Lords Sitting of 17 July 1986

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Lincoln): The LORD CHANCELLOR on the Woolsack.
Lord Byron—Sat first in Parliament after the death of his kinsman.

Stansted Airport: Rail Link
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what date approval was given to the scheme concerning the rail link to Stansted Airport submitted to them by the British Rail Board in November last; and what progress has been made since the British Railways (Stansted) Bill was committed to a Select Committee in the Commons on 3rd June.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, we have almost completed our consideration of the board's investment proposal and expect to be able to announce our decision very soon. The board's Stansted Bill has completed its Committee stage in another place.
Baroness Burton of Coventry: My Lords, would the Minister answer the first part of the Question, please?
The Earl of Caithness: My Lords, I cannot answer the first part of the Question because we have not completed our considerations.
Baroness Burton of Coventry: My Lords, am I to understand that the Minister is telling us that approval has not yet been given to the British Railways (Stansted) Bill, which has been with the Government since last November? Furthermore, can he enlighten the House as to when the report on this matter, which is lying on the Table in another place, will be made available to us? Does he anticipate the Government reaching a decision during the Recess?
The Earl of Caithness: My Lords, I am afraid that the noble Baroness has slightly confused me. I thought that there were two parts to the Question: that the first related to the decision on the financial viability, which we are urgently considering following a revision of some of the parts of the financial elements of British Rail's proposal; and that the second part was in regard to the Bill which is in another place. As it is a Private Bill, as I have previously explained to the noble Baroness, it is not a matter for the Government.
Baroness Burton of Coventry: My Lords, it seems that I really cannot get any further on this matter. Does the Minister recall that on 16th January he told
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the House that this proposal from British Rail was a viable financial project, and yet he has now told the House that the Government are still considering it? Can he tell the House whether, if approval has not yet been given, developments are proceeding on the Stansted rail link without the approval of the Government?
The Earl of Caithness: No, my Lords. I informed the House in January, February, April, May and June on the progress of the Bill in another place. I have explained to the House previously that there were revisions to the proposals following consultations as a result of the Second Reading in another place.
The Earl of Selkirk: My Lords, can the noble Earl say whether it is proposed that the railway will run from Liverpool Street or from King's Cross?
The Earl of Caithness: My Lords, from Liverpool Street.
Lord Underhill: My Lords, can the noble Earl tell the House what advice Ministers or the department have given to the Select Committee on this matter, bearing in mind that on 24th April, in reply to a Question in this House, the noble Earl said that a rail link was not essential for the development of Stansted? Has consideration been given to a facility for passengers and also to the possible overloading of the M.11 and other roads?
The Earl of Caithness: My Lords, consideration has been given to that. I repeat that Stansted is not dependent on the rail link. We hope to complete our considerations of the British Rail proposals and make an announcement in the very near future.
Baroness Burton of Coventry: My Lords, can the Minister tell us when it might be reasonably expected that the Government will reach a decision on this matter and whether, if it is reached during the Recess, we will have an opportunity of discussing that statement when the House resumes?
The Earl of Caithness: My Lords, all I can say on that is that I hope it will be before the Recess. As to an announcement during the Recess and consideration of that announcement by this House, that will be a matter for the usual channels.

Shotguns: Control
3.5 p.m.
Lord Harris of Greenwich: 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 steps they propose to take to strengthen controls on shotguns.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, by amendment to the Firearms Rules we intend to introduce a require-ment that shotgun certificate holders should notify any change of address to the chief officer of police. We are

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also considering the possibility of requiring shotgun certificate holders to store their weapons safely when they are not being used.
Lord Harris of Greenwich: My Lords, in thanking the noble Lord for that Answer may I ask him whether he is aware that many of us will be very gratified by the latter part of his Answer? Is he aware that at a time when the Government rightly are devoting a lot of time to crime prevention it seems very strange that there is no absolute obligation on shotgun owners to keep their weapons in a safe and secure place? Is he aware that this is giving a great deal of anxiety to the police in the light of the increasing number of offences where shotguns are used? Can he indicate when he hopes that this change will be made?
Lord Glenarthur: My Lords, as well as the police, I believe that shotgun users agree that safe storage of weapons is important in keeping shotguns out of the hands of criminals. Each year about 700 shotguns are reported to the police as having been stolen. As I said, we are considering whether to amend the Firearms Rules in that respect. I cannot give the noble Lord a time on it, but I can tell him that it is under active consideration.
Lord Strabolgi: My Lords, is the noble Lord aware that crossbows can be almost as lethal as shotguns, yet they can be bought freely over the counter and by mail order? Will the Government consider instituting a licensing system for these dangerous weapons?
Lord Glenarthur: My Lords, I am well aware, as I think many of your Lordships will be, of the threat that crossbows pose, particularly to animals. We are considering whether any steps could usefully be taken to try to prevent crossbows from falling into the wrong hands. Discussions with interested parties, including the crossbow sporting organisations, the manufacturers, the police and the Royal Society for the Prevention of Cruelty to Animals, have taken place and we are evaluating the results.
Lord Morris: My Lords, may I ask my noble friend whether, in his consideration of the question of safe storage of firearms, he will seek the co-operation of the insurance companies with regard to the cover that they will give to firearms or will not give unless the firearms are safely and securely stored?
Lord Glenarthur: My Lords, I shall certainly bear my noble friend's remarks in mind.

Cigarette Imports: Tar Content
3.8 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many millions of cigarettes are currently being imported each month from Western Europe and whether their laboratories are adequately staffed to test this rising total for tar content and accurate labelling on the packets.
Baroness Hooper: My Lords, in the year ended December 1985 an average of 1,016 million cigarettes a month were imported into the UK from countries within the European Community. A small number of cigarettes were also imported from Western European countries which are not members of the EC. The Government are satisfied that the existing procedures enable all brands which achieve a significant level of sales to be tested for their tar yield.
Lord Orr-Ewing: My Lords, is my noble friend aware that the imports have been rising very steeply in recent years: that the figure was one-half of 1 per cent. imported some years ago and that it is now nearer 10 per cent? Has the manning of the laboratories been sufficient to match that? I ask that because there are indications that large numbers of the cheaper type with the higher tar content are now coming in and are not being properly monitored by the Government laboratories.
Baroness Hooper: My Lords, we are currently testing brands representing 95 per cent. of cigarettes imported. There has been a sharp increase in the number of imported brands available in this country in recent years. It would not be practical or cost-effective to test every brand that comes on to the market, but the Government try to ensure that brands that have built up a considerable volume of permanent sales are tested. The manning is therefore considered currently adequate.
Lord Bruce of Donington: My Lords, is the noble Baroness aware that she still has not answered the Question put by her noble friend, which was: are the laboratories adequately staffed? Is she aware that this is a quite serious matter and that it is essential that this should happen?
Baroness Hooper: My Lords, it is indeed a serious matter, but I believe that at the end of my last reply I said that we considered the manning to be adequate.
Lord O'Neill of the Maine: My Lords, is the noble Baroness aware of the great importance of cigarette manufacture to Northern Ireland and the difficulty of the firms existing there in maintaining employment if they are subjected to what may be unfair competition?
Baroness Hooper: My Lords, yes, indeed; but in fact all cigarettes produced for the United Kingdom market, whether manufactured in the United Kingdom or imported, are subject to the same tests.
Lord Ennals: My Lords, is there any way in which we can reduce this very considerable increase in the importation of these products which are damaging to the nation's health? Also, can the noble Baroness say whether imported cigarettes have on average a higher tar content than those manufactured in Britain?
Baroness Hooper: My Lords, to answer the last question first, to my knowledge there is no evidence that the imported brands have on average a higher tar content. The Government are doing everything they can, on the same basis as with home-manufactured products, to carry out testing procedures to ensure that that continues to be so.
Lord Kennet: My Lords, is there no system of European Community tar content grading?
Baroness Hooper: My Lords, I am not aware that there is a European system. Certainly, so far as the United Kingdom is concerned, we deal with the matter through voluntary agreements, and under those agreements a substantial lowering of the average tar yield of cigarettes has been achieved.
Lord Orr-Ewing: My Lords, did I understand my noble friend rightly when she claimed that 95 per cent. of brands selling more than 10 million a year in this country are now being tested? Can she assure me that the tar content appears on those packs; and are the health warnings, as required by statute, also on those packs? Perhaps she can also tell us whether the overseas people are keeping in line, so that there is a steady reduction in tar content to meet the aim of 13 milligrams by December 1987. Is that also being monitored?
Baroness Hooper: My Lords, we are monitoring everything. I can assure my noble friend that we are currently testing brands which represent 95 per cent. of cigarettes imported. That is not necessarily 95 per cent. of all brands, but, as I said previously, all cigarettes produced for the United Kingdom market are required to carry the tar group on the pack.

Schools: Daily Act of Worship
3.13 p.m
Lord Orr-Ewing: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they have taken in recent years as a result of the failure of many schools to comply with the provisions of the Education Act 1944 in respect of a daily act of worship.
The Earl of Swinton: My Lords, the Government have made it clear, both in the White Paper Better Schools (Cmnd. 9469) and on many other occasions, that we look to the schools themselves, and to the local education authorities by which they are maintained, to ensure that the statutory requirements for daily collective worship are being met. Where complaints have been made about particular schools, my right honourable friends the Secretaries of State have undertaken a full investigation into the circumstances of each case.
Lord Orr-Ewing: My Lords, can my noble friend tell the House what percentage of schools are carrying out the statutory act of worship? Is it not a fact now that about half the schools are positively disobeying the law and are not carrying out these acts of worship? Can my noble friend also perhaps say what is the right route for a parent to take if she objects to a negligible act of worship in schools and to there being no religious teaching at all? Does she complain to the school
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governors, to the local education authority, or to the Secretary of State? Who is going to make sure that the Acts, as ordained by Parliament, are in fact obeyed?
The Earl of Swinton: My Lords, if my noble friend has any examples of schools which are not carrying out the law, it would be a good thing if he were to raise them with my right honourable friend, who would be very interested indeed to learn of such cases.
Similarly, if a parent is worried that a school appears to be breaking the law in the matter of assembly, he or she should first raise the matter with the school and then, if necessary, with the local education authority. If the parent remains unsatisfied, he or she should complain to my right honourable friend the Secretary of State, who has statutory powers under which he considers complaints and under which he can issue directions if he is satisfied that the duty has been breached or that a statutory function has been performed unreasonably.
Lord Avebury: My Lords, would the noble Earl agree that in a free country, where the right of legislators not to acknowledge the existence of any god or gods was recognised 102 years ago in the Affirmation Act 1884, it is illogical that the rights of school children as regards freedom of religion are still limited by statute in that social pressures are exerted on them to conform to religious ceremonies with which they may be fundamentally out of sympathy? Is it not therefore hardly surprising that so many schools are flouting an unenforceable statute?
The Earl of Swinton: My Lords, I hope that schools are not flouting the statute, because the Government believe strongly that the statutory framework for religious education and collective worship has stood the test of time. Similarly, the 1944 Act provides that a pupil may be excused from attending collective worship at the request of his or her parents.
Lord Nugent of Guildford: My Lords, is my noble friend aware that he did not answer the question of my noble friend Lord Orr-Ewing as to whether he had an estimate of how many schools are in fact flouting the law and not carrying out the daily act of worship?
The Earl of Swinton: No, my Lords, he has not; but I must say that the department receives very few complaints. For example, there were six complaints in 1985 alleging a breach of the statutory requirements for collective worship, and another three in respect of the giving of religious education.
Lord Denning: My Lords, is the Minister aware that it is open to any parent to go to the courts of law and ask for a judicial review so as to compel the Secretary of State and the local authorities to do their duty? Would it not be a good thing, in a way, if legal aid were provided for any parent to take action to enforce the law?
The Earl of Swinton: My Lords, I understand that the parent has a right to go to the Secretary of State, who in turn can go to the courts. I think perhaps the Government are not yet so pushed that the Secretary of State would have to apply for legal aid.
Lord Paget of Northampton: My Lords, is it really reasonable in this day and age to try to invoke the majesty of the law to impose the reading of prayers in schools, which we cannot even persuade our bishops to accept?
The Earl of Swinton: My Lords, I have a certain amount of sympathy with the noble Lord on the last point. I think that if some of the right reverend Prelates could make up their minds about whom we were to worship and why, it might help certain humble believers like me. At the same time it is the law of the land and, as the law of the land, it should be enforced.
The Lord Bishop of Lincoln: My Lords, is the noble Earl the Minister aware that neither the Churches nor the teachers would be at all happy in a situation where schools were brought to court? Is he further aware that both the most reverend Primate the Archbishop of Canterbury and the right reverend Prelate the Bishop of London, in conversations with the Select Committee on Education and Science in another place, have spoken of their wish for greater flexibility in the approach to the law—not with regard to the flexibility of their conviction that religion should be part of the total education experience, but with regard to the fact that the whole educational scene has changed greatly over these last 40 years and that many people, including the Churches, hope that this matter can be approached with greater flexibility than it is now?
The Earl of Swinton: My Lords, I can only say that what the right reverend Prelate has said makes me more and more convinced that what I said in answer to the noble Lord, Lord Paget, was about right.
Viscount Tonypandy: My Lords, can the Minister inform me, despite the wishy-washy attitude of the right reverend Prelates on this question, whether Her Majesty's inspectors of schools are required to inform the Secretary of State as to whether the law is being fulfilled with regard to the daily act of worship? The right reverend Prelates speak for the Church of England, but they do not speak for everyone.
The Earl of Swinton: My Lords, if Her Majesty's inspectorate found a school which appeared to be attempting to evade the requirement of the 1944 Act they would first raise the matter with the head teacher and, if necessary, with the local education authority concerned, and if neither approach was successful they would indeed draw it to the attention of my right honourable friend.
Lord Hunt: My Lords, is there not a real difficulty here? Without dissenting in any way from the spirit or the intention of the 1944 Act, or the intention of the Question of the noble Lord, Lord Orr-Ewing, is there not a very real difficulty in a number of schools in finding teachers on the staff who have either the convictions or the qualifications, or both, to conduct acts of worship; and is the Minister satisfied that schools are adequately staffed with this purpose in view?
The Earl of Swinton: My Lords, I think that the noble Lord has a very valid point, in that Section 30 of the 1944 Act makes it impossible to require teachers in county schools, and most teachers in voluntary controlled schools, to attend religious worship or to give religious instruction. Indeed, there are a great many teachers who do not wish to do this.
Lord Peyton of Yeovil: My Lords, does my noble friend agree that this whole question is surrounded with an aura of uncertainty, that as a nation we tend characteristically to try to ignore it and hope that it will go away, and that this is not a very sensible or lasting attitude?
The Earl of Swinton: My Lords, I do not think that it is. The Act lays down the duty and it should be carried out. Incidentally, we have just had an Education Bill go through this House and I do not think this matter was raised by any noble Lord in his Second Reading speech, or that any noble Lord felt so strongly about it.
Lord Sefton of Garston: My Lords, does the noble Earl the Minister agree that there is a large body of opinion in this country which would not view with any great alarm the abolition of religious education in schools, in view of the past and present association of religions with violence and terrorism—
A noble Lord: Oh!
Lord Sefton of Garston: Perhaps the noble Lord who laughed would care to ask a question. Would the noble Earl consider liberalising the law in this regard and recommend his right honourable friend to take some action to change the law?
The Earl of Swinton: My Lords, a number of people in this country have very odd views on very odd subjects.
Lord Donaldson of Kingsbridge: My Lords, does the noble Earl regret, as I do, that certain elements of the Christian religion should in this House describe the Church of England as wishy-washy?
The Earl of Swinton: My Lords, I am here to answer questions, not to make comments on what other noble Lords say.
Lord Ritchie of Dundee: My Lords, is the Minister aware that a great many head teachers in areas of high immigration need to assemble the whole school once daily, but have great difficulty in performing an act of specific Christian worship because the preponderance of the pupils are not Christian? In that case the parents do not send their children, so the head teachers will not have a complete assembly of the whole school.
The Earl of Swinton: My Lords, the Act specifies that there must be an act of worship. It does not specify that it need necessarily be an act of Christian worship.
Lord Brockway: My Lords, may I ask a question of the noble Viscount the Leader of the House? Are we to have an opportunity to pay some tribute to the late

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Lord Boothby? Is it not a fact that he twice held office as Parliamentary Private Secretary to a Minister and that at the time of the Ministry of Fuel he was in effect a junior Minister? In addition to that—
Noble Lords: Order!
Lord Brockway:—did he not serve longer than anyone else in the two Houses of Parliament? Should we not recognise that?
The Lord President of the Council (Viscount Whitelaw): My Lords, I was anxious to allow the noble Lord to have his say—although I fear it was slightly out of our normal procedure—because of the respect that I have for him, and indeed the respect that all of us in the House have for the late Lord Boothby, of whom he was speaking. There are very clear rules laid down on these matters which are normally respected, but I am sure, despite that, that the whole House would wish me to say how sorry it is at the death of Lord Boothby.

Business
3.25 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Davidson will, with the leave of the House, repeat a Statement that is being made in another place on the report of the Scottish Tertiary Education Advisory Council.
It may be for the convenience of the House if I announce that, if necessary, the Third Reading of the Gas Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment consideration of Commons Amendments to the Patents, Designs and Marks Bill and the Second Reading and remaining stages of the Education (No. 2) Bill will be taken.

The Summer Recess
Lord Denham: My Lords, it may also be for the convenience of the House if I announce that, subject to the progress of business, the House will rise for the Summer Recess on Thursday, 31st July. The House will sit at 11 a.m. on that day.
I hope to announce the date of the return of the House next week.

Lords Expenses
Lord Cledwyn of Penrhos: My Lords, this might be an appropriate moment for me to remind the House that yesterday we approved without debate a Motion moved by the noble Lord, Lord Belstead, the Deputy Leader of the House, in respect of your Lordships' allowances. Since then, there was a debate late last night in another place and the other place carried by a substantial majority an amendment providing Members of another place with a substantially increased allowance. I ask the noble Viscount the
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Leader of the House to what extent this affects the Motion we passed yesterday, and whether any further consideration can be given to the position of noble Lords in this House in the light of the vote in another place last night. I wonder whether the noble Viscount would be good enough, either today or tomorrow, to make a Statement on this matter.
Viscount Whitelaw: My Lords, it is perfectly true that on my behalf my noble friend Lord Belstead moved the Resolution in your Lordships' House yesterday afternoon, and it was a Resolution in line with what the Government themselves put forward to another place. Your Lordships felt able to agree to that Resolution last night. It is not for me to say whether, in the circumstances, the Members of another place were right or wrong. I merely confine myself to saying that they decided not to take the same view as the Government—that is something that people do from time to time—and they defeated the Government on this matter.
In view of that, if the noble Lord wishes it, I think we should consider this matter carefully through the usual channels and I shall make a Statement to the House next week if, after those consultations, it is thought appropriate to do so.
Lord Cledwyn of Penrhos: My Lords, I am much obliged to the noble Viscount.
Baroness Seear: My Lords, we on these Benches also agree that that is the most appropriate way to deal with the matter.

Barony of Strange
3.28 p.m.
Lord Mackay of Clashfern Lord Mackay of Clashfern rose to move, That the report of the Committee of Privileges be agreed to [[H.L.] 175].
The noble and learned Lord said: My Lords, in the unavoidable absence of my noble and learned friend Lord Bridge of Harwich owing to illness, I rise to move the Motion standing in his name. Just in case there are any of your Lordships who have not had an opportunity of fully studying the report of the Committee for Privileges, perhaps I should say that the report concerns a petition for the determination of the abeyance in the Barony of Strange. The petitioner, who is the eldest daughter of the late Lord Strange, applies for this, but because of certain arrangements between herself and her two sisters who are co-heiresses to the barony it was necessary that the petition should be referred to the Committee for Privileges. After hearing the Attorney-General and counsel for the petitioner, the Committee decided that there was nothing improper in the arrangements between the parties and that accordingly the barony was at Her Majesty's disposal.
I should perhaps add that at this same meeting the committee reviewed the procedure for dealing with questions such as the one raised here, and in due course my noble and learned friend will propose to your Lordships for your consideration a report on that aspect of the matter. But it was thought right not to

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postpone this particular report until that report was ready. My Lords, I beg to move.
Moved, That the Report of the Committee for Privileges be agreed to [[H.L.] 175].—(LordMackay of Clashfern.)
On Question, Motion agreed to.

Building Societies Bill
Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clause 1,

Schedule 1,

Clauses 2 to 5,

Schedule 2,

Clauses 6 to 13,

Schedule 4,

Clauses 14 to 24,

Schedule 5,

Clauses 25 to 27,

Schedule 6,

Clauses 28 to 32,

Schedule 7,

Clauses 33 and 34,

Schedule 8,

Clauses 35 to 44,

Schedule 3,

Clauses 45 to 68,

Schedule 9,

Clause 69,

Schedule 10,

Clauses 70 to 77,

Schedule 11,

Clauses 78 to 83,

Schedules 12 and 13,

Clauses 84 and 85,

Schedule 14,

Clauses 86 to 90,

Schedule 15,

Clauses 91 to 93,

Schedule 16,

Clauses 94 to 98,

Schedule 17,

Clauses 99 to 120,

Schedules 18 to 20,

Clauses 121 to 124,

Schedule 21,

Clauses 125 and 126.

—(Lord Brabazon of Tara.)
On Question, Motion agreed to.

Financial Services Bill
Lord Brabazon of Tara: My Lords, on behalf of my noble friend Lord Lucas of Chilworth, I beg to move the Motion standing in his name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Financial Services
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Bill has been committed that they consider the Bill in the following order—

Clause 1,

Schedule 1,

Clauses 2 to 10,

Schedule 2,

Clauses 11 to 35,

Schedule 3,

Clauses 36 to 83,

Schedule 4,

Clauses 84 to 96,

Schedules 5 and 6,

Clauses 97 and 98,

Schedule 7,

Clauses 99 to 110,

Schedule 8,

Clauses 111 to 118,

Schedule 9,

Clauses 119 to 142,

Schedule 10,

Clauses 143 to 151,

Schedule 11,

Clauses 152 to 158,

Schedule 12,

Clauses 159 to 176,

Schedule 13,

Clause 177,

Schedules 14 and 15.

—(Lord Brabazon of Tara.)
On Question, Motion agreed to.

Gas Bill
3.31 p.m.
Read a third time.
Clause 4 [General duties of Secretary of State and Director]:
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead) moved Amendment No.1:
Page 3, line 28, after ("or") insert (", as the case may be,").
The noble Lord said: My Lords, at the previous stage of the Bill the noble Lord, Lord Diamond, tabled an amendment, Amendment No. 76A, which would have substituted the word "and" for "or" in the Government's amendment to Clause 4 placing a duty on the Secretary of State and the director to take into account in particular the interests of the elderly and disabled in performing their Clause 4(2)(a) duty to protect the interests of consumers of gas in respect of the quality of the gas supply services provided. The noble Lord sought an assurance, supported by my noble friend Lord Boyd-Carpenter, that the duty applied to both the Secretary of State and the director, and I undertook to consult parliamentary counsel on the point.
Although counsel advised that the interpretation of the Government's amendment was that the duty did apply to both the director and the Secretary of State—and this was certainly the Government's intention in moving that amendment—counsel agreed that noble Lords were on to a point in that a few words

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might be added in the interests of clarity, and this is the purpose of inserting the words "as the case may be". I hope that this removes any possible doubt on the point. I beg to move.
Lord Diamond: My Lords, I agree with every single word the Minister has said, and I am grateful to him.
On Question, amendment agreed to.
Clause 7 [Authorisation of public gas suppliers]:
Lord Diamond Lord Diamond moved Amendment No. 2:
Page 5, line 38, at end insert—
("and shall include such conditions requiring arrangements to be made with respect to the provision of special services for meeting the needs of consumers of gas supplied through pipes who are disabled or of pensionable age as appear to the Secretary of State to be requisite or expedient having regard to the duties imposed by section 4 above.").
The noble Lord said: My Lords, in moving this amendment perhaps I may speak to Amendments Nos. 3 and 9 at the same time. This amendment is precisely the same as the following amendment in the name of the noble Lord, Lord Belstead, Amendment No. 3, and Amendment No. 9 is purely consequential. For that reason I shall not bother your Lordships with the central content of the amendment, and I shall leave it to the noble Lord, Lord Belstead, if he will be good enough to deal with that. The only point of my putting this amendment down was to make what is a permissive arrangement under the noble Lord's amendment a compulsion under my amendment.
My amendment, using the same words, came at a point in the Bill where we are talking about "shall" and not "may". The amendment of the noble Lord, Lord Belstead, at page 5, line 33, comes at a point in the Bill where we are talking about "may". Therefore, the only difference is the one I have already described, and there is no need for me to say more than that at the moment. I beg to move.
Lord Belstead: My Lords, the brief introduction of the noble Lord, Lord Diamond, to his Amendment No. 2 shows that Amendments Nos. 2, 3 and 9, the last two amendments being Government amendments, are all aiming to do something which I believe noble Lords in all parts of the House wish to see accomplished. I am anxious in the few words that I shall speak to try to make a case to your Lordships that although it is true that the Government amendment comes at a point in the Bill where it is permissive and not mandatory, at the end of the day the amendments we are putting forward, together with a changed condition in the authorisation for British Gas, add up to the same thing as the noble Lord, Lord Diamond, wants; namely, a mandatory requirement.
Noble Lords will recall that at the previous stage of the Bill, in response to my noble friend Lady Macleod who had moved an amendment at that stage for the care of the elderly and disabled, theGovernment tabled an amendment to Clause 4 imposing a duty on the Secretary of State and the director in exercising certain functions to take account in particular of the interests of elderly and disabled people. At the same time my noble friend Lord Campbell of Alloway also
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spoke in favour of another amendment to Clause 9, proposing a legally enforceable code of practice designed to protect the interests of elderly and disabled people. I undertook on behalf of the Government to take the whole thing away and to see if we could come back with amendments which would meet the case being made from all sides of the House.
The proposed Government Amendment No. 3, which is the substantive Government amendment, is an endeavour to fulfil the Government's commitment. This amendment will enable conditions to be included in a public gas supplier's authorisation requiring arrangements to be made for the provision of such special services for the elderly and disabled as the Secretary of State considers to be necessary or expedient in the light of his Clause 4 duties. The amendment to Clause 48 is simply consequential.
I have made available to noble Lords who spoke on this subject on Report, and I have put into the Library of the House, the text of a new condition in the authorisation for British Gas which we proposed should be included in the authorisation if the amendment is accepted. The new condition means that the Secretary of State and not British Gas will decide what services would be appropriate to be included in the code of practice, and it also means that the code of practice would be enforceable by the director using his powers at Clauses 28 to 30 of the Bill so that failure to make arrangements for the provision of the services specified, which cover all those currently provided by British Gas, including the free safety checking for which the noble Lord Lord Stoddart, particularly pressed at Report, would be a breach of a relevant condition, and that would entitle the director to make an enforcement order.
But bearing in mind that one of the matters about which the noble Lord, Lord Campbell, was particu-larly anxious was that there should be some form of legal status to the code, the amendment we are bringing forward also has the effect that if an enforce-ment order were not complied with by British Gas this would enable an aggrieved elderly or disabled customer to go to court to seek damages. If the public gas supplier—in other words, British Gas—remained in breach of the code the director operating under his Clause 4 duties would also be able to go to court for an injunction. The legal enforceability for the amendment I am seeking to put to your Lordships goes a good deal further than my noble friend Lord Campbell of Alloway sought to go when he moved his amendment.
I come now to my final point. The noble Lord. Lord Diamond, quite rightly has said that the Government nonetheless are asking your Lordships to agree that Amendment No. 3 should go into a part of the Bill where this is a power and not a duty. We believe this is right because we think that we ought to leave the Secretary of State the final discretion as to how he carries out his duty in setting conditions for public gas suppliers generally, and that in this context it is the proper drafting to use the word "may" in Clause 7.
The noble Lord, Lord Diamond, will remember that he particularly pressed the Government at previous stages of the Bill to try to make it easier for other gas suppliers to set up in the future in addition to British Gas—the franchising amendments. We believe

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therefore that we ought to stick to that part of Clause 7 where there is a power for the Secretary of State to decide what conditions a gas supplier should have to set out in carrying out its duties, bearing in mind that it may not be just British Gas that is a public gas supplier in the future but that there might be some very small gas suppliers for whom an absolutely blanket requirement would not be appropriate.
However, although our construction is different from the construction of the amendment of the noble Lord, Lord Diamond, I believe that, so far as concerns British Gas, we reach exactly the same objective as the noble Lord. We do it by this way. Given the combina-tion of the duty in Clause 4 and the express vires that we are putting into Clause 7 by Amendment No. 3, it is impossible to conceive of how any Secretary of State could omit a condition in services to the elderly and to the disabled in any authorisation. With the proposal for Amendment No. 3 is the new condition to which I have already referred, which spells out the detailed special services that must be provided for elderly and disabled people.
I hope that after that explanation your Lordships will feel that we are providing, first, that a code must be drafted; secondly, that the code must be approved by the Secretary of State and cannot just be written by British Gas; thirdly, that the code will be legally enforceable. My Lords, I am speaking to Amendment No. 3.
Lord Diamond: My Lords, I cannot see the noble Lord, Lord Campbell of Alloway, in his place and so I assume that he has no desire to speak on these matters. It therefore falls to me to say how grateful I am to the Minister for the very careful consideration that the government have given to this aspect. The issue is purely between, as the Minister himself has said, mandatory and permissive or voluntary. We wanted to make sure that it was not voluntary but compulsory; that is to say, that it would be compulsory, or mandatory as we would prefer.
Let me clear my amendment out of the way by saying that it ill-fits the place in which I had put it, but there was no other way of bringing my point to the attention of your Lordships. So I shall not be pressing my amendment.
To turn to the amendment of the Minister, I have listened very carefully to what he has said, and I believe that I speak for all sides of the House when I say that the amendment achieves what we all wanted. However, it does so by a long way round. Simply, the authorisation is not in the Bill, and however hard we try to get it into the Bill, the Government are not prepared to have it in the Bill. Had it been in the Bill, then what we are now being told about an alteration in the authorisation would be seen on the face of the Bill.
We have of course expressed anxiety—both Opposition parties have done so—that the authorisation can be altered so many times between the time when your Lordships see it and it leaves Parliament and the time when it becomes effective. We are a little anxious about that. However, I do not want to look a very acceptable gift-horse in the mouth. I repeat my gratitude to the Minister for doing what we all wanted done and doing it, I suppose, in the only
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way in which it can be done, consistent with the Government's desire not to include the terms of the authorisation in the Bill.
Lord Belstead: My Lords, if I may be permitted to speak again, I ought to tell the House that my noble friend Lord Campbell of Alloway notified me that he could not be present today; but he particularly requested that I should say, on behalf of the Government, that he endorsed Amendment No. 3.
3.45 p.m.
Lord Henderson of Brompton: My Lords, on behalf of the noble Lord, Lord Campbell of Alloway, as well as on my own behalf, I thank the Minister unreservedly for what he has achieved. I wish to thank not only him but also the officials in the departments concerned, and the parliamentary draftsmen. They have gone to very great lengths to accommodate the point of view which was expressed by the noble Lord, Lord Campbell of Alloway, when he moved an amendment in Committee at about 2.30 a.m., when neither I not the noble Baroness, Lady Masham, had the stamina to be in the Chamber. Great thanks are due to the noble Lord, Lord Campbell of Alloway, for having persevered, not only in the House but, as the Minister perhaps knows only too well, outside the House also.
In many ways, Amendment No. 3 is a very great tribute not just to the noble Lord, Lord Campbell, but to what can be achieved in this House by perseverence and without taking up much time on the Floor of your Lordships' House.
I grant the noble Lord, Lord Diamond, that the amendments are obscure, and that on the face of it, the amendments of the noble Lord, Lord Campbell of Alloway, to which my name was also attached, were much clearer. The only difference really is that the Government have not conceded one of the points we wanted, which was by no means essential to our package. That was, that the code of practice would be embodied in regulations that would be laid before Parliament, and that there would be some kind of parliamentary approval. That is the one item that is missing. Otherwise, the Minister has gone as far, and even further, than we ourselves proposed. The disablement organisations had nothing to do with all that, and they should be very grateful to the noble Lord, Lord Campbell, for what he has achieved. So should the organisations concerned with the elderly.
I have no more to say except that I see that the noble Baroness, Lady Macleod, is in her place. It was on the foundations of her amendment that the superstructure or refinement now before your Lordships, which brings the code of practice within the legal and judicial process, has been built. I give my thanks to the noble Baroness as well as to those others that I have mentioned.
Baroness Macleod of Borve: My Lords, first, may I ask the Minister if I am to understand that he will not now be speaking to Amendments Nos. 3 and 9? I see that I am correct, in which case I shall say a few brief words. The noble Lord, Lord Diamond, has already paid a tribute, and all parts of the House are enormously in debt to my noble friend the Minister. I

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know that he has spent many hours, way into midnight, trying to find a way around the various requests that have been made in your Lordships' House. I feel, as I am sure we all do, that the Minister has not only met us 100 per cent., but perhaps has gone a little over the top as well.
We have accomplished what we wanted, in that at the end of the day the disabled and those less able to look after themselves because of age and other reasons will be as adequately looked after in the future under the Bill as they are looked after now by British Gas. That responsibility will be part of the Bill and will be mandatory. That is a great step forward.
Many points will be emerging about the care of the people that I have mentioned. Perhaps I may refer just to the free services that have been given to gas consumers in the categories in question. I had a feeling at one time that we could not make British Gas give a free service in the future; but the Minister has put that into the Bill with the authorisation and the codes of practice. Being myself disabled, perhaps I may say a word about how grateful I am sure everybody is, although, with the noble Lord, Lord Henderson, I have not received any mail from those representing the disabled, which is perhaps surprising. On their behalf, and on behalf of the elderly with whom I am also associated, we are very grateful to the Minister for what he has done for us.
Lord Stoddart of Swindon: My Lords, I shall be brief. We had many attempts both in Committee and on Report at dealing with this problem of the disabled and elderly. I think the Minister has now probably got it as right as he can. We are indeed grateful to the noble Lord, Lord Campbell of Alloway, for his persistence and for his drafting skills which I think helped the Minister along the road to accepting what has now been put into the Bill and into the authorisation.
I am particularly pleased that the Minister honoured his pledge to me that he would also get the free checking of appliances into the Bill or into the authorisation. He has now got it into the authorisation. Elderly and disabled people will now have a remedy in law, if the new British Gas plc does not in fact perform. I think we can all be pretty satisfied with the result of the combined efforts of all sides of this House.
Baroness Masham of Ilton: My Lords, I should like to add my thanks to all those who supported the needs of the elderly and disabled. As I had my name to the amendment tabled by the noble Lord, Lord Campbell of Alloway, I pay tribute to the work that he did and I thank him very much indeed.
Had there not been pressure from Members of your Lordships' House, perhaps the change would not have been made to the Bill, since the Government had not brought forward their own amendment. I thank the noble Lord the Minister for listening to your Lordships and for being sympathetic towards the amendment. I am sure that it is now a much better Bill than it was. There were people outside this House who were concerned about the needs of the disabled and the elderly. I am sure they will be as relieved as we are. I thank all those who have supported the amendment.
Lord Diamond: My Lords, is the noble Lord the Minister seeking to intervene? No; then with your Lordships' permission I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Belstead Lord Belstead moved Amendment No. 3:
Page 5, line 44, at end insert—
("(aa) such conditions requiring arrangements to be made with respect to the provision of special services for meeting the needs of consumers of gas supplied through pipes who are disabled or of pensionable age as appear to the Secretary of State to be requisite or expedient having regard to those duties;").
The noble Lord said: My Lords, I spoke to this amendment when speaking to the previous amendment of the noble Lord, Lord Diamond. I beg to move.
On Question, amendment agreed to.
Clause 39 [Annual and other reports]:
Lord Diamond Lord Diamond moved Amendment No. 4:
Page 41, line 39, after ("year;") insert—
(" ( ) the functioning and staffing of, and the provision of facilities for, his department and any representations made to the Secretary of State thereon;").
The noble Lord said: My Lords, I gather that it will be for the convenience of the House if Amendment No. 8 is taken at the same time as this amendment. I shall speak to Amendment No. 8 in a moment. Page 41, line 39, relates to that part of the Bill which deals with reports to be made by the director. It states that:
"The Director shall, as soon as practicable after the end of the year…make to the Secretary of State a report on".
I have added,
"the functioning and staffing of, and the provision of facilities for, his department".
I have done that because we know that there are going to be staff and facilities, but we also know that they are going to start at a very low level and will need to rise considerably. One of the reasons for the amendment, therefore, is to give the director a little encouragement in engaging the most effective staff as circumstances require—not before that—and in publishing any comments he has to make; that is, bringing the public's attention to any particular difficulties he has had in staffing his department and in having the facilities he thinks he requires in order to carry out the duties which Parliament imposes on him by this Bill. That is the reason for this amendment so far as the director is concerned.
As I said, I wish to refer also to Amendment No. 8, which uses the same words in the context of page 42, line 32. This deals with the annual reports of the council. Clause 41 states:
"The council shall…after the end of the year…make to the Director and to the Secretary of State a report on its activities during that year".
My amendment proposes to add that the report should also deal with,
"the functioning and staffing of, and the provision of facilities for, the Council and of any representations made to the Secretary of State thereon".
Again, the council will need staff. The council will have additional responsibilities to those it had previously; that is, there will be one central council

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which will have to cover the whole country as opposed to a central council which did not have to do that and which had regional councils to handle the second part of that function. Here again the council may find it necessary—I do not know that it will—to seek increases in staffing and facilities in order to enable it to carry out its very important functions and duties in:posed on it by this Bill.
I hope that the Government will find these amendments reasonable and will either accept them or say that they are unnecessary because they are already provided for in the Bill. After all, we have been very kind to the Minister and accepted his amendments, and he might be willing to reciprocate; who knows? Those are my reasons for the amendments. They are reasonable, and I hope they will find favour with the Government. I beg to move.
Lord Belstead: My Lords, the effect of the noble Lord's amendment is to require the director and the Gas Consumers' Council respectively to include in their annual reports a section on the functioning and staffing of their organisations. As the noble Lord, Lord Diamond, has explained, this derives from his concern that there shall be a strong and effective system of regulation based on the office of the Director General of Ofgas. The noble Lord is, of course, also concerned that the new Gas Consumers' Council shall be properly staffed.
I reiterate the Government's commitment to ensuring that the Office of Gas Supply will be adequately and fully staffed to do its job, and I remind your Lordships once again of the example of the Office of Telecommunications. In his latest annual report, which was published only two months ago, Professor Carsberg, the Director of Oftel, makes specific mention of the staffing and recruitment position in Oftel, pointing out that numbers are expected to continue growing—approaching 120 staff during 1986. That is a doubling in the staff of the office of Oftel in the telecommunications field. The Director General of Gas Supply will have exactly the same powers to appoint staff as Professor Carsberg has now.
In the light of the current information I have just provided I cannot see that there is an argument that the director is likely to have difficulty in adequately staffing his office. With respect to the noble Lord and his amendments, I do not think it is appropriate to require someone of the standing of the Director General of Ofgas to have to include comments on the staffing and functioning of his office in his annual report.
The noble Lord, Lord Diamond, invited me to say whether the power is there. Indeed it is. If the Director General of Ofgas feels that there is any merit in commenting on staffing matters or the way that his office is working, he will do so, and he has the power to do so. Exactly the same applies for the Gas Consumers' Council. They too have the power to appoint such staff as they determine, subject to the usual constraints, and they also have the power to include in the annual report anything relating to their activities during the year, including staffing and other matters. It is for that reason that I suggest that these amendments, although I understand the reasons of the noble Lord in putting them forward, are not necessary.
4 p.m.
Lord Stoddart of Swindon: My Lords, I am surprised that the noble Lord will not accept this amendment. What the amendment seeks to do is to place a duty on the director to report on his staffing requirements: What staff he has, what staff he may need in the future and any representations he may have made to the Secretary of State. It seems to me, bearing in mind the fact that Parliament is losing control of this industry and indeed handling over the regulatory authority to what I suppose is an independent body, that they are entitled to know whether Ofgas is properly staffed and whether the director believes that it is properly staffed.
It might be, although I doubt very much whether this would happen, that the director wished to conceal the number of staff he has. There are circumstances in which he might wish to do that, and that would be a matter of concern both for Parliament and indeed for the Minister. Therefore, I should have thought that the safest course would be that which is suggested by the noble Lord, Lord Diamond, in the amendment which puts the duty in the Bill. We could then be sure that Parliament and the public were kept abreast of how many staff the director had, whether he thought they were adequate, what he thought the calibre of the staff to be and whether he thought they were doing the job for which they were appointed.
It is a very simple amendment. It is just as simple as the amendment which the Minister really accepted in relation to the free checking of gas appliances, and it would improve the Bill and create satisfaction. I hope the Minister will reconsider his reply and accept it.
Lord Belstead: My Lords, if your Lordships will allow me one more word, may I say that with respect to the noble Lord, Lord Stoddart, who is as ever persuasive, I do not think that this amendment would improve the Bill. The difficulty is that if one starts to specify the functions to be reported upon in the annual report—and in this case the Government are being asked to agree that only the functions concerning the facilities and the staffing of the director of Ofgas shall appear in the annual report—I think that most readers of the Bill would raise an eyebrow and ask: "What about all the other activities?" The answer is that, as it is drafted, the Bill says that the Secretary of State shall receive a report from the director and in that report there shall be included the activities carried out by the director during the year. If I may say so, I think that is a safer and better way of legislating.
However, there is also a second reason. I think that if a person of standing is appointed as director of Ofgas—and the new director designate is a very distinguished man who is going to have a very important job—to put in the statute that one of the things he must do in the annual report is to report on the way his office is running is unnecessary; it is asking a bit much of a man who is highly qualified and who will undoubtedly include such information as being part of his activity during the year if he feels that Parliament or the general public or the Secretary of State needs to know if anything is not going right in his office.
Lord Diamond: My Lords, I am grateful to the Minister for the full consideration he has given to these amendments and I am particularly grateful to the noble Lord, Lord Stoddart, for what he had to say. It would have been more satisfactory to me, and clearly also to the noble Lord, Lord Stoddart, if the Minister had come to the conclusion that it was possible to include these amendments, prefaced, if necessary, by the words, "without prejudice to the generality of the foregoing". That always deals with the situation in which anyone, including the Government and this very Bill, wants to bring in a particular matter without bringing in all matters and therefore makes it clear that the generality is not affected by the particular instance.
The main purpose of my amendment has been achieved, however, because the Minister has made it quite clear that now, at all events, the director and the council will indeed publish reports about their staffing and will refer to any particular difficulties they have had. Now that there has been this exchange and the Government have made it clear through their official spokesman that it is expected that the director and the council shall, if they desire, make a report of this kind, and that it will be fully understood that if they want to make public or draw to the attention of either House of Parliament certain differences of view they may have had with the Government as to their staffing and similar needs that shall be published as well, I must say that the main purpose of this amendment is achieved. I am grateful to the Minister for what he has said. He has made it very clear that what I thought ought to be done can and will be done if the director and the council so desire. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 5:
Page 41, line 42, ("include") insert ("(a)").
The noble Lord said: My Lords, in moving paving Amendment No. 5, I wish also to speak to Amendment No. 6, which is the substantive amendment, and to Amendment No. 7, which is the consequential amendment.
Amendment No. 6 is a substantial amendment which I will deal with in two parts because the second part relates to certain information which has just been handed to me and needs to be aired at this particular point. To put Amendment No. 6 in context, it is necessary to refer to page 41, line 42, dealing with the annual report of the director. Subsection (2) says:
"Every such report shall include a general survey of developments…"
This amendment seeks to add a statement of increase in efficiency achieved in each management area of the successor company in respect of the supply of gas through pipes to tariff customers. There is in fact a slight misprint in the Marshalled List but the reference is obviously to tariff customers.
I contend that this is an important amendment because it deals with the fundamental difficulty that arises from the whole of this measure in dealing with the privatisation of a monopoly without providing any competition. Hitherto, the Government's argument has always been that greater efficiency will be achieved by transferring an activity from the public sector to the
1030
private sector because competition will result which will be the spur to efficiency. There is no competition whatever in the present arrangements so far as tariff customers are concerned. Not only is there no competition but it is very difficult to think of any way of having competition, given that no one wants to put two lines of pipe next to one another running down the same street. We are talking here about the supply of gas to tariff customers.
The next best thing to competition is comparison. We suggested from these Benches at Committee stage, and again on Report in a similar way, that there should be a measure of comparison which could be arrived at by selecting a typical area—not a large area but one sufficient for the purpose—which can be used by way of comparison with other areas, and that the supply of gas in that particular area should be licensed or franchised so that another party could have the opportunity of trying its hand at doing the same job that British Gas was doing in the rest of the country, with the possibility of doing it even better.
If one found in that licensed or franchised area that gas was being supplied through pipes to tariff customers more efficiently, with better service and at no greater cost to customers, then that would be an indication that the rest of the supply by the private monopoly of British Gas was worth inquiring into, and indeed improving, and one would have gone some way toward achieving the effect of competition.
The House will know that in British Telecom, which is the nearest parallel, the Government have indeed introduced competition. They were so satisfied that privatising a monopoly was not of itself sufficient unless one had competition that they created a creature called Mercury to provide that competition. At this moment, the competition is being provided; namely, calls are being made available at a price some 20 per cent. cheaper than those provided by British Telecom. That is why—I am still speaking about the background rather than the content of this particular amendment—we tried to provide a franchise, which would enable a useful comparable area to have its results compared under the management of the licensee as opposed to British Gas for the rest of the country. That proposal was rejected. It is a great pity, but there is nothing that a minority Opposition can do about it.
This is a very modest amendment. It provides merely that the director shall include,
"a statement of the increase in efficiency achieved in each management area of the successor company".
We know that there will be management areas of the successor company, because we have been told so. I do not know whether they are specifically identified in the Bill, but there will be management areas of the successor company. Under this amendment, the director is required to look at the results of each area and to ascertain the increase in efficiency achieved in each one. Again, we are talking only about the supply of gas through pipes to tariff customers.
What would be the benefit of this procedure? It would be substantial. It may come to light that in one or two areas the increase in efficiency is substantial; that in other areas there is no increase in efficiency at all; and that in certain areas there is a falling off in

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efficiency. That can be measured without too much difficulty. One does not want anything too precise; one merely wants an indication of which particular areas do not seem to be functioning as efficiently as others.
Of course, there may be a perfectly good explanation; and if so it would have been given to the director. The director would have access to the information he required in order to come to a conclusion and he may come to the conclusion that notwithstanding the fact that certain areas are not showing very good results in terms of their increase in efficiency, there are good reasons for it and there is no reason to inquire further. However, there may be other areas where the lack of efficiency or the great increase in efficiency could only be attributed to good or bad management, as the case may be. Good management would set the pattern for management elsewhere and bad management would need to have corrective measures applied.
So, clearly it would be of benefit for the director to know and to make available to Parliament and others who are interested through his report details of the increase in efficiency achieved in each management area. It is a simple point to grasp but it is an extremely important one in relation to the whole of this Bill, which, I repeat, is creating a private monopoly without any competition or anything approaching competition. I hope therefore that the Government will regard this amendment as a very worthwhile attempt to fill in a large and clamant gap and will accept if not the words then the spirit of the amendment. I beg to move.
4.15 p.m.
Lord Belstead: My Lords, during the various stages of this Bill we have debated the question of whether what are called indicators of service (these being one of the ways in which efficiency should be measured) should in some way be written into the Bill or possibly into the authorisation. As the Government have previously made clear, they do not believe that provisions about indicators of service ought to be in the Bill because they consider that it is the responsibility of the public gas supplier to respond to normal commercial pressures and to maintain and improve standards. This amendment proposes that there should be a statement of increases in efficiency in each of the areas of the public gas supplier put into the director's annual report.
If I may say so, I think there is something in the Bill which is rather better than that, which I should like to outline to the House. Within the new regulatory arrangements, via any complaints that it receives, the Gas Consumers' Council will be able to monitor the standards of service which British Gas offer. That will provide a good measure of those areas which are of real concern to consumers. Yet there is more to it than that. The council will then be able to refer to the director any deterioration that it discovers in the quality of the gas supply services to tariff customers and, in turn, the director will be able to propose modifications to British Gas's authorisation if he feels that it is necessary in the light of what he has heard.
I think that that is really rather more practical than having a statement of increases in efficiency in the annual report. I believe that the noble Lord, Lord
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Diamond, and the Government are driving for much the same goal but that we are setting about it in a different way. Perhaps I may add that the noble Lord made some play of the fact that we are setting up a private monopoly. Although basically that is true, there are aspects of the Bill, as the House will know, through which we intend to try to encourage competition, particularly through the common carriage arrangements. When one looks at the whole of the energy field—oil, electricity, coal and nuclear—it is clear that it will be very much in British Gas's own interests to maintain its standards.
I assure your Lordships that the new company will have every incentive to be efficient both through normal market pressures and as a result of the regulatory regime under which it will operate. In addition to what I have tried to say in answer to the amendment, there will be a watchdog (namely, the consumer council), and the council will be able to feed its views to the director. At the end of the day, if he feels that he has to, he will be able to take action. I hope that your Lordships will feel that that is preferable to the amendment.
Lord Diamond: My Lords, I regret to say that we are talking about very different things. I hope that I may exercise my right of reply to say why I think the Government are not meeting the purpose of the amendment and to add a point which I did not want to bring in earlier because it is wholly different and relates to information on energy efficiency which has only just reached me.
I first turn to what the Minister said. The amendment does not relate to standards of service generally. The consumer council will be aware of falling standards of service and may make complaints. But in this amendment we are not concerned with that, but with efficiency. There may be the same standard of service in different areas, but in one case the service may be carried out efficiently and in the other, not. The net result would be that, although the consumer would receive the same standard of service and would not complain to the consumer council and via it to the director general, nevertheless in one case the service may be provided much more cheaply by better management and a better conception of what is required.
We are dealing not with overall standards of service but with the comparative efficiency of different management areas. One may be more efficient than another, and we should know about that. There is no way other than this proposal open to Parliament, the consumer, the director and the public generally with a private monopoly of this kind to see which area is being managed efficiently. There will be minor variations. Some people will be better at the job than others, there will be reasons for variations and there will be temporary circumstances. We understand all that. But one or two areas may not increase efficiency year after year and quarter after quarter as well as the rest.
The Government have recognised the principle of driving towards increased efficiency and have included in the authorisation an efficiency factor. That is what we are talking about. It was put in by them to encourage the management of the gas supplier to be

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more and more efficient each year. That is what the amendment is driving at. The provision is to find out what success there has been in the various management areas in achieving greater efficiency. Without competition and without the licensing and franchise arrangements suggested at the previous stages of the Bill, I know of no other approach. This method is by no means totally satisfactory, but it would give an indication which could be followed up.
For example, if two or three areas consistently showed far less than average increases in efficiency and that fact was included in the director's report, which would go to the Select Committee on Energy in another place, it might well decide to call for evidence to see whether it indicated that overall in the management of the private monopoly there were serious gaps. There might be reasons or justifications, or there might not be. But this would be an indication, and I believe that the Government ought to require that. Having heard the Minister's reply, I am by no means satisfied that he has taken on board the essential point. He keeps talking about services, but that is not the essential point of the amendment.
Let me leave that for the moment and go to my second point, which I did not deal with earlier. It relates to a promise given by the Government to include in their authorisation a concession on energy efficiency. That is not directly referred to in the amendment, but we are talking about energy efficiency. The information has only just reached me, and I shall well understand if the Government cannot deal with it immediately. I am sure that they will take it on board, consider it and, if necessary, write to me.
I understand that the revised draft authorisation orders the supplier of gas to make available informa-tion to tariff customers; and the relevant word is "information". On the other hand, I understand that the promise was that advice would also be sent. There would not just be information, but information and advice. That is to be found in col. 759 of the Official Report at the Committee stage of the Bill. Unfortunately, I do not have it with me, but I imagine that it is an accurate reference. Making information available to ordinary consumers simply means reminding them to turn appliances off overnight, for example, but that is not the same as giving them proper advice about installations and other such matters. That is what I am told is the position. There has been an alteration in what the Government said. I should be grateful if they would take that on board and perhaps be kind enough to let me have a reply later.
The amendment ought to commend itself to the House. We have tried time and time again to remedy the major defect of the Bill, which for the first time contains a proposal by the Government to turn a public monopoly into a private monopoly without any competition being built in, and I therefore do not propose to withdraw the amendment.
Lord Ezra: My Lords, I should like to take up a point made by the noble Lord, Lord Belstead, at an earlier stage, when he said that it was in the interests of the gas industry to maintain the highest level of efficiency, bearing in mind that it would be competing in the tariff market with the other forms of energy. I
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agree. That is true today; that is the situation which now exists. The act of privatisation will not alter that one jot or tittle.
Gas, electricity, coal and oil are today competing for the domestic market. Despite that pressure of competition, the Government decided some time ago that each of those publicly owned enterprises should periodically be subject to detailed inquiry by the Monopoliies and Mergers Commission to judge whether they were efficiently managing their businesses. As the position will not have changed in any way by privatisation, because the gas supplier will remain in exactly the same control of the business, facing exactly the same forms of competition, it seems to me to be not logical to contend that there should be some continuing efficiency audit, by an independent body, of its activities. As the director has now been appointed to take on that role, I should have thought that it is not unreasonable to suggest that this proposal should be one of the provisions in the Bill.
Lord Belstead: My Lords, perhaps I may reply to the noble Lord, Lord Diamond, who was concerned about an undertaking which we gave to make a change to the authorisation so that the public gas supplier should give advice to tariff customers about the efficient use of gas supplied to them. The wording in the authorisation is,
"information for the guidance of tariff customers".
That amounts to guidance or advice. I think that we have discharged our undertaking in that respect.
I am sorry, but the noble Lords, Lord Diamond and Lord Ezra, and the Government must agree to differ. I believe that under a privatised British Gas, management is a matter for British Gas. I believe that British Gas will be spurred on by competition in the whole energy field and, as the noble Lord, Lord Diamond, fairly said, also by the efficiency factor in the price formula. If noble Lords intend to divide on this amendment, I would say that I see the amendment as being an unwarrantable interference in what will be a privatised company. I shall resist the amendment.
4.32 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 73: Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Addington, L.

Dean of Beswick, L.

Airedale, L.

Denington, B.

Amherst, E.

Denning, L.

Ardwick, L.

Diamond, L.

Attlee, E.

Donaldson of Kingsbridge, L.

Aylestone, L.

Dowding, L.

Banks, L.

Elwyn-Jones, L.

Barnett, L.

Ennals, L.

Birk, B.

Ewart-Biggs, B.

Bottomley, L.

Ezra, L. [Teller.]

Brockway, L.

Fitt, L.

Bruce of Donington, L.

Foot, L.

Burton of Coventry, B.

Gallacher, L. [Teller.]

Caradon, L.

Gladwyn, L.

Carmichael of Kelvingrove, L

Grey, E.

Cledwyn of Penrhos, L.

Grimond, L.

David, B.

Harris of Greenwich, L.

1035

Houghton of Sowerby, L.

Oram, L.

Hutchinson of Lullington, L.

Pitt of Hampstead, L.

Irving of Dartford, L.

Ponsonby of Shulbrede, L.

Jeger, B.

Prys-Davies, L.

Jenkins of Putney, L.

Ritchie of Dundee, L.

Kilbracken, L.

Rochester, L.

Kilmarnock, L.

Ross of Marnock, L.

Leatherland, L.

Sefton of Garston, L.

Listowel, E.

Serota, B.

Llewelyn-Davies of Hastoe, B.

Stallard, L.

Lloyd of Kilgerran, L.

Stedman, B.

McGregor of Durris, L.

Stoddart of Swindon, L.

McNair, L.

Taylor of Mansfield, L.

Mais, L.

Underhill, L.

Mayhew, L.

Wells-Pestell, L.

Monson, L.

White, B.

Morton of Shuna, L.

Williams of Elvel, L.

Mulley, L.

Winstanley, L.

Nicol, B.

Winterbottom, L.

Ogmore, L.

NOT-CONTENTS

Abinger, L.

McAlpine of Moffat, L.

Allenby of Megiddo, V.

McFadzean, L.

Alport, L.

MacLehose of Beoch, L.

Auckland, L.

Macleod of Borve, B.

Belhaven and Stenton, L.

Malmesbury, E.

Beloff, L.

Mancroft, L.

Belstead, L.

Margadale, L.

Bessborough, E.

Masham of Ilton, B.

Birdwood, L.

Maude of Stratford-upon-

Brabazon of Tara, L.

Avon, L.

Brougham and Vaux, L.

Merrivale, L.

Broxbourne, L.

Mersey, V.

Butterworth, L.

Middleton, L.

Caithness, E.

Minto, E.

Campbell of Croy, L.

Monk Bretton, L.

Carnegy of Lour, B.

Montgomery of Alamein, V.

Carnock, L.

Mowbray and Stourton, L.

Chalfont, L.

Moyne, L.

Coleraine, L.

Murton of Lindisfarne, L.

Constantine of Stanmore, L.

Newall, L.

Cork and Orrery, E.

Norfolk, D.

Cowley, E.

Nugent of Guildford, L.

Craigavon, V.

Onslow, E.

Crathorne, L.

Orr-Ewing, L.

Dacre of Glanton, L.

Pender, L.

Darcy (de Knayth), B.

Penrhyn, L.

Davidson, V.

Peyton of Yeovil, L.

Denham, L. [Teller.]

Plummer of St Marylebone,

Donegall, M.

L.

Drumalbyn, L.

Porritt, L.

Eccles, V.

Rankeillour, L.

Ellenborough, L.

Reigate, L.

Ferrier, L.

Renton, L.

Fortescue, E.

St. Aldwyn, E.

Gainford, L.

Sandford, L.

Gardner of Parkes, B.

Selkirk, E.

Gisborough, L.

Sempill, Ly.

Glanusk, L.

Sherfield, L.

Glenarthur, L.

Skelmersdale, L.

Gridley, L.

Stodart of Leaston, L.

Hardinge of Penshurst, L.

Strathcarron, L.

Henderson of Brompton, L.

Sudeley, L.

Henley, L.

Swinton, E. [Teller.]

Hives, L.

Teviot, L.

Hooper, B.

Thomas of Swynnerton, L.

Hylton-Foster, B.

Thorneycroft, L.

Ilchester, E.

Trumpington, B.

Killearn, L.

Tryon, L.

Kimball, L.

Ullswater, V.

Kinnaird, L.

Vaux of Harrowden, L.

Knollys, V.

Vickers, B.

Lane-Fox, B.

Vivian, L.

Lauderdale, E.

Whitelaw, V.

Layton, L.

Wise, L.

Long, V.

Wolfson, L.

Lucas of Chilworth, L.

Young, B.

Lurgan, L.

Ypres, E.

Lyell, L.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

Higher Education in Scotland
4.40 p.m.
Viscount Davidson: My Lords, with the leave of the House I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a statement following consultations on the Scottish Tertiary Education Advisory Council's report on a future strategy for higher education in Scotland, which was published on 9th December 1985.
"First of all, I wish to thank the council for its work. Its report has stimulated wide debate, and there has been particular interest in its proposals with regard to the number of colleges of education in Scotland and future arrangements for the planning and funding of higher education. In these two important areas, my conclusions are as follows.
"The council endorses the vocational character of the colleges of education and recommends that teacher training should continue to be provided in specialist institutions. I accept that recommen-dation in principle, while not ruling out entirely the possibility of some other arrangement if circumstances appeared to warrant it. I agree also with the council that there is a very real problem of overcapacity in the colleges, which militates against the best use of the available resources and which must be reduced. The present accommodation will substantially exceed expected demand even in the 1990s when student numbers are expected to increase to some extent. I consider, however, that there would be merit in seeking to retain, if practicable, a fairly wide geographical spread of provision. I have accordingly decided against closure of any college of education and I intend to seek to achieve the necessary capacity reductions in other ways.
"I have reached the following decisions. First, the training of physical education teachers, both men and women, will be centralised on the site of the present Dunfermline College of Physical Education, and accordingly the training of men PE teachers at Jordanhill College of Education will cease. Dunfermline College will itself be merged with Moray House College of Education under a single governing body.
"Secondly, Aberdeen and Dundee colleges of education will be merged on their existing sites under a single governing body. Thirdly, the detailed arrangements for bringing these organisational changes into effect will be a matter for discussion between my department and the governing bodies concerned. Fourthly, I shall expect all colleges of education, whether or not directly affected by the organisational changes, to take early and strenuous measures to dispose of surplus accommodation on any of their sites, whether for educational or for other use. This will require the co-operation of the colleges themselves, the local authorities and other interests.
"Fifthly, my department will undertake a further programme of course rationalisation designed to make the best possible use of manpower and

1037
facilities throughout the college of education sector as a whole, including those colleges, Craigie and St. Andrew's, which are not otherwise directly affected by the organisational changes.
"I shall review the position again next year in the light of progress made. I must make it clear that, if overcapacity remains a real problem, site closures will then become inevitable. I believe that it would be appropriate also, as the council recommended, to review the continuation of teacher training at the University of Stirling. I shall be discussing the most suitable form of this review with my right honourable friend the Secretary of State for Education and Science, involving the UGC as appropriate.
"So far as the planning and funding of higher education in Scotland is concerned, I accept the council's view that there is scope for improvement in the existing arrangements for the planning and co-ordination of provision across the university and non-university sectors. I agree that there is a gap in the planning process which could better be bridged.
"I accept the council's rejection of a planning body for the public sector of higher education only, the bulk of which is in Scotland directly funded by central government. The situation is different from that obtaining in England and Wales and a planning body for the public sector alone is not required in Scotland. I agree also that the Northern Ireland model would not be appropriate.
"Nevertheless, it does not seem sensible to proceed immediately to the establishment of an overarching planning body in Scotland with responsibility for the planning and co-ordination of provision across both the university and the public sectors. Like the council, I regard it as important that planning mechanisms should be backed by appropriate systems for the delivery of results. I have therefore decided to defer a decision on the establishment of such a body until the Government can form a clear view of the future funding arrangements for the Scottish universities. This will require advice, which has already been sought, from the committee chaired by Lord Croham which is reviewing the UGC and also from the Advisory Board for the Research Councils. I am in touch with my right honourable friend and he will be seeking the ABRC's views shortly. The Government will consider the advisory council's recommendations in respect of planning and funding arrangements for Scottish higher education, in the light of the further advice received.
"I have today given the Government's response to the advisory council's many other detailed recommendations in a Written Answer to my honourable friend the Member for Cunninghame North.
"Finally, in order to allow time for decisions to be taken on planning and funding arrangements, I am asking the members of the advisory council to serve for one further year until July 1987. This will also enable the council to complete its review of the Scottish Business School, which the chairman now expects will not be possible until late this year. I shall
1038
make a further statement to the House when decisions on the matters outstanding are reached."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, we should be grateful and express our gratitude to the noble Viscount, Lord Davidson, for undertaking the task of repeating the Statement. He is fast becoming an expert on Scottish business. Last time, it was sheep. Now it is tertiary education. I am sorry that the noble Viscount should be landed with this, but he read it very well. The fact is that the STEAC report appeared on 9th December last year. So the mountaineers of St. Andrew's House have laboured for nearly seven and a half months. And now this is what they have produced. What is it? It is purely and simply a holding Statement. What it states loud and clear is that this is not the time to make decisions that might not be popular. To my mind, the Statement underlines the fact that we are going to have an election next year.
What have we got? The Statement is in two parts. The first deals with colleges of education. That means, in Scotland, the teacher training colleges, funded entirely by the Secretary of State. No one is going to impede him in respect of anything he wants to do there. It is his decision. What the Secretary of State has done is to bow to the EC. He has ended the segregation of women and men in relation to physical education by taking away the physical education department from Jordanhill and putting it into the Dunfermline College. And be not deceived! Dunfermline College, where the ladies are trained, is in Edinburgh. There, it is to be put, I believe, under one governing body. No one will have much objection to that. But the Statement goes further and says that Dunfermline College is to be merged, I believe, with Moray House under a single governing body. What is to happen eventually there we have no idea.
The other great decision is that Aberdeen and Dundee training colleges will be merged on their existing sites, which are, by the way, just 61 miles apart, under a single governing body. What is the purpose of that? Is it a prelude to merging the colleges on one site? It will be remembered what happened in relation to Notre Dame and Craiglochart. These are now called St. Andrew's in the Statement. They became one college. Is that what will happen here? It is rather strange to have one single governing body for colleges which are 60 and more miles apart. Where will they meet? Will it be like the EC jumping from Strasbourg to Brussels? Will it be Aberdeen one month and Dundee the next, or will they settle for somewhere like Montrose in between? What is the reason for this? Is it the prelude to complete merger? The decision not to do anything about any of the other colleges is to my mind somewhat negatived by what the Government eventually say:
"I shall review the position again next year… I must make it clear that, if over-capacity remains the real problem, site closures will then become inevitable."
That is a little mealy mouthed. It is not the site that will be closed but the college. Why did the Government not say so? What is the clue to this? How will they save themselves? They will do so by getting rid of surplus accommodation on any of their sites.

1039
Of the many colleges the one that I know best is Ayr, which already has close links with the technical college. It has close co-operation with Manpower Services and quite a lot of its accommodation is being used for training. Only a week or so ago we had a Statement from the Government's head window dresser, the noble Lord, Lord Young, giving us an impression that there was going to be a great new link-up with education and industry, that there will be new courses for the young and older unemployed, in-vocation training, all of which were mentioned in the Government's Green Paper, Higher Education in the 1990s, published in May last year. Surely if the Government are going to make progress along these lines this is where one has to do it if one has surplus capacity in the training colleges. But all the Government talk about is getting rid of spare capacity, selling it, giving it to somebody else, and doing something with it or the whole college will be closed next year. It is a purely negative Statement. In the light of the Statement that was made by the noble Lord, Lord Young, this Statement makes his ring with insincerity.
Can I be informed how many reviews there are to be? There will be a review next year of the whole matter. There will be a review of the continuation of teacher training at the University of Stirling. When we come to planning and funding of higher education what do we get?—
"I have decided to defer a decision on the establishment of such a body".
That is an overarching body linking the planning of the public sector—they are the local authorities and the Scottish education department—with the universities. But have the Government forgotten what they themselves said? While the STEAC was still sitting the Government saw no practical scope for a united planning body for higher education of the kind comprehended by the term "overarching body". Now they say, "We shall defer a decision". They have already given us the decision. Why do they not make their real purpose clear? Then they say that it will complete the review on the Scottish business school.
Why on earth was this Statement made when they are deferring decisions and announcing reviews? There is little or nothing in it. What there is in respect of the teacher training colleges with reference to Aberdeen and Dundee will arouse the greatest suspicions—as indeed it will from the others who are told, "Close down, get rid of spare capacity, or else". It is a very negative Statement on Scotland's higher education.
Lord Grimond: My Lords, I too should like to thank the noble Viscount very much for making this Statement and also the council for their admirable report. It seems to me that the report and the Statement raise issues which would be better dealt with in debate than by question and answer. I hope therefore that the Government will forgive me if I do not go at great length into the details of these matters which they have mentioned.
There are three points, however, which I should like to raise with them. First, there is in the Statement a proposal to place certain teacher training colleges under a common governing body. Can the
1040
Government tell me whether this is the same process that has gone on in England with the arts colleges? If so—I do not suppose that they will be able to answer now—will they look into the question of whether it has been successful and whether it has led to economies and satisfaction?
Secondly, there is mention of the University of Stirling. I hope that the Government will be able to tell us that they appreciate the great work that the University of Stirling has done in the educational field, and that this will be taken into account in the future.
Thirdly, on the question of funding, the Government will be well aware that the future funding of the Scottish universities is a matter of considerable controversy. Are they aware that, although there is a case for more control in Scotland over the funding, the future entirely depends on the funding being adequate? It is the scale of the funding which will decide whether the measures are successful or not. I very much hope that the Government may be able to give some reassurance that they intend to give the Scottish universities the funds which they deserve.
Viscount Davidson: My Lords, I am grateful to the noble Lord, Lord Ross of Marnock, and the noble Lord, Lord Grimond, for their reception of this Statement. That of the noble Lord, Lord Ross, was somewhat qualified. He will not expect me to enter into a debate at this stage on his many points, some of which were quite political. The noble Lord asked me three questions. Why was there such a delay in responding to the STEAC report? The answer is that the Government allowed a period of more than three months up to 27 th March for comments on the STEAC report. They then took time to consider all the comments received before making the Statement. I therefore do not think that it was as long as the noble Lord thought.
On the question of the merger of Aberdeen and Dundee colleges of Education, they are 50 or 60 miles apart—
Lord Ross of Marnock: Sixty-one, my Lords.
Viscount Davidson: Sixty-one miles apart. When I was last there they were about 70 or 80 miles apart. The merger will facilitate the rationalisation of courses over the two sites and will, I hope, make it easier to dispose of surplus accommodation at both of them. We expect the outcome to be a single strong college of education operating at a reduced overall unit cost but well adapted to meet the teacher training needs of the North and North-East of Scotland. The noble Lord also asked me how many reviews there will be and then told the House the answer. I do not think, therefore, that I need to answer him on that point.
The noble Lord, Lord Grimond, asked about the mergers and whether they resembled the recent arts colleges merger in England. I understand that this involved more than just two colleges, but we shall certainly see what lessons can be learned from that arrangement.
On the future funding of the Scottish universities, the Government are open minded on this matter and will take account of the views that have been expressed on both sides of the argument before reaching a

1041
decision. We shall also take account of the comments of the Croham Committee. I would add that the committee hopes to submit its report early next year.
Lord Carmichael of Kelvingrove: My Lords, may I also thank the Minister for the Statement he made. Can I point out that the only positive decision in the Statement concerned a college that is literally on my doorstep in Glasgow? 1 refer to the men's physical education training at the Jordanhill College of Education. Is the noble Viscount aware that this is a very beautiful college in a very lovely park and that there will be considerable worry about the disposal of any of the surplus buildings?
Will he take back to the Scottish Office the real concern which there is and which there will be in Scotland about even the mention of the disposal of colleges of education? The last major college of education that was disposed of by the Government— Hamilton College of Education—caused, to say the least, a great deal of disquiet in respect of the price for which it was sold to a private school. Will the noble Viscount ensure that in future the public valuer is involved in setting the price and that it is not done in the very unsatisfactory way in which I think everyone in Scotland is now convinced Hamilton College was disposed of?
5 p.m.
Viscount Davidson: My Lords, I am grateful to the noble Lord, and I shall certainly convey his views to my right honourable and learned friend the Secretary of State. The noble Lord may be reassured if I tell him that it will be up to the Government to secure the compliance of all governing bodies as to the disposal of parts of their colleges. We would of course expect the governing bodies to act responsibly. I understand that it may be the intention to appoint independent consultants who would report to the Secretary of State on the marketing prospects of the land and buildings at each college.
Baroness Carnegy of Lour: My Lords, I, too, should like to thank my noble friend for repeating the Statement. I should like to ask him two questions. First, clearly it is extremely sensible, in view of the history of the difficulties of rationalising the colleges of education accommodation provision in Scotland to merge colleges rather than to close them and to ask new governing bodies to do the rationalisation within themselves.
However, in view of the fact that that is the method that has been chosen, will my noble friend convey to his right honourable and learned friend the Secretary of State the importance to the local areas of there continuing to be some provision in the local areas of Dundee and of Aberdeen, and point out that at present there is community education training in both these colleges and it is extremely important that that community education provision should be located in both areas and not only in one? I should be most grateful if my noble friend would convey those sentiments to his right honourable and learned friend. Will he also convey to him the importance of the
1042
freedom of those colleges to make the right decisions in regard to the local areas?
My second question is directed to my noble friend As regards Dunfermline College, where I had the privilege of conferring the degrees the other day, it struck me that that college has a very small but very important identity of its own. While I can accept that, due to European legislation, the merging with the men's college is sensible, will it be possible to keep the indentity of that college clear and separate once it ha; merged with Moray House? I hope that that will be possible, and I should be grateful if I could be reassured on that point.
Viscount Davidson: My Lords, I am most grateful to my noble friend Lady Carnegy of Lour, and I shall certainly convey what she has said to my right honourable and learned friend. As regards the merger between Dunfermline College and Moray House, at present there are no plans for any new name for the joint college, but I shall certainly convey my noble friend's views. It will be a matter for discussion with the governing bodies. We do not have any preconceived ideas. As regards the existing staffing of the two colleges, that will be a matter to be discussed between my department and the governing bodies. It will be for the governing bodies to make the decisions.

Gas Bill
5.5 p.m.
Consideration of amendments on Third Reading resumed.
[Amendments Nos. 6 and 7 not moved.]
Clause 41 Annual reports]:
[Amendment No. 8 not moved. ]
Clause 48 [Interpretation of Part I and savings]:
Lord Belstead: moved Amendment No. 9:
Page 48, line 45, leave out (" (a) and (c) ") and insert ("(a), (aa) and (c) ")
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 2, when I also spoke to Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 51 [Initial Government holding in the successor company]:
Lord Diamond Lord Diamond moved Amendment No.10:
Page 51, line 26, at end insert ("and without first consulting a committee appointed by him for the purpose of offering advice on the exercise of such powers and the disposal of such securities, and consisting of the holders for the time being of the offices of Governor of the Bank of England, Chairman of the London Stock Exchange, Comptroller and Auditor General, and Public Trustee.")
The noble Lord said: My Lords, this amendment deals with the clause under which the successor

1043
company is appointed. To put the amendment in context, subsection (5) says:
"The Secretary of State shall not exercise any power conferred on him by this section, or dispose of any securities issued or of any rights to securities…without the consent of the Treasury"—
and the amendment goes on to say:
"and without first consulting a committee appointed by him for the purpose of offering advice on the exercise of such powers and the disposal of such securities, and consisting of the holders for the time being of the offices of Governor of the Bank of England, Chairman of the London Stock Exchange, Comptroller and Auditor General, and Public Trustee."
Perhaps I may deal with the amendment shortly by reminding your Lordships of a fact of which I am sure you are all aware; namely, that in France at present the Right-wing Government are conducting a large measure of privatisation. The privatisation is proceeding on the basis that the evaluation of the various undertakings to be privatised and the determination of the offer price for those undertakings are not fixed by the Government at all, but are fixed by a committee of "Seven Wise Men" (as they are called) appointed for the purpose. They are doing that for the very good reason that it is thought best that a body at arm's-length from the government should have the responsibility of making this very important judgment.
We think that the same should apply here, particu-larly as we all know that the Chancellor and the Government, but particularly the Chancellor, is under great financial pressure to realise cash for the purposes for which he himself indicated he needs the cash. Therefore, the people best in a position to make an objective evaluation of the gas undertaking which is to be privatised is a body of people who could act as trustees and who would have between them all the information that could possibly be required bearing in mind that they are the Governor of the Bank of England, the Chairman of the Stock Exchange, the Comptroller and Auditor General and the Public Trustee. One cannot imagine a better informed or better equipped committee.
We brought forward an amendment at an earlier stage of the Bill arguing that that course should be taken. However, the Government were unwilling to accept that view. We have to accept, in turn, what the Government decided. I am now bringing forward as a final attempt an amendment which seeks not to take away from the Government the power of valuation and the power to determine the share price, and so on, in connection with the privatisation of gas, but which seeks to impose an obligation to consult a committee appointed by the Secretary of State for the purposes set out in the amendment (which are taken from the Bill itself) and that consultation shall be carried out by these most eminent, able and experienced office holders.
It is a simple amendment. It interposes between the Government and the company to be privatised not a separate body of action but a separate body of consultation. That is all, my Lords, pure consultation. The Government can consult and reject the advice or reject the views, or adopt them, as they think fit. They are perfectly free to do so. When I say "the Government" I refer to the Secretary of State.
In this clause the Secretary of State is the person given all these relevant and important powers, and all this amendment suggests is that he should strengthen his own judgment, clear his own lines, and put himself in a position to answer any criticism that may subsequently be levelled against him by the simple process of consulting a committee of this eminence. I beg to move.
Lord Belstead: My Lords, in this amendment the noble Lord, Lord Diamond, is seeking to establish a committee drawn from the Bank of England, the Stock Exchange and the offices of the Comptroller and Auditor General and the Public Trustee to advise the Government on the disposal of shares for the successor company. As the noble Lord has rightly said, this is largely a re-run of a series of amendments that the noble Lord tabled at Report stage but withdrew.
I am sorry that the noble Lord has so little confidence in the Government to handle these matters, in which after all there is now a considerable fund of expertise. The Secretary of State is the guardian of the existing nationalised gas industry and it is right that he should have the power, with the Treasury, to issue securities and to determine the value of shares in the nationalised industry's successor company.
But of course the Government agree with the noble Lord that the Secretary of State has to be properly advised. That is a matter of the national interest. Pursuant to that my right honourable friend has appointed city advisers to assist him in these matters and it will be open to him to seek advice from appropriate institutions, including those mentioned in the noble Lord's amendment. Indeed, it is the Government's firm intention to consult the Bank of England on these matters, and of course the Stock Exchange will have to be satisfied with the arrangements for the sale of shares.
I am afraid that I am saying the same as my noble friend Lord Brabazon said at the previous stage of the Bill but this is in essence the same amendment, and I cannot accept that the Government do not have the competence to handle the disposal of shares and the matters which flow from that. I think this amendment overlooks the fact that my right honourable friend is being properly advised, and that it will be open to him—and it is his firm intention—to consult the Bank of England and of course the Stock Exchange in the run up to the flotation. It is on those grounds that I must resist this amendment.
Lord Diamond: My Lords, I am grateful to the Minister for some slight and distant encouragement; namely, that the Government will of course consult the Bank of England, as they always do. What the noble Lord is telling us is not quite the same as is put forward in this proposal. It is only a proposal for consultation and therefore differs totally from previous amendments. However, the Minister has gone as far as he can go, and all I can do is repeat my gratitude and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 11:
Page 51, line 26, at end insert ("and no provision in the successor company's Articles of Association giving the special shareholder the right to redeem the Special Share by giving notice to the Company and delivering to it the relevant share certificate shall be effective until the expiration of 5 years from the transfer date as defined in section 49(1) of this Act.").
The noble Lord said: My Lords, I beg to move the amendment standing in my name and that of my noble friend Lord Stoddart on the Marshalled List. Your Lordships will recall that on Report stage on 9th July, having by that time obtained a copy of the proposed articles of association of the new company, which up to that time had been in short supply, I lighted an Article 10 of the proposed articles, and in particular paragraph 5, which, among other things, dealt with the rights attaching to the special shareholder.
Your Lordships will recall that at various stages of the Bill it has been pointed out that the security of the national interest could, in the last resort, always be protected by the fact that under the terms of the transfer of the undertaking to the newly-privatised company the Government would hold a special share which had certain specific rights attaching to it. Believing the Government on such matters, we naturally assumed that that would be so. We also assumed that the special share provided for in the articles of association reflected the Government's concept of the importance of the Government's interest in these matters being maintained.
So when I went through Article 10 of the proposed articles of association and came to paragraph 5 I drew your Lordships' attention to the fact that it said:
"The Special Shareholder may, after consulting the Company and subject to the provisions of the Act, require the Company to redeem the Special Share at par at any time by giving notice to the Company and delivering to it the relevant share certificate".
I fell to thinking about why, if this special share was of this considerable importance, the Government should ever contemplate surrendering it? Indeed, those noble Lords who were present at Report stage will recall that I put the specific question to the Government, and was replied to by the noble Lord, Lord Brabazon of Tara, at col. 426 of the Hansard report of that day. The noble Lord said:
"the special share would be redeemable at any time at the option of the holder—that is, the government—after consulting British Gas. Thus, at any time the Government could remove the entrenched status of the limitation on shareholdings provision. But they would obviously do so only if they were satisfied that this would be in the national interests".
He continued:
"I should make it clear that although it is difficult to foresee all the eventualities, we do not at present envisage that the Government will wish to redeem the special share within the foreseeable future—perhaps I should not say the 'foreseeable' future, as that would be making a commitment beyond that which I can go; but certainly in the near future".
I did not pursue the matter at that stage bearing in mind the lateness of the hour and the fact that I and my colleagues had not been able to study in full the implications of that, but I would ask the Government under what circumstances, after landing the rights and safeguards of the special share, would they consider it right to relinquish it. It is a little difficult to see. After
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all, by the very terms of the special share, which is or £1 only, a redeemable share at that, it has no extra rights as to capital and has no extra rights as to dividend or anything of that kind. Its purpose is purely that of a safeguard for what I presume the Government would say would be the national interest Why, therefore, make a provision to relinquish it? What are the circumstances in which it would be considered proper that the matters covered by the special share should not be dealt with?
If your Lordships will refer to the articles, you will note that among the things that the special shareholder can do—and, for this purpose, one has to refer in detail to Article 40 of the same articles of association—is prevent a shareholding of over 15 per cent. if one so wished. Indeed, the point was originally made in the very early proceedings on the Bill that this was one of the ways in which what might be considered as undesirable overseas investors could be prevented from getting a controlling interest in British Gas. This is part of the noble Lord's protection of the national interest.
If noble Lords will look at Article 40 of the proposed articles of association—and I should warn your Lordships that it is a very long and complicated article, occupying four and a half A.4 pages—they will note the provisions there to accomplish that purpose. In what circumstances would Her Majesty's Government wish to abandon their previous safeguard that enabled them, if they wished, to prevent anybody, or any body of persons, from owning more than 15 per cent. of the company's share capital? Your Lordships will also be aware that Article 40 deals with the variation of shareholders' rights. The shareholders' rights, in due course, will be promulgated in the prospectus and on their faith in the prospectus investors will make an investment. True enough, they will be in the main institutional shareholders; they will not be individual shareholders; although, as in all cases where things of this kind are involved, there are the widows and orphans and small shareholders whom the Government will emphasise as being the forerunners of the property-owning democracy. But we all know that the bulk of them will be institutional shareholders. Why, therefore, with all these considerations in mind—the right to secure a variation in shareholder rights; the right to require holdings to be limited to 15 per cent., which is set out in the very elaborate procedures of Article 40—should the Government wish to relinquish their hold? Why?
In order to find that out, among other things, this amendment has been put down. It provides that for at any rate five years the Government shall not dispose of their special share, shall not divest themselves of the powers that attach to it. Five years is a figure that I willingly concede is out of the hat—it coincides, of course, with the length of time during which the price formula operates—but it is as good a period of time as any.
I straight away admit that the noble Lord, Lord Brabazon of Tara, was not apprised of the question in advance and therefore had no detailed opportunity to obtain advice on the subject. So I do not blame him for the absence of information in his reply in the course of the debate. But I am bound to say that, being a politician, I had certain speculations in the matter. I

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said to myself, "What would happen in the run-up to the general election, which may be in May or June of next year; or it may be later; if the Government suddenly apprehended that they were not going to win the election but, at the same time, having put all this dexterous work into the privatisation of British industry, or certain sections of it, at any rate, they decided to make it even more difficult for an incoming government to be able to rectify the colossal and squalid error that they had made?" I said to myself, "One of the ways in which they could make it difficult for an incoming government would be to divest themselves, before the election, of this particular power"—because in those circumstances, with the Government's very obvious support from the City of London, it is quite easy to see that once this particular provision was out of the way, and the Government have surrendered the whole thing, including the national interest, to those controlling the new company, they would be quite at liberty to make what arrangements they liked in order to place the shareholdings offshore.
I do not like to put ideas into the noble Lord's head, and I would say in advance that one has already taken certain precautions against such an eventuality. I do not want to tempt them into action if so far it has not arisen in their minds. But this is a possibility. What, then, in those circumstances could happen?
Your Lordships will recall that in the course of recent inquiries in regard to Westland we tried to find out where were the shareholders who had the crucial 20 per cent. which finally swung the issue in favour of Sikorsky. Eventually the noble Lord, Lord Lucas of Chilworth, replied on the part of the Government that these had gone to Actraint No. 34 Property Ltd. Australia, Marc A. Odermatt, of Palma de Mallorca, Guillermo Schiess, of Uruguay, Mauricio de Castro, of Los Angeles, and Lynx Marketing of Panama. Somewhat incautiously, and with a slip that was psychologically very interesting, the noble Lord, Lord Lucas, referred to these as "nominees". Being courteous, I referred to the "psychological slip" and he corrected it to describe them as the "beneficial owners".
Do we really want a situation in which it is possible for large sections of an important industry to go to the tune of nearly 5 per cent. in each case to bodies in Panama, Los Angeles, Uruguay and Palma de Mallorca? 1 am not sure. If the outgoing government apprehended that this would make it more difficult for the incoming government then, quite frankly, and without any reflection on the noble Lord himself, to whom I am sure the possibility has not even occurred, I am bound to say that this situation would make it possible for it to happen.
It is not a thing that we would like. If the noble Lord could get up and say that this subsection 5 of Article 10 is quite inadvertent and that, so far as the Government are concerned, they are quite prepared to scrap it anyway and that they have no intention of withdrawing the ownership of the special share, then I would withdraw the entire proposal. But in the absence of such an assurance or of a far more detailed explanation than we have had so far—not the responsibility, as I say, of the noble Lord, Lord Brabazon of Tara, who after all had it slung at him at
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very short notice without opportunity for consultation —we shall have to take a very strong line about it. I beg to move.
5.30 p.m.
Lord Belstead: My Lords, I always enjoy listening to the noble Lord, Lord Bruce of Donington, who until now had not taken part in our debates this afternoon. It occurred to me that any of your Lordships who might have come in during the noble Lord's speech and heard him referring to offshore holdings, the Westland Company and the prospects for the next general election might not readily have realised that he was in fact picking up a point which he raised at the last stage of the Bill, about the circumstances in which it might be proposed to redeem the special share under this particular Bill.
As my noble friend Lord Brabazon made clear when the noble Lord raised this point at the previous stage, the special share would be redeemable at any time, at the option of the holder (in other words the Government) but after consulting British Gas. Thus at any time the Government could remove the entrenched status of the limitation on shareholdings provision, but obviously they would do so only if they were satisfied that this would be in the national interest. Once the special share had been redeemed, it is the case that the limitation on shareholdings could be removed from the articles by special resolution of the ordinary shareholders, but it would involve a 75 per cent. majority, and although it is difficult to foresee all eventualities, we do not at present envisage that the Government would wish to redeem the special share.
The noble Lord says to me, "That's all very well, but what would be the circumstances in which the Government would wish to do this?" I would say two things to the noble Lord on this. First, the Government would take such a step, as I have already sought to explain, only after taking the very greatest care. There would have to be consultation with the public gas supplier, and the Government, as they always have to do, would consider what was in the national interest.
The second point I put to the noble Lord, Lord Bruce, is perhaps a little foreign to his particular philosophy. The ability of the Secretary of State to redeem the special share will put the new gas company in a similar position to that of other private sector companies which are subject to normal commercial pressures, including the ultimate threat of takeover if the company does not perform well. We believe that the new gas company ought to have all the advantages but also all the responsibilities of being in the private sector. Preventing the redemption of the special share in any circumstances for a period of time would, I have to put it to the noble Lord, weaken that ultimate possibility and, hence, the commercial pressures on the company.
The noble Lord, Lord Bruce, may say that that does not wash with him, but what I hope may wash with your Lordships who are listening to this part of this last stage of the Bill's passage is that the provision in this Bill is exactly in line with what was done in regard to the special share in BritishTelecom. We believed then and we believe now that it is right to have the protection of the special share. However, we believe it

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is not right that it should be entrenched, without any further thought being given to it, for all time to come. It is for that reason that I resist this amendment.
Lord Bruce of Donington: My Lords, I am sorry that the noble Lord has resisted the amendment. Of course it does not try to extend the prohibition for all time; it proposes five years. Are we to assume that after all the benefits which are alleged to flow from privatisation, a company such as the new company is likely to be in such a position and to be so uncompetitive commercially, and all the rest of it, as to want to be rid of the Government's special share right? It simply does not wash, and the noble Lord reinforces my suspicion.
I shall immediately give way to the noble Lord and undertake to withdraw the amendment if he gives me the assurance here and now that this provision will not be exercised before the general election. After all, there can be no substantial developments between now and what at the most is approximately two years' time—or what might even be shortened to one year from now. The company will not be transferred until October. I shall give way to the noble Lord if he will give an undertaking on behalf of the Government that they will not in any circumstances relinquish this right prior to the next general election.
Lord Belstead: My Lords, I unhesitatingly give the noble Lord, Lord Bruce, an assurance that the Government have no present intention of redeeming the special share this side of the next general election.
Lord Bruce of Donington: My Lords, coming from the noble Lord—and he is a very honourable man—I would accept that. But the fact that the Government have no present intention makes me think immediately that the present is now and what the Government may think in about a week's time may be entirely different and something for which the noble Lord would not himself be responsible. However, in the light of the very frank way in which the noble Lord has dealt with the question, I am satisfied with his word. I am quite sure he will understand when I say, on behalf of my colleagues and myself, that we will most certainly hold the Government to it. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No. 12:
After Clause 63 insert the following new clause:
("Right of vendor of gas not to supply certain information.

.—(1) A potential vendor of natural gas to a public gas supplier may elect not to supply certain information to the public gas supplier, for the purposes of relevant negotiations, provided—

(a) that the public gas supplier would be able to obtain an unfair commercial advantage from the said information, if he was in possession of it;

(b) that the vendor has the information's conclusions verified by an independent expert; and

(c) that these conclusions are communicated by the said expert to the public gas supplier.

(2) The said expert must be agreed between the parties and approved by the Secretary of State.

(3) In the event of the public gas supplier, by reason of such election, discriminating against such potential vendor in any matter, he shall be guilty of an anti-competitive practice, as
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specified in the Competition Act 1980 and the matters covered by this provision include, without limitation—

(a) the conduct or further conduct of the relevant negotiations; and

(b) the agreement or award of any contract to cover the whole or part of the natural gas to which the information relates.")

The noble Lord said: My Lords, I beg to move Amendment No. 12, and I can be very brief about it. This is an amendment which was moved in Committee on 1lth June and, after some discussion, the noble Lord, Lord Belstead, undertook to give this suggestion careful consideration. It is to give us. the opportunity of knowing the results of his careful consideration that I now move the amendment at this Third Reading.
The purpose of the amendment is to supplement Clause 63, which provides certain safeguards for the vendors of gas to the private gas supplier where the information concerned could be commercially prejudicial. The proposal in the new clause is to enable an independent assessor to receive all necessary information in order to substantiate the offer for sale of gas without putting such information in the hands of the purchaser, the purchaser himself also being likely to be searching for gas in neighbouring areas and so such information could be used to his commercial advantage and to the commercial disadvantage of the vendors.
This is a very simple proposal. It is an additional safeguard and one which the vendors of this gas would very much like to see introduced into the Bill. I hope very much, allowing for the interval since the proposal was first made that the noble Lord will be able to tell us that he is prepared either to accept this amendment or to introduce changes which would go some way in this direction. I beg to move.
Lord Belstead: My Lords, I most certainly recognise that the noble Lord is on to an important point here and it is something which has concerned people. That is why Clause 63 has been put into the Bill. The point the noble Lord, Lord Ezra, is on to is the fact that an oil company might give the public gas supplier confidential geological information about a gas field that it wished to sell, and that this information would then be used as an unfair advantage by the public gas supplier. As I say, we have put Clause 63 into the Bill precisely in order to try to deal with this. The clause, if the Bill is agreed to by the House, will enable the Secretary of State to give a direction to a public gas supplier to ensure that no unfair commercial advantage is gained from information acquired in the course of gas purchase negotiations. The intention of the Government is to give a direction to British Gas which will require the company not to pass geological and geophysical data obtained during gas purchase negotiations to people in the company, or any associate company, who are involved in obtaining licences or interests in licences. The direction will apply to all negotiations for gas purchases. That means that it will not be possible for British Gas to permit sensitive information to be seen by their own exploration and production people. The very real sanction preventing that is the threat of civil damages.
The noble Lord is putting forward a new clause for reasons which he explained at the previous stage of the Bill and has explained again briefly this afternoon The

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clause would add to the arrangements in Clause 63 a right for companies to choose not to make information available to British Gas at all. Of course, there is nothing in the Bill, or indeed in the law as it at present stands, which requires companies to give information to British Gas against their will. The Government are aware, indeed, that some companies have their own in-house rules about the types of information which they are not prepared to reveal.
But I think we must recognise—and it is here that I begin to come to where I find that there is a real difficulty with the amendment—that it is of genuine importance for British Gas that it should be what I would call an informed buyer. After all, the contracts which it concludes with gas producers typically require it to buy all the gas which can be produced from the field in question.
It is therefore of the first importance that it should be satisfied about the quantity of gas likely to be produced from a field, and also that the field will be able to produce at the annual levels which have been forecast and at the swing promised by the producing company. It would not be in the interests of 16 million customers of British Gas if the public gas supplier's purchasing people were handicapped by a lack of information about the fields from which it intends to buy gas.
I realise that the noble Lord's new clause provides that, if a company chooses not to provide information, it has to provide British Gas instead with the conclusions to be derived from the information verified by an independent expert. There may be circumstances in which an expert, acting as a go-between, has a valuable part to play. I do not deny that. But as I sought to say to your Lordships at the previous stage of the Bill, in general I am not sure that many of us in our own lives would regard a procedure of this sort as an adequate basis upon which to make important decisions.
Experts do not always reach the right answers, and very often the answers that they give depend upon the precise questions that they are asked. Confidence in their judgments is bound to be diminished where there is no opportunity, as there would not be here, to test and question their judgments against the raw data upon which the judgments are based.
I believe that the approach which we have adopted in Clause 63, and in the direction which the Government intend to give under Clause 63, is preferable to, and ought not to be supplemented by, the provisions in this new clause. It is enormously important that British Gas should not obtain unfair advantage from information acquired in gas purchase negotiations, and that is what Clause 63 aims to do. But it is not in the public interest that British Gas should be denied the raw information that it needs to make informed purchasing decisions on behalf of 16 million people who are its customers and who depend upon it. It is there that I think there are dangers in this amendment.
5.45 p.m.
Lord Ezra: My Lords, I thank the noble Lord for the answer that he has given on this issue. However, I am somewhat saddened that, after the month in which he
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has had time to reflect on it, he still feels that it is not possible in any way to take on board what is proposed. He said that no vendor needs to pass over any information which it does not wish to pass over, but the vendor's objective in negotiating with British Gas at the present time is obviously to sell the gas and it cannot sell the gas without providing the information which justifies the offer of the gas. So clearly it could be frustrated in the sale if it withheld essential and necessary information.
Equally, I can agree that the private gas supplier will need to be an informed purchaser. Of course, it must know that what it is purchasing will actually be there over the period of the purchase and in the quantities and qualities indicated. There is not the slightest doubt about that. However, the trouble in the new situation is that the private gas supplier will itself be in the private sector, with all the greater freedom that that implies compared with the present position of British Gas being in the public sector. Therefore, if British Gas in the public sector were to misuse this information, there are all sorts of ways in which a vendor, if it felt itself to be harmed, could take action.
In fact, no such situation has arisen, so far as I am aware, but there is a very strong feeling of concern among the potential vendors that the privatisation of this effectively unique buyer alters the situation and they require real safeguards. This is a very sensitive area. It could cause a lot of trouble and I am very sorry that the Government are not prepared to strengthen the provision of Clause 63. Nevertheless, we have heard what the Government have said, and the noble Lord accepts that this is an important issue. I very much hope that the sort of conflict of interest that I have mentioned will not arise. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Schedule 8 [Transitional provisions and savings]:
Lord Belstead Lord Belstead moved Amendment No. 14:
Page 104, line 45, leave out ("six") and insert ("three").
The noble Lord said: My Lords, at the Report stage, my noble friend Lord Brabazon of Tara accepted two amendments moved by the noble Lord, Lord Stoddart of Swindon, which had the effect of reducing from six months to three months the minimum period after which interest is payable on security deposits required by a public gas supplier. This requires a further consequential amendment in order to make the matter certain. I hope that the noble Lord, Lord Stoddart, will feel that this is right. I beg to move.
Lord Stoddart of Swindon: Yes, my Lords. I am most obliged. That is obviously one that I missed. It got away and I am most obliged to the noble Lord for picking it up. I thank him for this amendment, which I shall certainly support.
On Question amendment agreed to.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 15:
Page 107, line 11, after ("that") insert—
(" ( ) the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply; and").
The noble Lord said: My Lords, I beg to move Amendment No. 15 standing in my own name and in the names of my noble friend Lord Gallacher and the noble Lord, Lord Diamond. It may be for the convenience of the House to take with this amendment Amendment No. 16, which is a rather long one. I do not propose to read it to the House, because I feel sure that it has already been read.
The fact is that we were alerted to the provisions of TUPE '81—that is the short title for the Transfer of Undertakings (Protection of Employment) Regulations—by the noble and learned Lord, Lord Denning, who successfully moved last Thursday an amendment to the Dockyard Services Bill, writing into that Bill similar provisions to those we are seeking to write into this Bill tonight by these amendments.
We are so often obliged to the noble and learned Lord, Lord Denning, with his acute mind. It is quite clear that he has picked up here a defect or a possible defect in the Bill itself. Indeed, in speaking to his amendment on the Dockyard Services Bill, the noble and learned Lord, Lord Denning, made his case with his usual clarity. Although it would be tedious if I quoted the whole of his speech, I can assure the noble Lord opposite and other noble Lords that his speech would be well worth repeating. I shall therefore just summarise it. Any noble Lord who wishes to read what he said can do so in cols. 523 and 524 of the Hansard report of the Dockyard Services Bill.
Basically, the noble and learned Lord, Lord Denning, said that it was the duty of a person transfer-ring an undertaking to keep the workforce informed; that the transferor should consult the workforce and have regard to all their objections; that the Government had to give full information as to what they were going to do and who the transferee would be—the person to whom the undertaking is to be transferred; that the Government would have to inform the trade unions of the legal, economic and social implications of the transfer and that the TUPE '81 regulations provide that the Government have to go to the transferee and obtain information as to how many men would be made redundant and what alternative work would be obtained for them.
The noble and learned Lord, Lord Denning, also said in relation to the trade unions that they had real powers of challenge available to them under the regulations. Finally, the noble and learned Lord, Lord Denning, made it clear that in his view there was a right of appeal not only to an industrial tribunal but also to the High Court. In fact his amendment to the Dockyard Services Bill was a very important and significant one not only for that Bill but, I believe, for this one.
At the Committee stage we tried to deal with some of these issues. The noble Lord will recall that. For example, my Amendment No. 68A attempted to ensure that proper arrangements existed following privatisation for establishing proper negotiating arrangements and means of consultation of the workforce. But the noble Lord, Lord Belstead, rejected that amendment as being unnecessary and he success-fully resisted its inclusion in the Bill. But clearly the amendment was necessary and may very well have
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persuaded the trade unions that they had no need to resort to TUPE '81. There were other amendments too, dealing with foreign influence (which was also referred to in the speech of the noble and learned Lord. Lord Denning, last Thursday night) and the need to ensure the financial viability of the successful company. Those amendments were moved but they were similarly rejected by the noble Lord, Lord Belstead.
The Government may reply that they have embarked upon consultation with the British Gas unions. That is very doubtful. While it may very well be true that there has been a plethora of information from British Gas, this does not of itself constitute proper consultation within the meaning of TUPE '81. There was certainly an airy statement from the Government that nothing would change; but the Government cannot guarantee that. Indeed, how can they when throughout the Bill they have been contending that British Gas plc must be allowed complete freedom to manage their business as free as possible from government or statutory restraint. That has been their line all the way along. Indeed, the noble Lord has just repeated it in replying to amendments this afternoon.
The Government want privatised British Gas to be absolutely free from Government interference or involvement or statutory restraint. But in any event the British Gas Corporation workforce is entitled to consider what has happened in British Telecom. It cannot be encouraged by what has happened there. I shall not go into what has happened in relation to the workforce in British Telecom but it certainly gives no encouragement to the trade unions in British Gas. But as I have said, the Government have resisted all attempts to write into the Bill proper protection for the 93,000 employees of British Gas. Indeed it is only in this part of the Bill that there is any reference at all to the workforce, and the requirements of TUPE '81 are not spelled out in that reference.
The TUPE regulations say that legal, economic and social implications for affected employees have to be spelled out. As I understand it, the unions have already pointed out the real dangers of setting a rigid price formula. There have been no consultations on that. The best was a statement by a junior Minister. Mr. Alick Buchanan-Smith, that he would be willing to meet the unions on this matter; but to date no invitation has been forthcoming. It may well be that in those consultations the Government would have rejected the unions' reasoning on the price formula; but, again, in accordance with TUPE '81, they would have to give reasons for rejection rather than the airy brush-off they have been given in Parliament and elsewhere.
The regulations go further in that they require the social implications to be spelled out. There is an obscure part of the draft licence that defines the gas business. That definition cuts adrift a substantial part of the workforce in appliance retailing, warehousing, installation and contracting. We tried to put that back into the document but we were unsuccessful. The current nationalised industry management intends to retain this part of the business. But what of the privatised company? We do not know. At least in Schedule 1 of the Oil and Gas (Enterprise) Act if a

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British Gas Corporation employee was hived off there were rights finally of appeal to the Secretary of State on important matters such as continuity of employment rights. But in Part II of Schedule 9 of this Bill the Government are repealing that part of the Act when they take BGC over. Therefore rights that already exist are to be swept away under the Bill. But there have been no consultations on this.
The Government also have never really given reasons, or adequate ones, as to why the transfer should take place at all. It cannot be enough simply to say "We want to do it and we have the majority to do it". They have not shown that it would make British Gas more efficient, more profitable or more effective. Indeed, it would be hard to do this, as we have pointed out repeatedly during the various stages of this Bill. They have simply said that there is too much government interference in British Gas. That would have been easy to remedy without privatising the industry. The Government merely had to stop interfering; in fact, we believe that they have interfered too much in British Gas, particularly in relation to pricing.
From the point of view of employees it seems to us that the most equitable thing to do is to put this amendment into the Bill. I understand—and I do not know how correct my information is—that the Government are prepared to accept, if not entirely at least substantially, the amendment of the noble and learned Lord, Lord Denning, to the Dockyard Services Bill. If that is so, in equity and decency the Government should surely be prepared to accept these amendments.
As I have said, there is nothing, except in relation to this particular schedule, about employees in the Bill. It may be that that is because the transfer of employees is covered by TUPE '81 without express mention. When the noble Lord comes to reply, he will no doubt make it clear beyond question whether it is his view that TUPE '81 is involved. Clearly, there is inadequate provision within the Bill to protect employees. It seems to us that the right thing to do, in order to give them such protection, is to agree to the amendments. I hope that the noble Lord, will accept them. I beg to move.
6 p.m.
Lord Sanderson of Bowden: My Lords, it seems strange that such a very important amendment, produced by the Opposition Front Bench, should be coming before your Lordships at this particular stage of the Bill. I do not quibble with that, but I should like to refer to the start of the amendment, to insert that:
"the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply".
My understanding is that, so far as concerns British Gas, it has complied with that particular regulation most meticulously. I understand also that there is only one respect in which it has not complied, and that concerns data transfer. As we have heard constantly during various stages of this Bill, data transfer is something that cannot be decided until the Bill has become law. I can well understand the reason why that particular information, which no doubt has yet to be decided, has not been divulged to the workforce.
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I am, however, absolutely amazed that the question of information, or lack of it, should be coming before your Lordships at this stage. I do not know about other noble Lords, but I have been bombarded with material from British Gas about the information that they are passing to employees regarding what will happen to the privatised company. Surely that was the subject of the first part of the noble Lord's speech, when he spoke about full information being available, etc.
We are dealing with a matter of principle, as to whether this House believes that privatisation of British Gas will be good or bad for the gas industry. We have been over that ground very many times. I am encouraged by what I read of Mr. Howard Greenfield, chairman of North-West Gas, when he addressed his employees. He said:
"What is clear, however, is that it is up to us to get on with the job of running the business so that it continues in good shape and this means providing a good service to all our customers".
That is what is going to make the business go, and no amount of filibustering at this stage of the Bill with such an amendment will change the fact that the customer will be all-important.
I believe that there is a secure future for the employees of that great industry—all 9,000 of them. I am even more secure in my belief when I refer to what Sir Denis Rooke has said in the past. He has been quoted many times and I make no apology for quoting him again. He stated:
"I believe that continued heavy pressure and arm-twisting of Ministers and civil servants over the years has not been good for the nationalised industries nor for business, and particularly for my own business".
I rest the case, and I feel that by moving the industry into private hands, and with suitable information and suitable safeguards for the employees of that industry, we can rest assured that the employees will get a fair deal from a very well-run business. It is well known that British Gas is well run, and there is no reason at all to suppose that after privatisation it will not be just as well run. In fact, it will probably be better run because British Gas will have more freedom to manoeuvre, to run a business in the private sector.
Lord Belstead: My Lords, the case that the noble Lord, Lord Stoddart, has made for the last two amendments on the Marshalled List rests very particularly on comparability, as the noble Lord saw it, with the Dockyard Services Bill. In just a moment I should like to draw your Lordships' attention to the considerable differences that there are between the Bill that we are discussing now and the Dockyard Services Bill. Before I do so, I shall briefly make one or two other points.
First, the noble Lord asked whether the Transfer of Undertakings (Protection of Employment) Regulations 1981 affects British Gas. The answer to that question, which I shall give perfectly openly, is yes, indeed they do. The responsibility for complying with those regulations falls in this case to British Gas. However, British Gas has taken great care, as it always does, to make sure that it does everything within its power to fulfil all its obligations to its employees. Indeed, such are relations between the employees and management of British Gas that it is clear that it goes much further than merely fulfilling obligations.

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British Gas's legal advice is that the regulations do apply to the transfer of its staff from the corporation to the private sector company. On that basis, British Gas has done all it can to comply with all the requirements of the regulations set out in the amendment, to inform and consult the trade unions—that is, with the exception of one matter. That one matter is that management has not yet told the unions what will be the date of transfer from the corporation to the public limited company. That is because this Bill is still before your Lordships' House and has to complete its statutory processes before it becomes law. However, once the Government are able to announce the timetable leading to privatisation and the sale of shares, then British Gas will complete the last link in the chain of consultation and information and immediately inform the unions about the transfer date.
What the amendment would therefore do in essence would be to legislate for what has already taken place and which British Gas has been very careful to ensure complies with the regulations. We have on some occasions during the passage of this Bill considered amendments that I have ventured to describe as being belt and braces amendments. With respect to the noble Lord opposite, this amendment is a belt and braces amendment for a non-existent pair of trousers.
There is with this amendment a technical difficulty. It is a rather large one, and I must just mention it before I come to deal with the dockyard point. The technical difficulty that I must mention in passing is that the amendment extends not only to British Gas but also to the National Gas Consumers' Council. We are on Third Reading and I have to say, first, that none of the staff of the councils that exist at the moment is being compulsorily transferred. We are setting up a new gas consumers' council and employing staff on that basis. As a technicality, I would add that the regulations apply only to commercial undertakings.
Lord Stoddart of Swindon: My Lords, is it not true that the director of the National Gas Consumers' Council has already been made redundant?
Lord Belstead: My Lords, the arrangements that there have been either for taking on or not taking on existing staff of the councils are a matter for the new gas consumers' council. However, as I have said, it is not a transfer. The old councils are being wound up and a new council is being established. I will simply add that as a matter of fact and not just as a technicality the regulations on page 4 of the Marshalled List cannot extend to the National Gas Consumers' Council because such councils are not commercial undertakings.
I now come to the real point. The noble Lord says that whatever the arguments may be, there is a direct similarity between the situation that we are now discussing, with British Gas changing from a nationalised industry into a public limited company, and the Dockyard Services Bill that was debated in your Lordships' House and into which a similar amendment was put the other day. While I make no comment on the situation in the case of the naval dockyards, I must stress to your Lordships that the Bill
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now before the House is a very different kind of measure, being taken in very different circumstances.
First, we have made clear from the outset that the Government's intention has been to privatise British Gas as a whole. My right honourable friend the Secretary of State made clear in his statement to Parliament on 12th June that he intends that the present board of British Gas should continue to be the board of the successor company. From the point of view of employees there is, in fact, an essential continuity. They are going to continue in their current jobs with the same contracts of employment under the same management but with the considerable additional benefit, to which the Government attach great importance, that for the first time since 1948 employees will be able to take a direct stake in the success of their industry through employee shares.
I am grateful to my noble friend Lord Sanderson of Bowden, who said that he could not understand the reference which I believe the noble Lord, Lord Stoddart, made about people not receiving enough information. Enormous pains have been taken to inform and consult employees in British Gas——
Lord Stoddart of Swindon: My Lords, said "a plethora".
Lord Belstead: My Lords, not only British Gas itself but also, picking up the point the noble Lord opposite made, my right honourable friend has met the trade unions as recently as the middle of May on gas subjects. I simply remind your Lordships that all this has happened with a welcome from the employees. I understand that of the 90,000 employees of British Gas literally only a few dozen have, when asked, told the management that they do not wish to be informed about the share offers which are to be made to them. I believe that they welcome the change which is to be made.
Noble Lords opposite may say that nonetheless, and for the avoidance of doubt, should not this provision be included in the Bill? I believe that the inclusion of the words in Amendment No.16 would not achieve the avoidance of doubt but would create it. At a drafting level, the amendment is very heavily defective. For some reason which nobody has explained to me, it leaves out completely a very important sub-paragraph which is to be found in the original regulation. It states that if there are any special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by the regulations then the employer shall take all such steps towards performing that duty as are reasonably practicable in the circumstances. That is an important and reasonable protection which all employers enjoy under the regulations but which for some reasons Amendment No. 16 does not extend to British Gas.
For some reason there is also a reference in paragraph (iv) of the amendment—and let us remember, we are at Third Reading and there is no other stage of the Bill—to "Regulation 5 above". I cannot find it. I do not know whether any other noble Lord can find "Regulation 5 above". I do not think it is there. There is also no provision for enforcement. Moreover, as I have said, and most difficult of all, the

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amendment seeks to apply to the gas consumers' council, and that it simply cannot do.
I am not trying in any way to sweep out of the way the case which the noble Lord makes for the regulations applying to British Gas. Indeed, they do apply to British Gas. However, what I am saying is that, first, British Gas has proved that it has done everything in its power to comply with both the spirit and the terms of the regulations as they exist; but if we include this amendment in the Bill we would, at the very last moments of the detailed stages of this Bill, be putting into it an amendment which is very highly defective.
6.15 p.m.
Lord Graham of Edmonton: My Lords, I am sure I share the disappointment of my colleague on the Front Bench at the Minister's not understanding why the amendment has been moved. I listened very carefully to the Minister's case on why it is not needed, and he may very well have a point.
The noble Lord, Lord Sanderson, quite fairly wondered why at this very late stage a matter which we believe is so important is now introduced in such a hurry. It is because last week, on Thursday night, this House listened—I believe for the very first time—to the true import of what TUPE '81 really means. To my shame, I confess to having handled from our Front Bench the Bill relating to the Royal Ordnance factories, and when we moved amendments in respect of redundancies, pensions and terms to hearing the Minister, time after time, telling me that there was no need to worry, that they were covered by TUPE '81.I believe that the trade unions themselves have some responsibility, having listened to that.
Last week, the noble and learned Lord, Lord Denning, because of his deep interest in the Dockyard Services Bill and, more importantly, his deep interest in the welfare of the workers in the dockyards, got his teeth into the matter and examined the regulation. He came up with a series of questions. Having listened to the arguments, the House decided to take the noble and learned Lord's advice, which was to write on the face of the Bill that which the Minister, as he is perfectly entitled to say, felt there was no need to do. Why did the House do that?
If the Minister is entitled to quote, as he is, a paragraph from TUPE '81—and that is the part which he read out concerning special circumstances—then I am entitled to read out an amendment that appeared on the Marshalled List last week but was not pressed because of a technical deficiency. This illustrates, in my view, why today's amendment is valid.
The amendment appeared on the Marshalled List of amendments to be moved on the Third Reading of the Dockyard Services Bill. It states:
"If the Secretary of State fails to inform or consult a representative of a trade union in accordance with the provisions … above then that union may present a complaint to the High Court of Justice or to an Industrial Tribunal, and if the High Court or an Industrial Tribunal finds the complaint well-founded, it shall make a declara-tion to that effect.".
The whole genesis of the argument then and now is not that the Minister, the Government or TUPE '81 are fair or otherwise; it is this: what does the trade union
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do if it believes that in its application the Minister and the officials have not acted reasonably or fairly?
The noble and learned Lord, Lord Denning, said that in those circumstances one should have proper redress. When we looked at TUPE '81 we found that the redress is to an industrial tribunal. In the view of the noble and learned Lord, Lord Denning, and this House, that was not good enough. The noble and learned Lord said we should look at TUPE '81 and the limit of the award that can be given to a disgruntled employee. It is two weeks' pay. Noble Lords opposite may feel that TUPE '81 is fair and reasonable—that if one is aggrieved and follows the procedures one finishes with two weeks' pay. But we are talking about the livelihood, and the life, not only of a man and a woman but of a community.
Let me say to the Minister that I do not doubt for a moment that he has been making available as much information as possible. But my noble friend did not quibble about the quantity of information; he argued about the quality of consultation. Noble Lords opposite may feel that there is no difference—if you supply the paper, that is consultation. With respect, the trade unions do not take that view. They want to be meaningfully involved. So as far as I am concerned, this is not a delaying tactic; it is simply to reassure the trade unions, or the employees in the business, that they have access to greater powers than those at present in TUPE '81.
The noble Lord the Minister is privy, as I am, to the fact that the Government are taking very seriously the implications of the decision taken last week. Of course, discussions are going on. The noble Lord is right. While that applied last week to the dockyards it could—I say, "could"—equally apply to other methods of privatisation: the transfer of employees from one set of employers to another. It is a serious matter.
I have listened carefully to what my noble friend told me he intended to do about this, but I am bound to say that I heard the Minister earlier talking about the fallability of experts and the fact that experts are not always right. The noble and learned Lord, Lord Denning, last week stirred up what was, from my point of view with my concern for the dockyards, a good thing, and what we say to the Minister tonight is that, in the spirit of the dockyards amendment, he should write on the face of the Bill things which may well not be necessary but which, if employees believed them, should help them to get to grips with the consequences of this Bill on their lives and their livelihood. In my view the House ought to accept the good sense of this amendment moved by my noble friend Lord Stoddart.
Lord Stoddart of Swindon: My Lords, this has been a very statisfactory discussion so far as I am concerned, and I should like to thank my noble friend, Lord Graham of Edmonton, for his support and for the information he gave the House, because he was involved with the noble and learned Lord, Lord Denning, in that important amendment which was carried to the Dockyard Services Bill. I am most obliged for his assistance and support.
The noble Lord, Lord Sanderson of Bowden, believes that the British Gas Corporation have complied with TUPE '81, but it is not for him to say

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whether or not they have complied. It is for the law to say whether or not they have complied, and that is what we are talking about. We are talking about regulations of TUPE '81 as they apply or might apply to employees in the British Gas Corporation. I would suggest to the noble Lord, Lord Sanderson of Bowden, that he reads the regulations thoroughly and, together with them, the speech of the noble and learned Lord, Lord Denning, which was made to this House last Thursday. I think that if he does that, he may well reach a different conclusion. I have to say to him that Mr. Greenfield's speech which he quoted was quite irrelevant to this debate.
The noble Lord, Lord Belstead, was in fact very helpful. He said—and there could be no shadow of doubt about it—that TUPE '81 does apply. It applies in relation to employees of the British Gas Corporation. I am prepared to accept that assurance, and I accept that he has put it on record that that does apply.
Of course I accept that these amendments are defective, and the noble Lord will be glad to know that I do not intend to press them. However, even if they are defective and the House agreed to accept them, I feel sure that he would extend to me the same courtesy that was extended to the noble and learned Lord, Lord Denning, and to my noble friend Lord Graham of Edmonton in discussing the amendments and how they could be improved before they were considered by another place. However, that is not going to happen because we will not be pressing the amendments. The assurance of the noble Lord, Lord Belstead, is one of the most helpful comments he has made during the course of discussion on this Bill.
The noble Lord, Lord Belstead, stated that British Gas had taken legal advice and that that advice was that not only does TUPE '81 apply, but that they believe that the regulations have been complied with. With respect to the noble Lord, it is not simply for the British Gas Corporation and its legal advisers to say whether these regulations have been complied with. This is a matter of opinion, and that opinion may be different from the opinion of the trade unions. If there is a difference and they have not been consulted in the way they should have been under the regulations, and if other parts of the regultions have not been applied, it would be perfectly in order and would be reasonable for the trade unions to take their case before an industrial tribunal. As the noble and learned Lord, Lord Denning, said, they might take their case eventually to the High Court. That is the position which we wish to establish.
I did not deny that there has been information made available, and I said in my opening speech that there has been a plethora of information from British Gas. However, this does not constitute proper consultation. There is a difference between information and consultation. It is possible to inform someone about something, and that is then the end of the matter; but consultation is a two-way process. Consultation means one person talking to another on the basis of equality. We do not believe that that has happened. The trade unions do not believe that that has happened, and that is why it is important that we have the Minister's assurances on the record that the Transfer of
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Undertakings (Protection of Employment) Regulations 1981 apply in this case. There is no doubt that if they need to be tested, they will be tested, and from our point of view that is important. It defends the interests of employees who, against their will (no matter what the noble Lord says) and probably against their best interests, are going to be transferred from British Gas, which is a successful and profitable undertaking under public control, to a private monopoly, which may very well be against their best interests and the best interests of the country. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
Lord Belstead: My Lords, I beg to move (hat this Bill do now pass.
Before we part company with the Bill may I say a word on behalf of my noble friends on this Bench who have been working on it with me. I refer to my noble friends Lord Gray of Contin and Lord Brabazon of Tara. I should also like to thank all noble Lords who have taken part in the proceedings on the Bill. The Second Reading took place on 10th April and since then a very considerable amount of work has been done. The Bill was drafted after very careful scrutiny of the gas industry, in both Great Britain and other countries around the world, and I like to think that for that reason it is possible to claim that we have not inflicted Government amendments on your Lordships' House except in response to points made by your Lordships, or in one or two cases of drafting. Nonetheless, 630 amendments have been put down to the Bill during all the various stages.
Perhaps I may pay brief tribute to my two noble friends Lady Macleod of Borve and Lady Gardner of Parkes, who I think shaped the consumer represent-ation arrangements in the early part of the Bill so that we now have it clear in the Bill that there will be regional representation on the Gas Consumers' Council and that voluntary representatives can be appointed at local level to help in dealing with customer complaints. I also wish to mention the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Diamond, who together persuaded the Government that the interests of the small businesses needed to be written into the consumer representation arrangements. That went into the same part of the Bill.
Your Lordships once again safeguarded the interests of the elderly and the disabled, and I would pay tribute to my noble friend Lady Macleod, who started the ball rolling on this, and also to the noble Lord. Lord Campbell of Alloway, and the noble Lord. Lord Henderson of Brompton. I mention also the noble Lord opposite, Lord Stoddart, who spoke at every stage. Due to this move in your Lordships' House we now have not only a duty on the Secretary of State and the director to have regard to the special needs of the elderly and the disabled but also enforcement powers for a code of practice which must be approved by the Secretary of State. This code, incidentally, includes the point made by the noble Lord, Lord Stoddart. that elderly and disabled customers who are living alone will continue to receive safety checks on their gas appliances and other fittings free of charge.

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My noble friend Lord Boyd-Carpenter was good enough to take an interest every day that we have debated this Bill. I am grateful to him also. I remember very well when, over three months ago, he made his Second Reading speech that he said that this was an important Bill which would bring great advantage to customers, new shareholders, and to the industry itself. We may not all agree with everything in this Bill; I know that we do not; but I hope that we can agree that, as a result of all the work which has been done in this House, we are sending back to another place a better Bill improved in a number of respects as a consequence of our debates over three months. It is a Bill which I certainly believe will provide a firm basis for the gas industry for the future. I beg to move.
Moved, That the Bill do now pass.—(Lord Belstead.)
6.30 p.m.
Lord Stoddart of Swindon: My Lords, I am afraid that I shall not take quite so short a time for my remarks on this Bill as has the noble Lord. I agree with him that the Bill is slightly better now than it was when it first reached this House. It leaves this House a better Bill than when it came. However, as the noble Lord, Lord Belstead, has said, the Bill is now near the end of its passage through this House and although, in accordance with convention, we shall not seek to divide on the Motion, we remain as opposed to the Bill now as we were on Second Reading.
Indeed, the more we examined the Bill in Committee and on Report the deeper became our conviction that the measure is against the interests of gas consumers, against the interests of employees, against the interests of energy conservation and energy planning, and, above all, against the national interest. In our view it is a Bill conceived in cynicism and enacted for the basest of motives, in that it seeks not the best interests of the gas industry but the means of survival of the Tory Party at the next election. For that reason it is the most odious of Bills and I believe that history will judge it accordingly.
The proceedings on the Bill were undoubtedly extended. Many records were broken during the passage of the Bill through Committee and Report stages. That was only to be expected, given the use of the guillotine in the House of Commons. I hope that the Government have learned that restricting debate in the other place is neither the democratic nor sensible thing to do, bearing in mind your Lordships' keen sense of their duty to ensure that measures placed before them receive proper consideration and scrutiny. Accordingly, the House has endured its longest all-night sitting since 1945 and our other sittings into the early hours undoubtedly have caused inconvenience (for which we are sorry), not least to the Government who failed on a number of occasions to retain a quorum and on other occasions were able to do so only with the good will and co-operation of the Opposition.
The Chief Whip was almost driven to distraction, but, like all good Chief Whips, the noble Lord, Lord Denham, has a thick skin and the ability to bounce back, which he has demonstrated this week. On a number of occasions the noble Viscount the Leader of
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the House has had his reputation for serenity, good humour and diplomacy put severely to the test. I feel sure we all agree that he passed the test with flying colours and we are obliged to him for his assistance.
What has been remarkable is the tenacity and stamina of those who have been engaged in examining this Bill. That applies to noble Lords on all sides of the House. The noble Lord, Lord Belstead, showed infinite patience, even kindness if I may so, during the passage of the Bill and we are grateful for his attitude and attempts to help which in some instances, of course, have been successful. The noble Lord, Lord Gray, too, displayed his natural resilience and there were only one or two occasions when his Scots temperament threatened to break out and wreak havoc on the Opposition Benches; but he contained himself and held on to his reputation as the best stone-waller in the game. Then of course there is the noble Lord, Lord Brabazon, who is sitting in his place, fresh-faced, innocent of expression and certain to disarm if not to convince. He, too, played his part in obtaining this Bill for the Government and I hope that he will get his reward sometime.
But if the Government had their difficulties, so did the Opposition parties. They had to get to grips with this complicated Bill, understand its provisions and implications, frame amendments and prepare cogent and persuasive arguments in their support. That they were able to do so with meagre resources compared with those available to the Government redounds, I think, to their credit. I am particuarly grateful to my noble friends Lord Bruce, Lord Williams and Lord Gallacher, without whose assistance and commitment I should have been in great difficulty. The expertise of the noble Lord, Lord Ezra, has been particularly valuable and the marathon performance of the noble Lord, Lord Diamond, with its attention to minute detail, constituted a veritable tour de force which will be remembered in your Lordships' House for a very long time to come.
There were other noble Lords too numerous to mention from all parts of the House who played their part. There was the noble Lord, Lord Sanderson of Bowden, who made some very sensible contributions to our debates—in spite of the fact of his commitment to the Tory Party, he still made sensible contributions; the noble Lord, Lord Boyd-Carpenter; and of course the noble Baroness, Lady Macleod, who also gave us great assistance in the' Committee. As I say, noble Lords from all sides of the House played their part in the examination of this Bill. I am personally grateful to them, and I feel sure that their efforts will have been appreciated by all your Lordships.
Yet at the end of it all, with all our efforts and long sittings, the Government have their Bill more or less intact, and though we are obliged for the concessions made by the Government, they in no sense meet the requirements of this side of the House nor do they render the Bill any the less odious in relation to its central purpose—I have to say that. A well-run public monopoly making profits for the taxpayers as a whole will be converted into a private monopoly making profits for the select few. The regulatory regime has not been strengthened in the way that was likely to provide proper protection for the consumer and the national interest.

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Both in Committee and at Report stage we sought to strengthen Ofgas by tabling amendments to set up a commission or appoint assistant directors to assist and strengthen the position of the director himself. The Government were offered several options by the noble Lords, Lord Ezra, Lord Diamond and myself, but all the options were rejected out of hand, not because they were intrinsically undesirable or unworkable but because they were in conflict with the policy of the Secretary of State and Sir Denis Rooke that privatised British Gas should be on a light regulatory rein.
Our attempts to give more power to the National Consumers' Council and to retain regional councils were similarly rejected, though there has been a little movement to ensure some local and regional input into the national council and for the director and the national council to have some influence over the codes of practice for the elderly and the disabled.
In the context of this Bill the authorisation is an important document—indeed, it is a vital document—but since it does not form part of the Bill itself, it lacks proper statutory force. It can be amended without reference to Parliament, and for that reason we thought it safer to have the authorisation in the Bill. However, our attempts to do so failed, as did our attempts generally to inject a measure of parliamentary control into the new regime.
We attempted also to write into the Bill a pricing system to give proper protection to consumers and to extend price control beyond a period of five years. However, again that found no favour with the Government, and as a result the director will have only limited control over 50 per cent. of the elements which make up the delivered gas price. The price ofgas itself will not be subject to proper control, and that spells danger for the gas consumer.
One would have imagined that this Government, who pretend concern for British industry, would have been amenable to writing into the Bill some protection for British manufacturers; but our amendments dealing with that issue were resisted by the Government on the most spurious of grounds. So much for the idea that the Tory Party and business are synonymous. They certainly are not.
We also hoped that noble Lords opposite would be moved by our pleas that British Gas would not go to flotation at a time when that might be against the national interest—at a time of low oil prices, for example—but again our hopes were dashed. In dashing those hopes, the Government confirmed the universally held belief that this Bill is only about financing a tax-cutting Budget for next year as a means of staving off a Conservative defeat at the next general election.
Bearing in mind that this is Energy Efficiency Year, this side of the House tried to ensure that the Bill contained adequate provisions for energy conservation and the proper management ofgas supplies. Certainly the Government moved some way towards us in that regard but not to a significant extent. The stark and depressing fact is that the management ofgas supplies, which are a national resource, and depletion policy will be handed over to private individuals and the exigencies of the market. In our view that is a highly
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irresponsible policy for which the consumer and the country will pay dearly in the long term if not in the short run.
So far I have mentioned some of the issues that we raised from this side of the House on Part I of the Bill; and, as I have indicated, we had little comfort or movement from the Government. But when we reached Part II of the Bill our difficulties were compounded, for we were faced with the fact that the Government had already announced with a great flourish the arrangements for the flotation—who was to get what, who would do what and details of the expensive advertising campaign to flog off shares at any price.
But the fact that the Government jumped the gun, and in my view thumbed their noses at your Lordships when you were still considering the Bill, did not deter us from trying to prevent a British Telecom-type scandal being repeated with British Gas. Nobody, we thought, not even the Government, would want a repeat of the British Telecom flotation, when huge fortunes were made overnight by well-heeled city slickers and foreign speculators at the expense of the British taxpayer. However, we were mistaken and the Government again resisted our attempts—as they did this afternoon—to ensure that the British Telecom scandal was not repeated by rejecting our amendments which were designed to protect the public and the taxpayer from being ripped off yet again.
Similarly, our attempts to prevent a foreign takeover of British Gas were thwarted, and the failure of the Government to agree that the protection of the golden share should be written into the Bill rather than merely constituting a clause in the articles of association has heightened our suspicions that at a time that suits them—not before the general election; the noble Lord gave us that assurance this afternoon, and we are obliged to him—this Government will liquidate the golden share and leave the way wide open for a foreign takeover.
I believe that we on this side of the House have done our duty in trying to improve the Bill, to safeguard the public interest and to warn of the real purposes behind it and the dangers which it presents. Our endeavours have met with only very limited success and the Bill is virtually intact at this final stage.
However, it is right that before the Bill leaves this House, I should make it quite clear on behalf of the Labour Party that when we return to government we shall reverse the privatisation of British Gas. As some of my right honourable and honourable friends in another place said, that commitment will take some time to realise. We hope, however, that it will come quite clearly within the lifetime of the first Parliament of the Labour Government's taking office.
In the intervening period between arriving in power and taking British Gas back into social control there will be a need to strengthen the control exercised by Ofgas over the monopoly activities of British Gas. As noble Lords will be aware, we have tried to concentrate on that in our debates on the Bill and neither the Government nor future shareholders in British Gas should lightly put aside the points that we have made and the alternative methods of control that we have put forward.

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When we come to take British Gas back under social control, as we shall, it will be in a manner that will encourage long-term investment from the private sector in the company and discourage those who bought shares on flotation purely for speculative reasons. We believe that in doing that a fair balance should be struck to allow the community to exercise proper control in British Gas and at the same time to provide a reasonable return to those who are prepared to make a long-term commitment to invest in the company.
Let me say in conclusion that we cannot wish the Bill well. It is a bad Bill, brought forward for the worst and most disreputable of reasons. We believe that it is a Bill which reflects badly on the Conservative Party and is not in accordance with its traditions. Nor does it have the support and blessing of those Conservatives who hold dear the reputation and standing of the Tory Party and who wish to retain the party as one of Britain's respected institutions. But we cannot stop the Bill and it remains for me only to repeat my thanks to the noble Lord, Lord Belstead, and all other noble Lords for their courtesy and kindness throughout the discussion of this odious measure.
6.45 p.m.
Lord Boyd-Carpenter: My Lords, I am rather sorry that the noble Lord, Lord Stoddart, in the course of his otherwise good humoured speech, cast reflections on the Government's motives in respect of the Bill. On reflection, he may feel that that comment was unworthy of him and of his high standards of debate in the House. In any event, I must ask him to accept, just as I accept that he is against the Bill for genuine reasons of conviction, that there are noble Lords on this side of the House, as there are honourable Members in another place, who for reasons of equally honest conviction favour it. I do not think that we help the discussion of these matters by imputing motives of one kind or another.
As it happens, I was in another place when the Bill to nationalise gas was taken. But neither I nor any of my colleagues ever cast imputations on the motives of the late Mr. Gaitskell, who was the Minister in charge and who conducted the Bill with great skill. We simply opposed it because we believed—and we feel that in the event we have been justified—that such a measure was not in the interests either of the industry or of the country.
I shall take up only one other point from the noble Lord's speech, and it is this. He referred in a rather airy way to the fact that the outcome of denationalisation—which is the word that I prefer to "privatisation"—should be profits for the select few. He does not seem to have appreciated that in this case, as in the case of British Telecom, it is the intention to give every opportunity to those who work in the industry to become shareholders in it.
Your Lordships know that in the case of British Telecom large numbers of workers in that industry are shareholders in it. They share in its profits, which look like being excellent. I have very little doubt that the workers in the gas industry, being equally sensible, will take the good opportunities that they will be offered, and take up shares in the industry.
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It is obscuring counsel to talk about profits for the select few, when the noble Lord knows, as your Lordships know, that among those who will receive and enjoy profits from the industry are the people who contribute to those profits by working in it. That is a point which is of some general relevance to the outcome of this change.
Unlike the noble Lord, I welcome the Bill. I should like to wish those who work in the industry at all levels good fortune in the new situation in which they will be. I am fortified in the belief that it will be good fortune by observing the enormous improvement that has taken place in the other industries which have been denationalised in recent years: for example, British Aerospace, Amersham International, and others. They have all greatly improved their position. That has not been because of the virtues of the individuals. Excellent individuals worked in those industries as they worked in gas under nationalisation; but the greater freedom and responsibility and freedom of access to the market which go with privatisation help to stimulate, develop and make industries successful.
I hope and believe that that will be the case with gas. I am sure that all your Lordships would want to wish the industry and all those who work in it the greatest good fortune.
During the very long proceedings on this Bill, my noble friend Lord Belstead has conducted the case for the Government not only with skill but with extraor-dinary good taste and patience, regardless of the fact that gas would seem to many of us to be a long way from agriculture, which I understand is his official function and in respect of which he receives his modest remuneration. My noble friend has conducted the Bill magnificently. He seems never to have lost his temper. His patience has been wonderful. In that connection, I should like to quote what a learned judge said in another context: "Patience stakes Lord Belstead first; Job second".
Lord Monson: My Lords, although I have taken practically no part in our debates on the Bill, there is one question that I should like to put to the Government before the Bill passes which arises from the closing remarks made by the noble Lord, Lord Stoddart of Swindon. The disgraceful U-turn made by the Conservatives away from their former passionate and principled opposition to Mr. Anthony Wedgwood Benn's so-called compensation terms for the warship shipbuilders—confiscation terms may be more accurate—came home to roost in Strasbourg only nine days ago. As The Times wrote on 9th July, the treatment of those warship companies:
"leaves a stain on this government"
Many other national and leading provincial newspapers echoed those sentiments.
The Times went on to point out that the Strasbourg judgment,
"will cast a shadow over all privatization issues between now and the next general election."
It went on to emphasise:
"it underlines the ability of a future Labour government to do virtually anything it likes to unpick the privatization programme."
I should like to ask the noble Lord, Lord Belstead, what guarantee the Government can give to prospec-

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tive purchasers of shares in British Gas that their shareholdings will not be compulsorily purchased in a few years' time for between one-fifth and one-sixth of the net issue value, as happened to the unfortunate shareholders (of whom I was never one, I should stress) in the warship shipbuilders.
Lord Diamond: My Lords, I am as anxious as all your Lordships are to make as much progress as we can before we rise. No doubt those in charge of business will take account of that. It is my pleasure, first, to echo the appreciation which has been expressed on all sides of the House to Ministers, who have carried out their duties with unusual charm and patience. A tremendous load is carried by Ministers in your Lordships' House which is not appreciated outside. It is not appreciated that our Ministers hold several portfolios and that often, as has been the case with nearly every Minister who has participated in the Gas Bill, their main responsibilities—the matters about which they have the most natural knowledge and on which they do not have to brush up with help from the Box behind them and by carefully reading briefs—are not the ones in which they have been participating in the Gas Bill.
That is both a tribute to the Ministers and a criticism of the way in which we conduct our affairs in your Lordships' House. Your Lordships' House is continually becoming busier. There is more and more work to be done. No one objects to that. It is a proper and essential function of your Lordships' House. It increasingly demonstrates the need for a second Chamber.
It should be appreciated outside this Chamber that an enormous load is carried by Ministers and those who contribute to the discussions. They have to work as best they can with the most extraordinary lack of convenience with regard to assistance, space and all the other amenities which are available to a third-rate clerk in an ordinary office.
We on these Benches are more opposed to the Bill as a result of our examination of it than we were at the start. The Bill does not serve any of its alleged or any other worthwhile purposes. It is likely to do damage. It is not likely to be of any benefit. We are wholly opposed to it. We are equally constitutionally conventional in that we recognise that it is the Government's responsibility to have their way. The Government must not therefore be defeated on Third Reading or on the Question, That the Bill do now pass. We therefore shall not be voting at this point.
The Bill has not achieved anything. We have an industry which is thoroughly efficient. I do not see how it will achieve that increase in efficiency. It will be the same industry, covering the same area with the same board, the same chairman, the same staff, the same workforce and the same plant; it will be carrying out the same functions. From where will the new greater efficiency come? I cannot see it at all.
The theory always was that if one privatised—one never privatises without having competition—then competition added the spur and people would therefore work even better, harder and more efficiently. As we know, there is no competition here whatsoever. I do not want to go over the ground again.
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It is the first time in this country's history that a Conservative Government have attempted privatisation without any competition. That was never the case with the public utilities before 1948. It is not the case with those which continue. As we know, it is not the case with those in the United States—the home country of private enterprise where every utility of this kind is controlled in terms of profit and by the public utility commission. We tried to introduce something of that kind. It does not apply in this country. We tried to introduce some measure, not necessarily of competition but of comparison. We tried to introduce a measure of franchising. We thought that at all events it would be possible to take one small area and franchise there, to license someone to carry out the work previously carried out by British Gas, and see if this produced a better result. The Government would not listen.
They believe that we are alone in making such suggestions. That is far from the case. The latest issue of the Economist contains this advice:
"The Tories ought also to think more about franchising as a half-way house between state and private ownership for enterprises with an element of natural monopoly".
The writer must have been reading our speeches. We have been saying that this is a natural monopoly. We have been saying that the Government should search for a half-way house. The Government have heard today the result of their refusal to have anything that approaches a half-way house. We have heard today officially what the Labour Party has decided upon for the time when it has a measure of government. The present Government cannot possibly think that, however much they try, they will be able to maintain power for all time. So their unwillingness to go half way will result in the dreadful swing of the pendulum—nationalise, privatise, nationalise, privatise—causing upset and no benefit to anyone. That is one of our major objections to the Bill, and to the way that the Government have handled it
There is no drive to efficiency at all in the contents of the Bill. There is a silly attempt in the price control to introduce an efficiency factor that is totally meaningless. Why do I call it silly—because it provides that the price shall not increase overall by something more than probably 1 per cent. One per cent, efficiency overall is deducted from the inflation index that is involved in the price. That compares with 3 per cent. for British Telecom. British Telecom has to meet a target of 3 per cent. Here, British Gas has to meet a target of 1 per cent. This is, I repeat, really silly. It is like saying to an athlete training for the high jump that he must go out every day, put on his shorts and try to jump 18 inches. A lot of use that will be to him when he is seeking to jump seven feet plus! That is what happens with the 1 per cent. It is a meaningless use of words. It will not increase efficiency in any way whatever.
We have lost, as a result of this Bill, the fair balance between the interests of the consumer and the interests of the nation as a shareholder. The drive will be wholeheartedly in favour of more and more maximization of profits. Instead of talking to Government Ministers who have concern for the national interest, the chairman and the board will be talking to the managers of the institutional investors

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whose sole consideration will be annual profits. It is the short view as against the long view. That is what will happen. There is nothing in the Bill that will right that balance.
Most of what I wanted to say has been said by the noble Lord, Lord Stoddart. I want to underline my agreement with all that. I want particularly to point out that, so far as amendments are concerned, there is little about this Bill that is different from what it was to begin with. Any change relates only to amendments introduced by two Members on the Government side. There is very little else—very little at all. The efforts that we have made have been without avail. While understanding that, we believe it is most unfortunate that a government should use their powers in this high-handed fashion. This is not a Bill that an objective government would introduce if they were really concerned to increase the. efficiency of a huge organisation which, as already stated, serves 16 million tariff customers alone. This is a Bill to satisfy the feelings of the present chairman of British Gas, who has control of the situation and has drawn up with the Government a measure that provides for privatisation along lines that he sees as right and proper. It is nothing more than the re-creation of Rookery Nook.
The real reason is only too evident. We have tried to think of other possible reasons. They are non-existent. The reason why all this is being done is only too evident. It has been stated by the Government themselves. It is for cash—and pretty quickly. The delay over British Airways and the gap caused by the cancellation of the privatisation of the ROFs all add urgency to the Government's desire to lay their hands on the cash that they need for the purposes that they have disclosed. All attempts that we have made to introduce objectivity into the pricing and mechanism have been rejected. The Government are determined to go ahead irrespective of market conditions, irrespective of depressed oil prices, irrespective of depressed share prices and, as recently pointed out, irrespective of the depression caused by the judgment at the Court of Human Rights which will now support, so far as domestic buyers are concerned, the kind of renationalisation or socialisation measures that the Labour Party has been describing.
The answer is, I am afraid, very clear—and it is not only my own feeling. Again, I refer to the Economist which says:
"The way that the Government has done its privatising seems designed to convince consumers that their interest comes well behind that of raising billions for the Treasury".
That is the truth. It comes well behind. That is why we have the greatest objection to the Bill. I can only see in all this the continuation of the drive that the Government have started, and now continue in increasing measure, to sell the family silver, not to pay for the groceries but, this time, to buy votes at the next general election.
Baroness Macleod of Borve: My Lords, as the noble Lord, Lord Stoddart, and my noble friend Lord Belstead have mentioned my name—and I am grateful to both—I should like to intervene briefly. First, I wish the Bill well. I have had the advantage (I call it that) of working not only with the gas consumers' council for
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five years but also, through that, with British Gas. I enjoyed those years. I have an enormous affection for both bodies. I am certain that they will make an outstanding contribution to industry in this country. I should like to say how much I have admired the way in which my noble friend Lord Belstead has conducted the whole of this Bill. His tolerance, understanding (as I know very well) and patience have been absolutely second to none.
However, I finish by saying this. A week is a long time in politics, but the past three months have seemed like an eternity.
Baroness Burton of Coventry: My Lords, I shall be very brief. I regret the passing of this Bill. I should like to say why. I should also like to express the appreciation of all of us to the noble Lord, Lord Belstead, and his noble friends on the Government Front Bench, who have shown patience through some very tedious and lengthy proceedings. I should like today to thank the noble Lord, Lord Belstead, who I think has tried to meet our objections in so far as it was at all possible for him to do so.
However, I feel with this measure, as I did with the Airports Bill, that it is not that I would oppose privatisation as such but that I object to the transition of a public monopoly into a private one. That is what I think has happened here. I have noted that Government Ministers in both Houses have stated that the original and primary purpose of privatisation was to bring greater efficiency to state enterprises so that all concerned—managers, workers and consumers— would feel that they were getting a better deal. The Airports Bill had nothing to do with getting better management in the civil aviation industry or with the British Airports Authority. The authority was modern, efficient and profitable.
The gas industry is also modern, efficient and profitable. In common with many in both Houses of Parliament and outside Parliament, and in all political parties, the great majority of people have not approved the Gas Bill. I have tried hard but I have not found one good reason for this privatisation. I do not think we have gained anything. The concessions that the noble Lord, Lord Belstead, has been able to give were no advance on what we had before this measure entered Parliament.
I think that the Bill we are now about to pass into law contains proposals that provide British Gas with maximum monopoly power combined with minimum constraints on the use of that power. I went into the Library the other day and had a look at the Conservative election manifesto of 1983. Speaking of the gas and electricity industries, that manifesto said:
"In the next Parliament, we shall seek other means of increasing competition in, and attracting private capital into, the gas and electricity industries.
Merely to replace state monopolies by private ones would be to waste an historic opportunity. So we will take steps to ensure that these new firms do not exploit their powerful position to the detriment of consumers or their competitors".
Bearing in mind those words, I think that this Gas Bill is a waste of an historic opportunity.
I looked up a quotation in a leader in the Sunday Times on 1 st December. This is what it said at the end:
"If privatisation is to change the face of British industry for good then the consumer must come first, and the government's first

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priority is to make sure that is where the bulk of the benefits go—even if that means the Treasury has to make do with less."
I am afraid that the Treasury has won. I do not believe that this Bill does anything at all for consumers. I would share the views of the Financial Times, which in a relatively recent article said that in the years to come we might well ask ourselves why all this time had been spent on such a useless piece of work.
7.15 p.m.
Lord Bruce-Gardyne: My Lords, I, too, want to speak very briefly before we leave this Bill. I must confess that I thought when it first came to us that it was, in the words quoted by the noble Baroness, Lady Burton, a waste of an historical opportunity. I am bound to admit that I have not changed that view.
I join with others who warmly congratulated my noble friends on the splendid example of patience, skill and courtesy which they have displayed in carrying these long proceedings through to a successful conclusion. We do not have the competition which I believe we could have had, and we shall have to hope that regulation makes an adequate substitute.
I want to express one word of anxiety. I am not so sure that this flotation will be all that easy. It looks as though the stock market may be well off the bloom by the time British Gas is ready to be floated. Clearly, the energy background is not what we might have wished. It is hard to believe that energy stocks will command a premium of admiration in the financial markets in November. I must say I wonder how easy it will be to convince potential investors that Sir Denis Rooke is the appropriate haven for their savings in view of some of the things he has had to say about private shareholders in the past.
What concerns me is this. It seems to me quite clear that at the time of the flotation of British Telecom conscious action was taken to push interest rates down in advance of that flotation regardless of domestic monetary conditions in order to make sure that the flotation went off successfully—as indeed it did. Of course, the flotation of British Gas will be a very much bigger morsel. It worries me that there could be a temptation similarly to push down interest rates steeply in advance of the November flotation regardless of domestic monetary conditions. When we did that in the case of British Telecom we were soon confronted by a pretty hefty run on sterling which had to be reversed with a dramatic reversal in interest rates. I think that we could have a very similar situation if we were tempted to follow the same path this autumn.
I appeal strongly to my noble friends in the Government to see that that mistake is not repeated, whatever the temptation to indulge in it may be, in order to try to ensure that the flotation goes off success-fully.
Lord Belstead: My Lords, the noble Lord, Lord Monson, asked me one direct question about the consequences of the European Court decision. I have on many occasions heard threats of renationalisation from the party opposite. I am confident that when everyone sees the great success that will be made of privatisation of British Gas no future government
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would be able to reach the conclusion that renationalisation would be in the national interest. I believe that that should be our guide for the future, and that is my answer to the noble Lord. Lord Monson.
It only remains for me, on behalf of my noble friends who have been dealing with this Bill, to thank your Lordships, wherever you sit, for the kind personal remarks which have been made. Once again, I beg to move that this Bill do now pass.
On Question, Bill passed, and returned to the Commons with amendments.

Patents, Designs and Marks Bill [H.L.]
7.18 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[References are to [Bill 155] as first printed for the Commons]
1 Clause 4, page 3, line 6, leave out "paragraph 1" and insert "paragraphs 1 and 1A.".
Lord Lucas of Chilworth: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1, and with the leave of your Lordships I should also like to speak to Amendment No. 3. Perhaps I should point out that in the first line of Amendment No. 3 the words "name and address" should be "name or address".
Turning to these amendments your Lordships will recall that when this Bill was considered in Committee in this House an amendment in the name of the noble Lord, Lord Lloyd of Kilgerran, removed from Section 1 of the Trade Marks Act 1938 the requirement for the descriptions of proprietors to be entered in the register. Amendment No. 3 is consequential upon Lord Lloyd's amendment.
Section 34 of the 1938 Act, which relates to alteration of the register, also contains a reference to "descriptions", and Amendment No. 3 causes that reference to be omitted. Amendment No. 1 causes the paragraph which is inserted by Amendment No. 3 to extend to the Isle of Man. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

COMMONS AMENDMENT
2 Page 3, line 10, leave out '4' and insert '3'.
Lord Lucas of Chilworth: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 2. Clause 4(4)(c) lists those paragraphs of Schedule 2 which amend or modify legislation which extends to the Isle of Man. and provides for those amendments or modifications also to extend to the Isle of Man.

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Paragraph 3 was added during the Report stage of the Bill in your Lordships' House. The present amendment, made in another place, includes that paragraph in the list to which I have just referred. I beg to move.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Lucas of Chilworth.)
Lord Bruce of Donington: My Lords, we agree.
On Question, Motion agreed to.

COMMONS AMENDMENT
3 Schedule 1, page 5, line 21, at end insert—
" 1 A. The words "name or address" shall be substituted for the words "name, address or description" in subsection (l)(a) and (b) and subsection (2) of section 34 of that Act (correction of register).".
Lord Lucas of Chilworth: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 3.
Moved, That this House do agree with the Commons in the said amendment.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
4 Schedule 2, page 10, line 36, at end insert—
"3A. In the proviso to subsection (1) of section 26 of that Act (removal from register and imposition of limitations on ground of non-use) for the words after "bona fide use" there shall be substituted the words "of the mark by the proprietor thereof for the time being in relation to—

(i) goods of the same description, or

(ii) services associated with those goods or goods of that description,

being goods or, as the case may be, services in respect of which the mark is registered".".

5 Page 13, line 22, at end insert—
"8A. In paragraph 14(2)(b) of Schedule 1 to that Act (modifications of Trade Marks Act 1938 in application to service marks) for the words from "the words", in the first place where that phrase occurs, to "in relation to" there shall be substituted the words "paragraphs (i) and (ii) and the words following them there shall be substituted—".".
6 Page 13, line 23, leave out from "of to "there" in line 24 and insert "that Schedule".
7 Schedule 3, page 15, line 30, column 3, at end insert—

"In Schedule 2, paragraph 5 and the heading preceding it.

Lord Lucas of Chilworth: My Lords, I beg to move that this House do agree with the Commons in their Amendments Nos. 4 to 7 en bloc. I accept that these amendments are complicated, but they are in fact essentially technical. Section 26 subsection (1) of the Trade Marks Act 1938 provides that any person may seek to have a trade mark removed from the register on the ground of non-use. The proviso to this subsection provides for a possible defence against such an action. Schedules 1 and 2 to the Trade Marks (Amendment) Act 1984 modify this proviso in its application to services and goods respectively. With hindsight we see that there is a gap in the modification in respect of goods. Paragraph 5 of Schedule 2 to the 1984 Act, fails to deal with the case in which a mark has not been used in relation to goods but is used in relation to services associated with those goods.
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Paragraph 5 is therefore being repealed by Amendment No. 7 and is in turn replaced by Amendment No. 4. Amendment No. 5 then modifies the new provision for service marks, and Amendment No. 6 is consequential upon the insertion achieved by Amendment No. 5.
As I said at the outset, these amendments are essentially technical. They are rather long and complicated but they are an endeavour to make the new Act, the 1984 Act and the earlier Act clearer and beyond question. My Lords, I beg to move these amendments en bloc.
Moved, That this House do agree with the Commons in the said amendments.—(Lord Lucas of Chilworth.)
Lord Bruce of Donington: My Lords, the noble Lord can say it again: the amendments are, indeed, complicated and by the time one has eventually traced them through the various Acts to which they refer, one comes to the conclusion that the Government are right. Therefore, we agree with the amendments.
Lord Lloyd of Kilgerran: My Lords, I should like to repeat what the noble Lord, Lord Bruce of Donington, has said: these amendments are technical and complicated, but they are useful and will assist I think the jurisprudence in relation to intellectual property to be more closely affiliated to the needs and the atmosphere of the Treaty of Rome in relation to which we have to consider many of these international problems.
I should like to add, although perhaps it is irrelevant to these amendments, how much I welcome the co-operation that has existed in relation to improving the law concerning intellectual property in patents, designs and marks embodied in this Bill. I am very grateful for the courtesy and kindness shown to me by the noble Lord the Minister and for the way in which he has given an opportunity for co-operation between myself—having spent most of my adult life in this field—and some of his hard-working officials.
In conclusion, may I dare to say that I hope that the co-operation which has existed as regards this small Bill, and particularly in relation to the Treaty of Rome (in the context of which intellectual property must be considered) will continue in relation to the Bill which will be arising from further considerations of the White Paper on intellectual property and innovation in not the very near future, but in the next few months.
On Question, Motion agreed to.

British Council and Commonwealth Institute Superannuation Bill
Brought from the Commons; read a first time, and to be printed.

Education (No. 2) Bill
7.27 p.m.
Baroness Hooper: My Lords, I beg to move that this Bill be now read a second time.

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This is a short and uncontentious measure. Some of its provisions are highly technical, and I will not attempt to describe them all in detail today. I will limit my remarks to a description of the overall result which the Bill is designed to achieve. The first clause gives my right honourable friend the Secretary of State for Education and Science specific power to pay grants to the Fellowship of Engineering and to the Further Education Unit. Those bodies have both received grants for several years and I hope that your Lordships would agree that they should by this means be enabled to continue their work. There is, however, a general principle recommended many years ago by the Public Accounts Committee that, where payments, originally made under the general powers of the Appropriation Acts, are to be continued over a period of years, this should be done on the basis of specific statutory authority. Accordingly my right honourable friend is seeking specific authority to pay grants to these two bodies.
The second part of the Bill deals with a system known as pooling. This is an arrangement whereby the costs of certain local authority expenditure on education is shared between all education authorities. It has operated for many years. The purpose of the Bill is to allow the system to continue to operate as it has in the past, but taking account of circumstances which were not foreseen at the time the original pooling legislation was enacted. It affects only the mechanisms for sharing costs between authorities. It may be helpful to your Lordships to know that this Bill will not affect the way in which education provision covered by pooling, and in particular advanced further education is organised.
The central principle of pooling is that all authorities contribute to a pool in accordance with formulae, and all may draw from the pools, either what they spend, or, in the case of most advanced further education expenditure, an amount determined by the Secretary of State. The difference between what an authority is due to receive and what it contributes is known as its pooling adjustment. This may be either positive—if its receipt is greater than its contribution—or negative—if it contributes more than it receives.
The vehicle for operating pooling is the rate support grant system. Under Section 63 of and Schedule 10 to the Local Government Planning and Land Act 1980, the block grant otherwise payable to local authorities may be adjusted to give effect to the education pools. Authorities with a positive pooling adjustment have their block grant increased. Those with a negative adjustment have a reduction in their block grant. The total of positive adjustments matches the total of negative adjustments, and there is no effect on the amount of block grant payable in total.
The situation which has now arisen is that this year for the first time one or more authorities in England may have a negative pooling adjustment which is larger than the block grant payable for the year in their case. The pooling adjustment cannot therefore be effected wholly through a reduction in block grant. The 1980 Act does not provide for such a situation. Clause 2 of this Bill remedies the deficiency by
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empowering my right honourable friend the Secretary of State for the Environment to recover directly that part of a negative pooling adjustment which cannot be recovered through a reduction in the authority's block grant.
Clause 3 of the Bill introduces a technical device, substitution payments, to ensure that the operation of the pooling system continues to have a neutral effect on the total of block grant payable. It also puts beyond doubt the right of an authority which does not otherwise receive block grant to receive positive pooling adjustments; this is the position of the Inner London Education Authority.
The remaining clauses deal with timing, definition and extent. The pooling provisions may be required for use in this financial year in England. The Bill also extends to Wales, as with existing pooling legislation. However, a separate pooling system is operated in Wales, and it is not expected that my right honourable friend the Secretary of State for Wales will need to use the new powers.
The Bill has been certified as a money Bill, and in accordance with normal conventions will not be considered by a Committee of this House. Your Lordships will nevertheless wish to know the reasons for it. I hope that these will be clear from the brief explanation I have given. This is a limited measure, but one which is very necessary if the education pooling system is to continue. I commend it to the House.
Moved, That the Bill be now read a second time.—(Baroness Hooper.)
7.30 p.m.
Lord Irving of Dartford: My Lords, after the outbreak of harmony following the Gas Bill it would be churlish of me to change the mood. First, I should like to welcome the achievements of the Further Education Unit. It has played an important part in developing curriculum work, and particularly for adult learning and continuing education. I should also like to pay tribute to the work of the Fellowship of Engineering.
As to the Bill, one of my honourable friends in another place said that he was told it was simple, non-controversial, and simply to rectify some of the anomalies that had presented themselves in recent years. It does not seem at all simple to me; non-controversial, yes, and that can be demontrated by the fact that it took only 23 columns for all its stages in another place.
There was some doubt, however, as to whether it rectified all the anomalies which have arisen in the last few years. It is further complicated, as the noble Baroness has said, by being a money Bill, which means that we cannot amend it anyway, and by the fact that we must pass it within a month, which seems a little academic. I want therefore to confine myself to asking the noble Baroness the result of the reconsideration that the Government said was under way when the Bill had its Report stage in another place.
There was the problem of the 1981–82 capped pool. The reconsideration that was undertaken at that stage had not then disclosed whether there would be need to have new legislation, presumably in due course, as to

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the Secretary of State's power to remedy that position. For us, it seems that as ILEA clearly paid an unfair proportion it would seem only fair for the Government to find some way of compensating it. That is for the year 1981–82.
The Government said in addition on Report stage that they were seeking much more important changes to pooling legislation—changes that were urgently needed if the pooling system is to continue to function. Can the noble Baroness tell us anything about that? But in particular can she give us an assurance that the Bill will now rectify all the anomalies, including the one I have mentioned, which have arisen and which were mentioned in the debate in another place?
Lord Ritchie of Dundee: My Lords, I, too, should like to thank the noble Baroness the Minister for her explanation of this Bill and to express the willing acceptance from these Benches of its provisions. We are pleased that the two bodies named in Clause 1 are to receive support from the department for the excellent work that they undoubtedly do.
There is one question I should like to ask the Minister for enlightenment. It is about the statement made under the heading "Financial effects of the Bill" in the introductory Memorandum. It is stated that annual grants of £0·45 million and £2·5 million are already paid to the Fellowship of Engineering and the Further Education Unit respectively, and that no net increase in public expenditure is expected. This seems to imply that these sums are fixed for all time, with no allowance made for inflation, and that there will be a consequent gradual decline in the value of the grants in real terms. Is this really the situation? We should be grateful to the Minister for some explanation, if possible.
Regarding Clauses 2 to 4, we have taken on board that pooling arrangements have been in operation for 25 years, and that the basic principles of the provisions in this Bill have been approved by the associations of local authorities. This being so, we are happy to know that satisfactory arrangements are to be made for the very important work of these two organisations.
Baroness Hooper: My Lords, I am glad that we are all agreed that this is an uncontroversial Bill. Although its provisions are complex, they are indeed necessary. I should also like to join with the two noble Lords opposite in adding my comments about, and acknowl-edging, the valuable work done by both bodies concerned in the grants in their respective fields; the Fellowship in the maintenance and promotion of excellence in the field of engineering, and the Further Education Unit in the promotion and development of efficient further education provision.
The noble Lord, Lord Irving of Dartford, referred to the position of ILEA and its back years' claim, and the method of calculation of contributions to the advanced further education pools. Perhaps I may respond to this in a little detail. Last year my right honourable friend introduced a new formula for determining contributions following a successful legal challenge brought by the Inner London Education Authority. The ILEA subsequently claimed compensation for the injustice which it alleged it had
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suffered through the use of a different formula in earlier years.
It was suggested in the other place that legislation should be introduced to facilitate the payment of such compensation, but the Government do not agree. The regulations in force in the years before 1985·86 were made in good faith and were laid before Parliament. They were not subject to legal challenge at the time. Local authorities, including ILEA, took account of the pooling adjustments due under those regulations in fixing budgets and issuing rates or precepts for the years in question. A restrospective refund for ILEA from the pool would cause considerable disruption to the finances of other education authorities, and in the Government's view there is no case for such a refund, and no case for seeking to amend legislation on this account.
The other part of the noble Lord's remarks concerned the calculation of authorities' entitlements from the pool for expenditure on advanced further education in 1981–82. Exceptionally, the method developed for setting these allocations in 1981–82 involved a recalculation of allocations once actual expenditure on advanced further education for the year was known. This is always some time after the event, and the relevant information has only recently become available.
However, it has also now come to light that the legislation under which this pool is operated may not allow the recalculation to be carried through in the way originally intended. It is possible, but by no means certain, that further legislation may be required on this point. However, in the Government's view it would have been premature to legislate in this Bill, which is required urgently if the pooling system is to continue to function. I hope that that reassures the noble Lord somewhat on the point he raised.
The noble Lord, Lord Ritchie of Dundee, made reference to the Memorandum of the Bill and expressed concern about the level of grants. I understand that the figures quoted at the end of the Explanatory Memorandum are those agreed for the current year, which will not be affected by this Bill. The level of grant in future years will be assessed in the usual way after consultation and on the merits of any particular case. With that, I must finalise by saying that I am grateful to noble Lords for their expeditious treatment of the Bill. I commend it to the House and ask that it be read a second time.
Lord Irving of Dartford: My Lords, before the noble Baroness sits down, may I thank her for that hope, perhaps slender, that there may be new legislation in the future?
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 8th July), Bill read a third time, and passed.
House adjourned at nineteen minutes before eight o'clock.