lord Hooson, has provided for in his amendment, this matter ought to have been adjudicated upon properly by the machinery that has been set up by Parliament—either the Charity Commission or the courts—and that the trustees who have, as it were, railroaded it through had no right to take advantage of the provisions of this Bill and they ought to have listened to the person who dissents.
It is not always a matter of apathy. It is plain that apathy often plays a part and there are dormant charities and extinct charities, but sometimes there are occasions when people feel passionately on a matter of principle about what is being proposed. They could be over-ruled by the majority under the proposed amendment provided there were enough trustees. Therefore, my advice to the Committee is that we should retain the rule of unanimity and not provide for this sort of majority exercise, but do as the noble and learned Lord, Lord Brightman, suggests—which is to rely upon the existing provisions for dealing with disputes if unanimity cannot be achieved on one of these schemes.
I am afraid to say that I must say the same for all three amendments because I believe that in this case it is a matter of principle. I hope that in the circumstances the noble Lord will feel that he need not press the amendment.
Lord Hooson: I do not intend to press this amendment to a Division, but I am not convinced by the arguments I have heard. It seems to me that we take an exceptionally cautious approach on charities and one has to balance the practicalities of the matter with the desirability of unanimity; but in certain circumstances where unanimity is virtually impossible it may still be desirable that the powers given under the Bill should be exercised and it seemed that my compromise that, if four trustees are in favour, thereafter the three-quarter rule should apply, is about right to balance the practicalities of the situation with the desirability of having unanimity. However, I shall not press it to a Division. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 22:
Page 3, line 37, leave out ("opinion") and insert ("opinions").
The noble Viscount said: I shall speak to Amendments Nos. 22 and 23 together.
Amendment No. 23: Page 3, line 37, leave out ("subsection (2)") and insert ("subsections (2) and (3)").
The Charity Commissioners have to be convinced of the propriety of what is being proposed by the trustees. In the Bill as it stands the trustees have to tell them about the opinion that they form under subsection (2). We have just discussed subsection (3) and the way in which it elaborates upon the sort of thinking that ought to have lain behind the trustees' decision to seek an alteration in the objectives of the charity. The trustees are told that they have to form an opinion under subsection (3) as well. It seems wrong that they should not have to explain that opinion to the Charity Commissioners as well as the opinion they form under subsection (2) which relates to obsolescence, or whatever the words are to be. Therefore, these two amendments make sure that they explain both halves of their thinking in writing to the Charity Commissioners. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 23:
[Printed above: col. 510.]
On Question, amendment agreed to.
Lord Airedale Lord Airedale moved Amendment No. 24:
Page 3, line 43, after ("trustees") insert ("of the charity").
The noble Lord said: This is only a drafting matter and Amendment No. 35 deals with the same point.
Amendment No. 35: Clause 3, page 5, line 35, leave out ("of the charity").
This subsection (7), and subsection (6) of Clause 3, are identical except for the curiosity that the words "of the charity" which appear in the later subsection are omitted from this one. I think there is virtue in consistency and clauses which are meant to be identical should be identical. I do not mind which way it is done, although I prefer this amendment to Amendment No. 35. If the noble Viscount prefers Amendment No. 35, I would be quite happy, but we ought to do it one way or the other. I beg to move.
Viscount Colville of Culross: As a matter of fact I prefer Amendment No. 35 because the scheme is meant to be that at the beginning of every clause when one first comes to a reference to the trustees one finds either the words "the charity trustees" or "the trustees of a charity". Thereafter, all through the rest of the clause unless there is a specific reason to differentiate between, for instance, "transferor trustees" and "transferee trustees" the Bill merely says "trustees"; in which case Clause 2 as it stands is all right. But I think that the noble Lord has a point in line 35 on page 5, because there the rule has been broken. That is why I prefer his other amendment.
May I draw the noble Lord's attention to something which I think even his eagle eye has missed, and that is another sin which has been committed on page 5, line 20, which he might care to deal with at a subsequent stage?
Lord Airedale: In that case, I beg leave to withdraw the amendment, but I shall be lurking in the shadows until we come to Amendment No.35.
Amendment, by leave, withdrawn.
7 p.m.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 25:
Page 4, line 1, after ("section") insert ("or as to their compliance with this section").
The noble Viscount said: Another of the things that it was thought better to include within the requirements that the trustees should send to the commissioners was their compliance with the various technical provisions which are necessary under Clause 2. We shall come to exactly the same point under Clause 3. There are various requirements for notice and that sort of thing, and it seemed right that the trustees should satisfy the commissioners that they had in fact complied with all those provisions. That is what they will have to do if this amendment is passed. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 26:
Page 4, line 5, leave out ("within the period or) and insert ("not less than six weeks or more than").
The noble Viscount said: The Bill both under Clause 3 and under Clause 4 provides for representations to be made to the commissioners when an application is made either to vary the objects of the charity or for one of the amalgamations that can be dealt with under Clause 3. It seems perfectly ridiculous that the Charity Commissioners should be able to come to a decision on the matter before there has been time for representations to be received and considered. The suggestion in this amendment is that there should be a period of six weeks for those representations to be received and considered, and not until after that should the Charity Commisioners come to a decision about what to do. This provision is being suggested here and we shall come to a similar one at Amendment No. 37 in relation to Clause 3. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 27:
Page 4, line 28, leave out ("or') and insert ("specified in").
The noble Viscount said: This is a very simple point. At the present moment, when the commissioners agree to a proposal by the trustees to change their objectives, the way that the clause is drafted would mean that the objects are in law changed on the very day that the decision has been taken. That means to say that they could easily change before even the trustees know about it. It seems better that the commissioners should in their consent specify the day upon which the objects are deemed to be changed. That is the point of this amendment. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 28:
Page 4, line 35, at end insert—
("(11) This section does not apply to an exempt charity or a charity which is a company or other body corporate.
(12) Section 4(6)(b) of the Act of 1960 (duty to give notice etc. to the Commissioners) does not apply where the trusts of a charity are modified by virtue of this section.").
The noble Viscount said: This relates to the exempt charity part in Clause 2. Subject to the promise that I have already given to have another think about this, the new subsection (11) deals with that. There is, however, also new subsection (12), and this disapplies Section 4(6)(b) of the 1960 Act. That is a provision which places a duty on the trustees of a registered charity to inform the commissioners, among other things, of any changes in its trusts. Under the procedure that exists in Clause 2, the commissioners of course know, anyway, because they have had the application made to them and they have had all the details. They decide whether or not to agree to it. There is no point in providing an extra provision for them to be told under the existing law in Section 4(6)(b), so it is being left out. I beg to move.
Lord Renton: My noble friend Lord Colville has already kindly said that he will reconsider the way in which he is asking your Lordships' Committee to deal with these exempt charities. Seeing this new subsection (11), I must confess that I am rather confirmed in the view that I put forward previously that, instead of having them dealt with in these piecemeal ways, an elegant amendment to Clause 6 would be a far better way of dealing with them.
On Question, amendment agreed to.
On Question, Whether Clause 2, as amended, shall stand part of the Bill?
Baroness Ewart-Biggs: In spite of all the precautions that have been taken, I believe that this clause still lays a heavy responsibility on the trustees of a charity. As the noble Viscount said, it is a case where they will have to go in for a do-it-yourself operation, changing the objects of the charity. Having to work out how to adjust them while keeping them similar to the original objects and continuing to be charitable is quite a baffling task to many lay trustees. I worry about the possibility that some trustees may become very puzzled.
In spite of the assurances that the noble Baroness, Lady Trumpington, gave on Second Reading, I do not see what help those trustees will receive. I cannot believe that they can expect much help from the Charity Commissioners, who, with the best will in the world, are unable to respond with any speed to a request from a charity. I am merely putting myself in their shoes and thinking how difficult it might be for some of them to comply with this requirement.
I briefly, for the record, put forward a suggestion made by the director of the National Council for Voluntary Organisations, which he expressed in a letter to The Times recently and which might be of interest to the Committee. It seems to me to be very relevant. The letter welcomes the recommendations to permit the alteration of the objects of a local charity. It goes on to say:
"experience gained by NCVO suggests some practical difficulty in securing the Commissioners' consent to such alterations.
"Thus activities which trustees may not unreasonably feel to be in line with their charity's existing objects, often of an archaic nature, could fail the tests developed by the courts over the past 400 years (and by which the Charity Commissioners are themselves bound).
"It was with such considerations in mind (and not only in relation to the relief of poverty) that NCVO in its evidence to the select
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committee stressed the great benefit to the evolution of charity law as a whole that would flow from the creation of a suitors' fund (a form of legal aid) out of which key test cases could be financed.
"Responsibility for administration could lie with the Charity Commissioners who would carefully scrutinise all applications for assistance. Aid would be given broadly on the basis of the importance of the legal points involved, the complexity of the case and the circumstances (financial or otherwise) of the organisations concerned".
The letter ends by saying:
"Soundings taken by NCVO indicate a very wide range of support in the voluntary sector for this proposal".
As I said, I can fully appreciate the need to make adjustments in the objects of a charity, but I hope that help and advice will be available for the trustees, some of whom, from my experience, are not entirely expert in and familiar with the formal language which is used in trust deeds and which they would find it helpful to be familiar with in such a case.
Viscount Colville of Culross: Of course, I agree with that. The more help that can be given, the better. Having said that, I think it will probably be easier under this legislation to carry out these changes than it is to go through the technicalities of, for instance, getting a scheme or dealing with something under the cy-près rule within the full terms of the 1960 Act.
There may be a point that the noble Baroness has missed and I think that it is an important one. If she would be so kind as to look, for instance, at page 4, Clause 2(8)(a)—it does not matter very much which clause one looks at—she will see that the commissioners have a period (and of course it is a limited period) during which they have to make up their minds on the matter. When they read the reasons for the trustees forming the opinions that they have to form under subsections (2) and (3) that we were discussing just now, those trustees opinions are to be treated as prima facie well-founded and not to be set aside in the absence of contrary considerations.
Therefore, the balance of advantage lies in favour of the decision that the trustee has made and the charity commissioners would have to have some very good reason for refusing to consent to what the trustees want to do. This is quite a subtle point but I think it puts a very great advantage in the hands of the trustees in seeking to achieve the objects that they wish to achieve or make the changes that they wish to make. I am sure that this will all be explained, but this kind of provision has been built into the legislation to provide for exactly the kind of facility that we do hope will be available to the trustees.
Clause 2, as amended, agreed to.
Clause 3 [Power for certain charity trustees to transfer whole property to another charity]:
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 29:
Page 4, line 37, leave out ("registered").
The noble Baroness said: In speaking to Amendment No. 29, perhaps I may speak also to Amendment No. 31.
Page 4, line 38, leave out ("registered").
I am quite prepared to be shot down by the noble Viscount. Nevertheless, the reason, I have been advised, for wishing to take out the word "registered"

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both in lines 37 and 38 of Clause 3 is as follows. The wording as it stands means that charities wishing to benefit from the Bill will have to register only to deregister straight after the transfer. The reason for removing the word "registered" when it first appears and the reason for removing it in the next line would be to prevent the new transferee charity being an exception to non-compulsory registration. My amendment makes it mandatory that they register after the transfer.
Having said that, I do realise that the noble Viscount, Lord Colville, through his amendments—Amendments Nos. 30, 31 and 32—is seeking another way of dealing with this particular case that some charities are not required to be registered. We are merely putting forward our suggestion as an alternative. At this point I should like to stress that we on these Benches are most certainly giving our support to the aim of this Bill to encourage the formalisation of the local charity system. But in the particular instance of one charity being transferred to another, we thought it most likely that the Charity Commissioners, when presented with the resolution for the transfer, would exert their influence on the transferee charity to register and that this would be the most appropriate way of ensuring that such charities agreed, of their own free will, to register with the Charity Commission.
At this particular point I think it would be highly relevant to reiterate what was said during the Second Reading by many noble Lords—and notably by the noble Lord, Lord Allen—in relation to the importance of publicity for this Bill if it is passed. Surely its success relies considerably on the fact that it should be widely known and widely understood. I know that the NCVO will play a big part in giving it publicity. However, the danger is that small rural charities—in fact, the very ones which will benefit from this Bill—will at worst ignore its existence and at best know of it but not thoroughly understand it. I beg to move.
Viscount Colville of Culross: Perhaps in dealing with this amendment I may speak to Amendments Nos. 30, 31 and 32 and in the schedules, 64 and 65.
Amendment No. 30: Page 4, line 37, after ("charity") insert ("or a charity that is not required to be registered").
Amendment No. 31: [Printed above: col. 514.]
Amendment No. 32: Page 4, line 39, after ("charity") insert ("being a registered charity or a charity that is not required to be registered").
Amendment No. 64: Schedule 2, page 10, line 13, leave out ("registered").
Amendment No. 65: Page 10, line 16, leave out ("being a charity registered under the Charities Act 1960").
Far from shooting down the noble Baroness, I wish to support her. As she will see, we are wholly at one on Amendment No. 31. The effect of my amendments—and I think this comes to exactly the same as what she has just said—is that we wish to release the restriction on registered charities being able to take advantage of Clause 3, either as transferor or as transferee charities. The present unregistered charities are the exempt ones and charities which have no permanent endowment and an income of £15 or less a year. There is absolutely no reason why the amalgamation procedures in Clause 3 should not apply to them in either direction.
Therefore we are now proposing that the provisions of the clause should be extended to charities which are not required to register and in the schedules we are changing the forms which the trustees are invited to fill in, so that the same matter is reflected there. I hope the noble Baroness will be entirely happy and that we shall be able to charge through the next two or three amendments without too much difficulty.
Baroness Ewart-Biggs: I am very grateful to the noble Viscount for clarifying that and explaining it to me.
Viscount Colville of Culross: I should prefer the noble Baroness not to press Amendment No. 29. I should prefer to have the other three.
Amendment, by leave, withdrawn.
7.15 p.m.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 30:
[Printed above.]
The noble Viscount said: I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 31:
[Printed above.]
The noble Viscount said: I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 32:
[Printed above.]
The noble Viscount said: I beg to move.
On Question, amendment agreed to.
Baroness Faithfull Baroness Faithfull moved Amendment No. 33:
Page 4, line 40, at end insert ("Provided that a charity for the relief of poverty shall not have power under this section to pass such a resolution for transfer to a charity which is not for the relief of poverty.").
The noble Baroness said: The arguments which I put forth on Amendment No. 19 apply to this Amendment No. 33. Therefore I shall not repeat them except to say that, taking the words of the noble Baroness, Lady Ewart-Biggs, the susceptibilities of trustees are such that it would be only human if one trust wanting money and knowing that another trust wanted to give some away tried somehow or other to come to a deal and interpret the law to suit them both. Therefore it was for that reason that I thought that we ought to put in the words to make it absolutely clear:
"that a charity for the relief of poverty shall not have power under this section to pass such a resolution for transfer to a charity which is not for the relief of poverty".
I beg to move.
Baroness Trumpington: If my noble friend Lord Colville of Culross was dreading tackling the noble and learned Lord, Lord Denning, may I say that I have the same familiar feeling when tackling my noble friend Lady Faithfull. I have to say that the Government cannot support this amendment. We do not believe

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that the amendment is necessary to ensure that trustees transfer their property to a charity which has objects similar to those of their own charity.
The Bill as it stands does this by requiring trustees to satisfy themselves under clause 3(2) (b),
"that the objects of the transferee charity are not so far dissimilar in character to those of the original charitable gift that the proposed transfer would constitute an unjustifiable departure from the intentions of the donor or violate the spirit of the gift".
The trustees must also of course satisfy the Charity Commissioners. Therefore, distasteful though it is for me to disagree with my noble friend, in this case I must do so.
Viscount Colville of Culross: I am sorry to say that I have to agree with my noble friend on the Front Bench. My noble friend Lady Faithfull will appreciate that in Clause 3 we have moved away from charities strictly for the relief of poverty into a much wider field. Of course I understand her concern that there should not be a transfer which takes the charitable money away from the whole field of the relief of poverty. But, for the reasons given by my noble friend Lady Trumpington, I feel that the scheme of this clause and the way in which the commissioners have power to consider and, indeed, to listen to any representations upon the proposed transfer give a completely adequate protection against any such thing happening.
Taking the point that I was making to the noble Baroness, Lady Ewart-Biggs, it is all very well for the trustees' opinion to be prima facie well founded and not to be set aside in the absence of contrary consideration, but one very good contrary consideration would be that the transferor charity was a charity for the relief of poverty and that the proposed transferee charity was nothing of the kind. That would be a very good reason for the charity commissioners to consider that they should not give their consent to the proposals.
I believe truly that the way in which the Bill has been drafted deals with this point. It is not a point that I wish to undermine or underestimate. It is simply that the machinery is, I think, there. I can assure my noble friend that we have thought carefully to see that no such mistake should occur. I hope that she may be content with that explanation, because there is nothing between us in the objectives that we seek.
Baroness Faithfull: I thank my noble friend Lady Trumpington, speaking from the Front Bench, and also my noble friend Lord Colville, for their explanations. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 34 not moved.]
Lord Airedale Lord Airedale moved Amendment No. 35:
[Printed earlier: col. 511.]
The noble Lord said: We discussed this when I moved Amendment No. 24. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 36:
Page 5, line 37, after ("section") insert ("or as to their compliance with this section")
The noble Viscount said: This is a point that we have also dealt with previously. In addition to satisfying the commissioners about the opinions that they have to form, the trustees must also satisfy them that they have complied with the provisions of this section. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 37:
Page 5, line 41, leave out ("within the period of") and insert ("not less than six weeks or more than")
The noble Viscount said: This is the same point about giving the commissioners time to consider representations. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 38:
Page 6, line 16, leave out ("copies") and insert ("a copy")
The noble Viscount said: This is drafting. There is no reason why they should send more than one copy. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 39:
Page 6, line 18, leave out ("then with effect from the date of the notice")
The noble Viscount said: This is the equivalent of the point about the date when the transfer is to take effect. As the Bill stands, it takes effect from the date of the notice. That could well be too early. It seems that it would be better to leave that out and to put in the words in Amendment No. 40.
Amendment No. 40: Page 6, line 19, leave out ("have power by virtue of this section to transfer") and insert ("on receipt of the notice make arrangements for the transfer of")
This would make it clear when the transfer took place. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 40:
[Printed above.]
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 41:
Page 6, line 39, at end insert—
("(11) This section does not apply to a charity falling within paragraph (g) of Schedule 2 to the Act of 1960 or a charity which is a company or other body corporate.")
The noble Viscount said: Subject, by this time, to the normal reservations on this point, I beg to move.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 [Power for very small charities to spend capital]:
Lord Maude of Stratford-upon-Avon Lord Maude of Stratford-upon-Avon moved Amendment No. 42:
Page 6, line 42, leave out ("£25") and insert ("£100").
The noble Lord said: In moving this amendment it may be for the convenience of the Committee to consider Amendment No. 46, which clearly hangs with it, and it is possible that some of your Lordships will wish also to consider Amendments Nos. 43 and 47, proposed by the noble Lord, Lord Hooson, which clearly fall within the same field.
Amendment No. 46: Page 7, line 2, leave out ("£5") and insert ("£10").
Amendment No. 43: Page 6, line 42, leave out ("£25") and insert ("£250").
Amendment No. 47: Page 7, line 2, leave out ("£5") and insert ("£50").
This is an amendment of rather more substance than the drafting amendments which we have recently been considering. It is one to which my noble friend Lord Renton and myself attach some importance. It may be within the recollection of your Lordships that the Small Charities Bill, which, with the Government's help, I was able to carry through another place and which my noble friend Lord Renton introduced into your Lordships' House, dealt specifically and only with the ability of charities to spend their capital. The figures that we inserted in the original Bill were, of course, very much larger than the figures we are talking about today. We have recognised, obviously, that the provisions in this Bill which enable small charities, by agreement, to merge themselves with larger and richer charities make the provisions of the original Small Charities Bill much less important than they were.
Nevertheless, we think that for very small charities the provision that they should be enabled to spend capital, which, in many cases, would mean winding themselves up, is important. We believe that the figures put into the Bill are too small. When this question was debated and when the Small Charities Bill was originally published, there were a great many objections from certain people who said that it was a breach, if not of charitable law at least of the principles of charities, that the intentions of a benefactor should be extinguished; in other words, that while there was still money that could be spent the intentions of the donor should continue to be carried out.
I never felt that this was a very valid principle. Indeed, it was not accepted by the Goodman Committee, which was certainly not short of heavyweight legal opinion. The Goodman Committee recommended that small charities should be able to spend their capital within certain restrictions. The Select Committee of the House of Commons also recommended this; and it was accepted by the Government and by Members of another place when they considered the Small Charities Bill. However, it was clear that the Select Committee of your Lordships' House was considerably influenced by these arguments. They have breached the so-called principle that this should never be allowed, but they have, so to speak, reduced it to nothing by making the figures permitted miniscule.
I suppose that, having accepted that we might sin, they were trying to reduce the sin as much as possible, presumably along the lines of the principle laid down in the case of the housemaid's baby. But it seems to my noble friend and myself—we have considered this very
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carefully and we have consulted fairly widely—that the figures of £25 capital and £5 income are far too restrictive and will make life very difficult for a number of small charities. We have thought hard what the figures should be raised to. We have concluded that a capital sum of £100 and an income of £10 are about right, offer no serious risk of abuse and will be helpful.
Obviously, I cannot object to the principle of the amendments of the noble Lord, Lord Hooson. I would, however, venture to suggest, with respect, that he has put his figures rather high. I hope very much that in the circumstances, since both my noble friend Lady Trumpington and my noble friend Lord Colville made fairly helpful noises to me in winding up on Second Reading, suggesting that they might be prepared to go a little way beyond the original figures in the Bill, my noble friend will be prepared to accept these two amendments. I beg to move.
7.30 p.m.
Lord Renton: In supporting my noble friend Lord Maude of Stratford-upon-Avon, I merely wish to say that I am astounded at our moderation.
Lord Hooson: With your Lordships' permission, I should like to speak to my own Amendments, No. 43 and No. 47—and No. 44 as well—while speaking to this particular amendment.
[Amendments Alas. 43 and 47 printed earlier: col. 519.]
Amendment No. 44: Page 6, line 42, leave out from ("less") to ("and") in line 44.
I agree entirely with what has been said by the noble Lord, Lord Maude, on his own amendment, but I think that he has been far too moderate in his approach here. It seems to me that the problem tackled by the Bill is a proliferation of defunct or semi-defunct local poverty charities, and it is therefore important to attack the problem effectively. Of course, in this clause we are concerned only with the expenditure of capital. But surely it is necessary, considering the present value of money, to multiply the figures by 10. For example, the value of capital should go up from £25 to £250 and income should go up to £50.
This Bill is specific and fairly narrow in its scope, despite its very general Title. But I feel that it is too timid. I agree entirely with the noble Lord, Lord Maude, that this is a very important amendment he has moved; it goes to the substance of the matter. With his experience, he knows that this Bill has to proceed from this House to another place, where a perhaps much more robust attitude will be taken towards it. It is an important measure, provided we are not too over-cautious. Surely charity law is riddled with over-caution, at great cost to the public and to the original donors. The amount of time, effort and resources wasted in dealing with all the mechanics and laws relating to small charities is often disproportionate. Therefore, we ought to think in terms of the modern value of money. A capital value of £250 and an income of £50 is much nearer the mark; but, if I gave vent to my true feelings in the matter, it is still probably too modest.
I should like to mention briefly my amendment No. 44, which eliminates the exclusion of land from

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this subsection. Nothing could be more annoying and wasteful than for a small charity to have to hang on to a bit of land—under my amendment, land worth £250, or, under the clause as at present amended, £25. I ask your Lordships: how much land can you buy today for £25 or £250? It is time we took a slightly more realistic view of the value of money today.
Lord Denning: I should like to support all the amendments, but I am in favour of the figures which have been mentioned by my noble friend Lord Hooson.
Lord Airedale: It seems to me that when we are considering a matter of this kind we really ought to ask ourselves: what would the founders of this charity think about what we are here proposing to do to interfere with something which they ordained, probably many years ago? The trustees establishing a charity are very often extremely concerned with two points. One is the good, charitable work that they hope is going to be done. The other very often is preserving, they think for eternity, the memory of some local citizen whom they held in high regard, in whose memory this charity was established. Very often, I believe, it was only the high regard that was had for this person that enabled the trustees to collect the money to establish the trust and found the charity.
Probably they thought, in their wisdom (and who are we to disagree with them?), that rather than erect some elaborate tombstone or memorial it was better to establish a charity and to do good work. What would the founders be likely to think about saying that as soon as the endowment falls to £100 then the time has come when the charity can be terminated and the memory of this person shall no longer live in the minds of people in the locality? An endowment of £100, well invested, will produce £10 a year; and one bears in mind that Parliament has said that £10 at Christmas time is a worthwhile gift to an old-age pensioner.
Although the welfare state looks after a great many of the poor people who until recently had to rely upon charity, I am quite sure there are in various localities many people who are not within the net of the welfare state and to whom a gift of £10 or £10-worth would be very welcome indeed. The kind of example I have in mind is some bed-ridden, elderly, poor person, whose television set has broken down and who can ill-afford to pay the cost of repairs.
In asking ourselves the question, "Would the founders of the charity have agreed to terminating the charity when it ceases to be worth more than £10 a year?", I do not believe we can say with any confidence that the founders must have agreed to the course which we propose. When it comes down to £25, which was the figure the committee decided upon, after much deliberation, I think one can say with much greater confidence that the founders might well have been content that when the endowment had fallen to that level perhaps it was not worth continuing the existence of the charity. I am sorry to disagree with my noble friend Lord Hooson about this, but I hardly think this will be an occasion for newspaper headlines about a tremendous split in the ranks of the Liberal Party.
Baroness Faithfull: I should like to support the noble Lord, Lord Airedale, in what he has said, for a slightly different reason. Speaking as a social worker, I can say that very often I know that a small amount of money will make a great deal of difference to somebody who is needing something that does not fall within the terms of reference of supplementary benefit or other state benefits. I know it is very difficult sometimes to find just a little money to put right quite a little thing which is nevertheless going to mean a lot to some person who cannot afford it.
Baroness Ewart-Biggs: I should like to support everything that the noble Lord, Lord Airedale, and the noble Baroness, Lady Faithfull, have said. I, too, believe there is a certain sanctity in the wishes of the founders of a charity being respected. Very often there could have been something highly symbolic about their wishes in creating a certain charity. This is something that, to my mind, the benefits of raising the level could not justify. For this reason, and also the reason that if a principle is to be breached then the breach should be kept as small as possible, I am unable to support this amendment.
Lord Brightman: I should like to say a few words on the Select Committee's approach to Clause 4. The committee were very deeply divided at one time as to what was the proper monetary limit to put into the clause. There was a great deal of discussion and a great deal of disagreement. In the end we came to the view—which perhaps on the surface might be thought a little surprising—that we should keep the sum as low as we possibly could. The type of considerations which we had in mind were that as a general rule the problems of trustees of a very small charity would be able to be solved by an amalgamation under Clause 3. Clause 4 is really a last resort where the charity fund is so small that it would be unreasonable to put the trustees to all the expense and trouble of trying to find a suitable transferee charity unless one were close at hand and easily identified. So we thought that we could safely keep the sum specified in Clause 4 down to a low figure.
I should also mention that to avoid overburdening the resources of the Charity Commission—which was always in the forefront of our mind—Clause 4 does not contain any safeguards at all against an erroneous use of the power, save only that unanimity is required among the trustees. There is no provision, such as is found in the other clauses, for public notice; there is no provision for concurrence by the Charity Commissioners in the resolution which is passed. That is by design because the sum upon which we decided in the committee was such a small sum that we thought that it could safely be left to the trustees and that it would be unreasonable to burden the Charity Commissioners.
If the sum in Clause 4 is increased substantially, then a case will arise for requiring publicity, and the concurrence of the Charity Commissioners. So all in all we felt that the best course would be to keep the sum a small one justifiably to exempt the charity trustees from advertising what they intended to do and to exempt the Charity Commissioners from the burden of looking at this very tiny distribution of money.

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So far as land is concerned, I suggest that it is correct under Clause 4(1)(a) to exclude "land or interest in land". Land is not susceptible to division among beneficiaries or payment out to a single beneficiary. If the trustees held a small piece of land and were going to exercise their power under Clause 4 to distribute the capital, inevitably they would have to sell the land. So it would seem reasonable to us to except land from Clause 4 and let the power apply to the proceeds of sale of that land, which then will be known, and no question of valuation for the purposes of exercising the Clause 4 power will be needed.
I ask the Committee to let the compromise figure reached by the Select Committee stand. This is only a pilot scheme; it is not intended to be more than that. If, at the end of the day, it is found that it works or that it has deficiencies and so forth, then primary legislation can be introduced which will take that into account.
Lord Allen of Abbeydale: I should like briefly to make two points. First, there were those on the committee who expressed the view that there should be no Clause 4 at all, that the only way forward should be via the Clause 3 procedure which explains, I think, the nature of the compromise which my noble and learned friend has just been expounding.
The second point is really a small, practical point, but it is worth mentioning. There is an obligation in the 1960 Act on trustees who wind up a charity to tell the Charity Commission. Whether the trustees who wind up the small charities will discharge that obligation any more satisfactorily than all the other obligations they fail to discharge must be very doubtful. If the scope of this clause were too wide, the effect on the register and its continuing inaccuracy could be quite considerable.
7.45 p.m.
Baroness Trumpington: It might be helpful at this stage if I set out briefly the Government's view on this amendment, the case for which has been so persuasively argued by my noble friends Lord Maude and Lord Renton. The Government's support for the Bill promoted in the first instance by my noble friend and by my noble friend Lord Renton is well known to the Committee. The Government appreciated, however, that much of the evidence submitted to the Select Committee did not favour the Bill, and that the Select Committee were not able to commend the Bill as it stood. The Government consider that this amendment is a reasonable one in these circumstances and agree with my noble friends Lord Maude and Lord Renton that the limit could be raised to £100 without seriously threatening the pool of charitable capital.
The administration of a charity with an income worth less than £10 a year may be an unproductive burden. Under the provisions of this Bill as it stands the trustees of charities with endowments worth very little will have to find another charity whose trustees would be prepared to continue the administration of these very small funds.
Your Lordships' Committee will appreciate that brokerage charges are such as to deter trustees from moving out of small holdings in unsuitable stock.
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Moreover, in the case of small amounts of capital representing permanent endowment, such as those received from the redemption of rent charges, brokerage charges (a minimum of £7) can render worthless such endowments.
We think it should be left to the good sense of the trustees of charities whose endowment is worth £100 or less to consider whether their best advantage lies in spending their capital on the purposes of the charity or seeking amalgamation, given the cost of that amalgamation. It seems desirable also to have an income limit of £10 which is consistent with the value of the endowment. Therefore, we welcome the amendment.
I turn to Amendments Nos. 43 and 47 which have been tabled by the noble Lord, Lord Hooson. Your Lordships will appreciate that the higher the figure goes at which charity trustees may expend capital, the more controversial the Bill may appear to be. There is no clear criteria to determine what the limit should be and it is a matter of judgment whether the limit should be as high as £250. The Government are content to leave that judgment to the Committee.
As regards Amendment No. 44, which is also tabled by the noble Lord, Lord Hooson, and which relates to land, we do not believe that it would be appropriate that charities with an interest in land should be allowed to use the provisions of this clause. We think that they should continue to be subject to the requirements on the disposal of land in the 1960 Act, to guard against the possibility that land is sold at below its proper price.
Lord Renton: I am sure that your Lordships' Committee is grateful to my noble friend Lady Trumpington for what she has just said. It seems to me that what she has put before your Lordships' Committee is the kind of wisdom which we have learned to accept from Home Office Ministers through the ages. But I should just like to make the comment that those who are opposed to the amendment moved by my noble friend Lord Maude of Stratford-upon-Avon have produced arguments which are really arguments against having Clause 4 at all. If we are to have Clause 4, I suggest that it should be realistic. To have the figure of £5 as the gross income included in it is quite absurd. The sum of £5 for one hour's work is now the rate for many semi-skilled workers, and we are referring here to an annual income. It is quite ludicrous. I appreciate what my noble friend has said about going too high and what was said by the noble and learned Lords on the Cross Benches about the administrative burden that might be placed on the Charity Commission if we went too high. But using what my noble friend Lady Trumpington has called "our judgment", I should have thought that our best judgment is to accept the two amendments moved by my noble friend.
Viscount Colville of Culross: As the sponsor of this Bill, I had hoped that I would be allowed to have a few words, but I have waited until I have heard the rest of the debate. There is perhaps not a great deal to be said, except for an explanation as to why it is that I am unpersuaded by those who wish to increase these limits. I am glad that I have at least one friend on these Benches.

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I started off as a member of the Select Committee with no views at all upon this subject. I knew the history of the legislation in both Houses and I knew that my noble friend's Bill had passed through another place at least once, and I rather think twice. But there then started to develop the whole dynamic process of the Select Committee.
We began to consider the other provisions which now appear in Clauses 2 and 3, and at the same time it became apparent that there is in the country—and there is also some in the Select Committee—virulent and absolutely sincere opposition to the dissipation of the capital of charities, and that this would be a major sticking point for a large number of people who otherwise would be extremely interested in getting this legislation through Parliament.
As one listened to the witnesses and the reasons they gave, one could not but respect the wisdom and the sincerity which they brought to bear upon the subject. I am bound to say that it had an effect upon me. I thought to myself that it might be all right to have, as the noble and learned Lord, Lord Brightman, has said, a small trial exercise to see what would happen. The evidence clearly showed that there are some extremely tiny charities and, although £5 may be a very small amount, there are some charities where the annual income is about 75p or even 50p and where, by this time, the capital value is tiny as well because of the erosions that took place when the capital was invested in undated gilts during the period before the Trustee Act 1961 was passed.
Therefore, I find myself in a position where I am absolutely bound to agree with all the other members of the Select Committee that we should not go above these figures and, so far as I am concerned, I am afraid that I shall have to ask the Committee to express an opinion on the matter because I could not accept any of these amendments.
Lord Maude of Stratford-upon-Avon: My noble friend Lord Colville of Culross has been unpersuaded by the arguments that we have adduced. I am afraid that I remain unpersuaded by the arguments which he and other noble Lords have adduced because, as my noble friend Lord Renton said, virtually all the arguments have been against the principle of Clause 4 as such. I really find the Select Committee's conclusions very strange.
As to the principle of Clause 4, as I said, this has been approved by the Goodman Committee, by the Commons Select Committee, by the Government and by the Members of another place, and, as we have heard from my noble friend Lady Trumpington, is still approved by the Government today. That really is a pretty formidable set of sponsors for the idea that the principle of Clause 4 is sound.
The Select Committee clearly did not believe that the principle was sound and they were very unwilling to go any distance at all with it. So they rather hesitatingly dipped one toe in the water and said "All right, we shall have this principle accepted but we shall make a nonsense of it by making the figure very low". The noble and learned Lord, Lord Brightman, said that £5 a year and £25 were compromise figures. My goodness, what sort of a compromise is a figure of £5
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a year as the annual income of a charity? It was obvious that they were as anxious as possible to ensure that this principle was never applied at all.
In view of the weight of the argument that there has been in previous years in favour of making this change, I do not believe that simply to leave this at this point would be satisfactory. I do not think that this is the right hour in the Committee to have a Division, but I must say that my noble friend and I are not prepared to drop this matter. We shall return to it at the Report stage and if we cannot secure the approval of my noble friend Lord Colville, and if we cannot reach some sort of compromise in the meantime, we shall feel bound to ask for the opinion of the House. In the meantime, I beg leave to withdraw the amendment.
Lord Airedale: Before the noble Lord sits down, as a member of the Select Committee I do not think he has been quite fair to the Committee. We were confronted with a great deal of evidence from people who we regarded very highly and who were very expert, who were extremely anxious that the endowment figure should be very low indeed. I think that the report of the Committee only reflects the Committee's decision, based upon serious evidence given to us by a great many people whose wisdom and knowledge we respected very highly indeed.
Lord Maude of Stratford-upon-Avon: Yes, but with respect perhaps I may point out to the noble Lord that views on the other side were expressed with a great deal of force to the Goodman Committee and to the Select Committee of another place. Moreover, as I have read the evidence, there were a number of bodies, as well as individuals, in favour of keeping the principles of the Small Charities Bill, and they made these points to the Select Committee. The evidence against was not overwhelming.
Lord Allen of Abbeydale: Perhaps I may intervene and remind the noble Lord that he himself took the point earlier on that the whole position has changed since the days of Goodman because of Clause 3. Goodman was looking at an entirely different situation.
Lord Maude of Stratford-upon-Avon: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 43 and 44 not moved.]
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 45:
Page 7, line 1, leave out ("last").
The noble Viscount said: This is a drafting amendment to make Clauses 3 and 4 consistent. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 46, 47 and 48 not moved.]
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 49:
Page 7, line 22, at end insert—
("(5) This section does not apply to a charity falling within paragraph (g) of Schedule 2 to the Act of 1960.").
The noble Viscount said: This is the exempt charities point in Clause 4. I beg to move.
On Question, amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5 [Financial limits for classification of certain small charities]:
8 p.m.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 50:
Page 7, line 25, leave out from beginning to ("by") in line 27.
The noble Viscount said: I am not sure about this amendment. If anybody objects to the amendment I shall be happy to withdraw it. It takes away the signpost, as it were, which is to guide the Secretary of State in the exercise of his powers in raising the financial limits under Clause 3 of the Bill. It may well be that members of the Committee would prefer to see the signpost left. If so, I should be happy to withdraw the amendment, but for the moment I beg to move.
Lord Allen of Abbeydale: I should prefer to see this signpost remain. It gives some indication of the reasons why these powers should be used, and I hope that the Committee will accept the noble Viscount's offer.
Viscount Colville of Culross: I see no opposition. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 51:
Page 7, line 31, at end insert ("and").
The noble Viscount said: Amendments Nos. 51 and 53 go together.
Amendment No. 53: Page 7, line 32, at end insert ("or either of those sums").
What is being done is to provide that the Secretary of State's powers to increase the financial limits in Section 18(5) of the 1960 Act and in Clause 3(2) of this Bill shall be exercisable by statutory instrument. The point is that he can do it either conjointly or separately, and this amendment makes that clear. I beg to move.
On Question, amendment agreed to.
Lord Hooson Lord Hooson moved Amendment No. 52:
Page 7, line 32, leave out ("section") and insert ("sections 2(1) and").
The noble Lord said: There is a typographical error in the printing here which emanated, I regret to say, from me. I meant to refer to section 4(1) and not to section 2(1). The noble and learned Lord, Lord Brightman, referring to the financial limits in Clause 4(1), suggested that they might be changed later, after an experimental period, by primary legislation. Bearing in mind the difficulty of obtaining primary legislation on a narrow subject like that, I thought it proper that the Secretary of State should have the same right to adjust the figures there as he has in relation to Section 3(2), and that is why I put down this
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amendment. With your Lordships' permission, if one can read 4(1) for 2(1), I beg to move the amendment.
Viscount Colville of Culross: I am afraid that I was wholly misled by the mistake. I thought this was consequential upon an earlier amendment that the noble Lord had put down. Now that I understand what he is saying, I am afraid there is no way in which this amendment can live with Clause 5(2). It sets different criteria and is hopelessly inconsistent. For that reason alone I hope he will not persevere with it.
There is another point, and it is a point of substance. It is plain that we are going to come back to the whole question of limits, and I am bound to say that there is an alternative route to the setting of a figure in the Bill. One could of course remove (if I may put it in shorthand) the inflation-linked criteria for increasing the amount of money by order under Clause 4 and use the same formula that applies to Clause 3 and Section 18(5) of the other Act. That is what the noble Lord is suggesting; but it would be an amendment of substance which perhaps ought to be considered as an alternative to some of the other increases in absolute terms which have been discussed in the course of the afternoon.
As we are inevitably going to come back to this at another stage, perhaps it might be better if the noble Lord were to leave it for this evening, bearing in mind that it can be stirred into the general melee next time.
Lord Hooson: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 53:
[Printed above.]
On Question, amendment agreed to.
Clause 5, as amended, agreed to.
(Amendment No. 54 not moved.)
Clause 6 [Interpretation.]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 55:
Page 8, line 3, leave out ("either—
(i)")
The noble Viscount said: I am afraid that this looks the most awful muddle, but as a matter of fact it is an attempt to clear up what is a rather difficult technical problem, which is the definition of a "local charity for the relief of poverty". The Bill as it stands, in Clause 6(1)(b)(i), refers to a charity's area of benefit falling within
"a single area of local government greater than a parish".
But these expressions are not clear. Parishes are not universal in England and Wales. They do not happen in urban areas, and there are not any anymore in Wales. A single area of local government could be a district or a county.
It is desired, however, that as long as the area of benefit of a charity falls within a county or within Greater London it should be covered by this Bill. This series of amendments will make it clear that if the

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charity's area of benefit is, or falls within, the area of no more than five adjoining parishes, or a county, or Greater London, it will be covered by the definition.
Then Clause 6(1)(b)(ii) refers to a charity
"established (wholly or mainly) for the benefit of one or more parishes".
This could be construed as placing no limit at all on the area of benefit of a charity short of nationwide, so that that would be a failure properly to define "local charity for the relief of poverty". It might include a charity which is in no sense local.
This series of amendments therefore seeks to make it clear that the area of benefit for the charity, when that charity was originally established, was or fell wholly within the area of one or more parishes specified in the trusts. It is a complicated matter. It caused a great deal of difficulty in the Select Committee. The draftsman has helped me in applying his mind to it, and I hope that we now have it right. I beg to move Amendment No. 55.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 56:
Page 8, line 7, after ("Wales") insert ("(in this section referred to as "the area of benefit")").
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 57:
Page 8, line 7, leave out from second ("and") to end of line 12 and insert—

("(i) the area of benefit is, or falls wholly within, the area of not more than five adjoining parishes or of one county or of Greater London, or

(ii) the area that would have been the area of benefit when the charity was originally established was, or fell wholly within, the area of one or more parishes specified in the trusts.").

On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 58:
Page 8, line 13, leave out subsection (2) and insert—
("(2) In this Act. "appropriate local authority", in relation to a local charity for the relief of poverty, means any local authority for an area which is the area of benefit or within which the whole or any part of the area of benefit falls, being the council of a non-metropolitan county, metropolitan district or London borough or the Common Council of the City of London.")
The noble Viscount said: As the Bill stands at the moment the local authority that was going to be consulted about questions of charities for the relief of poverty was to be dealt with by means of subsequent legislation. What has happened since is that there have been discussions with the local authority associations and, as I think was always intended by the Select Committee, it has been agreed that the appropriate local authority is likely to be the one with the social services functions because it would be they who would be the most interested in other sources of money for the relief of poverty.
Therefore, in country areas it will be the county. That will include Wales. Although it is appreciated that some of the counties in Wales are very large, nevertheless the advice is that it still ought to be the
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social services authority in Wales; and in metropolitan counties it will be the district. That now goes into the Bill; and in London it will be the London borough or, in the city, the Common Council of the City. That clears it up and puts it into primary legislation. I hope that noble Lords will think that this is the right solution, and I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 59:
Page 8, line 20, leave out paragraph (c).
On Question, amendment agreed to.
Lord Denning Lord Denning moved Amendment No. 60:
Page 8, line 23, at end insert—
("( ) "charity trustees" has the meaning in section 46 of the Charities Act 1960 (namely, the person having the general control and management of administration of the charity) and, in addition, in any case when it appears to the appropriate local authority that the trust is dormant or inactive, such additional persons as appear to the appropriate local authority to be suitable to act as trustees;")
The noble and learned Lord said: This is an attempt to deal with one of the real difficulties in enforcing this Bill. The Select Committee drew attention to dormant and inactive trusts. In paragraph 49 the committee said:
"Of the 144,000 registered charities … only about 10,000 render accounts to the Commissioners".
The rest are dormant or obsolescent. About the others the committee gave a particular example of the position in Humberside. An investigation carried out between 1978 and 1979 found 120 inactive charities with balances of accumulated income of £107,000. That shows that a great many charities do not operate, the trustees have died, and no new ones have been appointed, or the present trustees do nothing and are completely inactive, they do not register accounts or anything of that kind.
What is the machinery in the Bill to persuade those people to do their duty? As far as I can see it is the complicated machinery whereby a member of the public, if you please, under Clause 1 has to know about the charity, has to put it before the Charity Commissioners, who in turn have to hold an investigation and inquiry. Then they may make a scheme and in that remove the trustees or appoint new ones. It is a long, complicated machinery for dealing with this enormous problem of dormant and inactive trusts.
My amendment is intended to provide an easy, simple solution. When the appropriate local authority, which has a social services committee, finds that no accounts have been rendered and nothing has been done by the trustees, what are they to do? Are they to go to the commissioners for an inquiry? Why not? Let them have the power to appoint a banker or solicitor, or both, as trustees of that small local charity. They are sure to appoint good trustees, such as a banker or solicitor, who would do the work voluntarily. In every small village one can find bankers or solicitors ready to work as trustees and look after the affairs to see that they are in order.
My amendment, instead of having to go through the long complicated machinery that I have mentioned, being initiated by a member of the public, would allow

531
the appropriate local authority, after collecting all the details, to bring a trust back to life again. It would be said, "Let us appoint our friend so-and-so, a banker, or our friend so-and-so, a solicitor, who will see that the thing is kept in order". That is the objective of my amendment. I do not know whether it is acceptable, but I think that thought should be given to the matter of how to bring dormant and inactive trusts back to life and keep them going.
8.15 p.m.
Lord Brightman: I hope that your Lordships will not think that the machinery, if it can be called that, set up by Clause 1 is either long or complicated; if it is, then the Bill is failing in its purpose. It is intended to be very simple and to enable a member of the public, probably a resident in the locality, to bring the matter to the attention of the Charity Commissioners, so that they can take the simple action open to them.
The effect of the proposed amendment causes me some misgivings. It would have the effect of giving to a local authority power to appoint additional trustees if the local authority thinks that the trust is dormant or inactive.
There are possibly two objections to dealing with the matter in that way. First, there is a possible political objection. Ought county councils, which are primarily political bodies, to be given power, first, to decide whether the local charity is dormant or inactive, and, secondly, to decide who should be the trustees of that charity if the local authority considers that it is not doing its job?
There was strong evidence before the Select Committee that county councils are not appropriate bodies to be given a substantial say over local charities, because of their political standing. That was spelt out in paragraph 53 of the report.
There is a possible second objection to dealing with the matter in the way proposed. There will inevitably be a confusion of responsibility between the local authority and the Charity Commissioners. If the charity is inactive or dormant, the probability is that it has defaulted in the filing of accounts as required by the 1960 Act and by the Bill. If that is so, the Charity Commissioners are likely to be activated by an interested local resident, so that they will have powers, under Section 18, to appoint additional trustees or new trustees. Are we to have two concurrent powers of appointing new trustees running side by side, one power in the local authority and the other in the Charity Commissioners? I suggest that that concurrency of powers is not practical or desirable.
I do not suggest that the Bill is perfect. It is difficult to formulate a Bill which will compel all trustees to be active and efficient in the discharge of their office. We on the committee thought that the only practical way of dealing with the matter was that which we set out in Clause 1. I suggest that this amendment is not really a practical way of meeting the problem, that it will cause confusion, and that it is better to leave the Bill in its present form.
Lord Hooson: When two Titans disagree it poses great difficulties for your Lordships' Committee. But
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having heard the two contributions we have just listened to, I find myself attracted by the argument of the noble and learned Lord, Lord Denning, for this reason. If we have so many inactive and dormant charities in the country, what process will get them reactivated? The suggestion made by the noble and learned Lord is rather more robust in its approach and I favour the appropriate local authority having this right. Personally, I should have preferred the local authority to have been the district council because it is so much closer to the people, but it does not have a social services department. I suppose technical problems might arise, but I feel that the noble and learned Lord, Lord Denning, is on the right track. I am not sure that his amendment has been as carefully considered as he might have liked to consider it in setting down the proper machinery to achieve his objective.
Baroness Faithfull: I had intended to speak to the Question, That Clause 7 stand part, but, in the light of this amendment and of what the noble and learned Lord, Lord Denning, has said, perhaps I may speak now. My mind was running in the same direction as that of the noble and learned Lord, Lord Denning, but arrived at a different solution. I was going to "not move" an amendment that asked Her Majesty's Government whether they could consider monitoring this Act over a period of time. We have had the Nathan Report, we have had the Select Committee of the Commons, we have had the Goodman Report—and, following all those three reports, in some cases Acts were passed but were not implemented or certain sections of them were not implemented. I was going to draw the attention of the Committee to that and to suggest that Her Majesty's Government might consider monitoring this Bill by asking, for instance, a polytechnic or a university such as Brunel University, which is running a course for trustees at the moment, to monitor this Act when it is passed, over a period of, say, five years. I did not put down an amendment because I thought it would be something that the Government just might consider.
Lord Maude of Stratford-upon-Avon: Briefly, I must say that I thought that the first argument adduced by the noble and learned Lord, Lord Brightman, was absolutely conclusive against this amendment. I think it would be quite disastrous that a local authority which was run on party political lines and controlled by a political majority should have the powers that are suggested in this amendment. I can see a great deal of controversy and resentment rising out of it if this amendment were to go through.
Viscount Colville of Culross: I wish that I could find myself in a greater area of agreement with the noble and learned Lord, Lord Denning, than has happened on the Committee stage of this Bill. But I, too, have to join in objection to what he is proposing. I do not want to repeat what has been said before but, on the political point, if Members of the Committe would like to look at paragraph 53 of the Select Committee's report, which gives the references to the evidence in the bigger Blue Book, I think they will see that there is a point of great substance in what has just been said

533
and has been endorsed by my noble friend Lord Maude.
The second matter that arises directly out of that is that the noble and learned Lord, Lord Denning, said that he thought that what the local authority would do would be to appoint the friendly neighbourhood banker or accountant. But, as a matter of fact, I do not think that they would. I think that there are some local authorities who would appoint members of the Finance Committee; and you might get a very different result indeed. I am not putting this on any party political lines. It could happen in any party which was running a local authority. I make no difference whatever between the parties. Then you would get politicisation.
The other thing is this. Granted—and it is indeed granted—that one wishes to do something about charities which are defunct, dormant and completely inactive, how is the local authority going to be in a better position than anybody else to find out about it? The Select Committee tried to see if the banks were prepared to assist with the provision of any information about funds that they might hold for charities either nationally or on an individual basis. They said that they certainly could not assist on that; that it was a private matter between themselves and their clients. The same would apply to solicitors or accountants who were holding money for a charity which was defunct. Quite frankly, a local authority is in no better position than anybody else to get at the truth about these matters or to root out the funds which ought to be used.
I absolutely agree with the noble and learned Lord, Lord Denning, that something ought to be done about this, but I am afraid that I do not think that this is the way to do it. I really suggest that if anybody does obtain information—and this would include a local authority, because we have already discussed the fact that they are persons who can use Clause 1—they can go to the Charity Commissioners and get the new trustees appointed and get the money back into action and working again. I would suggest to the committee that the arguments of the noble and learned Lord, Lord Brightman, covered the field so thoroughly that we ought to be content to leave the Bill as it is without adding a complication which I believe could be dangerous.
Lord Denning: I would deplore the thought that politics would come into the appointment of any trustees of a little charity but, on the other hand, if there was evidence before the Select Committee that it does, I should regret it but it would be a point against my amendment: I agree as to that. But I do hope that something can be done to bring these dormant and inactive charities to life. The one method which appeared—and that is why I am sorry that my first amendment was not taken up—was that if the appropriate local authority is the body to get the accounts and is the body to publish the information, then, for goodness' sake, let it (when the thing is dormant or inactive) put the matter before the Commissioners and get the Commissioners to make the scheme—and I hope that it will not be long and complicated—and remedy all these cases.
I hope that the discussion will have been of this
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value: that it will attract some notice to the question so that in all further publicity which is given to the matter, the attention of the appropriate local authority can be drawn to the importance of dealing with dormant and inactive charities so as to remedy the position. Also I should like very much, as the noble Baroness, Lady Faithfull, has said, for the position to be monitored over the ensuing five years so that we can see whether it really works. On that, I would withdraw the proposed amendment.
Baroness Trumpington: Before the noble and learned Lord sits down, I wonder whether I may reply to my noble friend Lady Faithfull and to the noble and learned Lord, Lord Denning, as to the remarks about monitoring. I would say that the Government will look carefully at the suggestion by both speakers that the way that this Bill works in practice should be monitored. As my noble friend is aware, the commissioners, who report to Parliament annually, will themselves be a valuable source of information on how the Bill works out. I hope that that is useful to both my noble friend and the noble and learned Lord.
Amendment, by leave, withdrawn.
[Amendment No. 61 not moved.]
Clause 6, as amended, agreed to.
Clause7 [Citation, etc.]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 62:
Page 8, line 40, at end insert ("and different days may be appointed for different provisions and for different purposes.").
The noble Viscount said: If this Bill should ever get on to the statute book, it would be hoped that a great deal of it would come into force immediately. There are, however, provisions for making regulations under Clause 1 and it could therefore be that a slight delay would ensue. Therefore, different commencement dates should be provided for in the way that this amendment does. I beg to move.
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Schedule 1 agreed to.
Schedule 2 [Section 3]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendments Nos. 63, 64 and 65:
Amendment No. 63: Page 10, line 10, leave out ("last preceding financial year") and insert ("preceding accounting period").
Amendment No. 64: [Printed earlier: col. 515.]
Amendment No. 65: [Printed earlier: col. 515.]
The noble Viscount said: I wonder whether at this time of the evening I may move these three amendments en bloc. Amendment No. 63 is consequential upon No. 45 and Nos. 64 and 65 are consequential upon Nos. 30 and 32 to which the Committee has already agreed. I beg to move.
On Question, amendments agreed to.
Schedule 2, as amended, agreed to.
Remaining schedule agreed to.
House resumed: Bill reported with the amendments.

Food Imitations (Safety) Regulations 1985
8.31 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that the draft Food Imitations (Safety) Regulations 1985, laid before the House on 11th December 1984, to be made under the Consumer Safety Act 1978, be approved. I should just point out that the Order Paper refers to "Food Limitations". We are in fact here referring to "Food Imitations".
The proposed regulations replace and extend the Scented Erasers (Safety) Order 1984 (S.I. 1984 No. 83) made on 30th January 1984. They revise the size criteria, introduce severance test procedures, cover appearance and taste resemblance, in addition to scent, and extend to certain other products.
The definition of "safe" contained in Section 9 of the Consumer Safety Act 1978 is,
"such as to prevent or adequately to reduce any risk of personal injury".
This is what has to be kept in mind when considering the need for regulations made under the Act.
There is a need to remove from supply certain products which, by this definition, cannot be considered safe, particularly to young children because, by wilfully and unnecessarily imitating food they increase the risk of choking presented by all small objects. These regulations need cause no concern to suppliers of toys, novelties and stationery items if the goods they market do not imitate food.
One is bound to ask: why should such things look, taste or smell like food, anyway? What is the point of making a pencil-sharpener look like a strawberry, or a rubber shaped like a typewriter smell of bananas? Any ordinary adult finding such things in the shops will react with surprise. But if he or she is the parent of small children, that surprise is likely to turn into concern and possibly annoyance. Parents are well aware of the habit that all small children have of putting things in their mouths. But they have every right to be concerned when small objects appear in the shops that positively invite children to pop them into their mouths.
Of course, consumers constantly demand novelty and suppliers rightly exercise ingenuity and imagination in responding to that demand. But suppliers must be responsible, and the unfortunate fact is that some suppliers are not thoughtful or careful enough for the public to be protected without regulations of this kind. For this reason responsible manufacturers and traders look to Parliament for guidance on particular aspects of safety. These regulations, therefore, relate to the hazard and unnecessary temptation that small objects present to a specially vulnerable group; children under three years of age.
During last year the Department of Trade and Industry carried out extensive consultations on the scope and content of these regulations. In all 104 bodies were consulted. This figure included 30 trade associations and 16 individual firms. Half of the 104 responded; two had no comment, 39 were generally in favour, and 11 opposed the concept. Some, if not quite
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all, of the concerns of the trade associations who were consulted have been met by subsequent amendments to the regulations. All comments received have been fully considered in determining the form and content of the draft regulations.
In taking action now, Parliament will do two main things: first, keep known food imitation products (mainly scented erasers) off the market and thereby avoid the potential increase in numbers of accidents associated with them; and, secondly, pre-empt the introduction of other products which might imitate food.
In making permanent regulations it is logical to cover not only scented erasers, but also other similar products which are equally dangerous, and to include other means of food imitation. In order to cause the minimum restriction on trade, however, the product coverage has been confined to those items known to exist, or which can reasonably be surmised could exist, in food imitation form, whose utility does not require them to bear any resemblance to food and to which children have ready access.
A targeted approach has been adopted so that the trade should know with certainty what would and would not be permissible. The target is not the traditional toys of long standing, but the new and more dangerous products which have come on to the market in recent years, and almost all from the Far East.
The regulations need to contain three simple tests, all related to the size of objects. The main test is the truncated cylinder. But there is also a potential hazard from larger objects from which small children can detach smaller pieces by biting or pulling. So two severance tests are necessary to simulate the abuse things are likely to receive in the hands and mouths of small children.
The Government, in a White Paper (Cmnd. 9302), published proposals last July to strengthen the legislation on the safety of goods. It is proposed that a general duty be placed on all suppliers to ensure that their goods are safe in accordance with sound modern standards of safety.
Additionally, powers are proposed to enable enforcement officers to seize or freeze and thus prevent the distribution of suspected dangerous goods and to allow Customs and Excise to notify the importation of specific goods. All these measures will have the effect of diminishing the need for safety regulations, prohibition orders and notices of the kind we are considering tonight.
Finally, my Lords, it is pertinent to remark that there is legislation banning small objects that imitate food in a number of countries—France, Austria, West Germany. Switzerland, Sweden, the Republic of Ireland, Greece and Australia—and Belgium, Denmark, the Netherlands and a number of other countries are proposing action shortly.
The draft regulations before the House will promote greater safety, and, accordingly, I ask your Lordships to approve them. I beg to move.
Moved, That the draft regulations laid before the House on 11th December 1984 be approved. [5th Report from the Joint Committee.]—(Lord Brabazon of Tara.)
Lord McIntosh of Haringey: My Lords, we must be grateful to the noble Lord for introducing what is, of course, a serious matter as seriously and responsibly as he did. We on this side of the House support the regulations. We believe that although it might be thought that this is an extension of the "Nanny state", which none of us would wish for its own sake, the dangers here which are to be avoided by the regulations outweigh the dangers of increased regulation.
Having said that, I must also say that this is one of the most delightful little sets of regulations I have seen for a long time. There are very few that actually contain engineering drawings of test jaws or truncated cylinders. There are very few regulations which actually contain definitions of "food", "severable parts", "toys" or "marbles". I think the English language is in no way diminished by the kind of definitions which we see included in the regulations. We support the Motion.
Lord Brabazon of Tara: My Lords, I should like just to thank the noble Lord, Lord McIntosh, for his support for the regulations.
On Question, Motion agreed to.

Employee Involvement
8.38 p.m.
Lord Rochester Lord Rochester rose to ask Her Majesty's Government what conclusions they have reached in monitoring the action reported to have been taken by companies in introducing, maintaining and developing employee involvement in accordance with Section 1 of the Employment Act 1982.
The noble Lord, said: My Lords, I beg leave to ask the Question standing in my name and in doing so I shall try to cover as quickly as possible what is necessarily, I am afraid, rather a lot of ground. Section 1 of the Employment Act 1982 is based on an amendment to the Bill which I was privileged to move on behalf of my noble friends. Its primary aim was to improve this country's industrial relations and performance by increasing the extent to which employees participate in the activities of the companies in which they work.
The amendment was at first resisted by the Government, but after it had been agreed to by the House the Government accepted it in principle and, following consultation within industry and discussion with me, a slightly modified version was introduced by the Government and now forms Section 1 of the Act.
The section makes it a statutory requirement that in every directors' report of a United Kingdom company relating to financial years beginning on or after the 1st January 1983, where the number of employees exceeds 250, a statement is included describing the action taken during the year to introduce, maintain or develop arrangements aimed at,

"(i) providing employees systematically with information on matters of concern to them as employees,

(ii) consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests,

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(iii) encouraging the involvement of employees in the company's performance through an employees' share scheme or by some other means,

(iv) achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company".

On 21st May last, in reply to a parliamentary Question, the noble Earl, Lord Gowrie, said that Ministers would be monitoring all company annual reports to see how employee involvement was being pursued.
My purpose in asking this Question is two-fold: first, to establish broadly how companies actually reported on the subject during the year 1984 and what conclusions the Government have drawn from their reports; and, secondly—and much more important—I should like to ask what the Government think should be done next and, in so doing, to canvass a few possible courses of action.
I should make it plain from the start that I am not seeking to make any great political capital out of this discussion; the matter is far too important for that. Indeed, apart from the Liberal and Social Democratic parties, there are a great many individuals and organisations with a stake in the outcome. In another place, the honourable Member for Wyre Forest, Mr. Esmond Bulmer, made an unsuccessful attempt shortly before my amendment to the Employment Bill was moved to introduce somewhat similar legislation through a Private Member's Bill.
The Industrial Society, the Institute of Personnel Management and the Industrial Participation Association—and from now on I shall call the last two the IPM and IPA—have all demonstrated their practical support for the aims of the section. Indeed, it seems to me that the best hope of making further progress in this field is to identify as much common ground as possible on which we can move forward together.
An analysis by the IPM of 165 annual reports issued during the first six months of 1984 contained a number of interesting features. In more than half the reports—and this applied also to just those medium-sized companies employing betwen 1,000 and 10,000 people which Section 1 was particularly designed to activate—either there was reference in the relevant statements to only one or two of the four elements of employee involvement specified in the section, or there was only a very short general statement dealing with the matter.
In one large company employing more than 10,000 people and in 10 smaller ones, there was no statement at all and from their survey the institute drew the conclusion that there was clearly scope for improvement in reporting. In another analysis by the organisation known as Industrial Relations Services, of 200 statements made by companies, almost all of them large ones, it appears that the majority do not have, or if they do they failed to mention its existence, any formal consultative machinery. Over half did not issue or omitted to mention reports to employees on the company's financial results. Industrial Relations Services drew two possible conclusions: either that companies were not concerned to draw up such statements, or that voluntary arrangements are not as widespread or of as substantial a nature as sections of industry have suggested.
I do not for a moment suggest that statements of this kind provide an accurate account of what is actually happening. Some may overstate and others underplay the true position. Indeed, in a way, this may be all to the good, if it means that awkward questions are then asked, on the one hand by employees who cannot recognise the company painted in colours that are too glowing as the one for which they work; and, on the other, by shareholders anxious to know why their company is apparently so inactive in this field. In all fairness, I should add that it is plain from many of the statements made, by no means all of them coming from large companies, that much positive action is being taken, and it is, of course, action that is at the heart of the philosophy underlying Section 1.
On this point, it is worthy of mention that both the Industrial Society and the IPA have already made awards affording positive recognition to organisations which have made notable progress in establishing genuine employee involvement. The IPM have, in turn, written to the 91 organisations which came within the substandard categories of their survey in the hope of stimulating them to do better in 1985.
The only specific question that I have to ask the Minister concerning the statements so far published is: what, if anything, do the Government propose to do about them? Do they think of offering any kind of general commendation where that may appear appropriate or, on the other hand, reproof where the response to the requirements of the section has evidently been inadequate, perfunctory or, in some cases, non-existent? So much for last year's report.
The question that really matters is: where do we go from here and, more particularly, what follow-up action do the Government have in mind? On this point, I should like first to refer to, and warmly to commend, the document entitled Employee Involvement and Participation: Principles and Standards of Practice, with its accompanying action guide which was drawn up jointly by the IPA and the IPM and first published in October 1983. This document was formally approved by the governing bodies of both organisations which, in the case of the IPM, included a leading employee relations practitioner, and in the case of the IPA senior management and, significantly in my view, trade union representatives.
Both organisations affirmed their belief that the document provided the most appropriate and practical approach to the development of participation in this country and one which was likely to be supported by a large section of both employers and employees. They also felt that it could form the basis for a formal code of practice, if the Government eventually decided to publish one.
The very first principle put forward in the document in relation to its general application is:
"Participation is relevant to all organisations in which people are employed and at all levels within them. It applies equally to commercial, service and financial institutions, manufacturing and distribution industries and public services such as education, health and local and central government, irrespective of their form of ownerships or constitution".
I shall come back to that principle shortly, but first I want to ask the Minister whether the Government
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propose, after consultation with interested parties, to place their own imprimatur, so to speak, on the IPA-IPM code or to publish their own code, as they have in the case of, for example, closed shop arrangements and picketing.
I can see points for and against their taking that course, but if the Government's view is that on balance it is better at this stage that they should not do so, then I would ask the noble Lord, Lord Belstead, whether he would agree to pass on to his right honourable friend the Secretary of State for Employment my strongly held view, for what that is worth, that after this first year of operation of Section 1 the time is ripe for the Government to take further action. Having first sought the widest possible support for so doing, they should really go to town in seizing every opportunity—they have taken one or two already, as the Parliamentary Under-Secretary of State for Employment reminded me when he was kind enough to let me see him last week—to impress on companies the need to adhere to the principles and practices advocated in the IPA-IPM code, and particularly to the Action Guide with its check list of questions management should ask themselves.
I hope also that in acting in this way the Government will draw special attention to the section of the code which stresses that successful participation takes time to develop because it depends so much on attitudes, and that changes in attitude and the establishment of mutual trust will develop only through the experience of working together.
Section 1 was of course deliberately framed as a continuing requirement and there is therefore need for companies to have not only clearly defined short-term objectives but a long-term programme for the development of employee involvement and means by which progress in carrying it out can be measured. I trust that the Government will stress, too, the desirability of seeing either that employees all receive a copy of their company's annual report or one prepared specially for them, including particularly the information about employee involvement contained in the report issued to shareholders. It is surely anomalous that statements on this subject now have to be made to shareholders but there is no corresponding obligation to give such information to those who actually work for the company concerned. So I should be grateful if the Minister when he replies would say what the Government's view is on this point.
Another principle to which prominence is rightly given in the IPA-IPM code concerns the involvement of trade unions. I entirely support the view there expressed that, where trade unions are recognised, it is important that the co-operation and support of union representatives should be sought in developing participation arrangements and procedures. In that connection, from personal experience I would recommend joint training of managers and other employees especially in seeking to achieve the fourth, and in my view the most important, element of involvement included in Section 1; namely, a common awareness on the part of all employees of the financial and economic factors affecting the company's performance. Just how urgent is the need for that common awareness in the public sector has been amply demonstrated in recent years in the mines,

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on the railways, in the docks and indeed in the public services generally. The work that the Industrial Society in particular is doing to help in this area is therefore very much to be welcomed.
That brings me back to a point which I first stressed at Third Reading of the Employment Bill in 1982. It was later taken up in another place by the honourable Member for Kidderminster when, in supporting New Clause 1 as it then was, he said, at column 768 of the Official Report of 25th October 1982:
"I am sure that in due course the Minister will wish to address himself to a glaring omission in the Bill's approach—the exclusion of the public sector. There is a greater problem in the public sector in terms of 'us and them' than in the majority of private companies".
The exclusion of the public sector was of course inevitable at that time because Section 1 had to be introduced through the vehicle of the Companies Act. But what is going to be done about it now?
I am on record as having said on a number of occasions that throughout industry and in the public services it should next be made a statutory requirement that in all organisations employing more than a certain number of people there should be consultative bodies of some kind. I must ask the noble Lord, Lord Belstead, to give us the Government's view on this matter. If in their attitude they are not supportive, I fear they may later come to regret it. Apart from the pressures coming from Europe for legislation in this field that would impose on this country much heavier obligations in the form of the Vredeling and Fifth Directives, there are the pressures that are unremittingly increasing within our own society. Can it be right that it is only when people are at work that they may still be denied consultation or representation when major decisions affecting their lives are made?
There are many other matters relevant to employee participation that I barely have time now to mention. I have in mind things like the Co-operative Enterprises, for which my noble friend Lord Grimond has constantly called so cogently, the development of policies designed to provide as far and as fast as possible similar terms and conditions of employment for all employees, and the benefits that would accrue to companies from involving employees much more than is often now the case in helping to determine the structure and the content of their jobs.
In conclusion, I must reaffirm my belief that real participation will not flourish if premature attempts are made to implant it from above. It will prosper only through organic growth which starts at the bottom and works upward. In the end progress will, in my view, depend on the extent to which people generally are prepared to learn from the experience of the best practitioners, and on how they can be brought to believe that it is in their own interests to act in accordance not merely with the letter of Section 1 but with its underlying spirit and philosophy.
8.57 p.m.
Lord Kilmarnock: My Lords, I did not put my name down to speak but I have already consulted the noble Lord, Lord McCarthy, and he has graciously said that he does not mind my speaking for a couple of minutes before he does. I did not want to let this occasion pass without giving my support to the Question asked by
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my noble friend Lord Rochester. The truth of the matter is that I have always had a soft spot for this initiative of my noble friend, and I admired the way and the persistence with which he went about gaining consent to it, finally achieving its insertion as Section 1 of the Employment Act 1982. I think it is an important achievement.
The Government, after years of dragging their feet on the question of wider share ownership, have recently been converted to spreading capital ownership. One may legitimately wonder how far their flotation of nationalised companies will in the long run achieve that wider spread. One fears that a great many of the shares floated in this way will eventually end up back with the institutions. On the other hand, the modest proposal embodied here, particularly in Section 1(3), for encouraging the involvement of employees in the company's performance through an employees share scheme or by some other means, brings the whole question right to the heart of existing companies and how employees are to be involved with them. I am not saying that I do not attach importance to items (i), (ii) and (iv), but it is (iii) about which I really wanted to speak. The noble Lord really must be congratulated for having achieved the inclusion of this in the statute.
The relevant companies do not, of course, have to do anything, but in that case, on the face of the statute, they have to say so. If they are doing something, they have to say that, too, and they have to describe it. I have always thought that this modest measure could have extremely important effects in the sense that we would learn about a wide variety of schemes and that those which seem successful might catch on and be more widely adopted.
Therefore, the question of the information which emerges is of first importance, and I share the interest of my noble friend Lord Rochester in learning how companies have reported and whether the Government are pursuing systematic monitoring. If, as my noble friend has told us, there has been inadequate reporting by some companies, I echo him in asking whether the Government will take any steps to see that the amended Section 16 of the Companies Act, which is embodied in Section 1 of this Act, is respected and acted upon.
My noble friend talked about various forms of monitoring that have been carried out by outside bodies and various awards that are being set up. All that sounds absolutely admirable, but it seems to me that this whole initiative requires a wind in its sails from the Government if it is to get off the ground. The Government may not think that this is a particularly important matter, but in view of their collaboration with my noble friend in the final version which emerged in Section 1, that seems to be improbable. They may possibly feel that it is a waste of companies' time, but I think that anyone reflecting on the state of industrial relations in this country would not come to that conclusion, and I do not believe that the Government will, either.
I said I did not want to make a speech: I merely wanted to reinforce my noble friend in seeking to ensure that this modest but valuable measure should not just lie as a dead letter on the statute book. I hope that when he replies the noble Lord, Lord Belstead,

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will be able to assuage our anxieties and confirm that the Government are fully committed to the principles embodied in Section 1 of the Employment Act 1982.
9.2 p.m.
Lord McCarthy: My Lords, I want to do three things very quickly. First, I want to thank the noble Lord, Lord Rochester, for reminding us of this small section in the Employment Act 1982 for which he was responsible, and then I simply want to remind the House, very briefly, as to how we came to obtain this section, because it leads into the second thing I want to do, which is to obtain, if I can understand it, the Government's view of this section and to see if I can get it right. No doubt if I get it wrong the noble Lord, Lord Belstead, will tell me. Thirdly, I should like to go back to the central point of this Question and, from our point of view on these Benches, ask something about the conclusions reached by Her Majesty's Government in monitoring the actions reported, and, indeed, some questions about when we are going to get (if we are to get them) the results of that monitoring.
The noble Lord, Lord Rochester, began this little journey at the Committee stage of the 1982 Employment Bill. At that stage he was defeated, and the Government in the person of the noble Earl, Lord Ferrers, said that what the noble Lord, Lord Rochester, wanted would impose a rigid legal system on consultation.
Lord Rochester: My Lords, simply to set the record straight, may I say that at no point was the amendment defeated. The noble Lord may recall that it was simply left over from the Committee stage to the Report stage.
Lord McCarthy: My Lords, that is perfectly true. In fact, it was withdrawn in Committee and reintroduced on Report. But the Government at that stage told us why we should not pass the amendment if we had gone to a Division. They said it would impose a rigid legal system. They said that it would be unwise to rush in, pell-mell, in advance of the Vredeling proposals; but the noble Lord was not to be put off and, as he said, he brought the amendment back on Report and the Government once again said that it was rigid, inflexible and at the same time anodyne. However, the House voted for it on that occasion by 116 votes to 112 votes.
At that point the Government—and I give full credit to them—conceded to that vote, and the noble Earl, Lord Ferrers, said on 2nd August that the Government accepted the substance of the amendment. At Third Reading on 13th October the Government introduced their own amendment, which differed from the amendment originally introduced by the noble Lord in only a few minor respects, and it became embodied in the Bill. The problem at that stage, as I saw it, was—and I sought to elicit from the Government an answer, but I failed—that we had never had a statement as to why the Government had changed their minds and why what in the past had been regarded as a rigid legal system and something unwise to rush into had become intellectually acceptable to the Government.
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Therefore, it would help us tonight if we could have from the Minister a clear statement as to what the Government feel about this section: whether it is merely something which they have accepted because the House expressed its wish—and all credit to them if they have—or whether (even more credit to them) they have accepted it because they think it rather a good idea.
There is some evidence that they think it is rather a good idea. There is some evidence that they have changed their minds, because we have had some small statements—not satisfactory, but small statements—from Ministers elsewhere since the passage of the Bill. The noble Lord, Lord Rochester, referred to the statement by the noble Earl, Lord Gowrie, who said, "We will monitor the Bill." That suggests that the Government are interested in the way in which the Employment Act actually comes out. But on 5th June the Secretary of State for Employment in another place (reported in column 163 of the Official Report) went a little further than that. He said:
"I will take a close interest in these reports"—
that is, the reports of the monitoring of the Act—
"and will expect employers to take the opportunity offered to review and, where necessary, improve their existing arrangements for employee involvement'.
I take the statement of the noble Earl. Lord Gowrie, and the statement of the Secretary of State for Employment, as I have just read it, to indicate that the Government implicitly, if not explicitly, now favour the best possible use of Section 1 of the Employment Act 1982. But the best possible use of it, as the noble Lord, Lord Rochester, said, can only be based upon information—information about where we are now and information subsequently about whether we are improving and making progress, and, if we are not making progress, then action on everybody's part, including the Government's, to try to secure that that progress is made.
So I pass to my third question. What are the Government proposing to do now to ensure, first of all, that we know where we are, and, if we are not where we want to be, that they will assist us in progressing towards the implementation of this section? What we have at the moment—and the noble Lord. Lord Rochester, has mentioned the two sources—are two imperfect but useful unofficial bits of information. We have a survey from IRRS of some 200 companies which is not representative. It is based upon the contacts that it has. It is probably skewed towards the larger firms. which on the whole do rather better in information and consultation than the smaller firms. We also have the 165 contacts of the Institute of Personnel Management. Fifty per cent. of the sample is based on its own members—again for the most part they are good firms, because on the whole it is good firms which have members in IPM—and 50 per cent. or so is based upon a random sample drawn from the columns of the Financial Times.
I do not suggest that either of these two surveys is adequate. I do not think that either of the organisations would suggest that. I do not suggest that either of those two surveys is representative. Nevertheless, such as they are, they are what we have and they give us cause for concern if we are committed

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to carrying through the implications of Section 1 of the 1982 Employment Act.
For example, let me just refer briefly to some of the findings of the IPM sample. The IPM sought to classify the results under four headings. There were those that were satisfactory because they mentioned all four aspects of Section 1 and also adopted a positive approach to information, consultation and so on. That was the first category. It was found that only 20 per cent. of the respondents came in that category. The next category included those which, true, mentioned all four aspects of consultation, communication, information, and so on, but did not have a positive approach towards these matters: and it was found that 24 per cent. were in that category. Then there were those which referred to only two aspects—that was the third category—and it was found that 30 per cent. were in that category. Seventeen per cent. had a very short reference; and, finally, 9 per cent. made no report whatsoever.
I believe that that suggests to us—and I am not saying that it is representative, but it is all that we have—that more than 50 per cent. of the firms contacted by IPM in a very favourable sample have a level of information, communication, consultation and worker involvement which any reasonable person would say was less than satisfactory. If that is what unofficial surveys say, what would a Government survey say?
So I come to my questions. Is it not implicit in what the noble Earl, Lord Gowrie, said that the Government will monitor this? Does it not therefore follow that we can expect, and perhaps shall have from the noble Lord the Minister, a report on where we are at this moment based either on some set of categories similar to those of the IPM or on some other set—a representative or even a total report gleaned from the Registrar of Companies, who has these returns though he does not have to do anything with them, and an authoritative interpretation of these results? If we have them for this year, shall we get them for next year? Therefore shall we be able to make progress in seeing how far this part of the 1982 Employment Act is actually being carried out?
9.12 p.m.
Lord Belstead: My Lords, I very much welcome this opportunity to set out the Government's views on employee involvement and on the role of Section 1 of the 1982 Employment Act. Perhaps I may say first of all that the Government are firmly committed to the principle of management informing and consulting employees about matters which affect them. We believe, however, that successful and genuine employee involvement depends as much on a spirit of co-operation as on the existence of formal machinery, and that it is therefore best introduced on a voluntary basis.
But I must come now to Section 1. Indeed I recognise, as other noble Lords who have spoken this evening have done, that it was the noble Lord, Lord Rochester, who was instrumental in bringing this section on to the statute book. Now that it is in operation, I want first of all to answer directly the question which the noble Lord, Lord McCarthy, asked
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me, which was how the Government view Section 1, by saying that the Government see it as one of a number of means of serving two purposes. The first is to encourage the companies within the scope of Section 1 to develop better employee involvement arrangements by bringing the issue to the attention of directors and shareholders. The second purpose of Section 1 we see as being to help the Government to monitor the success of this voluntary approach.
May I take the first of those two purposes which I have identified on behalf of the Government: the encouragement of better employee involvement arrangements. The noble Lord, Lord Rochester, ended his speech by making the point that of course the greatest encouragement for employers and employees to do this is that it is in their own interests so to do. There is no doubt that the employees of any enterprise are an indispensable asset and the more an enterprise can involve its workforce and draw upon their full loyalty and range of talents the more I believe both it and they will prosper. This is especially true today given the opportunities, and the challenges for human ingenuity, of new technology.
But encouragement for better employee involvement also has been coming from a number of bodies representing employers, management and trade unionists active in industry. I have in mind bodies such as the CBI, the IPM, the IPA and the Industrial Society, who all speak with the authority of first-hand experience and who have in recent years—and I am very glad to recognise this on behalf of the Government—pioneered and promoted so many practical approaches to employee involvement. This valuable work, which the noble Lord mentioned in his speech, has borne fruit in many companies, as we know from the Section 1 reports that the Government have already seen.
There is also the role of Government in the encouragement of this movement. Perhaps the most important role Government have in promoting employee involvement and communication is as employers themselves. Several departments have job satisfaction projects. For example, a project at Customs and Excise's VAT Central Unit in Southend is helping to develop an in-house management development programme and is expected to make substantial savings by eliminating unnecessary procedures. Projects in the Department of Health and Social Security have contributed to improvements in service to customers. Many departments in the Government have reviewed their internal communications procedures and are continuing to seek improvements. Finally, the Government's Financial Management Initiative, which is intended to improve value for money in the public service, will itself encourage closer participation, not least by generating intensive discussion between line managers and their supervisors, and their staff, about planned results and resources for the year ahead.
In moving this short debate the noble Lord asked about employee involvement in the public sector. On behalf of the Government, I entirely accept that the principles of good employee involvement practice apply to all organisations, whether they are in the public or the private sector, regardless of the constraints which there were on bringing Section 1

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into the 1982 Act. The Government seek to set an example as direct employers, as I have just endeavoured to argue, and we encourage managements elsewhere in the public sector to develop arrangements best suited to their own circumstances. There are indeed a variety of existing arrangements in the public sector. I think that the noble Lord, Lord McCarthy, with all his experience, and the other two noble Lords, with their knowledge, will know a great deal more about those arrangements than I do.
However, may I say that the Government are more concerned to encourage the development of these arrangements in the public sector in practice, rather than seeking to alter the formal scope of Section 1. In other words, we are more interested in the spirit with which the public sector recognises that Section 1 is there, even though it technically stands outside it, rather than with worrying about whether we ought to try to change the law.
The Government also have a role so far as encouragement is concerned. I know your Lordships are aware of the dramatic increase in employee share schemes, attracting tax relief, that have occurred in recent years. The noble Lord, Lord Kilmarnock, devoted a good deal of his remarks to these schemes. I really do believe, if I may say so, that the increase in these schemes encourages that understanding of a company's prospects that leads to good industrial relations and increased productivity. I would also claim that the Government have been giving direct encouragement. Speaking at an Industrial Participation Association awards ceremony—the sort of awards to which the noble Lord, Lord Rochester, was referring—on 28th November, my right honourable friend the Secretary of State for Employment said:
"The law … cannot … bring about good relations at shop floor level between managers and their employees. That can only be achieved by the voluntary effort of managers to improve communication with their employees and to involve employees more in the success of their companies".
In short, I am arguing that the Government have consistently urged companies to develop employee involvement arrangements appropriate to their particular circumstances. I give an assurance that we shall continue to do so at every possible opportunity. When the noble Lord, Lord Rochester, asks what the Government intend to do and asks essentially, "Is it the carrot or the stick that we should resort to in trying to get more action in the future?" I am very clear that the Government believe that encouragement is more effective than reproof. That is the road down which we prefer to go.
Section 1 is complementary to this approach. It ensures that the issue of employee involvement is constantly in the mind of top management. It provides an opportunity for the better practitioners to report what they have achieved and gives a stimulus to others to do better. I should therefore turn to the second purpose that I suggest is served by Section 1 that of monitoring the success of the voluntary policy. The noble Lord, in his Question, asks about the conclusions we have reached from monitoring company reports. It is, I think, a little premature to talk of conclusions. Section 1 only applies, after all, to
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annual reports covering periods beginning on or after 1st January 1983. Some companies will only have quite recently finished their first reporting year to which the requirement applies. Many more will not have yet published their reports for that year. So we are far from having a complete picture.
Nevertheless, we can, I think, say that we have gained two main impressions from what we have seen so far. First, the reports reveal the extent and great variety of employee involvement schemes that are already under way. The Government have no doubt that to attempt to impose a restrictive legislative framework upon such schemes would only damage the worthy efforts already being made. Secondly, although we must be wary of assuming that a cursory report necessarily means an unsatisfactory situation in practice, it seems likely that many firms have still a long way to go before they can reap the benefits of better employee involvement practices. The Government fully intend to keep on encouraging them to do better, but real improvement, we believe, can only be achieved voluntarily by firms seeing the benefits that they can gain by doing better.
This picture is, I think, confirmed by a variety of other evidence. I think it would be fair to say that those other bodies, such as the Institute of Personnel Management, which have been monitoring Section 1 reports, have drawn tentative initial conclusions broadly similar to our own. However, going wider than Section 1, I draw your Lordships' attention to a few examples of relevant research results. Results from a survey of industrial relations in over 2,000 establishments published by the Department of Employment in 1983 showed that formal consultative arrangements existed in almost three-quarters of firms with 1,000 or more employees and that such arrangements were spreading. I regard that figure as accurate. It is consistent with the somewhat lower proportion of Section 1 company reports making a specific mention of formal consultative arrangements quoted by the noble Lord. Over half of the respondents in a British Institute of Management survey of its membership conducted about a year ago believed that participation in their companies had improved in the preceding three years. A recent Urwick Group employee relations survey showed that over two-thirds of the companies covered introduced refinements to their employee involvement methods during 1982. There are indications that the trend for growth in employee involvement has continued since those encouraging results were produced.
Each of your Lordships has asked: how can further progress be made? An important contribution, which the noble Lord, Lord Rochester, mentioned, is being made by the code of practice on employee involvement produced jointly by the Industrial Participation Association and the Institute of Personnel Management. I am grateful that the noble Lord gives me the opportunity to say a word in reply on this code, because it undoubtedly provides an admirable guide to the many and varied ways forward in these matters. The code derives a great deal of its authority from the fact that it is produced by bodies which represent employees and trade unionists as well as employers and managers. I am not sure that there is any better authority in these matters.

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The noble Lord asked whether the Government would give some sort of formal stamp of Government approval to this very valuable code. I must say I am not convinced—the Government are not convinced—that the code would be made any more effective by doing this. Of course, there are certain problems, as the noble Lord knows very well, about adopting a code unless it has originated either from an ACAS draft or a draft from the Secretary of State. But the point I should like to make in reply, if I may, is that the Government have gladly commended that code. I am endeavouring to do so again this evening, and we shall certainly go on doing so. I am not convinced, if I may say so on behalf of the Government—if I may repeat it—that by giving in some way some official stamp it would make this code more effective, but I shall of course respond to what the noble Lord asked me and certainly draw my right honourable friend's attention to the view of the noble Lord, Lord Rochester, on this particular point.
It is, I suggest, the will to move forward voluntarily on these matters that should be the absolutely crucial issue here. We do not believe that compulsion, whether by domestic legislation or in the shape of European Community proposals such as Vredeling, can succeed if there is not freely-given co-operation. Such measures also fail to recognise the great variety of existing schemes which is demonstrated by the Section 1 reports. The noble Lord, Lord Kilmarnock, expressed the hope that Section 1 would be leading to the discovery of valuable different methods of employee involvement. My advice is that this has happened. The Institute of Personnel Management's survey of 165 annual reports, published last September, to which both the noble Lord, Lord Rochester, and the noble Lord, Lord McCarthy, referred, recorded a specific reference to at least 20 different methods of employee involvement practised by those companies. In most cases, including, for example, profit-sharing schemes and consultation mechanisms, each method was specifically mentioned in a substantial number of reports. There is, as the IPA/IPM code recognises, no single ideal solution which one can hold up and say, "This is the way to apply employee involvement". Different circumstances require different solutions.
If It may say so also, I think that it is right to remember that Section 1 is a means to an end and not an end in itself, and so shareholders ought to be interested in better employee involvement because it can make a real contribution to the success of their company. Shareholders are a group whose potential influence has often been neglected up to now. I think the noble Lord, Lord Rochester, mentioned them
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specifically. I should say, on behalf of the Government, that I hope they will take the opportunity which Section 1 gives them to play their part in encouraging the development of further employee involvement.
But despite all that, at the end of the day real and effective employee involvement on the ground means more than any number of words spoken or written in a report. The Government see Section 1 as a means of helping boards of directors to review their employee involvement arrangements, rather than as a narrow reporting requirement. Similarly, the straitjacket that prescriptive legislation would impose would hinder rather than assist the developments which we all wish to see made.
We should be under no illusions, however, about the difficulties that industry faces in attempting to involve more of its employees. We also understand that there is a temptation to give insufficient priority to matters of long-term importance such as this, under the pressure of everyday events. But equally the Government are in no doubt that the more a firm pulls together the minds and ideas of all its employees the better it will respond to the challenge of economic and technological change, and the better it will succeed. Section 1 is valuable in encouraging that. For that reason I am most grateful for the debate which the noble Lord has initiated this evening in your Lordships' House.
Lord McCarthy: My Lords, before the noble Lord sits down, will he confirm that I have understood him correctly? Will he confirm that the Government have no intention of publishing the results of their monitoring exercise? Is that what the noble Lord is saying? We all know about the 1983 workshop survey: it had no questions about Section 1. The noble Lord says that he is monitoring the results. Will he publish the results of that monitoring?
Lord Belstead: My Lords, there is no secret about what the Government have discovered from their monitoring. I should have thought that I had been very forthcoming at considerable length this evening. Therefore, I should have thought that the noble Lord would have been satisfied, not only with my reply but also with the information which the Government are giving as we proceed with this particular matter.
House adjourned at twenty-eight minutes before ten o'clock.