Lords Sitting of 19 March 1987

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Ripon): The LORD CHANCELLOR on the Woolsack.

EC Consumer Bodies: Meetings
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the European Council of Consumer Affairs Ministers has any meetings arranged prior to or following that on 10th June, and what dates have now been arranged for meetings of the Consumers' Consultative Committee in 1987.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, the Government understand that a progress report on the Toy Safety Directive may be made to the Council of Ministers on 7th April. We also understand that the Danish Presidency proposes to hold a Consumer Council on 10th November. The Consumers' Consultative Committee will meet on 11th-12th May, 9th-10th September, and 25th-26th November 1987. Meetings of the steering committee of the CCC will be held on a further four dates in 1987 and a number of working party meetings will be held throughout the year.
Baroness Burton of Coventry: My Lords, I thank the Minister for that helpful list of dates. Can he tell us what the Commission is doing to implement the resolution which was agreed at the October meeting of the Consumer Council and which stated that consumer interests should be more fully reflected in Community legislation? Does he recall that that same proposal urged that early measures should be taken? In view of that, can the Minister say whether on any of the dates he has mentioned this matter will now be on the agenda?
Lord Lucas of Chilworth: My Lords, I appreciate and understand the concern of the noble Baroness. I think her concern is shared by the Select Committee of your Lordships' House and indeed by consumer organisations. However, I have to remind the House that the resolution does not require the Commission to make a report until the end of this year and so I can offer no grounds for optimism that the subject will appear on the agenda of the Consumer Council before then.
Baroness Burton of Coventry: My Lords, while being somewhat encouraged by the information that has been given this afternoon, and while believing that the Government are aware that the Consumers' Consultative Committee is frequently neither
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consulted nor informed about what has been decided, is the Minister himself aware that an important announcement by the Commission about their intention to bring forward a directive on a general obligation to market safe products was reported in the Financial Times on 19th February? Is he aware that no mention of that fact was made at the meeting of the Consumers' Consultative Committee on the day before, 18th February? Would the Minister feel able to comment on this lack of communication with the Consumers' Consultative Committee?
Lord Lucas of Chilworth: My Lords, the noble Baroness puts me in a rather difficult position because I think she will recall that the Government have no locus with the CCC and therefore are not party to any of their discussions. As regards the newspaper report of 19th February, my understanding is that this was not a statement made by the Commission as such: it was more of an announcement that this could be a matter that the Commission would be dealing with.
As I have suggested, we do not have minutes of the CCC meetings and therefore it is difficult for me to say anything about what happened at that meeting. If the noble Baroness or her advisers can acquaint me with exactly what did take place at that meeting, I might be able to take the matter forward and indeed I should be pleased so to do.
Lord Molloy: My Lords, when the European Council of Consumer Affairs Ministers meet, do they not seek any guidance or any information from the lands whence they come? For example, they might seek information from our committee, to which the noble Baroness has referred. Or do they meet on a "hit or miss" basis, with no planned and sensible intelligence gathered so that they can deal with recommendations based on the suggestions of the French, the British, the Italians or whoever else may be involved in European Community consumer affairs? I should have thought that our committee on consumer affairs ought to be regularly consulted, as indicated by the noble Baroness.
Lord Lucas of Chilworth: My Lords, the noble Lord, Lord Molloy, embraces two separate issues. I have explained that we have no standing in the CCC—the Government are not represented there—and so what they do is outside any jurisdiction. I have also explained that the Commission are required by the resolution of last October to report the outcome of their deliberations on the implementation of consumer interests throughout the Community's directives. I have explained that the steering committee will be meeting on four occasions and that the working party of that body will be meeting throughout the year. That is how the matter will be taken forward.
Baroness Burton of Coventry: My Lords, while very much appreciating the way the Minister has answered these questions today, may I ask him whether he is aware that, if I have the information as to what has taken place in that committee, I think it not unlikely that he will have it? May I further be so bold as to ask him whether he will inquire within his own

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department about this, because I think he may find that the information is available there?
Lord Lucas of Chilworth: My Lords, I am always surprised that the noble Baroness has information about meetings of the CCC, and indeed about consumer matters in the Commission, long before I get such information. She is extremely well informed in that area—
Noble Lords: Hear, hear!
Lord Lucas of Chilworth: —and therefore I am always grateful to her for the information she gives me. We do not have information as to what happened at the meeting of the 18th February, but we shall press to see what information we can get, and no doubt the noble Baroness will do likewise.

Meat Industry: Training Provision
3.7 p.m.
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 whether they have any plans to improve the quality of training and education available to the meat industry.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, the Manpower Services Commission will continue to work closely with both the Meat Industry Training Organisation and the Institute of Meat to help these organisations to improve the quality of training and vocational education available to the meat industry.
Lord Graham of Edmonton: My Lords, will the Minister accept that the spirit of this Question is not to decry what is being done either by the Minister or by central Government but merely to ask for more, so that the best interests of the consumer, the trade and indeed the nation can be served? Would the Minister agree that a powerful central body capable of playing a pivotal role in training and maintaining standards in the meat industry could be a national asset and that such a body could well be the Institute of Meat?
Lord Young of GrafTham: Yes, my Lords, I am very grateful for the work which the Institute of Meat, of which the noble Lord, Lord Graham, is president, has done. Indeed, I am also aware of what the Institute of Meat is now doing and that there is contact with the National Council for Vocational Qualifications to see whether they can fulfil the criteria for the national vocations qualification kite mark, which perhaps could even be used as an exemplar for other industries. Discussions are also taking place with the Manpower Services Commission on what could possibly be, to coin a phrase, a joint development which could be used to define standards within the meat industry.
Lady Saltoun of Abernethy: My Lords, is it not the quality of the meat that needs improving?
Lord Young of Graffham: My Lords, the quality of the meat is in the eye of the consumer and we are talking about the training.
Lord Graham of Edmonton: My Lords, if the Minister can speak about "joint agreements", I can certainly try to make both ends meet! I am grateful to the Minister for his general support for the aspirations of a great many people to ensure that the meat industry and those who work in it have access to the kinds of opportunities which the Minister is aware are provided in Japan and in many European countries. I wonder whether the Minister could say anything about the possibility of access to EC funds, in order to make sure that the responsibilities which the Government have placed upon bodies like the Institute of Meat are capable of being fulfilled.
Lord Young of Graffham: My Lords, there are many, perhaps, in your Lordships' House who consider I have quite enough responsibilities at the present time. Europe is not one of them. I can however tell the House that since 1985 the Manpower Services Commission has advanced some £52,000 to the institute to help to develop and extend its modular standards based training scheme, and we are very satisfied with that. I have no doubt that work will continue with the Manpower Services Commission. Europe is quite another matter.

PM's Visit to Soviet Union
3.10 p.m.
Baroness Robson of Kiddington: 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 the Prime Minister intends to raise the case of Mr. Raoul Wallenberg during her forthcoming visit to the Soviet Union.
Baroness Hooper: My Lords, we have pressed the Soviet authorities on a number of occasions for a full and frank account of the fate of Raoul Wallenberg. On this occasion I note the Question from the noble Baroness, and will ensure that it is drawn to the attention of my right honourable friend the Prime Minister.
Baroness Robson of Kiddington: My Lords, I thank the noble Baroness for that helpful reply. I hope she will agree that never has the opportunity been greater, in view of the apparent slight change of mind of the Soviet administration and Mr. Gorbachev's various statements about human rights. For the sake of his family, and for the sake of all of us, to find the true answer to the fate of Raoul Wallenberg—one of the greatest humanitarians this century has seen—would be very worth while.
Baroness Hooper: Yes, indeed, my Lords. We hope that the new openness in Soviet society will lead to a fuller explanation of Raoul Wallenberg's fate. We take every opportunity to raise human rights issues with the Russians.
The Earl of Lauderdale: My Lords, will my noble friend say whether she is willing to receive a representation, before the Prime Minister leaves, about the Dragunsky case, which is not widely known but which has been drawn to my attention? May I write to her about it?
Baroness Hooper: Yes, my Lords.
Lord Bottomley: My Lords, would the Minister ask her right honourable friend the Prime Minister, on her visit to the Soviet Union, to recognise that there has been an easing of the situation for dissidents since arrival of the new Soviet leadership and will she encourage this to continue?
Baroness Hooper: Yes, my Lords. I feel sure that my right honourable friend will follow this tack in her meetings.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness tell the House what is the latest information about Mr. Wallenberg? Is it thought that he is still alive? Secondly, can the noble Baroness say whether any initiative through the United Nations has ever been contemplated by the Government?
Baroness Hooper: My Lords, this is primarily a matter for the Swedish Government. The Soviets have in the past responded to our representations and to Swedish representations by referring to a note sent in 1957. Neither we nor the Swedish Government regard this as a definitive answer and we remain in close contact with the Swedish Government on this matter.

JET Nuclear Fusion Project
3.13 p.m.
Lord Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the progress made at the JET nuclear fusion project and whether all professional staff, irrespective of nationality, now enjoy common salary scales.
Viscount Davidson: My Lords, though much remains to be done, the latest results from JET have been encouraging. A peak temperature of 140 million degrees centigrade has been reached. The project is staffed by the member organisations of the project according to the statutes of the joint undertaking. Staff made available to the project by the UKAEA remain subject to its own conditions of service and are paid accordingly. The European Court has upheld these arrangements and rules that they do not discriminate on grounds of nationality.
Lord Beswick: My Lords, I am grateful to the noble Viscount for his reply. Would he not agree that, despite what he said at the beginning of his Answer, there is a lowering of morale at that plant? Would he not further agree that it is quite impossible to maintain the necessary morale and motivation if you have this
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gross disparity between the salaries'paid to the English people on the one hand and the other Europeans on the other? Will he confirm that at the present time the English are getting half the salary paid to the other European scientists alongside whom they work?
Viscount Davidson: My Lords, the judgment of the European Court is not against the United Kingdom Atomic Energy Authority or the British Government. The case was brought against the JET Council and the Commission of the European Communities, and they defended the action. The European Court upheld the existing arrangements embodied in the JET statutes and concluded that the difference in treatment between UKAEA staff and staff made available by other members of the joint undertaking is objectively justified bv the particular circumstances applicable to JET.
The Earl of Lauderdale: My Lords, can my noble friend add to what he said about the progress of the JET project when he referred to a temperature of 140 million degrees centigrade having been attained? Can he say whether that has yet exceeded a duration of one-hundredth of a second?
Viscount Davidson: No, my Lords.
Lord Tordoff: My Lords, would the Minister not agree that it is perfectly normal in multinational organisations for different rates to be paid to different nationalities working on the same project?
Viscount Davidson: Yes, my Lords.
Lord Bruce of Donington: My Lords, in view of the importance that Her Majesty's Government have previously attributed to this project, will the noble Viscount give the House an assurance that when the EC Commission budget for 1987 comes up for consideration Her Majesty's Government will fully support the restoration of cuts made in the JET project and will do their very best to ensure that it receives the utmost encouragement not only from the EC as a whole but from the United Kingdom?
Viscount Davidson: My Lords, I can assure the noble Lord that the JET project gets the utmost support from the British Government.
Lord Orr-Ewing: My Lords, can my noble friend say whether the people working on this ambitious, essential and very much to be encouraged project are paid free of tax or do they pay the tax of the countries from which they come? How is this administered so that there is some justice between one worker and another?
Viscount Davidson: My Lords, I am afraid I cannot answer that question, but I will write to my noble friend. I ought to tell the House the UKAEA staff assigned to JET were told that they would remain authority employees on authority terms and conditions while engaged on the project. The JET undertaking has a limited life and the UKAEA employees have, of course, a right of return to the authority.
Lord Ironside: My Lords, when the late Lord Hinton and I visited the joint research centre at Eastborough to look at the issue of siting the JET project in this country, little did we expect that there would be different conditions of employment between the European members and our own people. But we found that the issue centred on the—
Noble Lords: Question!
Lord Ironside—setting up of a European school for the education of the children of Community employees. This was done by the government of noble Lords opposite. I should like to ask my noble friend whether the UKAEA employees working at JET qualify to send their children to the European school.
Viscount Davidson: My Lords, that, I am afraid, is a question to which I do not have the answer, but I shall write to the noble Lord.
Lord Beswick: My Lords, does the noble Viscount not remember that we had a great struggle to get this joint European project in this country and that the argument which we then put forward was that British scientists were ahead of all the others? Is it not quite intolerable that they should be paid half the rate? Although the noble Lord on the Liberal Benches may be right, and there is often a difference between the pay of one nationality and another, it is not such a difference. I ask the noble Viscount whether something more is not to be done.
Viscount Davidson: My Lords, the employees of the UKAEA took the matter to the European Court, which took account of all the factors and decided, as I said, that the existing arrangements are to be upheld.
Earl Ferrers: My Lords, what kind of thermometer reads a temperature of 140 million degrees centigrade without melting?
Viscount Davidson: My Lords, I should think a rather large one.

Business: The Easter Recess
Lord Denham: My Lords, it may be for the convenience of the House to know that, subject to the progress of business, the House will adjourn for the Easter Recess on Thursday, 9th April, and return on Monday, 27th April. The House will sit at 11 a.m. on Thursday, 9th April.

Consumer Protection Bill [H.L.]
3.20 p.m.
Read a third time.
Clause 2 [Liability for defective products]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No.1:
Page 2, line 36, after ("damage") insert ("or, in the case of that person being incapable of acting, a person authorised to act on his behalf")
The noble Lord said: My Lords, perhaps I may speak to this amendment in my name and that of my noble friend Lord Williams of Elvel. The amendment relates to a fairly technical point in Clause 2. In that clause, there are provisions for the person who has suffered damage to ask the supplier to identify the person who gave the product to the supplier and for going back down the line to get to the producer. This amendment will deal with, the situation in which a person who has suffered damage is not capable of asking the supplier or anyone else for information, either because that person is not capable because of age (such as in the case of a very young child) or is incapable as a result of the damage suffered. That situation is not met in any way in the Bill and what we have endeavoured to do in this amendment is to cover the situtation so that somebody who is a child who has suffered damage or somebody who is mentally injured or has suffered severe brain damage can have the processes of the Act working for him. It is a fairly simple amendment and I trust that the Government will accept it. I beg to move.
Lord Campbell of Alloway: My Lords, surely the supposition as to incapacity to which the noble Lord refers is met. A solicitor, friend or legal advice centre could easily make such a request. Also, if it is not complied with, under subsection (3)(c) we see that the supplier is liable for the defective product. With great respect, it is hard to understand how the amendment serves any practical purpose.
Lord Morton of Shuna: My Lords, with the leave of the House, may I deal with the point raised by the noble Lord, Lord Campbell of Alloway? At least in Scotland, if one acts for somebody who has no authority to ask one to act, one has no authority to act. Somebody who has suffered severe brain damage cannot, in Scottish law at any rate (and I would be surprised if it is different in England), instruct a solicitor to act on his behalf. How would he do that? It is easy if somebody is capable of giving instructions. But what does one do with somebody who is incapable of giving instructions? It is that situation which I have endeavoured to meet.
Lord Lucas of Chilworth: My Lords, I fear it will be necessary for me to jog back a bit. I accept that the person who is injured by a product must be able to ask the supplier, under Clause 2(3), to identify the producer. At Committee stage, the noble Lord, Lord Morton, put down an amendment to ensure that the injured person could act through a representative. As my noble and learned friend the Lord Advocate said at that time, it seemed to us unnecessary to make a provision of that kind. However, the amendment did highlight a potential difficulty in cases where the injured person had died before making a request, because he would not by that date have acquired a cause of action under Part I which would enable his estate or his dependants to sue. We accordingly tabled an amendment at Report stage to deal with that problem and the relevant provision is now in Clause 6(2). I am grateful to the noble Lord, Lord Morton, for putting us on notice of that problem.

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At that time, the noble Lord questioned whether the amendment went far enough to meet his point. He mentioned in particular the case where a person had suffered an injury which was so serious that he was incapable of giving instructions to anybody to deal with the matter. That is the point which he reiterates this afternoon and that is one example of a disability. There are of course others, such as the case where the injured person is an infant. In such cases I am satisfied that the existing provisions of the law governing the exercise of powers of a person under a disability by his guardian or other representative are adequate to allow a request made by that representative under Clause 2(3) to be treated as having been made by the injured person himself.
I fear that the only effect of the noble Lord's amendment would be to throw doubt upon the ability of a representative to give notices and take similar steps under other legislation which does not contain a similar provision, and I oppose it on that ground. In addition, the amendment gives rise, in our view, to difficult problems of interpretation. On the one hand, if the authority referred to is a reference to the person who is under the disability, it is not easy to see how that person is supposed to give the authority itself. On the other hand, if the authority is that conferred by the general law, there is obviously no need for it to be restated in this Bill. There is, finally, a risk that by limiting its application to persons incapable of acting, the amendment would imply that anyone else would have to act personally and would not, for example, be entitled to instruct a solicitor.
I hope that what I have said will convince the noble Lord that the matter dealt with by this amendment is adequately accommodated by the general law and that an amendment on the lines proposed would only confuse the issue.
Lord Morton of Shuna: My Lords, I do not intend to press the matter. However, I may say that I find the Minister's answer wholly unsatisfactory. Perhaps the matter will be cleared up in another place. I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Application of certain enactments etc.]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 2:
Page 7, line 8, after ("tort") insert (", or in Scotland delictual or quasi-delictual liability,").
The noble Lord said: My Lords, this amendment is fairly straightforward. Again, it is a matter which I raised at Committee stage and which the Government dealt with to some extent by an amendment they proposed at Report stage. However, I regret that that does not fully satisfy me.
What is said in Clause 6(7) is,
"It is hereby declared that liability by virtue of this Part is to be treated as liability in tort for the purposes of any enactment".
That section applies to Scotland. I regret to say that "tort" is a term which is not used in Scotland at all. We use the words "delict" and "quasi-delict". Since the 1982 Act adopted the conventions on jurisdiction and refers to tort, delict or quasi-delict, I do not see why
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this House or the Government are so intent on leaving out the words which have a meaning in Scotland. I hope that on this occasion they will be prepared to accept the amendment because the sense remains the same but it would become understandable in Scotland. I beg to move.
Lord Lucas of Chilworth: My Lords, your Lordships will recall that at Report stage my noble and learned friend the Lord Advocate explained that we had considered the noble Lord's desire to make clear that liability under Part I is to be treated as a liability in tort, delict or quasi-delict. We had taken the view that there was some uncertainty about the position under the law of tort. However, we did not think that the same doubt arose about delict. We accordingly tabled amendments dealing only with certain statutory provisions referring to liability in tort, of which the most important is now in Clause 6(7).
My noble and learned friend the Lord Advocate explained at that time that he would give consideration to the reservations about the position in delict which the noble Lord, Lord Morton, said he still felt about the matter and which he still feels this afternoon. This consideration has not yet been completed and it would therefore be wrong to indicate acceptance of this amendment until consideration has been completed. It may be helpful if I explain the three main difficulties raised by the amendment. I ought to raise them if only for the record so that if we should come back to the matter we have the background clear in our minds.
First, it is not clear that any amendment is required because it is difficult to see how the liability imposed by Clause 2 would be classified under Scots law if it was not delictual. It is true, as the noble Lord says, that Clause 2 does not expressly impose a legal duty on a producer or a supplier not to produce or supply any defective product. It simply imposes upon them liability for any damage caused by such a defective product. Nevertheless, it is not at all clear why this should prevent the liability from being considered delictual.
Secondly, if it is thought that, for the avoidance of doubt, there should be an express provision making it clear that the liability under Clause 2 is delictual, it is not clear that the noble Lord's amendment would suffice. That amendment has the effect of providing only that the liability is delictual or quasi-delictual for a particular purpose; namely, that of any enactment conferring jurisdiction on a court. It is necessary to consider what other enactments might be in question, and how any amendment should relate to them.
Thirdly, the amendment of the noble Lord, Lord Morton of Shuna, does not make it clear whether the liability under Clause 2 is delictual or quasi-delictual. As my noble and learned friend pointed out at the Report stage, the distinction between these concepts has created some confusion and we should attempt, so far as we can, not to perpetuate that confusion in the Bill.
These are all matters upon which I think it would be advisable for further and detailed consideration to be given. This we shall do, reflecting perhaps in another place the outcome of such consideration. If the noble

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Lord can accept what I have said and the assurance I have given, I should be grateful to him if he would withdraw the amendment.
3.30 p.m.
Lord Morton of Shuna: My Lords, subsection (7) of Clause 6 deals only with jurisdiction. Therefore it does not matter whether something is delict or quasi-delict.1 should not wish to detain the House but I am perfectly prepared to detain the noble Lord the Minister in some other place for a discussion on the distinction between delict and quasi-delict. The difficulty here is that it is said to be,
"liability in tort for the purposes of any enactment conferring jurisdiction on any court".
Why it is difficult for the Government to say, "Treat it as liability in tort or in delict or quasi-delict," I fail to see. However, as the Government are continuing to look at the matter, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 [Suspension notices]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 3:
Page 14. line 4. at end insert ("; and
(c) it is shown that the enforcement authority did not have reasonable grounds for exercising the power.").
The noble Lord said: My Lords, perhaps I may speak to this amendment with Amendment No. 4 which is an amendment to similar effect in Clause 34. They relate to the payment of compensation.
Amendment No. 3 relates to compensation after a suspension notice has been served. Amendment No. 4 relates to compensation after seizure of goods. In both cases the "enforcement authority" in Clause 14 or the "officer" in Clause 29 is under a duty to issue the suspension notice or to seize the goods if he has "reasonable grounds for suspecting". Then he has a duty to serve the suspension notice or to seize and detain. In both instances, there is the compensation provision although for Clause 29 that provision is in Clause 34.
The authority is to be liable for compensation if, at the end of the day, it is found there is no contravention and that the exercise of the power has not been due to the fault of the owner of the goods, the person who has the interest in the goods. As the Bill is drafted—and this is what we seek to correct—there is no excuse. The authority or the officer had reasonable grounds for doing what he did. If one compares that with the numerous Bills which have become law, one gets a very different picture.
In Clause 1 of the Banking Bill, which we discussed on Monday, there is a liability on the board or its staff only if they are shown to have acted in bad faith. Otherwise they have no liability at all. I do not need to remind the Minister, although perhaps I may remind other noble Lords, that Section 187 of the Financial Services Act has the same exclusion of any liability for the members and staff of self-regulating organisations, the designated agency, the competent authority and recognised professional bodies, for any of their acts
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except if done in bad faith. The Criminal Justice (Scotland) Bill which was before the House last month only has responsibility in respect of Customs officers and police if they are found to have been unjustified in seizing property and are shown to be in serious default. The Drug Trafficking Offences Act has the same provision for serious default and a necessity to prove substantial loss.
If we want the Consumer Protection Bill to protect consumers, the enforcement agencies must not be inhibited from issuing suspension notices and seizing goods which they reasonably think are potentially dangerous by the possibility that they may be found liable in compensation. It is applying a standard totally different from that applied to everybody else. It is reasonable that they should be liable to pay compensation only if it were shown that they did not have the reasonable grounds for exercising the power in the first place. I beg to move.
Lord Campbell of Alloway: My Lords, perhaps I may briefly ask the noble Lord, Lord Morton of Shuna, how it is to be shown. Who is to decide whether the enforcement authority did or did not have reasonable grounds for exercising the power? As far as I can see, there is no machinery in the Bill to enable such a decision to be made. It would appear that the only available remedy is judicial review. Is judicial review with its complex, costly legal proceedings appropriate apart from bad faith, which the noble Lord mentioned, where it would apply in any event?
By and large, if there were any evidence, any basis, for the exercise of power, as matters now stand according to the state of the law on judicial review, judicial review would not lie. Therefore under judicial review, which appears to be the only available machinery—there is none in the Bill—there are no grounds apart from bad faith on which it could lie. The Wednesbury principles, about which your Lordships have heard so much, concerning whether something which ought to have been taken into account was not taken into account or whether something which was taken into account ought not to have been taken into account are totally wide of the mark on reasonable grounds, the basis upon which this amendment is proposed. With the greatest respect, I suggest that this amendment is misconceived.
Lord Lucas of Chilworth: My Lords, I agree with the summing up of the position by the noble Lord, Lord Morton, but I fear that after that I part company with him. These two amendments raise an important question for both traders and enforcement officers. I begin by recalling a little of the history of these provisions since they represent the outcome of considerable debate earlier in our proceedings and an earlier change in the provisions in favour of the enforcement officers.
The new powers of suspension and forfeiture were suggested in the White Paper on the safety of goods published in 1948. Because of the sweeping nature of the powers, the White Paper suggested that compensation should be available to traders wherever there was no conviction under the safety legislation. That is, compensation would not be paid only when there was a conviction.

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During the passage of the Consumer Safety (Amendment) Bill in 1986, it was suggested that a compensation provision along those lines did not sufficiently reflect the difficulties that trading standards officers might face. Noble Lords will probably be aware that the Government listened to those representations, and the result was that the circumstances in which compensation would not be paid were substantially widened. Those new circumstances were enacted in the Consumer Safety (Amendment) Act 1986 and they are reproduced in the present Bill, which in this respect does no more than consolidate that Act.
The provisions were substantially widened and indeed they are wider than noble Lords opposite acknowledge. Compensation is to be paid only if both of two conditions are satisfied. They are that there has been no contravention in relation to the goods of any safety provision—that is, in fact that the goods are safe—and that the exercise of the relevant power of suspension or forfeiture is not attributable to any neglect or default by the person seeking compensation. This latter condition is an important one, and it does not just include specific failures to meet obligations under safety legislation, but also any act or omission which is in the circumstances blameworthy. It could include, for example, an unreasonable unwillingness to provide an enforcement officer with information or indeed access to the goods.
There is an important balance here between the trading standards officer and the trader, and this has been much discussed. The circumstances in which compensation shall be paid are relatively narrow.
I now turn to the specific effect of the two amendments before us. I said both in Committee and on Report that the important question we have to address is what should happen in those unfortunate circumstances where goods are seized or suspended and nobody is to blame. The goods are safe, the trader has acted reasonably and so has the enforcement officer. Such circumstances could arise when the enforcement officer relied, quite reasonably, on incorrect information supplied perhaps by a third party. Noble Lords opposite say that in those circumstances the trader should bear the loss.
The Bill as it stands says that in those circumstances, unfortunate though they may be, it is the enforcement authority that should bear the loss. We think it is quite wrong that in providing powers for enforcement authorities to halt the supply of unsafe goods we should do so at the expense of the innocent trader. Frankly, we are not prepared to create a new burden on business of this nature.
The noble Lord has during our consideration of this part of the Bill brought up the contrast between this legislation and other criminal legislation such as the Drug Trafficking Offences Act 1986 and the analogous provisions of the Criminal Justice (Scotland) Bill which have recently been discussed by a Committee of your Lordships' House. I explained in some detail during the Report stage, that I agree that there is a contrast between the two sets of legislation. In that Act and the Criminal Justice (Scotland) Bill, there is a provision that compensation shall not be paid unless
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the court is satisfied that there has been some serious default on the part of the person concerned in the investigation or the prosecution of the offence.
As I explained again on Report, I did not believe then, and I continue not to believe, that the analogy with the investigation of a very serious crime like drug trafficking is sufficiently relevant to provide an answer here. A police officer must be free to act on his reasonable suspicion that a serious crime has been committed. However, there it is accepted that where things have gone seriously amiss an innocent person may receive compensation.
I would not wish your Lordships to feel that I underestimate the importance of consumer safety, but we must recognise that we are not talking about the same kind of thing when we are concerned with the suspension of the supply of goods or their forfeiture. It seems right that where local authorities have a power to interfere with the course of trade they should exercise a greater degree of caution. I repeat, as I said at Report stage, that this has nothing to do with any difference in attitude that the Government may have to the police and to local authorities. It is the nature of the underlying offences which is the fundamental distinction.
The noble Lord, Lord Morton, raised a number of points of contrast with other legislation. I find his attitude just a little odd. I can understand that he might want consistency between the two sets of legislation, although, as I explained, I find that formal consistency inappropriate. The noble Lord is seeking to have it both ways. He sought to remove from the Criminal Justice (Scotland) Bill the same sort of provision. I accept it is not exactly the same but it is very similar to the provision he is now trying to insert into this Bill. The noble Lord, while asking why we are not consistent, seems to me to be seeking to make the two pieces of legislation inconsistent in a quite undesirable way, making compensation more easily available in the case of suspect drug traffickers and less easily available for innocent traders.
It is for those reasons, and in support of what I have said on a number of occasions, that I ask your Lordships' House to resist both these amendments.
Lord Morton of Shuna: My Lords, I am interested in the arguments put forward by the Minister when he said compensation for the suspected drug traffickers as opposed to compensation for the innocent trader. That is not the point. Under the drug trafficking legislation, before there is any question of compensation the accused drug trafficker's innocence has to be established. It is not a case of being a suspect; he has been acquitted and so has the trader. He has been acquitted, and they are both in exactly the same position. The acquittal of a trader under the Consumer Protection Act, as it will be, will have exactly the same standard of leaving a suspicion, or not leaving a suspicion, as the acquittal of somebody on any other charge.
I failed to see on drug trafficking, and even more so under the Financial Services Act, why a person who wishes to do financial service trading is entitled to no compensation unless he can establish bad faith. He is to get no protection, no compensation. He may be prevented from doing any business at all but he will get

1527
no compensation whereas the trader is to receive compensation even where the enforcement authority can show that it has reasonable cause for acting. That seems to me and to others on this side of the House to be entirely wrong. It also seems wrong because it will inhibit the enforcement authorities from acting at all.
I turn now to the point made by the noble Lord, Lord Campbell of Alloway. I refer, first, to Clause 14. In the compensation provisions it has to be shown that,
"there has been no contravention"—
and that presumably is an acquittal—and,
"the exercise of the power is not attributable to any neglect or default".
However, with someone as careful as the noble Lord in considering legislation and the amendments I find it surprising that he spoke about judicial review, because in Clause 14(8) and Clause 34(2) he will see who is to make the decision. It is quite easy to put on to the arbiter who is to be appointed the decision on whether the enforcement authority had reasonable grounds for suspecting, just as it is the decision on whether there has been neglect or default by the owner of the goods. Therefore, it seems that there is no question, and can be no question, of judicial review. I regret to say—
Lord Campbell of Alloway: My Lords, I am obliged to the noble Lord for giving way. I agree with him, but the difficulty is that his amendment does not provide that the arbiter should set aside. In the absence of any provision in the Bill as it stands, or in the amendment as drafted, the only other possible judicial redress is judicial review. I agree with the noble Lord that it is not appropriate, but his amendment does not tie it up.
Lord Morton of Shuna: My Lords, I am sorry, but we seem to be misunderstanding each other. Clause 14 states:
"Where an enforcement authority serves a suspension notice … the authority shall be liable to pay compensation",
and so on, if: "(a) there has been no contravention", and (b) there has been no "neglect or default". If one adds an additional paragraph (c) that comes to be one of the facts that has to be decided, in the event of a dispute, by the arbiter appointed under subsection (8). In my submission, that is quite clear, but we must remain in dispute. Unfortunately, on this occasion I am not prepared to withdraw the amendment and I must seek the opinion of the House.
3.53 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 76; Not-Contents, 111.

DIVISION NO.1

CONTENTS

Airedale, L.

Barnett, L.

Allen of Abbeydale, L.

Beaumont of Whitley, L

Aylestone, L.

Bonham-Carter, L.

Banks, L.

Brockway, L.

On Question, amendment agreed to.

Bruce of Donington, L.

Lloyd of Hampstead, L.

Burton of Coventry, B.[Teller.]

Lloyd of Kilgerran, L.

McNair, L.

Carmichael of Kelvingrove, L.

Mais, L.

Cledwyn of Penrhos, L.

Manchester, D.

David, B.

Morton of Shuna, L.

Dean of Beswick, L.

Mulley, L.

Diamond, L.

Murray of Epping Forest, L

Elwyn-Jones, L.

Nicol, B.

Ennals, L.

Northfield, L.

Ewart-Biggs, B.

Ogmore, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.[Teller.]

Fitt, L.

Fletcher, L.

Raglan, L.

Gallacher, L.

Rathcreedan, L.

Gladwyn, L.

Ritchie of Dundee, L.

Graham of Edmonton, L.

Robson of Kiddington, B.

Grimond, L.

Rochester, L.

Hacking, L.

Sainsbury, L.

Hampton, L.

Seear, B.

Hirshfield, L.

Serota, B.

Houghton of Sowerby, L.

Silkin of Dulwich, L.

Hughes. L.

Somers, L.

Hunt, L.

Stallard, L.

Hutchinson of Lullington, L

Stewart of Fulham, L.

Irving of Dartford, L.

Strabolgi, L.

Jeger, B.

Taylor of Blackburn, L.

Jenkins of Putney, L.

Tordoff, L.

John-Mackie, L.

Underhill, L.

Kagan. L.

Wells-Pesteli, L.

Kilbracken, L.

Whaddon, L.

Kilmarnock, L.

Wigoder, L.

Kirkhill, L.

Williams of Elvel, L.

Leatherland. L.

Wilson of Langside, L.

Llewelyn-Davies of Hastoe,

Ypres, E.

NOT-CONTENTS

Aldington, L.

Ferrier, L.

Alexander of Tunis, E.

Fraser of Kilmorack, L.

Alport, L.

Gainford, L.

Arran, E.

Gridley, L.

Atholl, D.

Hailsham of Saint

Auckland, L.

Marylebone, L.

Bauer, L.

Hankey, L.

Beaverbrook, L.

Hardinge of Penshurst, L.

Belhaven and Stenton, L.

Harvington. L.

Belstead, L.

Hesketh. L.

Bessborough. E.

Hives, L.

Blyth, L.

Home of the Hirsel, L.

Borthwick, L.

Hood, V.

Boyd-Carpenter, L.

Hooper, B.

Brabazon of Tara, L.

Jessel, L.

Brougham and Vaux, L.

Kimball, L.

Broxbourne. L.

Kitchener, E.

Butterworth, L.

Knollys, V.

Byron, L.

Lane-Fox, B.

Caithness, E.

Layton, L.

Campbell of Alloway, L.

Lindsey and Abingdon, E.

Carnegy of Lour, B.

Long, V.

Carnock, L.

Lovat, L.

Clitheroe. L.

Lucas of Chilworth, L.

Coleraine, L.

Luke, L.

Cottesloe. L.

Marley, L.

Cowley. E.

Massereene and Ferrard, V.

Cox, B.

Maude of Stratford-upon-Avon, L.

Craigavon, V.

Cullen of Ashbourne, L.

Merrivale, L.

Davidson, V. [Teller.]

Mersey, V.

De Freyne, L.

Milverton, L.

Denham, L. [Teller.]

Molson, L.

Denning, L.

Monk Bretton, L.

Dilhorne, V.

Morris, L.

Drumalbyn. L.

Mowbray and Stourton, L.

Dulverton, L.

Moyne, L.

Dundee. E.

Munster, E.

Eccles, V.

Murton of Lindisfarne, L.

Effingham. E.

Nugent of Guildford, L.

Ellenborough. L.

Orr-Ewing, L.

Elliot of Harwood, B.

Pender, L.

Enroll. E.

Portland. D.

Ferrers. E.

Rankeillour, L.

Reigate, L.

Terrington, L.

Renton, L.

Teviot, L.

Rootes, L.

Thomas of Swynnerton, L

Saint Oswald. L.

Thomeycroft, L.

Saltoun of Abernethy, Ly.

Trumpington, B.

Sandford, L.

Vaux of Harrowden, L.

Shannon, E.

Vickers, B.

Skelmersdale. L.

Ward of Witley, V.

Slim. V.

Westbury. L.

Stanley of Alderley. L.

Whitelaw, V.

Strange. B.

Wise, L.

Sudeley, L.

Young of Graffham, L.

Swansea. L.

4.1 p.m.
Clause 34 [Compensation for seizure and detention]:
[Amendment No. 4 not moved.]
An amendment (privilege) made.
Lord Lucas of Chilworth: My Lords, I beg to move that the Bill do now pass.
This may be a good time to remind the House of the Bill's main purposes. Part I implements the European Commission product liability directive, which is a long-awaited improvement in consumer affairs. Some aspects of this part of the Bill were discussed at length, and in particular I have in mind the importance of the development risks defence in the overall balance of this improvement to the consumers' position.
In Part II of the Bill we have introduced the new concept of a general safety requirement, which provides that the supply of any consumer goods that are unsafe will constitute an offence. However, as with any general offence of this nature there is a range of defences against prosecution, including compliance with an approved standard.
Part III deals with misleading price indications and replaces the complicated provisions of Section 2 of the Trade Descriptions Act 1968 and the Price Marking (Bargain Offers) Order 1979. Part III creates the offence of giving a misleading price indication. It provides for a code of practice and confers a power to make regulations. Perhaps at this point I may mention one matter that has still to be resolved; namely, the legal status of the code. The Government's original proposal was to the effect that compliance with the code should constitute a complete defence. However, some of the major interests which are affected have recently presented an agreed package of alternative proposals which includes one that suggested that the code should not provide a defence but that compliance or contravention should tend to establish innocence or guilt. The Government are now consulting on the matter and will move amendments that reflect that consultation in another place. Your Lordships will have an opportunity to consider the matter further when the Bill returns for our consideration of amendments agreed in the other place.
During the passage of the Bill the Government have been offered a great deal of help by your Lordships in matters of detailed policy and in drafting. We have not always complied with the advice offered by noble Lords, but the fact that your Lordships have considered these points can only add to my confidence
1530
in the Bill. I should like briefly to express my gratitude to your Lordships for the way in which the Bill has been treated. The noble Lord, Lord Williams of Elvel, assured us at the outset that he and his colleagues would deal expeditiously with it, and they have done so. I am grateful to them, as I am also grateful to all noble Lords opposite and behind me for the cooperation that we have received.
I have said that the Bill has been widely welcomed. I hope that we can now send it to another place and that we can look forward to its return for our consideration with that one outstanding matter resolved.
Moved, That the Bill do now pass.—(Lord Lucas of Chilworth.)
Lord Williams of Elvel: My Lords, indeed this is an important Bill and your Lordships have recognised it as such by spending so much time and trouble on its various provisions. The Opposition Benches welcomed the Bill on Second Reading. We still welcome the Bill and wish it well. We think that your Lordships have made a number of improvements to the Bill during its passage through the House. They have perhaps not been in full the improvements that we should have liked to have seen; but there has been some progress, and on some issues the Government have shown a welcome flexibility for which we are grateful.
Nevertheless, as the Minister pointed out, there is a fairly major hole in Part III of the Bill, on which the Government are still consulting with various parties. Noble Lords will not know the result of that consultation until amendments are moved by the Government in another place and then, as the Minister has said, we shall have a chance to review them in this Chamber. This is not an altogether satisfactory situation. I have to make clear (as I did when we had our debate on this subject in Committee) that we are not entirely satisfied that this is the right way to go about things. Nevertheless, the Government have decided that it is what they want to do. I only hope very much that, the Bill having passed through another place, they do not come back to your Lordships'House with exactly the same formulation with which we started when the Bill was introduced.
The Minister was kind enough to refer to the cooperation given by the Opposition in seeing the Bill through the House expeditiously. I am grateful for his remarks and in turn wish to thank him and the noble and learned Lord the Lord Advocate for having been so accommodating and courteous in their replies to arguments, which, however badly they may have been formulated by the Opposition, nevertheless received a genuine, prompt and considerate response from the Government Front Bench, for which we are grateful.
I should like to thank my noble friends Lord Morton of Shuna, Lady Nicol, Lord Gallacher and Lord Graham for their co-operation from the Opposition Front Bench. I ought also to thank the noble Baroness, Lady Burton of Coventry, for the part that she has played in furthering this Bill. She is a well known champion of the consumer, and I hope she feels that the fact that this Bill is heading towards the statute book is due at least in part to her unremitting efforts.

1531
I also thank the noble Lord, Lord Allen of Abbeydale, who has contributed to your Lordships' discussions a great deal of the wisdom and experience that he gained from his role on the Pearson Commission.
We wish this Bill well. We hope that it will not get lost as a result of the timing of the next general election. We should very much like to see this measure on the statute book before the general election and we hope that the Government will ensure a quick passage for it in the other place and its return to your Lordships' House with a formulation of Part II that we can sensibly discuss.
Lord Campbell of Alloway: My Lords, my noble friend the Minister is to be congratulated upon the patience, courtesy and indeed ingenuity with which he has handled the formidable set of gremlins lurking in Part II of the Bill. It was helpful of my noble friend not to oppose Amendments Nos. 71 and 72 during the Committee stage of the Bill which could have forced a division that would have divided even these Benches. He was also helpful in regards to Amendments Nos. 44 and 62 in particular during the Report stage.
The essence of the problem warrants restating in view of the postponement of the revisory role. The essence of the problem is concerned solely with the due administration of the criminal law, for, in Committee, the enforcement procedures envisaged in Part III of the Bill were bedevilled by resort to contravention of a code of practice as an aid to conviction of a criminal offence.
On Report, my noble friend the Minister grasped the lifeline proffered by the noble Lord, Lord Henderson of Brompton, and accepted Amendments Nos. 44, 61 and 62, which removed all reference to a code of practice from Part III of the Bill. My noble friend accepted those amendments, without commitment, as part of a perfectly proper constitutional procedural device by which the revisory role of your Lordships' House was to be postponed so that when the Bill returned to your Lordships' House, "further opportunity to discuss the status of the code", —[Official Report, 12/3/87; col.1155] would be afforded.
Amendment No. 61 accorded the status of compliance with the code only for the purposes of defence. When my noble friend dealt with Part II just now, he seemed to suggest that the defence aspect as the only aspect that he had in mind for further consultation. I hope that that is not the case. My noble friend always keeps a mind open to argument and a door open to consultations, but has this devil of a code been exorcised? No assurance can be sought as to the form of amendments to be presented to another place. What is said in your Lordships' House today may well affect the ongoing process of consultation; what was said by the noble Lord, Lord Williams, just now may well affect the ongoing process which my noble friend has undertaken to entertain.
What then is the valedictory message? It is simply, first, resort to a code of practice as an aid to conviction of a criminal offence, whether as proposed in the Bill as originally drafted or, by analogy, by resort to a "highway code", was not acceptable to your Lordships' House. Secondly, the Bill, as amended, is
1532
acceptable to your Lordships' House, and provides a framework for enforcement by redefinition of Clauses 20–23 or by regulations under Clause 26, or both. Thirdly, and lastly, my noble friend Lord De La Warr, speaking from his experience of trade interests, and the noble and learned Lord, Lord Denning, speaking from a lifetime's experience of judicial office, strongly advised your Lordships' House that anything relating:
"to the code of practice should go out of the Bill altogether". —[Official Report, 12/3/87; col.1152.]
Such is the position of the noble Lord, Lord Henderson of Brompton, as I understand it, such assuredly is my position and such is the position of many noble Lords.
That is the position as the Bill now stands. The hope must be that Her Majesty's Government will not, by amendment, seek to restore the admissibility of this code of practice as an aid to conviction of a criminal offence. The interests of any trade are subservient to the public interest and to the due administration of criminal justice. If the status of the code of practice were to be restored as an aid to conviction, it would tend to confuse, import uncertainty and inhibit effective enforcement.
In conclusion (end of message) does it not come to this? The principles of the amendments carried into the Bill on Report were accepted without a Division. The hope must be that, on reactivation of the revisory role of your Lordships, your Lordships will not be called upon to examine any substantial departure from those principles.
4.15 p.m.
Baroness Burton of Coventry: My Lords, I should like to comment briefly before we part with the Bill. This Consumer Protection Bill contains provisions that, are welcomed by consumer organisations, and we in the House have been able to carry certain measures which add to that welcome. I very much regret that we were unsuccessful in deleting the development risks defence. I believe that in future it will be seen as a grave error and a misjudgment. Obviously, this is not the occasion to reopen the matter, but I still feel that the argument that the individual should not suffer unduly compared with the rest of us is a just one. Four member states of the Community accept that responsibility: namely, France, Belgium, Luxembourg, and West Germany also in cases involving pharmaceuticals. I regret that we could not join them.
My main regret, and one that I suggest is particularly suitable for comment before we send the Bill on its way, concerns the position of your Lordships' House. We all know the difficulty of securing debates in this House on any major Bill prior to it being debated in another place. I think we all appreciate the problems faced by Leaders of the House, irrespective of which party is in power, and so those of us with a particular interest in consumer affairs welcomed the advent of the Consumer Protection Bill. I think that all quarters of the House have worked hard on the Bill, and we are appreciative of the part played by the Minister the noble Lord, Lord Lucas.
But I feel, and I feel very strongly, that this House has been slighted—I do not know whether "slighted" is the correct word or whether it should be "eroded" or

1533
"had its position weakened", I shall leave it with the term "slighted"—by the action proposed on behalf of the Government: namely, that the Secretary of State is prepared to reflect the outcome of the serious and proper consultations that we have been discussing when the Bill is before another place.
As 1 see it, it is our—I stress the word "our"—responsibility to pass on this Bill when we have discussed the major provisions contained in it. As the noble Lord, Lord Lucas, said:
"The legislation contains three basic elements: a general offence of giving a misleading price indication; a code of practice; and regulation-making powers."—[Official Report, 12/3/87; col.1153.]
We have not been able to discuss those elements because when we try to do so we are told that all will be included in the discussions taking place with the Retail Consortium and other interested parties which are known by the umbrella term of the "concordat". In a letter dated 5th March, the consortium stated the disquiet and disagreement felt by the whole concordat with many of the provisions contained in this part of the Bill.
Alternative proposals have been submitted to the Minister more than once and at his request. These alternative proposals were further developed and presented to the Secretary of State on 19th February. The Minister found these unacceptable and further comments were invited for 25th March and 21st April.
I find myself quite unable to accept that what is proposed by the noble Lord, Lord Lucas, at cols.1154 and 1 156 on 12th March—namely, that to be able to comment on any amendments proposed in another place when the Bill eventually returns to us (as of course we have always been able to do under the rules of procedure; this is nothing new; this is no concession)—is in any way the same as reasoned debate in our Chamber on a major Bill starting its parliamentary journey in your Lordships' House.
I am not unmindful of what the noble Lord, Lord Lucas, has tried to do by accepting Amendments Nos. 44, 61 and 62 proposed by the noble Lords, Lord Gallacher and Lord Williams of Elvel, and myself. Obviously all I can do is to protest. However, I feel strongly on the matter and I think that this is the time to say so.
I should like to express appreciation to the Government Bench, and especially to the noble Lord, Lord Lucas, for their patience and courtesy throughout.1 am not unappreciative of what we have been able to achieve and we must obviously now await the outcome.
Lord Denning: My Lords, may I from these Benches add a few words? I thank the Government for all the concessions that they have made, but I should like to say a word about the code of practice. In the form in which the Bill leaves this House it is only a guide. It is no basis whatever for a criminal charge. It is suggested by the Government that in another place in some way or other they will make it the basis for evidence in support of a criminal charge. I would deplore any such introduction in the Bill after it leaves this House. However, we may be able to consider that at a later time.
1534
Perhaps I may turn to another very important point. This is the first Bill that I know of in which it states in Part I on product liability:
"This Part shall have effect for the purpose of making such provision as is necessary in order to comply with the product liability Directive and shall be construed accordingly.".
How many of your Lordships will have seen or sent for that product liability directive? It is much shorter and far simpler than our Bill. Our Bill has been considered here, line by line, and word by word, but not the directive.
The important point of principle which I should like your Lordships, and our courts afterwards, to consider is this. What is the relationship between our Act of Parliament, passed by both Houses after full consideration in every detail, with the product liability directive passed in Brussels without any democratic assembly or members going through it line by line or word by word? That is the legal point that I should like to raise.
Our Act of Parliament, our statute, is directed to all the people of England and Scotland, and others, and they must obey it. The directive in its very terms is addressed to the member states only, to all 12 of them, in the nine languages in which they operate. Each of them is equally authentic, and there are many differences between each of them. The question which I ask, and which must be considered by the courts, is this. How far in interpreting our Bill are we to look at that directive? If there is a conflict, is the directive to take governance over our own statute?
I have written this out because it is important for the future. I should like to suggest that the courts of this country should have regard exclusively to the English statute and should ignore the directive for this reason. By our law the statute alone is that which is binding on our people. The directive is not. By the Treaty of Rome the directive is not addressed to our people at all. It is addressed to the governments of the member states for each one of them to implement by its own legislation. It is addressed to them in nine different languages, each of which is equally authentic.
Each member state, including our own, must implement the objectives by its own legislation, using its own language, legal terms and concepts, clearing up any ambiguities or uncertainties and adding any additional explanation which it thinks desirable consistent with the result to be achieved. In short, it is by the process of synthesis—I do not understand altogether what synthesis is—by putting the objectives of the directive into a coherent statute, recognisable by our English courts. Once the Bill is passed the courts should assume that this implementation has been well and truly done.
For those reasons the Government were quite right during the the passage of the Bill to refuse to append the directive in the schedule where it could be seen and also to refuse to have the English text of it or make it authoritative, because it is no part of our law. Nor should our English courts ever refer to Luxembourg for the meaning of the directive. Once the Bill is on the statute book our courts must go by the words of the statute and not by the directive. That is why we have been through our statute word for word and line by line, at all stages, and not through the directive.

1535
For instance, how grateful we were in Part I where there were two or three quite incomprehensible passages, which were, quite rightly, struck out. The Government conceded that they were, in effect, meaningless. We were going through a Bill which was to become our statute. That is why we went through it word by word, and line by line, so that the statute, as finally passed by both Houses of Parliament, would govern our courts and not a directive which was addressed to all member states in Brussels.
I should like to suggest that that is a very important point, governing not only the implementation of this directive but of other directives in the future. That is why I have said as much as I have.
4.30 p.m.
Lord Allen of Abbeydale: My Lords, I hesitated before speaking today but I should not like the Bill to leave this House without saying that it is a source of gratification that Part I will enable this country to put into effect the EC directive on product liability which was at last concluded after so many years of delay and disappointment. It has not been very encouraging to those of us who laboured pretty hard, and certainly pretty long, on the Pearson Commission that our report has been so largely ignored. It would be churlish of me not to recognise that at any rate one of our main recommendations has at long last been implemented. I should like to add my appreciation for the way in which the Minister responded to the arguments put in the course of debate, even though sometimes he came to the wrong conclusion.
I certainly do not wish to go over the arguments that we had at the earlier stages of the Bill, but I must record my regret that in two respects it seems to me that as the Bill leaves this House, it is quite seriously flawed. In my innocence I had thought that a consumer protection Bill would protect all consumers. Alas, that has turned out not to be. As the Bill leaves your Lordships' House it still exempts some of the food we eat, as there remains the exemption for agricultural produce which has not undergone an industrial process. In spite of all that has been said, we still do not know precisely what constitutes such a process. Try as I may, I have been unable to understand this decision. It is not much of an exaggeration to say that those who insisted on retaining this special provision for agricultural products argued, on the one hand, that industry was so efficient, and already so hedged about with controls and subject to criminal sanctions, that the risk of things going wrong was minimal. On the other hand, to refuse this let-out would cripple the industry and bring the farmers to their knees. There seems to be something missing in the argument. However, the decision has been taken; so be it.
I must say a few words about the second aspect already touched upon by the noble Baroness concerning the defence of development risks. The wording of the relevant subsection has been greatly improved and I should like to express the hope that the Government will not countenance any alteration in another place. There is also the comforting thought that the directive itself provides for the operation of this particular
1536
defence to be reviewed in 10 years' time, so that consideration can then be given to its abolition. I hope and believe that that is what will happen. I am pleased that the Bill is drafted in such terms that, if the need arises, this defence can be struck out by a subordinate instrument without the need for fresh legislation.
However, I find it particularly disappointing that drug manufacturers remain within this exception, if only for a decade. I devoutly hope that there will never be a tragedy comparable to the thalidomide disaster. No one has ever sought to deny that another tragedy of this kind could happen, however remote the possibilities in the light of the precautions which are now taken. It is an odd and rather disquieting reflection that, although the thalidomide tragedy was largely responsible for starting the debate in this country concerning strict liability, followed by the setting-up of the Pearson Commission and the reference to the Law Commissions, we are now leaving the possible victims of a further thalidomide-type tragedy as one of the very few exceptions to the doctrine of strict liability provided for in the Bill.
At earlier stages we heard a lot about the threat to innovation, most of it, to my mind, misconceived. We heard a good deal about the merits of the pharmaceutical industry, merits which no-one for a moment has had any thought of denying. But, after all, it is not much comfort to know that this is an industry which has gone along without strikes if you happen to have been born without any arms. Our decision not to venture down the path which West Germany has already gone down and make special provisions is not a decision on which the House will be able to look back with any pride.
Lord Auckland: My Lords, having been involved, albeit marginally, in several consumer protection Bills in my years in your Lordships' House, perhaps I may venture a few words as the Bill takes its valedictory passage through your Lordships' House.
As I said on Second Reading, I believe that this is the most important of all consumer legislation Bills which Parliament has discussed. In a philosophical moment one may say that no piece of government legislation will ever protect every consumer, no matter how watertight the wording may be. I have spent most of my working life in the insurance industry. I am also honorary vice-president of the Royal Society for the Prevention of Accidents; so I have an ambivalent view on certain aspects of the Bill.
Undoubtedly, Clause 4 is the linchpin of the Bill. I have had many years of interest (of a non-financial kind) in the pharmaceutical industry. Serving, as I have, on hospital committees, I have come into contact with that industry. I have discussed matters, many of which are inherent in the Bill. I venture to question that even if Clause 4 were deleted it would be possible, in any definite sense, to avoid something as awful as the thalidomide tragedy. So long as there is human error, no matter what legislation government produce, the unfortunate fact that we have to face is that such tragedies will happen.
I would beg the insurance industry to recognise that when it comes to this very difficult problem of product liability, the more research that is undertaken, whether

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it concerns drugs, electrical appliances or other products, the less the risks are likely to be. I believe the insurance industry has an important part to play here. I leave the House with that thought.
Finally, I should like to support a comment made by the noble Lord, Lord Williams of Elvel; namely, that when the Bill reaches the other place it will go through as rapidly as is possible, bearing in mind the exhaustive amount of discussion the Bill has had in your Lordships' House. It would be a great tragedy— whatever may happen in the next three months—if the Bill was lost. This is a necessary Bill. It is by no means a perfect Bill; but this House has shown what it can do, on all sides, in making legislation as practicable as possible.
Baroness Robson of Kiddington: My Lords, on behalf of these Benches, I should like to join Members of the House in welcoming the Bill, which in many ways has been greatly improved by your Lordships. It goes to the other House as probably the best Consumer Protection Bill that has ever come before us. I must however join the noble Baroness, Lady Burton of Coventry, in regretting that we did not manage to amend the development risk defence.
I think that, as the noble Lord, Lord Allen, has said, we should at least have removed it on pharmaceuticals. I am equally sad that the amendment on agricultural produce failed by only four votes. It shows that a large number of Members of your Lordships' House felt that this was an amendment that should have been passed.
Another major concern remains which we have not discussed. It is that any Bill which, after its passage through the other place will become an Act of Parliament, is only as good as the enforcement mechanism contained within it. I refer not only to the mechanism of enforcement, but also to the financial implications of enforcement. I am more than concerned that the Bill states:
"There are not expected to be any implications for public expenditure or public service manpower.".
I know that my noble friend Lord Ezra has written to the Minister and pointed out that many local authorities have estimated that the increased cost of the enforcement will be about 3 per cent, per annum. I should like to ask the Government to keep that in mind when the rate support grant is under discussion because, unless local authorities have the right amount of finance at their disposal, the enforcement will not take place. With those words I welcome the passing of the Bill.
4.45 p.m.
Lord Airedale: My Lords, I should not like to be left out of the felicitations that have been exchanged this afternoon, but I must say a few words about the unsatisfactory nature of Part I of the Bill as it leaves this House.
Originally the question was: is it just that a producer who is without blame shall be liable, to the limit of his resources, for a defective product? We were told "You need not really worry about that because the producer can get his protection by ensuring against his liability and he can pass on the cost of the insurance in the price
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of the products that he sells." It took a very long time to induce the Government to believe that there was a flaw in that argument, but by the time we reached the Report stage the Government had accepted that insurance for unlimited liability simply is not available, and so the producer was left exposed to liability up to the limit of his financial resources beyond the point at which he could obtain insurance cover. We were not just talking about great big manufacturing industries. This is very much the age of small businesses and they were left exposed to unlimited liability.
Faced with that argument on Report, the best that the Government could do was to say, "Unlimited liability is not unique to this Bill. There is unlimited liability in cases of negligence."
That is true, but not all of us are happy about that position and I do not believe that the noble and learned Lord, Lord Denning, is happy about that position. If I am wrong, I shall surely be put right. I say that because, in yesterday evening's debate upon civil liability for negligence by members of the professions, the noble and learned Lord said at col.1487 of Hansard:
"When professional men are involved, let them insure as best they can. Do not make them liable beyond the limits of what any reasonable insurance can cover. Surely that is fair, both to the injured person and to the professional person."
If that is true in cases of negligence, how much more must that be true in the case of people who are without fault and without blame.
I understand that we are prohibited by the directive from placing a limit upon the liability of the producer, so I suggest that we are driven to an inescapable conclusion that it must be right that, where the producer is blameless and exposed beyond the point for which he could insure, he deserves to be compensated as to the exess by the Community. I do not believe that we could achieve fairness in Part I of the Bill in any other way, having been prevented by the directive from imposing a limit of liability. I hope very much that this Bill will come back to this House with an amendment taking care of this aspect of the matter.
Lord Henderson of Brompton: My Lords, I have hardly spoken on this Bill, but I have followed its proceedings with some care. I would not have sought to speak on Third Reading but for the fact that I find myself in disagreement with what the noble Baroness, Lady Burton of Coventry, said on Report, and again today on Third Reading, about the position of your Lordships' House. She said today that this House had been slighted or perhaps eroded or possibly weakened by the conduct of the Minister in this House and the Government generally and particularly the Secretary of State.
The noble Baroness knows that I have the very highest regard for her and that I disagree with her only with great misgiving, but I must do so on this occasion and salute, if I may, the Minister and his reaction to a very complicated and difficult problem. Here he was, bringing this Bill into this House of Parliament as the first House to consider it. He found not only strong views on all sides of the House, but also a very powerful consortium, or whatever it is called—the concordat—outside the House. He would have rightly

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been accused of perhaps eroding the position of this House or slighting this House if he had sought to call up a large majority of his supporters to defeat opinions strongly held in this House, not just on the Cross-Benches or the Opposition Benches but also on his own Benches.
I have no doubt that he could have summoned up forces of that kind, and if he had done so he would then have been treating the House with contempt. I regard the way that he behaved and the way that the Secretary of State has behaved as the classic way in which Ministers and governments should respond to proper pressure from Parliament. In this context, where this House is the first House of Parliament to consider the Bill, another place has the revisory function, which normally falls to us because most Bills are introduced in another place. After this consultation period, which simply could not have been concluded by the time the Bill leaves this House because of the diversity and number of those who have to be consulted, (who number well over 200), it is for the Minister in another place to present the result of those consultations. Then of course we in this House must see what another place makes of them. We have an opportunity to comment on the amendments made by another place when the Bill returns to this House and that is entirely right and proper. I congratulate the Minister on the way that he has handled the Bill, particularly in relation to the difficult crux: namely, the code of practice in Part III.
The noble Lord, Lord Campbell of Alloway, mentioned my name, and I should like to say that this is a indication of the flexibility of the Minister. He brought in the Bill with a code of conduct with the intention that it should be a complete defence for those who had complied with it in a court of law. It leaves the House as nothing more than a guide. Perhaps something in between the two will result from the consultations which the Minister is now having and the amendment made in another place.
I particularly ask the Minister and the ministry to have regard to the three principles enunciated by the noble Lord, Lord Campbell of Alloway, at the Report stage on 12th March (Official Report, col.1150): first, when dealing with a code of practice such as this, to create the offence; secondly, if one is to use a code of practice, redraft the code with the use of the criminal courts in mind; thirdly, that the status of the code in terms of legal efficacy must be defined with total clarity in the primary legislation.
If the Minister and the ministry will bear those principles in mind during the consultations that they are having with the concordat and others, I should be most grateful. I believe that in many ways this is a test case for the use of codes of conduct in Bills of this importance. It is vital that the matter should be right so that in future cases there will not be the muddle which, quite frankly, has been exposed in the course of the deliberations of this House on the Bill.
Baroness Burton of Coventry: My Lords, may I have the permission of the House to comment on what the noble Lord, Lord Henderson, has said? We all recognise the noble Lord's great constitutional
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authority, and the affection and respect in which we hold him. I am afraid that with some temerity I disagree with what he has said. I should like to ask him whether he is aware that if the Secretary of State had been able to accept the substantiated proposals which were submitted to him by the concordat and the Retail Consortium for the second time in February, we should then have been able to discuss them in full in the Bill. I still maintain, with great respect to the noble Lord, Lord Henderson, that that would have been a more democratic procedure and more in keeping with the rights of your Lordships' House.
Lord Lucas of Chilworth: My Lords, I do not want to keep your Lordships' House this evening. I should like to acknowledge with thanks the points which have been made this afternoon—some more heartfelt than others. We have discussed most of them on more than one occasion and therefore I do not propose to reiterate any arguments.
I should like to add one final comment, despite the fact that the noble Lord, Lord Henderson of Brompton, has made the point. I certainly neither sought to slight, nor erode, nor weaken the role of your Lordships' House, and neither did those of my colleagues, nor the managers of our affairs. In a bicameral Parliament there is no erosion, weakening or slighting in allowing the second Chamber to make further amendments to a Bill in the light of undertakings given in the first Chamber. It happens frequently in your Lordships' House in respect of another place; now it will happen the other way round. I suggest that it is one of the great advantages of our system. Noble Lords will be able to consider any amendments which are put down in another place when that other place returns the Bill to your Lordships' House in due course. With those remarks, I commend the Bill to the House.
On Question, Bill passed, and sent to the Commons.

Patents (Amendment) Bill [H.L.]
4.56 p.m.
Lord Northfield: 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 Northfield.)
House in Committee accordingly.
[The LORD AYLESTONE in the Chair.]
Clause 1 [Restriction of acts authorised by certain licences]:
The Deputy Chairman of Committees (Lord Aylestone): In calling Amendment No. 3 in the name of the noble Lord, Lord Stallard, I should remind your Lordships that the debate on the amendment, which was moved on 4th February (col. 319 of Hansard), was adjourned pursuant to Standing Order No. 55. Unless therefore any noble Lord wishes to continue the debate, I shall have to put the Question.
Following is the amendment:
Page 1, line 24, at end insert ("and within the prescribed time limits").
Lord Northfield: I should briefly like to say a few words because my voice is disappearing rapidly. I am grateful to the Chief Whip and to the officials for kindly arranging for the Committee's work to resume at an early hour today. After our experience at 11 o'clock the other night, this is appreciated. I apologise to your Lordships for the fact that, in my view, the proceedings on the last occasion degenerated to standards of dignity that were below what we proudly maintain in this Chamber. My views have been made clear in private.
If I may be permitted a lighthearted remark—and I mean it to be lighthearted—I hope that the noble Lord, Lord Mclntosh, is enjoying his visit to China. I guess that others will join me in hoping that his Chinese hosts will perhaps make him an honorary Chinese citizen and prevail upon him to stay for a long time with them.
I turn to the amendments which we were discussing. They concern the date on which the provisions of the Bill will begin to operate. I listened carefully to my noble friend Lord Stallard pressing that they should operate from the date of the passing of the Bill, rather than from the date of publication. I asked for time to consult on that point, and when the issue was pressed I forced a Division so that I could consult. As I explained to my noble friend, I have accepted his pressure with some reluctance.
However, it will be unfair on companies that have been waiting almost a year for the repeal of licences of right which was promised last May. The major trade unions that support the Bill will also be sorry, because the interval will no doubt see further licences of right granted to copyists and production perhaps later on transferred abroad to the detriment of jobs in the United Kingdom.
Nevertheless, in an attempt to secure agreement on the Bill, I have with good grace tabled amendments to carry out what my noble friend Lord Stallard wished to see, and he has kindly withdrawn his amendments which were technically defective. I am also grateful to the noble Viscount, Lord Craigavon, for withdrawing his amendments. I understand that he accepts that the amendments I have tabled cover the points that he kindly raised at the last sitting.
As the matter was fully debated on the last occasion, I hope that we may now proceed by accepting my noble friend's Amendment No. 3 and later on my Amendments Nos. 6A and 8A.
Viscount Craigavon: Will the noble Lord speak in detail to those later amendments or has he already made his main speech?
Lord Northfield: I have, yes.
5 p.m.
Lord Northfield Lord Northfield moved Amendment No. 6A:
Page 1, line 25, leave out from beginning to end of line 13 on page 2 and insert—
("(4) A declaration may not be filed if—

(a) there is an existing licence for any description of pharmaceutical use of the product, or

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(b) an application is outstanding under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms of a licence for any description of pharmaceutical use of the product.

and, in either case, the licence took or is to take effect at or after the end of the sixteenth year of the patent.").
The noble Lord said: I beg to move. I have just spoken to this amendment.
Viscount Craigavon: I make a few remarks on this amendment because I was involved with the issue of retrospection at the earlier stage of the Bill. Briefly, I am grateful to the noble Lord, Lord Northfield, and the ABPI for the amendments before us. It is important that normal practice as regards retrospection has now been accepted, and the time scale of the effect of this Bill is now clear on the face of it, and we should be grateful for that.
The noble Lord, Lord Lucas, may have seen from Hansard. that despite his enforced absence abroad at the previous stage he made quite a considerable contribution to the debate about retrospection thanks to my lengthy quotations from his earlier speeches on the subject. I should be grateful if the noble Lord could make clear the attitude of the Government to this Bill, and how he sees the prospects for it in the other place.
If the noble Lord, Lord Northfield, is going to speak again I should like to know how he expects this Bill to receive any time for debate in another place. If, as I believe, there is little practical chance of any progress there, the noble Lord, Lord Northfield, is in a slight danger of wasting the time of this House in pressing on with this Bill, even though one might agree with the principles of what he is, in my opinion rather forlornly, trying to achieve.
Lord Lucas of Chilworth: I remind myself that we are back in Committee, and I shall respond to any point that is put to me on any amendment as and when those amendments come up. I think I made the Government's position clear at an earlier stage in the Bill, and my noble friend Lord Beaverbrook made it abundantly clear when he looked after the first part of the Committee stage. We support the principle behind this Bill. I really do not think that I can answer for another place.
Lord Northfield: Neither can I. I should just like to remind the noble Viscount, Lord Craigavon, that when I put through the deer legislation I had to put it through three times before I got it through the other place. No time is wasted. You get the Bill in final shape. Regarding the point about how long it will take to go through, I hope it will be very soon.
[Amendment No. 7 had been withdrawn from the Marshalled List.]
Lord Stallard Lord Stallard moved Amendment No. 8:
Page 2, line 21, at end insert—
("(8) A declaration filed under this paragraph shall have no effect, and any declaration already filed shall cease to have effect, in relation to a medicinal product which has been licensed for sale or supply in the United Kingdom under section 7 of the Medicines Act 1968 for a period often years or more.").
The noble Lord said: This amendment may take a few more minutes. The issues raised go right to the heart of my concerns about the Bill. My amendment proposes that patent protection should last the development period plus a further 10 years from the date when the drugs are first sold to cover research and marketing requirements, to be followed by the generic substitution after that 10th year.
Since our previous sitting I have been able to discuss the issues with representatives supporting the Bill and with representatives from the opposite camp. I have also sought clarification on the possible costs of the proposals to the National Health Service. I am bound to say that 1 am now more than ever convinced that this whole subject is not one that ought to be dealt with by way of a Private Member's Bill.
I said that during the previous sitting. I only have to repeat here that after giving it further consideration, and after further discussions with many people, because of the complexity of the issues raised, the amount of in-depth analysis and research necessary to present the case for or against the abolition of licences as of right, it is far beyond the resources of any private Member. I would have hoped that it would have been a government Bill.
The longer I study it, the more I think that there is a case that could be argued both ways. We could argue for either side in this particular case, either for or against the proposals. But there are many points of view that have not even been considered, and many people who have not been consulted. There is the whole administration of the National Health Service, many of whom would have an opinion about the abolition of these licences.
There are various government departments who would be involved, and I have not seen their views on this issue. There are the consumers; the GPs; the hospital consultants; the surgeons; the anaesthetists: the professional representatives; the trade unions representing the production side of the argument; the pharmaceutical industry itself; the drug companies, including the generic sector. These must surely all have an opportunity to express views, and not just one or two people.
In a Private Member's Bill like this we can give some views for or against; but the views can, of necessity, be limited, for the reasons 1 have just given, to selected calculations from parts of the interested and affected groupings. I find that unsatisfactory. It is certainly not sufficient. What is needed is a properly-researched measure presented by the Government, subject to widespread scrutiny, and allocated sufficient parliamentary time for detailed debate. Only then can we be sure that we are treating this subject with the gravity it deserves.
It has been mentioned that, given that this Bill has not yet passed all its stages in both Houses, it is just possible that it might be overtaken by the impending general election, and so the Bill could still emerge in another Parliament as a government Bill. That might be conjecture, but I hope that it might be near the truth. Therefore, we are dealing with a difficult situation, given all the circumstances.
However, we have to deal with the situation. We have this Bill, and I want to come back to my amendment. The Association of the British Pharmaceutical Industry claims that the Bill is necessary in order to ensure that drugs protected by patent have a sufficiently long period on the market to ensure that research and development costs are reasonably recovered. Again I find that a fair argument. I would not quarrel with that. There is nothing wrong with that. But it begs the question of how long is reasonable. What is a reasonable time?
In a recent proposed EC directive the Commission puts forward 10 years for the marketing of bio-technological medicines which are not protected by patent. This amendment proposed 10 years—the same time. The average length of time that it has taken the 15 best-selling products which have become available under the licence-of-right provisions of the Patents Act 1977 to enter the market has been under six years. This is according to a document that I dare say most noble Lords have received from an organisation called PLUS—the Pharmaceutical Licences Under Siege organisation.
They give examples and they say that the best-seller, ranitidine, better known under the brand name of Zantac, was on the market in under five years. According to numerous press reports—and I read a long report in the Guardian at the time—that is generating profits of £300 million a year. It will therefore enjoy a patented product life of over 11 years before it becomes available under licence of right.
The second in the table is atenolol, and that took under seven years to go on sale. Another one, amoxycillin, took fewer than four years, and salbutamol took fewer than three. There is a long list of similar examples which was circulated to Members of your Lordships' House.
Ten years, in the light of those circumstances and those statistics (and I have no others), would seem to be reasonable. The multinational drug companies must be properly rewarded for their research and development activities, and I have said that. But it is hard to imagine, particularly when you examine the performance of their shares on the stock markets all around the world and read the reports in the papers, to which I have just referred, that they need the extra profit—it has been called a windfall—that they would get from the Bill being put forward by my noble friend Lord Northfield.
On the other issue, my noble friend Lord Mcintosh sought at an earlier sitting on this Bill to find out how much extra the National Health Service would have to pay for its drugs if this Bill was passed. The noble Lord, Lord Lucas, was quoted as saying that the cost of abolishing licences of right would be insignificant. The association representing the pharmaceutical industry said that no exact figure can be calculated in relation to events a decade ahead. It even said in a handout that it was quite possible, at least in some cases, that the National Health Service would save through licence of right abolition.
Recently it conceded that the sum might be in the region of £5 million to £10 million. That might not be much in the context of the tremendous profits I have just mentioned, but it is certainly quite significant if we

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recall the state of the National Health Service and the views that we hold about it. I know that Members on all sides of your Lordships' Committee have expressed grave concern about the financial state of the health service, with the cost-trimming exercises that have been imposed causing great hardship to hospital administrations all over the country and certainly in London. Essential maintenance is being postponed and hospitals, wherever one goes, are beginning to look tatty and almost run down. Waiting lists for some operations are becoming nearly unmanageable and there is a great deal of concern about that all over the country.
We have debated these matters both here and in another place. The Government, to their credit, are currently reviewing their attitude and their expenditure in connection with some of these areas and are making more money available. Again to their credit, they have also expressed doubts about the cost of the National Health Service drugs bill.
In a document published last April, Primary Health Care—an Agenda for Discussion, the Government recommended that doctors should prescribe generic equivalents of branded products when these were available. I understand that special government leaflets were sent to all GPs, encouraging them to prescribe generic drugs. We also had the limited list scheme, which was aimed at cutting the costs of National Health Service drugs by ensuring that the cheaper generic medicines were dispensed wherever possible.
My noble friend will argue that the PPRS would stop multinational drug companies making excessive profits, and there is merit in his argument. But if the DHSS can recoup its losses by means of this PPRS, why do we need this Bill? That is the question I ask. The independent Henley Centre for Forecasting—we discussed this very briefly at the previous sitting—has produced a report setting out a case which calculates that the cost of abolition to the National Health Service could be at best £50 million a year by the early 1990s, with the possibility of the figure rising to as much as £ 190 million. Given the state of the National Health Service—and we all know about it—and given the commitment of my party and myself to the National Health Service, it is natural to expect us to be concerned about figures of the size of £190 million.
I hope therefore that the noble Lord who is sponsoring the Bill will be able to reply to some of the points that I have made and that the Minister may be able to supply estimated and updated costs for the National Health Service of the abolition proposals. Ideally, I hope both noble Lords will be able to accept my amendment. I beg to move.
5.15 p.m.
Lord Williams of Elvel: I apologise to the Committee for entering into the debate at a rather late stage. The debate has been interesting and indeed somewhat complex. I rise merely to support one of the points made by my noble friend Lord Stallard in moving his amendment: that is, the question of the cost of the National Health Service. I have read through the reports of the debates and, as my noble friend pointed out, a wide variety of forecasts have
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been made. That is not unreasonable, because clearly we are dealing with a period ahead in time and it is rather difficult to make exact estimates.
Nevertheless, the noble Lord, Lord Lucas, has made the Government's position on the Bill absolutely clear. They do support the principle of the Bill. In the light of that, I think it would be sensible and also important for the Government to give us their view and their estimate of what the cost to the National Health Service would be if the Bill were enacted—not of course in the state in which it was first introduced but in the state we have it at the moment, as amended by Amendments Nos.1 and 3 put foward by my noble friend Lord Stallard.
I also ask the Government to give us something we can grasp hold of, if I may put it in that way—not a word such as "insubstantial", "insignificant", "unreasonable" or whatever it may be. I should like them to give us something we can actually get to grips with, like a figure. I would, if I may, request any such figure to be calculated before compensating action is taken through the pharmaceutical price regulation scheme. In other words, I fully understand that there is a compensating mechanism that the Government can introduce if the cost to the NHS in gross terms is, let us say, too high. Nevertheless I think that one has to start with a base figure of what the Government feel might be the cost before any compensating action is taken.
I put this question to the Government because, as my noble friend Lord Stallard pointed out, this is a slightly odd Bill to come to us as a Private Member's Bill. One would have expected it to come as a Government Bill; and since the Government have given their support to the Bill I believe they have a duty to give the Opposition the sort of figure that I am asking for.
Lord Somers: I approve of the purpose behind this amendment but there is just one point I wish to make. Surely 10 years is rather excessive. The noble Lord mentioned some other alternative times in his speech. I should have thought that any product on the market without complaint for a period of three years can be considered quite safe; but of course that is merely my opinion and I leave the matter to your Lordships.
Lord Hacking: I wish to be wholly supportive of the new harmony which is now to be found between the noble Lords, Lord Stallard and Lord Northfield, and I rise, first, to support the amendment of the noble Lord, Lord Stallard.
Lord Stallard: The noble Lord is not suggesting that it was ever otherwise, surely!
Lord Hacking: I shall block from my memory the discussions that were held in your Lordships' Chamber during an earlier stage of this Bill. While I am on my feet, perhaps I may give an immediate response to the noble Lord who has just spoken. He may not have been here during the ealier debates on this Bill, and particularly during its Second Reading when the position was explained. In a sentence, the drug has to be patented before the manufacturer has had time to do research and to carry out a number of

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extensive tests. For that reason, there is a period of 12, and sometimes 15, years between the date of the patent and the date when the manufacturer can market the product. That is why a fairly extensive time—though I am not going into the actual number of years—is needed.
I was not expecting at the Committee stage to declare this interest, but I feel bound to do so. My wife is a consultant anaesthetist at a big National Health Service hospital which is very close to your Lordships' House. She, like her colleagues, is fully aware of the funding problems of the National Health Service and of the need to be cost-conscious. Indeed, one concern of many doctors in national health hospitals is the desire of consultants and physicians to go for the latest and rather expensive drug in the course of treatment when older and well-established drugs which cost far less would meet, and do meet, the needs of most illnesses that the physicians and doctors treat. It is only in more specialised cases that there is a need for the more advanced drug.
In the more specialised cases there is that need, and that is why I believe it is not right, having heard so much discussion about the test of cost to the National Health Service, that this should be the exclusive test. At the end of the day, the National Health Service and our hospitals are seeking to assist patients and make them better. If a new albeit very expensive drug is available and it is the only drug which will ease that patient's difficulties, that factor should be taken into account. I draw your Lordships' attention to that point when considering the issue of costs.
Things do not all work in the direction of more expense to the National Health Service caused by new drugs coming on to the market. I mentioned at Second Reading a drug called Diprivan. That drug is an anaesthetic which has special value in day surgery. It enables the anaesthetist to treat patients in day surgery, as opposed to surgery that keeps them in hospital overnight. Therefore, that drug has a potential for saving costs in the National Health Service. Those are the observations that I have to make on the issue of cost to the National Health Service.
The other observation which 1 should like to make is whether the vehicle chosen for dealing with the problem of licence of right—a Private Member's Bill as opposed to a Government Bill—is the right vehicle. Time is of the essence. This Bill concerns only drugs that were patented between 1967 and 1978. The vehicle of the Private Member's Bill has now been chosen. In my respectful submission, the Bill should now be sent—your Lordships having given it full consideration—to another place in the hope that it will receive there maximum support from the Government as well as the full consideration which the noble Lord, Lord Stallard, seeks for it, so that it may pass quickly into law.
Lord Lucas of Chilworth: I say to the noble Lord, Lord Stallard, that I fully understand his concern. However, I must indicate that I cannot accept his amendment. I recognise that some pharmaceuticals receive marketing approval long before others, and the noble Lord indicated a number of these. However, the
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Government's decision to remove pharmaceutical patents from the scope of the licences of right provisions of the Patents Act 1977 was based on the average increase in time taken to obtain marketing approval since 1977. We must take account of the need to encourage research and development in this important field. The Government have always recognised that profits from medicines entering the market earlier than the average play an important role in financing this.
I do not want to re-enter the discussion we had only a few nights ago on the value of the pharmaceutical industry to the nation as a whole, to the sick as well as to the economy. But the noble Lord, Lord Williams, has specifically raised the question of costs, and I am grateful to him for telling me that he would do so, because it enabled me to prepare for it.
Shortly before the beginning of the Committee stage on 4th February, an estimate was published—I think that the noble Lord was referring to the same one that I shall refer to—which I believe has come to be generally recognised as considerably exaggerated and quite unreliable. That may serve—and I say this in parenthesis—to underline the hazards of rushing into print with figures that are not sustainable.
When I and my noble friend Lord Beaverbrook were asked what was the Government's view on these matters, we informed the Committee of your Lordships' House that the Department of Health and Social Security had examined the position and was satisfied that any additional cost to the service would not be significant. One or two noble Lords invited us to offer a figure for the estimated cost. I shall do this, but I must emphasise the precarious nature of any forecasting in this area and the relationship between savings on licensees' medicines and the operation of the Pharmaceutical Price Regulation Scheme, the PPRS, to which a number of noble Lords have referred. I think the noble Lord, Lord Williams, recognised that there was some little difficulty in looking forward to what is not a totally predictable future, particularly in this area.
I emphasise here that the purpose of the PPRS is to set a ceiling on the amount of profit which any pharmaceutical company may earn from the supply of branded medicines for use by the NHS. It is important that we keep this in the forefront of our minds. It applies to each company individually. The circumstances of particular companies are constantly changing. For those affected by a licence of right, there could be implications for the assessment of the company's position under the Pharmaceutical Price Regulation Scheme.
A "saving" to the NHS, which reappeared as an allowable profit flowing from increased prices of other products within PPRS rules, would not be a real saving but a transaction which moved cash away from the original innovative company to those who had played no part in the underpinning research and development work. I recognise the difficulty faced by your Lordships, both in the House and in Committee, in addressing this question of costs and I have considered how I can give a clearer and more specific indication than we have previously given.

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The Department of Health and Social Security has examined very closely all the factual information to date on the effect of licences of right. This is, I admit, somewhat limited because these arrangements have only recently begun to have an effect. The analysis indicated that in 1985 and 1986 there were estimated cost savings to the National Health Service of less than £1 million in the first year and about £1 1/2 million in the second year, when a total of four products were affected. It might help if we were to consider the sum of around £1 million in the perspective of the total NHS drugs bill of £1,800 million. It is a sum that is within the normal area of tolerance. Even so, these sums represent the maximum estimate of possible additional cost to the NHS if licences of right had not existed.
I apologise to the Committee for being repetitive. However, I have to stress that part or all of these sums may not be a true saving because of the operation of the PPRS. What would happen in the future if the law stands unchanged must be uncertain to a degree. It depends on the number of drugs for which licences could be sought, the number of licences granted, the associated royalties payable, and so on. It is affected by market penetration and prices of licencees' products. The department's examination—and I am speaking of the DHSS—of future possibilities does not suggest any major change from the 1986 position in the years immediately ahead.
Nevertheless, the Government recognise that there is concern among innovative companies holding patents which could be subject to licences of right under present legislation. The Government appreciate that they have invested substantial amounts over a long period in developing their patented drugs, and they are conscious that in the longer term these firms' continued research and development work is essential to improved patient care. We wish to encourage that work by allowing a fair return on investment over the balance of the full 20-year patent life remaining once patented drugs are marketed.
The advantages to the country of the research-based industry have been spelt out on many occasions. But it is useful to note that this is one industry which has consistently provided a healthy balance of payments. In simple terms, what is before us is a choice of supporting an industry, which under both Labour and Conservative Administrations has produced new drugs to provide a saving in hospital beds and the need for operations and other kinds of care.
I believe that the disadvantage suggested by the figure mentioned and by some of the arguments put foward is far outweighed by some of the advantages that I have sought to illustrate. I hope that the noble Lord, Lord Williams, and others who have raised the matter of costs will feel reassured and will not feel that either I or my noble friend have sought to evade the question which is posed so directly to the House this afternoon.
5.30 p.m.
Lord Northfield: Before I comment on the amendment of my noble friend—and I must be brief because my voice is nearly gone—perhaps I may refer to what I said at Second Reading about one of the
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copyist companies, Generics UK. Solicitors for the company have asked me to point out that the company is not South African. The matter does not rest there; disquiet about the company has surfaced in another place. Answers given there indicate that Generics UK is 60 per cent, owned by a company named Interpharm which is registered in Panama. I leave the matter there; I have put the copyists' case, as I have been asked to do.
I have listened with great care to the moderate and persuasive case put by my noble friend for his amendment. He has now heard the Minister. I shall only put one or two further considerations to him. I think that he will agree that the case for repeal is strongly supported by four leading trade unions operating in the pharmaceutical industry. They were on the NEDO working party, which had nine trade unionists on a committee of about 25. They also published reports on R&D aspects. The unions concerned were the Transport and General Workers' Union, the Association of Scientific, Technical and Managerial Staffs, the Union of Shop Distributive and Allied Workers, and the General, Municipal, Boilermakers and Allied Trades Union. They were all strongly in favour of repeal. My noble friend will say that we cannot always follow the wishes of the trade unions. But of course their painstaking work, which took two years and produced a massive technical report, will count with him when he considers what to do about the amendment.
I shall make two final points. The amendment, as drafted, would be particularly unjust. I am sure that my noble friend will accept the evidence, so clearly given, that some patent lives are disastrously eroded. Some medicines, as I have explained, are subject to licences of right soon after they arc allowed on the market. When this happens, such companies should, I suggest, be allowed a longer run of life within the law and without being cut off at 10 years from the protection that my repeal Bill affords. It would be very unjust if companies which have very short runs on some newly patented drugs find that the others which could compensate them to some extent will be cut off at 10 years.
Finally, if my noble friend wants to be fair (as I am sure he does) perhaps he can tell me why his amendment does not provide for all patents to have at least 10 years before licences of right are allowed. As drafted, it deprives the ones with longer life but does nothing to help those with a very short patent life before copying is allowed.
The remedy in the long run, and I hope in the short run, will be to extend patent life as had been done in America, for example, so that the time taken in testing does not count against the total which is allowed. In the meantime, in the interests of research, I hope that my noble friend will feel that it is proper to agree to the repeal and not to limit protection to 10 years. Perhaps I may quote to him from the research and development report of NEDO which had trade union support:
"it has been reported that, because financial projections showed that there would be insufficient time to obtain satisfactory return on R&D investment, some promising lines of research have been abandoned".

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The danger we face is that more and more promising lines of research will be abandoned if we continue to see the erosion of patent life and if we do not take one step to restoring it by getting rid of the right of copyists to copy drugs in the four years which are under consideration in this Bill. It is therefore in the interests of R&D that this Bill is being promoted. I hope that on consideration of all these matters, my noble friend will feel able to withdraw his amendment.
Lord Stallard: I have listened to the debate with great interest. I hope all noble Lords will accept that no one on this side of the Chamber, and certainly not myself, would want to interfere or hold up research and development in important fields. That has not been one of our objectives. As I have said before, we accept the need for R&D and the time and effort which is spent in it. Nor do I decry for one second the efforts of the trade union movement and the contributions which its representatives have made on numerous committees in looking after the interests of consumers and of their members in relation to all these matters.
I am not entirely convinced as regards the loss to the NHS. There are confusing and differing sets of figures. I am sure that the Minister will accept that the figures he gave in his intervention are something I wish to reread and compare with other statistics and discuss with members of the National Health Service. However, I do not want to hold up anything in the meantime. While I may decide to return to this at Report stage, in view of what has been said, and in view of the Minister's intervention in relation to the DHSS, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1, as amended, agreed to.
Clause 2 [When application may be made for settlement of terms of licence]:
Lord Northfield Lord Northfield moved Amendment No. 8A:
Page 2.line 28. leave out from ("paragraph") to end of line 31 and insert ("applies to applications made after the commencement of the Patents (Amendment) Act 1987 and to any application made before the commencement of that Act in respect of a patent which has not at the commencement of that Act passed the end of its fifteenth year").
The noble Lord said: I spoke to this at the beginning of our proceedings this afternoon. I beg to move.
Clause 2, as amended, agreed to.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 9:
After Clause 2. insert the following new clause:
("Non-proprietary Medicines
After section 25 of the Patents Act 1977 (term of patent), insert—
"Non-proprietary Medicines
25 A. (I) Where on the expiry of a patent, or by virtue proprietary of a licence under patent, a non-proprietary medicinal Medicines. Product is lawfully available on the market in the United Kingdom, a chemist providing pharmaceutical services pursuant to the National Health Service Act 1977 and any Regulations of Orders made the reunder, shall supply that non-proprietary medicinal product in
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response to an order on a prescription form for the equivalent proprietary medicinal product unless specifically instructed to supply that proprietary medicinal product by the registered medical practitioner making the order on the prescription form.
(2) In subsection (1) above "proprietary medicinal product" shall have the same meaning as in subsection (7) of section 7 of the Medicines Act 1968, and "non-proprietary medicinal product" shall mean any medicinal product, as defined in that subsection, which is not a proprietary medicinal product." ").
The noble Lord said: I am afraid that I must also trespass on the Committee's time for a few minutes to introduce an idea which has not previously been touched on. I must also apologise for coming in at this stage but I was ready to speak to this amendment on the first day of Committee which, for the reasons that we all know, collapsed.
In moving this amendment I want to make it quite plain that I have absolutely no interest to declare but the public interest. I advise nobody, I am retained by nobody and I have no holding in any pharmaceutical company, generic or otherwise. I have even managed to hold at arm's length all lobbyists, which has been quite an undertaking in relation to this Bill. I repeat that the public interest is the one that I have to declare.
There is clearly a fine balance to be struck between assuring to the holders of patents a proper return for their costs in developing their branded products and the effect of such a proper return on the drugs bill to the National Health Service. It was on this balance that much of the debate both at Second Reading and on the first day of Committee turned, and indeed on Amendment No. 8 introduced by the noble Lord, Lord Stallard.
On the question of patents protection, I broadly accept the case that the industry has put to the Government and which the Government have chosen to offload, for reasons best known to themselves, on to the able and not unwilling shoulders of the noble Lord, Lord Northfield. It is clear from the NEDO publications on pharmaceuticals and research and development, and from other sources, that the lead time required for bringing innovative drugs on to the market has increased and is now probably in the region of 12 or 13 years. I am prepared to accept that. I have been asked more than once to state the Alliance position on patent life in debates organised by the ABPI and I have always given the assurance that the Alliance recognises the need for enough leeway in patent life to encourage the development of new drugs required equally for the NHS and for our export performance.
However, when it comes to licences of right, which the Bill seeks to repeal, I am a little more torn, as it has to be borne in mind that some of the drugs which would receive a four-year reprieve under the Bill fall into the profitable category which has already been referred to by the noble Lord, Lord Stallard. This includes drugs such as Zantac, which costs the National Health Service some £40 million annually, Ventolin, costing £37 million, ICI's heart drug, Tenormin, costing £38 million, and Beecham's antibiotic, amoxycillin costing £37 million.
It has been suggested that the lead time on the development of these drugs, although it is generally accepted that lead time has increased in recent years, was somewhat shorter. The noble Lord, Lord Stallard,

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mentioned a period of six years before marketing. My information is that the period is somewhat longer. Even so we are talking about large sums continuing to be realised on drugs that could be said to have received already a fair return. This is where I put on my hat as a health spokesman, which means that I cannot be indifferent to National Health Service costs and that I have to take them seriously.
There were heated exchanges on this subject on the first day of Committee, not least between the noble Lord, Lord Northfield, and his own Front Bench and other members of his party. I do not want to follow him into that ideological conflict with his noble friends, of which I have not lost the memory. I want rather to concentrate on his repeated assertion that nothing under the Bill could possibly affect National Health Service costs because these are contained within the envelope of the pharmaceutical price regulations scheme which limits the profits that the industry can make out of its National Health Service business.
This is the broad intention in general terms, but it is not quite so conclusive and cut and dried as it might seem. The drug bill of the health service rose by 7.3 per cent, in 1985 even though the number of prescriptions fell by 12 million. The scheme as renegotiated in 1986 continues to provide a grey area within which it may be allowed in certain circumstances to retain additional profits earned on National Health Service medicines. Allowable promotional expenses vary with sales, and new products may be priced at the discretion of the company.
As a result of this last provision, some health authorities simply cannot afford some of the new drugs coming on to the market. One example is Cyclosporin, the post-kidney transplant drug, which is priced so high that it is only marginally cheaper than haemodialysis. The PPRS is a complex scheme, with a number of variables. I think I am right in saying that even the ABPI has recognised that the Bill could lead to a rise in NHS costs of £5 million to £10 million.
The noble Lord, Lord Lucas of Chilworth, said on 13th January (at col. 464 of the Official Report) that it would not have any significant overall effect, but that depends on one's definition of "significant". An increase of £10 million or even £5 million could have a great impact on kidney dialysis or on cervical cancer screening for younger women, a field in which a sum of that order would make a vast difference.
Lord Williams of Elvel: I am sorry to intervene. On the last amendment we went over the question of National Health Service costs and the Minister gave us a full reply. Is the noble Lord disputing the figures we have, which I think are more up to date than the ones he has been reading out?
Lord Kilmarnock: I was about to come to the intervention of the noble Lord, Lord Lucas, in which he mentioned the sum of £1 million. I think he said that that would have been the difference, if licences of right had not operated, over four products. If I am right, and if I did not mishear him, that appears to me to affect a fairly limited part of the spectrum. I
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respectfully say to both the noble Lords, Lord Lucas and Lord Williams, that we are still not entirely in the clear on the ultimate cost to the National Health Service.
Lord Lucas of Chilworth: I am grateful to the noble Lord for giving way. Perhaps I should repeat what I said, because there is no picking particular figures. These were the actual figures. I said that that analysis indicated that in 1985 and 1986 there were estimated cost savings to the National Health Service of less than £1 million in the first year and £1.5 million in the second year, when a total of four products were affected.
Lord Kilmarnock: That is exactly what I thought I heard the noble Lord say and what I believe I reproduced in my own words. I am certainly grateful to him for repeating it but it still does not seem to cover the whole of the field that is relevant in this matter.
Even supposing that the low-cost case is waterproof—and I do not accept that it is—we are still left with the undoubted fact that higher profits on drugs freed from licence of right must mean leaner times for generic companies. The noble Lord, Lord Northfield, referred (at col. 314 of the Official Report for 4th February) to,
'"this reallocation of profits between the generic producers and the original producers, which is what this Bill is about".
Those were his words and I see him nodding. That, of course, is correct. All drug sales to the National Health Service above £1–5 million, including generic sales, fall within the PPRS. Therefore it is the generics which will be squeezed by this Bill.
In my opinion that is not desirable from the National Health Service point of view. This does not mean that I accept the assessment of the Henley Centre for Forecasting of the effects of the Bill, which was promoted by the PLUS campaign. The noble Lord, Lord Lucas, said that these figures were not sustainable and I am inclined to agree that they are open to serious questioning. The noble Lord shakes his head. He said they are not sustainable and I am agreeing with him.
Lord Lucas of Chilworth: I did not say that.
Lord Kilmarnock: If I may be allowed to continue, both sides have overstated their claims and that is why I want to be closely associated with neither. Common sense and the future development of cost-effective prescribing requires that there should be a healthy generics industry. I have accepted somewhat reluctantly that licences of right should go, but it is extremely important that the generic companies should not also go to the wall. There should be some incentives for the maintenance and improvement of generic production in this country.
I come to the substance of this amendment, which is basically a quid pro quo for the abolition of licences of right. The inventors and the innovators should have their protection. There might even be a case for longer than 20 years with regard to block-busting drugs which have a long time lead to production. Whatever the

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statutory patent life, as soon as it is over there should be distinct encouragement of generic substitution if and when these substances are available, licensed and tested and they satisfy the requirements of quality control.
The proposal in this amendment is based upon the recommendation in paragraph 24 of the Greenfield Report on effective prescribing, published in February 1983, which says:
"We consider that many doctors would be quite content for their patients to receive an alternative version of the drug prescribed, but that they tend to prescribe the proprietary brand with which they are most familiar. We therefore suggest the introduction of a simple scheme which would require doctors to indicate a positive preference for the proprietary version by initialling a box provided for that purpose on the FP10. In the absence of the doctor's initials, and assuming an alternative 'generic' version exists, the pharmacist would be expected to dispense the approved name preparation and would be paid according to the basic price indicated in the Drug Tariff. This could bring about a significant change in the pattern of prescribing which would result in savings to the NHS.".
It is interesting to note that the present medical director of the ABPI, Dr. Wells, was a member of the Greenfield Committee which made this recommendation, so it would not appear to be entirely friendless within the mainstream of the industry. I cannot clearly put a figure on the savings which would accrue from this proposal; some claims running into hundreds of millions have been made but they are almost certainly exaggerated. Ultimately it depends on doctors, since they have the overriding power to insist on the brand-named products for their patients if they so wish. At the same time there is little or no doubt that generic substitution would gradually extend the use of generic drugs to family practitioner prescriptions and would act as a long-term stimulus to the generic sector of the industry.
It is important, as I have already indicated, and in the public interest that this sector should not wither away. If there are worries about the quality of certain foreign imports, these should be dealt with by a strengthening of the medical inspectorate.
One of the great attractions of this amendment is that it does not signal "All change" overnight, but it introduces a gradual evolutionary process from which the NHS would benefit and by which the mainstream of the industry would not be seriously threatened, as Dr. Wells must have recognised during his membership of the Greenfield Committee. I repeat that we on these Benches want the industry to have proper and reasonable patent protection. We must be strictly cost-conscious as regards the National Health Service, and this has always seemed to me to be a major concern of governments as well.
When Mr. Fowler, the Secretary of State, introduced the limited list early in 1985 he said:
"I hope that we shall achieve further savings through better prescribing and more competition in the generic manufacturing of the drugs on the limited list".— [Official Report, Commons, 21/2/85; col.1231.]
That will not happen if there are no generic companies in business to provide those equivalents. Likewise, the encouragement of doctors by the DHSS to prescribe generically through the distribution of cost-comparison charts, which they are actually doing, will be so much wasted effort as will be the steps being
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taken by the Royal College of General Practioners in the same direction.
On all these grounds the Government will be doing no more than underpinning their own policy by supporting this amendment. By failing to support it they will be letting the Bill on to the Statute Book in a dangerously unbalanced form. Perhaps the noble Lord, Lord Northfield, will also feel that his Bill will go forward with more widespread support by all sections of the community in the more balanced version that I am suggesting. Ultimately it is a question of the public interest, the interests of the consumer and the National Health Service, and it is on that interest that I rest the case for this amendment. I beg to move.
Lord Lucas of Chilworth: It might be helpful if at this stage I put the Government's view. I have looked at the amendment itself and its effect. We do not support the concept of compulsory generic substitution or the imposition of an additional burden on doctors in their methods of prescribing. The amendment which has been proposed and described to us by the noble Lord, Lord Kilmarnock, would require changes in the contracts and conditions of service of both doctors and pharmacists and it would undermine the research-based pharmaceutical industry in the United Kingdom which the Administration of the noble Lord opposite and my own party have consistently encouraged.
It would in fact mean that a pharmacist on receiving a prescription with a branded medicine prescribed could fill it with a generic equivalent. The result would be a growth in the generic trade and a shrinkage in branded medicine business. I ask rhetorically, where would this leave United Kingdom inventors over the next few years?
The Government believe that the right balance must be struck. There is a place for generic drugs and that has always been acknowledged, but it is not a place under a system of compulsion. Our concern is for economical and effective prescribing. We have encouraged, and we will continue to encourage, generic prescribing, but only where the doctor considers it suitable for the patient. We cannot entertain an element of compulsion in the way doctors prescribe for their patients, and that would be the effect of this amendment. I suggest to the Committee that it would not be in our best interests to accept it.
Lord Northfield: I am grateful to the noble Lord, Lord Kilmarnock, for raising this issue. He should not be concerned that this Bill will somehow kill off the generic trade; there is a respectable generic trade and its practitioners are members of the association of the industry, the ABPI. I am sorry that the noble Lord thinks that this Bill would in some way kill them off. The companies that are members of the ABPI fully support this Bill.
As the noble Lord, Lord Lucas, said, this could not be brought in without considerable consultation, and it is, as I think he did not say, outside the Long Title and the purpose of the Bill. Therefore, I hope that he will feel able to withdraw his amendment.
6 p.m.
Lord Kilmarnock: May I briefly respond, first, to the noble Lord, Lord Lucas? He has misunderstood the purpose of the amendment. It does not compel doctors to adopt a generic equivalent. It allows them to specify the branded name and to continue with the branded name after 20 years if they so wish. It is mandatory on the pharmacist if the doctor has not so specified, but it is not mandatory on the doctor. Therefore, I do not see this as an additional burden on doctors.
It is also very much in line with the guidelines which have been issued by the Royal College of General Practitioners, which is a respected body, to its 14,000 or 15,000 members (I cannot remember the exact figure) that they should proceed as far as possible on a voluntary basis along those lines. Frankly, therefore, I think the argument that it would be an intolerable burden on doctors is not sustainable.
The noble Lord, Lord Lucas, spoke about a shrinkage in brand names but I remind him that the proposals in the amendment are designed to come into effect only after the patent has run its full life of 20 years. Indeed, I have suggested that there may be cases where it might be right that the patent life should be longer than 20 years. Therefore, to suggest a sudden disappearance of brand names from the shelves is
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rather an alarmist view of the results of this amendment.
I am grateful to the noble Lord, Lord Northfield, for having listened to my explanation of the amendment. I am sorry that he does not like it. I was not suggesting that his Bill would kill off the generic industry altogether. However, I suggest as a quid pro quo for what he proposes that we should give some encouragement towards long-term development, as I believe that is in the interests of the country as a whole and of the National Health Service.
I shall not press the amendment this evening. Like the noble Lord, Lord Stallard, on his earlier amendment, I shall want to read carefully what has been said and decide whether to come back at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Remaining clause agreed to.
House resumed: Bill reported with amendments.
House adjourned at four minutes past six o'clock.