HL Deb 21 April 1988 vol 495 cc1637-51

4.24 p.m.

Read a third time.

Clause 1 [Power to act in relation to proposals for privatisation etc.]:

Lord Renton moved the following Amendment:

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 or other body corporate".

The noble Lord said: My Lords, the amendment was tabled in my name but I was glad to find this morning that the noble Lords, Lord Williams of Elvel and Lord Ezra, had added their names to it. The effect of the amendment would be to place at the beginning of Clause 1 a new subsection which would make clear its acknowledged purposes, which are not stated in the clause as it is drafted.

This is the second time of asking, because at Report stage—when distinguished support was given from both sides of your Lordships' House—I moved a similar amendment. My noble friend Lord Caithness told the House that his legal advice was against it and that he accepted that advice with some reluctance. He then asked me to withdraw the amendment on his undertaking to seek further legal advice from the ablest source. That is why we now have the pleasure and advantage of having my noble and learned friend the Lord Chancellor with us to say what he thinks about it. He is of course the ablest source, but I cannot undertake to agree with him until I have heard what he says. Meanwhile, I merely make the comment that none of us is infallible.

I must say that my noble friend Lord Caithness did his valiant best at earlier stages of the Bill, including his best on Clause 1 which many of us think is quite unacceptable as it stands. I need not repeat all the various criticisms that were made at earlier stages. However, I must point out that although the clause gives extremely wide powers to the Secretary of State to make proposals and to water authorities and electricity boards to implement them—whatever implement may mean in this context; and we do not know—it does not limit the use of those wide powers to purposes for which they are said to be intended; namely, privatisation and the possible creation of a national rivers authority or other body corporate.

We know that that is what is intended—not from the text of the clause itself but from speeches made by Ministers and from the Explanatory Memorandum attached to the first print of the Bill, though of course that memorandum very properly falls once it has gone through Committee. We also have some indication of the purpose from the side note to Clause 1. But none of those would be admissible for interpretation by the courts in any case brought before the courts with a view to challenging the use of the powers given by Clause 1. Therefore those powers could be used for purposes which are not intended.

Therefore as well as the clause being, I suggest, defective by not making clear, as we generally try to do in legislation, how far the powers extend or what they are to be used for, the clause runs the risk of enabling people who do not want the powers to be used to frustrate government policy.

In the course of the previous debate and in discussions which I have to confess my noble friend Lord Caithness was so kind as to arrange for me to have behind the scenes, it has been said that the clause has the advantage of being flexible and we must be careful not to lose the flexibility which it gives. I say that the necessary flexibility would not be lost if the amendment were accepted. However, if powers are used for purposes other than those intended then the flexibility would be lost, and rightly lost.

In moving the amendment I am trying to help the Government as well as Parliament and the courts and other users of statutes by making clear the purposes for which the wide powers in Clause 1 can be used. I promise your Lordships that although the committee on the preparation of legislation recommended that purpose clauses should be used where appropriate, I do not set about doing so on every possible occasion. In fact, my recollection tells me that in the past 12 years this is only about the fifth or sixth occasion on which I have suggested to Parliament that there should be a "purpose" provision. On this occasion it seems to me to be quite essential. I beg to move.

4.30 p.m.

Lord Williams of Elvel

My Lords, in supporting the amendment tabled by the noble Lord, Lord Renton, I must make clear that it is not my function at this Dispatch Box to help the Government. I am here to help Parliament. The noble Lord, Lord Renton, said that he was helping the Government but I am trying to help the noble Lord to shape the legislation in understandable, comprehensible and effective form.

This amendment has an interesting history. During our discussions in Committee we on these Benches moved a series of amendments in an attempt to define the nature of the proposals, the role of Parliament in any such proposals that might be made and generally to try to make sense of Clause 1. At that point the noble Lord, Lord Renton, came up with a suggestion that there might be some such preliminary subsection. The noble Earl responded that he would like to look at the matter very carefully. I think I am right in my recollection of our discussions at Committee stage.

When the Bill came back on Report my noble friend Lord McIntosh supported the noble Lord, Lord Renton, in his drafting. I remember him saying in Committee that he was drafting on the back of an envelope—even before the Committee rose, his agile mind was at work drafting a clause. We supported that provision at Report stage and we support it again.

We believe that the flexibility in Clause 1 referred to by the noble Lord, Lord Renton, goes too far. We should like to see sense made of Clause 1. We should like a number of amendments to Clause 1 but we understand that your Lordships' House has not accepted the proposals that we made and we shall not press them at this Third Reading of the Bill. Nevertheless we feel with a great deal of strength that in his original submission in Committee, which the Government agreed to consider, and in his final submission now, the noble Lord, Lord Renton, has a major point and a proper amendment which would give us at least some comfort in the knowledge that Parliament's intentions in respect of this clause are clear to the outside world. That is what we want to achieve.

I shall be interested to hear what the noble and learned Lord the Lord Chancellor will reply to the noble Lord, Lord Renton. It will of course become something of a distinguished lawyers' argument, if I may put it in that way. As I am not a lawyer I should not dream of intervening in such an argument, but, looking at this Bill and its subsequent enactment from the point of view of the layman, we should like to see in it a subsection of that nature. That is why we support the amendment of the noble Lord, Lord Renton.

Lord Ezra

My Lords, in supporting this amendment, I should like for my part to remind the House that on these Benches we have always felt that this first clause is too widely drawn in terms of both time and content. The purpose of the first clause was made very clear in debate, not least by the noble Earl himself. It is made very clear in the marginal note and on the first page of the document with the arrangement of clauses, but surprisingly it is not made sufficiently clear within the body of the Bill itself.

It is a simple thing for which we ask, which seems to me to be entirely in line with the role of this House as a revising chamber. It is that this purpose, which has been clearly stated and understood, should be incorporated in the Bill before it is enacted.

I recall that when we debated this point at an earlier stage the noble Earl said that the word "privatisation" was not one that had a legal significance. If that is so, perhaps I may suggest "private ownership", which I presume has a legal meaning. The Government intend to prepare these bodies for that and, if that is what needs to be said, then let it be said. However, whatever is done about this Bill, I ask noble Lords to ensure that there is greater clarity in Clause 1.

Lord Nugent of Guildford

My Lords, I took a small part in the debates at the earlier stages of this Bill and supported my noble friend Lord Renton in the wish, which is indeed now being echoed on all sides, that the Bill should be clearer than it is at present. I said—I think with some justice—that I had never before seen such a vague Bill, which seeks to give Ministers enormously wide powers in a way which I believe is most undesirable for Parliament. I trust that in the short time that this Bill has to be extant and working before the main Bill is presented in the next Session, it will not be challenged in the courts.

However, I am bound to say that if it is left in its present state, I defy any court to know what on earth this first clause means. That is my feeling about it. I am not wildly keen on the measure but I accept that my noble friends have the right to proceed with their measure of privatisation and that they intend to do so. However, it seems desirable that while we are deliberating on the shape of the Bill we should ensure that it is a Bill which is clear to the whole world and to the courts. I warmly support my noble friend Lord Renton.

I must say that I feel glad that my noble friend Lord Caithness, who up to now has dealt very adequately with our points in the debates, is now supported by my noble and learned friend the Lord Chancellor, which adds very greatly to the occasion. I realise that we are now about to be given advice from the highest authority and I look forward to hearing it. I suppose that I shall bow my head because I cannot think of anyone who is better able to give advice on a legal point than is my noble and learned friend. I know from a private note that he has written that he thinks the amendment is wrong and undesirable but I still believe that this is a very unlikeable clause and one which does not do credit to Parliament.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, I think that we are all agreed about certain matters: first of all, that the Explanatory Memorandum forms no part of the Bill or Act and will not form part of any judicial material that is used in its construction. The same applies to the marginal note. My noble friend Lord Renton mentioned that none of us is infallible and I personally agree very heartily with that sentiment. I can think of nobody more fallible than myself. Therefore I propose to try to explain my reasoning so that noble Lords will have an opportunity of judging for themselves rather than attaching any particular importance to what I am giving as my view.

In response to the noble Lord, Lord Williams of Elvel, I should like to say that I hope I shall make the position clear. I trust that this will not be an argument between lawyers, although some of us happen to be lawyers. The matter is one which concerns the use of language and an understanding of the meaning of the Bill.

My noble friend Lord Nugent of Guildford said that this clause gave very wide powers to Ministers. I fear that there may be some misunderstanding among your Lordships about the effect of this clause, because it does not give any powers to Ministers at all. Perhaps I may take the example of the public utilities, the most typical of which are the water authorities. It complicates the argument to have to name the electricity boards very time, so let us stick to the water authorities. This clause gives power to the water authorities to do things which in their opinion it is appropriate for them to do.

The Committee of the noble Lord, Lord Renton, suggested that it is sometimes wise—not always—to have a statement of purpose. We have a statement of purpose. The purpose is to do things, for the purpose of facilitating the implementation of the proposal for the transfer"— I shall return to that in a moment— or facilitating the implementation of, or securing a modification of, any related prosposals of the Secretary of State". Perhaps therefore I may try to set this in its context.

What is in issue here is the future form of the water industry, if one is considering this part of it, and the electricity industry, although perhaps I may leave that aside completely. The Secretary of State has proposals for action to change the state of the water industry. They are not proposals to any particular person or body of persons. They are proposals for action; they are proposals for change. They include proposals that the property or functions of a water authority should be transferred to another body corporate. That is all. He is proposing that something of that kind should happen.

I wish to make this abundantly clear. There is no question whatsoever of this clause containing any power to enable that to happen. This is a clause only to give the water authorities power in relation to proposals of the Secretary of State that this should happen. The power to implement the proposal will come in the main legislation, if at all, and certainly not in this Bill. There is no proposal in the Bill which will enable a water authority to transfer its property, assets or functions to anybody else. I should like to make that absolutely plain because it is fundamental. Possibly a misunderstanding of that point may underlie the concerns that have been expressed.

The clause provides that the Secretary of State makes a proposal that there should be companies incorporated under the Companies Acts set up to take over certain of the property and functions of the water utilities—the water authorities. In other words, that assets, property and functions of the water authorities should be transferred to bodies corporate, companies incorporated under the Companies Act, possibly in part to a national rivers authority or, depending on the ultimate shape of the proposals, possibly some other body or bodies corporate.

The local water authorities are creatures of statute. Therefore they are not entitled to spend money on anything which is not incorporated as part of their constitutional provisions. If an issue arises about the implementation of such a proposal to transfer the property or functions of a water authority to a new company incorporated under the Companies Act, questions of advice to the Secretary of State about the implementation of that proposal arise, for example, in relation to the technical possibility of separating out various parts of the property as between bodies incorporated under the Companies Act on the one hand and the National Rivers Authority on the other as to the value of the assets of the water authorities, and a multitude of questions such as the advice that might be given for the modification of these proposals.

Your Lordships will notice that paragraph (b) refers to securing among other things modification of any related proposals of the Secretary of State. The water authority might well think when it considers matters with its technical advisers that the proposal of the Secretary of State relating to the principal proposal for transfer should be modified; that a better proposal can be made. The purpose of this clause is to give the water authorities the necessary power to consider these matters and to do what they think fit, not for implementing the proposal but for facilitating the implementation of the proposal. That is what this clause provides.

The provision needs to be general because the question that will arise is whether a particular use of the water authority's funds is empowered or whether it is something that the water authority may properly do. A water authority may ask now: "Is this a proposal to transfer property or functions of this our water authority to another body corporate? If so, anything that we deem appropriate to be done to facilitate the implementation of that proposal may be done before there is any authority for the proposal to be carried out".

Clause 4 makes it clear that this may well arise before the proposal is carried out. The carrying out of the proposal to transfer property or functions to a new body corporate will require another Act of Parliament. The principal Bill will provide that, if it is done, and not this Bill. Accordingly, I was somewhat astonished to read the amendment in its detail. It states: The purpose of this section is to ensure that water authorities in England and Wales … 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". In other words, this provision will give them the power to fulfil the proposals. That cannot be right. The fulfilling of the proposals cannot take place until the main legislation comes along. Therefore this purpose clause, with the greatest possible respect—and I fully appreciate the effort that my noble friend has put into this—is directed to a different purpose from the purpose of the clause about which we are talking.

This clause is talking about an earlier stage. It is not the implementation of the proposals, but a consideration of whether the proposals should be made. To have in the purpose clause a provision that the water authorities should have the necessary statutory powers given to them under this section to fulfil the proposals is shortening the privatisation procedure a very great deal. I should be surprised if this purpose could be encompassed in one section; indeed I should be nothing short of astonished, but there it is. That is what this purpose clause states.

In my respectful submission to your Lordships, first, this purpose clause is misconceived for that reason. Secondly, the purpose for which the powers are given in this clause is, facilitating the implementation of the proposal for the transfer … or securing a modification of, any related proposals". This clause refers to an earlier stage. It is plain that it has to be general because one has to relate it to the proposals when they come along. One has to relate it to the possibility—and surely it must be right to preserve this—that the Secretary of State's ultimate proposals may be affected by the advice he receives from local water authorities under this clause. He may then put forward modified, perhaps even better, proposals than at present. It cannot therefore be right to try to tie this to some form of present proposal. Part of the purpose of the clause is that the possibility of modification of related proposals should be open for consideration. Therefore, with great respect I would suggest to your Lordships that this amendment should not be passed.

I should perhaps say that when my noble friend Lord Caithness told your Lordships that he would seek to secure the best advice, he was of course referring to advice from the legal advisers of the Government. Therefore, your Lordships may take it that he has secured the best advice available to the Government including that of parliamentary counsel. I am now seeking to put before your Lordships these views in support of the rejection of this amendment and the passing of the clause in its present form.

Lord Renton

My Lords, perhaps my noble and learned friend would be good enough to explain this point. It seems to me from what he says (although it is very strange to hear when one reads Clause 1) that there is to be no transfer of functions or property until we come to the main legislation. Is he therefore saying that all that Clause 1 suggests is a mere paper exercise based on proposals made by the Secretary of State?

The Lord Chancellor

My Lords, I can answer the first part of that question absolutely plainly. There is no question whatsoever of a transfer of property by virtue of a power given by this clause. It contains no power to transfer a single iota of any property whatsoever.

I am not quite sure what is meant by a paper exercise. The Secretary of State has put proposals on paper for transferring certain parts of the property and functions of local water authorities to companies incorporated under the Companies Act and for transferring the balance of their property and functions to a national rivers authority. That is a paper proposal. It is written on a piece of paper.

However, the effect of that on any particular water authority is a complicated question. Nobody knows more about that than my noble friend Lord Nugent of Guildford. The operations of water authorities are complicated. The best people to advise on these matters are the officials of the water authority. They can advise as to the consequences of these proposals, what the value of the water authority's property is and the technical feasibility of the related proposals.

A question has arisen as to whether the water authorities have power, because they are statutory corporations, to use their money for the purpose of getting such advice on the paper proposals. I have no doubt that the advice will ultimately be written on paper also; but it is still valuable and vitally important as a prerequisite to privatisation.

The clause makes clear that the authority may if it thinks fit do things with a view to promoting the interests of a new body corporate to which the property or functions of the water authority may be transferred. However, the transfer cannot take place under any powers given in this Bill. If a transfer is to take place it will take place under powers granted by other Bills. The water authorities have no power under their present statutes, generally speaking, to transfer their property or functions to others. If they are to do so, statutory authority to that effect will be required.

With the greatest possible respect, this is an inept purpose clause. If the purpose stated in the clause were to be fulfilled, one would require more elaborate provisions than anything one finds in the main part of these provisions.

Lord Renton

My Lords, I am extremely grateful to those noble Lords who have supported this amendment. I am sure that we are all extremely grateful for the attempt by the Lord Chancellor to explain the Government's position with regard to this clause.

It seems to me, with deep respect to the noble and learned Lord—and there is nobody in this world for whom I have a greater respect as a lawyer—that his description of the effect of the clause is not borne out by the terms of the clause itself. Alas, I have to say that. The noble and learned Lord says that nothing is to happen by way of implementing the proposals until we come to the main legislation. I wonder whether he would read with me subsection (4) of this clause, which says: 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 seems to me to carry us far beyond what my noble and learned friend has described as the very limited purpose of this clause. I also have to point out that Clause 1(1), which must be read along with subsection (4), which I have just read out, refers to, the purpose of—

  1. (a) facilitating the implementation of the proposal for the transfer; or
  2. (b) facilitating the implementation of, or securing a modification of, any related proposals of the Secretary of State".
If we in your Lordships' House are puzzled by the meaning of the clause—and I must confess that I am even more puzzled after the explanation given by my noble and learned friend—what are the courts, the water authorities and the users of the statutes going to make of this situation? They will not be able to say, "Oh, but it's all right; we have only to read the Lord Chancellor's speech, which has told us that in effect the clause does not mean what it says".

I am awfully sorry to have to say this, because, as I say, I respect my noble and learned friend and appreciate his coming to the Woolsack and explaining this to us very fully this afternoon. But I have to confess that I am not convinced. I have the misfortune to disagree with him.

I must take up one or two other points that have been made. The use of the word "privatisation" in the amendment to which the noble Lord, Lord Ezra, referred, cannot be regarded in any sense as being inappropriate because it is used in the marginal note. Therefore the Government know what it means. We were told by my noble friend Lord Caithness at Report stage that it is in the Oxford English Dictionary, and the courts are allowed to take notice of definitions in the Oxford English Dictionary. I should prefer that word to stay rather than the words "private ownership".

My noble and learned friend referred to the contents of the amendment and said that he was surprised by them. However, they are taken almost word for word from the Explanatory Memorandum which accompanied the first print of the Bill. They are consistent with what Ministers have said is the intended purpose of the clause.

My noble and learned friend says that no power is given to Ministers. However, when we say in Clause 1, where the Secretary of State is at any time proposing", and we refer to the proposals, the whole foundation of the clause is that Ministers will be making proposals. Surely it cannot be said that no powers are given to Ministers.

The Lord Chancellor

My Lords, with leave of the House, could my noble friend point to the power which is given to the Minister in this clause?

Lord Renton

My Lords, I am very sorry; I did not quite catch that.

The Lord Chancellor

My Lords, I am wondering whether perhaps my noble friend would be kind enough to point to the power that he says is given to the Secretary of State by this clause.

Lord Renton

My Lords, we are asked to read a great deal into the clause anyway, but when we find the expression, Where the Secretary of State is at any time proposing", that clearly expresses the fact that Parliament envisages that he should be given power to propose. I do not see how we can get away from that. We find that subsection (2) begins: The proposals which are to be treated for the purposes of this section as related to a proposal of the Secretary of State for the transfer of anything from a relevant public utility to a body corporate shall include so it is not only a power but an obligation which is conveyed here— any proposal relating to", and it goes on. I do not think it can be said that the Secretary of State is exactly a lay figure in this matter. Indeed he is the initiator of the powers which are more specifically given to the water authorities by the clause.

One could go on, but I do not wish to weary your Lordships. I hope that I have said enough to indicate that I do not in conscience feel that it would be right for me to withdraw the amendment.

5.2 p.m.

On Question, Whether the said amendment shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 102.

DIVISION NO. 1
CONTENTS
Aylestone, L. Hayter, L.
Bancroft, L. Houghton of Sowerby, L.
Banks, L. Hughes, L.
Blease, L. Hunt, L.
Bonham-Carter, L. Hylton-Foster, B.
Boston of Faversham, L. Irving of Dartford, L.
Bruce of Donington, L. Jeger, B.
Buckmaster, V. Lawrence, L.
Callaghan of Cardiff, L. Listowel, E.
Carmichael of Kelvingrove, L. Longford, E.
Carter, L. [Teller.] Lovell-Davis, L.
Cudlipp, L. McIntosh of Haringey, L.
Dean of Beswick, L. Mishcon, L.
Elwyn-Jones, L. Molloy, L.
Ewart-Biggs, B. Mountevans, L.
Ezra, L. Nicol, B.
Falkland, V. Ogmore, L.
Fitt, L. Parry, L.
Foot, L. Pitt of Hampstead, L.
Gallacher, L. Ponsonby of Shulbrede, L.
Gladwyn, L. Prys-Davies, L.
Graham of Edmonton, L. Renton, L. [Teller.]
Halsbury, E. Russell, E.
Hampton, L. Sainsbury, L.
Saint Brides, L. Taylor of Blackburn, L.
Saltoun of Abernethy, Ly. Underhill, L.
Seear, B. Wallace of Coslany, L.
Serota, B. Wells-Pestell, L.
Shackleton, L. White, B.
Somers, L. Williams of Elvel, L.
Stedman, B. Willis, L.
Stewart of Fulham, L. Winchilsea and Nottingham, E.
Stoddart of Swindon, L.
NOT-CONTENTS
Alexander of Tunis, E. Macleod of Borve, B.
Ampthill, L. Manchester, D.
Atholl, D. Mancroft, L.
Auckland, L. Margadale, L.
Bauer, L. Marley, L.
Beaverbrook, L. Merrivale, L.
Belstead, L. Milverton, L.
Bessborough, E. Monk Bretton, L.
Birdwood, L. Morris, L.
Blatch, B. Mountgarret, V.
Blyth, L. Munster, E.
Borthwick, L. Nelson, E.
Boyd-Carpenter, L. O'Brien of Lothbury, L.
Brabazon of Tara, L. Onslow, E.
Broadbridge, L. Orkney, E.
Brougham and Vaux, L. Oxfuird, V.
Bruce-Gardyne, L. Pender, L.
Buckinghamshire, E. Pennock, L.
Caithness, E. Porritt, L.
Campbell of Croy, L. Pym, L.
Carnegy of Lour, B. Rankeillour, L.
Carr of Hadley, L. Reay, L.
Coleraine, L. Rees, L.
Colnbrook, L. Romney, E.
Colwyn, L. Rugby, L.
Constantine of Stanmore, L. St. Aldwyn, E.
Craigavon, V. St. Davids, V.
Craigmyle, L. Sanderson of Bowden, L.
Crickhowell, L. Sandford, L.
Cullen of Ashbourne, L. Sandy's, L.
Davidson, V. [Teller.] Savile, L.
Denham, L. [Teller.] Sharples, B.
Dundee, E. Skelmersdale, L.
Eden of Winton, L. Strange, B.
Elton, L. Sudeley, L.
Ferrers, E. Suffield, L.
Ferrier, L. Swansea, L.
Grantchester, L. Swinton, E.
Havers, L. Terrington, L.
Hesketh, L. Teviot, L.
Hives, L. Thomas of Gwydir, L.
Holderness, L. Thomas of Swynnerton, L.
Hooper, B. Thorneycroft, L.
Ingrow, L. Trafford, L.
Kimball, L. Trumpington, B.
Kitchener, E. Ullswater, V.
Layton, L. Vaux of Harrowden, L.
Long, V. Westbury, L.
Lyell, L. Windlesham, L.
McAlpine of Moffat, L. Wise, L.
Mackay of Clashfern, L. Wyatt of Weeford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.10 p.m.

The Minister of State, Department of the Environment (The Earl of Caithness)

My Lords, I beg to move, That the Bill do now pass.

Moved, That the Bill do now pass.—[The Earl of Caithness.]

Lord Williams of Elvel

My Lords, in speaking to the Motion that the Bill do now pass, I express gratitude from these Benches to the noble Earl for his patience with our arguments—indeed, with many of our amendments—gratitude to the noble Lord the Leader of the House for his intervention on Second Reading and, of course, gratitude to the noble and learned Lord the Lord Chancellor for the exposition of his arguments against the amendment that has just been defeated.

I cannot say—I do not suppose that noble Lords opposite would expect me to say—that we wish the Bill well. We do not wish the Bill particularly well, first, because we disapprove of the policy. We do not like the idea of privatising utilities. The water and electricity utilities are two major utilities that the Government propose to privatise in a monopoly or quasi-monopoly situation. That is a policy of which we profoundly disapprove.

We also believe, in spite of what the noble and learned Lord the Lord Chancellor said earlier, that Clause 1 is still a mess. It gives fairly wide-ranging powers that we should like to have seen curtailed in some manner, but, having moved amendments in Commitee, on Report and now recently on Third Reading, we recognise that the Government have not accepted the position.

We have been told on a number of occasions that the Secretary of State would use the Bill's powers and his ability to make proposals under the Bill wisely. We are not allowed to know in what form or how the proposals will be made, but we are told that they will be made wisely. I suppose the least we can say is that the present Secretary of State did not try to prevent your Lordships from discussing the Bill at all, which he seems about to do on another Bill that will come before your Lordships' House shortly.

We were also told to wait for the principal Bill when all, apparently, will be revealed. We have had this refrain time and again. On Second Reading I compared the Government's privatisation programme with the closing scenes of the film "King Kong" when the giant gorilla crashed about pulling down skyscrapers in New York. It now appears that we have son of King Kong, a bigger Bill, a bigger gorilla, making an even bigger mess. We on these Benches shall do our best to stop the maniac in his tracks before he does too much damage.

Lord Ezra

My Lords, the Bill—particularly Clause 1, which has taken up so much of our time—is the precursor to two major Bills that will shortly come before us. I regret that we have not been able to agree at least on the wording of the clause. It seems to me a bad foretaste of what may come. I hope that, as regards clarity, the succeeding Bill will be clearer than this clause has been.

Furthermore, let us hope that any preparatory work that is done will be such as to enable us, when we consider the main Bills, to make modifications. I take it, following the noble and learned Lord the Lord Chancellor's remarks, that this does not confer any powers on Ministers and does not finalise anything; it is merely by way of preparation for something that in the event may be changed.

Lord Renton

My Lords, I should like to make it clear that I am in favour of privatisation and I look forward to the creation of a national rivers authority. I only hope to goodness that, when we have the main legislation and all other legislation that the Government put forward, it will be very much better drafted and clearer in its terms and in expressing its intention than Clause 1. I think that it is a disgrace. I have no hesitation in saying so. As to the other provisions of the Bill, they have been little discussed, but are of considerable importance and could be of great help, apart from the question of privatisation.

There is no doubt—I have come up against this in East Anglia where I was a Member of Parliament for many years—that water supply is a real problem. That is especially so with the rapid and considerable expansion of population that has occurred in East Anglia—large, new towns and the expansion of old towns to treble their size, such as Peterborough. The question of the use of water, especially in a dry season, raises a considerable problem.

Water metering is, I know, unpopular. I have water metering in the house in which I live; it works satisfactorily and I think is quite fair. However, from the logistic point of view, it is something with which we must experiment. I am glad that the Bill gives powers to do that.

In Committee, I mentioned a most unfortunate case that arose in Cornwall, which went to the Judicial Committee of your Lordships' House. I felt in that case that there was an injustice as regards the law as it now stands. The Bill does not specifically cure that, but it gives an opportunity for various anomalies to be ironed out—I hope that they will be.

I am grateful to the noble Earl, Lord Caithness, for his patience and hard work. Let me say again that I am grateful to my noble and learned friend the Lord Chancellor, although I had the misfortune to disagree with him.

The Earl of Caithness

My Lords, perhaps I can use this appropriate moment quickly to review the provisions of the Bill and the reception that they have had in your Lordships' House.

By far the largest part of your Lordships' deliberations on the Bill have borne won Clause 1, which provide the water and electricity supply industries with an express power to prepare for our proposals for their restructuring and privatisation. Those proposals were included in the manifesto on which the Government were returned to office in the general election only 10 months ago. The intervening months have seen major policy statements of our proposals for both industries. In the case of water, there was the statement on the national rivers authority published in December; in the case of electricity, there was the White Paper published in February. Those are the foundations upon which we are currently engaged in building up the necessary legislation that we intend to introduce as soon as possible.

As I have explained before, however, we need to be certain that the water and electricity industries can assist us fully both in the work of getting that legislation ready and in the preparations that need to begin in the immediate future if we are to realise our proposals in an ordered and timely fashion.

I would stress that it is not our intention to prejudge the consideration that Parliament will give to the main legislation on our proposals, nor is that the effect of Clause 1. If the main legislation is indeed approved by Parliament, we shall want to make the best progress in its implementation consistent with the complexity of these industries. However, we shall be able to implement our proposals only after they have been scrutinised and approved by Parliament.

I recognise the concern that has been expressed about the width of the powers conferred by Clause 1, a concern that has underlain several amendments that have sought to restrict those powers in various ways. Indeed, in Committee the noble Lord, Lord Diamond, divided the House on an amendment to time limit the powers. We have been unwilling to accept any of these amendments because of the need to preserve the flexibility that the clause gives to the water and electricity industries in using these powers. The arguments advanced so eloquently by the noble Lords who have moved the amendments have compelled us to test and test again our own conclusions about the way in which these provisions are expressed in the Bill. In the end, however, we remain clear in our view that to amend Clause 1 along the lines proposed by noble Lords could hamper, and might even defeat, the objective of enabling the water and electricity industries to play their full part in the work ahead.

I feel bound to say that no amendment has compelled us to think more deeply than that moved by my noble friend Lord Renton both on Report and today. In speaking to that amendment on Report I acknowledged my difficulty in responding as a layman to some of the more legal arguments advanced by my noble friend. In today's debate your Lordships have heard my noble and learned friend the Lord Chancellor respond to those arguments. The whole House must be grateful for the clarity with which he explained the purpose of Clause 1. I shall not seek to add to that response except to say that it has reinforced my conviction that Clause 1 is drafted as it needs to be. I trust that your Lordships share that view.

The other provisions of the Bill have generated less debate in your Lordships' House. They relate to charges made by water undertakers, to metering as a method of charge and to metering trial schemes. Of the two amendments which we made to these provisions in Committee, the first, to Clause 3, was a technical amendment designed to meet a concern expressed by the Water Companies Association, and the second, to Clause 4, fulfilled an undertaking given in another place to ensure that bodies representing the interests of consumers are consulted by water undertakers proposing metering trial schemes.

We consider that these provisions have been improved by the making of these two amendments. The first will reassure investors in statutory water companies that the companies will be able reasonably to remunerate capital. The second will reassure customers taking part in metering trials that the Government are concerned to have consumer interests represented as effectively as possible.

I should like to thank the noble Lords, Lord McIntosh of Haringey and Lord Williams of Elvel, for the constructive way in which they have approached this Bill. I thought that the noble Lord, Lord Williams of Elvel, was more constructive than usual at Third Reading but perhaps he has slipped back into his bad old ways when it came to the Motion that the Bill do now pass. I also pay tribute to the noble Lords, Lord Ezra and Lord Diamond.

I should particularly like to thank my noble friend the Leader of the House for undertaking Second Reading for me when I was at an Environment Council on the Continent; and, indeed, I thank my other noble friends Lord Nugent of Guildford and Lord Renton who have taken part in the proceedings. I have much appreciated the perceptive and challenging debates that we have had at the various stages of the Bill. I now look forward with great enthusiasm to the main Bill, which must be to the benefit of all consumers of the water industry.

On Question, Bill passed, and returned to the Commons with amendments.