Lords Sitting of 30 November 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 Norwich.
Lord Spens Lord Spens —Sat first in Parliament after the death of his father.

State Pension Entitlement Age
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they have yet come to a decision on the EC proposal that the age of entitlement to state pensions should be the same for men and women.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, the Government's intention is to announce their proposals some time next year. Over 4,000 responses have been received during the public discussion period and social security Ministers have met representatives of various interested organisations to discuss their submissions.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Is he aware that to my personal knowledge this matter was under discussion in British Government circles 37 years ago? Therefore, is he aware that there does not seem to be very much hurry about it?
Lord Henley: My Lords, I understand that this matter has been under discussion for some years. It has possibly been under discussion ever since the pension age for women was reduced from 65 years of age to 60 during the war. I accept that it is very difficult and that no simple solution will satisfy everyone. That is why my right honourable friend announced a discussion period in June of last year and produced a discussion paper in December of last year. That discussion period continued until June of this year. As I said in my original Answer, we have now received some 4,000 responses and we intend, as I indicated, to announce our proposals in due course.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that many of us in this House and elsewhere cannot see why on earth the EC should be involved in the retirement age for men and women in this country? Is it not a fact that this is a decision which should be made by the British Government, the British Parliament and the British people alone? When it is made, may I have an assurance that it will be made in a way so that men as well as women retire at the age of 60?
Lord Henley: My Lords, on the second part of the noble Lord's question, I can give him no reassurance to that effect. As I said quite clearly, no decision has yet been made. As regards the first part of the noble Lord's question, I can give him a categorical assurance
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that a decision will be made by the British Parliament, the British Government and the British people. EC law does specifically allow for unequal state pension ages under a derogation under its Directive 79/7.
Lord Hailsham of Saint Marylebone: My Lords, is not my noble friend aware that the question directed to him by the noble Lord, Lord Stoddart, was based on a misunderstanding? He was confusing the European Convention on Human Rights at the Strasbourg courts with the European Community and the Luxembourg courts.
Lord Henley: My Lords, I suspect that many of the questions coming from the noble Lord, Lord Stoddart, are based on a misconception. I will leave it to my noble and learned friend to correct the noble Lord on occasions. As I said, EC law does specifically allow us derogation in this matter.
Lord Stoddart of Swindon: My Lords, since I have been attacked—I do not want to waste the time of the House—but perhaps I may say that my question was based on no misconception at all. I understand far more about the European Community and European affairs than most other people in this place.
Lord Henley: My Lords, no attack on the noble Lord was intended by me or, I suspect, by my noble and learned friend. I was merely stating, first, what the Government's position is and, secondly, that under EC law there is a derogation which allows unequal state pension ages.
Baroness Platt of Writtle: My Lords, has my right honourable friend considered the question of a flexible decade for retirement for both sexes? That might solve many of the problems for both men and women which exist at the moment.
Lord Henley: My Lords, we shall consider all possible options, including bringing the age down or taking it up or having a flexible period for retirement. Obviously, there are advantages and disadvantages in every single option. I would not like to give any indication as to the way in which the Government are thinking at the moment.
Baroness Hollis of Heigham: My Lords, it is clear that the present pension age benefits women, but the structure of pension provision does not. Does the Minister agree that women have interrupted contributions because they have children, they take up part-time work and very often they earn too little to pay national insurance contributions, so that most poor pensioners are women and most women pensioner households are poor? Therefore, I ask the Minister not to isolate the issue of the pension age from the wider question of financial security in old age for men and women alike.
Lord Henley: My Lords, I would never want to exclude anything from our period of discussion. Certainly, we take all factors into account. I would not necessarily accept the assertions of the noble Baroness. I would stress that we have increased

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provision for the poorer pensioners in our extra premiums in income support quite dramatically over the past few years.

Trident
2.43 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether the Trident nuclear missile is less safe than its Polaris predecessor.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, the recent Oxburgh report on United Kingdom nuclear weapon safety states that the Trident II Strategic Weapon System has,
"safety levels that are comparable to and in some ways higher than those of Polaris".
Lord Jenkins of Putney: My Lords, I thank the noble Viscount for that Answer, but is he aware that Professor Oxburgh's rather reassuring conclusions have been challenged scientifically on both sides of the Atlantic, and that the second BASIC report (from the British-American Security Council) suggests that Professor Oxburgh has not examined the matter with sufficient care? As I understand it, he has not, for example, examined the possibility of a road accident involving Trident which, since Trident is carried by road, is a factor that should be looked into because the consequences of such an accident might well be almost beyond description.
Viscount Cranborne: My Lords, the noble Lord, Lord Jenkins of Putney, will know as well as I do that the BASIC report is not an authoritative report and that the other reports which have been produced in this field, particularly the Drell report, make it perfectly clear that in all respects Trident is at least as safe as Polaris was and, in some respects, safer. With reference to road transport, the noble Lord will also be aware that particular attention has been paid to this subject of late. I am happy to assure the noble Lord that we are entirely satisfied about the safety of road transport for Trident.
Lord Judd: My Lords, does the noble Viscount recall that he told the House on 16th November that a comprehensive test ban treaty would not affect the safety of the Trident system? Bearing that in mind, will the noble Viscount now take this opportunity to revise his description of the new US testing legislation as,
"unfortunate and misguided"—[Official Report, 16/11/92; col. 447.],
especially as the President elect supports it? Will he now endorse the resumption of talks aimed at banning all nuclear tests world wide by 1996?
Viscount Cranborne: My Lords, I am grateful that the noble Lord, Lord Judd, pays so much attention to what I say in your Lordships' House. I was also much gratified to hear that in another place an attempt was made to quote me from Hansard from the very same exchange, which was slapped down at the time. I have
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nothing more to add to or to detract from what I said. The present American Government are perfectly clear in their understanding of the ban on future testing. I assure the noble Lord and your Lordships that the overwhelming reason for continuing selective testing is one of safety, and that safety would benefit greatly if we were able to continue our testing programme, which is something we intend to do until 1996.
Lord Jenkins of Putney: My Lords, is it not precisely the question of safety that we are discussing in this Question? Is the noble Viscount further aware that it is quite wrong to describe the BASIC report as "not authoritative"? Certainly it is not a government report but the membership of the research committee, which gave the evidence upon which the BASIC second report is based, is extremely authoritative and the noble Viscount should not question it. Perhaps I may suggest to him that Professor Oxburgh and his group should take a look at the second BASIC report and see what conclusions they reach.
Viscount Cranborne: My Lords, I can assure the noble Lord, Lord Jenkins, that we always take matters of nuclear safety with the utmost seriousness. We read all reports which address themselves to this subject and we take them most seriously. All that I can say to your Lordships—and to the noble Lord, Lord Jenkins, in particular—is that we are at present satisfied about the safety conditions governing the Trident missile system. That satisfaction is, of course, always tempered by keeping the matter under close and serious review.
Lord Mayhew: My Lords, following the reply which the noble Viscount gave to the noble Lord, Lord Judd, can he say what the Government will do in 1996 when we can no longer test in the United States? Will they rely on non-nuclear tests; will they test somewhere else, such as Australia; or, at long last, will they sign a comprehensive test ban treaty?
Viscount Cranborne: My Lords, the noble Lord, Lord Mayhew, who I think was present during the fairly recent exchanges which have been referred to by the noble Lord, Lord Judd, will remember that we are perfectly clear that the future safety of nuclear weapons in this country would be greatly aided by an extension of the nuclear testing programme beyond 1996. However, as I think I made clear at the time to the noble Lord, this certainly does not impede the existing safety of the nuclear systems of the Trident system. We are concerned purely with the safety of future weapons systems. Although alternative technologies exist, at present they are not adequate substitutes for testing, but we shall certainly want to look further at them.
Lord Mellish: My Lords, I hope that the Minister clearly understands that the Question that has been put to him today comes from a Member of this House who is opposed to any deterrent of any kind and that he does not speak for anybody on this side of the House except himself.
Viscount Cranborne: My Lords, I am greatly indebted to the noble Lord, Lord Mellish, and I am

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well aware that his history as a former Chief Whip of the Labour Party in another place makes him a far greater expert than I on the opinions of the people who were formerly under his charge.
Lord Jenkins of Putney: My Lords, I can assure the noble Viscount that I do not speak on behalf of the noble Lord, Lord Mellish.
Viscount Cranborne: My Lords, we are all well aware not only that the noble Lord, Lord Jenkins, is more than able to speak for himself but certainly that the noble Lord, Lord Mellish, is as well.
Lord Ashley of Stoke: My Lords, will the noble Viscount bear in mind that in all of these discussions we should never ever forget the nuclear test veterans who were seriously damaged by the very early nuclear tests? They are still waiting for adequate, proper and fair compensation.
Viscount Cranborne: My Lords, I think that your Lordships will agree that that question is outside the scope of the Question on the Order Paper. However, I refer the noble Lord, if it would be of some help, to the debate raised by his noble friend Lord Parry on this very subject. I hope that he will take the time to read my reply to that debate.

The Cameroon Republic
2.50 p.m.
Lord Rea Lord Rea asked Her Majesty's Government:
What is their position regarding the situation in the Cameroon Republic following the recent allegedly fraudulent presidential election and subsequent human rights violations.
Baroness Trumpington: My Lords, we have noted with grave concern the numerous reports of widespread intimidation and repressive measures taken by the Cameroonian authorities against opposition parties and of serious human rights abuses since the results of the election were announced. We have called on the Cameroon Government to take all possible measures to end human rights abuses and to take active measures to demonstrate their commitment to democracy.
Lord Rea: My Lords, I thank the noble Baroness for that Answer, which on first hearing sounds quite robust. However, I think the problem is one of giving some teeth to the Government's expressed indignation. Is she aware that the National Democratic Institute of the United States, which monitored last month's presidential elections in Cameroon, concluded that,
"widespread irregularities seriously call into question the validity of the outcome"?
In view of the subsequent house arrest in Bamenda of the opposition candidate, John Fru Ndi, whom I have met both in Cameroon and in this country and who is an eminently reasonable man, and the human rights abuses which the noble Baroness has mentioned, will the Government consider terminating all development aid to Cameroon and encouraging in their presidency of the EC all other EC members to do the same,
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particularly their opposite numbers in the Quai ďOrsay since France has a special relationship with Cameroon? I ask this particularly because the United States has in the past two days suspended all except humanitarian aid to Cameroon for the same reason.
Baroness Trumpington: My Lords, I am aware of the report from the American National Democratic Institute. The Cameroon supreme court in announcing the result also drew attention to a flawed process. One example of the reasons for international concern was the result in South Province. Although government figures showed 190,000 people of voting age, voter turnout, overwhelmingly in support of President Biya, was given as 216,000. With regard to our aid, which is about £3 million a year, it is largely devoted to important forestry conservation projects. We are keeping the situation under review in consultation with other major aid donors.
Baroness Blackstone: My Lords, can the noble Baroness give an estimate of the number of political prisoners currently being held in Cameroon? Can she say what representations the Government have made, or whether they will make representations, to secure the release of opposition leaders who have been arrested and detained for no other reason than that they have criticised the government?
Baroness Trumpington: My Lords, many members of the opposition have been arrested. In particular, the main opposition candidate, John Fru Ndi, is currently under detention together with around 150 of his supporters. A Cameroonian mission led by the deputy foreign minister, Mr. Francis Nkwain, visited the Foreign and Commonwealth Office on 18th November. We made our views plain to this mission and have subsequently drawn a British statement issued on 19th November to the attention of the Cameroon government.
Lord Bonham-Carter: My Lords, is the noble Baroness aware that it is universally agreed that the human rights situation in Cameroon is particularly outrageous? If we are not prepared to withdraw aid under these circumstances, would she be so good as to tell your Lordships under what circumstances we would withdraw aid?
Baroness Trumpington: My Lords, as I said, we are discussing this with other major aid donors.

Bosnian Refugees
2.55 p.m.
The Marquess of Tweeddale The Marquess of Tweeddale asked Her Majesty's Government:
Whether they will revise their policy towards Bosnian refugees.
The Minister of State, Home Office (Earl Ferrers): My Lords, my honourable friend the Parliamentary Under-Secretary of State will be making a Statement on this matter in another place later today, which will be repeated in your Lordships' House at a convenient

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moment after 3.30 p.m. I hope therefore that the noble Marquess will be content to wait until then for an answer to his Question.
The Marquess of Tweeddale: My Lords, I thank the noble Earl for his reply, which I understand.

Business
2.56 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lord Ferrers will, with the leave of the House, repeat a Statement that is to be made in another place on Bosnian refugees.

Midland Metro (No. 3) Bill
Read a second time, and committed to a Select Committee.

Business of the House
The Lord Privy Seal (Lord Wakeham): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable the remaining stages of the Car Tax (Abolition) Bill to be taken on 3rd December.—(Lord Wakeham.)
On Question, Motion agreed to.

Business of the House: Debate, 2nd December
Lord Wakeham: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Annan set down for 2nd December shall be limited to five hours.—(Lord Wakeham.)
On Question, Motion agreed to.

British Coal and British Rail (Transfer Proposals) Bill
2.57 p.m.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)
Lord Richard Lord Richard rose to move, as an amendment to the Motion that the House do now resolve itself into a Committee upon the Bill, To leave out from ("House") to the end and insert ("pursuant to the Resolution of this House of 20th October last, declines to consider the Bill in Committee until such time as Her Majesty's Government have received and published the results of the inquiry into the coal industry").
The noble Lord said: My Lords, this is a somewhat unusual procedure and I recognise that right at the outset of what I would like to say to the House. But there are unusual circumstances in relation to the Bill and the subject matter that it deals with. Not only that, I should also make it quite clear at the outset that there are indeed strong feelings on this side of the House at least about the way in which the Government have behaved in this matter.
The problem arises from the postponement of the Committee stage of the Bill on 19th October. That postponement was the first act in a series of somewhat desperate acts on the part of the Government, thrown as they were completely off balance by the storm of protest which greeted their announcement of 31 pit closures. They then tried frantically to extricate themselves from the self-created mess that they had thereby engendered.
We can no doubt appreciate why alarm bells were ringing in government circles. The Prime Minister, that great interventionist the President of the Board of Trade and the few Cabinet Ministers whom they deigned to consult on this matter had all failed to predict the depth of hostility evident throughout the country at this ill-considered policy. The Government, having underestimated the opposition to the pit closures and facing increasing disquiet, if not indeed active panic, from their own Back Benchers, then postponed the Bill, conscious of the fact that it would have to face the stormiest of passages in your Lordships' House, as it will undoubtedly have to face if it is now brought back.
On 19th October the noble Lord the Leader of the House, in withdrawing the Bill—it is important that we remember the words precisely—said:
"it has become increasingly clear to me that, since the announcement of the pit closures made last Tuesday, many of your Lordships consider that the context in which the Bill is to be scrutinised by the House has changed since the Second Reading debate".
He went on to say:
"Though it is my view that the issue of pit closures and the subject matter of the Bill are separate, I recognise that this perception may not be widely shared by your Lordships".
How right he was! He continued:
"In these circumstances, and particularly in view of the relatively short time which has elapsed since the pit closures' announcement, it appeared to me that the House would find it difficult to fulfil its functions effectively as a revising Chamber should it be asked to proceed into Committee on the Bill today. My feeling was reinforced by the fact that the pit closures policy itself is currently under legal review".
A little later he said:
"Moreover, as your Lordships have just heard, the Government have proposed further adjustments to the policy. In the light of these developments, and the uncertainty they necessarily engender, I considered that the measured consideration of legislation, in which the House plays such a valuable role in Parliament, would not be possible".—[Official Report, 19/10/92; col. 627.]
At the time, we on these Benches opposed that rearrangement of the business. We did so primarily on the grounds that we wished a discussion to take place on the pit closures programme and upon the Government's failure to consult and reach agreement with all the opposition parties. The Committee stage of the Bill was therefore not proceeded with.
The next day (20th October) the House considered a Motion moved by my noble friend Lord Cledwyn of Penrhos in the following terms:
"That this House calls upon Her Majesty's Government to hold a thorough independent inquiry into the future of the coal industry before proceeding with either their original proposals or those announced on 19th October, and to publish the outcome".—[Official Report, 20/10/92; col. 666.]
As the House will undoubtedly recall, that Motion was carried by 125 votes to 100 votes. Apart from the Labour Party and the Liberal Democrats, 20 Cross-Benchers voted for the Motion, as did eight Conservative Peers. It was the clear and expressed intention of the House that nothing further should be done regarding the coal industry until there had been a full and independent inquiry which Parliament was in a position to consider. Reflecting that, on that same day (20th October) the Prime Minister and the noble Lord, Lord Wakeham, gave their support to a wide-ranging inquiry under the auspices of the Select Committee on Trade and Industry into the future of the coal industry and the impact of the closures, despite the fact that the day before Mr. President Heseltine had refused to countenance any such development.
Perhaps I may remind the House that the Select Committee has not yet concluded its work. The decision to return the Bill is, in some ways, an attempt to prejudge that inquiry itself. It also casts doubt upon the Government's commitment to the inquiry in the first place. In the light of that background—I am sorry to have taken the time of the House to set it out, but it is important in this case that we have the framework and the parameters of the discussion clear—I find it astonishing that the Bill is now back again in front of the House.
I have three points to make. First, what has changed since 19th October? Nothing, as far as I am aware. The matter is still before the courts. The Select Committee is sitting. No doubt a White Paper is being drafted. The context—to use the words of the noble Lord the Lord Privy Seal in which the Bill is now to be considered is essentially the same as it was on the day that it was withdrawn.
Secondly, it is impossible to argue that the Bill has nothing to do with the closure programme or the future of the industry: one has only to look at the amendments already on the Marshalled List to see that. The issues which the Select Committee is supposed to be considering are bound to be live ones and, indeed, very lively ones, if the Committee stage continues—a fact recognised by the noble Lord the Leader of the House on 19th October when he withdrew the Committee stage.
The noble Lord the Leader of the House may say that he is not responsible for the amendments. Of course, that is perfectly true, but by bringing the Bill forward now at this time, before the Select Committee has had a chance to consider the matter, and before we have had a chance to consider the Select Committee's Report, he is provoking the very discussion that he professes to wish to avoid. Of course the House will wish to consider the whole matter, not just the bits of it that the Government would like it to.
Thirdly, to commence the Committee stage now would be to fly in the face of the Resolution of the House on 20th October. We have not had our independent inquiry; we have not been given the opportunity to consider the result of one. One assumes that there will be a White Paper. Incidentally, whatever happens to this Motion today, I assume that the noble Lord the Leader of the House can assure us that no Bill for the privatisation of the coal industry will be introduced until after the White Paper has been published and until after Parliament has had a full opportunity to consider it.
It may be argued that the Bill is necessary to enable British Coal to employ consultants to advise on the sale of individual pits, and that unless those consultants are employed there is a possibility of eventual job losses. If that is an argument which is valid now, it was an argument which was just as valid on 19th October. Not only that, it was never argued on Second Reading that the Bill was necessary to give British Coal power in respect of individual pits. I find that argument extremely difficult to accept.
To employ financial consultants on the offer to the public of the whole industry in a privatisation is one thing. That may well require consultants of the highest, and no doubt of the most expensive, order in the City; but to deal with the sale of individual pits —if, indeed, any buyers can be found—seems to me to be different. Information as to their life; as to the geology of the area; and as to the costs of production is already in the hands of British Coal, otherwise it could not have taken a decision to close the pits in the first place. It is fanciful and, indeed, somewhat misleading to suggest that that has now become the object of the Bill. Of course it is not. Moreover, I note what Mr. Heseltine said in a debate in another place on 21st October:
"I have today invited Boyds, an international mining consultancy of world repute, to report to me on the viability of those pits. I also intend to appoint consultants to report on the prospects for British Coal". —[Official Report, Commons, 21/10/92; col. 455]
He at least did not feel that he needed the Bill before being able to take such consultancy advice.
That is the situation in which we now find ourselves. What should the Government therefore do in the light of that situation and the Resolution of the House passed on 20th October? Having posed the question, I shall now try to answer it. They should not proceed with the Bill's Committee stage. If they insist on continuing with rail, then coal should be severed. If they wish to proceed with a paving Bill for rail, so be it. That is a matter for them, and the House can consider it in the normal way. But to proceed with a Bill for coal is premature, ill-advised, and contrary to the specific Resolution of the House. It is premature because, essentially, nothing has changed since 19th October. The reasons for withdrawing the Bill then are just as valid today. It is ill-advised because it flies in the face of your Lordships' clearly expressed view that we should await the results of an independent inquiry before proceeding any further. Finally it is—to put it mildly —somewhat tactless to proceed in this slightly autocratic manner that so disregards the views that the House has already expressed.
For those reasons, we on these Benches have tabled the Motion which seeks to ensure that the Bill is postponed until such time as the inquiry into the coal industry is complete. We believe that that is a reasonable request, especially since the court actions have yet to be resolved. I hope that noble Lords on all sides of the House will be able to support the Motion. I beg to move.
Moved, as an amendment to the Motion that the House do now resolve itself into a Committee upon the Bill, To leave out from ("House") to the end and insert ("pursuant to the Resolution of this House of 20th October last, declines to consider the Bill in Committee until such time as Her Majesty's Government have received and published the results of the inquiry into the coal industry").—(Lord Richard.)
Lord Jenkins of Hillhead: My Lords, I had thought that the noble Lord the Lord Privy Seal might wish to speak at this stage. As he does not, I shall intervene and await his reply with interest.
I am not merely surprised, but amazed, that the noble Lord the Leader of the House did not accede to the request which was most strongly put to him last week by the noble Lord, Lord Richard, and myself. That is all the more so as the vote in October indicated that there was a widespread view held right across the House on that issue. The proposition we were putting forward was that the Government should wait only until the publication in January—no longer than that —of the committee of inquiry into the coal industry before proceeding with the Bill. Even from the narrow point of view of the efficient management of government business, it would have been wise to have acceded to that request. To start the Bill in ill-feeling in December is unlikely to produce a quick or earlier outcome than to start it with good feeling in January.
I should also have thought that wise leadership in the present circumstances would have sought to win friends for the Government rather than gratuitously trying to alienate everyone in sight. The hard, incontrovertible fact is that this Government are the least esteemed government within living memory. If the noble Lord doubts that for a moment, let him pick up any newspaper, whether Conservative inclined or not. Alternatively, even more significant, let him listen to the views of people of public spirit and in positions of influence, many of whom must have voted Conservative in April, and see what is their feeling. He will find a widespread sense—and I say this deliberately —of national shame at the antics of this Government.
I cannot, therefore, easily see what are the Government's motives for ignoring a wholly reasonable request and warning from both the Opposition parties. They can hardly believe that by so doing they will achieve what is sometimes known as the "smack of firm Government". There are few sights less convincing or more pathetic than that of a weak government and of weak men trying to puff themselves up with a display of forced strength.
Then, as I understand it, the Lord Privy Seal said that the Government are concerned above all with
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preserving jobs in the coal industry and that they must have the Committee stage today in order to facilitate that. Have they really no sense, if not of shame, at least of the ridiculous? For the Government to say that their prime motive is the defence of jobs in the coal industry is like Richard III, after the murder of the princes in the Tower of London, opening a subscription list for the Save The Children Fund.
Then we have the proclamation of the doctrine of the mandate: a Bill which was envisaged at the time of the election is sacrosanct. What was primarily put before the country in April was that if this Government were returned, there would return with them renewed confidence, and an economic upswing would begin immediately. What was also put before the country was that the central economic strategy must be to maintain the exchange rate and our position in the ERM. In addition, a great success was to he made of the British presidency of the European Community and Britain was to be acclaimed as the leader of Europe. If I were the Lord Privy Seal, I think I should say as little as possible about the utterly discredited promises of April.
If the Government wish to ride roughshod over this House, instead of observing some decent civilities or convenances between the two sides, it is wise to make sure that they have the resources to do so. At the moment, the Government have neither repute nor authority, neither judgment nor consistency. I think that the Lord Privy Seal will come to regret his intransigence on this.
Lord Dormand of Easington: My Lords, I have only a few brief points to add to the comprehensive speech made by my noble friend and by the noble Lord, Lord Jenkins. After the Government's announcement that a review of the coal industry would take place, any rational person would assume that nothing should be done to change the basis on which the industry exists. The Government suggest otherwise.
It is important to remember why the Government decided to undertake the review. It was decided on because of the sheer strength of opinion in the country against the proposed pit closures. People who had no connection whatever with the coal industry—people with no relatives in it, people who did not live in coal mining areas and those who perhaps did not support the miners in the 1984–85 strike—all joined in the protest against the massive scale of pit closures which had been proposed. The protest was so strong and universal that the Government did not simply say, "We had better take heed of what the people are saying", they were shocked and scared at what was happening. Even this Government, we thought, were not so incompetent and silly as to ignore what could only be described as a revolt.
I venture to suggest that if the public were aware that the Government had decided to press ahead with the Bill, there would be further protests. Of course, the public cannot be expected to know the details of parliamentary procedure. If they were able to do so, there would be cries of, "Betrayal!", because that is exactly what the Government are doing, particularly in view of the detailed information which my noble

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friend reiterated. There can be no justification whatever for any change since the review was announced.
This is perhaps the most important part of my contribution. Other important changes are taking place: development work at some pits has been stopped. That is blatant interference which cannot be justified in any circumstances. In my former constituency, a planning application has already been submitted to the local authority for the demolition of the entire surface workings of the two remaining pits in the area. I have a copy of that application. Perhaps I should mention that 3,000 miners will lose their jobs at Easington and Seaham Vane Tempest, if those pits are closed, to say nothing of the multiplier effect.
There has been widespread publicity about the numbers of miners who have applied for redundancy payments since the review was announced. Your Lordships should know that many of those applications are based on inaccurate and misleading information being given to miners who, understandably, are deeply concerned that they may lose their payment. That may well be the case.
Last week I met the president of the north-east area of the National Union of Mineworkers. He and his members are greatly disturbed about the matters that I mentioned and, I have to say, other matters. I hope that the Government are listening to what the miners are saying because there may well be a shortage of skilled men to operate the pits which remain.
A plea which I and others constantly make concerns the security of supply. At the present rate of extraction, this country has 200 years' supply of coal beneath the surface. That is of the greatest importance to the future of this nation and it should not be prejudiced in any way. There is abundant evidence that the British coal industry, without subsidy of any kind these days, is as efficient as any other in the world. To start paving the way to privatising it is, to say the least, speculative.
It is as certain as anything can be that safeguarding our massive reserves will not be a priority in a privately-owned coal industry. That should be a major factor, in my view the most important factor, in the review of our coal industry. The Bill is irrelevant and based on an uncertain knowledge of what form the industry will take.
The amendment before us today is not party political, it is based on simple common sense. The people of this country, if they had the opportunity, would say, "What is the argument? We were promised a review. Let's see what it produces and then we will determine whether privatisation, part privatisation, public ownership or public control is the wisest way to proceed".
I need not remind your Lordships because my noble friend made the point forcefully from the Front Bench, but this House defeated the Government's recent proposals relating to pit closures. Some of us thought and still think that the coal industry has made outstanding progress in recent years and that a review was unnecessary in any case. It was a tacit, real admission by the Government that their proposed policy was wrong. In the circumstances, there should
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be a review, untrammelled by this or any other Bill. Action, if any, can be taken when the results of the inquiry have been examined. In the meantime, let us get on with other more important business.
Lord Boyd-Carpenter: My Lords, the three speeches to which your Lordships have just had the pleasure of listening have all referred to the fact that the Bill deals with the coal industry. I appreciate that it is in respect of that industry that there is real concern, not only on the Benches opposite but generally in the country. However, the Bill also deals with a much bigger and, from the British economy's point of view, more significant matter—that is the railways. If your Lordships were to adopt the amendment moved by the noble Lord, Lord Richard, the provision for preparing the railways for denationalisation would be eliminated. This is the really important part of the Bill. It is the part of the Bill where it is extremely necessary that the British Railways authorities should be given a clear indication of what steps they are to take to prepare for privatisation. It is significant, and perhaps a little alarming, that noble Lords opposite, including the leaders of the two parties, did not feel it necessary even to mention British Rail and the future of British Rail.
Lord Clinton-Davis: My Lords, the noble Lord seems to be arguing a case that it would have made sense in the first place to have had two separate Bills. These are two separate industries. Why not have two separate Bills? Indeed it is perfectly possible, I believe, for that to be done now.
Lord Boyd-Carpenter: My Lords, the noble Lord will be aware of the fact that this Bill in its present form has already had a Second Reading. Therefore to drop it would mean that all aspects of it, including the one to which I am drawing attention, the railways, would have to start again from the beginning. I suggest to your Lordships that the really important matter is that our railways should be given the earliest possible opportunity to organise themselves for the change in ownership which I believe most opinion in most parts of the country believes in. What does the noble Lord want?
Lord Howie of Troon: My Lords, I wish to speak only briefly as I do not wish to detain the House. Surely the noble Lord has overlooked the fact that the railways have been preparing for privatisation for the past several years. To the outsider it looks as if they have been doing little else.
Lord Boyd-Carpenter: My Lords, that is perhaps an undue reflection on those responsible for our railways. I do not think the noble Lord can possibly controvert the view that this Bill is necessary in order that those who run our railways should be given the full authority and opportunity to get ahead with the preparations for privatisation. I regard it as very disturbing that in moving this Motion the noble Lord the Leader of the Opposition and his supporters did not even think this was a subject worth mentioning.
Lord Richard: My Lords, I am sorry to interrupt but that really is just not so. The whole passage of my

1181
speech was devoted to saying that the Government should sever coal from rail. I said that if the rail Bill came before the House, we would then consider it in the usual way. The noble Lord does me less than justice.
Lord Boyd-Carpenter: My Lords, the noble Lord cannot get away with that. In fact the Motion which he has moved would prevent your Lordships' House getting ahead with enacting the preparatory legislation in respect of the railways. Merely to say, "Oh well, you can have another Bill to do that", is to avoid the issue. What we are now concerned with this afternoon is whether we shall he able to proceed with a Bill which has already had a Second Reading and which has, as a major factor, the question of the railways and of their getting ahead with the somewhat overdue—in the view of many of us —steps towards privatisation. We heard a great deal about coal. If the Bill goes ahead, noble Lords who object to its coal aspects will be able to move amendments. I am perfectly certain that they will be able to do so. Your Lordships may agree or disagree with those amendments. But the fact that they can raise the point which really interests them—that is, the question of the coal side of this matter—is, if the Bill goes ahead, absolutely conclusive against the idea of scrapping the Bill, as is proposed by the noble Lord. I very much hope that your Lordships will reject this proposal.
Lord Tordoff: My Lords, in the first place in response to that last remark, this is—
Noble Lords: Oh!
Lord Tordoff: My Lords, I beg the pardon of the House, but I had thought that this was a matter of the Business of the House and that we were discussing a Motion before the House and therefore people were entitled to speak. I merely intend to reply to the noble Lord, Lord Boyd-Carpenter. In response to his last remark, the Motion before your Lordships does not scrap the Bill. It postpones consideration of the Committee stage of the Bill until a later date.
With regard to the connection between rail and coal and the desirability of separating coal from rail, if we proceed to the Committee stage I trust that the noble Lord, Lord Boyd-Carpenter, will agree to support the first amendment standing in the name of my noble friend Lord Ezra. However, there is a connection between rail and coal and that is the matter of coal freight. The bounds of probability of privatisation going ahead in one way rather than another will depend on the amount of coal freight which is available to the rail industry. The noble Lord shakes his head but it is well known that the freight movement on rail is very much determined by the amount of coal which is moved. There is a connection there and it may well be that noble Lords may consider that, as there is uncertainty cast on the future of privatisation of rail as well as of coal, we should proceed on the basis of the Motion from the noble Lord, Lord Richard.
Lord Simon of Glaisdale: My Lords, I hope very much that the noble Lord the Leader of the Opposition will not press this Motion because it runs counter to a settled and very valuable practice of your Lordships' House; namely, that the House will let the Government, any government, get their business through. That has been of great value to Labour governments in the past and will no doubt be of value to any Labour government in the future. What this does is to postpone in the middle of a Bill the progress of government business. I desire only to say this, that that settled practice has a concomitant; namely, that government business managers allow noble Lords to have adequate time to discuss the various government businesses that are before them. That is only a corollary. At the moment the Motion strikes at the very heart of the settled practice of your Lordships' House —that is a very valuable practice indeed—namely, that your Lordships do not entertain dilatory procedures.
3.27 p.m.
Lord Wakeham: My Lords, I hope it will be convenient to your Lordships if I say something at this stage. The Motion that the noble Lord the Leader of the Opposition has moved would have the effect of delaying for both British Rail and British Coal the granting of enhanced powers to do things to prepare for privatisation. The effect of this would be different for each corporation. I intend to concentrate my remarks on the reasons why it would be detrimental for the coal industry to delay proceedings on the Bill as the noble Lord proposes. However, that is not to say I shall ignore the important points that my noble friend Lord Boyd-Carpenter made about British Rail.
In inviting your Lordships to reject the Motion I do not think that I need remind your Lordships of the circumstances in which the Committee stage was postponed. Suffice to say that in the light of the announcement made on 13th October by British Coal of significant pit closures, and in the knowledge of a further Statement which was to be made later that day in another place, I took the view that it would not be proper to invite your Lordships to consider the Bill in Committee on 19th October.
It is, however, interesting to recall the reaction of noble Lords opposite to my decision to postpone the Committee stage. The predecessor of the noble Lord, Lord Richard, as Leader of the Opposition, the noble Lord, Lord Cledwyn of Penrhos, said that I was wrong. He argued that the issue of pit closures was no reason for postponing consideration of this Bill. Speaking in the debate on 19th October, the noble Lord, Lord Cledwyn, said that I had:
"tried to make a case for the postponement of the Committee stage of the British Coal and British Rail (Transfer Proposals) Bill, but we on this side of the House see no valid argument for that".—[Official Report, 19/10/92; col. 628.1
The noble Lord, Lord Jenkins of Hillhead, was of the same view, although he thought that discussion might be limited to a general debate on energy strategy on the first amendment tabled to the Bill. Now, by contrast, noble Lords opposite ask us to delay the Committee stage yet further.

1183
I appreciate that the noble Lords, Lord Richard and Lord Jenkins, are seeking not to stop the passage of the Bill for all time but to delay its passage for a further period. I shall seek to argue that the agreement of your Lordships' House to such a delay, if perfectly proper in procedural terms, would be more questionable in constitutional terms. Moreover, it would in itself be highly damaging to the task of considering the widest possible range of options for saving some pits and consequently some of the jobs in the mining communities already hard hit by the inevitable run down in the coal industry.
What has intervened since 19th October to justify the call from noble Lords opposite to delay the passage of the Bill until the coal review has been concluded? I confess that I find it hard to find any such reason; indeed, in so far as circumstances have changed, they seem to me to point rather in the direction of proceeding with this Bill as fast as possible.
First, the six weeks which have elapsed have enabled everyone to approach this Bill in a different light to that engendered by the heat of the argument about pit closures.
Secondly, the Government have of course now established a wide-ranging review of the future of the coal industry. Your Lordships' House called on the Government to establish such a review on 20th October before proceeding with the pit closure proposals. The Government have already given a commitment that your Lordships' House will have the opportunity to debate the conclusions of that review before any programme of colliery closures is undertaken by British Coal, beyond the closure of the 10 pits already undergoing statutory consultation.
The amendment to the Motion now before your Lordships' House attempts to pray in aid the resolution of the House of 20th October as a reason for delaying proceeding into Committee on this Bill. I should point out to your Lordships that the resolution of 20th October had nothing whatsoever to do with this Bill. It was, as I have indicated, concerned with the separate issue of pit closures. Moreover, the Bill was not mentioned by any speaker in the debate on 20th October. In those circumstances, I find it difficult to accept the proposition now put forward by the noble Lord the Leader of the Opposition that the decision of the House on 20th October can be taken in some way to justify a further delay in proceeding with the Committee stage of the Bill.
On 19th October I referred to the uncertainty surrounding legal proceedings which had just been instituted as reinforcing my view that the climate was not then right for consideration of this Bill. Since then the issues involved have been clarified and I think that it is now sufficiently clear that a full discussion of matters that are relevant to the Bill need not trespass on the issues that are before the courts.
Since 19th October we have had the opportunity to absorb a number of ministerial statements on the pit closures proposed by British Coal. The review has been announced and its full terms of reference published. British Coal has withdrawn its decision on proposed pit closures announced on 13th October—
1184
the subject of the legal actions I referred to on 19th October—and begun statutory consultation on 10 of the pits proposed for closure. It has said that it will await the recommendations of the review before taking decisions on the 21 pits in the moratorium.
Perhaps I may now try to describe in practical terms what the Bill will allow British Coal and British Rail to do. It will allow the two corporations to make their proper contribution to the Government's privatisation proposals, for example by enabling them to comment on and make an input to detailed plans put to them by Government. Since the two corporations themselves have the best and most detailed knowledge of their businesses, that is absolutely essential in ensuring that the detailed privatisation plans will be effective and workable. In addition, there may be some areas where British Coal and British Rail need outside assistance to enable them to make their contribution. The Bill therefore ensures that there will be no legal obstacle to their appointing advisers—for example, to advise them on the financial and legal implications of privatisation.
The Bill does not allow British Coal and British Rail to implement the transfer of functions, property, etc., apart from those which are already possible under existing legislation. Before any such transfers could take place, Parliament would have to approve substantive privatisation legislation at a later date. The Bill has no connection with any pit closures proposed by British Coal.
Moreover, Parliament's agreement to the passage of the Bill would not in any way imply that the substantive legislation would follow immediately. Your Lordships will recall that the water and electricity privatisation Bills were, for instance, introduced in a subsequent session of Parliament to the Public Utility Transfers and Water Charges Bill. Though the passage of the Bill is necessary to ensure that the Government's privatisation proposals can be formulated and implemented with the benefit of expert advice, there is no sense in which the Bill would require the introduction of privatisation legislation itself.
It is of course for British Coal and British Rail to judge the precise limits of what they can reasonably do within the framework of the existing legislation. I understand that the present position is that they have nominated some of the advisers who they would wish to assist them with the privatisation work but that they are inhibited in the work that they can properly ask the advisers to do and the costs that they can incur.
It has been argued that proceeding with the Bill could in some way pre-empt the coal review currently under way. That is not the case. I should like to give your Lordships a categoric assurance on this question. I can assure the House that there is no question of this Bill being used to further privatisation in a way which is prejudicial to the review. I can give an undertaking that no decisions on the timing of future coal legislation will be taken before the White Paper setting out the results of the review has been published and debated in both Houses of Parliament.

1185
There is also a new factor to be taken into account. It is well known that several private organisations and individuals have expressed an interest in licensing some, or indeed possibly all, of the 21 pits which are the subject of the review. British Coal must be put in a position where it is able to give full and thorough consideration to any proposals that are made in the review. It is to be a wide-ranging and thorough review. In my view, it is absolutely essential that British Coal should be put in a position where it can fully explore and develop all the options. There is no doubt that under its existing powers under the 1946 nationalisation Act, and until this Bill comes into effect, there are restrictions on the range of private sector options that British Coal is able to consider in a full and proper way.
In other words, far from prejudicing the coal review in any way, the passage of this Bill is necessary to make sure that all the options can be properly and fully considered, and so that whatever conclusions it comes to arc well informed and can be developed as speedily as possible.
It is for that reason above all that I strongly urge your Lordships not to allow the House in any way to impede the proper working out of options for the future of jobs in the mining industry.
Finally, I urge the House to consider the wider implications of agreement to any such amendment to the Motion as that moved by the noble Lord the Leader of the Opposition today. There is no question but that the amendment is entirely proper in procedural terms. However, the conventions by which the House operates are perhaps more difficult to interpret, not least for one as new to your Lordships' House as I am. Your Lordships would wish me to point out the novelty of what is proposed by the noble Lord opposite.
It is a convention of this House that the House will not oppose at Second Reading Bills introduced to give effect to manifesto commitments. As your Lordships will be aware, this Government were elected on the basis of a manifesto which included the promise of measures to transfer functions of British Coal and British Rail to the private sector. Your Lordships' House has of course given a Second Reading to the Bill. I suggest that your Lordships will wish to think carefully about the implications for the observance of the conventions of the House if it were now to agree to this amendment. Certainly, in modern times there is, I think, no precedent for such a dilatory Motion to be moved in respect of proceedings after Second Reading of any government Bill, let alone one which springs directly from a manifesto commitment.
Indeed, if your Lordships felt that they wanted to restrain British Coal in its powers to prepare for full or even partial privatisation of some or all of its operations, I suggest to your Lordships that this dilatory Motion is not the proper nor most effective way to proceed. I suggest that the right way to achieve this would be to seek to amend the Bill in such a way as to delay the implementation of the coal section of the Bill. I have to say I would see great difficulty with such an amendment for the reasons that I have already
1186
given but it would in my view be the proper way to proceed rather than by way of a dilatory Motion after having given the Bill an unopposed Second Reading.
I urge your Lordships to reject this amendment if it is pressed to a Division by the noble Lord opposite; and I hope that we can then proceed to what this House does best; namely, the detailed consideration of the Bill on its merits in Committee and at subsequent stages.
Lord Richard: My Lords, I am grateful to the Leader of the House for what he has just said. I take it that the wording that he used is meant to give the assurance that I asked him for; namely, that no Bills for the privatisation of the coal industry will be introduced until after the White Paper has been published and considered by Parliament. I see the noble Lord nodding his head. Perhaps he would confirm that.
Lord Wakeham: My Lords, certainly I will give the noble Lord that undertaking.
Lord Richard: My Lords, I am much obliged. In that case, what concerns us now is whether it is proper to continue with this Bill.
The noble Lord makes two or three points. First, he says that there are constitutional implications. Secondly, he says that the Labour Party has changed its position. I should like to deal with that point. My noble friend Lord Williams of Elvel reacted first to the Statement made by the Government Chief Whip on 19th October—I hope the Leader of the House will note it—when he said:
"I can only say that the change is greeted with the greatest resentment. It has been imposed unilaterally".—[Official Report, 19/10/92; col. 603.]
Perhaps I may say to the noble Lord the Leader of the House that that too is against the conventions of this House. My noble friend went on to say:
"it has not been agreed through the usual channels"
perhaps that is another little breach of the conventions of this House.
"It has deprived your Lordships of a debate on the coal industry which many of us were expecting to have at the Committee stage of the British Coal and British Rail (Transfer Proposals) Bill which the Government had set down for business this afternoon".
I was absolutely accurate in my opening remarks to the House when I said that the Labour Party took the view, when the debate was taken off, that we had been deprived of the opportunity of a full debate on the future of the coal industry. In fact, we had that debate on the following day when the Motion was carried by 125 votes to 100.
Before your Lordships vote on my amendment I hope your Lordships will reflect upon what the House agreed to on 20th October. What we said collectively on 20th October was that nothing should happen to the coal industry until after there had been a full and independent inquiry, until after that had been considered. That still remains the position.
The Leader of the House presented the Motion in his usual charming way but I am sorry that he has done nothing to reassure me, nor, I suspect, any noble Lords on these Benches, that my amendment is

1187
unnecessary or tendentious, or that it should be withdrawn. I propose to test the views of the House on this amendment.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the original Question was, That the House do now resolve itself into a Committee upon the Bill, since when an amendment has been moved To leave out from "House" to the end and insert the words set out on the Order Paper. The Question is that this amendment be agreed to? As many as are of that opinion will say, "Content", to the contrary, "Not-Content". Clear the Bar.
Division called.
3.44 p.m.
Their Lordships divided: Contents, 106; Not-Contents, 165.

Division No. 1

CONTENTS

Airedale, L.

Jenkins of Hillhead, L.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Ashley of Stoke, L.

Judd, L.

Aylestone, L.

Kagan, L.

Barnett, L.

Rennet, L.

Birk, B.

Listowel, E.

Blackstone, B.

Llewelyn-Davies of Hastoe, B.

Blease, L.

Lovell-Davis, L.

Bonham-Carter, L.

McIntosh of Haringey, L.

Boston of Faversham, L.

Mallalieu, B.

Bottomley, L.

Mayhew, L.

Brimelow, L.

Merlyn-Rees, L.

Broadbridge, L.

Milner of Leeds, L.

Brooks of Tremorfa, L.

Molloy, L.

Bruce of Donington, L.

Monkswell, L.

Carmichael of Kelvingrove, L.

Morris of Castle Morris, L.

Carter, L.

Mulley, L.

Cledwyn of Penrhos, L.

Murray of Epping Forest, L.

Clinton-Davis, L.

Nicol, B.

Cross, V.

Ogmore, L.

Cudlipp, L.

Peston, L.

Dainton, L.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Desai, L.

Prys-Davies, L.

Donaldson of Kingsbridge, L.

Rea, L.

Donoughue, L.

Richard, L.

Dormand of Easington, L.

Ritchie of Dundee, L.

Ezra, L.

Rochester, L.

Falkender, B.

Sainsbury, L.

Fitt, L.

Seear, B.

Gallacher, L.

Serota, B.

Galpern, L.

Shackleton, L.

Gladwyn, L.

Shaughnessy, L.

Graham of Edmonton, L. [Teller.]

Soper, L.

Stallard, L.

Greene of Harrow Weald, L.

Stoddart of Swindon, L.

Gregson, L.

Strabolgi, L.

Grey, E.

Taylor of Gryfe, L.

Hampton, L.

Thomson of Monifieth, L.

Hamwee, B.

Tonypandy, V.

Hanworth, V.

Tordoff, L. [Teller.]

Harris of Greenwich, L.

Turner of Camden, B.

Hayter, L.

Varley, L.

Healey, L.

Wallace of Coslany, L.

Hilton of Eggardon, B.

Wedderburn of Charlton, L.

Hirshfield, L.

White, B.

Hollick, L.

Wigoder, L.

Hollis of Heigham, B.

Williams of Elvel, L.

Hooson, L.

Williams of Mostyn, L.

Howie of Troon, L.

Wilson of Rievaulx, L.

Jay, L.

Winchilsea and Nottingham, E.

Jay of Paddington, B.

Young of Dartington, L.

Jeger, B.

1188

NOT-CONTENTS

Abercorn, D.

Hood, V.

Ackner, L.

Hothfield, L.

Aldington, L.

Howe, E.

Alexander of Tunis, E.

Hunt of Tanworth, L.

Archer of Weston-Super-Mare, L.

Hylton-Foster, B.

Ironside, L.

Arran, E.

Jellicoe, E.

Astor, V.

Johnston of Rockport, L.

Astor of Hever, L.

Killearn, L.

Attlee, E.

Kimball, L.

Banbury of Southam, L.

Kinloss, Ly.

Barber, L.

Kinnaird, L.

Belhaven and Stenton, L.

Kitchener, E.

Beloff, L.

Knights, L.

Belstead, L.

Knollys, V.

Bessborough, E.

Laing of Dunphail, L.

Birdwood, L.

Lauderdale, E.

Blatch, B.

Lawson of Blaby, L.

Blyth, L.

Long, V.

Boardman, L.

Lyell, L.

Borthwick, L.

Mackay of Ardbrecknish, L.

Boyd-Carpenter, L.

Mackay of Clashfern, L.

Brabazon of Tara, L.

Macleod of Borve, B.

Brougham and Vaux, L.

Mancroft, L.

Butterworth, L.

Manton, L.

Cadman, L.

Mar, C.

Caithness, E.

Margadale, L.

Caldecote, V.

Marlesford, L.

Campbell of Alloway, L.

Merrivale, L.

Campbell of Croy, L.

Mersey, V.

Carnegy of Lour, B.

Milverton, L.

Cawley, L.

Monk Bretton, L.

Chalfont, L.

Morris, L.

Charteris of Amisfield, L.

Mountevans, L.

Chelmer, L.

Mowbray and Stourton, L.

Cochrane of Cults, L.

Munster, E.

Cockfield, L.

Murton of Lindisfarne, L.

Coleraine, L.

Nelson, E.

Colnbrook, L.

Norfolk, D.

Constantine of Stanmore, L.

Northbourne, L.

Cox, B.

O'Cathain, B.

Cranborne, V.

Oppenheim-Barnes, B.

Crickhowell, L.

Orkney, E.

Cullen of Ashbourne, L.

Orr-Ewing, L.

Cumberlege, B.

Oxfuird, V.

Davidson, V.

Park of Monmouth, B.

De Freyne, L.

Pearson of Rannoch, L.

Denham, L.

Pender, L.

Denton of Wakefield, B.

Perry of Southwark, B.

Dudley, B.

Peyton of Yeovil, L.

Eccles of Moulton, B.

Platt of Writtle, B.

Effingham, E.

Porritt, L.

Elliot of Harwood, B.

Prentice, L.

Elliott of Morpeth, L.

Rankeillour, L.

Elphinstone, L.

Reay, L.

Elton, L.

Rippon of Hexham, L.

Faithfull, B.

Rix, L.

Ferrers, E.

Rodger of Earlsferry, L.

Fraser of Carmyllie, L.

Romney, E.

Fraser of Kilmorack, L.

St. Davids, V.

Gainford, L.

Seccombe, B.

Geddes, L.

Shannon, E.

Gilmour of Craigmillar, L.

Simon of Glaisdale, L.

Goschen, V.

Soulsby of Swaffham Priory, L

Grantchester, L.

Stedman, B.

Gray of Contin, L.

Stewartby, L.

Gridley, L.

Stodart of Leaston, L.

Hailsham of Saint Marylebone, L.

Strange, B.

Strathclyde, L.

Halsbury, E.

Strathmore and Kinghorne, E. [Teller.]

Harding of Petherton, L.

Harmar-Nicholls, L.

Terrington, L.

Haslam, L.

Teviot, L.

Hayhoe, L.

Teynham, L.

Henderson of Brompton, L.

Thomas of Gwydir, L.

Henley, L.

Thorneycroft, L.

Hesketh, L. [Teller.]

Thurlow, L.

Holderness, L.

Trumpington, B.

HolmPatrick, L.

Ullswater, V.

1189

Vaux of Harrowden, L.

Wharton, B.

Vivian, L.

Wolfson, L.

Wakeham, L.

Wyatt of Weeford, L.

Walton of Detchant, L.

Wynford, L.

Westbury, L.

Young, B.

Resolved in the negative, and amendment to the Motion disagreed to accordingly.
3.55 p.m.
On Question, original Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause I [Power to act in relation to proposals for transfer of functions, property etc.]:
Lord Ezra Lord Ezra moved Amendment No. 1:
Page 1, line 7, leave out ("the British Coal Corporation or").
The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendments Nos. 50, 52, 53 and 54. The issue raised in the amendment was touched on in the previous debate. The object is to separate coal from rail. The noble Lord, Lord Boyd-Carpenter, in his intervention a few minutes ago indicated he thought that that might be a reasonable proposition. It is clear that the privatisation of rail is more advanced than the privatisation of coal; in the case of rail there has already been a White Paper. In those circumstances it could be argued that British Rail should be in a position to consider what further steps might be proposed by the Government before its eventual privatisation.
That is not the position as regards coal. There has been no White Paper as yet but there are in train three reviews and two court cases. If I heard correctly, Mr. Tim Eggar, Minister for Energy, indicated on television last week that one outcome of the present reviews could well be special legislation addressed to coal. Is that a possibility which the Government have in mind? If that is the case and, as was indicated by the noble Lord the Leader of the House, there could be a White Paper, and that possible legislation relating to it will follow, there is an even stronger reason for deferring the consideration of coal.
The issues relating to coal and rail are different in almost every particular. Apart from the subject of timing which we are addressing today, it would be more reasonable to devote time to each of those industries in turn. Each raises major issues which are of an entirely different order. In the case of coal the issues remain of an unknown order until the promised White Paper appears.
In considering the legislation there is a strong case in practical terms to separate the two industries. As regards coal many uncertainties lie ahead. I do not wish to repeat some of the relevant points raised in the previous debate. However, I detected in some of the remarks made by the noble Lord, Lord Wakeham, a suggestion that he would not consider it entirely illogical if rail and coal were separated. That is precisely what is proposed in the amendment. I beg to move.
4 p.m.
Lord Haslam: Perhaps I may introduce a slightly practical note into the discussion. I spent 40 years of my industrial career in the private sector and eight years in nationalised industries. Also I am one of the few remaining managers who has worked in both the privatised and nationalised UK coal industries. That exposure has led me to become a fervent advocate of the benefits of privatisation.
Managing a nationalised industry is more demanding and frustrating than running a comparable private sector company. Obviously many operational and strategic problems are common to both, but nationalised industries carry a raft of unique problems which in themselves can be very debilitating.
I will mention two examples. When I was chairman of the then nationalised British Steel, I was also chairman of Tate amp; Lyle, sharing my time between the two. During certain months I kept a record of the time spent in accounting for and explaining the board's activities, as distinct from engaging in creative work. In Tate amp; Lyle that accountability element never exceeded 10 per cent. of my time, involving talking to shareholders, investment groups, government and the European Commission. In British Steel it never fell below 50 per cent., involving talking to government departments, the opposition, Select and Back-Bench Committees, the MMC, the European Commission, regional and local authorities, many groups of MPs, individual MPs and so on. One month, when we closed the Gartcosh steel works in Scotland, the accountability factor rose to 80 per cent. This phenomenon is not confined to the chairman but permeates down through the organisation and in the process carries a heavy overhead cost; but the major negative is the distraction from using one's energy in a creative way. Nevertheless, it is perfectly understandable that this accountability element should be so dominating, particularly in those nationalised industries like steel and coal which in the past have had substantial financial support from government. But at the same time it has to be recognised that this factor has a marked adverse impact on potential performance.
Secondly, in my nationalised industries' period of eight years I responded to seven different Secretaries of State. In their different ways they were all very helpful and supportive, but understandably they were all anxious to put their particular stamp on the industry, which made the development of a consistent strategy somewhat elusive. That is equivalent in private sector terms to an on-going chief executive having a new chairman who has little or no relevant knowledge of the industry imposed on him each and every year. In practice, could one imagine that ever happening?
I could quote many other unique problems which are peculiar to nationalised industries and hence I can understand better than most the great sense of release which is felt by management when an industry is privatised. That release brings a surge of confidence and inevitably an improved performance. Although British Coal, since the miners' strike, has carried out the most radical restructuring of a major UK industry

1191
in recent times, accompanied by a massive improvement in productivity, I firmly believe that if British Coal had been privatised four years ago we should be looking at a much better prospect for the industry than we do today.
Turning specifically to the amendment proposed by the noble Lord, Lord Ezra, even in the unlikely event that the current inquiry into the future of the coal industry does not foresee a somewhat brighter future for coal than was outlined in the original controversial announcement, I still fervently believe that British Coal, whatever its residual size and shape, should be privatised. We are now discussing an enabling Bill which would be helpful to my successors in British Coal in moving in that direction. For those reasons, I oppose the amendment.
Lord Donoughue: This amendment, which stands in my name and that of the noble Lord, Lord Ezra, approaches the problems involved in bringing this Bill before Parliament from a slightly different angle from that on which we have just voted. I wish to support what the noble Lord, Lord Ezra, said.
From the beginning it has always seemed to me odd to mix together rail and coal, which I believe are intrinsically different. Coal is an industrial commodity; rail is a public service. The case for separation was from the beginning and is now, I believe, strong. The noble Lord, Lord Ezra, made a basic case. I felt that the noble Lord, Lord Boyd-Carpenter, appeared to support the case for separation. I look forward to hearing him speak on the amendment and possibly voting in favour of it.
It was odd, and has now become totally inappropriate, to proceed with coal linked with rail since the setting up of the inquiry into coal. Some of that argument has been covered as regards the previous Motion. However, it must be stated that if we believe the Government's assurances on that inquiry, all options are still open on coal policy. Therefore, it is surely illogical to deal with privatisation of coal now when we do not know what will be the shape, size, nature and market for the coal industry. Is it not terribly wasteful to spend public money on consultants when they too will not know the nature or scale of the industry on which they are being consulted? I should like to think not, but perhaps the insistence on proceeding reflects something about the Government's approach to the coal inquiry. Perhaps some in the Government do not intend to listen or to change their approach, whatever the inquiry's conclusions.
In October the Prime Minister and Mr. Heseltine stated very firmly that they were convinced of the need for closures and that there is no market for coal. I wonder whether the insistence on proceeding means that they are still convinced of that; they are proceeding with this privatisation because their minds are still closed and in their minds nothing has changed.
If the inquiry is not a sham and if the Government are genuinely willing to listen, they should put the privatisation of coal on hold until the inquiry reports. The noble Lord, Lord Wakeham, assured us that there will be no privatisation Bill until after the inquiry's report; that is helpful. However, that is not the point.
1192
The point is that until the inquiry has reported on energy policy, on the changes which could be made that will fundamentally affect the demand for coal, it is quite wrong to proceed with this part of the Bill.
I make the point also about the courts. That was the basic reason given by the Minister at the time for withdrawing the Bill on 19th October. It was said that the matter was before the courts. That was stated as the reason and that still applies. The matter is still before the courts today, this week. Surely if it was a reason for not proceeding then, it is a reason for not proceeding now.
The noble Lord, Lord Wakeham, suggested in our opening discussions that the court issue is not now related to the Bill's provisions. I question that and should like further elaboration from the Minister on that. As I understand it, the matter before the courts concerns consultation. Clauses 31, 34 and 36 deal with consultation. If that was a reason for withdrawing then, that reason still exists. If that is not now a genuine reason for withdrawing the Bill, I wonder whether it was an honest and accurate reason then.
Much has changed since 19th October when the Bill was last before the House and withdrawn. Those changes, encapsulated in the inquiry, are an unanswerable reason for delaying the coal clauses of the Bill. It must make sense now, with the changes that affect coal and do not affect rail, to delay the coal provisions. I am sure that on this side we would have been co-operative on rail—that has been indicated —had the separation been made.
This is a positive amendment. It is not a wrecking amendment. I am sure that many noble Lords on the Cross-Benches, and we hope some government supporters, will see the logic and practicality of what we propose, which would be a helpful move enabling the Committee to proceed constructively on the rail proposals, where much work has been done, where there has been a White Paper and where much is known. Let us have further consideration on coal, where there has been no White Paper, where we do not know the Government's policy and where we trust all options remain open until after the report of the committee of inquiry has been made.
Lord Boyd-Carpenter: This debate has been a somewhat quieter replay of the more animated discussion that we had on the Motion not to take the Bill into Committee. This amendment at this stage follows—which I do not think the amendment on the previous debate did—the proper procedure. The noble Lords, Lord Ezra and Lord Donoughue, both referred en passant to the speech that I made on the earlier debate when I said, and I repeat, that if we wished to take coal out of the Bill this—that is, an amendment in Committee—is the proper procedure. I did not of course indicate any support for the view that we should take coal out of the Bill. Indeed, if Members of the Committee would care tomorrow to study my speech they will see that I emphasised, perhaps at undue length, the importance of keeping it in. But we are at least now having a debate in the proper procedure and not, as we frankly were on the previous round, wasting time with a wholly unnecessary Motion.

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I believe that on balance we must keep coal in the Bill. As my noble friend the Leader of the House said in the earlier debate, it enables the Coal Corporation to make the preparations for privatisation; and the fear that nonetheless this might be rushed through before the present difficulties have been cleared up has been dealt with effectively by the full and detailed assurances given by my noble friend the Leader of the House. Consequently this amendment seems to me to be a mistake, and I hope that the Committee will not accept it.
4.15 p.m.
Lord Peyton of Yeovil: I do not wish to keep the Committee for any length of time, but I should like to say how warmly I support what has been said by my noble friend Lord Haslam. He speaks with great experience. He made the point clearly that this Bill does not set out to change anything. It merely enables certain preliminary steps to be taken. I for one see no objection whatever to our proceeding with it as it is now. Indeed, I would think it odd if we did not.
Whenever a problem arises, no matter what the source, it is our instinctive knee-jerk reaction to set up an inquiry. In this instance we have two, even three, on the tapis now. That would seem to me to be an excess. One of the consequences of an inquiry is delay. Further to add to the delay by holding this Bill back would do nothing to help.
I hope that the discussion of this Bill will afford to the Government an opportunity to make clear at least some of their intentions. I do not wish to go back into history, but I have always thought that to put the privatisation of electricity in front of coal was a cardinal error. I said so at the time and so did many other people. I also thought it was a grievous error to have only two generators because it put them in a very powerful bargaining position. I felt some sympathy with the coal industry in the great disadvantages, so it seemed to me, that it faces.
The second reason why I am on my feet now is that I want to express to my noble friend the earnest hope that opportunity will be taken by the Government during the discussion of this Bill to look with favour upon any pattern that has in it an ingredient of flexibility. The rigidity that worries me now has been greatly overdone in previous privatisation measures. I think I should declare an interest here. I am president of British Alcan and we have a large smelter in the North East which depends upon a neighbouring colliery. The fate of that colliery is likely to depend upon a degree of flexibility being introduced that is now absent.
One of the aspects that I most fear is that large concerns —British Coal, no matter who it is owned by, or any large successor body and the two generators—will not consider local problems, local difficulties and local interests, with the result that quite promising enterprises could well be extinguished when they might be saved. I hope that my noble friend will have that very much in mind and keep it in the minds of her noble friends.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): I was delighted to hear my noble friend Lord Boyd-Carpenter clarify his views on this amendment. Much has happened since we were due to debate this Bill on 19th October, and much of the material has been covered by my noble friend the Lord Privy Seal. But as your Lordships will know, following British Coal's announcement of pit closures, the Government announced a review of the prospects of 21 of those pits in the context of their energy policy. This review is full and wide-ranging, and I am pleased to assure my noble friend Lord Peyton that it will indeed look at flexibility.
Consultation is taking place with the principal providers and consumers of energy, the trade unions and other interested parties. The evidence to the review and its findings will be published to the fullest extent possible, except where those providing information have done so in confidence in view of commercial sensitivities. Early in the new year there will be a White Paper setting out the results of the review in the context of the Government's energy policy. The White Paper will make clear the consequences for British Coal, the implications for individual pits and the employment prospects for the industry. The White Paper will be presented to Parliament, and my noble friend assured the House that each House will have the opportunity to debate the issues fully.
There may be temptation in some parts of this Committee, reflected in this amendment, to think that it is a sensible response to such a wide-ranging review to remove British Coal from this Bill, or even to take coal privatisation off the political agenda. I think that would be a mistake.
The Government remain committed to privatisation of the coal industry. Although decisions about privatisation will take account of the review, the policy will remain in place. Whatever conclusions are reached as a result of the review, it must continue to be the case that the long-term interests of the industry will be best-served by freeing the management from the constraints of public sector ownership. I hasten to reassure the noble Lord, Lord Donoughue, that that does not mean that we will not be listening to and taking note of the full review. I hope that my noble friend Lord Peyton will agree that freeing the management from the constraints of public sector ownership is one of the best ways to achieve flexibility.
The Bill is a technical paving measure to give British Coal and British Rail powers to participate in the preparation process. It is not the substantive legislation which will allow privatisation transfers to take place, decisions on which will have to take account of the results of the review. I assure noble Lords that there is no question that the Bill will be used to further privatisation in a way that is prejudicial. I confirm the assurance that was given by my right honourable friend that no decision on the timing of further main legislation in respect of coal will be taken until the White Paper, which will set out the results of the review, has been debated.

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As my noble friend Lord Haslam so ably stated, it will be vital to the effectiveness and workability of the Government's proposals for privatisation that British Coal and British Rail are able to contribute.
If references to British Coal are removed from the Bill, it will be prevented from playing a full and proper role in commenting on and making an input to Government proposals for privatisation. British Coal would be handicapped, which would be a worse situation than delaying giving it the power. The amendment would have a greater effect than the amendment that was moved by the noble Lord, Lord Richard, which proposed that the Bill be postponed until after the pit review. This amendment would remove British Coal from the Bill.
I should like to remind the noble Lord, Lord Donoughue, that we gave a Second Reading to the Bill as a coal and rail paving Bill. We wish to think hard about the implications of that situation, particularly in the light of the Lord Privy Seal's commitment that no decision on the timing of substantive coal privatisation legislation will be taken until the pit review has been debated in both Houses.
It is possible that options will be considered in the coal review, for example exploring the opportunity for the private sector in the production of coal. British Coal may wish to have an input in relation to that matter. The amendment could inhibit British Coal from making a full contribution to the development of such an option.
Lord Tordoff: Can the noble Baroness explain how it can be that the Bill is necessary to enable British Coal to make a contribution to the review? Is that what the noble Baroness is saying?
Baroness Denton of Wakefield: Without the Bill, British Coal does not have the necessary authority to have advisers, which means that it would be handicapped. The noble Lord, Lord Ezra, drew attention to a comment made by my honourable friend on the necessity of further legislation relating to coal. It is for the review to reach conclusions and it would be wrong to rule out any situation.
The noble Lord, Lord Donoughue, questioned why, if the court situation was relevant in October, it was not relevant now. I should like to point out that full discussion of matters in the Bill need not trespass on the issues that are before the courts. We have now had time to examine that issue, unlike the situation in October.
I feel sure that noble Lords would not wish to restrict the rights of British Coal. If noble Lords vote for the amendment, the effect will be to deprive British Coal of an ability to play a full part in considering options that might be helpful to coal miners and the coal-mining industry of this country.
My right honourable friend pointed out that a possible method of achieving separation would be to amend the Bill in such a way as to delay the implementation of the coal section of the Bill. However, there can be no firmer assurances than those that have been given today and I hope that in the interests of British Coal the amendments will be withdrawn.
Lord Donoughue: Can the noble Baroness help us all by explaining what I have never understood? What was the basic rationale in putting together a totally different industry and service? Why did we not have two separate Bills that could have been taken concurrently?
Baroness Denton of Wakefield: The amendments are not intended to involve debates about the industries. They concern technicalities which apply to both industries. The Bill has passed through the other place and it seemed that this was a sensible and logical way to deal with them.
Lord Ezra: I am obliged to those noble Lords who have considered the amendment and done so in a very careful way.
The noble Baroness has stated that if we were to approve the amendment it would put British Coal at a big disadvantage because it would be prevented from giving proper consideration to the various options for privatisation and it would be deprived of the ability to recruit advisers. British Coal must have changed a good deal since I was connected with it. I did not need to have a paving Bill in order to answer questions that might be put to me on strategic issues.
Baroness Denton of Wakefield: I should like to clarify the point. I did not intend to suggest that British Coal could not make its own decisions, but the paving Bill allows it to have advisers if necessary. If the amendment is passed it will be handicapped in that manner.
Lord Ezra: I thank the noble Baroness for that elucidation. I was going to say that I did not need a paving Bill in order to give my views on various strategies that the Government might think up in relation to the coal industry. There were very many strategies in my time on which I was asked to give an opinion; sometimes they took my opinion and sometimes they did not. But I never felt it necessary to turn to the outside world for advisers on the intricacies and affairs of the coal industry. It is an extraordinary suggestion that such a great industry, with an in-built knowledge of its business, with leading mining engineers of the world and with people who are particularly knowledgeable in financial and economic matters and who spend their entire time on those subjects, cannot prepare itself for possible eventual privatisation without turning to the outside world. Inevitably, any advisers who were obtained would know far less about the coal industry than those who are already involved in it.
To my mind that is not the issue. The issue is that as between the two industries there is a different case. There is a White Paper in relation to railways. The Government have indicated how their mind is working towards eventual privatisation, so as we go through the provisions of the Bill regarding the railways we can relate them to those ideas. That makes it a logical, sensible procedure.
However, in the case of coal the situation is entirely different, as we well know. There were a number of ideas floating around about the form of possible privatisation when we went up to the Second Reading

1197
stage and while the Bill was going through another place; but the whole situation has been fundamentally altered by recent events, as everybody admits. As a result of the inquiries that are now taking place, we have been promised a White Paper in the early part of next year. That is not very far away. As a result of the debates to which that White Paper will give rise, no doubt we shall get some idea about the Government's thinking regarding the privatisation of the coal industry. Indeed, the noble Lord, Lord Peyton, referred to this in his speech. He said he hoped that during the course of our debate on this Bill the Government would give an indication of the way their minds were thinking. I hope I have understood him correctly.
Lord Peyton of Yeovil: Is there anything wrong with that? The Government will be passing legislation, and if they take away the veil which presently covers their intentions I for one would be delighted. I do not see that they would be doing anything wrong, although they may be doing something unusual.
Lord Ezra: I see nothing wrong with that at all. I was going on to say that I fully supported what the noble Lord had said. If it were the Government's intention during the course of our deliberations on this Bill to tell us the various options they have in mind for privatisation, that would certainly alter my opinion of the amendment which is now before your Lordships. Perhaps the noble Baroness would tell us whether that is the intention of the Government—if so, I would take a very different view about this amendment. Are we to be told during the course of the various amendments that we shall be moving today what sort of privatisation the Government have in mind for the coal industry?
Baroness Denton of Wakefield: I believe the noble Lord, Lord Ezra, knows well that this is not a debate on privatisation. It is a debate on a technical Bill to allow British Coal and British Rail to take advisers, and not about privatisation. There will be lots of scope in due course to debate privatisation.
Lord Ezra: Precisely! That is exactly the answer that I expected. So we are not going to be told anything more on privatisation of the coal industry because we cannot be told anything more. What I am trying to suggest to your Lordships is that we could have a much more sensible debate in the not-too-distant future of this paving Bill for coal if we knew as much about the Government's intentions for the coal industry as we know now about the railway industry. That is what this is all about. We are not expressing an opinion on privatisation and we are not even trying to delay privatisation, because the Government have made it clear that there is no timing attached to it. It might be quite a long time, judging by previous examples which the noble Lord, Lord Wakeham, quoted, before a privatisation measure comes before us. So we are not trying to delay privatisation: nor are we arguing for or against it. All we are saying is that we could have a much more sensible debate on this paving measure for coal, if we had the same sort of
1198
indication of the Government's thinking as we have for rail. It is on that basis that I have moved the amendment.
4.34 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 99; Not-Contents, 150.

Division No. 2

CONTENTS

Addington, L.

Jeger, B.

Airedale, L.

Jenkins of Hillhead, L.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Aylestone, L.

Judd, L.

Barnett, L.

Kagan, L.

Birk, B.

Listowel, E.

Blackstone, B.

Llewelyn-Davies of Hastoe, B.

Blease, L.

Lloyd-George of Dwyfor, E.

Bonham-Carter, L.

Lovell-Davis, L.

Boston of Faversham, L.

McIntosh of Haringey, L.

Bottomley, L.

Mallalieu, B.

Brimelow, L.

Mar, C.

Broadbridge, L.

Masham of Ilton, B.

Bruce of Donington, L.

Mayhew, L.

Callaghan of Cardiff, L.

Merlyn-Rees, L.

Carmichael of Kelvingrove, L.

Milner of Leeds, L.

Carter, L.

Molloy, L.

Cledwyn of Penrhos, L.

Morris of Castle Morris, L.

Clinton-Davis, L.

Mulley, L.

Cobbold, L.

Nicol, B.

Cross, V.

Ogmore, L.

Cudlipp, L.

Peston, L.

Dean of Beswick, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Prys-Davies, L.

Donoughue, L.

Rea, L.

Dormand of Easington, L.

Richard, L.

Ezra, L.

Ritchie of Dundee, L.

Falkender, B.

Rochester, L.

Fitt, L.

Russell, E.

Gallacher. L.

Seear, B.

Galpern, L.

Serota, B.

Gladwyn, L.

Shaughnessy, L.

Graham of Edmonton, L. [Teller.]

Stallard, L.

Stoddart of Swindon, L.

Greene of Harrow Weald, L.

Strabolgi, L.

Grey, E.

Taylor of Blackburn, L.

Hampton, L.

Taylor of Gryfe, L.

Hamwee, B.

Thomson of Monifieth, L.

Hanworth, V.

Tordoff, L. [Teller.]

Harris of Greenwich, L.

Varley, L.

Healey, L.

Wallace of Coslany, L.

Hilton of Eggardon, B.

Wedderburn of Charlton, L.

Hirshfield. L.

White, B.

Hollis of Heigham, B.

Wigoder, L.

Holme of Cheltenham, L.

Williams of Elvel, L.

Houghton of Sowerby, L.

Williams of Mostyn, L.

Howell, L.

Wilson of Rievaulx, L.

Jay, L.

Winchilsea and Nottingham, E.

Jay of Paddington, B.

Young of Dartington, L.

NOT-CONTENTS

Abercorn, D.

Bessborough, E.

Aberdare, L.

Birdwood, L.

Aldington. L.

Blatch, B.

Allenby of Megiddo, V.

Blyth, L.

Archer of Weston-Super-Mare, L.

Boardman, L.

Borthwick, L.

Arran, E.

Boyd-Carpenter, L.

Astor, V.

Brabazon of Tara, L.

Astor of Hever, L.

Braine of Wheatley, L.

Attlee, E.

Brougham and Vaux, L.

Banbury of Southam, L.

Butterworth, L.

Barber, L.

Cadman, L.

Beloff, L.

Caithness, E.

Belstead, L.

Campbell of Alloway, L.

1199

Carnegy of Lour, B.

Margadale, L.

Chelmer, L.

Marlesford, L.

Cochrane of Cults, L.

Merrivale, L.

Coleraine, L.

Mersey, V.

Colnbrook, L.

Milverton, L.

Constantine of Stanmore, L.

Monk Bretton, L.

Cox, B.

Morris, L.

Craigavon, V.

Mountevans, L.

Cranborne, V.

Mowbray and Stourton, L.

Crickhowell, L.

Moyne, L.

Cumberlege, B.

Munster, E.

Davidson, V.

Murton of Lindesfarne, L.

Denham, L.

Nelson, E.

Denton of Wakefield, B.

Norfolk, D.

Eccles of Moulton, B.

Northbourne, L.

Elliot of Harwood, B.

O'Cathain, B.

Elliott of Morpeth, L.

Orkney, E.

Elphinstone, L.

Orr-Ewing, L.

Elton, L.

Oxfuird, V.

Faithfull, B.

Park of Monmouth, B.

Fanshawe of Richmond, L.

Pearson of Rannoch, L.

Ferrers, E.

Pender, L.

Fraser of Carmyllie, L.

Perry of Southwark, B.

Fraser of Kilmorack, L.

Peyton of Yeovil, L.

Gainford, L.

Platt of Writtle, B.

Geddes, L.

Plumb, L.

Goschen, V.

Prentice, L.

Grantchester, L.

Rankeillour, L.

Gray of Contin, L.

Reay, L.

Gridley, L.

Renwick, L.

Hailsham of Saint Marylebone, L.

Richardson, L.

Rippon of Hexham, L.

Halsbury, E.

Rodger of Earlsferry, L.

Harmar-Nicholls, L.

Romney, E.

Haslam, L.

St. Davids, V.

Hayhoe, L.

Seccombe, B.

Henley, L.

Shannon, E.

Hesketh, L. [Teller.]

Shrewsbury, E.

Holderness, L.

Skidelsky,

HolmPatrick, L.

Soulsby of Swaffham Prior, L.

Hood, V.

Stewartby, L.

Hothfield, L.

Stodart of Leaston, L.

Howe, E.

Strafford, E.

Hylton-Foster, B.

Strange, B.

Ironside, L.

Strathclyde, L.

Jellicoe, E.

Strathmore and Kinghorne, E. [Teller.]

Johnston of Rockport, L.

Kimball, L.

Swinfen, L.

Kinloss, Ly.

Teviot, L.

Kitchener, E.

Thomas of Gwydir, L.

Knights, L.

Thurlow, L.

Knollys, V.

Trumpington, B.

Lauderdale, E.

Ullswater, V.

Lawson of Blaby, L.

Vaux of Harrowden, L.

Long, V.

Vivian, L.

Lyell, L.

Wakeham, L.

McColl of Dulwich, L.

Walker of Worcester, L.

Mackay of Ardbrecknish, L.

Westbury, L.

Mackay of Clashfern, L.

Wharton, B.

Macleod of Borve, B.

Wolfson, L.

Mancroft, L.

Wynford, L.

Manton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.43 p.m.
Earl Ferrers: This may be a convenient moment to take the Statement which has been made in another place. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House Resumed.

Detainees from the Former Yugoslavia: Asylum
Earl Ferrers: My Lords, with the leave of the House, I should like to repeat a Statement on ex-detainees from the former Yugoslavia which is now being made in another place by my honourable friend the Parliamentary Under-Secretary of State at the Home Office. The Statement is as follows:
"With permission, Madam Speaker, I will make a Statement about further arrangements which the Government are making to accept in this country ex-detainees from former Yugoslavia.
"In his Statement on 5th November, my right honourable friend the Home Secretary confirmed the willingness of the Government to receive from Bosnia and other parts of former Yugoslavia, people with special humanitarian needs whom the international organisations judge should be evacuated. We had already advised the United Nations High Commission for Refugees that we were prepared initially to accept 150 former detainees from camps in Bosnia and, in due course, their dependants.
"In the light of the plans made to receive the first group of 150, we have now informed UNHCR that we are willing to receive over the next few months additional groups of former detainees to a total of 1,000, together with their dependants, totalling perhaps 4,000 in all.
"Arrangements have already been made to receive the first group of 150 ex-detainees as soon as UNHCR confirm that they are ready to depart. The size of further groups, and the timing of their arrival, has still to be discussed with the United Nations High Commission for Refugees. This will be dependent in part on the speed with which the international organisations are able to bring the detainees out of detention to transit camps in Croatia or elsewhere, and to complete such screening and documentation as UNHCR and the International Committee of the Red Cross consider necessary.
"We have asked the Refugee Council and the British Red Cross to provide initial reception support and accommodation for the former detainees; both the initial group and subsequent groups. The first group will be taken to three locations; a former mental hospital in Surrey, an existing Refugee Council hostel in London and a former residential care home owned by the British Red Cross in Cambridge. Arrangements for accommodating subsequent groups of arrivals are being developed. After an initial period in reception accommodation, the evacuees will be rehoused in more permanent accommodation in the community arranged by the Refugee Council.
"The British Red Cross will liaise with the International Committee of the Red Cross to trace the dependants of the former detainees, and arrangements will be made in consultation with the Foreign and Commonwealth Department and voluntary organisations to bring them here.

1201
"Once rehoused in the community, the evacuees, and their dependants, when they arrive, will be entitled to receive the range of statutory benefits and services which are available to the rest of the population.
"I am sure that we all hope that these evacuees will be able to return in due course to their own country. They will be admitted to this country exceptionally outside the immigration rules for six months initially. We shall obviously wish to review the position in the light of individual circumstances and the situation in former Yugoslavia.
"The Government will be meeting the cost of transport of the former detainees and of their dependants to this country. They will reimburse the costs incurred by the Refugee Council and the British Red Cross in providing initial reception support and accommodation. And they will fund the Refugee Council to provide the necessary degree of ongoing support".
My Lords, that concludes the text of the Statement.
4.47 p.m.
Lord McIntosh of Haringey: My Lords, the House will be grateful to the noble Earl for repeating the Statement made in another place. For once we have no complaint to make about the short notice given for us to consider a Statement, because virtually its entire text was printed in the Daily Telegraph on Saturday. In accordance with their usual practice, I have no doubt that the Government will be setting up an inquiry to discover how the leak occurred.
The Statement is curious, in that it refers to "ex-detainees" at all times and never refers to "refugees". There is no indication at all in the Statement whether the Government recognise that these are civil war victims in the widest sense. Some will be ex-detainees, but many will not. Can the Minister say why it is that this particular form of words has been chosen rather than that which is most commonly used in these circumstances?
The Statement states that the ex-detainees—I believe the word "evacuees" is used—will be accepted,
"outside the immigration rules for six months".
Does that mean that they will not require visas to come to this country? Does it also mean that the announcement which was made a few weeks ago that citizens of the former Yugoslavia would require visas that could only be issued in Zagreb, Belgrade and Ljubljana no longer applies? Does it mean that visas are to be obtained? If that is so, how are they to be obtained, because many of these people are detained in Bosnia where they cannot possibly get access to Belgrade, Zagreb or Ljubljana? If visas are to be issued, will they reflect refugee status, which is the status recognised by the United Nations High Commissioner for Refugees?
There are doubts both about the restrictions on the categories of people who will be allowed into this country and about the status under which they will be allowed in. However, our most profound questions must be about the total numbers. The Government have indicated that the total number, including
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dependants, is to be up to 4,000. I say "up to" advisedly because there are to be 1,000 ex-detainees, plus their families. Each family may include up to three members. Those figures still contrast with those for Germany—do they not?—which has admitted 235,000 refugees, and with those for Sweden, a much smaller country, which has admitted over 60,000 refugees. Do the Government not accept that even with this minor concession (which we cannot say is unwelcome) this country is still lagging far behind the humanitarian aid which has been given by nearly all other countries? Therefore, although one does not wish to look a gift horse in the mouth, it appears that the Statement is unsatisfactory in terms of the definition of those involved, their status and numbers.
Lord Bonham-Carter: My Lords, I should like to thank the noble Earl for repeating the Statement that was made by his right honourable friend in another place. I should also like to associate myself with many of the points raised by the noble Lord, Lord McIntosh of Haringey. I am also glad that the Government have (belatedly and not particularly generously) responded to the pressure which has been exerted upon them by public opinion both in this country and abroad.
I, too, am mystified by the use of the word "ex-detainees". I thought that we were dealing with refugees and with people who are seeking asylum. Does the use of the word "ex-detainees" mean that our reception arrangements are confined to that category of person? Does it take no account of the fact that many others in Yugoslavia (and in Bosnia in particular) are living in danger of their lives? That is the human problem that we are meant to be tackling, as opposed to making rather absurd distinctions between people on the grounds of whether or not they have been detained. The real factor is whether they are in danger. The Government should be concentrating on that. I hope that when the noble Earl answers, he will explain why he has used that particular and unusual expression.
There are other questions. I must confess that the lack of urgency is one of the things that strikes one most. I believe that it was at the beginning of this month that the Government announced that they would take the magnificent number of 150 people, but we hear that those 150 people are still waiting to come in or have still not been told that they can come in. Is that honestly the pace at which the Government think that they should respond to an emergency of massive size, scale and horror? Do they think that this is an adequate way of responding?
Why is the selection of these people to be left to the United Nations High Commissioner for Refugees? Is that part of his job? I thought that it was our job—the job of our officials—to say who should and who should not come into this country. Will the noble Earl tell us what role British officials will play?
Like the noble Lord, Lord McIntosh, I wonder what has happened to our visas. How many people have been let into this country since it was announced that they could get visas in one or two remote towns in Yugoslavia if they were clever enough to reach

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them? How many visas have been given, and are these people to have visas after six months or is that all to be forgotten?
I agree with the noble Lord that this is a drop in the ocean. It really is. The figures which he quoted for Germany, Sweden, Austria and Hungary are simply indicators of the size of the problem. To suppose that we are playing our part by taking in 4,000 people at most is frankly ludicrous. The fact is that this is a massive problem. It will be dealt with adequately only if it is dealt with on a European scale. It is no good thinking that we can deal with it on a "beggar my neighbour" basis. If there is not to be a great deal of resentment in the countries next to the areas of conflict, we must take our share. Those countries should not have to carry far too much of the burden. Although we do not behave like it, the fact is that we are members of the European Community. We get benefits from it, and we must also share its problems. I hope that this lesson will be learned ultimately by the Government.
Finally, I hope that the ex-detainees who come here will receive a word of welcome on arrival. They are people who have gone through the most appalling experiences. They have been the subject of unspeakable hostility and I think that it is important that when they arrive here they should be welcomed to a safe haven.
Earl Ferrers: My Lords, when I knew that this Statement was to be made, I thought that it would meet with the universal approval of your Lordships, but I wondered which noble Lord would find something disagreeable about it. Both the noble Lords, Lord McIntosh of Haringey and Lord Bonham-Carter, have been critical of it. I thought that it was rather a good Statement and I am sorry that they have found cause to criticise it. Both noble Lords found the word "ex-detainees" curious and asked why the Government used that expression. The fact is that that is what they are. They have been detained in detention camps and are being moved out of detention camps into transit areas from which, if they come to this country, they will come as a special group outside the immigration rules. As such, they are ex-detainees. It might very well be that when they are here they will become refugees but, at the moment of entry, they are not that. It is important—I see that the noble Lord, Lord Tordoff, wishes to say something—
Lord Tordoff: My Lords, I am most grateful to the noble Earl for allowing me to intervene. Just to make it clear in people's minds, is he saying that this group is to be restricted entirely to those people who have been in detention and that it does not cover refugees who perhaps have been bombed, shelled, raped, pillaged and generally treated appallingly? Am I right that those people are not to be included in this group and that it will include only those people who have, as it were, the status of having been in a detention camp?
Earl Ferrers: My Lords, many of the people who have found themselves in detention camps have suffered the very conditions which the noble Lord,
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Lord Tordoff, has described. Although I see he shakes his head, he must allow me to answer the question—
Lord Tordoff: My Lords, I am not denying what the noble Earl is saying.
Earl Ferrers: My Lords, the noble Lord says that he does not deny it. That is a good thing. If he could signify assent as opposed to dissent, that would be more helpful.
What he must realise—and I am sure that he does —is that one cannot operate any form of immigration policy if one allows everyone from anywhere to come in. Therefore, we have a policy of requiring visas from those who have come from the former Yugoslavia. In order to meet the problem which has been associated with this devastation, we have agreed to take people who have been put into detention camps —who, on the whole, are the ones most people would say have suffered worst. It is for the United Nations High Commissioner for Refugees to decide which are the most deserving of moving out to another country. That is why we take that body's advice upon whom we shall receive.
The noble Lord, Lord Bonham-Carter, asked about the position of our officials. The position of anyone entering this country via what used to be Yugoslavia with a visa or without a visa is exactly the same as it is for anyone else under our immigration rules. What we are doing here is to meet a special circumstance for those who have been hardly hit.
The noble Lord, Lord McIntosh, said that Germany had done very much better than us. Inevitably, in crises such as this the greatest burden falls on those countries with the strongest geographical, cultural, historical and community links with the country which is experiencing the crisis. Germany, for instance, had a Yugoslav community of 700,000 before this conflict. Naturally, in times of trouble, people choose to seek help and assistance from their friends and families in such countries. The United Kingdom, by comparison, had a community of only 12,000, and naturally has attracted smaller, though still substantial, numbers.
The noble Lord, Lord McIntosh, said that Germany has taken 26,000 people compared with the United Kingdom. That may have been so in the case of the ex-Yugoslavs who have already gone to Germany but in the current situation, far from being at the bottom of the league, we are right at the top of those countries in the European Community which have agreed to assist in taking these ex-detainees. Belgium is taking 200, including the dependants; France is taking 300, with dependants; Germany is taking 1,362; Italy is taking 100; The Netherlands is taking 200; Spain is taking 1,050; Luxembourg is taking 10; Denmark is taking 100; and the United Kingdom is taking 1,068, plus dependants. Far from being at the bottom of the list, we are in fact at the top of the list to help those people who have suffered.
The noble Lord, Lord Bonham-Carter, asked how many people have been let in under the new visa

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arrangements. The arrangements only came into operation on 6th November and so I cannot as yet tell him what the figure is.
5.1 p.m.
The Lord Bishop of Norwich: My Lords, I apologise to the House for attempting in my ignorance to speak out of turn. This is a matter with which Church leaders are vitally concerned. In general I know I speak for leaders of all denominations in expressing a warm welcome for the Statement. I know that the noble Earl will agree with us that there is incontrovertible evidence that thousands of people are in imminent danger of losing not merely their homes but their lives and also that neighbouring countries which have been very generous in provision of refuge have now reached the limit of their capacity for reception.
The Churches of this country as well as voluntary agencies have been and are doing all in their power but the problem is of such a scale that it can be solved only by the goodwill and compassionate action of governments. One should also note that the situation in former Yugoslavia is dangerously fluid and so one expresses the hope that our Government will be able to respond to future events with the same flexibility which we welcome today.
Earl Ferrers: My Lords, I am most grateful to the right reverend Prelate for his welcome for the Statement and for what he said. It is perfectly true that the Churches are doing a great deal in this situation and we are enormously grateful for that.
The right reverend Prelate asked whether the Government would be prepared to look constantly at the situation because it is, as he said, dangerously fluid. I agree that it is and my right honourable friend has said that he is prepared to keep the matter under review. The suggestion has been made that at the moment we take the number that I mentioned. Obviously we will keep the position under review for the future.
Lord Merlyn-Rees: My Lords, with the right reverend Prelate I applaud what the Government have done. That is the praise. The fact that it is too small is an allied matter but one that will crop up more in the next few weeks. The weather in that part of Yugoslavia has not yet reached its worst. When that time comes I observe that the Government will have to be clearer on status. It will not be enough to say "ex-detainees". Indeed, after the six months is up, there will have to be clarification on this point.
I wish to raise three points which are of importance to me. First, who will carry out the screening in the camps in Yugoslavia? Will they be Home Office personnel or Foreign Office personnel? What is the nature of this screening? If they are in the camps, they are in the camps, so what is there to screen? On what basis will they be allowed to come in? Secondly, who will be responsible for the camps in the United Kingdom? Who will pay for the camps here? Who will administer them? My third question is about the children and those who are older than children. Are the local education authorities primed to deal with the
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numbers, as small as they may be? Are they primed to deal with those who will go to colleges of higher education and so on? It is important that we are clear on these points, especially as the numbers will grow in the months ahead.
Earl Ferrers: My Lords, I am grateful to the noble Lord. He is quite right. The position is likely to get worse for the simple reason that a good many of these detention camps are above the snow-line. As the winter gets worse, the conditions will get worse. The conditions in the camps in terms of heating, food and medical treatment are not very good.
The noble Lord asked about screening. There are at the moment some 10,000 people in detention camps. It will be for the United Nations High Commissioner for Refugees to decide which of those are the most deserving. He will request, as I understand it, that certain ones come to this country. Obviously, those who have some form of link or language connection will be more easily accommodated here than those who may have a different language facility, if they have one, who may be better accommodated elsewhere. We intend to follow the advice of the United Nations High Commissioner for Refugees and not to try to suggest that we know better about the circumstances that obtain there.
The noble Lord asked who will pay for the camps. This is being done by the Refugee Council and the British Red Cross. They are making arrangements with local authorities and the expenses which they incur will be reimbursed to them. The noble Lord asked about children. I can only give a general answer. Until we have the children, we will not know exactly how they will be positioned. Once they are here all parents will have the benefit of housing allowance and income support. They will also have the benefit of being educated. That will have to be done by the education system and it will be for those who involved with taking these people in to make sure that those facilities are available. Once they have been moved into their temporary housing in the three places which I mentioned, the idea is that they will subsequently move to other more permanent housing throughout the country but that they should be kept nevertheless in groups. It is not on the whole desirable to farm people out into individual private houses because they will be lonely. They will be required to be kept fairly close together. The exact position on that remains to be seen.
Lord Beloff: My Lords, I welcome the Statement. I do not think it is very profitable to indulge in speculation about numbers, either actual or comparative. The question that I wish to ask my noble friend is a rather different one. It arises in part from his reference to looking at the matter again in six months' time after these individual allotments of detainee status have been agreed and carried out. It seems to me that the Statement reflected what has really been the problem before his department in dealing with the human consequences of the war in former Yugoslavia; namely, the total failure politically of the European Community to do anything to bring an end to the

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conflict and a failure which results from—one hears it echoed in ministerial statements—a complete misunderstanding of the nature of the conflict.
We talk about people avoiding the distress of a civil war. We say that when the civil war is over there will he homes for them to go back to and that six months in Britain will fortify them for that experience. But this is not to a very considerable extent a civil war. It has been revealed as a war of genocidal aggression against one of the communities in Bosnia—to some extent against others but mainly against the Moslem community. There is no prospect of their going home unless there is a total revolution in terms of the situation in that country. There is no escape from facing the political consequences. It is no use saying that we will not give arms to the Bosnians as that would exacerbate the conflict. The conflict exists. It is a war. It is hard—this is why I do not criticise my noble friend or his department—for them to catch up on a year or two of constant misunderstanding and folly on the part of the European Community and its member states.
Earl Ferrers: My Lords, my noble friend Lord Beloff takes the subject rather wide of that to which the Statement refers. He asked why the European Community did not do more to prevent the conflict. It would be inappropriate to speculate as to why that has been the case. My noble friend will be aware that a great many people have been applying their best efforts to try to bring the conflagration to an end, so far without success. As a result, many people have been deeply traumatised and subjected to the most appalling conditions. We therefore try to help, as does every other country. One country cannot automatically open the floodgates. It has to be done in a structured way. We have done it with the help of and in agreement with UNHCR and the International Committee of the Red Cross whose members know about the refugee position. They are on the spot. They can best advise and help us.
The people will be allowed in for six months. If at the end of six months they wish to remain, they will have to apply for leave to remain under the normal immigration system. Their cases will be considered when they apply.
Lord Prentice: My Lords, I welcome the Statement. The grudging nature of the comments made by the opposition parties was a pity. We are not talking just about numbers of refugees. If we measure Britain's contribution in terms of the substantial financial help that we have given through the ODA, the dedicated work of British volunteers on the spot, and the presence of our troops who are in a most difficult and unusual situation, this country need not be apologetic about its contribution in relation to other European nations. Perhaps we should all be doing more, but our total effort should be appreciated fully.
Earl Ferrers: My Lords, I am grateful to my noble friend Lord Prentice for saying that we need have nothing to be ashamed about. He is entirely correct. The United Kingdom has done a great deal to help those people. Since the beginning of the crisis, we have
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donated more than £70 million, bilaterally and through the European Community, to relief efforts in the former Yugoslavia. We are providing 2,300 United Kingdom troops who are protecting humanitarian convoys. We have flown about 200 air flights into Sarajevo. We have assisted the UNHCR with a £3 million programme for winter shelter in central Bosnia, based around nine centres, to house 20,000 refugees. We are engaged upon a feasibility study with the UNHCR to ensure that power and heating is maintained in central Bosnia. We have provided 15 expert field staff to assist the UNHCR. We have 31 lorries operational in Bosnia, ferrying emergency supplies, and 12 more left the United Kingdom on 16th November. We have provided £2.5 million of medical supplies to the WHO for its operation, and we have evacuated 68 wounded and sick Bosnians for medical treatment in the United Kingdom. I agree with my noble friend that we have done quite a lot.
Lord McIntosh of Haringey: My Lords, I do not wish to take up a lot of Back-Bench time but two questions, arising out of the Minister's replies to supplementary questions, have not yet been answered. The first relates to the restriction of the offer to former detainees. I understand from what the Minister said that the selection is to be made by the UNHCR. Does not the UNHCR normally consider as a prime criterion the danger in which people find themselves? Does that not conflict with the proposal to restrict admission to those who are former detainees.
Secondly, in a supplementary reply the Minister referred to the possibility that those who come here might obtain refugee status after six months. Will he enlighten the House as to the circumstances under which that might occur? Having said that, I do not wish any of our comments to show anything other than admiration of the work to which the noble Lord, Lord Prentice, and the Minister referred.
Earl Ferrers: My Lords, with regard to the former detainees, the noble Lord, Lord McIntosh, asked whether the UNHCR normally dealt with danger. In this case, it is dealing with those people who have, for one reason or other, been put into detention camps. They have to be removed. They are suffering appallingly. It is those people whom we seek to help with the assistance of the UNHCR. The noble Lord also suggested that I said that they could apply for refugee status after six months. What I actually said was that they would be allowed in for six months, outside the immigration rules, and that at the end of six months they could apply for leave to remain. That is not the same as applying for refugee status.

British Coal and British Rail (Transfer Proposals) Bill
5.16 p.m.
House again in Committee on Clause 1.
Lord Donoughue Lord Donoughue moved Amendment No. 2:
Page 1, line 8, after ("should") insert ("subject to subsection (1A) below").
The noble Lord said: It may be for the convenience of the Committee if we deal also with Amendment No. 15. The amendment goes to the heart of our worries about this privatisation paving Bill in so far as it relates to coal. It calls basically for a statement from the Government on their energy strategy and the role of coal within that strategy. We on this side of the Committee have called for such a statement many times before. The Government have not responded. They did not have an energy strategy. I felt that at times they seemed almost proud not to have an energy strategy. They had ideological postures: privatisation was good and everything should be left to market forces.
The Government had political prejudices against the mine-workers' union, but they had no energy strategy. Today we see the consequences of that policy vacuum: the looming destruction of the coal industry at great economic and social cost with no perceiveable compensating benefits. We see 100,000 people unemployed in mining and related industries in the coming year; we see our import bill on energy rocketing; we see gas demand and prices rocketing, and why? That is what the amendment is probing—why?
The only explanation we have received is the alleged free market in coal. We know that there is no free market in coal or in UK energy. The market is structured and biased against coal, and that has been caused primarily by the botched job of privatising electricity. There I agree wholly with what was said a little earlier by the noble Lord, Lord Peyton.
We have that policy vacuum: a free market which is not a free market but a market biased against coal. That all needs re-thinking and we need a clear statement on the Government's views. The basis of that re-thinking should be that as a nation we should not, first, abandon the long-term security of domestic energy. The underlying basis must be the long-term security which is provided by our huge coal reserves which constitute about a half of the reserves of the whole of the European Community. Prudently, we should not expose ourselves to the price fluctuations of foreign suppliers and the price rises if sterling depreciates, as we have learned it does periodically.
Surely, a small premium is worth paying to secure that, and within a few years it might not be a premium at all. It would be a premium to ensure the benefits of security of supply, the benefits of stability of price and the economic benefits that will arise for the balance of payments and for the public sector borrowing requirement. Those are the bases we hope to hear at some point are behind the Government's thinking in approaching privatisation.
I wish to draw the Minister's attention to the fact that the amendment also specifically refers to redundancies. I should like to ask the Minister about the number of miners currently being made redundant during the inquiry into coal. We hear quite appalling reports of pressure by the management of British Coal on the miners to take their redundancy money and run now, coupled with the threat that if they do not the terms will be reduced. This is before the inquiry has
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reported and I believe that it is quite outrageous. Will the Minister help us by informing the Committee how many miners have been made redundant in the 31 named pits—helpfully broken down into the 10 apparent lost causes and the other 21—since the inquiry was announced? Will she take steps to inform British Coal that it must stop intimidating miners into taking redundancies before the report has pronounced on the future of the British coal industry?
To return to the central thrust of the amendment on energy strategy, it is surely very positive and gives the Government an opportunity to set out their alternative strategy. Such an alternative strategy is perfectly possible. It should be based on the balanced mix of sources and the security of supply that I have mentioned. It should require the electricity generators to have contracts which preserve a viable coal industry for this country as part of that balanced mix of supply. It should stop the electricity distributors investing in higher cost gas generation; and it should stop the electricity distributors from passing on higher costs to the consumers. That involves the role of the regulator. Also, the regulator should be required to ensure that generators seek the cheapest source and such a strategy should have a depletion policy for our indigenous gas and oil reserves.
That seems to me the basis of such a strategy and it will, of course, have to face the fact that Britain's energy self-sufficiency ceases within a decade. It should be tailored to the European energy strategy and the Committee should note that the European Commissioner for Energy has expressed deep concern that Britain, with the largest European coal reserves and the most efficient production, is contemplating closing that down.
Such a strategy should avoid the contemplated wanton destruction of our coal industry; it should avoid the wanton depletion of Britain's gas reserves, with gas, a premium fuel, quite wrongly in my view used for bulk electricity production. It should avoid the wanton damage to the lives of all those people who work in the coal industry and related industries. Such a strategy must, I believe, be in the nation's interests and in the Government's interests.
The Minister in reply may say, "Well, all of this is before the inquiry". That would have been acceptable, and I should have spoken differently today and possibly have withdrawn the amendment if the Government had withdrawn the coal aspects of the Bill. But we must insist that, because the Government are proceeding with the Bill, it implies that they have an energy strategy, a coal strategy that lies behind it. Either they have one—and we should like them to pronounce on it—or they have a secret strategy and we should like it to be revealed. We want clarity on the energy strategy and the coal strategy for this country. The amendment presses for such clarity. I beg to move.
Lord Ezra: I support the amendment. I have for years felt that we should have a more coherent energy strategy than we possess at present. There is a policy for the different energy sectors, but when put together, regrettably, the policies do not add up to a strategy. There is or has been until recently a policy towards

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coal, but now that is being reconsidered. There is a policy towards nuclear energy; the gas electricity markets are regulated in different ways and the oil industry, of course, moves freely throughout the world. So in each sector we have a different approach.
Britain, as a major producer of all forms of energy, possessing a wide range of energy skills, should long before now have had a broad strategy. I am not talking about a detailed plan, a year by year objective or dividing up markets. I am talking about broad strategic objectives.
We hope that the coal inquiry, which has now been expanded into a general energy review, will give us some of the answers which we have sought by putting forward this amendment. Indeed, the amendment gives further support to the views which we expressed at an earlier stage when we sought to suggest—but did not obtain the vote of the House—that it might have been more sensible to come back to the Bill when we knew what the strategic thinking was. We should know that in a matter of two to three months. I hope that the noble Baroness, when she replies, will enlighten us as to the range of subjects which are likely to be covered in the strategic review and whether they encompass the issues set out in the amendment.
Baroness Denton of Wakefield: The amendment was tabled against a very different background from the one which exists today. Since the amendment was tabled the President of the Board of Trade has announced the terms of reference for the coal review. I hope that I shall be able to persuade the Committee that it covers the areas in which Members of the Committee are interested. I should not wish to anticipate the findings of the review. It is full and wide-ranging. It is considering views and evidence on the future of each of the 21 pits included in the context of the Government's energy policy, including the consequences of that policy for British Coal and the employment prospects for the industry.
The review will decide whether the case for closure at each of the pits has been fully made and whether it is sensible to mothball some of them. It is considering whether the market prospects for coal have been correctly assessed and, in consultation with the Director General of Electricity Supply, whether any company is abusing its position in the market place. The review is looking at the level of coal stocks, both at the pithead and the power station, and whether plans to run them down are sensibly phased. It is considering the consequences of the switch to gas in power generation and the relative costs of gas and coal-fired generation. It is looking into the latest estimates of likely reserves of gas. It is considering the present scale of gas generated power stations in production, being built and in the planning process.
In that connection the review is examining the use of the consent powers of the Secretary of State for Trade and Industry under the Electricity Act 1989. The review is also considering the implications of the statutory obligation on electricity suppliers to purchase non-fossil power, including that from nuclear sources.
The review is exploring the opportunities for the private sector in the production of coal. It is
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considering the existing and anticipated level of imports and their wider economic implications. The review is also giving due regard to Scottish and Welsh interests and it is also giving consideration to the particular needs of Northern Ireland. I think the Committee will agree that this constitutes a comprehensive review.
In addition, I should add that the President of the Board of Trade has appointed outside consultants to report on the viability of the 21 pits; to report on the prospects for British Coal, including any alternative markets that may exist for coal; and to comment generally on the competitiveness of British Coal as an organisation. The team conducting the review has been established as a new and independent entity within the DTI. As has already been said today, evidence will be published to the fullest extent possible except where the information provided is confidential for commercial reasons. The President of the Board of Trade is also giving as much assistance as possible to the inquiries of the Trade and Industry and Employment Select Committees.
A White Paper will be published early in the new year setting out the results of this comprehensive review in the context of the Government's energy policy. It will make clear the consequences of that policy for British Coal; the implications for individual pits and the employment prospects for the industry. The President of the Board of Trade will present the conclusions and the Government's future decisions to Parliament, which will of course be able to debate the issues fully.
The noble Lord, Lord Donoughue, raised the specific issue of voluntary redundancies since 13th October. I understand that there have been 4,614 voluntary redundancies since that date. Of these, 1,776 were at 10 pits. I am sorry that I do not have the figures for the other 21 pits but I shall obtain them and write to the noble Lord. I heard the noble Lord's comment on the situation of the miners. I suggest that he underestimates the ability of the British coal-miner to make his own decisions. I believe that what I have just described is a sensible and constructive approach to the coal industry's needs at this stage and that the amendments before us suggest a more fixed position. I hope I may ask the noble Lords concerned to withdraw the amendment and await the results of the review in due course.
5.30 p.m.
Lord Jay: Before the noble Baroness sits down I hope she will answer my following question. As she referred to the wider economic implications of these policies, have the Government seriously considered the point that I raised on Second Reading; that is, it is not merely our future balance of payments security but also our defence security that must he considered in conditions where nearly 80 or 90 per cent. of our electric power supplies have become dependent on oil rigs in the North Sea and gas installations and on oil tankers bringing oil to this country from far afield? In the light of our experiences in the past two wars—I do not propose to argue this now—has that matter been

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considered seriously with defence advisers as well as economic advisers either in the review or in the Government's own internal discussions?
Baroness Denton of Wakefield: I am pleased to assure the noble Lord that it is the Government's policy to ensure adequate secure and diverse supplies of energy. The noble Lord's points on Second Reading were taken into account.
Lord Donoughue: I thank the Minister for producing the figures on redundancies, which were helpful. I believe they have not been published elsewhere. Does she acknowledge that those figures are worrying and that that number of redundancies is nearly 10 per cent. of the entire workforce? What the Minister has said is that nearly 10 per cent. of the workforce has left since the inquiry into the future of the workers was announced. If she accepts what I have said—my remarks are based upon good information from the mines—that a large number of these miners are leaving under circumstances that they consider intimidatory on the part of the Coal Board management and they are threatened that if they do not run and take their redundancy now they will receive less in future, does not the Minister agree that such a situation is intolerable? Does she not accept that the Government should publicly state that an inquiry is being held into the future of the coal industry and one possible outcome of that inquiry, we hope, is that there is a good future for British Coal and a good future for British miners in it? It is quite intolerable that British Coal's management should attempt to pre-empt the outcome of that inquiry and to secure the results of the closures that were originally intended before the inquiry was reported.
Baroness Denton of Wakefield: There has been enormous media coverage of the coal issue and of the review. I do not believe that British miners are unaware of what is happening in their industry. It is not for me to comment on their individual choices.
Lord Donoughue: I wish to consider further what the Minister has said in reply to this amendment, although much of what she said was helpful and constructive. I may wish to return to this matter on Report. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 3:
Page 1, line 8, after ("should") insert ("subject to subsection (1B) below").
The noble Lord said: In moving Amendment No. 3 I wish to speak also to Amendment No. 16, which is the amendment which sets out the essence of our case. The Government are being extremely optimistic against the weight of so much evidence from independent sources and from people with substantial consulting practices of repute as regards the merits of their proposals. What we are seeking to do here is to determine whether further information and evidence should be forthcoming from the Government before this paving Bill is adopted by this Chamber.
I have said that the Government are being optimistic and I suggest the difference between optimists and pessimists is that the optimists are not really in a position to know the facts. I do not think the Government know the facts, or have revealed the facts to the public, if they know them, about their real intentions. Our case is that the proposals of the Government for privatisation cannot be seen in a vacuum. They have to be viewed in a way that enjoins the wider issues of transport policy. The White Paper has made no effort at all to set out the role of the railways and how that role is to be fulfilled in the context of what we have called for; namely, an integrated transport policy.
I know the Minister's predecessor did not believe in an integrated transport policy. He professed not to understand what it meant. But it is something that most people in all sectors of the transport business understand perfectly well. It is known in the European Community and I hope this Minister will not share the view of the Minister's predecessor. We are saying that the objectives, including the environmental and safety ones that the Minister intends the railways to meet, should be set out. We also say that the railway programmes and projects he believes will be needed to meet those objectives should be set out.
Perhaps I may point out that there is an error in paragraph (b) of Amendment No. 16, which should read "he will need to meet". I apologise if that is our fault, but I believe that it is self-evident.
The third strand of the argument is that the financial and other support which he intends to provide towards the achievement of those programmes should also be set out.
We believe that the Government have established the wrong priorities for their transport policy. The emphasis on road construction and on alterations to roads is in marked contrast to the provisions made for rail, notwithstanding—and we shall return to the argument at a later stage—the environmentally friendly nature of rail compared with road transport.
The concept upon which the Government have based the notion of privatisation is the alleged success of bus privatisation, which they constantly pray in aid. We say that we should learn the lessons of bus privatisation before we proceed with these proposals. Contrary to the Government's argument, bus privatisation augurs very badly for rail. It has resulted in poorer services, fewer passengers, greater use of older vehicles and the neglect of more remote areas. We fear that that could well be the situation in relation to rail.
We argue that this is a destructive diversion from the essential need for increased investment in a railway industry which is suffering from one of the worst investment programmes in the European Community. In the Autumn Statement the Chancellor announced that spending on rail was to be reduced still further over the next three years, from £2 billion this year to £1 billion by 1995–96. The recession has reduced BR's income by some £400 million, has led directly to the loss of 5,000 jobs, announced only the other day, and to some investment plans having to be deferred, if not abandoned altogether. Against that background, we

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are entitled to know the Minister's answer to the case that has been adduced by reputable consultants on behalf of Transport 2000. Steer Davies Gleave has concluded that there will be a risk of further reduction in investment for a number of reasons: fragmented decision-making between rail track and train operators; difficulties in buying or leasing rolling stock; higher track charges, especially for freight; and conflicts between franchising passenger services and allowing open access to the tracks. If the Minister disputes that, as presumably he will, perhaps he will tell the Committee why.
One of the most difficult areas in this connection is the position of passengers in the South East. They will bear the brunt of even larger than average fare increases on busy commuter routes into London. Despite old trains and deteriorating reliability and punctuality, and all the other inconveniences that they suffer, they are the people who effectively subsidise so much of the more profitable services run by BR. The swingeing fare increases have been described by Major-General Lennox Napier, the chairman of the Central Transport Consultative Committee, as "unreasonable and unacceptable". It is not irrelevant that against that background London Underground and bus fares are also to be increased by swingeing amounts. Travelcards will cost 14.3 per cent. more.
Worse is to follow. This is an industry which is beset by loss of income as a result of a reduction in the number of travellers. Income has fallen by £80 million over two years. The industry is unable to cash in on property sales in view of the recession presently affecting property prices.
There is a risk—which the Minister could not possibly deny—that rail fares will rise. There are a number of particularly important issues which I commend to the Government. I do not propose to rehearse them now. They have been put to him by Transport 2000. Specific policies are required to deal with those issues. If the Minister wishes to challenge me on that matter I can return to it later.
Mr. John Prescott, who leads for the Opposition on these matters in another place, described the increases as the Tory Party's rail privatisation tax. He went on to say that they are being levied to make some rail services profitable for selling off and to compensate for the £3.5 billion reduction in subsidies imposed on British Rail by the Government. I believe that he was absolutely right when he said that.
The Government claim that they are responsible for huge investment in British Rail. Like so many other claims made by this Government it needs to be viewed with a measure of scepticism. The fact is that half the funds available in the current financial year are tied to Channel Tunnel related projects. In 1990–91 only a quarter of railway investment grants came from government; the rest was raised within BR itself. Since 1983 government support for the railways did not increase in real terms: it decreased by 34 per cent. The result is a continually worsening situation, as the travelling public are best able to judge.
I turn to the White Paper, in case the Minister asserts that the White Paper provides that transport policy. In my submission it does nothing of the kind.
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It gives scant attention to the issues of congestion and the environment. There may be one or two words about the environment. It does not mention the question of a national rail strategy. It says nothing about the provision of rural services or those affecting peripheral communities, which we shall deal with tomorrow. It says nothing about the relationship with other modes of transport. Apart from a few comments about the Channel Tunnel, it says nothing about our relationships with European transport systems, particularly rail, and this only a few days before we complete the framework for the single market.
The White Paper deals unsatisfactorily with the problems of fragmentation of responsibility for safety and loss of the benefits of network integrity for passengers and freight. If it deals at all with the question of asset stripping it does so very unsatisfactorily, yet that is a matter of considerable importance. The document says little that is adequate about the future role of PTAs and PTEs. Again, we shall return to that issue with another amendment. There is a host of issues, including others that I have not mentioned, to which we shall have to turn specifically when we debate other amendments.
There is also another matter which is of continual concern to people who use the railways. The de-manning of stations affects safety, particularly that of women. That is an issue about which I should have thought the White Paper would have had something to say, but it does not.
We believe that there are serious doubts about the programmes which the Government wish to pursue. We fear that dramatic increases in fares and freight charges will be necessary to meet the unsubsidised fees of the rail track authority. That will lead to a greater use of road transport—the very thing that we should be seeking to avoid.
I do not propose to say very much more, except in conclusion that we believe that it is essential that the Secretary of State should publish a national rail strategy in the context of the wider issues to which I have already referred. We recognise that rail plays a crucial part, as it has for many years, in local and regional transport strategies. It provides vitally important links with rural areas. It is vital that the strength of the existing rail network should be used as the basis for further development and innovation to meet the challenges set by congestion and the deteriorating environment. The challenge and the way in which the railways can meet it should be one of the cornerstones of national rail policy; and included in that approach, and some would say central to it, is the involvement of local government. The Government have not begun to set out their policies with regard to those issues. I beg to move.
Lord Ezra: Just as in the previous amendment we pressed hard for an energy strategy within which the policy for coal could be identified—and that is now to take place—so, I believe, with equal force we can press for a general transport review within which the railway strategy can be placed.
The history of the railways since the war in Britain has been a very unfortunate one, for the simple reason that, under successive governments, we could not

1217
make up our minds whether it was to be a public service or to be run as a profitable business. In the end neither objective has been clearly achieved. With the Government's plans for privatisation, a unique opportunity arises for a strategic review so that we can see where railways and the transport service of the country are to go in the future, with all the challenges that we face, at home within the single market and further afield. I hope that the noble Baroness will be able to reassure us that the Government intend to produce such a strategy.
The Earl of Caithness: I was very surprised to see these amendments on the Marshalled List. At first I thought that the noble Lord, Lord Clinton-Davis, had not taken note of the White Paper that my right honourable friend the Secretary of State produced in July, which, if any Members of the Committee have read it, answers many of the points in the noble Lord's amendment.
It became quite clear as the noble Lord spoke that the reason for the amendment was to have a general bleat about privatisation, make a Second Reading speech and refer very little to the amendment in front of him. He also wanted just to raise the general point that he did not like privatisation; he preferred to tell people exactly what they should do and what mode of travel they should use, which is a different philosophy from that of the Government.
He mentioned one or two other points which he said were a matter for amendments later on, which they are. It is appropriate that we consider them when they are raised later.
For Members of the Committee who took the amendments in the same way as I did, which was as seeking information about what my right honourable friend had said, I think it is worth saying that the White Paper, New Opportunities for the Railways, which was published in July, made our strategy quite clear. It is to improve the quality of rail services by creating new opportunities for private sector involvement; to ensure continuity of services; to ensure safety; and to provide value for money. We are anxious to make progress in improving the quality of service to rail customers and therefore to have in place as soon as possible the necessary legislative framework.
The Government intend to bring forward the necessary legislation as soon as they are in a position to do so. The Bill before us today paves the way for that legislation and for the greater involvement of the private sector in the operation of the railways. Again, this is a point of confusion in the mind of the noble Lord, Lord Clinton-Davis. He still has not understood the difference between this Bill and the main Bill on privatisation. This Bill does not provide any powers for the implementation of privatisation. Doubtless the noble Lord will make the same speech when we come to the main privatisation Bill.
In summary, the key proposals for the railways are: that the existing passenger services be franchised to private sector operators; that the freight and parcels business be transferred to the private sector; for new rights of access to the rail network for private
1218
operators; for the restructuring of BR to separate out a track authority, Railtrack, and passenger service operations, which will continue to run passenger services until they are franchised; to appoint a rail regulator and a franchising authority; to provide opportunities for the private sector to purchase or lease stations; and to provide improved grant arrangements for individual rail services or groups of services.
A further important step was taken when in October my right honourable friend issued a consultation document The Franchising of Passenger Rail Services, which the noble Lord did not mention but which gave further information on how the franchising system will work and sought views from prospective franchisees about how franchising might best be carried out. A useful response has been received from a wide range of interested parties, including nearly 50 expressions of interest in running franchised services and about 10 in leasing rolling stock. My right honourable friend is now considering the responses received to that document and hopes to be in a position to announce early in the new year the first services to be franchised.
The noble Lord's amendment refers specifically to safety and the environment. Let me make it abundantly clear beyond peradventure that safety is of prime importance to us. That is why one will find in the White Paper a whole Chapter, Chapter 6, devoted to the subject of safety.
The noble Lord then went on to the subject of the environment. He said that there was precious little in the White Paper on the environment—"a word or two", he said. Perhaps I should refer him to the whole paragraph on page 16, paragraph 75.
The amendment also suggests that within a rail strategy my right honourable friend should specify railway programmes and projects to meet stated objectives. Although British Rail is subject to the constraints of a nationalised industry, it is expected to act as a commercial organisation and set its own investment priorities within the external finance limit. It would not be appropriate for the Secretary of State to specify the detailed projects and programmes of British Rail or any other rail operator.
Finally, we come to a point on which the noble Lord did major; namely, the financial support to be provided. The Government's commitment 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 £850 million, and since 1986 over 1,200 new vehicles have been delivered. On InterCity, the electrification of the east coast mainline was completed last year at a cost of some £475 million.
The noble Lord sought to put into the minds of the Committee the fact that there was less money in reality for British Rail as a result of the Autumn Statement. Let me reassure the Committee that that is not the case. We have allocated to British Rail £239 million more over the next two years compared with previous plans. The investment is much higher now in real terms than it was in the late 1980s.

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The noble Lord referred to the question of fares, but that has been covered in oral Questions in this Chamber, and it would be wrong of me to go back over the same well worn ground.
Following BR's re-organisation, investment in infrastructure will remain the responsibility of the public sector Railtrack. The intention is that Railtrack will operate on a commercial basis, with its investment financed from charges to operators for use of the track network. However, we have said that we will be prepared to provide direct grants for infrastructure investment in the railway where, for example, a project although not earning an adequate financial return, achieves a satisfactory cost-benefit return when wider benefits are taken into account. The Government also want to encourage private sector involvement in rail investment. For passenger services, the Government are particularly keen to see the private sector investing in rolling stock—for example, through the development of a leasing market—and we are currently exploring ways that this might be achieved.
Sadly, the noble Lord did not raise the question of the leasing of rolling stock. It was a very important part of the Autumn Statement made by my right honourable friend. It offers great benefits to British Rail, and it will be able to lease £150 million worth over the next three years. Clearly a lot of what the noble Lords, Lord Clinton-Davis and Lord Ezra, have sought in their amendments have been met by the White Paper. Other comments of the noble Lord will be dealt with in later amendments.
6 p.m.
Lord Clinton-Davis: The Minister's response was thoroughly unsatisfactory but it was not unexpected. It is a travesty of the truth—but it is typical of the Minister because he believes it—to say that we on this side of the Committee want to tell people what to do, how to travel and so forth. We want to give people a proper choice but it must be based on an equality of standards between road and rail in terms of investment and the like. That does not exist at present.
The Minister did not begin to refute the case that I made. He does not like the amendment and is perfectly entitled not to like it. He is also perfectly entitled to be purblind about the issues and ignore all the criticisms which are being made not only by me but by many reputable organisations which have sought to make representations to his department. It is recognised that the Government are bent on pursuing this policy and having been recently elected they have a period of perhaps years in which to do so. But surely they should not be so resistant to the desire to ensure that the mistakes which were made elsewhere are not repeated in respect of this important industry. However, it appears that the Government are not prepared to encounter such arguments.
The Minister says that it is all in the White Paper. Not at all. The Minister has not rebutted the fact that the White Paper is scant on many material issues. It does not set railways in the context of a proper
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transport policy. The Government are absolutely blind to that and therefore they are likely to make serious mistakes.
I believe that my case and that advanced by the noble Lord, Lord Ezra, was corroborated rather than rebutted by the Minister's comments tonight. He insisted that there are record levels of investment in this country. However, he carefully avoided comparing those levels, whether record or not, with the situation that persists among our major competitors in the EC. There is overwhelming evidence to show that our efforts are puny by comparison. The amount of research and development and investment which has been undertaken in France and Germany puts our efforts in pure light.
As regards the leasing of stock, I am delighted that the Government have at last recognised the argument that the Opposition has been putting forward for years. We were told that that would be incompatible with the requirements of the public sector borrowing requirement. That case was argued on previous occasions by his predecessor and by the Minister. If the Minister wants to borrow our clothes that is fine if it will benefit our railway industry. However, he has chosen to be almost frivolous about the amendment and therefore it is necessary to test the opinion of the Committee.
On Question, Whether the said amendment (No. 3) shall be agreed to?
6.3 p.m.
Their Lordships divided: Contents, 67; Not-Contents, 132.

Division No. 3

CONTENTS

Addington, L.

Jay, L.

Airedale, L.

Jay of Paddington, B.

Ardwick, L.

Jeger, B.

Attlee, E.

Jenkins of Hillhead, L.

Blackstone, B.

Jenkins of Putney, L.

Blease, L.

John-Mackie, L.

Boston of Faversham, L.

Judd, L.

Bottomley, L.

Llewelyn-Davies of Hastoe, B.

Carmichael of Kelvingrove, L.

McIntosh of Haringey, L.

Carter, L.

Mallalieu, B.

Clinton-Davis, L.

Mason of Barnsley, L.

Cocks of Hartcliffe, L.

Merlyn-Rees, L.

Dean of Beswick, L.

Milner of Leeds, L.

Donoughue, L.

Mishcon, L.

Dormand of Easington, L.

Molloy, L.

Ennals, L.

Morris of Castle Morris, L.

Ewing of Kirkford, L.

Nicol, B.

Ezra, L.

Ogmore, L.

Falkland, V.

Pitt of Hampstead, L.

Fitt, L.

Prys-Davies, L.

Gallacher, L.

Rea, L.

Galpern, L.

Redesdale, L.

Gladwyn, L.

Richard, L.

Graham of Edmonton, L. [Teller.]

Seear, B.

Stoddart of Swindon, L.

Greene of Harrow Weald, L.

Strabolgi, L.

Gregson, L.

Taylor of Blackburn, L.

Grey, E.

Tordoff, L. [Teller.]

Hampton, L.

Varley, L.

Harris of Greenwich, L.

Wallace of Coslany, L.

Healey, L.

White, B.

Houghton of Sowerby, L.

Williams of Elvel, L.

Howell, L.

Winchilsea and Nottingham, E.

Irvine of Lairg, L.

Young of Dartington, L.

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NOT-CONTENTS

Ailesbury, M.

Lauderdale, E.

Aldington, L.

Lawson of Blaby, L.

Archer of Weston-Super-Mare, L.

Leigh, L.

Long, V. [Teller.]

Arran, E.

Lyell, L.

Astor, V.

McAlpine of West Green, L.

Astor of Hever, L.

McColl of Dulwich, L.

Banbury of Southam, L.

Mackay of Ardbrecknish, L.

Barber, L.

Mackay of Clashfern, L.

Belhaven and Stenton, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Bessborough, E.

Margadale, L.

Blatch, B.

Marlesford, L.

Blyth, L.

Marsh, L.

Boardman, L.

Merrivale, L.

Boyd-Carpenter, L.

Mersey, V.

Braine of Wheatley, L.

Milverton, L.

Brookeborough, V.

Monk Bretton, L.

Brougham and Vaux, L.

Mottistone, L.

Butterworth, L.

Mountevans, L.

Cadman, L.

Munster, E.

Caithness, E.

Murton of Lindisfarne, L.

Campbell of Alloway, L.

Nelson, E.

Carnegy of Lour, B.

Norfolk, D.

Carr of Hadley, L.

Norrie, L.

Clanwilliam, E.

O'Cathain, B.

Clark of Kempston, L

Orkney, E.

Cochrane of Cults, L.

Oxfuird, V.

Colwyn, L.

Park of Monmouth, B.

Constantine of Stanmore, L.

Pearson of Rannoch, L.

Cox, B.

Pender, L.

Craigavon, V.

Peyton of Yeovil, L.

Cranborne, V.

Platt of Writtle, B.

Crickhowell, L.

Prentice, L.

Cumberlege, B.

Rankeillour, L.

Davidson, V.

Reay, L.

Denham, L.

Rees, L.

Denton of Wakefield, B.

Rennell, L.

Eccles of Moulton, B.

Renwick, L.

Elles, B.

Rodger of Earlsferry, L.

Elliot of Harwood, B.

St. Davids, V.

Elliott of Morpeth, L.

Shannon, E.

Elphinstone, L.

Sharples, B.

Elton, L.

Shrewsbury, E.

Faithfull, B.

Skidelsky, L.

Fanshawe of Richmond, L.

Soulsby of Swaffham Prior, L.

Fraser of Carmyllie, L.

Stewartby, L.

Gardner of Parkes, B.

Stodart of Leaston, L.

Gilmour of Craigmillar, L.

Strange, B.

Goschen, V.

Strathcarron, L.

Greenway, L.

Strathclyde, L.

Gridley, L.

Strathmore and Kinghorne, E. [Teller.]

Hailsham of Saint Marylebone, L.

Swinfen, L.

Harmar-Nicholls, L.

Tebbit, L.

Harmsworth, L.

Terrington, L.

Haslam, L.

Teviot, L.

Hayhoe, L.

Thomas of Gwydir, L.

Henley, L.

Trumpington, B.

HolmPatrick, L.

Ullswater, V.

Hood, V.

Vaux of Harrowden, L.

Hothfield, L.

Vivian, L.

Howe, E.

Wade of Chorlton, L.

Hylton-Foster, B.

Wakeham, L.

Jeffreys, L.

Wise, L.

Johnston of Rockport, L.

Wynford, L.

Kimball, L.

Young, B.

Kitchener, E.

Resolved in the negative, and amendment disagreed to accordingly.
6.11 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 4:
Page 1, line 8, after ("should") insert ("subject to subsection (1C) below").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment Nos.
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12,14, 17 to 19 and 32. This is a rather complicated set of amendments, made even more complicated by the fact that we are dealing with two industries and there are not necessarily common denominators in each.
The first two amendments to which I shall refer are Amendments Nos. 4 and 17. Amendment No. 4 is the paving amendment and Amendment No. 17 deals with consultation requirements with members of the British Rail pension scheme, the British Rail superannuation fund committees of management representing the workforce, the appointment of advisers and the appointment of advisers with the consent of the members.
Amendments Nos. 19 and 32 deal with a requirement for transferees to guarantee the continuation of pension rights and concessionary arrangements. Amendment No. 22 also deals with that as regards changes made to the British Rail pension scheme and the line workers pension fund and so on. It deals also with a requirement that there should be laid before both Houses a statement certifying such changes for the protection of the interests of the members and beneficiaries or an enactment by statutory instrument to that effect. My noble friend Lord Donoughue will deal with that in so far as it affects coal.
Amendment No. 18 affects the coal industry. It deals with the question of consultation and is similar to the amendment to which I have just referred. That will also be dealt with by my noble friend. Amendment No. 12 deals with balloting when there is a change of scheme. My noble friend will deal with Amendment No. 14 concerning coal.
I turn to those amendments which affect the rail industry. I believe that all those amendments—as do those relating to coal—concern people in employment or who have been in employment with British Rail. We contend that those rights must be maintained, as must be the rights of their dependants. We have serious doubts about that matter.
As regards the rail pension funds, British Rail operates a number of pension schemes. In one way or another they cover almost 350,000 people. The assets of the British Rail pension scheme amount to something in the order of £7.25 billion. We are talking about substantial sums. The present benefit structure has led to a situation in which substantial benefits were paid following considerable surpluses that arose. Those matters have been dealt with generously, properly and equitably; for example, death in service payments are four times salary and all pensions are fully index-linked to the retail prices index.
While the Government have promised protection of pension benefits and the establishment of broadly similar schemes after privatisation, the fact remains —and we exercise grave doubts about the situation —that any subsequent employer seeking to reduce costs could take any or all of the following actions. Steps may be taken to end the matching of additional voluntary contributions by employers. Steps may be taken to amend the one-sixtieth accrual rate for pensions or to amend the one-fortieth accrual rate for tax free lump sums. Index-linking may be reduced to a maximum of 5 per cent. Proposals may be made to

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lower the death-in-service payment and there could be a reduction in the 10-year membership enhancement for early ill-health retirements. Wholesale workforce reductions may well enable the surplus earmarked for maintaining a reduced contribution rate and additional voluntary contribution matching to be used for an employer contribution holiday. I seek a reassurance from the Minister about that. Now is the time that we seek those reassurances. We do not wish people to discover later that they are in a very difficult position.
We draw little comfort from previous privatisations that have taken place; for example, some of the British Rail subsidiaries. All the companies concerned—British Transport hotels, Sealink, the National Freight Consortium plc, and so on—were required to establish their own pension schemes to protect the benefits of members following privatisation. None of those schemes has led to an increase in benefits to anything like the level presently offered by the British Rail pension scheme. Indeed, in some cases there have been substantial reductions and employer contributions holidays.
Let us take the example of the hotels. Many of those changed hands on a number of occasions and their pension schemes remain unimproved or have even been closed. Experience shows that privatisation, even within the railway industry, has not been altogether happy. The employer has frequently identified possible savings and greater company profitability by reducing pension costs. Notwithstanding all the efforts made to safeguard the situation before the businesses were sold, subsequent events have resulted in inferior pension benefits being paid and consequently, there has been less protection for employees and their families.
The situation is not unlike that in other privatisations that have taken place. We believe that workers in those industries, who in many instances have given a life time of service to them, are entitled to rather better provision than they have been given. They are certainly entitled to assurances which we hope will be forthcoming from the Government.
The only way in which the system can properly be safeguarded so far as concerns past, present and future employees is for British Rail's pension scheme to be redesigned on an industry-wide basis. There is no technical reason why that should not be done. It has been done in other cases. We should be able to proceed on that basis, and I hope that the Government will be forthcoming. We regard this debate tonight as a probing debate into the Government's intentions, and I hope that we may get a rather more satisfactory reply from whoever is replying than we did to the last debate where the reply was derisory. This is not an issue that is susceptible of being dealt with on that basis because many hundreds of thousands of people are vitally affected and involved.
To turn to advice, it is important that good, independent and objective advice should be available, and that that should be done by openly consulting with potential and actual pensioners and dependants. This should be done free of pressures and influences
1224
on the part of subsequent employers, whose interests may well be different from, or even in conflict with, their pensioners. This is a critical situation where transparency is important and the public interest is clear. I hope that the Minister will be forthcoming. My noble friend will deal with some of the issues affecting the coal industry. I have not touched on those as they are not within my remit, but there are substantial common denominators. I beg to move.
Lord Ezra: Perhaps I may speak on the coal industry pension fund. That raises important issues just as the rail fund does, as the noble Lord, Lord Clinton-Davis, mentioned to us. In the case of coal, the value of the fund and the number of people affected are just about getting on for double that of the railways. It is very large indeed. The fund is currently worth about £13 billion, which is probably 10 to 15 times what the business will be worth when sold. It is much larger than the business we are talking about privatising.
There are a large number of people involved, of whom the bulk are people in receipt of pensions or with deferred pensions because of the rapid rundown, particularly in recent years, of the size of the coal industry. Therefore, it makes it a special problem. The numbers are quite stupendous. There are two schemes. In the case of the staff scheme, there are 16,500 contributing members, but there are 74,500 pensioners with another 12,500 with deferred pensions. In the case of the mineworkers' schemes, there are 35,000 serving members, 270,000 pensioners, and 260,000 with deferred pensions. We are talking about half million people in the mining schemes either in receipt of pensions or who have deferred pensions to which they are entitled.
It is obvious that in any changes that are made in these pension funds as a result of the process of privatisation there should on the one hand be full consultation (which some of these provisions are about) and full protection. I think it necessary that in this paving Bill there should be something to that effect. I should like to recall to the Committee that in the case of the electricity industry the Electricity Act 1989 gave clear statutory protection for pensioners and serving members at the time of privatisation. I should be interested to know whether it is the Government's intention in the case of railways and coal to give similar statutory protection.
Lord Donoughue: In this complex grouping there are five issues: consultation; guarantees; the ballot question; a separate fund for the already retired; and ways of changing the schemes. Regarding coal (the guarantees and the changes in the separate fund) on consultation and on advisers for coal —that is, Amendment No. 18—I will endorse the points made in relation to rail by my noble friend Lord Clinton-Davis. The same principles apply. I support the ballot amendment because it seems to me the best form of consultation.
On the guarantees—Amendment No. 19—the funds in the coal industry pension funds total in value over £13 billion. In the light of recent experiences with pension funds, I think it is accepted that we need

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statutory protection. We need a guarantee of existing benefits for existing retired members; we need a guarantee that currently working contributors continue to accrue rights even if those members are transferred to work elsewhere in the industry. It is important that subsequent changes of working situation should not in any way affect the rights of members. The noble Lord, Lord Ezra, mentioned the electricity supply pension scheme, and that seems to be a model giving statutory protection. I hope that the Minister will be able to assure the Committee that that will operate here. I believe that the noble Lord, Lord Wakeham, when Secretary of State in another place, gave undertakings to the colliery managers that these guarantees would operate. I should like to hear that that is still the case.
It would also be appropriate to have statutory guarantees in the area of actuarial surpluses. In other words, statutorily prohibiting that the surpluses should be used for any purpose other than the benefits of the members. These surpluses are huge moneys. I think there was a surplus of £1.5 billion between 1987 and 1990. The pensions contribution was calculated on that basis by British Coal. Will that pension contribution holiday—I think it was through to the year 2,000—carry over to the private buyer? I should like to resist that. The surplus, we say, should be for the benefit of members, including improving benefits or reducing contributions.
Amendment No. 32—the provision for changes—provides some statutory protection and a proposed certification. The changes in the interests of members should extend to the changes in the governance of schemes. There it is important that the governance of these schemes should be statutorily entrenched. There is a great deal of thought being given to the model governance for pension schemes at this moment, and a number of proposals have come forward. It would be desirable for these schemes that the governance should be entrenched so that a private buyer cannot later change the governance. The chairman should certainly be an independent trustee. The employer should have less than 50 per cent. of the representatives, and the workers representatives and independents should be more than 50 per cent.
We are probing. We should like to know the Government's thoughts on the future governance of these schemes. How do we make sure that some future private buyer, who may be three purchasers along the way, does not change the governance to the detriment of members?
Finally, I should like to mention the proposal for separate schemes—Amendment No. 14—and pick up a point that the noble Lord, Lord Ezra, made about the numbers. There are over 250,000 retired beneficiaries. At the time of privatisation, 90 per cent. of members will be retired beneficiaries. There is no reason to transfer their pension rights, which are calculated at £11 billion out of the £13 billion, to private owners. Those members will not have worked for or had any relationship with the new owners.
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There is no reason why the buyers of all or any part of British Coal should get their hands on the enormous funds involved.
It would not be a difficult matter to split the schemes. There could be one scheme for currently working members, who would represent about 10 per cent. They would have guaranteed benefits under the guarantee clause, with good governance that is entrenched statutorily, and there would be no changes without the permission of Parliament or of members, as is provided for by the various clauses. There could be a separate fund, a retired scheme, for 90 per cent. of the members. It would be separate and free-standing with the surpluses being for the benefit of the members only. Such an arrangement would be very acceptable to the industry and it would properly protect the interests of those involved.
6.30 p.m.
Baroness Denton of Wakefield: As the noble Lord, Lord Clinton-Davis, stated, the amendments and their grouping are complicated, but they are probing amendments and I hope that I shall be able to reassure noble Lords in the course of the reply. They are important matters.
The provision of pensions and concessionary benefits, which are included in Amendment No. 19, is an important issue about which employees of the coal and rail industries are rightly concerned. Numerous assurances have been given by my honourable friends the Ministers of State for Energy and Public Transport that pension rights will be safeguarded at privatisation.
None of the amendments is appropriate as an addition to the Bill, which, as we have made clear, is solely designed to give powers to British Coal and British Rail to enable them to consider the Government's proposals and to allow them to prepare for privatisation. The Bill does not allow for the implementation of those proposals, which would require further legislation.
As was the situation with previous government privatisations, we will ensure that the pension entitlements of existing contributors and of past employees of both industries are properly safeguarded. My honourable friend the Minister of State for Energy has made that position clear in another place. I hope that that reassures the noble Lord, Lord Donoughue. There would be no circumstances in which a potential purchaser of the coal industry could be attracted by the potential of any predatory gains from the pension funds. Such an option could not be countenanced by the Government. I wholeheartedly endorse those sentiments.
Similarly, my honourable friend the Minister of State for Public Transport is in no doubt about the importance of this issue in relation to the privatisation of the railways. Both he and my right honourable friend the Secretary of State for Transport have taken a number of opportunities to emphasise that point in another place. Since then, the rail privatisation White Paper has been published and it confirms that the pension rights of existing contributors and past employees will be properly safeguarded.
Lord Clinton-Davis: I am sure that nobody would cast doubts on the bona fides of the noble Lady or those of her honourable friend. However, past precedents do not bear out what she is saying. I could cite many examples where there have been serious distortions of the position once privatisation has taken place or after the passage of some time. That point is concerning people and I hope that the noble Lady can deal with it.
Baroness Denton of Wakefield: I am very happy to deal with that point at this stage. The noble Lord earlier raised the subject of pension rights of employees of British Rail hotels and Sealink. We are aware of the arrangements that have been made and they are being taken into account in the arrangements that are currently under consideration for the future of the pension rights at privatisation under the present proposals. Those arrangements have been noted.
The security of the rights now enjoyed by members and pensioners of the British Rail scheme is of the highest priority. The subject of pensions is a complicated issue that requires careful consideration, the more so in the case of British Coal pension funds, where, as the noble Lord, Lord Ezra, pointed out, the ratio of beneficiaries and future beneficiaries to current contributors is uniquely high.
The details of any proposals are not a subject for the Bill and would require further legislation. The Bill is a technical measure and contains no powers to enable the Government to take any action on pensions. It would be quite inappropriate to make a specific reference to pensions in the Bill.
British Coal and British Rail will wish to be well advised on the crucial issue of pensions. All departments undertake inquiries to establish the professional competence of any adviser who is appointed by the Government and I have no doubt that British Coal and British Rail too will undertake such checks as they believe necessary in the appointment of their own advisers. They will wish to ensure that they are in receipt of the best possible advice—advice that will help to ensure that pension arrangements can be established which will safeguard pension entitlements. They will wish to appoint advisers in whom they and all those concerned can have complete confidence. That is a matter that must be left to them.
The mechanism for the appointment of advisers to the Secretary of State or to either of the corporations is not an appropriate matter to include in the Bill. Nor is it appropriate for representatives of the workforce to be given a power of veto, which would be the effect of the proposed subsections, in relation to the appointment of advisers by the Government, British Coal or British Rail.
I should like to add that conversion of the British Rail pension scheme into an industry-wide scheme is one of the options that is being considered. I emphasise that the disposal of surpluses declared by the mineworkers' pension scheme or the staff superannuation scheme is a matter for the trustees of those schemes.
This is not the occasion to discuss the details of pension arrangements that will be put into place at
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privatisation. The Government will be making their policies clear when the main privatisation legislation is introduced. There will be an opportunity to give careful consideration to this very important subject. I hope that I have convinced your Lordships that we appreciate that the subject of pensions is a crucially important matter and that the noble Lord will withdraw the amendment.
Lord Clinton-Davis: I thank the Minister for that reply. I accept that she and her colleagues will think very seriously about these matters. She accepted that it was not an inappropriate debate because it is right to ventilate the anxieties of thousands of people, anxieties which have been expressed to us by the unions and by other interested parties. The noble Lady stated on a number of occasions that she recognised that these were important matters and that therefore it was legitimate to raise them today.
I note that the noble Baroness says that this is not the proper vehicle for that. I will carefully consider what she has to say in that regard before Report stage, along with my noble friend Lord Donoughue and the noble Lord, Lord Ezra. However, the noble Baroness may recall, if she consults the Hansard Reports of another place and of this place with regard to previous privatisations, that very similar assurances have been given in the past on those occasions and in a number of material respects those assurances have not been fulfilled. Consequently, I was very pleased to hear her say that some of those precedents will he taken into account. That is a far cry of course from some statements that have previously been made—that everything in the garden as far as pensions were concerned was perfectly all right, "trust the Government and that is fine". I am glad that the Government will be considering those precedents and to what extent they went awry.
I was also very pleased to hear the noble Baroness say that one of the proposals that I put forward; namely, converting the BR pension scheme into an industry-wide scheme, is on the agenda. I do not think that I could ask the Minister to go further than that, and I am comforted by the fact that at least it is an option which is being considered.
I will just repeat what our two concerns are so that the position is clear beyond any peradventure in future debates. We are anxious to ensure that all future surpluses will be used for the benefit of pensioners and contributors. They should not be used for the benefit of any private buyer, who has made no previous contribution to a pension scheme. We are concerned too, whether we come back to it in the course of this Bill or in the substantive Bill in due course, to ensure that against the background of recent events, pensioners should have a much greater say so far as concerns the administration of pension funds. It is their lives that are at stake. We believe that they should enjoy majority control as trustees of their pension funds. I believe that the Government do not agree with that, and that is a point of difference between us. Certainly we do not think that events within the last year or so enable us to rest comfortably

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with the idea that control of much of the administration should be outside the province of the beneficiaries.
Having listened to what the Minister has said, I should like to cogitate further upon that. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 5:
Page 1, line 8, after ("transferred") insert ("subject to subsection (1F) below").
The noble Lord said: I beg to move Amendment No. 5. I believe that it would be for your Lordships' convenience if we consider at the same time Amendments Nos. 6, 20 and 21. These amendments deal with questions of competing for franchises. I recognise that the Government have produced this consultation document, which is of considerable length and complexity. However, I do not believe that certain points which we are anxious to refer to have been dealt with there.
Amendments Nos. 20 and 21 effectively come to this: we are asking the Secretary of State to ensure that British Rail will be invited to bid for the award of any franchise alongside any other bidders. The second amendment seeks to ensure that British Rail should itself be under an obligation to compete for the award of franchises. We really want to test the Government on these issues because they are not dealt with sufficiently, if at all, in the White Paper.
There are very deep concerns here which hinge on the issue of franchises. We do not object to the idea that franchises should be awarded on the basis of competitive tendering, if we are going ahead with this idea at all. We know that InterCity operations, being profitable, will go to the highest bidders. Network SouthEast and Regional Railways, because they are loss making, will go to the companies requiring the lowest subsidies. Thereafter, franchisees will rent or buy rollingstock from British Rail, bearing the full commercial risk for their operations; so they will pay track charges, rollingstock rentals, wages and other operating charges out of fare revenues. And of course they hope that they will be left with a profit. So if franchises are to be profitable costs will need to be cut. The consultation paper says that they will be free to change the working conditions of employees once the franchise is under way. I do not know what the Minister will have to say about that, but that is what the Government have put forward and we express our concern about it.
One issue which arises directly from that is "cherry-picking". What is the position of would-be franchisees concerning competition from cherrypickers?—that is to say, from free-wheeling operators who seek to grab traffic from the franchisee's most profitable services? That is just one of a number of serious problems.
Perhaps I may refer to some specific concerns expressed in the amendments. The White Paper envisages that British Rail should not be permitted to tender for franchises of passenger services which it
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currently operates. I think that I am right in saying that, but I stand to be corrected if the Minister has any evidence to the contrary. If that assumption is right then I ask: why not? Have the Government previously taken the view that the public sector should always be tested against private contractors? For example, we have subsidised bus services and local authority services. The Local Government Act 1988 makes the provision that compulsory competitive tendering had as its aim to secure:
"that local and other public authorities undertake certain activities only if they can do so competitively".
When we examine that issue, the White paper says in paragraph 3:
"British Rail has made significant improvements in recent years. Its efficiency compares well with that of other European railways".
That may or may not be correct.
It goes on:
"The productivity of the BR workforce is among the highest of any European railway. InterCity services and BR freight operate without direct subsidy".
That is what the White Paper has to say. According to British Rail Board's annual report for 1991–92, staff numbers in the main businesses fell by 4,000 between 1988 and 1992, from 137,160 to 133,060, while the total train miles for passengers, freight and parcels operations rose from 255.5 million to 265.6 million. British Rail generates 3.289 train kilometres per member of staff: the average for European railways is 2.320: substantially less.
Against that background, the Government's desire for any significant private sector involvement in railway operations is, in our judgment, flawed. It is contrary to common sense and contrary to all principles of fairness that the existing efficient operator of train services should be forbidden to tender for their continued provision. We say that it is in the interests of the public that British Rail should be permitted, and indeed invited, to tender even if franchises are eventually awarded to private operators. In the absence of a properly costed bid from the most experienced provider of rail services, against what standards are private sector bids to be judged at all? That problem would be particularly serious if, as seems likely, many franchises are sought by only a single private sector bidder.
If British Rail is to be invited to bid alongside the private sector, obviously its commercial confidentiality must be protected. British Rail's present exclusion from bidding permits the Department of Transport effectively to plunder its expertise to find ways of implementing the Government's philosophy. Ending that exclusion would enable British Rail's operating businesses to devote their full managerial skills to winning franchises in a competitive environment.
British Rail is not by any means a monopoly provider of transport in this country. It has to compete with road, air, sea and canal. I believe—and this is the gravamen of our submission—that it should have a chance to prove itself in the new internal railway market which the Government seem determined to create. If British Rail is not permitted to bid for franchises, it will become an operator of last

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resort, leading to lower standards on the services that it does operate. There would also be no benchmark against which private sector bids could be considered.
Finally, I come to the question of requiring British Rail to bid for franchises. If it is to be given the opportunity to hid for franchises just as any private operator does, then it does not absolve the company from its statutory obligation to provide a passenger service throughout Great Britain. The requirement to tender is also essential for proper comparative assessment of private sector bids. The Government may argue that this amendment is more appropriate (I have heard this argument once or twice this evening) to the rail Bill in due course rather than to the paving Bill. But decisions are being taken—I believe that this is a point which the Government have not met—in advance of that future legislation. Indeed, that was demonstrated when the Secretary of State made an announcement at the Conservative Party Conference concerning the forthcoming sale of Red Star. So it is of great importance that British Rail's role in franchising is clarified now. I invite the Government to do precisely that. I beg to move.
The Earl of Caithness: I well recall what the noble Lord, Lord Donoughue, said as regards the first amendment. He said that his party would be constructive on the rail amendments. Yet if Members of the Committee care to look at these amendments they will see that they seek to enable—
Lord Donoughue: I said that in the context of the separation of coal from rail. What I hung before the noble Earl was a prize which the Government chose not to take. I said that I am sure that, had they separated coal from rail, we would have been very co-operative about rail. The Government were not co-operative with us.
The Earl of Caithness: I do not believe for one moment that the noble Lord would not have moved these amendments. I am sure that the noble Lord was only too keen to move these amendments whether or not coal was in the Bill. As the noble Lord said, the amendments seek to enable British Rail to prepare itself to bid for franchises on an equal footing with potential private sector franchises. That would run directly counter to the Government's policy and the objectives for rail privatisation. In effect they are wrecking amendments.
As the noble Lord so rightly said, the amendments are not appropriate for this Bill. However, it will be worth while —and I am sure that the Committee will appreciate it—if I spend a little time saying why the Government cannot agree with the amendments as tabled.
The rail privatisation White Paper states clearly that, so far as the passenger railway is concerned, the Government believe that the private sector should be given the fullest opportunity to manage and operate existing railway services. The noble Lord will find that in Paragraph 21 of the White Paper. We want to harness the fresh thinking and innovation that involvement with the private sector will bring. The objective is to improve the quality of railway services
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by creating many new opportunities for private sector involvement. We would not achieve that objective if BR was also able to bid for franchises. We believe that the improvements to services that all rail users want to see can be achieved only if BR's monopoly of rail service provision is ended.
However, it is an important part of our policy to enable BR's existing workforce to take a stake in the privatised rail industry. The noble Lord will find that in Paragraph 41 of the White Paper. There will be an opportunity for the staff in BR to bid for franchises. Indeed, the Government wish to encourage that so that they bring their expertise to bear on the rail industry outwith the constraints of a nationalised industry. Of course, it will be open to the franchising authority to reject all bids from the private sector should none represent value for money, in which case BR would continue to operate the service. Franchising of passenger services will be carried out progressively. BR will continue to run the services until they have been franchised, but BR's role as an operator will diminish over time.
The amendment before the Committee also suggests that BR should not disclose information that might prejudice its ability to compete for franchised services. The franchising authority will have to ensure that the same information is provided to all bidders so that the franchise competitions are fair. I am sure that the Committee will agree that it would be quite wrong to withhold information to tip the scales in favour of one bidder.
The franchising authority will obviously have to draw on information about the costs incurred by BR in providing the services in question in order to compile the invitations to tender, as well as other operational information. He will therefore have that in mind when deciding whether the private sector bids received represent good value for money.
Perhaps in conclusion I may reiterate the point with which I started. These amendments are not acceptable.
Lord Clinton-Davis: It seems that the Minister forms the judgment that if he does not like an amendment then it is a wrecking amendment necessarily, which is quite absurd. As the Minister knows, the White Paper envisages that BR will be forbidden to tender for franchises for the passenger services which it now operates. He concedes that. But the Government's view hitherto has been that the public sector should always be tested against private contractors. Is the Minister saying that that is wrong? I give way to the noble Earl if that assertion is wrong.
The Earl of Caithness: It has varied from situation to situation. There has been a welcome increase in market testing. That has been to the benefit of services. Equally, we believe that privatisation through franchising of British Rail passenger services will be to the benefit of the consumer.
Lord Clinton-Davis: That is an assumption which the Minister makes having already, in a sense, contradicted himself. What he is now saying runs completely counter—he did not meet this argument

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—to the provisions of the Local Government Act 1988. That Act introduced compulsory competitive tendering with the aim of securing that local and other public authorities undertake certain activities only if they can do so competitively.
The Government have never previously sought to deny such authorities the ability to bid for their existing work. That has never happened before. Why are they now departing from that policy? We know that this is a government who engage in somersaults on a colossal scale. What is the justification and the rationale for departing on this occasion from their proven policy in the past? The Minister has not begun to answer that point. I invite him to do so before I sit down.
The Earl of Caithness: I am sorry that the noble Lord thinks that. He clearly did not listen to what I said. I spelt out exactly why the Government have taken the decision that they have.
Lord Clinton-Davis: That is not really satisfactory. The Minister has not answered the very specific point I made. The reason is, of course, that he has not been briefed on it, so I must not be too hard on him. But I ask him to reconsider the matter.
The Earl of Caithness: The noble Lord is quite wrong on that. I have answered the noble Lord. I have been briefed on the amendment. I repeat that I have answered him.
Lord Clinton-Davis: The Minister is now losing his cool, which is never very good in this House. The fact of the matter is that he did not answer the points about the 1988 Local Government Act, the rationale behind that Act and behind the subsequent policies that were applied. If he says that he has read his brief and if this is in his brief, I invite him to read it again and to take on board the point that I am now making, which is a point of substance. I do not propose at this stage to test the opinion of the Committee, but we may well wish to return to this issue in due course. In the circumstances, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Grantchester): Is it the Committee's pleasure that the amendment be withdrawn?
The Earl of Caithness: Not content.
The Deputy Chairman of Committees: The Question is, That the amendment be agreed to.
On Question, amendment negatived.
[Amendment No. 6 not moved.]
7 p.m.
Lord Donoughue moved Lord Donoughue moved Amendment No. 7:
Page 1, line 10, after ("shall") insert ("provided subsection (1H) below has been adhered to,").
The noble Lord said: In moving Amendment No. 7 which stands in the name of my noble friend Lord Clinton-Davis, perhaps it would be for the convenience of the Committee if we considered also Amendments Nos. 13, 22 and 23.
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I shall touch briefly upon the costs-of-privatisation aspect in amendments Nos. 13 and 22, which ask the Secretary of State to publish information on the costs of the implementation of privatisation. We wish to see the true costs. This amendment has been tabled against a background in which we know that the examinations by Select Committees in another House and by the Comptroller and Auditor-General have demonstrated that the true cost of previous privatisations has been far higher than was implied at the time. We want to know the direct and indirect costs of the privatisation of the coal industry, including the triggering of historic liabilities. I should like to draw the Minister's attention to the use of the word "precise" in Amendment No. 22 and the way in which that differs from Amendment No. 13.
Perhaps I can deal in a little more substance with the question of valuations, which is a matter of considerable public interest. I refer now to Amendments Nos. 13 and 22 in relation to British Coal. British Coal is a major landowner; but we do not know the actual value of the land it currently owns which, presumably, will be transferred. Attempts to get this information at Question Time have been resisted. Her Majesty's Government have refused to give either the acreage or the value of the land and have stated that this is a question for British Coal. However, British Coal has been equally unhelpful. If one examines its accounts—I have them in my hand —one sees that they are very general. Before this matter proceeds to a conclusion, we must have precise information.
We are asking for that against the controversial background —some believe the scandalous background—of the sales of Rover Group and of Royal Ordnance to British Aerospace. We recall that properties at Enfield and Waltham Abbey were valued at £5 million prior to privatisation; but after privatisation they were suddenly valued at £64 million. This scandal was criticised not only from this side of the House, but by the Comptroller and Auditor-General who, as a result, recommended the technique of clawback which is referred to in Amendment No. 23.
In this context, I should like to ask the Minister certain questions. Can she now or at Report Stage inform the House of the total acreage of land involved in the sale of British Coal? How much is agricultural and how much is urban? What percentage of that land is used for mining operations and what percentage is used for open-cast operations? What percentage of that land is available for disposal? Will there be an independent valuation? I draw the Minister's attention to the fact that Amendment No. 13 specifically asks for an independent valuation of the land owned by British Coal. The noble Baroness must accept that the House and the country will no longer be happy with in-house valuations of British Coal's land which may end up, as has happened previously, as a sweetener for the purchaser. How many houses does British Coal own? I believe that British Coal is one of the largest house owners in this country. May we have the number?

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Underlying these questions is the thought that the value of the assets being included in the package is of great relevance. The scope for the kind of rip-off that has happened in the past relates to the value of those assets. We are in a tricky situation. The actual operations of British Coal—the mining operations—may be valued very low. Some people have referred to sums of about £250 million. It might be possible to buy the whole of British Coal for £250 million; yet potentially included are pension funds of £13 billion and thousands of acres of land and of houses which may well be worth hundreds of millions of pounds —if not billions. We need some precise numbers on all this. I beg to move.
Lord Clinton-Davis: My noble friend Lord Donoughue has dealt with the aspects relating to coal; but similar issues—although not precisely the same
affect railway property. The trouble is that we know that railway property could easily be exploited and given over to non-rail use. Indeed, it is not inconceivable that railways could be acquired simply to enable the sale or development of the property assets which they own. These are immense. The railways own a number of city centre sites and considerable greenfield land between cities. The land that is occupied by station sites and tracks could be worth billions of pounds if developed. Thus, the anxieties which have been expressed in relation to coal are also applicable to railway land.
If railway land were to be privatised at its nil value, this would give incentives for closing and developing railway routes. That sort of thing happened in the United States in the 1950s and 1960s. It could mean station closures or resiting them to less accessible areas. It could also mean line closures or reductions in the number of tracks.
We have already observed—and the Minister has noted—that there have been difficulties in relation to previous privatisations and in other contexts. After bus deregulation, bus garages and bus stations were sold. Cheap asset sales in that and other privatisations attracted considerable criticism from the House of Commons Public Accounts Committee and the National Audit Office. But pricing rail land at development value would make the rail industry still less attractive to the private sector.
We believe that the implications of the Government's proposals for stations, land and property need to be explored in some detail and arrangements need to be put in place to ensure four particular objectives. First, land which has potential for future rail development should not be disposed of to meet short-term financial pressures. Secondly, the disposal and development of land adjoining rail infrastructure and stations should reflect transport and land use policy. Thirdly, developments at and near stations should not prejudice operational requirements, including possible future development. Fourthly, the interests of local authorities in land and developments that they have financially supported should be protected, the protection being based on the current value of assets rather than outstanding loan debt.
Investment in railways is obviously a long-term
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proposition. The advantages of sites close to railway stations are enormous. But facilities such as station car-parks can be pivotal so far as concerns transport strategies, including the promotion of rail-based park and ride schemes. It is essential that short-term pressures for realisation of capital should not outweigh longer-term operational and policy requirements. These are matters which we are asking the Government to address. We are probing the Government's intentions on these matters. It is not too early to do that. I therefore await with interest what the Minister has to say in response to the amendments.
Baroness Denton of Wakefield: The noble Lord, Lord Clinton-Davis, said earlier that he had heard the argument several times that the matter under discussion was not for the Bill. I fear that he will have to hear it again. I should say at the outset that this is not the correct forum for discussion on valuations and property issues. They are not relevant to British Coal and British Rail preparing for privatisation but rather to the main sale process itself. However, as both noble Lords have wished to air these matters, perhaps I may rehearse the answers.
As the noble Lords rightly said, British Coal and British Rail hold substantial portfolios of property. They are vast and wide-ranging holdings and include everything from working pits and stations to domestic property and farm land. The proposed amendments would mean that British Coal's and British Rail's land holdings together with any other assets which are to he transferred on privatisation would have to be valued and that value published within one month of the proposal to transfer assets. The scale of such an exercise would be huge and I doubt whether it would be possible in the timescale. The cost of valuing everything from estates of land to rolling stock to miners' lamps would be a vast commitment and would run into many tens of millions of pounds. I am sure that the proposers of the amendments and I share a common ambition to obtain value for money from the sale of public sector assets. That is certainly the Government's aim and Ministers have to answer for their actions on this score to the Public Accounts Committee.
I ask the Committee to consider what the relevant value of a piece of land or property actually is. An item must be worth what one can get for it—nothing more. A coal mine or a rail freight yard is worth what purchasers, be they trade buyers or shareholders, are prepared to pay. A blanket valuation exercise is therefore very costly and unnecessary. The valuation that the market puts on an asset is the one that matters.
Certain circumstances have arisen during past privatisations when the Government have wished to make use of property valuers in order to fulfil their value for money responsibilities. They have been principally cases where the market might not work properly. There have, for example, been circumstances where the alternative use value of a piece of land is very much higher than its existing use value. A site

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which has been used as a warehouse would be worth more to a purchaser if its use as a supermarket site was intended in the future.
On previous privatisations the Government have sought to flag up high alternative value sites and to impose clawback provisions to ensure that they are maximising proceeds. Previous privatisations have tried to ensure that the Secretary of State participates in any windfall profits realised from the disposal of any interests in certain real properties by privatised entities. Such a windfall might occur if property prices rise sharply after privatisation.
Clawback in the past has ensured that half the capital gain on the property disposed of by the privatised entity less corporation tax is paid to the Secretary of State and requires a valuation to determine the base value of the property at the time of sale. On electricity, clawback was imposed by a mechanism imposing on the privatised entities the obligation to pay the clawback amount, if any, to the Secretary of State and providing security against non-payment. As regards the British Technology Group, clawback was imposed by means of a contract. In no previous privatisation has clawback been included by means of a statutory compulsion in the Act.
These amendments propose that valuations and the imposition of clawbacks will be required on all proposals for property transfers. I can assure the Committee that the Government will in due course consider both alternative use valuations and clawback valuations in the light of their responsibility to ensure value for money, but I cannot see that the valuation of all British Coal's and British Rail's properties as proposed by the noble Lords would be a valid use of government time and resources.
Lord Donoughue: I have obviously not quite understood the noble Baroness. Is she saying that there will not be an independent valuation of British Coal land and houses before disposal, or is she simply saying that this is not the appropriate stage to propose it? If she is saying that there will not be a valuation, that is absolutely outrageous in relation to a business where the assets are almost certainly worth far more than the going business.
Baroness Denton of Wakefield: I started my remarks by saying that this is not a matter for the Bill. I was trying to be helpful by rehearsing the answers to the questions, which in the first place were not relevant to the Bill. I was saying that an overall valuation of everything within a month did not represent good value for money.
I was about to suggest that there must be certain de minimis grounds to prevent clawback being imposed on the transfer of trivial items. There can be no point in retrieving windfall profits of £100 on the sale of a piece of equipment or land if the drawing up of a clawback contract costs £5,000 in solicitors' fees. Secondly, the valuation of all the corporation's assets would involve very significant expenditure. It must be
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right that clawback is only introduced on those items of property where the market is such that there is actually some potential for windfall gains to be made.
Lord Donoughue: Does the Minister accept that clawback, although useful, is not a substitute for a proper valuation? Apart from anything else it gives a 50 per cent. gross windfall potential. We welcome clawback, but it is not a substitute for a proper valuation.
Baroness Denton of Wakefield: I was trying to indicate how, in some instances, the decision concerning which properties would be under question. But I would again confirm that these are decisions which must be made nearer the time of privatisation. The Government will of course have to justify their decisions in due course to the PAC.
The amendment also proposes that the cost of transferring the property to the private sector entity should be estimated and published. An estimate of the cost of transferring property would be difficult to produce and would be likely to be misleading because of the problem of identifying in advance to what extent there would be difficulties in relation to title and because it would cover only part of the sale process.
I repeat that the costs of privatisation can be considered only when the process has been completed. I remind the Committee that the Government will be asked to defend the costs before the PAC. The amendments are not relevant to the Bill and do not improve the prospects of securing value for money on privatisation. In fact, the reverse is true. Therefore, I urge the noble Lord to withdraw the amendment.
Lord Donoughue: We have heard what the Minister has said—that this is not the appropriate stage to deal with the matter. We said that these were probing amendments. We should put down a marker that these are matters that we consider to be important. Should we ever reach the stage where we both agree that it is appropriate, I trust that the Minister's answers will be more forthcoming. We shall reconsider what the Minister has said and decide what to do on Report. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 8:
Page 1, line 10, after ("include") insert (", provided the conditions specified in subsection (1K) below have been satisfied,").
The noble Lord said: I shall speak also to Amendment No. 24. The White Paper envisages the outright sale of the freight and parcels businesses and the transfer of passenger service assets and staff to franchisees. Existing BR employees are entitled to know what kind of potential new employers they will be dealing with. Of course, no one will deny that there are many good employers in the private sector of the transport industry. Many recognise trade unions for collective bargaining purposes. Many have properly structured career development programmes. They offer fair wages and decent conditions of service and respond positively to questions of staff and public safety. Consequently, I argue that when one comes to operators of that standard bidding for sections of the

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railway industry they would have nothing to fear from the scrutiny of their records by the public and potential employees.
The most prominent of the potential new operators of passenger services—I understand that negotiations based on the first proposal that was made have now ended—is Richard Branson's Virgin organisation. As an employer in the airline industry it has a good record. It is generally willing to respond constructively to requests for trade union recognition. It offers fair employment terms and salaries and is conscious of the need for safety. What would he, for example, have to fear from a disclosure of the record? However, not every employer would bear up to such scrutiny. The public and existing BR employees are entitled to know what lies in store for them.
Working conditions are linked inextricably with questions of safety. The Hidden Report into the Clapham rail disaster highlighted excessive working hours and constant overtime working as a clear minus factor in relation to safety. In consequence of that, British Rail sought to introduce its own guidelines, and when it could not immediately implement its own objectives interim arrangements were brought into force. That of course is something upon which it is entitled to he complimented.
The public is entitled to know what provisions would be made by the new service providers and to have an assurance that they would not go back on the arrangements—I shall not rehearse them at this hour —which British Rail made to balance its books. I take some comfort from what the Government have to say in the White Paper about safety, but, nevertheless, I still believe that the points I have made, which I have made at the request of a number of people, should be replied to.
I say that most particularly in the light of other assurances that were given when bus deregulation was proposed, because the situation that has been revealed in the five years since bus deregulation is inconsistent with the assurances that Ministers then proffered to both Houses. In fact, average hourly rates of pay for drivers have fallen by nearly 5 per cent., while the average increase for all industries was 8.9 per cent. Hours worked increased by 2.1 per cent compared to a national average increase of 1.6 per cent. So the auguries in that regard are not good. How do the Government propose to put those concerns at rest and how will they go about doing so in terms of the processes that they envisage in the White Paper, while taking into account the fact that their own position was debased to some degree as a result of experience in another privatised industry?
There is one other point to which I should like the Minister to give his attention; that is, the EC acquired rights directive. What effect will that directive have with regard to workers who change from being employed by a public utility to privatised companies? There is a recent ruling in the European Court of Justice which indicates that the United Kingdom regulations which put that directive into operation restricted protection to workers in commercial ventures and that that was unlawful. I understand that the Government's view is that the regulations had
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always covered the public sector. I should like to know what the position is and whether the Government have satisfied themselves that they can now take proper account of the view expressed by the court. I beg to move.
The Earl of Caithness: The amendments would require British Rail and British Coal to secure details of employment practices and records of potential transferees before—I underline the word "before"— exercising the powers in the Bill. Such an amendment would be unworkable. I do not see how the noble Lord sees it working but, given its wording, the amendment would be unworkable. There is much work that British Coal and British Rail need to carry out well in advance of the implementation of privatisation and before potential transferees will have been identified.
No powers of transfer are included in the Bill. Such powers will be included in the main privatisation Bills that will be brought forward later this Session. It is only when the main legislation has been passed that the question of potential transferees can properly be addressed. Although the amendment is not appropriate for the Bill, it raises an important issue and one that we may find ourselves discussing again—I shall change the wording to "almost certainly will find" ourselves discussing again, not just during this Bill's passage but when the main privatisation Bill is before us. We shall all be well accustomed to the arguments by then.
The Government attach great importance to the maintenance of employees' rights, and in respect of coal and rail employees. This has been underlined on numerous occasions during the passage of the Bill and again today. The Government have stated repeatedly that they will ensure that pension entitlements of existing contributors and of past employees of the coal and rail industries are properly safeguarded. We have given similar assurances concerning existing concessionary fuel entitlements earned as a result of service with British Coal and concerning concessionary travel arrangements earned as a result of service with British Rail.
These assurances were also given in respect of British Rail in the rail privatisation White Paper, paragraph 86. As the Committee knows, no decisions have yet been taken on the future structure of the coal industry or on the form and timing of privatisation. So neither the Government nor British Coal can know who might be the potential purchasers of the industry.
Turning to rail privatisation, while the Government have received a number of expressions of interest in response to their franchising consultation document, it is far too early to know whether that interest will develop. Nor can it develop properly until the details of the transfer powers and other provisions in the main legislation have been considered.
The Committee will understand therefore that to require, as these amendments seek to do, employment records and practices of potential transferees to be made available before British Coal and British Rail can exercise the powers conferred on them by the Bill is not an option.
When I come to the European directive and the transfer of undertakings (protection of employment)

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regulations, otherwise known as TUPE, I can assure the noble Lord, Lord Clinton-Davis, that very serious consideration has been given to the implications of that.
Lord Clinton-Davis: As regards the last part, I wonder whether the noble Earl would undertake to write to me before the next stage of the Bill with regard to the directive. I mention it late in the day and clearly the Government must consider its implications. But it would be helpful if the Minister could give me the undertaking that he will write to me on that point.
The Earl of Caithness: If there is anything more that I can add, I shall be only too pleased to write to the noble Lord.
Lord Clinton-Davis: The Minister said that the Government were considering the implications, therefore it appears that their final decision has been made. We hope that the noble Earl will be able to write to us before the Report stage.
On the other issues, I note what the Minister said and will consider his observations. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
7.30 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 10:
Page 1, line 10, after ("anything") insert ("subject to their having considered the document published in accordance with subsection (1U) below").
The noble Lord said: I beg to move Amendment No. 10, and with it perhaps it would be convenient to the Committee to discuss Amendment No. 33. These amendments bring us to the objectives for rail freight. I concede at once that the White Paper has dealt with this issue rather more emphatically perhaps than some of the other issues to which I drew attention in an earlier debate.
The White Paper, paragraph 45, states that:
"The industry faces the twin challenges of coping with significant restructuring in its traditional core businesses such as coal and steel, and exploiting the new opportunities offered by the Channel Tunnel and the development of intermodal technologies".
That is a fine statement; but what is the clue to the progress that will be made? We know that already there has been one unhappy experiment concerning Charterail. I ought to disclose an interest here, since the firm of solicitors for whom I am a consultant advised Charterail. It was an unhappy experiment which does not indicate that this area of policy and progress will be wholly successful. I wish to know from the Minister what his view is about the experiment and why it failed.
Paragraph 46 states:
"Rail freight will be able to meet these challenges only if it is efficient and responsive to the demands of its customers … The Government's policy is … to establish a competitive and privately owned rail freight industry in the course of this Parliament".
That is all very fine, too; but there is no hope unless rail is dealt with on—to use the frightful expression, if it can be used in this context—a "level playing field" with road transport. The situation at the moment is
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that there is no comparison in the treatment of the two. Overwhelmingly, opinion has been produced to the Government not simply from the Opposition but from those who are familiar with the day-to-day operations of rail freight which make that point very clear indeed.
Then the White Paper goes on to say in paragraph 47 that:
"The Government will require BR to reorganise its freight operations for transfer to the private sector"
That is fine so far as concerns the Government's policies. But we need signposts rather more clearly pointing that out than are in the White Paper.
When dealing with freight interests, people often say, "Well, should we not try to switch much more freight from road to rail?" But the Government's reply is that this would not be of assistance to the environment, because if rail freight were doubled, it would not reduce road freight by more than a small proportion. However, a good deal of research has been carried out on the issue by Transport 2000. With respect, that argument is not correct. The heaviest articulated lorries which involve the worst damage environmentally also travel the longest distances. The average length of journey exceeds that for rail. As regards short distance bulk traffic, that is also a matter which should be considered more suitable for transfer to rail and to water, where appropriate. But the Government give no indication of their thinking along those lines and how those environmentally advantageous arguments could be met.
How might the switch from road to rail and water be brought about? Clearly, a package of measures would be needed. Public funding for rail and water freight facilities, and infrastructure to put them on the same basis as road and to recognise their environmental advantages, would have to be provided. Releasing rail freight from its requirement to make an 8 per cent. return and substituting a cost benefit approach to investment would be required. Full taxation of heavy lorries reflecting the full environmental and social costs which they involve would also need to be considered. Putting lorry taxation on a mileage basis on the polluter pays principle might be something which the Government should take into account.
Strict enforcement of regulations governing lorries, including driving hours, vehicle maintenance, overloading and speeds are all matters where there are serious irregularities so far as the enforcement of the law is concerned. That too could have an effect. Local restrictions on access to urban areas by the heaviest lorries should also come within our contemplation.
If we can proceed on the basis of a policy for freight along those lines, such measures would give incentives to transfer long distance freight from road to rail and to use more environmentally friendly vehicles for local deliveries. There is no indication in the White Paper or in any other document with which the Government have provided us except aspiration. At the end of the day the Government merely hope that there will be a greater use of freight by rail. That aspiration will not be realised unless positive measures are undertaken.

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So we take the view that the Government ought now to spell out rather more effectively than they have done in the White Paper whether they propose to meet the requirements and whether they believe that there is any point in simply offering aspirations without the necessary infrastructure of ideas which would make those aspirations come to reality. I beg to move.
The Earl of Caithness: I am grateful to the noble Lord, Lord Clinton-Davis, for raising such an important issue. If I cannot agree that the amendment tabled is either necessary or appropriate for the Bill before us, I can certainly share the spirit in which it was tabled. The Government remain committed to maximising use of the existing infrastructure and are keen to see greater use of rail for the transport of freight.
We must, of course, keep this issue in perspective. Our industry is inevitably largely dependent on road transport to meet its freight needs. Even a 50 per cent. increase in the amount of freight carried by rail is equivalent to only the year's growth in road transport between 1988 and 1989. Nor should we forget the contribution made by shipping, which accounted for 26 per cent. of domestic freight movements in 1989.
The Government have approved BR investment in preparation for Channel Tunnel freight services, and committed investment now stands at some £390 million. We have widened the assessment criteria for freight facilities grants to assist in removing lorries from environmentally sensitive roads and we are continuing to encourage companies to take advantage of the scheme; since 1979, we have awarded grant-aid equivalent to £100 million in real terms for 140 schemes. This has removed over 2.5 million lorry journeys a year from our roads and accounts for some 10 per cent. of all freight tonnage carried by rail.
The improvements we have made to the grant assessment criteria have generated a great deal of interest. There have been over 150 specific enquiries and 80 meetings with firms to discuss their proposals. And we have encouraged the development of joint ventures between BR and the private sector. The Committee will be pleased to know that some 40 per cent. of freight rolling stock is already in private hands. Of course we cannot compel people to use a particular mode of transport for the carriage of freight, so the emphasis must be on making rail more at tractive to freight customers. This is certainly one of the objectives of our privatisation proposals. To achieve this objective a more radical approach is needed, involving the development of competition between rail freight operators and the introduction of private sector financial and management freedom. This is what our policy of privatisation and liberalisation is designed to achieve.
We are currently considering a number of measures to encourage industry to consider rail for its distribution needs, and external consultants are currently working on options for the privatisation of rail freight. Their final report is due in February and the Government will publish the conclusions shortly thereafter.
I can assure the Committee that the Government are fully seized of the valuable contribution played by
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rail freight and the importance of encouraging its further use. My right honourable friend the Secretary of State has already said in another place that the Government will consult on the privatisation proposals in the new year.
The noble Lord, Lord Clinton-Davis, also asked about Charterail. He asked me why it failed. Far be it from me to comment on a company such as that. I should have thought that, if anyone in the Committee should comment, it would be the noble Lord, given his firm liaison with that company.
Lord Clinton-Davis: With respect, as regards Charterail, I was not intimately involved with that company. I wondered what the Government's reaction to its failure was. It is not a question of why it failed but of the consequences of that failure. Is it not a fact that if, in conflict with what the Minister has said, that were to establish a precedent, there would be a real danger of an even greater move from rail to road? That is the concern which is being expressed widely in the press, not simply following Charterail's collapse but also in relation to the generality of opinions that have been expressed about the need to move from road to rail. The Minister himself has expressed that view.
The trouble is that not only the Minister but also his colleagues in the Department of Transport have failed to meet the essential point, which is that there is no hope on this issue unless there is a much greater measure of parity between the way in which infrastructural costs are charged for road as against rail. The railways essentially bear their own infrastructural charges, and therein lies the real difference. I am sure the Minister is familiar with representations that have been made to him on this point not simply from the Opposition but from many other people. However, the Government seem unwilling to make any concession on this point. As long as they remain unwilling to do so, I fear their aspirations for a greater move from road to rail will founder. I hope I am wrong but I believe we have to look to a much more positive assertion of what the Government's role is in relation to this matter than we have heard tonight.
However, it was my intention simply to probe the Government on this point. I feel sure we shall wish to return to it in further stages of this Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.45 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 11:
Page 1, line 10, after ("which") insert ("satisfies the conditions specified in subsection (1M) below, and").
The noble Lord said: In moving Amendment No. 11, I wish to speak also to Amendment No. 26. As regards historical records, it is quite clear that British Coal has a large, extremely valuable collection of archives which are very important to social and industrial historians. These archives also represent an important source of planning information. They disclose the locations of old mine shafts and future

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coal reserves. They are important as regards identifying subsidence dangers and who is responsible should subsidence occur.
What we are anxious to establish is who will hold the archives in their possession. Further, we are anxious to establish that they will be responsibly and safely maintained. That costs money. Who will be responsible for that? Further, we are anxious to establish that there will be easy access to them, most particularly as regards local authorities, as they would require that access for planning purposes.
I know my noble friend Lord Donoughue was anxious to move this amendment himself. He is a professional historian and he knows much more about this matter than I. Noble Ministers opposite will of course say, "Hear, hear!" to that. However, he could not remain in the Committee this evening as he had a prior engagement of some considerable importance. I am sure the Committee will excuse his absence. Having said all that as regards the coal industry, I should add that precisely the same arguments apply to railway archives. I beg to move.
The Earl of Caithness: I am sure we would all agree that the rail and coal industries represent an important part of our industrial and national heritage. This has been recognised by both British Rail and British Coal, which have both made significant contributions in ensuring that relics and artefacts are preserved. One only has to look at the National Railway Museum in York to see that that is the case. I therefore understand the concern expressed in this amendment that any collections and individual items still in the possession of the corporations should not only remain intact but should continue to grow following the privatisations of the coal and rail industries. It is a concern that the Government share and I hope I can give the Committee the assurances that it seeks on this matter.
So far as our railway heritage is concerned, as the Committee may know, there is statutory provision in the Transport Act 1968 governing the transfer and disposal by BR of historical archives and relics. The Government wish to ensure that provisions for the preservation of Britain's railway heritage continue to be safeguarded in legislation. We are therefore considering very carefully the best means of achieving this in the rail privatisation Bill.
In some respects, however, the existing legislation is outdated. We believe that provision needs to be made for the Secretary of State to introduce a scheme which more closely reflects the day-to-day arrangements which have been established by British Rail and the collecting institutions and which also takes account of the fact that new rail operators will be coming into the rail industry. Although wider in scope than the noble Lord's amendment, the scheme would provide for similar safeguards against the inappropriate disposal of historical records and relics. We are, of course, consulting interested parties and will continue to do so as we develop the details of the scheme.
British Coal's records are public records. Under the Public Records Act 1958 and the Coal Industry
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Nationalisation Act 1946 British Coal is obliged to make plans of its workings available to the public. In addition, it is the custodian, on behalf of the Health and Safety Executive, of many plans of abandoned mines, which are vital for safety reasons. The Government recognise the importance of maintaining those arrangements. The precise mechanisms for doing so will be addressed in the main privatisation legislation.
I can understand the intention behind the proposal of the noble Lord, Lord Clinton-Davis, that transfers of historical records and relics should require the approval of the Secretary of State for National Heritage. However, I hope that he will understand from what I have said that the measures taken by British Rail and British Coal to preserve their heritage go well beyond the requirements of any legislation for which the Secretary of State for National Heritage has responsibility. Therefore, I hope that, with the assurances that I have given as to the importance which the Government attach to preserving that heritage and our intention to ensure that it is properly dealt with in the main legislation, the noble Lord will agree to withdraw his amendment.
Lord Clinton-Davis: I am not sure whether I heard the Minister correctly because that was a rather rushed reply. Am I right in thinking that it is within the contemplation of the Government that, in relation to railway archives, the costs would not necessarily fall on British Rail but would be extended to other interests which would be involved in the privatised industry? I understood that to be the purport of what the noble Earl said, although I accept that, as he said, this Bill is not the right vehicle. Leaving aside vehicular arguments, am I right in making that assumption?
The Earl of Caithness: I can assure the noble Lord that the right vehicle, to which he will seek to attach his wagons in the future, will come along as soon as possible after the Bill receives Royal Assent. We shall be able to discuss the matter in the right context then.
I did not mention costs specifically, but I said that we are discussing this matter with other institutions in addition to British Rail and British Coal. I shall bear in mind what the noble Lord has said.
Lord Clinton-Davis: I am grateful to the Minister for that reply. I sought merely to raise the matter tonight. I note with interest that the Minister is taking the matter seriously, as I am sure is the Minister with responsibility for coal. In the light of what the noble Earl said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments Nos. 12 to 26 not moved.]
Viscount St. Davids: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at five minutes before eight o'clock.