Lords Sitting of 13 July 1992

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

Lord Ashley of Stoke
The Right Honourable Jack Ashley, CH, having been created Baron Ashley of Stoke, of Widnes in the County of Cheshire, for life—Was, in his robes, introduced between the Lord Carter and the Lord Dormand of Easington, and made the solemn Affirmation.
Lord Finsberg
Sir Geoffrey Finsberg, Knight, MBE, having been created Baron Finsberg, of Hampstead in the London Borough of Camden, for life—Was, in his robes, introduced between the Lord Wolfson and the Lord Crickhowell.

Mortgage Arrears
2.59 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What are the latest figures available concerning mortgage arrears in the owner-occupied sector and whether they have any further plans to deal with the problem.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, according to the latest figures from the Council of Mortgage Lenders, around 275,000 borrowers (or 2.8 per cent. of the total) had mortgage arrears of six months or more at the end of 1991. My right honourable friends the Chancellor of the Exchequer and Secretary of State
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for the Environment met the lenders on 2nd June to discuss progress on the package of measures they had agreed last December. They were encouraged to hear the lenders' assessment that those measures will prevent some 55,000 repossessions this year.
Lord Dean of Beswick: My Lords, I am grateful for the information given by the Minister. However, is he aware that if the dates are moved slightly the figures look quite different? For example, between March 1991 and March 1992 the number of repossessions increased from 47,940 to 68,000, which is a 40 per cent. increase. The number of borrowers who are six months in arrears increased in the same period from 209,000 to 290,000, which is an increase of nearly 33.3 per cent. Those figures emerge from a survey carried out by Shelter for the Rowntree Trust. Although what the Government are doing is welcome, do they not need to do a lot more to prevent the disaster which is looming in the owner-occupied sector?
The Earl of Caithness: My Lords, I shall be able to update the noble Lord, Lord Dean, on the latest figures to be published in August, which refer to the first half of 1992.
Lord Stallard: My Lords, perhaps I may bring the noble Earl up to date, not in terms of telephone numbers but by using ordinary statistics. Is he aware that for the first three months of this year repossessions were running at the rate of 144 per day? Is he aware further that since the introduction of the much-heralded mortgage rescue scheme last December only 12 rescues have taken place? How does he square that with the 55,000 expected this year? He will have to rescue a lot of people to bring up the numbers from 12 to 55,000. Is it not time that we had a look at the whole scheme and all the arrangements and problems in this sphere to see whether we can find a workable scheme—and there are quite a number of suggestions which will enable those people to stay in their own homes, either as tenants or as part owners?
The Earl of Caithness: My Lords, that is exactly what the package of measures which my right

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honourable friends and the Council of Mortgage Lenders agreed in December. The noble Lord, Lord Stallard, has taken only one aspect of the scheme. It is true that formal rescue deals have been concluded with only a small number of borrowers, but negotiations are continuing. I ask the noble Lord to look more widely at the whole package of measures because that is what will lead to the prevention of some 55,000 repossessions this year.
Lord Elton: My Lords, while accepting that those figures in large part stem from the current economic condition in the world generally, and in this country in particular, does my noble friend accept that another important ingredient is the lack of understanding which many people have in their early years about the proper management of debt and the danger of accepting too much in the way of credit? Does my noble friend agree that efforts should be strengthened in schools to give some training in that regard in advance of adult life?
The Earl of Caithness: My Lords, all our children should be brought up to be made aware of the question of debt and the value of saving. The Council of Mortgage Lenders has been keen to discuss debt management with home owners who are finding it difficult to pay their mortgages.
Baroness Fisher of Rednal: My Lords, is it not the fact that those who are unemployed cannot possibly afford to pay their mortgages? Those people are in dire circumstances; not only are they losing their homes but they are losing their jobs. Local authorities cannot pick up those people. Are the Government aware of where they are disappearing to?
The Earl of Caithness: My Lords, considerable efforts are being made by the Council of Mortgage Lenders to prevent exactly the situation referred to by the noble Baroness of people being repossessed. That is the reason that it is making such efforts.
Lord Shepherd: My Lords, does not the noble Earl agree that it would be wrong for us to leave this House believing that those people who sought to buy their homes through mortgages do not know how to manage their debt? Does not the noble Earl agree that for a long time we have been seeking to encourage people to buy their own homes? The only way that they can do that is through a mortgage. Is not a mortgage, properly managed, a form of compulsory saving?
The Earl of Caithness: My Lords, not only have we encouraged people to buy their own homes but we shall continue to do so. However, they must borrow prudently.
Lord Peston: My Lords, it is a little late for the building societies to tell people to borrow prudently when until recently they were telling them to borrow as imprudently as they possibly could. Is the noble Earl aware that, given the extent to which house prices have fallen, a great number of people have mortgages larger than the value of their homes? Some
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economists, mostly those sympathetic with the Government, believe that that position is so dangerous that it may lead us further into a slump unless the Government intervene.
The Earl of Caithness: My Lords, we are aware that some people are in the position of being in "negative equity", to use the phrase of the economists. The Council of Mortgage Lenders states that the number is around 375,000, which is far fewer than many have suggested.
Lord Mackie of Benshie: My Lords, does the noble Earl possess any figures in regard to the cost to public funds of rehousing people who are dispossessed of their homes?
The Earl of Caithness: No, my Lords.

Ofgas: Estimated Gas Bills
3.6 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they are satisfied that Ofgas is paying sufficient attention to the policy of British Gas to produce estimated bills.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, new tariffs and standards of service were recently agreed between Ofgas and British Gas and introduced at the beginning of April. The standards of service set out the circumstances in which estimated bills may be issued and set specific targets for controlling their accuracy.
Lord Molloy: My Lords, I thank the noble Baroness for that reply. But does she not agree that while the British Gas document Commitment to Customers is both helpful and well drawn up, the paragraphs referring to estimated bills are unsatisfactory? Many poorer people—for example, those who are disabled—cannot reach their meter. They are paying large amounts of money which they need not pay. British Gas must be collecting the interest on money it should not have received in the first place. What are the Government going to do about that?
Baroness Denton of Wakefield: My Lords, I thank the noble Lord for his interest in the brochure. I hope that it will go a long way towards helping people and that the deeds match the words. Under the new arrangements agreed between Ofgas and British Gas, the company is required to monitor the accuracy of estimates to ensure that procedures operate without advantage to the company. Of course the customers have the opportunity to submit their own readings. Moreover, British Gas will read meters every quarter where elderly or disabled customers are unable to take their own readings.
Lord Skelmersdale: My Lords, is not the problem that meters tend to be inside the front door in the great majority of cases, whether it is a fiat or a house? Should not British Gas, and indeed the electricity and water companies when metering comes in, be

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encouraged either to site the meters outside the front door or use telephonic equipment in order to read them?
Baroness Denton of Wakefield: My Lords, estimating is obviously the answer to the current situation where meters are situated inside. I am pleased to advise my noble friend that British Gas, in common with other utilities, is looking into technologies for the remote reading of meters. That will result in accurate bills.
Lord Tordoff: My Lords, is not British Gas using the consumer as a remote reader of bills? Is the noble Baroness aware that recently my wife, standing near the front door of our home, received a piece of paper through the letter-box stating,"We are sorry you were out when we called to read your meter. Will you please read it for us?"
Baroness Denton of Wakefield: My Lords, I can only suggest that the noble Lord probably gave a more accurate reading.
Lord Williams of Elvel: My Lords, does the noble Baroness agree that the system of metering used by British Gas at the moment is little short of medieval? Is she aware that there are perfectly good technologies which have been available for many years? Does the noble Baroness further agree that it is time British Gas used some of the enormous profits that it is making as a privatised utility in order to install that kind of metering?
Baroness Denton of Wakefield: My Lords, British Gas is concerned with technology and improving the service. I point out to the noble Lord that, for every pound profit, British Gas has invested £2.
Lord Molloy: My Lords, will the Minister take account of the point made on her side of the House a moment ago; namely, that some of the meters are almost inaccessible, particularly to the purblind, blind people and those who are crippled? Another vital point has been mentioned by my noble friend Lord Williams of Elvel. Is the Minister aware that there is a technology which can almost provide the actual amount required at the time? Does she agree that some endeavour should be made to reduce the amount of money which British Gas is taking from people and which can be shown much later on it had no right to take?
Baroness Denton of Wakefield: My Lords, perhaps I may clarify the situation to the noble Lord. Part of the standard agreed between Ofgas and British Gas was that there should be monitoring of the accuracy of the estimates to make sure that no one—neither the customer nor the company—took advantage. Knowing the difficulties of the current meters, there has been a customer service commitment to call and read the meters for older and disabled customers.

EC Refunds for Milk Products
3.11 p.m.
Lord Benson Lord Benson asked Her Majesty's Government:
What steps are proposed in order to eliminate the defects in the procedures in the European Community for the payment of refunds to traders in milk products, as disclosed in the opinion of the Court of Auditors dated 22nd April 1992, No.92/C101/01.
The Earl of Strathmore and Kinghorne: My Lords, the Government accept that the report from the European Court of Auditors raises serious issues. We are arranging discussions in Brussels under our presidency to consider the court's recommendations and what measures might be taken to reduce further the scope for fraud.
Lord Benson: My Lords, I am grateful for that reply. Does the noble Earl agree that, as the Court of Auditors has pointed out an unsatisfactory financial administration in the Community for year on year, and as it costs the Community scores of millions of pounds a year, the proper course is for the Council of Ministers and the European Parliament formally to inform the Commission that they will tolerate that situation no longer and that failure to correct it will cause the appropriate sanctions to be invoked?
The Earl of Strathmore and Kinghorne: My Lords, faults do not all lie with the Commission. Member states also need to set their houses in order. Action is required by all parties. In our discussions of the court's report we will be seeking to reach agreement on such action at an early date.
Lord Boardman: My Lords, as these frauds cost the Community over 16 million ecus, can my noble friend say why neither the names of the companies concerned nor their nation states are disclosed? Can he confirm that the United Kingdom is not one of the nation states concerned and also say what action, if any, has been taken against those defrauding companies?
The Earl of Strathmore and Kinghorne: My Lords, I am unable to tell my noble friend the names of the companies today. I personally do not know them. As far as I understand it, the United Kingdom is not involved.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the Commission itself has spent quite large sums of money in skirting round this question of fraud and that about two and a half years ago it was trying to minimise its significance? Is he further aware that the Commission itself spent in 1990 no less than £51 million; in 1991, £50.4 million and in 1992 it will spend £53.5 million? Does the Minister agree that those sums arc greatly in excess of the total cost of the Court of Auditors per annum and that they are roughly double the amount which that court has? Does the Minister agree that there is little to show for those sums? Will the noble Earl enlarge a little on

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what he means by having discussions with the Commission? Does he agree that it is about time that we got some results or that heads began to roll?
The Earl of Strathmore and Kinghorne: My Lords, the report will shortly be discussed by officials from the member states and subsequently by permanent representatives. In due course it will be considered at the ECOFIN council. I believe that that will take place in September. The report also identifies 11 specific instances where there have been overpayments totalling £3.52 million. But these should be considered as examples of potential problem areas. Not all the overpayments should be attributed to fraud. Over £1.3 billion was spent on export refunds in the milk sector in 1990.
Lord Boyd-Carpenter: My Lords, can my noble friend say what action has been taken as regards the officials who permitted this to happen?
The Earl of Strathmore and Kinghorne: My Lords, I do not have an answer to my noble friend's point. I shall endeavour to find out and then write to him.
Lord Gallacher: My Lords, can the Minister confirm that the two companies concerned in this Question account for approximately 10 per cent. of all refunds on milk products and that neither has been audited by its national authority since 1986?
The Earl of Strathmore and Kinghorne: My Lords, I believe that the noble Lord, Lord Gallacher, is correct in his figure of 10 per cent.
Lord Elton: My Lords, will my noble friend kindly complete his reply to my noble friend Lord Boardman by saying that he will endeavour to discover which are the national states concerned and that he will put the answer in the Library of this House?
The Earl of Strathmore and Kinghorne: My Lords, I shall most certainly do that. I understand that the companies covered by the report are based in Ireland and Germany.
Lord Williams of Elvel: My Lords, the noble Earl responded to my noble friend Lord Gallacher that in his view the two companies concerned had approximately 10 per cent. of the business that was going. He failed to respond to my noble friend's next question which was this: have these companies been audited properly by their national authorities since 1986 and, if not, why not?
The Earl of Strathmore and Kinghorne: My Lords, this special report is an interim report from an audit into the payment of export refunds. Two unnamed member states (I have just named them) are specifically covered by this report. The United Kingdom is not one of them. However, that does not mean that none of the weaknesses identified has not occurred in the United Kingdom. No doubt there is room for improvement here as well.
Lord Campbell of Alloway: My Lords, is my noble friend the Minister aware that the initiative to combat Community fraud was taken by Her Majesty's
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Government under the aegis of my noble friend Lady Thatcher? Is he able today to expand a little more as to where we have now got to and what is on the table by way of proposals for active discussion?
The Earl of Strathmore and Kinghorne: My Lords, the Government continue to look for ways to combat fraud. The United Kingdom will shortly discuss with other member states and the Commission what changes are necessary to update the Community's 45 point anti-fraud action plan. These changes should he endorsed by the ECOFIN council when it considers the Commission's annual report on fraud.

School Inspections: Tenders
3.18 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
How they intend to ensure that there will be at least two tenders for inspection work for every school.
The Minister of State, Department of Education (Baroness Blatch): My Lords, the detailed arrangements for school inspections under the Education (Schools) Act will be a matter for Her Majesty's Chief Inspectors of Schools in England and Wales who are obliged under the Act to invite at least two tenders for each inspection.
Lord Dormand of Easington: My Lords, will the Minister say how many inspectors need to be recruited in order to make the national position viable? As she has not answered the Question, can she say what procedure will be adopted if two tenders for inspection are not received?
Baroness Blatch: My Lords, both of the questions which the noble Lord has put to me are for Her Majesty's Chief Inspector. At the moment there is a framework document out for consultation which the noble Lord would do well to read and perhaps respond to if he has particular anxieties. Her Majesty's Chief Inspector is obliged under the law to inspect all schools every four years and that will be done.
Baroness Blackstone: My Lords, can the Minister say whether the Government will be encouraging Her Majesty's Chief Inspector of Schools to recruit teams of local education authority inspectors to undertake this work if the response to the Government's bizarre and expensive advertising campaign to recruit registered inspectors is unsuccessful?
Baroness Blatch: My Lords, the noble Baroness raises an important point, which is also a matter for Her Majesty's Inspectorate. We have taken the view—I believe that we are supported in it by the noble Baroness and her colleagues—that the inspectorate should be independent of government. These will therefore be matters for the chief inspector. He will publish both his criteria and the framework under which they will operate.
Lord Dormand of Easington: My Lords, the advertisement for inspectors states:

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"If you have experience in education or management consultancy".
Does that not mean that some inspectors who will be appointed will have no experience whatever of education?
Baroness Blatch: My Lords, I can be absolutely sure that Her Majesty's Chief Inspector will make sure that anybody who is involved in the business of inspecting schools will be fully qualified to do so.
Lord Dormand of Easington: My Lords, with great respect, that does not deal with the advertisement, which, in that sense, says nothing about education. I repeat that it refers to applicants who may have "management consultancy" experience.
Baroness Blatch: My Lords, the noble Lord omits to mention the fact that all applicants will be subject to training that is approved by Her Majesty's Chief Inspector.

Business of the House
The Lord Privy Seal (Lord Wakeham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 44 (No two stages of u Bill to he taken on one day) be dispensed with for the purpose of taking the Finance Bill and the Consolidated Fund (Appropriation) Bill through their remaining stages tomorrow.—(Lord Wakeham.)
On Question, Motion agreed to.

British Coal and British Rail (Transfer Proposals) Bill
3.21 p.m.
The Earl of Caithness: My Lords, I beg to move that this Bill be now read a second time.
The Bill before your Lordships is a short, essentially technical, measure. Its purpose is to give British Rail and British Coal powers to take the steps necessary to prepare for privatisation. I will explain briefly the content of the Bill's two clauses.
Clause 1 of the Bill confers on British Coal and British Rail powers to act in relation to proposals for the transfer of their commercial activities to the private sector or proposals for the establishment of new arrangements for their other activities. In particular, it empowers them to consider and take advice on proposals for privatisation, advise the Government on such proposals and draw up plans for implementing such proposals. They will be able to employ external advisers to assist them in all these tasks.
Clause 2 simply gives the short title of the Bill, sets out the financial provisions and extends the Bill to Northern Ireland. The financial provisions deal with the source of any loans and clarify the destination of any repayments, should either British Coal or British Rail require additional funding to meet costs incurred in preparation for privatisation.
It is also worth taking a few moments to say, for the
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avoidance of doubt, what the Bill does not do. The Bill itself does not give British Coal or British Rail powers to implement any scheme of privatisation. That will be a matter for the main privatisation legislation which the Government intend to bring forward later in the year. Nevertheless, this Bill represents the first legislative step on the road to privatisation for British Coal and British Rail.
The successful privatisation policies of this Government have already enabled two-thirds of companies once owned by the state to be returned to private enterprise. They have been given commercial freedom to flourish in the market place away from the constraints of nationalisation. The Government believe that the time has come for the coal and rail industries also to benefit from the private sector management skills, entrepreneurial spirit and efficiencies which have transformed companies, businesses and indeed whole industries.
In the transport sector, we have witnessed the revitalising effect that privatisation has brought about. For example, since we privatised British Airways, productivity per employee has increased by more than 20 per cent. Last year BA's profits were up by over 100 per cent. while the major state-owned European airlines were heading for losses totalling I billion dollars. The National Freight Corporation was brought into the private sector through a management buy-out in 1982 and was successfully floated on the Stock Market in 1989. In the past five years, the value of shares in the company increased 42-fold and investment in the business quadrupled. In other areas of industry we have seen similar remarkable results. British Telecom prices are down 27 per cent. in real terms since 1984 and there are 17 per cent. more pay phones—96 per cent. of which work at any one time. British Gas domestic prices are down 13 per cent. since privatisation.
In all of these privatisations, the guiding principle has been the need to secure value for money, and to increase consumer choice and efficiency by promoting greater competition and calling on the initiative of the private sector. My noble friend Lady Denton will have more to say about coal in her concluding remarks. I intend to direct most of my remarks today to how we intend to apply this principle to the privatisation of British Rail.
The Government will be setting out their proposals in a White Paper in the next few days. We have already set out the background and indicated in broad terms the likely shape of these proposals both in the Government's election manifesto and during the debates on this Bill in another place.
However, before saying more about the proposals themselves, I hope your Lordships will find it helpful if I say a little about what lies behind them. BR has made significant progress and the introduction of its Passenger's Charter is a further step in improving its responsiveness to customers. While these have been steps in the right direction, we need to go further. BR is subject to all the constraints of a nationalised industry. These constraints mean that BR cannot ensure the efficient organisation and delivery of services. We need to end BR's monopoly of rail service

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provision which is outdated and does not provide sufficient incentives for the improvement of its performance. This will enable the railways to respond to the increasing demands of their customers and to provide the quality of service their customers want.
At a time of rising demand for transport services, of increasing road congestion, and when our commitment to protecting the environment is ever more important, it makes sense to make the best use of our railway system.
British Rail cannot be privatised in the conventional way because it makes substantial losses. But that does not prevent us from bringing private sector skills into the delivery of rail services. Indeed, we believe that greater involvement of the private sector is the only way to bring about the improvements in rail services that passengers and freight customers alike want and expect. The private sector has the capacity and incentive to respond in a flexible and adaptable way to the demands of rail customers. By involving the private sector we can provide the stimulus of competition that the railways need and provide the consumer choice that will attract passengers and freight customers.
The objective of our proposals is clear. We want to provide better services for all rail users. For passengers, we propose to involve the private sector through the franchising of existing services. We envisage franchises being let in a rolling programme over a number of years with each franchise agreement specifying standards of punctuality and reliability that must be met by the operators of these services. BR will continue to run those services not franchised to start with. We want to see network benefits maintained and we have said already that through ticketing will be required. BR will continue to be responsible for track and infrastructure.
A further element of our proposals is the liberalisation of access to the rail network giving the private sector the opportunity to run new services. BR has already been asked to co-operate on a voluntary basis to provide access for new operators. As a result, the first of these new services is already in existence. The Stagecoach Group recently started to operate an overnight service from Aberdeen to London. The legislation that we intend to introduce later this year will provide rights of access to the rail network for all types of domestic rail services. Already there are signs of interest in operating new passenger and freight services when the opportunities are there. The Government have also decided that BR's freight and parcels businesses should be sold.
The greater involvement of the private sector in rail operations does not mean that the Government are seeking to abandon their responsibilities. The taxpayer's support to the railways has been underlined in recent years by record levels of investment. Investment stands at around £1 billion in 1991–92 and a further £1.5 billion is expected for 1992–93. Over the past two years, Network SouthEast has invested over £700 million, and since 1986 over 1,000 new vehicles
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have been delivered. On InterCity, the electrification of the east coast main line was completed last year at a cost of some £475 million.
That commitment to the railways will continue. In particular, we recognise that there are many rail services that meet an essential social need but which rely on subsidy. But there is no reason why only profitable services should benefit from private sector involvement. We have made it clear that we shall continue to provide subsidy for those services where necessary to whoever is operating them. There have been claims—unfounded claims—that privatisation will lead to immediate or wholesale closures or cuts in the network. So let me make it clear that the statutory closure procedures will be maintained.
There have also been suggestions that greater private sector involvement will lead to a weakening of safety standards. I cannot emphasise strongly enough the importance that has been attached to safety considerations in the development of the Government's proposals. The high safety standards will be maintained, as in other privatisations.
Private sector involvement promises better use of resources and a better standard of performance. It is the way to ensure a sound and long-term future for the railways.
In the Government's election manifesto, we said that we would bring forward proposals for privatising the British Coal Corporation.
Lord Cledwyn of Penrhos: My Lords, the noble Earl has referred to a number of important inter-city lines in this country. As he and the House will agree, one of the most important is the line from Euston to Holyhead, one of the oldest lines in the country. The "Irish Mail" is the oldest named train in the world. Is he aware that in The Times this morning there is a disturbing report that the inter-city line from Euston to Holyhead is to be curtailed and is to end at Chester? If there is any truth in it, that would be a most deplorable step. Can the noble Earl give me an assurance that it is not true?
The Earl of Caithness: My Lords, I cannot give the noble Lord an answer to his question at the moment. I cannot give an assurance or dispel any doubts that he might have received from reading a press report. But I can assure him that, as usual, I shall take very careful note of what he said and let him know as soon as I can. I was fully expecting a question from the noble Lord about the Holyhead line and other Welsh connections too that he did not mention.
British Coal has a long tradition and fine record to be proud of in technical and professional excellence in mining, in improving productivity and in safety. However, British Coal's future development is hampered by remaining in the public sector, while its main customers, the electricity generators, now operate successfully in the private sector.
We want to create an efficient, competitive and profitable coal industry with a secure future. Privatisation will put the industry in a better position to compete on the basis of business strength.
The Government plan to privatise British Coal as soon as possible and will be introducing main

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legislation later in this Session. There is much work still to be carried out within government and British Coal. Decisions on the future structure of the industry and the timing of privatisation have yet to be made. My honourable friend the Minister for Energy invited the views of interested parties on the form and timing of the privatisation of British Coal by the 22nd June. The Government are now considering the responses carefully before announcing their policy intentions.
These are all matters that your Lordships will have a full opportunity to discuss in due course. The Bill before us today will enable British Coal and British Rail to make their input into these proposals so that the Government can introduce main legislation that has had the benefit of the expertise in these two industries and to ensure that the proposals that the legislation seeks to implement will be workable. We therefore look forward to the active and constructive participation of British Coal and British Rail in working up the detail of our proposals once the Bill has completed its passage through the House. I commend it to your Lordships.
Moved, That the Bill be now read a second time.—(The Earl of Caithness.)
3.34 p.m.
Lord Underhill: My Lords, I thank the noble Earl for introducing the Bill. There is one point on which we would all agree: we all want to see rail give the maximum benefit to its customers. Bearing that in mind, I must follow up the question raised by my noble friend the Leader of the Opposition. If the noble Earl finds that there is a decision somewhere to abolish the Holyhead line, what action will be taken? Will the Government go ahead with that or will they insist that it should not be proceeded with? If the Government intend to proceed with it and approve the British Rail policy, will justification be given as to why that line should be cut out?
This is only a two clause Bill but it has far reaching effects on the coal and railway industries. During the Second Reading debate in another place, the Secretary of State said:
"The Bill is an important first legislative step to bringing the benefits of the private sector and privatisation to the coal and rail industries".—[Official Report, Commons,18/5/92; col.22.]
The noble Earl quoted somewhat similar statements in his opening address. Where is the justification for the Secretary of State's statement? The Government have not yet issued the White Paper. We hear reports about what the White Paper may contain. In his speech the noble Earl referred to certain matters which the Government are to follow, yet we have not had the White Paper. We do not know what is in the White Paper. We do not know what justification there will be for points contained in the White Paper.
We know that the Government intend to press ahead with privatisation as soon as possible and that Bills will come forward in the autumn. Presumably, once the White Paper is issued, the coal and rail industries will go ahead with their proposals. From reading the Bill and the comments—not official decisions—that have been made by Ministers and repeated by the noble Earl today, we know that this
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small Bill has all the hallmarks of the Government's ideological obsession with privatisation. Has the noble Earl seen the article in today's Guardian by Will Hutton? I do not necessarily agree with everything in the article, but it is a balanced and reasoned article.
During the Second Reading debate in another place a number of honourable Members attacked the principle of nationalisation and referred to the coal and rail industries being returned to the private sector. At this point I should like to look at one or two points of history. Prior to the nationalisation of the four regional companies, which were built up in 1923 from some 120 smaller companies, those companies were hardly thriving organisations. On many occasions no dividends at all were paid to the shareholders of those companies. Perhaps I should mention that I shall not be dealing with the coal industry. My noble friend Lord Donoughue will deal with it in his speech. However, I have my noble friend's permission to make just one observation.
Such was the state of the coal industry with its 1,500 separate companies that there was general agreement that only nationalisation could solve the industry's problems. The Sankey Commission, which reported in 1919, recommended nationalisation of the coal industry. The conditions of the workers in the industry were appalling. Their lives in general were miserable. It has to be said that a number of coal owners built up their wealth and so-called social standing on the sufferings of the people in the mining industry. Nationalisation had to happen. It may be that with the passage of some 60 years there is the possibility of co-operation with the private sector in certain industries and in certain ways. But in the case of the coal industry the workers had to wait until the Coal Industry Nationalisation Act 1946 before there was an improvement in their general conditions.
We are told that private sector management is essential to achieve improvements in rail. In the Second Reading debate in another place the Secretary of State said:
"British Rail itself has made significant progress and compares well in terms of efficiency in Europe".—[Official Report, Commons,18/5/92; col.28.]
He went on to pay tribute to the many dedicated people in the management and workforce of British Rail.
It should not be overlooked that, overwhelmingly, the management of British Rail comprises railmen. That is a most important factor to keep in consideration. There is also the claim that rail needs the stimulus of competition. I hope that we receive an explanation as to exactly how competition is to be provided. I believe that the noble Earl mentioned that in his opening speech. Right at the outset, it must be remembered that British Rail already has to compete with other forms of transport in the country. As regards the few examples given by the noble Earl, I must say that a few carriages attached to a BR night service cannot be said to be vigorous competition. A private entrepreneur who seeks a franchise will look for a franchise on what he thinks will be the most profitable service at the most profitable time.
There has been talk of hiving off parts of British Rail. Needless to say, there are bound to be those that

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are profitable. But no one will hive off parts of British Rail which are unprofitable and in which people cannot see much opportunity for profit. Therefore, BR will be left with any necessary services which are at present receiving public service obligation grants. Such services will not be taken over by entrepreneurs who seek a franchise. There must be an authority to ensure that those services continue to carry out the effective running of the nationwide rail network and that they are accountable.
The noble Earl referred to certain decisions which, I gather, have been taken as to how the railway will be run in future with a track authority and an operating authority. Those decisions have apparently been made but we have not as yet had the White Paper. We do not know that they are in the White Paper or whether they are decisions that British Rail support. It seems that they are just observations by government Ministers. Where will there be real competition to which reference has been made? As one MP declared, any talk of effective choice for customers is ludicrous. He said that trains cannot leave the same station at the same time.
British Rail has stated that the question of ownership is a matter for the Government as the shareholder to decide. But British Rail has said that if that course is to be proceeded with, there ought to be some criteria to be followed. Those include: benefits of a nationwide rail service network must continue to be available; there must be effective arrangements to protect the safety of rail operations; and there must be provision for adequate and uninterrupted investment—a point strongly made by Sir Bob Reid, BR's chairman.
In the same debate the Secretary of State (at col.27 of Commons Hansard) stated:
"British Rail cannot be privatised in the conventional way as it exists now, because it is making substantial losses".
I believe that the noble Earl repeated that in his speech. We know that the loss encountered by BR last year was £144 million. The Secretary of State then added:
"As it stands, there would be no buyers for BR en bloc".
That means that people would take the best of BR and leave the rest of British Rail to try to stagger along. The Secretary of State went on to say that the Government were proposing a mixture of outright sale and the greater involvement of the private sector. I repeat what I have already said: we have not as yet seen the White Paper. We do not know what is proposed and exactly what is the justification for it.
When considering the financial aspect, we should bear in mind the fact that 80 per cent. of British Rail freight is dependent upon the movement of coal. No doubt my noble friend Lord Donoughue will make reference to that. One can clearly see the dependences between the coal and rail industries. I learnt today from a newspaper report that there is a possibility of the amount of coal being supplied by PowerGen and National Power being less than it has been in recent years. If that is so, it will have a tremendous effect on the finances of British Rail. When she replies, perhaps the noble Baroness will make reference to that point.
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There are two matters to which I should like to refer which relate to Clause 1 of the Bill. The clause refers to the transfer of,
"any functions, property, rights or liabilities".
I hope that the noble Baroness will be able to explain the limits of the "liabilities". Alternatively, perhaps she will be able to give an undertaking that that aspect will be dealt with in the White Paper. Further, who will meet the cost of safety provisions? Who will meet the cost of the British Transport Police? Those questions were raised in the debate in another place, but the position is still very far from clear.
My other point also refers to Clause 1. In carrying out any transfer, British Rail and British Coal are given power to take "appropriate steps" to prepare for privatisation. What does the phrase "appropriate steps" mean? That is a very sweeping term to be included in any item of legislation. However, I doubt that any steps will be taken which are not in accord with government wishes and government policy.
Before I conclude, there is just one important point that I should like to raise. It has been raised by the Association of Metropolitan Authorities, of which, as noble Lords will know, I am the current president. The AMA has a particular interest in metropolitan authorities outside London. The passenger transport authorities, with their public transport executives, provide finance in those areas for urban rail services under what are known as "Section 20" grants; that is, Section 20 of the Transport Act 1968. Those services play an important part in public transport in the respective areas. In the current year, they provided no fewer than £225 million-worth of rail services and made about a 150 million passenger journeys. They also achieve co-ordination with other local transport. Therefore, they are most important bodies which carry out important work.
Will the White Paper include details of how those PTA/PTE services, and their supporting finance from the local authorities in the area, will feature in the Government's proposals? If those services are to be included in any intended franchising proposals, what part is it proposed that the PTAs and the PTEs will play in the award of franchises and in the accountability of those franchises? Local authorities are making grants, as I said, under Section 20 of the Transport Act 1968. They will expect—and rightly so—that not only will they be considered but that they will also play a part in the actual accountability of those very important services.
Generally speaking, the Opposition dislikes the Bill and its purpose. We look forward to the Minister's reply on the points that have been made. We shall consider very carefully in Committee what we can do to avoid this two-clause Bill causing damage, especially so far as I am concerned, to the rail industry.
3.48 p.m.
Lord Ezra: My Lords, in speaking on the Second Reading of the Bill I wish first to declare an interest. Apart from a long past involvement in the coal industry, I am at present connected with companies dealing with the distribution and usage of energy,

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including coal. Although it is a short Bill, as the noble Lord, Lord Underhill, just said, it raises major issues affecting the structure and ownership of two basic industries.
I believe that the first question to be asked is whether this is the right time to be contemplating the privatisation of the two industries. Of course, I realise that the Government are committed to that course, but not necessarily to its timing. It could be argued that neither industry is ready for the major changes involved in privatisation. In the case of coal, the crucial issue is the form of contracts now being negotiated with the electricity generators, and affecting 84 per cent. of coal production. It is rumoured that that is proving a difficult negotiation. Until those contracts are concluded, there is no knowing what the future size of the coal industry will be and, therefore what there will be to privatise.
In the case of the railways, they have suffered seriously as a result of the recession. They have incurred major losses in the past year—the noble Lord, Lord Underhill, reminded us that they were £144 million—and even though their investment levels have increased, as the Minister pointed out, that falls short of what many of us consider is needed to establish an efficient and satisfactory railway system. Therefore, it might be held to be more prudent to spend a little more time sorting out those fundamental issues in both industries rather than proceeding at this stage to privatisation.
If, nonetheless, it is decided to go ahead at this time, then it is to be hoped that in both cases there would be published a White Paper before legislation is brought before Parliament. While it seems fairly clear that the Government intend to issue a White Paper dealing with the railways—its contents have been fairly well leaked in the newspapers today—there is uncertainty about coal. It is just as important that there should be a White Paper dealing with the coal industry's proposed privatisation, indicating the various options and the reasons why the Government are moving in one direction or another, as it is in the case of the railways. I hope that the Minister will be able to reassure us on that score.
Coal privatisation raises a host of issues. The first, as I have said, is the future size of the industry. At present,65 million tonnes a year are being supplied to the electricity industry. It is rumoured that in the new contracts being negotiated with the two major generating companies the quantity involved might be reduced in total to 45 million tonnes a year, and that that might decrease still further during the currency of the contracts—an ultimate figure of 25 million tonnes after five years has been mentioned. That would involve substantial further pit closures. Who will be responsible for carrying out those closures, and under what terms and conditions?
Next, there is the issue of the form that privatisation will take. Will the industry be kept in its present form and be dealt with similarly to the gas industry which was transferred, as it stood, from the public to the private sector; will it be split in two and take the form of a duopoly, similar to what has happened to electricity generation in England and
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Wales; or will it be broken into a larger number of parts? Depending upon the form that privatisation takes, a number of subsidiary issues will arise. Among those issues, and of especial importance, is the possible encouragement of management buy-outs and the involvement of the mine workers in such new enterprises.
There is then the question of who will own the coal reserves. On the nationalisation of the coal industry in 1946 those were vested in the National Coal Board, having previously been held by the Crown through a body known as the Coal Commission. Is it intended to re-establish such a body and, if so, under what conditions will it issue licences to exploit coal? Will that body be the regulatory body also, or will there be a separate regulatory body?
Another issue involves research and development, which is a vital ingredient in the future of the coal industry. There is much to be done to achieve still further improvements in underground mining technology; but, above all, there is the need to develop clean coal technologies to make the usage of coal consistent with current environmental requirements. If effective progress is to be made in research and development it will need to be continued on an adequately funded basis. Will that be provided for under the privatisation measures?
The coal industry has a remarkable safety record. It is the safest large-scale mining industry in the world. It is vital that that record he maintained. Under what conditions will that be achieved under privatisation? Finally, there is the issue of pensions. The Coal Board pension schemes—one for mineworkers and one for staff—are among the largest and most successful in the country. On a possible break up of the industry under privatisation, what will happen to those schemes? What assurances will be given to existing and future pensioners? Here I must declare another interest: I am an existing pensioner. British Coal is at present enjoying a pension holiday. Will that be continued for the benefit of potential purchasers of either the whole or parts of the industry? If so, will it be taken into account in the purchase price? All those are issues which need to be clarified before the legislation is formulated. It is therefore to be hoped, as I said earlier, That there will be a White Paper on coal privatisation.
In the case of the railways not only have the Government committed themselves to the publication of a White Paper setting out their intentions but they have already indicated, as the Minister did today and his right honourable friend did in another place recently, the broad direction in which they are thinking. British Rail, according to those indications, will continue to operate the track and signalling. Railway services will be franchised to the private sector, but, insofar as services are not franchised they will continue to be operated by British Rail. It is intended to sell off the freight and parcel services and probably the stations too. There will be a regulator to ensure that the various provisions affecting competition, access to the network and prices are properly observed. Those are the matters that the Government have indicated.

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The key question to be asked about those proposals is where the railways users will stand at the end of it all. Will there be a more efficient service? Will it cost less? What about investment, especially on track and signalling upon which much more is required? Will British Rail, as the track operator, have adequate resources for that purpose? The Central Transport Consultative Committee has raised important questions about consumer safeguards under privatisation of the railways. It has asked that there should be a preservation of the network effect, providing through fares and ticketing between all stations, irrespective of the operator. It has asked for integrated national train tables providing connections between each operator's services. No doubt they will be provided. It has also pressed for a national information and reservation system. Furthermore—this is most important—it would like to see separate, independent statutory consumer councils to deal with complaints. Those bodies would be separate from the regulator and the operators. I hope that we can obtain an assurance on that point.
In the hope that the Government will be issuing separate White Papers on the privatisation of both coal and the railways, will the Minister confirm that there will be debates on those White Papers before legislation is presented?
3.59 p.m.
Lord Marsh: My Lords, this is undoubtedly a small but significant Bill. These are the first privatisation measures that have required the prior enactment of such a Bill. Despite that, I am afraid that I do not go along with the noble Lord, Lord Underhill, in dismissing the value of the Bill, because it is an important Bill although it is small. It is especially important to him, because he will not be able to get the questions he has raised answered by the Government until they have the Bill to enable other people to carry out further investigations as to what the answers to those questions might be. That is one of the problems all the way through this saga—the way in which the Government have stumbled into privatisation in this case as a matter of principle. They then found that in this instance it is much more complex than in any other area.
Nonetheless, it would be foolish to suggest that all is well within the railway industry. It is also fatuous—and the noble Earl, Lord Caithness, did not suggest it, but many other people did—to say that it is simply a problem of inadequate railway management. Nor is there any evidence that the problems can be solved within the present structure. Some people have had the honour to serve, as I did, both as Minister responsible for the industry and then—presumably because they thought I knew more about the problems of the railway than anyone else because I had created more—they decided to promote me to manage the industry. People with knowledge of the industry know that there is no difference in the difficulties facing the railway industry, whether the government be Conservative or Labour. The problems are inherent in the present structure.
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For the past 45 years British Rail has been a wholly-owned subsidiary of Great Britain Limited, with all that that entails. Throughout that period the government of the day have exercised total control over the investment policy and the strategy pursued by the board. They have intervened in pricing policy, in wage negotiations and in the closure of uneconomic units whenever or wherever they felt it right and regardless of their political complexion.
The most important power is the Government's absolute control of board appointments, and not just the much publicised appointment of the chairman and the seven eminent non-executive directors. The Government and not the board appoint not only the non-executive directors but also the chief executive and the executive directors responsible for finance and planning, group services, engineering, operations and safety. I make this point because throughout those 45 years the ultimate management of the railway has been in the hands of the government of the day. They have been in a position to appoint whomever they wished and to change operational decisions on pricing policy or even wages policy.
All Ministers say that they never intervene in wage negotiations, but if one is sitting listening to a Minister from either party on the radio in the morning when the Southern Region is in difficulties with a railway dispute, the Minister may say: "I have no responsibility for the management of the railway and the conduct of the negotiations. That is a matter for the railway board. All the Government ask is that they get together and talk". What he thinks a trade union talks to an employer about in the middle of an industrial dispute, other than a settlement of the wage negotiation, I know not.
I make these points because it is important to establish that the organisational structure of the industry has totally failed to provide the country with a stable system anything like that which the public want. Anything that the Government disliked they could have changed at any time over the past 45 years. They have not made changes because the problems involved are real and complex. We must understand those problems.
The fact is that British Rail has never made a commercial return on investment. The noble Lord, Lord Underhill, said that it did not do so when it was privately owned; it has not done so since it has been publicly owned and no railway system in any other country in the world has done so. No passenger rail system anywhere in the world of which I am aware produces a commercial return on the money invested. Nor do I know of one where the Government—and all governments in all countries have faced the same problem—have found a way of getting a cheap railway.
The railway is probably one of the few businesses which responds to having money thrown at it. We can have any kind of railway we wish; there are no great scientific frontiers to be broken. There are things called wheels about which we know an enormous amount, We put boxes on them and the technology is

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well known. It is a matter of large sums of money and no government have been prepared to raise the amounts needed.
There are many reasons why the railway cannot be commercially successful. Much of the infrastructure is well over 100 years old; it was designed for a pattern of industry and population very different from that of today. There is an extraordinary level of fixed costs and many of what would laughingly be described as "assets" if the Government had the barefaced nerve to go ahead with a public prospectus—literally thousands of tunnels, bridges and sea walls which have a negative value. Further, unlike the airlines or bus companies, there is virtually no secondary market for ageing coaches and locomotives.
Finally and probably most important, if any system of franchising passenger services is to stand a chance of success it has to be understood that far from British Rail being a monopoly it is a small player in the highly competitive freight and passenger market compared with road and air.
For a road haulier, access to the road system represents about 4 per cent. of total operating costs. For the airlines, airport and navigation charges represent only 10 per cent. of the overheads. But for British Rail, track costs constitute 48 per cent. of the total costs. The argument about the need for a level playing field with road and rail cannot be dodged, because it is impossible for the railway to compete with that difference between them.
Richard Branson is a man who exudes limitless charm and endless enthusiasm. But I warn the Government, if they are not aware of it, that he is also a tough and experienced businessman. His views are more important than mine in this context. He has announced that he is interested in playing an active role, so I inject one of his views into the debate with enthusiasm. As one of the two people expressing serious interest in the exercise, he said:
"If privatisation is to work—it has to make the rail lines available to private operators at roughly the same cost as road is made available to lorries".
That is a simple proposition and, one way or another no doubt with the help of creative accounting, it is the issue which the Government will have to face. But important though it is, the cost of the rail track is not the only problem. No matter who owns British Rail, trains will continue to break down for many different reasons. Frequently they will be delayed. Unlike buses and aircraft, competing trains cannot go over, under or round the obstruction. The disruption caused by one train failure can extend over a wide area and affect literally dozens of other services.
With a multitude of competing commercial services, the task of determining the cost and the allocation of compensation to those affected is likely to be as expensive to administer as it will be complex. Once again, the Government will have to carry the responsibility and the cost of those arrangements.
The Government are embarked upon a unique experiment. So far as I know, it has not been tried anywhere else in the world. Whatever view one forms on the final proposals, the Bill can only be beneficial in shedding light on the complex and difficult problems involved.
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It is possible that in four years' time Ministers may find that they have created a monster compared with which the poll tax will pale into insignificance—a veritable Frankenstein. It is much more likely that it will be a massive anti-climax: a few glamour services with increasing costs for a declining service. However, it could just work. Investing companies will require from the Government long-term legally-enforceable contracts which will set out the responsibilities of both the Government and the private companies. In that event, while it might not be quite what Ministers had in mind at the beginning of this exercise it would provide the railway system with a degree of stability which only a true partnership between the state and the private sector is ever likely to achieve. If that happens, it will not please the ideologues but I promise the voters will love it.
4.10 p.m.
Lord Mountevans: My Lords, I begin, as I always do in this context, by declaring an interest as indeed I did some eight years ago when I tabled an Unstarred Question that looked forward to the privatisation of British Rail. It follows that I welcome this Bill and the initiatives which it precedes. As has been said several times, it is a short and important Bill which, as I understand it, enables BR to incur expenditure on preparing to dispose of some of its prime assets contrary to its statutory duties under the 1962 Act which were to operate with due regard to economy, efficiency and safety.
In incurring such expenditure I hope that BR and indeed the Government will bear in mind a number of factors. First, there must not be creative accounting. That factor was in effect mentioned by the noble Lord, Lord Ezra. We must stick to financial disciplines and to the principle of value for money. In the circumstances I believe that we obtain surprisingly good value for money from the railways in their current state. I believe that the customer obtains value for money from the non-subsidised businesses and that both the customer and the taxpayer obtain good value for money from the subsidised businesses of British Rail.
British Rail is an innovative business. Anyone who has studied the railways for any length of time will realise that. British Rail is particularly innovative by the standards of other more feather-bedded operators abroad. That fact is most simply demonstrated by the considerable number of foreign secretaries of state, foreign civil servants and indeed foreign railway operators who come to Britain year after year to find out how we are achieving that innovation. We must continue along those lines. We must ensure that any future reorganisation continues that work regardless of whether the onus of continuity is on the remains of the railway as we know it—there will be the remains of the railway as we know it—or on those private sector elements which become involved.
I would hope that both BR and the Government will ensure that privatisation proposals lead to improved services to customers and that we, the customers, retain the benefits—the noble Lord, Lord Underhill, referred to that matter and the noble Lord,

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Lord Ezra, extended the argument, particularly with reference to the Transport Users Consultative Committee—of an integrated system, irrespective of the provider of services or blocks of services. Learning from the experience of urban bus deregulation, we must seek to protect universally-available through ticketing and information provision.
In introducing the Bill my noble friend Lord Caithness and the noble Lord, Lord Underhill, also mentioned Stagecoach. It is worth mentioning that Stagecoach only entered the long haul railway business because it could not cope with road congestion. However, that is a subject for another day. I greatly admire Stagecoach. It is an extremely enterprising organisation, but one of the difficulties that that operation faces at the moment is that information and through ticketing are not readily available. I admire the rapidity with which Stagecoach and British Rail got their act together in a period of just four-and-a-half to five months. However, that operation teaches us that in developing privatisation proposals we must walk before we start to run. We only have one chance to get it right. We must avoid the many chances where we might go wrong, some of which, as I have said, have been demonstrated by Stagecoach.
Further, the railways and the Government must ensure that whatever is proposed in privatisation terms carries the staff with it. I firmly believe that the successful privatisations of BA and NFC—I could also have added BAA, and, to a certain extent, Associated British Ports—were largely due to staff enthusiasm and to the financial participation of both management and staff. It is just as important that BR's present staff are persuaded that there is a future, and ideally that they are given the opportunity to invest in that future. Looking purely at the present, discussions have taught me recently—in one instance my honourable friend the Member for Kettering, the Minister of State for Public Transport was present—that staff are concerned about their immediate future, their long-term future and about their pensions at the end of their working lives. They are also concerned about job security. I echo the words of the noble Lord, Lord Ezra, when I say that I would appreciate it if my noble friend could comment on that issue when she replies to the debate.
While on the subject of staff, I must express my concern about British Rail's drivers who constitute a small but important part of the operation. As some noble Lords will know, some 70 per cent. of them will retire by the end of the decade. It takes a minimum of two years to train a driver up to the point where he can take charge even of a shunting locomotive or carry out the most modest driving duties. It takes longer to train him to use new equipment and even longer for him to learn wider routes. To attract recruits to replace the drivers who will retire we must ensure that the prospects are attractive. We must also try to ensure that all drivers work to common safety standards and, ideally, that they are not head-hunted by prospective private operators. Given the imminent shortage of drivers and the difficulties of replacement such
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head-hunting might be good for those who hire drivers but it would be damaging to what one might call the rump or remains of the system, that is, the ongoing subsidised railway.
Safety is paramount. We should do all we can to preserve it. We should ensure that whoever provides the railway service in the future must maintain national safety standards that are as high, or higher, than those currently prevailing. The pursuit of additional funds, the introduction of private sector involvement, the growth of better services to customers—I hope that applies to all customers and not just a lucky few—the growth of the part which rail plays in our transport system are all factors that must not be allowed to compromise safety.
To make sure that safety is preserved we must make sure that the present level of safety investment remains intact. We must also ensure that the railways inspectorate is sufficiently resourced for the task it faces. One cannot but be concerned at the length of time it takes nowadays to produce an inspectorate's report after an accident has occurred. Some noble Lords will be old enough to remember the Taunton disaster of 1940. That was a substantial disaster, but the report was produced by the then railways inspectorate in less than four months. However, that is not the case nowadays.
Safety investment leads me on to the matter of investment in general. It is essential that however our railways develop, we preserve or even enhance present levels of investment. I have in mind the cyclical nature of railway investment as illustrated by the modernisation plan days of the 1950s, the subsequent long, deep trough and the present high—one is almost tempted to say all time high—levels of investment.
We shall still need, and must find the funding, to enhance and rebuild the west coast main line. We have to build Crossrail and Thameslink. We will need substantial funding for those projects in the near future. It is essential that the Government continue to support planned infrastructure investment levels and that those who eventually operate services pay costs that not only reflect the investments that by then have been made—what one might call wear and tear investment and replacement investment—but also make a fair contribution to renewals.
The private sector should also be encouraged to invest in rolling stock by means of long-term contracts. We should not simply permit the cherry picking of prime services leading eventually to the operators pulling out when assets have reached the expiry of their lives and are due for renewal. We must ensure that as we evolve what my noble friend Lord Caithness called the rolling programme of privatisation, we do not suffer any form of hiatus in investment.
As I have said, I welcome this Bill. However, until the White Paper is published the present situation is rather like being on a mystery tour. We know we are going somewhere but we do not know when, where or how. I started by declaring an interest and I shall finish by doing the same. As I do not drive I am concerned to see that effective transitional arrangements for the railways are in place. The railways need to run

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continuously. There can be no gap in service while private operators take over. We must take time to ensure that everything is in place—recruitment, training, investment, safety and other facilities'—to allow new operators to take over a live railway and to maintain standards of safety and reliability without any hiccup.
4.19 p.m.
Lord Cocks of Hartcliffe: My Lords, this is a paving Bill for the privatisation of the coal and railway industries. I have been spurred into speaking by the abysmal ignorance of some young Conservative MPs speaking in another place of the reasons which led the Attlee Government to nationalise the industries in the first place. Those young Conservative MPs seem to have developed an intellectual constipation, probably due to an unrestricted diet of Conservative Central Office hand-outs from an early age.
Like my noble friend Lord Underhill I believe that we should sometimes refer back to history. I should not like this Bill to pass through both Houses without some record of the difficulties which faced the post-war Labour Government. In the euphoria of victory in Europe few bothered to take stock of the problems facing the incoming Labour Government. During the war 4.5 million houses out of a pre-war stock of 13 million had been damaged by enemy action. Nearly half of them were totally destroyed. The repair task in itself was enormous. Much of our Merchant Navy had been sunk by enemy action. Our major industries had been exhausted producing war materials. Major utilities such as gas, electricity and railways had been run on a care and maintenance basis only. There was a huge backlog of essential work to be undertaken.
Millions of servicemen and women were anxious to be demobilised. It is a tribute to the Labour Government that by the end of 1947, within 18 months of coming to power,5 million servicemen and women had been returned to civilian life without creating the kind of massive unemployment which followed the First World War. A large proportion of our overseas assets had been sold to buy food and raw materials.
I was particularly interested in the railways because my grandfather started as a porter on the old Southern Railways, eventually becoming chief inspector at Brighton station. Indeed, in a modest little book which I wrote I described how I joined the Labour Party at the age of 25 having heard an intemporate attack on railwaymen by a middle-aged Conservative lady. I could not equate her remarks with what I knew of my grandfather and felt something had to be done about it. I clearly recall the holidays which we spent with him before the war and the substantial losses which were then being made by the four major railway companies.
During the war my brother and I were sent to a school for Congregational ministers' sons near Wakefield. When I played rugby for the school against teams of boys from mining community schools the difference in our respective sizes and physical condition was clear. Even at that age, as boys, we
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understood that those differences were due to the appalling conditions in the mining communities before the war.
Those two industries were always in difficulties. There was confirmation as to the state of the railways in an article in the Sunday Express yesterday by Bruce Anderson who wrote:
"Throughout their history, Britain's railways had flirted with state ownership. As early as the 1840s, Gladstone had contemplated nationalising them. After the First World War, the Government intervened to save them from bankruptcy by encouraging a reorganisation into four regional companies … After the Second World War, with bankruptcy once again imminent, full nationalisation seemed the only answer … This was one of the Attlee Government's least controversial excursions into public ownership. It is probable that even if Churchill had won the 1945 elections, the railways would still have been nationalised".
The coal industry was also in an appalling state as a result of years of pre-war neglect. The noble Lord, Lord Mountevans, who has spoken in the debate, may recall that his grandfather, speaking in this House during the Second Reading of the Coal Industry Nationalisation Bill on 29th May 1946 described how he was commissioned by the Prime Minister, Winston Churchill, during the war to travel all round England, Wales and Scotland calling for a "pit and shovel blitzkrieg" by the miners to produce the coal essential for the war effort.
A succession of industries have been privatised by this Government. In another place during the Second Reading of this Bill the Secretary of State for Transport promised the appointment of a regulator for the railways. That reminds me of the story current at the end of the war of the Russian woman with three sons who conceived the idea of christening them with names which would help them get on in life. One she called "Captain", another she called "Doctor", but the one who really made a success of life was the son who was christened "Inspector". I feel that if that story was being retold today the name which would really guarantee success for a son would be "Regulator".
Let me make it clear that in talking about the regulators I am not impugning the integrity of any individual. Nevertheless, we have to consider the situation which is developing. At present we have regulators for the electricity, gas, telecommunications and water industries. One cannot imagine that they do not meet as a group from time to time to discuss regulatory matters of common interest.
The study of group behaviour is now an accepted part of business culture and it is inconceivable that members of that group do not react to what other members of the group do. The key, if not the only, source of information about the regulators and their offices available to the general public is their annual reports. If we examine these what do we find? The first report was produced by Oftel for 1984, albeit not for a full year, and ran to 51 pages with no photographs. Your Lordships may be interested to know that I had the report weighed at the post office before I came into the Chamber: it weighs 80 grammes. The latest report by Oftel weighs 560 grammes. No further comment is required.
The second Oftel report was also in a small format without a photograph. The first Ofgas report, for

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1987, contained one photograph of the director general. After that a new disease manifests itself—polyphotitis. The most severe outbreak occurred in 1988 when the Ofgas report contained no fewer than 13 separate photographs of the director general. Ofgas's attack of polyphotitis gradually subsided with 10 photographs in 1989, six in 1990 and three in 1991. We await the 1992 report with great interest to see whether the patient has made a complete recovery or whether there has been a relapse.
This plethora of photographs in the Ofgas report tells us something about the director general's personality. Is it a coincidence that he has the reputation for being the most stroppy with his industry? Mind you, we cannot rule out the possibility that he has been advised to do that. I was recently told of an ad man's jingle:
"If your client's hopping mad Put his picture in your ad".
Is the disease contagious? Apparently so, because the annual reports of both OFFER and Ofwat which first appeared in 1989 contained six and seven photographs of the director general respectively. Indeed the OFFER report started off with a bang since it contained studio portraits of the director general and his key staff which would not be out of place on top of the piano in a Victorian drawing room.
Is there immunity to this disease? I think that we may say yes, because the director general of Oftel has featured in one small passport-type photograph in the year 1989. It must be said that that photograph resembles nothing more than a Kuwait oil rig fire and the only clue to the director general's presence is the caption underneath the photograph.
In any high profile group of regulators such as these there is bound to be a great deal of awareness of what the others are doing. They would be very strong-minded people indeed if there was not a competitive element. Moreover, is this going to become a structured career, with regulators moving from one industry to another? Retirement has only just become an issue, and if a regulator retires is not his successor bound to feel that he must lean over backwards not to appear softer on his industry than his predecessor?
Given this growing group of regulators, we have to ask the question: who regulates the regulators? Anxieties have been expressed about this before. For example, the noble Baroness, Lady Platt, speaking during the Second Reading of the Competition and Service (Utilities) Bill on the 14th February 1992 at col.953 said:
"While some of the respective Secretaries of State have certain powers over the regulators they are fairly limited. But this Bill gives a whole new set of powers to the regulators with few supervisory powers residing with the Secretaries of State. The Bill increases the powers of the regulators without a corresponding increase in accountability".
The lack of public accountability is very serious. If a director general is not doing his job properly or acceptably, there is no form of public accountability to force him to improve. To some extent, the director generals are accountable to the Secretary of State, but the Secretary of State only has the power to fire a director general during his term (generally five years)
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on grounds of incapacity or misbehaviour. This five years, of course, is a far longer term to spend in a particular office than an individual Secretary of State is likely to have.
This is a matter which will come before the House repeatedly until it is resolved and a fair balance is struck between the needs of the consumers and the needs of the industries. This matter becomes more pressing as the group of regulators grows in size. If the industries raise questions about how the regulators are behaving such questions can too easily be dismissed as special pleading, but in fact very often serious issues are involved. So I ask the Government once more to think very seriously, in the context of this Bill, about who will regulate the regulators.
4.32 p.m
The Earl of Shrewsbury: My Lords, in warmly welcoming this Bill, I crave your Lordships' indulgence while I say a few words about the United Kingdom coal industry. I have to declare an interest as I have an involvement in the private sector of that industry.
I must state at the outset that I am firmly in favour in general of the privatisation of nationalised industries. Privatisation has been one of the outstanding successes of this Conservative Government. Since 1979 some 46 major businesses, employing 920,000 people, have been transferred successfully to the private sector. In 1978– 79 those industries which have since been privatised received government subsidies of £2.6 billion—more than one-third of that year's NHS spend. In 1990– 91 those same companies paid the Exchequer approximately £2 billion in corporation tax.
Privatisation has brought benefits to every other industry: lower prices and better service for the consumer and the chance for employees to exercise their entrepreneurial skills. In addition, there is more job satisfaction and freedom from Government interference and diktat. I believe that the opportunities for the coal industry should be just as good, particularly as Her Majesty's Government are committed to giving employees a stake in the industry.
It is important, with the United Kingdom's substantial reserves of indigenous coal, that this fuel is produced efficiently, economically and with as little long-term disruption to the environment as possible. Of course the extractive industries all in varying degrees involve disruption to the environment as well as to local communities, but the national interest has to be brought into the equation and a balanced situation must be achieved and tolerated. The opencast industries have improved their act dramatically over recent years and, although these sites are unattractive in many ways while in operation. the production life of the majority of sites is limited. Moreover, refurbishment is carried out to a high standard with care and responsibility, often with the effect of producing a better end-product than that which existed at the start of extraction. I strongly suggest to your Lordships that a visit to an opencast colliery would be well worth while. It is a fascinating

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experience, and one can see at first hand just exactly what a good job these people make at the end of the life of these operations.
To the benefit of the national interest, more economically and efficiently produced coal means cheaper and more competitive fuel and fewer foreign imports. That represents a major economic gain to the country. There can also be some planning gain for local communities in the form, for instance, of sports fields, golf courses, light industrial facilities and thoughtful landscaping of amenity areas for the general public.
It is my view that it would be most worth while if better formal arrangements under which more benefits would be obtainable by local communities affected by opencasting were allowed. After all, no one in his or her right mind enjoys living next door to such an operation, even though the disruption is relatively short-lived. That is often the case in other industrial areas as well. Often, the very thought of opencasting on their doorstep has the effect of creating an almost panic situation among local residents—an example of this is currently to he seen in the Potteries—and on occasion no amount of reassurance as to the final refurbishment of the area is enough to quieten concern.
Public hostility to the extractive industries generally, and to coal in particular, is one of two key challenges faced by the modern coal industry. The second major challenge is that the generators must be persuaded to accept that a thriving domestic coal industry is absolutely essential to them: indeed they would surely be foolish virgins to allow their lamps to be dependent upon foreign coal, with the ever-present danger to security of supply posed by disruption from war, among many other factors.
Finally, perhaps I may mention briefly a few thoughts on the form privatisation might take. There is a view—with which I entirely agree—in the private sector that atomisation of the industry would be detrimental. Far preferable, in my view, would be a multiple-unit reconstruction in which, in view of the problems of coal transportation and strong regional traditions, the units comprised two to four geographical regions. The result of such a framework would be real competition, with no undue risk of weakness against the generators. In particular, Scotland would offer an excellent example of a regional company with real potential, which I believe would be well received by the people of Scotland. Multiple-unit privatisation along these lines would, I believe, ensure new and highly commercial management and would realise far greater levels of efficiency and productivity. I believe that such a framework would achieve the medium-to long-term aim of achieving a truly competitive industry in the world marketplace.
There are many experts here: I do not pretend to be one. Suffice it to say that I welcome this Bill and look forward to an interesting and thoroughly informative series of debates ahead.
4.37 p.m.
Lord Donoughue: My Lords, as other noble Lords have stated, this is in fact not just a technical Bill; it is a very important Bill which opens doors to further major changes to two great industries. However, it gives little indication of the nature or details of the intended changes. Indeed, we are being asked to buy tickets for the mystery tour mentioned by the noble Lord, Lord Mountevans, but no maps are provided in advance.
My noble friend Lord Underhill has dealt primarily with British Rail. For myself, I shall concentrate on issues relating to coal, although I should add that there is definitely a connection. There is a connection between their fortunes. Some 80 per cent. of freight income of British Rail is dependent on the movement of coal. Therefore, the declining use of British coal through imports and the switch to gas has serous implications for the future of British Rail. They are, and have been for some time, locked together in a downward spiral based, I suggest, on the false assumption that at some ultimate, lower, ever-diminishing level of activity they become viable. In fact, as they become smaller they lose the capacity for national servicing and low pricing; and any decline in either industry inevitably damages the other.
I should like to ask a question about the efficiency and profitability of the coal industry. Will the Minister confirm, as I am sure she will, that the coal industry made a profit of £78 million in 1990–91 and is forecast to make a further profit in 1991–92, and that British Coal is in fact the most efficient and most productive coal industry in Europe? Will she also acknowledge that there is no practical reason for privatisation either on grounds of present efficiency or profitability, or on ground of competitiveness? Does she accept that it is unfair to judge British Coal's competitiveness on the basis of whether or not it can compete with imports from, say, Colombia or South Africa where labour conditions and pay are intolerable? Privatisation is mainly ideological, as my noble friend Lord Underhill said, and as the noble Lord, Lord Marsh, indicated. It puts at risk the nation's capacity to maintain security of supply of energy which in our case depends on maintaining some coal industry. Security of indigenous energy depends upon maintaining coal or relying wholly upon nuclear power.
I wish also to refer to the crucial question of electricity generators. Some of the problems of British Coal lie in the nature and activities of its main market purchasers. The electricity generators buy over 80 per cent. of our coal. The noble Lord, Lord Ezra, referred to that. The contracts being negotiated now will determine the future of our coal industry. Does the Minister have anything to report, not only on the important questions of price and future volume, but also on the duration of contracts? Without long-term contracts investment finance will not be available to the coal industry and without investment it cannot continue the recent commendable record of improving efficiency and lowering unit costs.
Can the Minister give some idea of the Government's thinking on the form of privatisation in the coal industry? The noble Earl said that it was too

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early to do so. As we know, consultation finished in June. It would be quite unfair to ask for, and I would not expect, the detail, but any indication of the broad thrust of policy among known choices would be helpful. Will the industry be privatised intact as a single entity? Or will it be broken up piecemeal? That is very important. Small sections of the coal industry would be in a weak position to negotiate prices faced by the massive power of near monopoly customers in electricity generation.
I was interested in what the noble Earl, Lord Shrewsbury, said in a very good speech with regard to a regional basis for coal. Indeed, as the noble Lord, Lord Ezra, asked, what will be sold? Will the whole mineral rights and reserves be handed over to whoever buys the industry privately or buys at the second stage—perhaps, international conglomerates or international mining companies? Alternatively, will the ownership of rights and reserves be retained with simply a licence to operate, as occurred fairly successfully with North Sea oil and gas. If so, what happens to licensing responsibility? Does it refer back to the Crown?
The Government have generously stated their pride in the safety of our mining industry, the safest in the world. However, will the Minister now guarantee the safety of our privately owned coal industry if it were to be taken over again by international conglomerate mining companies, some of whom we know have historically bad safety records? How will the Government guarantee that the safety records of such companies suddenly improve to the marvellous level of British Coal?
About 20 million tonnes of foreign coal enter this country. That is part of the massive trade deficit from which we suffer. I did not support the transfer, but now that the Department of Trade and Industry sponsors energy as well as having a direct responsibility for our trade performance, does it propose in any way to discourage those massive imports of foreign coal?
Clean coal technology is the key to the issue. If one wishes to put one's finger on a factor which is vital for ensuring a viable coal industry in this country, it is that aspect, with its massive potential for exports. If we could develop clean coal technology, we could export to the great coal consuming countries such as China and India where the scale of consumption of dirty coal is enormous, with its consequent impact on pollution of the atmosphere. The scope for selling clean coal technology is huge. What are the Government doing to invest in, and promote, it? Of more direct significance, what will happen to British Coal research into clean coal technology after privatisation? There is enormous public interest in that aspect. How will the public interest be protected after privatisation?
On a smaller scale—although it matters much to many people—will the Minister confirm that the existing concessionary benefits and entitlements of former employees and eligible dependants will continue? The matter relates back to the Coal Industry Bill with which we dealt in the last Session. In
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that Bill the Government proposed to repeal the 1908 Coal Mines Regulation Act which limited the maximum number of hours a coal miner could work underground. One of the main arguments for that repeal was that the legislation was to be replaced by the new working times directive of the European Community. I now read—it was while I was abroad and I did not see all the details—that the Government have negotiated some exemptions for the UK under that directive. If that is so, will the Government now revise their views on repealing the 1908 Act?
Finally, I have a general but fundamental question. What do the Government envisage as the viable size for the coal industry? How many more pit closures are required to reduce the industry to that viability level? Is the coal industry on a slippery slope that ends at zero?
I wish to ask those questions of the Minister. In conclusion I wish more generally to suggest that the Government may be deceived and in pursuit of an illusion if they believe that privatisation will solve the deep difficulties involved in running, first, an adequate national rail service including mass commuter services operating only a few hours a day and, secondly, in maintaining the security of supply of our domestic coal industry when it is forced to compete with cut price imports and gas. In my view privatisation will accelerate the decline of both industries while conveniently shifting responsibility for that decline away from the Government. Not a single advanced country in the world has a successful railway industry based on private ownership. I believe that that was confirmed and powerfully explained in the speech of the noble Lord, Lord Marsh. No country has a deep mined coal industry such as ours which is run successfully without public support.
I agree that it is right to explore new ways of private financing for public industries and new ways of co-operation between public and private sectors. Again, the comments made by the noble Lord, Lord Marsh, in what was an excellent and authoritative speech were most interesting. Total dependence on private finance for public services often means no public services. One has only to look at the Jubilee Line extension, the Paddington-Heathrow link, the Channel Tunnel rail link and at our European neighbours who run excellent railway services on a basis of public financial support. Look, too, at our coal industry, which is fading away even before privatisation. It is in danger of falling below that critical mass of size which is necessary to produce and to sell at competitive low prices.
During my political life I have never had much sympathy for widespread nationalisation or for massive state monopolies. Their failures are part of our recent life history. Furthermore, I believe in the benefits of market competition. However, there should be no absolute ideological view on the matter. We should never lose sight of the national interest with coal or the public interest with rail.
If free market competition promises only to destroy many of our rail services and most of our remaining coal industry, as I believe it does, it is surely right to pause and to question. We must ask: what are the

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right structures to provide the best services for the rail travellers and at the least cost to the taxpayer? We must also ask: which structures will maintain a viable coal industry that will guarantee security of energy supply? Surely, as the noble Lord, Lord Ezra, argued so convincingly, this crucial matter should not be hurried. We need to give it more thought. We need White Papers and debates on those White Papers. We on this side of the House will look most carefully at what follows from this Bill in order to see whether those criteria and those requirements are met.
4.51 p.m.
Baroness Denton of Wakefield: My Lords, we have had a most interesting and constructive debate. Not only did it cover the specific purpose of the Bill before us but also the issues that we shall be able to discuss at greater length when the main legislation to privatise British Coal and British Rail comes before this House. Therefore, I thank noble Lords for their contributions to the debate. They amply demonstrated their continuing interest in the future of the coal and rail industries and the regulators and also the depth of experience which exists within your Lordships' House.
My noble friend the Minister of State for Transport properly concentrated his speech on British Rail. Therefore, I shall confine the majority of my speech to British Coal. In doing so I shall seek to answer some of the points raised by your Lordships on the privatisation of British Coal. As the noble Lord, Lord Marsh, pointed out, the intention of the Bill is simply to confer on British Coal and British Rail powers to take those actions which are required to prepare for privatisation. It is perhaps worth dwelling on that point for a moment or two since it is fundamental.
The Bill does not give British Coal or British Rail any powers to implement the Government's proposals for privatisation. It gives them only the powers to consider those proposals and to make any necessary advance preparation for their implementation at a later date. I wish to make it quite clear that there are no powers given in the Bill which will enable British Coal and British Rail to make any transfers whatever of any of their functions, property, rights, and liabilities to any other body in response to a proposal by the Government.
It may help your Lordships if I explain that there is no need for the Bill to spell out any restriction on actual transfers. British Coal and British Rail, as creatures of statute, can take only those actions which they are permitted to take under the current legislation which affects them. Those actions would not include activities which', in the light of consideration of the Secretary of State's proposals, might have to be included in the main Bills for privatisation. In other words, there is nothing in the Bill which will enable the corporations to make any transfers beyond those currently permitted. The Bill merely provides for a necessary enlargement of the corporations' powers so as to permit them to do what currently they legally may not do; that is, to take any action which in their opinion is appropriate for the purpose of facilitating the implementation of proposals made by the Secretary of State.
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I draw attention to the word "facilitate" in Clause 1(1). It relates to the preparatory work which may be needed. It does not cover the actual implementation of any proposal since that further power will not be available until provided by the main privatisation Bills. If the Government had intended that the Bill should enable transfers to take place the word "facilitate" would not appear in Clause 1.
It is most important that in drawing up their proposals for privatisation the Government can draw on the valuable advice and expertise within British Coal and British Rail. If the Government are to achieve their aims of securing the largest economic coal industry that the market can support and to provide better services for rail customers I am sure noble Lords will agree that it will make no sense for British Coal and British Rail to be unable to provide the Government with their advice when they are formulating detailed proposals. Indeed, I regard that advice as an integral part of the privatisation process.
Today we have ranged over many issues which although outside the Bill are of great relevance to it. In answering as many questions as I can I ask your Lordships to understand that I cannot go ahead of the White Paper nor comment on the consultation which has been only recently concluded. Those matters will come forward in due course.
I can assure the noble Lord, Lord Underhill, that the statutory closure procedures in British Rail will be maintained. The rumours of wholesale closures after privatisation are just that—rumours. My noble friend Lord Caithness also emphasised a complete commitment to safety on British Rail. The noble Lord, Lord Marsh, showed his direct and great knowledge of the industry and I am sure that we shall be able to share that on future occasions. I have no doubt that my right honourable friend the Minister of State will read his words carefully. I remind my noble friend Lord Mountevans that the Government have already given the assurance that existing pension rights accrued by British Rail staff will be safeguarded on privatisation.
The noble Lord, Lord Ezra, by the nature of his questions, showed his great depth of knowledge and experience in the energy industry. I wish to point out to him that the Government's objective is to achieve the largest economic coal industry in the longer term. The future size of the coal industry will depend on its ability to continue to reduce its costs and to secure its share of the energy market in this country. That is in the industry's own hands. Since sales to the electricity generators represent 80 per cent. of British Coal's market the contracts to be negotiated with the generators will, to a large extent, determine the UK's demand for coal. It is too early to speculate how the next contracts will affect the likely future size of the industry; indeed, the contracts are commercial matters for the companies involved.
The Government's aim for restructuring the industry is to achieve a structure which allows the industry to be economically viable in a competitive market in the longer term. No decisions have been taken on the future structure of the privatised

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industry. As has already been mentioned, interested parties were asked for their views by 22nd June and their responses are now being considered.
The list of the organisations which my noble friend approached are in the Libraries of both Houses. The replies are available from the organisations and individuals concerned if they wish that correspondence to be made public. However, we shall make public the details of all communications which we receive from the chairman of the Health and Safety Commission on the safety consequences of coal privatisation.
I am also pleased to say that privatisation of coal will not affect the benefits payable to British Coal pensioners. As with previous privatisations, the Government will ensure that the pension entitlements of existing contributors and past employees of the industry are properly safeguarded.
I am pleased also to repeat what my noble friend said: that privatisation will require through-ticketing to continue. A question of a debate on the White Paper is a matter for the usual channels.
Like all noble Lords, the Government recognise fully the hazardous nature of coal mining. We are determined that the current high standards and improvements to health and safety in the industry will be maintained after privatisation.
In reply to a question asked by the noble Lord, Lord Ezra, I should tell him that no decisions have yet been taken on the precise timing of coal privatisation. As several noble Lords said, such considerations must proceed with the greatest care and the Government fully recognise that.
I knew that the noble Lord, Lord Cocks, and I have in common a knowledge of Wakefield. I suspect that the people of Wakefield may be prouder of the noble Lord's speeches than they are of mine. I discovered that we also have in common the fact that our grandfathers were employees of British Rail. Perhaps my superiority is that my grandfather was a driver. I regret that there is no book to commemorate his services to the industry, but I have his watch. The noble Lord's analysis of the regulators will not go unread and will be well noted. More seriously, I am sure that my honourable friend the Minister for Energy will note the other matters raised by the noble Lord.
The noble Lord, Lord Donoughue, said that coal should be profitable and efficient. I can confirm that British Coal made its first bottom-line profit for 13 years in 1990– 91 and it expects to make a bottom-line profit in 1991– 92. However, further improvements in productivity are needed for the industry to take its rightful place as a competitive fuel supplier in the market place. I can confirm also that British Coal is the most efficient coal-producing company in Europe but to secure its future it must be able to compete with the most productive producers in the world.
The noble Lord, Lord Donoughue, asked for guidance on the form and structure of privatisation. Those are vitally important areas and I shall ensure that the noble Lord's anxieties in that sphere are noted. However, the time to discuss those must be
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when we introduce our main legislative proposals. The noble Lord asked also about coal imports. Decisions by coal purchasers as to whether to purchase local or imported coal must be for the commercial judgment of those concerned. As we all know, the best prospects for the British coal industry lie in producing reliable supplies which are competitive both with imports and with alternative fuels.
The Government are confident that the industry has the technology, investment and skilled workforce to successfully meet that challenge. I remind your Lordships that imports can contribute to a diverse and secure supply of low-cost fuel. The Government agree also with the noble Lord, Lord Donoughue, about the importance of the development of clean coal technology. We shall give careful consideration to the future of British Coal's research in that area in the context of privatisation.
I am pleased to be able to tell the noble Lord, Lord Donoughue, that the Government will ensure that existing concessionary fuel entitlements earned as a result of service with British Coal will be safeguarded. Therefore, privatisation of the industry will not affect concessionary fuel benefits to former employees of the industry and their eligible dependents.
The Coal Mines Regulation Act 1908 will not be repealed until either the proposed Community directive on working time is adopted or, if agreement on that is not reached, until an alternative UK measure is introduced. We are aware of the need to keep that in mind.
The matter of future licensing arrangements was also raised. The arrangements for granting rights to coal after privatisation are obviously of great importance. That is an area which we intend to get right. We recognise the need to ensure that we avoid the inherent conflicts of interest associated with the present regime. Again, that matter will obviously concern your Lordships when the main legislation comes forward.
The Government's privatisation policy stems from the belief that enterprise flourishes best and provides a better service to customers in a commercial environment where management is free to manage without interference from government while being subject to the demands of the market. The future development of British Coal is hampered by remaining in the public sector while its main customers—the electricity generators—now operate successfully in the private sector. Recent years have seen major change.
As I said earlier, this short Bill is a preliminary but important step towards the privatisation of British Coal and British Rail. There will be many opportunities to discuss again the important issues raised today on the details of privatisation when the main Bills are brought forward. I am sure that the matters raised will be taken into account by my honourable friend the Minister for Energy.
Lord Ezra: My Lords, before the noble Baroness sits down will she indicate whether in addition to the White Paper on railways there will be a White Paper on coal?
Baroness Denton of Wakefield: My Lords, there will be no White Paper on coal. Consultation has been comprehensive and, as I say, the replies will be available from those parties consulted. We do not propose to bring forward a White Paper.
There is no doubt that the changes that we propose for British Coal and British Rail will be of great benefit to the nation and the consumer. They will result in greater efficiency, better use of resources and will encourage and motivate those who work in the industries.
Lord Underhill: My Lords, before the noble Baroness sits down, I understand that her ministerial responsibilities do not extend to rail but I asked an extremely important question about Section 20 grants affecting the passenger transport authorities. Will she say anything about that?
Baroness Denton of Wakefield: My Lords, as I said earlier, I hope noble Lords will understand that I cannot go ahead of the White Paper, which I am sure the noble Lord will read with great interest. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Companies (Single Member Private Limited Companies) Regulations 1992
5.10 p.m.
Baroness Denton of Wakefield Baroness Denton of Wakefield rose to move, That the draft regulations laid before the House on 11th June be approved [3rd Report from the Joint Committee.]
The noble Baroness said: My Lords, the purpose of the regulations is to implement the 12-company law directive adopted on 21st December 1989. That directive provides that member states must allow the formation of a private limited company having one member or shareholder and must permit a company to be a single member company when all its shares come to be held by one person. At present the Companies Act 1985 requires that a company formed in Great Britain must have at least two members.
The regulations expressly authorise the formation and continuation of single member companies. The Government believe in removing unnecessary restrictions on companies. The requirement for a second shareholder is not a barrier to incorporation. Company founders have generally been able to find a second subscriber to play a nominal role in order to comply with the law. But it is a restriction that produces no benefit. It can be wasteful and troublesome both for the sole trader and the larger company. The regulations remedy that situation by removing the need for private limited companies to have a second shareholder. I hope that the House will feel able to approve the regulations. I beg to move.
Moved, That the draft regulations laid before the House on 11th June be approved [3rd Report from the Joint Committee].—(Baroness Denton of Wakefield.)
On Question, Motion agreed to.

Parole Board (Transfer of Functions) Order 1992
5.12 p.m.
The Minister of State, Home Office (Earl Ferrers)The Minister of State, Home Office (Earl Ferrers) rose to move, That the draft order laid before the House on 23rd June be approved [4th Report from the Joint Committee].
The noble Earl said: My Lords, the order transfers from the Secretary of State to the Parole Board, responsibility for the release and recall of long-term prisoners who are sentenced to less than seven years under the new Act from 1st October this year.
It may be helpful to your Lordships if I were to say something about the existing parole scheme. At present, prisoners who are serving more than 12 months in prison must serve one-third of their sentence before they can become eligible for parole. Whatever length of time a prisoner may have spent being remanded in custody—which can be offset against his prison sentence—he must spend at least six months in prison before being eligible for parole.
Every case is considered by a local review committee, and the more serious cases—those who are serving four years or more—are also seen by the Parole Board. The middle third of the sentence is available for parole. Those who do not receive it are released unconditionally at the two-thirds point of sentence.
But the scheme does not work in all cases in the way in which the court may have wished. Those who are in most need of supervision often do not obtain parole. They are then released, as it were,"cold" into the community. The system has also been criticised for its secrecy. Because of those short comings, my right honourable friend the then Secretary of State asked my noble friend Lord Carlisle of Bucklow to look at the parole scheme and at remission. My noble friend's committee reported in 1988. The new arrangements largely follow its recommendations which were warmly received.
But there was one area where the Government felt unable to agree with the committee. The committee had proposed that Ministers should withdraw from the decision-making process entirely, and that they should give the Parole Board the final say on the release and recall of all long-term prisoners. Ministers consider that Ministers should keep the responsibility for the release of those who have committed extremely serious offences because, in the end, it is Ministers who are responsible for the safety of the public. Therefore, in the White Paper, Crime, Justice and Protecting the Public, published in 1990, the Government proposed that the Parole Board should have sole responsibility for deciding the release of those who are serving more than four but less than seven years of imprisonment.
The order before your Lordships this evening will transfer to the Parole Board certain functions which are at present held by the Secretary of State relating to those offenders who are sentenced under the new Criminal Justice Act when Part II of the Act comes into force in October.
The Act introduces three new early release schemes. Although two of them are outside the scope of the order, your Lordships may find it helpful for me to explain all of the schemes. Those who are serving sentences of less than 12 months will be released automatically at the half-way point of sentence, subject to their good prison behaviour. Their release will be delayed by any additional days which may have been awarded for misbehaviour. They will not be supervised on release but, like all prisoners who are released under the Act, they will be under liability until the end of the sentence.
No longer will there be "remission". These prisoners will be "at risk". If they commit a further imprisonable offence before the end of their sentence, the outstanding period of the original sentence may be added to any new sentence. That gives more impact to the sentence which was originally passed by the court while giving some incentive to good behaviour.
For those who are serving between 12 months and under four years, there will be an Automatic Conditional Release Scheme. Those prisoners will also be released automatically at the half-way point—subject to good prison behaviour. But, on release, they will receive compulsory supervision from the probation service. That supervision, which will be on licence, will extend to the three-quarters point of their sentence. Thereafter they will be at risk. The judge may direct, though, that the licence period should run to the end of the sentence for some sex offenders.
The licence will make real demands on the individual. A condition may be added, for instance, requiring him to attend on a course to address an alcohol problem or to prohibit contact with a named victim, and the man who is on licence may be recalled to prison if the licence conditions are breached.
I have referred to two schemes which are not the subject of this order in order to put the schemes into perspective. I now turn to the new parole scheme, which is the subject of this order. This is tougher than the present parole scheme. It will apply to those prisoners who are sentenced to four years or more on or after 1st October this year. They will have to serve at least half of their sentence in custody—instead of one-third, which is the case at the moment—before becoming eligible for discretionary release.
Those who do not receive parole will be released at the two-thirds point of their sentence automatically. But release in either case will be on a licence, which will last up to the three-quarters point, or in the case of some sex offenders to the end of their sentence. The fact that those who are released without the benefit of parole are to receive compulsory supervision for a period—one-twelfth of sentence—is a real improvement on the present scheme.
I should add that sentence planning will form an integral part of the scheme. Prisoners will see the reports which constitute the parole dossier, and the Parole Board will give reasons for its decisions. That represents a significant step towards a more open and a more fair scheme—one in which the prisoner knows
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what is going on, sees what is going on and one in which he can realise the effect of his own behaviour. I am sure that it will be widely welcomed.
I have already indicated that Ministers have decided to retain the final say on the early release for those who are serving sentences of seven years and more. Those represent the minority of long-term prisoners.
The Parole Board has done excellent work under the direction of my noble friend Lord Colville of Culross and his predecessors. The Parole Board has amassed considerable skill and expertise in making difficult judgments about the release of offenders, including those who have committed extremely serious offences and who pose most risk to the rest of the community. But it is the Home Secretary who has the responsibility for public safety. That is a public responsibility for which he is responsible to Parliament and it should not be delegated to a body of people, however eminent.
Ministers decided, therefore, that it should be they who should continue to consider the cases of those who are serving the longer sentences. Those people will have committed the most serious offences such as robbery with violence or violent sexual crimes. It is right that Ministers should continue to safeguard the public by making the decisions on when and whether those persons who are serving that kind of sentence should be allowed back into, and among, the public. Ministers will, of course, have the advantage of all the expert and professional advice on each case, but the decision will remain that of the Home Secretary.
The seven-year determining point was fully debated during the passage of the Criminal Justice Act 1991. We believe that this is the right point for the start of the new scheme. But the Act also provides for Parliament to be able by order to approve a higher, or indeed a lower, threshold if, in the light of experience, that seems to be right.
When the Criminal Justice Act comes into force, the Parole Board will apply specific directions on the release and recall of prisoners which will be given to it by the Home Secretary. These directions will come in on 1st October. They will be announced shortly, and they will be made available in the Library of both Houses of Parliament.
On release, the directions will set out three conditions which have to be satisfied before the Parole Board can recommend parole. They relate to the risk of further offences being committed; to the prisoner's willingness to tackle offending behaviour; and to the resettlement plan of the prisoner and his rehabilitation.
These directions will require the board to assess the risk which is posed to the community if an offender should be released early into the community under supervision. Under the order, the Parole Board will have the final say on the release of prisoners who are serving between four and under seven years. At the moment, it makes recommendations. But the Home Secretary very rarely overturns the board's recommendations. Out of almost 4,000 cases in which the

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board recommended parole last year, the Home Secretary overturned the board's recommendations in only 13 cases.
The order will also extend the board's existing recall powers. It requires the Secretary of State to act on the board's recommendation to revoke a prisoner's licence and to recall him. Under the present arrangements, the Secretary of State, via the Parole Board, can only recall a prisoner if there has been a recommendation by the board or by the courts, except in the case of an emergency. And he must release an inmate, who has been recalled by emergency authority, if the board so recommends.
Under the new arrangements, the criteria for recall will also be set out in policy directions to the Parole Board. These will be published together with the release directions. The directions will require the board to assess the risk to the public if the offender is allowed to remain on licence. It will also have to assess the extent of his compliance with the conditions of the licence.
The order will also provide that the Parole Board, in the light of its expert assessment of any case, may set conditions to the licence for released prisoners. This will allow the Parole Board to fit the detailed licence conditions to the circumstances of each offender, and to take into account the level of risk, which is involved in release, in every case.
These may include conditions which prohibit contact with named individuals, or conditions which will require attendance on courses which are designed to tackle alcohol or drug abuse. This will be done in close consultation with probation officers in order to ensure the correct level of supervision, such as prohibiting contact with a young victim in, for example, a sexual abuse case.
Parole is by no means granted automatically in every case. The Parole Board's annual report for 1991 states that parole was recommended in 53 per cent. of cases last year. Only 8 per cent. of those who were paroled were subsequently recalled to custody. I suggest that the arrangements which are introduced by this order represent a significant improvement in the way in which parole decisions are administered, both in the interests of offenders and of ensuring the protection of the public. I trust that this order will meet with the approval of your Lordships.
Moved, That the draft order laid before the House on 23rd June be approved [4th Report from the Joint Commit tee].—(Earl Ferrers.)
5.24 p.m.
The Earl of Longford: My Lords, I am grateful to the noble Earl for explaining the order so clearly and for setting it in a context which gives me an excuse for moving fairly widely. I was rather surprised to hear him say—if I heard the noble Earl aright—that government policy is largely based on the Carlisle Report and that it is a tougher system of parole. When we discussed that report here there was no suggestion that it was a tougher scheme but there was a suggestion that it was a more enlightened and liberal one.
Earl Ferrers: My Lords, perhaps I may just interrupt the noble Earl. I can assure him that I will not do it again. The toughness was supposed to refer to the time spent in prison and not to the parole conditions.
The Earl of Longford: My Lords, I am sorry but I cannot follow the point. I am talking about the treatment of prisoners and I understood that it was tougher on them. Anyway, I have made myself plain and I am afraid that the noble Earl has not, as far as I can understand him.
The noble Lord, Lord Carlisle, produced a memorable report. A very generous tribute was paid to a committee of which I was chairman, which reported on penal matters generally. I am not sure whether it is in order to refer to anyone sitting on the Woolsack, but a lady not 100 miles from here was one of the most distinguished members of the committee. According to the Carlisle Report, that was the first committee which specifically recommended a parole scheme. I am sure that all the members of that committee will be very grateful to the noble Lord, Lord Carlisle, for that reference.
However, when the report was debated in this House the noble Earl said that it was well received. It was not well received by me. I pointed out that it was likely to result in more people in prison rather than fewer. I said that then and I say it again now. In fact, according to the latest Home Office calculations, as a direct result of the Government's policy which we are told stems from the Carlisle Report, there may be anything up to 1,400 more prisoners in prison, so the Government's parole policy may be tougher. That policy is not in accordance with the principles of the Carlisle Report as they were understood at the time.
The report offered the hope and expectation that the judiciary would adjust its sentencing policy and therefore there would be fewer people in prison. At the time I expressed the opinion that that was the triumph of hope over experience and so it has proved. The judiciary has not adjusted its policy and the likely result of the Government's parole policy is that there will be more people in prison. That is the unhappy result.
So much on the general question of the Government's parole policy. As regards this particular order, I am leaving it to my noble friend Lord Richard who will deal with it much more effectively. As the noble Earl went fairly wide in his remarks, perhaps I may offer a few remarks about the position of life prisoners. It may be pointed out that life prisoners do not receive parole, but are released on licence. However, it is almost impossible to discuss the whole question of parole without dealing with life prisoners.
Last Thursday I visited a lady in Holloway aged 39. She is serving a life sentence for her share in the murder of her husband's mistress. She was not present when the offence was committed. It was a horrible murder committed by two other people. Although they may have thought they were carrying out her wishes she had no control over them. She was certainly not in a position to pay them. It may be felt that her share was not the greatest. At any rate, she recognises that she shared in the murder and that she used

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gravely compromising words. She feels also that it is quite right that she should receive the severe punishment which she is receiving.
I now come to the point. She has been informed by a Home Office official that she will not be considered for parole until the year 2004. That will be 17 years from the time when she first went to prison. It is generally assumed that it takes another three years to come out of prison. Therefore this lady will spend 20 years in prison without an appeal to anybody and just on the notification from the Home Office official. I shall not be long and there is a great deal to be said. I hope that we shall have a debate on this subject later in the year. This lady is of course serving a mandatory life sentence and not a discretionary one.
Perhaps I may quote something said by the noble Lord, Lord Windlesham, in the debate on the Address.
The noble Lord, Lord Windlesham, stated:
"After October … "—
that is, this October—
"there will be the extraordinary spectacle of two separate systems running in parallel. One will be for the so-called discretionary lifers, which will be more open, and fairer, and will have sufficient judicial characteristics to satisfy the European Convention on Human Rights, and should lead to better informed decisions."
That does not apply to this lady.
The noble Lord continued:
"The other, for so-called mandatory lifers, will retain the objectionable features of decisions taken by the Executive, in private, in the absence of the prisoner or his legal representative, on grounds that are never disclosed."
That is the system under which the lady to whom I have referred is living her life.
The noble Lord, Lord Windlesham, went on to say:
"That cannot be right. Moreover, it is unlikely to endure".—[Official Report,12/5/92: col.252.]
The noble Lord, Lord Windlesham, went on to quote the words of the noble Lord, Lord Waddington, when he was Leader of the House. He quoted him at some length, but I shall cut it short. The noble Lord, Lord Waddington, had said:
"With regard to the debate on mandatory life sentences, I am sure that we have not heard the last of it, and it may be that on maturer reflection, policy will move in the direction which some of your Lordships wish to see".—[Official Report,23/7/91; col.652.]
That was in the direction of obliterating any distinction between mandatory and discretionary life sentences. That was the attitude of the House, and the Leader of the House at the time gave the impression that eventually that would prevail.
As I have not given the Minister more than five minutes' notice of this, I am certainly not asking him to pronounce on this particular case, which I hope to take up in some other way, and nor am I asking the House to pronounce on it, but I am asking the House—without any kind of vote, of course—to agree that justice will not be done to this lady or to others like her until the views that have been expressed so firmly by your Lordships' House, by the judiciary and by penal reformers all combine together for once. I repeat that justice will not be done until the views that were expressed in the House of Lords in 1991 prevail.
5.32 p.m.
Lord Richard: My Lords, perhaps I may say at the outset that we on these Benches generally support the order which the noble Earl, Lord Ferrers, has moved.
In so far as the speech of my noble friend Lord Longford was connected with abolishing the distinction between mandatory and discretionary life sentences, he will know that he is pushing at an open door as far as we are concerned. It is a little unfortunate that the overwhelming view of this House, including that of many noble and learned Lords who have spoken in such debates, among them, I believe, the then Lord Chief Justice, was ignored by the Government in that somewhat cavalier way. However, that matter ranges perhaps wider than the precise order that we are considering.
We welcome the order as a step in the right direction. I should, however, like to raise four matters with the noble Earl, of which I have given him short prior notice. Although he has not had much prior notice, I believe that he is at least vaguely aware of the matters that I want to raise with him. The first is to ask why a period of seven years has been chosen. Why not eight, nine, or 10? Indeed, why any period at all? In another place, the Minister responsible, Mr. Peter Lloyd, merely said that in his view seven years had been chosen as "a matter of judgment". But on what is that judgment based? Is it based upon some statistical analysis of the kind of crimes that attract sentences of seven years or more, as opposed to the kind of crimes that attract sentences of seven years or under? Is it based somehow or other on the desire to be tougher on certain classes of case which, if one analyses the statistics, fall into the over-seven-year category rather than the under-seven-year category?
Of course, it is always nice to know that a Minister is exercising his judgment on a particular matter, but it might be a little more helpful if at some stage the Government could give us an indication of the basis upon which they have come to this judgment. As the noble Earl said, it cannot be on the basis of the Carlisle Committee report. I shall quote merely one sentence from that report. The Carlisle Committee was emphatic about the need for the change, stating:
"The present structure is not the right one for the new scheme which we propose. We believe that the only answer to these problems is for the Home Secretary to cease to be responsible for individual parole decisions".
If the thrust of the Carlisle Report was that decisions in relation to parole should be removed from the Home Secretary and passed to the Parole Board—and it is a thrust that we would accept—we think that it is wrong that the Home Secretary should get himself involved in parole decisions. For the life of me, I do not see how the Government can say,"Very well, we accept the thrust of the argument in relation to sentences of under seven years, but we shall have a cut-off point at seven years". Again, if they accept the thrust of the Carlisle Report, it is for the Government to justify why they have chosen the somewhat arbitrary figure of seven years as the point at which they will start disregarding that report.

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Secondly, I am concerned about directions that may be given to the Parole Board. Again, in another place, the Minister responsible, Mr. Lloyd, stated:
"When the Criminal Justice Act comes into force, the Parole Board will apply specific directions given to it by the Home Secretary on release … The directions set out three conditions which have to be satisfied before the Parole Board can recommend parole. They relate to the risk of further offences being committed; the prisoner's willingness to tackle offending behaviour; and the resettlement plan and rehabilitation".—[Qfficial Report, Commons,6/7/92; col.146.]
All those conditions apply to the individual prisoner—in other words, one assumes that the direction will say that the Parole Board has to consider whether or not that prisoner is likely to commit further offences; whether that prisoner is willing to tackle offending behaviour; and whether that prisoner has a sensible resettlement plan for his rehabilitation. As I understand it, therefore—and this is the point upon which I should like confirmation from the noble Earl, Lord Ferrers—any idea that by those directions one will exclude certain classes of crime from the consideration of the Parole Board will now go. In other words, one cannot say in relation to certain sexual offences, certain drug offences or certain offences of violence that the Parole Board will be directed by the Home Secretary not to consider parole in relation to those classes of offence. As I understand it, the directions that are coming from the Home Office will apply to individuals, not to a class of case. I should be grateful if the Minister could confirm that that is, in fact, the position.
I also question whether the power—and, indeed, intention—to issue guidelines, which the Government have announced both tonight and recently in another place, is still appropriate in cases where the Parole Board will be given greater powers and, indeed, almost the ultimate say in respect of offences for which somebody has been sentenced to a term of up to seven years. In those cases, why should the discretion not be left to the Parole Board? Why should the board not be allowed to get on with it? I hope that I am not being unduly combative in relation to the directions, but I really do think that it would be helpful if we knew a little more of the Government's thinking as to precisely what the directions will cover.
We welcome the statement that in future prisoners will be able to see the reports that constitute the parole dossier and that the Parole Board will in future give reasons for its decisions, which it does not do at present. I assume that that will apply only to prisoners who have been sentenced to terms of imprisonment of less than seven years—or is it the intention that prisoners will be able to see the dossier if they have been sentenced to a term longer than seven years but where the Parole Board is in the process of considering it? If the latter is the case, will prisoners who are sentenced to terms of longer than seven years also be given the reason the Parole Board turned them down for parole for those offences—if it did turn them down? I assume also that where prisoners see the parole dossier and the board gives reasons for its decisions that process will be subject to judicial review in the usual way, though I suspect that it will not be appealable in any real sense of the word.
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However one looks at this change the Parole Board and the probation service will require more resources. When the Criminal Justice Bill was passing through Parliament in 1991 it was perfectly clear that the probation service would be called on to shoulder greater responsibilities and to fulfil a great many more tasks. At that time we on these Benches made the point that the probation service would need greater resources if it was to do the job properly. The order imposes additional responsibilities on both the Parole Board and the probation service. They will need greater resources. I should be grateful for the Minister's assurance that those resources will be forthcoming.
As I indicated at the outset of my remarks, broadly, we support the order as a step in the right direction.
5.41 p.m.
Earl Ferrers: My Lords, I am grateful to the noble Lord, Lord Richard, for his welcome for the order. When I saw that the noble Earl, Lord Longford, had put down his name to speak I thought that he would be pleased that the Government were producing yet another liberalising measure. I expected his agreement to it. But the noble Earl was a trifle perturbed by my use of the word "tough".
The Government are always in the difficulty of what to do with people who have misbehaved in society and how to make them better and make them improve. There has to be an element of toughness. We have tried to say that those who commit the worst offences—the most serious offences—should spend longer in prison and that they will now spend half of their sentence in prison as opposed to a third. In my book that is being tougher. It does not mean that the regime in prison will accord with the noble Earl's view of toughness; the fact is, however, that those people will be in prison for longer. What we have then tried to do is give them more chance of remission and more chance of doing better outside prison. In that way we have shown an enlightened view.
The noble Earl referred to lifers. The noble Lord, Lord Richard, put it very well when he said that that was going somewhat wide of the order. I thought that it was quite a lot wide of the order. However, I do not blame the noble Earl for trying to make his point. He was not out of order; he merely extended the scope of the debate considerably. However, I do not think it is necessarily a point in which we want to get too involved today. There is a distinction between a mandatory life sentence and a discretionary life sentence and I know that that distinction irritates a number of people, including the noble Earl. He will remember that Parliament endorsed the distinction, admittedly after some fairly fearful arguments, when it enacted the Criminal Justice Act 1991. The release of those serving mandatory life sentences will continue to be the responsibility of the Home Secretary, following a recommendation from the Parole Board and consultation with the judiciary.
I am grateful to the noble Lord, Lord Richard, for his support for the order. He was quite fair in asking his questions. He asked why on earth the Government had chosen seven years as being the point where the

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Home Secretary should be responsible for releasing those people on parole. He asked why, if the thrust is to let the Parole Board make the decision, the Home Secretary should keep the power after seven years. The best way of putting it is this. The Parole Board knows full well the details of all these cases. It is the best body to judge the most suitable time to release a prisoner. But in the end the Home Secretary is responsible for public law and order. It is up to him, we believe, to say when those who have committed the worst offences should be allowed back into society and among people. That responsibility should belong to the Home Secretary. Of course, he will take the advice of the Parole Board. And, of course, he will take the advice of all those who know the individual. But in the worst cases—those who have committed the worst offences—it is right that the Home Secretary should, in respect of his duties for public law and order, keep that responsibility.
The noble Lord, Lord Richard, referred to the directions—
Lord Richard: My Lords, before the noble Earl leaves that point, I wonder whether he would be kind enough to deal with this problem. He referred to the "worst cases". If, for the sake of argument, one accepts that point—I do not—why does he make the assumption that seven years should be the cut-off point for the worst offences? One could have a case of someone serving 10 years for a financial offence and someone else serving six years for an offence of violence. How can one make that comparison merely on the length of the sentence?
Earl Ferrers: My Lords, I apologise for not answering the noble Lord's point. It is a perfectly fair question to ask. One has to make a judgment somewhere. If one had said "eight years" or "six years", the noble Lord, Lord Richard, could still have come up with the same question. We consider that seven years is a reasonable length of time. Anyone who has been in prison for more than seven years has committed some fairly heinous crimes. We have also allowed for the fact that, if this is proved to be incorrect, then by a further order Parliament can either raise that length of time or lower it. There is flexibility there. Clearly, one has to start something new from a given position. We thought that that was a reasonable period of time to take.
With regard to directions, Ministers will give the Parole Board directions on release and recall. Those will be promulgated shortly by way of a parliamentary Question and a letter from the Ministers to the chairman of the Parole Board. It is hoped to do that before the Recess. Copies of the letter and the directions will be placed in the Library of your Lordships' House. The noble Lord, Lord Richard, is correct that any directions will be given to the board on individual cases and not on classes of case.
The noble Lord also referred to the dossier. As part of the policy of openness, this dossier, which contains the papers for Parole Board consideration, will be disclosed to the prisoner. There will be very limited exceptions to the policy of openness. Exceptions will
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be decided by the chairman of the Parole Board. Prisoners will be able to seek corrections to the papers. It is hoped that these will be resolved via the internal procedures before the Parole Board considers the case. This will apply to prisoners who serve more than seven years as well as to those who have left seven years. The noble Lord referred to judicial review. Decisions like this are ultimately liable to judicial review but we hope that that such cases will be few and far between. We should like to see those problems adjusted and addressed before reaching that ultimate sanction.
The noble Lord referred to resources and said that if people are being given more work they should have more resources. The number of people on the Parole Board will be increased from 60 to 80. That increase will be resourced, and therefore there will be increased resources.
I hope that I have dealt with the points raised by the noble Lord. I am grateful to noble Lords for their support for the order.
On Question, Motion agreed to.

River Usk Barrage Bill [H.L.]
5.49 p.m.
Lord Stoddart of Swindon: My Lords, I beg to move that this Bill be now read a second time.
The interest in the Bill appears to be increasing. The last time that I introduced the River Usk Barrage Bill to the House on 13th March 1991, there were 10 speakers on the list. I am glad to say that this evening we have 13 speakers. In fact, the Bill has engendered a great deal of interest over the past year.
Noble Lords will know that the joint promoters of the Bill are the Borough of Newport and the County of Gwent. The purpose of the Bill is to,
"empower Newport Borough Council to construct a barrage across the River Usk; to empower Gwent County Council to construct roads and to carry out highway improvements … to empower the said Councils to carry out other works and to acquire lands; to provide for the control and development of part of the river Usk for amenity and recreation".
As I said on 13th March last year, the Bill is the cornerstone of a sustained and long-term plan by Newport to regenerate the centre of the town and to attract inward investment.
Noble Lords will know that Newport was, this year, commended by the Audit Commission as one of the two most effective councils to carry out economic development strategies. The Audit Commission's review put Newport Borough Council in top joint position with Bolton, and was based on the results of a study of the economic development strategies of local authorities in England and Wales. Those economic development strategies were examined on a value for money basis. The Audit Commission's award is a tribute to both the commitment and the enthusiasm of the council, and of its officers, in pursuing bold and well thought-out plans to bring investment and employment to Newport. That is just exactly what they should be doing.
As a result of Newport's economic development strategies, the TSB, Panasonic, the Patent Office, Newbridge Networks and the Imperial College of Science and Technology have all relocated in the

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town. Imperial College has joined with the borough and the Welsh Development Agency in setting up a 50-acre science park at Duffryn and Imperial House. That, in turn, is part of the bigger Celtic Lakes development which will eventually cover 170 acres and is set to become one of the most prestigious science and business parks in the whole of Europe.
But although the borough of Newport has been successful in attracting development to sites with immediate access to the M.4 motorway, little new industrial or commercial investment has been attracted into the centre of the town. The tendency of companies to take up sites along the M.4 corridor and around Newport's "green belt" is posing an acute dilemma for the council. It naturally wishes to continue to attract such investment and generate new jobs for the high number of unemployed within Newport and Gwent. But, at the same time, the council also wishes to protect the beautiful countryside which surrounds Newport from development pressures. Such pressures will undoubtedly be there and, indeed, are there at the moment. Equally, the council is concerned to improve the heart of Newport town itself. Part of that will be the regeneration of the Pillgwenlly area which at present has the appearance, in my view, of a downtown area in some big American city.
The last objective is one that cannot easily be understood by those who do not know Newport and who have not visited the town. I had the privilege of visiting the town at a time when the tide was extremely low. It does not surprise me that the Usk's unpleasant mudscapes, which are used as industrial and domestic rubbish tips, and the river's wide open sewer, deter potential investors.
The fact that the river is an environmental and visual mess helps to explain why, since 1988,15 companies intending to relocate within Newport expressed substantial interest until being shown the town. As a result of their perception of the town, those 15 companies did not proceed further. Between 1987 and 1992 Newport attracted £179 million of inward investment. Of that, only £3.3 million went to the riverside.
The distortion in the direction of private commercial investment can also be demonstrated by a comparison between the £155 million invested in the periphery of the town against £23 million invested in the centre.
Newport's position as the first major urban area with assisted area status on the M.4 from London provides an important advantage in competing for highly mobile foreign and domestic investment. It has low land premises and labour costs if compared to similar costs in Cardiff, Bristol and Gloucester. However, the increasing problems of congestion on the M.4 itself and the pressures that further development will place on newport's "green belt", have increased the borough's determination to deflect investment from motorway sites and from countryside areas into the already developed centre. I should have thought that we would all say Amen to that. Is that
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not in fact what we want? As a result, this must be a scheme which needs, and which should have, very good consideration.
Newport has high rates of unemployment in its centre. The unemployment figure now stands at 3,874 in Newport East and 3,978 in Newport West. For the Newport travel-to-work area, it is 9.6 per cent. of the available workforce. Of the 20 borough wards in Newport,42 per cent. of the total unemployment in April was concentrated in just six riverside wards. I emphasise that fact.
The town's municipal leaders are aware that it is primarily the young who are being affected by this unemployment; for example,49 per cent. of those who had been unemployed for over a year in April 1992 were between the ages of 20 and 34. Opportunities for the young people of Newport to obtain and develop new skills in a rapidly changing work environment are constrained by the lack of investment in the town centre. At the same time, Newport is suffering from outward migration. Its white collar and professional workers cannot put their talent to use with firms in Newport, as they should be able to do. It is precisely to attract jobs for that type of worker and to progress job and promotion prospects as a whole, that the borough council has embarked on this bold economic development scheme, together with others.
We must all remember that outward migration of Newport's young people is largely to already overcrowded areas of the South-East. I live in Reading where we also suffer those pressures. If we are to improve the environment of the South-East, we need to provide opportunities in areas like Newport so that young people do not have to leave their homes, their relatives and families to go elsewhere. So improving the environment and job prospects of Newport people will also help keep down jobless levels in many areas in London and the South-East, and improve the environment.
This Bill is central to the vision of Newport's leaders for their town. It has all-party support and the borough is confident that the scheme can be funded from existing balances, from projected land sales, from contributions made by other parties and from modest long-term borrowing.
I have some experience of the enthusiasm felt for this scheme by the people of Newport because I visited the exhibition, which has been placed in the heart of the shopping centre so that as many people as possible can have the opportunity to see it. It had been set up by the council as part of its process for consulting the citizens of Newport. The exhibition was packed. I could hardly get in. I heard only positive and enthusiastic comments about the scheme from the people who visited. The people of Newport know that it will revive their town and will help bring together communities to the east and west of the turbulent River Usk. Opinion surveys have shown that approximately two-thirds of the people of Newport felt that the barrage would make the town more attractive and that it would attract more jobs to the town.
As I have previously indicated, the River Usk has a dramatically wide tidal range of 45 feet, second only

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in the world to the St. Lawrence river in its tidal variation. That high tidal variation affects people and property, for at high tide there is a very real threat of flooding especially in the area of Crindau.
Flood tides occur when the tide exceeds a peak of 7.9 metres. Floods have occurred on four occasions since 1960: in 1981 when it reached 8.4 metres; in 1985 when it exceeded 7.9 metres; in March 1989 when it was 8.01 metres and as recently as February 1990 when the tide reached 8.17 metres. The floods which devastated Towyn also caused flooding in both Newport and Caerleon. Flooding also occurs whenever heavy storms are accompanied by high spring tides. That happens on average twice every five years, and may well happen with increasing frequency as a result of the greenhouse effect.
The Usk River Barrage is intended to address three main major development objectives, the first two of which cannot be achieved without the barrage. They are, first, to attract investment to the centre; and, secondly, to prevent flooding due indirectly to the tide. That will protect lives and property in Newport. Thirdly, as part of the barrage scheme, the objective is to divert raw sewage outlets, something which I am sure we all applaud. An additional and very welcome benefit will be the development of the river as a pleasant recreational area for the people of Newport, which will replace the unsightly mud flats which face them at present.
Your Lordships will know that Newport first deposited its Bill with this House in March 1991. Unfortunately the drought of both that and the previous year prevented the authority from completing its water quality studies and from carrying out further groundwater studies. The council therefore withdrew the Bill to give petitioners adequate time to consider the council's environmental assessment.
As a result of further studies undertaken since May 1991, the council feels even more confident that a suitable high water area can be maintained. The research undertaken has demonstrated that both the volume and the period of tidal intrusion over the barrage will be less than originally thought. The council now believes that a suitable high water area will be maintained with no significant sedimentation or water quality problems.
Water quality studies have demonstrated that NRA standards can be met. Favourable results have also been obtained from the algae model. Just as important, the council's groundwater studies give it confidence that there will be no significant groundwater problems arising from the barrage project. Nevertheless, the council is promoting an additional provision to the Bill which will provide for compensation for residents who may be affected by any rise in groundwater levels. There have been further feasibility studies during the year including that for the design of the fish locks. That brings me to the most controversial aspect of the barrage; namely, its likely impact on the passage of salmon up and down the river.
Newport has been taking continuous advice on the most appropriate design for a fish pass to maximize
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the passage of all types of fish. Your Lordships will know that modern engineering and environmental estimates are iterative processes. Newport Borough Council is keen to ensure that "state of the art" techniques are used in the construction of the barrage. The council has continuously sought improvements rather than relying simply on proposals currently before it.
That approach or methodology is to be applauded and indeed Dr. Richard Creswell of the NRA said at a consultative meeting with Newport that
"technology regarding fish pass design is progressing all the time … and both the NRA, MAFF and Newport's consultants are aiming to get the best design".
The fish pass will now be made up of twin fish locks measuring 30 metres by 9 metres (97 feet by 29 feet six inches). It will help your Lordships visualise the size of those locks if I tell you that your Lordships' Chamber measures 80 feet by 45 feet. Your Lordships will then realise that the locks are very big indeed. They will be able to handle the fish reasonably easily. I tell your Lordships that because it will give you some idea of the size of the locks and what Newport is trying to achieve.
The locks will be similar to a boat lock on a canal. The advantages of the fish pass are that it can pass fish at all states of the tide; a far larger flow of water can be accommodated (the equivalent of the normal summer flows of the river); and fish do not have to expend great energy in negotiating the pass. The pass will in effect act as lifts in a hotel do, except that in this hotel there will always be a lift open on the ground floor. The locks will operate throughout the day at a 20-minute cycle with fish being able to enter the lock 24 hours a day.
For almost 60 per cent. of all tides the river will overtop the barrage and fish will be able to swim freely across for a period of between two and two-and-a-half hours. Secondly, all normal river flows will be catered for by the fish locks and the overflow gate next to the locks.
Finally, and just as importantly for down stream migrants, the maximum fall over the barrage structure will be 5 metres. Newport's expert, Dr. Solomon, believes that fish will be able to cope easily with that fall.
I do not want for a moment to offer meaningless assurances to salmon fishermen about the impact of the barrage on migratory salmon, nor is the council in a position to predict what that impact may be. The truth is that nobody knows and no one will know until the council undertakes its comprehensive monitoring programme once the barrage is built. But we must get this all into perspective. If fishermen visit mid-Wales for an angling holiday and if all they hoped to catch were salmon then we could presume a major effect on businesses dependent upon salmon catches. Clearly, however, anglers rely on the Usk more as a brown trout river than as a salmon river. The reason I can say that with some confidence is that anglers are estimated to spend almost 13,000 rod days on the Usk. However in the past three years fewer than 400 salmon per annum have been caught by rod; in other words, there have been over 30 days of fishing for each salmon

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caught. Clearly it is not the salmon fishing which is the major attraction to anglers visiting the upper reaches of the Usk Valley.
Mr. Ernest Jones, a seasoned local fisherman who writes for the South Wales Argus notes in a recent article that compared to catches in the 1960s anglers "are not getting the run of fish in the river of that period". He points out that in May 1963 over a 10-day period 100 salmon were recorded. During July, August and September 1991 only 57 salmon rod catches were recorded. That emphasises what I have already said.
The municipal leaders of Newport do not want the environment of their town and of the upper reaches of the Usk to be pitted against the interests of the people. For them, that would be a completely false position. Naturally, their concerns are to improve the living standards and prospects, particularly of the young people of their town. They have watched their children leave home and make for other conurbations where opportunities have been greater. They want to bring a halt to this migration. At the same time, they wish to preserve the rich and marvellous character of the river.
I believe that the Bill and the environmental and engineering research that underpins it represent the best opportunity for Newport to protect both its citizens and its wildlife. I therefore commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Stoddart of Swindon.)
6.10 p.m.
Lord Moran: My Lords, the noble Lord, Lord Stoddart, introduced the Bill in a clear and helpful way. This morning I also had a useful discussion with representatives of Newport Borough Council and their expert advisers and I am grateful to them for what they told me.
When we discussed the earlier Bill, on 13th March 1991, some of us suggested that it had been put together without adequate consultation. On that occasion I said:
"Surely the sensible way to proceed is to have thorough consultations with all the bodies concerned—first and foremost in England and Wales with the National Rivers Authority but also with the Nature Conservation Council, its successor bodies and all the non-governmental organisations concerned—and to modify the plans as necessary to meet their concerns".—[Official Report,13/3/91; col; 262.]
The promoters—I believe wisely—withdrew that Bill and have since had extensive discussions with the NRA. They have done their utmost to resolve the many outstanding problems. For this they should be given credit. They have also established consultative groups, the membership of which is listed on page 11 of their Environmental Statement. This, I am sure, is helpful. However, the fact remains that they have not been able to satisfy the NRA or the Countryside Council for Wales that some of their principal concerns can be met.
We now have 47 petitions against the Bill, more than double the number petitioning against the earlier Bill. Among the objectors are the NRA, the Countryside Council for Wales, the Council for the Protection of Rural Wales, the Brecknock and Gwent Wildlife Trusts, Brecon Town Council and Brecknock Borough Council. There are a good many important
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points in these petitions; for example, objections to Clause 65 of the Bill which would give the Newport Borough Council power to make by-laws for the upper river. That seems to me a highly questionable proposal. It is the NRA which should propose by-laws for our rivers.
The NRA, which in this matter is wholly unprejudiced, issued a position statement in February which in most respects, I am told, still represents its considered views. In the statement it said:
"Notwithstanding the more detailed Environment Statement and subsequent Fisheries Report now produced by the promoters, the NRA continues to have serious concerns about the damage this proposal may do to the aquatic environment, and in particular to fish stocks and fisheries".
I understand that good progress has been made on flood defence and water quality. On flood defence, the provisions have not been finally agreed, but the NRA does not expect serious difficulties. On water quality problems—sedimentation, dissolved oxygen, salinity, algae, microbiological quality and the handling of sewage effluent—the NRA is not yet, I understand, fully satisfied, particularly with the provisions for the river upstream. However, it believes that it will be possible to overcome these problems. The discharges of raw sewage into the river from Newport will have to be dealt with anyway by Welsh Water and are not therefore strictly relevant to the barrage plans.
It is therefore primarily fisheries problems on which the promoters have failed to satisfy the NRA, which has of course been given by Parliament the statutory responsibility to maintain, improve and develop fisheries. I have no personal interest in the Usk or its fisheries, but I have a great interest in and concern for all fisheries in Wales.
When we discussed the earlier Bill on 13th March 1991, I went into some detail at cols.266 to 268 of Hansard about the problems which would face migratory fish in the Usk—salmon, sea trout, twaite shad, eels and lamprey—if a barrage were to be built. I reminded noble Lords that Usk fish are threatened with two barrages—this and the proposed Severn barrage, which might in future constitute a double obstruction which few fish could hope to pass. I described the problems which would face incoming and outgoing fish which I concluded were enormous and probably insurmountable. I shall not repeat them now, as the Committee will have available the record of our earlier debate. I would just say that all those problems remain unsolved, although fish migrating downstream will no longer have to fall 10 metres over the barrage, but only five metres at low spring tides, into a pool five metres deep.
The NRA's concerns are spelt out in detail in section 3 of its February position statement, which I am sure the Committee will wish to study. Its conclusion is that:
"Despite the provision of facilities for fish passage, the NRA fears therefore that the construction of the barrage will:

(1) delay or obstruct fish passage;

(2) increase mortality of young salmon and sea trout;

(3) adversely affect salmon stocks and/or the dependent commercial and rod fisheries;

(4) reduce the number of eels within the river.

Furthermore, the provisions for monitoring fish stocks and fisheries, and mitigating the anticipated damage are wholly inadequate".

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The NRA also raises the question of conservation issues, for which it is responsible. It mentions in particular otters, which are heavily dependent on eels, and the once common but now scarce and extremely vulnerable twaite shad—an anadromous fish of the herring family. It says that unless the promoters,
"formulate a satisfactory monitoring programme and identify acceptable mitigation measures, the NRA will not be satisfied that the conservation interests in the river upstream have been adequately protected".
Anxieties about otters and twaite shad are also expressed in the petition from the Council for the Protection of Rural Wales. The Countryside Commission for Wales is particularly worried about the danger to the twaite shad.
The NRA's overall conclusion is that:
"Notwithstanding detailed consideration and discussion with the promoters, their experts and advisers, the NRA remains of the view that if the Usk barrage were to be constructed it would create an unacceptable risk to the fisheries, particularly in view of their high conservation and commercial value. The Environmental Statement and Fisheries Report relied on in support of the Bill do not adequately address these concerns or provide acceptable proposals for mitigating the potential damage which may be caused if Parliamentary approval is given to this Bill".
In the light of that conclusion what should be our attitude? When he introduced the earlier Bill, the noble Lord, Lord Stoddart of Swindon, said:
"Clearly the promoters have an obligation to convince the NRA that statutory obligations will be met by their plans to ensure water quality standards and that the design for the proposed fish lock facilitates the passage of migratory fish".—[Official Report,13/3/91; cols.257–258.]
I am glad that the noble Lord recognised that the promoters had such an obligation. But 16 months have gone by and, as I have made clear, the NRA has not been convinced that its statutory responsibilities for the maintenance of fisheries can be met. It describes the risks involved as unacceptable. Perhaps between now and the autumn, the promoters can come up with new proposals. However, I wonder whether they can satisfy the NRA's proper anxieties.
There is no precedent anywhere in the world for a fish pass through an estuarial barrage with a tidal range of 45 feet—the second highest in the world, as the noble Lord, Lord Stoddart, said. Migratory fish would have to negotiate a greatly changed estuary, find the fish pass, swim through a ball and lift, suddenly instead of gradually encountering fresh water, and then travel through a largely stagnant artificial lake,11 to 12 miles long. On the return journey they would have to undergo similar hazards. It seems to me that, almost inevitably, first the easily damaged and relatively weak shad and then the salmon would be rapidly reduced in number. Before long, the runs of migratory fish in the Usk would come to an end.
It is not surprising that so many petitions from angling organisations and individuals express alarm about this. Once built, the effects of a barrage would be irreversible. Your Lordships' Committee will need to consider carefully whether it is right that the populations of migratory fish in the Usk should run a real risk of extinction in order that a barrage should be
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built for purely cosmetic reasons to cover up the mud flats in Newport and create in their place an essentially static lake of murky water.
There is another point. There is now great public concern about our rivers. The public are concerned about low flows, pollution and much else. Parliament has established the NRA to look after the rivers in England and Wales and has given it appropriate powers and responsibilities. When, as in this instance, the NRA objects on solid, professional, technical and scientific grounds to a development proposal on a major river, I think this House should think long and carefully before setting aside the NRA's views and overruling them.
I have not said anything about ground water. I believe the problems are still being investigated but I am sure that the Committee will wish to satisfy itself that serious problems will not arise or, if they do, that all remedial costs will be met by the promoters.
I shall now say a few words about the Instruction standing in my name on the Order Paper. Paragraphs (b) and (c) are virtually identical with paragraphs (b) and (a) of the Instruction I moved on 13th March last year, at col.284 of the Official Report. That instruction was agreed by the House. I fully support the regeneration of Newport and its economic development but I do not think the promoters have established that a barrage, with all the damage it may do to the ecology of the Usk, is essential to achieve that. The Committee should examine that matter carefully.
I also think the Committee should consider whether there is room for another investment-related barrage in south-east Wales. The economic climate has become worse since March 1991 and Canary Wharf has shown us what the results of investment gambles may be. I think that among other things the Committee should consider whether, if expectations about proceeds from land sales are disappointed, the financial burden on the people of Newport would be within acceptable limits.
Paragraph (a) in my present Instruction is designed to help the Committee by directing its attention to the essential question that it must, in my view, determine. All three paragraphs need to be considered against the background of the significance and importance of the River Usk. Your Lordships' Committee will hear all the evidence from the promoters and the petitioners and will consider what is said in the House today. The Members of the Committee will have to weigh up the arguments for and against a barrage. However, if they conclude that a barrage is not indispensable for the development of Newport, or that it can only be constructed by taking unacceptable risks with the ecology of the Usk and the economy of the Usk valley, or if the NRA's concerns cannot be satisfied and the Committee shares my view that on such a question the NRA's views relating to a major river should not be overruled, the Committee should reject this Bill.
6.23 p.m.
Lord Crickhowell: My Lords, if one is chairman of the National Rivers Authority and one's speech follows immediately the speech of the chairman of the

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regional fisheries advisory committee one's task is rendered a good deal easier and shorter than it might otherwise have been. Indeed, as I listened to the speech of the noble Lord, Lord Moran, I wondered whether there was anything I could usefully add to the debate.
When this Bill last came before the House I spelt out the principles that must guide the National Rivers Authority. I am speaking today because 1 believe it is useful that the House should understand the NRA's position. Before I turn to those matters I hope I may be forgiven for expressing pleasure that we are to hear two speeches in this debate that will be particularly interesting. We are to hear from the noble Lord, Lord Mason of Barnsley, who made an immensely valuable contribution to the work of the National Rivers Authority in its formative period and whose wisdom on fishery matters was greatly valued. It is also a great pleasure that my noble friend Lord De L'Isle is taking part in the debate. I well recall that on the previous occasion we discussed this subject my noble friend's father spoke. That debate occurred only a few weeks before the death of my noble friend's father.
I should make clear at the outset that the NRA has no reason at all for criticising local authorities' desire to improve the environment of Newport, to provide amenities for its citizens and to encourage development and job creation. I would be the last person to raise obstacles to such eminently worthwhile objectives. If local authorities can achieve those objectives in a way that does no harm to the things that the NRA has a statutory duty to preserve and protect, we would, of course, withdraw our objections. Our interests centre on our statutory responsibilities for water quality, the protection of fisheries, conservation, recreation, flood defences and navigation.
Much discussion has taken place since the original Bill was presented. As the noble Lord, Lord Moran, told the House, the promoters have clearly undertaken a significant amount of further work to support their environmental statement. A number of issues have been clarified and some of our anxieties—for example, about water quality—have been moderated. However, fundamental issues remain about which we are by no means satisfied. The NRA's petition is lengthy and spells out those objections in great detail. I need not repeat all the points. However, the most essential for us to consider is that of the Usk fishery, an important fishery despite what has been said about the poverty of the salmon catch in recent years. The stocks of salmon, and to a lesser extent sea trout, in the Usk support a valuable rod fishery and also contribute to commercial fisheries in the Severn estuary. Despite a decline in anglers' catches in recent years, the Usk remains one of the five most prolific salmon angling rivers in the Welsh region.
In addition, Usk salmon stocks are heavily exploited in the Severn estuary. They contribute approximately one-third of the catch of local commercial fisheries and about 5 per cent. of the total commercial catch of English and Welsh salmon in home waters. There is also a small commercial fishery for eels, both as elvers and adults, associated with the river.
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The barrage would constitute a major obstruction both to the upstream and downstream passage of migratory fish, including salmon, sea trout and eels. Migratory fish would have to negotiate the barrage itself, pass through the altered tidal zone downstream and an 11-kilometre stretch of impounded water upstream. When I refer to an 11-kilometre stretch of water I am being rather more modest than the noble Lord, Lord Moran, as I believe he mentioned an 11 or 12 mile stretch of water. I suspect the problem here is one of defining exactly how long this semi-stagnant stretch of water will in practice be. However, taking the most conservative view, it is clearly a long stretch of relatively still water through which the fish will have to pass.
To help facilitate the passage of fish across the barrage, facilities for fish passage—as we have heard—have been included, at the authority's request, in the proposed design of the barrage. The authority has been consulted on a variety of designs for these works but it has yet to be convinced in principle that such a facility will be adequate satisfactorily to secure the unhindered passage of fish migrating both to and from the river. The petition states:
"There exists no tested precedent for a fish pass in such an estuarine situation, and recently several authoritative sources have expressed deep reservations as to the efficiency of fish passes in fresh water. Therefore, although there have been discussions between the Authority and the Promoters on the detailed design of the proposed fish pass facilities, these are subject to the Authority's grave doubts as to the effectiveness and efficiency of any fish pass in an estuarine situation and the consequential effect of the barrage as an obstruction to migratory fish".
Even the noble Lord, Lord Stoddart, in moving the Motion, confessed that the truth is that nobody knows. So, at best, we are confronted with serious uncertainties.
The NRA believes that even if the upstream passage of fish past the barrage was completely unhindered, the salmon would be delayed in the environment upstream, as the promoters have themselves indicated. The NRA considers that the rod fisheries throughout the river would be detrimentally affected because fewer fish would move into the fishing reaches during the rod fishing season. The NRA cannot accept the delay in the upstream migration of salmon and sea trout which is expected to result from the barrage and the impoundment. Nor is the NRA convinced that fish survival would not be jeopardised by downstream passage past the barrage. We also fear that eel stocks will be significantly affected.
Comparatively little is known about the estuarine and marine fish utilising the Usk estuary. As a result the NRA asked the promoters to commission a baseline survey to determine their diversity and significance in the area which will be affected. The promoters have undertaken a preliminary assessment but have so far not demonstrated fully the significance of the species found. While they propose further survey work it is a fact that it will not be possible to judge the results until after the construction is complete.
Indeed, the noble Lord himself confessed that we shall not know the result of any aspect of the proposal fully and adequately until after the construction is

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complete. Many feel that by then it will be too late. Until the results of such surveys are known it simply is not possible to judge the effect of the barrage on estuarine and marine fish populations nor whether effective mitigating steps can be taken to protect them. The same is true of the river itself.
Even if the NRA's concerns could be satisfied there will remain an element of uncertainty. Should the barrage proceed it is therefore essential that a comprehensive monitoring programme is undertaken. We are by no means satisfied that the monitoring arrangements suggested by the promoters will be adequate. That is also a matter which needs to be examined by the Committee which will consider the Bill.
Regardless of the effectiveness of the monitoring process, we have to consider whether effective steps can be taken to mitigate the undoubted consequences. Here again the promoters have not demonstrated to the satisfaction of the NRA that effective mitigation measures could be employed to compensate for any effect of the barrage on fish stocks.
Therefore, the situation is that despite the provision of a fish pass the NRA fears that construction of the barrage will delay or obstruct fish passage, increase the mortality of young salmon and sea trout, adversely affect salmon stocks and the dependent commercial and rod fisheries, and reduce the number of eels within the river. Furthermore, the provisions for monitoring fish stocks and fisheries and for mitigating the anticipated damage are not adequate.
I have indicated that real progress has been made on water quality issues, as the noble Lord, Lord Moran, said. If I do not dwell on the other issues, including water quality, at any great length, it is not because I do not think that they are important. They, too, will have to be adequately examined. However, we have made progress and I believe that there is a good chance that it will be possible to resolve the water quality issue.
I freely acknowledge that a great deal of progress has also been made in developing and calibrating computer models. That will be most helpful in assessing the impact of the barrage on water quality. If I am right in thinking that the water quality problems can be overcome by effective barrage management and technical means, we still have to satisfy ourselves about flood defence requirements. Here again I am optimistic. The design of the barrage meets the standards laid down by the NRA and we believe that it will provide flood defences which are at least as good as those we have at present. I also believe that the noble Lord, Lord Stoddart, was right in saying that the sedimentary problems can be adequately dealt with.
Our fundamental objection to the Bill is that we believe that it poses a major threat to the fish stock and existing fisheries on the river and consequently to the conservation of fish-eating birds and mammals, particularly otters, which feed upon migratory fish in the river. I am conscious in making that remark that many fishermen may say,"Splendid. It is the best thing that we have heard so far if some of the
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fish-eating birds are done in in the process." However, I do not believe that most of them will be very pleased if there is an adverse conservation impact on the river. Certainly the NRA, with its statutory duties, cannot take that view.
We have a statutory duty to maintain, improve and develop fisheries. We have responsibilities for further conservation in the riverine environment. In those circumstances I believe that we have no alternative but to maintain our objection to the Bill. Of course, if at the end of the day the Committee can be satisfied and we can all be satisfied that those consequences will not follow, then I shall join with those who hope that Newport will be successful in attracting new jobs and improving its environment. We all want that. The question at issue is whether the price is worth paying.
6.37 p.m.
Baroness White: My Lords, after listening to three such authoritative speeches it seems hardly necessary for the rest of us to say very much more. However, one reason why I did not take part in the earlier debate on 13th March 1991 was that at that time I was engaged in moving my main domestic base in South Wales from Cardiff to Cwmbran, from Glamorgan to Gwent. My Welsh friends will understand the significance of that. Since that time I have naturally taken a closer interest in the possible developments in and around Newport, such developments being the main reason for considering a barrage at all.
Like my noble friend Lord Stoddart, I find the great mud banks of the lower Usk depressing, particularly as one approaches Newport railway station on the train travelling from London. One cannot help wishing that at that point the river could avoid low tides altogether. Aesthetically it would undoubtedly be much more attractive.
Appearances, however, are not everything. Nevertheless, if I were a member of the Newport Borough Council or Gwent County Council I should certainly be concerned about that aspect. I feel a great deal of sympathy with those members. I also congratulate my noble friend Lord Stoddart on his eloquent exposition of the needs of Newport and of its population, particularly the younger members. However, I am still not convinced that a barrage is necessarily the only way. Of course, I am very much influenced in my opinions by the overriding consideration, as the noble Lord, Lord Crickhowell, made clear, that there still remains opposition from the major statutory authority in charge of river quality and usage; in other words, the NRA. I have before me, as others of your Lordships will have, a copy of its petition against the Bill. In paragraph 18 the authority specifically states that it objects to the Bill and in subsequent paragraphs the reasons are spelt out. Also included are doubts about the financing of the scheme as well as about fish stocks, flood defences, water courses, water quality and so on. Those views are repeated in the final paragraphs 41 and 42.
Although, since the petition was first before us, some further progress has clearly been made, there remain substantial difficulties which really ought to be solved, preferably before the barrage is built. It is easy

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enough to say that you cannot tell much about it until after the barrage has been built, but if you are going to have a barrage of the dimensions described by my noble friend it is difficult to suppose that you can do much about it after the event. I must say that I find this a very difficult situation indeed.
I am particularly worried by the fact that, as I understand it, the main study for the proposed barrage was carried out several years ago when barrages and marinas were at the height of their popularity. Since then the cost-benefit analyses have become a good deal less assured, and the bright, blue waters of the advertisements are greeted with growing scepticism. Legislation to sanction the Cardiff barrage is expected to emerge some time in late autumn or even next spring from the other place. One is tempted to suppose that it might be better to see how Cardiff gets on and then try to avoid its mistakes.
Meanwhile there have been several important developments in government thinking about how we should handle the very intricate problems of coastal protection and planning, including the estuaries and inter-tidal areas. I do not know whether all your Lordships have yet had an opportunity to digest the Government's response to the very impressive report from the Commons Select Committee on the Environment. This we could obtain, I think, only last Friday morning; so no one has had much time to take it in. However, it makes some extremely interesting and important comments upon the difficulty of dealing with these very intricate areas in the environmental scenario.
We have already recognised that the Usk estuary is one of the most important examples, not just in Britain but in the world, by reason of its extreme tidal range and its fast-changing upstream flow characteristics, which ought not to be entirely overlooked. These are challenging conditions, far beyond what the relatively small size of the river might suggest. It is not just a matter of the salmon fishermen against the rest, although it is easy to suggest that this is so. There are other matters which plainly have to be dealt with, with very considerable skill and concern. In addition, we are not sure how far the conditions in the report to which I have referred, and the Government's response, will be carried. If, as is customary in this House, the Bill secures a Second Reading and the Instruction moved by the noble Lord, Lord Moran, is accepted, the Select Committee on the Bill will have a daunting task adequately to examine all the pros and cons of the proposals.
This brings me to another consideration which has come about since the first presentation of the Usk Barrage Bill; namely, the Transport and Works Bill, which became law in March this year. Its main purpose was to transfer the kind of intricate local problems we are now facing in the River Usk Barrage Bill away from the Private Bill procedure altogether. The argument is that it would be far better to deal with such matters through ministerial consideration combined with adequate local public inquiries. I would refer your Lordships to paragraphs 40 to 43 of the report which we received last week, Coastal Zone Protection and Planning. The report emphasises that
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Private Bill procedures in such situations can prove cumbersome, expensive for objectors and remote from public scrutiny and it recommends that they should be less frequently used.
Of course it is obvious that we would be obliged in this instance to follow the customary Private Bill rules, as the Bill was presented before the Transport and Works Bill reached the statute book. But the procedural thoughts strengthen some of the arguments so ably deployed by the noble Lord, Lord Moran, and touched upon also by the noble Lord, Lord Crickhowell. We are very much indebted to both noble Lords. I hope that the Select Committee to whom, no doubt, this Bill will be referred, will not find its task too overwhelming but will give us some firm guidance as to how we can proceed in a very puzzling situation.
6.47 p.m.
Lord Rees: My Lords, I intervene in the debate with some diffidence. I can hardly now describe myself as a fisherman. I am not an expert on water management and I am not really a botanist. However, I am a resident of Monmouthshire or, as I suppose one must now call it, the county of Gwent, and I hope that I may welcome the noble Baroness who has just sat down as a neighbour, albeit a distant one. I am also a local government taxpayer and of course a central government taxpayer, and therefore I hope it is right for me to express some concerns that I feel about the measure.
I am full of sympathy for the aspirations of Newport Borough Council, at least as they underlie the proposals embodied in the Bill. No one visiting Newport regularly, as I do, can be impressed by the sight of the river and its banks at low tide. The noble Lord and the noble Baroness who preceded me have commented on that, and I find myself in total agreement.
It must also be right to control the discharge of raw sewage out of the Usk. There may also be a case for a further downstream crossing; that is to say, downstream of the present bridges. If all these proposals result in the creation of a pellucidly clear 11-kilometre or 11-mile stretch of water and if it can be financed by the creation of acres of amenity and development land, then we can all applaud—provided of course that all this can be achieved without detriment to the residents, fishermen, farmers, landowners and businesses further north in the county.
So many of your Lordships are highly informed about the likely impact of the barrage on the migration of salmon, twaite shad—a fish which I must confess I have never killed and have not even consciously seen—eels and other fish that I would not presume to make a point on this, or indeed on the economic impact of any restrictions on migratory runs, on riparian owners, anglers, hotels, and the population generally. No doubt such issues will be the subject of exhaustive inquiry in due course by the Select Committee. Nor will I weary your Lordships with my view of the likely impact of the barrage on the bed of the river upstream and the quality of water

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there, in particular if heavy rain carries down a mass of silt. My noble friend Lord Crickhowell said that he was half way to being persuaded that that might be remedied in some way. I am happy to leave all those aspects to expert witnesses who will no doubt be called before the Select Committee.
I will not add any comment about the need for further bridges or crossings over the Usk except to remark that that must be considered in the context of the projected second Severn bridge. We have been asked to consider the proposal in a rather narrowly parochial context.
However, I wish to comment briefly on the financial impact of the proposals. I must admit to not having secured the two reports commissioned from Coopers and Lybrand by Newport Borough Council. I was surprised to discover that no copies have been deposited in the Private Bill Office although no doubt copies will become available to the Select Committee in due course.
I hope that the noble Lord, Lord Stoddart, will allow me to say that I was also surprised that he did not touch on the financial implications either tonight in his elegant and lucid speech or in his earlier intervention in March of last year. As I understand the position, the major source of finance for this great project is the sale of development land along the banks of the river created by the barrage. I am prepared to accept that development land would be created. I am also prepared to accept that for some miles upstream of the barrage the river will be considerably improved, that the water may be purified and that the surroundings will become considerably more attractive than at present. But who can forecast with any confidence whether there will be a robust market for such land for office or recreational developments in the five, seven or 10 years' time that the project will take to develop? Perhaps when the noble Lord, Lord Stoddart, winds up he will tell us the estimated cost of those proposals.
What part of the costs is to be met by the borough council under the most recent substitute for rates proposed by the Government? What part is to be met by the county council? What part will be met and over what period by the sales of development land? It would be unfair to expect utter precision in answers tonight, but I am sure that it would assist the House if the noble Lord could offer some assistance when he winds up.
I wish to address a question to my noble friend Lord St. Davids who will speak on behalf of the Government. Perhaps he can enlighten us. If the calculations of Newport Borough Council have been over optimistic and the land either cannot be created or there is no robust market for the sale of such land—the timescale over which such land can be unloaded on the market may become important—will the full burden of the project be shouldered by the ratepayers of Newport, if I may so describe them, although perhaps inaccurately? Their enthusiasm for the proposal might be somewhat tempered if they learned of that possible risk. Alternatively, will the Government, perhaps the Welsh Office—I turn to my
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noble friend Lord Crickhowell, who has so much more experience in these matters—be prepared to shoulder part of such burdens? If my noble friend on the Front Bench cannot give an unequivocal answer, no doubt he will write to me and publish his views at a later stage.
I hope that if the Bill proceeds to a Select Committee, the committee will wish to address those matters and question how much private capital is likely to be drawn to Newport as a consequence of the proposals if they are implemented? I believe that in one of the Coopers and Lybrand papers a ratio of £11.8 of private capital to £1 of public capital has been suggested. If that is so—I admit candidly that I have not had an opportunity to read the paper—I should like to know the basis for the suggestion. It would be churlish for me to draw any analogy with Canary Wharf, although the proposers of the Bill may care to ponder on some of the lessons to be drawn from that melancholy scene. But it is right to observe that Newport will probably be in keen competition with the development of Cardiff Bay, a matter obviously well known to your Lordships.
In conclusion, although I shall not vote against the Bill tonight, since, as I said earlier, I am in sympathy with the aspirations of the borough council—at least on this matter, although I do not back all their political views—I unhesitatingly support the Instruction proposed by the noble Lord, Lord Moran. If the noble Lord will allow me to say so, it shows the hand of one well versed in the drafting of important papers of state. The Instruction raises most of the questions on which I and others outside this House will require reassurance. Unless I receive such reassurance in the months to come, I shall find it difficult to support the Bill on Third Reading.
6.56 p.m.
Lord Mason of Barnsley: My Lords, my interest is
in the conservation of salmon. Over the years I have drawn the House's attention to the North-East drift net fishery in which the indiscriminate use of nylon monofilament gill nets constantly threatens the salmon on their way to the spawning grounds of the North-East of Scotland. I mention that as an example over which the Government are relatively inactive. They take no positive steps to curtail that activity. If the Government are so complacent on salmon conservation, I have no faith in the Government if the Usk Barrage goes ahead. If the local authority, the developers, or whoever are in authority over the barrage, are not interested in salmon conservation, salmon stocks are threatened. We could not therefore look to the Government for help. Therefore, we have to be assured at the outset on the preservation of the salmon in the River Usk after the barrage has been built.
As a council member of the Salmon and Trout Association—I express the association's views—and a rod and line fly fisher, I take an interest in such affairs. However, I have my doubts about the Bill. There is no doubt about the widespread opposition. Many conservation and environmental interests are opposed. The Salmon and Trout Association and the

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National Rivers Authority in particular are anxious. Those are no mean bodies. The Salmon and Trout Association is a national association of great repute and standing in the fishing world. The National Rivers Authority is now well established and ably led by the noble Lord, Lord Crickhowell. Its theme, to be guardians of the water, plus its regional organisations, established to preserve our rivers, increase the quality of the waters and develop, maintain and improve our fisheries, is a legislative requirement, a statutory duty. It is on that latter point that I believe the NRA's Welsh Fisheries Committee has serious doubts that those policies and objectives can be pursued if the Usk Barrage goes ahead.
With that background, one has to recognise that the River Usk is one of the major game fishing rivers in Wales. It also has a large commercial and recreational salmon trout fishery. The worry of the Welsh Fisheries Committee and the Salmon and Trout Association is the effect that the barrage will have on the natural migration of the salmon and sea trout. They fear that severe damage may he caused to fish stocks and that much of that damage could not be repaired by restocking.
I appreciate that anxiety, as chairman of the Anglers Co-operative Association, a national organisation representing thousands of anglers and angling clubs. The organisation takes the polluters of our members' waters to court when their beat, river or lake has been polluted and thereafter replaces fish stocks. But it is never the same. Indeed, just as we fear with the Usk Barrage, the River Usk's ecology could be permanently impaired. In that respect it is best to conserve what we have; the present natural river environment is preferable to the many unknowns and imponderables which we fear from this development.
I understand that the National Rivers Authority believes that restocking the river would be difficult and expensive and even considers the task to be impractical. If that is true the Salmon and Trout Association, the Welsh rivers and fisheries committees and the N RA would continue to oppose the barrage. Salmon conservationists also believe that the genetic composition of the Usk salmon would be endangered.
It is likely that the Usk Barrage would impair the quality of the river, change its ecological structure and adversely affect the quality, quantity and genetic make-up of the Usk salmon. If all that were placed in doubt anglers and tourists would know that the River Usk and its local environs had lost its attraction and that would cause a serious rundown in the local economy.
From the speeches we have heard it is obvious that there are grave doubts about the development because so many important organisations seriously question it. Indeed, the number of petitions of opposition is constantly rising and now stands at 47. I am sorry to inform my noble friend Lord Stoddart that my doubts still exist. As he said, the effects on salmon cannot be truly predicted until the barrage and the pass have been built. By then it will be too expensive and too late.
7 p.m.
Lord Kimball: My Lords, as a fisherman there is little that I can add to what has already been said by the noble Lord, Lord Moran, and by my noble friend Lord Crickhowell. I speak as chairman of a salmon district fishery board and I wish to mention a problem that has not yet been dealt with. The noble Lord, Lord Stoddart, said that the fish would get over the barrier by swimming through the system of a lock as big as this Chamber and by being able to get over the weir at certain levels of the tide. One clear fact, not yet stated, is that any artificial obstruction which delays the passage from the sea of a salmon, or grilse, immediately reduces the enthusiasm of that fish to take. Any form of artificial obstruction spoils the sport.
Your Lordships may be aware of Dr. Mills' comment in the Spring 1989 report of the Atlantic Salmon Trust. He pointed to the abandonment of cruives and fish passes throughout the salmon rivers of Scotland, telling a sorry tale of their proven failure. Furthermore, it is true that in any run of fish one will catch a lower percentage if the fish have had to pass over a natural barrier. Any obstruction reduces the sport.
I and members of my fishery board have doubts about the damage caused by some of the new fish counting devices which everyone is so keen to install. They comprise of an electric current passing through a weir and cause less of an obstruction than what is proposed in the Bill. However, it is significant that even the small obstruction of a modern fish counting device on the River Torridge in Devonshire has spoilt the sport. The device has been abandoned on the famous Laxford river in Sutherland, having been proven to be detrimental to the sport.
What has happened in the case of another authority which began to obstruct our rivers; namely, the North Scotland Hydro Electric Board? It admitted that its dams and weirs would spoil the sport and therefore they bought out the angling rights. I have seen not even a suggestion that the promoters of the Bill might buy out the angling rights along the river above the weir. Noble Lords will know that in the case of the North Scotland Hydro Electric Board many of the angling rights were restored later, using artificial stocking and many expensive means far beyond the pockets of the existing riparian owners. As the noble Lord, Lord Mason, said, fishing in those restored rivers is not the same as in natural rivers. The noble Lord, Lord Crickhowell, dealt with the equally important problem of how the migratory fish smolt. How will the smolts get back to the sea without being damaged by the artificial obstruction at the mouth of the river?
My second concern is the problem—not so far mentioned—which Members of this House face as regards Private Bills. My concern has been reinforced by my experience on the committee dealing with the Calder Valley River Bill which sat for almost a year during the previous Session. In that case the local authority, using ratepayers' money (or poll tax money, or whatever) promoted the Bill. Often that can involve unlimited expense. The petitioner—in this case

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there was only one petitioner—out of his own pocket had to employ Queen's Counsel and expert witnesses to put the case. Even if the doubts are upheld and the petitioners win in the end, under our procedure there is no system for them to be awarded costs.
Erskine May states that there is little precedent for the Second Reading of Private Bills to be debated and that certainly there is no precedent for them to be thrown out on Second Reading. However, I remind your Lordships that in 1937 this House threw out the North Devon Water Bill because it would destroy the fishing in the Devonshire rivers. Subsequently, the House threw out the North Devon Electric Power Bill on Second Reading. Therefore, there is a precedent for throwing out such Bills on Second Reading.
Having regard to the doubts which have been expressed tonight and the number of petitions raised against the Bill one is tempted to throw it out on Second Reading and not to put the petitioners and all the riparian owners throughout the rest of the watershed to the expense of appearing before the committee and employing expert witnesses and counsel.
We must hear the rest of the debate before reaching a conclusion. However, I suggest to your Lordships that, in view of the number of petitions against the Bill, there is sound precedent for saying "Not Content" to a Second Reading.
7.7 p.m.
The Earl of Clanwilliam: My Lords, I spoke in a previous debate on behalf of the Bill. It is always a pleasure to follow my noble friend Lord Kimball and to hear his moving appeal in the cause of sport. That subject has been the main source of tonight's debate. Perhaps it has become a case of town and gown with the NRA sitting in the middle as proctor, but I do not know whether the noble Lord, Lord Crickhowell, will accept such a suggestion. Certainly it is a case of the council versus game fishing interests.
By definition, therefore, two interests are involved and your Lordships have said that fishing is the most important. I suggest that the town of Newport deserves a great deal more respect. Two needs must be addressed; those of the town of Newport and those of the the fishing interests. Perhaps I may deal first with Newport. It has a rundown port area which has been in decay since coal shipping ceased, which was long before the end of coal mining there. It also has a decrepit housing stock and unemployment at 50 per cent. above the national average. The area is part of the Severn estuary, which means a 13 metre tidal rise and fall. There are 20 feet of mud banks at any one time and at low spring tides they will be about 40 feet for one week in four.
There are 18 raw sewage outfalls which must be dealt with in any event. However, that is part of the scheme. Only those of your Lordships who have toured the area can imagine the soul destroying aspect of that part of our country. The council has vital responsibilities to restore the area and we must examine what it has done.
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First, it appointed Coopers & Lybrand. That is a firm of experts and when one pays for an expert, one expects to take his advice. A consultation paper was prepared and ERL has been retained to act as consultants, as it was on the Mersey Barrier and the Thames Barrier. That company was commissioned to evaluate tidal conditions and water quality. The consultants prepared comparisons for a bridge and a barrage but they came down firmly on the side of the barrage which would provide total regeneration of the area by cleaning up the mudbanks and rebuilding the rundown immediate area of the port. All plans are vital to the human aspect of regenerating housing, providing employment and paying for a totally new sewage system, which is required in the name of common sense as well as required by the EC. It is clear that only a barrage can overcome the mud flat problem and, no less significantly, prevent upstream flooding, which is an important matter during spring tides and sou'westerly gales.
There is a considerable demand for factory space in the centre of town and on the banks of the river. That has been clearly established by the noble Lord, Lord Stoddart. Coopers & Lybrand has estimated that 8,500 new jobs will be created and 4,200 man hours of construction work during the seven to 10 year period required to build the barrage plus the labour and infrastructure benefit from the construction of the barrage. Those may sound extravagant figures but Newport is quite clearly able to run parallel with Cardiff and the attraction of business to that area is well established.
The Newport business plan is not a kind of Canary Wharf project. There is no City of London corporation which can suddenly increase its business area by one-third by altering its by-laws. The demand is there; it is clearly demonstrated.
The noble Lord, Lord Stoddart, has already spoken of the business which has been brought into the town. Coopers & Lybrand estimates that 25 million square feet will generate £44 million per annum of increased income to the area at a cost of £70 million. I am sorry that my noble friend Lord Rees is not in his place to hear that. That would be as a result of introducing 8,500 new jobs.
In respect of the demand for space, Coopers & Lybrand said:
"First, demand may be growing at a rate over the medium term which can only be met by increased supply from both Cardiff Bay and Newport. Second, the development potential at Newport may be different in scale and nature from that at Cardiff Bay and therefore not competitive. Third, developments at Newport may offer greater choice to inward investors in the region and may therefore enhance demand for location sites within it".
I shall not continue with that, but there is a firm case for regenerating the area and for putting new business into it. That strong case is borne out by professional advice and in terms of the instruction proposed by the noble Lord, Lord Moran, it will be clearly shown by expert evidence to the committee that business wants to come and will not come while the mud-flats are there. In my opinion, the barrage will answer those problems.
There will be a constant flow of water through the impoundment with complete water change every 1.4

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days in normal conditions. The barrage will allow partial water intrusion into the lake on 58 per cent. of tides when salmon will be able to migrate upstream without hindrance. They will be able to migrate upstream over the sill for two to two-and-a-half hours per tide.
On the other hand, with the flushing rate every hour, there would be a rate of one cubic foot per second providing that flow through the lake at all times. Therefore, there will not be an impounded lake which is absolutely still. The flow of water will be 235 cubic metres per second. That shows that there will always be a stream against which the salmon can swim. They will wait to get over the sill because they do that when they wait for the tide.
With regard to fish locks, there will also be a permanent flume of water flowing through the fish locks which will attract fish and will give them an opportunity to continue into the fish lock and then be transported upstream in a positively Rolls-Royce manner.
As regards the economics, I believe it is agreed that between 1986 and 1990 on average 560 salmon were caught each year. According to The Times recently those catches generate a capital value of about £6,000 per fish. Therefore, if my calculations are correct, that gives a capital value of £3.5 million for salmon fishing in the Usk. At 10 per cent. per annum that is an income of £350,000 per year. The barrage will generate £44 million per year. Surely we must put the human scale into context.
Of course, that is only part of the equation. We must also consider the remit of the National Rivers Authority, as clearly stated by my noble friend Lord Crickhowell. There is a requirement that fishing quality should be maintained. I believe that expert advice to the committee will be able to convince it that while quality may change it will not be damaged.
On that point, I recall that my noble friend Lord Crickhowell has only recently had to take fairly strict measures against the local water boards in southern England, which have allowed six fishing rivers to run dry. That surely points to the fact that there is a human factor involved in the requirement to look after fish stocks and to provide for human need.
The barrage will not stop all salmon. As my noble friend Lord Kimball said, there may be a reduction but they will not disappear completely. We are advised that while fishing methods may change at the head of the impoundment, the catches will not be affected because the number of salmon will probably be the same, although they may not be catchable because they will be going upstream at a different time of the season.
The council has made proposals and suggestions supported by professional advice to the NRA. The noble Lord, Lord Crickhowell, explained that in some detail, so I need not do so. The authority is obviously not satisfied at present. I hope and pray that the committee will be allowed to receive sufficient professional advice to proceed with the Bill. In particular, I believe that ERL, which has been responsible for the hydraulic research, fish pass and
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barrage design, has established new theories regarding siltation which were not known previously to the NRA but are now accepted.
Water quality and algae bloom are another problem. It is again recommended and believed that that can be controlled, as my noble friend Lord Crickhowell agreed. If there is a requirement for the fish rights to be bought out, perhaps the council may consider buying them for £3.5 million against an investment of £70 million with £44 million income. I should have thought that that would not be a problem.
I have given only a brief review of the appraisal. Detailed facts and proposals are available for the committee, to which I thoroughly recommend the scheme.
Lord Moran: My Lords, before the noble Earl sits down perhaps I can remind him that at the outset of his earlier speech he declared a personal interest. I wonder whether he can tell the House whether that personal interest still applies or whether circumstances have changed.
The Earl of Clanwilliam: My Lords, I have a relation who is employed by the lobbyists for the Bill. However, I speak entirely from my own conviction, having been to Newport and seen the area.
7.21 p.m.
Lord Morris of Castle Morris: My Lords, no one born and bred in Cardiff as I was can fail to have an interest in the future and fortunes of our neighbour, sister and rugby rival, Newport,11 miles upriver. I must also declare an interest as a trustee of the Campaign for the Protection of Rural Wales, which is concerned about the presentation and progress of the Bill. I help to look after its money though I stress not a penny of it comes to me.
Clearly the barrage and all that goes with it offer considerable benefits and opportunities to Newport. The borough and the county are to be congratulated on the enterprise and energy with which they have developed the Bill before us, so ably presented by my noble friend Lord Stoddart of Swindon. Equally clearly, no benefit comes without cost; there is no such thing as a free barrage and we must weigh the one against the other with the presumption that we should seek to satisfy legitimate objections if we possibly can.
When the Bill came before your Lordships' House for Second Reading four months ago, a number of noble Lords pointed out the piscatorial problems and they have not lacked their defenders today. I marvelled then as I do now at the mysteries of the modified Borland lift. It is clear that the kelts, smolts and twaite shad have many and vigorous defenders to protect their interests. My concern has been engaged more with the hydrological and geological consequences of constructing a barrage both on the rural and, more especially, the urban environment of the river.
Newport Borough Council has long been aware of the problem that the barrage would create in the disturbance of water levels and particularly the groundwater in the area immediately adjacent to the barrage. Since the first Second Reading—if I may put

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it that way—we have had added to the Bill the clauses, amendment and the new and extensive Schedule 5. However, Malcolm Fraser, the arboricultural officer for Cardiff City Council, studied the nature and location of trees and amenity areas in and around Newport. His report makes clear that, as a result of the barrage, tree cover will certainly be lost or at least reduced in quality and health. The fabric of the landscape and public open space areas will be seriously affected making them in some cases sterile and unusable, particularly during the winter. The financial implications of those facts will be considerable and yet they seem, as yet, not to have been taken into account.
But trees are only a minor problem. The borough council was aware that the groundwater levels were an unknown factor in the proposal. To its credit it commissioned a report by its consultant engineers, Rendel, Palmer and Tritton—known as the RPT report. Even to a layman's eye—and in these matters no eye is more lay than mine—the RPT report leaves some questions unanswered and some unasked. The Campaign for the Protection of Rural Wales sought a second opinion from Dr. John Miles of the School of Engineering in the University of Wales College of Cardiff. Dr. Miles has studied at some length the potential groundwater effects of the proposed Cardiff Bay barrage and is clearly well equipped to report on the Usk barrage scheme.
Dr. Miles, in his report, has a number of technical objections to the RPT report on such matters as the relevance here of the concept of "classical valley sink situation" and perched water tables. But his central criticisms are, first, that he does not believe that RPT has made any serious attempt to calculate the hydrological budget for the lower Usk valley and, secondly, that there are serious shortcomings in the standard of its groundwater modelling. He concludes,
"Given that the crude financial value which could potentially be damaged by the impoundment of water … is of the order of £100s of millions, not to mention the potential ecological damage then RPT's lack of understanding of the groundwater flow mechanisms is extremely worrying".
Even from an academic, those are stern words.
There is considerable detail behind that conclusion. Dr. Miles analyses the likely leakage from water mains in the urban area; the RPT report does not. Dr. Miles is sternly critical of RPT's investigation of leakage to sewers, estimated at 10 per cent. of the flows in the sewers. Dr. Miles comments,
"Given the number of guesses necessary to arrive at this figure it must be regarded as being a very crude estimate".
He is equally worried about the RPT's "groundwater modelling" which, as your Lordships will recall, is the name of a process which involves the use of computer programs containing equations based on the fundamental laws of groundwater motion, to try to represent what occurs in reality. Although that sounds rather difficult, it is not particularly difficult to do. Programs are readily available and the computing power required can be provided by any personal computer bought in the high street. As Dr. Miles said,
"So for a few thousand pounds anyone can set themselves up as a groundwater modeller".
All the more serious therefore is his conclusion that,
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"all that can be concluded from a study of RPT's modelling is that they have little appreciation of how groundwater currently moves in the Usk valley. One cannot determine from their results what the significance of vertical flows through the alluvium are likely to be, how much water flows through the gravels and marls to the river and how much of the incoming water budget is removed from the made ground by the sewers".
The urban areas' impact could be grave. Land drains would be required, possibly spaced 20 to 30 metres apart. Think what that would mean in a block of terraced houses. Pumps would not solve the problem, especially beneath large buildings where there is the possibility of water leaking up through the floor slabs. Considering the effect of the proposed barrage on groundwater levels, Dr. Miles ends his report with these words,
"In some areas of Newport, groundwater levels will rise to the surface, leading to swamp conditions. Also in the rural parts of the valley there will be some areas of land that will be lost although the extent of such land is likely to be small".
The publication of Dr. Miles' report shattered any complacency the residents of Newport may have felt, and initiated an intense public debate which is still continuing. Newport Borough Council has now resolved to offer compensation to reassure its citizens of the efficacy of its barrage proposal. Accompanying the current version of the Bill is a fairly extensive piece called,"The River Usk Barrage Bill (Additional Provision)". The additional provision is a late addition to many documents which we already have on the proposal. That in itself may cause your Lordships to wonder whether everything that it is necessary to take into account, has been taken into account.
It is certainly an earnest of good intentions on the part of the proposers but there is as yet no clear understanding of the extent and nature of the groundwater problem. Certainly until there is such an understanding there can be no accurate computation of the costs which may be very considerable. That additional provision which comes with the Bill offers a kind of insurance without knowing the risk which is being insured against. Details of compensation are not clear and it is not known what funds are available or will be available to meet it.
I believe that it is beyond doubt that the effect of the barrage on the groundwater situation in Newport and upriver has not yet been satisfactorily studied. If the RPT report is as imperfect as Dr. Miles suggests, the cost of the scheme might be many millions of pounds. We have no reassurance that Newport Borough Council has taken that fully into account.
Mr. John Bowers of the University of Leeds Business School, was also commissioned to make a similar examination of the economic appraisal made for Newport Borough Council by Coopers & Lybrand Deloitte. Without going into detail, Mr. Bowers clearly expresses many reservations. He is quite unconvinced about the likely development demand from entrepreneurs in the various scenarios. He concludes:
"All that the barrage in fact achieves in addition is to create conditions akin to a permanent state of high tide".
So there are unresolved doubts about the effects of a barrage on the water-table and about the economic

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appraisal, and questions remain about such crucial components of the scheme as the leverage ratio for the barrage option which, as Mr. Bowers points out,
"at 1 to 11.8 is higher than the schemes cited as comparable and similarly much higher than has been calculated for the Cardiff Bay barrage".
The most important petitioner against the Bill is without question the National Rivers Authority. We have heard authoritatively about it tonight from the noble Lord, Lord Crickhowell. The NRA is concerned about the impact of the barrage on its statutory responsibilities. In its most recent position statement the NRA seems more or less satisfied with the situation proposed for flood defence, but it still has grave reservations about fisheries, conservation and water quality.
The Committee of your Lordships' House to which I fervently hope that this Bill will be committed, will need to give close and rigorous attention to satisfying itself on these matters if this Bill is to proceed successfully. I have commented only on the hydrological, geological and economic considerations though they, likewise, still present unresolved difficulties.
Writing so long ago as 1651 the great poet of the River Usk, Henry Vaughan, the silurist, born at Trenewydd and buried within sight of the river at Llansantffraed, said, prophetically, of the River Usk:
"In all thy Journey to the Main
No nitrous Clay, nor Brimstone-vein
Mixe with thy streams, but may they passe
Fresh as the aire and deer as Glasse".
Let us hope that this Bill may achieve a similar tranquil and unimpeded passage when all the reservations which we have heard about tonight have been removed.
7.34 p.m.
Viscount De L'Isle: My Lords, perhaps I may first thank my noble friend Lord Crickhowell for his kind remarks about my father, who spoke at the last Second Reading on this matter 14 months ago. I must immediately declare an interest in that my stepmother and stepsister are riparian owners on the banks of the Usk. My father and stepmother married in 1966 and in the ensuing 26 years on many visits I have learned to admire the unrivalled Usk Valley with its swift-flowing stream where salmon have run since time began.
Any fast-flowing river brings enchantment not only to fishermen, which I am not, but to lovers of nature and countrymen who can delight in living waters that are pure enough to allow the annual passage of these magnificent migrant fish up and down stream.
The Newport Borough Council proposes a barrage scheme. The purpose of this scheme is not to prevent the occasional flood nuisance, but is principally cosmetic. Cloaking unsightly mudbanks in water, it is hoped, will encourage development of a run-down area of Newport in a manner similar to the Cardiff Bay project.
The impounding of the water will make it difficult for migratory fish which include salmon and the twaite shad, which we have heard so much about in this debate, to make their passage upstream through a
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redesigned but still unproven, fish ladder into an area of impounded water which the National Rivers Authority is still not convinced will be of sufficient quality. That does not bode well for both fish and other wildlife dependent on the fragile ecology of a swiftly-moving river.
Were this Bill to pass into law it would be too late to reverse the damage it would do to the wildlife along the Usk, as so many noble Lords have said this evening. Gwent County Council and Newport Borough Council are attempting with this scheme to regenerate the economy of a part of Newport. The result further upstream will be to damage the fragile rural economy which is becoming more reliant on fishing to generate income as agriculture and local industry enter a deepening recession. Fishermen and their families visiting the Usk provide employment for ghillies, river keepers and support many hotels and bed and breakfast establishments. The impact of the estimated £650,000 per annum spent is greater than the sum suggests.
Should the barrage be built many of these jobs and businesses will disappear and the landscape will be damaged as it will no longer be economic to maintain it, thus further damaging wildlife habitat with the consequent effect on flora and fauna on the river banks and flood plains. Here lies the dichotomy. We are told that the barrage will bring a new economic dawn to Newport while its effects could drive the Usk Valley, its people and wildlife, into a dark abyss.
In summary, I should like to quote from Hansard of 13th March 1991 (cols.279– 80) which was the last time that my father spoke in this House at the first Second Reading of this Bill. He said:
"I am not persuaded that the reasons for the barrage scheme are in any way connected with the preservation of this great natural resource. Shortly after the Second World War, Alexander Cordell wrote a book entitled The Rape of a Fair Country. It called attention to the unhappy industrialisation of so much of the beautiful countryside of South Wales in the 18th and 19th centuries. I hope that this House, and Parliament in general, will not earn itself the title of the rapist of a fair river".
That is a view with which I heartily concur.
7.38 p.m.
Lord Elibank: My Lords, I intervene in this debate not because I have any intimate knowledge of Newport, but because I was a Member of your Lordships' Select Committee on the Cardiff Bay Barrage Bill. A number of the problems which occurred in that Bill have appeared in this one although a number of the details are quite different. One of the most serious problems as regards the Cardiff Bill was that of groundwater which, until the noble Lord, Lord Morris, spoke, had been largely ignored in the debate and indeed in much of the documentation and reports that preceded it. It forms one section of the NRA's petition and that is the only objection to it that I know of so far. The noble Lord, Lord Morris of Castle Morris, did well to raise that as a serious point.
The Cardiff Bay Barrage Bill contained elaborate provisions for compensation for those householders who might be affected by groundwater. There were provisions for inspection both before and after the

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barrage was constructed and for compensation as appropriate. Your Lordships' Select Committee thought that those provisions were not adequate, and we enlarged them. The Bill then went to another place where it had a rather chequered history. I understand that the chief item of contention there also was the effect of groundwater.
We are talking about a serious problem because it affects what for most of us is our principal investment in life—one's house. Damage to one's house can be catastrophic, affecting one's financial position and one's sense of personal security. However, a groundwater problem is not insuperable. It can be dealt with both by proper engineering investigations and testing, and by proper measures for compensation following such testing. However, as the noble Lord, Lord Morris, pointed out, that is expensive and it will be a likely burden on the promoters of the Bill, I suspect.
I have only two thoughts on the issue of fish. The first is that all fish passes seem to be unique. There are special conditions surrounding each river and the tides affecting it. That means that there is no standard accepted model to which we can turn with total confidence. Each fish pass is an experiment in itself and its success or failure can only really be measured when it is in place. Therefore, one goes ahead with hope and perhaps with a measure of confidence, but there can be no measure of certainty.
My other thought about fishing echoes the views of the noble Earl, Lord Clanwilliam, who is not in his place. Where there is a conflict, as there inevitably is here, between those who are keen fishermen, those anxious to protect fishing rights, the fishing industry and the sport of our country and between the citizens of Newport, it seems to me that, if no other issues are involved, we must get our priorities right. No concern about salmon fishing—or about any other fishing—should supersede the citizens of Newport's requirements for financial prosperity. Although I realise that it is not a straight question between fishing and the barrage and investment, that is certainly one of the main subjects that has arisen in this debate. There is a strong fishing lobby—and very good luck to it—but as the noble Earl, Lord Clanwilliam, said, we must bear in mind the fact that the wishes of the citizens of Newport must surely come first.
I have one postscript under this heading, and it is about mud flats. I, too, find mud flats varying between the boring and the positively repellent. However, in your Lordships' committee I was quite surprised to hear the number of petitioners who actually liked mud flats, who appreciated the rise and fall of the tides over a 24-hour cycle, and who found that much more attractive than, as they would see it, a rather sterile lake. That is a minority view, but it is a quite strongly held minority view and one that we should perhaps bear in mind.
When I came to the debate I had assumed that most of your Lordships would have a copy of Coopers & Lybrand Deloitte report, but it seems that that is probably not so. The noble Earl, Lord Clanwilliam, has however given a fair summary of most of its
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proposals. It purports to make a comparison between the results of the barrage proposal, of a high level bridge and of a low level bridge—I suspect that Coopers & Lybrand Deloitte was instructed to do that by the council—but it gives a slightly unreal element to the report because it is pretty clear from reading that and the other reports and documentation that Newport either goes ahead with its barrage or does nothing specific in that area. Other alternatives seem to me to be unrealistic.
The report is very clear about the increasing shortage of development land in the Newport area. Apparently, development took place fairly recently along the M.4 corridor where a number of sites that were suitable for development were duly developed. That source of land has now apparently largely disappeared. Paragraph 412 of the Coopers & Lybrand Deloitte report states:
"In our assessment, supplemented by the results of our survey of developers, investors and property agents, it is unlikely that much development discouraged from M.4-adjacent sites would take place elsewhere in Newport without the barrage or other major activity".
I take that to be something quite divorced from the barrage proposals. If one relies on the judgment of the report, it is the barrage or nothing.
I should like to make just one or two points in conclusion. There is a very real risk that Cardiff will prove a serious rival to Newport. Again in the Coopers & Lybrand Deloitte report it is said that Cardiff will attract the major users of land—the bigger firms—and that Newport will satisfactorily accommodate smaller firms and somewhat smaller businesses. I think that that is quite unrealistic. Firms will no doubt examine both sites and will make their judgment on the attractiveness of both sites. One must accept that if the Newport barrage goes ahead, although late in the field it will be a rival to Cardiff and there will be competition between the two for industrial development. I am optimistic enough to think that there will be enough business for both, but that is perhaps an article of faith.
The report also deals fairly comprehensively with the economic evaluation of the project. The noble Earl, Lord Clanwilliam, has already mentioned some of the most important figures in the report. To me, it is almost a subjective thing. It is a question of how far one considers what is largely a freshwater lake to be a positive attraction to a business that is expanding or seeking a new site for development. That is a matter of personal judgment. It is very difficult to produce figures to reinforce one's judgment on this matter one way or the other. I personally think that the barrage will provide an attractive site for building and investment, and I formed the same opinion about the Cardiff barrage.
The noble Lord, Lord Rees, mentioned the problems that might well arise over the price of development land and the estimates of capital sums that would accrue by sales of such land to potential investors. He commented—I think a little pessimistic-lly—on how calculations under that heading might go astray. An economist cannot tell us the economic position in five years time. We must all form our own judgment on it as best we may from the facts at our

77
disposal. Again, speaking purely subjectively, I am inclined to think that the situation will have improved; that land values will have improved and that both Cardiff and Newport will attract the kind of development that they want.
Finally, perhaps I may return to a point that I made earlier. We must look to the opinions of the democratically elected local representatives of the citizens of the County of Gwent and of the Borough of Newport. They have thought long and hard about this; longer and harder than anyone else. To them will come the success; on them will rest the price of failure. We must assume that they speak for their citizens and that they speak with a majority voice. They are firmly behind this proposal. I think that we should back them in that.
7.50 p.m.
Lord Prys-Davies: My Lords, this is a Private Bill and there is no party line. The views that I express from the Dispatch Box are therefore my own personal views. I should add that I have no interest to declare except that I have much affection for the historic township of Caerleon and its Roman remains which adjoin the banks of the Usk.
The Bill is similar to the one which was presented to the House in March 1991 and which was given a Second Reading. Your Lordships will therefore be familiar with the complex arguments for and against the barrage project. But the points which have been made today arc the points which were also made last time round the course. The Bill was then given a Second Reading. I believe it is fair to say that we in this House have regard for precedent. I therefore very much hope, notwithstanding the observations of the noble Lord, Lord Kimball, that the Bill will be allowed to be considered by the Select Committee which, as usual, will be unfettered in its examination of the Bill.
My noble friend Lord Stoddart in introducing the Bill set out very clearly its purpose and scope. He emphasised the conviction which is held by the elected representatives of Newport Borough Council and Gwent County Council that the Bill will attract new investment into that rundown part of Newport, which is to be found more or less in the centre of the city on both banks of the meandering river, and then provide much needed employment to the community and to its young people in particular. Many noble Lords have spoken in support of that objective in principle.
My noble friend went on to indicate that the project will bring other substantial benefits to the area. It should prevent the tidal flooding which has affected properties in parts of Newport with regularity in the past. We have heard how the untreated sewage outlets will have to be diverted. My noble friend also told your Lordships that the promoters, having taken advice, are satisfied that the barrage development is the best strategy for Newport.
However, there are 47 petitions which reflect the genuine concerns of local organisations, individuals and businesses, who believe that their interests or the environment will be damaged by the barrage. I have analysed these petitions. Of the 47 objectors,40 fear
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its impact on fish life—that is their main concern; 30 are concerned about damage to the ecology of the Usk Valley generally; 26 are concerned about water quality; 25 complain of inadequate compensation arrangements for the consequential loss that they might suffer; 20 fear siltation of the river; and 14 express some anxieties about the effect on ground-water levels and the lack of compensation provisions in the Bill. It is clear that the objectors have many friends in your Lordships' House today. I listened with great respect to the noble Viscount, Lord De L'Isle, who delivered a speech which was worthy of his father. There are concerns but we can be sure that they will be listened to with great attention by the committee to which I very much hope the Bill will be referred.
We have often heard this evening that the Usk has two distinguishing and dominant features. Of all the rivers of the world it is reputed to have the second biggest tidal rise and fall, with the result that the quality of its waters up to the tidal limit is constantly maintained by a natural flushing process twice daily. Some 26 of the objectors fear that the quality of the waters, either upstream of the barrage or downstream of the barrage, will be adversely affected because the barrage thrown across the river will effectively stop the cleansing process. On the other hand, we have heard from the noble Lord, Lord Stoddart, that the promoters believe that the water quality standards of the NRA can be achieved and maintained. I rather thought that the noble Lord, Lord Crickhowell, supported that view.
A second distinguishing feature of the Usk is that it is still one of the major salmon rivers of Wales. I was born and bred in the countryside and I have an appreciation of salmon fishing in Wales. The barrage will interfere with the free movement of salmon and other fish upstream and downstream. While the design of the barrage provides for the construction of a fish pass, I believe that there is agreement in the House that its detailed design may be the stiffest problem facing the promoters.
I do not intend to cause offence to any of the other objectors when I say that particular regard will have to be paid to the petition of the National Rivers Authority, which is the body with the prime statutory responsibility over the matters in question. We have had the benefit of hearing the noble Lord, Lord Crickhowell, giving us his assessment of the position as the NRA sees it. Indeed I was glad to learn from the noble Lord that there has been much co-operation between the promoters' experts and those of the NRA. But I saw when I read the petition that the NRA had not been satisfied, when its petition was filed, on a number of key issues. Indeed the petition seems to put the promoters to strict proof on several points. However, the technical advisers of the promoters and those of the NRA are by now in agreement on a number of issues which are mentioned in the petition.
Reference has been made by my noble friend Lady White to the Coastal Zone Protection and Planning Report, which was published last week. In fairness to my noble friend, I should say that she alerted me to the existence of the report. Your Lordships will appreciate

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that the promoters have not had an opportunity to study this important report. But clearly, wherever it is relevant, it will have to be considered and taken into account.
It is fair to emphasise that the promoters have been listening, as was acknowledged by the noble Lord, Lord Moran. During the 15 months which have elapsed since the original petition was deposited the promoters have undertaken further studies in order to see how best they can meet some of the outstanding concerns which have been voiced. On the question of the groundwater level, the noble Lord, Lord Elibank, who was chairman of the Select Committee which considered the equally complex Cardiff Bay Barrage Bill, has spoken with particular knowledge of that subject. One knows how people in Cardiff were concerned about the effect on their properties. Nevertheless, in the list of amendments before the House, we at least have an amendment which would provide compensatory safeguards for the people of Newport, if their properties are damaged. However, there is no concession at present that the properties will be damaged.
As I said, I believe it is fair to say that the promoters have listened carefully to what has been said and have come forward with certain safeguards. But, having said that, there will be outstanding matters. There will be issues which remain unresolved. We must all accept that fact. That is usually the case where there is a conflict of competing rights as there may be in this instance. Moreover, it seems to me that the standards of proof demanded by the promoters in some of the petitions imply that such standards have an absolute significance in every respect. Well, that will be a matter for the Select Committee's consideration.
Therefore, I trust that the Committee to which I very much hope the Bill will be referred bearing in
mind the fact that the first Bill was given a Second Reading and that, on the whole, we tend to follow precedents will form a judgment, after examination
of all the petitions which have been deposited and consideration of all the evidence relating to the matters in dispute, in the light of the best of existing experience and knowledge.
The Bill is important for Newport. That is the testimony of the leaders of the borough council, supported by their constituents. It is important for the Usk Valley and for south-east Wales. I believe that the Bill deserves a Second Reading and that it should then receive the very careful attention of a Select Committee in accordance with normal practice. Such an examination would be unfettered by any rules, except those in relation to a search for the truth.
With regard to the Instruction tabled in the name of the noble Lord, Lord Moran, at first I wondered whether it was necessary as the three considerations referred to therein are covered in one or more of the petitions. Nevertheless, I should have thought that the considerations would not cause any difficulty for my noble friend Lord Stoddart of Swindon, on the usual understanding that they are not mandatory but permissive. In the words of Erskine May:
"They"—
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that is, the considerations outlined in the Instruction—
"should not fetter the discretion of the committee in dealing with the bill".
The Instruction is not in breach of that principle.
8.3 p.m.
Viscount St. Davids: My Lords, I should like to give a brief indication of the Government's views on the Bill, introduced so eloquently by the noble Lord, Lord Stoddart of Swindon.
When a Bill to authorise the construction of a barrage across the Usk came before your Lordships' House in March 1991, the Government took a neutral stance. That is the position which, by tradition, the Government take on Private Bills. There is nothing in the Bill before us which lead the Government to take a different position. We have considered its contents and have no objections in principle to the powers being sought by Newport Borough Council. It is now for the promoters to persuade Parliament that the powers which they seek are justified.
My noble friend Lord Rees raised the question as to who would be the recipient of the ultimate liability should the promoters' financial forecasts be optimistic. That is a question that I shall answer in writing in due course. I am aware of the concerns about the possible environmental effects of the proposed barrage, especially the effects on migratory fish. A large number of the petitions against the Bill deal with that aspect. Petitioners will have the opportunity to present their objections to a Select Committee of this House which will, I am sure, want to examine the issues in detail.
The Government see no difficulty with the Instruction, to be moved by the noble Lord, Lord Moran, and would not wish to stand in your Lordships' way in the matter. I hope the Bill will receive a Second Reading and that it will be allowed to proceed in the usual way to a Select Committee for detailed examination.
8.5 p.m.
Lord Stoddart of Swindon: My Lords, we have had a long and most interesting debate. I do not quite know how I shall be able to pick up all the points—and the very relevant points that were made. I was pleased to hear the noble Viscount, Lord St. Davids, say that the Government's stance of neutrality had not changed since the Bill was last debated in your Lordships' House and that he believed the Bill should now proceed to a Select Committee so that it can be examined in detail.
I believe that noble Lords have done a service to the Bill in their remarks and, indeed, in the well-prepared speeches and points that were made. It is necessary that a Bill of this sort and magnitude, affecting as it does many interests and many people, should be given the time and attract the quality of debate that it deserves. I believe that we have had that this evening.
Perhaps I may now deal with some detailed points. I am glad to say that the noble Lord, Lord Moran, had a meeting with Newport Borough Council and its advisers. I am extremely pleased that he found those

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discussions helpful. There is no doubting the fact that the promoters want to be helpful; that is, not only to Newport itself, but also to the surrounding area. Indeed, they want to try to meet the objections of people who are at present opposed to the scheme.
It is true that 47 petitions have been lodged against the Bill. Of course, many involve the same objections, problems and worries. Nevertheless, those petitions have been lodged and they will have to be taken seriously. I hope that the Bill will proceed to a Select Committee so that such matters can be dealt with and argued in a proper manner.
I understand that the noble Lord, Lord Moran, accepts that Newport Borough Council and Gwent County Council are concerned about the interests of their people and that he finds the scheme acceptable; that is, in relation to the employment that it would provide and the improvements it would make in Newport. He feels that the major problem with the Bill is the risk to migratory fish, especially salmon—and, indeed, other fish—of extinction. That is something which must worry us all. I have to say, however, that the risk to migratory salmon over the past decades has not been from the proposed barrage, but obviously from other factors. I say that because rod catches have been reduced by such an enormous proportion over those decades. The noble Lord, Lord Crickhowell, seems to disagree. However, the records show that there has been a drop in rod catches over a period of time.
Lord Crickhowell: My Lords, I am grateful to the noble Lord for giving way. I should not have dreamt of intervening except for his reference. I was merely going to observe that our studies of all rivers suggest that it is rash to reach conclusions about this matter on short-term cycles. There are short-term problems and short-term cycles, but it is the job of the NRA, at any rate, to look at the long term and the potential and ability to restore a river to what it was in the past. I do not believe that we have any evidence to show that the problems in this river that have been confronted in the recent past are any more capable of resolution than they have been in other rivers which have been equally afflicted but which are now restored to the quality of days gone by.
Lord Stoddart of Swindon: My Lords, I would not disagree with the noble Lord, but I felt that I had to make the point that over the period I have described salmon catches have been dropping for some reason. We do not know what the reasons are. Perhaps we should do more to find out and to ensure that, whatever happens, rod catches increase.
I return to the Instruction of the noble Lord, Lord Moran. I intend to accept it. The promoters do not see that it presents a difficulty.
As chairman of the NRA, the noble Lord, Lord Crickhowell, has not just the right but the duty to ensure that any scheme on the River Usk will benefit the river, people on all stretches of the river, the fishing and the wildlife in the river. I hope that he will agree that Newport Borough Council, with its engineers and
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advisers, has kept up a constant dialogue with the NRA in an attempt to resolve the real difficulties and differences which exist between them.
I am sure that the noble Lord will understand that Newport Borough Council, the promoters, wish to continue the dialogue. However, when all is said and done, a decision has to be reached. We cannot argue the detail this evening. The detail will have to he argued in committee. Much of what the noble Lord said will be the subject of argument in committee. The committee will have to be satisfied that the borough council has met in full the objections of the NRA, in particular. The fears that he has expressed will be dealt with by the committee. He was right when he said that it was not possible to know the result before the event. That is the most difficult problem that the promoters and everyone else have to confront, but with the best advice available, Newport Borough Council believes that its proposals, especially the fish locks, will ensure that game fishing in particular is not damaged unduly.
The noble Lord said that agreement had been reached on water quality. That is so. The NRA is now more satisfied about flood control than it was when the Bill came before your Lordships' House in 1991. Some progress has been made. I hope that further progress can be made in due course.
My noble friend Lady White, whom I thank for her kind remarks about my opening speech, believed that substantial difficulties remain. As we heard, substantial difficulties do remain. She believes that we should see what happens to the Cardiff Bay Barrage Bill before we proceed with this Bill.
Baroness White: My Lords, I am not worried about the Cardiff Bay Barrage Bill. I am worried about Cardiff Bay's performance.
Lord Stoddart of Swindon: My Lords, I understand. But this is a different Bill, involving different impacts on the environment. It raises problems different from those raised by the Cardiff Bay Barrage Bill.
Baroness White: My Lords, both of them have bright blue water in their advertisements.
Lord Stoddart of Swindon: My Lords, my noble friend is obviously thinking about blue algae. While blue algae might be a problem—I do not know this—in Cardiff Bay, I believe that it has been agreed that it will not be a problem in Newport.
Lord Skelmersdale: My Lords, the noble Lord, Lord Stoddart—if he will forgive me—is obviously struggling as he winds up on the Bill. Will he say whether there is anything improper in rejecting the Second Reading of the Bill because many voices have been raised against it during the course of the debate?
Lord Stoddart of Swindon: My Lords, I can assure the noble Lord that I am not struggling. I am trying to answer the detailed queries that have been raised. He always tried to do that when he was a Minister, and he did it well, although at times he appeared to be struggling. It is necessary to deal with the points that have been made. I shall come to the other point he made in a moment when I deal with the speech made by his noble friend Lord Kimball.

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My noble friend Lady White also criticised the Private Bill procedure. Many noble Lords on both sides of the House agree with her. But we have to deal with the Bill under the existing procedure; so I am afraid that it is before your Lordships' House tonight. My noble friend also referred to the Government's response to the second report of the House of Commons Select Committee on the Environment entitled Coastal Zone Protection and Planning. It is a useful document. I looked especially at paragraph 125 which states:
"The Government will seek, through sensitive planning and management, to integrate conservation and development in the coastal zone. Whilst conservation may be the dominant aim on the undeveloped coast, protection of the environment and of the coastal resource will be an important consideration in assessing development proposals on any part of the coast. On the urban coast, the emphasis will be on improvement and regeneration to improve attractiveness and to encourage development to locate there and relieve pressure on the undeveloped coast. This approach is reflected in draft Planning Policy Guidance on the coast which is currently out for consultation".
That is what Newport is trying to do through this Bill.
Although the noble Lord, Lord Rees, felt some sympathy for the Bill and for the people of Newport and Gwent, he was worried about the financing. He wanted to know how it would be dealt with. As I understand it, the total cost of the scheme will be £70 million, of which £20 million has already been set aside in balances by Newport Borough Council. A further £5 million will be obtained, by the time the scheme is running, by the provision of a £1 community charge over the next five years. It is estimated that land sales will bring in about £15 million; borrowing will be £15 million; and contributions from other parties are expected to be about £15 million.
My noble friend Lord Mason also entered the fray; he was worried about the fishing. I have tried to answer some of the points which have been raised, and I thank him for putting his views. The noble Lord, Lord Kimball, said that any form of artificial obstruction in a river impairs the ability of the fish to swim up river and spawn.
Lord Kimball: My Lords, we agreed that the fish could get through, but the effect of being held up makes them reluctant to take. I agree that a percentage gets through, but the hold-up destroys their ability to provide spawn.
Lord Stoddart of Swindon: My Lords, that may be so. The noble Lord is an expert on the matter and I am not. However, I understand that in many rivers fish are assisted over locks and have not necessarily been affected. The noble Lord, Lord Kimball, suggested that there was absolutely no reason why there should not be a vote on Second Reading. He quoted two Bills—I believe, the North Devon Water Bill and the North Devon Electric Power Bill, the Second Readings of which were opposed in 1937. That was 55 years ago and there has been no precedent since then.
The Earl of Shrewsbury: My Lords, perhaps the noble Lord will be so gracious as to give way. I took
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a Private Member's Bill on boxing to a Division on a Second Reading debate last year, and won. So there has been a precedent since 1937.
Lord Stoddart of Swindon: My Lords, I believe that the noble Earl is confusing a Private Member's Bill with a Private Bill and therefore his precedent does not apply. There is no modern precedent for a Private Bill of this kind to be opposed on Second Reading. Frankly, I believe that it would be unfortunate if it were opposed on Second Reading. The noble Lord, Lord Elibank, believed that the Bill raised many issues which should be pursued and examined by a committee. I believe that that is the correct course. I hope therefore that the noble Lord, Lord Kimball, will not press the Bill to a Division tonight but will allow the committee to examine it in the detail in which it should be examined, so that fairness applies to all sides.
I welcome the support of the noble Earl, Lord Clanwilliam, who dealt with many of the points which had been raised previously. My noble friend Lord Morris of Castle Morris made an interesting point about groundwater levels, but I hope that he will agree that Newport Borough Council has dealt in good part with what he said by putting an additional clause into the Bill.
The noble Viscount, Lord De L'Isle, was worried about the difficulty of passage for migratory fish and about the water quality. I hope that I have dealt with those matters so far as I am able in replying to other noble Lords. I wish to thank my noble friend Lord Prys-Davies for his support of the Bill. He knows the area extremely well and believes that the measure should be given a Second Reading.
I said to the noble Lord, Lord Moran, that I would be prepared to accept the Instruction. I believe that it is not necessary because the issues are covered by petitions. Nevertheless, I see absolutely no reason why we should not agree to the Instruction. Rather than having a debate when it is put to the House after the Bill has been given a Second Reading, I welcome it now. Again, I thank noble Lords for their interest in the Bill and hope that it will be given an unopposed Second Reading.
8.26 p.m.
On Question, Whether the Bill shall be read a second time?
Their Lordships divided: Contents,24; Not-Contents,24.

Division No.1

CONTENTS

Airedale, L.

Monteagle of Brandon, L.

Clanwilliam, E. [Teller.]

Morris of Castle Morris, L.

Dean of Beswick, L.

Prys-Davies, L.

Dormand of Easington, L.

St. John of Bletso, L.

Elibank, L.

Sefton of Garston, L.

Gregson, L.

StoddartofSwindon, L. [Teller.]

Hamwee, B.

Tordoff, L.

Howell, L.

Turner of Camden, B.

Howie of Troon, L.

Wharton, B.

Judd, L.

White, B.

Lockwood, B.

Winchilsea and Nottingham, E.

Monson, L.

Wynford, L.

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NOT-CONTENTS

Aldington, L.

Lucas, L.

Barber, L.

Margadale, L.

Brougham and Vaux, L.

Moran, L.

Cox, B.

Newall, L.

Cross, V.

Palmer, L.

De L'Isle, V.

Rankeillour, L.

Dilhorne, V.

Reay, L.

FaithfuII, B.

Renton, L.

Glenarthur, L.

Saltoun of Abernethy, Ly

Jenkin of Roding, L.

Seccombe, B.

Kenilworth, L.

Shrewsbury, E. [Teller.]

Kimball, L. [Teller.]

Skelmersdale, L.

The Deputy Speaker (The Viscount of Oxfuird): My Lords, there being an equality of votes, in accordance with Standing Order No.54 which provides that no proposal to reject a Bill shall be agreed to unless there is a majority in favour of such rejection, I declare the Motion agreed to.
8.35 p.m.
Lord Moran: My Lords, as the Bill has now been given a Second Reading, I beg leave to move the Instruction standing in my name on the Order Paper to which I have already spoken. The Instruction aims to point out the key points that I believe the committee needs to address. I beg to move.
Moved, That it be an Instruction to the Select Committee to whom the Bill is committed that in view of the significance and importance of the River Usk they shall consider

(a) whether the extent of any damage or the risk of damage to the ecology or the economy of the Usk Valley or to the passage of migratory fish resulting from the construction of the Barrage has been fully appraised and is an acceptable cost;

(b) whether there is a sound basis for financing the proposed development particularly in the prevailing economic climate and in the light of other intended developments such as the Cardiff Bay barrage; and

(c) whether the economic regeneration of Newport and the adjacent areas could be better achieved by means other than building a barrage.—(Lord Moran.)

On Question, Motion agreed to.

New Buildings: Fire Safety Regulations
8.36 p.m.
Lord Howie of Troon Lord Howie of Troon rose to ask Her Majesty's Government to what degree the new building regulations relating to fire safety in England and Wales differ from those for Scotland and Northern Ireland, and why.
The noble Lord said: My Lords, after that excitement I rise to ask the Unstarred Question standing in my name on the Order Paper. The problem has become slightly more complicated than my Unstarred Question suggests because in the period which has passed since I first tabled it the Scottish building regulations and the English and Welsh building regulations are now in operation although they are different while the Northern Ireland regulations are not yet changed but, I am told, are likely to comply with the English and Welsh regulations when they are eventually altered. I believe
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that that process is in accordance with the Government's underlying wish that the regulations should be unified throughout the country.
A further complication arises from the attitude of the Loss Prevention Council which represents many insurers and which has published its own new code of practice. That document is not legally binding but its requirements will have considerable influence on the premiums which insurers will be required to pay. The requirements of the LPC are more stringent than either of the building regulations.
Why should these various regulations differ in what is after all a technological area? One reason is that the LPC code is aimed mainly at the protection of property whereas the building regulations are aimed largely at the protection of life. It appears from these documents that life needs less protection, by and large, than property, and that life in England needs less protection than life in Scotland. At any rate the new English and Welsh regulations are less onerous than the Scottish ones, although I daresay the fires are much the same.
Leaving aside the LPC code for the moment, it may be useful to consider the differences in the two sets of building regulations. The Scottish regulations, which were revised in November 1990, are not greatly different from the previous regulations which date from 1985. However, the new English regulations reduce the periods of fire resistance of elements of construction, introduce a trade off by permitting reduced resistance periods when sprinklers are used and relax the non-combustibility requirements of certain construction materials. Of course, those regulations were revised by two separate groups of experts. However, it is difficult to see how they could come to such widely different conclusions, even though some were Scottish and some English.
Perhaps the most startling difference is in the minimum fire resistance period for a multi-storey storage building. In Scotland, in certain instances of high hazard, it is four hours while in England and Wales it seems, so far as I can make out, to be only two hours. That can be reduced to no more than 90 minutes if sprinklers are installed. Most other resistance periods are compatible but in none of them do the Scottish regulations allow any reduction when sprinklers are used. That is also true of all other European countries.
When the English regulations were being drafted they were put out for consultation with interested bodies. I gather that more than 200 replies were received by the Department of the Environment. In cases in which favourable or unfavourable views were expressed the replies varied from 2: 1 against to 5: 1 against the proposed changes. Nevertheless, the department persevered and the changes went ahead.
The justification for reducing fire resistance in the presence of sprinklers, especially automatic sprinklers, is their efficiency in controlling fires or extinguishing them quickly. That is sensible. But how effective are they? Unfortunately, they do not always work. According to Home Office statistics published two years ago automatic sprinklers were effective in extinguishing or controlling fire on about 60 per cent.

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of the occasions when they ought to have been activated. Taken over a longer period that percentage figure may be slightly higher. Nevertheless, a figure of 60 per cent. scarcely suggests that a reduction by half in the resistance period is sensible. At any rate, the Scottish panel did not appear to think so.
Three questions arise. First, in proposing any trade-off, what consideration has the Department of the Environment given to continuing reports of sprinkler failures due to maintenance activities, inadequate design, human error, blockages, failure of water supply, disrepair, arson, and other causes? In relation to arson it is important to note that according to the Home Office in all years since 1981 the number of fires reported as being deliberate or possibly deliberate continued to rise, reaching 23,600 in 1990—more than a fifth of all fires in occupied buildings. In dwellings those fires have risen from 8 per cent. of all fires in 1981 to 15 per cent. in 1990 with the number doubling over that period. In occupied buildings other than dwellings they have risen from 21 per cent. to 31 per cent. of all such fires over the period from 1981 to 1990. Nearly a third of all fires in occupied buildings are deliberate or possibly deliberate. The possibility arises that the arsonist deliberately creating a fire will be quite likely to deactivate the sprinkler system if he possibly can.
Secondly, what measures will be required to ensure that sprinkler systems are effective during the lifetime of the building? Will those measures cater for any subsequent change of use of the building, its layout or its contents? Thirdly, will it be necessary to evacuate a building constructed on the trade-off principle if the sprinkler system becomes inoperative for any reason as the fire precautions will be inadequate while the sprinkler system is deactivated?
As to the combustibility of building material, it has to be remembered that most fire deaths arise from the inhalation of smoke. That is directly connected with the chemical composition of the materials used in construction, including paint and various forms of building board. Under the new English regulations materials of limited combustibility are no longer required for the construction of compartment walls except in hospitals and fire-fighting shafts. I believe that that also applies to compartment floors, separating walls and external walls. The relaxation does not apply in Scotland. Nor does it apply throughout Europe.
Lastly, should the Scottish regulations be brought into line, as the Government intend, despite the conclusions of the revising panel in Scotland, a recent Early Day Motion in another place,
"urges that any attempt to require Scottish standards to follow the England and Wales regulations, as has been indicated by Ministers, might proceed only after the new departures have proved themselves in practice to Scottish satisfaction".
If the English want lower standards perhaps they can have them. That is none of my business. The new English standards are not only lower than Scottish regulations and the LPC code; they are also lower than the requirements of BS5588 and those in other countries of Europe, at least to some degree. No other
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country in Europe permits a trade-off in fire resistance when sprinklers are used. If the English must have those standards there is no reason to impose them on the Scots, as Ministers appear to wish.
Can we perhaps apply the principle of subsidiarity here? At the very least, if subsidiarity is to be ignored the Scots should not be whipped into line until the lower standards have proved to be adequate, if they are. I should like an assurance from the noble Viscount that no attempt will be made to coerce the Scots in this matter until the Scots are satisfied that the new English regulations have proved themselves. How long will that take? I suggest at least five years, which is the normal period between reviews. After that the situation can be reviewed again and changes made, but only if the relevant Scottish authorities agree.
I hope that my comments will receive a sympathetic hearing from the noble Viscount.
8.48 p.m.
Lord Gregson: My Lords, the House will no doubt be aware of my interest in safety as I chaired the House of Lords Select Committee on Science and Technology inquiry into occupational health and safety. Since that time, I have maintained a close interest in the subject, both as an engineer and as a director of British Steel. I must state categorically that I am more concerned with the safety of people than with buildings, structure and property.
In any consideration of fire resistance provisions in building regulations and approved documents it is important to recognise that the term "fire resistance" is not a synonym for fire safety. Fire resistance has a specific meaning; namely, the ability of a structural element to withstand collapse.
Studies of the fire casualty statistics show that fire resistance is a very minor factor in fire safety. In 1989, out of a total of 843 fatalities, two members of the public died in buildings which suffered collapse, and it is still not known whether the deaths were caused by the collapse itself or by other factors such as smoke or fire. By far the greatest cause of casualties are smoke and burns. Around 90 per cent. of the casualties, even in those categories, occur in the home. It is instructive to compare the United Kingdom experience with that of Switzerland, which has the lowest fire fatality rate in Europe. In Switzerland there is no fire resistance requirement at all for structures such as houses and similar properties; yet the fatality rate there is one-sixth of that of the United Kingdom.
Clearly the difference in fire resistance provisions has little influence on fire safety with regard to persons—and it is persons that I am most concerned about. In contrast, the installation of sprinklers in a building has had a marked effect on fire safety and on saving life. It can be inferred from the figures given in a Home Office report of July 1990 that sprinklers can reduce fire fatalities by as much as 80 per cent., and recent fire bomb attacks confirm their effectiveness.
Lord Howie of Troon: My Lords, I wonder whether my noble friend will allow me to intervene. He will

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recall that the same report suggests that the sprinklers were only effective in 60 per cent. of the cases in which they ought to have been used.
Lord Gregson: My Lords, as I remember, the report said it was of little material effect so far as concerned people, though it may have an effect regarding buildings. But in regard to people, the statistics are absolutely fundamental.
Lord Howie of Troon: My Lords, the total number of people was extremely small.
Lord Gregson: My Lords, four fire bombs in the Arndale Centre in Manchester, my home town, in December last year were extinguished almost immediately by sprinklers. The stores were open for trading again within hours. A senior fire officer said that day:
"Without sprinklers, we would not have had the Arndale Centre this morning".
I should not like to say what the riposte in Manchester would be to that remark, because it would be unrepeatable in this House. Nonetheless, the sprinklers saved the buildings, and there were no casualties.
Similarly, in London's Oxford Street and at Brent Cross, on the 2nd and 15th of December respectively, fire bombs were effectively extinguished swiftly by sprinklers. Again, of 13 department stores which were fire bombed in Northern Ireland on the night of 5th January 1991, nine did not have sprinklers. Of those, eight were completely destroyed and one was 30 per cent. destroyed. All four which had sprinklers escaped without any significant damage, and I suggest that when the Secretary of State is considering the regulations for Northern Ireland he should look very carefully at those statistics.
The new approved document B for England and Wales encourages the use of sprinklers by reducing fire resistance times when sprinklers are installed. This is a positive contribution to fire safety which I particularly welcome. It is essential that monetary incentives should be applied in this way in order to increase the number of sprinklers that are installed, because they are effective against fire deaths.
8.55 p.m.
Baroness Turner of Camden: My Lords, I am grateful to my noble friend for introducing this subject. It is not a subject upon which I myself am very expert, and I listened with interest to what the noble Lords, Lord Howie and Lord Gregson, said since they obviously know a great deal more about the subject than I do.
Not being an expert I went to an organisation which one would expect to be fairly expert in this area-the Fire Brigades Union. The noble Lord, Lord Howie, has already covered much of the ground. As has been said, the fire regulations have been changed for England and Wales, although not for Scotland, from June of this year. Structural fire protection requirements for buildings were reduced by the Department of the Environment if companies introduced sprinklers into their buildings. However, I am advised by those who should know—the Fire
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Brigades Union—that sprinklers are not necessarily more effective and can break down. That view seems to have been endorsed by the noble Lord, Lord Howie, in his contribution today. Thus, buildings that have not been built in accordance with the regulations previously existing will be that much more vulnerable.
The Fire Brigades Union informs me that it believes the previous regulations were safer. The union believes that structural fire resistance regulations should not be reduced but that sprinklers could be added and offset against other fire safety requirements, such as the size of compartments and the distance people have to travel to escape the fire.
As the noble Lord, Lord Howie, has already said, the Loss Prevention Council, which is an arm of the insurance industry, is against these new regulations. The Fire Brigades Union is of the opinion that the lives of firefighters could he endangered, as well as those of people trapped in buildings. It holds the view that the regulations have been introduced too soon, without scientific evidence that sprinklers alone will be enough seriously to prevent fires. I am advised that fire losses in the United Kingdom are running at around £1.3 billion this year—but even more important, of course, are the deaths and injuries which result from fires.
Then there is the need, as I see it, to enforce the regulations that do exist. During the debate this evening there has been talk about deaths of people, and I notice that quite recently there was a horrendous fire in Hove which has been the subject of an investigation. The fire took place in one of those buildings which have been converted into flats and, apparently, there was no means of exit at the rear of the property. The barrister who was responsible for the inquiry said afterwards:
"The trend in national and local guidance on fire safety has been away from insisting on external escapes in buildings of this size, in favour of protecting the internal stairway as the escape route from fires which are presumed to originate within the units of accommodation, not within the common stairway and entrance hall".
I may say that such precautions included fireproof doors to flats and fireproof dividing lobbies. The barrister continued:
"Such measures do not, however, provide a means of escape in the case of a fire maliciously started in the common stairwell".
That apparently is what happened in this case, and unfortunately a number of people were trapped on an upstairs floor and lost their lives. The barrister concluded that more money and time should be spent by central and local government on enforcing fire regulations. I am sure we would all agree with that.
I should like to ask the noble Viscount what consultations took place before the regulations were changed, with whom, and with what result. I think that what the Fire Brigades Union has to say is important. Firefighters are constantly at risk. The job they do is inherently hazardous, and they know that. The Government should therefore be prepared to listen carefully to what they have to say.
8.58 p.m.
Viscount Goschen: My Lords, I am most grateful to the noble Lord, Lord Howie of Troon, for asking this Question about the differences between building regulations in the constituent parts of the United Kingdom. It has given us the opportunity today to look at what these are and why they exist.
For historical and legal reasons, the three parts of the country have their own systems of building control. The England and Wales regulations are made under the Building Act 1984; the Building Standards (Scotland) Regulations are made under the Building Standards (Scotland) Act 1959; and the Northern Ireland Regulations are made under the Building Regulations (Northern Ireland) Order 1979. New building regulations came into effect in England and Wales on 1st June. Scotland introduced new regulations in 1991, and they and Northern Ireland are working to introduce revised regulations soon.
The requirements of the regulations under all three systems are expressed in functional terms. This means that they set out the broad objectives in quite general terms. For example, on the subject of conservation of fuel and power, all three regulation systems require that,
"reasonable provision shall be made for the conservation of fuel and power"
in the building. However, there is an important difference between the system in England and Wales and the systems in the other two countries. This is in the way that these broad functional requirements are translated into the technical detail to which designers and enforcing authorities work. The England and Wales approach is based on technical guidance, whereas the others set specific technical standards. The guidance is given in a series of documents approved for the purpose by the Secretary of State, and known as approved documents. There is an approved document for each aspect of the functional requirements of the regulations, including one on fire safety. This guidance is not mandatory and designers are able to depart from it, or use an entirely different approach, provided that the enforcing authority is content that the functional requirements are satisfied.
Although, as I have said, the regulations in Scotland and Northern Ireland also express the requirements in functional terms, compliance is achieved by conforming to specific technical standards or by following provisions which are deemed to satisfy the requirement.
Building designers want to know precisely what they have to do to satisfy regulations, and they want freedom to do something quite different when circumstances demand it. Unfortunately, those two demands are mutually exclusive. Regulations that allow significant flexibility tend to introduce uncertainty; but if regulations are highly specific in their requirements, they create a rigid, inflexible system. Any system of regulation is a compromise between flexibility and certainty. The balance in the England and Wales approach is towards flexibility, while the other systems tend more towards the objective of certainty.
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Harmonisation of the technical content of the regulations was one of the objectives of the major review which preceded the publication of the new documents for England and Wales. Considerable progress has been made; but the process is not complete.
One impediment to harmonisation is the fact that building regulations are a moving target and have to be kept under review. One example from the fire safety area of the change with which regulations must keep pace has been the appearance of multi-user shopping complexes, in which all the public spaces are linked by covered malls and atrium spaces.
Lord Howie of Troon: My Lords, the noble Viscount talks of harmonisation. I assume that he means harmonisation within the United Kingdom. He must be aware that there is a concept of harmonisation within the European Community. He must also be aware that to harmonise the English rules with Europe will mean a move towards Scotland and not away from it.
Viscount Goschen: My Lords, to clarify that matter, I was talking about harmonisation within the United Kingdom.
The reviews of regulations have been made on different timetables with the result that Scotland, say, may be starting a review, while England and Wales are finishing one off. This means that it takes some time for one set of regulations to catch up with another.
Where Northern Ireland is concerned, this catching-up cycle will soon be complete. The DoE Northern Ireland has already consulted on new fire regulations, and should be producing new regulations fairly soon which, although not in the same requirement-plus-guidance format as those for England and Wales, will be the same in technical content, so far as the different format permits.
The noble Lord, Lord Howie, asked me for an assurance on the forthcoming Scottish review. The Scottish Office is expected to consult on revised fire regulations this year which will include further moves towards harmonisation. The proposals, not yet approved by the advisory committee, include restructuring the document to reflect the sequence of Approved Document B. They do not propose substantial changes to the periods of fire resistance or compartmentation size currently required in Scotland. Any changes resulting from that consultation are unlikely to be in force before mid-1993.
Lord Howie of Troon: My Lords, I am sorry to intervene again. Will the review relax the regulations on non-combustibility of building material?
Viscount Goschen: My Lords, I do not believe that it is appropriate for me to comment further on the review. It is not yet approved by the advisory committee.
As matters now stand between the regulations north and south of the Border, and leaving aside the different formats, the main differences in the fire regulations concern the following. Different criteria are used to decide the appropriate level of fire resistance and compartmentation; that is, the

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sub-division of buildings into fire compartments. There are requirements for three and four-hour periods of fire resistance in some instances in Scotland, where the England and Wales guidance sets a maximum of two hours. There are more onerous provisions concerning the compartmentation of basement storeys in the England and Wales guidance. The Scottish regulations require non-combustible construction in a number of instances where it is not specified in the England and Wales guidance.
Those differences will be reviewed whenever the occasion arises, but they may not necessarily be removed. It may be decided to monitor the effect of some of the changes introduced in England and Wales before adopting them in Scotland, or it may be decided that certain points are necessary to address circumstances found only in Scotland.
I agree with the noble Lord, Lord Gregson, that sprinkler systems have been shown to offer significant benefits to fire safety. To add sprinklers to the pre-1992 regulations would suggest that adequate safety levels have not been reached. Sprinklers fail occasionally, but the same is true of other forms of fire protection. There is clear evidence that, despite the occasional failures, the overall effect of sprinklers is to reduce significantly the loss of life.
Trade-off is allowed north and south of the Border, although it is expressed in different terms because of the different approaches to fire resistance and compartmentation. Such trade-offs are not new and there is good evidence that sprinklers reduce the likelihood of fire deaths and injuries. The new approved document on fire safety in England and Wales picks up the wider ranging concessions for sprinkler installations that first appeared in the 1990 Scottish regulations. Now Scotland has to decide whether to follow the changes in the new England and Wales document concerning fire resistance and compartmentation. Those changes attracted considerable comment and polarised opinions of various interest groups. It would be understandable if a decision was deferred until we had more experience with the new measures.
There are economic arguments for harmonisation. Designers wishing to work throughout the UK have to familiarise themselves with the differences in the regulations, as do contractors tendering for construction work. Property owners such as retail chains with a portfolio spread across the country have to adapt their practices when they cross the Borders. The Government have been conscious of all those factors and have made harmonisation one of the aims of the review of building regulations in order to relieve
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industry and commerce of burdensome legislation. The situation has improved and will, I believe, continue to improve.
However, it is important to stress that these are economic arguments. If one looks at the fire loss statistics one sees that there are geographic variations. The fatality rate in Scotland tends to be higher than average, but the highest rates of non-fatal fire casualties are in some of the large metropolitan boroughs in England. It is not possible to ascribe those variations to specific differences in building regulations.
As regards the points made by the noble Lord, Lord Howie, and the noble Baroness, Lady Turner, multi-seat fires, other than deliberately set fires, are most unusual. Deliberate multi-seat fires are less likely to be in occupied buildings because the perpetrator is likely to be discovered. At present they are not seen as a significant new change which could be addressed in building regulations. The situation will be monitored.
The noble Baroness, Lady Turner, asked about consultation. The preparation of new regulations both north and south of the Border involves consultation at several stages. A draft for public consultation is developed in discussions between officials, technical experts, lawyers and the panel which advises the Secretary of State on building regulation matters; that is, the Building Standards Advisory Committee in Scotland and the Building Regulations Advisory Committee in the south. At the public consultation stage comments are received from hundreds of interested individuals and organisations. Those comments are then considered before the advisory panel makes its final recommendations.
I hope that I have been able not only to explain the differences in the regulations which currently exist but also the reasons for them and the steps that are being taken to remove them. It only remains for me to thank the noble Lord, Lord Gregson, and the noble Baroness, Lady Turner of Camden. for their contributions to the debate and, in particular, the noble Lord, Lord Howie of Troon, for asking the Question.

River Humber (Upper Burcom Cooling Works) Bill [H.L.]
The Queen's consent signified, and Bill reported from the Unopposed Bill Committee with amendments.

Carriage of Goods by Sea Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at nine minutes past nine o'clock.