Lords Sitting of 9 February 1990

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

Palace of Westminster: Lighting Costs
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What is the annual cost of lighting in the Palace of Westminster.
Lord Reay: My Lords, in the last financial year the total electricity bill for the parliamentary estate was £576,873. However, I regret to say that it is not possible to separate the cost of lighting from other electrical costs.
Lord Hatch of Lusby: My Lords, is the noble Lord aware that I have been told repeatedly from his Front Bench that the reduction in the budget of the Energy Efficiency Office is a result of the success of that unit and there is thus less need for its operation? Has that unit operated in this Palace and can he say how many of the lighting bulbs in this Palace are of the energy efficient type?
Lord Reay: My Lords, I cannot say how many are of the energy efficient type. Following the energy audit of the Palace of Westminster which was carried out in 1989, various recommendations were made, including re-lamping with energy efficient lamps. To date 70 per cent. of the work to implement the recommendations has been completed and arrangements are in hand to complete the outstanding work. Perhaps I may add that the replacement of energy efficient lamps is not always practical in your Lordships' House or other parts of the parliamentary estate. For one thing, some of the fittings cannot easily or immediately be replaced.
Lord Ezra: My Lords, can the noble Lord say how much is expected to be saved as a result of the re-lamping programme once it is completed?
Lord Reay: My Lords, it will be very difficult to measure the precise savings which will be achieved. It is the case that, despite the savings that have been introduced, the electricity costs with regard to the parliamentary estate have continued to rise. For example, in 1987–88 the electrical costs were £509,000 compared with the figure for last year that I gave.
The Earl of Lauderdale: My Lords, does my noble friend agree that it is high time that the heating system in this building was overhauled? It is either too hot or too cold.
Lord Reay: My Lords, I am sure that the noble Earl makes a point with which many noble Lords
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find themselves in agreement. I shall pass on his remarks.
Lord Williams of Elvel: My Lords, the noble Lord described the measures that the Government are taking to introduce energy efficient lamps into the Palace. On a slightly wider scale, can he tell the House whether the Government have an electricity efficiency programme throughout all the buildings that they administer?
Lord Reay: My Lords, there is a public sector campaign run by the Energy Efficiency Office which aims to save £45 million a year in government departments.
Lord John-Mackie: My Lords, would the noble Lord care to take a walk along the corridors of this House and take a look at all the empty rooms with lights blazing?
Lord Reay: My Lords, I have often been very favourably impressed by the fact that after hours there are not very many lights burning at this end of the Palace of Westminster. Certainly much care is taken to try to ensure that electricity is not wasted in that respect.
Lord Mowbray and Stourton: My Lords, can my noble friend confirm that it is perhaps misplaced zeal for energy saving that stops us using the lights which have been installed in the past 15 to 20 years under the Gallery and which slightly lit those rather nice glass shields all round it? We are never allowed to see them now except at the State Opening of Parliament.
Lord Reay: My Lords, the noble Lord draws attention to the fact that there are other considerations which need to be borne in mind, not least aesthetic considerations. Those do not always tend in the same direction.
Lord Cledwyn of Penrhos: My Lords, does the noble Lord agree that in the public interest the more light that is cast on our affairs these days the better it will be? Is he aware that many complaints have been made to the effect that the light in your Lordships' House is much inferior to the lighting in the other place when seen on television? Can he say what steps are being taken to improve the light in this Chamber?
Lord Reay: My Lords, I entirely agree with the noble Lord's first point. I have been doing my best to comply with it. With respect to the lights required by television, that must be a matter for the Broadcasting Committee, which I am sure will consider the matter.
Lord Tordoff: My Lords, is the noble Lord aware that part of the answer to the question of the noble Lord, Lord Mowbray and Stourton, is that the lighting was discontinued because of damage caused to the friezes by the replacement of lights? This matter was discussed fairly recently by one of your Lordships' committees. Further, is he aware that the

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lighting in this Chamber is somewhat worse today than it was yesterday? Has this anything to do with the Question on the Order Paper?
Lord Reay: My Lords, perhaps that depends on the noble Lord's point of view.
Lord Airedale: My Lords, is the noble Lord aware that on 22nd January, when the House rose at 5 o'clock in the afternoon, I awoke in the television room four hours later, went to the Library to collect my briefcase and found the Library deserted but all the overhead lights were blazing in all four rooms and most of the table lamps as well?
Lord Reay: My Lords, I am sorry to hear what the noble Lord says. The PSA employs two full-time lighting attendants who, apart from their normal duties, have the obligation to switch off unnecessary lights. In addition, security staff are also asked to switch off lights in empty offices. I shall draw the complaint of the noble Lord to their attention.
Lord Swinfen: My Lords, can we also bear in mind that in this Palace lights need to be left on in certain places purely on grounds of security?
Lord Reay: My Lords, I think that the noble Lord is quite right.
Lord Hatch of Lusby: My Lords, I sincerely welcome the news that the noble Lord has given us that the Government are taking seriously the question of energy efficiency in this House. However, can he extend the matter a little further? To what extent are the Government encouraging knowledge throughout the country of the availability of energy efficient bulbs? I believe that in the United States public utilities are giving them away to poorer people in order to help to save electricity.
Lord Reay: My Lords, some years ago the Government ran a massive advertising campaign which was supported by many different events in different parts of the country. The campaign was very successful in raising consumer awareness. It has not been found necessary to repeat it.

Construction Industry Training Board
11.15 a.m.
Baroness Turner of Camden Baroness Turner of Camden asked Her Majesty's Government:
What is the present position concerning the reconstitution of the Construction Industry Training Board, and when an announcement will be made.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): My Lords, my right honourable friend the Secretary of State for Employment is firmly committed to reconstituting the Construction Industry Training Board. The main employer organisations have been
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consulted about the membership of the new board. He expects to be able to make an announcement shortly.
Baroness Turner of Camden: My Lords, I thank the Minister for that reply. However, will he take account of the fact that the uncertainty is creating a great deal of concern among the staff? Quite obviously morale is not improved by the uncertainties surrounding the issue. Will he bear in mind that in such circumstances very often highly skilled staff can obtain jobs elsewhere? If we wish to maintain a reasonable standard of staff at the CITB it is necessary to take account of all these factors.
Lord Strathclyde: My Lords, the Government of course do not wish to see any lessening of morale within the training board. Our intention is to appoint the right people as soon as possible. Until then the existing board remains in place.
Lord Mellish: My Lords, the Minister will be aware that the CITB is one of the finest in the country. That is accepted by all parties. I am making a non-party political point. In heaven's name, why do the Government have to muck about with what is already running very well and doing fine? Why cause concern and unhappiness among people who are doing a first-class job? Is such concern not the fault of the Government? The Government do not know when to stop.
Lord Strathclyde: My Lords, the noble Lord, Lord Mellish, is not quite right on that. We spent a great deal of time in the Committee stage of the Employment Bill last year discussing this precise point. The Committee came to the conclusion that the new proposals were the correct way to go forward. The CITB has been kept on as a training board precisely because it was seen to be doing a good job.
Baroness Turner of Camden: My Lords, perhaps I may come back to the Minister on his first reply. He stated that there would be consultation and that such consultations were proceeding. He referred to consultation with employers. Can he tell the House what consultations are taking place with organisations which represent employees within the industry?
Lord Strathclyde: My Lords, the General Secretary of the TUC has suggested names to the Secretary of State and these will be considered.
Lord Auckland: My Lords, in declaring my interest as a non-executive director of a small construction and civil engineering company, may I urge my noble friend to make representations that the announcement is made soon? Is he aware that the industry needs many young people to keep our very fine construction industry going? When the reconstitution takes place, will the youth training scheme play an important part?
Lord Strathclyde: My Lords, with regard to the timescale, we shall be making an announcement as soon as possible.
Lord Mellish: My Lords, what does that mean?
Lord Strathclyde: My Lords, as soon as possible means very shortly indeed.
Many commercial YT managing agents already exist and supply high quality training. I understand that others within the departing sectors are developing further proposals.
Lord Molloy: My Lords, can the Minister be a little more specific? A remarkable situation is developing. Can the Minister enlarge on what part of the statement of the noble Lord, Lord Mellish, he finds inaccurate?
Lord Strathclyde: My Lords, it was not the statement of the noble Lord, Lord Mellish, that was inaccurate. My point was that it was policy decision that we took in this House last October. I am simply making the point that we had discussed it at some considerable length some months ago.
Lord Molloy: My Lords, will the Minister answer the first part of the question? Instead of saying "in the near future", or "in a few weeks' time" —he has not even said that —can we assume that within one month from today the matter will be completed to everyone's satisfaction?
Lord Strathclyde: My Lords, I am not sure that I could ever do anything to the satisfaction of the noble Lord, Lord Molloy. We are looking for the right people to sit on the board. That is what is important. We are trying to do it as quickly as possible but I cannot give a firm date.

Statutory Undertakers: Powers
11.20 a.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
What is their policy on statutory undertakers who dig up the highways.
Viscount Ullswater: My Lords, the powers of statutory undertakers to break open the highway are governed by the street works code in the Public Utilities Street Works Act 1950. The Government accept that the arrangements for utility street works are in need of reform and have said that they intend to bring forward new legislation to implement the main recommendations of the Horne Report, Roads and the Utilities. A Bill based on proposals contained in a consultation paper issued last May will be introduced as soon as a suitable opportunity can be found.
Lord St. John of Fawsley: My Lords, I thank my noble friend for that helpful Answer. Is he aware that the streets of many of our great cities, especially London, now resemble battlefields and that the residents are continually tormented by the chatter and vibration of electric drills? Should not companies such as Westminster Cable Television, which are profiting from the use of the public
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highway, make a contribution towards the costs incurred? Further, should there not be a duty on them to restore the highway to its former condition?
Viscount Ullswater: My Lords, times have changed since 1950 and the law is in need of reform. Cable television companies require a licence under the Telecommunications Act which makes them subject to the same street works code in the 1950 Act. Thus cable television companies are required to meet the same conditions as any statutory undertaker when excavating in the streets. For example, before digging up a street they must serve notice on the highway authority and the utilities which may be affected, and for major works agree arrangements with the highway authority. As regards charging, the department is now considering responses to a consultation paper which was sent out for consultation in September, 1989. There would be time to implement its details in any proposed legislation.
Lord Rea: My Lords, as a cyclist, who this morning was practically thrown off his bicycle three times on the way to the House because of inadequately filled holes in the road, can the Minister tell me whether he has any powers —even of persuasion —to insist that the undertakers who make holes in the road fill them up adequately and level with the rest of the road?
Viscount Ullswater: My Lords, under the existing provisions in the code which I mentioned in my Answer, utilities and others licensed to excavate the streets are required to restore the surface of the road or footpath only to its original surface level. That is often a temporary restoration. The highway authority has the right to carry out the permanent restoration at a later stage or it may allow the utility to do so. Most authorities elect to do so themselves. The difficulty arises in the time between the temporary and permanent restoration of the road, but the code of practice in the new law will over-come that.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether the proposed legislation will deal with a trouble which arises today? I am referring to the fact that just when the highway has been restored another worthy organisation comes along and digs it up again. In view of the fact that my noble friend says that the matter is being considered, does he agree that it was being considered in Government to my personal knowledge in 1955? Is it not now time that something was actually done about it?
Viscount Ullswater: My Lords, I have a great deal of sympathy for what my noble friend says but the 1950 Act is now in force. However, I understand that the Department of Transport has made proposals to local authority associations and utilities for joint development of a computerised street works register. I am sure that once that task has been undertaken the concerns held by many noble Lords about roads being dug up once and then dug up again will be overcome. However, that does not mean to say that we do not need the law to back it up.
Lord Underhill: My Lords, is the Minister aware that I and other noble Lords have been pressing the matter for at least the past two years? As long ago as 1986 the Government stated that they accept the 1973 recommendations in the Home Report and that legislation will be introduced as and when the opportunity arises. We have been given that answer time and time again. As the subject is to be debated next Wednesday on an Unstarred Question, will the Minister consult his right honourable friend the Secretary of State in order to obtain a better Answer outlining definite action?
Viscount Ullswater: My Lords, I shall consider most carefully the noble Lord's comments. I appreciate that he has an abiding interest in matters of transport and has raised the subject on many occasions. However, many factors must be taken into account when determining the legislative programme. Some measures are essential in order to conform to international law and others are a political priority. Street works reform would have required a lengthy, technically complex Bill and there would not have been sufficient parliamentary time this Session.
Lord Tordoff: My Lords, is the Minister saying that the Government give the subject low parliamentary priority?
Viscount Ullswater: No, my Lords, I am saying that there may be other subjects which have a higher parliamentary priority.

Ministry of Defence Police
11.26 a.m.
Lord Graham of Edmonton Lord Graham of Edmonton asked Her Majesty's Government:
Whether the replacement of Ministry of Defence police by private security firms at defence establishments has caused a decline in standards of security.
Lord Reay: My Lords, the standard of security at any establishment depends on the perceived threat to, and nature and purpose of, the establishment. In all cases where the Ministry of Defence police have been replaced, the department is generally satisfied that the security arrangements are adequate in relation to the current state of these factors. But the position is being kept under constant review.
Lord Graham of Edmonton: My Lords, I am grateful to the noble Lord for that Answer. However, does he not share the concern of Mr. Michael Mates, chairman of the Commons' Select Committee on Defence, that servicemen's lives could be put at risk because of a fall in security standards where the job of guarding military installations has been contracted out to private firms? Those are the views of the chairman of the defence Select Committee. Will the Minister look at the observations of a
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member of the same committee, Mr. Winston Churchill, who said that the action was sheer irresponsibility? Can we be told how many establishments are now guarded by private security firms and whether the change has been made on grounds of cost and not security?
Lord Reay: My Lords, Ministry of Defence police have been withdrawn where the Ministry's security staff are satisfied that the security requirements of the site in question have been adequately met by other means, including the employment of contract guards. The Ministry of Defence reviews and monitors the performance of all contract security guards extremely carefully. Where requirements are not met action will be taken, including the termination of the contract where necessary. Such action has recently been taken.
Lord Harris of Greenwich: My Lords, in how many cases has there been a termination of contract? Secondly, how can he possibly say that there has been no deterioration in the quality of security, given the fact that the Association of Chief Police Officers has made it clear that a substantial number of people employed by private security firms have formidable criminal records?
Lord Reay: My Lords, I cannot give the details for which the noble Lord asked. However, as regards his second question, it is Ministry of Defence policy as far as possible to employ Ministry of Defence police officers only where there is a need for their constabulary powers, specialised training and/or a requirement to be armed. They are a skilled and specialised force and we cannot afford to employ such scarce resources on tasks for which their expertise is not required.
Baroness Phillips: My Lords, is the Minister aware that many noble Lords would like to see the private security companies submitted to a licensing board under government control so that there would be adequate inspection of the employees and the type of work provided? Will the Government agree to support such a Private Member's Bill if brought before this House?
Lord Reay: No, my Lords, I can give no such assurance. I repeat that contract guards will be used only under tight control and the arrangements will be subject to regular review.
Lord Cledwyn of Penrhos: My Lords, is it not further the case that one of the witnesses from the Ministry of Defence giving evidence to the Select Committee in another place referred to by my noble friend said plainly that the hiring of private firms for those purposes had not been satisfactory? Is not that a grave indictment calling for a most careful inquiry into that whole area?
Is the noble Lord further satisfied that the vetting procedures in those establishments are adequate? Does he not agree that there is a great deal of work necessary at present if the lives and careers of servicemen are to be properly protected?
Lord Reay: My Lords, on the noble Lord's last point I completely agree that it is necessary to devote additional resources to protect the lives of our servicemen and their dependants from the terrorist threat. An additional £126 million has been allocated over the next three years to improve security at defence establishments in this country and overseas.
An increase of 300 in the strength of the Ministry of Defence police is also expected over the next year to meet the terrorist threat. That simply underlines the need for us to use that skilled manpower sensibly and properly to carry out the tasks for which they are trained.
Lord Grimond: My Lords, is it a policy of the Government that the security at the barracks of fighting units should be carried out in certain cases by private security firms?
Lord Reay: My Lords, as I think I made plain in the previous answer, it is the practice to use Ministry of Defence police where the requirements of their specialised training and constabulary powers are required. If there is a requirement to be armed, only those police are employed.
Lord Boyd-Carpenter: My Lords, is not part of the problem, as my noble friend has just said, that whereas Ministry of Defence police can be and often are armed, in general private employees are not permitted to be armed?
Lord Reay: My Lords, it is certainly the case that contract guards may not be armed.
Lord Bottomley: My Lords, is the Minister aware that the Ministry of Defence police was looked upon as one of the most efficient authorities in the country? Can we be sure that the private security firms will keep up that standard? Will the Ministry of Defence take special care to see that they do?
Lord Reay: My Lords, as I said, the Ministry of Defence reviews and monitors carefully the performance of all contract security guards and will only employ them where it is satisfied that it is proper to do so.
Lord Harris of Greenwich: My Lords, if the first priority is to protect our soldiers in this country, how can it be right to withdraw Ministry of Defence police who can be armed and replace them by unarmed representatives of private security firms, some of whom have significant criminal records?
Lord Reay: My Lords, I can only repeat that the decision to do that is taken by the Ministry of Defence security staffs only when they are satisfied that thereby security requirements can be properly met.
Lord Blyth: My Lords, it seems to my simple mind that it would be cheaper to use your own employees rather than somebody else's. Why is that not so?
Lord Reay: My Lords, I do not believe that that is so.
Lord Graham of Edmonton: My Lords, does the Minister not accept that the tone and tenor of his replies smack of complacency? What has been demonstrated is that Members from all sides of the House are saying that on a question of cutting costs the House would prefer —and I believe that the country would prefer —to feel that all our servicemen are adequately protected. Will the Minister answer a direct question? Given all that he has said as to the safeguards for the employment of private firms, why is it possible that at the Royal Marines' barracks at Deal and at other places there have been instances whereby private firms have employed people with criminal records? That does not make sense and does not line up with what the Minister said.
Lord Reay: My Lords, it is not correct to imply that the Government are cutting costs on this matter. As I said, we are devoting an additional £88 million over the next three years to improving security at defence establishments in this country.

Coal Industry Bill
11.35 a.m.
Viscount Ullswater: My Lords, I beg to move that the Coal Industry Bill be now read a second time.
The heart of this Bill involves the capital reconstruction of British Coal and it may be helpful if I set out the background before describing in more detail how the reconstruction will be achieved. Much of British Coal's present financial problems originate in the Plan for Coal agreed in the mid-1970s. This envisaged a massive investment programme estimated in 1976 at over £3 billion to build up output to 135 million tonnes by 1985, with productivity growth of 4 per cent. a year. The borrowings to finance this investment raised British Coal's debt from around £1 billion in 1978 to over £4 billion by 1984. However, the promised productivity growth failed to come through and increasing losses were incurred from 1979 onwards. From 1980 up until 1987, this Government extinguished the losses year by year by means of deficit grant, and this kept the debt at broadly the £4 billion level throughout the period. Altogether, taking into account restructuring and other social grants, this Government have provided £10 billion grant for the coal industry since 1979.
Your Lordships will be well aware of the tremendous productivity surge of over 75 per cent. since the 1985 strike. This has reduced costs by nearly 30 per cent. in real terms, and I pay tribute to what the corporation's management has achieved. But the financial benefit of this has been more than offset by the collapse in energy prices in 1986. Oil prices halved and international coal prices followed suit. This has led to a steady decline in British Coal's prices, which are now 25 per cent. lower in real terms than five years ago.
It was hoped that British Coal would break even in the second half of 1987–88 and for the full year 1988–89. In fact, because of the squeeze on margins and the accelerated restructuring programme that

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resulted, the losses for this period were around £500 million, and a further loss of the same magnitude is expected for the current year. To finance this British Coal has had to increase its borrowings to over £5 billion.
In addition, under SSAP 24 —a new accounting standard dealing with pensions and similar entitlements—British Coal is expected this year for the first time to provide in its accounts for its concessionary coal liabilities, primarily to ex-employees, instead of charging them on a pay-as-you-go basis. These will amount to between £1·5 and £2 billion. The corporation has also made provisions of around £0·5 billion in respect of ex-employees' industrial deafness claims.
Finally, falling energy prices since 1986 have shortened the economic life of many collieries and severely depressed the cash flow of others. It has been increasingly clear for some time that the book value of the corporation's collieries has been well in excess of their true earnings potential, and indeed the auditors have qualified British Coal's accounts on this point since 1984. And in the highly-capitalised Selby coalfield prospects have been seriously diminished by persistently adverse geology.
A majority of collieries are now likely to show a negative cash flow over their remaining lives, and others will show projected earnings well below their current book value. Much more work remains to be done in this area, but it seems likely that this will lead to the write-off of at least half the industry's £4 billion fixed assets and perhaps a good deal more. However this write-down, which is in line with standard accounting practice (SSAP 12), is essential if the auditors' qualification of British Coal's accounts is to be lifted.
The Government welcome the improved transparency that these changes will bring. For the same reason the Government also welcome the corporation's recent agreement to end the arrangement whereby each colliery is attributed with a share of the average proceeds nationally. From the beginning of next year each coalfield will be credited with the actual proceeds from its own disposals. These two steps will allow a much truer and fairer value to be established for each colliery and for the corporation as a whole.
However, the financial effect is large. The unrelieved losses of the last two years, the provisions for concessionary coal and deafness claims, and the asset write-down, will result in a deficiency of over £5 billion and possibly up to £7 billion in the corporation's March 1990 balance sheet. This puts the Government, as the industry's banker, in a quandary. With such a growing deficiency in the balance sheet there would be no way that the corporation could be expected to service and repay its borrowings, and thus no way in which the Government could legitimately continue to lend the day-to-day funds which the corporation will continue to require.
Clause 1 addresses the problem by giving the Government power to deal with the accumulated losses by means of a deficiency grant; but it also
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achieves two other objectives. The first is that the injection of grant will enable the corporation to repay an equivalent amount of its existing borrowings, which will bring its debt into closer alignment with the true value of the fixed assets to which they relate and will of course substantially reduce the corporation's interest burden. The second is that the grant, which is expected to be taxable on receipt, will greatly reduce the enormous tax losses and allowances of over £3 billion which the corporation has accumulated.
The Government's intention is to pay a substantial sum in deficiency grant immediately upon Royal Assent to this Bill, but the grant does of course constitute a state aid and payment is therefore subject to the prior approval of the European Coal and Steel Community, which we are urgently seeking. Further sums will be paid once British Coal's 1989–90 accounts have been finalised, while grant in respect of concessionary coal and industrial deafness claims will be phased over several years to match British Coal's own settlement of these claims.
The capital reconstruction is very good news for the coal industry because it very largely removes from the corporation the losses and liabilities of the past. The outline contract with the generators announced in December is also excellent news. It gives them a period of three years in which to adjust their costs and restructure the industry into a strong competitive position for the longer term.
Clause 2 provides for a continuing government contribution towards the cost of this restructuring. It increases the limit on restructuring grant from £750 million to £1,500 million and extends its availability by one year to March 1993. This is a broad-brush figure. Obviously, as in any business, the corporation will wish to look closely at those operations and segments of business which are not expected to generate a positive cash flow; but the extent and timing of the restructuring are matters for British Coal to assess.
Following the capital reconstruction we expect the corporation to achieve growing profitability. There will therefore be no requirement for any further government financial support to the corporation other than the restructuring grant that I have mentioned. We also expect the corporation within a year or two to have made sufficient progress towards its self-financing that it can start to reduce the outstanding borrowings which will remain after the capital reconstruction.
There will, however, be a need for continuing day-to-day borrowings. Clause 3 of the Bill is designed to facilitate that. It is a technical provision which ensures that temporary deposits from British Coal will not have to be paid into the Consolidated Fund but can instead be withdrawn when required. In other words, it will allow the Secretary of State to offer revolving credit facilities as well as term loans.
Clause 4 of the Bill provides for an increase in the limits on licensed mining and other consequential changes. The present limits —30 men underground in the case of deep mines and 25,000 tonnes in the case of opencast mines —have not changed since

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they were set in the 1940s and 1950s, in spite of the enormous changes in mining technology over the past 50 years. The smaller British Coal mine today employs between 200 and 250 men underground, and only a small number of the corporation's opencast sites are below 250,000 tonnes.
This Bill proposes an increase in the underground limit to 150 men —and I should like to confirm that this means 150 underground men on books rather than 150 men underground on any one shift —and an increase in the opencast limit of 250,000 tonnes. In other words, the largest licensed deep mine will still be smaller than virtually all British Coal mines.
Some have suggested that British Coal's operations should be hived off from its licensing role. The Government strongly agree with this in principle. This will be the essence of a coal privatisation Bill in the next Parliament. But it is technically complex legislation and would require wide consultation beforehand. It could not realistically be brought forward in the current Parliament.
Our modest purpose in this Bill is to open up economic reserves, particularly of special quality coals, such as anthracite, which are too extensive or deep to be worked under the existing limits but too small to be considered by British Coal. Much of the extra tonnage will directly displace imports. It will also create more mining jobs in depressed communities. Larger-scale operations will encourage investment in more efficient machines and working practices, which will not only cut costs but also greatly improve the safety of licensed deep mines and the environmental impact of opencast mines.
Your Lordships' House is agreed, I am sure, that safety must be the paramount concern in mining operations. There is no dispute that the recent safety record of licensed mines has been worse than that of British Coal's mines. But there is a difference of view about the safety implications of raising the 30-man limit. Some argue that this will simply expose more men to the dangers of old-fashioned mining. Our view is that potential licensees will look hard at the possibilities of investing in mechanisation to take advantage of the multi-shifting and larger throughput that the higher limit will allow; and that mechanisation will lead to the same reduction in accident rates as British Coal saw when it mechanised 30 or 40 years ago. The Government's firm view is that there can be no justification for condemning licensees to use older and inherently riskier mining techniques where, but for the manpower restriction, they would have been able and willing to mechanise and automate.
The key responsibility for enforcing mining regulations of course falls to the Mines Inspectorate which is able to, and actually does, close down mines which fall seriously short of acceptable safety standards. In addition, British Coal requires to be satisfied as to the technical capability of the applicant to carry out the operations safely; and it also requires to know the name of the manager and that he is suitably qualified. Finally, the insurance companies which insure licensed mines have taken a more proactive role over the past year in sending
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their own mining inspectors to all mines to identify safety risks and in advising on mine planning.
The environmental aspects of opencasting are just as emotive as the safety issue is for deep mines. But here too the Government believe the proposal to raise the licence limit will bring benefits. At present where there is a deposit of, say, 100,000 tonnes being worked by a licensee the 25,000-tonne limit means that the site tends to get worked in a piecemeal fashion. Moreover, there is simply not room to deploy modern efficient machines, so the extraction of each licensed area takes longer than it needs to.
Thirdly, the economics and the confined layout of a small 25,000-tonne site may prevent the extraction of the deeper seams. This is a waste of a national resource and it can leave the nagging worry for the local community that the site may be reworked at a later date. And finally, the lack of space to store excavated spoil can limit the scope for imaginative landscaping when the site is restored. We believe that raising the limit to 250,000 tonnes will go some way to overcoming these concerns about piecemealing, and this is a view which is shared by the local authorities. Raising the limits should lead to fewer but larger licensed sites, more quickly worked out and more sensitively restored.
Opencast coal is an immensely valuable national energy resource. Its costs are low —on average 30 per cent. less than deep-mined coal —and its quality, in terms of low ash content and low chlorine, is in high and growing demand. There are very large national benefits from more opencastirig. But against these national benefits there has to be set the disbenefits to the local environment.
A balance has to be drawn, and the Government believe it has to be drawn on a site-by-site basis through the planning system. In 1988, in response to rising environmental expectations, the Secretary of State for the Environment issued new mineral planning guidelines which set out much more fully and tightly than before the environmental considerations that have to be taken into account in striking this balance, including the arrangements for restoration. These guidelines apply to all opencast coal applications, and nothing in this present Bill detracts in any way from the planning regime as it applies to licensed mines.
The Secretary of State has also since 1988 required applicants for planning permission for opencast sites above 50 hectares —that is, about 120 acres —to prepare a full environmental impact assessment which examines all aspects of how the proposed workings will affect the environment. Assessments will be required for virtually all the larger licensed sites allowed by this Bill.
I want finally to refer to subsidence. The Government recognise that the present statutory arrangements governing subsidence are not fully satisfactory and they are committed to bring forward early legislation to put improvements in place. But the legislation is not straightforward because it needs to consolidate the two existing Acts that bear on subsidence as well as introducing new features. It would not be practical to tack subsidence provisions on to the present Bill, which has financial provisions

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that urgently need to be in place by the end of this financial year. I shall of course take careful note of the points made about this today.
The capital reconstruction of British Coal that this Bill proposes reflects two things: this Government's willingness to face up squarely to the hard financial realities and their unwavering support for British Coal's own efforts to become a viable and competitive business. This Bill recognises that further reconstruction will be required before this goal is achieved, but it offers a real basis for confidence in the industry's long-term future. I beg to move.
Moved, That the Bill be now read a second time. —(Viscount Ullswater.)
11.54 a.m.
Lord Graham of Edmonton: My Lords, on behalf of the whole House I begin by thanking the Minister for what quite clearly is the great deal of preparation that he has undertaken in order to give the House a full and lucid explanation of what the Bill is about. I say to him and the House that for many of us, especially those behind me on these Benches, the coal industry is more than just a subject for a piece of legislation.
When we look at the coal industry we do not see just columns of figures, balance sheets, profit and loss accounts, subsidies or prices; we do not just see preambles, clauses or schedules, but flesh and blood. I see sitting behind me my noble friend Lord Mason of Barnsley. I can recall, more than 20 years ago, the noble Lord, Lord Mason, going to see a play in London. I saw the same play in Newcastle-upon-Tyne at the Playhouse. That play was about the Northumberland and Durham coalfield. It was put together by three remarkable people. One was named Syd Chaplin, who produced the stories; another was Alan Plater, who produced the stage play, and the third was Alec Glasgow.
Together they produced a gripping story about the life and times of the mining communities of the North-East. The play told about the injustice and struggle and the fact that they were still continuing. It was called "Close the Coalhouse Door". I wonder whether my noble friend Lord Mason remembers the first line of each of the first three verses. They are:
"Close the coalhouse door, boys, there's blood inside. Close the coalhouse door, boys, there're bones inside. Close the coalhouse door, boys, there's skin inside".
When we speak of the coal industry we are talking about men as well as money. The raison d'etre for this Bill, as the Minister has said, is to see it as a restructuring of the finances of British Coal. The Minister does not need to spend much time on convincing the House that the accounts need restructuring. No other company in the world shares British Coal's accounting structure, which imposes unnecessary and unfair historical costs on current performance.
It would have been far better to take the advice and the plan of the TUC, especially when one sees that last year's operating profit rose to a 20-year high
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of £498 million, making British Coal one of the most profitable coal companies in the world. Yet, despite a 90 per cent. growth in productivity since 1985 and a real operating profit of £1·4 million, it was not allowed to raise coal prices in line with inflation as most other UK companies have done, and that real profit of £ 1·4 million was transformed into a bottom line loss of £203 million.
The Minister knows that the principal reasons for that were the obligatory cost of servicing the corporation's debt to government, terminal depreciation costs, net restructuring costs and the ludicrously high cost of loans. That means that for every £1 million invested by British Coal it will pay out £1 million in interest charges. I support restructuring which has the following aims: steps to be taken so that the British electricity supply industry sustains a sufficiently high and predictable demand for British coal to provide the basis for the long-term development of Britain's coal industry; investment in the coal industry sufficient to ensure that British coal supplies are available at an economically competitive price; more resources to be provided for the development of new, clean coal technologies; and imports of coal, especially dumped coal, not to be increased to the detriment of British coal.
These proposals form a financial restructuring and are designed to secure the future of a publicly-owned coal industry which I believe is fundamental to energy policy as a whole. It is a far better recipe for the industry than the slim-it-down, fatten-it-up and flog-it-off policy which is contained in this mercenary Bill. Whatever the case put forward in Committee to expand opencast coal mining, the Minister knows that it will be against the views of the Energy Committee report of another place made in 1987 concerning the coal industry. The report states:
"Opencast mining is one of the most environmentally destructive processes being carried out in the UK".
I invite the Minister to cut out all the rhetoric about the Government being the Green Party in drag, being environmentally pure and being prepared to make the polluter pay. What is the Government's record on overseeing environmental obligations on opencast operators? I suggest that at the moment it is abysmal. The Council for the Protection of Rural England is in no doubt that the Bill requires safeguards for protecting our countryside, our habitat and our heritage. There should be an environmental duty attached to the award of all licences for working coal in both the deep-mine and opencast sectors. Where is the framework within which licences for coal working, searching and boring can be granted? Where is the care, the concern and the responsible attitude?
There are many reasons why opencast mining is to be avoided if at all possible. Yet, when the Secretary of State spoke on the Bill at Second Reading in another place, the only case that he made out was on technical grounds as a result of which more coal could be mined than hitherto. What about the visual impact? There was not a word. What about noise? There was not a word. What about blasting, ground vibration and air blast waves? There was not

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a word. What about dust, overburden and transporting the coal? There was not a word. What about the effect on watercourses, leaching and pollution? There was not a word. What about agricultural use, nature conservation and forestry'? There was not a word. What about our natural heritage and extraction impact on listed buildings? There was not a word.
The Government's attitude in that respect is scandalous, cynical and mercenary. It has nothing to do with the national interest; it has everything to do with money and greed. To extend open-cast mining flies in the face of the Flowers Committee, which said:
"We strongly recommend that as older, more unprofitable and less environmentally acceptable deep mines are closed and more efficient and profitable operations take place, the volume of opencast mining should be allowed to decline. In the meantime there should be no increase in the present target of 15 million tonnes per year. The unique sensitive character of the British countryside and the high population density in much of the country would not be able to accommodate, without unwarrantable damage, a target in excess of that level".
Perhaps I may introduce what I hope the Minister will accept is a constructive note; it is certainly intended to be so. I have been involved over many years in encouraging the utilisation of minestone in a range of civil engineering outlets. That sector can utilise many millions of tonnes per year. I followed the debate on coal and the environment under the chairmanship of the noble Lord, Lord Flowers, in which evidence was given by the then National Coal Board's Minestone Executive. I am pleased to see that the noble Lord, Lord Ezra, is here as he played a major part in creating the Minestone Executive with a view to doing what it could to treat chemically and make environmentally useful what one would call the waste or slag from mines. Evidence was given by the executive in the report of the noble Lord, Lord Flowers and it was commended on its efforts to encourage the commercial use of minestone.
I also followed with great interest the evidence given to Sir Ralph Verney's committee, which ultimately produced the report, Aggregates: The Way Ahead. It recommended, first, that the Government, in conjunction with the construction industry, should study the implications of requiring tenderers for highway works to reveal the general source of material that they use with a view to permitting a full assessment of the costs and benefits of using different sources of imported fill. It recommended, secondly, that the Government should lay major and urgent emphasis on the studies already in hand and those that it had recommended with a view to maximising the contribution of waste materials to the supply of aggregates.
Those recommendations clearly show the enthusiastic support for the use of minestone in civil engineering and related projects. It has been clearly illustrated that the disposal of minestone is in the interests of the corporation itself; of the community generally from the point of view of conservation of scarcer, more costly alternative aggregates; and of the enhancement of the environment, by reducing the number of colliery spoil tips and reducing other quarrying activities.
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I met the then Transport Minister, Mr. Peter Bottomley, in 1987, when he agreed to nominate an official contact for the Minestone Executive for major road schemes with potential for use of minestone. I am now advised that no official has been nominated to encourage the use of minestone in major road schemes. Will the Minister tell the House why that has not come about?
As noble Lords are aware, in addition to highway schemes, there are some large land reclamation and development schemes under the jurisdiction of government departments which could utilise massive amounts of minestone. For instance, the Committee stage of the Cardiff Bay Barrage Bill has taken place in the House this very week. I am sure that there is a possibility there for the use of minestone.
It is sometimes argued that it is difficult to transport minestone over long distances, but that argument cannot apply in Cardiff because Wales must have millions, if not billions, of tonnes of minestone lying around. Minestone is a wasting asset which should be tackled because the arguments in favour of its use are very strong. The cost of disposal of colliery waste is high and puts an additional burden on the profitability and competitiveness of coal production. Therefore, any means of reducing that cost must be seriously considered. The use of minestone conserves the supply of quality aggregate for more appropriate uses. If more minestone was used, there would be a reduction in the number of new applications to quarry and the number of borrow pits along the route of a new road would be reduced. The utilisation of minestone would reduce the cost of a major civil engineering project. Is the Minister able to reply helpfully, and, I hope, encouragingly to those points?
In his final words, the Minister touched on a matter which affects many thousands of people. Subsidence is a major issue in relation to the coal industry at this time, yet the Bill fails to deal with it. I acknowledge what the Minister said. Although there had earlier been an intention to include it in the Bill, it has now been found best not to do so. However, the Minister has a major responsibility to use the opportunity today to tell people outside the House when legislation is likely to come forward. I have received representations from mining and environmental interests. I never thought that I would stand up to speak on behalf of the Country Landowners Association, but I speak on its behalf today. It tells me that hundreds of its members have been waiting a long time to have their claims settled. Will the Minister tell the House why, in 1989, the number of claims that were rejected increased from 39 per cent. to 46 per cent? What is the major reason for the rejection of those claims?
The Minister knows that the Government created the Waddilove Committee, which laid down fairly easy, straightforward, acceptable demands, first, for British Coal to reinstate and compensate for loss of market value; secondly, for claimants to appoint contractors of their choice; thirdly, for British Coal to accept the onus of proof that damage does not result from mining subsidence; and fourthly, to

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establish local arbitration panels to handle small claims. I hope that the Minister will help us on those points. We certainly intend to table amendments at Committee stage to give him the opportunity to do so.
Over the past 10 years we have had short-term solutions to problems which cried out for long-term answers. Never before has Britain been able to tease out those answers against the stupendous benefits of billions of pounds brought to us by the bonanza of North Sea oil. When the history of the last decade is examined, it will be found that, instead of carefully ensuring that we did not waste a drop, we have witnessed a criminal lack of investment in research to find more and better techniques to burn our coal resources more efficiently, that our environment has paid and that we shall continue to pay for that.
A report produced for Durham council by the County Planning Officers' Society drew attention to a number of privately operated sites where planning conditions have been breached and restoration commitments not fulfilled. How can the Minister tell us that, if the present limit of 25,000 tonnes is multiplied 10 times, the breaches which have existed for the past few years will not continue in the future? The Minister must attach to those licences meaningful conditions for reinstatement and observation.
What are we to make of the proposal to increase from 30 to 150 the numbers who can work in a private mine? That simply puts five times the number of miners at graver risk in private mines than is the position at present. How can we approve an extension of private mines if we are putting miners at greater risk than we need to? The Minister knows, as does the House —and, indeed, the nation should be grateful for this —that British Coal has the best safety record in the world. In fact it is better than in Germany, it is better than in America and it is 10 times better than in South Africa and Russia.
Why then are the Government slicing away at the present high standard of safety procedures? Surely we should be pressing for higher and not lower safety standards. Colliery deputies will no longer be required to hold a first-aid certificate. There is a reduction in safety training centres of on/off the job training. Moreover, underground supervisors will in future supervise all elements in pits with fewer than 15 workers. We intend to put down amendments to bring that safety aspect before the House.
In conclusion, we on these Benches will seek to improve the Bill so that it leaves this Chamber in a more acceptable form than when we received it. That should not prove to be too difficult a task. The improvements are modest and justified: first, to bring financial sense into the energy policy of the Government; secondly, to limit an expansion of private mining which brings with it danger for an increasing number of miners; thirdly, to arrest severely the spread of opencast mining with its damage to the environment; and, fourthly, to speed the process of compensation for those who suffer loss as a result of subsidence due to coal working.
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We shall not oppose the Bill because it brings many benefits to miners and mining communities; but we shall articulate on behalf of many who will suffer hurt in one way or another unless the Bill is improved.
12.11 p.m.
Lord Ezra: My Lords, I should first like to associate myself with the opening remarks of the noble Lord, Lord Graham of Edmonton, by expressing appreciation of the very clear way in which the noble Viscount introduced the Second Reading of this Bill. It is a most important Bill and for anyone connected with the coal industry it ranks among some of the most important developments in the industry's history since the last war. The noble Lord, Lord Graham, also made some moving comments about the human aspects of mining. I hope that I shall be forgiven due to my long past association with the industry if I also talk a little about the past before talking about the present and the future.
The sums involved in this capital reconstruction are very considerable. I should like to suggest that the sums which the coal industry in its post-war period contributed to the benefit of the country were even more considerable. I happened to join the coal industry in 1947. At that time there was what was known as a gentlemen's agreement between the Government and the coal owners which had held the price of coal during the war-time period. That agreement was continued by the new coal board under Lord Hyndley. For approximately 10 years coal was sold on the home market at something like £2 a tonne less than the world price. I know that for a fact because I was concerned in its export.
We were being attacked by the United Nations for practising what was known as dual pricing. That process consisted of selling coal cheaper at home and exporting it abroad at a dearer price. During that period some 2 billion tonnes of coal were produced —that is, 200 million tonnes a year, which represents roughly £4 billion. That was willingly contributed by the coal industry to the consumer and the taxpayer. I should remind your Lordships that £4 billion in 1950 prices would in today's values be about 15 times that amount. I merely mention that fact because, although these are large sums, I think that historically one needs to put them into context. Even in financial terms, let alone in social and human terms, the coal industry has made very big contributions to this country.
I believe that this capital reconstruction is necessary and very important. I was going to add that it was also timely, but it is a fact that during my time in the coal industry I tried very hard to get a similar capital reconstruction brought in. However, I am delighted that this one is now being brought into being. As the noble Viscount and the noble Lord, Lord Graham, pointed out, the coal industry has performed remarkably over the past few years as shown by the massive increase in productivity which it has achieved. It is right that that should be recognised by removing from the shoulders of the industry this great burden of debt which is largely inherited from the past. Therefore, I welcome the

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concept of reconstruction. I think that it will give the industry a great opportunity to move forward.
Of course this is to be a once and for all settlement of the problem so far as concerns the Government. We cannot argue about that fact. It is a sound way to set about the matter. But in regard to the question of the revaluation of assets, the noble Viscount said that this was being carefully looked into. I should like to ask him what progress has been made in this respect in the discussions which are taking place among the Government, the coal industry and the auditors. It is extremely important that that revaluation should be effectively and speedily carried out so that everything will start on a proper basis.
The other aspect of the capital reconstruction of the mining industry is its ability to sell the product. As the noble Lord, Lord Graham, properly mentioned, the electricity market is the overwhelmingly largest market for coal. There have been reports of contracts being made with the new electricity generating companies which will give some degree of security to coal over the next three years. Perhaps the noble Viscount would like to tell us a little more about that aspect. Quite clearly, as important as capital reconstruction is, if because of the way in which market developments are likely to take place due to changes in other industries, such as that in the electricity industry which is now being privatised, the coal industry is impeded in its efforts to sell coal, many of the benefits from the capital reconstruction could be lost. Therefore, some degree of security in that major market is clearly required. However, has that been achieved?
The question of the licensed mines and the opencast mines and the increased levels at which both can be developed raise major issues which have been mentioned by the noble Viscount and the noble Lord, Lord Graham. I am much concerned about safety. When I was at the Coal Board carrying on the tradition set by my predecessor, Lord Robens, and other previous chairmen, safety in the mines was given the highest priority. Every time there was a fatal accident in the industry —and I am glad to say they diminished in number —it was immediately reported to the full board and all details were studied in order to make absolutely sure that an eventuality that had occurred in a particular case could not conceivably happen again if human intervention could possibly avoid it.
We knew all along that the safety standards of the licensed mines were much lower than ours. But of course we had no influence over them. The noble Viscount has told us that his impression is that if the size of licensed mines is increased, then there would be more possibility of introducing mechanised systems of mining and that that should automatically reduce the incidence of accidents. I am not sure that that follows.
We found that mechanisation itself brought new risks and they had to be dealt with. We had to devote a very great deal of effort to solving the problem. I am glad to say that there was total agreement within the industry as regards the mining unions, the men, the managers and everyone else involved, including
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the mining machinery manufacturers. Indeed, there was total consensus on the need to keep our mining industry as safe as possible. Moreover, we achieved the record to which the noble Lord, Lord Graham, referred. Therefore I wish to ask the noble Viscount, first, whether he has in mind any ways in which the Bill could be strengthened in this respect so that we can be assured that, if the provision for increasing the size of licensed mines goes ahead, as firm an obligation as that which rests on the main mining industry —at present publicly owned —should rest on the private licensed mine owners.
Secondly, in the case of open cast mines, one of our major priorities was to ensure the best ways of open-casting the sites and of restoring them afterwards, in conformity with the best environmental standards. Here, too, the coal industry achieved an enviable record which was referred to in many parts of the world. I remember that we were asked to send a delegation to the United States to indicate to them how we handle the matter. It was equally well known in this case that the private open cast operators failed to achieve the standards which were set and achieved by the coal board in those days. I am sure that has continued to be the case.
The private operators had no doubt fewer resources to call on, but often they left sites not in the condition in which they were committed to leave them; they just walked away. Perhaps the companies were not of such a size that anything could be done about it.
Two standards developed as in the case of safety in licensed mines: the standard applied by the coal board and that applied by the licensed operators. Again I wish to see some strengthening of the Bill in this regard. We must not allow our standards of safety and of environmental conformity, so strongly fought for in the coal mining industry, to be debased in any way. On the contrary, those standards must be strengthened if we can think of any ways of doing so.
Subsidence has been mentioned and we have heard that the Government have thoughts about how it could be dealt with. They have decided that it would be inopportune for them to cover it in the present Bill, but they have committed themselves to coming forward with a Bill on the subject before long. Like the noble Lord, Lord Graham, I wish to hear a little more about this because it is a matter of major concern not only within the mining industry but for those affected by mining. Those of us who are involved in or connected with the industry will be aware of many serious instances of subsidence where people have suffered seriously and not been able to obtain the compensation to which one would normally feel they were entitled. We wish to hear more about that.
Finally, I am delighted that the noble Lord, Lord Graham of Edmonton, referred to minestone. Minestone is the residual product from coal mining. Over the centuries it has tended to be built into the slag heaps that have been a well-known sign of the industrial Midlands and north of our country. During the period in which I was involved in the

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mining industry, we tried to turn these to good and positive use. We found that by grading and analysing the minestone, we could use it for the purposes to which the noble Lord referred —namely, road infill, foundations and for converting into aggregate of various kinds in certain cases. We built up quite an organisation to do that.
I think that it would be helpful if the noble Viscount could respond to the questions put to him in this regard by the noble Lord, Lord Graham, and tell us whether the Government have in mind in any way stimulating and facilitating the expansion of the operation. There are many obstacles in the way of building this up. I was startled to learn when we began the operation that if a slag heap, a pit heap, were left totally idle, it was not rateable. However as soon as one started improving the environment by taking the stuff away and making some use of it, it became highly rateable. We had many arguments with local authorities about this because in some cases we found that the level of rates being levied was higher than anything we could have earned by taking the stuff away. That seemed to me to be rather peculiar.
Under the new system, with the changes in the rating of industrial activities and operations, perhaps the noble Viscount could explain to us what the rating position will be. Will it be regarded —as in my opinion it should be —as a positive asset to the environment and therefore not rated at all? Or if it is to be rated, will regard be given to these wider issues?
To sum up, I welcome the Bill because of the major capital reconstruction which it brings to the industry and which has been so long required. I wish the industry every possible success as a result of the reconstruction. There are aspects of the Bill which have been touched on both by the noble Lord, Lord Graham, and myself to which we will wish to return at Report stage. I believe that our great mining industry, with its great past and massive contribution to our country's affairs, will be able to contribute even more in the future in its present condition with much greater efficiency, now assisted with the capital reconstruction.
12.26 p.m.
Baroness Stedman: My Lords, I too wish to thank the Minister for the clear way in which he introduced the Bill this morning and also for sending out copies of his Notes on Clauses which have been most useful to me. I have been making a second venture into matters to do with coal, my first being some 40 years ago. For a brief period at the same time as the noble Lord, Lord Ezra, I was a member of the national coal consumers' council. However I speak purely as a lay person today, without any great knowledge of the industry or what is going on.
I welcome the proposals for the restructuring of the coal board's accounts. However I am concerned about the same two matters as regards which previous speakers expressed concern. I refer, first, to the system of compensation for subsidence which the Minister has said needs separate legislation; and
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secondly, to the open cast mining which needs much stronger conditions on the environmental side.
The Waddilove Report in 1984 made a number of recommendations to improve the compensation procedure. The Government accepted the need for future legislation to take account of these recommendations. Therefore while the Bill is primarily concerned about British Coal's finances, I am disappointed that it has not been used as a vehicle to settle the compensation liabilities which will not cease if and when British Coal is privatised.
I also speak today as one of the vice-presidents of the Association of District Councils. In several district council areas there has been serious damage by subsidence. I wish to see the Bill provide an opportunity to ease the plight of the residents in those districts. There was a conference at Mansfield in November 1989 attended by a range of speakers from the Country Landowners' Association to the British Property Federation and from most of the local authorities in the East Midlands and the South Yorkshire area.
That conference unanimously urged the Secretary of State for Energy to introduce a Bill based on the recommendations of the Waddilove Report. The first request was to amend existing legislation by publishing information as to future coal mine workings and give information about past workings; and where it was reasonable to do so, about the repairs that had been carried out or compensation that had been paid in respect of individual properties. The second request was to carry out thorough repairs and the payment of adequate compensation in respect of surface damage caused by coal mining without the constraints of the present six-year rule. That same conference last year asked the Secretary of State to consider incorporating into legislation a simple, inexpensive system of truly independent local arbitration or adjudication to resolve disputes between British Coal and claimants more quickly as regards repairs and compensation for subsidence damage.
In rereading the Waddilove Report and the Government's response I was reminded of my visit to West Cumbria on other matters during the previous election campaign. I also visited a housing estate in Egremont. Many of the tenants had purchased their council houses and they had spent a lot more money on modernisation and improvements. Then the subsidence began. Those who had not bought their houses were being rehoused by their district council and their existing estate houses were boarded up. However, those who had invested their life savings in their homes could obtain no redress. The council could not repurchase their homes, even at the price the tenants had paid for them. The houses could not be sold on the open market because no one wanted to buy them as there were holes in the roads and paths and the six-year rule applied. There must be many similar cases of hardship throughout the coalfield area.
Clause 4 of the Bill relates to licences for coal production and exploration. The British Coal Corporation will be able to give licences for opencast operations not likely to exceed, or greatly exceed,

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250,000 tonnes. That is a tenfold increase on the present limit of 25,000 tonnes. Local councils are rightly worried about the environmental implications of opencast mining. They are worried that this clause will increase the number and the extent of opencast operations. I share the concern of the noble Lords, Lord Graham and Lord Ezra. I do not think that Clause 4 faces up to the environmental problems and concerns.
In a debate in another place on 27th October Moynihan stated:
"There is no Government target for coal production or opencast output. That is properly a matter for the market place to determine". —[Official Report, Commons, 27/10/89; col. 1353.]
However, those statements are of concern to local authorities. They are, even now, negotiating with the opencast executive a national assessment, but this assessment explicitly excludes the contribution from the licensed sector.
Paragraph 8(1) of the draft assessment now being prepared states:
"During the past few years licensed opencast output has risen from 0·8 million tonnes per annum to over 1·7 million tonnes per annum. Even in the difficult marketing situation in 1986 and 1987 due to falling oil prices, this output has not reduced significantly … British Coal assume that this level of output from the licensed sector will remain at approximately this level".
I ask the Minister whether that statement is true or false. If it is true, why is there such urgency to increase site licensing from 25,000 tonnes to 250,000 tonnes? What environmental protection can be assured and how will it be done?
In seeking to increase the licensable tonnage from 25,000 to 250,000 tonnes, Clause 4 simply reiterates the wording of the Coal Industry Nationalisation Act 1946. That is the Act which fixed the amount of coal which could be won from a licensed site at an amount,
"not likely to exceed, or greatly to exceed, 25,000 tonnes".
The words,
"not likely to exceed, or greatly to exceed, 25,000 tonnes",
might be appropriate for such a small figure. However, when such a large figure as 250,000 tonnes is in question, it would be extremely difficult for anyone to decide what amount of coal was not greatly in excess of 250,000 tonnes.
I am assured that under the present arrangements an increase of 100 per cent. has on occasions appeared to be regarded by British Coal as not greatly to exceed the licensable tonnage. That kind of latitude would be inappropriate if we are talking in terms of 250,000 tonnes.
The second cause for concern is that, having regard to the considerable increase in the likely size of licensed opencast coal sites, there is no requirement in the Bill for the licensed sector of the industry to have specific regard to environmental considerations, as is the case with British Coal proposals. Like the other speakers before me, I believe that Clause 4 should be amended to incorporate the wording comparable with that already included in Section 3 of the Opencast Coal Act 1958. That would require that as regards the licensed working of coal by opencast operations British Coal should have regard:
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"to the desirability of preserving natural beauty, of conserving flora, fauna and geological or physiographical features of special interest, and of protecting buildings and other objects of architectural or historic interest … any effect which the proposals would have on the natural beauty of the countryside or on any such flora, fauna, features, buildings or objects".
As a lay person it seems to me that the national assessment will be too biased in respect of the economic situation of British Coal and will not consider sufficiently the environmental and social costs of opencast workings. The planning system has shown that it cannot control the noise, the dust and the extra heavy traffic associated with opencast sites.
Opencast mining can place an intolerable burden on the local population. It often occurs on the edge of fairly densely populated areas which are served by substandard roads and a road infrastructure which was not built to take heavy lorries. I believe that at later stages of the Bill we shall need two amendments on the lines of my suggestions. They would ameliorate some of the potentially adverse effects of Clause 4.
12.37 p.m.
Lord Forester: My Lords, the noble Baroness, Lady Stedman, was concerned at speaking to your Lordships for the second time on this subject. My temerity in addressing your Lordships for the first time is very much greater. I must declare an interest. I also apologise for my voice, which appears likely to leave me at any stage.
Clause 4 of the Bill allows British Coal's licensees to seek, through the courts, a right to search and bore for coal. It increases the number of people allowed to work underground to 150 and the size of opencast sites to 250,000 tonnes, as we have heard. I welcome those changes if their objective is to encourage the efficient and proper working of relatively small volumes of reserves which British Coal would not work. Such workings would increase employment and, in total, they could make a substantial contribution to our overall coal supply. If such coal can be made available to the market, at prices which are competitive with the ever-increasing competition from overseas, our balance of payments will benefit significantly.
Surely nothing should be allowed to inhibit the wider development of the licensed coal mining industries permitted by this Bill, provided stringent environmental safeguards and consideration for reasonable local concerns are properly taken into account. I stress that environmental safeguards should be stringent. This environmental point was debated at length in another place. I wish to make that point as the Minister touched upon it. Planning permission is still needed for opencast mining. It is needed for any mining. The Government recently introduced new planning guidelines on opencast mining which spell out more fully and more tightly than ever before the environmental criteria which must be met. They include environmental impact assessments and reinstatement.
I am happy to think that I have some "greenness" about me. The noble Lord, Lord Graham, was concerned about "the greens". County structure plans presume against planning permission for

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mining unless the ground has been worked previously. However, making safe former workings and removing hazards such as mine shafts can provide a benefit to the community. In my view, private operators make an excellent job of reinstatement nowadays. I should be happy to take the noble Lord, Lord Ezra, to see what the private sector can do. There are places where private operators have done a better job than the National Coal Board has done in the past. I must stand up for myself on that point.
Apart from those environmental aspects there is an inhibiting factor in the Bill. I should like to highlight the fact that the Bill confirms the continuing powers of British Coal to decide, at its sole option, whether or not to grant licences for the right to work coal. The Coal Industry Nationalisation Act 1946 was enacted at a time of coal shortage and lack of investment. From that time until the 1960s and 1970s the coal industry developed and licences were issued by the National Coal Board to encourage numerous licensees to produce as much coal as possible. Latterly the licensed mining industry has not had so much encouragement. Tonnage quotas have been imposed by British Coal. Penal royalty rents, sometimes amounting to more than 50 per cent. of the value of the coal, and greater than any other royalties in mineral industries throughout the world, were payable to British Coal. At one time British Coal charged £16 per tonne on coal worth only £22 per tonne. Those royalty rents are still more than 30 per cent. of the value of the coal.
To make matters worse, since privatisation of the electricity industry, British Coal has negotiated a satisfactory three-year contract with National Power and PowerGen. The licensees have not been treated so generously, being allowed only 76 per cent. of that price. The noble Lord, Lord Ezra, spoke earlier of dual prices. This seems to be another case of dual prices.
That low price and the high royalties charged by British Coal are serious enough problems. A further problem is the system of allowing British Coal to license its only United Kingdom competitors on whatever terms it wishes —either unconditionally or subject to conditions. That has done nothing to encourage the private coal industry. British Coal is allowed to resist or refuse applications without giving reasons for refusal or for imposing conditions. The Bill gives licensees the right to go to court to overthrow the unreasonable refusal, or the unreasonable terms, of a landowner to grant the right to search and bore for coal. There is no similar legal right for the licensees to question, reverse, or even appeal against unreasonable terms or the refusal of British Coal to grant a licence for the extraction of coal. British Coal is judge and jury. The noble Lord, Lord Mason, used that expression with regard to mining subsidence. British Coal is also judge and jury in the granting of licences. It does not have to give reasons or show its figures. Unknown quantities, due to seam tolerances, previous workings, gob slack and so on cannot be discussed.
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In Europe coal generally belongs to the state and its extraction is licensed by the state in the form of concessions. I should like to point out that the European Commission has an interest in and legal responsibility for the promotion of effective competition in the coal mining sector. The present situation might be considered by our European partners to be a restraint of trade advantageous to British Coal. As things stand, as in the case of British agriculture, licensees do not have a level playing field on which to compete in Europe.
In conclusion, it would surely be only equitable and give considerable encouragement to the licensed mining industry if the licensing of the right to work coal was undertaken by a body independent of British Coal and if royalties and wayleaves could be charged at levels more in keeping with those charged by other national and international mineral industries. We should all like to see the nettle of mining subsidence firmly grasped. Unfortunately, all those points were the subject of amendments in another place which were rejected with a suggestion that we wait for partial privatisation at some stage in the future.
I do not believe that we can wait that long, especially when British Coal is holding back on the granting of new licences and the single market is just around the corner. As an absolute minimum should not the licensed mining industry have a right of appeal against unreasonable refusal or the unreasonable terms demanded by British Coal? Without the right of appeal the benefits of Clause 4 are questionable. I urge my noble friend to consider an appeal procedure.
12.47 p.m.
Lord Mason of Barnsley: My Lords, this Bill is an enabling Bill for the eventual privatisation of the coal mining industry. The restructuring clauses and the write-off of £5 billion are clearly indicative of that intention. British Coal will welcome those clauses, but I believe that the miners and their unions will view with apprehension and grave concern the long-term view of their industry and their jobs as set out in the Bill.
I am sorry to say that the miners' strike of 1984–85 not only paved the way for the ruthless run-down of the mining industry over the past four years and hastened pit closures. It also provided a reason for many of the measures in the Bill and gave impetus towards the privatisation of the coal industry.
That strike was an unparalleled disaster. Nothing was gained and all was lost. Twelve months of fanatical leadership exploited mineworkers' loyalty and financially ruined many thousands of miners' families. Now the National Union of Mineworkers —my union, of which I have been a member since I was 14 years of age —is powerless, industrially impotent, financially on its knees, with no strength left for collective trade union bargaining. Indeed, it is no longer a national union. The richest coalfield broke away as a result of the no-ballot strike. In its wake British Coal and this Tory Government were cock-a-hoop. With no serious collective opposition they embarked on a pit closure

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programme with a vengeance. They did so dictatorially, closing far more pits than would have been closed had it not been for the miners' strike.
The miners' leadership of 1984 has a lot to answer for. The result was a ruined union which gave the go-ahead for the Tory Government to punish the coalfield communities. So now in this Bill we see a five-year plan, the write-off of debts, a restructuring plan —a slimming operation in fact —and we know full well that more pits are to close and there will be thousands more job losses. Of course in this Bill provision is made for redundancies. That is to be welcomed. Many young miners —young miners this time —will soon be cast on to the industrial scrapheap with little prospect of a job, especially in the coalfield communities of South Yorkshire and the Barnsley areas where unemployment is still over twice the national average.
I am concerned about the future of our deep-mined coal industry. I must say that I have been staggered and disgusted at the cruel pace of the pit closure programme. British Coal need not now consult. It can and has with impunity closed pits, declared redundancies and ruined mining communities on a scale that was frightening. It created a wave of misery and unemployment such as we had not seen since the 1930s. Although miners received good redundancy payments, their jobs and future prospects at work vanished and, what is not fully appreciated by the Government, many supportive industries had to close also. Their employees did not receive any redundancy payments. Many lost jobs and there are no future prospects in those dying communities. That became a major knock-on effect of increasing unemployment.
I know that British Coal and the Government boast constantly about increased productivity: that is to say, we produce the same tonnage as before the strike with half the men. I concede that £2 million a day in investment in more mechanisation and new sinkings have played their part but there is no doubt whatever that massive manpower cuts made the productivity figures look impressive. I believe that the men —the miners, those still at work during this traumatic phase of industrial decline —who have achieved those results have been quite magnificent. It is those men who need our support.
Since the strike the cost in human terms in our coal communities has been colossal. Ninety pits have closed and 130,000 men have been thrown on to the dole. There has been the run-down of our mining villages and despair in many families who suffered for 12 months with no income during the strike and fed the pawnbrokers in order to survive. Then came the insensitivity of British Coal and the Government who embarked on such a callous drive to cut back on the industry and did not worry fully about the social consequences of their actions. There was no real regional policy of aid to cope with the situation. Therefore history will record that period of shameless and uncaring government.
There has been one noticeable effort made by British Coal to offset the job losses. That was the creation of British Coal Enterprise Limited. It is the only real body to assist in producing alternative new
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job opportunities in the traditional coal mining areas of Britain. I believe that Merrick Spanton, the chairman, Tony Hewitt, the chief executive, and their board have now shaken off the criticisms of their efforts in the early years. Their enterprise is now bearing fruit. With a variety of schemes, projects that they have launched, their managed workshop activities and some ex-employees of British Coal resettled in jobs under the job and career change scheme, they can now claim to have helped 32,000 men gain some form of employment. It is a far cry from the 130,000 miners' jobs lost plus many thousands more in allied industries and all those who suffered in the wake of that strike.
But it is not the answer to our problems. It has been a creditable achievement in its time but certainly it is only a pinprick in tackling the size of our unemployment problems in the coal field communities. Therefore I should like to ask the Minister what the Department of Trade and Industry, the Department of Energy and the European Commission are planning to do to deal with the unemployment problems in those dying coal field areas.
Prior to this Bill two things happened that bode ill for those working our deep coal mines: the passing of the Associated British Ports Bill and the contents of the leaked energy policy paper prepared by the Department of Energy for Cabinet decision. The ports Bill gave the green light to a major increase in cheap coal imports. We are already importing about 12 million tonnes of coal per year from 12 different countries. Those tonnages alone have meant the loss of between 8,000 and 10,000 miners' jobs. When the ports have expanded for business they will have the capacity to receive and deal with up to 30 million tonnes of coal imports per year. Much of that tonnage is subsidised or quarried, and in many cases the use of cheap labour is employed. I believe it to be totally unfair competition. Even it it is only £5 per tonne cheaper than deep-mined British coal, with 12 million tonnes coming in annually that represents a massive saving. But I stress that every tonne of imports put our deep-miners' jobs at risk.
Nearer home and in relation to coal imports, the leaked energy paper notes that even with the phasing in of coal imports over a five-year period, as the Secretary of State states:
"British Coal will require substantial further adjustment".
Hence there is the restructuring in this Bill.
There is no doubt about the intention of the Government: there are to be yet more crippling job losses in the British coal industry. It is indicated in the leaked document that the privatisation of the electricity industry will result in the loss of 18,000 coal miners' jobs. Allied with the effects of cheap coal imports —a cutback in the take of British Coal to our power stations and the further substantial readjustment of the coal industry—there is the likelihood that there will be a reduction in the workforce of 30,000 jobs within the next four to five years. That is a cutback of one-third of British Coal's deep-mines workforce. Those are awesome figures and I should like the Minister to address the House

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on those prognostications when he winds up the debate.
This Bill contains two more unacceptable measures: a tenfold increase in opencast coal mining per site, which is a diabolical polluting activity; and an expansion in private or licensed mining activity. Again both those measures will result in a further cutback of deep-mining employment.
I cannot understand how the Government can escape the charge of being two-faced and hypocritical. How can they pretend to be bent on an environmental drive and urge the polluter pays policy when they are boosting the worst polluters in Britain? When I was Minister of Power opencast output was 7 million tonnes. It is now 16·8 million tonnes. This Bill will give the opencast executive the right to mine sites at up to 250,000 tonnes per site —a tenfold increase on present site output. The total tonnage may well rise to 20 million tonnes of opencast coal per year.
That will mean that there are thousands of people in coal mining communities (because that is where the coal is and not in the South of England) who have for generations suffered industrial pollution, noise, smoke, respiratory diseases from heavy industry, muckstacks and opencasting —indeed, the many forms of environmental pollution —will now be subject to a tenfold increase in production from each site. As we know from experience, objectors, including the local authorities, invariably have their appeals turned down by the Government. With 25,000 tonnes of output, that polluting menace could last for five years; but with 250,000 tonnes of output per site it is likely to last between seven and 10 years. That may prove to be the norm. Therefore there will be many more years of dust drifting into homes and gardens, constant noise and vibration from machinery, lorries and blasting. The landscape will be ruined for years and one cannot bring back those years.
However, one asks: what of the old folks? Their properties are devalued —blighted in the eventide of their lives. They have to suffer misery and unhappiness. Some of them die in that state during the seven to 10 year period of operations. The proposed expansion is an insensitive decision. It cares not for enhancing the quality of life. It will certainly vastly increase many forms of pollution. Therefore in my opinion these opencast vandalisers of our people and our communities should be curbed.
If the Government have adopted the principle of making the polluter pay, I ask this question. What will these polluters pay to our affected people? Every tonne of opencast coal in the past has threatened, and in the future will increasingly threaten, future job prospects in deep mining. I am aware of the profit margin and the argument of helping British Coal's survivability. However, deep mines when closed on grounds other than being worked out are a loss that can rarely ever be regained. Opencast coal can be called upon when urgency demands, and that is where it should lie —in reserve.
On that last point, much the same could be said in relation to private or licensed mines. Many of
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them are drift mines: coal mines that are near the surface, easily mined where necessary. But again, it is another expansion, jeopardising jobs in deep mines, increasing the manpower per private pit from 30 to 150 men. I know that safety of men in these small mines does not compare with the deep mine safety record. The Minister may say that with this proposed expansion more modern machinery will be accommodated and safety will be increased.
However, the expansion introduces another element of unfair competition. There is no comparison with the massive investment of sinking and opening up a deep mine. Therefore more of the deep mine workers' jobs are at risk, especially if one bears in mind the increased annual output as a result of this manpower increase.
When the Minister winds up, perhaps he can reassure me about the problem of redundancies and that there will be no return to compulsory redundancies during this next phase of cut-backs. Perhaps he can also reassure me that the traditional concessionary fuel allowances will continue for miners, retired miners and miners' widows. Perhaps he will comment on the project in which I have a personal interest, the fluidised bed power station project. I financed its birth in 1968. There was the promise of a highly efficient environmentally clean coal generating plant. Do the Government believe that it has a future?
The Bill, typical of the curate's egg, has good and bad contents. Unfortunately, I believe that they are mostly bad and ominous for the future of Britain's deep-mined coal industry. I concede that there is continuing investment and I welcome the redundancy payments clauses and the provision for industrial deafness. However, one has to recognise that with all the other measures, if the Conservatives win the next general election it will be a simple task to privatise the coal industry. The restructuring that is planned is a major step towards preparation for privatisation. It will result in a much smaller coal industry reduced to manageable profitable units. However, I warn that even those will have to fight to survive against the fierce competition from the use of North Sea gas in power stations, the increased tonnage from the private licensed mines, the rising tonnages of cheap coal imports and opencast mining expansion.
It is an energy policy that is fraught with danger, especially on security of supply. Our indigenous deep-mined coal industry will be reduced to a skeleton as coal consumers fight in the market-place for short-term cheap supplies. I am afraid that the Bill bodes ill for our deep-mined coal industry. I visualise a cut-back in manpower to little more than 50,000 men by 1994 with fewer than 50 coal mines surviving.
With a disunited trade union opposition —sad as that may be—powerless to oppose British Coal and the Government, it is incumbent upon us, especially on this side of the House, to use all our democratic powers of persuasion to warn the Government of the serious consequences of the course that they are pursuing: that is, their intent to cripple one of our major indigenous fuel industries. If there is to be

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any salvation for the deep-mined coal industry it lies in the return of a Labour Government. That, above all, I believe must now be our objective, and I think that we still have time to achieve it.
1.8 p.m.
Lord Norrie: My Lords, I see this as a short and technical Bill designed to introduce new financial and licensing arrangements for the coal industry. I welcome it. However, I am sure that noble Lords will be relieved to learn that I have no intention of embarking on a learned discussion about either its technical or financial merits.
The purpose of my taking part in the debate is quite simple. It is to establish in the mind of the Minister that it is a Bill with enormous impact on the environment. I also hope that the Bill will not leave our House without some important improvements designed to minimise the adverse consequences of coal extraction —a point brought out most forcefully by the noble Lord, Lord Graham of Edmonton. He and the noble Baroness, Lady Stedman, reminded us that deep mines can cause subsidence and noise disturbance. I would add that they cause physical damage to the landscape through the construction of unsightly surface buildings and tips. We all remember the concern that was generated by the Vale of Belvoir application in the early 1980s, and there are similar anxieties about the proposed increase in mining in the South Warwickshire coalfield.
However, opencast coal extraction creates environmental problems and hazards of an altogether higher order. Whole landscapes can be altered and people's lives can be devastated. While restoration is often possible, and should always be encouraged, even the best restoration cannot replace the intimate, mature landscapes that have been swept away. I am sure that we all agree that where such operations are necessary—and of course some opencast is necessary—they should always be governed by the highest possible environmental standards, a point reinforced by the noble Lord, Lord Ezra.
My concerns about the Bill therefore are straightforward. It must provide the means to ensure that environmental considerations are given the utmost priority.
In 1986 when legislation was last passed on the issue, the amount of private sector activity in opencast coal was small. Of the 15 million tonnes of coal extracted in 1984, 95 per cent. was extracted by British Coal and less than 5 per cent. under licence by the private sector. By 1988 the percentage from licensed sites had risen to 11 per cent.
The Bill proposes to increase the limit on private sector sites tenfold; that is, from 25,000 tonnes per annum to 250,000 tonnes per annum. I welcome in principle the increase in private sector activity but it would be wrong for it to take place without also extending the environmental duties to the private sector.
In 1986 when the Housing and Planning Act was passing through the House, my noble friend Lord Ridley and the noble Baronesses, Lady Nicol and
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Lady David, persuaded the Government to reinstate the amenity duty on British Coal, governing its activities in the opencast coal sector. That now appears as paragraph 1 of Schedule 8 to the Housing and Planning Act. Governed by this amenity duty, British Coal has continued to improve its environmental performance and has shown itself willing to take its environmental responsibilities seriously. For example, British Coal engaged the British Trust for Conservation. Volunteers (BTCV)—of which I am president —to carry out an exciting tree planting project on a former opencast site which is now the Rother Valley country park in Yorkshire. It used BTCV's commercial arm —Conservation Practice Limited —for restoration projects at Marley Hill near Gateshead and to create a nature reserve with Northumberland Wildlife Trust at Druridge Bay.
In spite of a reassuring green speech by my noble friend Lord Forester, I am sorry to say that the private sector opencast site operators have by no means such a good record. In 1984 Durham County Council published a report by the County Planning Officers Society entitled Problems on Licensed Opencast Sites. It described sites where environmental conditions had been breached and restoration conditions had not been fulfilled. There have also been a number of cases where operations have been carried out above the legal limit of 25,000 tonnes per annum. In 1987 that matter drew criticism from the inquiry of the House of Commons Energy Committee into the coal industry. Therefore, the private sector has a long way to go before it can start emulating the fine record of British Coal.
I hope that the Minister will look sympathetically on the proposals to extend British Coal's amenity duty to the private sector which I and other noble Lords hope to air during the Committee stage. Surely we should aim to make the Bill as environmentally friendly as the Opencast Coal Act 1958 and the Housing and Planning Act 1986, building on the most recent example of the Electricity Act where new environmental duties were accepted last year.
1.10 p.m.
Viscount Ullswater: My Lords, we have had a good and wide-ranging debate on coal and I shall try to deal with as many of the points raised as I can. But let me first re-state what this Bill is seeking to do. Its primary purpose is to give British Coal a proper financial foundation on which to build and develop its business and to give the corporation a realistic prospect of future viability. To that end the Bill will go a long way to wipe the slate clean of the overhang of past losses and long-term liabilities. It will recognise the true earnings potential of the corporation's colliery assets in a competitive market; and it recognises that there will need to be further restructuring over the next three years.
All that should help to complete British Coal's transformation from a subsidised institution into a successful and free-standing business. At the same time, by liberalising the industry through increasing the limits on licensed mining, we are hoping to increase the opportunities for private sector

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investment in safer working methods and more modern equipment.
I should like to deal with some of the points which your Lordships have raised. The noble Lord, Lord Graham of Edmonton, rightly said that the coal industry is not just about money; it is also about men. He said that the coal industry is about flesh and blood and he drew attention to a play which was performed many years ago, as he reminded his noble friend Lord Mason, "Close the Coalhouse Door". We all understand that in the past there have been great tragedies in coal mines and the noble Lord drew attention to the dangers that affect all those men working underground.
What has received most attention during the debate is the environmental aspect of the opencast operations. The point was raised by all noble Lords who have spoken; the noble Baroness, Lady Stedman, and the noble Lords, Lord Graham, Lord Ezra, Lord Forester and Lord Mason, and my noble friend Lord Norrie. It is essential to strike a balance between the environmental impact of opencast mining and the benefits to the national economy. That is why in May 1988 the Government introduced new planning guidelines on opencast mining which were referred to by my noble friend Lord Forester. He said that the Government have insisted on full environmental impact assessments on all but the small sites.
In recent years environmental expectations have continued to rise. By general agreement the UK opencast industry now finds itself operating under the most stringent planning system in the world. Many opencast operations take place on derelict industrial land which is then restored to a high standard. That is a positive gain to local communities. The opencast industry overall has been responsible for the reclamation of 16,000 acres of dereliction during the last 20 years. Local communities often benefit from creative restoration projects; for example, sports facilities, road improvements, nature reserves, reafforestation and a wide range of other schemes which restore variety and quality to the landscape. That matter was touched upon by my noble friend Lord Norrie.
Far from being callous, the opencast industry has shown great willingness to listen to what local communities want. We want to see opencasting, which is 30 per cent. cheaper than deep-mined coal, contributing more to our national economy, always consistent with each individual site being acceptable environmentally. That must be demonstrated rigorously through the planning system.
Lord Graham of Edmonton: My Lords, does the Minister appreciate that he is describing an aspiration and an ambition? However, as mentioned by the noble Lord, Lord Norrie, myself and others, the evidence from the Council for the Protection of Rural England and from the planning officers in Durham shows that in reality the operators of opencast coal mining are not only exceeding their licence and getting away with it but they are not fulfilling their obligations. My noble friend Lord
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Williams who will be dealing with the Bill in Committee is the President of the Council for the Protection of Rural Wales. He will bring to bear the evidence from Wales. Does the Minister not appreciate that there is a wide gap between what his advisers are telling him is the position in theory and what we know to be the position in reality?
Viscount Ullswater: My Lords, I agree that mistakes have been made about the reinstatement of some of the opencast sites. However, it would be wrong to judge the future from the past. As I have said, the reinstatement is controlled by one of the strictest planning regulations in the world. I draw the noble Lord's attention to the environmental impact assessments which must be undertaken in the future before the new licences are granted.
I should now like to deal with subsidence, as mentioned by the noble Lords, Lord Graham and Lord Ezra, and the noble Baroness, Lady Stedman. The Government are well aware of the widespread concern about the issue and of the human problems that arise from subsidence as well as the damage to property. The number of new claims is continuing to fall and so too is the backlog of outstanding claims. Last year there were 9,600 new claims compared with almost 13,000 in the previous year. And the backlog of claims has fallen from 37,000 in 1986–87 to around 26,000 last year.
Secondly, many of the Waddilove Committee recommendations that do not need legislation have already been implemented and the Government are continuing to see what more can be done. Finally, as my right honourable friend the Secretary of State confirmed during the Report stage of the Bill in another place, the Government are committed to introducing a Bill on subsidence at the earliest practical opportunity.
As I explained earlier in the debate, it is not practical to tack subsidence provisions onto the present Bill. However, I shall take away from this debate the clear message that your Lordships' House has attached great urgency and importance to subsidence legislation.
The noble Baroness, Lady Stedman, drew my attention to the six-year rule about subsidence. The Government recognise that, as currently applied, the rule has been strongly criticised. For that reason we are proposing that claims should be allowable six years from when the damage occurred or six years from when the claimant first had reasonable grounds for noticing the damage. The noble Baroness will appreciate that that is a great step forward.
As regards safety, for myself I feel that safety must be one of the highest priorities of future legislation and of the future of the licensed mining industry. I have to say that the accident rate in licensed mines has been greater than that of British Coal, as the noble Lord, Lord Ezra, said. However, the accident rate in licensed mines has declined over the past three years. That does not mean that the Government have become complacent: the accident rate is still higher than they would wish. However, I should like to feel that the mining inspectorate —which employed one mining

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inspector for every 3,195 miners employed by British Coal in 1979 and now employs one inspector for about every 2,000 miners —which is a great improvement —is now up to strength and has no vacancies.
I shall carefully note other points on safety. I appreciate what the noble Lord said. I am not trying to hide anything about the safety requirements but I repeat that I feel that the increase in the number of those involved in deep mining will allow the introduction of new and modernised equipment which will go a long way to helping in that regard.
The noble Lord, Lord Graham of Edmonton, also asked me about minestone and whether the Minestone Executive could be included more in the several engineering works which are taken on. I understand that decisions on awarding contracts for road construction are determined by the Department of Transport on the basis of competitive tendering. It seems that the Minestone Executive attempted to bid for contracts for which minestone was not entirely suitable. In 1986 the Department of Transport made that clear. The Minestone Executive should ensure that the materials that it can supply meet tender specifications. Also, where bids are acceptable the price must be competitive with alternative materials. There is scope for greater use of minestone in road construction programmes and it is up to the Minestone Executive to ensure that it submits competitive bids to the appropriate specification. I know that the noble Lord, Lord Ezra, who also spoke about the Minestone Executive will understand those requirements.
I turn to one or two points made by the noble Lord, Lord Ezra, which I have not already covered. He said in his opening remarks that the coal industry has made a great contribution to this country and I believe that all noble Lords agree with him on that. The security of supply which is now guaranteed by the new contract with the generators provides for a sale of 70 per cent. of the mining production. That is a great step forward and will ensure for the next three years, which may need some restructuring, that there is at least a security of supply.
The noble Lord also asked me a more technical question about the progress of the revaluation of assets. Our expectation is that the revaluation will be completed in time to be reflected in the corporation's accounts of 1989–90.
My noble friend Lord Forester asked me about royalties which British Coal charge. Royalties for opencast licences are indeed very high at about £11 per tonne. I believe that that is the highest paid to any coal owner in the Western world. Royalties are and will remain a matter for British Coal and the licensees, but we have made it clear to British Coal that royalties must be set at a level which will permit efficiently managed operators to develop their business profitably. Given the squeeze on operators' margins over the past 18 months I expect British Coal to look very hard at a case for a royalty reduction.
On licences, so long as British Coal owns the coal, a final decision about licences must be a matter for it. However, it has agreed to publish the criteria
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which it applies to licensing decisions. In particular, it has specifically promised to do its best to make any objections to a licence known to the applicant at an early stage. It has agreed to set up an internal appeals arrangement so that disputed applications can be referred to a national level.
The noble Lord, Lord Mason, with his knowledge of the industry, gave a résumé of what had happened in the past. Of course, he would understand about the need for pit closures and how necessary they sometimes are in economic terms as a result of exhaustion and restructuring, which this Bill specifically confronts.
After all, it was in the days of a Labour Government, of which the noble Lord was a Member, between 1964 and 1970 and 1974 and 1979, that 295 pits were closed down with a loss of over 190,000 jobs. I do not wish to make political capital from that but I wish to indicate that in the coal industry there have been times when restructuring has been necessary. That time was one and this is another.
The noble Lord quite rightly drew to the attention of the House the success which the British Coal enterprise had in creating a number of jobs —and I think he said 36,000. Its costs will continue to be supported by the restructuring grant in this Bill and I believe that Clause 4 will help to provide new mining jobs by raising the limits on the licensed mining sector.
The Government also welcome the European Commission's new RECHAR programme for revitalising depressed mining areas. We shall be working hard to ensure that our coalfields receive their fair share of the funds available.
Turning to another point made by the noble Lord, he asked me about an assurance that there would be no compulsory redundancies. I hope that British Coal will be able to continue with its policy of relying entirely on voluntary redundancies. Obviously, I cannot give a firm assurance on that because it is ultimately a matter for British Coal. Nothing in this Bill affects the entitlement of concessionaires. The Bill ensures that British Coal has the finance to meet the entitlements.
Also, the noble Lord asked me —and I am glad that he gave me notice of these questions —about the future of the fluidised bed project. The Government are making up to £8 million available for the next stage of the Grimethorpe project. We hope that it will prove the technique for high-efficiency coal burning to the point where it is carried forward for commercial application.
The noble Lord, Lord Mason, also drew attention to imports. I believe I have said before from this Dispatch Box that many of the imports are special requirements for industry and are not available from the supplies mined by British Coal. The Government's policy is not to restrict imports on coal. Decisions on coal purchases, whether from indigenous or imported sources, must be for the commercial judgment of those concerned on the basis of a willing buyer and a willing seller.
I think I have dealt with all the points made that I have noted, but if on reading Hansard I find that

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I have missed any I will write to the noble Lords concerned. I conclude by saying that this Bill is a recognition of the importance of coal to this country, while also reflecting the need to develop an increasingly competitive coal market. The dramatic gain in coal productivity of over 75 per cent. is an achievement which compares with any in Britain's industrial history. Coal has long held a special place in this country's industrial history and it remains a staple fuel. Coal-burning power stations provide three-quarters of our electricity supplies.
The Bill will lift the burden of the past from the coal industry and enable it to face the future with more certainty and continue to drive towards higher productivity and a more competitive future. It is a Bill that faces reality and offers practical help where appropriate. I commend the Bill to your Lordships.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Motor Trade (Consumer Protection) Bill [H.L.]
1.31 p.m.
Lord Ezra: My Lords, I beg to move that the Bill be now read a second time.
I should like to express my appreciation to those noble Lords who are spending this part of Friday afternoon in the House to take part in this important deliberation. I must declare an interest. I am president of the Institute of Trading Standards Administration, a body which has been for a long time concerned about the matters dealt with in this Bill. Indeed, it has played a major part, together with the Automobile Association, in doing the work leading up to the preparation of the Bill.
I remind your Lordships that about 7·5 million secondhand cars are sold each year. Regrettably many are in an unroadworthy condition or with false mileages shown on the clock, or odometer. The purpose of this Bill is to give added protection to the purchasers of used cars. Consumer complaints about secondhand motor vehicles have consistently topped the list of categories collated annually by the Office of Fair Trading. The bulk of traders undoubtedly carry on their businesses properly, but an important minority continue to trade in a way which defrauds and misleads consumers and reflects badly on the trade as a whole.
It was for that reason that in 1987 a joint committee was set up under the chairmanship of Sir Gordon Borrie, Director General of Fair Trading, to look into this whole matter. The membership of that body was wide ranging indeed. It consisted of the four local authority associations, the Consumers Association, the National Consumer Council, the National Association of Citizens Advice Bureaux, The Royal Automobile Club, the Automobile Association, the Scottish Motor Trade Association, the Society of Motor Auctions, the Society of Motor Manufacturers and Traders, the Vehicle Builders and Repairers Association and the Motor Agents Association. I read out that list in order to emphasise
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the importance which all those bodies connected with the motor business attach to these matters.
As a result of that wide-ranging inquiry conducted by those bodies, a letter was written by Sir Gordon Borrie on 29th December 1987 to the then Secretary of State for Transport with specific recommendations dealing with the sale of unroadworthy vehicles and the clocking of odometers. I regret that relatively little progress on those recommendations has since been achieved. Therefore, this Bill is an attempt to take the matter forward. A similar initiative is being undertaken in another place.
I now turn to the Bill in more detail. I refer first to Clause 1, which deals with unroadworthy vehicles. This clause does not seek to create any new offences but to provide for more effective enforcement of the adequate offence which already exists in Section 75(1) of the Road Traffic Act 1988. The offence has associated with it a statutory defence in Section 75(6) of that Act. That defence allows a dealer to escape conviction if he can satisfy a court that he had reasonable cause to believe that the vehicle would not be used on a road until it had been put into a lawful condition.
Given that the court need only be satisfied, on the balance of probabilities, that the dealer would have put the car into a roadworthy condition before it was driven away, enforcement authorities, who have to prove their case beyond any reasonable doubt, are understandably reluctant to pursue prosecutions knowing that the balance is so heavily weighted in favour of unscrupulous dealers. This matter was considered during consultation on the Government's White Paper The Road User and the Law in February 1989, when Ministers agreed with the Director General of Fair Trading that the offence is difficult to apply and that the statutory defence should be tightened up, while still making provision to permit genuine sales of unroadworthy vehicles.
There are, indeed, several examples of situations in which dealers might genuinely wish to sell vehicles in an unroadworthy condition; for example, sales between traders when the purchasing trader will take responsibility for carrying out repairs, or sales of cars to the public for use as spare parts, particularly in the building of so-called kit cars. This Bill does not seek to interfere with that legitimate element of the motor trade but to ensure that all car purchasers are clearly aware, before making up their minds, whether the vehicle falls into the unroadworthy category.
The Bill therefore proposes that the present defence should include two new provisions. The first would require the dealer, if he is to escape conviction, prominently to display a notice on an unroadworthy vehicle indicating that the vehicle was in an unroadworthy condition and that use on a road in its present condition would be unlawful. The second requires that, where an unroadworthy vehicle has been sold, similar warnings appear prominently on all documents associated with the sale.
There are, in fact, two difficulties associated with the effective use of the existing offence. I have dealt with one of them —the statutory defence. The other

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relates to those who are responsible for its enforcement. At present that responsibility lies with the police and vehicle examiners appointed by the Department of Transport. In terms of priorities and resources neither of those agencies has been able to make significant checks on cars before they are sold to the public.
Many local authorities have decided to use their general powers to bring prosecutions where examples of unroadworthy cars being sold come to the attention of their trading standards officers. However, those officers, who in the course of their duties under the Trade Descriptions Act already spend much of their time looking at cars on dealers' forecourts, have no power to check whether they are safe to use on the roads before they are sold. The situation only alters if a dealer makes a specific claim that the vehicle is, for example, in good condition. In that case the trading standards officer can check whether the description complies with the Trade Descriptions Act.
Where a vehicle is on a forecourt marked only with its price, as things stand at the moment a trading standards officer has no power to check if it is safe. This anomaly goes further when one considers the general duty and extensive powers which trading standards officers now have under the Consumer Protection Act 1987 to ensure the safety of all manner of consumer goods. Because it was thought that adequate safeguards existed elsewhere, motor vehicles were specifically exempted from that Act.
In April 1987 trading standards officers joined forces with Department of Transport vehicle examiners to establish the extent of the problem. Inspections were carried out in five areas of the country on 82 premises and 217 cars were examined. Of those cars 77 per cent. were found to be unroadworthy and 13 per cent. were in the dangerous category. That was the largest of a number of surveys, each producing a similar result. These are very startling figures.
Active forecourt inspections must be the key to greater protection both for car buyers and road users and they would provide fairer competition for traders. Therefore, the proposals in Clause 1(3) of the Bill suggest that in order to provide for the involvement of trading standards officers, a new class of enforcement person, the authorised officer, should be created alongside the authorised examiners currently recognised in Section 77 of the Road Traffic Act. Those officers would be appointed by the local weights and measures authorities, which is the term used in the Weights and Measures Act to denote the authorities responsible for trading standards functions. In addition to having the powers of a vehicle examiner, the officers would have the same powers that they currently exercise under the Trade Descriptions Act. Where necessary, they would be accompanied by expert assessors. These are the immediate changes that the Bill would bring about.
The Bill is also concerned with the offence of winding back vehicle mileage recorders and I wish to deal briefly with that subject now. It is covered
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in Clause 2 of the Bill as one of the several areas relating to the supply of motor vehicles, regarding which it is proposed that powers be given to the Secretary of State to make appropriate regulations. The regulations relating to mileage recording are in Clause 2(2)(a). A trader who clocks a car or who sells one which has been clocked already commits an offence under the Trade Descriptions Act. Trading standards officers take many hundreds of prosecutions each year for such offences while still unfortunately only touching at the tip of a huge iceberg. Surveys conducted by local authorities over the past 10 years have revealed that 20 per cent. of the cars monitored have had their mileage altered —20 per cent.!
A typical example of the gain to be made by the clocker is that of a popular saloon car four years old. At auction such a vehicle, with 65,000 miles on the clock, could be expected to fetch £2,500. If that car is sold by a trader at a retail outlet the cost would be about £3,100. With an odometer wound back to 25,000 miles instead of the 65,000 miles actually covered, the retail price would increase to £4,000. That would result in an illicit profit of £900. These are vast costs to the community when one considers the total cost to the consumers, to legitimate motor dealers and to enforcement bodies.
Plainly, the problem needs other solutions. The Office of Fair Trading Joint Committee to which I have referred came out strongly in favour of mileages being declared by vehicle owners each time they relicense the car. This information should be stored at the Driver and Vehicle Licensing Centre. While not being 100 per cent. foolproof, in most instances this suggestion would provide a full history of the vehicle for prospective purchasers and enforcement bodies. With such a high deterrent to would-be clockers, it was felt by all parties to be an effective solution to an age-old problem. Unfortunately, it did not find favour with the Government.
We are aware that some system of mileage recording and storage is still under consideration. For that reason, at this stage we seek only to provide the necessary enabling powers and a full consultation process. When an acceptable way forward is reached, a legislative framework will already be in place to enable speedy action to be taken by Ministers to protect the public from this very important fraud. I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Ezra.)
1.45 p.m.
Lord Lucas of Chilworth: My Lords, I am quite sure that your Lordships will be grateful to the noble Lord, Lord Ezra, for introducing this Bill and for explaining to us how he sees its operation. Equally, I am quite sure that you will be grateful to him for highlighting three particular areas of great concern.
I have a great admiration for the noble Lord and for his work in a number of areas, not least as president of the Institute of Trading Standards Administration. But at this stage I part with the noble Lord on a number of concerns. He described to us the various bodies which formed the working

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group under the chairmanship of the Director General of Fair Trading. I believe that he will agree with me that, while all the members had sympathy with the cause, they did not agree with the outcome demonstrated by the introduction of this Bill.
It is my belief that both the Society of Motor Manufacturers and Traders and the Royal Automobile Club did not agree with the Bill. They certainly agreed with the causes and perhaps with some of the solutions. It is a pity that the working group under the chairmanship of the OFT should have brought forward a Bill at this stage which does not have the complete agreement of all the parties in that advisory group. Not to put too fine a point on the matter, I am suggesting the ITSA and the AA have rather jumped the gun.
I would have preferred a greater measure of agreement not only between those groups but also with the Government and a rather more pragmatic Bill produced, if a Bill was then thought necessary, which had the Government's total commitment and agreement. I have to go back a few years to when I was a junior at the Department of Transport and, to use the jargon, clocking was discussed. We failed to find a solution. I am not going to weary your Lordships with the technical details of clocking. We could not find a solution.
The Bill deals with a number of matters. Perhaps I may come first to the question of unroadworthy vehicles. There are two points to be made here. The first concerns the write-off when the insurance company decides to pay cash to a claimant in an accident purely and simply because the cost of repairs exceeds the value of that which remains within the policy. Subsequently, the salvage is sold by the insurance company. The insurers have a serious responsibility to ensure that those vehicles which are written off beyond economic repair are not sold as salvage to persons who, in the jargon, do the cut-and-shut job. If they are to be written off because they no longer have an economic value, they should be written off and destroyed, as should the documents. That is the responsibility of an insurance company, not of a salvage operator. I therefore depart immediately from the comments of the noble Lord, Lord Ezra.
Perhaps I may now deal with the question of those vehicles which are quite properly bought at or offered at auction. (To digress for a moment, I wonder whether the electricity supply to the clock might be restored in order to help me. If it cannot, so be it.) I refer also to the vehicle taken quite properly in part exchange which is not roadworthy but has a number of useful sales outlets. It seems wrong that that vehicle should be offered for sale either to a private individual or to a trader without the necessity of sticking labels on it or of documenting it. That seems to be a rather useless occupation. I therefore depart from the comments of the noble Lord, Lord Ezra, in that regard too.
I again depart from the noble Lord on his contention about the registration of mileage at various stages, whether on the anniversary of the test, the third anniversary of the Department of Transport test, or on exchange. There is no
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provision —the noble Lord may say that this is a Committee point —for the audit, if I may put it that way, if the owner of the vehicle wishes to relicense his motor car. We have 24 million of them. The noble Lord is quite right when he talks about 7.5 million used car transactions, the bulk of which are handled through the trade. We must therefore also deal with those transactions which are privately conducted, but the Bill does not deal with them. The application for renewal of a licence must be accompanied by a declaration of mileage. Unless that can be audited or confirmed, it is meaningless.
I shall not go into the long story of how to break the sequence of mileage which is illustrated in the Bill. It is easy to break with or without another set of regulations or documentation. A potential buyer of a second-hand vehicle may on the completion of a form and/or the payment of a fee obtain the recorded mileage from the DVLC which would add some authenticity, although that would be totally spurious. Once again, the noble Lord's argument does not stand. There is a practical difficulty. I understand that the DVLC handles some 40 or 50 million paper transactions each year. If 7·5 million transactions were carried out and there was additional documentation, we would have great problems.
I sympathise on the point concerning trading standards officers, but there is a training problem and the cost of training to be considered. There is already a great deal of pressure on our trading standards officers in respect of matters which are perhaps more important.
Finally, if the group has been brought together properly, as I believe it has been, I would suggest that it consider these three issues —unroadworthy vehicles, clocking and other authorised persons to make examinations —separately because they do not come together quite as neatly as the noble Lord, Lord Ezra, suggested. I also suggest that it produces proposals that may be accepted by everyone concerned —retailers, owners, motoring organisations, insurance companies and so on. The Government could then embrace those suggestions in regulations which could be entered into under the Trade Descriptions Act, consumer protection Acts and road traffic Acts, all of which are already in place. We would then have a consensus and an easier way of moving forward into an area that causes a great deal of concern.
Finally, in my long experience, I know that it is not difficult for a potential purchaser using facilities which are available, or his own integrity and energy, to find out more about a vehicle that is offered for sale. The Bill highlights areas of great concern but —I make no apology for the pun —it is quite the wrong vehicle for dealing with the matter.
1.58 p.m.
Baroness Fisher of Rednal: My Lords, I find myself following the noble Lord, Lord Lucas of Chilworth, and I cannot see any reasoning in his argument for not supporting the Bill. One would have thought that any Bill was worth while which protects the consumer —not only the person who buys the vehicle but all other road users. We know that unsafe

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vehicles can cause accidents on the road and may cause serious injury to others driving roadworthy vehicles. We must consider the two aspects together. I should like to compliment the noble Lord, Lord Ezra, on giving a comprehensive account of the Bill.
Perhaps I should declare my interest in the Bill. I have been interested in consumer affairs for more years than I care to remember. I started off in the co-operative movement alongside my noble friend Lord Graham of Edmonton who is on the Front Bench. I was also on the Consumer Affairs Committee of the European Parliament and I am at present a vice-president of the Institute of Trading Standards Administration.
We should consider the Bill seriously. As the noble Lord, Lord Ezra, said, it is simple in its application, easy to understand and the majority of people in the motor trade go along with it. The reputable dealer who sells second-hand cars has no fear of this Bill because he makes quite sure that he is not selling unsafe vehicles. The Bill deals with the rogue element in the industry; for example, the Arthur Daleys of the car trade.
As the noble Lord, Lord Lucas, said, in the main the cars we are concerned with are those at the cheaper end of the second-hand market; that is, the little cheap ones that the loving husband buys for the dear wife so that she can take the children to school. I refer to those at the cheaper end of the market. Although they look good and the seating and paintwork look good, the vehicles are completely unroadworthy. Therefore, we must protect some consumers who are perhaps not in a position to be able to take expert advice from the relevant organisations. As I said, let us ensure that we are only dealing with the rogue element of the trade. It is those people we wish to bring to book.
However, it is those people we are finding it increasingly difficult to tackle because of the inadequacies in the present legislation. As the noble Lord, Lord Ezra, pointed out, at present the only people who can visit car lots or places where second-hand cars are being sold in order to inspect them are the police or the department's own officers. I am sure that all of us in this House would agree that in the present situation the resources of the police could be better used in other ways than visiting car lots and inspecting such cars.
I suppose it is because the trading standards officers are known in the localities for dealing with consumer complaints of all kinds that such difficulties will be referred to them. If a person feels that he has been "done" —to use a colloquial expression —because he has been sold an unroadworthy vehicle, he will go to the trading standards office. Therefore, for that reason it makes the task of those who are asked to look after consumer interests much more difficult. They cannot go to the root cause; they cannot visit car lots and see matters for themselves.
Let us now consider trading standards and consumer legislation. We see that under such legislation, as the noble Lord pointed out, trading standards officers have the power to inspect the safety of all other consumer goods, except
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unroadworthy vehicles. That seems to me to be very strange. I see that the noble Lord wishes to intervene, and I have no objection.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Baroness for her kindness. The trading standards officer has power, but this applies after the purchase takes place. I am sure that she would not disagree with that fact. However, the Bill introduces the involvement of trading standards officers at an earlier stage in the proceedings. Therefore, she is quite wrong to say that trading standards officers are unable to exercise authority in the matter of used motor cars. In fact, they can do so and they do.
Baroness Fisher of Rednal: My Lords, if the noble Lord had allowed me to continue with my speech he would have heard me say just that. I shall repeat what I said. Trading standards officers have the power to inspect the safety of all consumer goods. For example, they can visit shops, warehouses, supermarkets and street markets. They can notify the people concerned and say to them, "We are going to pick up these goods to test whether they are safe or dangerous". However, in their capacity as trading standards officers they cannot visit a car lot, prove who they are and say, "I am now going to inspect that vehicle". They simply cannot do so. It seems strange that a consumer protection Act does not allow them to do so.
I know very well that trading standards officers get around that problem; but they do so in a way which they ought not to. I can give your Lordships an example. I come from the city of Birmingham. It has an excellent trading standards department, as one would expect such a city to have. I should tell the noble Lord that just before Christmas, because of all the complaints that were coming into the office, the officers decided to carry out a survey of garage forecourts and auction lots. However, they could not do so as trading standards officers. So what did they do? They had to pose as private buyers so that they could purchase cars.
The survey was carried out in Birmingham at various places and 17 cars were bought by trading standards officers posing as members of the public. They did that because there was no other way it could be done. I should point out that all of those 17 vehicles were dangerously unroadworthy. It may also interest noble Lords to know that all those traders are now in the process of being prosecuted.
Perhaps the noble Lord will now agree with me that although trading standards officers find a way around the problem it is not an ideal solution and they should not have to do so. It would be preferable if they were able to visit such places, inspect a vehicle and say, "Look, mate — come on! —you know very well that that vehicle is unroadworthy and you know you ought not to be selling such a vehicle". Therefore, with that safeguard, if you are looking around and you cannot spot the Arthur Daley who is trying to sell you a car, you will be able to read for yourself that it is unroadworthy. We know that this is a safeguard which we can all accept. If we look at the way in which trading standards officers take care

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of the affairs of the consumer, it is an expensive way of dealing with the problem: going round, picking up cars, taking them away, having them inspected and then having to take out prosecutions. It is a very expensive and time-consuming way of doing things.
I do not know whether the Minister can say this when he comes to reply, but we would all accept that somebody ought to prevent unsafe vehicles being on the road. It is important that they should be taken off the road and we can only do that by not allowing them to be sold.
On expenditure, the Government constantly tell us that we must save money, be efficient and cost-effective. This would be a saving to a local authority. No local authorities think that there will have to be more examiners; they think that in the long run they will need fewer. If vendors know that a vehicle is unroadworthy they will not put it up for sale because they know very well that there will automatically be a prosecution. So there will be no extra expenditure and no extra manpower necessary for local authorities.
The noble Lord, Lord Ezra, described the second problem dealt with in the Bill with a different term from that used by the noble Lord, Lord Lucas. I shall call it "clocking", but the noble Lord, Lord Ezra, used the technical term. Clocking means that a considerable amount of time is wasted by trading standards officers. Overall, up and down the country many hours are spent every week dealing with this problem. Noble Lords may have missed me because I was not in the House yesterday —I hope that they did. Yesterday one of these "freebies", as we call them in the Birmingham area —free newspapers —came through my door. It was interesting. There was one column, "Here to help" which concerned a husband and wife who wanted to foster children. Another query concerned insurance, but there was one that particularly interested me in the copy of the paper for 7th February 1990.
The article states:
"Q. I have just bought a car and suspect that it's been 'clocked', even though I was assured by the vendor that the mileage was genuine. What should I look for to determine whether this is true and what can I do if it is?"
It is relevant to read the answer to noble Lords as it gives information on the problem. It mentions,
"excessive quiver of the speedo needle, damage to the screw heads holding the speedometer in place or hairbrush marks on or around the speedo figures".
That did not mean much to me but it was the advice given. The final sentence suggested that it would be helpful if the questioner consulted Birmingham City Council's environmental services department. So even that paper gave the information as to what should be done. I read the quotation because it was in the newspaper only yesterday.
In this House we have had various debates and Questions on clocking. The noble Lord, Lord Campbell of Croy, has raised the matter of clocking two or three times, as have other Members on both sides of the House. As the noble Lord, Lord Ezra, said, why do people turn the speedo back? It is just to make more profit. If a vendor did that when
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selling anything else he would be prosecuted for fraud. Why should people be allowed to get away with doing this? That is what it means —getting away with it.
Trading standards officers throughout the country realise the problem. In Birmingham the trading standards offices have a computerised vehicle mileage checking system in operation. It operates nationally with trading standards officers all over the country sending details of cars that come up for auction. Officers can try to trace owners back so that prosecutions can take place. That works fairly effectively but, as the noble Lord, Lord Ezra, said, it catches only a few culprits rather than many. Although that system works it does not go far enough.
The measure that the noble Lord, Lord Ezra, proposed as regards combating clocking seems such a simple one. When we dispose of our cars we have to rip off the bottom part of the vehicle registration form. I did so myself just before Christmas. When you dispose of your car, whoever you are selling it to, you have to tear off the bottom part of the form and return it to Swansea. You fill in the slip and inform the licensing centre at Swansea that you are disposing of your car. However, you do not have to say where the car will go to. If a garage buys your car it has to send the form back, as does any new owner of the car. Therefore the tear-off slip is returned to Swansea. I cannot imagine that it would be very difficult to send another form back at the same time stating how many miles were on the clock when the car was disposed of. The slip already has your name and address and the make of the car on it, so it would seem simple to add the number of miles registered on the clock.
One wonders why such a simple proposal cannot be implemented. As the noble Lord, Lord Ezra, said, we need a national register. Then we would know that the mileage was correct. I hope that the Government will seriously consider the proposal. I know that the Minister will probably say that it will cost money. But I point out that at the present time the licensing centre in Swansea is selling what are called cherished number-plates. I do not know how many thousands of pounds were raised at the last auction of such number plates. I suppose that that money must go to the Chancellor of the Exchequer. However, if this proposal would cost Swansea money, some of the money from the sale of the cherished number plates could be used to pay for it.
I hope that the Minister will give a satisfactory reply to the noble Lord, Lord Ezra, and the House this afternoon on what are two simple and practical measures. They would not only protect the consumer but also other road users as they concern safety. They would also stop people who are out to make a quick buck.
2.17 p.m.
Earl Attlee: My Lords, I feel I should start by damning the noble Lord, Lord Ezra, with faint praise. This Bill is rather like the curate's egg —good in parts.
I shall deal first with the comments of the noble Baroness, Lady Fisher. I would not trust a word of

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what her "freebie" states as regards how one tells whether a speedo has been clocked. The fact that the needle is quivering probably only means that there is a kink in the cable. I have had brand-new cars which show such quivers. As regards brush marks on the speedo figures, they have nothing to do with the clocking of miles.
Baroness Fisher of Rednal: My Lords, although I read from an article I had stressed that I was not an expert in this matter. However, I presume that the people who replied to the query in the article were experts. I personally would not recognise any marks or quivers.
Earl Attlee: My Lords, I am grateful to the noble Baroness. I claim to be something of an expert in this matter. I wished to put her right in that if she bought a car and saw the needle quivering, that would not necessarily mean that it had been clocked.
Several years ago I used to buy and sell second-hand and new cars. I worked for a group which to my certain knowledge was absolutely honest. I accept that there are rogues, but I ask your Lordships to accept that there are also rogues among the public. Some of the tricks they get up to are quite unbelievable. One asks them when they are trying to do a part exchange whether their car has ever been in a serious accident. They reply, "Oh no", as if butter would not melt in their mouths. However, they forget that they are dealing with experts and that if you stand in the right place you can see everything that has happened to the car.
They read in the "freebie" newspapers that if you have a high mileage car you change the brake pedal so that the rubber looks unworn. However, they do not realise that that has to be done well before the car is sold. Otherwise the salesman will see brand new brake pedals and think, "Hello, there's something wrong here". Another thing people do to older cars is to change the passenger seat, which has hardly been used, to the driver's side, and vice versa. Normally that is a dead giveaway.
The noble Baroness spoke about trading standards officers. Three of four years ago I went to my local trading standards officers in Finchley. As a result they brought the first successful prosecution against a motor trader who used to buy left-handed drive cars which had been exported to Europe, bring them back to this country and convert them. I had friends in Austin Rover. They offered to check out the car for me. They kept the car for two weeks, and the list of what was wrong with the car was pages long.
I asked the trading standards officers to prosecute. They said that that would be no good because Austin Rover would not support them. I replied that I had recently supported Austin Rover in the House of Lords and I thought that they would support me in this case. They did so. My car was extremely dangerous. Wrong parts had been fitted. Second-hand parts had been bent to fit. It was a death trap. The supplier received a summons and unfortunately for itself, found it was dealing with someone who was used to speaking in public. When it tried to browbeat me it did not work.
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I find it difficult to understand the MOT. Anyone who knows anything about cars will know the expression, "It has a very good MOT". That means that it has been through the MOT and been thoroughly tested. The obverse of that is that a car has a dodgy MOT. Some 18 months ago I bought at auction a Ford Fiesta for my daughter. I saw that five days previously it had had an MOT and since then it had done 38 miles. When driving the car home I realised that something was wrong. My son, among other things, is an automobile heavy recovery expert and mechanic. He found that the front brakes had seized. That car could not genuinely have passed the MOT. I had been fooled, believing that the car must be all right because it had previously been a Panda car with the local police.
In the old days a car had a registration book which gave the name of the registered owner Now it gives the name of the registered keeper. I sold a van a few weeks ago. The buyer was hard up so I said that he could pay me in a couple of months. He applied to the DVLC to be registered as the keeper of the vehicle. The DVLC contacted me. I said that he had not paid. The DVLC asked whether he had the car. I said that he had. Apparently he was therefore registered as the keeper. He does not own the car because he has not paid me for it; I own the car. I have never been able to understand why that change was made.
Several noble Lords have quoted statistics. I too shall quote statistics. Unfortunately I have to read them out, and when I intend to say 28 per cent. I may say 82 per cent., or vice versa, because I am dyslexic. I hope that the House will bear with me.
We have already been told that there are 7·5 million used cars sold per annum. Incidentally, it is rather funny that we should call them second-hand cars since some have probably changed hands eight or nine times. Half of those used cars (3·75 million) are sold through the motor trade; of those cars, 75 per cent. (2·81 million) are sold in an unroadworthy condition. That means that the buyers of those vehicles could drive off and suddenly find that they have no brakes or no steering. There could be a serious loss of life. Even of those vehicles which the general public hire, a recent check in mid-Glamorgan showed that 13 out of 16 hired vehicles were found to be unroadworthy.
I turn to insurance write-offs, a subject which I know has already been mentioned. In 1985 an AA survey found that one in eight vehicles (17,500) were unsafe; 50 per cent. (70,000) still had defects. Any vehicle on the road that has a defect or is unsafe might kill the driver. Worse than that, the driver might kill you, me, your daughter, son or grandchildren. That is why this is a part of the Bill that I strongly commend.
In an RAC survey it was found that 3 per cent. of all cars examined had post-accident repairs and that 20 per cent. of those repairs had been done badly. It is terrible that on our roads today there are so many cars which are unsafe. That is certainly something which the MOT was intended to check. When I lived in Belgium there was an annual government check of cars. The government could

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not care less whether or not the vehicles passed as fit. It meant nothing in their pocket. It was nothing to them if a car needed two new tyres, because they did not supply tyres. It was a very good system and I wish that we had such a system in this country.
Reference has also been made to clocking —a £100 million a year fraud. One in five used cars (1·5 million) is likely to have its recorded mileage doctored. I once worked for a company (whose name I shall not mention) whose employees used company cars and were given a standard amount of money each month. If one travelled more than a certain number of miles one received more money. I experimented. I bought a new speedometer and ruined it. I learned how to clock. But I clocked the opposite way round. I took out the clock and turned on the mileage, so that certain people could claim extra money. It was quite illegal but I did not think of it in that light in those days.
As I believe was said by the noble Lord, Lord Ezra, every 1,000 miles off the recorded mileage adds about £30 to the resale value of a vehicle. That means that some cars increase in value by about £1,000 when 33,000 miles have been taken off the clock.
I am sure that in an insurance write-off the registration document should be handed to the driver who should then send it to DVLC for it to be stamped with a record of that insurance write-off. If someone were to buy that vehicle and repair it, that vehicle could not then be taxed until it had been through a stringent test. For ever after the registration document would carry the fact in a stamp indicating that that vehicle was an insurance write-off. I am sure that that would be a great help.
I believe that one of the worst features of our system is that the registration document shows the name of the registered keeper. One may be a representative for a big company and travel over 100,000 miles a year in one's car. One may run it for one year and then sell it. The ordinary "Poor Joe" member of the public looks to see who is the registered keeper of the car. If he has been clocking, the car might be in excellent condition but the public are being "done" left, right and centre.
I wish that Lord Ezra's Bill was stronger and more detailed. It would be nice to think that the Government will dot the "i"s and cross the "t"s. However, judging by past performance, I have a nasty feeling that they will not do so.
2.30 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord, Lord Ezra, for introducing the Bill and speaking to it. I shall try to be brief in my comments. I must make it clear that although I speak from the Dispatch Box, I am not representing the Labour Party's position on the Bill because it is a Private Member's Bill. I am therefore speaking in my personal capacity.
The noble Lord's Bill seeks to address the issues of enforcement of the law relating to unroadworthy vehicles and what is known as clocking. As he rightly
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pointed out, the sale of unroadworthy vehicles is a criminal offence under Section 75 of the Road Traffic Act 1988 and clocking is a criminal offence under the Trade Descriptions Act. We therefore have quite clearly established in law that there are two offences.
As the noble Lord pointed out, the problem is that in the first instance there is a defence under Section 75(6)(b) of the Road Traffic Act 1988 which is a little too wide. The noble Lord seeks to narrow that defence. I shall come back to that point in a moment.
The second problem that he seeks to address is one of enforcement. I agree wholeheartedly with the noble Lord, Lord Ezra, and the noble Baroness, Lady Fisher, on that. I personally prefer the formula of the noble Baroness, Lady Fisher, that the general safety requirement under the Consumer Protection Act should apply to motor vehicles. When we discussed the Bill in your Lordships' House, I could never see why motor vehicles were exempted from that. There should be some arrangement for proper inspection of vehicles on a forecourt or a lot.
It is clear to me that the right people to do that are the trading standards officers. The only point I make about that is the one that I made to the Government when the Consumer Protection Act was a Bill before your Lordships' House: it is no good imposing burdens on trading standards officers without giving them the resources to carry on the tasks imposed. Government after government have imposed tasks on those very hard working, conscientious people without giving them the resources that they need to carry them out. Therefore, I would say that Clause 5 of the Bill dealing with financial provisions could perhaps be amended accordingly. If there is to be serious enforcement of these two matters then the officers in question need to be properly equipped; there needs to be sufficient number of them; and they need to be properly trained.
The problem that I had with the narrowing of what I call the subsection (6)(b) defence in the Bill is that it would impose an onus on the proposed vendor of the vehicle to decide for himself whether or not a vehicle was roadworthy. The Road Traffic Act is quite specific on this matter. It defines the offence. It is quite clear that the question of whether an offence has been committed is a matter for the courts, after prosecution. It is very difficult to say to a dealer, "Will you please put up a notice on the windscreen of a car saying, 'This is unroadworthy' ". It is for the courts to decide ultimately what is unroadworthy and what is not. If a day later, after replacing the missing wheel, he says, "I am now going to take this off and declare it roadworthy", he is again making a judgment about the interpretation of the law. That raises many problems for the dealer and one must consider them most carefully.
I turn now to the subject of clocking. As was pointed out by my noble friend Lady Fisher, in discussions in this House many possible solutions have been put forward. However, none has commanded the universal support of all the organisations and the Government. It is an extremely difficult problem to solve. How does one

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enforce the offence under the Trade Descriptions Act? Apart from allowing trading standards officers greater liberty in enforcing whatever system is adopted, I understand that all the noble Lord's Bill does is to allow the Secretary of State to make regulations describing a system. We do not know what system the noble Lord, Lord Ezra, or anyone else has in mind.
In debates in this House all systems that have been put forward have been found to be defective in some way. Therefore, I do not believe that the clocking side of the Bill takes us much further. I should like to see much more thought given to the matter before primary legislation is produced. With that, we must have an idea of the kind of regulation and system for which the Government are able to command respect.
I have certain reservations about the Bill, but nothing that I have said detracts from my enthusiasm or that of my party for ensuring that the offences are prosecuted. As my noble friend Lady Fisher said, there is no doubt that the problem of unroadworthy vehicles on the road is a social menace. There is also no doubt that clocking constitutes fraud. Wherever there is a social menace and fraud, the offences must be prosecuted and brought to book. However, I wonder whether the Bill brought forward by the noble Lord, Lord Ezra, is the vehicle for that process. Nevertheless, we support its aims. We hope that the Government will take the Bill, build on it and bring back an improvement which meets the aims of which we all approve.
2.38 p.m.
Viscount Ullswater: My Lords, I have listened to the debate with great interest. I am grateful to the noble Lord, Lord Williams, for setting out his remarks, which were brief, as he said. I fear that my remarks will take a little longer because I wish to address the issues.
The noble Lord, Lord Ezra, has chosen a subject for the Bill on which a number of noble Lords have experience. After a house, the purchase of a motor car is probably the biggest single expenditure which an individual or family undertakes. But what a contrast there is between the two transactions. Who would contemplate buying a second-hand house which was outside its warranty period without having at least a basic survey carried out by an independent expert? It would be folly to do so. However, when it comes to buying a motor car people appear to be prepared to commit themselves to an item costing thousands of pounds on the basis of little more than a quick look.
I find that most difficult to understand. In addition to the motoring organisations, there are independent motor consultants throughout the country who offer a pre-purchase inspection service. Yet they are comparatively little used by consumers who seem loath to spend £50 or so, even though it could save them hundreds and sometimes thousands of pounds in the long run.
Noble Lords may point out that of course the difference between buying a house and buying a car is that the mortgage loan is normally contingent
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upon the house having a survey, whereas that is not the case with a car which is being financed by a loan. That is true, but even so I cannot understand why people seem to throw caution to the wind when they set out to buy a used car.
There is no shortage of advisory information on the subject. For example, the Office of Fair Trading has published an excellent leaflet on used cars giving advice on what to look out for, what questions to ask, what to ask to see, what do if things go wrong and so on. The leaflet also deals with car repairs and servicing and is available free of charge at citizens' advice bureaux and trading standards offices throughout the country. The Consumers' Association, in its Which? magazine, frequently publishes advice on buying used cars, and articles often appear in the national and local press. Surely there can be few people who do not realise that there are risks involved in buying used cars. There will always be risks whatever legislation one has but the consumer can keep those risks to a minimum by taking some elementary precautions and by going to a reputable dealer.
The noble Lord, Lord Ezra, quoted some remarkable figures which invite us to accept that those risks are great. We have been told by the noble Lord of the results of a 1987 survey which estimates that three out of every four cars sold are in an unroadworthy condition. I query that figure which I suspect has been derived from the results of a single survey carried out on 200 vehicles in only four areas of the country in 1987. I am doubtful about the validity of using such limited evidence to draw a conclusion in respect of a population of 7·5 million cars.
I should like to examine the considerable amount of regulation which is already on the statute book and which provides protection for buyers of used cars and users of garage services. First, there are various criminal statutes. The Trade Descriptions Act 1968 is the most notable of these, requiring that any trade description which is applied to a car, such as "excellent condition", "one lady owner", or even "good runner" must be truthful. Noble Lords will also doubtless be aware that it is the Trade Descriptions Act which makes it a criminal offence to wind back the odometer of a car —I believe it is known as "clocking" in the trade —to make it appear to have travelled less miles than it really has.
The noble Earl, Lord Attlee, has experience of another form of activity which was useful to the debate but I shall not take that any further. Trading standards officers of local authorities took 379 successful prosecutions last year for offences involving false mileage readings on used cars and every dealer knows that he risks a heavy fine, or even imprisonment, if he tampers with a car odometer.
The Trade Descriptions Act also applies to garage services. If a dealer misdescribes servicing or repair work which he has carried out, he is again likely to fall foul of the Act and be liable to prosecution by the trading standards authorities. Another problem sometimes encountered by car buyers is also dealt with by criminal legislation. It is the practice of some disreputable dealers to advertise used cars as if the

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sales were private ones, thus depriving the buyer of some of his or her rights in civil law. This practice is the subject of the Business Advertisements (Disclosure) Order 1977 which requires the advertisement to make it clear that the goods are being offered by a dealer.
Of course, the consumer has a number of rights under the civil law, and it is appropriate to mention the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 and the Unfair Contract Terms Act 1977, all of which provide protection to purchasers of motor cars and garage services. Furthermore, where a car is purchased, as many are these days, by means of credit, the Consumer Credit Act 1974 may also provide additional protection for the consumer. For example, in certain circumstances the finance company shares legal liability with the supplier for defects in the goods supplied.
Under the provisions of the Road Traffic Act 1988 it is an offence for a person to sell, or to offer for sale, a motor vehicle or trailer which is in an unroadworthy condition. However, a person cannot be convicted of that offence if, among other things, he can prove that the vehicle or trailer would be put into a lawful condition before being used on the road.
I hope that your Lordships will agree that the protection which the law provides to those who purchase cars or have their cars serviced or repaired is already extensive.
Let me turn now to the Bill which is before your Lordships. Clause 1 would modify certain requirements of the Road Traffic Act 1988. In the case of unroadworthy vehicles that I have just mentioned, Clause 1 of the Bill would require the seller, to avoid conviction, to display a notice on the vehicle or trailer to indicate unroadworthiness, and to state this fact in sales documents. The Government have already agreed, in response to representations made by the working party under the chairmanship of the Director General of Fair Trading, that there is a case for tightening up the current defence. We intend to put proposals before Parliament in the autumn to limit the application of the defence to cases where the seller can prove that he has exercised all due diligence to avoid committing an offence. The noble Lord, Lord Williams, drew attention to that. However, arrangements will need to be made to exempt genuine sales of unroadworthy vehicles, such as sales between traders, as the noble Lord, Lord Ezra, said.
The other main effect of Clause 1 would be to give trading standards officers the power to test and inspect used motor vehicles and trailers to determine whether or not they are unroadworthy. Under the Road Traffic Act 1988 these powers are already available to, and exercised by, authorised examiners as defined in the Act. These include vehicle examiners from the Vehicle Inspectorate Executive Agency, which is responsible to the Secretary of State for Transport. These people are experts in assessing vehicle roadworthiness, whereas the trading standards officers are generally not qualified in that respect.
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In practice, vehicle examiners work closely with trading standards officers and their services are available on request to follow up suspected breaches of the relevant sections of the Act. Under current working arrangements vehicle examiners can also undertake routine dealer forecourt inspections on their own initiative. The noble Baroness, Lady Fisher of Rednal, did not mention that in regard to inspections of forecourts, so I draw her attention to that fact.
The Government consider that these arrangements for safeguarding against the sale of unroadworthy vehicles work well, though they are currently reviewing the means whereby additional vehicle examiner time could be made available to trading standards officers if required. If does seem, therefore, that these additional powers are unnecessary. Furthermore, extending these powers to trading standards officers would mean that they would not be so easily, expertly and consistently applied as they are at present.
Turning to Clause 2, your Lordships will recall that I have outlined the main aspects of the criminal law which apply already to the sale of motor cars and the provision of garage services. The noble Lord, Lord Ezra, indicated that there are some deficiencies in the existing law and that his Bill seeks to put them right. However, Clause 2 does not make any specific proposals for what should be done, as the noble Lord, Lord Williams, pointed out. The Bill would confer on the Secretary of State the most sweeping powers to make regulations to govern the motor trade. These enabling powers are so widely drawn that they could be used for almost any purpose from introducing a licensing system for the motor trade right down to regulating the width of the stripes on a car salesman's suit.
From what the noble Lord, Lord Ezra, said, however, I understand that one of the main objectives of Clause 2 of his Bill is to combat fraudulent alteration of car odometers —clocking. I understand that one proposal that the noble Lord has in mind is a national mileage recording scheme. That proposal has been made to government before. The suggestion is that it should be compulsory for every motorist to report the mileage reading on his or her car every time the car is taxed or sold; a point brought out by the noble Baroness, Lady Fisher. The details would then be passed on to the Driver and Vehicle Licensing Centre, which would transfer them to its computer records. These records would be made available to the trading standards officer investigating the previous history of motor cars sold or offered for sale to consumers.
Noble Lords might consider that this would be a very useful system which would make life much more difficult for the fraudsters. I have to tell noble Lords that the idea is fatally flawed. The DVLC has estimated that it would entail the recording of an extra 40 million pieces of data a year. That of itself would be a very expensive bureaucratic exercise. However, it could be financed if a suitable fee were charged for inquiries and if there was sufficient demand. But there is the rub. There would be no way of checking the accuracy of the information being recorded on the DVLC computer.

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My noble friend Lord Lucas of Chilworth drew attention to that fact. I believe the phrase he used was that there would be "no audit of it". The noble Baroness, Lady Fisher, said that it would be easy to put the figures on the bottom piece of the vehicle documentation when it was returned. She did not tell us why false details could not be put on the transfer form.
I am sure that those who were intent on fraud would find ways of submitting false details. These, together with genuine errors, would assume a spurious authenticity. I believe that those were the words used by my noble friend Lord Lucas. Eventually the unreliability of the information would cause the system to fall into disrepute and the DVLC would be left with an expensive white elephant to maintain.
Baroness Fisher of Rednal: My Lords, the Minister gave the number of pieces of information that would be added to the records. However, the DVLC is automatically writing off cars every year as these take place. That must also be a costly exercise. In addition, there is the information which goes through to the computer of police records and which has constantly to be amended. I speak as a magistrate and I am referring to motoring offences. Those records are constantly being amended and I do not know how many thousands of them must be on record at the DVLC. There is no suggestion —is there?—of the Government ever saying "We have too many people with motoring offences and we are not going to record them any more".
Viscount Ullswater: My Lords, I was seeking to stress that there would be 40 million additional pieces of data to record per annum and there is a cost involved in that. The Government deplore the practice of car clocking, but they do not accept that the answer is to require the declaration and the recording to millions upon millions of additional items of information every year. When the working party under the chairmanship of the Director General of the Office of Fair Trading first came up with this proposal in 1987, the then Minister for Roads and Traffic explained these difficulties and invited the working party to look at a more cost-effective scheme.
He suggested that the scheme should be targeted on the vehicles most prone to clocking; that is, the ex-fleet cars which cover high mileages in a short time. He also suggested involving private companies which are already in the business of tracing and recording vehicle histories. The working party seems to have ignored these suggestions, however, and it is still asking the Government to set up a system which would involve a very large investment for a very doubtful return.
Surely, the permanent answer must be to make cars in such a way that it is physically much more difficult to alter the odometer reading. Motor manufacturers have an interest in maintaining a healthy market for used cars. I believe that they could do more than they are doing at the moment to find a technical solution to this problem. For example, I have heard that Rolls-Royce has started
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installing in its cars a secret computer chip which records the distance travelled independently of the odometer. I do not say that that is the answer, but it shows that there is room for development in this area.
Regarding other measures which the noble Lord, Lord Ezra, may have in mind for the wide regulation-making powers of Clause 2, I do not know what these might be. However, I would argue that we already have on the statute book a wide range of legislation which protects the purchasers of motor vehicles and of other goods and services. The fact that trading standards officers took over 400 successful prosecutions last year for offences relating to the sale of motor cars suggests that the law is far from unenforceable. I am sure that every dealer knows the risk he runs if he contravenes the Trade Descriptions Act or the other consumer protection laws.
The Government are always prepared to consider specific solutions to specific problems, but we do not consider that it is necessary or desirable to have such sweeping and imprecise powers on the statute book. I am afraid, therefore, that I cannot commend this Bill to your Lordships' House.
2.55 p.m.
Lord Ezra: My Lords, I should like to thank all noble Lords who have participated in the debate. I believe that I can conclude that, although not necessarily in support of the Bill or of particular clauses in it, all nonetheless accept that there are problems and that we should do something about them. To that extent, we have had a useful debate. I should like to consider briefly some of the points raised by noble Lords, comment on them and then conclude.
The noble Lord, Lord Lucas of Chilworth, with whom on many occasions I find myself in full agreement, did not find himself in support of the Bill. When he started speaking, I thought that he would tell us that there was no problem, but he ended by saying that these are areas of great concern. Those were his words, so he clearly thinks that there are problems but that the Bill does not address them.
The noble Lord queried the fact that all the organisations mentioned by the working party of the Director General of Fair Trading did not necessarily support the Bill. To my knowlege, they all do. The points raised in the Bill are the three points raised in Sir Gordon Borrie's original letter. I am not aware that any of the signatories to that letter said that they did not support the Bill, but I shall certainly look into the matter as the noble Lord referred to it.
The noble Lord said that he was very much against the documenting of unroadworthy vehicles or of showing that they were unroadworthy. However, unless that is done, how are people who go along to a forecourt and see masses of cars drawn up with all the prices clearly shown to know which are roadworthy and which are not? We have agreed that there are legitimate sales of unroadworthy vehicles for particular purposes and that they can be properly but clearly shown on the forecourt in the same way as goods which are damaged in any other respect. I

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believe that they are known in the trade as seconds. They must be properly advertised as such, so unroadworthy vehicles should be designated in some way.
It was suggested that it is perhaps difficult for traders to determine whether a vehicle is unroadworthy. I cannot see how else to do so. That is their expertise. To try to adjudge that after the sale and when the matter has been to the courts and when perhaps serious damage and harm have been done seems to be leaving it a little late. The point about not showing that cars are unroadworthy when they are on the forecourt is debatable.
All noble Lords raised the question of odometers and clocking. As everyone agreed, it is a serious problem. However, there is disagreement as to the solutions. That was why Clause 2 was widely drawn and left matters to the Secretary of State. I should like to ask the noble Viscount—perhaps he will write to me about the matter—whether I was right in supposing, as I mentioned in my opening remarks, that the Government are considering possible alternative ways of dealing with the matter or whether they are leaving it entirely to third parties to consider. Is there any initiative in that field or is it to be left to others to bring something forward? I should like to be assured on that point. I am not clear whether the Government have merely said that they do not like the solution brought forward but are leaving it to others to find something better, or whether they are to have some input.
I am most indebted to the noble Baroness, Lady Fisher of Rednal, for her strong support for the Bill and for the vigorous way in which she demonstrated that there are real problems for ordinary people with these two difficulties —unroadworthy used cars and clocking. She was quite right to demonstrate that clocking is regarded as a big problem by ordinary people when purchasing used cars. They do not have much idea of how to check on such matters. The noble Earl, Lord Attlee, pointed out that even if they took the advice in the journal to which the noble Baroness referred, they would still get no further. All that makes it clear that this is a most difficult area. Therefore, perhaps some keen minds will try to look into the matter.
The noble Earl gave us a great deal of information about many aspects. I hope that we shall only treat them as matters brought forward in a debate and not go off, enter the trade to which he belonged and practise some of them. However, some of the statistics that he produced were very scaring. For example, in the case of unroadworthy cars he demonstrated that of the 7·5 million used car transactions per annum, 3·75 million cars were sold by the trade of which 2·81 million were shown to be unroadworthy. Those were the figures he quoted and he is an expert in his field. I think that that is a terrible indication of what is happening. He also mentioned the risks associated with car hire vehicles, saying that many were unroadworthy. Therefore, there is not the slightest doubt that we have a real problem in this respect. He fully supported clauses in the Bill which deal with unroadworthiness.
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However, he did not think that the clocking provisions went far enough.
The noble Lord, Lord Williams, made clear that he supported the broad intention of the Bill and that he recognised the fact that the real problem is not that these two aspects —namely, unroadworthiness and clocking —are offences (and they are offences) but how we deal with them. The question arises as regards the available defences which prevent proper prosecutions taking place. He felt that the TSOs had a role to play in gaining access to the forecourts and participating in inspections of such vehicles before they are sold. He emphasised that the officers would have to have the necessary resources to do so. I certainly agree with that conclusion. He too mentioned the matter of clocking. He was among the speakers who noted that this still remains a difficult issue.
In summing up the Government's point of view, the noble Viscount emphasised the importance of car purchases in the lives of ordinary people. He said that in regard to the purchase of a used car the purchaser should exercise the same care as he would when purchasing a house. He also pointed out that there are ways in which people can obtain advice at a relatively low cost. In fact, he drew our attention to the excellent OFT document on used cars. I believe that those words are most important and that such advice should be widely spread.
However, when the noble Viscount came to discuss the Bill he was not quite as positive as he had been in his opening remarks. In regard to Clause 1, he agreed that there was a case for tightening up the defence provisions as regards unroadworthy vehicles. He told us that the Government would be bringing forward proposals in the matter. That is a positive point. He did not agree that TSOs should be able to carry out examinations on forecourts, on the grounds that there are vehicle examiners who are experts in that field who are already doing this work. But he did say that the Government are looking closely at the possibility of extending and increasing the number of vehicle examiners, who, of course, work very closely with TSOs.
I am not entirely convinced about the noble Viscount's exclusion of TSOs. I do not see why they should not have the right to go and visit forecourts—if need be, with the vehicle examiners—because they have a clear role to play in the matter. I should have thought that it would strengthen their hand if they had such a right. I hope that we can come back to that later.
Finally, the noble Viscount criticised the wide-ranging powers that the Secretary of State may be given by Clause 2. I should be happy to look at that again at a later stage. However, in the case of the clocking problem, which was the main issue in mind under this clause,gave the reasons the Government had turned down the original proposals put forward by Sir Gordon Borrie after the deliberations of the working party. He said that asking the DVLC to keep this vast amount of information might not be helpful. The noble Viscount suggested various alternatives but I come back to the point that I put to him earlier. I hope

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that the Government themselves will look at the problem and come forward with proposals, just as I am convinced that other parties concerned will examine the matter. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at six minutes past three o'clock.