Lords Sitting of 20 January 1987

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.

The Royal Dockyards: Consultations
Lord Graham of Edmonton: 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 the state of their consultations with the workforce on the future of the Royal dockyards.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, my right honourable friend the Secretary of State provided the trade unions on 4th December with a full paper setting out the Government's arguments for commercial management at both dockyards and naming Babcock Thorn Ltd. as our preferred contractor for the future operation of Rosyth dockyard. We agreed with the unions an extended timetable during which they would consult their members, and my right honourable friend has offered to meet the unions tomorrow before he takes a final decision on Rosyth.
We are today providing the unions with another paper informing them that we have the basis for a similar contract with Devonport Management Ltd. in respect of Devonport dockyard and I have placed a copy in the Library. We will now consider with the unions concerned the question of additional time for them to make representations to us on this latest paper.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for his reply. Has the Minister seen the report by Michael Harrison in The Independent today; and does he care to comment on it? Surely the decisions in respect of Rosyth and Plymouth should be seen together. Why has the Minister failed to satisfy the trade unions that he has taken seriously their deep concerns, not only in respect of their members' jobs but also in respect of the communities in which they live? When does the Secretary of State intend to discuss with the workforce the conditions and the redundancies that will fall upon them after privatisation? In view of the unsatisfactory state of consultations, will the Minister care to consider postponing the vesting date of April for at least six months?
Lord Trefgarne: My Lords, I can assure the noble Lord that we have gone to the greatest lengths to ensure that consultation on this matter is properly and fully conducted. I myself have been involved in quite a large part of the consultation. My right honourable friend the Secretary of State has seen the trade unions on at least one occasion, and is prepared to see them again tomorrow and intends to do so. Indeed, the
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Navy Board, too, has recently seen the trade unions and had a useful exchange of views with them. I do not accept that we have been other than wholly proper in conducting this consultation; and we have done so with the utmost diligence. In the light of that consideration, there is no question of our postponing vesting day.
Lord Denning: My Lords, I thank the Ministry for the paper which I have only just had the opportunity to see. May I ask whether the Government are aware that this is but a preliminary decision, and that before a final decision is made there will have to be further consultation on the legal, economic and social matters concerned in accordance with the statute? Have steps been considered by which the retraining of the workforce and the replacement of the men in regard to the City of Plymouth can be safeguarded as far as possible?
Lord Trefgarne: My Lords, I certainly agree that the paper which I have recently sent to the noble and learned Lord and others refers to our preferred contractor at Devonport, but we are certainly anxious to listen to whatever representations the trade unions wish to make about that contractor before signing a contract. As for training the workforce and matters of that kind to which the noble and learned Lord has referred, he will know that we have gone to considerable lengths to help those in Devonport and elsewhere who may be displaced in the fullness of time.
Lord Denning: My Lords, I thank the Minister for his answer and I hope all will go well.
Baroness Vickers: My Lords, may I ask the noble Lord whether he has sent the note to me? If he has, I have, unfortunately, not received it. Will consultations take place between the Government and the local consortium, whichever one is chosen, bearing in mind the serious consequences for Plymouth and the surrounding areas in regard to job losses? Is the noble Lord contemplating dealing with the training of apprentices with whoever takes over in the future?
Lord Trefgarne: My Lords, yes, I sent a copy of the letter to my noble friend. I sent it at the same time as the ones I sent to the noble and learned Lord, Lord Denning, and the noble Lord, Lord Graham. I am sorry that my noble friend has not received it; and nor apparently has the noble Lord, Lord Graham. I confess that it was sent fairly recently and I am certain that it will arrive very shortly.
We are certainly taking into account all the factors to which my noble friend referred. On the point of job losses, I believe very strongly indeed that had we not embarked on some substantial change to the arrangements at both Devonport and Rosyth the job losses in prospect would have been very much greater than they are now.
Lord Taylor of Blackburn: My Lords, quite a number of noble Lords are a little confused as to the letter. Is the noble Lord referring to the letter that is now in the Library, or to some other letter?
Lord Trefgarne: My Lords, I am referring to a letter which I have recently sent to my noble friend Lady Vickers, to the noble and learned Lord, Lord Denning, and to the noble Lord, Lord Graham, a copy of which is in the Library because I put it there myself.
Lord Kennet: My Lords, the Government have now announced which contractors they would prefer. If the trade unions tell the Government that they would prefer other contractors, what will the Government do?
Lord Trefgarne: My Lords, we shall take their views into account before reaching a final decision.
Lord Graham of Edmonton: My Lords, will the Minister bear in mind that he has advised the House that the future of the Rosyth dockyard was publicly announced today without proper consultation with the trade unions, which is due to take place tomorrow? When one looks at what, according to the Act, should take place as regards consultation, does the Minister really consider that he has consulted properly? Does not the Minister accept that he and the Government have reneged on their responsibility to consult meaningfully?
Lord Trefgarne: No, my Lords, I reject that allegation completely. We announced the preferred contractor for Rosyth six weeks or so ago—only the preferred contractor. We had not, of course, at that time reached any final decision and we have certainly not signed a contract. In that six weeks, until now, we have been conducting further consultations with the trade unions, in some of which I have been involved and in some my right honourable friend has been involved; and in some the gallant members of the Navy Board have been involved. We have not reached a final decision on the Rosyth matter. We are anxious to have a further meeting with the trade unions tomorrow on that matter—which we shall do—and we are now ready to listen to the trade unions' views on the question of the preferred contractor for Devonport. We have not yet reached a final decision on that, either.
Baroness Vickers: My Lords, I advise my noble friend the Minister that I have just received the letter to which he referred. Will he make a Statement on which we can question him in the future?
Lord Trefgarne: My Lords, I did not for one moment imagine that there would not be more Questions on this matter in your Lordships' House.

EC Food Surpluses
2.44 p.m.
Lord Campbell of Croy: 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 now the prospects for reducing surpluses of agricultural produce within the European Economic Community.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the agreement reached at the December Agriculture Council demonstrated the Community's ability to take difficult decisions to curb common agriculture policy surpluses and their excessive budgetary cost. It is our aim that the forthcoming price fixing will take the process further.
Lord Campbell of Croy: My Lords, I thank my noble friend for his Answer. While applauding the initiatives taken by the Government during their recent presidency, I ask my noble friend how long it will be before action is taken on surpluses other than beef and milk? The longer these decisions are delayed the more painful it is likely to be for the farmers concerned.
Lord Belstead: My Lords, I am grateful to my noble friend for his first comment. We remain fully committed to reducing surpluses. We will continue to press in the forthcoming price fixing for realistic CAP prices as the central plank of our policy in this area. Those negotiations will begin next month. We strongly welcome the agreement in principle last December on a scheme for diversion of land out of sectors in surplus.
Lord Mellish: My Lords, is the noble Lord aware that it is very difficult for members of the British public even to try to understand what the common agricultural policy is all about? Is there any truth, for example, in the story that British farmers were paid over £1 million to destroy untold millions of cauliflowers? The average housewife would at present give almost anything to buy those cauliflowers. So what is going on? Someone is mad.
Lord Belstead: My Lords, over the past two years, taking all commodities, there has been a 9 per cent. reduction in prices for farmers in the Community. This shows that the agriculture Ministers—contrary to what has been said—are trying now, through the price mechanism, to see that surpluses are reduced.
However, the noble Lord, Lord Mellish, puts his finger on a very important point. It is that you need money when the going is tough. And, just at the moment, the going is tough because the weather is cold. I am absolutely delighted that the Agriculture Council has agreed that food should be made available from intervention stocks and other sources for charity organisations to distribute.
Lord Mellish: My Lords, that has not answered my question.
Lord Mackie of Benshie: My Lords, will the noble Lord confirm that at present the export of barley and/or wheat to third world countries is costing, with storage and the export subsidy, nearly, or about, the whole price paid for the grain which is stored? Should not the Government use this money to encourage alternatives such as forestry which are not in surplus? When do the Government intend to produce such plans considering the fact that taxpayers' money would be saved?
Lord Belstead: My Lords, it is for that reason that I said to my noble friend Lord Campbell that we very strongly welcome the agreement, taken in principle in the negotiations last December, for a scheme for the diversion of land out of sectors in surplus. The noble Lord, Lord Mackie of Benshie, asks when the Government are going to do something about that. Of course, the agreement in principle must be carried forward to agreement in fact, and I hope that we shall hear more about the matter from the Agriculture Council later next month. In the meantime, the Government are considering land use in the context of reform of the CAP, and we intend to keep your Lordships informed on that respect.
Lord John-Mackie: My Lords, I hope that the Minister is not in agreement with the point he made that price fixing is to be the sole way of dealing with these surpluses. It is generally agreed that that system would hurt British farmers very badly. At present we have quotas for various items, and I hope that the Minister will think about quotas along with some price fixing. Does the Minister consider that the EC plan announced this morning, with which the British Government agree, will have much effect on the total? I hear that it is being said in Brussels that it is only a small bite from a very large cherry.
Lord Belstead: My Lords, I am glad that the noble Lord, Lord John-Mackie, asked me the first question because it enables me to underline the fact that I entirely agree with him. There must be a two-pronged approach toward our problems. They cannot be solved by price alone. We shall be as tough as we possibly can be, and I hope that the Community will be tough too, so far as the price fixing is concerned. However, in the interests of both producers and consumers, there must be another plank to the platform of trying to reduce surpluses. That plank is involved in the answer that I gave to my noble friend's supplementary question when I said that we strongly welcomed the agreement on a diversion scheme for land where sectors are in surplus.
The noble Lord also asked me whether the sum announced from the Community would be only a fleabite. I am told that the scheme will cost around £38 million.
Lord Walston: My Lords, will the noble Lord quantify some of his remarks? As I understand it, he and his colleagues are relying on a reduction in price and a set-aside system either to do away with surpluses, although I am not quite sure if he meant that, or to enable the surpluses to increase at a rather slower rate than at present. It would be valuable to have his clarification on that point and particularly valuable to have some indication as to what sort of price diminution he thinks will be necessary to achieve the desired result. Under the set-aside scheme how much land does he think should or will go out of cultivation?
Lord Belstead: My Lords, the noble Lord asked me to quantify my reply. The size of the milk problem in the Community is over-production of around 20 million tonnes. The Government reckon that what
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was agreed last December will take a sizeable cut out of that. We must remember that, in addition, the Commission will take action on the accelerated disposal of butter and the ending of intervention for skimmed milk powder during autumn and winter.
There are over half a million tonnes of beef in intervention stores in the Community. Once again the agreement will ensure that more is eaten and less put into store. As regards cereals, I do not think there is anything that I can add to what I have already said.
Lord Cledwyn of Penrhos: My Lords, obviously, there are powerful arguments in favour of making part of the surplus available to those who have suffered as a result of the appalling winter. Perhaps the Minister will answer two questions: first, whether his right honourable friend the Minister is in favour of this scheme; and secondly, whether his right honourable friend said, as reported in the press, that the scheme had not been properly thought through? What is the view of Her Majesty's Government? If the Government are in favour, is the Minister satisfied that people in this country who have suffered will receive a fair share of the surplus? What machinery has been set up to make sure that it reaches the right people?
Lord Belstead: My Lords, if I may say so, I think that my right honourable friend had many reasons for saying that further thought was needed. However, the Council of Agriculture Ministers finally came to the conclusion that this should be done. I can say to the noble Lord, Lord Cledwyn, that my right honourable friend the Minister of State, Mr. Gummer, will today be contacting charity organisations. Further details of how the scheme will operate in this country will be announced as soon as possible.
Lord Gladwyn: My Lords, can the Minister say what percentage of the vast total stocks, more particularly of butter, it is now contemplated will shortly be given away to the poor and needy? What is the physical percentage?
Lord Belstead: My Lords, I am sorry but I cannot state the physical percentage. I can say that the range of foods covered by the scheme will be very wide indeed. As I said earlier it is reckoned that, initially, the scheme will cost about £38 million.
Lord John-Mackie: My Lords, can the Minister confirm whether the sum of £38 million is for this country or for the whole of the EC?
Lord Belstead: My Lords, as I understand it, that is a Community figure.

British Coal: Improved Efficiency
2.55 p.m.
Lord Gainford: 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 improvements in efficiency have been made by British Coal.
Viscount Davidson: My Lords, British Coal has made great improvements in its efficiency. Between November 1985 and November 1986, productivity in terms of output per man shift has increased by 23 per cent.
Lord Gainford: My Lords, I thank my noble friend the Minister for that short but very encouraging reply. Has he any information as to how much this percentage may improve in relation to the number of redundancies that there have been in the coal industry?
Viscount Davidson: My Lords, pits have always closed under governments of all persuasions. Keeping uneconomic pits open cannot provide an answer to unemployment. Nevertheless, recognising the need for restructuring the industry, Her Majesty's Government have made available most generous terms for those who wish to leave the industry. Furthermore, British Coal has been prepared to offer alternative jobs to all those who wish to remain. There have been no compulsory redundancies.
The Earl of Lauderdale: My Lords, can my noble friend say what progress has been made toward getting British coal down to a price that is competitive with coal imports from Australia, South Africa and North America?
Viscount Davidson: My Lords, the main point of the restructuring is to make British coal competitive with imported coal. That is still the aim. It has not yet been achieved. We are hopeful that it will be achieved before long.
The Earl of Lauderdale: My Lords, my noble friend also referred to improvements in productivity. Is he aware that in Australian coal mines productivity is something like 30 to 40 tonnes per man shift as against three or four tonnes in Britain?
Viscount Davidson: My Lords, I suggest that our coal mines are rather older than the Australian mines.
Earl Lloyd-George of Dwyfor: My Lords, can the Government say whether they have any plans to increase the opencast coal workings in this country, bearing in mind that the profitability of coal from that source is, I believe, something like 15 times greater than from deep mined coal?
Viscount Davidson: My Lords, one of the pits in the Selby complex is already producing coal. Others will follow next year. When complete, Selby will be British Coal's showcase to illustrate how utilisation of new technology can create low cost, high productivity output of around 10 million tonnes per year.

Air Transport: EC Internal Market
2.58 p.m.
Lord Kissin: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the answer given in this House on 17th
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December 1986 to Baroness Burton of Coventry, Her Majesty's Government would welcome the unilateral initiative to cut air fares within Europe taken by two British airlines and would then regard similar initiatives by other carriers as a helpful contribution towards the implementation of European Community policy on commercial competition.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Government strongly support efforts to introduce lower European air fares and greater competition. If the noble Lord is referring to plans by British Caledonian Airways and Air Europe for new routes in Europe, he will appreciate that I have to be a little cautious. These applications for licences are to be heard by the Civil Aviation Authority in March and, in view of my right honourable friend's appellate role in licensing matters, I cannot of course comment on these specific proposals.
Lord Kissin: My Lords, I thank the Minister for that reply. But may I ask him to clarify why there is a delay in dealing with the pricing policies of the major European airlines? In fact, as they stand now, the pricing agreements come as near to a cartel arrangement as one can imagine. In industry and commerce, the Commission is taking very intensive action against any sort of cartel agreement. In that particular instance, we had to postpone the time period for six years.
Lord Brabazon of Tara: My Lords, I assure the noble Lord that, as your Lordships will be aware, the Government have been doing all they can to promote liberalisation on European flights. The reason why the Civil Aviation Authority has to consider these applications is that objections have been made to some of them. That is why a hearing is to be held in March.
Baroness Burton of Coventry: My Lords, can the Minister tell the House from where the objections have come?
Lord Brabazon of Tara: Yes, my Lords. On some of the routes, British Caledonian has objected to Air Europe's applications, and vice versa. Both airlines have asked for a hearing. Other airlines have also objected and wish to be heard.
Baroness Burton of Coventry: My Lords, will the Minister elucidate which other airlines, please?
Lord Brabazon of Tara: My Lords, I understand that the other airlines are British Airways and Dan Air, not necessarily in respect of all the routes, but some of them.
Lord Underhill: My Lords, can the Minister give an assurance that the various answers that he has given in no way change the Government's view on bilateral or international agreements either in the Community or elsewhere? Is there any likelihood of a policy of cheaper fares being included in the prospectus for the sale of British Airways?
Lord Brabazon of Tara: My Lords, so far as the sale of British Airways is concerned, British Airways has always made clear that it would be much happier with a more competitive environment and would welcome any moves which make it less dependent on the requirements of competing carriers. As I said in answer to the noble Lord, Lord Kissin, we continue to press in Europe for a Europe-wide agreement and we shall, of course, continue to do so under the Belgian presidency. We should of course like to see more bilateral agreements, but it must be remembered that we already have several with the more liberal states and it is unlikely at the moment that we shall be able to achieve them with other states.

Business
3 p.m.
Viscount Davidson: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Caithness will, with the leave of the House, repeat a Statement that is being made in another place on bombing cases. This will be followed by my noble friend Lady Trumpington, again with the leave of the House, who will repeat a Statement on exceptionally cold weather payments.
It may be for the convenience of the House if I announce that the Committee stage of the Consumer Protection Bill will be adjourned at approximately 7.30 p.m. for approximately one hour, and that during this adjournement the Third Reading of the Ministry of Defence Police Bill and the Report stage of the Licensing (Restaurant Meals) Bill will be taken.

Business of the House
The Lord President of the Council (Viscount Whitelaw): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Allen of Abbeydale and the Lord Harris of High Cross set down for 28th January shall each be limited to 2½ hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Viscount Whitelaw.)
On Question, Motion agreed to.

Minors' Contracts Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that the Bill be now read a third time, and in so doing I should like to thank noble Lords on all sides of the House who have assisted its passage.
Moved, That the Bill be now read a third time.—(The Lord Chancellor.)
On Question, Bill read a third time, and passed, and sent to Commons.

Recognition of Trusts Bill [H.L.]
The Lord Chancellor: My Lords, I have it in command from Her Majesty the Queen and from His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Recognition of Trusts Bill, have each consented to place their respective prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill. I beg to move that the Bill be now read a third time.
Moved, that the Bill be now read a third time.—(The Lord Chancellor.)
On Question, Bill read a third time, and passed, and sent to the Commons.

Ministry of Defence Police Bill [H.L.]
Lord Trefgarne: My Lords, I beg to move that the Bill be now read a third time. As your Lordships may know, it was not certain at what time today the Bill would be taken. I am happy to move the Third Reading now.
I am grateful to all noble Lords who have taken part during the proceedings on the Bill, which was essentially a tidying up measure. There were no significant changes to the basis upon which the Ministry of Defence Police conduct their business. The legislation upon which they were operating was in some cases 150 or more years old. I am grateful to my noble friend Lord Inglewood for the contribution that he made during an earlier stage of the Bill and to noble Lords in all parts of the House who generally gave the Bill a warm welcome. On that basis, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Trefgarne.)
Lord Graham of Edmonton: My Lords, the Bill meets with the approval of Members on this side of the House. As the Minister is aware, members of the Defence Police Federation, who are more directly affected by the Bill, have said not only that they approve of the Bill but that they were properly, adequately and lengthily consulted on it. They have asked me to express to the Minister their appreciation for the manner in which he has dealt with the points they raised.
On Question, Bill read a third time, and passed, and sent to the Commons.

Consumer Protection Bill [H.L.]
3.5 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 4 [Defences]:
Baroness Burton of Coventry Baroness Burton of Coventry moved Amendment No. 39:
Page 4, leave out lines 6 to 10.
The noble Baroness said: In rising to move Amendment No. 39, I recall with real pleasure three points made on Second Reading. First, with one exception, all speakers welcomed the Bill; secondly, it was stated more than once that this was a non-party measure; and thirdly, that we wanted the Bill on the statute book as soon as possible. Apart from, or additionally to, your Lordships' House, consumer organisations feel strongly that there is a major flaw in the Bill. That was my opinion and the opinion of many Members, of all parties and none, in this place. The Committee will have noted that the amendment is signed by the noble Baroness, Lady Elliot of Harwood, and the noble Lords, Lord Williams of Elvel and Lord Allen of Abbeydale. That gives me the satisfactory feeling that what we are asking for represents an all-party attitude.
I said on Second Reading (col. 1014 of Hansard) that I believed
"that a major flaw in the Bill is what is termed the development risks defence".
That is what our amendment seeks to delete from the Bill. Before embarking on what I would call the debit side of this measure, I think it only fair to say that consumer organisations welcome the provision that under the proposed new law all the consumer has to prove is that there was a defect in the product and that the defect caused the damage complained of. Previously, as the Committee will be aware, the injured party had to prove that the manufacturer was negligent in allowing the defect to happen.
Having expressed appreciation, I move on to our major worry. That is the let-out that has been given to producers. Put simply and succinctly, it is: if producers can show that given the state of scientific knowledge at the time the product was designed they could not have foreseen the problem. This is the development risks defence contained in Clause 4(1)(e) lines 6 to 10 which we seek to delete.
As the Committee will be aware, France, Belgium and Luxembourg do not intend to allow the development risks defence and the Federal Republic of Germany will not permit the defence in cases involving pharmaceuticals. I am sure that the noble Lord, Lord Lucas, is aware of that fact. I trust that the noble Lord, Lord Peyton, will also note the action taken by those four countries.
The CECG (Consumers in the European Community Group) feel that in the case of drugs there is a clear though unquantifiable risk that a product could be thoroughly tested in line with best current scientific practice and still result in injury, perhaps coming to light after some years. In such a case the manufacturer could show that if it had done all it could to ensure that there were no defects, no fault or blame could attach to it. However, if injury did result, the manufacturer is in a better position than the victim to meet the costs arising from the injury.
The National Consumer Council do not accept that strict product liability will harm manufacturers,
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stating that they will be able to insure their liability, while representatives of the insurance industry have made it quite clear that the effect of the new law on insurance premiums will be insignificant. I remember that fact was stated by the noble Lord, Lord Lucas of Chilworth, last night.
The council stresses the conclusion of both Law Commissions, supported by the Bar Council, which said:
"Where the product turned out to be unsafe we think the injured person should be compensated by the producer however careful he had been".
The Consumers' Association believe that the development risks defence should be dropped. It provides a gap in the law which might leave future victims of a thalidamide-type disaster without compensation. The association puts forward the point, with which I agree, that the costs of insuring against a defective produce ultimately paid by all the purchasers of that produce is a better way to deal with compensation for a product defect than individual victims having to bear the loss uncompensated. I have mentioned these three consumer organisations because all are well known to Members of the Committee, and their conclusions are much respected by experts and public alike.
During Second Reading the noble and learned Lord the Lord Advocate made a statement that I noted at the time. He said:
"We"
—that is the Government—
"believe that without the development risks defence, innovation would be stifled."—[Official Report, 8/12/86; col. 1004.]
With due respect that is nonsense. I thought so at the time and I have thought so since, having read various material that was sent to me. I should like to quote from two sources on this point: the Economist and the Consumers' Association. The Economist of 29th November states:
"The Confederation of British Industry is adamant that the burden should not fall on the producer: if it did, the argument runs, fear of damages would stifle innovation and make products uninsurable. They point to America, where underwriters have lost so much money on product-liability insurance that they are now loath to take on new risks.
"Yet Britain is different. It does not have the American system of punitive damages, generous juries in civil cases, and contingency fees—where lawyers take a slice of the compensation if they won and nothing if they lose. And even though the regime is much stricter there than it would be in Britain, American companies can hardly be accused of a lack of innovation."
The Consumers' Association, also speaking of the United States (where strict liability has been in force for over 20 years), says that industry has shown no signs of having been inhibited in its research and innovation. Adding to its argument, the Consumers' Association declares that in France strict liability for defects in products already exists, as it does in Germany for drugs. Neither country is backward in terms of industrial innovation and neither has sought to protect its industry from strict liability by introducing a development risks defence.
I return to the CECG—Consumers in the European Community Group—who declare that in opinion surveys the majority of consumers say they are willing to pay slightly higher prices if it means that injured users will be compensated. After all, manufacturers

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put goods on the market for financial gain and in fairness they should bear responsibility for that product. They can insure against such risks; consumers cannot. It must be accepted that suppliers can pass on their insurance premium costs to their customers while the victims cannot share the injury or the costs, financial and personal, arising from it.
In the summer I attended a seminar on product liability at which the Deputy Director General of the European Insurance Committee was one of the speakers. Mr. John Cowell, who is stationed in Paris, sent me a copy of his speech. I should like to take a few short points from it in the hope that the Committee would be interested. What disturbed Mr. Cowell in particular was the attempt at scaremongering by producers who claim, without any justification whatsoever, that unless the limited protection offered in this Bill is interpreted in a way favourable to industry we can expect to see in the United Kingdom the kind of crisis which is said to be rocking the United States. I think that the Committee would agree with Mr. Cowell that such a view simply failed to take account of the origins of the directive—which are to be found in Europe and not America. I suggest that we remember that. I would make the same point as Mr. Cowell. The absence of development risks defence in France, Belgium and Germany has not led to an American-style epidemic of litigation or to product liability rates rising sky high. Why then should the United Kingdom be any different, especially since the aggravating factors in the United States are wholly absent in the United Kingdom?
We are speaking of the insurance of the producer in respect of products circulating within the European Community, and not insurance in respect of European firms exporting to or operating in the United States. However much some pessimists may protest, it cannot be denied that industry in France and Germany has long learned to live with liability for development risks and is certainly far from being at a competitive disadvantage compared with the United Kingdom. Furthermore—I thought that this was important for the Committee—the insurance industry must accept that there are no serious indications of any serious differences in insurance costs between France and Germany on the one hand and the United Kingdom on the other.
I should like to stress again that this is a European product, not an American import. All consumer organisations, as well as the three major ones that I have quoted, believe that the cost of insuring against a defective product ultimately paid by all the buyers of that product is a better way to deal with compensation for a product defect than individual victims having to bear the loss uncompensated.
There is much more to say and many respected and qualified speakers to say it. I beg to move.
Lord Williams of Elvel: I should like to support the noble Baroness in the amendment she has just moved. For the convenience of the Committee I should like to speak also to Amendment No. 54. Perhaps I ought to point out to the Committee that there is a small printing error in Amendment No. 54. I am advised that in Amendment No. 54 subsection (2)(b) should
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read: "In Scotland to the Court of Session" rather than "in Scotland to the Court of Sessions" in the plural. I apologise for that error.
I have no intention of repeating the arguments that the noble Baroness deployed so very eloquently in support of Amendment No. 39. I make one point. As the noble Baroness said, France, Belgium and Luxembourg intend not to avail themselves of the derogation under the directive, and whereas yesterday the Government had a fair point in the debate on agricultural produce—that we should not be out of line with the rest of the Community—in this case the onus of proof is on the Government to demonstrate why we should be out of line with the rest of the Community.
I should like to address myself specifically to the insurance matters which members of the Committee raised in a debate on another amendment yesterday and which are the object of Amendment No. 54. If Amendment No. 39 is accepted, Amendment No. 54 will be moved in its proper place. However, I must assure the Committee that if Amendment No. 39 is not accepted, Amendment No. 54 will not be moved. I believe that that is the proper procedure.
The noble Baroness made certain observations about the insurance problem in relation to development risks, and I shall not go over the ground that she has already covered. However, in view of the discussion that took place yesterday and discussions that have taken place since our Second Reading debate, I think that it is appropriate to look a little further at what I described yesterday as being the insurance problem, if indeed there is one.
The reason for insurance is to enable a balance to be struck between proper consumer protection and the promotion of research and development and proper innovation in the United Kingdom. It is clear that such a balance has to be struck. I think that it would be quite wrong for my party, or any noble Lord, to say that the balance has to come down very strongly one way or the other. The whole point is to strike this balance. We accept that there are certain high-risk areas which have been identified—notably aerospace and pharmaceuticals—which may in the future cause a problem. I say "may" because we are here dealing with hypothetical problems. We are asking ourselves the question: what will happen if the development risk defence is allowed or if the development risk defence is excluded from the legislation?
Like all hypothetical problems there are hypothetical answers, and like all hypothetical answers there are very many versions of the answer. A number of people believe that there will be no particular problem with either the availability of cover or the cost of cover if the development risk defence is not allowed in the legislation. On the other hand, others believe that there will be such a problem. I do not think that any noble Lord can be entirely confident of what will be the practical outcome either way when the legislation is in place as to exactly what amount of cover will be available and what rates will be charged for that cover. However, even if these are hypothetical problems, they are nevertheless problems, and we must address ourselves to them.
Amendment No. 54 was drafted on the basis of what I take to be the Government's position after the

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debate of yesterday. It was summarised by the noble Lord, Lord Lucas, when he quoted the brief from the Association of British Insurers which said that, provided the development risk defence was allowed under the legislation, there would be no significant problem in insuring product liability in the Bill as it is at present drafted. I take that to be the Government's present view on the matter.
This view was challenged by a number of Members of the Committee in debate yesterday. A number of them said that they were very much more pessimistic about the availability of insurance even under the Bill as at present drafted, if it is passed in its present form. Therefore I think that the Government have a problem to satisfy the Committee that even under the present arrangements as proposed there is sufficient insurance cover available, and would be sufficient insurance cover available, without some other arrangements being made.
The suggestion that we make in Amendment No. 54 is designed to produce an insurer of last resort. Given that the problem is hypothetical, given that it may not exist, given that the commercial market may be able to cover all risks, including development risks, at reasonable rates, then of course there is no problem. As I said yesterday, I think that this is a moving target because one can never tell for all time whether necessary insurance cover will be available. Given that it is a moving target, in our view arrangements have to be made to make sure that insurance can be provided even if the commercial market does not do so.
Since drafting this amendment, and since listening to the comments of some Members of the Committee yesterday, if I had had the opportunity I might even have left out the words in line 3 of Amendment No. 54,
"in respect of development risks".
If it is true that even under the Bill as drafted there will be an insurance problem, then all the more reason why there should be some standby provision in those cases. Therefore, the Government have to demonstrate, first, that the ABI position is right and that they are satisfied that there will be cover in the Bill as drafted. Secondly, they must demonstrate that the arguments of the noble Baroness are wrong, and that if the development risk defence is excluded from the Bill there will be a significant uplift in premiums or a significant reduction in insurance capacity.
The hypothetical problem of course becomes very real when one considers that France, Belgium and Germany in respect of pharmaceuticals and Luxembourg, as the noble Baroness pointed out, will not be allowing the development risk defence. Therefore, when the directive is implemented in national law by those countries, any United Kingdom company wishing to do business in those countries will have to have development risks insurance. It is not an option that is confined only to the United Kingdom. It will have to happen anyway, as indeed any United Kingdom business doing business in the United States must have such liability insurance. If there are doubts about the capacity of the insurance industry in the United Kingdom, or indeed in the world, to satisfy producers, then it is fair that these doubts should be
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addressed in very real terms now, because whatever the Committee says about Amendment No. 39, this will become an issue in the future when the directive is fully implemented.
There are certain noble Lords who I believe would argue that this solution should be left to the free market; that there is a price at which insurance is available—there is a price at which insurance is available for anything. There is the famous case of the legs of Miss Betty Grable which, as I understand it, were insured by Lloyd's at the appropriate time and for the appropriate sum. It is the appropriate sum which is important, because here we are dealing not with a distinguished pair of legs and limited liability but, as was said by the noble Lord, Lord Airedale, with unlimited liability. My question is whether the free market is able to cope with problems of unlimited liability. I suspect that the noble Lord, Lord Airedale, was right when he said that no underwriter in his right mind would write a policy involving unlimited liability.
Some of us do not believe in the free market solution, but believe that the free market will on some occasions simply dry up. Indeed, I think that the thrust of remarks made by a number of Members of the Committee yesterday was that the insurance capacity would simply not be available; in other words, the free market would dry up. There is no price at which cover is available.
Our suggestion is that there should be an insurer of last resort. This is analogous to the position in New Zealand where there is a government-sponsored arrangement which provides insurance in respect of product liability. Perhaps I may pursue an analogy. I would point to the export credit arrangements which exist in the United Kingdom. This is partly to answer noble Lords opposite who may be tempted to say that it is no business of government to become involved in guaranteeing or insuring liabilities. Export credit arrangements, through the Export Credits Guarantee Department, are such that business is done by X companies exporting to countries and unless it is insured by the Government or through a government agency that business would otherwise not be done. There has been an insurer of last resort.
Now, before Members of the Committee jump up and down to say that the ECGD itself is in some form of trouble or difficulty and not a very good example, I would simply point to Coface in France, Hermes in Germany and other institutions in other parts of the world which perform the same function and which are joint ventures between government and private sector insurance interest.
Amendment No. 54 is, first, based on the Government's own position and addresses itself to what would happen if Amendment No. 39 were accepted. I repeat that if I were to draft this amendment today I might not be accepting the Government's position and would draft it somewhat wider. The amendment is designed to meet the problem if the development risk defence is removed, and this it does.
The amendment would also be designed to make sure that no producer suffers in the event of the commercial market being unable to offer cover at a rate which in all circumstances is reasonable. The

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exact mechanics of how this would operate would take up too much of the Committee's time and it is not something that I would wish to dwell on today. Nevertheless, I believe that the principle of Amendment No. 54 is one which the Committee should find acceptable because it closes this circle and arrives at the proper compromise between allowing proper research and development and product innovation in cases where there is no commercial insurance cover.
Lord Bruce-Gardyne: If I may—
Lord Williams of Elvel: Perhaps I may just finish. At the same time we believe it will come anyway because until the Government show us why, we do not at present accept the view that in all cases there will be proper cover even under the Bill as drafted if it becomes law.
3.30 p.m.
Lord Bruce-Gardyne: I apologise for interrupting the noble Lord but I had a suspicion that he was coming towards the end of his remarks. I had hoped that before he did he would comment on the assumption of the noble Baroness, Lady Burton, that in this country we were in no danger of the American experience with contingency views—so-called ambulance chasing—which could have a dramatic impact on the cost of accepting Amendment No. 54.
Lord Williams of Elvel: I am grateful to the noble Lord. He is repeating a remark he made in his intervention of yesterday. Indeed, I did say that I was somewhat doubtful about the possibility of avoiding such developments. I was sternly reproved by my noble friend Lord Morton of Shuna, and indeed others, both in the Scottish Law Society and the English Law Society. They sternly reproved me for my remarks that it could not possibly happen here. My mind is open on the subject, but certainly my friends who are members of those two societies have reproved me for the remarks that I made.
Lord Denning: At Second Reading I was in favour of strict liability even for these exceptional products. After further thought I have come round to the other view and would not accept this amendment. The first reason is that it is most important that the law of every country in Europe should be the same upon this matter because these companies which research into drugs and the like operate in Germany, England and Italy, and therefore the law and the liability ought to be the same for every country in the European Community.
After canvassing the opinions of, I presume, all the countries in the European Community, the directive has allowed the state of the art defence, and in those circumstances it has put in Article 7:
"The producer shall not be liable as a result of this directive if he proves",
that the defect did not exist at the time. The directive goes on:
"the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered".
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That is the provision which is put forward. I have no doubt it was as a result of or was influenced by the American experience.
What brought me round more than anything else is a report in The Times today about a drug which has been produced by a United Kingdom company in regard to AIDS. The article says:
"An advisory panel has recommended the sale by prescription of a drug developed by a British-owned pharmaceutical company which has so far proved to be the only one effective in fighting AIDS".
This is by a well known company, Burroughs-Wellcome. But Burroughs-Wellcome, when producing and putting this drug on the market, warn of the dangers of the side-effects which it may have, and it should be used only under the most careful consideration by doctors and the like. The article deals with the various side-effects which the drug may have but which are not known at the moment until it has been further investigated. It has been recommended that the drug should not be given to sufferers of illnesses where benefit has not yet been proved.
So far clinical trials have tested tolerance of the drug over a certain time. The article says that about 80 million dollars—it may be even more than that but I cannot read my handwriting nowadays—an enormous sum has already been put in to develop this drug.
Is that scientific experiment, that testing of the drug, not of the first importance to humanity? It may cause defects and side-effects in some patients. Is this company which is doing such valuable research, and is testing the drug in this way, to be strictly liable to a person who suffers side-effects in the course of it?
That is the problem and that is the reason why I have been coming round. It seems to me that this British company ought to be able to develop this drug, ought to be able to experiment with it and ought to be able to test it on patients without being liable to any patient who happens to have unforeseen side-effects.
It is the experience of that British company which has brought me round to thinking that we ought not to put strict liability on this because it may hamper most valuable research and most valuable tests in regard to drugs which ought to be taken for the benefit of humanity as a whole. I gather that is the defence which has been accepted, or put forward, in the United States because they have enormous problems. They have been holding strict liability for years and it has become an enormous problem. The burden which has been placed on insurance companies and the community as a whole by reason of these liabilities may be partly due to the juries, contingencies and so forth, but undoubtedly in the United States it would be right to limit strict liability to allow the defence of the state of the art.
I return to the point concerning insurance and Amendment No. 54. Is it right that the state should bear the burden and be the insurer if a person is under a strict liability? Ought the state to pay for any of the side-effects and so forth? I would suggest not. If it is the case that the insurance premiums would be so high that the insurance were virtually unobtainable by these people doing research, then I say that is a ground for not having strict liability at all but for having this exception which has been put in for the moment in the

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directive. It is allowed in the directive and there are provisions for further consideration by other countries so that the desirable result of uniformity of liability throughout the Community can be achieved. So at this moment I would not be in favour of the amendment.
3.45 p.m.
Lord Peyton of Yeovil: The fact that the noble and learned Lord, Lord Denning, should have changed his position in this matter, as he has just said, is a development which could hardly be more welcome to those who, like myself, see in the amendment a very great source of danger not only to British industry but also to the consumer. I apologise to the Committee if I repeat some comments which I made yesterday, but when this high-sounding cause of protecting the consumer from all and every possible danger is pursued too far, then there is at least the possibility that the consumer himself will suffer: (a) in having to pay a higher cost than would otherwise be the case, and (b) from the possibility that he may not have made available to him the goods or commodities which he seeks.
May I just remind the Committee that the defence which it is sought to remove from the Bill is one of very limited application? It only covers those defects which were not known and could not have been known at the appropriate time. Any knowledge of such a defect, any awareness of the possibility of one, would defeat the defence. May I remind the Committee that the liability which would be imposed upon manufacturers, if this amendment were accepted, would be unlimited and unquantifiable?
Reference has been made by the noble Baroness, Lady Burton, in moving the amendment, to the experience in other countries. It is quite difficult for those who are not learned in the law to state with any precision what the law is in our own country. To say in a few sentences what it is in Germany, France and the United States—and not just in the United States, but in every state of the United States—is a little more difficult, and it might, I suggest, be very misleading indeed. In point of fact, I understand that in Germany special arrangements have been made for insurance and also total liability and individual liability are limited. There is no proposal of that kind incorporated in or accompanying this amendment.
The aim here is to impose strict liability. The purpose of it is, I suggest, at least as much to punish as to compensate, and in any event, whether that is accepted or not, I have absolutely no doubt that the effect will be to deter. It has been said that manufacturers produce for their own good and therefore if something goes wrong they must pay. I suggest that that is a slightly simplistic and naive view. Of course, manufacturers—like others in the community—are influenced in regard to their own good and the good of the businesses they run. But I think most manufacturers would claim, and would be proud to claim, that they render a service to the community. The more burdensome their task is made, the less likely they are to be willing to pursue it.
I detect in this country only too often an ambivalent attitude towards industry. We wish to encourage
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industry, we wish to encourage innovation, we say how important employment is and yet, when it comes to the crunch, it seems to me that we are in very grave danger indeed of imposing yet another burden upon industry which will certainly, in my view, have the effect of curtailing people's willingness to engage in areas where there can be no certainty of eliminating all defects. This applies particularly in areas of high technology.
I ask the Committee, in deciding the fate of this amendment, to consider how important are research and development. How often have we heard in your Lordships' House the lamentation going up that British industry is woefully deficient in its performance in research and development? I would beg the Committee to appreciate that it is very easy to remember the things that go wrong, but the Committee should recall the great benefits which are conferred upon the public by new and advanced products.
I was in the United States recently when some new cancer drug was announced at a very early stage of development, when I understand it could not possibly be made available to the public. But immediately there was, very understandably, a demand from many people, because they were suffering the agonies of cancer, for the drug to be made available to them. They said they were prepared to take the risks. There have to be some precautions before drugs and other new products are released upon the market; no one challenges that. But to impose, lightly and in a facile manner, further obstacles to innovation I think would be a very great error and one which the Committee would regret.
Much has been made, I think quite rightly, of the question of insurance. I must admit to being a director of an insurance company. I have not sought the advice of that company on this issue at all and perhaps I should have. But I wonder how much research the British Insurance Association has done on this matter before tendering the rather glib, smooth advice that it has done. "Oh, adequate cover will be available."
This brings me to Amendment No. 54 which has been mentioned by the noble Lord, Lord Williams of Elvel. I entirely share the doubts expressed by the noble and learned Lord, Lord Denning, as to whether it would be right to put this kind of liability upon the state. But leaving that aside, the two questions of how much insurance would be required and how much it would cost are left unanswered. In my view, the question of whether cover would be available can only be answered with great uncertainty. What can be said with some certainty is that the cover would be much more costly and that it would also be limited in its effect. Those two points will be much in the minds of industrialists who are embarking upon new products.
May I remind the Committee that we are not necessarily concerned with huge industrial companies which, it could be suggested, might be their own insurers—though I think they would probably be reluctant—but that in many instances innovation comes from small companies. This should be encouraged, and they should not be left facing a pressure of this kind which would in fact almost certainly make them think again.

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I go back to where I started. I think it very easy to be led down the road of consumer protection without considering adequately the cost not only to producers but also to the consumers themselves. I hope that the Committee will think long and hard before accepting an amendment, moved with great eloquence and conviction, as one would expect, by the noble Baroness, but I believe mistaken and, in its consequences, much more serious than has been suggested.
Lord Ezra: I have been involved in industry all my working life, in the public and then in the private sector. I fully support the view that we should do everything possible to regenerate industry in this country and give every opportunity for innovation, development and skill to be stimulated. On the other hand, we are here concerned with the Consumer Protection Bill. Therefore, as the noble Lord, Lord Williams, said in his address, we have to find the right compromise.
We are here at one of the crucial issues that this Bill raises, and for the consideration of which the Committee, with its combination of experience and talents, is well suited to debate before reaching a conclusion: how do we reconcile the need to stimulate and facilitate innovation in industry with the need to protect the consumer? That is what we are talking about and what is heightened by this particular amendment so effectively moved by my noble friend Lady Burton.
There are ways in which this could be done. We must reflect on those ways. The noble Lord, Lord Peyton, said that innovation is not necessarily restricted to the larger enterprises but is done by a number of smaller enterprises. That is perfectly true. But we are basically talking here, where the risk is largest, about two major sectors of industry: the pharmaceutical industry and the aeronautical industry. These are dominated by very large concerns.
Let me mention my experience in the coal mining industry, with which I have some association. The thing that we knew was uncertain in our affairs was whether we were likely to have a mining disaster or not. That is something which could not be forecast any more than the problems arising from innovation can be forecast. We decided at an early stage that this was something on which we had to bear the insurance responsibility.
Naturally that cost had to be recovered from the price of the product, and that we did. In the time that I was in the industry, which lasted for many years, when we totted up the burden that we had to carry in dealing with that problem—and unfortunately we had a number of mining disasters—we decided that we had taken the right step. We had dealt with that internally and passed on the cost, which would have been less than if we had dealt with it an any other way.
I believe that we should seriously consider possibilities of compromise between these two interests; the interests of industrial innovation on the one hand, and consumer protection on the other. My noble friend Lady Burton mentioned that she had the impression that the view was that consumers of pharmaceutical products, for example, would be quite
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prepared to pay a little more if they felt that they would be protected against some unforeseen, unforeseeable development. In other words, it is a question of whether we feel that the risks of innovation should be spread or not spread. That is the issue that we face. Should we spread the risk among the multitude of consumers who ultimately have to pay, or should it be concentrated on those who are unfortunate enough to suffer from some innovation which has gone wrong? I believe that that is the big issue that we have to face in our consideration of this problem today.
I would submit to the Committee that, before we come to a decision here, we consider this important social and moral aspect: should the risk be spread, or not? Of course if we spread it, then everybody has to contribute towards it. But if the risk is concentrated then the unfortunate few will suffer immeasureable damage. That is the probem we have to face.
The noble Lord, Lord Williams, suggested another way of doing it by an insurance system of last resort, which has been tried out in New Zealand with some success. We need to consider all these aspects seriously in the Committee before we decide on this important issue. I am prepared to say, before I conclude, that if we were to decide in favour of what the Government propose, the time will nevertheless come at some future date when, under public pressure, we should have to revise that position.
Baroness Elliot of Harwood: May I add one word from these Benches. I am speaking now for myself, as I have been associated with consumer activities and the Consumers' Association for so many years. I agree entirely with what has been said by the noble Baroness, Lady Burton, and also by the noble Lord, Lord Williams of Elvel. We have here a matter that we have to look at in an unbiased and unpolitical way.
Of course we are all in favour of enterprise. Of course we are all in favour of giving as much assistance as possible to enterprising people for what they do and for what they discover, and in the pharmaceutical industry in particular. But I do not think that it is right that when something goes seriously wrong, as we all know it did over the thalidomide business, that then there should be no resources that the consumers can call upon to help them with their disaster. Here we have an opportunity, as the noble Lord, Lord Ezra, said, which is of vital importance.
According to what I have been told—and I have here a brief from the consumers—it is not going to hamper enterprise; it is not going to stop people from inventing new things. As the noble Lord, Lord Ezra, said on the aircraft industry—about which I really do not know anything except what I have read in the newspapers—it will not hamper that.
In all other countries that have it, such as Japan, the United States and Germany, these regulations do not hamper their interests. The Japanese, as we know, are inventing things the whole time, and therefore it obviously cannot have a serious effect. From the consumer point of view, I am sure that the noble Lord, Lord Ezra, and the noble Baroness, Lady Burton, are right in saying that this is something about which, if we

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do not make this gesture now, we shall have to make it at some other time. This is an opportunity to do it in this important Bill that we are all supporting, and I hope that the Government will accept this amendment.
4 p.m.
Lord Bruce-Gardyne: I hope very much, unlike my noble friend Lady Elliot of Harwood, that the Committee decides to reject this amendment by a sufficient majority to ensure that we never hear of it again. I have great sympathy with the arguments advanced by my noble friend Lord Peyton. I confess I find it impossible to share the conviction of my noble friend Lady Elliot that the passage of this amendment would not impede the delivery of products to the consumer, let alone the impact that it would have on the cost of such products.
I listened carefully to the eloquent speech of the noble Baroness, Lady Burton, in introducing the amendment. I think I understood her to say—I do not believe there is any dispute—that the effect of approving this amendment would be that a product would be thoroughly tested in line with current product testing, but subsequently could prove to have deleterious side-effects and that, thanks to the passage of this amendment, those who suffered from the deleterious side-effects would still have remedy against the manufacturer or supplier. I do not believe there is any dispute that that is the purpose of the amendment.
I am led to understand, though I do not know whether it is true—Members of the Committee who are more learned in these matters will correct me if I am wrong—that aspirin would not be permitted on the market today under the current testing procedures. I suppose it is theoretically possible that the manufacturers or the suppliers of aspirin would be faced by potential liabilities under the passage of this cause, because, as I understand it, it most certainly is a drug that can have quite deleterious side-effects. The noble Baroness might prefer not to have aspirin on the market. It is about the only drug that I ever take, and I should be sorry to be without it.
The noble and learned Lord, Lord Denning, mentioned the relevant point of the development of an AIDS drug which might be effective against the disease but which almost certainly could have serious side-effects. If I were a sufferer from AIDS I should settle for the side-effects if that enabled prolongation of life, which is presumably the purpose of the drug. It horrifies me that we should be invited to contemplate putting on to the statute book legislation which might make it impossible for drugs of the type to which the noble and learned Lord, Lord Denning, referred to be available to the customer.
Lord Williams of Elvel: Will the noble Lord accept that, in the case of the drug mentioned by the noble and learned Lord, Lord Denning, and by himself, the side-effects are known? So we are not talking about development risks which are covered by this defence.
Lord Bruce-Gardyne: I am not sure that that is necessarily true, with great respect to the noble Lord,
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Lord Williams, because some of the side-effects may be known. It is possible that there are other side-effects which are not known. I should not dream of putting words into the mouth of the noble and learned Lord, Lord Denning. But his point, as I understood it, was that here is a drug which could help to prolong life for people whose expectation of life is otherwise very small, but which might have deleterious side-effects that one could not accept with some other drugs. Yet it be caught by the nature of the amendment were we to accept it.
There has been much understandable reference to the thalidomide experience. I suggest that there is another side to that quandary. I was told some years ago—again, noble Lords far more experienced in these matters will correct me if I am wrong—that following the thalidomide experience, the length of time involved from the discovery of a drug to its availability for sale is three times what it was previously. As my noble friend Lord Peyton pointed out, we need effective safeguards against the marketing of dangerous products or drugs with dangerous side-effects. What we tend to overlook is that during the extra eight years that the development of drugs may now take, many times the number of people who suffered from the thalidomide drug are denied the benefit of access to a drug which might have saved their lives or at least saved them from great discomfort and misery. If we were to approve this amendment, it seems logical to conclude that the preparation, the timelag between the identification of an effective drug and its marketing, would be further prolonged. I cannot believe this to be in the interests of consumers.
Lord Donaldson of Kingsbridge: I am not quite clear on this point. Is the noble Lord saying that the time taken to make sure that a drug is safe should be reduced? He suggested that people might die if it were reduced longer than necessary. Of course that is true. But equally, if it were reduced too quickly, people might die from it. I do not think there is an argument that the noble Lord has used which makes any sense.
Lord Bruce-Gardyne: I think it was the noble Lord, Lord Ezra, who referred to the need to strike a balance. I am saying that discussion on issues such as thalidomide sometimes seems to be exclusively concerned with those who have been found to suffer from the side-effects of a drug which has been produced and which has proved subsequently to have deleterious side-effects. Not, seemingly, put into the balance are those who, because of the prolonged period now required for satisfying conditions before a new drug can be marketed, are denied for many years access to a drug which might have relieved their suffering or even prolonged their lives. That is a logical consideration in the context of this amendment, one of the likely effects of which—if it was passed—is that it would take longer for manufacturers in the pharmaceutical industry to satisfy themselves that they could cover the potential hazards that marketing a new drug could involve.
Finally, I want to say a brief word about costs which has been slightly cavalierly dismissed by the promoters of the amendment. The noble Baroness, Lady Burton, said that we were assured by the insurance industry

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that insurance cover would be available. I do not want to go over the ground we discussed last night. But the noble Baroness referred to the comments of Mr. John Cowell. I received, like other noble Lords, the communications from the Consumers' Association in which reference is made to the comments of Mr. John Cowell, the deputy secretary-general, Comité européen des Assurances, which the noble Baroness quoted. What I did not hear her quote, which seems to me to be crucially important, is that the availability of this assurance would be subject to appropriate premium loading. Indeed, it would. And in many instances we can be sure that the appropriate premium loading would be quite material in terms of the end product. I note that the message we have received from the Consumers' Association ends by saying:
"We think that consumers should be prepared to accept that additional cost, and urge Parliament to exclude the development risks defence".
I am not sure that the Consumers' Association is entirely entitled to make such assumptions on behalf of the generality of consumers. I am not sure what research it has done to satisfy itself that consumers share its views in these matters.
In conclusion, I want to refer briefly to what the noble Lord, Lord Williams, said in support of Amendment No. 54. I agree with him that it would be essential to have some such device, if the amendment were accepted. However, I do not find it particularly attractive that we should pass the burden of this additional expenditure from the users of the end product to the generality of taxpayers, which is what is involved in the amendment. I cannot think of a surer way of bringing the contingency fees experience from the United States to this country than ensuring that all the lawyers have the taxpayer behind them.
Lord Mottistone: I should like to add only briefly to what my noble friends Lord Peyton and Lord Bruce-Gardyne have said because they have covered most of the ground. To re-emphasise one point, innovation provides innumerable benefits to society and the consumer benefits from that. These benefits are produced by large and small companies. If the amendment is accepted, the small companies in particular will be frightened away from trying the advanced research upon which this country's benefits depend entirely.
The noble Lord, Lord Ezra, said that we do not need to bother about them; there are only a couple of big companies that we are concerned with. He went on to compare them with the coal industry. It is not quite like that. On the one hand the small companies often start something good, and maybe the big companies will take it on later. The big companies in research and development are not one large mass of business; they are a lot of separate projects within a business. One project may be dropped and another adopted, but it is the projects about which we are concerned and not the total activity of the business. The noble Lord, Lord Ezra, and the coal industry had to produce coal and so they had to risk people. They had to take the risk; they could not stop.
Research and development within a big or small company can be stopped, and the danger of the amendment is that it will be. Whether or not the
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insurance cover is there, there is the danger all the time of being held liable.
The noble Baroness, Lady Burton, said that the consumers were prepared to pay slightly higher prices. It is a question of whether the prices would be only slightly higher. We have heard of evidence that they might be a great deal higher. Even if they were, what the noble Baroness, Lady Burton, omitted to take into account is the fact that the consumers will pay slightly higher prices perhaps for less valuable products—I am talking not just about jobs but any sort of product—in the sense that they will not be as advanced as they otherwise would have been because the research and development will have been shied away from as a result of passing the amendment.
I want to touch briefly also on the question of other nations and what they are doing. I think that this needs looking into. In the case of West Germany there is strict liability, particularly in relation to drugs, and the necessary legislation was passed in 1976. There are individual and total limits of liability, and cover is provided partly by domestic insurers and partly by a re-insurance pool, known as the Pharma pool, of domestic and foreign insurance.
All that is a special arrangement, and no doubt the noble Lord, Lord Williams, will think that Amendment No. 54 would go towards that end. The point is that this arrangement was already in existence before the directive came to be discussed. It is something with which we should have to agree if we traded with Germany, but it would then govern whether we traded with Germany. Cermany is not the only country in the world in this position. There are others that do not have these protections. The German position is therefore a special case.
France, it is sometimes claimed, already excludes development risk defence, but the situation in France has always been unclear. The French equivalent of the CBI has always taken the view that the French system for tort actions is based on fault for unforeseeable risks and the absence of case law makes the issue at least open to genuine doubt; and so that is not firm.
If I may turn to the United States without going into a lot of detail and come back to my original point, there is evidence that an increasing number of companies, small and large, because of the present legislation are not taking risks with the high development new projects to the extent that the country as a whole would like. As I understand it, the Americans are therefore moving to restore a uniform product liability law based on fault for design and failure to warn cases, which is very different from what we are talking about here. Thus there are tendencies for the United States to move away from the extreme product liability position in which it now is.
Finally, there is Japan, which is really the competitor. Japan is not in any case likely to prejudice its competitive position by introducing liabilities to development risks. Its position is very much looser, if that is the right phrase, than our legislative position will be without the amendment or, indeed, than the present legislative position is in this country.
That is the competition in the world that we have increasingly to take into account. In this area of high risk research and development, the world is a very

835
small place and we are utterly dependent on success in exporting anything and everything that we can, because that is how we exist as a country. I implore the Committee to bear that in mind and the fact that the consumer's risk in the end is oh, so small. It is important not to discourage people from trying to do things that improve our lives and give us drugs and other facilities that will make them better than they are now.
I therefore implore the Committee, if this amendment is unfortunately taken to a Division, to vote against it.
4.15 p.m.
Lord Donaldson of Kingsbridge: Will the noble Lord expains what he means by saying that the consumer's risk is "oh, so small? The consumer's risk is death—that is what we are talking about.
Lord Mottistone: The consumer's risk is death, but so is it if he walks across the road outside this building. In the last resort one must accept the fact that we are all at risk whatever we do. If we walk out of the Chamber we may trip over another noble Lord and break our necks. It is ridiculous to carry this to such a narrow point that one does not allow anything for development and improvement.
Lord Auckland: I believe that we are in danger of having a consumer versus the rest altercation in the Committee. I have sat through the consideration of at least a dozen consumer Bills during the time I have been in your Lordships' House and, as I think I said on Second Reading, this is undoubtedly one of the most important.
When we look at product liability we have to consider one overriding matter; that is, whether the consumer will always take note of what the producer of the product says on the product itself. This is germane to the amendment.
I want to say a word or two on the insurance aspect, which I think is covered in Amendment No. 54. I declare an interest, completely non-financial, as president of the Institute of Insurance Consultants and as an honorary vice-president of the RoSPA, so in a sense I have a foot in both camps.
I can see substance in the amendment of the noble Baroness, Lady Burton, except, I think, as the old test of product liability, for reasons which I gave just now. I wonder what research has been done into the fact that product liability insurance is unobtainable in the insurance market. It may be expensive. My mind goes back to the early 1950s, when I practised in Lloyd's of London. I was on the claims side of the syndicate and I remember then, particularly in the United States, some of the horrendously expensive claims arising from the workman's compensation Acts, product liability and so on.
I believe here that the insurance industry has a duty to consult with the producers themselves and see whether some arrangement can be made to keep premiums at a reasonable rate. That is done in other branches of insurance. Of course one must sympathise with the smaller companies who may find that they are
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having to pay premiums much in excess of what they can afford for these risks, but I think it is very important for the consumer as well as for the producer that this consultation should take place. It should have taken place already and, if it has not, now is the time for it to be done. On that basis I am bound to say that it is a fact that research is much more advanced than it was say, 20 years ago. Twenty years ago this amendment would have been extremely relevant, but I am not at all sure that it is now.
Lord Jacques: All my life I have belonged to a consumer movement, and naturally I believe that if a consumer suffers because of defects in a product he should be compensated, whether there is negligence or not and whether it could have been foreseen or not. I also believe that the manufacturer and the whole body of consumers, who ultimately pay, should not have unlimited liability. I believe there should be a great limit on their liability. I therefore not merely support Amendment No. 39 but I also strongly support Amendment No. 54. Indeed I would go much further than Amendment No. 54. I believe that the limits of liability should be far greater than they are in that amendment.
We have a habit of following America, probably more than other countries of Europe, perhaps because we are using the same language. I can therefore see that in the future we would have some huge claims for compensation arising out of this legislation. Accordingly, I should like to see limits of liability and I believe, with the noble Lord, Lord Ezra, that if we do not limit liability more strictly than we are proposing now, we shall be obliged to do so at some time in the future. Let us do it before we are obliged to. I should like to see the Government accept this amendment and say that they will come forward with another clause which limits liability even more strictly than Amendment No. 54. I would support that.
I am sorry that the noble and learned Lord, Lord Denning, has left the Chamber because I wanted to reply to some points that he raised. In the course of changing his mind about Amendment No. 39, he made two statements. Today he said that he wanted this to be consistent with the rest of Europe. That was his main point. On other occasions I have heard the noble and learned Lord saying that he was not prepared to accept directives hook, line and sinker. He apparently does it at his pleasure—sometimes he will and sometimes he will not—and not because he wants consistency with Europe. He said yesterday that to limit liability was to go against the whole policy of English law. If to limit liability is against the policy of English law then English law needs altering, and Parliament is the proper place to make the alteration.
4.30 p.m.
Lord Allen of Abbeydale: As a supporter of this amendment, I should like to say a few words backing up the proposals made what now seems a long time ago by the noble Baroness. I was very glad to hear the noble Lord, Lord Peyton of Yeovil, in an admirable speech (with practically all of which I disagreed) begin by reminding us that this is an issue which in practice will arise very rarely indeed. It is also worth bearing in mind that the Minister has more than once been on

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record as saying that the best estimates are that there will be no excessive rise overall in the cost of insurance as a direct consequence of the directive being implemented.
There are these two particularly difficult areas of drugs and aerospace, and although I think personally that the risks here have been greatly exaggerated, there is an argument for having some contingency reserve, some insurance arrangement of last resort, as the Pearson Commission itself rcognised what now seems to be many years ago.
I will not repeat the very forceful arguments which the noble Lord, Lord Williams, put to us but I should like just to emphasise one of the points he made: that, whatever we decide on this Bill, industry in this country cannot just opt out of getting itself covered for development risks for export to those countries where that defence is not, and will not be, allowed. The CBI have done their level best to explain away what is going on in the rest of the world but, I fear, not very successfully. We have already touched on West Germany, which after thalidomide did legislate about drugs and will have no intention of revoking that legislation. I would remind the noble Lord, Lord Peyton, that the limits set there are very high.
For their part, the French find some difficulty, from my personal knowledge, in understanding what the development risk argument is all about. The test will be whether they derogate from this provision in the directive which this Bill is implementing. We have not heard much today—in fact nothing at all—about the provision in Article 15 allowing for countries to derogate from this position. I think that France will not be the only country to take advantage of that power. That, I fear, answers the point the noble and learned Lord made in his speech when he said that he wants to see the same law for Europe. So do I, but we shall not get it unless we all go for derogation. At present some countries will and some will not.
Going on from there to the argument about which people feel so passionately—the matter of innovation and the suggestion that the abolition of this defence would put an end to it—one does wonder a bit how the countries which do not have this defence have ever managed to struggle along and put up a performance which we in this country can hardly claim to have excelled.
The CBI said in their circulated papers that to dismiss the argument about innovation in a cavalier way is irresponsible, and we have heard today suggestions that it is facile. Yesterday I was told I was looking at the agricultural problems through narrow blinkers. I am tempted to reply to some of these epithets but I shall content myself with the very mild comment that, for my part, I see some sign here, I fear, of the reluctance of industry to recognise what is going on elsewhere—something which I hoped was becoming a thing of the past. While we have heard a lot about the interests of industry, what about the individual members of the community who will have to carry the whole weight if things go wrong and the manufacturers themselves can escape liability? The trouble is that the individuals are not organised. They do not have a CBI to represent their interests and most people do not worry too much about compensation for
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injury, unless and until it happens to them or to their families when, all of a sudden, it becomes extremely vital.
I certainly recognise that a good deal has happened since the Pearson Report and—taking up a point made by the noble Lord, Lord Bruce-Gardyne—I do not think that if we were reporting now we should say that to exclude development risks would leave a gap through which the victim of a thalidomide disaster might easily slip. I think that we would withdraw the word "easily". But, as the Minister himself accepted on Second Reading, the possibility of such a disaster cannot be ruled out altogether and the existence of such a risk, however remote, leaves a gap which simply ought not to exist.
The Government, as I understand it, think it absolutely vital that the development risk defence should be allowed, but at the same time they hope that by reversing the burden of proof and making it very difficult to run the defence it will never be practicable to raise it; and if there is anything in the insurance point I would have thought that what they have already done would have some impact on premiums. But the possibility of a thalidomide disaster is left open. As the noble Lord, Lord Young of Dartington, pointed out on Second Reading, if a company run this defence they will be put to great expense in parading the necessary evidence, so that those who seek to disprove the defence and establish negligence would be faced with such a horrific bill if they lost that they might well never start.
Before I leave that point, I should like to refer to something that has been raised by the noble and learned Lord and by someone else. If a drug is put on the market with warnings about side-effects and what have you, I personally do not see how it can be caught by the Bill in view of the provisions of Clause 3, or as Clause 3 will be when the Government have succeeded in making it intelligible. As chairman of MENCAP, I know a bit about the plight of families, when, for example, a child suffers brain damage, and, although money can do only so much, it can help to improve the quality of life for the individual and his family.
I confess that I was a shade surprised, although I have almost lost the capacity for being surprised, to read that in exchanges in another place on 10th December—this is in the Commons Hansard at col. 325—the Parliamentary Under-Secretary of State for Trade and Industry said he did not accept that the thalidomide victims would not have received compensation under the development risks clause, as a legal decision was never reached on the liability of the manufacturers.
This seems to me an attempt by the Government to stand the conclusion of the Pearson Commission on its head. That commission was set up in part as a consequence of the thalidomide disaster, and the reasoning underlying the conclusion that it came to was that under present law it is essential for the victims to establish negligence, that in that case some of those concerned had no prospect of doing so and that it was wrong in such circumstances for individuals to be excluded from a régime of strict liability applying to those whose defective product caused harm. That conclusion, to my mind, holds good today.

839
Those who prepared this directive must have felt some uncertainty about the defence since, as I have pointed out, Article 15 provides for powers of derogation and, furthermore, it provides for the operation of this defence to be reviewed after 10 years. Clause 8 of the Bill that we are discussing has been very wisely drafted in a way which would enable the defence to be repealed if that review goes against retaining it, as I expect it will. It is just conceivable that we shall lose the vote today although I hope not. But the battle will continue and, in the end, we shall prevail.
Lord Hacking: As the good Cross-Bencher that I try to be, I delayed intervening in this debate until I had had an opportunity to hear the arguments. I believe that we remain, one-and-a-quarter hours after the noble Lord, Lord Williams, intervened, in the same position, although perhaps a great deal better informed. I say that because the noble Lord, Lord Williams, argued, as I argue now, that it is a question of balance—a balance between the interests of some plaintiffs who may be prevented from gaining compensation by this provision being included in the Bill, and the interests of society that there should not be a curb in the development of new drugs or other new inventions which run to our benefit.
Nobody has challenged the benefits which society has gained from the development of new drugs and other innovations in, for example, the aerospace industry. In my short lifetime—and I believe that I am still in the latter days of my youth—I have witnessed the extermination of such diseases as polio, diphtheria, and tetanus by means of vaccine. When the noble Lord, Lord Donaldson, intervenes and talks about the "death" of the consumer, may I remind your Lordships that many consumers—many men, women and young children—would have died but for the extermination of those horrible diseases which existed in my youth. It is indeed exactly this risk factor that is before any parent who has to make a decision about the whooping-cough vaccine. There have been a few known tragedies due to that vaccine, but there have also been many benefits including the saving of the lives of very young children.
Now we are told, against the argument of that benefit, that the imposition of absolute liability would impose upon the pharmaceutical industry and other industries a curb on research and development. As the noble Lord, Lord Williams, said, it does not really matter how real is the problem. What matters is that the problem is perceived, because if that problem is perceived there will be a cutback on research and industry which will run to our detriment. It is within that context that the balance should be looked at—the balance of what disadvantages are being placed upon plaintiffs by the inclusion of this provision in the Bill. It is a very limited disadvantage.
As the Government's consultative paper stated the burden of proof on the producer will be a severe one. It will not be necessary for him,
"to show that he has done as many tests as his competitor nor that he did all his tests required of him by Government regulation".
These are not tests directed to the law of negligence, nor even to the "state of the art". What it means is that
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if this provision is included in the Bill, producers can only successfully use this defence when a producer proves that he had no way of knowing or discovering the defects or, in the words of the noble Lord, Lord Peyton, the producer did not know and could not have known at the time of the defect in the product. Faced with that balance, I have no hesitation in coming down in favour of innovation and the further benefit to our society of research and development.
Lord Lucas of Chilworth: Since I have had the responsibility for answering from the Government Front Bench on consumer matters I have come to have an extremely high regard for the consumer movement, and in particular for the noble Baroness, Lady Burton, who diligently and rightly pursues the proper interests of the consumer lobby, if I may call it that. I have a very high regard, too, for the views held by the noble Lord, Lord Allen of Abbeydale, who has brought to the Committee this afternoon the arguments that he has deployed over a number of years.
The Government recognise that the development risks defence has an effect on the protection of the consumer, but that defence is part of the Community product liability directive which we are impelementing in this part of the Consumer Protection Bill. It is not something that this Government in isolation wish to add to the directive. It is part of the directive, and has been since 1976 when the directive was first proposed. The Government then agreed to and supported the adoption of the Community's liability directive in its present form because it represents a fair balance between the interests of industry and the consumer. The development risks defence is part of that important balance.
I should perhaps remind the Committee that it is a central part of my department's function to secure a climate which is favourable to industry and innovation. That climate must be nurtured in many ways. I hope that all noble Lords will agree that having a climate that encourages innovation is fundamental to the future prosperity of this country, its industries and its people. I have not heard any noble Lord say otherwise. Indeed, my noble friends Lord Mottistone and Lord Peyton, and the noble Lord, Lord Ezra, from the Liberal Benches, recognise this point. As I say, I do not believe it is denied anywhere across the Committee.
The primary question before us is how the development risks defence or its absence could effect that climate for innovation. The first thing we must do is listen carefully to the views of those who would be most directly affected by not making the defence available. Noble Lords opposite may deride this approach with cries of, "Well, they would say that"; but this Government listen seriously to industry, and listen in particular when industry says something very firmly, with complete unanimity and great consistency over a long period.
As evidence of what I have just said, I turn to the briefing paper put before most of us by the Confederation of British Industry. I should like to draw the attention of the Committee to the first paragraph of that paper which says:
"The Consumer Protection Bill raises issues of the greatest importance for industry. If framed correctly it will reinforce

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industry's drive to produce the better designed, high quality, high technology products needed in today's fiercely competitive market place. If not, it could jeopardise our competitive position by producing a climate in which innovative research and development of new products is inhibited, while our competitors suffer no corresponding constraints. It is vital in the interests of society as a whole that the development risks defence is retained".
I certainly do not propose to ignore a warning like that.
But it is not just the CBI which is saying this. A briefing paper was produced by the Association of British Pharmaceutical Industries. The paper is very extensive, but perhaps I may quote one sentence. In referring to the development risk, it says:
"The risk may be small, but is a significant factor when embarking on speculative research without any guaranteed return".
We ignore what our industrialists are telling us at our peril.
It is some 90 minutes since the noble Baroness reminded us, quite correctly, exactly what the development risks defence actually means. Noble Lords have talked about a number of matters but I should not like the Committee to lose sight of that point. Perhaps I may remind the Committee of its meaning. The producer of the defective product will have to prove—and I underline that it is for the producer of the defective product to prove, not the person injured by the product—that the state of scientific and technical knowledge at the time that the producer supplied that produce was such that no producer of products of that type might have been expected to have discovered that defect.
Do noble Lords suggest that this will be an easy defence to prove? It will be of no help to the producer to plead how difficult or how expensive it had or it might have been for him to have found the answers to that defect. If other producers of products of that type had the knowledge available to them, then the defence is of no use to the producer of the product. Neither will it necessarily be of any use to that producer if he shows that he manufactured the products to an accepted national or international safety standard. Neither can that producer point to what other producers of products like his are doing in the manufacture of their products. Only if the producer can prove to the court that he took all the steps that a producer of products of that kind might reasonably have been expected to take, and that the state of scientific and technical knowledge would have allowed him to take, will this defence be of any value.
My noble friend Lord Peyton of Yeovil made the point very clearly that we should also consider the impact that the removal of this defence would have on all types of research and development in British industry. We must certainly avoid needlessly inhibiting product development. Perhaps I may remind the Committee of the First Report (Session 1986–87) of your Lordships' Select Committee on Science and Technology. I quote from paragraph 7.40, which points out,
"the gravity of the United Kingdom's prospects in R & D".
That is a warning to us this afternoon from our own Select Committee which has looked at the great problems of research and development. Research leads to new products, and new products mean new jobs. British industry needs to make those products and Britain needs those jobs. I do not think that noble
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Lords who have spoken for the amendment want anything different.
Perhaps I may turn now to the question of insurance which was raised in the amendment of the noble Lord, Lord Williams of Elvel. The noble Lord put before us a new clause, the purpose of which is to ensure that insurance for development risks will always be available. I shall have something to say about the mechanism he has used in a moment or two. The noble Lord argued that once the insurance problem is solved, industry will not be concerned by development risks. Perhaps at this time I should respond to the noble Baroness, Lady Burton, who suggested that I said that there was no insurance problem. I think she said that I said that the problem was insignificant. When I said last night that insurance cost increases would have a marginal effect on the cost of production, I made it quite clear that the comments referred to the Bill as it is before the Committee this afternoon; that is, with the defence. The Association of British Insurers made clear that it expects capacity problems in high risk sectors if the defence is not retained.
Here I should perhaps comment on something that the noble Lord, Lord Williams, said when speaking about insurance for unlimited liability. Surely people face many unlimited liabilities already in their day-to-day and week-to-week lives—for example, under the existing law of negligence—and of course the insurance that is available is only up to fixed limits. That is a fact of life in many fields and there is nothing special in that regard about product liability.
Even if the insurance problem—if it is a problem—could be solved, then I believe that the absence of the development risks defence would still be a serious blow to the climate for innovation. The existence of insurance against a risk does not make us indifferent as to whether or not the event occurs. Let me take a simple example. Even though I insure my car, I would still rather avoid crashing it. It makes the disaster less catastrophic, certainly, but it is the risks inherent in driving that determine my behaviour, not the adequacy or otherwise of my insurance cover. I believe that it is precisely the same with development risks. Removing the defence would still deliver a blow to the climate for innovation.
My noble friend Lord Mottistone, the noble Lord, Lord Williams of Elvel, and others including the noble Lord, Lord Allen of Abbeydale, drew some comparisons with what is happening in the Community. Perhaps I should for a moment turn to consider what other member states are doing. Some noble Lords have made much of the fact that in France and Belgium there is at present no such defence. They have also mentioned the strict liability system that operates for pharmaceuticals in West Germany.
One thing that we cannot be sure about this afternoon is how in the end all the other member states of the Community will implement the directive or seek the derogation that is provided. The debate we are having will be produced all over Europe. The Committee should not assume that French industry will simply accept that it should be burdened with no development risks defence when much of Europe is going in the opposite direction. Indeed, it was the

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noble Lord, Lord Allen of Abbeydale, who said that the French may take advantage of the development risks defence, and I was encouraged to hear that he recognised that the French, often quoted as an example of where absolute strict liability exists, might be considering the directive as we are—without development risks defence.
Two member states—Denmark and the Netherlands—have introduced into their parliaments legislation which, like ours, includes the defence. The directive itself is drafted to include the defence and it is a specific derogation from it to remove the defence. While clearly I cannot be definitive until that European debate is finished, it seems to me from my discussions with many of the consumer Ministers in those states that the majority will retain the defence.
I return to the proposed new clause on insurance. Much has been said about insurance costs and availability. Not all of it has been consistent. I believe that ultimately time will tell. We should turn to the words of those who know and in its brief for Second Reading to which I referred last night the Association of British Insurers made clear that there may be reductions in capacity for insurance on development risks in certain high risk areas. There is no suggestion that with the defence there will be a paucity of cover. I do not believe that it is for me to prove the capacity of the industry. Its capacity for risk—certainly as the Bill stands before the Committee this afternoon—is not in doubt, any more than the insurance industry's capacity has been in doubt for cover across the world for an extraordinary number of risks.
The noble Lord opposite explained that the purpose of his clause is to ensure that insurance will be available. The proposed new clause sets up an elaborate mechanism whereby a producer, unable to obtain insurance, convinces the High Court of that fact. The Secretary of State then has to find the insurance or provide insurance himself. In practice, that means that the Secretary of State would have to provide the insurance himself since I do not see why he would be any more successful in finding it on the open market than the producer himself; assisted, of course, by an insurance broker or the industry itself.
There are further reasons why I am not prepared to accept this new clause. First, it is an unacceptable state intervention in the insurance market. Secondly, it will not achieve the result that the proposers seek. It is a fundamental tenet of this Government that goods and services are best produced by private bodies operating in a free market. The Committee will be well aware that a major part of our policy has been to extend the market and extend the area where goods and services are provided by private capital. The reasons why we wish to reduce state intervention are very well known. As we have seen, prior to this Administration coming into government in 1979, the state provision of goods and services was inefficient, costly, and often did not provide consumers with the kind of choice to which they are entitled. Against that background I do not believe it is right for the Secretary of State to enter the product liability insurance business.
Lord Airedale: If the noble Lord is pausing for a moment, may I put to him this point concerning
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insurance? Let us suppose the producer in the tragic thalidomide case had envisaged the possibility that such a tragedy might occur, with the full extent of the amount of claims that would arise, and did arise, in that tragedy, and the producer had gone to the insurance market. Does the Minister really believe that the insurance market would have been able, at any price, to have insured against that disaster to the extent that it occurred?
Lord Lucas of Chilworth: The noble Lord, Lord Airedale, has asked me what my beliefs are against a hypothetical situation set in itself against a situation which was never determined by the courts. With all the noble Lord's reasonableness, I do not think that he would expect me to lay my beliefs before the Committee this evening against that background.
On this issue of insurance I want finally to point out to the noble Lord, Lord Williams, what I think is an astonishingly cumbersome and bureaucratic method that he has chosen to achieve the end he seeks. Every producer unable to obtain insurance must separately convince the High Court of that fact. Such insurance will, by and large, either be available or it will not. If the insurance is available the clause is unnecessary. If it is not available it seems that British industry will be able to make use of the new facility granted by the Secretary of State only if each company makes its own case to the High Court. I do not think that there is a greater waste of time and money than that.
I ought now to sum up the argument as the Government see it and as I have sought to put it before the Committee. We wish to retain this fundamental part of the directive because it is essential to help in maintaining the climate of innovation upon which British industry depends. We hope and believe that most other member states in Europe will follow us and we shall not risk putting our companies at a disadvantage in the Community or indeed the world.
We do not believe that the problem can be solved by the provision of insurance alone, and we cannot contemplate the state becoming involved in the insurance market in the manner suggested. We are not prepared to ignore the very genuine concerns of British industry, nor indeed the views of the consumer. We have considered the matter most carefully and I have listened very carefully to everyone who has taken part in this very interesting debate. However, I believe that the Bill as it is before the Committee represents the balanced view. I invite the Committee to reject the amendment that is before us.
5 p.m.
Lord Allen of Abbeydale: Before the Minister sits down, perhaps I may say that I am sorry that he did not touch on the point that the directive allows for review in 10 years' time. If the matter is so clear cut, I wonder what was the thinking that lay behind putting that provision into the directive. What was the motive or the intention in ensuring that this particular defence should be looked at again, the way in which it worked should be observed and then a decision taken as to whether it should be repealed?
Lord Lucas of Chilworth: In fact I was not a party to all the discussions that went on but certainly one of the

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thoughts present in our minds on the two occasions on which I took part in those discussions was the pace of technology and that it might be a good idea to review all the articles of the directive in about 10 years' time.
Lord Allen of Abbeydale: I am sorry to pursue this matter; but there is a specific reference not to the articles in general but to this particular defence.
Baroness Burton of Coventry: We have had a long debate and it is not my intention to inflict myself on the Committee for more than a few moments. First, with regard to a matter about which great play has been made by the noble Lords, Lord Lucas, Lord Peyton and others—namely, the innovation and the innovative nature of British industry—I really cannot see why this question should keep coming up time and again. It only means that I refer back to France, Belgium, Germany, Luxembourg and the USA and say that I have not noticed any lack of innovation in those countries. It is quite wrong to say that such a thing will happen to us if we have the same rule as they have on the risks defence. That is the first point I should like to make and I think it is a matter of common sense.
Secondly, we all know that the CBI has been working very hard on the Government. The noble Lord, Lord Lucas, mentioned two organisations (if I may call them that) which have advanced such views, and those were the CBI and the pharmaceutical industry. I can only use the immortal phrase, "Well, they would, wouldn't they?" Those are the two bodies that I should have picked out anyway.
I was very surprised at the noble Lord, Lord Peyton, who had a good fling over on the right talking about this measure being an act of punishment. That is really complete nonsense. I am not seeking to punish anybody. I am merely trying to ensure a fair deal for the consumer as well as industry. I cannot see that there should be any question about that.
I want to come now to my next point. I could not follow the noble Lord, Lord Bruce-Gardyne, but I did not interrupt him. He seemed to be complaining that in the thalidomide case emphasis had been put on those who suffered. I thought that his was such a strange attitude that possibly I had misheard him. I should have expected the emphasis to be put upon those who suffered. I could not sort out his argument at all; but I shall read in Hansard exactly what he said.
The noble Lord, Lord Lucas, said that we should wait to see what the other countries in the Community will do. I hesitate to bring air fares into this discussion, but other countries in the Community have acted very differently from the way we expected, and I can only say that he may be wrong on this matter.
Finally, I deplore very much indeed the great difference of opinion in the Committee. I think that the noble Lord, Lord Ezra, really put his finger on the problem. He was supported by the noble Baroness, Lady Elliot, and by those who agree with this amendment. It is a question of whether individuals who suffer grievous hardship and illness and who undergo terrible suffering shall have to bear their suffering alone and uncompensated, or whether the rest of us, who are more fortunate and have to buy the
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same products, should not contribute. I take a higher view of human nature. I think that people will be prepared for the risk to be spread.
I should also like to say that I think it is very regrettable, that if our amendment is agreed—and the noble Lord, Lord Lucas, emphasised this point—then the research and development side of British industry might suffer. I think much more highly than that of the research and development side of British industry. Why on earth should British industry pull back from what it is doing simply because we wish the risk to be spread, and we do not want individuals to have to suffer from risks which they themselves cannot spread.
I thank the noble Lord, Lord Lucas, for his comments, even though he does not agree with me, and I thank everybody who has taken part in this very long debate. I hope that when we divide the Committee many Members will agree with us that the individual should not suffer unduly compared with the rest of us.
5.6 p.m.
On Question, Whether the said amendment (No. 39) shall be agreed to?
Their Lordships divided: Contents, 91; Not-Contents, 154.

DIVISION NO. 1

CONTENTS

Allen of Abbeydale, L.

Hughes, L.

Amherst, E.

Hunt, L.

Ardwick, L.

Irving of Dartford, L.

Attlee, E.

Jacques, L.

Banks, L.

Jeger, B.

Birk, B.

John-Mackie, L.

Bonham-Carter, L.

Kearton, L.

Bottomley, L.

Kilbracken, L.

Briginshaw, L.

Kilmarnock, L.

Brockway, L.

Kinloss, Ly.

Burton of Coventry, B. [Teller.]

Kirkhill, L.

Llewelyn-Davies of Hastoe, B.

Carmichael of Kelvingrove, L.

Lloyd of Hampstead, L.

Chitnis, L.

Lloyd of Kilgerran, L.

Cledwyn of Penrhos, L.

Lockwood, B.

Cudlipp, L.

Longford, E.

David, B.

Lovell-Davis, L.

Dean of Beswick, L.

Mackie of Benshie, L.

Denington, B.

McNair, L.

Diamond, L.

Mar, C.

Donaldson of Kingsbridge, L.

Merrivale, L.

Mishcon, L.

Dowding, L.

Morton of Shuna, L.

Elliot of Harwood, B.

Mulley, L.

Elwyn-Jones, L.

Nicol, B.

Ennals, L.

Paget of Northampton, L.

Ewart-Biggs, B.

Phillips, B.

Ezra, L.

Pitt of Hampstead, L.

Fitt, L.

Ponsonby of Shulbrede, L. [Teller.]

Foot, L.

Gallacher, L.

Prys-Davies, L.

Galpern, L.

Raglan, L.

Gladwyn, L.

Rathcreedan, L.

Glenamara, L.

Ritchie of Dundee, L.

Graham of Edmonton, L.

Robson of Kiddington, B.

Grey, E.

Seear, B.

Grimond, L.

Serota, B.

Hampden, V.

Shackleton, L.

Hampton, L.

Stallard, L.

Hanworth, V.

Stedman, B.

Harris of Greenwich, L.

Strabolgi, L.

Houghton of Sowerby, L.

Taylor of Blackburn, L.

847

Tordoff, L.

Whaddon, L.

Turner of Camden, B.

Williams of Elvel, L.

Underhill, L.

Wilson of Langside, L.

Wallace of Coslany, L.

Winchilsea and Nottingham, E.

Walston, L.

Wells-Pestell, L.

NOT CONTENTS

Abercorn, D.

Kintore, E.

Abinger, L.

Knollys, V.

Alexander of Tunis, E.

Lane-Fox, B.

Arran, E.

Lauderdale, E.

Auckland, L.

Layton, L.

Bauer, L.

Lloyd -George of Dwyfor, E.

Beaverbrook, L.

Belhaven and Stenton, L.

Long, V. [Teller.]

Belstead, L.

Lucas of Chilworth, L.

Bessborough, E.

Lurgan, L.

Birdwood, L.

Macleod of Borve, B.

Blyth, L.

Manton, L.

Brabazon of Tara. L.

Margadale, L.

Braye, B.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Broxbourne, L.

Bruce Gardyne, L.

Melville, V.

Butterworth, L.

Mersey, V.

Caithness, E.

Middleton, L.

Cameron of Lochbroom, L.

Milverton, L.

Campbell of Alloway, L.

Molson, L.

Carnegy of Lour, B.

Montague of Beaulieu, L.

Carnock, L.

Montgomery of Alamein, V.

Cathcart, E.

Cawley, L.

Morris, L.

Chelwood, L.

Mottistone, L.

Clitheroe, L.

Mountgarret, V.

Colville of Culross, V.

Munster, E.

Cornwallis, L.

Nathan, L.

Cottesloe, L.

Newall, L.

Cawley, E.

Noel-Buxton, L.

Cox, B.

Norfolk, D.

Craigavon, V.

Northbourne, L.

Cullen of Ashbourne, L.

Nugent of Guildford, L.

Davidson, V. [Teller.]

Onslow, E.

De La Warr, E.

Orkney, E.

Deedes, L.

Orr-Ewing, L.

Denning, L.

Pender, L.

Derwent, L.

Peyton of Yeovil, L.

Dilhorne, V.

Porritt, L.

Elliott of Morpeth, L.

Portland, D.

Elphinstone, L.

Radnor, E.

Elton, L.

Reay, L.

Faithfull, B.

Renwick, L.

Forbes, L.

Ridley, V.

Forte, L.

Rochdale, V.

Fortescue, E.

Rodney, L.

Gainford, L.

Rootes, L.

Gardner of Parkes, B.

Rugby, L.

Geddes, L.

St. Aldwyn, E.

Gibson-Watt, L.

St. Davids, V.

Glanusk, L.

Saint Oswald, L.

Glenarthur, L.

Saltoun of Abernethy, Ly.

Gray, L.

Sanderson of Bowden, L.

Gray of Contin, L.

Sandford, L.

Greenway, L.

Savile, L.

Gregson, L.

Seebohm, L.

Grimthorpe, L.

Selkirk, E.

Hacking, L.

Shannon, E.

Haig, E.

Shaughnessy, L.

Hailsham of Saint Marylebone, L.

Sherfield, L.

Shrewsbury, E.

Halsbury, E.

Simon of Glaisdale, L.

Harris of High Cross, L.

Skelmersdale, L.

Henderson of Brompton, L.

Stanley of Alderley, L.

Hesketh, L.

Stodart of Leaston, L.

Hives, L.

Strange, B.

Hooper, B.

Strathcarron, L.

Howe, E.

Sudeley, L.

Hunter of Newington, L.

Terrington, L.

Hylton-Foster, B.

Teviot, L.

Kaberry of Adel, L.

Teynham, L.

Kimball, L.

Thorneycroft, L.

848

Torrington, V.

Vickers, B.

Tranmire, L.

Vinson, L.

Trefgarne, L.

Whitelaw, V.

Trumpington, B.

Wilberforce, L.

Ullswater, V.

Wise, L.

Vaux of Harrowden, L.

Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.
Lord Beaverbrook: This may be a convenient moment to take the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Bombing Cases: Review
5.15 p.m.
The Minister of State, Home Office (The Earl of Caithness): My Lords, with the leave of the House I shall now repeat a Statement about the bombing cases which has been made in another place by my right honourable friend the Home Secretary.
"With permission, Mr. Speaker, I should like to make a Statement on my review of the cases of the Birmingham pub bombings, the Guildford and Woolwich pub bombings and Mrs. Anne Maguire and her co-defendants. Although there were of course connections between the Guildford bombings case and that of the Maguires, these were three separate cases, treated entirely separately in the courts. It follows that I have considered each one separately. I apologise for the length of the Statement.
"All 17 people concerned were found guilty of very serious offences by a jury following lengthy trials. The verdicts in each case were later upheld on appeal after further long hearings. In short, the question of guilt was in each case properly determined by due process of law.
"A Home Secretary must consider very carefully in what circumstances, if any, he would be justified in interfering with a verdict reached by the courts. These are among the most important individual decisions which a Home Secretary has to take. Over the years all kinds of changes may come to alter the view which some people may take of a particular case. The enormity of the crime committed may cease to dominate the scene; those convicted may continue to protest their innocence; police procedures may be improved; new scientific tests may be developed; individuals may write books or produce television programmes which summarise days or weeks of evidence in a way which reflects their genuine conviction that the verdict was wrong or open to considerable doubt; as a result, a body of distinguished opinion may grow up to the same effect. All that has happened here.
"In responding to these pressures a Home Secretary must never allow himself to forget that he is an elected politician and that under our system the process of justice must be kept separate from the political process. It is open to others to say: 'If I were

849
trying that case as a judge I would have given a different summing up', or 'If I had been on that jury I would have reached a different verdict'. But it is not open to a Home Secretary simply to substitute his own view of a case for that of the courts. It would be an abuse of his powers if he were to act as though he or those who might advise him constituted some higher court of law.
"A different situation arises of course if new evidence or some new consideration of substance is produced which was not available at trial or before the Court of Appeal. In any civilised system of justice there must be a means whereby a case can be re-opened so that new matters can be assessed alongside the old evidence by due process of law.
"This distinction between new evidence and differences of opinion about old evidence has governed the way in which my predecessors have used the power under Section 17 of the Criminal Appeal Act 1968 to refer cases to the Court of Appeal. Mr. Robert Kee, in his book Trial and Error, implies that this distinction is a technicality. I disagree. In my view it is fundamental. It is hard to see how the Court of Appeal could fail to dismiss any reference to it based simply on the proposition, argued without fresh evidence, that its predecessors and the jury had got it wrong. More important perhaps, this House and the public would rightly become deeply suspicious of a convention which enabled politicians to throw a verdict into doubt simply because they had developed, without any fresh evidence, a view that the verdict may have been mistaken. Once such a convention had become established the door would be wide open to interference in any case in which a Home Secretary thought it convenient to bow to pressure to have a case re-opened.
"I believe that my predecessors were right to take a principled view of the circumstances in which it is proper to exercise the power of reference to the Court of Appeal. After much thought I mean to follow them.
"Mrs. Maguire, her husband Patrick, two of her sons (Vincent and Patrick), her brother-in-law (Patrick ('Guiseppe') Conlon), Patrick O'Neill and Sean Smyth were convicted in March 1976 of unlawfully handling explosives. The prosecution case rested almost entirely on the results of TLC (thin layer chromatography) tests which indicated that all seven defendants had handled nitroglycerine. After a trial lasting six and a half weeks, during which the scientific evidence was examined at great length, all seven were found guilty. In July 1977 the full court, after a hearing lasting 10 days, refused their applications for leave to appeal.
"The defendants had protested their innocence throughout and have continued to do so. The case has been reviewed previously, most notably in the period 1980 to 1983 and following a debate in another place in May 1985 by which time Mrs. Maguire, the last to complete her sentence, had been released from prison.
"I have examined with the greatest care the arguments which have been advanced in particular by Mr Kee in his book published last October. I am
850
clear that there is no new evidence or consideration of substance which I can regard as casting doubt on the safety of the convictions. I am placing in the Libraries of both Houses a memorandum which sets out in greater detail the reasons why I have reached this conclusion. None of the arguments now presented succeeds, in my view, in challenging the scientific evidence. The scientific validity of the TLC test—which is not the same test as that used in the Birmingham case—has not been undermined. The main argument which Mr Kee now advances—that the samples must have been accidentally or deliberately contaminated—is not supported by any evidence. In these circumstances I can see no grounds on which it would be proper for me to refer the case to the Court of Appeal.
"Next, the Guildford and Woolwich pub bombings; in October 1975, after a trial lasting over a month, Patrick Armstrong, Gerard Conlon, Paul Hill and Carole Richardson were found guilty of carrying out the bombing of two pubs in Guildford in October 1974 in which five people died. At the same trial Armstong and Hill were convicted of two murders arising from the bombing of a public house in Woolwich in November 1974. All were found guilty by unanimous verdicts. In October 1977, after a hearing lasting 11 days, the full court refused applications for leave to appeal.
"The convictions were based wholly on confessions made by the four to the police. It is common ground, and was fully before the court of trial and the Court of Appeal, that there were a number of inconsistencies and contradictions in the statements made. All four alleged at trial that those statements were untrue and that they had been improperly obtained. All four put forward alibis, which were plainly not accepted by the jury. Later, members of the Balcombe Street Gang and Brendan Dowd claimed that they, and not the four, were responsible for the Guildford and Woolwich bombings. These claims formed the main plank of the four's grounds of appeal.
"The Court of Appeal, however, concluded that there had been—and I quote—
'a cunning and skilful attempt to deceive the Court by putting forward false evidence'.
The Court of Appeal also specifically considered Carole Richardson's alibi evidence, concluding that it was concocted.
"I have carried out a detailed examination of the points which have been raised about the conviction in this case. It is clear to me, however, that no new substantive points have been raised. The arguments which have been put forward simply repeat or rework those which were aired at trial or on appeal. Indeed, Mr. Kee acknowledges there is no new evidence. Accordingly, I have had to conclude that there are no grounds which would justify my referring the case to the Court of Appeal. Again, I am placing in the Libraries of both Houses a memorandum which sets out in greater detail the reasons for my decision.
"I turn to the case of the six men who were convicted in respect of the Birmingham pub bombings. In August 1975, after a two-month trial,

851
Hugh Callaghan, Patrick Hill, Robert Hunter, Noel McIlkenny, William Power and John Walker were convicted and sentenced to life imprisonment in respect of the bombing of two public houses in Birmingham in November 1974 in which 21 people were killed and 162 injured. Applications by the six men for leave to appeal were refused by the full court on 30th March 1976. The men later pursued a civil action which was eventually dismissed by the House of Lords in 1981. The prosecution case rested principally on admissions made by the six men in police custody, together with scientific evidence which indicated that two of the men had handled nitroglycerine.
"The six men maintained at trial that the admissions had been secured by means of police brutality and intimidation. The defence also disputed the scientific evidence, alleging that the results obtained on the Griess test were due to contact with a harmless substance called nitrocellulose.
"As the House will be aware, the safety of the convictions has since been challenged, most notably in two 'World in Action' programmes and in a book published by Mr. Chris Mullin in June last year.
"I have examined all this material with great care. I am satisfied that there is new evidence which would justify my referring the case to the Court of Appeal and I have now done so. The effect of my action is that the case will now be treated as an appeal by the six men and is sub judice. The House will understand why I cannot comment in detail. I can say, however, that the grounds relate to the scientific evidence given at the trial and the allegations by ex-PC Clarke that he witnessed intimidation of five of the six men in police custody and saw signs of injury on them. I am placing in the Libraries of both Houses a copy of a letter which I have today sent to my honourable friend the Member for Harborough, and the report of a reappraisal of the Griess test which was conducted at my request by the Aldermaston forensic science laboratory.
"Following consultation between the chief constables of the West Midlands and the Devon and Cornwall forces, the latter force has been asked to undertake further inquiries into the allegations made by ex-PC Clarke. The results of that investigation will of course be made available to the Director of Public Prosecutions and the appellants.
"I should add, for the avoidance of doubt, that the Court of Appeal is not confined to considering those matters which form the grounds of reference; and that it is open to the appellants to seek to place before the court any matters which they wish to raise on their behalf.
"As the House will recognise, these have not been easy decisions to make. I have thought it right to maintain the principle that I should interfere with the verdict of a court only where there is some new evidence or new consideration of substance which casts doubt on the safety of the convictions.
"The second necessary principle is that where such material is to hand no consideration of amour
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propre or possible embarrassment should prevent a referral of the case. I believe that by following these principles a Home Secretary can best serve the interests of justice."
My Lords, that concludes the Statement.
5.30 p.m.
Lord Mishcon: My Lords, I think that the House would want to thank the noble Earl for his patience and the Secretary of State for the Home Department for his propriety in having made such a lengthy Statement on matters which have caused grave public concern over a period of years.
There is a duality of public concern. The first is of absolute horror at the events which we recalled when we heard that Statement and at the thought of all those who died or were seriously injured in those dreadful occurrences. The second is that in all matters, whether dreadful or not, our system of justice is seen to work in the best possible way consistent with that justice.
Let me say at once that the constitutional proposition contained in the Statement in regard to the Home Secretary's rights and duties under Section 17 were very clearly, and as we think correctly, stated in what has just been read out to us. With that we have no quarrel whatsoever. Having said that, there must be a feeling at least of regret in the layman's mind that only one of these cases has been selected for reference under Section 17 and not all three of them. But lawyers will understand, and I believe that Members of your Lordships' House will understand, after that Statement the reasons that the Home Secretary has, in his view correctly, adopted.
Having said that, I wonder whether your Lordships will forgive me if I refer for only a moment to the specific case of the Maguires. I still wonder whether that could not have been brought within the scope of Section 17, or at least whether further steps could not have been taken, and cannot now be taken, so that with due propriety, and within the definition of his duties and powers under Section 17—as so clearly given by the Secretary of State—he could consider whether those powers could be applied to the Maguire case.
In the Statement reference was made to a debate in your Lordships' House in May, 1985. It was initiated by my noble friend Lord Fitt, who throughout this matter has taken such a leading part. If your Lordships will forgive a personal quotation, during the course of that debate I ventured to say this:
"There is another factor. I believe that as a matter of national policy—especially at this time—this country wants to assure every Irish citizen who lives in the United Kingdom (whether it be in England, Northern Ireland, Scotland or Wales) that they are safe from prejudice; that if they are good, peaceful citizens they will be safe in our midst from all authority. These are the factors which I believe the Secretary of State would want to consider.
"This is what I will ask him and the noble Lord the Minister to do—and I am not as pessimistic as the noble Lord, Lord Annan. I shall not ask for the section to be invoked at this moment.
"I will ask the Secretary of State whether, because of the great anxiety and concern that exists, he will appoint independent scientific advisers to look into the evidence that was then given and to advise the Secretary of State whether there are grounds under the section for him to consider that there is new evidence. Given all the concern and anxiety, that is not much to ask the Secretary of State to do".—[Official Report, 17.5.85; col. 1403.]

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In those days the noble Lord, Lord Glenarthur, was dealing with home affairs. He courteously answered me in the following way at col. 1406:
"However, I note with care the points raised by the noble Lord, Lord Mishcon, and his suggestion that perhaps an independent group of scientific advisers might examine the facts before the section of the Act to which I referred, Section 17, is looked at. I cannot give an undertaking in quite the way the noble Lord would like me to, but what I can tell him is that I shall certainly draw the attention of my right honourable friend to the suggestion that he has made.".
Again, a further courtesy was paid to me because following upon that there was a letter from the Home Office saying that unfortunately the Secretary of State could not see his way to avail himself of the suggestion that I had made.
The Statement refers to a memorandum being placed in the Libraries of both Houses. I have taken advantage of that facility and have read the memorandum. There are scientific arguments referred to but they appear to be scientific arguments advanced from within the Home Office itself. I may be wrong—and if I am the noble Earl will correct me or at least elucidate the position—but at the moment, from that memorandum and this Statement, it does not look as though the independent body of scientific advisers has in fact been consulted. I ask the simple question: is it too late? Can it not be done now so that all of us may have more satisfaction in regard to the Maguire case?
There is only one other observation I have to make. Again and again in the course of the two cases referred to—the one in which there is now to be a reference to the Court of Appeal and the other in which there is not—confessions were mentioned. It was said that some of them contradicted each other. It was said in regard to one case that the convictions were based on the confessions alone.
It reminds us of the debates in your Lordships' House when the Police and Criminal Evidence Bill was being considered with such care by your Lordships. At that time we on these Benches said, and we were supported in other parts of the House, how necessary it was to have confessions tape recorded in every one of our police stations and, where practicable, where any confession was being taken. We were promised then that that would be pursued under powers in the Act. How far has it been pursued? What percentage of police stations in the United Kingdom—I shall limit it to the United Kingdom—have these tape recording machines? What percentage of confessions are being recorded in this way? If we had a satisfactory answer to that question, many of us, who look with regret at some of the wording in this Statement about confessions, when convictions are based on confessions alone in serious matters of this kind, will have our minds a little more at ease in regard to the future.
Lord Harris of Greenwich: Perhaps I may join with the noble Lord, Lord Mishcon, in thanking the noble Earl for repeating the Statement. It is clearly right, as the Home Secretary has said, for the Government to pause for a substantial period of time before attempting to interfere with verdicts in the courts. However, I think that it is clear from the Statement which has been made about all three cases that the
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widespread concern in Parliament, which has been reflected by similar concern outside Parliament, has made it right for this long and detailed Statement to be made. I do not think any of us have any doubt as to the difficulty faced by the Home Secretary when he came to make a judgment on these matters. I also hope that some of those who campaign so ceaselessly for a return to capital punishment will for once themselves pause before considering what would be our position today if these men had been executed, as they clearly would have been had capital punishment been restored.
First, is the noble Earl aware that all of us in all parts of the House welcome the decison of Mr. Hurd in respect of the Birmingham pub bombing cases? It was a horrific crime in which 21 people were killed and over 150 people were injured, many of them very gravely. The Home Secretary has said that there is new evidence, and on the basis of what the noble Earl has said to us today there clearly is. The Home Secretary has also said that the matter is sub judice. That obviously is also right, and therefore I do not think that it is appropriate to comment further on that matter.
Perhaps I may turn to the question of the Maguires and the Guildford and Woolwich cases. None of us has yet had the opportunity of studying the memorandum which the Home Secretary is going to place in the Libraries of both Houses. However, I must say at once that I think his decision, difficult though it was, fills a number of us with substantial disquiet. These are very difficult decisions, but many of us remain deeply uneasy about his decision not to send these cases to the Court of Appeal. Mr. Robert Kee and many others, both in Parliament and outside, have I think produced a powerful prima facie case, which in our view would justify such a reference.
I think that we must recognise that what is at stake here is not simply the issue of these prisoners, and in some cases ex-prisoners; what is involved here, as I think the Home Secretary would obviously recognise, is public confidence in the administration of justice in relation to these particular defendants. I am sure that the Home Secretary is in no doubt, and we must accept the fact, that what will now happen is that there will be renewed public argument about these cases for many months, and possibly even for many years. I repeat, I think that we all recognise the difficulty of the Home Secretary's decision, but he should have no doubt that a number of us believe that it is mistaken.
The Earl of Caithness: My Lords, I am grateful to the noble Lords, Lord Mishcon and Lord Harris of Greenwich, in particular for what they said with regard to the difficult but correct decision that my right honourable friend has taken on the Birmingham bombers.
The noble Lord, Lord Mishcon, in particular mentioned the possibility of a scientific committee and was kind enough to say that he had already received a letter following the previous debate on this matter in the House. My right honourable friend considered very carefully this proposition. However, he still believes that no purpose would be served in setting up such a committee. There has been ample opportunity for scientists and others to comment. For example, we received copies of the reports by Dr. Caddy in 1982

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and 1983. The fact is that no one has seriously challenged the scientific basis of the TLC test or of the results of the Maguire test.
There is no evidence to suggest that the TLC results were erroneous. When the Royal Armament Research and Development Establishment has performed such tests they have always confirmed the TLC results. It was for that reason, with the results of the tests not being put in jeopardy or safety as to conclusion, that my right honourable friend reached the decision that he did.
With regard to tape recordings in police stations and the percentage of confessions resulting from them, I regret to tell the noble Lord that I do not have the figures with me today. I hoped that I had covered most of the points that he might have raised, but that point has eluded me and I apologise. Perhaps in view of the importance of this matter, if the noble Lord could put down a Question for Written Answer, that would be the best way of bringing it into the Official Report for everybody in the House who is concerned to see. I shall make sure that a prompt reply is made to the noble Lord, if that satisfies him.
The noble Lord, Lord Harris of Greenwich, referred specifically to Mr. Kee's book. We pay due respect to Mr. Kee in his belief that the innocence of the Maguires is clear. He did not find grounds to discredit the scientific evidence and he allowed himself to arrive at the conclusions that the evidence must have been accidentally produced or, a far more serious suggestion, deliberately fabricated. No evidence of any kind has ever been presented to substantiate such a comment. Without that new evidence, as has clearly been supported by the noble Lords, Lord Mishcon and Lord Harris of Greenwich, my right honourable friend would be quite wrong to make a reference under Section 17.
5.45 p.m.
Lord Paget of Northampton: My Lords, I do not wish to say anything about the two previous cases but I should like to say a word about the Birmingham case and the decision on how to deal with it. It is of course a political case, as are all terrorist cases. It is important that one must appear to have done justice and that the measure one takes is one which will convince people in Ireland and even convince such moderate Liberals as myself. I do not find that a reference to the Court of Appeal under this Act and in these circumstances will convince anybody that a fair trial has been ordered.
What happens? The first thing which this court does is to examine the police evidence. How does it do that? It does it by a reference to the Devonshire and Cornwall Police, who judge—and perhaps "judge" is the wrong word—in a report what they think the police did. That is the issue in this case. The first impression which one gets in Ireland, and which I shall get too, is that one starts off by making the police the judges of the police. Then one goes on to make the judges in the Court of Appeal the judges of the judges.
On that matter I should like to quote what the noble and learned Lord, Lord Denning, said on the bench in a very similar case in which the issue was as to whether confessions had been obtained by brutality. He said:
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"If the six men win [the accused] it will mean that the police were guilty of perjury, that they were guilty of violence and threats, and that the confessions were involuntary and were improperly admitted in evidence, and that the convictions were erroneous".
That is precisely the position here. The noble and learned Lord goes on to say:
"That would mean that the Home Secretary would either have to recommend they be pardoned or that he would have to remit the case to the Court of Appeal [again]. This is such an appalling vista that every sensible person in the land would say that it cannot be right that these cases should go any further".
I have a strong feeling from my knowledge of the Court of Criminal Appeal that it will be very much in agreement with the noble and learned Lord. That being so, with the police judging the police and the judges judging the judges, how can any reasonable person, particularly in Ireland, think that that is a fair trial?
There ought to be an independent investigation of the facts which the Home Secretary felt to be in doubt after his most careful investigation. It should be an impartial inquiry which will convince even the Irish that it is fair.
The Earl of Caithness: My Lords, the noble Lord is quite right in saying that the judges of the Court of Appeal are judges of judges. From my limited understanding of the law I have always believed that that has been the case. In some respects that is their job. I do not see that that invalidates the criminal justice system in this country.
The reason why there is no inquiry is, as I said, that my right honourable friend believes these matters are properly determined by the courts. An inquiry could not determine guilt or innocence. That can be decided only by a court of law. Moreover, there are no grounds for setting up an inquiry. The points raised in the Guildford and Woolwich case were all fully aired before the courts. In the Maguire case the convictions rests on the scientific evidence. That evidence was examined at the trial and on a number of occasions subsequently. Its scientific validity remains unshaken.
Lord Paget of Northampton: My Lords, we are not discussing those two cases. We are discussing the Birmingham case in which the judge has found very much in doubt whether or not the scientific evidence concerning the hands was correct.
The Earl of Caithness: My Lords, I was setting the reason why there has been no inquiry into context. I was just coming to the Birmingham case, where new evidence in the opinion of my right honourable friend the Home Secretary has become available. Bearing in mind what I have just said, it is right that that evidence should go back before the courts rather than an inquiry, because that is the right and proper place to do it. It is also right and proper that the Devon and Cornwall Police should make further inquiries into the statement of ex-PC Clarke. We believe that that has been the right way to proceed in the past and it is the right way now.
Lord Denning: My Lords, as my noble friend Lord Paget mentioned me and read a judgment of mine, I should like to say that that judgment was given upon the evidence before the court and on what I knew then.

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I would not go back on one word of it. But on the other hand, if the Home Secretary has before him material on which he thinks the matter ought to be gone into anew on fresh evidence, then he is perfectly right to do it and to refer it back to the Court of Appeal so that they can look at it. I would assure my noble friend that those judges are first class. They are not judges of judges, they are judges of the case in hand and we can have complete confidence in them. If it is a proper case for review, then they will review it.
The Earl of Caithness: My Lords, I am extremely grateful to the noble and learned Lord, Lord Denning, for that. He put the point far better than I did.
Lord Campbell of Alloway: My Lords, would my noble friend the Minister accept that there are some of us who would sincerely wish to congratulate the Home Secretary on the reasoning, the wisdom and the courage of what must have been a most agonising exercise of statutory discretion on a matter of tremendous public concern? Would my noble friend the Minister agree that, in the absence of an evidential linkage, a reasoned, case-by case assessment must be made and must only be made, as indeed it was made, on the basis of two factors? First, is there a glimmer of doubt cast upon the scientific evidence by the subsequent technological advances? Secondly, is there any fresh evidence which, if believed, could make some material difference?
Is my noble friend aware that there could be any other proper test? Was it not of the essence of wisdom to decline to entertain certain siren voices and invoke prerogative powers? Finally, was it not courageous to avoid abnegation of executive responsibility by referring all these cases to the judiciary?
The Earl of Caithness: My Lords, although one is always concerned when anybody protests their innocence and continues to do so, my noble friend is absolutely right in saying that my right honourable friend could not refer any of the ca es—and although there is a link between two of them oday, they were three individual, separate cases tried at three different times—unless there was doubt on the scientific test or there was new material or new evidence. I am sure my right honourable friend the Home Secretary has been absolutely right to refer the Birmingham case, taking into account those two points. In this case it would have been quite wrong for my right honourable friend the Home Secretary to use the royal prerogative of mercy because that can only be used when the Home Secretary is completely satisfied as to a person's innocence. That does not apply in any of the three cases before us.
Lord Fitt: My Lords, let me preface my remarks by drawing the attention of the House to the intervention which has just been made by the noble and learned Lord, Lord Denning. He has said that in the judgment which he then gave and which has been quoted to the House by my noble friend, he arrived at that conclusion because of the evidence which he then had before him. I repeat what has been said by one of my noble friends on this side of the House, Lord Harris. If hanging had been available in the years 1973, 1974,
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1975 and 1976, then those convicted of the Birmingham bombings on the evidence which was considered by the noble and learned Lord, Lord Denning would undoubtedly have suffered execution and we would not be standing here in this House 12 years on, now, accepting the fact that there are great grounds for doubt and concern in this case.
So much is that so that the present Home Secretary has referred all the circumstances of the case to the Court of Appeal. Had the executions taken place, the evidence of Mr. Clarke, the ex-policeman who has appeared on the scene within recent months, would have been of absolutely no value. The contradictions that now exist in the forensic tests which took place would all have been to no avail because the men would have been dead. I think that reinforces the argument, the point of view put forward by my noble friend Lord Harris to all those who still believe in the ultimate penalty, the death penalty.
I am only too conscious tonight that in the City of Birmingham, there will be hundreds of people—fathers, mothers, brothers, sisters and indeed children—who will be reliving the agony of what happened in those two terrible tragedies, because all the publicity that has been generated by this debate, by the Home Secretary's decision, by the books which have been written, by the television inquiries into these cases, must be a terrible trauma to all those who lost their loved ones and who saw their loved ones maimed because of those dastardly and savage actions by the IRA. I know how they must be feeling tonight and indeed at a point 12 years ago I expressed to them again, as I did when I first heard of the bombs going off, my total and absolute sympathy.
There are other people, people whom I know intimately, that is the Maguire family. I have met the Maguire family, many noble Lords have met them in this House. All those who have met the Maguire family are totally and absolutely convinced of their innocence of the charges on which they were convicted. Indeed, even on reading the memorandum which has been placed in the Library and of which the Home Secretary was kind enough to send me individually a copy, it will be seen that in every single circumstance of that case the finger of innocence is pointed at the Maguires.
The only thing on which they were convicted and for which they served years and years of imprisonment was the TLC test. The noble Lord this afternoon and the Home Secretary in another place have said that the findings of that TLC test were incontrovertible and impossible to contradict. I do not accept that, because even during the course of the trial the inventor, the scientist who invented the TLC test, Professor Yallop, speaking for the defence, cast considerable doubts on the authenticity of that test. He said, in the course of his evidence, that he was not certain that there was not another substance, although he did not know what it was, which could give exactly the same reading as nitroglycerine.
From the minute that they were arrested, the Maguires proclaimed to high heaven their innocence. They were arrested on the evidence of two of the people who were subsequently charged with the Guildford bombings, a Mr. Hill and a Mr. Conlon who

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also said that Annie Maguire had been with them when they planted bombs. Had the court accepted that Annie Maguire planted bombs, then she could have been, and indeed was, charged with the murder of the people who were killed in Guildford. But it was subsequently found that this evidence was totally untrue, and the murder charge against Annie Maguire had to be dropped. But then the police went on and investigated, and allegedly found, traces of nitroglycerine on the hands of all those who were charged and on the gloves of Annie Maguire.
It has been said this evening by the noble Earl that Robert Kee in his assessment of the trial and the publication of his book has, in effect, said that there may have been accidental contamination, or that there may have been deliberate contamination. Throughout all the years that I have been interested in fighting this case—with the help of Sir John Biggs-Davison, a Member in another place, when our two voices were the only voices to be raised in regard to the Maguire case—I have never felt compelled to cast any doubts on the activities of the police. But whatever faith the noble and learned Lord, Lord Denning, may have had in the police in Birmingham, I must say that I am beginning to lose my faith in the police who were in charge of the investigations into the Maguire convictions.
The noble Viscount, Lord Whitelaw, will remember that since the convictions took place I have made repeated representations to him. Indeed, he kindly granted me permission to go to Wormwood Scrubs Prison to visit one of those who were convicted, Patrick Guiseppe Conlon. I visited him on this Saturday, and indeed I reported back to the Home Secretary. The Home Secretary then had been making his own inquiries, and it was confirmed that Guiseppe Conlon was seriously ill. I repeat the circumstances of what happened when I went to that prison to see Guiseppe Conlon. He was very ill, and he realised it.
6 p.m.
Viscount Whitelaw: My Lords, the noble Lord has been generous enough to refer to some communications with me, and indeed that is true. He will be the first to understand that for me to have to suggest to him that what he is saying cannot go on too long is difficult. My past associations with him, my interest in this case with him, all lead me to be totally lenient, but I have my duty as Leader of your Lordships' House.
I have my duty to try to see that we perform, so far as we are able in difficult circumstances, in accordance with the procedures which our Procedure Committee has laid down. I am sure that the noble Lord will understand that. Possibly, despite our understandable feelings, he will feel able to come to a fairly early conclusion of the remarks he is making.
Lord Fitt: My Lords, I fully understand the anxiety of the Leader of the House that we should not prolong this debate to any great extent. But what I was saying there was in direct relationship to the memorandum that has been placed in the Library. Guiseppe Conlon knew that he was dying. He took the oxygen mask off
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his face. He told me that he knew he was dying, and asked could he depend on me, after he had died, to continue to prove his innocence. He had never at any time handled nitro-glycerine.
Page 21 of the memorandum, which can now be seen in the Library, says:
"Protestations of innocence, however strenuously sustained, cannot of themselves provide grounds for referring a case to the Court of Appeal. It is understandable that defendants who have protested their innocence up to the point of conviction might continue to do so afterwards even though guilty".
The suggestion there is that Mr. Conlon, even though he knew he was dying, had protested his innocence during his trial and was continuing to do so up to the point of his death. I would strongly contradict that.
It has already been said by previous speakers that the concern which has been expressed in this House and in another place by many people cannot go unanswered. I do not believe that the Home Secretary's decision not to refer the Annie Maguire case to a higher body will be accepted by all those who have expressed their concern. It will certainly not be accepted by me. I shall continue to do everything I can until I have proved to this House, and indeed to the world and the people of Britain, that Annie Maguire and her family should never have been convicted because they are totally innocent of any crime.
The Earl of Caithness: My Lords, I know that I speak on behalf of the whole House when I say that we fully appreciate and understand the strong feelings that the noble Lord, Lord Fitt, has in this matter. He made reference to the Birmingham bombers, and perhaps I should make it clear, if it has not been made clear already by what I have said, that the reference to the Court of Appeal does not mean that those in custody are either innocent or guilty. That is a matter that has to be determined by the Court of Appeal. It is not a matter that my right honourable friend the Home Secretary has ruled upon in making the reference to the Court of Appeal.
With regard to the evidence of Mr. Yallop, who developed the TLC test, the noble Lord, Lord Fitt, is absolutely right in saying that he raised doubts about some things during the trial; but of course this was before the trial and then before the Court of Appeal, so this evidence that Mr. Yallop has presented has been carefully considered on two occasions already and the judge and jury took that into account.
On the question of protestations of innocence, it is always troubling when people continue to assert strongly their innocence long after they have been convicted, and I do not seek to minimise that fact, but we believe that most people would accept that protestations of innocence would provide a very unsatisfactory and uncertain basis for interfering with a conviction.
If one did say that my right honourable friend the Home Secretary should, on the basis of a protestation of innocence, refer a case, I think it is wise to let the House know that in the Home Office we receive over 1,000 letters a year from people protesting innocence, either on behalf of themselves or on behalf of other people who have been convicted or are at trial. If we were to follow that precedent every single case would

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continually be referred on the protestation of innocence.
This leads us on to confidence in the judicial system. I do not think that public confidence in the judicial system is quite so fragile as has been made out by some of your Lordships by the unease that is still felt. Surely the best way of preserving confidence in, and the integrity of, our judicial system is for my right honourable friend to consider thoroughly representations made to him alleging a miscarriage of justice, and to act whenever there is new evidence or a consideration of substance which was not before the court and which casts doubt on the safety of a conviction, and not to interfere with the verdict which has been reached by the court of trial and the Court of Appeal having heard all the relevant evidence. These are the principles that my right honourable friend has followed in this case.
Lord Stallard: My Lords, as probably the only other member of the Clapham bus present here this afternoon on this short Statement, may I be allowed a couple of words and to ask a few questions on the subject under discussion? Although we accept the difficulty that the Home Secretary has obviously had in coming to any decision at all because of the complexity of the whole affair, we are puzzled.
There are many common factors in all three cases. There is the debate about unsafe evidence; there are queries about confessions; there are all the eminent scientists and learned judges, religious leaders, community leaders and so on who have expressed opinions about the Maguire case, and there are the book and television programmes that have been referred to. Why were all three not sent to the appeal court? It would seem just to ask: if one is considered proper to be sent to a higher body why, with all these common factors, are not all three cases being sent? It seems that unless we can satisfy the millions of people who have become involved in the minutiae of the three separate cases that justice is being done in all cases, we should have failed in gaining anything from the courageous decision that the Home Secretary has made in relation to the Birmingham case. My doubt is that there is a constant emphasis on the need for new evidence. The noble Earl referred to this in a number of passages in his speech.
I seem to recollect, and eminent judges have said before—I believe it was an appeal court decision made by Lord Diplock that emphasised it—that it was sufficient, as well as new evidence, to reconsider cogent arguments on the available evidence or the interpretation of available evidence as well as or perhaps in place of new evidence. One does not have to have new evidence. Will the noble Earl accept that there is an opinion that states that cogent argument of our interpretation of evidence is sufficient to send it to a court of appeal? If that is the case—I firmly believe it is—in view of all the factors that are available in all three cases, is it not now possible for both the Guildford and the Maguire cases to be sent for further consideration?
The Earl of Caithness: My Lords, I think I have covered sufficiently the three cases, why there is not a common factor and why all three had to be considered
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individually. It would be wrong for me to repeat the arguments that I have already put before the House.

Severe Weather Payments
6.12 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, with the leave of the House, I should like to repeat a Statement which has been made by my honourable friend the Minister of State for Social Security in another place.
"With permission, Mr. Speaker, I wish to make a Statement about supplementary benefit payments for exceptionally cold weather.
"Last Tuesday, I informed the House that for that week payments of £5 would be made available to everyone in the qualifying groups to help them heat their homes during the current extremely cold spell. This announcement was made in the expectation that the trigger point of minus 1·5 degrees celsius in the regulations would be reached. In the event that judgment has proved to be correct and the trigger point has been reached widely throughout the country. In many areas it was dramatically exceeded with average temperatures as low as minus 5 degrees celsius. In two thirds of the weather stations average temperatures for last week of minus 2 degrees celsius and below were recorded. In these extremely rare circumstances I believe the decision we took to announce the payment early last week has been amply vindicated.
"The Government have considered carefully the position both for this week and future weeks. As I told the House last week, our primary concern is to ensure that vulnerable groups should not be discouraged from heating their homes. It is clear that many people are still experiencing difficulties and are looking for assurance that they will get extra help to keep warm this winter.
"In these circumstances I wish to make it clear therefore that a further payment of £5 will be available for this week only to those in the qualifying groups. This entitlement will be widely advertised and existing claimants who have already made a claim will be paid automatically if eligible. Others eligible may claim immediately. The Government believe that our initiative in introducing a statutory entitlement to extra help in very cold weather was right. The rules are clear and can be operated speedily, fairly and effectively. But we recognise the anxieties felt by vulnerable groups that the temperature trigger-point may not be reached even in prolonged periods of cold weather.
"Since the whole purpose of this cold weather payment is to give people the confidence to keep warm we have decided to amend the trigger point from minus 1.5 degrees celsius to 0 degrees celsius—freezing point. I have laid amending regulations before the House to this effect today. Our intention, Mr. Speaker, is that they will come into operation from next Monday, 26th January. In all other respects, the scheme will continue to operate as presently designed.
"The amending regulations also provide for the further payment of £5 in respect of this week. The additional cost is within the normal margin of adjustment to the social security programme and will be met from the reserve.
"Mr. Speaker, I believe the Government have acknowledged anxieties that have been expressed. Today, we have responded to them quickly, flexibly and with great concern. I hope the House will welcome this Statement."
That, my Lords, concludes the Statement.
Baroness Jeger: My Lords, I thank the Minister for repeating the Statement. The fact that the Government have had so soon to come forward with amendments to their original plan would seem to vindicate those of us inside this House and many outside that the Government's original plan was some distance from perfection, to put it mildly. I shall briefly ask the Minister one or two questions which are of great concern to many people.
In the third paragraph of the Statement the Minister says:
"The Government have considered carefully the position both for this week and future weeks".
However, in the fourth paragraph, the Statement reads:
"A further payment of £5 will be available for this week only".
Perhaps I may ask what the reference to future weeks in the third paragraph refers to because it is very unsatisfactory not only for us but for many of the vulnerable groups concerned not to know from week to week what is to happen in this connection.
Of course we rejoice that freezing point is now to be the acceptable trigger; that everyone will be helped as long as the temperature drops to freezing point. Let us hope that we shall have another amendment which accepts that most people would like the temperature to be at a little more than freezing point before it is accepted that they are cold.
Will the Minister—who is very generous herself—try to influence some of her right honourable friends to be as helpful as they can without being fixed on the actual temperature levels? I say this because I have had several calls already today from old people who are not only suffering from the cold but the water pipes in their homes have burst. They are flooded with water. They say, "I have to keep the heating on not because I am so cold, but to dry out my flat. My bed is damp and my carpet is dripping". I believe we ought to give the most generous consideration possible to the effects of the cold weather as well as to the cold itself.
Lastly, can the Minister say what reports she is receiving from the local offices about how the scheme is working so far? I am especially worried about whether it has been found possible to give any help to people who use pre-payment meters or who have to buy coal or bottled gas for which they need the money in advance to buy these means of keeping warm? That point has been raised before, but we have not had an answer to enable us to help many of the poorest people who depend on slot meters for their heat.
Lord Banks: My Lords, I should like to thank the noble Baroness, Lady Trumpington, for repeating the Statement made in another place. We on these Benches welcome the Statement both as regards the payment of £5 for this week and also in relation to raising the trigger point to 0 degrees celsius.
I am glad that those who have already claimed will automatically get the further £5. Can the noble Baroness tell us how many have claimed so far? Have the Government any idea at all how many of those who qualify are claiming? I must echo what the noble Baroness, Lady Jeger, said. Does not the fact that it has been necessary to set aside the laid down procedure for two weeks running provide such striking vindication so far as concerns low temperatures? Does that not indicate that the scheme is basically unsatisfactory? Must not a retrospective scheme always defeat the object? Will not the vulnerable groups, as the Statement calls them, always be discouraged from heating their homes? Raising the trigger point to freezing point will help in this respect, but surely it cannot eliminate the danger. Will the Government in due course review the whole scheme in the light of current experience?
Baroness Trumpington: My Lords, I think that all credit should go to the Government for listening and for adopting a flexible approach to an everchanging and difficult situation. However, no amount of explanation seems to enable some people to understand that the main help with heating is in the scale rates and regular weekly additions. The Statement refers to an extra amount now likely to be paid more frequently than under any other previous system.
We already had a system that would have made payments in most of the major centres of the population last week under the minus 1·5 degree criterion. We have all along made clear our determination to run a system that would give people extra assurance at times of very bad weather. We have a system on the right lines, and we have now made it even more generous.
People with prepayment meters will get the payments quickly under the scheme. Local offices have been told to give claims priority. It was previous schemes that caused most difficulty for those with prepayment meters. The whole idea of the quick £5 is cash payments.
The noble Baroness, Lady Jeger, and the noble Lord, Lord Banks, asked how the schemes were working so far. It is a little early, but we know that claims have been dealt with in local offices and that £5 payments have already been issued. This prompt payment helps those with slot meters. It is a little soon to get the total take-up figures from offices because claims are coming in all the time.
From next week the 0 celsius trigger criterion will work in the normal way. The noble Lord, Lord Banks, suggested some form of regular payments, I think. As I have said, the main help is already given throughout the year. Perhaps he would indicate a "yes" or a "no" if I have misunderstood.
Lord Banks: My Lords, I did not in fact refer to a regular payment today, although I went into it last Thursday. No doubt the noble Baroness will want to look that up to see precisely what I said.
Lady Saltoun of Abernethy: My Lords, I am grateful to the noble Baroness and to the Government for the announcement that has been made today. I should like to ask the noble Baroness one question. Will she keep in mind the fact that in many parts of Scotland the temperature is normally 0 degrees centigrade or below on most nights from October to April whereas the weather stations in many cases are in warmer parts of the country? I think particularly of Braemar and other inland and upland places where the temperature is judged by the weather station at Dyce, near Aberdeen, which is near the sea and therefore very much warmer. Will she ask the Secretary of State to consider in future taking the temperature readings from such places as well as from the present weather stations?
Baroness Trumpington: My Lords, in answer to the noble Lady, in England, only three areas—Sunderland, Berwick and Whitehaven—would not have qualified under the December rules. I might as well put in Wales where there was only one, Caernarvon. All the remaining areas in Great Britain that would not have qualified are in Scotland. This simply reflects the fact that most recently, conditions have been milder in Scotland. On Sunday, the mean temperature in Glasgow was 1 degree above freezing; in Birmingham it was 5 degrees below freezing.
Under the new rules of 0 rating, everywhere in England and Wales would have qualified last week. Indeed, only two areas in mainland Great Britain—Wick and Campbeltown—would not have qualified. The remaining three areas that would not have qualified are the Western Isles, the Orkneys and Shetland where the weather has been milder.
The weather stations are located according to the directions given by the Meteorological Office at places where it is most easy to collect information speedily. They are spaced out so that they cover the widest area within their bands. We have done all this according to the advice helpfully given us by the Meteorological Office, which SSAC has endorsed.

Consumer Protection Bill [H.L.]
6.27 p.m.
House again in Committee on Clause 4.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 40:
Page 4, line 15, leave out from ("to") to ("instructions") in line 16.
The noble Lord said: Clause 4(1)(f)(ii) states:
"that the defect was wholly attributable to the design of the other product or to compliance by the producer of the product so comprised with instructions given by the producer of the other product".
The amendment changes the wording of the subsection to state:
"that the defect was wholly attributable to the design of the other product or to instructions given by the producer of the other product".
To my mind—no doubt the noble and learned Lord, in reply, will say that I am wrong—that means exactly the same thing, and in fewer words. It also has the advantage of using the words of the directive. In my submission, there is something to be said for making the subsection shorter, clearer and more definite. I beg to move.
The Lord Advocate (Lord Cameron of Lochbroom): I am always with the noble Lord in seeking to achieve clarity but as I think he will understand I have explained the reasons why I cannot suggest to the Committee that the amendment be accepted. It will indeed introduce an ambiguity that the words included in the Bill presently are intended to remove.
As the noble Lord has said, the subsection implements the provisions of Article 7(f) of the directive. That article provides that the producer shall not be liable if he can show, as a manufacturer of a component, that the defect in the product is attributable to the design of the product in which his component has been fitted or to the instructions given by the manufacturer of the product.
The case at which this article is clearly aimed—and I think it is clear from a general reading of the directive—is where component parts such as nuts and bolts, for instance, are made to the order of the finished product manufacturer, who then uses them for purposes for which they were not designed. That is to say that the component manufacturer is acting upon the instructions given by the manufacturer of the finished product.
The trouble about taking the words out, as the noble Lord has suggested, is that it might then be argued that the "instructions" referred to in the clause and in the article were instructions relied upon by the injured party. One might perhaps take the example of an electrical product which carries instructions for use prepared by the manufacturer of the finished product, and those instructions incorrectly specify adjustment to a component. Those instructions will not then usually be relevant to the component manufacturer's position since the component was supplied at an earlier stage. It was to correct this possible ambiguity that the subsection was carefully drafted to make it clear that there should be no ambiguity.
I think the noble Lord will understand, if he looks at the matter again in the light of what I have said, that it is important to obtain clarity and these words are then included to make it clear that they are instructions to the component manufacturer. This arises out of the point that he would not then be liable for a design for which he himself had not been effectively responsible.
Lord Morton of Shuna: I thank the noble and learned Lord for his answer, which I regret to say is wholly unconvincing. I agree it has to cover instructions to the manufacturer of the component but it is surely also designed to cover the situation where the manufacturer of the total article which has the component in it issues instructions to the consumer which involve a misuse of the component. That is

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what Article 7(f) says. If there is an ambiguity, it is one which exists in the directive, because it says there:
"The producer shall not be liable as a result of this Directive if he proves: … in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product."
It does not say "given by the manufacturer of the product to the manufacturer of the component": it just says "instructions given". One can quite foresee a situation where the instructions of the manufacturer of, say, a car to the consumer in the instruction book involve a misuse of a component manufactured by somebody else. Surely the manufacturer of the component should have the defence that the article says he should have. I regret to say that I find the noble and learned Lord's answer wholly unconvincing and I should be pleased to know whether he has any response to make to me on this point or not.
Lord Cameron of Lochbroom: It is not a question of response. I have given the Committee the advice that I have received—that that is the intention of Article 7 and that if one looks at it in the light of the whole directive the intention is to deal with design (a design which, however, may be one which has been the subject of instructions given to the manufacturer of the component by the manufacturer of the product). As I say, it is upon that advice that I have to advise your Lordships that this clause is framed as it is.
The noble Lord opposite takes issue with me on that matter, but I have to say that obviously we have very carefully considered the whole question of what the article means; and this part of the Bill is a synthesis of what the directive seeks to achieve. I am bound to say, acting on advice, that that is why this subsection appears in the clause as it does.
Lord Morton of Shuna: I will beg leave to withdraw the amendment in the hope that perhaps the Government may look at this again and perhaps the manufacturers of components may be able to persuade the Government in this respect if I have been unable to do so. I beg leave to withdraw the amendment.
Lord Kennet: On the Question that the Committee gives the noble Lord leave to withdraw his amendment, the noble and learned Lord has informed us that he has received advice that the intention—
Lord Cameron of Lochbroom: With respect, I think the amendment has already been withdrawn and the noble Lord is therefore out of order.
Lord Kennet: I believe the Committee has not yet given its leave for the amendment to be withdrawn and the Committee must give leave before the amendment can be withdrawn. It is at present still the property of the Committee—
The Deputy Chairman of Committees (Baroness Serota): I rise to put the Question—
Lord Kennet: I believe I am correct in saying that the amendment has not yet been withdrawn. The noble
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and learned Lord has just informed us that he has received advice that the intention of the clause in question was such and such—for the purpose of my intervention it does not matter what the intention is—and I should like to ask two questions. First, who gave him the advice which he has passed on to us? Secondly, whose intention was it that the effect of the article should be such and such? There appears to me to be an unacceptable degree of anonymity in what the noble and learned Lord has just said to us.
Lord Cameron of Lochbroom: I have made it quite clear that the advice I have received was from those officials who advise in these matters. It is upon that basis which I have indicated to your Lordships that the article is translated as it is into the Bill.
Amendment, by leave, withdrawn.
On Question, Whether Clause 4 shall stand Part of the Bill?
Lord Williams of Elvel: Before we leave this clause, may I ask a question about Clause 4(2), which refers to "the relevant time" in relation to electricity? I find myself rather perplexed by this subsection and I shall be grateful for clarification. The generation of electricity, as I understand it, is a continuous process and I fail to understand how you can determine a time at which electricity is generated. I do not quite understand how, given the problems of storing electricity at high voltage, you can distinguish between the time at which electricity was generated and the time at which it was transmitted.
My last question is: given that Clause 1(2)(c) indicates that there is a further process, the performance of which can make the person doing the processing into a producer, does the transformation of electricity from high voltage to medium and low voltage constitute a production process under the terms of Clause 1? Is therefore the transformer the producer of the electricity which may come from a prior source? Further, if that is not the case, and if one cannot pin the responsibility for being a producer on to the transformer and hence the immediate supplier, how is it possible to tell what is the source of the electricity generated?
As we know, there are many arrangements between, for example, Electricité de France and the CEGB, and between the South of Scotland Electricity Board, the North of Scotland Hydro Board, the CEGB and others, for the transfer of electricity. How is it possible for anybody to determine who was the generator of electricity? I should be most grateful if the noble Lord could clarify my points.
Lord Lucas of Chilworth: I shall certainly try to answer the points which the noble Lord has raised. Clause 4(2) read with Clause 4(1)(d) gives effect in relation to electricity to an entry in the minutes of the council. These were adopted at the same time as the directive. It reads:
"The council notes that the inclusion of electricity in the definition of 'products' in Article 2 is intended solely to cover defects which are due to a failure in the process of production of this commodity and not defects which are due to external agents intervening after the electricity has been put into the network".

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In other words, liability in the United Kingdom will be confined to defects of generation, for which usually the Central Electricity Generating Board is responsible, and not defects arising subsequently in the supply, such as faults in the distribution line, for which the area boards are generally responsible. Electricity is treated as a product, so that if it is defective due to a fault in its generation—for example, it may be of too high a voltage or its frequency may be incorrect—damage caused by that defect will be covered by Part I of the Bill.
Lord Williams of Elvel: I am grateful to the noble Lord for his response. I think that this is a rather complicated question and I should perhaps like to take it up with him elsewhere.
Clause 4 agreed to.
Lord Airedale Lord Airedale moved Amendment No. 41:
After Clause 4, insert the following new clause:
("Identity of producer.
—(1) Every producer shall whenever practicable incorporate in his product his identity.
(2) Any person who fails to comply with subsection (1) above shall be guilty of an offence.")
The noble Lord said: This amendment seeks to introduce a new clause and I think the need for it can best be explained if I give the Committee an example of what I am thinking of. I confess to having given this example once before, but not for some time now.
A carpenter builds a splendid step-ladder, staunch and strong, and sells it to a customer. Nevertheless, when it is used it collapses and somebody has a bad fall, breaks his thigh and presents the poor carpenter with a large bill for damages. The carpenter is not at fault in any respect at all. The trouble is that one of the hinges that he fixed to the ladder had a crack in it. It could not be seen by any reasonable inspection because it had been painted over. It had not been painted over dishonestly—it had been painted over by the manufacturer as one of a consignment which were all painted over—and neither did the manufacturer spot the crack in the hinge.
The carpenter's only hope of passing the responsibility for this disaster back along the line of communication is, first, to identify the builders' merchant who supplied the hinge to him. His situation is that he has a good relationship of trust and friendship with several travellers who visit him from time to time from different builders' merchants. When he is busy he allows them to look through his stock of fittings, because they know as well as he does what fittings he regularly needs in the course of his business, and he relies upon them to keep replenished the stock that he needs of these fittings.
When this particular hinge is shown to be defective, the carpenter is under terrible difficulty even to be sure which builders' merchants supplied it. His chance of taking the matter back, as it ought to be taken back, to the manufacturer in the West Midlands—and there are many manufacturers in the West Midlands of fittings like this—is just about nil. This surely indicates the need for an amendment like this one to make the Bill work satisfactorily from the point of view of people who are injured. It is surely desirable to make
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it obligatory upon the producer to put his identity mark upon his product so that in cases like this he can be identified.
I do not suppose that the acceptance of this amendment would be met with any dismay by the industry, because it is already very common practice for fittings to be marked with the maker's identity mark. Indeed, on balance, it is probably advantageous to him to do this, because in that way he probably relies upon getting repeat orders for the products which he supplies.
I qualify the new clause slightly by saying "whenever practicable", because I realise that there are limits. It is probably not practicable that every screw or nail should be inscribed "GKN" or whatever it may be. But subject to that I should have thought a new clause of this kind was necessary if this Bill is to work satisfactorily from the point of view of people who will be injured. I beg to move.
6.45 p.m.
Lord Kilbracken: I must say that on this occasion I find the noble Lord's wording in his new clause slightly inappropriate and misleading. He talks about a producer having to,
"incorporate in his product his identity."
I do not know why he does not say, "incorporate his identity in his product", which would be the usual order of words. To incorporate means to include something as part of something else, and I do not see how a producer can include his identity in a product. I suggest that he includes an indication of his identity. That is what we want to know. We want some indication of who he is. It is an indication of his identity, rather than his identity, which should be included.
Baroness Gardner of Parkes: I find this a slightly worrying suggestion, as those of us who have travelled overseas recently have discovered that anyone can get anything with a fake hallmark or a name of any sort on it. Indeed, if you go to Singapore you can buy any sort of fake watch, and watches are sold as being fake watches. But how then does someone later prove that a hinge which has a very small mark on it was genuinely made by someone and was not made by someone else who was faking it?
Lord Marshall of Leeds: I should also like to say that the words "whenever practicable" will be a matter of great contention if any person who fails to comply is thereby guilty of an offence. It makes me regret that I am a lawyer retired from private practice, because the amount of litigation that this might generate is a very attractive proposition so far as the law is concerned.
Lord Denning: I would just add that before creating any criminal offence it ought to be clear and distinct, so that you know exactly whether you are committing a criminal offence. These words "whenever practicable" have to be put in in case of argument, but the position is so uncertain that I am afraid it ought not to be made a criminal offence.
Lord Lucas of Chilworth: I greatly enjoyed hearing again the example of the noble Lord, Lord Airedale. He said that to alleviate to some extent his new clause he has added the words "whenever practicable". He then said that you cannot go on to name every component. He referred to the nail; but where is it not practicable and where do we draw the line? One would go to the producer of the step-ladder, if indeed that were defective.
Leaving that aside, I would sooner rest my suggestion of rejecting the noble Lord's amendment on rather firmer ground. The purpose of the amendment is that every producer of every product would have to incorporate his name on that product and if he did not do so he would be guilty of an offence. There are a number of problems here. First, the provision would place a quite intolerable burden on United Kingdom producers. Even if we were to accept the clause into the Bill it would have no effect whatsoever in other Community countries which are also implementing the directive. Indeed, it would have no effect anywhere else other than in the United Kingdom. For that reason alone, I suggest that the clause is misplaced.
However, to make it a criminal offence for a manufacturer not to put his identity into the product, as my noble friend Lord Marshall of Leeds and the noble and learned Lord, Lord Denning, suggest, is going too far. My noble friend Lady Gardner of Parkes had a point when she spoke about copied parts. I do not wish to engage this evening in a long debate—and I do not think my noble friend does either—on the great problem of counterfeiting, another problem into which the Community is looking.
Surely it must be for every producer to decide whether he wishes to attach his name to a product or whether his customer wishes his name to be attached to the product. We also have a problem in establishing what in this amendment the word "producer" means. Does the noble Lord, Lord Airedale, intend it to refer to the manufacturer of the product or to those persons who would be deemed to be producers by virtue of the provisions in Clause 2(2)? Both by putting their own trade mark or name on a product hold themselves out to be the producer of the product or a person who imports the product into the Community from a place outside. We can legislate only for United Kingdom manufacturers or importers. This would place them at a considerable competitive disadvantage within the Community.
Furthermore, the provision would make any producer who failed to incorporate his identity guilty of an offence. This part of the Bill does not deal with criminal offences. It is concerned solely with civil liability for damage caused by defects in products.
I feel quite sure that the noble Lord, Lord Airedale, will find those agruments sufficiently persuasive for him to withdraw his amendment.
Lord Airedale: As the amendment has been opposed strongly in every single quarter of the Committee, I think I should be unwise to press it to a Division. I am gratified that noble Lords have taken so much interest in this matter. Some of the criticisms have been slightly nit-picking. For instance, the noble
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Baroness, Lady Gardner, asks about the position with regard to a cheap imitation made in Singapore. If one took that to the firm in Birmingham it would say. "That's not our product. That's a cheap copy. If you take us to the court we shall have no difficulty in persuading the judge that it is a cheap copy of our product". I see no difficulty arising there in practice.
I shall not go on to deal with all the criticisms that have been levied. It is quite clear that the Committee is not prepared to accept the amendment, and I beg leave to withdraw it.
Amendment, by leave withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 42:
After Clause 4, insert the following new clause;
("Insurance of producer or importer.
. Every person to whom section 2(2) above applies shall maintain in force such a policy of insurance as complies with the requirements of this Part of this Act; and if a person acts in contravention of this section he shall be guilty of an offence.").
The noble Lord said: This amendment is based upon the relevant section of the Road Traffic Act which makes compulsory insurance in respect of road traffic. I should have thought that the amendment is necessary if the Bill is to work. For a variety of reasons, unless they have to, people and firms will not take out insurance to cover themselves against this liability. Some of them will be too busy to remember to insure and others will deliberately take the risk upon themselves.
They will say that these terrible disasters are things which happen to other people and will not happen to them, so they will not insure; they will stand the risk themselves. Then some terrible disaster will occur and the small firm will be quite unable to meet the enormous claim that will be made. The small firm will be made to meet it up to the point of bankruptcy perhaps, and its work-people will be thrown out of employment. The injured person will not receive his full compensation and there will be tears all round. To avoid such situations it is necessary to have a provision to require producers compulsorily to ensure against liability under this part of the Bill.
There is another aspect which I do not mention in the amendment itself. There is the Motor Insurers' Bureau provision whereby, in the cases where a motor vehicle or its owner is not insured, nevertheless by agreement with the Government the insurance industry agrees to compensate the injured person just as though the person guilty of the offence was insured. That, I believe, is not a statutory provision but is an extra-statutory arrangement come to between the Government and the industry. I hope that a similar arrangement would become available if this amendment for compulsory insurance was enacted. I beg to move.
Lord Williams of Elvel: I hope that the noble Lord, Lord Airedale, feels that I have been reasonably sympathetic to some of his amendments and to some of his thoughts, but on this one I am bound to say that as an Opposition we oppose it fundamentally. It appears to introduce into the Bill a whole new series of concepts of a wholly impractical nature. I very much hope that the noble Lord opposite will turn it down straight away without further debate.
Lord Auckland: I begin by declaring an interest as president of the Institute of Insurance Consultants, although any views I express do not necessarily represent the views of that organisation. There are some intolerable difficulties here. In the first place, I think it is fair to say that most producers of any repute will already be insured.
There is also the question of enforceability. Who is going to enforce this? I know that under the Road Traffic Acts at least third party insurance is compulsory, but here we are talking about all kinds of producers—mainly people who are reasonable, but obviously there are some mavericks.
One cannot compel an insurance company to deal with those people. We must leave it to the bona fides of the producer to seek insurance. It is not always easy, but insurance can normally be obtained, even if sometimes at a high cost, through a reputable insurance company for a reputable producer. I think that in this instance one has to trust the bona fides of both sides.
7 p.m.
Lord Denning: May I add that if this insurance is compulsory it would be only in regard to the strict liability. If you are to have insurance it must cover negligence, breach of contract and goodness knows what. I am afraid the amendment will not work.
Lord Lucas of Chilworth: I suggest to the noble Lord, Lord Airedale, that he does not press his amendment, for a number of reasons which have already been given by members of the Committee.
I do not normally comment upon the drafting of an amendment but this proposed new clause refers to,
"such a policy of insurance as complies with the requirements of this Part of this Act"
when there are no such requirements in the Act. Secondly, it is not right—
Lord Airedale: I should have said that I deliberately did not spell out the requirements of "this Part of this Act" because I am dealing with a general principle and I did not want to clutter the Marshalled List with a lot of detailed matter which in any case probably would not have been right. I am dealing with the general principle.
Lord Lucas of Chilworth: Perhaps I can then deal with the one principle which I believe is wrong. There are practical arguments that one can portray and some have been portrayed. I refer to such matters as own insurance which the noble Lord, Lord Ezra, spoke about earlier. I should say that compulsory insurance is not a feature of the directive. In the interests of harmonisation and the agreement which was struck in Brussels it would be wrong for the United Kingdom unilaterally to put in such a provision as it would put a tremendous burden—an impossible burden to enforce—on our manufacturers or producers.
Lord Airedale: Again I am grateful to members of the Committee who have taken part in this discussion and who have shown an interest. This is another matter on which I am not going to win on a Division.
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The noble Lord, Lord Auckland, asked how the proposal would be enforced. Whenever one makes something a criminal offence the news gets around. If you do not do what is legally necessary you are committing an offence and can be heavily fined. You must comply with the law of England. That is the way such matters get enforced.
Having said that, since the Committee is not favourably inclined towards this idea, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Damages recoverable under Part I]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 43:
Page 4, line 30, at end insert ("and including non-corporeal losses.").
The noble Lord said: This is in the nature of a probing amendment. Clause 5 deals with damages, what they consist of and what can be recovered. According to subsection (1):
"'damage' means death or personal injury or any loss of or damage to any property (including land)."
That conveys the connotation that it is corporeal property and there is no definition that I can find anywhere in the Bill of what "property" is supposed to mean; so one assumes that it means what the court holds it to mean.
There are many cases that one could visualise where someone is injured or suffers in some way because of a defective product and therefore suffers a non-corporeal loss. For example, if someone who runs his own business is seriously injured in an accident the good will of his business will suffer and he will have had a severe loss of that nature.
I should like to know from the noble and learned Lord whether he is satisfied that the Bill covers that type of loss because it clearly covers a loss of earnings claim. Does it cover the other types of claim? I beg to move.
Lord Denning: This is an important point to decide and it is not clear in the Bill as it stands. I do not like the phrase "non-corporeal losses". That sort of phrase is used in Scotland, but I have never heard it in English law. We usually refer to it as "economic loss". There are many cases about economic loss or damage, and it has been the subject of much discussion in the courts and in the textbooks.
It is important to resolve this point because Article 9 of the directive tries to define "damage", although it is not clear on that point. It then states:
"This Article shall be without prejudice to national provisions relating to non-material damage."
I expect that means the same as economic loss, but I do not know. Again, that is not an English phrase; it is a directive phrase but I assume that it does mean non-corporeal loss or economic damage, or whatever it is.
This is a matter which should be clarified in the Bill. I am a little uncertain about it. If you are imposing strict liability I am doubtful as to how far you should include economic loss. Certainly there has been much discussion on negligence and we include economic loss: loss of earnings, loss of profit in a business, and so on, are all included. I am not at all sure that they ought

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not to be included here. However, it should be made clear in the Bill whether or not they are covered. I do not know the Government's view, but I am inclined to think that the Bill should cover the same sort of damage as an ordinary action of tort should cover and that this is going to be considered as a matter of tort. It should be made clear.
Lord Cameron of Lochbroom: I recognise that this is an important point raised by the noble Lord. In regard to death or personal injury claims I think the noble and learned Lord, Lord Denning, extended this to the other kind of damage. I should say that the Bill is framed to make it clear that, as the directive intends, for property loss it will simply be the loss or damage to the property that is covered and no economic loss resulting therefrom.
As regards the case of personal injury or death, I have to assure the Committee that the intention is that damages recoverable under Part I will be the same as for other actions on personal injuries and will in particular include the normal incidents, apart from solatium, or pain and suffering as it is known more familiarly south of the Border. It includes what the noble Lord opposite would recognise as, in the Scottish term, patrimonial loss. I am bound to say that I stand alongside the noble and learned Lord, Lord Denning, in wondering what is an incorporeal loss. I can understand incorporeal property rights but not an incorporeal loss. I should have thought that it was a negation. However, I fully understand what it is that the noble Lord opposite is driving at.
I am bound to say, as a Scots lawyer, that I have expressed a certain concern about the way in which this particular part of the clause is framed to make it clear that both patrimonial loss and the other rights, which I might call in solatium, can be recovered. Perhaps I may say that our intention is perfectly clear. We think that it is within the sweep of the directive and indeed, as the noble and learned Lord has pointed out, the last words of Article 9, which say,
"This Article shall be without prejudice to national provisions relating to non-material damage.".
That includes, of course, pain and suffering.
I should like to consider the matter further. I think that our objectives are the same. I am not yet fully satisfied that the Bill as drafted secures the objective that both noble Lords and I wish to achieve. Perhaps with that undertaking, the noble Lord opposite will feel able to withdraw his amendment.
Lord Denning: I should like to add one word. There have been many cases in the courts in which damage to property has led to loss of profits or benefits of other kinds. So, in a way, it is necessary for all these aspects to be considered.
Lord Cameron of Lochbroom: Let me come back to say that this is why I was very careful at the outset to make clear that what I am talking about in my undertaking relates only to that part of the clause which deals with death or personal injury. We read the directive as making it clear that so far as property damage is concerned it does not extend beyond damage to property to other economic loss.
Lord Morton of Shuna: As I said, this is a probing amendment and I certainly intend to ask leave to withdraw it. However, in looking at the personal injury side, perhaps I may suggest the inclusion of a clause stating that damages for personal injury shall be assessed according to the law of England or Scotland as appropriate. That would make it perfectly clear what is being dealt with. I ask leave to withdraw this amendment.
Amendment, by leave, withdrawn.
The Principal Deputy Chairman of Committees (Baroness Serota): In calling the next amendment, Amendment No 44, I should mention to the Committee that if this amendment is agreed to, I cannot call Amendment No. 45.
Lord Airedale Lord Airedale moved Amendment No. 44:
Page 4, line 31, leave out subsection (2).
The noble Lord said: Subsection (2) provides that,
"A person shall not be liable … in respect of any defect in a product for the loss of or any damage to the product itself".
Why should this be so? If I buy the very latest 21-inch colour television set costing many hundreds of pounds and find that it has an electrical fault so that the set catches fire and is destroyed, why should I not be able to claim under this part of this Bill without having to prove negligence just because we are talking about the product itself? I see no reason for this. May I please have an explanation? I beg to move.
Lord Morton of Shuna: On these Benches we have to oppose the amendment, not with any purpose of saying that the amendment or the idea behind it is bad in itself but because the purpose of Part I of the Bill is to comply with the directive. We shall be discussing on the next amendment what the product is. But the directive states specifically in Article 9 that "damage" means,
"damage to, or destruction of, any item of property other than the defective product itself".
It seems to be perfectly clear. Therefore, something on the lines of subsection (2) has to be inserted.
Lord Beaverbrook: As the noble Lord, Lord Morton, has said, it is made clear in Article 9(b) of the directive that for the purposes of the directive "damage" means,
"damage to, or destruction of, any item of property other than the defective product itself".
This subsection of Clause 5 reflects that intention in the directive. The purpose of Part I is only to implement the provisions of the directive. I apologise to the Committee if I am being repetitive but it is important to confirm that the purpose of the directive is to provide compensation to persons injured by defective products.
Liability in respect of the quality of a product, its fitness for a particular purpose, including its freedom from defects in the sense that it will not be damaged or lost in its entirety as a result of defects in part of it, is normally governed in the laws of all the member states by the law relating to the sale of goods.
In the United Kingdom, the main provisions are contained in the Sale of Goods Act 1979. This field of

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law is not affected by the directive. For these reasons and because it goes beyond the provisions of the directive, I ask the noble Lord to withdraw his amendment.
Lord Airedale: I appreciate that if the person who suffers the damage is the person who entered the contract to buy the set, there is a cause of action in contract. I appreciate also that if negligence can be proved against the producer, there is an action in negligence. However, if neither of those circumstances is present, is it not anomalous that just because one is talking about the product itself, this part of the Bill is not available to come to the rescue of the person who suffers the damage?
When our representatives discussed this directive in its formative stages with their opposite numbers in Europe, did they point out how anomalous this was going to be and did they urge that the directive should not make this rather extraordinary exception which would create this anomaly? It is no good crying over spilt milk. Noble Lords are quite right, and we have to follow the directive. If the directive directs something which is anomalous, we have to live with it, but it is unsatisfactory. I am glad that I raised the matter because it shows up an anomaly. Nothing can be done about it at this moment, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.15 p.m.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 45:
Page 4, line 33, leave out from ("itself") to end of line 35.
The noble Lord said: In my view this is an important amendment and it returns to a matter that I raised on Second Reading. For what it is worth, my opinion is that Clause 5(2) does not reflect the wording or the meaning of the directive and is contrary to it. Clause 5(2) says:
"A person shall not be liable under section 2 above in respect of any defect in a product for the loss of or any damage to the product itself'.
So far I am quite happy. It is the following words that I seek to delete from the subsection; namely:
"or for the loss of or any damage to the whole or any part of any product which has been supplied with the product in question comprised in it".
In my submission the second half of this subsection is entirely contrary to the content of that article. If one turns first to Article 9(b)—and I read it out during our discussion on the previous amendment—it says:
"damage to, or destruction of, any item of property other than the defective product itself, with a lower threshold of 500 ECU, provided that the item of property … is".
Now we have to look at what is the item of property and what is being talked about by the directive. At Second Reading I gave the illustration of buying a car with a defective battery which went wrong and burned out the car. I said that clearly the intention of the directive was that one should be able to sue the producer of the battery for the damage to the car which was the loss. At col. 1061 of Hansard the noble Lord, Lord Lucas, said that I was wrong. We are now reverting to that argument. I shall refer to the
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preamble and the fourth "whereas", if I can identify it in that way. The directive states:
"Whereas protection of the consumer requires that all producers involved in the production process should be made liable, in so far as their finished product, component part or any raw material supplied by them was defective".
That seems to mean that the protection of the consumer requires that we should be able to go against the supplier of the raw material, the component or the finished article in which the component and the raw material are comprised. One then goes to the articles which give the definition. Article 2 defines what a product is. It states:
"For the purpose of this Directive 'product' means all movables with the exception of primary agricultural products and game, even though incorporated into another movable or into an immovable.".
In other words, a battery, when incorporated into a car, remains a battery.
Under Article 3 "producer" means:
"the manufacturer of a finished product,"—
that is the car—
"the producer of any raw material or the manufacturer of a component part".
That is the manufacturer of the battery in the example that I have given, or of a defective tyre or brake lining:
"and any person who, by putting his name, trade mark"
and so forth.
That is clear. The consumer is being given a choice. He can either sue the car manufacturer, in which case he cannot recover the damage to the car, or he can sue the battery manufacturer, in which case he can recover the damage to the car. That becomes clear if one looks at Article 7:
"The producer shall not be liable as a result of this Directive if he proves: … in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product.".
As I said, the point of the provision is to give a choice and a collection of producers. The manufacturer of a component or a raw material is clearly a producer. The directive says so time and again. He does not cease to be a producer merely because someone else puts his products into a car or any other component-assembled article.
The Government have not followed the directive. They have restricted the damages in a way that is clearly wrong. Subsection (2) would meet the directive completely if it said:
"a person shall not be liable under Section 2 in respect of any defect in the product for the loss of or any damage to the product itself"
and just left it there. I can find nothing in the directive to justify the next two lines, and for those reasons I beg to move.
Lord Denning: I support the amendment. I find it difficult to understand the two or three lines at the beginning. I should like to compare it to where an action in negligence or breach of contract still lies. I should have thought that one would be liable under that for the loss or damage to the component itself and to the other materials; in other words, I think the provision unduly restricts liability in damage. It is much better to keep it to those first two lines which correspond with the directive. I support the amendment.
Lord Cameron of Lochbroom: I invite the Committee not to accept the amendment. I do so for a number of reasons. The principal reason relates to the directive. I accept that if one goes through the directive one finds many places where it does not fully work out the consequences of the provision contained in Article 2 which provides that a product may include products incorporated into other products. This is one of those places. We take the view that the reference to the defective product in Article 9(b) is reasonably and rightly to be construed as including any product in which a defective component is comprised.
In that regard it may be helpful to quote paragraph 20 of the Commission's memorandum on the directive which I think makes the point abundantly clear:
"claims for compensation in respect of damage to or the destruction of the defective product itself are excluded. Product damage is damage which is inflicted upon the user or purchaser of a defective article in the form of personal injury or damaged property. The producer of the article is liable in respect of this type of damage. Liability in respect of the quality of a newly purchased article, its fitness for particular purposes, including"—
this is the important part—
"its freedom from defects in the sense that it will not be damaged or destroyed in its entirety as a result of defects in part of it, is normally governed in the laws of all the Member States by the law relating to the Sale of Goods. This field is not affected by the Directive."
There it is,
"including freedom from defects in the sense that a product will not be damaged or destroyed in its entirety as a result of defects in part of it."
I should make it clear, as the noble Lord opposite will recognise, that if we have a defect in the component of a car that leads to the car which is what the person who is claiming damages would have received, being destroyed, and that happens without any injury to that person or damage to his property, then such damage raises different considerations.
A product which destroys itself, which would be what that is, is not of merchantable quality and accordingly would be treated by the law which deals with the quality of goods and not their safety. That is the point that the Commission makes in its memorandum. Accordingly, the directive and the first part of Clause 5(2) does not cover damage done by the product to itself.
Having explained why we have taken that view, I hope that the noble Lord, Lord Morton, will understand that there was good reason for our drafting this provision as we did. Sadly, his expensive motor car which blows itself up with its defective battery, will not be a subject for litigation under this Bill. The noble Lord will as usual no doubt find many ways of recovering by adopting other remedies available to him in law.
Lord Denning: May I ask about this memorandum? Where do we find it? I have only the directive. Is the memorandum separately issued by the European Commission?
Lord Cameron of Lochbroom: I understand that to be the case. I shall certainly be happy to try to obtain a copy for the noble and learned Lord.
Lord Denning: It is interesting that when interpreting this we first looked at the directive and from the directive to a memorandum. I understand that the Commission is saying "Leave it to the sale of goods provisions", and not those on strict liability.
Lord Morton of Shuna: At this time of night I certainly do not want to test the opinion of the Committee. Nor do I wish to go into the question as to whether, if one buys a car with a defective tyre, that car is of merchantable quality and whether one would be able to operate wholly under the Sale of Goods Act. There is the other problem about whether, if A buys a car and it causes damage to B, for whom, if anybody, there will be a right under this directive.
No doubt the noble and learned Lord can tell us the status of the memorandum. The directive is published by the European Community and the Community has adopted it. Is the memorandum advice to the Community? What is its status if it contradicts the directive?
Lord Cameron of Lochbroom: I would simply say that the memorandum is not contradicting the directive. It makes clear the Commission's view, and it will be the Commission at the end of the day which will be ensuring that the directive is implemented as to the effect of this article. Obviously all member countries will be taking that into account when they are drafting their legislation based upon this directive. That is the reason why I thought it was extremely pertinent to quote it in some length to the Committee to make it quite clear why it is that we have taken the view that we have done about the effect of this article.
Lord Morton of Shuna: Perhaps this is an appropriate time to ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Beaverbrook: It may be for the convenience of the Committee if I suggest that we do not return to this subject until 8.30 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Licensing (Restaurant Meals) Bill [H.L.]
7.33 p.m.
Report received.
Lord Beaverbrook: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.34 to 8.30 p.m.]

Consumer Protection Bill [H.L.]
House again in Committee on Clause 5.
Lord Morton of Shuns Lord Morton of Shuns moved Amendment No. 46:
Page 4, line 37, after ("any") insert ("item of").
The noble Lord said: It may be for the convenience of the Committee if I discuss Amendments Nos. 46, 47 and 48 together. They are all straightforward semantic points. The aim is to comply, no more and no less, with the directive.
The first amendment is to add "item of" before "property". That is straight out of Article 9:
"damage to, or destruction of, any item of property",
and not "any property".
Amendment No. 47 is to take out the word "lost", which has one connotation which I understand. It means that you cannot find something. That seems to be different from the meaning of the word "destroyed", which is the word in the directive. If one loses something, it is different from destroying it. It is destruction that is talked of in the directive:
"damage to, or destruction of, any item of property".
The third amendment, Amendment No. 48, is in the same vein, leaving out "description of property" and inserting "type". That again is to take the words of Article 9(b)(i):
"is of a type ordinarily used".
All that I am trying to do is to fit Part I to the directive and I hope that that is not to the Government's disadvantage. I beg to move.
Lord Denning: I think it is important that our Act should correspond as closely as possible to the directive. I would hope that we can give explanations or make amendments in our Bill. However, I do not think that that should be done unless there is good reason, and I should like to know whether there is sufficient reason for departing from the directive in these cases.
Lord Kilbracken: I should like to comment on Amendments Nos. 47 and 48 moved by my noble friend. I puzzled for a long time as to the significance of and reason for Amendment No. 47, because in Clause 5 we find no fewer than eight references to "loss or damage", including this one to "lost or damaged". Yet on that one occasion my noble friend wishes to change that from "lost" to "destroyed". He has said that these are semantic amendments and I do not wish to appear to be anti-semantic. It seems to me that if here he wants to change "lost" for "destroyed", he should change "destruction" for "loss" on the seven other occasions where it appears in this Clause.
As regards Amendment No. 48, I should always support an amendment that seeks to substitute one short word for three much longer words so long as the provision still makes sense. I should be particularly inclined to do so here, where my noble friend's amendment would give the paragraph sense where at present there seems to me to be none. It talks of:
"damage to any property which … is not of a description of property ordinarily intended"
etc. At best that makes very little sense.
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I would go a little further than my noble friend and leave out altogether those six words:
"of a description of property ordinarily".
The paragraph would then read:
"damage to any property which … is not intended for private use, occupation or consumption".
However, if that would be improper I should like to see my noble friend's amendment accepted.
Lord Cameron of Lochbroom: I am grateful to the noble Lords for their contributions. I assure the Committee that we are attempting to represent in words which the courts have been accustomed to use the concepts in the directive. Perhaps I may take each in turn.
We have used "property" as opposed to "item of property" because, in the first place, probably in the English translation of the directive this was an attempt to reflect the French text, which refers to "chose". There is a danger of adding unnecessary words to a statute because the courts may feel bound to give them some kind of meaning. I think it would be difficult here, but, for example, I do not believe that one would naturally speak of an "item" of land, and there may be a danger that by a side-wind the amendment would exclude any recovery for damage to land or buildings.
We must remember, as has already been said in your Lordships' Committee, that at the end of the day acute minds, such as that of the noble Lord opposite, may come to bear upon this Bill, and we therefore want to make absolutely certain that by side-winds they do not defeat its principal object.
The noble Lord, Lord Kilbracken, raised a point on the next amendment. I would only add that if one reads subsection (3) of Clause 5 with the amendment, it begins to make slight nonsense:
"—person shall not be liable under section 2 above for any loss or damage to the property which, at the time it is destroyed or damaged".
The first thing the courts will ask is why use the word "destroyed" when it has been introduced by "loss". The noble and learned Lord, Lord Denning, will know that "loss or damage", is an expression commonly and widely understood in statute law. Indeed, I am sure that the noble Lord opposite uses that term in his private practice to describe property that is destroyed, even in his pleas in law.
It seems to be perfectly clear that the word "loss" has the same meaning as "destruction" in Article 9, but the use of the term "loss" would reduce some uncertainty. If we were to insert the word "destruction", it may compel our courts to give a different or narrower construction where none was intended. I am advised that the term "destruction" has been used in a rather narrower sense in previous legislation. I am referred to Section 29(1) of the Town and Country Planning Act 1962, where it is used in the context of wilful destruction of property.
I admit that the last point is very much a semantic point. However, it is simply that the English word "type" may have two different connotations. It could imply that the property in question has to be representative of a series or one of a class of articles of exactly the same kind. That is not the intention of the directive and a more general meaning is intended. Therefore we

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have adopted the more neutral expression "description", particularly since we have used such words in other parts of the Bill with the same general intention. I think that we are all trying to secure the same end. I am simply trying to use as accurate English as I can so that there can be no doubt and no ambiguity in the translation of the directive into this part of the Bill.
Lord Denning: I appreciate the explanation, but it does show that the important part of our own Bill, the directive, is framed not necessarily by English people. It has been framed mainly in another language and then translated into English. It may be much better to have it in the Bill in the words which we understand, rather than in a directive which may have become a little distorted in translation. However, on the whole, I am glad to have the explanation.
Lord Kilbracken: Perhaps I may ask the noble and learned Lord opposite whether or not he really thinks the phrase:
"property which is not of a description of property"
is really a phrase that we ever use in speaking the English language?
Lord Cameron of Lochbroom: I am bound to say that applying my own legal knowledge—and this is a personal view—I see the ambiguity which has been discovered in the directive, on one view of it. It is plainly a view which may be wrong. In an attempt to translate the concept in the directive, "a description of property" is very much better than putting in the word "type", which leaves the ambiguity there. I assure the Committee that this has obviously been the subject of very anxious consideration by parliamentary draftsmen in particular, and I would certainly accept their advice that that represents what the directive is seeking to achieve.
Lord Kilbracken: Perhaps "which is not of a kind" would be preferable to "which is not of a type".
Lord Morton of Shuna: I do not intend to ask the opinion of the Committee, but "loss and damage" is one phrase which is used fairly frequently in the legal language, at least of Scotland. I make no attempt to speak of England.
Lord Denning: I can assure the noble Lord that it is just the same.
Lord Morton of Shuna: The noble and learned Lord, Lord Denning, was speaking of England and I am sorry to keep on putting up the flag of St. Andrew. I have to do that and I have no intention of apologising for doing so. The difficulty is that if one talks of a description of property ordinarily intended for private use, and the directive talks of "a type of property" the court's first question will be: Why do you change the word? If you change the word you must mean something different, and what "different" do you mean? If one talks about "property" it includes perhaps everything that is owned. If one talks about "item of property" one is talking about an individual article, and that is the wording in the directive.
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I cannot see why it is so difficult for the draftsman, because the noble and learned Lord obviously is not relying on his own private opinion which, with respect to him, I should have thought he should rely on. After all, he is a very eminent Minister of the Crown. He should not be taking the advice of those who are drafting Bills. He should be deciding whether or not the advice that is given to him is correct. If it is correct, he should be giving it as his advice.
I do not wish to divide the Committee, but I can see difficulties on the interpretation of these words, especially as the noble and learned Lord persuaded the Committee yesterday that the directive should not be available in the Bill to the people who may have to try and work out what it means. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 47 and 48 not moved.]
8.45 p.m.
Lord Airedale Lord Airedale moved Amendment No. 49:
Page 5, line 11, leave out ("appropriate").
The noble Lord said: It might be convenient if, together with this amendment, I speak to Amendment No. 50, as they are closely related. We are still in the field of necessity for particular words. Subsection (7) is dealing with the knowledge that might be imputed to a person
"which he might reasonably have been expected to acquire …
(b) from facts ascertainable by him with the help of appropriate expert advice".
Is it really necessary in the Bill to spell out that the expert advice has to be appropriate? Can it not be left to the judge to exercise his discretion and say, "This piece of advice which is being offered is not going to help me to decide this issue. I do not think we need to have this evidence"?
Paragraph (b) continues:
"expert advice which it is reasonable for him to seek."
Let us suppose that the expert in some narrow field lives in Japan. Surely it is a matter for the judge's discretion to say, "It is not really reasonable to expect this piece of evidence to be adduced by calling a gentleman from Japan. The issue is not big enough to necessitate such a burden being placed upon the party to the proceedings."
If we are going to spell out all the instances where judges may or may not exercise their discretion in the course of deciding the cases, we are going to be in for very long Bills. In this particular instance it would be perfectly satisfactory to leave paragraph (b) as:
"the help of expert advice".
I beg to move.
Lord Kilbracken: On this occasion I should be very glad strongly to support the noble Lord on leaving out nine completely unnecessary words.
So far as the word "appropriate" is concerned, of course this expert advice from which facts can be ascertained has to be appropriate expert advice. If it were inappropriate expert advice it would be completely irrelevant.

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Similarly, in the case of "which it is reasonable for him to seek," the Committee will see that in line 9 of the same page we are already talking about a person's knowledge including:
"knowledge which he might reasonably have been expected to acquire".
If he has been reasonably expected to acquire it, it is also reasonable for him to seek it. Therefore, this is completely otiose.
I would support this amendment also because in leaving out the seven words in line 12, the section will no longer contain a relative clause:
"which it is reasonable for him to seek",
tagged on at the end of another relevant clause which begins in line 8:
"which he might reasonably have been expected to acquire".
I suggest that that is not good English, and if it is to stay in the Bill line 11 should read:
"with the help of such appropriate expert advice as it is reasonable for him to seek."
I would be prepared to argue that the word "which", appearing in lines 8 and 12 should in both cases be the word "that". The question of when to use the word "which" and when to use the word "that" is so complicated and badly understood that I do not intend discussing it tonight.
Lord Denning: Perhaps I may just say one word. This does not follow the directive at all; but if I recollect rightly, a great deal of this is on the same lines as we have in our own Limitation Act. I think in a way the draftsmen may have been following much the same thought as we have in our own Limitation Act which might be subject to the same criticisms. But on the whole I feel that it is probably all right as it is.
Lord Beaverbrook: I should have liked to take Amendments Nos. 49, 50 and 51 together because they all change the test of a person's knowledge or the knowledge he might reasonably have been expected to have about loss or damage caused by a defective product.
Lord Airedale: If the noble Lord will allow me to intervene, if he would like to take Amendment No. 51 with the other two, then perhaps it would be helpful if I were to speak to Amendment No. 51 and explain what I find difficult.
This amendment is to leave out all the words after paragraph (b) down to the end of subsection (7). I hope the Minister is being helped by my taking the matter in this order and in this way. What I find difficult is that I cannot understand the five lines in the paragraph because of the use of the word "unless", when we come to it. I would understand it if the word "if" were substituted for the word "unless". Let me just take the bones out of the five lines and state them in the two alternative possibilities:
"A person shall not be taken to have knowledge of a fact ascertainable only with the help of expert advice unless".
The Bill says unless he has failed to obtain that advice. I cannot make sense of that. If it said:
"A person shall not be taken to have knowledge of a fact ascertainable only with the help of expert advice if he has failed to obtain that advice.".
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To me that would make sense of it. I think it needs "if" in the place of "unless". That is my difficulty. I hope that helps the Minister if he is now going to reply.
Lord Beaverbrook: I am most grateful to the noble Lord for now grouping these amendments together and I shall speak to them accordingly. As I was saying, subsections (5), (6) and (7), to which these amendments are all directed, reproduce the wording in Section 3 of the Latent Damage Act 1986. They determine when damage to property is to be taken to have occurred in a case where the damage could not initially be discovered. It is when any person with an interest in the property had knowledge of such facts as would lead a reasonable person to consider the damage sufficiently serious to justify the institution of proceedings. In subsection (7) it says that knowledge for this purpose includes the knowledge which a person might reasonably have been expected to acquire from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek.
The noble Lord's Amendment No. 49 would mean that in considering the expert advice which might have been given, you must disregard whether it would have been appropriate to seek that advice. Thus you might fix the point at which the damage was suffered at the earliest date on which someone with some very unusual expertise could have detected the damage.
I would resist the noble Lord's first amendment on three grounds. First, it seems to me that it places an undue restriction on what ordinary people might be expected to do. Secondly, I find no reason for this Bill departing from the policy laid down so recently in the 1986 Act. Thirdly, the test laid down by Section 3 of the 1986 Act and reproduced here is the same test as that which is laid down by Section 14 of the Limitation Act 1980 for the purposes of determining the date from which time runs in actions for personal injuries and also, as a result of the 1986 Act, in actions for latent damage. This test is also applied to actions under Part I of this Bill by virtue of Clause 6 and Schedule 1. The test accords with the liberal approach advocated by the Law Reform Committee in their 20th Report concerning the limitation of actions in personal injury claims. I have no reason to believe that a less liberal approach should be adopted in this Bill.
With regard to the noble Lord's Amendment No. 50, the words which the noble Lord would remove reproduce exactly the corresponding words in Section 3(6)(b) of the Latent Damage Act. The purpose of those words is to ensure that while a person is to be fixed with knowledge of facts ascertainable by him with the help of expert advice, that only applies to advice which it is reasonable for him to seek. The effect of the noble Lord's amendment would be presumably that it was enough that the advice was formally available, even though in practice no one would ever think of seeking that kind of advice in the circumstances. I cannot think that it would be realistic to fix a person with knowledge in those circumstances; and for the same reasons which I gave in the case of the noble Lord's Amendment No. 49.
Regarding the noble Lord's Amendment No. 51, the words which the noble Lord would remove

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reproduce exactly the corresponding words in Section 3(6) of the Latent Damage Act 1986. The purpose of those words is to ensure that a person will not be fixed with the knowledge of a defect which an expert might have discovered if he took all reasonable steps to obtain that advice. So it may be that there was a firm of experts who could have uncovered the defect, but it would not have been possible for them to inspect the property concerned for a very considerable time. I cannot believe that the noble Lord would wish to fix a person with notice of the defect in those circumstances before that firm could carry out the inspection. For the reasons that I have given in relation to his Amendment No. 49, I would very much hope that the noble Lord will feel able to withdraw his amendments.
Lord Denning: My recollection is right, if I may say so. When you look back to Schedule 1 of the Limitation Act, the draftsman is following the words of our Acts of 1980 and 1986 and these words in this particular clause are almost taken from those statutes. I really do not think this is worthwhile. It was all discussed in those Acts and I do not think it is worth pursuing it now.
Lord Airedale: I am always grateful when so much trouble is taken to deal with the amendments which are put forward. I am very grateful for the amount of trouble that has gone into the reply to these amendments. I should like to thank the noble Lord, Lord Kilbracken, for his support. I would say to him that I think that the Committee must always be very careful not to get trapped into trying to redraft clauses in Committee across the Floor of the Chamber. That way lies disaster nearly every time.
The noble and learned Lord, Lord Denning, had some reservations about these amendments; but before the Minister was able to confirm it, the noble and learned Lord, Lord Denning, surmised quite correctly that the words being used here were hallowed by having been used in an earlier English Act. That pays great tribute to the learning of the noble and learned Lord, Lord Denning, although it is not necessary for me to compliment the noble and learned Lord.
I am grateful for the discussions that we have had. As I think this may be the last amendment that I shall be moving (although there is one more in my name), I am grateful to noble Lords for the patience with which they have heard me. I have enjoyed the Committee stage on Part I of this Bill. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 51 not moved.]
Lord Airedale Lord Airedale had given notice of his intention to move Amendment No. 52:
Page 5, line 16, at end insert—
("( ) In assessing damages recoverable under this Part the Court shall have regard to the amount of insurance cover which the defendant might reasonably have been expected to have in force at the relevant time in respect of the liability in question.")
The noble Lord said: Amendment No. 52 is about insurance and it is somewhat akin to Amendment No
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54 in the name of the noble Lord, Lord Williams, which he moved at the beginning of today's proceedings, alongside Amendment No. 39 in the name of my noble friend Lady Burton. Amendment No. 52 is just another way to try to resolve the insurance difficulty to which the noble Lord, Lord Williams, referred earlier. If some noble Lord intends to speak to No. 52 I shall move it formally; otherwise I shall not move it.
[Amendment No. 52 not moved.]
9 p.m.
On Question, Whether Clause 5 shall stand part of the Bill?
Lord Morton of Shuna: I take advantage of this procedure to raise two questions. One is why, in Clause 5(3)(b), the first word is "intended"? It reads,
"intended by the person suffering the loss or damage mainly for his own private use".
This, to my Scottish legal mind, means "intended but not used". The words in Article 9 are quite straightforward, and say that it is an item of property that is used.
According to my reading of Article 9, one has to prove that the item of property to which the claim relates was in fact used. As I read Clause 5(3)(b) one has to prove that one intended to use it but did not use it. No doubt the noble and learned Lord will give me an explanation as to why there is this distinction. But it is difficult to understand why one cannot simply use the words,
"was used by the injured person mainly for his own private use or consumption"
as meeting the intention of Article 9(b)(ii).
The other difficulty I have to raise is that in the definition of "injury", especially in Clause 5(5), which I realise relates only to property damage and not to personal injury damage, we are dealing with one incident of damage that occurs at one point in time. What is the position regarding both personal injury and damage to property which occurs over a period of time?
My experience happens to be mainly in personal injury cases, and, therefore, I think of asbestosis, or dermatitis, where the disease arises out of a length of exposure to the delinquent article, if I may refer to it in that way, over a period of time. There is also the situation that has been referred to of somebody who takes pills over a period of time which result in damage. What is the relevant time there? What is the time when the damage occurs?
In damage to property, there is the same situation—changing the way the damage occurs but not the method of a sort of percolating damage. What is the attitude to be adopted in the view of the Government? I should be pleased to have some answers to these points.
Lord Cameron of Lochbroom: In response to the noble Lord opposite, I am going to say something. I think the words "or other" are otiose. If one looks, in relation to the noble Lord's first question, at the words of Article 9, it would have the strange result that if you purchased something and it were to injure you before

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you had put it into use, you would be cut out from recourse to this Bill. That, clearly, is not intended by the article. In order to make the matter clear, we have used the word "intended" which avoids the problem where property is held but not yet used.
So far as the latter question is concerned, I answer with some trepidation as a Scots lawyer, because we have been told that this is taken from an Act which applies to England and Wales and, in terms of subsection (8), does not extend to Scotland. I think the question must be answered thus: it must always be a question of evidence as to what caused the injury, and from that, one has to determine the period of time at which the person having an interest in that property had knowledge of the material facts about the loss or damage.
Although it may be damage continuing over a period of time which arises, as the noble Lord suggests, from a packet of pills, I would imagine that having fixed what the defect is, there should be little difficulty from that point onwards in determining the point at which subsection (5) comes into operation. I hope that that is of some assistance to the noble Lord. This being a statutory provision which has precedent, I have no doubt that I shall be corrected if I am wrong in what I have stated.
Lord Morton of Shuna: The problem has arisen time and again in limitation and proscription legislation both in England and in Scotland about continuing damage where one has pills, or exposure to asbestos, or exposure to something that gives you a disease. That has caused continual trouble. It would be reckless of me to say that the law has got it right yet, but the collective mind of the drafters of this Bill does not seem to have been applied to the problems that occur with damage from asbestosis following exposure over a period of years, or the taking of pills over a period of years. However, I shall leave that. If I were, in my private capacity, instructed to appear for an insurance company and were to be instructed to defend a case where somebody who had used an article for some time had suffered loss or damage, I should take the position with some strength under Clause 5(3)(b) that the article had been used and was therefore no longer intended to be used because "intention" implies, in the way that subsection (3)(b) is worded, that one has to have an article,
"of a description of property ordinarily intended for private use, occupation or consumption … and … intended"—
and that is a future intention not a past intention. Therefore it has to be a new article that has not been used. If I may give any advice—no doubt it will be spurned as usual, but I proffer it—"intended" or "used" may cover the situation but "intended" implies a future which is not necessarily there.
Lord Cameron of Lochbroom: All I shall say is simply that I have listened to what the noble Lord has said. I am not persuaded by his first point about the continuing loss because one has to start with a defect in a product. One has to find out what the product is and the defect. Perhaps the question of being subjected to asbestos dust in one's employment is a slightly different question.
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I shall consider again the second matter that the noble Lord has raised, though we thought we had the matter right in the way we have put it in subsection (3)(b).
Clause 5 agreed to.
Clause 6 [Application of certain enactments etc.]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 53:
Page 5, line 24, leave out ("and") and insert ("by that person's wrongful act or negligent act or omission and for the purposes").
The noble Lord said: This is a very technical amendment. I apologise for it, but we might as well get things right. The reference to the Law Reform (Miscellaneous Provisions) (Scotland) Act and Section 1 of the Damages (Scotland) Act is not correctly put. The Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 refers to somebody's wrongful act or wrongful act or omission.
Lord Cameron of Lochbroom: It would be for the covenience of the Committee and of the noble Lord if I were to say that I am entirely persuaded by what he is about to say. If it would save time I indicate now my acceptance of this amendment.
Lord Morton of Shuna: For that small favour I am very much obliged. I formally move the amendment.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 agreed to.
Clause 8 [Power to modify Part I]:
[Amendment No. 54 not moved.]
Clause 8 agreed to.
Clause 9 [Application of Part I to Crown].
On Question, Whether Clause 9 shall be agreed to?
Lord Williams of Elvel: I am grateful to the noble Lord the Chairman of Committees for his indulgence. Clause 9 brings us to the end of Part I, for which the Committee will be extremely grateful. We can now pass on to other matters.
Perhaps I am anticipating events, but in the light of Clause 49, which specifically excludes Northern Ireland from the provisions of Part I which we are now completing, can the Minister or the Lord Advocate say what will be the position of Northern Ireland if the Bill is enacted as it as present stands? I understood that Northern Ireland was part of the United Kingdom and presumably the directive applies to the United Kingdom. I should be grateful if that matter could be cleared up.
Lord Cameron of Lochbroom: Clause 49 provides, as I understand it, that Part I will not apply to Northern Ireland. The result will be that it will have to be regarded as being applicable only to the other parts of the United Kingdom. That includes the part providing that so far as consumer safety is concerned it will not be regarded as a transferred matter for the purposes of the Northern Ireland Constitution Act but will be a reserved matter; that is, a subject to be legislated upon on a UK basis. This is consequential to extending Part II to the whole of the United Kingdom.

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Subsection (3) provides that, where an Order in Council under the Northern Ireland Act 1974 is made only for the purposes corresponding to the matters covered in the Bill but which are not extended to Northern Ireland, then such an order should not be subject to the affirmative resolution procedure and the special procedure in cases of urgency but should be subject to a negative resolution procedure. I hope that makes clear the way in which the matter will be dealt with and that the noble Lord is clearer now as to the result of the effect of Clause 49 in relation to Part I.
9.15 p.m.
Lord Williams of Elvel: I am grateful to the noble and learned Lord. As he says, I am slightly clearer, but not wholly clear. Am I right to understand that for the purposes of the directive Northern Ireland does not form part of the UK; in other words, the directive, which is a directive to the UK, as I understand it, and therefore has to be in place by a certain date for the whole of the UK, is not provided for in the Bill?
If that is the not the case, am I to understand that the Government have a firm commitment to bring forward some curious animal of legislation in respect of Northern Ireland that will give effect to the directive and will exactly reproduce what we have been discussing in Part I in respect of Northern Ireland? Am I to understand that that will be in the form of an order that will be subject to the negative procedure rather than the affirmative procedure?
Lord Cameron of Lochbroom: I am not suggesting—I hope that nothing I have said so far suggests—that the directive does not apply to Northern Ireland. It is simply the manner in which it would be brought into effect. The provisions of Part I are not extended to Northern Ireland, as I said, because the material is similar to the law of negligence, which is a transferred subject. Therefore, a separate order will have to be made for Northern Ireland. That I hope makes the matter clearer than I perhaps have been able to make it previously.
Lord Williams of Elvel: I am most grateful to the noble and learned Lord. I think we are two-thirds of the way there. May I therefore assume that the Government will bring forward an Order in Council in exactly identical terms to Part I of the Bill—which we have spent a great deal of time discussing—in respect of Northern Ireland in order to implement the directive?
Lord Cameron of Lochbroom: It would be wrong for me to suggest, I think, that it would be in exactly the same words as Part I. If there is to be an Order in Council for Northern Ireland, it would take account of the law as it applies there. Certainly the directive applies. The means by which it will be brought forward will of course be by way of an Order in Council.
Lord Williams of Elvel: I am grateful. I am now quite clear about the procedure. I should like to warn the noble and learned Lord that when we consider Clause 49 we may wish to make it the affirmative
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procedure rather than the negative procedure because it seems to be rather an important question.
Clause 9 agreed to.
Clause 10 [The general safety requirement]:
[Amendment No. 55 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 56:
Page 6, line 41, leave out second ("any") and insert ("an approved").
The noble Lord said: In order to expedite the work of the Committee I propose to discuss together Amendments Nos. 56, 57 and 58. I have had discussions with the CBI. It is my view and that of the CBI that Clause 10 in principle and as a whole is excellent and achieves the object that we wish.
The aim of catching the manufacturer or suppplier, and particularly the importer, who negligently puts an unsafe consumer product on to the market is thoroughly to be supported. However, the objection to the drafting of Clause 10 is that it does not provide a sufficiently precise objective test by which suppliers can determine where they may be breaking the law and by which trading standards officers, who will be the enforcement officers for the purposes of the legislation, can decide whether to prosecute with a reasonably high degree of certainty and consistency.
Turning to Amendment No. 56, I seek there to remove the second "any" from Clause 10(2)(a) and replace it by the words "an approved person". It seems to me that as the Bill is now drafted any standards of safety published by any person can take effect within this clause and it lays the matter very wide open to all sorts of people producing a standard of safety.
For example, if I were in a business manufacturing particular goods and I did not like the rival goods a competitor was producing, it seems to me that within the terms of this Bill as it is drafted I, as "any person", could produce a standard of safety which would be detrimental to my competitor's goods and possibly make it easier for me to sell my own. Therefore one needs to have not just "any person" but a recognised person, an approved person.
I should say that all these amendments of mine at this stage are probing amendments. I am quite ready for the Minister to say to me that the wording is not right. But they are put forward in order to make sure that it is only a person with some sort of status who can publish a standard of safety which would take effect within this Bill. That is Amendment No. 56.
Amendment No. 57 rests on the fact that the criterion in Clause 10(2)(b) is far too subjective and is quite an inappropriate test for a criminal offence. Safety is not absolute. It is almost always possible to make goods safer, either at a greater cost or sometimes at the expense of efficiency. It is for that reason that I propose that the subsection should be removed. A test, if it has to be there, should be much more closely tied to recognised modern standards of safety or to accepted sound modern practices.
It may be that my noble friend, if he agrees with me that this subsection is inadequate, would like to think of something better that could be put in its place. Because of the weather I have not had time to think of

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something better to put in its place and, if need be, I may come back on Report with something better if my noble friend is not as encouraging and helpful as I hope he will be.
Turning to my third amendment, No. 58, I correspondingly believe—and here we turn to a defence—that it should be a defence to a general safety requirement that a product conforms to standards of safety published by an approved or recognised body or person: that is, a body or person whose standards are generally adhered to in relation to a particular sector or class of goods.
As drafted, the defences are confined to standards contained in legislation of one sort or another, and in particular, as I read it, the Bill does not cover any safety regulations that might be published by the British Standards Institution, for example, which is a semi-official body. I should not have thought that they would be covered by this, and the object of my amendment is to try to make sure that recommendations of the kind put forward by the BSI should be covered by this part of the Bill. I beg to move.
Earl De La Warr: I should like to support my noble friend in all these amendments, but in particular in his Amendment No. 57. I drew attention on Second Reading to problems about the word "safety", although I said that I was a layman, and I wondered how it could be turned into sufficiently absolute terms if necessary to send a man to gaol. Now here in this subsection—and I had that in mind when I made the reference at Second Reading—we get safety in a special relative sense. We get the word "safer". Safer than what? Safer than the other chap who is selling something, and is he selling it at the same price? Safer than any particular standard? These are things which we surely ought to know if we are to judge a man to have committed a criminal offence. I am glad that my noble friend did not think of any answer, because I very much hope that the Government themselves will take the sense of what he said and think of something a good deal more precise than we find in this subsection.
Lord Gallacher: The noble Lord, Lord Mottistone, has moved Amendments Nos. 57 and 58 as well as No. 56. I address my remarks specifically to No. 56, because that is the amendment which commends itself mostly to this side of the Committee. We are of the opinion that the noble Lord, Lord Mottistone, is quite correct to ask for an "approved" person, rather than the words currently in the Bill; namely, "by any person".
We feel that there may be an explanation, which no doubt the Minister will give to us in due course if such an explanation exists. It may be that the explanation is that there is to be some form of distinction as regards defence; that is to say, if a person is approved for purposes of a standard of safety, then that will constitute an absolute defence, whereas if approval has not been given by the Secretary of State it may only constitute a partial defence. If that distinction is in the Minister's mind, we think that it would be undesirable to introduce it in an area as important as this.
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Therefore for this reason, and for the fact that in general we applaud and encourage the work of standards promotion in Britain by organisations like the BSI and, indeed, by comparable bodies operating in the electricity and gas industries, we support Amendment No. 56 moved by the noble Lord, Lord Mottistone.
Lord Brougham and Vaux: If I may come in at this stage, and first declare my interest as president of RoSPA on behalf of whom I speak, in general RoSPA welcome the Bill in total with one or two exceptions. This to me is one of them, as my noble friend on the Front Bench will know because RoSPA have had many communications with the DTI.
One of our concerns is over the means to be used to measure what is or what is not to be regarded as safe. Up till now Britain, we feel, has led the world in safety standards and we regret that we shall lose a degree of control. It is beyond doubt that some EC countries have very different and frequently lower levels of safety than our own. Standards are vitally important in helping to interpret the general safety duty, and they cannot be totally comprehensive in anticipating foreseeable conditions of use. The greatest care must be exercised by the Government when they are accepting a standard deemed to satisfy status, to ensure that it is comprehensive, up to date, comprehensible and acceptable to users as well as to producers. Otherwise we accept the Bill.
9.30 p.m.
Lord Beaverbrook: I am grateful to my noble friend for grouping these amendments and I shall speak to them all together. I turn first to Amendment No. 56. The purpose of Clause 10(2) (a) is to highlight one of the factors which should be considered along with "all the circumstances" which must be considered when deciding whether goods fail to comply with the general safety requirement.
Along with the consideration of "all the circumstances" it will also be considered whether the standard of safety published by any person is suitable for goods of that description and whether the level of safety set by that standard is suitable. Although we expect that these standards may be British, European or from any part of the world, they may be taken into account only if the level of safety provided by them is sufficiently high.
There is one point about this amendment which I do not understand, and that is who the noble Lord, Lord Mottistone, believes should be "an approved" person. Without that definition of the word "approved" it might appear that any person might approve himself for the purpose of this clause and that the amendment, when viewed in this way, has little effect at all. However, the point is that only relevant standards of safety will be taken into account for the purposes of the general safety requirement and if the published standard of safety does not reach the level of safety which persons generally expect—in other words, the goods would be defective for the purposes of Part I—then compliance with the standard will not necessarily be enough to outweigh consideration of these other circumstances.

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The purpose of Amendment No. 57 in the name of my noble friend would be to remove from Clause 10(2) (b) a particular factor which should be taken into account when deciding whether consumer goods fail to comply with the general safety requirement.
As I said in relation to Amendment No. 56, it is apparent from subsection (2) that all the circumstances should be taken into account when that decision is made. Subsection (2) also points back to those factors in Part I of this Bill which determine whether the product would be defective. There are in addition to those factors the further two factors listed in paragraphs (a) and (b).
Paragraph (b) provides that when deciding whether consumer goods fail to comply with the general safety requirement one should take into account whether it would have been reasonable for the goods to have been safer. When assessing that reasonableness it is particularly emphasised that one should take into account the cost, likelihood and the extent of any possible improvement.
This paragraph is there to ensure that when we assess compliance with the general safety requirement we do not look for safety in absolute terms. This paragraph ensures that we must look at whether it would have been possible to have made those goods safer, and if that had been possible, whether the cost in relation to that good would have been reasonable.
Thus the paragraph will ensure that a trading standards officer would not regard goods as failing to comply with the general safety requirement if the cost of making those goods safer would have been wholly disproportionate in relation to the benefit likely to accrue. I should repeat that this is only one factor in all the circumstances which must be considered before any decision about whether consumer goods fail to comply with the requirement can be made.
Amendment No. 58 would have a serious effect on Clause 10(3)(b)(ii). At present subsection (3)(b)(ii) provides that consumer goods shall not be regarded as failing to comply with the general safety requirements if they comply with, briefly, first, any safety regulations made by the Secretary of State; secondly, any standards of safety approved by the Secretary of State by or under such regulations; and thirdly, any relevant United Kingdom legislative requirements. Thus the only goods that will, as a matter of law, comply with the general safety requirement are those that comply, as regards any matter at issue, with regulations made by the Secretary of State, with standards of safety approved by the Secretary of State or with other relevant United Kingdom legislation. Any other standards, or legislation from any other country, will only be considered among all the other circumstances and those particularly mentioned in the preceding subsection (2) for the purpose of deciding whether goods comply with the general safety requirement.
The effect of this amendment would be that goods would be deemed to comply with the general safety requirement if they complied with any standards of safety recommended, but not approved, by a, I have to say, ill-defined "nationally approved body". I am not sure what is in my noble friend's mind in using the words "a nationally approved body". No matter. It
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must be apparent to the Committee that the approval of safety standards should, like the making of regulations and subordinate legislation, remain under the control of the Secretary of State, who is answerable to Parliament. "A nationally approved body", whatever that may be, would not be answerable. Anybody else's standards may only be taken into account with all the other factors. For those reasons I ask my noble friend to withdraw his amendments.
Earl De La Warr: May I raise one point with my noble friend? He has given a definition of how the word "safer" should be interpreted. I understand from what he said that the safety officer may take the view that a particular product is not safe enough because it could have been made safer provided it did not cost more to an unreasonable extent. I think that is what he said. If I have that wrong I should be grateful to be told because it is an important point.
Lord Beaverbrook: What I said was—and I must apologise to the Committee for repeating myself—that paragraph (b) ensures that we must look at whether it would have been possible to have made those goods safer and, if that were possible, whether the cost in relation to those goods would have been reasonable.
Lord Mottistone: I am afraid I am not altogether happy with my noble friend's answer. I take his point that on Amendment No. 56 if "any person" would do to produce a standard of safety then "any person" wanting to be an approved person could approve himself. I think that is true. There was an alternative of saying, "any recognised person", but I think we need a qualification rather than making it so wide open. If an international standard of safety is concerned, that will have been approved by somebody.
However, I believe that we need a qualification and I had hoped that my noble friend would say that he would take away these amendments and have a look at them. If he does not, I certainly shall and I shall endeavour to come back with something better to meet the points he made. I am not happy that "any person" is good enough in the circumstances.
With regard to subsection (2)(b), my noble friend did not take one of my points concerning the lack of precision. Perhaps we need definitions. Perhaps we need other wording, but as it stands at the moment subsection 2(b) is too wide both for a manufacturer to know precisely where he stands and also for a trading standards officer to know what he needs to do.
My noble friend said in relation to my third amendment that he did not know what was in my mind. With the greatest possible respect to him, I actually told him what was in my mind. I said I had the British Standards Institution in my mind. It was a little casual of him not to take account of that when commenting on the point.
On the whole I am not altogether happy with the reply that I have had. I hope that my noble friend will take this matter away and have a look at it. If he cannot do that, I shall certainly do my best to produce something which may be more acceptable at Report stage.
Lord Beaverbrook: I have listened carefully to what my noble friend has had to say. We shall carefully look at what he said, and if he cares to withdraw his amendments this evening and come forward at a later stage, we shall be pleased to consider anything that he may want to put down.
Lord Mottistone: I was rather hoping that my noble friend would say that he would come back at a later stage. However, at this time of night one cannot expect everything. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 57 and 58 not moved.]
Baroness Nicol Baroness Nicol moved Amendment No. 59:
Page 7, leave out lines 21 and 22.
The noble Baroness said: By taking out lines 21 and 22, this amendment deletes one of the defences against offences under the general safety requirement by removing the defence of goods intended for export.
We on this side of the Committee believe that it is morally wrong, and in fact it may even be commercially damaging, to export to another country goods which do not meet the safety standards of this country, unless we at least inform the importing country of the status of those goods. It would be even better if all goods manufactured in or supplied from the United Kingdom were included in the general safety requirement. We are discussing safety and not quality. I appreciate that goods are manufactured to different qualities for different importing countries, but I am concerned at present only with the general safety requirement.
Where unsafe goods exist there is always a danger that they may find their way back on to the British market. If an export order fails, or for some other reason goods originally intended for export do not in fact become exported, it is not unknown for such goods to turn up in this country for sale on market stalls or in other ways. The Consumers Association which supports this amendment draws attention to the United Nations guidelines for consumer protection which were adopted in 1985. Paragraph 44 states:
"Governments should develop or strengthen information links regarding products which have been banned, withdrawn or severely restricted in order to enable other importing countries to protect themselves adequately against the harmful effects of such products".
I hope that when it comes to a sensible moral stand of this kind this country allies itself with every other country which takes it. I think it will be a great pity if this amendment, or at least the sense behind it, is not found acceptable. Perhaps the noble Lord can explain why the subsection was included in the first place if he intends that it should remain. I beg to move.
Baroness Gardner of Parkes: I find this section very difficult to remove, although I appreciate the moral point that has been made. This is a matter that has been discussed quite often at United Nations women's meetings which I have attended. For example, some poorer African countries would like to obtain very simple types of dental anaesthetics which we no longer produce in this country because we have progressed to a sophisticated single cartridge individual type of anaesthetic. Because those poorer countries cannot afford such products and are not capable of that degree of sophistication, they end up with nothing. Patients either have pain or have their teeth extracted without an anaesthetic. Representatives from those countries have come here to discuss these matters.
I know that the United States Government will not allow to be exported any drugs or medicines of a type that is not available for sale in their own country. They have always taken that view. I have always found that there is a very delicate balance to be held between determining what one would really like the whole world to have and giving it something which might alleviate some distress. I think that this is a difficult matter and I should be very interested to hear the Minister's reply on it.
9.45 p.m.
Baroness Lockwood: I support my noble friend in this amendment. While I appreciate the remarks made by the noble Baroness, Lady Gardner, I would remind her that in moving the amendment my noble friend talked about safety standards. For the life of me, I cannot understand why we should be prepared to permit the export of goods from this country which do not meet the domestic market's safety standards. That is especially so in the context of the Common Market. I may be prepared to concede that there are some circumstances when such goods may be exported, although not unsafe goods, but we are thinking in terms of a single market in Europe by the early 1990s.
One of the British commissioners, the noble Lord, Lord Cockfield, was responsible for issuing the White Paper Completing the Internal Market. That White Paper has been supplemented by other documents from Europe. The Committee will remember that in June last year the Select Committee on the European Communities reported on one of those documents which was concerned with a new impetus for consumer protection. On page 23 in paragraph 64 of its report, the Select Committee said:
"The Internal Market cannot be successful unless there are sound modern safety standards for consumer goods. The aims of consumer safety and of free circulation of goods and services can be reconciled by imposing on manufacturers a general duty to produce and trade safely in the EEC."
In this debate, we have heard a great deal about compatibility among European countries. A Bill which gives protection to consumers in the United Kingdom would want to be compatible with other activities within the Community to ensure that those goods could be traded freely at safe standards. I support the amendment.
Earl De La Warr: I hope that the Government do not accept the amendment. I have great sympathy with what the noble Baroness has said. In many cases it is clearly a shame that we export unsafe goods. As she rightly says, that will probably do our reputation no good. But we must have regard to what we are about tonight; we are discussing acts which may become criminal. If we take that as the context, we are in the business of protecting our population. The criminal law cannot be extended to protect the population of the whole world.
Viscount Hanworth: I earnestly ask the Government to consider this proposal, in the drugs field in particular. Anyone who knows anything about international consumer affairs will know the appalling things that the multinational drug companies do in foisting unsafe drugs on to developing countries without even adequate instructions. That is a major scandal. It must be stopped. I ask the Government to look at this amendment in that respect. It is no good saying that the countries themselves can easily stop it; they do not, and they cannot because they are developing countries. It is morally completely wrong to foist dangerous drugs on a market for purchase without adequate instructions. I hope that the Government will look at this. There is plenty of evidence as to what is happening, which they can obtain, for example, from the Consumers Association.
Baroness Burton of Coventry: As it is getting late and I wish to speak on the next amendment, I should merely like to support what has been said by the noble Baroness, Lady Nicol, and by my noble friend Lady Lockwood on this matter. I hope very much that the Government will give consideration to the points put forward by the noble Baroness, Lady Nicol.
Baroness Seear: Let me say in reply to the noble Baroness, Lady Gardner, yes, of course it is highly desirable that, for instance, good, cheap drugs which are no longer of the level of sophistication that we use in this country should be exported abroad because they are cheap but are still perfectly good to use. However, that is not the argument. The argument that is under discussion is whether they are safe. An item can be simple and unsophisticated but still safe. I cannot see why one cannot use items that are not of the latest fashion but still safe.
Baroness Gardner of Parkes: Perhaps I may reply briefly to that point. In terms of dental anaesthetics we in this country would no longer accept what was always used 20 years ago—a large bottle from which one filled one's syringe for each individual patient. Now, with AIDS, we should not entertain that idea. We should not consider anything but a disposable needle. But people in those other countries could not entertain the idea of having a disposable needle or a sealed cartridge. To us such a situation would not be acceptable. But the dilemma that one finds oneself in, is which is more acceptable—to have no anaesthetic or to have one which, unless the proper sterilisation technique is carried out, could be considered unsafe. By our standards we would not accept that situation any longer.
Lord Kilbracken: Safety standards and regulations vary greatly from one country to another. In the case of an exporter what matters is that the product should conform with the regulations of the country to which the goods are being sent. They may be stricter or less strict than here, or they may be stricter in some cases and less strict in others. I should have thought that the exporter has enough trouble conforming with the regulations in the country to which the goods are to be sold without having to worry about whether they also conform to regulations in this country.
Lord Lucas of Chilworth: Let me first give a warm welcome to the noble Baroness, Lady Nicol, who moved this amendment. I think that this is the first occasion during our Committee proceedings that we have had the pleasure of hearing and seeing her at the Dispatch Box. That I do not agree with her does not in any way reduce my admiration for her argument.
Let me say something in general terms first on this amendment. On the starting point of the provision that we are discussing, in the White Paper relating to safety of goods published in 1984 the Government proposed the general safety requirement. They also proposed that this requirement would not apply to goods intended for export. That is the starting point to which the noble Baroness referred when she asked how this subsection came to be in the Bill in the first place.
At that time we explained that, although there was
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a sound case, it was possible to exempt from the scope of safety regulations goods intended for export. It would not be possible in the case of the general safety requirement to treat each case on its merits. For these reasons we concluded that it would be preferable on balance for the general safety requirement not to apply to goods for export. It would be better to allow manufacturers flexibility to meet the safety requirements of the overseas market concerned.
This is one of the points that the noble Lord, Lord Kilbracken, made. It also underlines the point that the noble Baroness made as to whether exporting goods abroad of a different standard was commercially damaging. That of course is for the commercial judgment of the company involved. If our manufacturers and suppliers are to compete effectively in overseas markets where standards may differ from those in the United Kingdom, the defence in Clause 10(4)(a) is essential.
Although we are primarily concerned in the Bill with safety standards, other standards may be relevant—for example, mechanical and electrical standards. I should like to give an illustration. An electric hairdrier manufactured for use in a country which operates on 110 volts and uses a two-pin unearthed plug might very well comply with the safety regulations of and be considered safe in that country; but it would certainly not be acceptable in this country. Therefore this flexibility is important to our manufacturers if they are to maintain their competitiveness in export markets. However, I should make it clear both to the Committee and to manufacturers that if this flexibility is abused, in order to stop any abuse the Government will not hesitate to make use of the regulation-making powers in the existing legislation, and eventually those in Clause 11 of this Bill. I believe that that answers the question raised by the noble Baroness about the "return to the market stall".
The noble Baroness, Lady Lockwood, spoke about the UN guidelines, and I am aware that information links should be strengthened. Certainly in the Community, through the consumer Ministers' meetings, we are fostering exchanges of information with regard to unsafe goods, and I have no doubt that that scheme will prosper.
The noble Baroness, Lady Nicol, said that it is morally wrong and other noble Lords moved somewhat in that direction. While we are of course concerned with morality, here we are talking of safety matters as concerned in the United Kingdom. Some argue that by the defence in Clause 10 there is implied a set of double standards and that perhaps unscrupulous manufacturers may dump unsafe goods on other countries. I do not believe that this is the case. First, I do not believe that the United Kingdom should be the arbiter of other countries' safety standards. If manufacturers are to compete overseas—a point made by my noble friend Lord De La Wan—they would have to comply with whatever safety regulations exist in the country where they intend to supply their goods.
Returning to the point made by the noble Lord, Lord Kilbracken, it would be quite unreasonable for this Government to impose United Kingdom

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standards on manufacturers or suppliers in this country who do not intend to supply those goods in this country.
I turn quite briefly to the contribution of the noble Viscount, Lord Hanworth. I was just a little disappointed not only by what he had to say but by the tone in which he said it. Perhaps that is quite irrelevant because in fact Part II of the Bill which we are now discussing does not apply to drugs. I would refer the noble Viscount to Clause 11, subsection (7).
Briefly, those are the basic reasons why we find the amendment unacceptable. There is no question of my thinking about this matter again. I have to say that I recommend to the Committee that they reject the amendment should it be formally put to the Committee to decide.
Viscount Hanworth: Can the noble Lord help me by saying whether or not this section, or the amendment, applies to drugs?
Lord Lucas of Chilworth: I have just said so.
10 p.m.
Lord Kilbracken: I wonder whether I can take up that point. The noble Lord referred to Clause 11(7). I turned to Clause 11(7) where I found all the goods to which this clause does not apply. It contains paragraphs (a), (b), (c) and (d). Under subsection (7) (d), the Bill does not apply to:
"controlled drugs and licensed medicinal products".
The point I should like to make is why on earth is subsection (7) not put into the Bill as subsection (1)? Why does this clause not start off by telling the unfortunate reader to what goods it does and does not apply? The result is that the noble Viscount, Lord Hanworth, very understandably picks up the Bill and reads the whole clause with great care. He does not get quite as far as the last subsection but finds the whole clause does not apply to the goods that he is interested in. It seems very perverse to put it that way round. I know that Bills are always written like this, but why do they always have to he written like this?
Lord Lucas of Chilworth: I think I said Clause 11; I should have said clause 10(7). I apologise to the Committee. As we discussed yesterday at Question Time, sometimes the way parliamentary draftsmen order the affairs in writing what Ministers want to put in a Bill exceeds some of our understanding. I take the point that the noble Lord makes. I do not think he wants to make too much of an issue about it this evening.
Baroness Nicol: Naturally, I am disappointed that the Minister is not prepared to give this matter some more consideration. I should have said at the beginning that this amendment was supported very strongly by the National Consumer Council, the Consumers' Association (which I mentioned), and also
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by the Association of County Councils. The Association of County Councils draws our attention to the fact that the Bill, as presently worded, is inconsistent with the Government's own principles relating to the quality of goods for export set out in the White Paper on standards of quality and international competitiveness.
I am sorry that this inconsistency should take the form of erring on the side of what I still believe to be a slightly immoral approach, not by the Minister opposite, but by the legislation as it stands. I do not think one should have double standards. I am not talking here of electrical goods with different technical requirements. I understand that. But there are other goods which must reach a required standard. It is a great pity that we do not decide what is good enough for us has to be the same for other countries. I am not going to test the opinion of the Committee tonight. I should like to read carefully the answer which the noble Lord gave. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Nicol Baroness Nicol moved Amendment No. 60:
Page 7, line 31, leave out from ("requirement") to end of line 40.
The noble Baroness said: The purpose of this amendment is to bring under the general safety requirement secondhand goods sold in the course of business as defined in subsection (5)(a). We do not wish to include sales between private individuals or sales in aid of charitable bodies, not even the Conservative annual fete where I am sure many secondhand goods change hands that might not meet the safety requirements—as indeed they do at the Labour Party fete.
This amendment has the support of the National Consumer Council and the Consumers' Association, as indeed have many other amendments that we have moved tonight. There is a risk that provided goods are marked "not sold as new", which is the requirement in the Bill, they can be disposed of quite lawfully, even though they may be part of a batch which has been found to be unsafe.
Then we have goods which have been returned to the trader by a customer as unsatisfactory. These goods can be resold as secondhand without being subject to the general safety requirements. There is a particular problem in the case of secondhand cookers. The noble Baroness, Lady Gardner of Parkes, has an amendment on this later. Sales levels are very high. The Committee may not be aware that it is a requirement of the Department of Health and Social Security that those in receipt of financial assistance to purchase a cooker must buy secondhand where it is possible. Almost any buyer of secondhand gas or electrical appliances is unlikely to be affluent. Are we saying that they are less entitled to protection from unsafe goods than the better off members of society? I am quite sure that that cannot be the intention of the Bill.
There are regulations which cover certain aspects on the sale of secondhand electrical goods. These may well be satisfactory, provided they do not fall within

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any of the Acts being repealed by the Bill. Gas cookers are not regulated. The Gas Consumers' Council has provided horrifying examples of problems caused by unsafe secondhand cookers. I shall not weary the Committee by repeating them at this late hour, but they exist and can be produced for anyone who wants them.
The amendment of the noble Baroness, Lady Gardner of Parkes, refers, I think, only to cookers. There are probably many other problem areas in secondhand goods which one ought to bring under the legislation. Surely we should try to bring them all within the safety net. I shall, however, not go on at length at this late hour. I beg to move.
Baroness Burton of Coventry: I should like to support the amendment put forward by the noble Baroness, Lady Nicol. As she said, the Gas Consumers' Council is concerned at the omission of all secondhand goods from the general duty to supply safe consumer goods. I think we are all concerned. I hope the Committee is concerned, and I know that the noble Lord, Lord Lucas of Chilworth, is anyway not unsympathetic to the point of view. We are concerned that the exclusion of secondhand goods could diminish vital safeguards for consumers provided under the safety provisions of the Bill.
As the noble Baroness, Lady Nicol, said, the Gas Consumers' Council has sent us various examples of tragic happenings. I do not propose to put them before the Committee at this late stage. But it is difficult for consumers to recognise, on an external inspection, whether a cooker has been properly reconditioned. It is only when the cooker is delivered and installed that faults show up or that accidents occur.
It is felt by many of us that consumers who can afford only cheaper, secondhand cookers may be especially vulnerable. It is the belief of the Gas Consumers' Council, a belief which I share, that consumers need some form of legislation to ensure that any appliance, whether new or secondhand, is safe. The Gas Consumers' Council has told me that during the Second Reading the noble Lord, Lord Lucas of Chilworth, stated that the Government would not hesitate to introduce similar regulations to those covering secondhand products with particular problems, notably gas cookers. I knew that because, as the noble Lord will recall, he made the statement to me at col. 1060 of Hansard on 8th December:
"There are particular types of secondhand goods which present real dangers, such as electrical appliances. They are already covered by specific regulations, and where there are particular problems the Government will not hesitate to introduce similar regulations for other types of products—notably gas cookers, to which the noble Baroness referred."
We were all pleased, the Gas Consumers' Council and myself, that the Government are aware of the potential dangers of secondhand goods. I wonder whether the noble Lord would be able to help us here. The Gas Consumers' Council feels that consumers will be best protected if these cookers, together with other secondhand gas or electrical appliances are included in the general safety provisions of the Consumer
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Protection Bill. The council feels that separate regulations may be slow to appear and that legislation is needed now. We should be glad to have the comments of the noble Lord when he comes to wind up.
Baroness Gardner of Parkes: I wonder whether, as my amendment is more or less on the same point, it would be convenient to the Committee to speak on this matter and deal with the two amendments together. The points that have been made concerning the gas cookers are relevant and real. The electric cooker situation, according to the London Electricity Board, of which I am a member, is not so serious. Most electrical appliances, unless they are very old, are fused. The fuse blows long before there is any injury to the person. The electrical devices are designed in such a way as to be fail-safe. Of course it is not very satisfactory from the point of view of use, but the safety element is not such a problem.
The gas situation is different, and the most alarming aspect that came out in the cases sent from the northern area by the former Northern Gas Consumers' Council is that many people who had a gas cooker condemned as unsafe and who invited some small local trader to buy it from them and received perhaps £10, walked down the street the next day to see the same cooker on sale again for perhaps £40 or £50. They knew that yet another person was being exposed to the danger of the cooker.
The DHSS quite rightly want the most economical and effective gas cooker to be purchased, because it is public money that is being provided for those cookers. It would be a good thing, for the DHSS as well as for the people using it, if they could be assured that such a cooker was in a safe condition. In some cases they say that the cooker has not even been cleaned, much less checked or repaired, between passing from one hand to another.
Gas appliances in general, and gas cookers in particular, present a real problem. They are potentially explosive and certainly highly dangerous. The only warning is a smell. Apart from the smell of gas there is no way of knowing whether you are going to have a flashback or a sudden leakage or explosion. It is something that the public in general are so concerned about that the Government should give that serious thought.
Lord Lucas of Chilworth: I can assure my noble friend Lady Gardner of Parkes—I am grateful to her for allowing us to discuss her Amendment No. 61 with Amendment No. 60—that we give serious consideration to the matters that she raises. Of course I am aware that the Consumers' Association and the National Consumer Council have opposed this exclusion, but I have to say that, car boot sales, private sales, or charity sales notwithstanding, where the Government see the need to prohibit the supply of unsafe goods, whether they are new or secondhand, we would do so under the existing Consumer Safety Act 1978 or the regulation-making powers contained in Clause 11 of this Bill when it is enacted.
We have done a lot in a number of areas such as toys, bedding, furniture, pushchairs, and so on. Certainly

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second-hand goods that present real dangers, such as electrical appliances, are covered under the Electrical Equipment Safety Regulations 1975 and 1976. At the moment we do not see further action as being needed in this sector.
As the noble Baroness, Lady Burton, reminded the Committee, I spoke about the question of gas cookers at Second Reading, and indeed have referred to it on perhaps more than one occasion in response to her penetrating questions. I confirm, and give the Committee an assurance, that the Government's intention to draft regulations to cover the safety of gas cookers is real. We are pressing on with the drafting of these regulations both for new and for second-hand gas cookers, and we hope to go to consultation in a few weeks.
To require all second-hand consumer goods to comply would really not be reasonable. The change, and improving standards, would make it difficult to assess the level of safety that second-hand goods should reach. The inclusion of second-hand goods could place a heavy burden on retailers. It would also put a heavy burden on the buyers, because there are the two problems: first, many of these goods which are supplied at a low price so that the purchaser may repair or renovate them—and this may well include increasing their level of safety—could no longer be supplied.
Secondly, it is possible that retailers who supply perfectly sound second-hand items at low prices to those on perhaps lower incomes may feel that the risk of supplying a product which, with the general safety requirement, might fail does not warrant the continuation of their business. I should perhaps remind the Committee that the general safety requirement does not apply to second-hand goods intended for sale, but it does apply to goods intended for hire. Thus, a person hiring, for example, a chain saw from a shop, although it has been used by others, would still be able to expect that product to comply with the general safety requirement.
I have given the assurance, particularly in relation to gas cookers, that the Government will take the necessary action where unsafe goods, and the sale of them whether new or second-hand, come to our attention. We shall deal with that situation. I believe that existing legislation provides the mechanism for doing that. I hope the noble Baroness and my noble friend Lady Gardner of Parkes, in relation to Amendment No. 61, will feel able to withdraw their amendments.
Baroness Nicol: Before I mention the amendment, I thank the Minister for his kind words to me earlier which, in the heat of the moment on the last amendment, I forgot to acknowledge. I am grateful. His was a reassuring reply. I am not convinced that the legislation will catch the trader who sets out to deceive, because it will be too easy to mark something not sold as new and to get rid of it on the market.
I very much welcome the reassurance about the intentions for gas and electric cookers, and I look forward to seeing the regulations if they are to come before the Chamber. I think I have probably had the
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best answer I can expect tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 61 not moved.]
On Question, Whether Clause 10 shall stand part of the Bill?
10.15 p.m.
Lord Hacking: In considering Clause 10, I should be grateful to the Committee if I could raise a point of some importance. I have not moved an amendment concerning this matter because I am aware of the Minister's sensitivity towards late amendments, and particularly towards manuscript amendments. Nevertheless, I draw this matter to the earnest attention of the Minister and I should be grateful if he could consider it between now and Report.
As the Committee knows, there are significant differences between Part I and Part II. Part I considers civil liability and Part II concerns criminal liability. Part I considers damage to persons and to property while Part II considers damages only to persons. Under the drafting of Clause 10(2) it is an offence under Part II to have committed a breach of Part I. I am referring in particular to line 37 and the phrase that starts "to whether" down to the words "Part I of this Act". If I had thought it was appropriate I should at this stage have moved an amendment to leave out that phrase from the draft of Clause 10(2).
The defectiveness test under Part I in my submission is not coexistent with the lack of reasonable safety that is the test under Part II. A producer might be found liable under Part I, yet have complied with safety standards and with the generally accepted practices of his sector of work. That deals with the point that I was conceding earlier on the development risks clause. The producer cannot plead compliance with the standards as a defence under Part I, except in the very narrow circumstances where compliance with a mandatory standard actually resulted in the damage.
While therefore it can be accepted that a producer should in appropriate circumstances accept liability for injury caused to a person through the products being judged defective, even though all the standards were complied with, it is another matter in my submission that he should at the same time be found criminally liable. Thus, if a producer has complied with the relevant standards and practices, in my submission he should not be subject to criminal penalties.
There is an additional point concerning the burden of proof. Defectiveness for the purposes of Part I is a matter that the courts can determine only after weighing all the evidence. Lack of reasonable safety on the other hand should be readily ascertainable by suppliers and by enforcement officers according to objective tests—for example, whether current safety standards and accepted practices for the same or similar products had been breached.
Under Part I suppliers will not know before they market their product, although the product is later found to be defective, whether they would be adjudged liable under civil law. It will depend, as I indicated to your Lordships, on whether they can satisfy the burden of proof that rests on them under the risk

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development provision, which is to be found in Clause 4(1)(e). This lack of certainty in my submission is wholly unacceptable when the issue is whether there has been a breach of criminal law.
That is the argument that I advance. I have not given notice of that argument before coming to the Chamber, the reason being that I have only recently had an opportunity to consider it. I should be most grateful if the Minister will consider it because I believe it to be a point of real substance.
Lord Williams of Elvel: I am sure that your Lordships will be most grateful to the noble Lord, Lord Hacking, for raising the issue because it is obviously one of great importance. I do not wish to comment on the arguments that the noble Lord has put forward because they seem very persuasive.
All I would do is refer to the previous debate on clause stand part. I refer again to Clause 49(1)(a), which says that the provisions of Part I and Part III will not apply to Northern Ireland, and the provisions of Part II will apply to Northern Ireland. Part II, as the noble Lord has rightly pointed out, refers specifically to Part I. If Part I is not to apply to Northern Ireland, how can Part I refer to something in Northern Ireland which will not be operative?
Lord Lucas of Chilworth: I am sure that the noble Lord, Lord Hacking, has raised matters of importance. I had intended to say, until the noble Lord, Lord Williams, stood up, that I would give the noble Lord, Lord Hacking, a couple of fairly quick comments. In the light of what the noble Lord, Lord Williams, says, I prefer to say to both noble Lords that I should like to consider carefully what has been said in relation to Clause 10 stand part. Perhaps I may come back to both noble Lords in due course.
Clause 10 agreed to.
Clause 11 agreed to.
Clause 12 [Offences against the Safety Regulations]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 62:
Page 11, leave out lines 4 to 7 and insert—
("(ii) he makes a statement which is false in a material particular.")
The noble Lord said: This is an attempt to simplify the provisions of the Bill. Clause 12 provides for various offences and Clause 39 provides that what is called the due diligence defence shall be available for subsections (1), (2) and (3). Subsection (4) provides something different. It provides for somebody who fails to make a statement when required or who in giving the information required of him makes a statement which he knows to be false or recklessly makes a statement which is false.
My amendment attempts to simplify the situation and to make it easier for everybody to know where they stand. It is to apply the due diligence defence to subsection (4) and to include the offence of making a false statement or failing to make a statement. From the point of view of the prosecution this would have the great advantage that it would only have to prove that the statement either was not made or was false,
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and then the defence could show that in making the statement due diligence was used.
The present position requires the prosecution to prove knowledge and, having been a prosecutor for some years—I think this is the one minor occasion where I can claim an advantage over the noble and learned Lord the Lord Advocate, because I have prosecuted for more years than he has—I know that it is very difficult to prove knowledge on the part of someone whom you cannot put into the witness box, as of course you cannot do with an accused. Therefore this would make the situation simple and straightforward. You would have to prove that there was a false statement, and then the defence could put forward the defence that they used due diligence. It makes the position clear. I beg to move.
Lord Cameron of Lochbroom: This is an offence which follows upon the preamble, as it were, in subsection (4) where safety regulations require any person to give information, and so on. It says that a person would be guilty of an offence if he fails to do certain things or then gives information which he knows to be false or recklessly makes a statement.
If Members of the Committee would be good enough to turn to Clause 32, which deals with obstruction of an authorised officer, you will find there a very similar offence, namely, under subsection (2):
"A person shall be guilty of an offence if, in giving any information which is required of him by virtue of subsection (1)(c) above".
I think that is clear; and then the offence is in precisely the same terms.
That formulation in Clause 32 is taken from the Consumer Safety Act 1978 and the Consumer Safety (Amendment) Act 1986. The two matters which give rise to the offence which appear in Clauses 12 and 32 are so similar that any divergence of approach would require special justification. Certainly I do not think the noble Lord has endeavoured to offer any. I would have to say that there can be no justification in the difference of approach, although I appreciate the serious point the noble Lord is making about proof.
But the purpose of this provision in Clause 12 is a very serious one. It is not a matter of catching simple mistakes or errors made in good faith. Rather, the primary concern is to penalise the person who knowingly or recklessly makes false statements. Because it is a serious matter, it is right that in this instance, as in the case of Clause 32, the burden of proof should be upon the prosecution, and that is the effect of the Bill. I hope that with that explanation the noble Lord may feel able now to withdraw the amendment.
10.30 p.m.
Lord Morton of Shuna: I am perfectly prepared to put forward the same amendment to Clause 32 at Report stage. This is an argument that, if my recollection is right, we had also on the Financial Services Act. It appears to me to be quite impossible to ask the prosecution to prove that somebody knows something is false if it cannot put the person into the witness box. Therefore this is a completely worthless provision because you cannot prove what is necessary.

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The purpose of my amendment is to make it possible to prove it and possible to defend it. I should have thought that that was a perfectly reasonable position to put forward both from the point of view of preventing crime and from the point of view of the freedom of the individual. I am sorry that the Government do not seem to accept either point of view, but in the circumstances and as it is late at night I beg leave to withdraw the amendment, subject to the comment that I may return to it.
Lord Hacking: I hope that the noble Lord will. Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13 agreed to.
Baroness Nicol Baroness Nicol moved Amendment No. 63:
After Clause 13, insert the following new clause:
("Product recall notice.
.—(1) If it appears to the Secretary of State that any product or any consumer goods are dangerous, defective or unsafe (whether or not they conform to any safety regulations or published standards), he may serve on any person a notice ("a product recall notice").
(2) A product recall notice may require the person named in the notice, within any period specified therein, to do one or more of the following—

(a) take action to recall the product or consumer goods;

(b) disclose to the public, or to a class of persons specified in the product recall notice, and in the manner specified therein, any of the following—

(i) the nature of a defect in, or a dangerous characteristic or want of safety of, the product or consumer goods identified in the product recall notice;

(ii) identify the circumstances in which the use of the product or consumer goods is dangerous or unsafe; or

(iii) procedures for disposing of the product or consumer goods specified in the product recall notice;

(c) inform the public, or a class of persons specified in the product recall notice, in the manner specified therein, that the person served with the product recall notice will—

(i) repair or replace the product or consumer goods; or

(ii) refund to whoever the product or consumer goods were supplied the price of the goods.

(3) The Secretary of State may by regulations make provision specifying what action is to be taken and the manner in which information is to be given by any person named in a product recall notice.
(4) A person who contravenes a product recall notice shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding level 5 on the standard scale or to both.
(5) The power to make regulations under subsection (3) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament and shall include power—

(a) to make different provision for different cases; and

(b) to make such supplemental, consequential and transitional provision as the Secretary of State considers appropriate

(6) In this section "product" and "consumer goods" shall have the meanings contained in sections 1(2) and 10(7) of this Act.")
The noble Baroness said: This amendment would enable the Secretary of State to order the recall of goods which have failed to meet the existing safety requirements. Clause 13 is emphatic about the need to prevent prohibited goods from being marketed, and it is logical therefore to wish to recall goods which have already been distributed. Other clauses in the Bill deal with the question of the destruction of goods which
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have been seized and found to be unsatisfactory, and there are other methods of disposal. But nowhere in the Bill can I find a requirement that goods which have already been distributed should be recalled at the expense of the supplier or the producer.
If we are to have a coherent framework of safety law, there should be a statutory provision for product recall. At the moment we rely on voluntary co-operation and I am sure that reputable suppliers do co-operate; in fact they have on occasions in the past. These same reputable suppliers do not cause the problems. The Secretary of State would not need to use these powers, unless a particular situation required it, but it would be very useful for him to have them in reserve.
The National Consumer Council supports this amendment and it points out in its submission that:
"statutory product recall powers exist in other countries, notably France, Australia and the United States. In the USA, the knowledge that there are mandatory powers available has enabled the Consumer Product Safety Commission to negotiate the voluntary recall of millions of individual items. Compulsion has been required very rarely".
I believe, as does the NCC, that this would be the position in the United Kingdom and that the existence of the reserve powers would demonstrate the Government's seriousness of purpose. I beg to move.
Lord Lucas of Chilworth: I am grateful to the noble Baroness for so clearly explaining the purpose of her amendment. She says that the new clause proposes that, if it appears to the Secretary of State that any product or any consumer goods are dangerous, defective or unsafe he may serve on any person a product recall notice. According to the proposed new clause, this notice may require a person named in it to recall the product or consumer goods in question. The notice may require the person to disclose the nature of the defect or the danger; to identify the circumstances in which the use of the product or goods are unsafe; and to disclose procedures for disposing of the product or consumer goods. The notice may also require the person named in the notice to inform the public that he will repair or replace the product or consumer goods, or refund the price of the goods. The new clause would also make provision for the notices to be supported by a regulation-making power.
All these are extraordinarily wide-ranging powers for the Bill. The aims of the new clause are commendable, but its provisions go beyond the purpose of securing the safety of consumers. They reproduce provisions contained in some consumer legislation already, and in practice they would prove difficult to administer.
The object of Part II of the Bill is to prevent unsafe goods reaching the market place. The Bill reproduces the powers in earlier Acts to make regulations prohibiting or restricting the supply of specified goods. These powers are now complemented by the general safety requirement. The powers of enforcing consumer safety legislation, in particular at the point of first supply, were widened by the Consumer Safety (Amendment) Act. Those powers have also been reproduced in this Bill. I believe that the Bill before us already provides enforcement authorities with a substantial arsenal of measures for securing the safety of consumers.

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Even if unsafe products get through these safety nets and reach consumers, the Secretary of State is empowered by Clause 13 of the Bill to serve on any person a "notice to warn". That notice requires the person to publish, in a form specified in the notice and at his own expense, a warning about the unsafe goods which he has supplied. This power was introduced in the Consumer Safety Act 1978. It is significant that it has never proved necessary to serve a notice to warn as voluntary arrangements for removing unsafe goods from the market appear to work reasonably satisfactorily; and I believe that the power to prosecute suppliers for breach of the general safety requirement, coupled with the enhanced enforcement powers, renders even more remote the prospect of having to serve such a notice, let alone needing recourse to a mandatory recall power. The threat of being told to publish a public notice stating that the goods are unsafe and that the Secretary of State is making you tell people can be extremely persuasive.
In addition, the new clause takes no account of the administrative difficulties that such a recall procedure would entail. To be effective, any recall procedure must be capable of being invoked quickly, and of being effectively enforced and monitored. There would be particular problems in securing the co-operation of persons in the supply chain who were not named in the notice. There would also be the problem of establishing whether a person named in the notice had adequately fulfilled its requirements. I should add that equitable provisions for recall procedure should include compensation and appeal procedures, which the new clause does not. It would be fair to point out also that the new clause would doubtless create an increase in central government manpower if recalls were to be carried out on a mandatory basis and monitored effectively.
There are provisions which we shall be discussing—and we have already discussed many of them over the past few months—for the apprehension, if I may use that word, of goods at the point of first supply (a point of entry, a factory or a warehouse) before they reach the market place. Support for these measures would have a greater effect than that we perceive might be achieved by the new clause.
For these reasons, and because I believe we would be unjustified in taking the wide-ranging powers that the new clause includes, I ask the noble Baroness to withdraw her amendment.
Baroness Nicol: This is an enabling power. We are not saying that the Secretary of State "shall" but that he "may". He need not use all the power at any one time. We are agreed, I think, that the need is probably not very great but there can be occasions when it will be necessary.
This is a serious point and I hope that the Minister is taking it seriously. Yes, goods can be stopped at the point of supply if they are found to be defective, but defects often show up after goods have been distributed. What then happens? The need to warn can be satisfactorily met but we are still left with the situation where there are unsafe goods on the market.
I am not convinced by the argument that the manpower implications would be high, because the
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Minister seems to be saying with one voice that there will be very little need for this power and with the other that he is expecting us to believe there will be a huge manpower bill. The occasions on which the power will be necessary will probably be infrequent but it is important that the power should exist and that suppliers and manufacturers should realise that it exists.
I hope the Minister is taking this matter seriously and that he does appreciate that we are not expecting the power to be used more than on very rare occasions. Does the Minister wish to reply?
Lord Lucas of Chilworth: Yes, I do, because I should not like the noble Baroness to think that I am not serious. I did smile but that should not be taken as a display of non-seriousness. I smiled because the noble Baroness said, "We are only providing an enabling power." I have stood here at this Dispatch Box on more than one occasion and produced exactly the same argument. The response has always been, "Why is the Minister asking for enabling powers unless he or the Secretary of State has the intention at some time of using such powers?"
I address the same question to the noble Baroness. It is only an enabling power but she is providing and therefore expecting or anticipating that the Government will take those powers at some time. I am suggesting that the existing powers are more than sufficient to deal with the problem to which the noble Baroness draws the Committee's attention.
I can think of a great number of really practical problems in a product-recall procedure. I go back to my old days in the motor industry when we had, as they still have, recall systems on a voluntary basis. One can identify a motor car that leaves a factory. One can follow it through its chain of ownership almost to its break-up point. I do not see how one can follow a lawn mower, a hair dryer or a cooker. Why not? It is because there are thousands upon thousands and they change hands so much faster than motor cars. I have to say quite seriously to the noble Baroness that I do not believe her suggestions are practicable. As I said, I believe we have adequate powers to deal with what she rightly describes as a situation which should have some element of control upon it.
Baroness Nicol: A recall system works in the United States and I firmly believe that, if they can do it, so can we. I do not see why the Minister feels that it is impossible to do the same. Every item of note that is distributed has records which show how and where it is distributed. There may not necessarily be a record of every customer who buys it, but a recall notice could work to a large extent, particularly with goods still unsold. However, I can see that I am not going to get anywhere with this tonight, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 [Suspension notices]:
10.45 p.m.
Lord Gallacher Lord Gallacher moved Amendment No. 64:
Page 12, line 6, at end insert—

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(", or moving the goods out of the area of the authority without notifying the authority of the destination.")
The noble Lord said: Clause 14 is linked to duties placed on local weights and measures authorities under Clause 27(1)(a). Those duties require these authorities to enforce the safety provisions in their various areas. If suspect goods which are subject to a suspension notice belong to a supplier who has outlets in other parts of the country, that supplier can evade the suspension notice by transferring the goods to another authority's area. The purpose of the amendment is to allow traders to move their goods freely, but the requirement that they notify the authority of their destination means that that authority can notify another authority of the whereabouts of the goods so that a further suspension notice can be served, and in this way consumers generally are protected.
The thinking behind this amendment parallels that in machinery already used in the EC whereby the Commission communicates information to member states about unsafe goods, and the fact that the principle (or precedent if you wish) has been established at Community level should, I think, commend the idea to the Government. Therefore, I hope that this particular amendment will be accepted and I beg to move.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Gallacher, for the way in which he has described the amendment, and I have to tell him straightaway that I have some sympathy with the reasons for it. I cannot actually agree to accept the amendment as it stands, which would in effect prohibit the movement of any goods, but I shall certainly agree to consider tabling an amendment which would ensure that local authorities were able to know at any time where those goods were kept to which a suspension notice related.
I believe that the amendment that I have in mind will satisfy the needs of the local authorities. I should be happy to discuss it with the noble Lord, and I hope that with that assurance he will feel able to withdraw his amendment.
Lord Gallacher: I am grateful to the Minister for the response that he has made to this amendment, which I readily accept, and in the light of which I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 65:
Page 12, line 41, at end insert ("and
(c) it is shown that the officer did not have reasonable grounds for exercising the power.")
The noble Lord said: This amendment deals with the compensation provisions which appear in Clause 14(6), providing that the enforcement authority (in other words, the local authority) is liable to pay compensation if:
"(a) there has been no contravention … and
(b) the exercise of the power is not attributable to any neglect or default"
by the person who owns the goods or is in control of them. I am seeking to add the words:
"and
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(c) it is shown that the officer did not have reasonable grounds for exercising the power".
When speaking to this amendment I should also perhaps speak to Amendment No. 89, which concerns the same provisions.
The point of this amendment is that without it enforcement authorities and enforcement officers will be very reluctant to exercise their powers to suspend, because if a conviction does not arise the local authority will suffer the risk of being liable in damages. The effect will be obvious on the ratepayer, who is someone whom the Government on previous occasions have perhaps shown a tendency to want to protect. More importantly, it will militate against the enforcement of the provisions, because if one has a situation in which, for example, a police officer says, "Now, I must not arrest this person or charge him with an offence because if I do so I shall be liable in costs, even if I have reasonable grounds for arresting him", then that policeman will be very anxious not to act. It appears to me—and this is the reason for the amendment—that this amendment is necessary to give some coherence to the clause and to make the enforcement authority enforce the law without risk of a severe liability. I beg to move.
Lord Brougham and Vaux: The success or otherwise of these important new provisions will to a large extent depend upon the effective enforcement of the criminal provisions of Part II of the Bill. I have already declared my interest in RoSPA as its president. It is concerned that no additional financial support will be made available to deal with the considerable extra work that this legislation will impose on trading standards departments.
We understand that the number of posts for qualified inspectors has remained virtually constant for 25 years, whereas the amount of legislation which must be enforced has increased dramatically. The testing of products will have to be increased and a wide range of expertise called upon to ascertain whether goods are acceptably safe.
The scope of the Bill is much more comprehenisve than previous protection measures, which covered only specific types of product such as electrial goods, toys and cosmetics. Now everything will be caught. Let us take, for example, an accident involving a lightweight ladder which has collapsed causing serious injury to the user and which is thought to have been defective. Will there be an expert immediately available to the trading standards department to which the accident has been reported who can test and evaluate the product? Undoubtedly, additional skills will be required of enforcement officers, including risk assessment techniques, and retraining will have to be undertaken, which will involve considerable additional cost.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Morton of Shuna, for speaking to Amendment No. 89 with Amendment No. 65. I understand the purport of the amendments. They would make a significant change to the application of the provision for compensation. At present, enforcement authorities are liable under the Consumer Safety (Amendment) Act 1986 to pay compensation, where

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the goods turn out to be safe, for any loss or damage resulting from the seizure or suspension unless that seizure or suspension were attributable to any neglect or default by the trader in question. The amendments would require the trader to show that the enforcement authority had acted unreasonably in seizing the goods or suspending their supply, even though the goods were safe, before he would be entitled to compensation.
We cannot accept that compensation should be linked so inextricably with unreasonable behaviour on the part of the enforcement authority. Where issues of safety are in question, it may be quite easy for the enforcement authority to show that it had acted reasonably in seizing or suspending the supply of goods about which there was some doubt. It is indeed quite possible to envisage circumstances where an authority was not acting unreasonably in detaining the goods, even though it transpires ultimately that the trader too had acted perfectly reasonably and that his goods were indeed perfectly safe. In such circumstances where neither the trader nor the authority acted unreasonably, I cannot accept that it is the trader who should bear the cost of any damages he has suffered as a result of the exercise of these sweeping powers.
The Bill already excludes compensation where a trader has been in some way negligent or at fault and this has led directly to the act of seizure by the enforcement authority. The phrase "neglect or default" embraces not merely failure to fulfil any legal obligation under the Bill but also any act or omission (such as failure to produce evidence of safety checks) which in the circumstances could be deemed to be blameworthy.
Enforcement authorities already have responsibilities for the enforcement of safety regulations under the 1986 Act, which has provided improved enforcement procedures. The general safety requirement provides a new sanction against unsafe consumer goods. It involves enforcement responsibilities. However, trading standards departments are often involved in dealing with complaints and problems about goods not covered by regulations, and the general safety requirement will, I believe, facilitate the taking of more, and direct, effective action in such cases.
Lord Morton of Shuna: With respect, the Minister's answer shows the contempt for local authorities which has been expressed by the Government throughout their exercise of power. They are not interested.
I invite the Minister to look at the provisions of the Drug Trafficking Offences Act 1986 to see what powers and responsibilities are put on the police and the prosecution authorities where somebody is proved to be innocent of any drug trafficking offence before he can recover any damages or compensation for having his assets taken away from him, and to compare the provisions in Clause 14(6). The only answer can be that the Government do not care what a local authority has to pay for, but care very much what the police or a prosecution authority has to pay for. The standard is a double standard and it does not work.
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However, as it is so late, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Appeals against suspension notices]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 66:
Page 13, line 33, at end insert—
("( ) Any person aggrieved by an order made under this section in Scotland or by a decision of the Sheriff not to make such an order may appeal against that order or decision to the Sheriff Principal and an order so made may contain such provision as appears to the Court to be appropriate for delaying the coming into force of the order pending the making and determination of any appeal.")
The noble Lord said: This is when I put on my Scottish nationalist hat, although I am not a Scottish nationalist. Why is there a right of appeal in England and Wales, and, for once, in Northern Ireland, but not in Scotland? The purpose of the amendment is to provide the right of appeal. No doubt the noble and learned Lord will say that I have omitted some provision somewhere. But there should certainly be a right of appeal in Scotland similar to that in England, Wales and Northern Ireland. I hope that the Government agree. I beg to move.
Lord Cameron of Lochbroom: We agree. I am surprised that the noble Lord, with his experience as a solicitor, was not aware that in Sections 27 and 28 of the Sheriff Courts (Scotland) Act 1907, as amended, there is already statutory provision for an appeal from a decision of the sheriff in a summary application to both the Sheriff Principal and the Court of Session.
This amendment would have the somewhat undesirable effect of restricting the courts to which an appeal could be taken. Perhaps the noble Lord might like to reflect on what I have said.
Lord Morton of Shuna: I am very willing to accept that and to withdraw the amendment. It points out the difficulty of keeping up with the way in which the Government amend legislation in schedules to various Bills.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Forfeiture: England and Wales and Northern Ireland]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 67:
Page 13, line 44, leave out from ("court") to end of line 47.
The noble Lord said: This raises the question of forfeiture in Clause 16, as it applies to England, Wales and Northern Ireland, and Clause 17 as it applies to Scotland. There are basically two provisions. One is a provision for forfeiture of goods without any court procedure against the owner or possessor of the goods. The other is where there is a prosecution of the owner.
I have no objection to the provisions about forfeiture where there is a prosecution resulting in a conviction of the owner of the goods. I am also aware—as no doubt I should be reminded, if I did not say it—that this is a re-enactment of the provisions in the Consumer Safety (Amendment) Act 1986. I doubt

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whether that Act has resulted in such a concatenation of prosecutions as to give us a picture of how the court will interpret it.
However, the difficulty is that we are going back to the mediaeval concept of deodand, of which I am sure the noble Lord, Lord Lucas, is fully aware. It is unusual in the modern day to prosecute goods rather than people. In 1766 Chief Baron Parker said:
"goods as goods cannot offend, forfeit … pay duties or the like but [only] men whose goods they are".
No doubt the noble and learned Lord the Lord Advocate and the noble Lord the Minister have studied very carefully the report of the committee chaired by Sir Derek Hodgson, one of Her Majesty's judges in England, The Profits of Crime and their Recovery. They and the Committee will perhaps excuse me if I quote from it. The recommendation was that civil forfeiture (which is what we are dealing with here) is troubling.
The report states:
"Of course, the defendant may well view the instigation of these forfeiture proceedings as the lesser of two evils and be content to risk the seizure of his property rather than have his liberty put in jeopardy. Few owners bother to challenge the lawfulness of customs' seizures. This is not always so with other forfeitures. Many publishers have complained that the forfeiture procedure under the Obscene Publications Act deprives them of a jury's verdict on whether their books really are likely to deprave and corrupt and are therefore 'obscene' or whether they are defensible in the public good. In 1964, the Solicitor General"—
who is now the noble and learned Lord, Lord Rawlinson—
"gave Parliament an undertaking which was understood to mean that a publisher faced with a forfeiture proceeding could insist on being tried for the parallel criminal offence. This seems sensible".
The report goes on to say:
"The purpose of forfeiture orders of this sort is to take out of circulation goods that are inherently dangerous or contrary to the public interest. There is little dispute that such orders should be within a court's competence, though there is, of course, vigorous public debate about whether particular types of goods, for instance obscene publications, are sufficiently harmful to justify subjecting them to the possibility of such orders. We think that such orders should clearly be retained but believe that the owner should always have the right to insist that he be put on a criminal trial before suffering the loss of his goods rather than merely contesting the forfeiture proceedings".
I appreciate that this report was produced with the assistance of the Home Office and that we are dealing with a different department in the Bill. Presumably the noble and learned Lord and the Minister are aware of the report. It puts my point of view much better than I could myself. I suggest that the Bill should include a power for the owner of the goods to insist that he be criminally prosecuted if he wants to be. I beg to move the amendment.
11 p.m.
Lord Cameron of Lochbroom: The noble Lord is quite correct in saying that these are provisions which were enacted only last year and at that time Parliament was satisfied that it was appropriate that the powers should be taken. Nothing that the noble Lord has said suggests that there was any reason why the arguments then put forward were in any way improperly based. Indeed, the results of his researches from the 18th century to the present day are dealing with a somewhat different topic.
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We are here dealing with safety of goods, and perhaps the Committee will allow me to expand briefly on why these powers were taken in the 1986 Act and why they are retained in this Bill. It is because enforcement authorities have often found that even when traders are prosecuted they may continue to sell the goods in question. The punishment imposed upon them may be such as not to dissuade them from seeking the profit of further trading, particularly when they have large stocks of the offending item.
Our paramount interest must be to prevent unsafe goods reaching consumers. As I have said, the whole thrust of this Bill is consumer protection. One way we can buttress our powers is to impose a suspension notice upon specific goods and a specific trader. That makes it quite clear that the trader is not to sell those goods, and offers a clear-cut case for a further prosecution.
Nevertheless, there are cases when an enforcement authority will feel that even a suspension notice is unlikely to achieve the effect that it wants. The goods may be so dangerous, and the trader so unscrupulous that the only way the public can be protected is to apply for forfeiture.
Normally, goods will only be forfeited in circumstances when other proceedings have been begun. But there will be circumstances with unsafe goods when it is possible that they will be removed and sold but it is not possible to find (at least for the purpose of legal proceedings) a relevant person. In those rather exceptional circumstances we think it right to give the authorities the power to act against the goods themselves. We believe forfeiture as provided for in this Bill to be a sensible and entirely appropriate response to a real problem.
There may be cases where a trader has done his very best not to supply unsafe goods. In such a case, an enforcement authority may not wish to prosecute him. It may still wish to apply for the forfeiture and perhaps destruction of the goods, especially if they possess, through no real fault of the trader, lethal characteristics.
In passing, noble Lords may wish to note that Sections 49 and 139 of the Customs and Excise Management Act 1979 empower the Commissioners of Customs and Excise to forfeit goods by administrative action. It is only if the importer otherwise wishes to challenge that action that the matter comes before the courts. In this Bill, only a court can make a forfeiture order, and only then if the court is satisfied that there has been contravention of a safety provision in relation to those goods.
I have answered in some length the initial statement made by the noble Lord because it seems to me that he has missed the real point and purpose of these powers. I suggest that the noble Lord gives thought to the matter having in mind the purpose of consumer protection, in particular, from unsafe goods. These are necessary powers to achieve a proper end.
Lord Morton of Shuna: I have heard of returning to Victorian values. We are returning here to the deodand, which is in a sense returning to dark ages value. So be it, if the Government wish.

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I shall withdraw the amendment on the basis that I may well return to it at a later stage.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Forfeiture: Scotland]:
[Amendments Nos. 68 to 70 not moved.]
Clause 17 agreed to.
Clause 18 agreed to.
Clause 19 [Interpretation of Part II]:
On Question, Whether Clause 19 shall stand part of the Bill?
Lord Williams of Elvel: With Clause 19 we have now come to the end of Part II, which I hope noble Lords opposite will agree we have covered very quickly. I should not like that to mean that we think that all the issues in Part II of the Bill have been adequately and suitably ventilated. Although in order to meet our commitment to get this Bill through your Lordships' Committee expeditiously we have moved forward rather fast, there are many issues in Part II of this Bill to which we may wish to return. I should like to serve notice that this may be an object of considerably greater scrutiny on Report than it has been in Committee this evening.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Williams, for his remarks. He reminds us of what he said at Second Reading, that for his part he would deal with this Bill as expeditiously as possible, commensurate, I think he also said, with our duties as a revising Chamber. I fully appreciate what he has said and what he means by it. I am grateful to him and his colleagues for the co-operation they have shown. We on our side have sought to give the essence, the kernel of the answers, in the hope that they may satisfy. If on this side we can do anything further to ensure that the Report stage, when it comes, is as harmoniously conducted as the first two days of the Committee, I assure Members that we should like to do that.
Clause 19 agreed to.
Lord Beaverbrook: My Lords, I beg to move that the House do now resume.
Moved accordingly, and on Question, Motion agreed to.
House resumed.
House adjourned at eleven minutes past eleven o'clock.