Lords Sitting of 14 April 1988

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

The Budget: Effect on Wage Claims
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What effect they expect the recent Budget Statement will have on wage claims and settlements in the near future.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the forecast issued by the Chancellor at the time of the Budget was for inflation to remain low. With the reductions in income tax announced in the Budget Statement, the increase in earnings required to compensate fully for inflation is likely to be around 2 per cent. at the end of 1988. Wage bargainers should recognise this favourable prospect in their negotiations.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply. However, does he not agree that the measures outlined in the Budget will make the application of the Government's policies more difficult? Although the tax rebates or tax deductions for some individuals will be in excess of £10,000 a week, at the same time, according to the Minister's Answer, the Government intend to continue to exhort people at the lowest end of the wage scale—those who are on very minimal and low rates—to keep their wage claims as low as possible. Is that not a contradiction? Will it not exacerbate still further the divide between the two groups of people?
Lord Young of Graffham: My Lords, I regret that on this occasion I cannot agree with the noble Lord. The Government exhort people to have regard to the level of wage claims on the basis that those claims should in fact be earned. Over the past year or so, the underlying level of average earnings has gone up by some 8½ per cent. whereas inflation stands at some 3·3 per cent. So all have had a real increase of over 5 per cent. in their standard of living. Happily, productivity has improved during that period to such an extent that unit wage costs have only increased by 1·3 per cent. And last year, we actually earned the increases that we paid to ourselves.
Lord Nugent of Guildford: My Lords, does my noble friend not agree that both the reduction in the standard rate of tax of 2p in the pound and the increase in the basic tax threshold of £300 for the married man will be substantial financial incentives to all wage and salary earners to keep their demands low?
Lord Young of Graffham: My Lords, I am sure that if one lesson has been learned over the course of this decade, it is the general realisation that wage
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increases have to be earned and not simply paid for. I hope that that lesson will continue to be borne in mind.
Lord Peston: My Lords, would the Minister care to comment on the fact that the very low paid and those on social security have marginal rates of tax in the order of 97 per cent.? Does he not think that at some time there should be tax reforms which offer some incentives to those people?
Lord Young of Graffham: My Lords, I agree with the noble Lord. The whole purpose of the review of social services payments now being undertaken is to get rid of, or to eliminate, as many of those marginal rates of tax as possible.
Lord Bruce of Donington: My Lords, the Minister quoted a figure for wage or salary increases earned by those who actually produce the goods and services. Is he aware that a recently published report has disclosed that those who belong to middle management received salary increases of some 12 per cent. and that those in the higher reaches of management had salary increases many times the multiple of those accorded to ordinary wage earners? Does he agree that by the exercise of a degree of moral probity it might be a good step if the so-called creators of wealth limited their increases to those that they recommend for ordinary working people?
Lord Young of Graffham: My Lords, the noble Lord must begin to recognise that the philosophies that lie behind his question were the cause of our decline in the 1960s and 1970s. It is only since we started to realise that we must first create the wealth before we can look at the distribution of it that we have seen the resurgence of the United Kingdom's economy. The actual average earnings percentage increase among all persons in the manufacturing sector was 8·4 per cent. and in the services sector 9·1 per cent. Both contribute to the creation of wealth.
Lord Molloy: My Lords, does the Minister not agree that it does the country no good when ordinary people learn that some folk are a few thousand pounds a week, or a month, better off while other folk much lower down the scale get no assistance whatever? Is he aware that it does nothing at all for the moral fibre of this nation?
Lord Young of Graffham: My Lords, once again I fear that I cannot agree with the noble Lord. I suspect that if he were to go out and ask people today, he would find that they recognise very clearly that the right kind of successful effort deserves a proper reward. The general satisfaction with the way that the economy as a whole has been performing has rarely been higher than it is today.
Lord Dean of Beswick: My Lords, bearing in mind that the Question relates to wage settlements, does the Minister recall that following negotiations a few weeks ago between Ford management and workers in which the full-time officers of the trade unions agreed to a settlement, that settlement was then overwhelmingly rejected by the workforce and further negotiations had to take place? Is the Minister

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aware that the substantial changes at the top of the scale in the Budget may make it more difficult in the near future for trade union negotiators who strike bargains at national level to sell them to the shop floor workers?
Lord Young of Graffham: My Lords, I assume that the noble Lord, Lord Dean of Beswick, was not referring to the union negotiations with Ford at Dundee but to those in the south at Dagenham. I am sure that the noble Lord recollects, as I do, that the negotiations were about whether they would have a three-year or two-year agreement. Rates of pay did not figure prominently in the rejection.

Film Industry: Policy
3.12 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What is their policy towards the British film industry, and whether any changes are to be proposed.
Lord Young of Graffham: My Lords, the Films Act 1985 offers a framework within which the commercial film industry is developing successfully. British Screen Finance Limited, which receives government funds under the terms of the Films Act, in just over two years has supported over 40 British feature and short films. In addition, 29 projects have received government finance under the development scheme managed by the National Film Development Fund.
The Films Act also effected a widely welcomed deregulation of the film industry. Our aim continues to be to encourage the industry to function competitively in an open and international market.
Lord Dormand of Easington: My Lords, does the Secretary of State accept that this country has some of the finest film makers in the world? Does he also agree that the effect of the facts he has given is to terminate government help towards the film industry? As the abolition of the National Film Finance Corporation, the Eady levy and the 100 per cent. tax capital allowances, among other things, have caused unforeseen circumstances in the film industry, does he agree that there ought now to be some fiscal incentives given to the film industry?
Lord Young of Graffham: My Lords, I suspect that the greatest fiscal incentive towards the film industry has been the recent tax changes which the Chancellor has been able to announce in the Budget. That is concerning the taxes on individuals. I am sure that all in your Lordships' House will join with me in congratulating all those concerned with the making of the film "The Last Emperor", which won no fewer than nine Oscars and which was British-funded without any help from the Government.
Lord Williams of Elvel: My Lords, will the noble Lord comment on the report of the British Screen Advisory Council on the proposed change in
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broadcasting policies and the effect that it will have on films? It says that priority will be given to small-budget to medium-budget films—films that appeal to a television audience—and major UK films, one of which the noble Lord has just mentioned. An important sector that is already vulnerable will be inhibited.
Lord Young of Graffham: My Lords, I am not certain how much government policy comes into that, but it is nevertheless true that, despite the fact that attendances at cinemas have increased substantially over the past three years, there is a continuing and ever-expanding demand for low-budget or medium-budget films for use on television and in other ways. That is known as the market; and I have little doubt that the demand will eventually be supplied by what the film producers make.
Lord Lloyd of Hampstead: My Lords, the Secretary of State has extended his congratulations on the remarkable success of "The Last Emperor" in winning nine Oscars recently in Hollywood. Perhaps I may ask him whether he agrees that it would redound more to the credit of this country, and to the support for the film industry of this country, if it were not a fact that that film was financed almost entirely by Continental bankers; and that neither the private nor the public sector contributed anything more than a fairly trifling contribution to its production.
Lord Young of Graffham: My Lords, my information is that Hill Samuel was the body that put it together. It arranged the funding. I care little who puts the money in. It was British-funded to that extent. It is a matter for great congratulations. If it shows one thing, it is this. The industry is very resourceful. I am sure that it will find a way better than we can.
Lord Auckland: My Lords, can the Minister make any comment about the present position of Pinewood Studios? It has produced some of the finest British films of all time. It now appears to be largely American-orientated. Are there any moves afoot to encourage British film makers to make, in particular, educational films in these admirable studios?
Lord Young of Graffham: My Lords, that is a matter very much for those concerned in running Pinewood Studios. In my original Answer I referred to the fact that British Screen Finance Limited had supported, with government assistance, over 40 British feature and short films over the past two years. That seems to me a great contribution. However, where they are made depends on the circumstances at the time. It may well be that costs in this country were too high for some of these films to be made here.
Lord Paget of Northampton: My Lords, does the noble Lord feel that the people of this country are capable of choosing their own entertainments and paying for them? In Northamptonshire people have far more fun from the Pytchley Hunt than they do from the film industry, and the Government do not subscribe a penny to them.
Lord Young of Graffham: My Lords, the tastes of the people of Northampton are not precisely my tastes, but I congratulate them nevertheless.
The Viscount of Falkland: My Lords, will the Minister comment on the restrictive practices which exist between exhibitors and distributors in this country? That matter has been adversely reported upon by the Monopolies and Mergers Commission and has also been taken up by the Government who have expressed an intention to bring forward legislation on the subject. What is likely to be the timetable? Will the Minister further agree that any more delay will prevent independent cinema owners from investing in new, comfortable cinemas in which people can watch the new and exciting films which we are led to understand will be coming from the British film industry?
Lord Young of Graffham: My Lords, as this matter is a little wide of the original Question I am not sure that my information is correct, but I understand that we are still waiting for the report from the Monopolies and Mergers Commission and therefore we must obviously wait to see what the detailed terms of that report are.
Viscount Mersey: My Lords, surely my noble friend will agree that the two Davids are beyond compare—by whom, of course, I mean David Lean and David Puttnam? Would it not be possible to restore government grant to British Screen, as it is now called, at least to the level that it used to be under the old National Film Finance Corporation? It is only a matter of a few million pounds.
Lord Young of Graffham: My Lords, unfortunately my noble friend gave me a slight shock at the start of his question. I believe that the passing of the Films Act 1985, which essentially deregulated the cinema in this country, has been responsible in part for seeing attendances at the cinema increasing from 53 million in 1984 to 74·8 millions last year. That figure is still going up. I believe that the help we are giving now through British Screen is probably the best targeted help that we could give to production. We should let the market show us the best way in which we can support the industry.
Lord Dormand of Easington: My Lords, is the Secretary of State aware that I thought he would refer to the success of "The Last Emperor"? He is quite right that most of the finance came from Hill Samuel. Is he further aware that that was the 12th financial institution which the producer approached? He has said publicly that had that finance not been available the film would not have been made. Does the Secretary of State recall a statement made in the 1984 White Paper on film policy which said that the industry has an importance and influence both in our national life and internationally which is out of all proportion to its size? Does that still apply? Will he therefore not give further consideration to financial incentives?
Lord Young of Graffham: My Lords, I certainly do not take away from that statement at all, but the issue surely is whether or not government help will make it
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better. I believe that the level we have at the moment is the best, but I suspect that the noble Lord has another view.

Palestinians: Imprisonment by Israel
3.24 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they will raise in the United Nations the imprisonment of increasing numbers of Palestinians by Israel.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we have made clear, in the United Nations and elsewhere, our view that the Israeli authorities should respect international law and human rights standards in their administration of the occupied territories. We shall continue to take appropriate opportunities to do so.
Lord Molloy: My Lords, I am grateful to the Minister for that reply. Does he not agree and is he not aware that, in addition to imprisonment without trial, there now can be added deportation and collective punishment; that all these things offend the Fourth Geneva Convention and the Universal Declaration on Human Rights; and that there are very many, particularly young, Israelis who have expressed grave apprehension about their Government's activities in the occupied territories? Will Britain do a little more, perhaps with the United States, to influence even more the Israeli Government because they are creating a highly explosive situation which, unless we are very careful, could involve very many nations?
Lord Glenarthur: My Lords, we deplore the illegal actions, such as to those which the noble Lord has referred, including deportations, collective punishment, house demolitions and all that sort of thing. Deportation is contrary to international law and will only create new martyrs to the Palestinian cause and fuel resentment.
I am quite sure that the noble Lord will also feel that we should continue to support Mr. Shultz in his efforts, and that is certainly what we shall do.
Lord Bottomley: My Lords, does the Minister not agree that, if the PLO were to recognise the state of Israel and to adopt the appropriate United Nations resolutions, there would be no need to imprison Palestinians?
Lord Glenarthur: My Lords, I believe it is the concern of all your Lordships that we should seek a satisfactory conclusion to what has gone on there for many years. We believe that implementation of Security Council Resolution 242 remains the main goal to be achieved. As part of the proposal the Israelis should withdraw from the territories occupied since 1967 and meanwhile should administer its occupation in compliance with international law and human rights standards.
Lord Cledwyn of Penrhos: My Lords, I warmly welcome what the noble Lord has said about the

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laudable efforts that Mr. Shultz is making in very difficult circumstances. Can the Minister say how Her Majesty's Government see the process of negotiation proceeding at the present time? Will he give an assurance that Her Majesty's Government will give Mr. Shultz every assistance in the efforts he is making?
Lord Glenarthur: Yes, my Lords, of course we greatly welcome the new United States engagement. It is a vital ingredient. My right honourable and learned friend the Foreign Secretary has made that absolutely clear. We are keeping in close touch with Mr. Shultz and we hope that he will continue his efforts. It is for the parties themselves to decide whether the United States initiative represents a sound basis for progress, but we certainly urge them not to reject or stifle this important opportunity for peace.
The Lord Bishop of St. Albans: My Lords, as someone who for the past two months has been living in East Jerusalem, I should like to express gratitude to the Minister for the way in which the Question has been answered. Are the British Government prepared to take up with the Government of Israel the case of Dr. Mubarak Awad, who is a highly respected Palestinian Christian advocating non-violent resistance to Israeli military occupation and who has been rewarded for his pains by the threat of expulsion from the land? I am wondering whether he would care to point out to the Government of Israel that it is only by retaining these people in the territories that they will have non-violent people with whom they can discuss the future of the territories.
Lord Glenarthur: My Lords, I assure the right reverend Prelate that we have taken up with the Israeli authorities a number of individual cases. I cannot tell him whether that case is one of them but I shall certainly consider it.
Lord Kennet: My Lords, the noble Lord has stated that the Government believe that Israel should abide by the United Nations resolutions. He has also stated that the Government support Mr. Shultz's present initiative. Can he say whether Mr. Shultz is urging Israel to abide by those UN resolutions? Can he also say whether Mr. Shultz is telling Israel that unless she abides by those resolutions he will reduce the flow of American military aid?
Lord Glenarthur: My Lords, perhaps that is a matter which the noble Lord should address directly to the country concerned. It is important that this country and this Government do all they can to support Mr. Shultz in the important efforts that he is making.
Lord Chelwood: Nonetheless, my Lords, is not Mr. Shultz unfortunately greatly inhibited by the fact that the United States Government firmly refuse to recognise the Palestinian people's right to self-determination? That is clearly recognised in the Venice Declaration by all the European Community countries.
Lord Glenarthur: My Lords, that may be my noble friend's view. I have stated before that the PLO cannot expect to play a full part in negotiations until it accepts the United Nations Security Council Resolutions 242 and 338, renounces violence and accepts Israel's right to exist.
Lord Molloy: My Lords, will the Minister agree that before this highly explosive situation develops into a massive war in the Middle East, which will draw in other countries as well, the time has come for action? It is an appalling paradox that the United Nations which created the state of Israel is being totally defied by the state of Israel. We should back the Americans and Mr. Shultz and all other countries that want to see fair play and the abolition—
Noble Lords: Question!
Lord Molloy: This is the question—the abolition of all the injustices—
Noble Lords: Speech!
Lord Molloy:—being perpetrated upon the Palestinians, and those in the occupied territories should be removed so that we can move forward—
Noble Lords: Question!
Lord Molloy:—to a peaceful endeavour.
Lord Glenarthur: My Lords, if Mr. Shultz's activities are not "action" I do not know what is.

DTI Enterprise Initiative
3.30 p.m.
The Viscount of Oxfuird The Viscount of Oxfuird asked Her Majesty's Government:
What has been the response to the Department of Trade and Industry's enterprise initiative.
Lord Young of Graffham: My Lords, the response has been excellent since the January launch. Fifty-seven thousand requests have been received by phone or coupon for the enterprise initiative booklet, of which some 300,000 have now been distributed. We are on course to achieve the target I set in the White Paper of 1,000 consultancy projects per month.
The Viscount of Oxfuird: My Lords, I thank the Minister for that reply. Is he in a position to tell the House which of the development consultancies among those listed have been the most popular?
Lord Young of Graffham: My Lords, these are still early days. Of the applications we are processing, just over half have been in marketing, some 12 per cent. in design, and some 18 per cent. in quality. Among the smaller amounts were for business planning and financial information systems which we have launched only recently. All are significant areas in which smaller and medium-sized British companies can profit to some advantage in improving the quality, design and marketing of their products.
Lord Williams of Elvel: My Lords, I welcome the initiative. Can the noble Lord tell the House how consultants for small and medium-sized businesses are selected? By what criteria are they selected? Is he not aware that the business in general—and I speak as one who spends some time in consultancy—is not very commercially attractive to the large consultancy firms?
Lord Young of Graffham: My Lords, I am not certain that it is not attractive to the large consultancy firms. It is certainly attractive to the specialist consultancy firms. As the original announcement made clear, we have appointed principal contractors in each of the areas. For example, the Institute of Marketing is the principal contractor for all the marketing consultancies; the Design Council is the principal contractor for the Design Council; and 3Is enterprise support is the principal contractor for those on business systems. Those firms are responsible for the lists of contractors and they contract with us. They are also responsible for supervising the results.
The department looks independently at the results of the consultancies. However, the first consultancies took effect only at the beginning of this month. The period until now has been used to organise and arrange them. As the months pass we shall watch closely to see the results.
Lord Taylor of Gryfe: My Lords, will the Minister give the geographical distribution of the inquiries? Will he say how many which are government-assisted are from the South-East and how many from the less-advantaged areas such as the North-East and Scotland?
Lord Young of Graffham: My Lords, although these are early days I can give the example that as a proportion the application in the North-West considerably outnumbers the number of companies in existence there. I know that close to the noble Lord's heart is the cause of Scotland. Some 6 per cent. of the applications so far received come from Scotland. I am not sure of the number of companies in Scotland. I shall inquire. However, I do not believe that we are much out of line.
Lord Williams of Elvel: My Lords, I am sorry to press the Minister further on the criteria on which consultancy firms are to be charged. I understand that these are early days. But can we have an assurance that consultancy firms which are not properly qualified will be excluded by the department from consideration in these initiatives?
Lord Young of Graffham: My Lords, not only by the department. They will have to be vetted first by the Design Council, the Institute of Marketing, by PERA and by the other main contractors. That is part of their responsibility as specialists. They must then be selected by the individual company which wants the consultancy. In most cases they are paying either half or one-third of the actual costs and they will be severe critics of the output. I have undertaken that we shall look at each complaint, if we receive complaints, about the output and the work of contractors. If such cases exist, then we shall, in that way, quickly compile a blacklist.

Business of the House: Debates, 27th April
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Hunter of Newington and the Lord Chalfont set down for 27th April shall each be limited to 2½ hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Lord Belstead.)
On Question, Motion agreed to.

Foreign Marriage (Amendment) Bill [H.L.]
3.35 p.m.
Read a third time.
The Lord Chancellor (Lord Mackay of Clashfern): I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(The Lord Chancellor.)
Lord Mishcon: My Lords, I believe that once again all noble Lords will wish to pay a tribute to the two Law Commissions whose recommendations are responsible for this useful little Bill. It does a great deal of tidying up.
I know that the noble and learned Lord the Lord Chancellor will forgive me if I repeat something for the last time. It is that I have yet to see the justice and the logic of Clause 2 of the Bill under which a young Scots girl, domiciled in Scotland and coming here to marry, being under the age of 18, remains subject to Scottish law. Therefore, no parental consent is necessary. On the other hand, a young English girl going to Scotland will be subject to Scottish law in spite of her English domicile. In that regard there must be some mystery of justice which has escaped me. I wish to make abundantly clear the fact that I know that the noble and learned Lord the Lord Chancellor is not recommending that by virtue of any national loyalty.
The Earl of Selkirk: My Lords, I note that in accordance with Clause 4 such marriage shall be solemnized and that the doors shall be open. Am I to understand that if the doors are closed, the marriage is invalid? It seems to be an extraordinary proposition and there may be an easy explanation. I believe that is a necessity quite out of line with the normal circumstances of a marriage.
The Lord Chancellor: My Lords, as regards the application of Scottish law in England, I do not believe that the Bill affects the proposition. It allows a person domiciled in Scotland and who is married abroad under the provisions of the Foreign Marriage Act to be married in accordance with the rules of Scotland. I believe that to be very just. I believe it is right that hitherto the Scots person being married abroad under these provisions was required to conform to the English law. Although I know that many noble Lords will consider that to be a great

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privilege, it does not appear to me to be entirely fair. The Bill makes it not absolutely obligatory on a Scots person being married abroad to conform with the rites of the Church of England. Again, that appears to be manifestly fair.
As regards the detailed question put to me by my noble friend Lord Selkirk, I did not entirely understand the difficulty he raised. Perhaps he will allow me to return to the matter in correspondence with him.
On Question, Bill passed and sent to the Commons.

Public Utility Transfers and Water Charges Bill
3.38 p.m.
Report received.
Clause 1 [Power to act in relation to proposals for privatisation etc.]:
Lord Renton Lord Renton moved Amendment No. 1:
Page 1, line 6, at beginning insert—
("(1) The purpose of this section is to ensure that water authorities in England and Wales and electricity boards and the Electricity Council in England, Wales and Scotland have the necessary statutory powers to enable them to fulfil proposals made to any of them by the Secretary of State in order to prepare for privatisation and, in the case of water authorities, for the possible creation of a National Rivers Authority.").
The noble Lord said: My Lords, I hope that this amendment will commend itself to noble Lords in all parts of the House, especially my noble friend Lord Caithness. It is intended to help him overcome difficulties which arise in respect of Clause 1 and which were described by noble Lords at earlier stages of the Bill.
The difficulties are fourfold—and there may be others. Perhaps I may quickly describe the four main difficulties which I see in Clause 1. First, the Bill does not refer to the intention underlying it, expressed in ministerial speeches and in the first paragraph of the explanatory memorandum attached to the Bill as it originally came to us where it states that new powers are being granted to prepare for privatisation and for creation of a National Rivers Authority. Neither of those matters is mentioned in the text of the Bill, although privatisation is mentioned in the sidenotes to Clause 1. I should mention in passing that a sidenote is not part of the text of the Bill.
Lord Hailsham of Saint Marylebone: Hear, hear!
Lord Renton: My Lords, I am so glad to have the endorsement of my noble and learned friend. I shall have to come to the attitude that the higher judiciary may take to the Bill in a few moments.
The second difficulty that arises—and I referred to it, as did others in Committee—is that Clause 1(1) refers to the Secretary of State making proposals for the transfer of property or functions, but it does not state to whom the proposals may be made.
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Thirdly, I must invite your Lordships' attention to Clause 1(4), which is, in my experience, one of the strangest provisions that I have seen in a Bill or statute and I must read it for the record. It states:
"The powers conferred by this section in relation to any proposal shall be exercisable whether or not Parliament has given any approval on which the implementation of the proposal depends and shall be without prejudice to any power conferred otherwise than by virtue of this section".
That is extremely wide and somewhat vague.
Lastly, I refer to the use of the expression "a body corporate", which occurs first in Clause 1(2), which refers to:
"the transfer of anything from a relevant public utility to a body corporate".
The nature of a body corporate in this context is unspecified. However, in subsection (5) we find another provision which purports to explain what is meant by a body corporate, but that other provision is, so far as I know, also unprecedented. I will read it. Subsection (6) states:
"References in this section to a body corporate shall include references to a body corporate which has not been established or formed but which may be established or formed in pursuance of a proposal of the Secretary of State".
Therefore, that is not necessarily done by an Act of Parliament.
Our legislation should surely achieve three things: first, it should reveal the intention of Parliament—something which the higher judiciary are always pleading that legislation should do; secondly, it should be comprehensible to people who are bound by the legislation and indeed to all who have to use it, including the courts; and thirdly, legislation should be certain in its legal effect. Indeed, that is what parliamentary counsel claim that they are always striving to achieve.
However, I hope that I have already said enough to reveal to your Lordships that Clause 1 does not achieve those three objectives or any of them. One could go on describing the obscurities and difficulties created by Clause 1 but perhaps I may just add that it is likely to lead to proceedings in the High Court by people wishing to make sure that what is proposed by the Secretary of State to somebody or other, or done by a water authority or electricity board in a particular case, is lawful. When that happens—and, as I say, I believe it is very likely to happen—the court will then try to ascertain the intention of Parliament, but, under our rules of interpretation of statutes, the court will have to look at the text of the statute: the explanatory memorandum would not be admissible, nor would my noble friend's admirable speeches or those of his right honourable friend.
Therefore, I suggest that our intentions should be made clear, as I have attempted to do in Amendment No. 1. That has the advantage of not altering the powers already contained in Clause 1 but, by stating the purpose for which those powers are to be used, it largely removes the uncertainties and obscurities which I have mentioned.
Before I conclude, I must refer to Amendment No. 2, which is a worthy alternative attempt to achieve what my amendment achieves. Therefore, Amendment No. 2 also deserves consideration, because it has the same objective. I am not a professional parliamentary draftsman; I have done

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my poor best. I know that my noble friend, because he has been very helpful in discussing this matter, is anxious not to lose any flexibility which the clause now allows, and I can understand that. I should be glad to add some words which I believe may meet his main difficulty over this particular point. Perhaps noble Lords will look at the last line of my amendment, which refers to "the possible creation of a National Rivers Authority". If this amendment is otherwise found to be acceptable, I should be quite prepared at Third Reading perhaps, rather than by a manuscript amendment today, to add the words:
"or any other body corporate",
just in case the Secretary of State, in his wisdom, decides to change his mind and not have a National Rivers Authority as part of privatisation but to have some other form of body corporate. If that is done, none of the flexibility in Clause 1 would be lost and meanwhile, the intention of Parliament would be made clear.
Lord McIntosh of Haringey: My Lords, before the noble Lord sits down, perhaps I may ask him whether he has any indication from the Government that, if that final phrase is added to the amendment, it would then be acceptable to the Government?
Lord Renton: My Lords, I have had certain private discussions with my noble friend and he has reserved his position. I beg to move.
Lord Campbell of Alloway: My Lords, perhaps I may support the spirit of this amendment in the hope that the Minister, while retaining total flexibility, which is crucial, will nonetheless take on board the experience of my noble friend Lord Renton in these matters of drafting for which everyone in your Lordships' House, on all sides, is always grateful so that Clause 1 can be made intelligible, or a little more intelligible than it is at present.
In essence, the problem—without repeating anything that has been said by my noble friend Lord Renton—appears to be that Clause 1 confers the power to act. One is then left to deduce the purpose of the power to act from complex means of implementation contained in the clause which are not readily intelligible. Certainly as regards subsection (4) they are open to the most serious objection.
Therefore, how do we get out of a situation which is pretty desperate, because, without overstating the position, Clause 1 as it stands (and no doubt will remain, perhaps subject to the inclusion of this amendment) is still there in turgid English without any precise legal effect and without any clear, positive intelligible intent? Indeed, as it stands, and probably as it will reach the statute book, it could qualify for first prize in any of the current Golden Bull competitions.
The merit of this amendment is that at least it does something, but it cannot cure the incurable. There it is, cast in its mould by the draftsmen, and we have to live with it, I assume. But cannot we try to do something to improve it? The merit of this amendment and why I support its spirit is that it tries, and it would succeed to a very large measure to do just that.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord Renton, for referring to my Amendment No. 2 and also for calling it a worthy attempt at drafting. There is nobody from whom I would rather have high praise than the noble Lord. I agree with him that both amendments attempt to achieve the same objective. I am content that both amendments should be considered together. Indeed, the noble Lord's amendment refers in the fourth line to,
"proposals made to any of them"
—that is, the water authorities and the electricity authorities. Therefore, I believe that if his amendment is agreed to it would also cover my Amendment No. 5. That would help to speed proceedings in your Lordships' House.
As I see it, the difference between the two amendments—the noble Lord, Lord Renton, will correct me if I am wrong—is that my amendment not only provides for the privatisation proposals but it also provides for related matters. The purposes that are related are a significant part of Clause 1(1). At Committee stage the Minister referred to the distinction between what he called the basic proposals—namely, the proposals for privatisation and the creation of the National Rivers Authority—as opposed to the related matters which are more concerned with the transfer of assets. This was said in the context of the Minister saying that modifications could be proposed by the authorities to the related proposals but not to the basic proposals.
In that sense, I marginally prefer my amendment simply because it covers all aspects of the proposals which the Government may make as regards Clause 1 and not just the proposals for privatisation. I believe it is a relatively sophisticated point. Since the noble Lord has already suggested an amendment to his own amendment, I do not think that we need detain ourselves too much with the detailed wording on the basis that I hope the Minister will see fit in his reply to agree to the amendment tabled by the noble Lord, Lord Renton, and to undertake to put forward a suitable amendment at Third Reading. I gladly give way.
Lord Renton: My Lords, I am grateful to the noble Lord for drawing attention to the difference in the wording between his amendment and mine, but I believe that in fact my amendment would cover related matters though not expressly saying so.
Lord McIntosh of Haringey: My Lords, I shall glady take that point on board. I believe that as a result of this debate we shall need an amendment at Third Reading. That amendment will have to be a conflation of the best of what the noble Lord is proposing and what we are proposing.
The matter is of considerable importance and it is one which is wider than those we have been discussing. The problem is that throughout Clause 1 there is an open-ended commitment forcing local authorities to co-operate in proposals which are not expressed clearly. They do not have to be in writing and they do not have to be addressed to any particular person. At one stage in Committee it was suggested that proposals had already been made in the series of White Papers that had been issued. As

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my noble friend Lord Williams said, in that case the deed is done and it could be continued after the end of this Parliament. It could be continued not only in the absence of approval by Parliament but in spite of the refusal of approval by Parliament. As the noble Lord, Lord Renton, correctly said, the clause is drawn extremely widely. It needs to be brought within the scope of proper legislation so that it does not become a question of dispute in the courts.
I very much hope that the Minister will see his way to indicate the form of an amendment that he would put forward at Third Reading. If not, I suggest that the noble Lord, Lord Renton, and myself will have to consider the form of an amendment that we would consider putting forward at Third Reading.
Lord Ezra: My Lords, I should like to support the spirit of the amendments of both the noble Lords, Lord Renton and Lord McIntosh. There is a degree of obscurity about Clause 1. The noble Lord, Lord Renton, has already referred to the fact that the marginal note is more illuminating than the clause itself. Furthermore, in the arrangement of clauses, Clause 1 is defined as,
"Power to act in relation to proposals for privatisation".
When one examines the wording of Clause 1, it does not refer to that. I believe that there is very strong reason, merely for the purposes of definition and clarification—leaving aside the question of whether one agrees with the objectives of the Government —to make clear what Clause 1 means. That is why I hope that these proposals will be very seriously taken into consideration by the Minister.
Lord Nugent of Guildford: My Lords, I support my noble friend Lord Renton in this amendment. He made a point which particularly appeals to me as a practical one—that even the Explanatory Memorandum has no validity in court. The point that I picked up at Committee stage was that the Explanatory Memorandum forecasts the creation of a National Rivers Authority. The Government have already done that informally by the publication of a sizeable document about it. It seems to me that if my noble friend intends to go ahead and create this body, which will be a very important body indeed—and the whole of his future proposals about privatising the water industry turn upon it—it is only common sense to put it in the Bill.
My noble friend's purpose clause does this admirably. My noble friend Lord Caithness was good enough to inform me and to keep me in touch with his communications with my noble friend Lord Renton, and I understand that the Minister is anxious that he might lose some flexibility if he defines his purposes to this extent. As my noble friend Lord Renton said, he could add at the end of the amendment words such as, "or any other body corporate". That would leave him with complete flexibility and it would still give on the face of the Bill what the noble Lord is contemplating doing. After all that is what legislation is all about.
In nearly 40 years between the two Houses I have seen a good many Bills but never before have I seen a Bill as vague as this one. It is a matter of common decency in legislation. My noble friend the Minister
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must have some obligation to produce a Bill which is a respectable one. Clause 1 is a terrible piece of legislation. I hope that my noble friend will give in to the blandishments which have been poured upon him from every side of the House and agree to the amendment of my noble friend Lord Renton, or indeed to the amendment of the noble Lord, Lord McIntosh, which aims at very much the same thing. I hope he will agree to put down something similar at Third Reading.
4 p.m.
The Earl of Balfour: My Lords, the last words in the amendment of my noble friend Lord Renton are, "a National Rivers Authority". At the bottom of page 9 of the Bill Schedule 1 refers to,
"a drain or private sewer".
Whichever authority is responsible for sewerage should be kept completely separate from anything to do with rivers and river purification. Because, unfortunately, sewage often creates pollution in rivers, the two bodies should be kept completely separate.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, I have listened carefully to the comments of my noble friend Lord Renton and of other noble Lords who have spoken, just as I paid close attention to what was said at the Committee stage of the Bill. I am happy to deal with Amendment No. 2 in the name of the noble Lord, Lord McIntosh. My comments on my noble friend's amendment also appertain to the noble Lord's amendment.
I should like to make one small correction to what the noble Lord, Lord McIntosh, said. He mentioned at one stage "local authorities" instead of water authorities.
Lord McIntosh of Haringey: My Lords, I am happy to be corrected. It was a slip of the tongue and I meant water authorities.
The Earl of Caithness: My Lords, I quite understand. I thought that it might be better for the record.
I know that there is a feeling that the Bill is insufficiently clear about the purpose of Clause 1. I know that my noble friend is vigilant in pursuing the objectives of clarity in the drafting of legislation. Let me say at the outset that I have a good deal of sympathy with the objective of my noble friend. I have therefore looked most carefully at whether there is any way in which we can meet the concerns that he has just expressed so clearly and which several of your Lordships have expressed in support of the amendment and at earlier stages. The fact is that, although the purposes of the clause are expressed in the Explanatory and Financial Memorandum which was attached to the Bill before the Report stage, and although the word "privatisation" is expressed in the side heading to Clause 1, I fully accept that neither the memorandum nor the side heading is part of the Bill. Neither therefore enables the courts to construe the meaning of a provision in an Act of Parliament.
I agree that I should like to be able to explain in a short concise provision such as the one drafted by my

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noble friend exactly what the purposes of the clause are to be. However, not for the first time—and nor probably for the last—I now enter an area which is difficult for me as a layman in debating with my noble friend, with his vast experience of legislation and his most distinguished chairmanship of the Renton Committee on the preparation of legislation.
I am advised that it would be possible, though in some ways undesirable, to express a purpose of this provision by reference to the word "privatisation". The main difficulty about this is that the word "privatisation" is of recent origin—indeed it has only just appeared in the latest supplement to the Oxford English Dictionary—and is not an exact expression. I do not, however, wish to dwell on that point. The main difficulty arises in relation to the body corporate, currently expected to be the National Rivers Authority. That is a body which does not exist, and cannot exist until the main legislation establishing it has received Royal Assent.
The NRA is an integral yet quite distinct part of our proposals for water restructuring and privatisation. However, in so far as it is a body which does not yet exist, it is by no means certain that a reference to it would produce the clarity which is the objective of my noble friend's amendment. If we were to take his amendment we would be committed to the title "National Rivers Authority" without any opportunity to reconsider that. We have no intention at present of changing the name, but we cannot be certain that it will necessarily be considered appropriate right up to Royal Assent of the main Bill. Indeed, your Lordships' House may decide to change the name, as the main Bill goes through.
Lord McIntosh of Haringey: My Lords, if the House is not satisfied with the name, would it not be possible to change the name by changing the provisions of this Bill when the main Bill goes through?
The Earl of Caithness: My Lords, that adds to the complications. If one changes the name and the name is in the Bill without the amendment suggested by my noble friend, there would be a gap when our proposals could not be considered.
To return to the point, the water authorities would lose their powers under the legislation to facilitate the establishment of the new body. I am advised—and the House will recognise that here I am heavily dependent on advice—that we could not be clear about what the National Rivers Authority is if we were to introduce a reference to it in this Bill, without a lengthy explanation of the various powers and functions which it is to have. That explanation is one of the purposes of the main legislation which we are seeking to bring forward at the earliest opportunity. Even if we were to attempt an explanation of the functions, if those functions changed—for example, as the Bill passed through Parliament—then again the authorities would lose their powers, a point I have just made to the noble Lord, Lord McIntosh. It is partly to help us do that that we need the co-operation from the water authorities which this Bill would allow them to give us.
I am sorry to labour this point. Both we and the water authorities take the view that the Bill as drafted
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gives them the powers they need, to the extent that they need additional powers. Clause 1 provides in legal terms for the process of privatisation and reorganisation of the water industry by the creation of a National Rivers Authority. The essence of that process in legal terms is the transfer of property and functions from the relevant public utilities to another body corporate. Subsection (2)(c) provides in legal terms for the detailed proposals about the establishment of the NRA and the formation and flotation of the successor companies. Subsection (6) deals with the fact that the corporate bodies in question—the successor companies and the NRA—have yet to be formed or established.
We have already provided considerable certainty about the proposals to which Clause 1 relates. We have made clear policy statements both on water and electricity. These have set the scene to a considerable extent for the changes we have in mind. The provisions in Clause 1 should not therefore be regarded as being completely open-ended. As we develop our proposals further, we shall, as Ministers, be answerable to Parliament and we shall have to bring proposals before Parliament. That will be a further limitation upon these provisions.
My noble friend suggested that in order to increase the flexibility which he and I discussed between Committee stage and today he could add the words "or other body corporate". I acknowledge the help which my noble friend is trying to give me on this matter.
Lord Campbell of Alloway: My Lords, perhaps I may intervene on a matter of some substance. My noble friend is saying that on his advice the incertitudes of Clause 1 are clarified by proposals that the Government have made that are within the public domain. That may sound all right to a layman but it will not wash in a court of law. It is a total error of presentation on his advice. With the greatest respect to him, it does not meet the point of my noble friend Lord Renton and the noble Lord, Lord McIntosh, or even the rather puny point that I was trying to make. It is plain wrong and his advice is wrong.
The Earl of Caithness: My Lords, perhaps I may come back later to the point that my noble friend has just made as I had intended to deal with it in due course. However, as I was saying, my noble friend Lord Renton kindly offered to help by suggesting an addition to the wording of the amendment, after the words "National Rivers Authority", of such words as "or other body corporate". I acknowledge the assistance that that would give me with regard to my concern for flexibility, but I believe that it defeats part of my noble friend's intention to help the higher judiciary—as he terms them—and does not remove the difficulty of identifying what the duties of the corporate body will be and what functions it will undertake. Those questions will be fully and precisely dealt with in the main legislation.
However, as I have said on many previous occasions, as soon as the proposals for both water and electricity have been implemented—that will be within the lifetime of this Parliament—those powers will become redundant. In conclusion, as regards this amendment and indeed Amendment No. 2, I am

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advised, and have accepted with some reluctance, that it would cast doubt on a fundamental part of our objectives—that of enabling the water authorities to prepare for the NRA. In addition, there are some difficulties with the concept of privatisation. However, notwithstanding that fact, I am also advised that the Bill as drafted provides the industries with all the powers they need and thus will enable the Government to advance two of our most important manifesto commitments.
I appreciate my noble friend's concern and desire to help. Indeed, I also appreciate the remarks made by my noble friend Lord Campbell of Alloway. I am not sure that "appreciate" is the right word. None the less, I take note of what he said when he pointed out that my advice was wrong. Therefore, should my noble friend see fit to withdraw the amendment, it will enable us to consider the matter further. I promise him that I shall seek further legal advice from the ablest source. In any case, I wish to discuss his concerns with him between now and the next stage of the Bill's proceedings.
Lord Renton: My Lords, I thank my noble friend for those last reasonably hopeful words. However, if I may say so with the deepest respect to those who have been advising him—some of whom I have met—I am quite convinced that he must obtain better advice. I am also grateful to my noble friend Lord Campbell of Alloway for stressing the point.
My noble friend Lord Caithness said that everyone knows that there have been ministerial Statements. However, that will not assist him in the courts. I am deeply grateful for the formidable support that I have received from noble Lords on both sides of the House.
I should like to amplify an important point made by my noble friend Lord Nugent of Guildford, who did not mince his words. He rightly said that the Explanatory Memorandum will have no validity in court. In case some noble Lords may wonder why that is so, the answer is a simple one. The Explanatory Memorandum is attached only to the first print of the Bill as it is sent to each House. Thereafter, during the course of its passage through either House, the Bill may be amended and therefore the Explanatory Memorandum may no longer hold good. That is one reason—not the only one—why the courts will not consider it.
I am grateful to my noble friend Lord Balfour for his help but I shall not be drawn by him into the thorny question—if that is the right adjective—of whether sewerage should be combined with other responsibilities. I shall duck that particular issue. Luckily, if I may say so, it does not arise on my amendment.
A noble Lord: Be careful what you duck in!
Lord Renton: My Lords, I return to the valiant effort of my noble friend Lord Caithness. I was glad that he was kind enough to say that he had much sympathy with the amendment of the noble Lord, Lord McIntosh of Haringey, and with the one I moved. He put forward the argument that it would be difficult for the word "privatisation" to be used, in
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this purpose subsection when it is not yet defined by statute.
I do not accept that. The word "privatisation" is, as my noble friend has pointed out, already in the Oxford Dictionary. It has a pretty wide meaning of which the courts would take judicial notice, without having to refer to ministerial Statements. Further, it covers various parts of the process of privatisation which can of course—as everyone knows—be carried out in different ways. So the mere use of the word "privatisation" in explaining Parliament's intention with regard to the Bill creates no such difficulty. I am surprised that he has received contrary legal advice.
I turn now to the use of the words "body corporate". I accept that we shall not have the National Rivers Authority finally set up until there is main legislation. I also accept the fact that there may not in fact be an organisation called the National Rivers Authority, but perhaps some other body corporate. I have already suggested that that point is met and flexibility retained by adding the words "or any other body corporate" to the end of the amendment. I also say, in answer to that point, that the amendment already refers to the fact that there may not be a national rivers authority after all by the use of the word "possibly". Therefore, that issue is already covered in the amendment; but let it be covered again by the addition of those words on Third Reading.
I do not accept that if this purpose subsection were included there would have to be a lengthy explanation added to the text. I think that the suggestion was put as a piece of makeweight advice and should be immediately discarded. I say to my noble friend that not only should he tell his advisers to reconsider the matter but that he should also obtain better legal advice. Furthermore, with the knowledge of what has been said this afternoon, together with the report which will appear in Hansard tomorrow, I hope that he will take seriously the possibility of a purpose subsection along these lines when he considers the matter further. We shall, in any event, return to the issue on Third Reading. However, in the meantime, I hope that by withdrawing the amendment a good purpose will have been achieved. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
4.15 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 3:
Page 1, line 6, at beginning insert—
("( ) Subsection (1) below shall cease to have effect in respect of either water authorities or the electricity boards and the Electricity Council on any date on which Parliament withholds approval to legislation proposing the privatisation of either the water authorities or electricity boards, provided that the subsection shall cease to have effect in respect of either industry on the next dissolution of Parliament after this Act receives the Royal Assent where no such proposals have been approved in respect of that industry.").
The noble Lord said: My Lords, I think it would be for the convenience of the House if we considered Amendment No. 4 at the same time. The amendments deal with another of the deficiencies in

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Clause 1 to which noble Lords have already referred when discussing Amendment No. 1.
The debate which took place in Committee on Clause 1 not only advanced no distance towards elucidating its meaning in respect of the time period in which it is intended to operate but actually made matters worse. As the noble Lord, Lord Diamond, said, it is bad enough that the clause should say:
"The powers conferred by this section … shall be exercisable whether or not Parliament has given any approval on which the implementation of the proposal depends".
That phrase ought to ring alarm bells in the ears of every noble Lord who is concerned with the sovereignty of Parliament and with the clarity of legislation.
The point is that the clause as drafted gives unlimited powers to the Bill, which would persist after the end of a single parliament in the event of a failure of the Government's political will or, indeed, the Government's inability, for any reason, to achieve their privatisation objectives, in such a way that there would have to be a further Act of Parliament by another government, perhaps of a different persuasion, to remove the effects of what is intended to be paving legislation. That cannot be satisfactory.
A government who have something in their manifesto must have the intention of completing the task within the period of one parliament. They cannot introduce paving legislation, which is designed for the achievement of a government's manifesto commitments and objectives, and allow for the possibility of that paving legislation persisting after an election if the government have not achieved their main manifesto objectives. In effect, a government are cluttering up the legislative programme of a future government to no good effect. It is not an acceptable use of parliamentary powers to have powers which persist in that way.
In response to the amendments moved in Committee by my noble friend Lord Williams, the Government said that the amendment would have caused delay in the first implementation of the powers which it is intended to confer. That may or may not have been the case. However, I think that I can claim, without fear of contradiction, that my amendments do not have that effect, and that the powers can come into effect straightaway, or as soon as proposals are put forward, without the delay that the Minister then feared.
The issue with which we are concerned in both amendments is that Parliament should work within the constitutional confines of a single parliament, and that in the end Parliament itself should be able to say, "We want to pursue this matter or not, and if we do not want to pursue this matter, then the paving powers immediately fall". I do not believe that I need to pursue the matter which was debated in Committee any further. Free-standing paving provisions in a Bill of this kind, to my limited knowledge, have no precedent in this form in legislation. It is thoroughly undesirable that the powers should be introduced in this way.
The problem would have been less serious if the Government had responded more warmly and constructively to the amendment moved by the noble Lord, Lord Renton. Since they failed to do so, and
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since it is still a matter for further discussion only and not for greater commitment, it is necessary that the time span of these paving powers should be brought under control. I beg to move.
Lord Renton: My Lords, although I have a great deal of sympathy for the amendment moved by the noble Lord, I feel bound to make several comments about it which he may perhaps find rather less helpful. The first is that, as he has said, it would be much better to have something along the lines of his Amendment No. 2 or my Amendment No. 1. Amendment No. 3 is a fall-back to a weak position compared with the one that we should have had with either of our first two amendments. I believe that the noble Lord accepts that.
I have another difficulty which is somewhat technical. I only hope that I can accurately describe it to your Lordships. It is that we must envisage that between the Bill receiving Royal Assent and the dissolution of this Parliament a great deal of activity will have taken place in the use of the powers granted by Clause 1. That is the assumption that we must make.
We must assume one of two things—that at the dissolution of this Parliament the Government change their mind and, not having had any main legislation, decide not to have the main legislation on this matter in the following Parliament. I believe that that is unlikely. The other possibility is one which, of course, the noble Lord, Lord McIntosh, would not expect me to relish, and that would be a change of government after a general election following dissolution. If the amendment moved by the noble Lord became part of the Bill, anything that was being done in pursuance of the Bill would have to come to an immediate stop even though some of it was only half done and even though half doing a particular thing might cause great confusion. So although it is tempting to say, "Let us in any event have a time limit", we must consider the consequences of suddenly having, so to speak, a guillotine on the exercise of the powers granted by Clause 1.
I could see that even another government coming into power and finding that position would find a state of great confusion which they might wish had been avoided. For that reason, I have a serious doubt as to the technical practicality of the result of the amendment.
Lord Ezra: My Lords, while I am of course impressed with the argument put forward by the noble Lord, Lord Renton, I must say that right from the start the clause has caused most of us a great deal of concern. I entirely agree that if the amendments put forward by the noble Lords, Lord Renton and Lord McIntosh, earlier had been accepted, there would be less reason to press for some time limit; but without a clearer definition of the objectives, and with a totally unlimited time scale, I feel that we shall be passing legislation which will have been far too broadly drawn to be appropriate for its purpose.
I am convinced by the argument advanced by the noble Lord, Lord McIntosh, that the paving legislation, which is what this purports to be, should be drafted to demonstrate that it is paving the way for other legislation which will no doubt be quickly

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brought forward by the Government in pursuance of their objectives. Unless we can look forward to some acceptance of the principle behind the previous amendments, we should press now, or at a later stage, for some limitation on the time scale.
The Earl of Caithness: My Lords, I have to confess to the House that I fear I was a little over-hasty at an earlier stage. If your Lordships would look at col. 1262 of 17th March you will see that I commended the Opposition for the early time at which they had put down their amendments. Alas, that has not been continued at this stage.
The noble Lord, Lord McIntosh, chided me for not being more helpful on the previous amendment. I thought that I was as helpful to the House as I could have been in view of the persuasive arguments that I heard from all sides.
I shall now speak to Amendments Nos. 3 and 4. Noble Lords will recall that at the Committee stage we debated a number of amendments and various noble Lords expressed concern about the breadth of the powers conferred on the water and electricity industries by this Bill. Related to those concerns were anxieties that the Bill did not spell out the purpose for which the powers were being conferred. That is the subject of other amendments on the Marshalled List.
At the Committee stage, the noble Lord, Lord Diamond, moved an amendment which would have imposed a time limit of 1st January 1990 on the exercise of the powers in the Bill. Indeed, he took that amendment to a Division and was defeated by 114 votes to 70. That timetable was impracticably short, as I believe the noble Lord himself recognised. I made clear in my reply to him the importance to the Government of getting on with the business of privatising these major industries. We have never envisaged that these powers would be needed for long, and once the main privatisation proposals are through the powers will of course be redundant.
The two amendments moved by the noble Lord, Lord McIntosh of Haringey, Nos. 3 and 4 on the Marshalled List, also set a time limit on the exercise of the powers in Clause 1. Amendment No. 3 provides that this limit would arise if Parliament rejected our proposals for the privatisation of either the water authorities or the electricity supply industry or at the next dissolution of Parliament, whichever of these events occurred first.
There are technical difficulties about this amendment which relate to the definition of privatisation and the relationship between privatisation and the establishment of the NRA. These are difficulties which we have already encountered in considering the first amendment and which I shall be looking at most carefully between now and another stage.
Putting these technical considerations to one side, however, the amendment would provide that if the main legislation on our proposals for either of these industries failed to receive the approval of Parliament and this occurred sooner than the next dissolution of Parliament, then the powers given to those industries by Clause 1 would be withdrawn. I can assure your Lordships that we are confident that our main legislative proposals when introduced will commend
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themselves to both Houses and that they will be carried through to approval.
It cannot, however, be entirely beyond the realms of possibility that the main legislation will not complete its passage through to approval, for example, because we ourselves chose to withdraw it in order to put right some unforeseen defect. But we would not want such an event to deprive the utilities concerned of the powers to prepare for the proposals which we nonetheless wish to carry forward.
The other element of Amendment No. 3, and the effect of Amendment No. 4, is to provide that the powers in Clause 1 should lapse at the next dissolution of Parliament. I feel that I should underline once again our firm expectation that the process of legislation will have been completed well before the end of this Parliament and that there will by that time be little still to be done to complete the implementation of our proposals. I have to say, however, that even so we should not be prepared to see the flexibility of the provision in Clause 1 cut back by the introduction of the time limit which these amendments propose.
As your Lordships know, this is a Government who have a full and challenging programme which they intend to put into effect during the term given them by the election last year. We all know, however, that Parliaments may have variable life times. The experience of the last 25 years has demonstrated that fact beyond peradventure.
We are committed to making the best possible progress with legislating and carrying out our proposals for the future of the water and electricity industries. We shall best achieve this object if through the Bill we give those industries the powers that they require and the flexibility in their application that we consider appropriate. These two amendments would reduce that flexibility, and my noble friend Lord Renton highlighted this. He showed that far from making difficulties for a future government, which the noble Lord, Lord McIntosh, indicated might happen, having no time scale would be a benefit to a future government. I must therefore hope that the noble Lord will withdraw these amendments.
Lord McIntosh of Haringey: My Lords, I have seldom heard such a stumbling argument put forward with such confidence. The noble Earl seems to think that Parliament is the poodle of the Government and that, the electorate having expressed a wish by electing a government who include in their manifesto the commitment to privatisation of water and electricity, somehow that ensures that that will be achieved. The Minister has not even convinced expert opinion on his own Back Benches that he or his Government can draft Clause 1 of a paving Bill to provide for water and electricity privatisation. If they cannot do that, what confidence can we have that the Government will be able to draft the main legislation for the privatisation of water and electricity?
My noble friend Lord Williams of Elvel, both at Second Reading and in Committee, pointed to the horrendous accounting difficulties that there will be in valuing the assets over a sufficient period to provide an adequate prospectus for the water and the electricity industries. This is particularly true for the

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water industry, part of whose assets are to be transferred to a National Rivers Authority. There was no satisfactory answer from the Government Front Bench to either of those points. There has not been one up till now, and there is no indication that the Government have even thought through, let alone found an adequate solution to, the problems which have been raised by noble Lords on this side of the House and the problems of drafting and clarity which have been raised by the noble Earl's own expert colleagues.
Under those circumstances, I am not in the least convinced by the argument put forward by the Minister. I do not think that he has in any way countered the point which I made, which is that there is a danger which must not be discounted that at the end of this Parliament there will be no completed main privatisation legislation; that there will be a government following a general election who will have different priorities and different ideas of what is proper but that the paving legislation which is now proposed will still be in existence and will have to be repealed. That is not a satisfactory situation and I do not believe that this House ought to allow it to continue in legislation.
However, the noble Earl has made certain criticisms of the wording of the amendment which I shall have to read very carefully before considering what to do at a later stage. In view of those criticisms, it is appropriate that I should beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 5:
Page 1, line 6, after ("proposing") insert ("to any utility referred to in this subsection").
The noble Lord said: My Lords, I think I can move this amendment very quickly. I hope that, since it was included in the amendment of the noble Lord, Lord Renton, Amendment No. 1, and he did not criticise that aspect of Amendment No. 1, the noble Earl will accept the justice of this amendment. I am sure that the noble Lord, Lord Renton, himself, having included a similar phrase in Amendment No. 1, will have no difficulty in supporting this amendment.
The argument here is that a proposal is not identifiable in any meaningful way to the courts, to the utilities themselves or to the general public unless it is actually made to somebody. I do not want to go over the arguments again about Ministers making proposals in their bath, but there is a valid point here. If a proposal is to mean something it must be expecting something of somebody or must be showing an intention to do something to or in conjunction with somebody. The obvious recipient of a proposal must be the utility referred to in this subsection. I hope therefore that since this aspect of Amendment No. 1 was not subject to any criticism, the Minister will have no difficulty in accepting Amendment No. 5. I beg to move.
The Earl of Caithness: My Lords, I recognise the spirit behind this amendment, which in seeking to define more closely what are the proposals in Clause 1 provides that they should be proposals made by the
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Secretary of State to the utilities concerned. A recurrent theme of the response which I have made to points raised by your Lordships both today and at the Committee stage of this Bill has been our wish to remove uncertainty about the ability of the water and electricity industries to act in relation to our proposals, so that they can get ahead with their preparations.
Of course they must know what they need to prepare for. I can assure your Lordships that we have established a very close dialogue with both industries to explain our intentions to them, and indeed to receive their advice and comment on those intentions. That dialogue will continue as we move towards the main legislation and, if it is approved by Parliament, towards its timely implementation.
It is a dialogue of fundamental importance. Nonetheless, it would in my view be neither necessary nor appropriate to restrict the proposals referred to in Clause 1 to the confines of this dialogue. The White Papers of February 1986 on water, and February 1988 on electricity, and the policy papers on the National Rivers Authority, have been major expositions of our proposals—but they were not statements narrowly addressed to the industries concerned. They went to a far wider audience.
I would ask your Lordships as well to look ahead to the expression of our proposals in the legislation which we expect to introduce as soon as possible. That legislation will be presented to Parliament. It will not be addressed to the water and electricity industries. It may be that the legislation is amended during its passage through Parliament, with the result that it incorporates different proposals by the Secretary of State. The water and electricity industries will need to be able to act quickly in relation to such amended or new proposals, and to require that the proposals should be reported to the industries in a distinct procedure would be unnecessary and could well delay their response.
Nonetheless, the noble Lord, Lord McIntosh of Haringey, did make a valid point about the connection with the amendment of my noble friend—Amendment No. 1. For that reason I should like to look at this amendment in connection with the first amendment. I hope that on that basis the noble Lord will withdraw this amendment.
Lord McIntosh of Haringey: My Lords, I am not convinced by the early part of the Minister's argument. But in view of the commitment that he made in his last sentence to consider the amendment in conjunction with his reconsideration of Amendment No. 1, I think it is appropriate that I should beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 6:
Page 1, line 6, after ("proposing") insert ("in a published form laid before both Houses of Parliament").
The noble Lord said: My Lords, with Amendment No. 6 I wish to speak to Amendment No. 7. We are ending up with a less and less satisfactory means of trying to get the Government to say what they plan to do and to protect the public in relation to what we understand to be the Government's own intentions.
But there is an important point of principle here as regards Parliament which was not dealt with when we discussed previous amendments. I do not conceal my view that Amendment No. 6 which states that the proposals should be:
"in a published form laid before both Houses of Parliament"
is preferable to Amendment No. 7 which states that they should be placed in the Libraries of both Houses. But if the Minister were sympathetic to Amendment No. 7 but not to Amendment No. 6 I should be very prepared to moderate my demands for parliamentary responsibility to that extent.
The issue here is of very great public importance. It is the issue of the right to know. It is not a purely theoretical issue. We have seen within the past two months a very regrettable example of negotiations and proposals which have not been made public and which have resulted in a conclusion which is in the view of many of us totally unsatisfactory. I refer of course to the takeover of Rover by British Aerospace.
The House will recall that when that happened the Secretary of State for Trade and Industry simply made an announcement that he was permitting discussions to take place and that he was preventing discussions from taking place with any other bidder for the Rover Group. Those discussions took place entirely in private and when the conclusion was reached without any other bidder having had an opportunity to put formal proposals the result was that the British Aerospace bid was accepted by the Government on behalf of Rover. The City and many of your Lordships felt that the deal was absurdly generous to British Aerospace.
That is the kind of result which one can obtain if one has secrecy in negotiations and if one maintains the inability of other interested parties to know what the negotiations are and to submit counter proposals to them. There is a serious danger that we might reach the same unsatisfactory result if negotiations are kept private in this way for the disposal of the electricity and the water industries.
The Bill is not concerned in itself with the detail of the final deals which will be struck for privatisation. That is a matter for the main legislation. However, we are concerned with the powers for the utilities which must inevitably involve expenditure on their part and which as the noble Lord, Lord Diamond, said in Committee involves in effect expenditure without any form of parliamentary control.
The purpose of the amendments is to impose some kind of parliamentary control and some kind of right for the public to know what is actually being negotiated so that things are not carried on entirely behind closed doors. I hope that the amendments will commend themselves to all of your Lordships who have a concern not only for public accountability but also for good business practice in negotiation. I beg to move.
4.45 p.m.
Lord Renton: My Lords, there is a little bit of a dilemma here. I agree with the noble Lord, Lord McIntosh, that it is important when public
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property—because that is what many of these bodies are—is going to be the subject of proposals by the Secretary of State as regards the change of its status, powers and functions that the public should know what is happening. A bit of glasnost—I hope I pronounce it correctly—would not be a bad thing in matters of this kind.
On the other hand, it is a question of at what stage the public should be told. That is the dilemma. Under either of these amendments the information would have to be presented in a published form. I presume that means that it would be available on public bookstalls or at the Stationery Office or that some press notices would be issued. That is the most usual way of doing it.
Under this provision any proposal, however tentative it may be, would have to be revealed. I can imagine preliminary negotiations taking place on a preliminary proposal. I really cannot see why the Minister or any water authority should be obliged at that stage to have the matter laid before Parliament or put in the Libraries.
But when things have reached the stage at which there is virtual agreement in principle, then I think that the public should have a right to know what is happening. Although I do not think that my noble friend could accept either of these amendments, I should like to make a helpful proposal. My suggestion can best be attached to Amendment No. 7.
Frequently the Government give undertakings to provide information for Members of each House of Parliament by laying copies of something or other in the Library. The Library is full of such information which has accumulated over the years. Very often it is much less important information than would come out of this Bill and out of any proposals made. So if my noble friend were to say that he would consider having some form of information made available to the public at some stage when agreement has been virtually reached as to what is to be done, that would be commendable and I would support it; but it does not have to be written into the Bill. We do not normally write that sort of thing into Bills.
As to Amendment No. 6, there the noble Lord, Lord McIntosh, has hit on something which is sometimes written into Bills. But for matters to be laid before Parliament which are of a merely tentative kind and still subject to some confidential negotiation does not seem to me to be a desirable process at all. Therefore, although I believe it is good and important that the noble Lord has moved these amendments in order that we can get some information from time to time as to what is happening, I do not think that either of his amendments is necessary to achieve that purpose.
Lord Ezra: My Lords, while I agree with the noble Lord, Lord Renton, that the definition of the word "proposal" is a difficult one and that if one took it too far it might just be a broad idea which the Minister wanted to discuss with the chairmen of the relevant bodies, nevertheless we are talking here of two vital issues which are of grave concern to the nation and certainly of grave concern to both Houses of Parliament as the legislation goes through. So I

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would support the concept of some commitment to openness at the earliest possible opportunity. I would personally be satisfied with some such commitment from the noble Earl if he were prepared to give it.
The Earl of Caithness: My Lords, I understand that the intention behind Amendments Nos. 6 and 7 on the Marshalled List is to secure some greater certainty about what are the proposals in relation to which Clause 1 of the Bill confers powers upon the water and electricity industries, and in particular to ensure that those proposals must be contained in a published document or documents made available to Parliament.
Your Lordships will know, without the need for my rehearsing at length the history of our intentions for these industries, that we have made a number of policy statements to which I referred on a previous amendment for electricity and water. There has been considerable discussion of our intentions in both Houses of Parliament on the basis of these policy statements. While these statements have indeed documented the fundamental stages in the formulation of our proposals for these industries, your Lordships will be aware that we are now engaged in the work of preparing the necessary legislation and that we are in dialogue with the industries in that process.
We do not claim to have had perfect wisdom from day one in forming our intentions for these industries and we may well see the need to make further proposals, not least because of insights that emerge from this process of dialogue. We shall make any such further proposals publicly known in due course, and no later than when the substantive legislation is passing through Parliament. However, we shall want the water and electricity industries to be in a position to act in relation to any such further proposals without the delay that might be involved if those proposals had first to be set down in a published document and made available to Parliament. Their preparations for our proposals must flow smoothly and expeditiously. I believe that these amendments would seriously threaten disruption of our programme and would introduce uncertainty.
I was therefore pleased by what my noble friend Lord Renton said when he suggested that the Library could be the place to put documents and that indeed it was full of such information. I can tell the House that three major letters written following preliminary proposals and discussions on further proposals to the water undertakers have already been put in the Library. Indeed, it is our policy that when we write following negotiations to the water authorities and when we have reached an agreed stage, or when we have agreed as far as possible, we then put information in the Library. But if we were to put all our proposals in the Library or to bring them before the House I do not see how one could possibly continue any sort of negotiation. I just wonder how the noble Lord, Lord Ezra, would have conducted the job he had if every single negotiation he had with his own board or with the unions had first to be laid before Parliament.
We realise the need to be open and we realise there must be some confidentiality while the proposals are being worked out, but I can assure the House that
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when we have got to that stage and we write formally to the water authorities and to the electricity industry, we will put copies in the Library.
Lord McIntosh of Haringey: My Lords, I have two basic points to make in response to that. The first is that any difficulty about the definition of proposals is not of our making but has been caused by the Government in putting forward this legislation. The fact is, as became clear at earlier stages of the Bill, that there is no adequate definition of what the Government mean when they use the word "proposing" in the first line of the Bill and therefore there is no adequate definition of the proposals.
If there had been a definition it would have been possible for us to put down more precise amendments, which would have indicated at what stage it was appropriate for the public to have the right to know, to which I referred. Clearly something which is a matter of discussion around a table does not have to be put in a fully fledged published form at that stage. Nobody is suggesting that. If the Government had adequately defined the proposals in the first place we would not be in the difficulty in which we now find ourselves in drafting these amendments.
Secondly, the analogy with the negotiations of the noble Lord, Lord Ezra, when he was at the National Coal Board is not a very sound one. What we are talking about here is taking assets which are at present the property of all our people—the water and electricity industries—and disposing of them to bodies corporate, privatising them, even though the Minister will not accede to the word being used in legislation. It is when the family silver is being sold off in order to pay for the groceries, as the noble Lord, Lord Diamond, said at Committee stage, that the public has a particular right to know the proposals at as early a stage as possible, because the public, which is being deprived of its family silver, must have the opportunity to say, "Come on, this approach to disposal is not satisfactory to us", even at a stage where no firm conclusion has been reached.
We must be grateful for the small concessions which the Minister made in replying to the debate. He said that as soon as possible papers, not necessarily in a published form, would be made available in the Libraries. I accept those assurances, and they are certainly enough to make me say that I do not wish to divide the House on these amendments. However, I must stress that when it is our assets and the disposal of them that we are concerned with, as soon as the Government take a position in principle about how the assets are to be disposed of, that is the stage at which the public has the right to know—not at the stage where a commercial agreement has been reached with the water or the electricity authorities. I hope that will be borne in mind when the Government make their detailed policy available for disclosure.
I am grateful to the noble Lord, Lord Renton, for his suggestion of a more limited and less threatening form of words for our amendments. If we think, on considering his words and those of the Minister, that it is appropriate to redraft the amendments, we shall certainly do so for Third Reading. In the meantime, I beg—
Lord Renton: My Lords, before the noble Lord sits down, in view of the undertaking that this information will be placed in the Library, which is the point that the noble Lord was really after in his Amendment No. 7, is it necessary to trouble all of us further on that point? I should think he has got what he is really after.
Lord McIntosh of Haringey: My Lords, unfortunately the undertaking was heavily qualified with comments concerning the stage at which the papers would be placed in the Library. I said that I would read what the Minister had said and what the noble Lord, Lord Renton, had said and see whether or not I am as reassured as he is. If I am, nothing will happen; if I am not, we shall introduce suitable amendments at Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 7 not moved.]
The Deputy Speaker (Lord Aylestone): My Lords, in calling Amendment No. 8 I should point out that the word in the first line should be "transferred".
5 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 8:
Page 1, line 7, after ("transferred") insert ("on an equitable basis, having regard to accepted accounting procedure").
The noble Lord said: My Lords, I apologise for the error in the amendment. The amendment follows a lengthy discussion at Second Reading and at Committee stage between the noble Lord, Lord Belstead, in the first instance, and my noble friend Lord Williams of Elvel, about matters of accounting procedure which I am no more qualified to discuss than I am to discuss matters of law.
I notice, in reading Hansard of the Committee stage, that the Minister referred on 17th March at col. 1280 to the considerable difficulties which he anticipated if local water authorities and electricity authorities were forced to maintain an accurate balance sheet and profit and loss accounts according to established accounting procedures. I was particularly interested to hear the Minister yesterday make great play of the deficiencies of the West Yorkshire County Council in failing to keep an asset register of its properties. Surely, what is sauce for the goose is sauce for the gander. If there are difficulties in maintaining asset registers for a county council and if that is deplorable, then surely it is deplorable that the same criterion should not apply to the water and electricity authorities.
At Committee stage my noble friend Lord Williams sought to establish that the transfers should be at a fair value. I appreciate that there could be difficulties about the meaning of "fair value". We are attempting to overcome some of the arguments put forward by the Government in resisting the idea of a fair value. We are now restricting that to a matter of accountancy practice.
I cannot see that there is anything unbusinesslike or counter to the spirit of the Bill in inserting that sort of provision. On the other hand, it is a necessary
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protection of the public that in such disposals of assets there should be not only proper accountancy procedures—whether that is done on an historic cost or a current cost basis is immaterial; it should be done in the same way for all such deals—but also that they should be on an equitable basis which protects the public interest. I hope that the amendment will not be thought controversial and will commend itself to the House.
The Earl of Caithness: My Lords, the amendment requires the transfer of the property and functions of a utility to have regard to accepted accounting procedure. At Committee stage on 17th March I said that the starting point for the accounting procedure for any transfer would be that already existing in the water authorities. As the noble Lord, Lord Williams of Elvel, then suggested, that is historic cost accounting with an addition of current cost accounting.
Water authority accounts have been prepared for a number of years now using normal conventions under the Companies Act and following all relevant statements of standard accounting practice. That required the auditors of each authority to certify that the historic cost accounts give a true and fair view. The auditors have also been required to certify that the current cost accounts have been prepared in accordance with recognised accounting principles. The auditors have provided their certifications and have not sought to qualify them in any way.
Questions of details of the transfer are matters which are most appropriately addressed in discussions on the subsequent Bill which will make provision for the actual transfer. As your Lordships will remember from the privatisation of British Telecom, British Gas and others, no detailed proposals for the terms of transfer will be made until much nearer the time of transfer. There is no way that a utility can know now whether the proposals, when they eventually emerge, will satisfy the criterion set out by the noble Lord, Lord McIntosh. It puts the utilities in an impossible position of having to make a judgment which cannot be made. Potentially it puts the courts in a position of having to confirm or overturn the utility's judgment, having no principles in the Bill on which to determine what an equitable basis would be in that context.
Therefore, I must say to the noble Lord that it is premature to write such a provision into the Bill. Of course it is a consideration which must be taken into account later. That will be accomplished in the main Bill which will follow the present Bill as soon as possible. It is then that we should be looking at such matters.
Lord McIntosh of Haringey: My Lords, I cannot accept that. It is true that the details of deals will be properly considered in the main Bill and will probably be properly concluded when the main Bill achieves parliamentary approval, if it does. However, the legislation provides specifically for the division of the functions of both water and electricity authorities. In the case of water authorities there is the division of functions between the successor bodies corporate and the National Rivers Authority. In the case of the electricity authorities, there is the division

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of responsibilities, functions and assets of the Central Electricity Generating Board and the Electricity Council, as well as the regional electricity boards.
In both cases, the division of responsibilities has enormous environmental implications which cannot be dealt with in the course of day-to-day negotiations of particular deals. The environmental consequences of any sort of energy production or indeed of the supply and distribution of water are thrown into the air, in the latter case by the provision for a national rivers authority.
The Government cannot leave it until the main legislation to give detailed thought to how that division will be made. There must be some assessment of the environmental impact of the division of responsibilities between the new bodies corporate who are responsible for water and the National Rivers Authority. Because the issue has already been raised and because the Government have made a decision in principle about that matter, they must come clean about what it means now. In order to tell the public and Parliament what it means now, the Government must find some way of putting a figure on the impact of the division of powers. That means that there must be some equitable solution on accepted accounting procedures.
I do not believe that the Minister's reply has in any way obviated the need for the amendment. I accept that there may be difficulties about the precise technical definition of "accepted accounting procedures". However, I hope that the House will not feel that all those matters can be left to the main Bill. At this stage of the Bill I can only invite the Minister to think again about what has been said in the hope that he will come back with a suggestion which is more effective at Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 9:
Page 1, line 13, at end insert ("or proposing any alteration to it for the purpose of the orderly and effective implementation of its functions").
The noble Lord said: My Lords, this amendment has been produced after very careful reading of what took place at Committee stage and in recognition of the fact that the Government had some valid objections to the amendments moved at that time. It is certainly true that if there were complete freedom for the authorities concerned to propose any alterations they liked to any of the proposals which the Government put forward, one could envisage a state of anarchy in which negotiations could continue for ever without reaching a conclusion.
At Committee stage the noble Earl made a distinction between what he described as "the basic proposals"—although of course the word "basic" does not occur in the Bill—which are the creation of the public limited companies and the National Rivers Authority, and "the related proposals", which are the more detailed proposals concerned with the transfer of undertakings. He said that so far as concerned the related proposals it was possible for the authorities to put forward alterations to them but not to the basic proposals. In other words, they could not object in
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principle to the object of the Government in putting forward this legislation in the first instance.
I accept that it would be wrong for the authorities to object in principle to the Government's intentions and therefore to hold up negotiations. However, I put to your Lordships that the distinction made between basic and related proposals is impossible to sustain in practice. Looking at the attempts at main legislation, it is clear that the proposals are inextricably interlinked and it will not be possible for us to say that this one is a subsidiary matter which is subject to negotiation as distinct from a basic matter.
I am convinced that when we come to look at the main legislation and any amendments to it, every amendment that we put forward to seek to improve the detail will be described as a wrecking amendment which seeks to overturn the general principle of the Government's legislation. That has always been my experience in the past and I am quite sure that it will happen again.
Our proposal, which we believe is constructive, is an alternative way of approaching the matter. We are saying that rather than being in relation to the principle, the restriction on the power for the utility to propose alterations shall be that the alterations should be:
"for the purpose of the orderly and effective implementation of its functions".
I suggest to the House that in fact this is a drafting amendment which improves the ability of the Government to achieve their objectives in a way that the distinction made between basic and related proposals does not. I beg to move.
Lord Renton: My Lords, in moving this amendment the noble Lord has made his intention perfectly clear but I wish that the amendment itself were as clear. The difficulty arises in relation to the word "it" which could refer to "facilitating the implementation". Weight is lent to that interpretation because the amendment itself refers to effective implementation. So perhaps the word "it" could refer to implementation, or to the proposal for the transfer. The amendment moved by the noble Lord does not make clear which of those two possibilities is intended and I do not think that we ought to add ambiguous detail of this kind to the Bill.
The Earl of Caithness: My Lords, as the noble Lord, Lord McIntosh of Haringey, has just said, we debated a similar amendment at Committee stage, when the noble Lord, Lord Williams of Elvel, sought to give the water authorities and the electricity supply industry powers to seek modification of our proposals for privatisation and restructuring. The House will recall the distinctions that I drew then between the two kinds of proposals on Clause 1. I am grateful to the noble Lord, Lord McIntosh, for realising the strength of the Government's argument.
First, there are proposals for transfer as referred to in subsection (1)(a) which for the sake of clarity I shall refer to here as "basic proposals". These are our fundamental proposals, for example, to set up the NRA and a series of water and electricity utility companies. Then there is the second category of proposals, the "related proposals" referred to in subsection (1)(b) and subsection (2), which are

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essentially more detailed proposals and which relate to the various matters referred to in subsection (2).
A number of basic proposals have already been made by the Government and more will no doubt follow, but the essence of the basic proposals is that by the time they are made they constitute firm statements of the Government's intention to transfer property or functions to some other body. In the Government's view these are not matters on which it is appropriate for the industries to be given powers to seek to change the nature of our objectives. Of course in this Bill there are many areas where we contemplate that the industries may wish to change our mind. In the more detailed area of related proposals it is right that the industries should have the power to do so.
I recognise that in moving his amendment the noble Lord is trying to be helpful to the water industry. He says that the power to seek an alteration to government proposals—such as his amendment would secure—would ensure the orderly and effective implementation of the industry's functions. In our view, on the structure of the clause as it stands and in particular considering the definition of "related proposals" as in subsection (2)(b), the relevance of the kind of representations that the industries might make to attempt to persuade us to change our minds would be to our related proposals rather than to our basic proposals. For example, if the industries want to propose that the function should be discharged in a particular way in advance of transfer so as to facilitate transfer, that would certainly be open to them under the clause as drafted. That was the very point on which my noble friend Lord Renton put his finger.
However, I repeat that the basic proposals are something to which the industries and the Government must devote all their energies in the coming months and years, and the industries should not be diverted by attempting to persuade the Government to change their mind. On the related proposals of course the industries should and indeed are making suggestions and proposals to the Government which at the moment we are discussing. I believe that that is right and equitable.
Lord McIntosh of Haringey: My Lords, I am not wildly impressed by appeals to the basic structure of Clause 1, which has already come under very serious attack from all parts of the House. However, I appreciate the point that has been made by the noble Lord, Lord Renton, that there is a possibility of ambiguity in my amendment, and under the circumstances I think it better to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
5.15 p.m.
Clause 3 [Provisions regulating the charges of all water undertakers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 12:
Page 4, line 7, after ("liable") insert ("where the premises have been occupied, or water consumed, by persons with no right to occupy
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those premises, in circumstances where he could not reasonably have been expected to give notice of the termination of liability or").
The noble Lord said: My Lords, this has now become a probing amendment because, since I tabled the amendment—and perhaps it should have been put down later rather than earlier—I have seen the letter written to my noble friend Lord Williams of Elvel by the noble Earl concerning the issue of squatters and their responsibility for paying water charges. It seems to me that in his letter the noble Earl was making a very valid point that, if there is a risk of squatters breaking into the house, so far as possible advance notice should be given to the water authorities that one is going away in order that the supply can be discontinued. In that way the supply is not made available to squatters and the charges will not fall on the householder.
The discussion on this point that took place in Committee concentrated on the occasions when occupiers (those liable to pay water charges) cannot anticipate that they will be away for a signficant period of time and therefore cannot provide the necessary notification to the water authorities. Examples which were given related to an occupier who had been taken unexpectedly to hospital.
The point that the noble Earl makes in his letter to my noble friend is that the relevant clause of the other Bill is concerned not with temporary breaks in occupation but with the permanent cessation of occupation. He argues that in the case of permanent cessation of occupation there ought not to be any difficulty in the occupier giving due notice to the water authority. If that is the case, and if that is all to which this clause refers, I shall be happy to withdraw the amendment. However, I think that it would be helpful if the noble Earl set this matter out for the benefit of all Members of this House. I beg to move.
The Earl of Caithness: My Lords, the noble Lord, Lord McIntosh, could not have put his amendments down much later. However, I am grateful to him for the thought of the help that that might have given—even greater help than receiving them late last night.
Lord McIntosh of Haringey: My Lords, perhaps I may say that they were put down on Tuesday night. They could have been available to the noble Earl first thing yesterday morning.
The Earl of Caithness: My Lords, as the noble Lord knows, we were deep in discussion on local government yesterday.
The question of an absent occupier's liability for measured charges when his property is taken over by squatters was raised by the noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Airedale, during the Committee stage of the Bill. As the noble Lord, Lord McIntosh of Haringey, has reminded the House, I subsequently wrote to his noble friend on 11th April setting out the position in more detail. I am happy to confirm to him that a copy of the letter is in the Library. However, as he so rightly says, it might be for the convenience of the House if I set the position out for the record.

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This is not a problem unique to householders who pay for water services by meter. Nor is it limited to water services. The same point arises with the other utilities. However, with regard to water, the best advice that I can give to any owner or occupier going away for a long period—besides making sure that the property is properly secured—is to ask their water undertaker temporarily to disconnect the water supply during their absence.
Under Section 79 of the Third Schedule to the Water Act 1945, customers must give undertakers not less than 24 hours' notice in writing if they wish their supply to be disconnected. Provided that this is done the customer is then no longer liable for water supply and drainage charges until reconnection is made, but he could still be liable for the standing and environmental services charges. A small charge would be made for disconnecting a supply, but it could be well worth an occupier's while to take this precaution. If squatters subsequently move into the property and reconnect the supply themselves the water undertaker has to take steps to recover the charges from the squatters. The undertaker may also decide to disconnect the supply again.
If on the other hand the occupier decides not to ask the undertaker to disconnect the supply before he goes away and subsequently discovers that squatters have moved into the property, apart from taking steps to evict them, it is still possible to ask for the supply to be disconnected. As before, the occupier would not be liable for any charges incurred after the date of disconnection but would still be liable for any charges up to that date. The recovery of those charges would be a matter of civil law between the occupier and the squatters.
If in any case the undertaker, having been asked to disconnect a supply, fails to do so, or does so in such a way that the squatters can reconnect the supply, the undertaker may be liable to the absent occupier for any damage arising out of the failure or omission. And, as I say, in such cases the undertaker could not seek to recover from the absent occupier charges for water supplied after the date by which the disconnection should have been made.
As I mentioned during the Committee stage debate, these issues go much wider than the scope of Clause 3(6) of this Bill, which is about liability for charges after a consumer with a meter ceases to occupy a property without giving the required two working days' notice to the water undertaker. In other words, this provision is not about temporary breaks in occupation. In a case where cessation of occupation is to be permanent we do not consider it is too much to ask the occupier to give two working days' notice, if further charges are to be avoided. Having given that full explanation, I hope that it helps the noble Lord.
Lord McIntosh of Haringey: My Lords, I believe that it was worth putting the amendment down in order to achieve that statement, for which I thank the noble Earl. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Provisions relating to meters etc.]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 13:
Page 6, line 35, after ("meters") insert ("including provision for the installation of meters which are easy to test").
The noble Lord said: My Lords, in moving Amendment No. 13 I should like to speak also to Amendment No. 14.
I apologise to the House for having omitted the word "water" in my draft of Amendment No. 14. I did not wish to demand the regular testing of electricity meters where the technology, although far from perfect, is rather better established than for water meters. I am not suggesting for a moment that we should be proposing the testing of water meters every week, every two weeks or even every year. The design life of a piece of equipment such as a water meter can readily be calculated, usually by the manufacturer. It is almost always the life of the most vulnerable part. There should be no difficulty in establishing the reasonable interval at which regular testing should be carried on.
However, the Bill is concerned with the introduction of something which is in most cases new to this country: the preparation in effect for the compulsory metering of water supply as an alternative to water rates or the possibility of the compulsory metering of water supply. It will affect a very large number of people. Some will be happy to see it. Some will be happy to participate in trials. But some will be resentful and will resist the imposition of water meters. Under these circumstances it seems only reasonable that all efforts should be made by the water authorities which will introduce these meters, first, to provide meters that are easy to test, and, secondly to provide for the testing of them.
At Committee stage the noble Earl made a very helpful comment when he said that the water authorities were prepared to undertake—I think that the phrase was—a confidence check. I believe that that is a step in the right direction which should be welcomed. It is to his credit that the Government have succeeded in getting the water authorities to agree to that step, which will go some way to alleviating the fears of customers who are having water meters thrust upon them.
However, it would be helpful if we were able to go further and to agree that water authorities should do their best to make the meters easy to test and to provide for regular testing at an interval dictated by the design life of the equipment. I beg to move.
The Earl of Caithness: My Lords, as I explained during the Committee stage of this Bill, in normal conditions modern water meters are reliable and accurate. When they fail it is usually because the piston inside the meter is jammed with particles of matter. This causes the register to stop moving but allows water to pass, though a reduced flow. This of course favours the customer. The flow may be reduced, but nothing is added to the meter reading.
Most tests of suspect meters reveal that there are problems with the plumbing; for example, dripping taps and leaking supply pipes. This can usually be proved simply by turning off all of the taps and

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checking whether the register on the meter is still moving.
Regular testing of meters in service will serve only to increase costs, which would need to be, one way or the other, passed on to the consumers as a whole. This would be particularly noticeable in the case of testing water meters because water services as a commodity are relatively cheap. So the cost of an annual test would be a significant addition to the current average annual water services charge of, say, around £100. I should add that government in consultation with the Water Research Centre and the Local Authority Co-ordinating Body on Training Standards are looking at ways of keeping the cost of testing meters to a minimum by simplifying the procedures to be used. This may reduce the cost to about £15 to £30. But, even so, we do not think that additional costs are justified in relation to the possibility of finding a faulty meter.
Nevertheless, as I shall explain when we reach Amendment No. 16 which is also to be moved by the noble Lord, the Government agree that customers should have full confidence in the accuracy and reliability of water meters and that there should be proper procedures for having them tested in use when the customer suspects that they are faulty and for adjusting bills where a meter is proven to be inaccurate. The Government intend to make regulations under Clause 5 and also under the weights and measures legislation covering these issues.
5.30 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Earl for that answer which I find very helpful. In the last year, and indeed during the last weeks, I have had experience of meters both freezing up and exploding due to intense cold and also jamming in the way the noble Earl described. This is a serious matter. Where meters are extensively used, the experience of trading standards officers from local authorities—this time I do mean local authorities—is that there is still a substantial level of complaint about water meters. I do not think the situation is as satisfactory as I am sure the Minister would like it to be, let alone the rest of us.
In view of what he said about the regulations and what is to be done under Clause 5, it is appropriate that I should thank him and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 14 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 15:
Page 7, line 13, at end insert—
("( ) require for the purpose of investigating consumer complaints about metering the creation of an independent water complaints body to be composed of such members as the Secretary of State may determine;").
The noble Lord said: My Lords, this amendment was put down at Committee stage, but perhaps through some misunderstanding about the grouping of amendments it was not moved. It deserves the consideration of the House which it did not receive in
1176
Committee. There are a number of ways in which we could achieve consumer protection in advance of the final form of the privatisation of water. I appreciate that it will be necessary for the Government, when they are producing their main legislation, to make proposals for consumer protection. I am sure that that is the reply the noble Earl will give in response to this amendment.
But changes are being proposed now which will affect the water consumer. I refer especially to the changes which relate to the trials of metering of water supply. I do not think it is premature to suggest that there could be an independent complaints authority. It need not be elaborate. It need not have all the paraphernalia that sometimes accompanies these organisations. It could be on a national basis in the first instance without a regional component. It could have representatives on it from local authorities, with the collaboration of experienced trading standards officers from the local authorities and with water authorities also represented or giving evidence to it.
This is not a dramatic amendment. Nor does it make any significant change to the Government's ability to achieve their objectives in legislation. I hope it will commend itself to the Government and to the House. I beg to move.
The Earl of Caithness: My Lords, the handling of complaints about water services generally is obviously a very important issue, which we intend to develop further in the context of the main water privatisation Bill. At present, by virtue of Section 24A of the Water Act 1973, there are formal arrangements for the representation of consumers' interests. Each regional water authority's consumer consultative committee provides a forum in which customers' representatives discuss with the appropriate authority its policies and actions and their effects on consumers. For example, I understand that all of those water undertakers who have expressed a willingness to carry out a metering trial have already discussed the issue with the relevant consumer consultative committee.
I understand that many, if not all, water undertakers have established formal procedures for informing their consumer consultative committees of details of complaints and discussing what needs to be done. This procedure can deal with metering just as with any other issue. If customers receive no satisfaction from their local consumer consultative committee, they have the opportunity to take the matter up with the local government ombudsman.
As regards specific complaints about meter accuracy, regulations will be made under weights and measures legislation governing the metrological control of meters, which will give trading standards officers an important role in dealing with complaints about the accuracy of meters. In addition, in the case of metering trials, under Clause 4(4)(e) of this Bill, one of the matters to which the Secretary of State is required to have regard when considering a proposed scheme for approval is the provision made by the scheme for the handling of representations about the implementation, effect or operation of the metering trial scheme. This takes into account the special nature of the trials. Complaints about the proposed trials can be considered at this stage.

1177
As regards the future, I should not normally have thought it right to anticipate future legislation in a debate on this Bill. But since we have a clear intention to act in the matter raised by this amendment I hope your Lordships will bear with me while I do so very briefly. Our intention is to establish a formal system of consumer consultation based upon independent regional consumer service committees, appointed by the Director General of Water Services to be set up to regulate the water industry after its privatisation. The new committees will be able to take a firm, independent stance and speak with a single, strong voice. They will have powers to investigate complaints, recommend action to correct problems and to refer matters to the director general for enforcement if necessary. However, this is all a matter for the future which your Lordships will have the opportunity to debate in full once we bring proposals before your Lordship's House in due course.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for that reply. It was the kind of response I hoped he would make. We shall await with interest and without commitment the details of the consumer protection proposals which will come forward in the main legislation. It is helpful that he has been able to do this now, and it is appropriate that I should beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey had given notice of his intention to move Amendment No. 16:
Page 7, line 13, at end insert—
("( ) provide for the powers of enforcement and regulation of metering equipment to be vested with the relevant trading standards authority.").
The noble Lord said: My Lords, I hope I heard the Minister correctly in his response to a previous amendment. If so, I think it may not be necessary to move this amendment.
[Amendment No. 16 not moved.]

Licensing Bill
5.38 p.m.
Read a third time.
Clause 1 [Modification of permitted hours]:
Lord Kaberry of Adel Lord Kaberry of Adel moved Amendment No. 1:
Page 2, line 4, leave out ("five") and insert ("six").
The noble Lord said: This amendment is similar to one I moved at Report stage. After a reasonably lengthy discussion during which many views were expressed, I withdrew the amendment so that there might be further consideration of it. The amendment is to give private registered members' clubs the same hours on a Sunday to supply liquor to their members as licensed premises to which the public at large have access enjoy under the Bill.
I hope your Lordships will allow me a little while, especially in view of the discussions which took place on the previous Bill, to inquire what is to happen in the latter stages of the Bill. The Lord Chairman of Committees has recently sent to us all a short
1178
memorandum reviewing the findings of the Committee on the Procedure of your Lordships' House. It is stressed that in the closing stages of a Bill we must concentrate on what is provided in the Bill and not what the Ministers would have liked to see. We should not consider what they hoped it might be, nor what they hope may happen when the amendment to Clause 1, already passed by your Lordships, goes to another place for consideration.
With regard to Clause 1, in Committee your Lordships saw fit to pass an amendment giving licensed premises to which the public have access permission to open on Sundays from 12 noon to 3 p.m. and from 7 p.m. to 10.30 p.m. It gave the clubs an extra hour's opening time in the afternoon. Instead of opening from 12 noon to 2 p.m. they have permission under the Bill to open from 12 noon to 3 p.m. That is a total of six and a half hours.
In the latter part of Clause 1 private registered members' clubs may have permitted hours of opening within certain specified rules. One of the rules is that on Sundays, Christmas Day and Good Friday they may open within hours which fit in with rules set out in the clause. It provides that they open for a total of five and a half hours. However, if the members so decide and register the time with the clerk to the magistrates, the clubs may open from 12 noon to 3 p.m. Therefore, there is no question of permitting an extra hour within that period because they have the option of deciding to do so. However, if one takes three hours from five and a half hours, one is left with two and a half hours in the evening. Therefore, they can open at 7 p.m. as do the public houses. It often happens that the pub next door opens at 7 p.m. and closes at 10.30 p.m. but that the club must close at 9.30 a.m. Alternatively, the club may open at 8 p.m. and close at 10.30 p.m.
I am sure that the Government have not provided for that deliberately. I am sure that they would not wish to condemn the many thousands of members of highly respectable clubs. They would not wish to condemn them as second-class citizens who cannot be trusted with an extra hour provided by the the Bill to public licensed premises.
There is a large variety of clubs. There is the country club which specialises in providing food. There are political clubs; Labour, Liberal and Conservative. On the last occasion I did not declare my interest, but for the past 28 years I have been chairman of an association of some 1,400 Conservative clubs round the country. Ill-spent time has given me a good knowledge of a variety of clubs. I know that the clubs are an association of law-abiding people. Throughout all their rules they have one thing in common. It is that no one under 18 is admitted as a member and therefore there is no question of underage drinking.
Many clubs provide meals. I can give many instances of clubs round the country which have excellent kitchens and dining rooms. For example, I know of a club in North-West Wales which existed for 100 years in the same premises. Last year it purchased a hotel which had ceased to be used as such by its proprietors. It now has excellent kitchens and dining rooms. Bar snacks are served and there is

1179
a range of facilities which are not specified in the earlier part of the clause.
I hope that the noble Earl will not tell me that the extra hour for public licensed premises was granted in order that people may take their midday Sunday meal at greater leisure. The clause does not provide for that. It gives blanket permission to every licensed premises in the country to open for six and a half hours. In respect of clubs there is a special provision in the principal Licensing Act 1964, which is referred to in the Bill. Provision is made there for similarly grouped clubs to have an inter-affiliation card, or a pass card in the case of the members of the club and institute union. That enables the holder to visit, and be treated as a member, any similarly grouped club in any part of the country. It is well patronised.
As regards the association of which I am chairman, I know that each year over 500,000 people use inter-affiliation tickets to visit clubs around the coast during their holiday. They visit clubs nearby in the same county to mix socially with people with like-minded pursuits.
We are now providing that those self-respecting, decent folk are to be denied the extra hour which your Lordships have granted to the public at large. When a club stops supplying drink at 9.30 p.m. the club steward can say, "It is now Conservative Government club-closing time. They believe in equality and freedom and each one of you is free to leave the club to go to the pub next door for further liquid refereshment". That is what will happen and that is what we are being driven to. The whole issue is grossly unfair and most inequitable. I hope that your Lordships will support the amendment.
5.45 p.m.
Lord Dean of Beswick: My Lords, I should like to support the amendment tabled by the noble Lord, Lord Kaberry. For some 22 years I was the secretary of a club in Manchester. Although it carried a political name and was politically active it was owned by each individual member. The noble Lord is correct in saying that under the old licensing law, within the global figure of opening hours, there was a variation in the hours of Sunday opening. Clubs were able to make application dependent on the local licensing magistrate in their area. For instance, my club did not open from 12 noon until 2 p.m. on Sunday, as did most of the other working men's clubs in Manchester; it varied the hours from 12.30 p.m. to 2.30 p.m. Therefore, there was a certain amount of relaxation and the hours were applied differently.
However, as the noble Lord, Lord Kaberry, has said, if extended hours are granted to public houses in a particular area and not to the clubs one could have a situation where, if clubs were closing earlier, there would be an overspill into some of the public houses, and that is not too desirable. Most of the thousands of working men's and political clubs are, in some areas, the social centres for the residents. When people become club-minded they often have little regard for the pubs in the area because often the club is the social centre for them and their families.
In most of the clubs in Leeds—an area which I was privileged to represent and which has a variety of
1180
working men's and political clubs—one finds that clubs give the least trouble. That is because the committees are very strict in dealing with members who are foolish enough to try to misbehave. Under the licensing laws every member of a management committee of a club is liable to prosecution if the rules of that club are broken, there is conflict with the law and a prosecution is launched by the police. The clubs are strictly disciplined. They look after themselves. It is very rare indeed in such clubs for the police to be called to enforce any sort of discipline.
There are clubs where, as with landlords, the licensing laws are contravened, and they have to pay the penalty. However, in the main clubs are part of the fabric of this country as it stands under the licensing laws. I believe that the noble Lord, Lord Kaberry, has made his case. I believe it would be grossly unfair and biased if clubs were seen to operate at this slight disadvantage. Therefore, I support the noble Lord.
Lord Monson: My Lords, not only do I warmly support this amendment but I added my name to it, although due to some failure of communication my name does not appear on the Marshalled List. When replying to an identical amendment at Report, the habitual, impeccable logic of the noble Earl, Lord Ferrers, deserted him for a moment. He argued that there was nothing to prevent clubs opening between the hours of 12 noon and 3 p.m. on a Sunday, as the clause stands. That is perfectly true. However, if they were to do so they would have to close at half-past nine at night on Sundays, as has already been mentioned; namely, one hour before the pubs close. Members and their guests who are not ready for bed at nine-thirty, and most people are not, would inevitably repair to a pub, or even to two or three pubs, so as to be able to continue drinking. I believe it is generally accepted that people who go on pub crawls end up drinking a good deal more than those who remain in the same establishment all evening. Is that what the Government want? Surely not.
If, as one trusts they will, the other place agrees to the extra hour at Sunday lunchtime which your Lordships inserted into the Bill in Committee, it is reasonable to suppose that following the present pattern the other place is likely to want an extra hour for clubs as well so as to maintain the present parity. It is not 100 per cent. certain but I believe it is extremely likely. However, unless your Lordships support this amendment the other place will have no opportunity even to consider the matter. It is possible of course that it may reject it: if that is the case, so be it. However, it is surely right that the other place should at least be given the chance to consider the idea. I hope that if the Government do not agree, the noble Lord, Lord Kaberry, will insist upon this amendment.
Baroness Ewart-Biggs: My Lords, during the passage of this Bill I have on some occasions argued against making further outlets for alcohol and I have been concerned at some points that the greater accessibility was perhaps going too far. However, in this case I feel that the logic of having the same hours for pubs and clubs seems to be absolutely irrefutable.

1181
I believe that the noble Lord, Lord Kaberry, who, as we remember, received support from all sides of the House at Report, has made a very strong case. We should prefer to see the more controlled environment of a club used by families on a Sunday than a public house. We know that there are strong safeguards against under-age drinking in the club environment. We also know that meals are served. Therefore, we do not see why families taking their Sunday meal at a club should not have that extra concession that those taking their meal at a public house will have.
One of the points of this Bill is to remove anomalies. In my view, this amendment removes an anomaly which is at present in the Bill. Therefore, that is one of the reasons why the Minister should accept the very strong logic behind the arguments of the noble Lord.
The Minister of State, Home Office (Earl Ferrers): My Lords, I am bound to say, "Oh dear, oh dear", because this is what happens, if I may say so, when your Lordships decide to tinker around with Sundays. My noble friend Lord Kaberry described this proposal in the Bill as "grossly unfair and inequitable", as did the noble Lord, Lord Dean. What is unfair and inequitable is the fact that your Lordships, with your Lordships' generosity and wisdom, decided to refute the Government's advice and table an amendment about Sundays in Committee. You decided to permit pubs to stay open on Sundays until three o'clock.
Lord Dean of Beswick: My Lords, is that not what democracy is about, that a group of people who know something about a subject may know more about it than the Government? Are they not entitled to express their contrary opinion? If the Government are right all the time, what is the point in having general elections?
Earl Ferrers: My Lords, the noble Lord is absolutely right. Your Lordships can take any decision and the Government can only advise your Lordships. I was bold enough to advise your Lordships in Committee that the purpose behind this Bill was to get rid of some anomalies, to make life easier during the week and not to interefere with Sundays. The purpose of that was that we knew we would be in a very difficult position, which is what we are now in because in Committee your Lordships decided to allow pubs to be open for an extra hour at lunchtime on Sundays as a social convenience. Now my noble friend Lord Kaberry comes along and argues that because pubs can now open for six-and-a-half hours, clubs should also be allowed to.
The noble Lord, Lord Monson, said that when we had a similar amendment at Report at that time my impeccable logic left me. I do not know whether my logic was impeccable, but it did not leave me. I shall try to explain to your Lordships why I believe that the logic is as good now as it was then. Of course I understand my noble friend's amendment and he has, as one would expect, expressed the matter very clearly, forthrightly and fairly. However, the fact is that when the Government tried to bring in this Bill, they did not want to interfere with Sundays.
1182
The whole purpose of the amendment of my noble friend Lord Harmar-Nicholls was, as I understood it, as a convenience to enable people to enjoy their social gathering on a Sunday when they would like to take the opportunity of a midday meal. I think that my noble friend Lord Kaberry said that he hoped that we were not going to use that argument. However, that is precisely the argument I use, not because I think that that is the right thing, because I advised your Lordships not to do it, but that is what my noble friend Lord Harmar-Nicholls said; namely, that he wanted people to enjoy their Sunday lunch in the pub until two o'clock.
The fact is that the rules which regulate the licensing hours of pubs are different from those of clubs. Pub licensing hours are fixed and club licensing hours are flexible. Clubs can choose, within limits, when they open. When the noble Baroness, Lady Ewart-Biggs, says that she cannot understand why people in clubs cannot have a drink with their Sunday lunch, of course they can. Clubs can now serve drinks between two and three o'clock.
My noble friend Lord Kaberry said that clubs are self-respecting places full of respectable people who are controlled and decent. I have no doubt that the ones that he frequents are. Whether or not they all are is a matter for your Lordship's opinion. However, when the noble Lord, Lord Monson, says that all the people who go to clubs will leave them as soon as they shut and go on to pubs—and he even said that they would go on to a pub crawl—I hardly feel that that equates with my noble friend's more salubrious description of the clubs which he attends.
Some of your Lordships believe that clubs provide a more controlled drinking environment than do pubs, and that the loss of parity between the hours permitted to them on Sundays will send more people into the pubs, which will be to the detriment of society. I am bound to say that I find that argument somewhat spurious. Clubs have the flexibility to open until 3 p.m. on a Sunday lunchtime if they wish. Presumably, if all their members head for the pubs at 2 p.m. and thereby demonstrate the demand for an additional hour at lunchtime the clubs will so arrange their hours to stay open until 3 p.m. If that happens they will lose an hour's drinking time in the evening.
What my noble friend's amendment really seeks to do is to permit clubs to have an extra hour's drinking in the evening. That is making a very different inroad into the Bill. The argument that without an extra hour club members will move to a pub, if that is the only place where they can drink, is not a very strong one, if I may say so. Of course, it can happen now because there is nothing to prevent a club from serving drinks from 5 p.m. to 8.30 p.m. if that is what members want. For example, bars at golf clubs may well want to open for drink earlier than 7 p.m. in order to cater for members leaving the greens. They are entitled to do that. However, if they do so those members who wish to continue to drink in the evening must move, as the noble Lord, Lord Monson, has described so graphically to us, from pub to pub and have a very good pub crawl until 10.30 p.m. That is what they will be obliged to do.
The simple fact is that clubs now enjoy a greater degree of flexibility to choose their Sunday hours

1183
than do licensed premises. If they wish to serve drinks until 3 p.m., they can do so under the present arrangements. Conversely, pubs cannot and that was the purpose of the amendment which was accepted by your Lordships at Committee stage. A number of your Lordships spoke against a similar amendment to that of my noble friend Lord Kaberry at Report stage. They saw it as another attempt to chip away at the character of Sunday. I am bound to say that I have a sneaking sympathy because the whole philosophy behind this Bill is that it should not interfere with Sundays.
Your Lordships decided—but perhaps I may remind the House that the decision was against the advice of the Government—to allow pubs to stay open for an extra hour for social purposes in the middle of the day. That is at a time at which clubs can also be open if they wish. I do not believe that it is reasonable for my noble friend Lord Kaberry, even in the excellent and persuasive manner in which he did so, to propose that clubs should be open and be permitted to open for an extra hour in the evening. That was the reason why we did not want to interfere with Sundays. It throws up a whole range of anomalies some of which have already appeared this evening.
6 p.m.
Lord Dean of Beswick: My Lords, before the Minister sits down, I wish him to be factually correct. He said quite clearly that clubs can now open until 3 p.m. on a Sunday. Am I not right in saying that that is only with the permission of the local licensing magistrates? Very often, in more cases than not, the magistrates do not grant such a licence. The overwhelming number of working men's clubs in this country open from 12 noon to 2 p.m. I said that the club of which I was the secretary for a great number of years had a variation from 12.30 p.m. to 2.30 p.m. but it was the only working club in Manchester that had such a concession. Can the Minister confirm that permission has to be granted by the local magistrates when the club is reregistered which, I believe, is now after every three years?
Earl Ferrers: My Lords, I believe that the noble Lord, Lord Dean of Beswick, is not entirely correct. The clubs do not need permission provided there is a gap of two hours. I see that the noble Lord shakes his head; but I believe I am correct in saying that.
Lord Dean of Beswick: My Lords, I challenge the information which the Minister has because I had the job of reregistering the club. When the licensing laws of 1964 were invoked the local magistrates could give a licence for 12 months, three years or five years and that depended upon their judgment. Together with other club secretaries, I had the job of going down to register the club. I am perfectly convinced that I am right, unless the law has been altered meanwhile and no one has taken much notice.
Earl Ferrers: My Lords, I think we are now totally out of order. Perhaps I may have the permission of your Lordships to speak yet again, but if your Lordships would prefer me not to do so I shall resume
1184
my seat quite happily. As I understand the position, subject to the requirement that clubs must not start serving alcohol before 12 noon, that they must take a break between 3 p.m. and 5 p.m. and may not serve alcohol for more than three-and-a-half hours after 5 p.m., registered clubs are free to set their own hours.
Lord Kaberry of Add: My Lords, perhaps I may take the noble Earl to a more convenient place adjoining this Chamber and explain to him the advantages of being a member of a Conservative club. At the same time, I shall tell him how angry the members are at the moment that this clause seeks to make them second-class citizens. There are no half measures about it because that is what the Government are doing.
The noble Earl said that the purpose of this Bill is to remove anomalies. He has just made one! Clause 1 is absolutely anomalous. The population is divided into two. People who frequent public houses to buy liquor in permitted hours are treated in one way; they are given six-and-a-half hours on Sunday. There is no dodging the issue because it is there in print. It is not what the noble Earl wishes to do or perhaps what may happen; that is what the Bill states. Equally, licensed clubs may only open for five-and-a-half hours despite the nonsensical idea that if they wish they can opt to open from 12 noon to 3 p.m. Equally, they can opt to open for three-and-a-half hours in the evening. However, three-and-a-half plus three, according to my arithmetic, does not make five-and-a-half. I am seeking to help the noble Earl. My amendment proposes six-and-a-half hours for clubs. I shall be very happy to take the opinion of the House.
6.7 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 65.

DIVISION NO. 1

CONTENTS

Ailesbury, M.

Kilmarnock, L.

Airedale, L.

Lawrence, L.

Attlee, E.

Lindsay, E.

Auckland, L.

Listowel, E.

Aylestone, L.

Lloyd of Kilgerran, L.

Bauer, L.

McGregor of Durris, L.

Bonham-Carter, L.

Macleod of Borve, B.

Boyd-Carpenter, L.

Mais, L.

Campbell of Eskan, L.

Manton, L.

Cocks of Hartcliffe, L.

Mayhew, L.

Constantine of Stanmore, L.

Monson, L.

Dean of Beswick, L. [Teller.]

Morris, L.

Elwyn-Jones, L.

Mulley, L.

Erroll, E.

Nicol, B.

Ewart-Biggs, B.

Orr-Ewing, L.

Falkland, V.

Pender, L.

Gallacher, L.

Pitt of Hampstead, L.

Graham of Edmonton, L.

Ponsonby of Shulbrede, L

Harlech, L.

Rathcreedan, L.

Hayter, L.

Thomas of Gwydir, L.

Irving of Dartford, L.

Tordoff, L.

Jeger, B.

Ullswater, V.

John-Mackie, L.

Underhill, L.

Kaberry of Adel, L. [Teller.]

Winterbottom, L.

Kennet, L.

1185

NOT-CONTENTS

Ampthill, L.

Kitchener, E.

Annandale and Hartfell, E.

Lauderdale, E.

Arran, E.

Long. V. [Teller.]

Balfour, E.

Lucas of Chilworth, L.

Beaverbrook, L.

Luke, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Belstead, L.

Marley, L.

Brabazon of Tara, L.

Masham of Ilton, B.

Brentford, V.

Merrivale, L.

Brougham and Vaux, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Cameron of Lochbroom, L.

Munster, E.

Campbell of Croy, L.

Nelson, E.

Carnock, L.

Nugent of Guildford, L.

Chelwood, L.

Orkney, E.

Coleraine, L.

Oxfuird, V.

Colwyn, L.

Perth, E.

Davidson, V. [Teller.]

Reigate, L.

Deedes, L.

Renwick, L.

Dundee, E.

St. Davids, V.

Elton, L.

Sanderson of Bowden, L.

Fanshawe of Richmond, L.

Selkirk, E.

Ferrers, E.

Skelmersdale, L.

Glenarthur, L.

Strathcona and Mount Royal L.

Haddington, E.

Halsbury, E.

Teviot, L.

Harvington, L.

Thorneycroft, L.

Hesketh, L.

Trafford, L.

Hives, L.

Trumpington, B.

Hooper, B.

Ward of Witley, V.

Houghton of Sowerby, L.

Whitelaw, V

Ingleby, V.

Wise, L.

Kenilworth, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.15 p.m.
Clause 10 [Disqualified premises—garages]:
Earl Ferrers Earl Ferrers moved Amendment No. 2:
Page 8, fine 40, leave out ("(3)") and insert ("(4)").
The noble Earl said: My Lords, perhaps I may speak at the same time to Amendments Nos. 3, 4, 5, 6, 8 and 9. At Report stage your Lordships decided to add, against government advice, a new clause prohibiting garages from receiving a justices' licence. These amendments to the new clause are intended only to ensure that the new clause fits logically within the structure of the Licensing Act 1964 and to clarify certain terms. The amendments do not affect the substance of the clause. Nor does the fact that we see a need to propose amendments mean that the Government have been persuaded of the merits of the clause. That is a separate matter which we wish to consider further.
The main effect of these amendments is to replace "sited within a location" and "primary purpose" with a reference to "premises or parts of premises primarily used as a garage". The term "sited within a location" is imprecise. It does not convey an accurate notion of boundary and could be construed as extending, for example, to an adjacent pub or off-licence that happened to be on a trading estate which might be regarded as a location. Equally, we felt that the words "primary purpose" were not adequately descriptive. I hope that my noble friend Lord Brentford will agree that our amendments convey his intended meaning with more precision. We have also added a definition of "use as a garage" which is couched in very similar terms to the wording of Clause 10.
Even as amended, there is still doubt about the precise interpretation of the new clause. The clause does not specify how the primary use of premises combining a shop and garage is to be determined. What constitutes primary use? Is it the size of the turnover of the petrol and motor side as opposed to what is sold in the shop? Is it the amount of space that is occupied? Is it the number of customers who buy petrol as opposed to the number who buy other things? Is it the number of transactions for the sale of petrol as opposed to the number of other transactions for the sale of other goods?
We have taken the view that if the new clause should become law it will be for local justices to decide what test to apply and how to apply it. It will also be for the local justices to determine what precisely constitutes the premises in any given case. Is it the total area of the garage, including the forecourt, repair workshop, sales room and shop? Or is it solely the building?
Where there could be a problem of interpretation is in the case of existing licensed garages. For some, it will not be immediately obvious whether the premises will become disqualified from holding a licence or whether they can lawfully continue as before. Much will depend on how they see their primary use, and some will need to take advice and to seek the views of the courts. Nevertheless, I think that as a result of our amendments the wording of Clause 10 is as precise as we can hope for.
The amendments tabled to Schedules 3 and 4 to the Bill are purely technical drafting points and are consequential on the amendments to Clause 10.
We have proposed these amendments in order to clarify the intention behind the clause which your Lordships chose to insert at Report stage. I am bound to make clear that the Government reserve their position as to whether the principle behind my noble friend's new clause is a suitable addition to the Bill. I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendments Nos. 3 to 6:
Page 8, line 41, leave out ("subsection") and insert ("subsections").
Page 8, line 42, leave out ("(3A)") and insert ("(4A)").
Page 8, line 42, leave out ("from") and insert ("for").
Page 8, line 43, leave out from ("are") to end of line 45 and insert ("primarily used as a garage or form part of premises which are primarily so used.
(4B) In subsection (4A) of this section, the reference to use as a garage is a reference to use for any one or more of the following purposes, namely, the retailing of petrol or derv or the sale or maintenance of motor vehicles.").
The noble Earl said: My Lords, these amendments have already been spoken to. I beg to move.
Viscount Brentford: My Lords, I should like to put in a word at this stage to express my support for my noble friend's amendments. I have some general comments to make on the points he raised, although I am most grateful to him for the clarification which he has inserted in the amendments. However, as regards his diffidence, I should like to point out that the justices will still retain their discretion if it falls within the law. Should there be any doubt in their minds it seems to me that they would have no problem in refusing a licence.

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Since previous discussions on the matter, I have given some thought to the position with regard to garages that are already licensed and will cease to be licensed as a result of the amendment—assuming that it becomes law. I think it is perhaps an outstanding question.
There is one further point that I should like to ask my noble friend to bear in mind for the future. It concerns the issue which would arise if the bar on retailing were enacted. In order to avoid anomalies—something which the Government are quite rightly keen on—should there not be a bar on the wholesaling of alcohol in garages? Naturally that point is not one which should be covered at this time, but I wish to put it into my noble friend's computer mind so that he may consider it before the next opportunity arises to discuss the matter. As I have already said, I support the amendments in general.
On Question, amendments agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 7:
Before Clause 18, insert the following new clause:
("Intoxicating liquor.
. In section 201(1) of the principal Act, in the definition of "intoxicating liquor", in paragraph (a), the words "of an original gravity not exceeding 1016° and" shall be omitted.").
The noble Lord said: My Lords, this amendment is of a technical nature. On the last occasion when the Bill was before your Lordships, on 31st March, I took the opportunity to explain at some length what lay behind the amendment and therefore I do not propose to repeat those arguments. However, I think it is sufficient to remind the House that we are discussing the manufacture and sale of low-alcohol and alcohol-free beers. Under existing legislation those products have to pass two tests under Section 201 of the 1964 Act. They have to undergo the test of gravity, called "original gravity", as well as that of alcoholic content. The origin of the "original gravity" criteria was in the late 19th century and arose as a result of excise laws. However, retail excise licences were abolished in the Finance Act 1967, so there is no relevance today to that part of the twofold criteria of "original gravity". Therefore we are left with the alcoholic content, which is measured by volume.
When I made the latter point at an earlier stage my noble friend Lord Arran, while conceding the points that I had made, said:
"It is important, for the sake of consistency and clarity, that the definitions stay in tandem".—[Official Report, 15/3/88; col. 1106.]
Of course that statement might be all right if the two definitions had relevance and indeed were in tandem; however, they are not relevant and not in tandem. The only true test is alcoholic content by volume.
The noble Baroness, Lady Ewart-Biggs, in her supporting contribution on 31st March of this year reminded us that the Budget provisions—the recent Budget—by virtue of the change in duty on beers actively encourage the drinking of non-alcoholic drinks. She said that the provisions were designed to encourage the production and wider sale of low-alcohol and non-alcoholic beers; that is, those beers with less than 1·2 per cent. of alcohol by volume.
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Previous to the Budget there were two levels but now it is to be evened out and such assistance to the industry is to be welcomed.
The noble Lord, Lord Graham of Edmonton, reminded us of what the Masham report said and I am glad to see that the noble Baroness is in her place this evening. Broadly speaking the report—although I take it perhaps a little out of context—called for the industry to use its expertise to provide a wider range of low-alcohol and non-alcoholic beers for the community and to monitor the effects thereof.
On that occasion my noble friend Lord Arran accepted the logic of my argument but said:
"It seems to us that there is considerable danger that, by encouraging children to drink these products, we shall be developing their taste for beer and wine at an all too early stage in their lives".—[Official Report, 31/3/88; col. 902.]
I do not support his contention. The amendment that I have moved on two previous occasions has received wide support from many noble Lords in this House. It has also received the support of the manufacturing industry, the retail industry and was mentioned in some sections of the Masham report. Furthermore, by virtue of the Budget, it even has support in governmental areas.
Finally I suggest to your Lordships that this will be the last opportunity, probably for 20 years, that we shall have to reform the Licensing Act. The last such reform was in 1964 when there was a tinkering with the legislation. My suggestion is that your Lordships should sweep away this anachronistic legislation which is quite irrelevant to today's technology; we should remove the restrictions that inhibit investment in manufacturing industry and inhibit the wider production and availability of low-alcohol and alcohol-free beers. We should also encourage young drivers, and indeed other drinkers generally, to turn to low-alcoholic drinks. We must show enterprise and leadership to the industry in a positive and responsible way, which is in keeping with the spirit of the Bill.
I finish by saying that the spirit of the Bill was described by my noble friend the Minister on 18th February when he said:
"Three considerations lie behind the Bill. The first is that the habits, conventions and customs of society change with time, and it is only right and proper that Parliament should periodically up-date statutes in order to conform".
That is the first consideration. He then said:
"The second consideration, though, is the recognition that the misuse of alcohol is a serious problem with long-term consequences for individuals and societies".
Later my noble friend said:
"The third consideration that we have in mind is that we believe that people should have freedom of choice, unless there are over-riding reasons to prevent it for the benefit of society at large".—[Official Report, 18/2/88; cols. 797–798.]
I suggest that the amendment meets all three of those considerations with no disadvantages whatsoever. I beg to move.
6.30 p.m.
Baroness Ewart-Biggs: My Lords, I again support the noble Lord and his amendment. I agree with him that the Minister's reply on Report was baffling and difficult to understand. If he is going to refuse to accept the amendment moved by the noble Lord I

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hope that his answer will be more understandable. Surely anything which might help to steer the public away from high alcoholic drinks towards low alcoholic drinks must be right, encouraged and welcomed in every way.
I should be interested to hear the Minister's arguments if he is going to oppose the amendment, because many of the arguments put foward on Report were unacceptable to many noble Lords.
Lord Brougham and Vaux: My Lords, I too support my noble friend Lord Lucas. Unfortunately, I was away when the Report stage was debated at the end of March. RoSPA also supports the amendment because it will help to promote alcohol-free drinks. As my noble friend quoted what my noble friend Lord Arran said at col. 902 of Hansard I shall not repeat it. If the case rests as it was in March, the Government will be going against the recommendation contained in paragraph 73 of the national report, which states:
"We recommend that the alcoholic and soft drinks industries should make a concerted effort to promote these drinks as an attractive alternative to alcohol".
Paragraph 84 was quoted by the noble Lord, Lord Graham, on 31st March (col. 900). Furthermore, if the amendment were not accepted it would undermine the excellent work done by the youth services, which help with health and education and the prevention of an intervention in alcohol abuse, as set out in paragraph 109 of the report. It would also undermine the work of the alcohol-free bars, as set out in paragraph 82. For all those reasons, I support the amendment.
Lord Graham of Edmonton: My Lords, I hope that the Minister has had time to reflect. If he accepts, as I do, the motivation of the amendment moved by the noble Lord, Lord Lucas, but cannot accept it for technical, constitutional or legislative reasons, that will be sad. I have listened to all the arguments put forward on this matter. I have had the benefit of reading the excellent report of the noble Baroness, Lady Masham. The amendment seeks to take account of the current social situation and to ensure that a wider and more acceptable range of drinks is available, which would be less alcoholic than if the amendment were refused.
The amendment will encourage people to put their money where their mouths are. They will have to take a risk and perhaps lose money. I and many noble Lords want to encourage a vibrant social life, but we are conscious of the terrible price sometimes paid by those who recklessly or fecklessly drink too much. The amendment tries to do something of which the whole House would approve. This is the last opportunity for the Minister to be helpful.
On the previous occasion when the amendment was opposed, it smacked of the feeling that it was opposed merely for the sake of opposition. There is no logic in opposing it. I do not think that it is right or just to do so. Someone somewhere is digging in his toes. I do not know whether it is the Minister or someone else who is saying: "We are not going to have it". Words are then produced on a sheet of paper that can be used to support the argument.
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The logic of what was said by the noble Lord, Lord Lucas, and the general situation mean that the amendment is right. At the last stage the noble Earl, Lord Arran, I think soberly and fairly, said that the proposal would encourage children to acquire a taste for alcohol at a younger age than they otherwise would. That was not a good argument. They would have a substitute for the more heavily alcoholic beverages. The Minister and his advisers may be cautious to the extent of saying that they are not prepared to contemplate a proposal which might go wrong. But the Minister would have had the benefit of the views not only of Members of your Lordships' House but of those organisations which, with great respect to him and his advisers, have spent a great deal of time, and some money, anguishing over these matters.
At this stage of the Bill the logic is to accept the amendment with whatever recommendations the Minister has. There is another stage to come. If the amendment is accepted, it will go to another place. There may be other arguments. The Government may decide to have their way in another place. On the basis on what we have heard at all stages and in all speeches on the amendment I feel that the amendment is sound; it will be of social benefit to the country and to the Government's credit.
The Viscount of Falkland: My Lords, I too should like to support the amendment because attitudes in the country are now happily changing. It is a proposal which at some stage of the Bill most noble Lords have said that they wish to see. It is especially important for young people. Unfortunately, I was unable to be here at the Report stage, but I read it carefully in Hansard. I found it curious that the noble Earl, Lord Arran, gave as reasons for opposing the amendment that it was undesirable to give young people a taste for beers at an early stage.
The move to low-alcohol beers is an important social change in our drinking habits. Everything should be done to encourage that change. The market is now growing, but there is uncertainty in the minds of those who manufacture and sell the drinks because of the anomaly which was so lucidly explained by the noble Lord, Lord Lucas. Everyone accepts that the provision in the original Act is an anachronism.
I agree entirely with the noble Lord who put forward this amendment. For the life of me I can see no reason why the Government cannot accept it, except for the reason given at Report stage by the noble Earl. I disagree with that because I think there is a misconception about attitudes. Surely it is preferable that a young person, even though he has a taste for beer, learns that it is better to drink beer and feel reasonable after it than that he should illegally drink beer which is stronger, become intoxicated and get an early taste for that. I think it has already been proved that that is so in our society. I strongly support the amendment on that basis alone.
Lord Monson: My Lords, once again there seemed to be a certain uncharacteristic lack of logic on the part of the Government at the Report stage of a Bill, as the noble Lord, Lord Graham of Edmonton, has suggested. My noble friend Lady Masham and her committee want to wean people on to lower strength

1191
beers. By and large the House agrees, and so, one understands, do the Government. The amendment of the noble Lord, Lord Lucas, would help this process. Yet the Government are, or at any rate were, resisting it.
As I understood it at Report stage, the Government were happy for young people to develop a taste for beer or near-beer with a relatively dry taste, but for some reason they were opposed to their developing a taste for beer or near-beer with a sweet taste, unless the sweetener were artificially added afterwards. I am bound to say that the logic of this totally escapes me, and I dare say it escapes most noble Lords as well. I hope that the noble Lord, Lord Lucas, will press his amendment.
Baroness Masham of Ilion: My Lords, I too would like to support the amendment. There is nothing wrong with drinking; the danger is the alcohol, which is a very dangerous drug. Therefore, the noble Lord, Lord Lucas, is trying to help promote non-alcoholic beers. The Government really want to be responsible but they are allowing pubs to open longer. Therefore, there will be more drinking because people will not stand there without a glass in their hands. If people can go on to a non-alcoholic beer and still enjoy it, surely that must be encouraged. I cannot see that the Government could think otherwise.
In addition, in the past few years many people have lost their licences. This has really made them take note and I think they are being more careful. They would prefer to drink a non-alcoholic beer than a glass of orange juice. Therefore, I cannot see why the Government will not accept this amendment.
6.45 p.m.
Earl Ferrers: My Lords, my noble friend Lady Masham does not know as yet that the Government will not accept this amendment. The noble Lord, Lord Graham of Edmonton, said that he could not understand the logic behind it. He said that all that Government Ministers do is stand up and read out from a piece of paper. I shall endeavour to refrain from doing that and probably get myself into more trouble by doing so.
However, there is a curious argument that runs here. Many noble Lords—and I can think of the noble Viscount, Lord Falkland, the noble Baroness, Lady Ewart-Biggs, and in particular the noble Baroness, Lady Masham—throughout the whole of the Bill have been saying how terrible it is for young people to be encouraged to drink alcohol, and that there should be less alcohol for young people. What we want to do, they say, is encourage less alcohol drinking in young people. Yet nevertheless they come along and support an amendment which allows beer-like substances, even though they may not contain alcohol, to be sold to children.
I accept that there is a very distinct difference of view here. The noble Viscount, Lord Falkland, said that low-alcohol beers should be encouraged. He is quite right in saying that they should be encouraged in opposition to high-alcohol beers. I think what the noble Viscount has in mind is that when people go to pubs they should be encouraged to drink low-alcohol
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beers instead of high-alcohol or full-alcohol beers, and that is totally acceptable. However, with a beer-like substance, the noble Viscount would be the first to consider that a beer which does not taste as if it is beer does not satisfy people. Therefore, the beer must taste like beer, even if it has no alcohol in it.
That substance without the alcohol in it but which nevertheless tastes like beer will, under this amendment be sold to children along with milk, coca-cola and lemon juice. Is that really what my noble friend Lady Masham wants? She is one of the people who are more concerned than most to see that young people do not get the taste for beer. Yet here she is encouraging young people to drink beer-like substances and to get the taste for it. Then when the children grow older, they will have the flavour of beer and they will go on to alcohol.
A noble Lord: My Lords, no.
Earl Ferrers: My Lords, the noble Viscount says, no; I think he emitted the word "No". Perhaps I may be permitted to depart for a moment from the advice of the noble Lord, Lord Graham of Edmonton, which was not to read from a piece of paper. I shall read from a piece of paper. It is not my brief but a piece from the Daily Mail of 10th April, only a few days ago. Some research was done at Reading University and the increased awareness of alcohol among the nation's 7 and 8 year-olds has been revealed in it. It says:
"Children not only frequently referred to outings to the pub at the weekends or evenings but included drunkenness in their adventure stories. A surprising number say they would go and get drunk in an ideal world where they could do as they liked … Teachers at the annual conference of the National Association of Schoolmasters/Union of Women Teachers last week said that going to the pub, or waiting in the car outside, was a common occupation for young children".
That is the reason we believe that it would be wrong to accept the noble Lord's amendment, because it would enable the beer-like substances to be sold freely to young people.
Lord Monson: My Lords, before the noble Earl sits down, perhaps he would agree that at the present moment bottled shandy, which has an underlying beer flavour, can be sold to children of any age whatsoever, even those 2 or 3 years old, if they so wish.
Lord Graham of Edmonton: My Lords, before the noble Earl sits down, perhaps I may correct an impression which he or I may have given but which I hope Hansard will reveal as different. What I meant to say was that it seemed to me that someone somewhere, either a Minister or a civil servant, had said, "We oppose this". Thereafter, having agreed in principle to oppose it, what happened was that arguments were produced to support the opposition rather than arguments causing one to come to the conclusion that it was a wrong principle. However, the last thing I would accuse the Minister of is either being a cypher or merely a second reader of a brief.
The Viscount of Falkland: My Lords, before the noble Earl sits down, I should be most grateful if he would allow me to correct something. I did not utter

1193
the word "No". If I had uttered anything, I should have said "Not necessarily". I accept that it is possible that a percentage of young people, having drunk non-alcohol or low-alcohol beers, may well go on to the stronger stuff and suffer as a result. I suggest that it is likely that a significant proportion of those young people will have a more gentle run-in, if I may put it that way, to the activity of drinking and will enjoy the taste more than the immediate alcoholic effect of the drink.
That is what now happens to a lot of young people well under the legal age who immediately become intoxicated and suffer, not only in terms of their health but in terms of the trouble into which they get as a result. I think that on balance I would go for letting them acquire the taste from the non-alcoholic or low-alcoholic beers in the likelihood that that would lead to more civilised drinking than when they were able to drink the higher-powered beer.
Baroness Masham of Ilton: My Lords, as the noble Earl talked about me—
Earl Ferrers: My Lords, perhaps I may interrupt. I fear we may be getting out of order because most noble Lords have spoken once, and some have spoken twice. I nearly made the same mistake too. I do not wish to shut the noble Baroness up. That is the last thing one could possibly want, with any form of courtesy. I merely point out to the noble Baroness the danger. She could of course always say, "Before the noble Earl sat down", since I sat down about five minutes ago!
Baroness Masham of Ilton: My Lords, before the noble Earl sits down again, and with the permission of the House, I wish to say that I should not like to give the impression that I would want non-alcoholic beer sold with milk. That is wrong. I should like it sold in pubs and in places where people will be drinking beer. I want to encourage them to drink non-alcoholic beer rather than alcoholic beer, which is the dangerous beer.
Lord Lucas of Chilworth: My Lords, I am most grateful to my noble friend Lord Ferrers for his response. I am more grateful however to all those noble Lords who have spoken in support of the amendment.
I say to my noble friend Lord Ferrers that I also have a copy of the publication to which he referred. It was not the Daily Mail but the Mail On Sunday. A young child in school asked about a wide variety of things might say, for example, that he wants to be a soldier and fight the enemy—whoever the current enemy may be. Should we therefore prohibit the sale of lead soldiers, tin tanks and the like in our shops? Children follow the example of grown-ups who have found the pub to be an attractive recreation area. Indeed, my noble friend Lord Ferrers said at col. 797 of the Official Report on Second Reading:
"Pubs are a great British tradition. They are not merely places to drink. They are meeting places for friends. They are debating chambers for rich and poor alike. They are social centres for small communities and they are refuges for weary travellers and tourists who seek refreshment".
Of course children have in their minds the outing that the family takes to the pub. They will write about this
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and see enjoyment and a certain grown-upness in expressing views.
The response of my noble friend Lord Ferrers has been solely—as indeed was his noble friend's response on 18th February—to do with young people. We are trying in this amendment to encourage manufacturers to provide more low-alcohol beverages. We are trying to encourage retailers to stock them and sell them for the young, for the old, for the infirm and for drivers to help change the pattern of drinking.
I do not believe that the Government have given a sensible enough answer to enable me to withdraw the amendment. I should like your Lordships to decide whose opinion they prefer.
6.53 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 41; Not-Contents, 47.

DIVISION NO. 2

CONTENTS

Airedale, L.

Listowel, E.

Bonham-Carter, L.

Longford, E.

Brentford, V.

Lucas of Chilworth, L. [Teller.]

Brougham and Vaux, L.

Colwyn, L.

McGregor of Durris, L.

Elwyn-Jones, L.

Macleod of Borve, B.

Erroll, E.

Masham of Ilton, B.

Ewart-Biggs, B.

Mayhew, L.

Falkland, V.

Monson, L.

Graham of Edmonton, L. [Teller.]

Morris, L.

Mottistone, L.

Halsbury, E.

Mulley, L.

Harlech, L.

Munster, E.

Hayter, L.

Napier and Ettrick, L.

Henderson of Brompton, L.

Pitt of Hampstead, L.

Hooson, L.

Ponsonby of Shulbrede, L.

Hylton-Foster, B.

Stoddart of Swindon, L.

Irving of Dartford, L.

Swinton, E.

Jeger, B.

Tordoff, L.

John-Mackie, L.

Underhill, L.

Kennet, L.

Wise, L.

Lawrence, L.

NOT-CONTENTS

Arran, E.

Kitchener, E.

Balfour, E.

Lauderdale, E.

Bauer, L.

Lindsey and Abingdon, E.

Beaverbrook, L.

Long. V. [Teller.]

Belstead, L.

Luke, L.

Brabazon of Tara, L.

Malmesbury, E.

Caithness, E.

Merrivale, L.

Cameron of Lochbroom, L.

Mersey, V.

Campbell of Eskan, L.

Nugent of Guildford, L.

Carnock, L.

Orkney, E.

Clitheroe, L.

Pender, L.

Constantine of Stanmore, L.

Penrhyn, L.

Davidson, V.

Renton, L.

Deedes, L.

St. Davids, V.

Dundee, E. [Teller.]

Sanderson of Bowden, L.

Elton, L.

Skelmersdale, L.

Ferrers, E.

Strathcona and Mount Royal, L.

Glenarthur, L.

Haddington, E.

Sudeley, L.

Hesketh, L.

Thomas of Gwydir, L.

Hives, L.

Trafford, L.

Hooper, B.

Trumpington, B.

Joseph, L.

Ullswater, V.

Kenilworth, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.1 p.m.
Schedule 3 [Minor Amendments of the Principal Act]:
Earl Ferrers Earl Ferrers moved Amendment No. 8:
Page 18, line 9, at end insert—
("1 A. In section 9(5) (saving for disqualification under other enactments of premises for receiving a justices' licence), the words "of subsections (2) and (3)" shall be omitted.").
The noble Earl said: My Lords, Amendments Nos. 8 and 9 have already been spoken to. I beg to move.
On Question, amendment agreed to.
Schedule 4 [Repeals]:
Earl Ferrers Earl Ferrers moved Amendment No. 9:
Page 21, line 14, at end insert—
("In section 9(5), the words "of subsections (2) and (3)".")
The noble Earl said: My Lords, I beg to move this amendment, which has been spoken to already.
On Question, amendment agreed to.
Earl Ferrers: My Lords, I beg to move that the Bill do now pass. I would only say that this is a fairly small Bill but we think it is a fairly important one and it sets out to tidy up one or two items in our law which we felt were now in need of modernisation. We have had a number of interesting speeches and a well-informed debate, particularly earlier about the problems of alcohol-related abuse—though I must say that the subject took a curious twist in connection with the last amendment we debated.
I am grateful to your Lordships for the part you have played in the progress of this Bill; and, if I may say so, for the highly informed and constructive contributions which have been made on the whole subject of alcohol and alcohol abuse. I hope that this Bill will be a useful addition to our law, and I think the best thing I can say, in moving that the Bill do now pass, as it is the end of this particular Bill in this particular House, to those of your Lordships who have taken part is, "Come and have a drink". Also, in view of the amendment of my noble friend Lord Lucas of Chilworth, perhaps I should add "strictly non-alcoholic".
Moved, That the Bill do now pass.—(Earl Ferrers.)
Baroness Ewart-Biggs: My Lords, I would certainly not wish to prolong the debate, especially after the very kind invitation just made by the noble Earl; but perhaps I may say that this is an important Bill and I think its provisions were needed and will make a great deal of difference over coming into line with the habits, conventions and customs of society, which is one of the objectives mentioned by the noble Earl at the beginning.
With a further extension in the number of hours when pubs are open, this will mean that their owners will be able to invest more in making them agreeable places to visit rather than the "hard-drinking" places that they have so often been in the past. Therefore tourism will be increased and civilised drinking will also increase; and that is all to the good.
I am also happy that this Bill has given many of us the opportunity to put forward the more serious and sombre side of drinking and to present to the House
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the really very worrying increase in drinking by young people. In particular, the noble Viscount, Lord Falkland, spoke of this disturbing trend, and it is for that reason that some of us are still worried that the Bill does not provide adequate safeguards against alcohol abuse by young people. In spite of changes that are made, it will still be all too easy for licensees to serve drinks to under-age customers without themselves going in too great a fear of prosecution. After all, we know that at present half the 15 year-olds who drink obtain their drink from pubs, and the gravity of this situation worries us. For this reason I very much hope that the Government will monitor under-age drinking after the Bill has become law, to see whether improvements occur with the new provisions. I hope that, if that is not the case, they will seriously tackle the problem—a dangerous and disturbing problem—of under-age drinking.
Finally, we hope that the Government will accept our amendment prohibiting the sale of alcohol at garages when the Bill returns to the Commons. We feel the necessity for this to be done is strengthened by the publication this week of the North report, which takes a very strong line against drink-driving offences. Indeed it has recommended a number of very stiff penalties to try to deter people from the irresponsible and wicked tendency to drive when impaired by drink. I hope there will be a great deal of monitoring after the enactment of this Bill because, in spite of its civilising side, one must face the danger that it will increase alcohol abuse and therefore it must be carefully reviewed and monitored in the future.
The Viscount of Falkland: My Lords, I should like to add my particular thanks to the Minister for the customary courtesy and good humour with which he has conducted his side of the business. I should like also to say that I am very encouraged—I think other noble Lords will probably share my view—because although the Government have fought against some of the amendments with customary vigour, I sense a very encouraging wish on the part of the Government seriously to tackle the social problem of drinking in this country.
Attitudes are changing and, certainly over the past 12 months with the Wakeham Committee and the careful consideration of our amendments during the course of this Bill, we are moving into a happier era of understanding of the dangers of alcohol. It is to be hoped that that will be reflected in lower crime figures and much less damage to the health of people, both young and old. I should like just to confirm my appreciation of the way in which the Bill has been handled.
Baroness Masham of Ilton: My Lords, perhaps I may say a very quick word and thank all noble Lords who were very complimentary about the report on young people and alcohol. I should like also to say that shortly in your Lordships' House we shall be having an education Bill. I hope that something can be inserted into the Bill to encourage health education because with the longer opening hours, the increasing violence in our society, the problem of parents having difficulty in controlling their children and also the schools having difficulty in controlling

1197
young people, there needs to be strong education to balance the problems of extra drinking with longer hours.
Therefore I hope that the Government will take a responsible view on this. I know they have many lobbies, and the drink lobby is a very strong one; but I can assure your Lordships that there is debate up and down the country in every county over the problems of alcohol abuse and young people. That will not go away, and I hope the Government will take it seriously.
On Question, Bill passed, and returned to the Commons with amendments.

Treaty on the Elimination of Intermediate- Range and Shorter-Range Missiles (Inspections) (Privileges and Immunities) Order 1988
7.9 p.m.
Lord Glenarthur Lord Glenarthur rose to move, That the draft order laid before the House on 28th March be approved [21st Report from the Joint Committee].
The noble Lord said: My Lords, this order is made under Section 1(2) of the Arms Control and Disarmament (Privileges and Immunities) Act 1988, which received its Royal Assent on 9th February. The Joint Committee on Statutory Instruments has considered the order and has made no comment, other than to draw the attention of Parliament to the Explanatory Note prepared for the committee by my department.
As your Lordships will recall, the Arms Control and Disarmament (Privileges and Immunities) Act is principally concerned with the granting of diplomatic privileges and immunities to observers and inspectors carrying out functions in the United Kingdom under the terms of the Stockholm Agreement. But it also provides for the extension, by means of an Order in Council, of such privileges and immunities to inspection personnel involved in other future arms control agreements. The Government made clear at the time that the INF treaty was one such agreement for which recourse to this provision of the Act was envisaged.
The aim of the order is to enable the British Government to fulfil the particular obligations which we have undertaken in respect of the verification of the INF treaty. The nature of these obligations, and the reason why they take the form they do, has been the subject of previous debates in your Lordships' House, and I shall not rehearse the background again this evening.
Needless to say the privileges and immunities to be conferred on Soviet inspectors and aircrew for the protection of their official functions when conducting INF inspections will cover only activities carried out in the United Kingdom. This is for the period from their arrival at the point of entry until their departure from the UK. The Order in Council also confers certain privileges and immunities on the equipment and aircraft used by the INF inspectors and aircrew. Naturally these privileges and immunities are no more extensive than those required under the Basing
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Country Agreement. They correspond directly to the privileges and immunities annex to the Basing Country Agreement, which in turn reproduces verbatim the relevant parts of the protocol between the USA and the Soviet Union. Nor do the privileges and immunities exceed those conferred by the Vienna Convention on Diplomatic Relations.
The United States Senate will vote on the ratification of the INF treaty within the next few weeks. It seems likely that the vote will be overwhelmingly in favour. We expect the United States and Soviet instruments of ratification to be exchanged during President Reagan's visit to Moscow from 29th May to 2nd June. The treaty will enter into force immediately thereafter. It is essential that the United Kingdom is able to fulfil its obligations in respect of the treaty as soon as it enters into force. This draft Order in Council will enable us to do so. I commend it to your Lordships, and beg to move.
Moved, That the draft order laid before the House on 28th March be approved [21st Report from the Joint Committee].—(Lord Glenarthur.)
Lord Irving of Dartford: My Lords, as the Minister has said, the order arises from the Arms Control and Disarmament (Privileges and Immunities) Act which we dealt with earlier this year. It is related to the INF treaty. It is a necessary and inevitable consequence, as without verification we would not have had the treaty. The order provides the nuts and bolts for that verification, and we therefore support it.
Lord Mayhew: My Lords, the Minister's statement was understandably low key. The content is extremely encouraging. A remarkable advance in East-West relations is reflected in what he said. My noble friends and I are worried about the possibility of circumventing the INF treaty under the guise of modernisation. We have made that point before. But we find the Order in Council a very cheering matter, particularly for elderly people who remember the state of East-West relations many years ago.
The task of verifying the INF treaty is a comparatively easy one. One is verifying the absence of weapons. Indeed, the inspections to which the order refers will be a formality. Once the United States has declared that it has removed its missiles in accordance with the treaty, it would be extremely suprising if the Soviet inspection team were to discover a missile that had been left behind. That would be a source of considerable amazement to all concerned. Indeed, the inspection will be somewhat farcical—an enjoyable ceremony. However, we welcome it.
We are on the nursery slopes as far as verification is concerned. When we compare the difficulties of verifying the hoped for treaty on strategic weapons, we see that the problem is of an altogether different dimension. There is the matter of verifying how many strategic missiles should be allowed. There is the difficulty of agreeing the method of checking that number, of agreeing the number of warheads on each strategic missile and of checking that number.
I read with amazement—perhaps the Minister can confirm it—that agreement has been reached

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between the superpowers on those points. That is to say, they have actually reached agreement on establishing how many strategic missiles each side now has; on confirming, partly by on-site inspection, that the requisite number are being eliminated; on the continuous on-site monitoring of production facilities; and on short-notice inspections where cheating is suspected. All those matters are in a different dimension of difficulty when we come to the verification of a strategic arms agreement. It is a remarkable step forward if it is true, as reported, that the superpowers have reached agreement on those matters.
In the meantime, as regards the much easier and simpler verification proposals embodied in the treaty and to be validated by the Order in Council, my noble friends and I give the warmest support.
Lord Kennet: My Lords, I agree with everything that has been said in approval of the order and of the treaty which it is designed to support. But it would be wrong of me to fail to mention once again the difficulty that I see in the future for this Government or another government in provision for national inspection only with no provision for British or alliance inspection.
The verification of the treaty is to be carried out on a national basis by the United States and the Soviet Union alone. We remember that the Government rightly maintain an independent nuclear strategic deterrent against a certain Soviet armoury. That armoury is changed by the treaty. The removal of SS.20s will reduce the size of the Soviet nuclear armoury in deterrence of which we maintain the Trident force and so on. It is therefore in our supreme national interest to know whether or not the SS.20s are being removed and destroyed in accordance with the treaty.
The same argument which has caused us to have an independent nuclear deterrent for the last 40 years now requires us to have independent verification possibilities of the reduction of the Soviet armoury. The Government have ignored that and they propose to leave the matter in the hands of the United States alone. We shall have to be content with what it choses to tell us. To say that is not to say that I think it is likely that the United States will lie to us. But sovereignty is at stake and the sovereignty of the United Kingdom and of other nations is infringed by the treaty.
I think that it is certain that in the long run the Government will have to face up to that problem. As my noble friend Lord Mayhew rightly pointed out, we are on the nursery slopes. We hope that treaty after treaty will come forward. Each will have its own verification machinery. If we allow bilateral national verification by the superpowers to go unquestioned in the present treaty, we shall make it that much harder to achieve alliance verification or even separate British verification in treaties further down the line where it may be more important.
This is the third time that I have made the point to the House and I shall be brief. On the last two occasions the noble Lord, Lord Mayhew, took me to task for saying something which would make
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ratification in the American Senate less likely. This time, since I am speaking after him, he did not say it, but perhaps I may answer the argument by saying that I do not believe that the action which the Government ought to take should be taken in the next few weeks. The noble Lord, Lord Glenarthur, told us that there are only a few weeks to the ratification debate. Action ought to be taken some time in the next year or two, preferably before the 50 per cent. strategic reductions come to occupy the centre of the stage. It is something which has to be faced. In saying that I do not intend to make ratification harder in Washington, nor do I believe that I am doing so.
Lord Glenarthur: My Lords, I am grateful to all noble Lords who have taken part in this debate and especially to the noble Lord, Lord Irving of Dartford, for his unqualified welcome of this order. As regards the other points, essentially they go rather wider than the very narrow issue with which the order is concerned.
The noble Lord, Lord Mayhew, is right. The INF agreement is a good agreement. It is a triumph for alliance solidarity and the strategy of negotiating from strength. One is bound to wonder whether we would be in such an encouraging position had one or two other ideas prevailed.
So far as START is concerned—and I hesitate to get involved too deeply in that question this evening—all I can say in reply to the noble Lord on what is, after all, a different issue and a complex one is that I confirm that we understand that the United States and the Soviet Union have reached agreement on warhead counting rules for strategic ballistic missiles. There are, however, many other problems still to be resolved. It is important that those problems and the question of verification be resolved if we are to see satisfactory progress.
I should like to make perfectly plain that there is no question of NATO circumventing the United States' obligations under the INF treaty. I do not believe that the noble Lord really thought that would be the case, although he indicates he thinks it is possible. I qualify that remark by saying that the treaty was intended by both the Soviet Union and the United States to bite on ground-based missiles with a range of 500 to 5,500 kilometres only and both NATO and the Warsaw Pact have the right to adjust or modernise other systems. I do not think that the noble Lord is right in making his suggestion.
Although the noble Lord, Lord Kennet, has raised this particular point before, I simply say that the INF treaty is a bilateral treaty. I have given him this answer on more than one occasion, but once more will not do any harm. This treaty is a bilateral one between the United States and the Soviet Union. The missiles with which it deals belong to those states and to them alone. It would be wholly inappropriate for other states to be involved in the inspection and verification procedures. It would add nothing to our benefit and it would unnecessarily complicate the arrangements if inspectors from seven basing countries—East and West—were to join the inspections. Of course we are involved, and rightly so, in the arrangements for inspections in the United Kingdom.

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I believe that that answers the main points that have been raised. I commend the order to your Lordships.
Lord Kennet: My Lords, before the noble Lord sits down I cannot let the Aunt Sally pass unanswered. I have not asked for seven basing country inspectors to go into the Soviet Union to inspect. I have been asking throughout for a NATO inspection, which could be done by one person designated by NATO for the alliance alongside the American person.
On Question, Motion agreed to.
House adjourned at twenty-five minutes past seven o'clock.