Lords Sitting of 12 February 1987

Preamble
The House met at three of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

Message From the Queen
The Earl of Airlie: My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen signed by her own hand. The message is as follows:
"I have received your Address praying that the Address to my Royal predecessor of 5th July 1927 on peerages in abeyance is set aside and submitting certain recommendations on the procedure to be followed should further claims to peerages in abeyance arise. I will comply with your advice and will issue instructions in accordance herewith".

EC Consumer Consultative Committee
3.7 p.m.
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 whether, upon relinquishing the presidency of the European Community on 31st December last, the chairman of the European Council of Consumer Affairs Ministers indicated the progress made for strengthening the Consumer Consultative Committee and for the correction of the imbalance therein between consumer interests and others; and what dates have been arranged for meetings both of the Consumer Affairs Ministers and the Consumer Consultative Committee in 1987.
Lord Beaverbrook: My Lords, my honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs has drawn attention in speeches to the resolution agreed by the consumer council last October. This resolution referred to the need for effective and duly representative consultation of consumers so that consumers' priorities are adequately reflected in the work of the Community. In line with the resolution, the Commission will keep the matter under review and report at the end of 1987. The Government understand that the Belgian Presidency will hold a consumer council on 10th June and that the Consumer Consultative Committee will be deciding future meeting dates next week.
Baroness Burton of Coventry: Obviously, my Lords, the answer to the first part of the Question is no. I believe that the Government are sympathetic to the idea of reforming the Consumer Consultative Committee, but do they accept that the real problem lies in Brussels? Is the Minister aware of the dissatisfaction that is felt among consumer organisations
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about the ineffectiveness of the committee, as reflected in the report to your Lordships' House of the Select Committee so ably chaired by the noble Baroness, Lady Serota? Arising from that, may I ask the Minister to tell the House whether the Government support Conclusion No. 68 of that report which calls for the strengthening and reform of the Consumer Consultative Committee?
Lord Beaverbrook: My Lords, naturally I am aware of the concern of the noble Baroness and of her efforts on behalf of consumers in Europe. There are a number of subjects under discussion. As she will know, there are proposals on unit pricing, toy safety and imitations of consumer products. All these matters may come before the Council of Ministers, but the agenda is a matter for the Belgian Presidency.
Baroness Burton of Coventry: My Lords, I asked the noble Lord about one specific matter. I wish that he would not ride off on other red herrings. I asked him if he could tell the House whether the Government accept Conclusion No. 68 of the report of the Select Committee of your Lordships' House which was chaired by the noble Baroness, Lady Serota.
Lord Beaverbrook: My Lords, the Government accept the findings of the Select Committee that the present consultation arrangements are not satisfactory. The new resolution of the Council underlines the necessity for effective and duly representative consultation of consumers. The European consumer council and the Government are not wedded to any particular reforms but want to see emerging a credible package of improvements.
Baroness Serota: My Lords, can the noble Lord say whether consideration is being given to publishing the reports of the Consumer Consultative Committee in the future?
Lord Beaverbrook: My Lords, I think that that will be a matter for the committee itself to decide.
Lord Harmar-Nicholls: My Lords, will my noble friend keep in mind the real meaning of "consultation"? The enthusiastic voices of consumers are not silent and their point of view is certainly made known. It is right that it should be. However, consultation ought not automatically to mean that what they recommend must be accepted. There are many other surrounding circumstances that the people who make decisions have to take into consideration.
Lord Beaverbrook: My Lords, I agree with my noble friend. The Government are not privy to the European Commission's consideration of these matters. However, the consumer council has called on the Commission to produce a report and we hope that it will take note of the consultation that has taken place.
Baroness Nicol: My Lords, we welcome the statement from the noble Lord that the Government support the findings of the Select Committee. However, we should like to know whether there has been a British initiative on any of the recommendations put forward by that committee and on any of

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the items discussed by it. For example, has there been a British initiative on the introduction of consumer impact audits, which would be a cost-effective and useful innovation? What about direct consultation with consumer groups? There is nothing about that in the original Answer that the noble Lord gave.
Lord Beaverbrook: My Lords, with regard to impact statements, the Government will press for the resolution to be implemented conscientiously and effectively. At the end of the year the commission is to make a progress report and we shall review that carefully.
Baroness Burton of Coventry: My Lords, the end of the year is a long time away. May I ask the Minister one other question? What representations have the Government made to the European Commissioner for Consumer Affairs on reform of the Consumer Consultative Committee? Is he aware, following the remarks made by his noble friend Lord Harmar-Nicholls and from my questions that the Commission and the people in Brussels are unlikely to be overburdened by the decisions that they take?
Lord Beaverbrook: My Lords, we constantly press for progress on consumer matters. As I said, my honourable friend has made a number of speeches, including one on 19th November to the European Parliament, to press for progress in this matter.

Nuclear Deterrent: Capacity
3.13 p.m.
Lord Mayhew: 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 are the expected changes in international relations in the 1990s which will call for a more than fivefold increase in the capacity of the British nuclear deterrent.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, as the Government have made clear on many occasions, Trident, like Polaris, will be a minimum deterrent and will include only those enhancements which will be vital if Trident is to continue to meet effectively, well into the next century, our national deterrence criteria—criteria which have remained essentially unchanged and have been judged appropriate by successive governments for more than 20 years.
Lord Mayhew: My Lords, will the noble Lord give an assurance that if the Soviet threat and the danger of war in Europe recede in the years ahead, the policy of a fivefold escalation of nuclear weapons will be modified by the Government?
Lord Trefgarne: My Lords, the exent to which Trident will be more capable than Polaris will depend upon a number of factors (notably the effectiveness of Soviet defences) which cannot be judged in detail until the time comes.
Lord Molloy: My Lords, can the Minister assure the House that the Trident policy will in no way endanger our forces in Europe with regard to the weapons they have in their hands to resist aggression, if need be? Can he assure the House that British forces on the ground and in the air will in no way suffer because the Government are following the extraordinarily expensive Trident policy?
Lord Trefgarne: My Lords, I can assure the noble Lord that the great danger that British troops in Germany now face is the prospect of the policy of noble Lords opposite.
Lord Graham of Edmonton: My Lords, can the Minister confirm that the Trident cancellation fee will be 125 per cent. of the original cost of £7 billion? How does the Minister justify such a contract? Is it not a contract designed primarily to obstruct future governments who may wish to decommission Trident and may well have an election mandate to do so?
Lord Trefgarne: My Lords, no. There is no intention of moving in the way that the noble Lord suggests. The cancellation terms that are being incorporated in the contract which exists for the first submarine, and which will be in place before long for the second submarine, seek only to be fair and reasonable to the parties concerned.
Lord Orr-Ewing: My Lords, is my noble friend aware that for a decade 10,000 Soviet scientists have been deploying their version of SDI: that is to say, the interception of missiles by missiles? If that achieves the results that they intend, is it not wise to have extra capacity so that with Trident we can afford to choose as between decoys and nuclear warheads?
Lord Trefgarne: My Lords, yes, indeed. My noble friend is right. By the time that Trident comes to be deployed in the mid-1990s, a much greater range of defences will have to be penetrated. For all that it will be able to achieve, Trident will represent a smaller proportion of Soviet strategic warheads than Polaris did in 1970, even if the currently proposed 50 per cent. reductions in strategic arsenals are to be agreed between the super powers.
Lord Kennet: My Lords, the Minister of State has told the House that Trident's penetration ability depends on Soviet defences. It is easy to understand that. Is it the Government's opinion that Soviet defences are likely to be the stronger or the weaker if the Reagan Administration were now to confirm every comma of the ABM Treaty and cancel their SDI initiative?
Lord Trefgarne: My Lords, I doubt whether that has much to do with it. Soviet defences and offensive capability continue to grow unabated.
Lord Jenkins of Putney: My Lords, the Minister's Answer to the original Question consisted of nothing but vague generalisations. Will he spell out a little more the purpose of Trident? Is not the idea behind Trident that it should be able simultaneously to kill a large number of people in a large number of Soviet

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towns? What is the need for that when everybody on earth can already be killed several times over? Does he agree that there is no point in Trident? It is an unnecessary expenditure upon which the Government have embarked, and they are entirely unable to explain exactly why they have done so.
Lord Trefgarne: My Lords, the purpose of Trident is to deter any potential aggressor from launching an attack upon us. We can only do that by having a credible response.
Lord Avebury: My Lords, the Minister said that we had to have a fivefold increase in the number of warheads because of the greater range of Soviet defences which will have to be penetrated in the 1990s. Is the development of Trident predicated on the assumption that the Soviets will have an anti-ballistic missile system in place in the 1990s, contrary to their treaty obligations?
Lord Trefgarne: My Lords, the basis of the system that we are now acquiring and will deploy in the mid-1990s is that by that time the existing Polaris system will be coming to the end of its useful life. It is therefore necessary to have a new system in place. We are certain that by then we will have to penetrate a wide range of new defensive capabilities.
Lord Mottistone: My Lords, is it not most important not to mention detailed figures when one is talking about a deterrent? It is much more important to keep people guessing about one's capability than to try to spell it out. Would it not be better if noble Lords opposite did not try to intrigue my noble friend into giving details? Would it not be better if this Question—to which my noble friend has not given a figure answer—is forgotten altogether?
Lord Trefgarne: My Lords, my noble friend puts his finger on a very appropriate point. The whole effectiveness of an independent nuclear deterrent is the uncertainty which it plants in the mind of the potential aggressor.
Lord Cledwyn of Penrhos: My Lords, on referring to SDI the noble Lord touched on an immensely important point. He confirmed to his noble friend Lord Orr-Ewing that in the development of SDI the Russians are as far advanced as, if not further advanced than the Americans. Is that indeed the case? If Russian SDI is as far advanced as American SDI, why are these two points not put on the table in disarmament conferences?
Lord Trefgarne: My Lords, I did not say that. I said that Russian research in this area is proceeding apace. What the success of that research is I cannot yet say. I certainly cannot yet say for certain what the scale of the defences will be in the mid-1990s.
Lord Cledwyn of Penrhos: My Lords, is it not the case that Mr. Caspar Weinberger has said that the Russians have been working on SDI for at least 14 years? Has the noble Lord nothing more to say about the matter? It is no use leaving it in the air. Do Her Majesty's Government believe that Russian SDI development is significantly far advanced?
Lord Trefgarne: My Lords, as Mr. Weinberger has said—and as I have said in this House on a number of occasions and as the noble Lord has reminded us—Soviet research in this area has been proceeding for 10 or 15 years at least. Therefore if we are to achieve a system of our own we need to get a move on. The SDI programme has started only comparatively recently. Precisely what success the Soviets have so far had, I cannot say. However, it would be a brave, and I believe unwise, man who assumed that they will not have some success between now and the mid-1990s.
Viscount Trenchard: My Lords, does my noble friend agree that in addition to the reason that he has given for Trident being only comparable with Polaris at the turn of the century—namely, the build-up of the anti-ballistic defences—there is also the important question of submarine vulnerability? Will he confirm that his painstaking scientists, civilians and service experts are still advising that it is necesary to move to something with the range of Trident by the mid-1990s if we are to keep a deterrent comparable in effectiveness to the one we have at the present time—though nothing like five times as effective?
Lord Trefgarne: My Lords, my noble friend is certainly quite right to remind your Lordships that by the mid-1990s the Polaris system will be coming to the end of its useful life and will have to be replaced with one system or another. We believe that the Trident system is the most cost-effective way of doing that, not least because of the improvement in Soviet anti-submarine capability, as my noble friend points out, which will to some extent be countered by the fact that the Trident submarines will have some 15 times more sea room in which to conceal themselves.
Lord Mellish: My Lords, to avoid any misunderstanding, will the Minister take it from me that there are many noble Lords on both sides of the House, who believe that the ownership of Britain's nuclear deterrent has been absolutely right; and that furthermore that that is proven by the fact that today the Russians appear to be much more conciliatory than they have been in the past? Does he agree that it would be quite foolish of us to take that situation for granted and do away with any nuclear deterrent unless we can be absolutely certain that peace is sound and viable?
Lord Trefgarne: My Lords, I welcome the fact that some members of the Opposition are not as daft as their leaders.
Lord Hatch of Lusby: My Lords, in his original Answer the Minister referred to Trident being the minimum deterrent. That is a comparative term. If present weapons are capable of obliterating the whole human race five times, what would he consider to be the maximum deterrent?
Lord Trefgarne: My Lords, I am not sure that that is a question which needs an answer.

Banks: Foreign Takeovers
3.26 p.m.
Lord Williams of Elvel: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their attitude to foreign takeovers of British-owned banks.
Lord Beaverbrook: My Lords, I refer the noble Lord to the reply of my honourable friend the Economic Secretary to the Treasury to the debate on Clause 22 of the Banking Bill on 15th January during Committee proceedings in another place.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord for his reply. Is he aware that there is serious disquiet in the British banking community, which is shared by the Bank of England, that major British banks may now be open to takeover from foreign institutions without proper control? Is he aware that there is nothing in the Banking Bill so far which prevents this? Are the Government flexible on this issue or is their mind closed?
Lord Beaverbrook: My Lords, noble Lords will be aware that the Banking Bill is presently in another place. It would be inappropriate and premature for me to comment on it now. There will be ample opportunity for noble Lords to discuss and fully debate the Bill when it comes to your Lordships' House. However, I understand the concern of the noble Lord. It may be of some comfort that in the one case where an attempt was made to acquire a UK clearing bank the matter was referred to the Monopolies and Mergers Commission and the acquisition was stopped.
Lord Grimond: My Lords, while we understand his reluctance to go too far in this matter before the Bill appears, can the Minister assure the House that the Government are aware of the peculiar importance of Scotland in this area? Will he give some assurance that if a Scottish bank is threatened with takeover not only will its importance in the British banking system be adequately safeguarded but also its importance for Scotland? At present under takeover laws this does not appear to be a factor which is taken into account.
Lord Beaverbrook: My Lords, I shall of course bring the comments of the noble Lord to the attention of my honourable friend in another place.
Lord Taylor of Gryfe: My Lords, while I share the concern of the noble Lord who has raised this Question, is the Minister aware that the British banks referred to have been actively engaged in the past five years in acquiring US banks? Is there any danger of retaliation in the event of any prohibition being established? Does the Minister not feel that there is adequate provision in the consideration of the Monopolies and Mergers Commission of public interest in dealing with this matter?
Lord Beaverbrook: My Lords, we are not aware of any reciprocal attempt by American banks simply
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because our banking institutions have purchased companies in the United States. We are not aware of any particular move in the other direction.

Business
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Report stage of the Pilotage Bill will be adjourned at approximately 7 p.m. for about one hour and that during this adjournment the Protected Shorthold Tenancies (Rent Registration) Order 1987 and the Rent (Relief from Phasing) Order 1987 will be taken.
Petroleum Bill
Brought from the Commons; read a first time, and to be printed.
Grampian Regional Council (Harbours) Order Confirmation Bill
Brought from the Commons, read a first time, and, (pursuant to the Private Registration Procedure (Scotland) Act 1936) deemed to have been read a second time and reported from the Committee.

Pilotage Bill [H.L.]
3.30 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Brabazon of Tara.)
Lord Simon of Glaisdale: My Lords, before a decision is made on that Question, I should like to ask the Minister how late he proposes to proceed on this Report stage. It is a most important Bill, reforming the law for the first time since 1913, and reforming the system of pilotage, which dates from long before that. There are 112 amendments listed for consideration. A number of them are of great importance; some are very lengthy, and some are very difficult to understand. Will the Minister assure us that we shall not be sitting into the early hours of the morning, or even the late hours of the night? I should like to remind your Lordships—
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, not until I have put the Question! My noble and learned friend on the Cross-Benches did not let me do so. If he wishes to speak on the Question, he must let me put it.
The Question is, That the Report be now received.
The noble and learned Lord may now proceed.
Lord Simon of Glaisdale: My Lords, may I have an answer from the noble Lord? The Bill is very lengthy with 112 amendments. Not all of us are in the full

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plenitude of the mental and physical powers of the noble Lord and others of your Lordships. It would be an abuse of your Lordships' use of parliamentary time if the Bill were pursued very late tonight in view of the fact that we are starting at half past three.
The Lord President of the Council (Viscount Whitelaw): My Lords, I am sure that the House will appreciate that this was the Bill on which we tried the new procedure of a Standing Committee. I believe that I am right in saying that some 11 hours of debate took place during the Committee stage in that Standing Committee. I also remind your Lordships that this was a procedure to enable the amount of time taken on Report to be cut down. From what the noble and learned Lord, Lord Simon of Glaisdale, is saying, that does not seem necessarily to be the case. However, I am sure that we should proceed to the best of our ability. I am also sure that if, in view of the considerable time that has been taken in Committee, all noble Lords keep their remarks very short—as I am sure they will—we should make very satisfactory progress.
On Question, Motion agreed to.
Report received.
Clause 1 [Meaning of "competent harbour authority" and "harbour"]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 1:
Page 1, line 15, after ("area") insert ("or areas").
The noble Lord said: My Lords, I beg to move Amendment No. 1, with the leave of the House I wish to speak at the same time to Amendment No. 2. These are technical amendments. There are a number of harbour authorities who have responsibility for one or more additional harbours, over and above the harbour which is in an active pilotage district and by virtue of which they qualify as a competent harbour authority. There is no need for their CHA responsibilities to cover such additional harbours, and this amendment limits their responsibilities to harbours where there is an active pilotage service. I beg to move.
Lord Strathcona and Mount Royal: My Lords, I do not wish to speak to these amendments. However, as we are at Report stage I should like to make a point about the groupings.
I remind your Lordships—if that is necessary particularly after the comments that have just been made—that we are allowed to speak only once on amendments. If we group the amendments—and some of them are complex, as the noble and learned Lord has said—we run into a real danger of getting into difficulties when we reach some of the detailed amendments later. Therefore, I suggest that while we talk to them when they are introduced, it would be very helpful if they could be formally moved and then almost immediately withdrawn in case anyone wishes to make a comment later on any of the grouped amendments.
Lord Brabazon of Tara: My Lords, with the leave of the House, of course noble Lords have every right to do that, if that is what they wish, when we come to the various amendments. The groupings were agreed
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through the usual channels; but if a noble Lord wishes to speak on a particular amendment which was grouped with others, then, as I understand it, he has every right to do so.
Lord Shackleton: My Lords, they may have been agreed through the usual channels, but not necessarily with those who, like the noble Lord, Lord Strathcona, wish to move the amendments.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 2:
Page 1, line 17, at end insert ("but, where there are two or more separate such areas, include only those areas which fall wholly or partly within an active former pilotage district").
On Question, amendment agreed to.
Clause 2 [General duties as to provision of pilotage services]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 3:
Page 3, line 28, at end insert—
("( ) Without prejudice to the generality of subsection (1) above, each competent harbour authority shall in performing its functions under that subsection have regard in particular to the hazards involved in the carriage of dangerous goods or harmful substances by ship.")
The noble Lord said: My Lords, I shall deal with this amendment very briefly. It fulfils an undertaking which I gave in Committee when discussing amendments moved by my noble friend Lord Swinfen and the noble Lord, Lord Underhill, which were spoken to by many others. It places a specific duty on competent harbour authorities to take account of the hazards presented by shipping carrying dangerous cargoes when they are considering pilotage needs in the port, including the stage to which pilotage should be made compulsory. I beg to move.
Lord Swinfen: My Lords, I welcome this amendment and I thank my noble friend for bringing it forward.
On Question, amendment agreed to.
Clause 3 [Authorisation and employment of pilots]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 4:
Page 3, line 32, leave out ("subsections (3) and (6)") and insert ("subsection (3) and section (Employment etc. of authorised pilots)").
The noble Lord said: My Lords, I beg to move Amendment No. 4, and at the same time speak to Amendments Nos. 15 and 30 in my name on the Marshalled List. I understand that it will also be convenient for noble Lords to speak to Amendments Nos. 15, 16 and 17, and Amendments Nos. 31 to 35.
Amendment No. 4 provides for the transfer of the provisions about the employment or other contractual arrangements made with pilots to a new clause proposed in Amendment No. 30. I shall briefly outline that now.
Clause 3 of the Bill as it stands at present is long and complex, and during our discussions in Committee there were understandable requests that we should consider whether it might be simplified and clarified. This amendment is the result of our efforts, and while

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I fear noble Lords will see that it does not shorten the Bill, I hope this part of the Bill will now be a little easier to understand.
The principal change is that, by virtue of this amendment and the associated amendments to Clause 3, the provisions concerning the employer or other contractual arrangements which a pilot has with his CHA are separated from those concerning his authorisation to do the job as pilot. It is important to bear in mind the difference between the situation under present legislation and that proposed in the Bill. At present a pilot's relationship with his authority is governed solely within the statutory provisions by his licence: in future he will have a contract agreement, whether of employment or of service, and his authorisation does not therefore play the same central role as his licence does at present. I hope the separation of these two aspects into separate clauses will help to make this clearer.
The new clause contains in subsection (1) a specific power to make arrangements for pilots' services to be provided either by contract of employment or by a contract for services, which would include arrangements with self-employed pilots. I hope this reassures noble Lords that the earlier drafting did not allow for the possibility of self-employment, despite our statements, in the White Paper and elsewhere that it was our intention to do so.
The provisions concerning the obligation on a CHA to offer employment now fall in subsections (2) to (4). I am afraid that we have not been able to find a way of simplifying them. But I think that, set against the new subsection (1) their place in the overall scheme of things is much clearer. In Committee, the noble and learned Lord, Lord Simon, suggested that the matter might be left to negotiation with the pilots' organisations, but where the intention is to give pilots a statutory right, I believe that more specific provisions of the kind in these subsections are inescapable.
I should mention two particular points on these subsections. First, the offer is now simply "to employ" rather than "to employ as a pilot", which meets Lord Simon's point about the position of those who may be employed to do other work as well. Secondly, the arrangements about who should be the relevant licence holders in pilotage districts with revised CHA's (the case in subsection (3)(b)) have been amended, as it has been pointed out that the original arrangements would have been impracticable, at least in the present London pilotage district.
Finally, Clause 3(7) of the Bill was interpreted as ruling out any possibility other than employment. As I explained in Committee when moving the amendment which added that subsection, the intention was to make it clear that, if no agreement with a pilot on his employment was reached, the CHA was not obliged to authorise him. The revised version in subsection (5) of this amendment makes clear that that also applies where no other arrangements, on some basis other than employment, have been made with the pilot. In other words, that a CHA is under no obligation to authorise—and indeed almost certainly will not authorise—any pilots with whom no arrange-
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ments, whether based on employment or self-employment, have been made.
I hope noble Lords will agree that the amendment is an improvement. Inevitably, the statutory right to be offered employment which we are proposing looms large in the clause, whereas there is no similar need for detailed provisions covering the various other arrangements which will be possible, and which will be arrived at by discussion between the CHA's pilots and agents. This amendment will make it plain that such other arrangements are possible. I beg to move.
Lord Underhill: My Lords, I should like to make one or two introductory remarks. It will be noted that there are a number of amendments down in my name and in the name of my noble friend Lord Carmichael of Kelvingrove. I hope that the House will accept my assurance that these are in no way party political amendments. I have been advised on these matters by the pilots' organisation who are seeking fair and equitable treatment under the new scheme. Although the Bill is very controversial, it is not politically controversial. I hope that the House will clearly understand that point because with the number of names which appear on the amendment there may be the impression that these are party political matters. Party politics does not enter into these amendments.
It may well be that some of my remarks will be disjointed. I appreciate that there must be a certain amount of grouping but I did not receive the final grouping until 1.45 p.m. As we have to do our own clerical work and research, matters may be in a bit of a mess.
Concerning Amendment No. 16, in the names of the noble and learned Lords, Lord Brightman and Lord Simon of Glaisdale, and also Amendment No. 4 which has been moved by the noble Lord, Lord Brabazon of Tara, there is no way in which the pilots' organisation can support leaving out from the Bill subsections (4), (5) and (6). That would be the position in both Amendment No. 16 and the government amendment which noble Lords have just heard. Amendment No. 16 in the names of the noble and learned Lords, Lord Brightman and Lord Simon of Glaisdale, would have the effect of allowing a competent harbour authority to vary the terms of each type of contract so as to nullify the options. Other noble Lords will be putting their own case, but as I can only speak once, I must deal with all the amendments at this stage. Amendment No. 16 would allow individual pilots to make a choice between being employed or self-employed. Such a mix in the same authority would result in administrative and operational chaos. The pilots would be unrepresentational and at the end of the day the two camps could easily be at each others throats.
Amendment No. 16 must be considered with the government amendment which would add the new clause under the government Amendment No. 30, on the employment of authorised pilots, and also amendments which appear in my name, Nos. 31 to 35. It is somewhat strange that in the Bill, the Government appear to take the view that it is right for pilots not authorised in new régimes to participate in the determination of whether or not those pilots who will continue shall be employed or self-employed. If

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that interpretation of what is contained in the Bill is incorrect, I hope that the Minister will put me right.
The government amendment is preferable to Amendment No. 16 provided it is amended along the lines suggested in my amendments Nos. 31 to 35. Unless that is so, then frankly we do not like Amendment No. 16, and we do not like the new clause in the government Amendment No. 13. Amendment No. 17 in my name would delete subsection (7). As drafted, that subsection is totally unacceptable. The statement made by the Minister at Committee stage that the amendment would provide a fall back is not clear. The Minister stated that the amendment would provide a fall back for pilots to be employed by the CHA.
The subsection can be interpreted as meaning that a competent harbour authority would be able to offer any terms that it may consider fit, even derisory terms, which was the phrase used by the noble Lord, Lord Walston, at col. 49 of the Hansard report of the Committee stage. The potential new pilot would be unable to accept such terms, and the CHA can be considered to have avoided a statutory duty of the obligation to offer to employ. Such treatment could not be considered fair, and would make a mockery of any local negotiations. The competent harbour authority would have total power over any pilot wishing to continue his profession under employed status.
Concerning the Government Amendment No. 30, as drafted, this new clause would allow a competent harbour authority to employ pilots on whatever terms the CHA thought appropriate. Subsection (1) states:
"… a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots.".
Subsection (5) states:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above.".
This is precisely what is at present in subsection (7) of Clause 3 to which I have already stated objection. It can be seen from subsection (5) that a relevant licence holder—namely, a pilot presently licensed wishing to continue as a pilot—will not be authorised to do so by the CHA unless he accepts the terms and conditions of employment offered by the CHA.
It is incredible to think that the Government of this country in revoking pilots' licences by means of legislation should command that injustice by what can only be described as an act of immorality. To then introduce a clause entitled temporary procedure for resolving disputes as to terms of employment, to which we shall come to later on, adds only insult to injury. Clearly, if the primary legislation states that the terms and conditions are to be in accord with what a CHA considers appropriate, then what purpose can be served by the establishment of an arbitration panel? Primary legislation will allow a CHA to ignore its determinations.
Amendments Nos. 31 to 35 of this clause are all designed to ensure that any terms and conditions offered are reasonable, in the broadest sense of the word, and should in the event of disagreement be referred to arbitration. The drafting will not in any
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way inhibit the freedom of the proposed arbitration panel. Concerning subsection (5), this amendment is more in accord with industrial attitudes prevalent in the latter quarter of the 20th century than the Government's drafting. It recognises what the Minister said throughout the Committee stage about the ability and power of the pilots to negotiate. Without this amendment which I am proposing to subsection (5), there will be no real rights of negotiations and all the power in the world will be to no avail. In summary, these amendments—Nos. 31 to 35—to the Government's amendment have something to do with justice and a sense of fair play and will ensure, as well as this type of legislation can, industrial harmony. The amendments which I propose are in full accord with the desire of the pilots to agree to the reorganisation scheme, but it should be fair and equitable as has been promised three or four times by government Ministers.
Lord Simon of Glaisdale: My Lords, there were a number of objections to Clause 3 as it stands, most of which have been dealt with by the noble Lord, Lord Underhill. The most serious was that whereas at present pilots are, except in two pilotage districts, independent contractors, the clause as originally drafted and as now reported to your Lordships gives no rights to the pilots as independent contractors.
What is more, any contract given under what is now subsection (4) has no need to be, as the noble Lord, Lord Underhill, pointed out, a reasonable contract. That has been met by the noble Lord the Minister, and I desire to say that in this and a number of other respects he has gone a long way to meet views expressed in Committee. Nevertheless, I agree with the noble Lord, Lord Underhill, that the new clause the noble Lord has tabled is still unsatisfactory.
The fourth thing that was wrong with the clause as originally drafted, and is still wrong, is that although an offer of a contract of employment—which meant direct employment, master and servant—has to be offered, and need not be a reasonable one, that was subject to nullification if a majority of the relevant licence holders (those are the old pilots in question) or the relevant authorised pilots (those are the new pilots in question) decided otherwise. But there was no statement about what the alternative was. There was no statement that if they did not agree the offer of direct employment, they have the right to be self-employed as at present.
The drafting of this clause is extremely complicated—and I shall not read it out because it is a very long clause—and the definition of "relevant licence holders" is extremely difficult to understand. I have not been able to understand subsection (6) at all even after listening to the proceedings in Committee and examining it a great many times. After shaking it and holding it up to the light, I confess that I still do not understand what it means.
I hope that the noble Lord the Minister will explain what it means as it appears in the new draft, preferably without looking at the Notes on Clauses or any brief but looking, as the pilots and the Members of the harbour authorities will have to do, at the provsions of the Act as they will appear. It was for those reasons that my noble and learned friend Lord

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Brightman—unfortunately he has to go now, and it therefore falls to me to introduce Amendment No. 16—put down Amendment No. 16. I think your Lordships will agree that at any rate it avoids all the drafting difficulties of the clause as it appears.
It also obviates what I agree with the noble Lord, Lord Underhill, is the objectionable subsection (7) which takes away the right given on the vote. We put down the amendment after I had had the privilege of first meeting representatives of the pilots and ascertaining that they wanted to have the option of self-employment. That is the main purpose of our new provision.
I subsequently met them again in the company of the noble Lord, Lord Strathcona, who could not be present the first time. They pointed out to me the point made by the noble Lord, Lord Underhill; namely, that to have in one port or harbour some who are self-employed and some who are directly employed would be extremely difficult administratively. In fact, I think they put it that it was inviting administrative chaos.
Nevertheless, we decided to leave the amendment down because we hoped that provisions could be made by negotiation for a majority decision to be taken in each case. In other words, a majority of the pilots at any particular port who opted for direct employment would carry the whole personnel of the pilotage area, and those who opted for independent employment by a majority would similarly carry the vote.
I personally was encouraged when I saw one of the amendments to Amendment No. 30 by the noble Lord, Lord Underhill—it is Amendment No. 35—which refers to the representatives of the relevant licence holders. My only objection to that is that it involves this extremely complicated definition of "relevant licence holders". But it is something of that kind that the trade unions should negotiate on behalf of the whole body of pilots in a pilotage area, and on their behalf have the free option of either independent contractors or direct employment. It was for that reason that we maintained the amendment for your Lordships' consideration.
Like the noble Lord, Lord Underhill, I think that a lot of the objections to the original clause remain in the new clause, Amendment No. 30. In the first place, it has all the clumsy and difficult draftsmanship; and I still adhere to the view that I expressed on Second Reading that this is on the whole a well-drafted Bill and the fact that this clause is so clumsy, difficult and incongruous suggests that the draftsman has been given an impossible chore. I also think that the new subsection (5) takes away the right of choosing between being an independent contractor and being an employed pilot. If we look back to Clause 2, the competent harbour authority has to,
"provide such pilotage service as it considers need to be provided".
Under the amendment it can then either offer a contract of employment or a contract for services. If one looks at subsection (5) of the new clause one sees that the offer need only be what the competent harbour authority considers to be appropriate. In other words, that takes away the choice that is apparently given by the earlier part of the new clause.
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When we eventually consider that new clause we shall obviously have to consider very carefully the amendments of the noble Lord, Lord Underhill. At present it seems to me a most unsatisfactory clause and I hope that the Minister will have the opportunity of reconsidering it before the next stage, particularly to see whether there cannot be erected a system of consultation on the lines that I suggested which would give a real choice in each port between direct employment and the independent contractor status, which the pilots so greatly value and which operate today in all except two pilotable districts.
4 p.m.
Viscount Simon: My Lords, I have only two comments to make when we reach Amendment No. 30, but I assume from what has been said by the Minister that that will be moved in due course by him and we can deal with that matter when we come to it. In that case, on Amendment No. 4 I want to thank the Minister for having accepted the point to extend some of these provisions to cover people who are both pilots and otherwise employed as well.
Lord Strathcona and Mount Royal: My Lords, before the Minister replies I should like to make two points. This little debate has reinforced the point I was trying to make at the very beginning of this Report stage that it will be extremely important, if each of these amendments should subsequently be moved and discussed, for us to do our best to keep it as short as possible. Some of the considerations spread over a whole series of amendments and it is proper that we should be having a debate on this amendment attempting to cover many of the others. I believe we shall need to have an opportunity to discuss them one by one.
The only other thing I want to say is that I agree with almost everything that the noble Lord, Lord Underhill, said. I was lost in admiration for the way he managed to marshal all the arguments that have given us a good many misgivings about this matter.
I recognise that my noble friend the Minister is doing his best to put into the legislation what the Government say were their intentions—that it would be possible for pilots either to be employed or to be self-employed. If they were self-employed it would be possible for organisations—particularly one has in mind Trinity House—to operate on an agency basis. What has happened subsequently—one regrets that all this is happening at Report stage instead of at Committee stage—is that it has become extremely clear to the pilots that whatever the legislation may say the practicalities are that self-employment will simply not be an attractive and viable option. Unless self-employment is likely to be an option the agency concept simply will not work.
While one thanks the Government for their noble attempts to put into reality what their declared original intentions were, I believe that a number of us are expressing considerable doubts—even the great legal minds who do not totally understand what the clause means—about whether the Government have succeeded in doing what they have said they are trying to do.
Lord Brabazon of Tara: My Lords, I said when I explained Amendment No. 30 to your Lordships that it had not been easy to make it any clearer. But we have gone a great distance in making it considerably clearer, as we said at Committee we would do. Therefore I have fulfilled that wish of the Committee and I am grateful to the noble and learned Lord, Lord Simon of Glaisdale, for having said those kind words about the number of occasions on which I have met views expressed in Committee.
I take first the remarks of the noble Lord, Lord Underhill, in relation to his Amendments Nos. 31 to 35 to my Amendment No. 30. The noble Lord said first that it was unsatisfactory that pilots who were not going to be authorised should be able to determine whether the pilots who are to be authorised are to be employed or self-employed. The choice has to be made before the appointed day for practical reasons. It is therefore not possible to know whether pilots are to be authorised; therefore to allow all the existing pilots to exercise this choice is the only practical option.
The amendments are intended, as the noble Lord explained, to provide for arbitration to apply to any dispute between the pilots in a port and the CHA. From the references to relevant licensed pilots I take it that this procedure is intended only to operate in the period before the appointed day, not thereafter.
As I am sure the noble Lord will accept, for such a provision to be practicable it would need to be expanded considerably so as to indicate, for example, how the arbitrator is to be appointed and how his terms of reference are to be set. One would need to specify what constituted an offer, as mentioned in the third amendment.
To deal with the principle of these amendments, I am not at all persuaded that it is right or necessary for arbitration to apply to contracts of service as well as contracts of employment. A contract of service may be direct with self-employed pilots or it may be with an agent. I reaffirm, particularly to my noble friend Lord Strathcona, that it is our intention that the concept of self-employment or agents should be possible and we believe that in this Bill it is. A CHA may wish to go to competitive tender before placing such a contract and I find it difficult to see how arbitration on the reasonableness of the terms of such a contract would work.
As your Lordships are aware, and as the noble Lord, Lord Underhill, mentioned, we have brought forward an arbitration clause that relates to the employed situation, since we have accepted that the statutory obligation on a CHA to offer employment, if the pilots so wish, requires some such way of determining disputes about the terms on which employment should be offered. Those arrangements provide pilots with a firm assurance of equitable treatment that will form the basis on which, if they wish to pursue other options involving self-employment or employment by an agent, they will negotiate with the CHAs or the agents. If satisfactory alternatives cannot be agreed, they have the option of employment with its associated arbitration procedures to fall back on. I believe that is the right course on which we should proceed.
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Turning now to Amendments Nos. 34 and 35, moved by the noble Lord, Lord Underhill, the effect of these amendments is not entirely clear to us. Subsection (5) of the new clause is intended to make clear only that, whatever arrangements are arrived at in a CHA's area, there is no obligation on a CHA to authorise anyone who is not willing to serve under either of such arrangements. I should have thought that that was fairly straightforward. How the arrangements are to be determined is covered elsewhere in the clause. They will indeed be the arrangements that the CHA thinks appropriate, but subject to the requirements of subsection (2) which may oblige them to offer employment, and subject also to the requirements of any arbitration provision. Those are important provisions which, if invoked, may well limit the options open to the CHA, but to make all arrangements subject to the pilots' agreement—as these amendments appear to be implying—would, I believe, be quite wrong.
The CHAs will, of course, wish to reach agreement with the pilots about the arrangements for the provision of their services, but at the end of the day it is the CHA which has the statutory responsibility for providing the service. It must be able, subject to the statutory provisions I have mentioned, to decide what are and what are not appropriate arrangements for the port.
The noble and learned Lord, Lord Simon of Glaisdale, in speaking to his Amendment No. 16, recognised that there were certain disadvantages to it. I am bound to say that we feel the same thing. My first worry concerns the practical implications of what is proposed. It seems to me that a CHA could find itself employing half of its pilots and entering into contracts of self-employment with the other half, which the noble Lord, Lord Underhill, suggested would be an undesirable end product to this clause. It might be possible to make such an arrangement work, but I find it difficult to envisage. It is not a very economical or practical way of organising a pilotage system. It would be possible to modify the proposed amendment so that all the pilots in a port decided by a majority vote for employment or self-employment. However, that would lead straight to the complexities in the Bill which arise from the difficulty of specifying who should vote on such an issue in each port before it is known which pilots will be authorised. The noble and learned Lords, Lord Simon and Lord Brightman, would no doubt prefer to avoid these, as I should too, if an acceptable alternative can be found.
A second point in the noble and learned Lord's amendment which concerns me is that the amendment would leave it to the pilots to choose between employment and self-employment. Our own proposals would give them the right to insist on employment if they so wished, and that is to give the pilots a fall-back position of security if they decided that they need one in the absence of the protections which they enjoy at present under the 1983 legislation. It would be tipping the balance too far in the pilots' favour, I believe, to give them an unfettered choice no matter what the port wanted.
A further point which concerns me is that the amendment proposed by the noble and learned Lord seems to rule out a contract for services with an agent

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which might then itself in turn employ or have contractual arrangements with the pilots. I think we have already decided that it would be a pity to rule out this possibility.
The fourth concern I have is that the amendment proposes arbitration on the reasonableness of the terms not only of a contract of employment but also of a contract for services. I find this rather a difficult concept to grasp. It is, of course, not unusual to resort to arbitration to determine whether the terms of a contract have been met or where the costs on a contract would fall. It seems to me less usual to seek arbitration on the reasonableness of the terms of a contract yet to be made. This may be because I find it more natural to think of contracts in terms of competitive rendering in the market place than as something that a third party has to decide is reasonable.
I believe that the noble and learned Lords have cut through a number of issues in a very elegant fashion in putting forward this amendment, but in doing so I think they are in danger of creating one or two further difficulties which our Bill manages to avoid, admittedly at the expense of a certain amount of elegance and brevity in the noble and learned Lords' amendment.
The noble and learned Lord, Lord Simon of Glaisdale, asked what happens if a CHA does not have to offer employment. As we have explained previously, the appropriate arrangements for pilotage are to be a matter for the competent harbour authority. The main safeguard for pilots is that they can require a CHA to offer employment. As I said when speaking to Amendment No. 30, we believe that this goes a long way to correcting any confusions which might have occurred as to whether self-employment was a viable option in the Bill. I think it goes a long way in that direction.
We shall come to Amendment No. 36—the new arbitration clause—in due course. I think that that clause too meets a good many of the concerns implied by the noble Lord, Lord Underhill, in his amendment. I believe that that is the right way to proceed. Therefore, I cannot accept these amendments.
4.15 p.m.
Lord Simon of Glaisdale: My Lords, before the Minister sits down, I do not know whether this is a convenient time to ask him to deal with the point I raised on Amendment No. 30. Perhaps I may put the point again. If one looks at Amendment No. 30, subsection (1) of the new clause appears to give the pilots the offer of either a contract of employment or a contract for services. If one looks at subsection (5), one sees that it is entirely up to the harbour authority to decide which is the appropriate contract to put forward. In other words, it takes away the choice at the option of the harbour authority.
I apologise if I did not make the point clear when I originally spoke. I should be very grateful if the noble Lord would deal with it whenever it is appropriate.
Lord Brabazon of Tara: My Lords, with the leave of the House, I will deal with it briefly. I had hoped that
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I had covered it in my most recent speech. Under subsection (1) it is the harbour authority's option as to whether to employ pilots or to offer contracts of service. That has always been the case since the Bill first started in your Lordships' House. Subsection (5), as I explained, merely gives the harbour authority the right to refuse any person who is not willing to provide his services under either arrangement.
The Deputy Speaker (Lord Nugent of Guildford): My Lords, I should explain for the assistance of the House that I propose to call each amendment in turn because there are many grouped together informally for the convenience of the House. This will give any noble Lord who wishes to speak on an amendment thus included the opportunity to do so.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 5:
Page 3, line 33, after ("such") insert ("number of").
The noble Lord said: My Lords, Amendment No. 5 is grouped with all the amendments through to No. 8, but I propose to speak to Amendments Nos. 5, 6, 8, 11 and 12, because they all relate to the same subject and are necessary to achieve the same ends. I am rather surprised at the grouping that has been proposed, because at the Committee stage whoever assisted the Minister to get it right did get it right. At this stage it is different. It shows just how awkward the whole situation is.
This group of amendments is designed to ensure that pilots who are already working in a particular port authority's area will not need to take any examination or requalify to work for the new competent harbour authority in that area after this Bill becomes law. The Minister did respond to the amendments at Committee stage, but on rereading what he said, I am still not satisfied that those pilots who are qualified and working at the moment will be able to continue working in the same areas. He seemed to think that I had a wider question in mind and talked about—I must get this right—licensees from Liverpool and other places. I am thinking at the moment that if, for instance, a pilot is licensed to operate in and out of Southampton and he has been doing so for a number of years, why should he need to re-qualify in order to do exactly the same job but employed by a competent harbour authority rather than as a self-employed person? I beg to move.
Lord Underhill: My Lords, I wish to intervene in this matter only because the grouping is said to be for Amendments Nos. 5 to 8. Amendment No. 7 stands in my name and that of my noble friend, and in that amendment we are urging that an authorisation should remain in force for a period of not less than one year. This matter was considered at the Committee stage and there was a very wide measure of support for it. Under the Bill a pilotage exemption certificate may be granted to a master or a first mate. Clause 6(4) provides that such a certificate shall remain in force for one year and may be renewed annually, subject to certain conditions in carrying out the pilot's duties.
What Amendment No. 7 seeks to ensure is that precisely the same conditions as apply to a pilot's

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exemption certificate shall apply to a pilot's authorisation. At present a licence is renewable each year unless there is incapacity or disability. In our view there is no justification whatever for this difference of treatment between a pilotage exemption certificate and a pilot's authorisation.
At the Committee stage the noble Lord the Minister said that the Bill made no provision for periods for which an authorisation should last. He said it was possible for it to run on until revoked. However, he kindly said that there might be something good in the suggestion that there should be a fixed time for a certain period, which might be extended, if that was helpful. The noble Lord suggested that that was a possibility and that he would look at it. He recognised that a minimum period of one year would enable pilots to plan ahead.
Incidentally, on this matter, in relation to the arbitration clause I would urge that there should be some basis for appeal if the authorisation is not to be renewed after a period of one year. At this stage that point is not at all covered by the arbitration clause. That is one of the defects we shall point out when we reach that clause. Amendment No. 7, at this stage, is mainly urging that an authorisation should be for a period of not less than one year. I should like to know from the Minister whether his kind offer to look at this possibility of a period has been looked at and whether he can now accept my amendment.
Lord Mottistone: My Lords, it seems to me that all these amendments, particularly Nos. 6, 7, 8 and 12, are limiting the competent harbour authority's choice of pilot and removing its control over the number of pilots it has to employ. To that extent it is defeating the object of the Bill to make sure that the numbers that are employed satisfy the demands of a particular port. I did not get from either my noble friend Lord Swinfen or the noble Lord, Lord Underhill, the message that that was what they had in mind; but that would seem to me to be the outcome of these amendments if they were to be agreed to. Accordingly, I am against them if it comes to that point.
Lord Greenway: My Lords, I supported the principle behind the amendment of the noble Lord, Lord Underhill, at the Committee stage and, very briefly, I should like to say that I do so again. As I see it, it removes yet another obstacle against the self-employment of pilots.
Lord Brabazon of Tara: My Lords, my noble friend Lord Swinfen, as he said, moved identical amendments at the Committee stage and at that time I gave my reasons for not accepting them. Therefore I shall be as brief as I can now in, I am afraid, giving the same reasons. Incidentally, we had originally suggested that Amendments Nos. 11 and 12 should be grouped together with these amendments, but that suggestion was rejected by noble Lords opposite and we bowed to their wishes. So there is co-operation, and I am very happy to answer now the points made in connection with Amendments Nos. 11 and 12.
As I have said, these amendments are identical to those which were put down at the Committee stage. These amendments would have the effect of relieving
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existing licensed pilots of the need to meet any qualifications set by the CHA for the authorisation of pilots under the new arrangements. The first three amendments would relieve such pilots only if they already worked in the district concerned, but Amendments Nos. 11 and 12 would also relieve former licensed pilots transferring from another port of any need to satisfy the CHA of their abilities. As I pointed out in Committee, one effect of the amendments might be that where there was a vacancy a CHA might have no option but to accept any former licensed pilot who applied.
Of course there is a special case for special treatment of existing pilots who could be expected to know the port at least as well as anyone else. The Bill recognises this special case by providing for CHAs to set different qualifications for former licensed pilots. In many cases I am sure the possession of a licence will be enough to satisfy a CHA that a pilot should be authorised. However, I cannot agree that they should not have the right to go further if they think it is necessary and require the applicant to demonstrate that he can meet any necessary qualifications.
In Committee, my noble friend Lord Swinfen suggested that was totally unfair to pilots, but I believe it would be unfair to the CHAs who are to carry the responsibility for safe pilotage in the port, as my noble friend Lord Mottistone pointed out, if they were not to retain the right to satisfy themselves as to the abilities of those they are authorising.
Lord Strathcona and Mount Royal: My Lords, may I interrupt the noble Lord for one second? Surely the implication of that is to say that the pilots who are doing the job at the moment are not capable of doing it. Either they are capable of doing it now and capable of going on doing it, or else they are not capable of doing it now—in which case they are not adequate to do it in the future.
Lord Brabazon of Tara: Not at all, my Lords. I said that obviously most of the existing pilots, if not nearly all of them, will continue working in the same places as they are now and they will not need to have any special qualifications.
Turning to the amendment in the name of the noble Lord, Lord Underhill, and others, as I said in Committee, I cannot accept that authorisation should be renewed automatically. A CHA must have the right to terminate an authorisation in the circumstances which are described in Clause 3(9). On the suggestion that there should be a minimum period for which the authorisation should last, I agreed in Committee to take the point away for consideration. On reflection, I am afraid I do not think that this would be desirable. In future a pilot's security about his future must rest on the terms of his agreement with the CHA. He will be employed either with the obligations that places on the employer in the way of notice and so on, or under some kind of arrangement in which such matters will be determined by the particular terms of the contract or agreement.
To apply conditions of this sort also to an authorisation issued by a CHA seems to be unnecessary and confusing. It amounts to additional employment protection which I cannot see anything in

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the circumstances of pilots to warrant. Moreover, a fixed period of, say a year might well cause practical difficulties at the outset of the new regime by making it difficult for a CHA to release pilots who would otherwise be prepared to leave in order to make way for someone from another port. That is a very important point and one which I do not think noble Lords would want to interefere with, shall I say? So for those reasons I cannot accept these amendments.
4.30 p.m.
Lord Swinfen: My Lords, I have listened with care to what my noble friend has said. I am inclined to agree with the comments of my noble friend Lord Strathcona and Mount Royal. I should like to take the matter away and read carefully what the Minister and other noble Lords have said with a view possibly to coming back at the next stage with a different amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Lord Underhill Lord Underhill moved Amendment No. 7:
Page 3, line 38, at end insert—
("( ) An authorisation under this section shall remain in force for such period, being not less than one year, as the competent harbour authority may prescribe and shall at the expiry of that period be renewed; provided that such obligation to renew shall not apply in the case of a pilot suffering from an incapacity.").
The noble Lord said: My Lords, I have spoken to this. Frankly the Minister's reply is not satisfactory. He said that this is a matter for negotiation. This means that in one harbour authority an agreement could last for one year and in another there could be none at all because of local negotiation. If we want pilots who are experienced to stay in the job and not say that they will get out, there ought to be a minimum period. I think it is not asking too much to suggest that the minimum period be one year.
It is a point of principle, I think, that this should be a matter not just for negotiation in each competent harbour authority but laid down in legislation. The authorisation should last for a period of one year to give the pilot something to look forward to in that one-year period. I beg to move.
Viscount Simon: My Lords, as I understood the argument of the Minister, he objects to the suggestion that there should be an automatic renewal. I do not know whether the noble Lord, Lord Underhill, would be prepared to modify the amendment to withdraw that proposal. There would then be a period of one year with no obligation to renew.
Lord Underhill: My Lords, with the leave of the House, I can see that that is a problem. Perhaps the Minister would be prepared to accept the period of one year. I agree that automatic renewal presents certain problems. We have said that it should be renewed,
"provided that such obligation to renew shall not apply in the case of a pilot suffering from an incapacity".
I appreciate that there could be other circumstances. If the Minister says that he is prepared to consider an amendment to cover a period of one year and we can look at the other matter later, I shall be happy to
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withdraw the amendment. If that is not the case, it will be better to vote on the amendment and have the matter corrected on Third Reading.
Lord Brabazon of Tara: My Lords, I am afraid that I could not give the assurance which the noble Lord seeks, as I thought I had explained in answer to the amendment. I also pointed out one considerable difficulty to which the amendment gives rise. I think that we shall have to take the opinion of the House.
Lord Strathcona and Mount Royal: My Lords, may I ask the noble Lord two questions? Will he consider the possibility that an amendment along these lines might apply to existing pilots in the changeover period, as opposed to what happens thereafter, as he has said that the future employment terms will be subject to arbitration? I think that we can all accept that one could argue about the subject then. Some of us are concerned apparently to be taking away something from pilots that they now have. Therefore, we are in a slight muddle. May I ask whether this is something that would be covered by the arbitration clauses in the transitional period? If so, it may well be that this meets the case.
Lord Brabazon of Tara: My Lords, that is exactly the sort of thing at which I imagine the arbitration will look. The arbitration process is for the transition of pilots from the present arrangements into future arrangements.
Lord Underhill: My Lords, is the Minister giving a categoric assurance that Clause 36, the arbitration clause, will cover the question of a minimum period for the first authorisation? If that is the case and it will be written into the record, I shall be happy.
Lord Brabazon of Tara: My Lords, with the leave of the House, I was hoping to deal with the matter more fully when we reach the arbitration clause. The pilots and ports are already talking to us about what will be within the purview of the arbitration procedures. I cannot give a cast-iron guarantee that this will be included, but I very much expect that it will be.
Lord Broxbourne: My Lords, surely my noble friend appreciates that the only reference to an arbitration clause is in the new clause proposed by Amendment No. 36. The matters that will be subject to arbitration are there specified. There is rather surprisingly no provision for arbitration in the Bill as originally drafted. Surely my noble friend is not saying that the specific terms of reference prescribed in the statute can be varied by these sorts of discussions and bargaining?
Lord Brabazon of Tara: My Lords, with the leave of the House, the arbitration clause deals specifically with the terms of any provision of any contract of employment to be entered into between the parties; that is, the pilot and the port. As authorisation is the equivalent of employment or self-employment, and it would be covered by that.
Lord Underhill: My Lords, with the leave of the House, in the light of what the Minister said—and we shall read carefully what he said—and of any debate

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we may have on the new clause proposed in Amendment No. 36, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 9:
Page 3, line 44, at end insert (", time-expired apprentice pilots or recognised assistant pilots").
The noble Lord said: My Lords, with this I speak to Amendments Nos. 13 and 29.
These amendments fulfil the commitment I gave in Committee to give pilot apprentices and Manchester Ship Canal helmsmen a second level of priority for authorisation as pilots once the supply of applications from former licensed pilots has dried up. This priority, like the licensed pilot's own priority, will last for four years after the appointed date. We thought it preferable in drafting terms to refer to the Manchester Ship Canal helmsmen as "recognised assistant pilots" rather than by name, but the definition covers their position. I beg to move.
Lord Swinfen: My Lords, the Minister said that he was speaking to Amendments Nos. 13 and 29. Was he speaking to Amendment No. 28 also?
Lord Underhill: My Lords, it may help the Minister if I tell him that I have Amendments Nos. 9, 13, 28 and 29.
Lord Brabazon of Tara: My Lords, I apologise. I was meant to be speaking to Amendment No. 28 also, which is purely a drafting amendment.
On Question, amendment agreed to.
Lord Kirkhill Lord Kirkhill moved Amendment No. 10:
Page 3, line 45, leave out ("four") and insert ("two")
The noble Lord said: My Lords, in moving Amendment No. 10, I speak to Amendment No. 14 also.
I recognise that the emphasis lying behind the amendments is against the thrust of this part of the Bill. I return to comments and views which I expressed at the Committee stage.
I was not of course myself a member of the Committee and I confess as an aside that I felt somewhat disadvantaged in speaking from behind the seated members of the Committee, although from their point of view they may well have regarded that as being something of a blessing in disguise. However, at this point of the Bill there is an alternative argument and it is one which I think should be expressed and one to which your Lordships should give your consideration.
The guidance notes presented to Parliament by the Secretary of State for Transport, Marine Pilotage: Legislative Proposals, at the introduction on page 1 open with these words:
"In recent years there has been growing concern about the costs of using British ports, in particular compared with those on the Continent, and the Government is anxious to seek ways of helping to reduce these costs".
While none of us would dispute the urgent need to reorganise pilotage in the United Kingdom, which is
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the purpose of the Bill—and certainly one of the principle aims of the Bill is to reduce pilotage costs—the Minister should accept that in general there is only scope for reducing costs in ports which have a surplus of pilots. That seems to me to be self-evident. I believe we should keep in mind that all ports do not have surplus pilots and most British ports already have the correct number of pilots for current requirements. This is unlikely to change significantly as a consequence of any change in compulsory pilotage arising from the consultations and investigations very properly required under Clause 5(4) of the Bill before us.
The Minister is no doubt aware, because I pointed this out to him at the Committee stage, that in Scotland there are probably only two ports—the Forth and the Clyde—where there is a surplus of pilots. Clearly then in most ports the numbers of pilots has been properly and sensibly regulated over the years, and contrary to the view expressed at an earlier stage by the Minister a very large number of the members of the British Ports Association to which he then referred are dissatisfied with the proposed arrangements for compulsory transfer of pilots to fill future vacancies.
And what of the ports which already employ pilots—ports such as Shetland, Orkney, Montrose and others? They already enjoy the very situation which this Bill seeks to create and yet they too will be subjected to what I consider to be an unfair restraint. Why should they not continue to exercise their present right—the right to choose the best man for the job? The best man may in many if not most cases be an experienced pilot transferred from another district. But from time to time candidates with better experience and specialised local knowledge will offer, and they should have the opportunity of putting their expertise and specialised local knowledge to good use.
In considering the pilots who may become surplus to the future needs of some pilotage districts, your Lordships should not ignore the very large number of master mariners with specialist ship handling skills who, through no fault of their own, are also surplus to requirements because of the ever-declining merchant fleet. They too are deserving of some consideration and ought not to be denied opportunities of employment during the long four years provided by the Bill.
Nor should it be assumed that a local review of compulsory pilotage will significantly reduce the number of pilots in many of the ports. Pilots provide their service in the interests of safety. The duties of the pilot have tended to change over the years and, while they continue to fulfil their primary function of giving guidance to ship masters as to local conditions and safe navigational requirements, it is surprising that not much has been said so far on the increasingly important role that pilots now play as a consequence of reducing manning on merchant ships.
Indeed, I am informed that it is not unusual nowadays to find only the master and a helmsman on a ship's bridge when entering or leaving port, and in some instances the master not only has to con his ship into the harbour but also has to steer the ship—sometimes with remote control gear. As a consequence, the pilot forms a very effective part of

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the bridge team, effectively a unit in the ship's crew for the purposes of entering and leaving the harbour. This is a factor which undoubtedly will be considered by the competent harbour authorities in their deliberations before issuing pilotage directions and this may well detract from further reduction in the need for pilots.
Since the safety of navigation must be the foremost consideration, it is incumbent upon competent harbour authorities to appoint the very best man for the job. It may very well be that in many ports a pilot transferred to a comparable district would be the most suitable candidate, and clearly wherever possible priority must be accorded to the employment of qualified pilots from other comparable districts wherever this is sensible, feasible and in the interests of safety.
But the noble Lord, Lord Swinfen, at the Committee stage said that he believed the problem of reducing the period for compulsory transfers from four years to one year—the proposal which I then had before the Committee—would be resolved more quickly than I realised. At col. 28 of the Official Report of the Public Bill Committee on 9th December, the noble Lord, Lord Swinfen, said that he was,
"led to believe that in order to have enough pilots in two years we really ought to start recruiting now to make certain that they are trained".
Assuming the vesting date on which the Bill when enacted becomes operative to be 1st January 1988, then we are really saying that the compulsory transfers must continue in force until 1st January 1992.
As the noble Lord, Lord Swinfen, indicated, many pilots will have retired by that time and this is surely an argument for reducing the period of time during which the restriction is operative; hence my proposal before your Lordships' House that it be one or two years. When I raised this issue at the Committee stage the noble Lord, Lord Gray of Contin, suggested just this compromise of two years which is now before the House. This would take us to 1st January 1990.
If I may turn now to Amendment No. 14, because these two amendments very properly are grouped together, and having particular regard to the necessity in the interests of safety that a competent harbour authority should always appoint the best man for the job, it seems to me that my proposed amendment in that light is not unreasonable. When at some future date a competent harbour authority is recruiting pilots to fill vacancies, priority of consideration, as I emphasised a moment ago, must be given to surplus pilots from elsewhere. No one would dispute such a sensible principle.
The Minister at an earlier stage gave it as his opinion that basic skills are the same and that there is no reason to give local people priority over licensed pilots from whatever port. I argued at that stage that I thought that local expertise was a factor which a competent harbour authority must take into consideration. I consider that the statement of the Minister was somewhat misleading. I do not put it more strongly than that.
Pilots in some districts have little ship manoeuvring to undertake and their function is largely to conduct ships from the pilot station to the point at which a
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docking pilot takes over. In some districts—and I used Milford Haven as an example at Committee stage—pilots are experienced in the handling of ultra-large vessels with vast open spaces and very specialised needs for berthing at tanker terminals and so on. Conversely, other ports are small, very intensively utilised and subject to widely varying weather conditions.
My submission then and now is that the basic skills are quite different and that pilots experienced in one type of skill could not readily adapt as easily as the master of a ship who holds a pilotage exemption certificate and who is already experienced in that size and type of vessel in that location. The examples which I used at an earlier stage were Milford Haven on the one hand and Aberdeen, of which I know something, on the other.
The Minister said in replying to that point at Committee stage that if there were no applications from previously licensed pilots from other ports offering their services, it would be an option to recruit locally. I found that helpful because I had not been able to infer that that was an application of the Bill at that point. Therefore, his remark was helpful to me at the time.
Nevertheless, while training can be given, there is an obvious advantage in ports where specialised conditions exist in recruiting a master of a ship who has already held a pilotage exemption certificate for that port and who is familiar with constraints imposed by local weather conditions, confined spaces and the employment of manoeuvring aids such as dynamic positioning systems and thrusters.
Quite simply, in the interests of safety, the best man must be employed for the job. During Committee stage my noble friend Lord Carmichael of Kelvingrove wisely drew the attention of the Minister to the question of training transferred pilots and the assessment as to when a pilot has acquired sufficient local knowledge. I consider that this is a real problem in ports where specialised local conditions exist.
A pilot transferred in spring or summer could well have gained basic familiarity with fair weather conditions. He may not encounter storm or ice conditions for six months or so and, having been granted a local licence and the cost burden of his training having been terminated by his original port, he could then be faced with conditions which he has never before experienced. Is he the better man to safely conduct a ship to a safe berth, or is the better man a ship master who for years has operated in and out of the port in all weathers and who has a pilotage exemption certificate?
I commend these two amendments for your Lordships' consideration. Their effect, if they are carried into the Bill, will be, first, to reduce the time limit to two years instead of imposing constraints for four years, by which time a problem of imbalance of ages could be created. Secondly, new employment opportunities would not be confined to a few pilots, necessary though it is to give them a priority, but would be afforded to certain experienced master mariners in our declining merchant fleet who, like pilots, also have ship handling skills and, in the case of holders of local pilotage exemption certificates, have

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superior local knowledge compared with pilots transferred from districts where conditions are quite dissimilar. Thirdly, in those ports where there is already a correct number of pilots, including those who already employ pilots, the position would not be worsened or constrained. It is in the light of those arguments, which I believe to be relevant (although I accept that they are against the major thrust of the Bill), that I move Amendment No. 10. I beg to move.
Lord Brabazon of Tara: My Lords, I congratulate the noble Lord, Lord Kirkhill, on having come back again at this second stage of the Bill. Admittedly he has moved from one year to two; however, I fear I have to tell your Lordships that even with that I shall not be any friendlier towards the amendments than I was at Committee stage. Nonetheless, I shall attempt to be brief.
Lord Kirkhill: Hear, hear!
Lord Brabazon of Tara: Subsection (3) of Clause 3 is aimed at ensuring as far as possible that existing licensed pilots shall be given every opportunity to continue in their profession under the new regime. I think that that will be welcomed in all quarters of the House. However, I should like to give two reasons why we do not accept that the two-year period would allow sufficient time, first, for harbour authorities to decide on the number of pilots they will eventually need once the initial wrinkles in the pilotage service they wish to provide have been smoothed out, and, secondly, to allow a reasonable period of time for those who wish to carry on in pilotage to find a new berth. We hope there will be cases of ports where there is no surplus of pilots and where volunteers will be prepared to take early retirement, so creating vacancies for surplus pilots from elsewhere. All this takes time, and I cannot accept that the first amendment will give everyone long enough.
Nor can I accept the second amendment. I accept the point that there are wide differences between harbour areas and that a pilot moving from one port to another may have a great deal to learn about the local conditions. But there would also be a period of learning for a master with a pilot exemption certificate, or for a master of a ship regularly trading into the port, before he is able to deal safely with the variety of vessels which use the port. There seems to me not much difference between a CHA taking an existing pilot from another district, who would have to familiarise himself with the local conditions, and recruiting a master with local knowledge and experience who is not sufficiently competent to pilot all types of vessels. There is of course no question of CHAs being obliged to take on pilots from elsewhere without satisfying themselves as to their suitability. Transfers will not be compulsory. A CHA will have the right to turn down anyone, former licensed pilot or not, who does not have the required qualifications even within the four years. Therefore, the question of safety which the noble Lord, Lord Kirkhill, has mentioned does not, in our opinion, arise.
Given that pilotage and in particular the number of pilots is a national problem, it does not seem to me to be too much to ask of authorities which are in the
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position of needing additional pilots that they should look long and hard before turning down experienced pilots from other ports.
These provisions have been discussed at great length in the preparation of the Bill between the British Ports Association and the pilots. I certainly have not heard that, as the noble Lord, Lord Kirkhill, suggested, there are large numbers of those in the BPA who are dissatisfied with this provision. Therefore, I cannot accept these amendments.
Lord Kirkhill: My Lords, detecting a wide measure of support for my position in your Lordships' House, and ever the skilful parliamentarian as I believe myself to be, the Minister will no doubt be relieved to know that I shall not be pressing my point to a Division. However, I want to say one thing to him before I resume my seat. At the point to which I make reference, this is another example of a Bill drawn in United Kingdom terms which has great significance for Trinity House and others but has little or no significance for the more remote geographical areas of the United Kingdom.
Lord Brabazon of Tara: My Lords, with the leave of the House, the noble Lord himself said that the Bill has significance possibly in the Clyde and the Forth; and that so far as I am concerned is pretty remote from here.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 and 12 not moved.]
5 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 13:
Page 4, line 2, at end insert—
("( ) If at any time during that perod there is such a shortfall, the competent harbour authority shall not authorise any person who was not immediately before that day a time-expired apprentice pilot or a recognised assistant pilot unless the number of such apprentice and assistant pilots applying to be authorised who have the required qualifications also falls short of that number.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
[Amendment No. 14 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 15:
Page 4, line 3, leave out subsections (4) to (8).
The noble Lord said: My Lords, I spoke to this with Amendment No. 4. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 16 and 17 not moved.]
Lord Underhill Lord Underhill had given notice of his intention to move Amendment No. 18:
Page 4, line 42, leave out ("may") and insert ("shall in the absence of other commensurable arrangements")
The noble Lord said: My Lords, subsection (8) provides that a harbour authority,
"may pay into any pilots' benefit fund … such contributions as may be required by the rules governing that fund".
That deals with the Pilots' National Pension Fund. At the Committee stage an amendment was proposed to substitute "shall" for "may". This amendment brings

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in that essential change and also introduces this qualification. At present, self-employed pilots contribute to the Pilots' National Pension Fund—
Lord Brabazon of Tara: My Lords, I wonder whether the noble Lord will give way for a moment. We have just passed Amendment No. 15 in my name which struck out subsections (4) to (8).
Lord Underhill: My Lords, unfortunately the Minister is correct. This shows the difficulty of hasty grouping. I would have referred to the position of the pension fund, because it is a vital issue affecting the pilots. We shall now have to see how we can bring that in at Third Reading.
[Amendments Nos. 18 and 19 not moved.]
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved Amendment No. 20:
Page 4, line 46, at end insert—
("( ) Where by virtue of subsection (4) above a competent harbour authority has to offer a contract of employment to a "relevant licence holder" as a "new pilot", the terms of that contract shall include a provision ensuring that the "new pilot's" remuneration exclusive of any contribution that may have to be made into any pilots' benefit fund by virtue of subsection (8) above will be no less than that which he would have been entitled to as a "relevant licence holder" in or in the approaches to the harbour of the competent harbour authority at that time.").
The noble Lord said: My Lords, this amendment is important. It concerns a broad issue which we have already addressed and which we shall be addressing several times later this afternoon. I refer to giving legal effect to the Government's undertakings to treat continuing pilots fairly. I am practically quoting the words of the Prime Minister in saying that. I have a feeling that the Minister will say that his amendment on arbitration has everything to do with this amendment, but there is one major uncertainty in his amendment.
What we seek could be achieved by the Minister giving us an undertaking that words to the effect of this amendment, which says that the earnings of continuing pilots should be equivalent to what they are earning now, might be within the terms of reference for arbitration. If he says that, as I hope he will, it occurs to me that there would be no objection to putting in this amendment anyway. Then we would have a belt and braces position. We would be certain that the the Government accept this provision as being a statement of one of the aspects of what any reasonable person would regard as the meaning of the undertakings about fairness for continuing pilots which have been so often repeated by the Government.
I hope that the noble Lord will be able to accept this amendment and will also be able to give us the assurances which are associated with subsequent amendments. I beg to move.
Viscount Simon: My Lords, I should like very warmly to support the spirit behind the amendment of the noble Lord, Lord Strathcona, but I am bound to say that I do not think it works. The amendment begins with the words:
"Where by virtue of subsection (4)".
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Subsection (4) has been removed from the Bill. If the Minister could indicate agreement in principle with what the noble Lord, Lord Strathcona, is getting at, it would be a great help to all of us.
Lord Mottistone: My Lords, I am sorry to sound again a damp note on this, but it seems to me that this is an attempt to guarantee a pilot's level of earnings under the new arrangements. The amendment disregards other aspects of conditions such as volume of work, hours or work, nature of work, area of work and so on. It also ignores the fact that sometimes earning levels have been brought up much too highly by ill thought-out rate setting by existing pilotage authorities. Therefore I doubt whether the amendment should be supported. We debated it in Committee and I think it should be rejected.
Lord Underhill: My Lords, perhaps I may also support the principle of the amendment and what the noble Lord, Lord Mottistone, has said. It may well be that in the negotiations locally the question of hours and other matters of work conditions will be discussed, but what is important is that the negotiations will be on a local basis between a port authority and the pilots in that area. National negotiations are going by the board. The pilots have declared their full support for a scheme or reorganisation as the Bill proposes. Having declared their support, and having had on at least three or four occasions assurances from Ministers and from the Prime Minister that they will be given fair and equitable treatment if negotiations on earnings are to be left to local negotiations, the pilots are frightened that some of them could find themselves in an adverse position. That is why they are endeavouring to lay down in the amendment moved by the noble Lord, Lord Srathcona, some guarantee that their earnings will not be less than is at present provided on a negotiated basis.
Lord Simon of Glaisdale: My Lords, on the drafting point that was made by the noble Viscount, Lord Simon, that there is a reference to subsection (4), which has been removed, perhaps I may make two points. First of all, I very much agree with the noble Lord, Lord Underhill, about the excessive grouping that we have had. We have got into a mess over Clause 3 and will, I think, continue in that way.
So far as concerns subsection (4), it is true that it has been removed in terms. However, there is a similar subsection in the Minister's new clause that in effect has replaced most of Clause 3. I should have thought that there would not be any difficulty if your Lordships choose to add the provision, and the reference to subsection (4) can be tidied up at the next stage of the Bill. I suggest that there is every advantage in not being deterred by a purely drafting point and for this matter to be decided on its merits.
Lord Brabazon of Tara: My Lords, perhaps I may say first to the noble and learned Lord, Lord Simon of Glaisdale, that the new clause of Amendment No. 30 has been tabled for a week, and indeed the noble Lord, Lord Underhill, put down some amendments to it. I cannot accept therefore that people have not had an opportunity to look carefully at it.

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Turning to this specific amendment, it is of course similar to one that was put forward at Committee stage. But, as my noble friend has explained, the purpose of the present amendment is to require CHAs which are obliged to offer employment to licensed pilots, to provide them with at least the same level of remuneration as that to which licensed pilots in the ports concerned are entitled before the harbour authorities assume their responsibility for pilotage. I fear that after very careful consideration I regard this amendment, as I regarded the amendment that was brought forward in Committee, as imposing too much of a straitjacket on the harbour authorities.
I recognise that in the past legislation on some occasions has provided for the level of earnings of employees being transferred by legislation from one employer to another to be preserved; and indeed that is what we are proposing in this Bill for the employees of pilotage authorities. However, most of the pilots are classified as self-employed. Pilotage charges are set at levels whch are expected to yield particular levels of earnings for the pilots in each district, but what they actually earn depends on the volume of shipping using the ports. After implementation of this Bill, where pilots become employees of the harbour authorities, their earnings are likely to be much less dependent on fluctuating volumes of shipping than they are at present. I believe that to be an important consideration which argues against guaranteeing employed pilots in the future levels of earnings to which they were entitled as self-employed pilots. Their levels of earnings as employees of the harbour authorities are likely to be more secure.
I suggest that it is also relevant to bear in mind that the ports have not been party to the national agreements on pilots' pay, which, though no longer in operation, still largely underlie pilots' earnings, nor were the ports party to the way in which pilots earnings have been determined locally in the various districts.
During the debate in Committee on the corresponding amendment, some noble Lords—for example the noble Viscount, Lord Simon and my noble friend Lord Strathcona and Mount Royal—argued that the Government would be going back on their assurances that pilots remaining in the industry will receive fair and equitable treatment. Indeed some noble Lords seemed to argue that fair and equitable treatment and the guaranteeing of present levels were synonymous. I cannot accept that. The earnings to which the pilots are at present entitled as self-employed persons reflect their availability for service at all hours of the day and night, at weekends, on bank holidays, at Christmas and so on, which I think was the point that my noble friend Lord Mottistone was driving at.
The Select Committee on Transport in another place referred to a number of localities in which there was prima facie evidence of low productivity, and the noble Lord, Lord Underhill, accepted that point in debate in Committee. I suggest that in some cases earnings levels may well not reflect those low levels of productivity. Should we now guarantee pilots, if they enter employment, those same levels of income, it will be open for the pilots in negotiations with the harbour authorities to argue for additional payments for overtime and for working during unsocial hours, at weekends, on bank holidays and so on. Where
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productivity is low and the earnings to which pilots locally are entitled do not reflect that fact, it would be open to the pilots to argue for increased payments to reflect increased productivity.
I believe therefore that if we were to legislate to guarantee pilots who are to be employed by harbour authorities the levels of earnings to which they are now entitled as licensed pilots, we should be going much further than giving them the fair and equitable treatment to which they are entitled; indeed we should be placing on the harbour authorities an imposition which would still be both unfair and inequitable, and that would feed through into costs to users of our ports which would be higher than they should be. I hope that noble Lords will agree that this is not the best way to proceed.
However I have put down an amendment on arbitration to this effect which we shall have an opportunity of debating later. This amendment proposes to include in the Bill an arbitration procedure under which a panel will be set up to consider disputes on pay and conditions of service that are referred to it either by a harbour authority or by the pilots. Its recommendations will be binding unless the two parties to a dispute agree otherwise. It will have powers in all cases where pilots are employed by CHAs, and not only where pilots insist on employment, as would be the case with the amendment proposed by my noble friend.
The amendment which I have put down also provides for my right honourable friend the Secretary of State to lay down guidelines which the arbitration panel will be required to take into account. As I said earlier, my officials have already started discussions with representatives of the ports and the pilots about the content of these guidelines, and I am sure that they will need to include a reference to the levels of earnings to which licensed pilots are at present entitled.
I very much hope that noble Lords will agree that, with the compensation terms for pilots leaving the service which my right honourable friend the Secretary of State has already announced, the restrictions on recruitment from outside the industry that are already in the Bill and the pilot's ability to insist on employment, for which we are also legislating, this provision for settling disputes between pilots and the harbour authorities gives pilots the assurance of fair treatment, which they are entitled to expect. Therefore I hope that in the light of that explanation my noble friend will not feel the need to press this amendment.
5.15 p.m.
Lord Swinfen: My Lords, before my noble friend sits down, may I point out that he mentioned fair and equitable treatment? Where in the Bill are the guarantees that Government have been promising for so long?
Lord Brabazon of Tara: My Lords, we have not yet come to that point. We shall reach it when we deal with Amendment No. 36, among other measures on arbitration.
Lord Broxbourne: My Lords, the Minister has criticised the amendment of my noble friend as putting

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things into a straitjacket. Surely it would be a more respectful and perhaps more accurate way of stating the proposition to say that it has the virtue of clarity and certainty, which the alternative procedure adumbrated by him probably will not have.
Lord Brabazon of Tara: My Lords, with the leave of the House, perhaps I may say that is does indeed make things abundantly clear, but unfortunately it makes them clear beyond what we think they should be.
Lord Strathcona and Mount Royal: My Lords, I am extremely grateful to my noble friend who is sitting behind me because I feel that he has flushed out from my party in government a rather embarrassing state of mind. Most of the early part of his reply struck me as essentially irrelevant, if I may say so.
As for the remarks of the noble Lord, Lord Mottistone, about ill thought-out rate setting, the answer is that it simply demonstrates that some of the people who will be handed total authority appear to be incompetent in their jobs, which gives no comfort at all. The question of present levels of earnings and so on, and in particular the very unrespectable argument about self-employment, are essentially irrelevant. The real question, which the Minister quite fairly put, is: what do most of us understand by "fairness"? I believe that my noble friend behind me was supporting me when he said that this is what the ordinary man understands as the meaning of fairness.
The noble Lord then dealt with some complicated questions about how pilots' entitlements had been calculated in the past. That is an extremely complicated point from which I suggest we try to stay away. If he is saying that that is the principal impediment, I dare say we could find a different form of words which would talk about present entitlements as opposed to remuneration, if that would help him. He has said that he does not want to give that undertaking. The trouble about that is that he has not yet laid down the guidelines to which we shall come in Amendment No. 36.
I am made extremely apprehensive about those guidelines by what the noble Lord has now said. He has said, "Our idea of what should be in the guidelines is extremely different from yours". Until he said that, I was in the mood to say that we would tackle this point when we reach the arbitration clauses, withdraw this amendment and return to it on Third Reading if we cannot have satisfactory guidelines. When he expresses his view of what is fair in the way that he has, he makes me apprehensive about what the guidelines will contain. I feel tempted to press the amendment. I think that the Minister looks pregnant for the fourth time during this Report stage, and before I sit down he may care to make a further contribution.
Lord Brabazon of Tara: My Lords, with the leave of the House, my noble friend has completely misinterpreted what I said about the guidelines for the arbitration procedure. I shall repeat the phrase, which he will be able to read tomorrow in Hansard. I said that my officials have already started discussions with representatives of the ports and the pilots about the content of the guidelines. I am sure that they will need
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to include a reference to the level of earnings to which licensed pilots are at present entitled. I could not be much clearer than that.
Lord Strathcona and Mount Royal: My Lords, I am grateful to my noble friend. He has said that the guidelines will refer to the pilots' present entitlement. He did not say what sort of a reference it would be. He said, "I do not like the present entitlement". That leads me to suppose that the guidance will say that the arbitration should take no cognisance of present earnings levels even if it addresses the general problem of earnings levels.
I am sure that the Minister intends to meet some of those arguments later. I have no wish to provoke him into an uncooperative mood, and so I am prepared to withdraw the amendment at this juncture.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 21:
Page 5, line 4, at end insert—
("(aa) that the authorised person has ceased to have the qualifications required from persons applying for authorisation by it under this section or has failed to provide evidence that he continues to have those qualifications").
The noble Lord said: My Lords, Amendment No. 21 fulfils a commitment that I gave in Committee to bring forward an amendment which will allow an authorisation to be suspended or revoked if the pilot concerned no longer meets the qualifications required by the CHA. That was a suggestion made by the noble Viscount, Lord Simon, for which we are grateful. It is of course principally directed at the question of health and fitness for the job, where there may in certain cases be a need, in the interests of safety, to take a pilot off pilotage duties straight away without of course affecting his rights under a contract of employment or other agreement. I beg to move.
Viscount Simon: My Lords, I am obliged to the noble Lord. I am not surprised that he has brought forward an amendment as he undertook to do.
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 22:
Page 5, leave out lines 5 to 10.
The noble Lord said: My Lords, it has been suggested, and it seems sensible, that Amendments Nos. 22, 23 and 24 should be taken together. The pilots are concerned that this clause could enable a CHA to circumvent Section 54 of the Employment Protection (Consolidation) Act 1978 which relates to the right of an employee not to be unfairly dismissed and Section 59 which relates to dismissal on grounds of redundancy.
Subsection (9) (c) relates to agency self-employed pilots and subsection (9) (b) relates to the employee and is totally unnecessary but on completely different grounds. A CHA will have contracted an agency to provide pilotage services on its behalf. It is envisaged that it would be for an annual lump sum. That being so, surely it is up to the agency to decide how best to manage its affairs. There are a number of ways by which it could cope with reduced revenue. The

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removal of an authorisation by a harbour authority need not be one of them. Any such action would reduce flexibility. The pilots feel that those two paragraphs illustrate the fact that the Bill does not help them. They feel aggrieved by it.
Amendment No. 23 proposes to leave out "(a)" which appears in subsection (10), which states:
"Before suspending or revoking an authorisation under subsection (9)(a) above, a competent harbour authority shall give written notice … and shall give [the person] a reasonable opportunity of making representations".
Subsection (9)(a) relates to a person being guilty of incompetence or misconduct. The amendment, by deleting "(a)", would give the right to have a written notice and to make representations to those persons covered by paragaphs (b) and (c).
Paragraph (b) provides:
"that the number of persons for the time being authorised by it under this section exceeds the number required to be authorised";
and paragraph (c) provides:
"that it is appropriate to do so by virtue of any alteration in or the termination of any contract or other arrangement".
We now have paragraph (aa) as a result of Amendment No. 21, to which the Minister has referred. It is unfair that a pilot who is to have his authorisation revoked or withdrawn on grounds of incompetence or misconduct will have the right to have a written notice and to make representations, while those who come under paragraphs (b), (c) and now (aa) will not have that right.
We debated that matter in Committee. I cannot see the argument against giving all categories the right to written notice and to make representations. We were told by the noble Lord, Lord Gray of Contin, in Committee that it would remove a management ability. The point that was made in reply to that was that we have surely reached a stage in industrial relations that persons who are affected by paragraphs (b), (c) and (aa) should have the same right to a written notice and to make representations as those persons who have had their authorisation revoked or suspended because of incompetence or misconduct. There is no rhyme or reason why that should not apply to everyone affected by subsection (9), as now amended. That is the substance of Amendment No. 24.
5.30 p.m.
Lord Brabazon of Tara: My Lords, as the noble Lord, Lord Underhill, has explained, the amendment would deprive a CHA of the power to suspend or revoke an authorisation other than on grounds of incompetence or misconduct. I am not yet persuaded that the powers to remove an authorsation on the grounds specified in paragraphs (b) and (c) can reasonably be dispensed with.
It can of course be argued that it is the cost of pilotage that matters to the ports and their customers and that the number of pilots is a secondary consideration. In logic that may be true, but all past experience shows that if there are more pilots than are necessary, then costs will be related to those numbers. That is after all the root of the difficulties that have caused this new legislation to be necessary.
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The powers to suspend or revoke are of course discretionary, and there is nothing to prevent a CHA agreeing with the pilots how many of them are to be authorised and agreeing with them to maintain that number even if trade declines and the demand for pilots' services and the available income decline. That may well be an attractive arrangement where self-employment is to be the basis on which pilotage services are to be provided. I certainly take note of that point which the noble Lord, Lord Underhill, made.
I believe that any such arrangement must be for the CHA to agree with pilots on a port-by-port basis. To write in a statutory provision that authorisation must, except for cases involving misconduct or incompetence, run on indefinitely would remove one of the central provisions which a CHA needs to have available if we are to achieve the Bill's objective of maintaining the cost effectiveness of pilotage services. It is a provision which we hope will not need to be called on very extensively, but it would be irresponsible to remove it, at least without providing some adequate replacement.
Turning to Amendment No. 23, as the noble Lord said, we discussed a similar amendment at some length in Committee, and I made it clear that in our view a pilot's rights in such matters as employment protection should be attached to his contract of employment or other agreement under which he carries out pilotage for the CHA. It is inappropriate to attach them to his authorisation, which merely enables him to carry out his duties under that contract or agreement.
The noble Lord, Lord Underhill, suggested that the same argument could be applied even to cases where a pilot's competence or conduct were in question, under subsection (9)(a). I am tempted to agree—but I do not—and accept that subsection (10) could be dispensed with altogether. But that would be going too far.
However, I feel fairly strongly that it should not be applicable with regard to paragraphs (b) and (c). Nor can I agree that an appeal procedure of this kind can be justified. As I have said before, a pilot will have his contract of employment or other arrangement with the CHA and if there is any question of unfair dismissal or breach of contract his remedies will be clear. If he wishes to appeal because he disagrees with the judgments that the CHA has made about the number of pilots needed in the port or whether the pilotage is to be provided by directly employed pilots, by an agency or by some other arrangement, then those seem to be the matters entirely within the CHA's areas of responsibility in which it would be inappropriate for the Secretary of State to be given a role.
The noble Lord queried whether two sections of the employment Act were applicable in these circumstances. I said at the Committee stage that pilots who took employment under the new arrangements, and who had a contract of employment, would be covered by the employment protection Act. I shall look again at the points which the noble Lord, Lord Underhill, has raised, but further than that I cannot go.
Lord Strathcona and Mount Royal: My Lords, I should like to support the noble Lord, Lord Underhill.

775
Amendment No. 23 does not apply if we agree to Amendment No. 22; but that is purely a procedural question.
The Bill refers to "the number required". One must assume that the noble Lord is implying that the body who will decide how many are required is the CHA itself although it does not say so. I should have thought that that was a fair presumption. The next question which arises is this. Supposing one has an agency and the agency decided to employ all part-time pilots—that is not an inconceivable scenario, is it?—one would need a great many more pilots in that situation than if one had full-time pilots. Supposing then the CHA decides how many pilots it thinks it needs on a full-time employed basis, what is the agency to do if it wants to employ different kinds of people on a different kind of basis? The CHA might be prepared to agree to the proposal by the agency but there is nothing in the Bill which says that it has to do so.
The second point was referred to just now by the noble Lord. What happens if for some reason an authorisation is removed? Somewhere in the Bill it says that one cannot have a person purporting to be a pilot on the bridge of a ship if he is not authorised to do so. One then has the situation where an authorisation has been removed and, ipso facto, the man can no longer be employed. Is that a reason we would wish to give for his losing his job? If so, is he able to claim unfair dismissal, for example? I do not know the two sections of the Act to which the noble Lord was referring but I should have thought that one of the provisions which we need to write into the Bill in some way is that authorisation cannot be removed in such a way as to take away a man's job. Otherwise, one simply says, "We want to get rid of this fellow. What we shall do is to take away his authorisation and then he automatically loses his job." That must be an unsatisfactory state of affairs.
When I first considered this I thought it raised an outrageous issue of principle: that when the perceived demand for the services of a given profession—be it school teachers, doctors or lawyers—drops below the market requirement, one takes away their right to practise, because that is what the authorisation is about. I then started to consider that although in principle it is highly objectionable, in practice it may be acceptable. They will not be offered a job if they are not needed by the CHA. It therefore does not matter if it has taken away their authorisation. But if one looks at it the other way round, it seems to me that one must somehow provide sufficient flexibility for an agency arrangement whereby the numbers can be determined other than directly by the CHA. One must also ensure that the loss of authorisation cannot be used as a device to get rid of somebody whom one does not wish to employ. For those reasons, unless the Government can come up with a better idea, I believe that we ought to accept this amendment.
Lord Carmichael of Kelvingrove: My Lords, the Minister may recall that I moved the equivalent of Amendment No. 23 at the Committee stage. I listened to his reply which he repeated in large substance a few minutes ago. I feel much the same. It is asking a great
776
deal, where someone has been dismissed because he has been guilty of incompetence or misconduct affecting his capability as a pilot, that he should be given a notice in writing stating why.
The Government Amendment No. 21 says
"that the authorised person has ceased to have the qualifications",
in the opinion of the competent harbour authority. If it was merely considered by the harbour authority that they have ceased to have qualifications—whatever these qualifications were—they would have no protection by having a statement in writing. The only people who would have a statement in writing and a right to appeal would be those who were dismissed because they have been guilty of incompetence or misconduct affecting their capability as a pilot.
One of the points made at the Committee stage was this. There are certainly situations in which a pilot may, in his expert and technical judgment, not satisfy the competent harbour authority in its commercial judgment. There may be a very definite difference of opinion here. It may be that the employment Acts would not give protection. The pilot may say that in his judgment it would be wrong to take in a ship in those conditions, or that it would be dangerous because of the cargo to take in a ship in those conditions. If a pilot had the reputation within a CHA of being over-cautious—although he might have perfectly good reasons for being so—he would have no entitlement under the Bill as it stands to be given any security at all or any explanation in writing.
I therefore ask the House to consider accepting Amendment No. 23, which leaves out "(a)". The subsection would then read:
"Before suspending or revoking an authorisation under subsection (9) above, a competent harbour authority shall give written notice of its intention to do so to the authorised person.".
That would mean that every pilot who was dismissed for whatever reason, including the reason given in the Government's new Amendment No. 21, would be given notice in writing as to why he was being dismissed. In a responsible job such as pilotage where there could be a conflict of commercial and expert technical judgment, it is little more than merely a dismissal under the Employment Act. Therefore, if the Minister will not accept this amendment, I shall want to test the House on Amendment No. 23. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 23:
Page 5, line 12, leave out ("(a)").
The Deputy Speaker (Lord Aylestone): My Lords, the Question is that Amendment No. 23 be agreed to? As many as are of that opinion will say, "Content"—
Lord Mottistone: My Lords, if Amendment No. 22 is withdrawn then the point of Amendment No. 23 is lost because it is not leaving out paragraph (a), it is just leaving out "(a)". Amendment No. 23 is consequential on Amendment No. 22.
Lord Underhill: My Lords, if the noble Lord will permit me, leaving out "(a)" refers to (9)(a) which

777
appears in subsection (10). Therefore, by leaving out "(a)" all the categories to which my noble friend referred will be covered.
5.43 p.m.
On Question, Whether the said amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 74.

DIVISION NO. 1

CONTENTS

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Aldenham, L.

Longford, E.

Ardwick, L.

Lovell-Davis, L.

Aylestone, L.

Meston, L.

Blease, L.

Monson, L.

Bonham-Carter, L.

Morris, L.

Brockway, L.

Mulley, L.

Bruce of Donington, L.

Nicol, B.

Buckmaster, V.

Norfolk, D.

Carmichael of Kelvingrove, L.

Phillips, B.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L. [Teller.]

Prys-Davies, L.

Diamond, L.

Ritchie of Dundee, L.

Elwyn-Jones, L.

Rugby, L.

Ewart-Biggs, B.

Seear, B.

Gallacher, L. [Teller.]

Shackleton, L.

Geddes, L.

Simon, V.

Graham of Edmonton, L.

Stallard, L.

Gray, L.

Stedman, B.

Greenway, L.

Stewart of Fulham, L.

Gregson, L.

Strabolgi, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Houghton of Sowerby, L.

Swinfen, L.

Irving of Dartford, L.

Underhill, L.

Jeger, B.

Wallace of Coslany, L.

Jenkins of Putney, L.

Wells-Pestell, L.

John-Mackie, L.

Wigoder, L.

Kagan, L.

Wilson of Rievaulx, L.

Kennet, L.

Winchilsea and Nottingham, E.

Kilbracken, L.

Kirkhill, L.

Winterbottom, L.

Liverpool, E.

Ypres, E.

NOT-CONTENTS

Abinger, L.

Gainford, L.

Ampthill, L.

Gardner of Parkes, B.

Auckland, L.

Glanusk, L.

Bauer, L.

Gormanston, V.

Beaverbrook, L.

Hesketh, L.

Belstead, L.

Hives, L.

Bessborough, E.

Home of the Hirsel, L.

Boardman, L.

Hooper, B. [Teller.]

Boyd-Carpenter, L.

Hylton-Foster, B.

Brabazon of Tara, L.

Inchcape, E.

Brougham and Vaux, L.

Killearn, L.

Broxbourne, L.

King of Wartnaby, L.

Butterworth, L.

Lane-Fox, B.

Caithness, E.

Lauderdale, E.

Cameron of Lochbroom, L.

Layton, L.

Carnegy of Lour, B.

Long, V.

Carnock, L.

Lyell, L.

Cathcart, E.

McAlpine of West Green, L.

Coleraine, L.

Macleod of Borve, B.

Cork and Orrery, E.

Marley, L.

Cox, B.

Maude of Stratford-upon-Avon, L.

Craigavon, V.

Cullen of Ashbourne, L.

Merrivale, L.

Davidson, V. [Teller.]

Mersey, V.

Denham, L.

Molson, L.

Dilhorne, V.

Mottistone, L.

Dundee, E.

Munster, E.

Ferrier, L.

Murton of Lindisfarne, L.

Fraser of Kilmorack, L.

Orr-Ewing, L.

778

Pender, L.

Sudeley, L.

Penrhyn, L.

Teynham, L.

Polwarth, L.

Trumpington, B.

Portland, D.

Vickers, B.

Rankeillour, L.

Vivian, L.

Sanderson of Bowden, L.

Whitelaw, V.

Sandford, L.

Wise, L.

Shannon, E.

Young of Graffham, L.

Skelmersdale, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.50 p.m.
[Amendment No. 24 no moved.]
Lord Underhill Lord Underhill moved Amendment No. 25:
Page 5, line 15, at end insert—
("( ) Any person who was before the appointed day a holder of a full licence and who is subsequently employed by a competent harbour authoritiy may by notice in writing to the authority require it to employ him on terms which deem his period of employment to be reckoned as from the date when he was first licensed.").
The noble Lord said: My Lords, for convenience, I should also like to speak to Amendment No. 95A in the name of the noble Lord, Lord Swinfen, which partly covers the same point; namely, the back-dating of a pilot's employment. Through this Bill the Government will make a number of self-employed pilots take the form of employees. The amendment ensures that as employees they will enjoy legal employment rights which they would not otherwise have. This principle is enshrined for pilotage authority personnel in Clause 23(5) of the Bill and has been agreed informally between representatives of the ports and pilots. As the Government are initiating change, it is up to them either to provide a legislative guarantee by inserting that in the Bill and agreeing to the amendment, or to say that they agree with the principle and bring forward their own amendment.
At Committee stage, in col. 38 of Hansard, the Minister said that he does not consider that this is a matter for legislation. There are currently discussions going on between pilots and the ports. However, I am informed that the latest views put forward by the Department of Transport who take part in these discussions are that guidelines only would be sufficient for discussion between the two parties. Guidelines are not enough.
It is generally acknowledged, as was made absolutely clear at Committee stage, that the British Ports Association cannot commit its members. It cannot say, "We agree with this" and therefore every harbour authority falls into line. That does not happen. The general council of the TUC can come to certain decisions, but they are not binding, in most cases, upon the different trade unions. The trade unions can say: "We shall take no notice, we shall go on". The BPA can come to an agreement with the pilots, which would not necessarily be binding on all port authorities. To be fair, a legislative guarantee is required. What is asked is that the period of employment before this Bill comes into effect should be reckoned as their period of employment for benefits and entitlements under the Bill. I beg to move.
Lord Swinfen: My Lords, I must support the noble Lord, Lord Underhill, in this amendment. If this

779
amendment is agreed to I shall not move my Amendment No. 95A because both are in the same terms.
We have a situation where a number of independent individuals who are self-employed, have been press-ganged, or are being press-ganged for the most part, into employment. As the Bill is drafted, it will be extremely difficult for the majority of those individuals to insist in their negotiations with the competent harbour authorities that they remain self-employed.
Let us take, for example, a number of very senior, highly-qualified accountants in the City of London who, in any one year, probably earn far more than three noble Lords put together. Let us suppose that they are moved to the Treasury to sort out its problems. This is much needed, but that is beside the point. They are treated as if they have come straight out of school, recently qualified, and have no seniority and experience. It is absolutely right that pilots with 25 or more years' experience, and a long time before that at sea for many years, should be treated in a responsible manner. I am all in favour of the amendment.
Lord Strathcona and Mount Royal: My Lords, I should like briefly to add my support to the amendment. It goes back to the definition of what is meant by fairness. It is perfectly clear that the period of service prior to the change in the nature and the terms of employment should be reckonable. It is one of the four conditions which to me relate to the question of the Government's good faith in being prepared to write into the legislation the undertakings of fairness that they have so often repeated.
Lord Brabazon of Tara: My Lords, these amendments propose that the Bill should deal for employment protection purposes with the previous service of pilots to be employed by CHA's in the same way as it deals with the previous service of the employees of pilotage authorities. The difference is of course that the pilots' previous service is as self-employed pilots, and there has been absolutely no exception to the principle that such self-employed service should not count towards a period of service for the purposes of rights under the 1978 employment protection legislation. I do not believe that it would be right to make an exception in this case. That legislation is about employment and employees and I hope that noble Lords will agree that it would be quite wrong to extend its provisions to periods of self-employed service.
The noble Lord Lord Underhill, mentioned that discussions which are going on under the chairmanship of my department's officials between representatives of the ports and of the pilots about the drawing up of national guidelines within which negotiations between harbour authorities and pilots might take place at local level.
The port's representatives have said that they are prepared to see such guidelines state that, in the event of redundancies becoming necessary after what we have called the shake-down period, the terms offered to the pilots will be no less favourable than those which would have been payable under statutory requirements
780
if previous service as a licensed pilot counted as employment. That seems to me to be a very important concession to the pilots, especially when it is seen in the light of the statutory arbitration procedure which we propose to set up. Any dispute which arises about redundancy terms between a harbour authority and the pilots will of course be capable of being referred to the procedure, and clearly the arbitration panel will expect to take account of the national guidelines such as I have referred to and which have been agreed between representatives of the ports and of the pilots. I believe that that takes care of the point raised by the noble Lord, Lord Underhill, about whether or not these national talks between the ports and the pilots would go down to the local level. This seems to me to be the right way to deal with this issue. The pilots will be able to appeal to the arbitration panel and to point to the national guidelines if an individual harbour authority decides to ignore their periods of self-employed service; but I believe we should avoid making a nonsense of the 1978 employment protection legislation, which we should be doing if we tried to relate it to periods of self-employment.
My Lords, I hope with the assurances that I have given that noble Lords will not feel that the pilots are now being hard done by and that the mechanism we propose will be just as effective as the way that the noble Lord tries to put it in the amendment.
Lord Shackleton: My Lords, perhaps I may ask the noble Lord whether he can find any parallel situation to the pilots of a kind that would make a nonsense of the 1978 Act. The noble Lord seems to be opposing this major undertaking that we hope the Government would honour on the grounds that technically it would do damage to other legislation. Are there other comparable examples where a self-employed group such as the pilots is being specially provided for? Does this create a nonsense of the Act? What the noble Lord said sounded reasonable, but I am not satisfied with his reason.
Lord Brabazon of Tara: My Lords, I cannot give an example offhand of any other case to which this might apply. Of course it might set a future precedent, which would be undesirable as well. But I think that the alternative that I have offered is a fair one.
Lord Underhill: My Lords, I do not know that the Minister has really offered an alternative. He has referred to quidelines. But is it not a fact that Associated British Ports have broken away from the British Ports Association? If that is the case, then where stands any agreement that may be reached by the BPA?
It is already recognised that it cannot be binding. It will make it an even worse position that Associated British Ports have broken away from the ports authority body conducting negotiations. Could it not mean that we have one port authority which says, "We will not recognise the past service of previously self-employed pilots" and another port authority, not too far away, saying, "We will recognise"? Surely that is not simplifying the matter but creating more bitterness among pilots. The last thing we want in this Bill is to create bitterness among the pilots who want to be

781
ready participants in this reorganisation scheme, and yet this lays the foundation for bitterness and controversy.
I have not consulted the TUC as to their view of the 1978 protection Act but, as my noble friend Lord Shackleton made clear, this is a unique occupation. A great majority of the pilots have been self-employed. It has been a different occupation altogether. We do not know where the guidelines are going to be. We cannot reinforce the guidelines. The Minister says that these could be covered by the arbitration machinery. When we come to Amendment No. 36 we shall have to have a long discussion to see exactly what will be covered by the arbitration machinery and what will not.
This is a vital principle. Men who have given years of devoted service to the safety of British shipping should be safeguarded in this legislation, not by casual guidelines, so that their past service will rank when the new regime takes over. Unless the Minister can give me something far stronger than he has given so far, this is another issue on which, for the fair, equitable and honest treatment of the pilots, the House should declare a view.
Lord Brabazon of Tara: My Lords, with the leave of the House, I would say that Associated British Ports while not a member of the BPA, are participants in these discussions, and they will of course be part of the national guidelines to which I referred. The noble Lord obviously does not feel that what I have said is fair, but what I said was that these national guidelines would be taken into account by the arbitration panel. Therefore, if a port outside tried to go against them they would almost certainly lose when they went before the arbitrators.
Lord Underhill: My Lords, before the noble Lord sits down, if he believes that this is something that ought to be in the guidelines, and if he believes that therefore the arbitration machinery to be set up should take cognisance of the guidelines, why is there hesitancy to write this into the legislation so that there is not the slightest doubt whatever as to what the Government and the country want?
Lord Brabazon of Tara: My Lords, it is for the reasons that I have already given in my original reply.
6.5 p.m.
On Question, Whether the said amendment (No. 25) shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 71.

DIVISION NO. 2

CONTENTS

Airedale, L.

Craigavon, V.

Aldenham, L.

David, B.

Ardwick, L.

Dean of Beswick, L.

Aylestone, L.

Diamond, L.

Bessborough, E.

Elwyn-Jones, L.

Blease, L.

Ewart-Biggs, B.

Brockway, L.

Gallacher, L.

Bruce of Donington, L.

Graham of Edmonton, L. [Teller.]

Buckmaster, V.

Carmichael of Kelvingrove, L.

Gray, L.

Cathcart, E.

Greenway, L.

782

Gregson, L.

Ponsonby of Shulbrede, L. [Teller.]

Grey, E.

Hanworth, V.

Ritchie of Dundee, L.

Hatch of Lusby, L.

Russell of Liverpool, L.

Irving of Dartford, L.

Seear, B.

Jeger, B.

Shackleton, L.

John-Mackie, L.

Simon, V.

Kagan, L.

Stallard, L.

Kinnoull, L.

Stewart of Fulham, L.

Lawrence, L.

Strathcona and Mount Royal, L.

Llewelyn-Davies of Hastoe, B.

Longford, E.

Swinfen, L.

Meston, L.

Tordoff, L.

Monson, L.

Underhill, L.

Morris, L.

Wallace of Coslany, L.

Mulley, L.

Wells-Pestell, L.

Newall, L.

Wilson of Rievaulx, L.

Nicol, B.

Winchilsea and Nottingham, E.

Norfolk, D.

Perry of Walton, L.

Winterbottom, L.

Phillips, B.

Ypres, E.

Pitt of Hampstead, L.

NOT-CONTENTS

Abinger, L.

Inchcape, E.

Ampthill, L.

Killearn, L.

Auckland, L.

Lane-Fox, B.

Bauer, L.

Lauderdale, E.

Beaverbrook, L.

Lindsey and Abingdon, E.

Belstead, L.

Long, V.

Boardman, L.

Lyell, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Broxbourne, L.

Butterworth, L.

Merrivale, L.

Caithness, E.

Mersey, V.

Cameron of Lochbroom, L.

Molson, L.

Campbell of Alloway, L.

Mottistone, L.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Munster, E.

Coleraine, L.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Orr-Ewing, L.

Cox, B.

Pender, L.

Davidson, V. [Teller.]

Penrhyn, L.

Denham, L.

Polwarth, L.

Dilhorne, V.

Portland, D.

Dundee, E.

Rankeillour, L.

Ferrier, L.

Sanderson of Bowden, L.

Fraser of Kilmorack, L.

Sandford, L.

Gainford, L.

Shannon, E.

Glanusk, L.

Skelmersdale, L.

Gormanston, V.

Strathclyde, L.

Halsbury, E.

Sudeley, L.

Henderson of Brompton, L.

Teynham, L.

Hesketh, L.

Trefgarne, L.

Hives, L.

Trumpington, B.

Home of the Hirsel, L.

Vickers, B.

Hooper, B. [Teller.]

Vivian, L.

Hylton-Foster, B.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
6.15 p.m.
Lord Swinfen Lord Swinfen moved Amendment No. 26:
Page 5, line 15, at end insert—
("(10A) The competent harbour authority by which a pilot's authorisation is revoked under paragraph (b) or (c) of subsection (9) above shall pay compensation to the pilot for the loss of that authorisation; and the amount of that compensation shall be determined in accordance with regulations made by the Secretary of State.
(10B) Regulations under subsection (10A) above shall require the amount of the compensation in any case to be calculated by reference to the number of years the pilot has worked as a pilot in waters which include the authority's harbour or its approaches, whether before or after the appointed day and whether as an employee or otherwise; and provision may be made in the

783
regulations for reducing the amount of compensation to which the pilot may be entitled (apart from any such provision) under subsection (10A) above by the amount of any compensation to which he is otherwise entitled by reason of the revocation of the authorisation.").
The noble Lord said: My Lords, I apologise to your Lordships that originally I made some mistakes in the draft of this amendment—some of you may have been misled by them—before I corrected them in time for the Marshalled List.
At the Committee stage of the Bill, my noble friend the Minister said:
"If the authorisation is revoked, the pilot will still have the protections contained in his contract of employment safeguarded by employment legislation".—[Official Report, Public Bill Committee, 10/12/86; col. 70].
This amendment deals with the compensation payable to pilots for loss of their jobs on redundancy within the four-year period. As the Bill stands a pilot of, say, 30 years standing can be transferred from being self-employed to being employed by one of the competent harbour authorities and, because of changing circumstances in the area and the business to and from his port, can lose his job within the four-year period through no fault of his own. If there is a general run-down of trade to the nation as a whole there may be nowhere else for him to go within that line of business.
My noble friend has been emphasising the fairness with which the Government propose to treat pilots throughout this Bill. For example, let us take a pilot aged 59 with 20 years' service as a pilot, for two of which he has been employed by the competent harbour authority. Under the Bill he will be entitled to compensation for redundancy as though he had been employed for only two years. I have with me a pamphlet produced by the Department of Employment in 1986, pamphlet PL808. According to the table in the pamphlet this pilot would get three weeks' redundancy money. However if my amendment were accepted—I think the terms of it can only be construed as fair treatment—he would get 29 weeks' redundancy money.
Let us take another example of a much younger man aged 35, employed for the same length of time by the competent harbour authority. He would get two weeks' redundancy money. If he had been a pilot for a total of eight years he would get eight weeks' redundancy money. This problem becomes more serious as the pilot becomes older. I have a strong suspicion that it would be the older pilots who would get redundancy first because they do not have the length of service to give to the competent harbour authority.
My noble friend the Minister, who has been emphasising all the way along the fairness with which the Government are proposing to deal with the pilots, should accept this amendment. I know he will say that it can be dealt with by arbitration. Pilots are not in a particularly strong position at the moment. The competent harbour authorities will take them on. They will then decide how many pilots they need. They are really like the Christmas walnut in the crackers. They have nowhere to go. I beg to move.
Lord Brabazon of Tara: My Lords, this is a similar amendment to the one that the House has just decided upon. Indeed, it is identical to an amendment my noble friend moved in Committee. Whether it satisfies my noble friend or not, this amendment would give the pilots an entitlement to compensation over and above the employment protection provisions to which they will be entitled by virtue of their contracts of employment or other contractual arrangements.
As noble Lords are aware, and as I have said before, we are shortly bringing forward amendments which will introduce the arbitration procedure that will, among other matters, be able to deal with the question of the terms that will apply on subsequent redundancy. That, I believe, is the proper way forward in this matter. My noble friend suggested that the pilots are in a weak position. I do not believe that is the case. When we reach the arbitration amendment, they will have a good case there. My noble friend also suggested that the pilots had nowhere to go. The ports will still need pilots. Furthermore, for the first four years they are obliged to offer jobs first and foremost to existing pilots. I think the pilots are in a pretty strong position.
Lord Underhill: My Lords, before the noble Lord sits down, may I raise one point? When we come to the arbitration clause, surely this only takes effect for three years and then it will be out. What is going to be the position on the point which the noble Lord, Lord Swinfen, raised with regard to pilots who will be covered by the particular amendment he has moved after the arbitration clause has ceased to take effect? That is the important part of the amendment of the noble Lord, Lord Swinfen.
Lord Strathcona and Mount Royal: My Lords, that seems to be a very good question. The noble Lord has taken refuge in what to me is not a very respectable point, and we have mentioned this before. He fell back on the self-employed argument being the reason why this period of service should not be counted. He overlooks, I think, a letter—which has very often been quoted—from the Prime Minister, which said that she recognised that the terms of service of pilots had few of the characteristics of self-employment. I think I am quoting her actual words; I do not have the letter with me.
I really do not believe that it is a very respectable argument to take shelter behind the fact that they were pseudo self-employed before the Government made these radical changes to the working conditions in which pilots find themselves. While I am perfectly prepared to agree that potentially the arbitration clause may cover the first three years of their service—indeed, one would hope that they will have a chance to negotiate terms which will cover subsequent service thereafter—the fact remains that we still do not know what considerations the arbitrators are going to be told to take into account. Every time the noble Lord, as we see it, resiles from the Government's undertaking about fairness, so we become more and more nervous as to what those guidelines may say. This is the fair warning one has to give him as to what is in front of us.
Lord Shackleton: My Lords, I must say that the more I hear of this debate the more confused I

785
become. Is the Minister saying that they will automatically apply the guidelines of the arbitration procedure? There will be no discretion. Will they be arbitrating? If it is a matter of interpreting the guidelines, one can see that there may be some scope, but one hopes the guidelines will be quite clear, that they will provide adequately in accordance with the Government's previous promises; in which case why the need to arbitrate? This matter seems to me to be very difficult.
Some of my trade union colleagues may be able to comment more on how an arbitration procedure takes place, but it seems to me that they would not automatically be applying the guidelines; they would in fact be trying to work out some sort of compromise between what the ports may say and what the individual pilot may say. I think the Minister really has got himself into an intellectually indefensible position on this matter.
I must say at this time that I wish more of your Lordships were here to hear this debate. Gradually, if more noble Lords were here, the Government's majority would be whittled away.
Lord Mottistone: My Lords, I rather think that the noble Lord, Lord Shackleton—for whom I have the highest opinion, having started off in your Lordships' House under his leadership—is over-exaggerating this situation. My noble friend has been sniping from behind. It is all fair for the Opposition. I can remember being in Opposition and producing just the sort of arguments that the Opposition are now producing—"We must have the guidelines" and "It is no good going to this stage of the Bill without the guidelines". It is a common thing to do.
In taking up the point made by the noble Lord, Lord Shackleton, if you look at Amendment No. 36, what subsection (3) says is quite clear:
"In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them."
That seems to me to be quite straightforward. Of course it would be nice to know now what the guidance points will be, but as I understand it from my noble friend his department and the interested parties are in constant discussion at the moment. No doubt they will agree something, perhaps before this Bill has got through another place.
However, I do not think it is altogether reasonable at this stage to press my noble friend to come out suddenly with all sorts of guarantees when the whole matter is under discussion. It would seem to me that there is quite enough flexibility to cover an awful lot of these amendments, and I really think that noble Lords are pressing things much too hard and quite unreasonably.
Lord Shackleton: My Lords, although I am not entitled to speak again, with the leave of the House I am entitled to correct a misstatement. We are not fighting this matter on party lines. That has been made very clear. The noble Lord knows that he has colleagues round that side, and it is a pity that he introduced a party point.
Lord Brabazon of Tara: My Lords, with the leave of the House, I shall pick up a couple of points. I am
786
grateful to my noble friend Lord Mottistone for his contribution. I have already said on a number of occasions that among those guidelines for the arbitration, or indeed if one of the parties wished, redundancy payments certainly would be one of the matters to be taken into consideration.
I must also correct another point which was made about the arbitration procedure lasting only for three years. Under subsection (7) of the new arbitration clause, that is the minimum period it would last. The subsection goes on to say:
"no such order shall affect the terms of any contract continuing in force at that date."
Once they have made that contract, that goes on beyond the arbitration timetable.
Lord Swinfen: My Lords, I am not sure about the Minister's comments that because the arbitration does not go on beyond three years that should not have any effect on the contract that goes on beyond that term. Contracts can be made for a period longer than three years, longer indeed than the four years when a pilot comes in. It is a total red herring. I can see absolutely no reason why the Minister should not accept this amendment. He is hiding behind very nebulous guidelines of which very little indication has been given. He himself, other Ministers, the Prime Minister herself having talked all the way through about the way in which pilots are going to be treated fairly, I feel quite honestly that I have no alternative but to ask the opinion of the House.
6.28 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 55; Not-Contents, 60.

DIVISION NO. 3

CONTENTS

Airedale, L.

McGregor of Durris, L.

Aldenham, L.

Meston, L.

Aylestone, L.

Monson, L.

Broadbridge, L.

Morris, L.

Brockway, L.

Mulley, L.

Bruce of Donington, L.

Nicol, B.

Buckmaster, V.

Norfolk, D.

Carmichael of Kelvingrove, L. [Teller.]

Perry of Walton, L.

Phillips, B.

Cathcart, E.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

Russell of Liverpool, L.

Diamond, L.

Seear, B.

Ewart-Biggs, B.

Shackleton, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L.

Simon of Glaisdale, L.

Gray, L.

Stallard, L.

Greenway, L.

Stewart of Fulham, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Hatch of Lusby, L.

Swinfen, L. [Teller.]

Houghton of Sowerby, L.

Tordoff, L.

Hylton-Foster, B.

Underhill, L.

Irving of Dartford, L.

Wells-Pestell, L.

Jeger, B.

Wilson of Rievaulx, L.

Kennet, L.

Winchilsea and Nottingham, E.

Lawrence, L.

Liverpool, E.

Winterbottom, L.

Llewelyn-Davies of Hastoe, B.

Ypres, E.

787

NOT-CONTENTS

Abinger, L.

Hives, L.

Ampthill, L.

Home of the Hirsel, L.

Bauer, L.

Hooper, B. [Teller.]

Beaverbrook, L.

Inchcape, E.

Beloff, L.

Lane-Fox, B.

Belstead, L.

Lauderdale, E.

Bessborough, E.

Layton, L.

Birdwood, L.

Long, V.

Boardman, L.

Lyell, L.

Boyd-Carpenter, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Butterworth, L.

Caithness, E.

Merrivale, L.

Cameron of Lochbroom, L.

Mersey, V.

Campbell of Alloway, L.

Molson, L.

Carnegy of Lour, B.

Mottistone, L.

Carnock, L.

Mountevans, L.

Cox, B.

Munster, E.

Craigavon, V.

Murton of Lindisfarne, L.

Craigmyle, L.

Penrhyn, L.

Davidson, V. [Teller.]

Polwarth, L.

Denham, L.

Portland, D.

Dundee, E.

Rankeillour, L.

Ferrier, L.

Shannon, E.

Fraser of Kilmorack, L.

Skelmersdale, L.

Gainford, L.

Sudeley, L.

Glanusk, L.

Trefgarne, L.

Gormanston, V.

Trumpington, B.

Henderson of Brompton, L.

Vivian, L.

Hesketh, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.36 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 27:
Page 5, line 27, at end insert ("but he shall not take part in any proceedings relating to any question affecting himself personally").
The noble Lord said: My Lords, it gives me great pleasure to move my own amendment instead of resisting what I believe to be ridiculous amendments from other people. This amendment seeks, in the case of competent harbour authorities which are also local authorities, to protect pilots from being misunderstood if they happen to sit on committees which deal with matters affecting their own terms and conditions.
At Committee stage my noble friend Lord Harvington, in moving Amendment No. 30 on my behalf, sought to remove the whole of what is now subsection (1). My noble friend the Minister said, among other things, that the object of that subsection was to allow a pilot's technical knowledge and experience to be called upon as necessary. With that I would not quarrel in any way whatsoever. Therefore, in order to provide this protection of their good name, which is the object of the amendment, I have proposed here to add a small sentence at the end of subsection (12).
I am advised that the wording follows fairly closely a similar provision in the Gloucester Pilotage Order, which shows that there is some basis for it; but of course I shall fully understand if my noble friend says that in primary legislation it has to be worded in another way. However, I do think that something along these lines ought to be in the Bill; and I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I have a great deal of sympathy with the amendment tabled
788
by the noble Lord, Lord Mottistone, except that I think it is unfair that it should apply only in the case of pilots. For a long time now I have been rather concerned about the whole question of declaring an interest, because in your Lordships' House and in the other place if one has merely said, "I have an interest in this" one can go on talking and taking a full part in the debate that follows. I have never checked this, but I am sure that noble Lords on all sides of the House have frequently taken part in a debate, having declared an interest in just as few words as that, and then voted.
I think that the noble Lord has a very strong point here and, if this were the beginning of a revision and a new look at the whole question of interest and involvement, I should be happy to take it further. We are coming on to something which is dear to my own heart fairly soon, and some time in March we shall be discussing what we call in Scotland the poll tax, the alternative to rates. Every single Member of your Lordships' House, particularly if he is a Scottish Member, is bound to gain by it. There is not the slightest doubt that he will gain by it; yet it would be ridiculous for a Member not to take part unless we changed the whole basis of matters. That may be correct but I think it could get us into great difficulties.
That is the basic reason why I feel it is wrong just to take out pilots as being the only people who are affected. I certainly agree with the principle of the amendment and would support it, except that it is too specific and perhaps slightly punitive towards one small section of the population.
Viscount Simon: My Lords, like the noble Lord who has just spoken, I was rather surprised that the noble Lord, Lord Mottistone, put this forward. After all, of all the places in the United Kingdom, the House of Lords is a place where we have an immense amount of expertise on all sorts of subjects and, provided people declare an interest, we welcome their taking part in discussions and bringing that expertise to bear.
If a pilot happened to be a member of a local authority and the discussion concerned pilotage, it would be well for him to declare his interest—everybody would know it in any case—formally take part in the discussion and to offer his advice. If the noble Lord had said that he should not vote, I would understand that. That is quite possible. However, to say that he must not take part in any discussion on the subject about which he knows seems to me extraordinary.
Lord Mottistone: My Lords, I did not say that.
Viscount Simon: The noble Lord tells me that he did not say that. I thought he said that such a pilot was not to take part in the discussion.
Lord Mottistone: I shall reply when I come to wind up.
Viscount Simon: My Lords, I do not think that we should vote against the amendment, but I am surprised, and I wonder whether the noble Lord when he winds up will give a little more explanation of what is in his mind.
Lord Simon of Glaisdale: My Lords, I support the amendment, subject to the drafting,
"any question affecting himself personally".
This seems to me much too broad. I thought that the Minister was convincing in Committee when he argued against the rejection of the whole of the subsection. When it comes to taking part, and particularly voting on a matter of personal interest, provided that personal interest is more narrowly drawn than here, I think that the noble Lord, Lord Mottistone, is on a valid point. It is most unsatisfactory in local government that persons who have an interest in a transaction should take part in it.
I thought that the noble Lord, Lord Carmichael, had a valid point when he asked, why only pilots—to which I think the answer is that we are legislating about pilots. I think he is quite right that the matter ought to be considered in a wider context. While we are legislating about pilots and specifically giving them immunity in this subsection, it seems to me that the noble Lord, Lord Mottistone, is justified in taking the line that he does.
Lord Swinfen: My Lord, despite my noble friend's unflattering reference to the past two amendments, I support the principle behind this amendment. Like the noble and learned Lord, Lord Simon of Glaisdale, I have a feeling that barrack-room lawyers in particular might draw the word "personally" too broad. The question of the discussion of a pilot's hours on duty could be considered to be personal to one particular pilot among others. If the noble Lord is willing to take this back and redraft it to include some declaration of interest, that would be better.
Lord Underhill: My Lords, when the noble Lord, Lord Mottistone, replies to the points that have been made, will he indicate whether he believes that this provision should apply to any person on the committee with shipping interests? It seems a little unfair to say that, because the clause deals with pilots, we will debar pilots in the way suggested by the noble Lord. There could easily be shipping interests on the committee. Does he propose on Third Reading to come forward with an amendment to deal with those?
Lord Brabazon of Tara: My Lords, we have had an interesting little debate on the amendment, which I think is sensible. I am glad to say that I think it is unnecessary since it is already made clear under Section 94 of the Local Government Act 1972, which regulates the membership and proceedings of local authority committees, that committee member shall not take part in proceedings that affect them personally. That section will continue to apply, notwithstanding any of the provisions in the Bill.
The debate has gone somewhat wider than the Bill. I suggest that this is not an appropriate moment to try to reform the local government Acts.
Lord Swinfen: My Lords, will all the competent harbour authorities be local authorities as well? Otherwise surely they would be excluded.
Lord Brabazon of Tara: My noble friend has not studied the Bill with the care that I hoped he had and
790
pretends to have done in other respects. This part of the Bill applies only to those competent harbour authorities that are local authority harbours, which is a fairly small number in the country.
Lord Mottistone: My Lords, it was a happy little debate. Perhaps I may answer quickly because we must not waste time. We have wasted too much time already on unnecessary Divisions.
Noble Lords: No.
6.45 p.m.
Lord Mottistone: To take the point of the noble Viscount, Lord Simon, my noble friend the Minister said in Committee that we want the expert knowledge and experience of pilots in the areas in which they can be useful, and I said that that was absolutely right. The object of the amendment is to make sure that they are not involved in discussions on their pay and other conditions. In that respect, the shipping interests as such would not be affected. The representatives of the shipping industry would not be talking about that sort of thing. That answers the noble Lord, Lord Underhill.
The noble Lord, Lord Carmichael, had a point in what he said. As my noble friend said—of course one should have known this—it is already covered in the local government legislation.
I am glad that my amendment is unnecessary. I should have thought that in your Lordships' House, when one declares an interest in talking in a broad sense about a subject of which one has knowledge perhaps because one is being paid to be observant of it, that is all right, provided the debate and legislation do not affect one's pay and conditions personally. That is the real issue of which one must steer clear always, on which one must not vote and about which one must not even talk in an assembly such as this. When it comes to the poll tax, that will be rather fun, will it not?
Lord Carmichael of Kelvingrove: Indeed.
Lord Mottistone: Yes, it will. However, in another place they vote on their own pay from time to time. The buck must stop somewhere, and perhaps Parliament is the place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 28:
Page 5, line 28, leave out ("subsection (12) above") and insert ("this section").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 29:
Page 5, line 33, at end insert—
(""time-expired apprentice pilot" means a person who has served the full term of his apprenticeship as a pilot but is not the holder of a licence under section 12 of the Pilotage Act 1983;
"recognised assistant pilot" means a person who acts as an assistant to pilots in a pilotage district and is recognised as such an assistant by the pilotage authority for the district but is not the holder of such a licence.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 30:
After Clause 3, insert the following new clause:
("Employment etc. of authorised pilots.
.—(1) Subject to the following provisions of this section, a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots in the area in relation to which its duty under section 2(1) above is exercisable (whether under a contract of employment or a contract for services).
(2) A competent harbour authority shall offer to employ under a contract of employment any person it authorises under section 3 above ("the new pilot") unless—

(a) a majority of the relevant licence holders have agreed during the period beginning six months and ending three months before the appointed day that this subsection shall not apply; or

(b) a majority of the relevant authorised pilots have agreed on or after that day that this subsection shall not apply.

(3) For the purposes of subsection (2) above—"relevant licence holders" means—

(a) in the case of a competent harbour authority whose harbour falls within more than one former pilotage district, the persons who at the time of the agreement were holders of full licences (within the meaning of section 3(3) above) for the pilotage district in which the area for which the new pilot is authorised falls;

(b) in the case of a competent harbour authority whose harbour falls within a former pilotage district in which another such authority's harbour also falls, the persons who at that time were holders of such licences for that district and, in the opinion of the Pilotage Commission, were then regularly providing their services as pilots within the part of the district in which the first-mentioned authority's harbour is situated;

(c) in any other case, all the persons who at that time were the holders of such licences for the former pilotage district in which the competent harbour authority's harbour falls; and "relevant authorised pilots" means—

(i) in the case mentioned in paragraph (a) above, the persons who at the time of the agreement are authorised pilots for the area for which the new pilot has been authorised; and

(ii) in any other case the persons who at that time are authorised pilots for the harbour of the authority.

(4) Where by virtue of subsection (2) above a competent harbour authority is obliged to offer to employ persons it authorises under this section for part of its harbour but not persons it authorises for another part, it shall not authorise any person for any area falling within both those parts unless it offers to employ him throughout that area.
(5) A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above.
(6) A competent harbour authority may pay into any pilots' benefit fund established under paragraph (i) of section 15(1) of the Pilotage Act 1983 such contributions as may be required by the rules governing that fund in respect of any authorised pilot providing his services under such arrangements as mentioned in subsection (1) above.").
The noble Lord said: My Lords, I spoke to this with Amendment No. 4. I beg to move.
Lord Underhill Lord Underhill moved, as an amendment to Amendment No. 30, Amendment No. 31:
Subsection (1), line 2, leave out ("such arrangements as it considers appropriate") and insert ("reasonable arrangements").
The noble Lord said: My Lords, I referred to the five amendments, Nos. 30, 31, 32, 33, 34 and 35, in my name, but in view of the breadth of the grouping there
792
was not sufficient opportunity to get to grips with what was proposed, particularly in Amendment No. 31.
The new clause which the Government have put forward says:
"a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots".
My amendment proposes to change the words,
"such arrangements as it considers appropriate"
to "reasonable arrangements". Here I shall be guided by such persons as the noble and learned Lord, Lord Simon of Glaisdale, because I am certain that when the arbitration panel, to which considerable reference has been made in the course of our debates, comes to consider matters it will surely take cognisance of whether "reasonable arrangements" are rather different from,
"such arrangements as it considers appropriate".
Therefore it seems to me that the adoption of the words that I am suggesting in Amendment No. 31 could be vital when we come to the consideration by the arbitration panel, if eventually we get the arbitration panel. In any case, although we have said that the period could be extended beyond three years, it may not be. It seems to me that Amendment No. 31 is very reasonable and I do not know whether the Government can find a reasonable argument for not putting in the words "reasonable arrangements". It seems to me very difficult to argue against it. I beg to move.
Lord Simon of Glaisdale: My Lords, I support this amendment. Naturally I am attracted by the word "reasonable" in this connection, because my noble and learned friend Lord Brightman and I used a similar expression when we tried to frame a short amendment to take the place of this clause. But I am particularly anxious to get rid of the words,
"such arrangements as it considers appropriate".
I am afraid that the noble Lord the Minister must be getting bored rigid by the point that I make; namely, that subsection (5) of his new clause takes away the option of either self-employment or employment—a contract for services or a contract of employment—that is apparently given by subsection (1) of his new clause. Obviously, the noble Lord the Minister is satisfied that that point is not good, but as my mind still is obscure on the point I would ask him once again to try to clear it.
The point is that the competent harbour authority has to make such arrangements as it considers appropriate for carrying on the pilotage business, whether under a contract of employment or a contract for services. On the face of that, that gives what the Bill does not give and what we have all clamoured for; namely, the preservation of the right of self-employment by pilots. But when one turns to subsection (5) it says:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot",
and then come the crucial words,
"in accordance with such arrangements as the authority considers appropriate".
So that what the competent harbour authority may do, notwithstanding that the majority of pilots may

793
wish to be self-employed, is consider it appropriate to go under the first limb of the "whether" and offer a contract of employment and not a contract for services. If that is refused the competent harbour authority may refuse to authorise because a pilot has not accepted the arrangements that the CHA considers appropriate.
I know that the noble Lord the Minister says that subsection (5) only applies if the pilot refuses either the offer of a contract of employment or a contract for services, but I am afraid that I simply cannot read that into the subsection. It is for that reason, as well as for the reason given by the noble Lord, Lord Underhill, that it seems this amendment justifies acceptance. In any case, I should be very grateful if the noble Lord the Minister would clear my mind on that subject, if it is still a mind capable of being cleared.
Lord Mottistone: My Lords, speaking strictly at this stage to Amendment No. 31 only, and with great trepidation crossing swords with the noble and learned Lord, I am advised that the use of the word "reasonable" could expose a competent harbour authority to challenge in the courts on the grounds that the arrangements made were not reasonable. It is also unquestionably the case that Amendment No. 31 would greatly weaken the ability of the competent harbour authority to determine the nature of the services to be provided. But the problem of being challenged in the courts is a rather more important one.
Lord Brabazon of Tara: My Lords, my noble friend Lord Mottistone makes an interesting point. I thought I had already answered Amendment No. 31, in the name of the noble Lord, Lord Underhill, when I spoke to Amendment No. 30, and I also thought that the noble Lord had already spoken to Amendment No. 31. May I try to clarify the mind of the noble and learned Lord, Lord Simon of Glaisdale? I feel nervous about trying to do so, because if a legal brain such as his cannot understand the point then I feel rather doubtful whether I shall be able to explain it to him.
As he said, all subsection (5) does is this. A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot under either option; that is to say, employment or self-employment—
Lord Simon of Glaisdale: My Lords, I am so sorry to interrupt, but where does the noble Lord get those words?
Lord Brabazon of Tara: My Lords, I am paraphrasing the subsection, which is perhaps a mistake when replying to the noble and learned Lord. Subsection (1) of the new clause is really very little different from what used to be in the old clause, except that we refer to a "contract for services". It is primarily the competent harbour authority that decides whether it wishes to employ pilots or to make other arrangements under a contract—either self-employment or through an agency. That is the best I can do to explain the position to the noble and learned Lord. I do not know whether he is any clearer about it now.
Lord Underhill: My Lords, I wonder whether the explanation that we have just been given is one which
794
I as a layman can understand. I gather that there is provision for the pilots to take votes as to whether they all wish to be employed or self-employed. Therefore I gather that it is not solely in the hands of the competent harbour authority to decide.
I have listened to the arguments put forward by the noble and learned Lord, Lord Simon of Glaisdale, that the use of the word "reasonable" is very important. As a complete and utter layman on matters of law, I have nevertheless been long enough in your Lordships' House to hear long arguments from Ministers as to why the word "reasonable" should be used. It seems to me that this is a case where the inclusion of the words, "reasonable arrangements", rather than, "such arrangements as it considers appropriate", is a reasonable request.
In the light of the support which we have received from such an eminent legal mind as that of the noble and learned Lord, and in light of the fact that the Government say that they cannot accept what is said, I believe that the House ought to accept the amendment. We can deal with the principle of subsection (5) when we come to my Amendment No. 35. I wish to put this to the House.
7.1 p.m.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 42; Not-Contents, 57.

DIVISION NO. 4

CONTENTS

Ailesbury, M.

Llewelyn-Davies of Hastoe, B.

Airedale, L.

McGregor of Durris, L.

Attlee, E.

Monson, L.

Broadbridge, L.

Mountevans, L.

Brockway, L.

Newall, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Craigavon, V.

Perry of Walton, L.

David, B.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L. [Teller.]

Diamond, L.

Donoughue, L.

Seear, B.

Ewart-Biggs, B.

Shackleton, L.

Gallacher, L.

Simon, V.

Graham of Edmonton, L. [Teller.]

Simon of Glaisdale, L.

Stallard, L.

Greenway, L.

Stewart of Fulham, L.

Grey, E.

Strathcona and Mount Royal, L.

Hanworth, V.

Houghton of Sowerby, L.

Tordoff, L.

Irving of Dartford, L.

Underhill, L.

Jeger, B.

Wilson of Rievaulx, L.

Kennet, L.

Ypres, E.

Lawrence, L.

NOT-CONTENTS

Abinger, L.

Cameron of Lochbroom, L.

Aldenham, L.

Carnock, L.

Ampthill, L.

Cathcart, E.

Bauer, L.

Coleraine, L.

Beaverbrook, L.

Cowley, E.

Belstead, L.

Cox, B.

Bessborough, E.

Craigmyle, L.

Boardman, L.

Davidson, V. [Teller.]

Boyd-Carpenter, L.

Denham, L. [Teller.]

Brabazon of Tara, L.

Dundee, E.

Brougham and Vaux, L.

Ferrier, L.

Caithness, E.

Gainford, L.

795

Gray, L.

Maude of Stratford-upon Avon, L.

Halsbury, E.

Hesketh, L.

Merrivale, L.

Hives, L.

Mersey, V.

Home of the Hirsel, L.

Molson, L.

Hooper, B.

Morris, L.

Hylton-Foster, B.

Mottistone, L.

Inchcape, E.

Murton of Lindisfarne, L.

Lane-Fox, B.

Norfolk, D.

Lauderdale, E.

Penrhyn, L.

Layton, L.

Polwarth, L.

Lindsey and Abingdon, E.

Rankeillour, L.

Liverpool, E.

Shannon, E.

Long, V.

Skelmersdale, L.

Lyell, L.

Strathclyde, L.

Macleod of Borve, B.

Trefgarne, L.

Marley, L.

Trumpington, B.

Resolved in the negative, and amendment to Amendment No. 30 disagreed to accordingly.
Viscount Long: My Lords, I beg to move that further consideration on Report be now adjourned. For the convenience of the House, we shall not return to consideration of this Bill until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Protected Shorthold Tenancies (Rent Registration) Order 1987
7.9 p.m.
The Under-Secretary of State for the Environment (Lord Skelmersdale)The Under-Secretary of State for the Environment (Lord Skelmersdale) rose to move, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]
The noble Lord said: My Lords, I beg to move the first Motion standing in my name on the Order Paper. I trust that it will be convenient to the House if I introduce both orders together. This is the second time in a week that I have been privileged to announce extensions to the right to rent. These orders, which I hope will be widely welcomed, will restore some of the incentives for private landlords to let properties left empty because of restrictions of the Rent Acts. They will encourage landlords to make accommodation available in London where housing need is particularly high. This will benefit many people—job movers, single people and the homeless—for whom private renting is the logical or sometimes the only choice.
I shall deal first with the Rent (Relief from Phasing) Order, which abolished the phasing of rent increases for regulated tenancies. Notwithstanding the history lesson which the noble Lord, Lord Dean, gave me last week, the House will need no reminder that it was the Labour Party's Rent Act of 1965 that introduced the current fair rent machinery. That Act made no provision for the phasing of rent increases. Landlords were allowed to charge the full fair rent immediately. Phasing of increases in regulated rents is not fundamental to the fair rents system. It was introduced at a time of high inflation to protect tenants from paying large increases all at once. In particular, the Conservative Government in 1973 froze rent increases, and this was subsequently converted into statutory phasing in the Housing Rents and Subsidies Act 1975 which provided for an increase in the fair rent to be payable in three equal instalments. In 1980,
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as inflation started to go down, we altered the phasing provisions and the effective period of registrations. We reduced the period before a fair rent could be reviewed from three years to two years and made a similar change to the phasing period. The effect of this is that only half any increase in rent can be charged immediately; the full rent one year later.
Under phasing the landlord never gets a fair rent. He does not get the fair rent assessed in 1985 until 1986—when it has already fallen behind. When in 1987 a new fair rent, appropriate for 1987, is set, he cannot get that until 1988. "Unfair rent" would be a better description; less fair than it was in 1965 when Labour introduced the system.
For many years private landlords have lost out because rent increases fell behind the rate of inflation. Since 1970 private rents have lost a fifth of their value against the retail price index, and two-fifths against average earnings or indeed against local authority rents. During the 1970s this falling behind was particularly marked. Inevitably there has been a catching up process, and this is still continuing. Nonetheless, the annual rate of increase in registered rents has fallen from 12·5 per cent. in 1983 to 8.5 per cent. in 1986. Inflation is now at its lowest for many years. The abolition of phasing will make a marginal difference to rents payable but it will help landlords to obtain a better yield from rentals and in turn help them to carry out repairs to their property. Ending phasing will not of course affect the ability of tenants to claim housing benefit on any higher rent.
The second order with which we are concerned today is the Protected Shorthold Tenancies (Rent Registration) Order which deals with shorthold tenancies in Greater London. Initially, it was a precondition of a shorthold tenancy that a fair rent had to be registered for that tenancy. This condition does not apply and never has applied for any other private letting. The law gives the Secretary of State power to review the position and modify the conditions. This he did in 1981. It was clear that the requirement for uneconomic fair rents to be registered was enough to deter many landlords from using shorthold. So, this requirement was waived for shorthold tenancies outside Greater London.
While precise statistics are not available, it is increasingly apparent that shorthold is being used successfully elsewhere in England and Wales. This is not the case in London, however. That is why with this order we now propose to lift compulsory rent registration for shorthold tenancies inside London to bring them into line with shortholds elsewhere. Noble Lords tell me practically every day how important it is to make available more rented accommodation, while others press me on the need to protect the tenant. Shorthold tenancies achieve both these objectives.
The order does not affect the position of existing shorthold tenants in London. Their existing fair rents will continue to have effect. I emphasise that it is still open to either landlord or tenant of a shorthold tenancy outside London to apply for a fair rent to be registered although it is not now compulsory.
Both these orders help to further the joint causes of increasing choice in housing and helping those in housing need. I commend them to the House.
Moved, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee.]—(Lord Skelmersdale.)
7.15 p.m.
Lord Dean of Beswick: My Lords, we seem to be having a surfeit of debates on this type of rent legislation in your Lordships' House. I am sorry that there is no representative present on the Alliance Benches to speak on such an important issue. I should have thought that it is important enough to attract them to this Chamber even at this time of the evening.
Your Lordships will recall that a fairly broad debate was initiated only two weeks ago by the noble Lord, Lord Harris of High Cross. Noble Lords who took part covered almost the whole field of rented accommodation in the private sector as affected by the orders. During that debate noble Lords on all sides of the House gave various statistics. It depends on one's political point of view what one thinks will happen when this type of order is brought forward and the alterations take place. I have no desire to hold back your Lordships or to restate what I said on that day. What I said and what my party believes in is on the record.
For instance, I do not believe for one moment the Minister's claim that London will be better off. All the indications from people involved in private sector housing in London are that London will be worse off. I made the point that when last there was a total release on renting in the private sector and a full market policy was introduced in the late 1950s by the then government, housing was not freed for letting. However, property in the private sector was freed to be sold at attractive prices compared with what rents could have brought in. I see no reason to alter my view on that issue.
In his speech, which was as long as was necessary for the occasion, the Minister spoke about the rate of inflation and the rates of increase in rents. But is it not a fact that over the past two years rents in the private sector have increased by 17 per cent? If noble Lords take the trouble to do the calculation they will see that the increase is more than double the rate of inflation. On that score one could not say that the landlord is losing out on the basis that rents are below the rate of inflation.
The Minister also made the point that the order will allow the landlord to carry out necessary repairs. This has never been proved. There is no evidence to suggest that as soon as the clarion call goes out from here tonight and landlords become a great deal freer than they were before they will immediately start—if they have not done so already—to survey the properties, bring in the property repairers and start a repair programme. That is not the case and never will be. I believe that more houses will be brought on to the market but for sale in the private sector.
In the debate two weeks ago I produced evidence from a report commissioned by a section at Cambridge University. As your Lordships will be aware, the report concluded that rented housing is a diminishing commodity which would continue to do so. Nobody could see a future for the present private rented housing stock. Whether one could introduce a
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building programme for the private rented sector is a much wider issue. This would require massive investment from the Government and from the private sector in order to make it attractive for the private sector to become involved. There is no question but that government money would have to be involved.
As a consequence of these two orders the balance will be tilted against the tenant. Many tenants who have been in their houses for quite a number of years are now in the twilight of their lives. There is no question but that they will be disturbed and frightened by the consequences of these two orders. I have had letters from various organisations and individuals mentioning these fears. Time will prove whether or not they are groundless but history will show that these people are probably right and there is room for concern.
The Minister mentioned that three-year phasing was introduced because of the higher rate of inflation in those days. He now says that because the rate of inflation is low they believe they should take a further step and, when the rent is set, reduce the period from two years to one year. No one can guarantee what will happen in the future, but let us suppose that for reasons outside the control of this Government inflation takes off. That has happened in the past because of the oil crisis. It was a Conservative Government at the time but it could equally have occurred under a Labour or an Alliance Government.
No government could have protected this country from the consequences of the tremendous increase in the cost of living that took place at that time because of changes in oil policies. Is the Minister prepared to say that should the denominator move the other way the Government will be prepared to come back to this House for a review of the situation in the light of their policy having been mistaken? I do not think that one can ask for anything less than that.
Normally, in another place, when such orders are considered, these statutory instruments are dealt with pretty expeditiously upstairs in Committee, and eventually they become consigned to history. However, on the occasion that these two orders were moved in the other place they were discussed in the full Chamber at the request of the Opposition because at that point in time the Opposition had neither the desire nor the power to interfere with what was taking place. It was made clear by the spokesman of my party that we were against what was happening.
I have to say that although the orders will be accepted tonight without a Division, as is the custom in this House, we are categorically opposed to them. We do not believe that they will achieve the Government's objective. That view was expressed by some noble Lords during the debate that took place in your Lordships' House a few days ago. I know that the orders will be accepted but I want to put on record that, when a Labour Government are elected to office, one of their first priorities will be to review the private rented sector to see whether the tenants in that sector are getting a square deal. Having said that, I shall end my observations on that score.
My noble friend and colleague from Camden, Lord Stallard, has had a long career in local government. He

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was Member of Parliament for an inner London borough and must be better versed or at least as well versed as any Member of your Lordships' House in the effects of these two orders on private sector tenants in London. I have no doubt that he will explain them in his usual very lucid and forceful manner.
Lord Monson: My Lords, I should like briefly to extend a warm welcome to these two orders. I should also declare a modest interest so far as the first one is concerned.
I cannot agree with the noble Lord, Lord Dean, that these orders tilt the balance against the tenant or that they will strike fear into tenants' hearts: I think that that is going a little over the top. I cannot agree that the abolition of phasing will cause any genuine hardship. After all, wages and salaries rise every single year without fail. Food, petrol, gas, electricty and clothing rise at least once a year. Why should rents alone be singled out to be held down artificially, and held down not only below the market value but below the so-called fair rent, which itself is below the market value, in the South of England at any rate if not necessarily in the North and the Midlands?
As the noble Lord, Lord Skelmersdale, has pointed out, these orders will encourage owners of houses to let property which at the moment they feel they cannot let economically because of the restrictions that have been imposed hitherto. As such, these orders will positively prevent hardship rather than cause it and for that reason I welcome them once again.
Lord Stallard: My Lords, as my noble friend has said, quite recently we had a long debate on rent control and deregulation, and it is not my intention to cover ground that we have already covered. Certainly we have no time this evening, and as custom stands at the moment, at the end of our short debate on these orders there is not much that can be done about them in this House.
There has been mention of a number of points that I should like to pick up. In his opening remarks the Minister did his best to put forward these orders as two innocuous little measures which did not mean a lot and would not do much damage. No harm would be done, he said, and in any case it was a previous Labour Government who had introduced the 1965 Rent Act. As my noble friend pointed out, the fact that in another place we insisted that these orders be debated in the full Chamber is a measure of the interest and anxiety that have been aroused outside this House by these orders and their interpretation, as we who live among the victims know.
The noble Lord, Lord Monson, mentioned phasing and asked why rents should not rise just as food and everything else have risen in cost. The simple answer, which was given also during the debate on the Motion tabled by the noble Lord, Lord Harris, the other week, is that in recent years the retail price index has hovered around the 5 per cent. to 7 per cent. mark but that certainly in London housing costs have been increasing at the rate of 17 per cent. and more. It is self-evident that if housing costs and rents are rising at 17 per cent. and the RPI is rising at only 5 per cent.,
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that is an adequate reason for not increasing rents every year.
The figure of 17 per cent. that I have mentioned relates only to the first six months of 1986. In London there are instances of increases in the year of over 100 per cent. I do not know whether the noble Lord, Lord Monson, could justify a rent increase of 100 per cent. when the cost of living is rising by 5 per cent., 7 per cent., 9 per cent. or 10 per cent. There is no justification for that kind of rent increase. There is therefore something wrong with the basis of his argument.
Lord Monson: My Lords, does the noble Lord not agree that the reason for the high increases is the restriction of supply? If more rented accommodation comes onto the market because of the abolition of restrictions, rents will not rise to such a great extent.
7.30 p.m.
Lord Stallard: My Lords, that is a much longer argument which I should love to debate with the noble Lord, Lord Monson. That is a myth that has built up since 1965. There is ample evidence to prove that there are more reasons than the one he gave for the diminution of rented stock which has taken place not just because of the simple facts that the noble Lord has pointed out. There is a long list of reasons why rented accommodation is not as widely available as it was. Building and development have taken away huge chunks of it. We know that the lodgings or digs in which many people used to live when they first came to London have disappeared. A huge chunk of such rented accommodation has been taken away.
We know that it is more acceptable to the new breed of tenants, as it were, to buy rather than rent. Whole heaps of what was originally rent-controlled accommodation have been converted into self-contained units of accommodation and sold off in that fashion. It is just too glib to say that the 1965 Act caused the disappearance of rented accommodation. There are a number of complicated reasons. They are easily understood by those who live and work in inner city areas, particularly London. It is not as simple as the noble Lord made out. I have dealt with the phasing argument.
Phasing and the tenants' ability to pay are crucial. The justification for phasing is simple. Tenants in the private rented sector in London are often the people with the lowest incomes. They are the poorest people. That is evidenced by reports and surveys which have been carried out ad infinitum. They are just unable to pay high increases all at once. Recent government statistics prove that incomes are not rising anywhere near as high as registered rents. That is another reason why tenants cannot pay the increases.
The Minister said (I believe his honourable friend in the other place said the same) that those people can obtain housing benefit. We have had a number of debates on that subject in this place. We are all aware that while the Minister says that tenants can obtain housing benefit, one of his noble colleagues in another department is doing his best to ensure that fewer tenants qualify for housing benefit. Ministers are under pressure to take people off housing benefit and to reduce the number who qualify.

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The Government cannot have it both ways. They cannot say that those people can obtain housing benefit, because many of the people who will be affected by the proposals contained in the first order are not eligible for housing benefit. Many are students, and many others are pensioners with a small occupational pension which takes them outside the scope of housing benefit. There are low paid workers and single women who are often outside the scope of housing benefit. They suffer hardship due to the rents and because they receive no assistance with them. That is an answer to the point put forward by the noble Lord when he introduced the order.
We know that in 1984 the average weekly rent was £212 for furnished accommodation and £76 for unfurnished accommodation. I can only talk about London, but much of this applies only to London. Shortholds apply only to London, so why should we not talk only about London? We are talking about £212 a week for a furnished flat and there are advertisements for unfurnished accommodation in London at upwards of £76, £100 and £150. It is suggested that those rents could go higher in the next few months. It therefore becomes evident that the argument against phasing does not hold water.
The points put forward about phasing by the Minister and the noble Lord, Lord Monson, can be dealt with adequately with regard to London. Fabulously high rents cannot be afforded by people who need accommodation. That is one reason why we were concerned and insisted that the order be taken on the Floor of the House.
My noble friend said that the Minister thinks that when the clarion call goes out from this House tonight that these orders have gone through, everyone will jump in and free all their houses for rent, loads of rented accommodation will be available and all repairs will be done overnight. That is another myth. It is another story. The clarion call that will go out from this side of the Chamber tonight is that there will be a review of the matter. In the debate initiated by the noble Lord, Lord Harris, I spelt out what our party's housing policy would be. There is no ambivalence about it. There is no question of the Minister asking us what we would do. We have said what we will do. One of the things we will do is to abolish shortholds. That should be the clarion call that goes out from here. There will be no such thing as shortholds in the life of the government who will take over in the next few months.
The argument is that the order on shortholds merely brings London into line with the rest of the country. London was excluded. It is said that it is about time that it was brought into line with the rest of the country. In 1981 when shorthold tenancies were introduced, it was the noble Lord's predecessors and his honourable friends' predecessors in the other place who argued that London should be treated differently. They would never have got the legislation through had they not argued that point and pressed it on the Government because of the sheer size of the privately rented sector in London.
London is not like other places. I do not know whether the noble Lord is aware that I have lived all my adult life in London. London is different in every
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respect, whether it be transport, health, education or housing. Whatever aspect one looks at, London is not the same as other parts of the country. Members on both sides in the other place recognised that and made provision for it when they introduced these tenancies and the phasing that we are discussing tonight.
The size of the rented sector in London forced that attitude on Members of the other place. There is a much higher rent-income ratios. I mentioned that when I discussed a previous order. They are much higher. The rent-income ratios in London are almost grotesque. I know Hackney, Lambeth, Brent, Camden and Islington.
Lord Graham of Edmonton: And Edmonton, my Lords.
Lord Stallard: I know Edmonton and Tottenham as well. I know many parts of London where those things are true. Rent-income ratios are different in London. Such things do not happen elsewhere in the United Kingdom. Of course the Government responded to Members of Parliament (mainly their own Members) representing London, and they introduced this legislation.
The Shorthold tenancy was already a diminution of tenants' rights. Given London's long tradition of the exploitation of tenants by landlords, more protection was needed in the capital. I could go on talking for another hour and a half talking about exploitation and Rachman. I took the liberty of sending one or two press cuttings to the noble Lord, Lord Harris, after he had used his cuttings. I have not yet had a reply. I hope that he had had a chance to study the press cuttings that I sent him.
Outside London market rents and registered rents are much closer than they are in London. In London market rents can be as much as four times the amount of registered rents. There is no incentive for London landlords to apply for rent registration with such a ratio. Tenants rarely apply because they fear harassment. That is a real factor in London. If I had time, I should be happy to read reports by the Select Committee on the Environment which contain long lists of cases of harassment which still go on in London. Tenants are still being terrorised by landlords and high rents.
Not all tenants are aware of their rights. Whatever the Minister may say, tenants of shorthold properties do not know their rights or how to enforce them. I have heard it said that they should know their rights because they receive enough material and everything is written down. It is written down but it is no doubt written in Whitehall jargon. It is said that they have all these leaflets and documents and therefore they should understand their rights. They do not all understand their rights or how to enforce them.
As I said before, the Government's shorthold proposals amount to effective decontrol. That is the nub of the matter. The Government fully intend to decontrol rents altogether. If noble Lords, on whatever side (including the government side) were honest they would say that that is their ambition. The noble Lord, Lord Harris, made no bones about it. He is in favour of complete decontrol. That is the objective.

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Although these two orders may appear innocuous, they are the thin end of the wedge. They are a step towards the total decontrol of rents. That is the Government's ambition, although not in the lifetime of this Parliament, as has been said by the Secretary of State and the Minister in the other place. However, they both said that they did not know about the next Parliament. In other words, it is not very far from their minds that this policy is a runner.
As shortholds already carry less security, it will lead to a boom in shorthold lettings in London. Tenants will be intimidated into signing shorthold agreements in deperation. Large numbers of new lettings will be on shorthold, all at market rents, and the tenants' rights will be almost totally ignored. There is no doubt about that. Tenants will end up paying more rent. In many cases that is rent they cannot afford. That means more arrears and more harrassment. It certainly means more evictions. Or they will leave the privately rented sector and go elsewhere—perhaps the Embankment—or to local authority bed and breakfast if they can make themselves homeless.
The empty private homes will not be let, in spite of what the noble Lord, Lord Monson, thinks. Those properties that become empty as a result of this process of winkling out, or harrassment and emptying, will not be let. There is much more profit to be made in London by selling, and they will be converted and sold. There is no doubt about that. In 1977, of 550,000 empty properties in private ownership only between 8,000 and 30,000 could be said to be empty for any reason connected with the rent Acts. The bulk were sold.
I shall not weary your Lordships with any more statistics although I should love to. On shortholds, the measure that the Minister has introduced means, so far as I am concerned, a stepping up of the Rachman-type landlord that we knew immediately after the 1957 Act. This is another invitation for that kind of activity in London, where there is such scarcity and where there is so much money to be made from a free-for-all with no controls or legislation. One does not have to be very bright to work out what will happen and who will come in and grab the pickings.
As I have said, the tenants will be made homeless. Local authorities which are already in real difficulties with bed and breakfast accommodation will be hard pressed to do much about the problem. We shall have more serious problems in London than we have at the moment. We have had a debate recently on the difficulties in the inner cities. We have had the debate on a Motion relating to the International Year of the Homeless moved by the noble Lord, Lord Scarman, which, again, points out the problems of the homeless in London. The situation arises mainly in London and in the big inner city conurbations.
To introduce this measure, which is a licence to double and treble those problems, is absolutely crazy and almost criminal. If it were possible to do something about this tonight I should be going through the Lobby to vote against the thin edge of the wedge of total decontrol. That is what these two orders represent to me. There is no way that I can agree to them. I understand, as my noble friend says, that they
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will be agreed to because of the customs of the House, I think that is a great pity.
Lord Monson: My Lords, before the noble Lord sits down, may I put one short question to him as he has made several criticisms of my intervention? I agree with him that to some extent London is a special case. For example, the ripple effect of the City Big Bang is sending up values all over London. This inevitably affects tenants as well as potential owner occupiers. Does the noble Lord agree that a solution to the problem of the hard-pressed private tenant might be found if private tenants—who at the moment are unique in receiving no tax relief or subsidy of any kind—were brought into line with council tenants on the one hand and owner occupiers on the other by being given some kind of tax relief or subsidy? Would he agree that that might ease the problem?
Lord Stallard: My Lords, I would not rule that out of any review. These orders are not the way to review rent controls. I think that the noble Lord, Lord Harris, would have agreed with that. The matter needs review. Those aspects that the noble Lord, Lord Monson, mentioned must come into that review. We have to look at the possibility of attracting institutional capital—from building societies and so on—into that area, where they will provide the funds and accredited housing associations will do the building or the renting. These are all constructive and practical possibilities but they cannot happen in the atmosphere created by these two orders.
I would therefore say that the policy I outlined in the previous debate will be the Labour Party's approach to the matter. We understand all the problems that have arisen since previous legislation. We shall not say, "Because you did this, we shall do that." We shall do it because the whole matter needs rejigging and reshaping. That is what will happen immediately after the next election when the Labour Government looks at the new housing policy. I would certainly not rule out those matters for consideration.
7.45 p.m.
Lord Skelmersdale: My Lords, I am grateful to the three noble Lords who have spoken in this very short debate, which certainly hotted up in the last 19-odd minutes.
The noble Lord, Lord Stallard, was a little mischievous, to say the least, because shorthold tenancies were introduced as an initiative to encourage private landlords to let property. Almost overnight 5,000 came into existence. The key element of shorthold is that it is a fixed term tenancy of between one and five years at the end of which the landlord may if he wishes take possession of his property. I am fully aware that the noble Lord, Lord Stallard, does not approve of this. He says that the constrictions are so unintelligible that tenants will not know what they are letting themselves in for. It is a fixed period of years. That is a very simple concept to grasp. However, much more importantly the whole edifice comes crashing to the ground if the landlord does not go through the prescribed routine. As the landlord of a shorthold tenancy in Somerset I know this perfectly

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well. I should declare another interest, incidentally, as a tenant in London.
Lord Stallard: My Lords, before the Minister leaves that point I also mentioned that tenants in London are desperate. I do not think the Minister has grasped the situation of people looking for accommodation in London. Desperation will make them sign all kinds of bits of paper, and accept all kinds of conditions. They might understand some, but sheer desperation will make them accept.
Lord Skelmersdale: My Lords, I am answering points in the best way that I am able in the limited time available. If the noble Lord, Lord Stallard, will let me continue with my speech he may find that he has rather more answers than he expected.
Under shorthold the tenant does not have a right to stay on beyond the fixed term. He or she will be aware of this when taking the tenancy. This is the most important aspect of shorthold from the landlord's point of view and is crucial in cases where a landlord envisages only a short-term let. It will be for the landlord and tenant to agree on the length of the fixed term and the level of rent. If a tenant chooses to seek a registered rent the landlord will have nothing to gain by not continuing the shorthold because, once registered, the fair rent will apply to any subsequent lettings.
The department has received very few complaints about the use of shorthold outside London following the removal of compulsory rent registration in 1981. On the other hand, there have been several complaints that compulsory registration acts as a deterrent to landlords who want to make accommodation available on shorthold in London.
The noble Lords, Lord Dean and Lord Stallard, covered some of the same ground and talked about the increases in fair rents being much higher than the rate of inflation. I accept the figures given by both noble Lords showing that for the first half of 1986 the mean increase in rent on re-registration was 17 per cent. This works out, as I said, to an annual rate of about 8 per cent. However, these figures—as I also sought to show in my opening speech—must be put into perspective. Rent increases in the 1970s—a time of high inflation—lag well behind the retail price index and other cost indicators. Comparing rent levels and prices in 1970 with 1986 gives a surer indication of the erosion of the value of fair rents. It is small wonder that the private sector has been substantially reduced over the long term. I accept that these orders will not have the dramatic overnight recovery potential that the noble Lord, Lord Stallard, suggested that I put forward in my speech just now. Nonetheless, I think that they are valuable.
Rents for that period between 1970 and 1986 rose by about 340 per cent. Over the same period the all-item retail price index rose by 417 per cent. Local authority rents—and this is an interesting point—rose 581 per cent.; average earnings rose 579 per cent. I think that these figures all speak for themselves. All that this change will do is to allow landlords the full registered rent; the amount that the rent officer deems to be a fair rent at the time of registration. It does not alter the way in which registered rents are assessed.
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The noble Lord, Lord Monson, very nearly answered the second point of the noble Lord, Lord Dean, and the first point of the noble Lord, Lord Stallard, concerning inflation and what the future would bring. I have no better crystal ball than any other noble Lord in your Lordships' House. However, phasing was never the right way to deal with rent rises even in a time of high inflation, and we now recognise that. Why should the landlord, who, by definition, is equally affected by inflation, be made to subsidise his tenant, whose income may well be rising in line with inflation? Help for tenants is largely a matter for housing benefit.
Turning to housing benefit, we estimate that some 626,000 private sector tenants received housing benefit in 1984. That is about one third of all private sector tenants, and I cannot say what proportion of the 550,000 Rent Act tenants received housing benefit.
I did not come armed with figures for students and single people, but I can tell the House that a family of two adults and two children, paying some £25 per week in combined rent and rates, would not cease to be eligible for housing benefit until their income reached around £152 per week, or £7,900 per year. Therefore, I do not think that one can argue in that case that housing benefit thresholds are set at too low a level to help the least well off.
I dispute that the Department of Health and Social Security is in conflict with the policies of the Department of the Environment. It is common ground among all concerned that the public purse should not be asked to meet rents which are set unreasonably high purely to cheat the benefit system. The Department of Health and Social Security is discussing with the local authority associations ways of building into the machinery of DHSS grants to local authorities incentives to encourage local authorities to ensure that this abuse is prevented. Of course local authorities already have the power to withhold benefit on unreasonable rents, and the great majority exercise that power sensibly. That will not change. The changes that we are making today do not disturb the basic system of fair rents. However, even if they did, there would be no conflict between raising rents and taking measures to discourage benefit abuse.
It is true that in 1981 the Government were against removing compulsory rent registration for shortholds in Greater London. At that time we had no experience of how a shorthold would operate without compulsory rent registration. The experience of the last six years has shown that outside London shorthold operates very well without it and provides much-needed accommodation. The demand for short term rented accommodation is at its greatest in London and we see no justification for continuing the requirement that fair rents must be registered on shortholds here.
The noble Lord, Lord Stallard, made great play with the review which is due to take place within the next few months, when he anticipated that a Labour Government would come into power. That review has been taking place continuously for the last two years under a Conservative Government. Nonetheless, the noble Lord, I suspect slightly unintentionally, gave us a very good advertisement for our introduction of private capital into the rented housing market through

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the Building Societies Act, of which we are extremely proud and which he clearly thinks is a step in the right direction and would like to see continued. I agree with the noble Lord, but we shall know the effect of that when it gets off the ground, in the same way as we shall know the effect of these orders when they get off the ground. I do not expect them to have the damaging effect which the noble Lord Lord Stallard, and in a rather softer and more muted tone, the noble Lord, Lord Dean, clearly expected.
The Government's housing policy is about choice. The right to buy is well established. The pent-up demand from a million households has been released. The right to rent is our next goal. We shall continue to open up variety in tenure and to stimulate private investment in housing. Whether we shall go along the route suggested by the noble Lord, Lord Monson, as regards tax advantages I cannot yet say. That is something which has been suggested to me in this House before and I believe it was last mentioned at Question Time by the noble Lord, Lord Hams of High Cross. It is certainly one of the many things which we are considering in the area of the private rented sector. However, the extension of assured tenancies, the changes to encourage privately financed shared ownership and the new specific power for local authorities to support private rental development, are all important steps along the road.
The two orders which we are considering tonight are small but significant steps in the same direction. On that basis I commend them to the House.
On Question, Motion agreed to.

Rent (Relief from Phasing) Order 1987
7.55 p.m.
Lord Skelmersdale: My Lords, I beg to move.
Moved, That the draft order laid before the House on 13th January be approved. [8th Report from the Joint Committee].—(Lord Skelmersdale.)
On Question, Motion agreed to.
Baroness Hooper: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.56 to 8 p.m.].

Pilotage Bill [H.L.]
Consideration of amendments on Report resumed.
[Amendments Nos. 32 to 34 not moved.]
Lord Underhill Lord Underhill moved, as an amendment to Amendment No. 30, Amendment No. 35.
Subsection (5), line 3, leave out ("the authority considers appropriate") and insert ("are agreed between the authority and the representatives of the relevant licence holders").
The noble Lord said: My Lords, as with Amendment No. 31 we included this amendment in
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the mass grouping. But I wonder whether the Minister would take a careful look at Amendment No. 35 because it is a different principle to what we ask in Amendment No. 31. Here we are saying that instead of the clause reading:
"the authority considers appropriate"
We are suggesting the following amendment:
"are agreed between the authority and the representative of the relevant licence holders".
The Minister has agreed that discussions are taking place and that there will be, we hope, an agreement. Therefore, instead of making it look so authoritative, as though the authority is the determining body, if we were to insert the following:
"arrangements as are agreed between the authority and the representatives of the relevant licence holders"
that would give some satisfaction and it would not cost the Government anything to agree to it. I beg to move.
Lord Simon of Glaisdale: My Lords, I hope that the noble Lord, Lord Underhill, will say why he has limited the amendment to the relevant licence holders or all the old pilots. I also wish to take up a point I made earlier which applies equally to Clause 3 and Amendment No. 30. I should like to ask whether it is possible to simplify enormously the very clumsy definition of "relevant licence holders" and "relevant authorised pilots", which the Minister accepted was, even if necessary, rather cumbrous drafting? One could cut straight through that by referring to the trade union representatives of the pilots. The phrase appears later in the arbitration amendment. If the Minister would consider that matter, it might be possible to simplify the present Clause 3, or the new clause, Amendment No. 30 in that way.
Lord Brabazon of Tara: My Lords, I think it would be helpful to the House if I tried to set out the intention behind the new clause in this amendment. Subsection (1) will allow a CHA to make what arrangements it considers appropriate for the provision of pilotage services. In principle, they will be able to choose between self-employment and employment. It will not be open to the pilots to make this choice. Subsection (5) says that there is no obligation on the CHA to authorise anyone if he is not prepared to accept such arrangements.
These subsections are subject to the provisions in subsections (2) to (4) which allow the pilots the option of being offered employment. That will limit the CHA's option in that they will no longer be able, if the pilots exercise their option, to introduce arrangements on any other basis. If the pilots do not exercise the option available under subsections (2) to (4) then the full range of options remain open to the CHA including the right to insist on employing the pilots they need. I accept the point made by the noble and learned Lord, Lord Simon of Glaisdale, that the drafting of subsection (5) in particular has caused problems. I shall be happy to look again at the particular wording.
Concerning the amendment in the name of the noble Lord, Lord Underhill, I have referred to that earlier. But it would be a good idea for me to take on board what has been said this evening and to come

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back, I hope, with something which at least will be a little clearer. But I do not think that it will interfere with the principle of what we are trying to achieve.
Lord Underhill: My Lords, I am grateful to the Minister for agreeing to have a careful look at this matter. It may be that I am showing how little I know about some of these matters. I was given the impression that when we were discussing a subsection in the Bill which has been replaced by subsection (5) of this new clause, that there would still be an option as to whether the pilots wished to be employed or self-employed and then the CHA would decide accordingly. I think that I heard the Minister say now that the CHA will decide which system it has. Surely there is the opportunity for the members to say which system they want? I hope that the Minister will consider this matter and also the point raised under my Amendment No. 35. On that basis, I beg to withdraw the amendment.
Amendment to Amendment No. 30, by leave, withdrawn.
The Deputy Speaker (Lord Airedale): The Question is, That Amendment No. 30 be agreed to?
Viscount Simon: My Lords—
Lord Simon of Glaisdale: My Lords, I hope that the noble Viscount will go ahead. He remains seated, so I will go ahead. I have already made a number of rude noises about this amendment and its predecessor Clause 3. A moment ago the Minister suggested that subsection (2) gives the pilots a choice between a contract of employment and a contract for services as self-employed. That limits the apparently very wide options of the CHA under subsection (1). I wonder whether the Minister is right on that point.
Subsection (2) says that the competent harbour authority shall offer to employ the pilot under a contract of employment unless a majority of the relevant licence holders have agreed, or a majority of the relevant authorised pilots have agreed. It does not say that they have the right to opt instead for a contract for services as self-employed. I wonder whether the Minister, if he thinks there is anything in that, will look at that again in connection with his further look at the redrafting of the Bill. I am sorry to be so pertinacious about that.
The Minister was good enough to try to convince me about the interrelationship of subsection (1) and subsection (5), and there is no point in our arguing that again. But I ask again with great respect, since I do not understand it, whether he will explain what subsection (4) means.
It is a particularly baffling piece of drafting. As I suggested on Second Reading, I feel confidence in the draftsman of this Bill, and I have no doubt that he has something cogent in mind, but I am afraid that I cannot see it. Can the Minister give an example of one of the new harbour authorities which will be affected? I rather thought that it was an authority like the new Tees authority would be, where you get a main port, Teesport, on the south side of the estuary and the old
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pilotage of Hartlepool on the north. But I was baffled then by the words;
"any area falling within both those parts".
If the noble Lord could enlighten me on what that is intended to do to begin with and secondly how it does it, I should be extremely grateful.
Viscount Simon: My Lords, the point I wanted to raise on this amendment arises on subsection (6):
"A competent harbour authority may pay into any pilots' benefit fund … such contributions as may be required".
This was discussed in Committee. I looked up the Committee's report and it appears to me that the Minister did not agree to change this to "shall pay" on the grounds that some of the pilots might not be members of the pilots' benefit fund. Is that a sound argument?
If any pilots were not members of the fund, then surely no contributions would be required of them, so the question would not arise. I still think that in so far as any pilots are members of the fund the clause should read:
"A competent harbour authority shall pay into any pilots' benefit fund … such contributions as may be required".
I was going to raise also subsection (5), but we have said so much about that, and the Minister kindly said that he is going to look at it again, that I shall say no more about it.
Lord Underhill: My Lords, I should like to support the point just made by the noble Viscount, Lord Simon. I had amendments down to other clauses of the Bill dealing with the pilots' benefit fund which quite rightly were ruled out because those clauses were deleted and I was not able to move the amendments; but the principle still stands. If I had known that the other clauses were going to be ruled out I should have had an amendment to this particular amendment of the Government, which I do not think we saw until a few days ago.
It seems to me that the Minister might have a careful look at this. If you make it a permissive matter as to whether a harbour authority shall pay into the fund, one could be in a situation where even long-serving pilots might find themselves out of the fund because the harbour authority does not wish to pay the contributions. That seems to me again to be extremely unfair. Surely there ought to be the inclusion of the word "shall", or this should be worded somewhat differently so as to avoid a decision being taken by a harbour authority which would unfairly affect pilots whether long serving or new.
8.15 p.m.
Lord Brabazon of Tara: My Lords, I shall attempt to answer the points as best I can. I would pick up the noble Lord, Lord Underhill, on one matter. This new clause, Amendment No. 30, has been down for a week, and the noble Lord has put down amendments to it, so he did of course have the opportunity—
Lord Underhill: My Lords, will the noble Lord permit me to intervene? I did not put down an amendment to that amendment because I had amendments covering this point in other amendments

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which have gone by the board because the clauses have gone.
Lord Brabazon of Tara: My Lords, that is true. If the noble Lord would cast his mind back to about midday today, we suggested that his amendments be grouped in an earlier group because then they would not have fallen. Perhaps they would have fallen, but at least we could have had a discussion on them.
I covered the pensions point in Committee. Let me try to answer first the noble and learned Lord, Lord Simon of Glaisdale. I think I have already answered this point, but the onus at the beginning of the operation—let us try to simplify it—is that the CHA decides whether to employ pilots or whether to offer self-employment. If the CHA decides that it would like to offer self-employment, it is up to the pilots to decide whether they wish that option to be exercised. If the pilots decide that they do not want to be self-employed, they have the right to call the competent harbour authority—
Lord Simon of Glaisdale: My Lords, is the noble Lord sure that he is right about that? Subsection (2) refers only to "a contract of employment".
Lord Brabazon of Tara: My Lords, I know I am right about it. Whether I am expressing it in the correct way is for the noble and learned Lord to decide.
The noble and learned Lord also asked me about subsection (4). He is quite right. This is intended to cover the Tees and Hartlepool area, where one harbour authority covers two pilotage districts. The subsection provides that where pilots in one former pilotage district opt for employment, a CHA shall not authorise a pilot for the whole harbour being employed in one part but not in the other. To avoid confusion it has to offer to employ in both ports. I amended that subsection in Committee, and I could point out the relevant part to the noble and learned Lord perhaps at a later stage.
The issue of pensions was raised by the noble Viscount, Lord Simon, and the noble Lord, Lord Underhill. I covered this point at Committee stage. If I could briefly sum up what I said, not all pilots in the future may wish to join the pilots' pension fund. They may wish, for instance, to join the pension fund of the competent harbour authority, or indeed (as they may do under government legislation) wish to make their own pension arrangements. That briefly is why we say "may" rather than "shall" in that subsection.
On Question, Amendment No. 30 agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 36:
After Clause 3 insert the following new clause:
("Temporary procedure for resolving disputes as to terms of employment.
. —(1) Where any dispute arises between a competent harbour authority and an authorised pilot—

(a) as to what the terms of any provision in any contract of employment which is to be entered into between them should be; or

(b) whether the terms of any provision in any existing such contract between them should be modified,

and that dispute cannot be resolved by negotiation between them, the authority or the majority of the authorised pilots for its
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harbour may refer the dispute to the arbitration panel appointed in accordance with subsection (2) below and the panel shall determine what the terms of that provision should be and the contracts of employment between the authority and authorised pilots to which their determination is to apply ("relevant contracts").
(2) The arbitration panel referred to in subsection (1) above shall consist of a member appointed by the Secretary of State and two members appointed respectively by a body appearing to the Secretary of State to be representative of harbour authorities throughout the United Kingdom and a body appearing to him to be representative of pilots throughout the United Kingdom.
(3) In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them.
(4) Where the arbitration panel make a determination under subsection (1) above then, subject to any agreement to the contrary between the parties and to the effect of any subsequent determination under this section—

(a) on and after the date on which the determination is made any relevant contracts entered into before that date shall have effect with the substitution for any inconsistent provision of a provision in the terms determined by the panel; and

(b) any relevant contracts entered into on or after the date shall contain a provision on those terms.

(5) In the case of an authority whose harbour falls within more than one former pilotage district, for the reference in subsection (1) above to the majority of the authorised pilots for its harbour there shall be substituted a reference to the majority of the authorised pilots for the part of the harbour for which the authorised pilot as to whose contract the dispute has arisen is authorised.
(6) Subject to the provisions of this section, the Secretary of State may by regulations make such provision as he thinks fit as respects the referral and determination of disputes under subsection (1) above and such regulations may, in particular, provide that the expenses of such referrals and determination are to be borne by the Pilotage Commission or by such other person as the Secretary of State thinks fit.
(7) The preceding provisions of this section shall cease to have effect on such date (not being earlier than the expiry of the period of three years beginning with the appointed day) as the Secretary of State may by order prescribe, but no such order shall affect the terms of any contract continuing in force at that date.").
The noble Lord said: My Lords, in speaking to Amendment No. 36, with the leave of the House, I shall speak at the same time to Amendments Nos. 102 and 109 which are consequential to it. My noble friend Lord Strathcona has various amendments to those amendments which we shall also no doubt debate.
Lord Simon of Glaisdale: My Lords, on the grouping list according to my note here there is also Amendment No. 37. Is that right?
Lord Brabazon of Tara: Yes, my Lords. That is one of the amendments of my noble friend Lord Strathcona which is an amendment to this amendment.
We have already discussed these amendments considerably this evening, but they follow from discussion in Committee on amendments to Clause 3 which sought to include, in an offer for employment which the CHA was obliged to make under that clause, a guarantee as to the level of earnings which should apply. I made it plain, and I have made it plain again today, that I did not regard such a guarantee as justifiable, but I recognised that there was a feeling in the Committee that the provision about the offer of employment needed to be supplemented. Several noble Lords suggested that an arbitration procedure should be considered. These amendments set out such a procedure which I hope your Lordships will accept.

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Briefly, the procedure provides for the appointment of a panel of three, with one member appointed by the Secretary of State and one each by representatives of the ports and pilots respectively. If negotiations between a CHA and pilots about the terms and conditions of employment which will apply in the port reach an impasse, it will be open to either side to refer the matter to the panel. Their meeting will be binding unless both parties agree otherwise, whether beforehand or subsequently. The Secretary of State will be able to give the panel general guidance as to the matters to be considered by them. These are for future consideration, and as I have said, we have already had some discussion with representatives of the ports and pilots. I envisage they will require the panel to take account, among other matters, of previous recommended level of earnings of pilots in the port.
Subsection (7) of the proposed new clause will allow the Secretary of State by order to discontinue these procedures, but not until at least three years after the appointed day. This recognises that these are special provisions arising from the change in legislation. There is no case for making them apply permanently. After withdrawal, it will be for ports and pilots to settle terms and conditions between them in the normal way, as any normal workforce does.
The amendment to Schedule 1 provides for the arbitration procedure to be available before the appointed day, as well as afterwards; and that amendment, and the amendment to Clause 27, will allow the cost of the panel to be met from funds raised by the Pilotage Commission.
The matters which may be referred to the panel will not just be levels of earnings, but may, if one of the parties wished, include any other terms and conditions of employment, including pension arrangements, hours of working, redundancy payments, the effects of removal of authorisation on the contract of employment, the length of notice to be given in contracts and other such matters. I believe that with the acceptance of these amendments there can no longer be any doubt in anyone's mind that the Government are fulfilling the undertakings we have given the pilots who continue in the profession, no less than those who retire, that they will receive fair and equitable treatment. I hope noble Lords will agree to accept these amendments. I beg to move.
8.30 p.m.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved, as an amendment to Amendment No. 36, Amendment No. 37:
Subsection (3), at end insert ("Such general guidance shall be in accord with the undertakings given, in particular, in respect of the equitable treatment of the continuing pilots".).
The noble Lord said: My Lords, I am not sure whether procedurally I should start by thanking the noble Lord for Amendment No. 36 as I am supposed to be speaking to Amendment No. 37. But I shall take a chance and say how much I welcome the noble Lord's amendment, even if, by implication, it is not totally without reservation.
We saw his amendment only two days ago. It is a fairly lengthy one. We have mentioned it several times this evening and I am sure we shall be mentioning it again before we finish. There is no doubt that an
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arbitration procedure of the kind my noble friend is proposing takes much of the steam out of the suspicions that some of the pilots have had about what their position would be after the Bill was passed. I have no wish to open up any old wounds by explaining why such suspicions have arisen.
I think the Minister recognises that subsection (3) is crucial. My amendment would make subsection (3) read:
"In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them. Such general guidance shall be in accord with undertakings given, in particular, in respect of the equitable treatment of the continuing pilots".
Let me say immediately that those words may not be totally satisfactory and acceptable. But the point all the way through is the spirit which the words are intended to convey. We have not used the word "fairness". Instead we have used the phrase "equitable treatment". But a number of words, all of which are very similar, have been used, as has been so often pointed out by various Ministers from the Prime Minister downwards, and in both the Green Paper and the White Paper. Unfortunately it is true to say that there appears to be some disagreement as to exactly what "fairness" in this context means. I should not have suspected that strongly until the debate we had earlier today.
I was very glad to hear the Minister rattle off a list of some of the issues that he envisaged would be covered under this arbitration clause, which appears to be fairly comprehensive and is something that was raised earlier, particularly in connection with the removal of authorisation. I was very glad to hear my noble friend say that that was included. On the question of "fairness", we talked about previous earnings or present entitlements. I recognise that there are technical difficulties because we have Letch agreements, proper numbers and all sorts of complicated technicalities which surround the way in which pilots' earnings have been calculated heretofore.
I think I heard the Minister say that one matter to be taken into account would be the present level of earnings. I hope I heard him say that. I should be grateful if he would confirm that as it is a matter of great importance.
Lord Brabazon of Tara: Yes, my Lords.
Lord Strathcona and Mount Royal: My Lords, I see that I have that correct and I am greatly relieved. If he has said that, we have gone a long way. Whether he and I will disagree about the interpretation of what taking into account the present level of earnings means is still open for discussion. However, I understood him to say and to repeat just now he did not feel that the present level of earnings would necessarily be sustained. He seems almost to have made two conflicting statements, because the thought that most of us have is that if the Government unilaterally decide to alter the whole basis on which people earn their living it is up to them to see they are no worse off than they were before. I really believe it is basically as simple as that.
If the Minister is saying that he accepts that, then we are moving forward and the arbitration clause will

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work effectively. However, it is also true to say that the pilots have had problems since the passing of the 1979 and the 1983 Acts. Every now and again a White Paper or a consultative document is produced which says that the intention is this, that or the other. What has invariably happened is that people—particularly civil servants or the Government—have said, "There may have been all kinds of White Papers, there may have been all sorts of noble intentions, but is this in the legislation? If it isn't in the legislation, I'm sorry, you've had it."
That is the background against which all this is being considered. It is extremely important, therefore, that these guidelines should be as comprehensive, and as binding as possible. I very much hope that the Minister is going to be able to tell us that there is a reasonable prospect that we may see these guidelines before the Bill has its Third Reading in this House, so that at least if we are desperately unhappy we can indicate our feelings about the matter before the Bill finally leaves this House and goes to another place, where it may not receive all the careful attention which it is receiving in this House and which it looks like going on receiving for some hours yet.
I cannot see that words on the lines of my Amendment No. 37 would bind the Government other than to saying that they are against sin and on the side of the angels. I hope that the noble Lord will feel able to accept it. I beg to move.
Lord Underhill: My Lords, I should like to support Amendment No. 37, standing in the name of the noble Lord, Lord Strathcona, but also to speak to the Government's new clause.
As the noble Lord has said, I also welcome the fact that the Minister has kept to his undertaking to look at the question of some machinery. Whether this fills the Bill is another matter but at least he has endeavoured to carry out his promise to look at the question of representations and appeals.
I wonder how far there have been negotiations with the various bodies concerned in drawing up this particular new clause. Has the pilots' organisation been consulted? Has the ports' organisation been consulted? It seems to me that when drawing up a clause involving a new procedure of arbitration it would have been wise to hold such consultations beforehand. However, there may have been consultations. Maybe the Minister can assure us on that issue.
It will be recalled that at the Committee stage I and other Members pressed on various clauses that there should be opportunity for appeals or representations. On a number of them, the Minister, I will not say rejected them, but saw no need for them. I am hoping that now we have this new clause on arbitration before us we can take a very careful look to see exactly what will be the final terms that the arbitration panel will be able to look at.
Generally speaking, those of us who are at all interested in industrial relations do not like arbitration without firm provision for negotiations beforehand. Unfortunately, this Bill leaves negotiations completely on a local basis between a particular port authority
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and the pilots. There is no basis for general negotiations of conditions and terms; it is all left locally.
As is really covered by the amendment in the name of the noble Lord, Lord Strathcona, whatever we may feel about arbitration, I am certain that it will be regarded by the pilots as no substitute for some guarantee of their present entitlements and conditions. They will want to feel that that is part of the new machinery, and that really is the substance of the noble Lord's amendment to the Government's amendment.
Reference was made earlier on this afternoon to the initial period of three years. The Minister drew attention, quite rightly, to the fact that it is possible for this to be extended. The Secretary of State has the authority to decide whether there shall be a date later than three years. What happens if there should be any change in conditions, new contracts, even after the closing date? What happens to any question of arbitration in those matters?
Similarly, when I raised the question of Associated British Ports being separated, the Minister kindly told me that they had been a party to the particular matter we were discussing then. What will be the position of associated British Ports in relation to the appointment of a representative to the arbitration panel? Will they be participating in the appointment of that representative, or will it be more desirable that there shall be two representatives from the ports—one from the BPA and one from Associated British Ports—giving the pilots two representatives to balance up? If the Minister assures me that whatever may be applicable an arbitration to the British Ports Association will also be applicable to anything that the Associated British Ports may wish to do, then I will accept what he says on that. However, as the noble Lord, Lord Strathcona, has stressed, the most important matter in the whole of this new clause will be the guidelines to be issued by the Secretary of State under subsection (3).
I would echo what the noble Lord has said. I am sure that everybody will agree that there has been no deliberate attempt to keep the debate going. There have been legitimate questions of a controversial character, though completely non-political in their controversial nature, but this is a very important and complex Bill and it is obvious that we are not going to complete it tonight. I would echo the plea that the noble Lord has made, that it would be of help to everyone if before the Third Reading we could see the actual terms of the guidance to be given by the Secretary of State as to these guidelines because it is the guidelines which will be the key to the whole arbitration clause. If the guidelines are wrong, then you may as well throw this amendment away; it will be of no value to the pilots or to the ports. Therefore, the guidance notes are of great importance to us.
There arises from Lord Strathcona's amendment the point that—I accept what the Minister has said—the guidelines will include reference to the earnings as at present. The important thing is: will the guidelines give some sort of positive recommendation that these are the sorts of matters to which the new agreements between the CHAs and the pilots should be directed? Merely to list them up without some sort of positive lead in the guidelines would appear to me again to mean that something would be missing.

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The other point that has not been mentioned is the regulations that are to be made. Different from the guidelines, there are regulations to be made under subsection (6) as the Secretary of State thinks fit,
"as respects the referral and determination of disputes under subsection (1)".
Obviously that relates to the terms of those regulations, because if the terms of referral and determination are not right then once again this clause will not be as valuable as we hoped it would be.
I repeat that we thank the Minister for giving attention to this, but it is not yet in its final desirable shape. If we can see the guidelines, if we can have some idea of what the regulations will be like, and if the other points that have been raised can be considered, then I think we shall be more satisfied.
Lord Simon of Glaisdale: My Lords, I do not desire at this stage to speak about Amendment No. 36 in general except that I should like to associate myself with the gratitude that has been expressed to the Minister, because I was one of those who at the Committee stage urged the necessity of either appeal or arbitration. This is yet another example of the way the noble Lord has gone far to meet the views that were put forward in Committee. I am also very grateful for his sending me a copy of the letter which he wrote to the noble Lord, Lord Underhill, about the matter.
The only other thing I should like to say about Amendment No. 36, the new clause, arises strictly out of the amendment of the noble Lord, Lord Strathcona; namely, the reference to the general guidance in subsection (3). Desirably that would be subject to parliamentary control, but at any rate I think it is highly important, as has been said, that Parliament should see that general guidance before the Bill passes into law, and indeed that your Lordships should see it before completing the passage of this Bill, whether on Third Reading or on the Motion, That the Bill do now pass. In the meantime, I agree that we have had highly satisfactory indications from the noble Lord the Minister as to the content of those lines of guidance.
Turning to the amendment itself, No. 37, I readily acknowledge the far greater knowledge which the noble Lord, Lord Strathcona, has about these matters. I agree with the general thrust and intention of the amendment. Moreover, I have always been in favour of legislating in comprehensible terms, in ordinary language if possible, and avoiding terms of art if that is possible. Nevertheless, I am bound to say that to write these words into a statute would present any court faced with them with an absolutely insurmountable difficulty.
What are the undertakings given in respect of the equitable treatment? I know perfectly well what the noble Lord had in mind, but no court, having to construe this on a challenge, will possibly know, or, if it knows, will be able to judge. So I hope that the noble Lord, having made his point and knowing my sympathy both with his approach on this Bill and on the general way one should legislate, will nevertheless not press his amendment.
Viscount Simon: My Lords, I should like also to express my firm approval for the amendment of the
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noble Lord, Lord Strathcona. I have listened to the noble and learned Lord, Lord Simon of Glaisdale, and I fully agree that this is a very difficult point. The question of drafting is exceptionally difficult but we must face this difficulty, must we not? The pilots have been led to believe that they are going to be fairly and equitably treated, and unless something is written into the Bill I feel that they will be greatly disappointed.
Also, if I am still in order, perhaps I may follow the example of the noble Lord, Lord Underhill, and make one reference to Amendment No. 36. When I read it I thought there was a little difficulty over the opening words, and perhaps when the noble Lord comes to reply he will say something about that. The beginning of this new clause says:
"Where any dispute arises between a competent harbour authority and an authorised pilot".
But what about disputes that arise before the authorised pilot becomes so authorised, when he is discussing what his terms and conditions are going to be? That would be outside the terms of Clause 36.
Then I bethought me that possibly that was dealt with in Clause 109, to which the noble Lord, Lord Brabazon, has already referred. That certainly widens the subjects which can be referred to this arbitration, but it is only where the dispute arises before the appointed day. Is it imagined that there will never be any disputes about terms and conditions of employment after the appointed day? Will those also not need to be subject to investigation and arbitration even though the applicant is not by then an authorised pilot? I will, if I may, just leave those thoughts with the noble Lord, and if he feels inclined to say anything about them when he replies I shall be delighted.
8.45 p.m.
Lord Brightman: My Lords, I rise only to speak on Amendment No. 37. I entirely agree with what my noble and learned friend Lord Simon of Glaisdale has said. In my submission, it imposes a duty which is simply not justiciable. It is too vague. The undertakings are not defined. I ask: to whom were the undertakings given, by whom were they given and on what occasion were they given? I ask your Lordships to reject Amendment No. 37 as drawn.
Lord Shackleton: My Lords, I think we are in real difficulty now. The Government could feel a little bit aggrieved at the criticism of what is obviously a brave attempt to meet some of the anxieties of the pilots. The truth of the matter is that I do not believe that under this Bill, however hard the Minister tries, we are going to get real satisfaction; nor, I suspect, are the Government going to move on the guidelines question with a view to publishing them before we come to Third Reading. Governments do not usually like producing guidelines, and we do not know how far those guidelines will be binding, how long they will last and how far they will reflect the policy of the government of the day.
Quite early this morning I thought I heard Mr. Clarke saying that in future pay should be determined not by old-fashioned methods such as comparability and job evaluation but in relation to the profits of undertakings. We do not know what guidance will be given in these matters and I should like to suggest to

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the noble Lord—because this is a new, major clause and it is very difficult to debate on Report stage—that if he is going to give consideration to the points that have been made, perhaps this particular clause should be recommitted. I am not suggesting that should be done today but it might be done later when he has had a chance to consider these matters, especially if guidelines are going to be published. It is very difficult, because we have the chance to speak only once. It is the classic example of something that could be recommitted, and recommitted any time up to Third Reading.
The noble Lord may not wish to speak on that, but it is quite clear that despite the sincere efforts he has made to get this right it is a very difficult matter. The noble and learned Lords who have spoken have pointed out that the noble Lord's amendment—which I do not think he ever really thought was a serious legal proposal; so I do not think they need worry too much about that—makes it clear that we are in real difficulties, and it may be that some discussion on recommitment may even help the task of not only the noble Lord but of his honourable colleagues in another place when the Bill goes there in Committee.
Lord Brabazon of Tara: My Lords, to answer the noble Lord, Lord Shackleton, I must say that I am not attracted to the idea of recommitting this new clause. The new clause has been produced in response to a specific undertaking given at Committee stage to your Lordships. I feel it is well within the bounds of behaviour of your Lordships' House that I should bring forward an amendment at this stage.
Lord Shackleton: If I may interrupt—
Lord Brabazon of Tara: No. We are on Report. I will not give way; I am sorry.
Lord Shackleton: This is a point of procedure, if the noble Lord will give way.
Lord Brabazon of Tara: No. I will not give way I should like to get on with the business. We are going slowly enough as it is. I know this is an important matter but we are at an important stage.
If I may deal briefly with the amendment, I am bound to agree with the noble and learned Lords who have spoken that the amendment would make little sense in legislation and would be very hard to interpret.
To turn to the more general points on Clause 36, I believe that the precise matters to be covered by the general guidance that the Secretary of State will give to the arbitration panel will need further consideration. The noble Lord, Lord Underhill, asked whether we had consulted on the preparation of this. We have indeed discussed it with the UKPA and the British Ports Association and discussions will be going on.
Lord Underhill: But have they agreed?
Lord Brabazon of Tara: I do not know whether they have agreed, but we are talking to representatives of
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the pilots and of the ports about what should go into the general guidance. I very much doubt whether those discussions will have reached meaningful conclusions while the Bill is still in front of your Lordships. It may be so. I do not know.
As I said earlier to my noble friend Lord Strathcona and Mount Royal—and I repeat—I envisage among the considerations that the Secretary of State's general guidance covers will be the recommended level of pilots' earnings under the present arrangements. That does not imply a guarantee of earnings at the present level. As my noble friend will be aware, pilots' earnings are not at present guaranteed in any case.
The noble Lord, Lord Shackleton, referred to what my right honourable friend the Paymaster General had said, or was reported as having said, on the wireless this morning.
Lord Shackleton: He said it in his own words.
Lord Brabazon of Tara: Very well, in his own words—I did not hear him myself—namely, that pay in future should be linked to the profits of undertakings, and I quite agree with him. Pilots' earnings at present, as my noble friend Lord Strathcona and Mount Royal will well know, are set at the beginning of the year to take account of what they think the traffic will be into and out of a port in that year. If the traffic in the year falls, perhaps even to nothing, the pilots will not earn anything at all. Therefore, it is a complete myth to say that pilots' earnings at present are guaranteed.
Turning to the noble Lord, Lord Underhill, I have talked about the consultations that have taken place. He asked whether the associated British ports were involved in these discussions. I said earlier that they were. As things stand at present, I think that they will be bound by the decisons made by the Brtitish Ports Association, but I should like to check up, see what the position is and come back to the noble Lord.
The noble Viscount, Lord Simon, asked what would happen before authorisation. That, I think, is covered in Schedule 1.
We are, of course, speaking to the amendment of my noble friend Lord Strathcona and Mount Royal. I have already said—and I think that my noble friend accepted it—that we would not be able to accept it.
Lord Strathcona and Mount Royal: My Lords, the noble Lord, Lord Shackleton, is quite right. This was a hastily conceived amendment and we did not think that it was a serious legal proposal. I freely acknowledge that I have called down upon my head the predictable criticisms of the noble, learned and formidable Lords on the Cross-Benches, if I may so call them. It may be that the proper course is to have a look at something on similar lines, taking out such words as "undertakings given".
I suggest to the Minister that he has slightly confused our discussions by launching into a general debate on Amendment No. 36, with which we have not dealt yet. I had better get out of the way Amendment No. 37 by agreeing, with the leave of the House, to withdraw it subject to the possibility that, given that we are not going to see any guidelines before the Bill leaves the

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House, we may have to try to insert some kind of rider there. After that, perhaps we can return to the general discussions on Amendments No. 36. That will give us a chance to deal with these matters at the appropriate time. I beg leave to withdraw the amendment.
Amendment to Amendment No. 36, by leave, withdrawn.
Lord Shackleton: My Lords, I take it that Amendment No. 36 is now debatable. I must say to the Minister that, if ever anyone made a case for recommitment, he did by his refusal to let me explain further the purpose of the amendment. It showed a degree of discourtesy that I have never before encountered on Report. I went out of my way to say that we appreciated the efforts that he has made. I still think that it may be necessary—I do not wish to prolong the debate—to give the matter further consideration, and this will be difficult on an amendment at Third Reading. I do not ask him to do anything more. On Report we are always in difficulty. On the whole I think that noble Lords have shown great restraint in not trying to take advantage and speak more than once. I think it is a pity that the noble Lord refused to let me intervene.
Lord Simon of Glaisdale: My Lords, as we are now debating Amendment No. 36, I ask the noble Lord to consider three points.
The first is that raised by the noble Viscount, Lord Simon, as to Amendment No. 109, which deals with the situation before the Act comes into force. There will therefore be only licensed pilots and not authorised pilots. As the noble Viscount pointed out, in the second line of the new clause there is a reference to "authorised pilot". A few lines lower there is a reference to,
"the majority of the authorised pilots for its harbour".
The noble Lord thought that that trouble was taken care of by the amendment to the schedule so far as the situation before the Act was concerned. If I may say so, I am not convinced that it is. I ask him at least to be good enough to look at it again.
The second point arises on subsection (1)(d), where evidently there may be a dispute as to an existing contract between an authorised pilot and the CHA. Will the noble Lord say in what circumstances an existing contract may be reviewed, and what sort of existing contract? The point is even stronger if the existing contract has been entered into before the appointed day.
The other point that I should like to make is that paragraph (a) again deals with a contract of employment. There is yet another indication of the bias of the Bill against the self-employed pilot. Finally, about eight lines down in subsection (1) there is a phrase to which I have already referred,
"the majority of the authorised pilots for its harbour".
If one could use that phrase in the much disputed and disliked part of the new clause which your Lordships have written in, Amendment No. 30, probably a good deal could be simplified by that.
I realise that there will be difficulty in so far as the draftsman has obviously wanted to bring in the existing pilots. I wonder whether that is strictly
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necessary and whether one could get by all that complication and cumbrousness by referring as here to,
"the majority of the authorised pilots for its harbour".
I do not suggest that the noble Lord should reply to those points at this time, but I should be very grateful if he would say that he will consider them before the next stage.
9 p.m.
Lord Underhill: My Lords, I passed my general remarks on the amendment, because I thought we were dealing with the whole grouping. But may I make two additional remarks before the Minister replies? First, I am certain that if we had had this new clause at the Committee stage, there would have been very detailed consideration given to every single subsection. Most noble Lords who were interested in the Committee stage will recognise that this question of arbitration, of appeals and of machinery for representation is one of the keystones to the whole of the Pilotage Bill. That is why it is so essential that we should get it right.
Despite what the Minister has replied to my noble friend Lord Shackleton, perhaps he will consult with his colleagues on whether or not this clause might deserve recommital, because if this is not right the comfort within the new regime will not be satisfactory. It is vital that we should get the whole of this right.
I raised the question of the period of three years when I spoke earlier, and this is the one point to which the Minister did not reply. Obviously he had a lot of points to deal with. The decision as to the expiry date, which can be beyond three years, is left to the Secretary of State. It is made clear, as I believe the noble Lord said at the outset, that,
"no such order shall affect the terms of any contract continuing in force at that date."
What will be position of any new contracts that may be made after that date? There is no provision for negotiating machinery except at the local level. There is no machinery for arbitration. I am certain that the pilots will be anxious to know. The side note reads:
"Temporary procedure for resolving disputes as to terms of employment".
While they will be vitally concerned with the temporary procedure while the new regime is finding its footing, they will be equally concerned with the permanent procedure for dealing with disputes.
Lord Kennet: My Lords, I have probably said this before and I ask the House's pardon, but I am going to say it now. I think it is not within the normal customs of this House that any Member of the House, whether a Minister or not, should refuse to give way to a former Leader of the House. I regret that it happened and I think many Members of the House also regret it.
Viscount Long: My Lords, I am most grateful for what the noble Lord said; but we go by the standards of this House and the noble Lord, Lord Shackleton, with great respect, apologised. He knew what Report stage meant and there was only one question at that moment. He virtually said it himself—
Lord Shackleton: My Lords, did I apologise? For what?
Lord Strathcona and Mount Royal: My Lords, I have not yet spoken to Amendment No. 36 and I hope the House will not think that I am trespassing upon its time or generosity, nor will the Minister think I am trying to take advantage of his very valuable offer of this arbitration clause, but I want to put something to him. He will recall that at Report stage we discussed what was then Amendment No. 110, which will be Amendment No. 97 if we ever reach it, whereby I was concerned that there was no system for consultation or appeal against regulations produced by competent harbour authorities. I suggested that the Pilotage Commission during the transitional period would be a suitable body to tackle that problem.
I just wonder whether the Minister would be prepared to consider the possibility of extending the first few sentences of this clause to include disputes which might arise between the competent harbour authorities and other interested bodies, because having set up the arbitration panel here is a possible way of getting it to do something else, which I believe we should make some provision to do.
Lord Mottistone: My Lords, I should like to make two quick points. One is that we often have this pressure for recommitment, when somebody has produced a new clause as a result of pressure at an earlier stage, and I do not think it is deserved in this case. My other point is on what the noble Lord, Lord Strathcona, has just said. I have down Amendment No. 46 which is about disputes procedure and I am not sure that I would not welcome his thought when I come to that. For once I have agreed with him, but I do not expect that I shall do so again.
Lord Brabazon of Tara: My Lords, may I first apologise to the noble Lord, Lord Shackleton, if he thought I was being particularly hasty or rude to him—
Lord Shackleton: Thank you.
Lord Brabazon of Tara: My Lords, he knows the procedures of the House at Report stage and he has, in fact, had the opportunity, now that we are back to discussing the new clause, to make his point, so that at least is something.
The noble and learned Lord, Lord Simon of Glaisdale, asked me a number of detailed questions which I should like to look into, particularly the first about the appointed day and the one about existing contracts. I would emphasise that this new clause only covers contracts of employment and not other arrangements which might be made. He also asked me to look at the wording regarding the majority of authorised pilots in subsection (1) and I certainly undertake to do that.
The noble Lord, Lord Underhill, asked me what would happen after three years or if those three years were extended. I am bound to say that I spoke about that during my opening remarks on the new clause. I made the point that after a certain amount of time pilots and ports should settle terms and conditions
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between them in the normal way of any other workforce.
My noble friend Lord Strathcona wanted to widen the arbitration process to cover points which I suspect we shall come to when we reach Clause 5. I must say that I am not attracted to that idea. I suspect that he is talking about the area of compulsory pilotage and that sort of thing. I am not certain that my noble friend Lord Mottistone will agree when he hears what he has to say about that.
In general terms I am grateful to noble Lords for having accepted this amendment. I assure the House that we have done our best to produce it in consultation with those involved and as a commitment that I made at the Committee stage. If it is not quite perfect, we shall do our best to put it right.
On Question, amendment agreed to.
Clause 4 [Pilot boats]:
Lord Swinfen Lord Swinfen moved Amendment No. 38:
Page 5, line 34, after ("Ships") insert ("shall not be").
The noble Lord said: My Lords, in moving Amendment No. 38, I shall also speak to Amendment No. 39. I make no apologies for bringing forward the same two amendments as I brought forward at the Committee stage of the Bill. In doing so I thank my noble friend the Minister for sending me a copy of the draft M notice, the merchant shipping regulation on the manning of pilot boats. That appears to be satisfactory.
The pilot boat is in many respects the most important piece of equipment that we are talking about in this Bill. It is the one piece of equipment that means that the pilot service is able to operate at all. It is the piece of equipment that makes certain that pilots themselves continue to be available in sufficient numbers to operate an efficient service. With inefficient pilot boats, we should soon lose our pilots and we should have no one with any experience or training left.
There are times when pilots need to be put on board ships in howling gales during which anyone with any sense would bolt the front door and sit beside the fire. Pilots do not go out because they wish to go out in such weather. They go because some ship, coming from another part of the world, is out there and needs to get to safety. I realise that there are times when a ship should run for open water in bad weather. However, that is not always possible, and if there is a difficult estuary, no matter where, the ship may well need a pilot to get in. Without a pilot boat, it will not have a pilot. Some weather is too bad for even helicopters to fly.
At Committee stage my noble friend said that he would be bringing forward proposals to cover the survey of pilot boats as soon as possible. I suspect that these will be in the form of notices like the M notice. However, it is important that the proposals should be strengthened by the inclusion of these amendments in the Bill. The competent harbour authorities are going to be in competition with one another. They are commercial undertakings. In the past we have seen how our harbours have run down; they have been in

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severe financial difficulties, sometimes because of dock strikes and sometimes for other reasons.
A harbour authority in financial difficulties will be looking for ways of reducing its costs. One of the easiest ways is to cut down on maintenance, let something go another month before being replaced and make do with second quality materials. The temptation is there. The vast majority of individuals and harbour authorities will not be tempted; but lives are at stake, not just the lives of the pilots but possibly the lives of the crew on the ship to which they are trying to get. The ship gets into difficulty and the lifeboats have to go out and risk the lives of their crews.
It is important that an amendment of this kind, whether this one or another one that my noble friend brings forward at the next stage if he is prepared to do so, goes into the Bill to strengthen it on this point. I beg to move.
Lord Greenway: My Lords, I agree with the noble Lord, Lord Swinfen, about the great importance to pilots of good pilot boats. At earlier stages of the Bill I supported the provision of some means of keeping pilot boats up to a required standard. It is probably fair to say that at the moment the pilot boats in this country are of a very high standard compared with those of other countries. However, I have a certain reservation about the general survey of pilot boats, because surveying a pilot boat is rather an expensive business. It might be beyond the means of some of the smaller ports to go through this process. I wonder whether the Minister will be able to comment on that point when he comes to reply.
At the Committee stage the Minister gave an assurance that he would bring forward as soon as possible some means of covering the suggestions that we put forward. Perhaps he will be able to give us a little more information on this.
9.15 p.m.
Lord Brabazon of Tara: My Lords, my noble friend Lord Swinfen, the noble Lord, Lord Greenway, and other noble Lords are quite right to be concerned about the state of pilot boats. By saying that I do not mean to imply that the present state of pilot boats is bad; I am talking about future standards. I can only reaffirm what I said during the debate on these amendments in Committee. The safety and manning of pilot boats are important issues. As my noble friend Lord Swinfen is aware, the department has circulated to interested parties a draft merchant shipping notice which provides that the manning of each pilot boat will be determined by my department's district surveyors after consulting the pilotage authority concerned. In future of course the CHAs will be consulted, following the transfer of pilotage responsibilities to them.
As regards the suggestion that the Secretary of State should approve and license pilot boats, I still think it is important that CHAs should have this responsibility regardless of whatever else is done in the way of regulations. The powers to make regulations on the standards of pilot boats are already contained in legislation in Section 21 of the Merchant Shipping Act 1979 and it is therefore not necessary to include such powers in pilotage legislation.
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What has made progress difficult in this matter is not any lack of statutory powers but rather the difficulty of making sensible proposals that relate to a fluid situation. My department is nonetheless still considering the terms of regulations on the survey of pilot boats. In Committee I undertook to bring forward proposals on this matter as soon as possible and definitely before the implementation of the Bill.
The noble Lord, Lord Greenway, asked me about the expense of surveying pilot boats. Of course expense is involved—I am not quite sure exactly what it is at the moment—but I think that competent harbour authorities in the future, being commercial organisations, will probably be in a better position to pay those expenses than the present pilotage authorities.
I am aware of the concern about the pilot boat issue and I have undertaken to take things forward on both the manning and the survey aspects. Therefore, I do not consider that this amendment is necessary. I hope that my noble friend will take my word for it that we intend to move ahead on the lines I have suggested and feel able to withdraw the amendment.
Lord Strathcona and Mount Royal: My Lords, perhaps I may ask the Minister two questions. Did I understand him to say that he hopes to bring forward regulations before the Bill leaves this House or before it goes to another place? That is my first question. My second point is possibly not in the form of a question. The noble Lord, Lord Swinfen, said that the people who are vitally interested in the state of these boats are the chaps who have to ride in them; I refer to the pilots. I acknowledge what the noble Lord, Lord Greenway, has said. Formal surveys can be very expensive. At the Committee stage I said that I was not enamoured of the idea of introducing the rather elaborate, and to me rather rigid, Board of Trade type of regulations in respect of pilot boats. But could we not have some arrangement whereby the pilots will have the right of consultation, and indeed our old friend the arbitration procedure, if they are not satisfied with the boat that is being provided by their CHA? The difficulty is that they go to the CHA and say, "Look, it's a ropey old boat that you are giving us"; and the CHA turns round and says, "If you don't like the pilot boat you had better go and work somewhere else". That is not a very satisfactory situation at all. What is needed is some way in which the pilots can express the view that the boat which is being provided is not satisfactory for the purpose.
Lord Brabazon of Tara: My Lords, with the leave of the House I shall answer those two points. What I said about the timing of this matter was that we should bring forward the regulations before the implementation of the Bill.
My noble friend makes a point about consultation and he is worried that pilots may be asked to go out in a ropey old boat. However, when we bring forward these regulations they will of course be binding on the harbour authority. If the pilot does not like the boat, presumably he will be able to go to the marine surveyors and say that he thinks there is something wrong with it and they will have to look into the matter, although, the boat having been certified, I hope they will not find anything wrong with it.
Lord Swinfen: My Lords, I thank my noble friend for what he has said. I think that everyone who has taken an interest in this Bill will be interested to see a draft of the regulations before the Bill leaves this House. I shall be grateful if my noble friend can produce it for us. He gave me to understand, though I may not have understood him correctly, that the regulations were being produced under Section 21 of the Merchant Shipping Act 1981.
Lord Brabazon of Tara: No, my Lords; 1979.
Lord Swinfen: I gained the impression, my Lords, that there was some difficulty in drafting regulations that were suitable for all the different harbours and the different areas in which the pilot boats would be operating. One of the points about my Amendment No. 39 is that Section 4 allows for different regulations for boats operated from different harbours. If that particular aspect is a problem in drafting the regulations, will my noble friend consider bringing forward an amendment to this Bill that would amend the relevant Act so that different regulations can apply to different pilot boats in different areas? Quite obviously a boat that may suit the noble Lord, Lord Kirkhill, out of Aberdeen may not be suitable out of Southampton; they have different conditions. I should be interested to hear what my noble friend has to say. I wonder whether he will consider that point and give me an assurance on it.
Lord Brabazon of Tara: My Lords, with the leave of the House, I do not think that it is necessary to have an amendment to the Merchant Shipping Act to allow us to make different regulations for different areas. I am pretty sure that that is correct, but if I am wrong I shall write to my noble friend.
Lord Swinfen: My Lords, having received that information, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 39 not moved.]
Clause 5 [Pilotage directions]:
Lord Underhill Lord Underhill moved Amendment No. 40:
Page 6, line 12, at end insert—
("(2A) A competent harbour authority shall have jurisdiction for the purposes of pilotage over the area which immediately before the appointed day was a pilotage district which included the area of that authority.
(2B) A pilotage direction shall not specify an area other than an area which immediately before the appointed day was a pilotage district unless a harbour revision order has been made under section 14 of the Harbours Act 1964 or, in Northern Ireland, a harbour order has been made under section 1 of the Harbours Act (Northern Ireland) 1970, to alter the limit of the area in respect of which the direction is to apply.
(2C) Schedule (Altered Areas) shall have effect in relation to harbour revision orders under subsection (2B) above.").
The noble Lord said: My Lords, Clause 5 deals with the question of compulsory pilotage. It may be helpful to the House if, in moving Amendment No. 40, I speak also to Amendments Nos. 44, 108, 112 and 113. The important relevant amendments are Amendments Nos. 40 and 108, the other three amendments being consequential.
In Amendment No. 40 there are three specific proposals dealing with pilotage outside port limits, a harbour revision order and altered areas. These proposals will ensure that the safety of navigation is not on the appointed day prejudiced in those areas currently subject to compulsory pilotage but outside the port limits which it is proposed under the Bill should become the new outer limits. The amendment stipulates that reductions of such limits should be made by means of harbour revision orders.
Amendment No. 108, which is to be inserted before Schedule 1 and become a new schedule, is consequential upon that particular amendment on the safety of navigation outside port limits. It is designed to protect the public interest in the safety of navigation and the consequencs arising from any such changes. It will ensure that initially pilotage areas remain as presently defined. Before they can be changed the Secretary of State will have to consult bodies or organisations representative of the public interest. It is of the utmost importance that the public should be able to voice its opinion about any changes to compulsory pilotage areas. I beg to move.
Lord Greenway: My Lords, I supported the principles behind the amendment in Committee and I should like to do so again. We have the problem of the Thames Estuary, about which we have talked on several occasions during our proceedings. Under the Bill it is intended that the present pilotage limits should be drawn into the harbour limits, leaving a large area of what is often rather treacherous sea completely open and without any pilotage. The noble Lord, Lord Underhill, has a point with these amendments. I should like to reiterate my support.
Lord Swinfen: My Lords, I should also like to support the spirit behind the amendment on the environmental grounds that I mentioned in Committee. The noble Lord, Lord Greenway, mentioned the London pilotage district. The Goodwin Sands, the most notorious banks, which have claimed more ships than anything else in this part of the world, will no longer be under pilotage. It is essential not only from the environmental point of view but for the safety of shipping that such an amendment be accepted.
Lord Mottistone: My Lords, as I understand it, the amendments would extend the power of the CHA to impose compulsory pilotage. They would give a CHA power to do so by a pilotage direction both within and outside its area of jurisdiction. There would be no right of appeal. That is unacceptable. I hope that my noble friend will be able to turn down the proposal.
Lord Brabazon of Tara: My Lords, we have been over this ground before in Committee. As I understand the intention behind the amendments, it is that a CHA would need to obtain a harbour revision order to reduce the present area of compulsory pilotage or to extend it beyond the limits of the former pilotage district. I am not sure that the amendments achieve that objective. I drew noble Lords' attention, when the same amendments were discussed in Committee, to an

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apparent inconsistency in the circumstances in which a harbour revision order would be required after the appointed day and those in which a harbour revision order would be required by the shortened procedure before the appointed day. I doubt whether the noble Lord, Lord Underhill, intended that.
Be that as it may, we are talking about compulsory pilotage. I am sure that we should be wrong to take the present limits, whether of the pilot districts or of areas of compulsory pilotage, as a starting point for the CHAs. The existing pilotage districts were established decades ago when modern navigational aids were not available and when patterns of trade and shipping movements were different from what they are today. Similarly, areas of compulsory pilotage were generally laid down long ago in different circumstances. I do not believe that it is realistic to start from the assumption that existing pilotage districts or existing areas of compulsory pilotage make sense in today's world.
My noble friend Lord Swinfen mentioned the Goodwin Sands within the London pilotage district. They fall within part of the London pilotage district, which the London pilots accept does not need to be subject to compulsory pilotage any more. I also point out that compulsory pilotage is applicable only when a ship is entering or leaving a port within that district. Any ship passing up the Channel past the Goodwin Sands does not have to take a pilot. That point is stretching matters a little.
I accept, and the Bill makes clear, that CHAs should look very carefully, from the point of view of safety, at present compulsory pilotage areas even though in some areas they are drawn very wide. They must also look at them critically. I am sure that they will act responsibly in doing this as they do in the other cases of statutory responsibilities for the safety of shipping which they already exercise. I see no reason why they should need to seek harbour revision orders to reduce areas of compulsory pilotage from the limits which were set so long ago and in such different circumstances. If that is indeed the intention of the amendments I must ask noble Lords to reject them.
9.30 p.m.
Lord Underhill: My Lords, I have no intention of asking the House to vote on these amendments. As the noble Lord has said, they were discussed at the Committee stage. However, we felt that they were so important that they should be brought before the full House at Report stage.
The Minister says that it is questionable whether they meet the desired objective. The desired objective is to ensure that there are no changes in the areas of compulsory pilotage unless all factors are taken into consideration. I shall look carefully at what the Minister said because there is one further stage and there are subsequent amendments which may have some effect on this position. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Greenway Lord Greenway moved Amendment No. 41:
Page 6, line 13, after ("apply") insert ("to pleasure craft of less than fifty tons gross tonnage or").
The noble Lord said: My Lords, in the past pleasure craft have always had the benefit of an exemption from compulsory pilotage by virtue of the specific exemption of pleasure yachts contained in Section 11(3)(b) of the Pilotage Act 1913 and, following the repeal of that provision, by Section 8 of the Merchant Shipping Act 1979 by virtue of the general exemption for ships of less than 50 gross tonnes.
No such exemption is contained in Clause 5 of the current Bill, with the result that pleasure craft generally could be the subject of pilotage directions requiring compulsory pilotage. Not unnaturally the Royal Yachting Association is somewhat concerned about that. I acknowledge that most competent harbour authorities would not contemplate compulsory pilotage for any pleasure craft. Nevertheless the risk that some might is, I submit, a real one. There will be a great many competent harbour authorities, some of which are very small concerns, who will not necessarily see the sense in pleasure craft continuing to be exempt. For example, they may well be influenced by a need to spread costs, and in the absence of any objection procedure regarding the making of pilotage directions the Bill contains no restraint on an overzealous approach. It would in theory be possible, for example, for pilotage directions to be made for the simple purpose of trying to exclude pleasure craft from particular areas of the harbour such as a fairway. A requirement of compulsory pilotage in such areas would no doubt be quite effective for such a purpose.
The principle of exemption is not without precedent in the Bill as drafted. Already an exemption exists from the compulsory pilotage in Clause 5(3) for fishing vessels under 47.5 metres. I realise that the drafting of a new exemption for pleasure craft is to some extent complicated by differing views concerning the best method of applying a limit whether it be by length or by tonnage. I have therefore chosen 50 gross tonnes more as a discussion point. It would be open to amendment if necessary.
The Minister is himself a yachtsman and I trust that he will look favourably on this amendment.
Lord Mottistone: My Lords, I should like very strongly to support the amendment.
Lord Shackleton: There will be no need to recommit on this amendment! I thank the noble Lord for his apology.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord, Lord Shackleton, and I reaffirm my apology to him. However, I am bound to say that I do not propose to accept this amendment and I therefore hope that the question of recommitment will not arise. I am a yachtsman, but I doubt whether there would be room for a pilot on board my boat in addition to my crew.
It is our view that harbour authorities, given their responsibilities for safety of navigation in their areas, should have the power to impose compulsory pilotage on such types, classes and size of vessels as they believe necessary in the interests of safety. I am therefore

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reluctant to accept this amendment, which would assume that there are no circumstances in which it would be reasonable for pleasure craft below a certain size to take a pilot. It is very unlikely that many harbour authorities will in practice decide to bring any pleasure craft (except possibly the very largest) under compulsory pilotage. However, the central principle of the Bill—and I think that my noble friend Lord Mottistone to some extent forgets himself in his support for the amendment—is that the decisions should be for the local harbour authorities to make, taking account of all the local circumstances. I am not certain that the noble Lord, Lord Greenway, will be happy with that reply.
Lord Greenway: My Lords, I am certainly a little disappointed. The Royal Yachting Association will read what the Minister has said in reply to the amendment and will make up its mind as to how it wishes to proceed further. I should like to voice my thanks to the noble Lord, Lord Mottistone, who is commodore of your Lordships' yacht club.
I believe that there is a difficulty here. Speaking from the point of view of the pilots themselves, they do not want to have to go out and pilot yachts. They have better things to do. As the Minister said, maybe the harbour authorities can make up their minds about this matter. However, I think that something that has been incorporated in the legislation for a great many years should perhaps be looked upon a little more favourably. Nevertheless, I do not intend to press the matter in any way. I am grateful to the Minister for his reply and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Underhill Lord Underhill moved Amendment No. 42:
Page 6, line 20, at end insert—
("and
(c) any other person appearing to it to have a substantial interest").
The noble Lord said: My Lords, we are still dealing with the question of compulsory pilotage under Clause 5. As well as dealing with Amendment No. 42, I should like to speak to the consequential amendment, Amendment No. 43. Clause 5(4) states:
"Before giving a pilotage direction a competent harbour authority shall consult—

(a) the owners of vessels which customarily navigate in the area to which the proposed direction would apply; and

(b) any other persons who carry on harbour operations within the harbour of the authority;

or, in either case, such persons as it considers to be representative of them".
In other words, owners of vessels and persons who may carry on other harbour activities within the harbour will be consulted but no public interests.
I believe that I used the words "public interest" in Committee. During the discussion reference was made to the possibility of local councils being bodies which should be consulted. I think that in Committee we were asked what interests local councils have in this matter. We are dealing with vessels which might be carrying hazardous cargoes and there may be other problems of that kind. Instead of using the words
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"public interest", Amendment No. 42 says that, in addition to the two groups of persons or bodies who shall be consulted, we should add a third group under a new paragraph (c):
"any other person appearing to it to have a substantial interest".
By that we mean any other person appearing to a competent harbour authority to have a substantial interest. This seems to be a matter for the public good. I can see no reason why the Government should not accept the amendment because at the end of the day it will be the competent harbour authority which has to decide which other persons who have a substantial interest should be consulted.
Lord Brabazon of Tara: My Lords, the noble Lord, Lord Underhill, has explained his amendments. They are, as he said, similar to amendments that were put down at Committee stage. Pilotage is one aspect of the controls which need to be exercised in harbours and their approaches to ensure the safe movement of shipping. The Bill recognises this by placing pilotage under the same authorities as these other controls. As I pointed out in Committee, when making directions about the movement of shipping in their ports, most port authorities are not under any formal obligation to consult anyone other than shipowners, who are the people who may be financially affected by such decisions and whose ships are directly at risk if the harbour authority makes the wrong decision.
Pilotage does not raise any issues of safety or otherwise which would justify a statutory obligation to consult more widely than is required in the case of directions about the movement of shipping. That is not to say that authorities may not consult more widely when they think it necessary; and they will have the benefit and expertise of the local pilots, although, as I said in Committee, I do not believe that a statutory obligation to consult them would be at all appropriate since they will be the CHA's employees or in a contractual relationship of some other kind to provide their services to the CHA. For these reasons I must urge your Lordships to reject the amendments.
Lord Underhill: My Lords, I am disappointed with the Minister's reply. I make it quite clear that this amendment has not been prompted by any particular interests, except those of the pilots. It is the pilots who are urging that there should be consultation with other persons who appear to have a substantial interest. It is not any conservation group, or other group of that kind; it is not any group of local authorities. It is the pilots who believe that it is desirable in the general interest that this should be agreed to. But in the light of what the Minister said and at this late hour, I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendments Nos. 43 and 44 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 45:
Page 6, line 29, at end insert—
("(6) Notice of a pilotage direction given under this section, or of the amendment or revocation of any such pilotage direction, shall be published in such manner as the Secretary of State may by regulations direct.")
The noble Lord said: My Lords, the Pilotage Act 1983 requires at Section 15(4) that:
"Notice of any byelaw proposed to be submitted for confirmation under this section shall, before it is so submitted, be published in such manner as the Secretary of State directs".
There are similar requirements concerning the publication of general directions affecting navigation made by harbour authorities. As drafted, the Bill makes no provision for the publication of a pilotage direction. It is clearly important that information about compulsory pilotage should be brought to the attention of those affected, not the least because failure to comply with a pilotage direction may under Clause 13 lead to criminal proceedings against the master. It would be an improvement to Clause 5 if we added an amendment on the lines of that which I propose. I beg to move.
Viscount Simon: My Lords, I am delighted to be able to support an amendment of the noble Lord, Lord Mottistone. He is quite right.
Lord Underhill: My Lords, I should have supported this amendment if I could have been assured that the notice was to be given in a public manner and had the House agreed to my previous amendment so that when the notice was given in a public manner those bodies with a substantial interest could have done something about it. But it is a step in the right direction. I regret only that the other provisions which I have mentioned have not been taken up.
Lord Swinfen: My Lords, I should also like to support this amendment. Concerning the words of the the noble Lord, Lord Underhill, there is nothing to stop another body making representations.
Lord Brabazon of Tara: My Lords, I think for once we are all in agreement on an amendment, although I am not quite sure that our reasons for agreeing are exactly the same. I accept that masters of ships using a harbour should be made aware that a pilotage direction has been made by the local harbour authority, particularly in view of the offence provisions in the Bill for failing to comply with a pilotage direction.
However, I do not accept that it is necessary for the Secretary of State to make regulations setting out how such a notice is to be published. I would regard that—and perhaps other noble Lords, may think the same—as a little bureaucratic, and I believe that it would be best left to the discretion of the CHAs as to how best to make known the existence of a pilotage direction.
I cannot accept the amendment as drafted. However, I accept that CHAs should make known the existence of a pilotage direction, and I am prepared to bring forward a suitable amendment to cover this point at the next stage.
9.45 p.m.
Lord Underhill: My Lords, before the Minister sits down, could he say whether the statement made by the noble Lord, Lord Swinfen, is correct: that if a notice is
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published in some form—about which the Minister is going to bring an amendment—any person, any body, would be eligible to make representations?
Lord Brabazon of Tara: My Lords, with the leave of the House, I do not think that that is the case. The only people who can make representations—I think I am right, and I shall check on this—are the shipowners, as detailed elsewhere in this clause. I shall look into that point.
Lord Underhill: My Lords, they are the ones to be consulted. The subsection refers to the bodies that he shall consult. It makes no reference to the bodies which may make representations.
Lord Mottistone: My Lords, I am indeed grateful to my noble friend for undertaking to bring something forward on these lines at the next stage, and I have pleasure in withdrawing this amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 46:
After Clause 5, insert the following new clause:
("Resolution of disputes concerning pilotage directions.
.—(1) Where any dispute arises between a competent harbour authority and those persons required to be consulted in accordance with section 5(4) above concerning the provisions of a pilotage direction any party to the dispute may appeal to the Sectetary of State.
(2) On an appeal under subsection (1) above the Secretary of State shall settle the dispute in such manner as he considers appropriate and may in particular direct that such provisions as are mentioned in that subsection shall not have effect or shall have effect subject to such modifications as he may specify.")
The noble Lord said: My Lords, at Committee stage we had an amendment on these lines seeking a right of appeal. It was unfortunately not properly taken because there was a muddle over the grouping. I suppose that I should not have agreed to it. The main points I want to make—and I do not want to go over the same ground again—are at cols. 15 and 16 of the Official Report relating to Amendment No. 48.
However, I should like to make three points. The ability to impose compulsory pilotage inevitably involves the imposition also of an additional cost on port users. I would remind your Lordships that this tends to be forgotten. One of the features of this Bill is to make things more economical for operating trade from these ports.
The cost of pilotage for a small ship which has probably been accepted in the past could amount to 30 per cent. of the entire voyage revenue. The Bill gives the competent harbour authorities a monopoly of pilotage services. It is unreasonable to create a monopoly power without at least giving those affected by it a right of appeal against its possible abuse. For example, when we had the monopoly of British Telecom the Government wisely set up the Director General of Telecommunications, in effect acting as a court of appeal against British Telecom because it is a

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monopoly. It would not have been necessary if it was not a monopoly.
The Bill provides for a right of appeal in respect of pilotage charges, and in including such a right of appeal the Government have recognised that some control over the exercise of a competent harbour authority's responsibilities is needed. A similar control is needed over a CHA's power to impose compulsory pilotage, and that is all that this amendment seeks to achieve.
There is one point which I know will not satisfy my noble friend. He said at Committee stage that the Secretary of State cannot see himself as a court of appeal. I am afraid we have recast him as that, but we have done that because other Secretaries of State frequently are a court of appeal. For example, the Secretary of State for the Environment has an appeal position in relation to planning appeals. There are a whole host of others one could quote.
Therefore I hope that my noble friend will not press that point too hard. I fully accept that the way I have worded the amendment may be wrong. I come back to him—though he indicated he would not like it—by saying that perhaps this arbitration procedure, if it becomes a bit more solid than temporary (and I understand why he wants it to be temporary at this stage) may be a body—if the Secretary of State does not want to act as a court of appeal—that could take this on. Basically it is not fair or economical in the trading sense for shipowners to have to pay compulsory pilotage in all circumstances without some way of appealing against it, if that is necessary. I beg to move.
Lord Brabazon of Tara: My Lords, I fear that this time I can only reinforce the comments that I made during debate at Committee on a similar amendment which my noble friend put down. While I agree this amendment is more limited in that it restricts the right to appeal to those parties which the CHAs are required to consult under Clause 5(4), I am still not convinced that an appeal to the Secretary of State on decisions which depend on local circumstances is appropriate. The CHAs will have to consult port users before making a pilotage direction and that will give the opportunity for them to make representations. In the nature of things, a CHA will be bound to give careful consideration to the views of its customers. Otherwise it could be in danger of losing those customers. But I consider that to give my right honourable friend the Secretary of State a power to override the decisions of the CHAs in this area would represent a substantial derogation from the responsibility of the CHAs for decisions on pilotage needs in their harbours, which, as I can only reaffirm, it is the intention of this Bill to place fairly and squarely on their shoulders. Therefore I am afraid that I cannot be as friendly as I have been to my noble friend's previous amendments.
Lord Mottistone: My Lords, it is late and I shall not pursue this point. I see a germ of a way through for this. I can see in the long term what my noble friend is saying. There may be a stage when the new CHAs do
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not act responsibly enough and they will have to learn by losing trade if they make a mistake. The temporary arbitration idea might be a solution. I might come back on Third Reading with something along those lines; but at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Pilotage exemption certificates]:
Lord Underhill Lord Underhill moved Amendment No. 47:
Page 6, line 31, leave out ("shall") and insert ("may").
The noble Lord said: My Lords, in considering Amendment No. 47, it will be helpful if I speak also to Amendments Nos. 48, 51 and 52. It will be noted that Amendment No. 47 has a wide measure of support. We are dealing now with Clause 6 covering pilotage exemption certificates. Paraphrasing subsection (1) it states that the CHA shall on application grant a pilotage exemption certificate to a master or first mate. We believe that the word "shall" should be substituted by "may".
On Amendment No. 48, as the clause is written, the CHA will not be able to refuse the issue of a pilotage exemption certificate, for whatever reason, provided it is satisfied as to an applicant's skill, experience and local knowledge. We believe that having regard to the sometimes suspect insular régimes on ships it is essential to be able to have special regard to vessels containing noxious cargoes and the effects of large vessels navigating in restricted channels. The acceptance by the Minister, when he brought forward an amendment to Clause 2 dealing with cargoes conveying dangerous and noxious substances, makes it all the more important that we should give consideration to the question of granting exemption certificates.
Amendment No. 51 suggests that the criteria for examination should be the same for authorised pilots as for those to be granted pilotage exemption certificates. If my memory serves me correctly, this matter was raised at Committee stage and we could not see why the Minister did not accept that there should be no difference whatever in the criteria for granting a certificate to the master or the first mate to those granted to authorised pilots. Amendment No. 52 states that a holder of a pilotage exemption certificate may be in the position of not being experienced in the handling of large vessels of different characteristics and which will have lower margins of safety, and therefore should not be automatically entitled to a certificate for them. Therefore, we are saying that any certificate granted to a master or mate should be for the same class of vessel, not necessarily for any class of vessel.
Lord Mottistone: My Lords, these four amendments all water down the provisions of this clause. As drafted, the competent harbour authorities shall grant a pilotage certificate to masters and first mates who can satisfy the competent harbour authority of their

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ability to navigate their own vessel without having to take a pilot. All these amendments will weaken the requirement to issue certificates and put unnecessary obstacles in the way of candidates.
I could produce arguments against each and every one of them but I am not going to waste your Lordships' time doing that. It is a fundamentally faulty, narrowing, restrictive set of amendments which I hope your Lordships will reject.
Lord Simon of Glaisdale: My Lords, with regard to Amendment No. 48, the noble Lord, Lord Underhill, made it plain that what he had in mind was dangerous cargoes. When your Lordships were discussing this matter in Committee, there was general agreement that dangerous cargoes should be specifically dealt with. I ventured to express doubts as to whether it was necessary to amend both Clause 6 and Clause 2. The noble Lord the Minister brought forward Amendment No. 3 to Clause 2 in order to meet the points that had been made. I therefore wonder whether, in view of Amendment No. 3 which is now part of the Bill, we need Amendment No. 48 at all.
Lord Swinfen: My Lords, my name is to Amendment No. 47 basically because it ties in with my Amendment No. 53. I shall not in fact be moving that as I shall be accepting my noble friend's Amendment No. 49 and Amendment No. 50, or agreeing with him on them.
However, I wonder whether Amendment No. 48 does not tie in with my noble friend's Amendment No. 3 to Clause 3 which deals with the question of pilots, not masters of vessels, who have exemption certificates. I do not think that the two are the same. I feel that we should be particularly careful of vessels where the master has an exemption certificate, who do not normally carry dangerous cargoes but may do on one or two odd occasions. This point may cover that. It is a safety point, and I think that Amendment No. 48 certainly has some value.
Lord Greenway: My Lords, I supported the feeling behind these amendments at Committee stage. On what has been said now, my noble and learned friend may well be right in that the Government's commitment to writing in dangerous cargoes to Clause 2 of the Bill may well have implications here. The noble Lord, Lord Mottistone, said that he felt that the situation was adequately covered in the Bill as drafted; but I think that Lord Underhill's Amendment No. 52 has some bearing. It is important that if a master or mate is granted an exemption certificate for a certain class of ship—say, for instance, an ordinary cargo ship—and then that master happens to be transferred to a high-sided car carrier, which suffers from the problem called windage (a major consideration in pilotage today) he should not necessarily retain that exemption certificate. I believe there is some merit in that amendment.
10 p.m.
Lord Brabazon of Tara: My Lords, Clause 6(1) requires those CHAs which adopt régimes of compulsory pilotage to issue pilotage exemption certificates to any person who can meet the required standards. I said during the debate in Committee that the only grounds on which we think a CHA should be entitled to refuse to issue a certificate are those relating to an individual's competence, experience and local knowledge. I reaffirm that this evening.
As to allowing CHAs to have discretion in issuing certificates to vessels carrying dangerous cargoes, I do not agree that a CHA should be allowed to restrict the issue of certificates for such vessels since the cargo has little bearing on the competence of the master to navigate his vessel.
However, I said during Committee that I accepted that there might be cases where the combination of hazardous cargoes, bad weather conditions and difficult navigational circumstances was such that a CHA might believe that no certificates could safely be issued. Clause 6(3) allows the Secretary of State to exempt such CHAs from the normal obligation to issue such certificates. But such cases will be exceptional and I am sure that the general rule must be that certificates are to be issued. To allow them to be withheld on any grounds other than the competence of the master or mate involved means that unnecessary costs have to be borne by shipping, as my noble friend Lord Mottistone reminded us.
As your Lordships are aware, a Government amendment which was accepted earlier today means that CHAs will now have a duty, when considering under Clause 2 what pilotage services need to be provided in the harbour and approaches and whether pilotage should be compulsory in those areas, to have particular regard to the hazards involved in the carriage by ship of dangerous goods or harmful substances. I think all your Lordships are agreed that that was a good amendment.
Having decided that pilotage should be compulsory, a CHA is required under Clause 5 to issue a pilotage direction specifying the ships, areas and circumstances to which compulsory pilotage will apply. The CHA may apply a direction to all ships or to all ships of a certain description, and this will allow a CHA to take into account considerations such as whether a vessel is carrying passengers or hazardous cargoes.
Having decided which vessels are to be subject to compulsory pilotage, the next step required under Clause 13 is that such ships shall be under the pilotage of an authorised pilot or under the pilotage of a master or first mate possessing a pilotage exemption certificate. Both authorised pilots and pilot exemption certificate-holders must have satisfied the CHA that they are competent to pilot vessels within its harbour, and I believe it would be wrong to allow a CHA further discretion to restrict the issue of certificates for certain vessels for reasons unconnected with the applicant's skill and experience.

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An important point is that the fact that a vessel is carrying hazardous cargo makes a master with a pilotage exemption certificate no less capable of piloting his vessel in just the same way as it makes a pilot no less capable of piloting a vessel. My noble friend Lord Swinfen, I thought, carried his imagination to the limit when he said that perhaps somebody who had a pilotage exemption certificate would once in a while carry a dangerous cargo and he might have earned that pilotage exemption certificate by carrying passengers. I hope that even though my noble friend is concerned about dangerous cargoes, he would not wish to be any less concerned about the carriage of passengers.
The noble Lord, Lord Greenway, said that of course high-sided car carriers, for instance, are particularly likely to carry a lot of windage, but the Bill as drafted says that a pilotage exemption certificate must apply to the same sort of vessel. That was something which we introduced in Committee. I remain unconvinced that the qualifications for pilotage exemption certificates should invariably be the same as those for authorised pilots. On some matters qualifications to be required from pilots and masters will be the same, but there is no reason why this should always be so. Authorised pilots will be required to handle a variety of sizes and types of vessels even within a certain class. Every vessel has different handling characteristics.
The CHA will wish to satisfy itself that a candidate for authorisation has sufficient experience on a wide number of vessels. On the other hand, a pilotage exemption certificate relates only to a master's or first mate's ability to navigate his vessel within the CHA's area. It is therefore likely that the qualifications to be met by authorised pilots will be more stringent or more extensive. Under Clause 6(2), the CHA is only prevented from imposing more onerous requirements on certificate holders than those laid down for authorised pilots.
As to Amendment No. 52 to remove subsection (2)(a), this subsection would prevent a CHA imposing unreasonable requirements on certificate holders which had little to do with the difficulties and dangers of navigation in its area. I cannot see that there is any case at all for dispensing with this subsection. To open the possibility that requirements might be imposed which are not related to the difficulties and dangers of navigation seems quite unnecessary and could well lead to unnecessary costs having to be borne by shipping. Therefore, I must ask the noble Lord to take account of my answer. I hope that he will not feel the need to press the amendment.
Lord Underhill: My Lords, the Minister of course has had excellent advice from his Department, but some points still need to be made. First, there was general welcome for Amendment No. 3 to Clause 2, but that related to the provision of pilotage services, proposing that they should take account of hazardous cargoes. There was pressure in Committee. Here we
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are dealing with the granting of exemption certificates. I should think that there would be a strong legal argument as to whether the question of exemption certificates and the issue of them come under the duty of the provision of pilotage services. We are introducing these amendments to be thoroughly satisfied with the position.
The noble Lord, Lord Mottistone, said that this weakens the position—weakens the position of whom?
Lord Mottistone: Of the competent masters of ships.
Lord Underhill: I asked that question because there was emphasis on costs in the answer of the Minister. From our standpoint, this strengthens the position of authorised pilots. It ensures that those granted exemption certificates—the master or chief mate—shall be in exactly the same position as authorised pilots. I am sorry that the Minister cannot agree. The noble Lord, Lord Swinfen, accepted that we are dealing here with exemption certificates and not services.
As to Amendment No. 51, I cannot possibly see why the criteria for examination and qualification should not be the same for those granted pilotage exemption certificates as for authorised pilots. I am advised by our own pilots that they too cannot understand this. That is the reason for the amendment.
The Minister has rejected all the amendments. At ten-past ten I do not think I can do other than beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 48 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 49:
Page 6, line 35, after ("impose") insert ("(a)").
The noble Lord said: My Lords, I beg to move Amendment No. 49, and at the same time I shall speak also to Amendment No. 50. I agreed at Committee stage to consider an amendment to make explicit provision about competence in English of candidates for pilotage exemption certificates. These amendments place a specific requirement on CHAs to satisfy themselves that a candidate for a pilotage exemption certificate had adequate knowledge of the English language. I beg to move.
Lord Swinfen: My Lords, perhaps I may say how much I welcome these two amendments.
Lord Greenway: My Lords, I also spoke on this matter and I am most grateful to the Minister for bringing forward this amendment.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 50:
Page 6, line 38, at end insert ("; and
(b) in any case where it appears to the authority to be necessary in the interests of safety, that his knowledge of English is sufficient for that purpose.").
On Question, amendment agreed to.
[Amendments Nos. 51 to 53 not moved.]
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 54:
Page 6, line 49, at end insert ("or may during such period as aforesaid, if he is satisfied as aforesaid, suspend the operation of any pilotage exemption certificate already granted in respect of the harbour or part of the harbour in question.").
The noble and learned Lord said: My Lords, this amendment raises a point that I mentioned at the Committee stage. Under subsection (3) the Secretary of State may, by reason of unusual hazards involved in shipping movement within a harbour, give directions that there shall be no issue of exemption certificates for such periods not exceeding three years as he may specify.
At the Committee stage, owing to the reference to unusual hazards and to the time limit, I read that as meaning fortuitous hazards and I gave as an example a wreck which had not yet been shifted, or a normally dredged channel which was for some reason awaiting a dredger which was not available, where the local pilot would know the situation but a visiting master or mate in possession of an exemption certificate would not know the local situation of the temporary hazard.
That construction was not contradicted at Committee stage, but recently the noble Lord the Minister has written to me saying that what is in mind in this subsection is a permanent hazard of navigation in some particular port, and I accept that. Nevertheless, it seems that there ought to be consideration, now that we are amending the pilotage law after a lapse of 70 years, whether there should be a suspension in the case of the type of hazard that I mentioned.
Therefore notwithstanding the noble Lord's letter, for which I am most grateful, I have put down for your Lordships' consideration Amendment No. 54 and Amendment No. 55, which is really just a means of carrying it out. I think everything will depend on whether the Minister has any evidence either way as to whether the sort of unusual hazard which I mentioned might lead to danger in navigation, so that any exemption certificate which had already been issued should be suspended, and whether the harbour authority should have a duty to notify the holder of the certificate of such suspension. It may also be that there will be exemption certificates in relation to some of the harbours to which the Minister referred in his letter. If so, some suspension procedure might be called for. I beg to move.
10.15 p.m.
Lord Brabazon of Tara: My Lords, I am grateful to the noble and learned Lord for having moved this
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amendment and for his thanks to me for having written to him earlier on the subject. Clause 6(3) is intended to deal with the possibility that in a few places there may be a case arising from the general circumstances of the port for believing that no certificate should be issued. It is not envisaged that the clause will be used in response to short-term changes in the navigational circumstances, which we believe a master holding a pilotage exemption certificate should be as capable of coping with as an authorised pilot.
However, the amendments of the noble and learned Lord have pointed to a gap in the Bill as drafted. Where the Secretary of State does make the direction under Clause 6(3), what happens to any certificates which have already been issued? The point may not be of great practical significance as it is likely that in any port where a case for a direction under Clause 6(3) can be made, such as Sullom Voe, no pilotage exemption certificates have in fact been issued. However, the Bill does need to cover the point and I should like to take it away for further consideration.
Lord Simon of Glaisdale: My Lords, it only remains for me to thank the Minister for his words. I am entirely content that he should take the point away and consider it. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 55 not moved.]
Clause 8 [Pilotage charges]:
Lord Mottistone Lord Mottistone moved Amendment No. 56:
Page 7, line 47, after ("may") insert (", subject to section 27(6) below,").
The noble Lord said: My Lords, Amendment No. 56 is a paving amendment to Amendment No. 103; I shall speak to them both. Shipowners believe that the only cost that a certificate holder who undertakes his own pilotage should finance is the administrative cost associated with the issue, alteration or renewal of the certificate.
At Committee stage I put down Amendment No. 63, cols. 103 to 106 of the Official Report, Public Bill Committee, which sought the deletion of Clause 8(3) for that reason. It is all part of the business of trying to make shipping cost-effective and competitive. Your Lordships need constantly to remember that we are losing our merchant fleet at far too fast a rate because we cannot compete. Any penny we save is worth it. During the debate at Committee stage, my noble friend said, at col. 105 of the Official Report, Public Bill Committee,
"there is nothing in the Bill which forces a competent harbour authority to make these charges. It is an option open to it … it might need only to be transitional while the costs involved in implementing this legislation are taken forward. After that they could perhaps drop pilotage charges. But it is important, at this stage anyway, that they should be allowed to make charges for certificates.".
The point of Amendment No. 103 is to take up that very aspect and write it into the Bill. The amendment proposed specifies that the CHA could charge for the use of a certificate, but only so as to assist in meeting any cost arising from the reorganisation of pilotage effected in the pursuance of the Bill. Until the Bill is enacted and a new regime is in place, it is not possible to predict whether certificate holders have benefited from reorganisation. Some masters who have not been able to obtain certificates under the existing legislation may succeed in doing so under the new arrangements. They will have benefited and might therefore be expected to contribute to financing the change.
We have therefore proposed a compromise based entirely on what my noble friend had to say, and I hope that he will feel that he can go some way to accepting the amendment. I beg to move.
Lord Underhill: My Lords, I must oppose the amendments tabled by the noble Lord, Lord Mottistone, as I am advised that these amendments will restrict a CHA's ability to charge pilotage exemption certificate holders so as to recover costs incurred for the winding up of the present pilotage organisation. They will not be able to make charges in order to recover some of the costs of an ongoing pilotage operation from which the pilotage exemption certificate holders benefit. That is a very important point. We shall find that there will be discrimination against those ships using the services of a pilot and in that respect the proper management of a pilotage service will be inhibited. I have been advised on these matters and my advice seems to be completely contrary to the views, whether advised or otherwise, that the noble Lord, Lord Mottistone, expressed. I hope that the Minister will agree with my objection.
Lord Greenway: My Lords, I should like to support the noble Lord, Lord Underhill, on this point. It is quite proper that a charge should be made for exemption certificates to help the general administration costs of pilotage. After all, that is done on the Continent today and I see no reason why it should not be done here as well.
Lord Brabazon of Tara: My Lords, when we discussed this matter in Committee I mentioned the reasons why, in the short term, CHAs should have the option of requiring a contribution from certificate holders. Some mariners, particularly those operating in ports where there have previously been restrictions on the issue of certificates, will be among the most direct beneficiaries of pilotage reorganisation and can reasonably be required to pay towards the costs associated with that reorganisation. I am glad that my noble friend has recognised this in tabling his amendment. But, as I also explained in Committee, whatever the short-term position, I believe there is also a case for allowing a CHA the option of making such charges in the long term to help meet the costs of the pilotage service in the port.
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There may be some ports where it is reasonable for ferry traffic to be charged in this way, so that those needing to take a pilot, whether occasional visitors or the ferry operators on occasion, do not find themselves facing a prohibitive charge. There is, as I said, the general benefit to safety which a pilotage service brings to a port and from which as regular users the certificate holders benefit considerably.
I also mentioned the provision for appeal to the Secretary of State on such charges. That will prevent abuse of the system. That final sentence is, I am afraid, on this occasion the only comfort that I can give to my noble friend.
Lord Mottistone: My Lords, I thank my noble friend. I am terribly disappointed when I hear the noble Lords, Lord Underhill and Lord Greenway, making speeches to the effect that we must have money coming into the ports. The ports do not go away but the shipping is disappearing. The priorities of your Lordships in this discussion are out of step with what is happening to this country. I think it is very sad. I also think it is sad that my noble friend could not take this a little further than he was able to, but it being late I shall not press the point at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Use of agents and joint arrangements]:
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 57:
Page 8, line 36, leave out ("(4)") and insert ("(Employment etc. of authorised pilots)(2)").
The noble Lord said: My Lords, this is consequential. I beg to move.
On Question, amendment agreed to.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal had given notice of his intention to move Amendment No. 58:
Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 25").
The noble Lord said: My Lords, I have been caught unaware by this amendment and I frankly admit it. I had not noticed that I was down to speak to it. I do not know whether the noble Lord, Lord Carmichael, would be prepared to move it in my stead.
Lord Brabazon of Tara: My Lords, before noble Lords decide who is to move the amendment, perhaps I may mention that in principle I am prepared to accept it except that I feel there is a printing error in it. I think that noble Lords are referring to Section 26 rather than Section 25. I pointed that out to the noble Lord, Lord Underhill, earlier, but I am afraid that it has not been corrected on the Marshalled List. If the amendment refers to Section 26, I am prepared to accept it.
Lord Strathcona and Mount Royal: My Lords, I beg to move Amendment No. 58, which I can modify so that it reads "section 26" instead of "section 25". Will that be in order?
Lord Simon of Glaisdale: My Lords, I am not sure where we are. Has the noble Lord, Lord Strathcona and Mount Royal, moved a manuscript amendment to put his amendment in order? A manuscript amendment may be moved on Report; otherwise surely the amendment that is put from the Woolsack should be that which is printed.
Lord Strathcona and Mount Royal: My Lords, if it will make the noble and learned Lord any happier, I shall be very happy to make a manuscript amendment which will read:
"Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 26").
The Deputy Speaker (Earl Cathcart): My Lords, it is for the House, with leave, to accept the amendment in that form. I thought that the House had accepted it. I ask again: will the House accept this as a verbal manuscript amendment? That is agreed.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved the following manuscript amendment:
Page 8, line 36, leave out ("or 6(1) above") and insert ("6(1) above or section 26")
On Question, amendment agreed to.
Clause 10 [Information and directions as to joint arrangements]:
The Deputy Speaker: My Lords, in calling Amendment No. 59 I should advise your Lordships that if that amendment is agreeed I cannot call Amendment No. 60.
Lord Underhill Lord Underhill moved Amendment No. 59:
Page 9, line 18, leave out ("may require any of") and insert ("shall require all").
The noble Lord said: My Lords, I hope that we can agree on this amendment because it will be noted that Amendment No. 60, tabled by the noble Lord, Lord Swinfen, is exactly the same as mine except that my amendment inserts the words "shall require all" whereas that of the noble Lord inserts only "shall require".
This point was discussed during the Committee stage of the Bill and we thought it important to put it forward again. It deals with the supply of information from CHAs. Where information is required under Clause 10 we consider that all the relevant CHAs should be asked to supply it and it should not merely be left open for one or other of them to do so. Therefore, I hope that the Minister will accept this amendment.
The noble Lord, Lord Swinfen, will explain why he has tabled his Amendment No. 60 (which has also been linked with Amendments Nos. 61 and 63 in his name) in which instead of asking for "information" he prefers to use the word "particulars". Obviously he will tell the House why he wishes to do that. I beg to move.
Lord Swinfen: My Lords, I am perfectly happy to accept or agree to Amendment No. 59, which will mean, as the Deputy Speaker said, that Amendment No. 60 cannot be moved. I do not honestly think that Amendment No. 63 is all that important. It is simply that the word "particulars" strikes me as being better than "information". The House may disagree.
As the noble Lord, Lord Underhill, explained, this discussion is a re-run of the debate that we had at Committee stage to make competent harbour authorities operating in the same estuary—or, as is the case in Manchester and Liverpool, on the same canal—operate together. The noble Lord, Lord Mottistone, said earlier that it was important to bear in mind the cost of shipping. This amendment bears that cost in mind, because it will end up with a reduction in the cost of pilotage if these areas, which are all approached by the same area of water, are operated with one large pilotage team that is capable of being moved hither and thither as, where and when required. It is wasteful to have pilots sitting at Ramsgate, for instance, doing nothing, while all the traffic is coming in from the North Sea and only pilots from Harwich are operating. Nowadays it is possible to see from where the traffic is coming and to move pilots from point A to point B to meet it. That strikes me as common sense.
I know that the Bill, as drafted, gives the power to the Minister. The Minister must take the matter in hand and insist that competent harbour authorities which are operating against one another (they are all after the same trade) use the cheapest possible method of running the pilots for the benefit of the shipping industry. The Bill's prime object is to reduce costs to the shipping industry.
10.30 p.m.
Lord Brabazon of Tara: My Lords, I listened carefully to the debate on these amendments when they were brought forward in Committee. I have subsequently read the proceedings again several times. I remain convinced that it would be wrong to accept them. To do so would be likely to compel the Secretary of State to impose an unnecessary burden on a number of harbour authorities. In particular, there are likely to be a number of authorities falling within the definition in Clause 10(1) where there is unlikely to be any practical problem about the future organisation of pilotage. It is a central principle of the Bill that decisons about what pilotage services are needed are local matters which should be decided locally by CHAs in the light of their experience. To accept these amendments would involve the Secretary of State in a number of decisions which should be made locally.

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We do not want to reproduce the faults of the present system in which far too many local decisions are referred upwards to be taken at national level.
Clause 10 is intended very much as a reserve power to enable the Secretary of State to ensure that, in cases where decisions taken by a CHA may affect the interests of other CHAs or operators in the area, the arrangements made take proper account of the interests of those authorities and operators. We expect that it will in most cases be unnecessary for the Secretary of State to exercise this power and that CHAs will take proper account of the interests of other authorities and operators.
Nevertheless, I should make it clear, and perhaps I did not do so during the debate at Committee stage, that the Secretary of State recognises the importance of ensuring that suitable arrangements are made in the major estuaries and that he will accordingly require information under this clause of the CHAs in, for example, the present London District and in the Mersey, the Humber and the Severn Estuaries. I hope that that gives some assurance to the noble Lord, Lord Underhill, and to my noble friend Lord Swinfen.
I come now to Amendments Nos. 61 and 63. I envisage that when the Secretary of State requires an authority to provide him with information under Clause 10 he will have a pretty clear idea as to the issues he is interested in in each case, and they are likely to vary from one case to another. That being so, it will make sense for him to specify what information he requires; otherwise, as might happen under the amendments brought forward by my noble friend, he could well find himself receiving a good deal of information which was of no interest to him but which an authority might have gone to a good deal of time, trouble and expense to prepare. At the same time he might find the issues which concerned him not being properly dealt with. I think that it is essential that the Secretary of State should be in a position to specify what he wants to have, and I must ask my noble friend to withdraw the amendments.
Lord Underhill: My Lords, I tried to be brief when I moved the amendment. I am grateful to the noble Lord, Lord Swinfen, for further explaining it. In Clause 10 four categories are mentioned where there might be joint arrangements. After detailing the four categories the clause states:
"the Secretary of State may require any of the authorities, or, in the case of paragraph (c) or (d) above, the authority concerned".
The amendment therefore in effect deals only with paragraphs (a) and (b).
Clause 10(1)(a) says:
"Where the harbours of two or more competent harbour authorities fall wholly or partly within a single former pilotage district".
Paragraph (b) says:
"access for ships to the harbour of a competent harbour authority is customarily available through the harbour of another competent harbour authority".
The point of my amendment is this. If we are going to ask for information—and I recognise that the Secretary of State will want to have information—then he should obtain it from all the authorities concerned and not just from one of them.
I must again ask the Minister to read very carefully what has been said on this matter and to see whether or not he himself feels it desirable to tighten up this provision when we come to the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 60 and 61 not moved.]
Viscount Long: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at twenty-three minutes before eleven o'clock.