Lords Sitting of 22 February 1993

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

Insolvency Legislation
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
What action they propose to take to reform the Insolvency Act 1986 in order to avoid the unnecessary failure of large numbers of companies.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, insolvency laws cannot themselves prevent business failures but can provide mechanisms for assisting financially troubled companies to be rescued. Such provisions already exist.
Lord Bruce of Donington: My Lords, I am grateful to the Minister for that reply. But is she aware that Sections 8 to 27 of the Insolvency Act, when taken in conjunction with Section 230, are all slanted heavily towards the ultimate liquidation of a company in difficulty? Would she agree that it would be far better were the United Kingdom to adopt something more approximate to Article 11 as applied in the United States?
Baroness Denton of Wakefield: My Lords, I agree with the noble Lord that it is important that if a company can be saved it should be saved. Our companies are important and irreplaceable. The Act already has the company voluntary arrangement procedure which allows a company to come to binding arrangements with its creditors for settlement of its debts, and an administration order allows a company a period of time during which creditors' rights are
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stayed. I had a look at chapter 11 of the United States legislation and was disappointed to find that only 17 per cent. of companies into chapter 11 emerged to continue.
Lord Campbell of Alloway: My Lords, is my noble friend the Minister aware that to the uninitiated such esoteric discussions are virtually unintelligible?
Baroness Denton of Wakefield: My Lords, I feel much reassured that they are unintelligible to my noble friend too.
Lord Clinton-Davis: My Lords, does the Minister agree that, while such discussions may be unintelligible to the noble Lord, Lord Campbell, the fact is that practitioners in this field are almost united in asserting that the 1986 Insolvency Act failed in its ambition to enable good companies to survive financial setbacks, and survive so that they emerged stronger? Therefore is not the answer that she gave remarkably complacent in the light of their views? Is she aware that though, as she said, insolvency laws cannot by themselves resolve such problems, Customs and Excise and the Inland Revenue have proved to be the most intransigent creditors, and thousands of sound companies unable to re-schedule their debts go into receivership or insolvency?
Baroness Denton of Wakefield: My Lords, I reject the noble Lord's suggestion of complacency. The Government continue to monitor the working of the Act, and suggestions for improvement are always given careful consideration. I question that the majority of practitioners are unhappy. I know that some are unhappy and have made their views well known; they have been listened to. But it is not for the insolvency laws to ensure that the taxpayers' money owed to the Customs and Excise and Inland Revenue is not collected.
Lord Holme of Cheltenham: My Lords, is the Minister aware that a major contribution to insolvency—putting aside the legal questions raised by the noble Lord, Lord Bruce of Donington—is the late

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payment of bills by suppliers of one sort or another? It is appropriate to pay tribute to the efforts made by the Minister herself in respect of commercial companies and the late payment of bills. But has she had a chance to scrutinise the behaviour of government departments themselves, particularly the Ministry of Defence? Does she accept that it would be reassuring to know that they are prompt in the payment of their bills?
Baroness Denton of Wakefield: My Lords, I thank the noble Lord for his comments. I believe that this is one of the major pressures on small firms in particular and I am extremely concerned about it. It is appropriate that today there came across my desk a press release from one of the banks' factors showing that there was some evidence that there had been more responsible behaviour from large companies.
As concerns government departments, there is a commitment from the whole of government to pay on contract terms or 30 days. I have a personal commitment that if there is an example of this not being adhered to I shall take it up. I have taken up such matters and fortunately have managed to redeem the situation.
Lord Hailsham of Saint Marylebone: My Lords, does my noble friend agree that the only thing that can save the unnecessary failure of large numbers of companies is the continuance of sustained and sustainable profit?
Baroness Denton of Wakefield: My Lords, it gives me great pleasure to reply "yes" to my noble and learned friend.
Lord Barnett: My Lords, is the Minister aware that I can give an example of legal aid of over £1 million being owed to a major firm of lawyers? That is for a major case and it has been outstanding for more than 12 months. Will she accept that often banks tend to take advice from accountants as to whether companies should be made insolvent? Frequently they do so with one objective in mind: namely, that they should be the receivers.
Baroness Denton of Wakefield: My Lords, I look forward to receiving the details of the instance quoted by the noble Lord. Of course, I cannot comment on it at the moment. The situation with banks is that in order to lend money they have to have security, but it is important that the relationship between banks and small firms is restored.
Baroness Nicol: My Lords, is the noble Baroness aware of the difficulties being caused to small pharmacies—which are, after all, small businesses—by slow payment in the National Health Service? Does she recall the exchange in the House about 10 days ago when we uncovered the fact that a considerable sum of money is owed to pharmacists for 90 days and many are being caused considerable difficulty through that? Will she undertake to look into that aspect when she is looking into other government departments?
Baroness Denton of Wakefield: My Lords, I am delighted to confirm to the noble Baroness that I am happy to look into any aspect which is outside contract terms.
The Earl of Halsbury: My Lords, has the noble Baroness observed that all over London and in every city in the country new office blocks are standing vacant with the words "To Let" across their windows? The entrepreneurs who built them are now at hazard.
Baroness Denton of Wakefield: My Lords, I have powers of observation, but I am not certain how that question relates to the Question on the Order Paper.
Lord Mackie of Benshie: My Lords, the Minister said in her reply that she cares greatly for the taxpayer's money. Is it not true that money spent in assisting small and large firms may prevent the further erosion of our manufacturing base and save the taxpayer money at the end of the day?
Baroness Denton of Wakefield: My Lords, I shall repeat for the noble Lord my statement that we consider it important to help keep going every firm we possibly can. Such businesses are important, particularly in the manufacturing area.
Lord Bruce of Donington: My Lords, will the noble Baroness take one more look at Section 230 of the Insolvency Act? It lays down that administrators must be insolvency practitioners before they can take up their task. Will she bear in mind that the success of a business or its rescue is far more likely to occur under a person who is qualified as an entrepreneur than one whose basic qualifications are those of an accountant?
Baroness Denton of Wakefield: My Lords, I agree with the noble Lord that the best way out of problems for the benefit of the future economy is to trade out of them. I shall take the noble Lord's remarks back to my honourable friend, who has asked for a review of legislation in this area.

Crown Agents: Future Status
2.46 p.m.
The Earl of Shrewsbury The Earl of Shrewsbury asked Her Majesty's Government:
Whether, in the process of reviewing the options with regard to the future status of the Crown Agents, they will ensure that the credibility and integrity worldwide of the Crown Agents are retained.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, the Government recognise the importance which Crown Agents' clients place on its credibility and integrity. We shall take full account of this in deciding the future status of the Crown Agents.
The Earl of Shrewsbury: My Lords, I am grateful to my noble friend for that reply. Is he aware that the Crown Agents enjoy an exceptional international reputation? Does he agree that the best option in order to retain the substantial benefits that accrue to

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the UK in terms of international trade and good will would be to find a form of privatisation of the Crown Agents which would preserve intact both the organisation and its reputation for impartiality, free from any direct commercial interest?
Lord Henley: My Lords, of course I recognise the international reputation of the Crown Agents. I should like to repeat the confidence that we in the Government have in them. What I must say to noble Lords is that we have not ruled out any option, as my noble friend Lady Chalker made quite clear in her Written Answer last December (Official Report, 15th December 1992, cols. WA 31–32). Obviously, at the moment I should not like to second-guess any decisions that might be made after the report comes through.
Lord Molloy: My Lords, does the noble Lord agree that the Crown Agents do extraordinarily good work? Can the noble Lord say, as nearly as possible, what is the object of the review of the Crown Agents which is causing some apprehension? Will it in the end enhance the ability of the Crown Agents to improve on the wonderful job that they are doing?
Lord Henley: My Lords, as I hope I made clear, no option has been excluded, including remaining in the public sector or privatisation, but we feel it is important to review the status of all the public sector to ensure that it performs as efficiently as possible.
Lord Geddes: My Lords, when assessing the future status of the Crown Agents will my noble friend ensure that the restrictions placed on it under the 1979 Crown Agents Act are removed? As I understand them, those restrictions are that the Crown Agents cannot enter into business with private entities, nor can it enter into joint ventures other than with ministerial consent.
Lord Henley: My Lords, all I can say is that I hope that my noble friend's remarks will be noted. At the moment I cannot second-guess decisions that will be made. I can only say that all options will be kept open.
Lord Weatherill: My Lords, is the Minister aware that of a sample of £950 million worth of orders placed in the United Kingdom by the Crown Agents, £627 million was placed with suppliers with under 1,000 employees? Of that total, £285 million was placed with suppliers with under 200 employees. Will the noble Lord therefore ensure that, when reviewing the options, the benefits that the Crown Agents bring to small businesses is not overlooked?
Lord Henley: My Lords, certainly the benefits that it can bring to small businesses—and for that matter to industry or business throughout the United Kingdom—are well recognised and certainly will be taken into account.
Lord Morris: My Lords, will my noble friend assure me that if the Crown Agents is privatised in the normal form it will cease to be Crown Agents? Will he consider the option of the formation of a foundation, or indeed the formation of a Royal charter company?
Lord Henley: My Lords, a foundation is certainly an option—as are privatisation or remaining in the public sector. As I have tried to make clear, all options remain open.
Lord Judd: My Lords, will the Minister categorically assure the House that the principal criterion for the future of the Crown Agents must always be its contribution to development as a self-financing and highly efficient professional service and not as a profiteering organisation? Will he assure the House that the Government see the Crown Agents' special Crown status like that of the BBC—as a great asset for Britain—and that the Government will not give in to myopic nonsense from the Treasury or anywhere else?
Lord Henley: My Lords, as I made quite clear, I do not intend to second-guess any decisions that are made. What I do want to make clear is that what we see as most important is that the Crown Agents perform the tasks that it is allotted as efficiently as possible. That is the point of the review. We are not ruling out any option, be it privatisation, remaining in the public sector, or whatever.

Baghdad: Action Against Industrial Plant
2.51 p.m.
Lord Kennet: My Lords, in asking my Question I wish to apologise to the House for not having been in my place when it was called three weeks ago. I beg leave to ask Her Majesty's Government:
What words in what UN Security Council resolution in their opinion authorised the United States to attack an industrial plant in Baghdad with cruise missiles, an attack which the Prime Minister immediately endorsed.
Lord Henley: My Lords, action on 17th January by United States cruise missiles against a site which the Iraqis themselves admitted was associated with the Iraqi programme to develop weapons of mass destruction was taken to ensure that Iraq complies with its obligations under United Nations Security Resolution 687; a mandatory resolution under Chapter VII of the United Nations Charter which set out the terms of the formal cease-fire and related resolutions.
Lord Kennet: My Lords, many in the House mould be much obliged if the noble Lord could go further and state under which section of Resolution 687 the bombing was carried out. I have not myself been able to find words in that resolution which justify armed attack on the territory of another state.
Lord Henley: My Lords, under Resolution 687 and under authority from the United Nations Security Council the Iraqis were warned of the serious consequences of non-compliance with Resolution 687. Further, on 14th January the Western allies and Russia gave the Iraqis a final warning. On 15th January they set a deadline later that day for unconditional agreement to the United Nations Special Commission flights. On 16th January the United Nations Special Commission submitted

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revised flight applications. Iraq wilfully ignored all those warnings and imposed unacceptable conditions on the United Nations Special Commission flights. Iraq also continued to deploy missiles threatening coalition aircraft in the southern "no fly" zone. There was therefore no alternative but for the coalition to remove the threat to aircraft and to use force, as it did, to bring home to the Iraqis the need to comply with the United Nations resolutions. The operation was limited to achieving those aims.
Lord Judd: My Lords, does the noble Lord accept that we on this side of the House are fully with the Government in their firm resolve in dealing with the Baghdad regime and that we therefore totally supported the air strikes? Does the noble Lord further agree that it is essential for the credibility of the UN that whenever serious military action is being taken in the name of the UN it must always be demonstrably with the full, specific, explicit and prior authority of the Security Council and never on the assumption that the Security Council will find a way of giving subsequent endorsement?
Lord Henley: My Lords, I think it is quite clear from what I have said that we did have the full and explicit authority of the United Nations Security Council. Perhaps I may further say that I am very grateful to the noble Lord and to the noble Lord's Front Bench for their support for Her Majesty's Government on this issue.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that if this action had not been taken there would have been a failure to implement Security Council resolutions?
Lord Henley: My Lords, my noble friend is absolutely correct.
Lord Ashley of Stoke: My Lords, I too support the Government in the thrust of their policy in the action taken. Although the lawyers can argue about the actual wording of the resolution I support the Minister's interpretation. Will he take the thrust of the comment made by the noble Lord, Lord Kennet, that it is of paramount importance that we ensure that all action is through the Security Council?
Lord Henley: My Lords, I thought that I had made that perfectly clear in my responses both to the noble Lord, Lord Judd, and to the noble Lord, Lord Kennet. But again I am grateful for the noble Lord's support.
Lord Molloy: My Lords, does the noble Lord accept that there are still one or two United Nations and Security Council resolutions referring to the appalling suffering of many people in Iraq which have not yet been implemented? Ought not the Government to be prepared to ask when something will be done effectively—not merely through the passing of resolutions —by the United Nations?
Lord Henley: My Lords, I agree with the noble Lord, as he has made clear on many occasions, that Iraq has a long record of denying basic human rights
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to its own people. The Iraqi regime's appalling brutality and disregard for the welfare of its people led the United Nations Security Council to adopt Resolution 688 in 1991. That demanded an immediate end to repression in Iraq.
Lord Kennet: My Lords, the Government have not been able, either today or in answer to an earlier question about the bombardment of missile sites in the "no-fly" zones, to quote the particular words in the numbered resolutions which they maintain legitimated the use of armed force. Will they bear in mind that every time a member of the Security Council interprets a Security Council resolution to suit its own interests, whether passing or permanent, that member licenses others to do the same?
Lord Henley: My Lords, the plant referred to in the noble Lord's original Question was capable of producing nuclear weapons or material for nuclear weapons. The Iraqis themselves specifically admitted to some of the United Nations Special Commission teams when carrying out inspections that the plant was producing equipment for the nuclear programme. Some of that plant had then been sealed by the United Nations inspectors, but the International Atomic Energy Agency was considering whether it should be destroyed. Most people in this country and in the countries around Iraq will, I think, be profoundly relieved that it now has been so destroyed. The noble Lord asks for a reference in Resolution 687. If he cares to look at paragraphs 12 and 13 of Resolution 687, he will find that they specifically refer to nuclear weapons and the ability to manufacture nuclear weapons.
Lord Kennet: My Lords, that is not an answer to my question.

Assisted Areas Review: Wansbeck
2.58 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
When they expect to reach a decision on the question of development area status for Wansbeck.
Baroness Denton of Wakefield: My Lords, my noble friend will appreciate that I cannot anticipate completion of the review of the assisted areas map as a whole by making an announcement about a particular area. We intend to announce the results of the map review as soon as possible, taking account of the outcome of the coal review and after the necessary clearance by the European Commission.
Lord Peyton of Yeovil: My Lords, this is rather like waiting for the last judgment. Does my noble friend agree that continuing uncertainty could cause a deteriorating situation in the North East to turn into a disaster? Will she please remind her right honourable friends that they have in front of them proposals from the area whereby local action and co-operation could save many thousands of jobs?
Baroness Denton of Wakefield: My Lords, I would say to my noble friend that any of us who took

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delegations on the question of the assisted areas map will be well aware of the importance of the early resolution of this matter. I am also particularly aware of the integrated needs in the Wansbeck area. However, I do not believe that anyone in your Lordships' House would wish to see expedient and hurried decisions made on the coal review, which is so important.
Lord Peston: My Lords, I am a trifle puzzled as to how the coal review comes into this matter. While agreeing with the noble Baroness that we must not rush decisions, does she agree that in the present economic state of the country we must proceed very rapidly indeed if, as the noble Lord, Lord Peyton of Yeovil, says, there are not to be very serious job losses and, for that matter, business bankruptcies? The noble Baroness said that she could not anticipate, but can she give the area at least a little more hope by indicating approximately when it might expect to hear that a decision has been taken? It is not just a question of being a special case, it is also a question of policy in general. Does the noble Baroness agree that the sooner we can get the matter decided, the better?
Baroness Denton of Wakefield: My Lords, I agree with the noble Lord, Lord Peston, that the sooner we have resolution of this matter the better. The issue of the coal review comes into it because that will obviously have an effect on specific areas and must be taken into account. I am sure that the noble Lord would not wish me to put a firm date to a matter on which the European Commission has an input.
Lord Bruce of Donington: My Lords, before the noble Baroness's department issues the final result of her review, will she bear in mind the necessity of there being absolute clarity as between the Commission and ourselves in this matter so that we do not get into a haggle over what is called "additionality" when the various grants are announced? The area concerned would not lightly forgive the Government if they imposed an undue delay as a result of continuous argument about the application of the regional development fund.
Baroness Denton of Wakefield: My Lords, I am happy to give the noble Lord, Lord Bruce, that assurance.
Lord Stoddart of Swindon: My Lords, from what the noble Baroness has said, do I understand that a review of the whole country is taking place in relation to development area status? If that is so, does that involve London and the South East, which now has an unemployment rate of 11.7 per cent. with 1.4 million people unemployed?
Baroness Denton of Wakefield: My Lords, the assisted areas map review covers the whole country and takes into account every area. It is based on identifying that third of the country with the worst unemployment figures.
Lord Peyton of Yeovil: My Lords, while the coal review is going through this very long period of gestation, will my noble friend bear in mind that other
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things are happening and that before long those in the area who might be able to help will be losing a very valuable opportunity?
Baroness Denton of Wakefield: My Lords, the status does not change until the review. We are well aware of the need for urgency in this matter.

Food Protection (Emergency Prohibitions) (Oil and Chemical Pollution of Fish) (No. 2) Order 1993
3.3 p.m.
The Minister of State, Scottish Office (Lord Fraser of Carmyllie)The Minister of State, Scottish Office (Lord Fraser of Carmyllie) rose to move that the order laid before the House on 28th January be approved [18th Report from the Joint Committee].
The noble and learned Lord said: My Lords, I beg to move the order in my name. In the Statement which the Secretary of State for Scotland made in another place on 11th January about the Shetland tanker incident, he explained that an exclusion zone had been declared under the Food and Environment Protection Act 1985, within which fishing and harvesting of farmed fish is prohibited. The exclusion zone was set up by the making of an emergency order under the Food and Environment Protection Act 1985.
The purpose of that order was to ensure that, in the light of the MV "Braer" incident, there was no danger of fish or fish products reaching the market, if they could be hazardous to human health. Obviously no sensible fisherman would have fished in the area after the incident; and fish farmers affected by the spread of oil could similarly have been relied upon, voluntarily, to keep their products from the market. Indeed the Shetland Fishermen's Association imposed a voluntary ban before the order was made.
Nevertheless, we thought it was right to use the statutory powers that were available to give legal force to a ban on taking fish from the area. This was done after full consultation with, and with the agreement of, both the Shetland fishermen and the fish farmers. The imposition of the order was part of a three-pronged strategy which also included the establishment of arrangements to sample and test fish being landed on Shetland markets, and the setting up of longer-term monitoring arrangements covering both fish and water quality.
That background to the order is important. In setting up these arrangements the vital importance to the Shetland economy of both the fishing and fish farming industries were taken into account. They faced an obvious and immediate threat to their businesses. There was also the danger of much longer-term damage if these industries should lose market and consumer confidence. Therefore the order, and the other arrangements I have mentioned, were of the greatest importance in assuring commercial buyers and consumers that the greatest care was being taken over the quality of Shetland fish products, and correspondingly that the public should have every confidence in these products when they reach the shops. This approach had the full confidence and

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support of the industries in Shetland, and so far as salmon is concerned, it is now reassuring that a number of representatives of large supermarket chains who have visited the islands are remarketing Shetland products.
Perhaps it would be helpful to say a little more about the arrangements which underpin the ban. These are based on a continuous programme of water and fish sampling. The first test is the state of hydrocarbons in the water. If the water is polluted, the pollution will then get into the fish. The critical test, from the point of view of food safety, is the fish itself and the accumulation of hydrocarbons in their edible tissue. A variety of fish and shellfish are being sampled continuously for analysis of hydrocarbons in edible tissue and also for taint.
Having summarised the general background, I will explain the details of events which led to the making of the order before the House today. During the debate on the emergency order on 26th January in another place, my honourable friend the Parliamentary Under-Secretary of State, Scottish Office, explained that he had decided to extend the western boundary of the zone by five nautical miles from 1°30' west to 1°40' west.
This decision was based on test results which had shown above background levels of hydrocarbons on the west side outwith the original zone. The new order, which revoked the previous order, came into force on 27th January. This is the order which the House is to consider today.
The order is necessary if we are to continue to reassure both consumers and industry alike that the fish and fish products reaching the market are safe to eat and are of the usual good quality associated with the Shetland Islands. I have arranged for copies of maps of the new exclusion zone area to be made available.
Sampling of fish and water both from within and outside the zone continues to be carried out on a regular basis. The latest test results, while indicating a progressive reduction in the level of contamination, still point to the need to retain the zone for the present. Nevertheless we are keenly aware of the problems which this situation creates for the fishing industry.
In an attempt to alleviate economic hardship the Government have made available to producers a bridging fund which will be operated for the Government by Shetland Islands Council. Details of the fund's operation were announced in another place on 21st January by the Secretary of State for Scotland. The first payment of £1 million to set up the fund has been made to Shetland Islands Council.
It is important also that we assess the ecological effects of the incident and for that purpose the Government have set up an ecological steering group to consider strategies both in the short and longer terms on the impact of the incident on the local environment. On 26th January the Secretary of State for Scotland announced the terms of reference and the appointment of Professor Ritchie as chairman. A further announcement about the membership of the group was made on 18th February.
The group's initial purpose is to take an oversight of the various ecological and environmental initiatives which are now under way or are likely to be established on the group's initiative.
I trust that your Lordships will recognise that the order we are debating today forms part of a pattern of effective government action and is in the best interests of the fishing industry and the consumer. We will continue to review the need for the order and will lift it as soon as the evidence warrants it. I commend the order to the House.
Moved, That the order laid before the House on 28th January be approved [18th Report from the Joint Committee].—(Lord Fraser of Carmyllie.)
Lord Carmichael of Kelvingrove: My Lords, the House is most grateful to the Minister for dealing with this matter more fully than was the case in the Statutory Instruments Committee, which, as he Will be aware, met last week. Most people are very pleased with the Government's work and with the fact that they acted with considerable alacrity. People are particularly pleased about the approachability and the work of the Parliamentary Under-Secretary of State at the Scottish Office, Sir Hector Monro. He told the committee that he would visit Shetland last weekend, so perhaps the noble and learned Lord is now in a position to answer some of the points raised in another place which the Minister there said that he would look into.
I understand that there were problems with the banks over whether they were likely to realise their threat of foreclosing on certain farmers and small fishermen. The Under-Secretary undertook to investigate this matter, particularly in reference to bridging funds, and he thought that there would be a simple way out of it.
Questions were also asked about how widespread the dissemination of the results of the monitoring would be. Some people in Shetland felt that they had not been given the results of the monitoring as early as they would have liked. I refer particularly to the local newspaper, the Shetland Times. No one in Shetland wants to cause a panic, and there has been no panic about this. The people there have been most steady; but the best way to stop panic is to make available as much information as possible. Perhaps the Minister can say whether his honourable friend was able to clear up that point.
I should like to make two other points. First, we seldom discuss Shetland without referring to the sand eels. They are so much a part of the food chain that I have been asked to find out whether the "Braer" incident had any effect on the recruitment of sand eels into Shetland, and the estimate of the local stock. My other point relates to hydrocarbons, to which the Minister referred. Is the Minister in a position to say at what level of hydrocarbons scientists and the Government feel that it would be safe to continue fishing in the area?
Leaving aside the wider question of tanker traffic and the problems of design and manning, to which I am sure that we shall return at greater length in this Parliament and perhaps soon in primary legislation, it is only fair to say that all the reports that I have

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received from people who have been involved in this tragedy have been supportive of the work that the Government have done. They believe that the Government have worked fast and sympathetically, and I congratulate them on that.
3.15 p.m.
Lord Mackie of Benshie: My Lords, I too congratulate the Government on the speed and sympathy that have been evidenced in the actions that they have taken in relation to this situation. I dare say that is due to the very good vintage of the Minister who is in charge, Sir Hector Monro, assisted by his honourable and noble friends.
Perhaps I may ask first about the bridging funds. I believe that the Minister said that Shetland Islands Council will be responsible for the bridging payments, and it is most satisfactory that local knowledge will thus play an enormous part.
Can the Minister say whether the monitoring that has already been carried out shows a steady decline in pollution or is the decline variable? One remembers that 85,000 tonnes of oil were discharged into the sea. Do various areas differ in terms of the amount of pollution? Is the bottom of the sea around the coast —the shellfish area—particularly contaminated? Is the open sea gradually improving? It would be gratifying if the Minister can tell us that the decline in pollution is gradual or that no spots of contamination come and go. That is an important point.
The terms of reference of the monitoring group are also important, as is its funding. Will it be funded directly by the Scottish Office and not inhibited by a lack of cash? That is an important point because monitoring will be important for the longer term.
I agree entirely that the order is necessary for the good name of the products of Shetland. I hope that the Government will continue the good work that they have undoubtedly begun.
Lord Campbell of Croy: My Lords, I am grateful to my noble and learned friend for explaining why the exclusion zone is now being extended. This touches on points that arose during the exchanges following my Starred Question on 9th February on the wreck of the "Braer" and its effects. As I understand it, the fish affected are seafish, shellfish and the salmon that are farmed in cages. By a strange turn of events, there has been a glut of landings of whitefish in Shetland in recent weeks, and that continues. Therefore, it is particularly the shellfish fishermen and the salmon farmers whose fish were confined in cages inside the exclusion zone who are likely to suffer financially by far the most. Sea fishermen can hunt elsewhere for their catches. The processors should not therefore be as affected as we had originally thought. I understand that slaughter arrangements are being made for salmon and that contracts have been drawn up with those who are to carry out the slaughter to ensure that is done in a way that will not cause any further pollution to the food chain.
At Question Time on 9th February we mentioned the effect of the International Oil Pollution Compensation Fund and the fact that it had already
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undertaken to provide a great deal of compensation for the salmon farmers, who are the ones likely to lose the most. It is estimated that that will amount to between £8 million and £10 million. I understand that the director, Mr. Jacobsson, is well organised to provide interim payments for hardship where there are cashflow problems. I hope that the Government will ensure that salmon farmers' claims, together with the facts that are needed, are sent in as quickly as possible. The address is quite easy to remember because the IOPCF, which has a very good reputation for paying up in such situations, has its office in London beside that of the International Maritime Organisation, on the South Bank by Lambeth Bridge.
My noble and learned friend mentioned the fund that is being set up by Shetland Islands Council and the fact that the Government are providing money for it. That is to be welcomed, but is there to be co-ordination with the larger funds which are due to come from Mr. Jacobsson? Is there any allocation? Is it the case that Mr. Jacobsson and the IOPCF are dealing with the salmon farmers and that Shetland Islands Council and the Government are dealing with the others? I should be grateful for some information about co-ordination.
Lord Grimond: My Lords, I am sure that the people of Shetland will re-echo what has been said in this Chamber and the thanks to the Government for their quick and effective action so far. I also thank the Minister for his explanation, and ask two questions.
First, is it intended that the Donaldson Committee will make an interim report or will we have to wait for the final outcome? Secondly, am I correct in understanding that all applications for and questions about the bridging fund should be addressed to the local council and not to the Government or any government agency?
Lord Fraser of Carmyllie: My Lords, I shall respond to a number of the queries raised. The most important point to be addressed is that of compensation. I am grateful for the welcome given to the action the Government have taken. I can confirm to the noble Lord, Lord Mackie, that the bridging fund is being handled by the SIC on behalf of the Government. The IOPC Fund wrote to the Shetland Salmon Farmers Association on 17th February outlining the terms of an agreement to compensate for the loss of the 1990–91 intake within the exclusion zone. As soon as that is approved, letters will be sent to the farmers seeking a declaration from them that they agree to the destruction of the fish. That is important. As soon as the signed declaration is received, the fund will be able to authorise advances of 50 per cent. of the assessed value of the fish, based upon an agreed price per tonne. A proportion of such advances will be met from the Secretary of State's bridging fund, to which I have already referred.
Upon destruction, the full cost of which will be met by the insurers, the farmer will receive a further advance of some 25 per cent., and when the fish are weighed a 10 per cent. premium will be added to cover

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the weight loss during the period when no feeding of the farmed fish took place. At that stage there will be a final reckoning.
As the noble Lord, Lord Carmichael, said, anxiety has been expressed about one bank not extending its overdraft facilities to an individual in respect of marketing prospects of the immature fish upon which longer term decisions have yet to be taken. That is not the fish that will be harvested this year but harvested next year. I understand that the IOPC Fund has written to the bank assuring it that in the event of the fish being unmarketable, or marketable only at a reduced price, the farmer will receive compensation for any loss that he may suffer. I hope that with that clear indication from the fund the bank will be assured.
Further questions I was asked related to the extent of the monitoring. I repeat, extensive monitoring is going on, not just within the exclusion zone but also outwith it. I was asked a question about sand eels. Sand eel spawning in the area of the spill will have taken place before the incident. Some herring spawning will take place later in the year. Any effect of the oil spill on sand eels will depend upon the extent to which the oil finds its way onto the sea-bed sediment where the spawn is or will be located.
Fisheries research vessels, as part of their work in the area, are taking samples of sediment, eggs and larvae for further detailed analysis. That work will obviously have to be considered carefully. The monitoring exercise is extensive. The department has deployed a team of scientists and a fishery research vessel to the Shetlands to assist the monitoring. The team is using facilities at the North Atlantic Fisheries College in Scalloway. The Torry Research Station has devoted a considerable part of its resources to the analysis of fish samples.
I can assure the noble Lord, Lord Carmichael, that since the end of January the department's marine laboratory has issued regular bulletins on its monitoring activities. They are circulated to interested parties in Shetland. So anyone who has an interest in the matter should have no difficulty in discovering what is going on. There is no intention of keeping things secret. In addition, monitoring is being carried out by local environmental health officers and the Shetland seafood quality control department.
I cannot predict when the zone will be removed. Clearly it will be important to take the best possible marine scientific advice. I can assure the House that there will be no removal of the exclusion zone until all questions about the quality of fish that might be sold are satisfied. We want to maintain the high reputation of the Shetland Islands for quality products. It is only when we are satisfied that that reputation can be wholly maintained that the order will be removed. I commend the order to the House.
Lord Mackie of Benshie: My Lords, can the Minister give me any information about the graph of pollution? Is it in steady decline or are there variations?
Lord Fraser of Carmyllie: My Lords, I apologise for not mentioning that point. While the emulsifying effect of the violent weather caused the oil to disperse and break up in a remarkable way, my understanding is that there are some areas where there are concentrations of oil spill. Some of them have moved from the immediate vicinity of the wreck. The general indication is that, once all the oil had left the vessel, it dispersed quickly. I should not like to say that it has dispersed completely. Clearly there will be some which will be affecting the sea-bed.
On Question, Motion agreed to.

Local Authorities (Recovery of Costs for Public Path Orders) Regulations 1993
3.26 p.m.
Viscount Goschen Viscount Goschen rose to move that the draft regulations laid before the House on 18th January be approved [16th Report from the Joint Committee.]
The noble Viscount said: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Strathclyde.
The regulations were laid before the House on 18th January 1993 and, if approved, will come into force on 15th March 1993. The regulations are made under Section 150 of the Local Government and Housing Act 1989 which enables local authorities to charge for services, subject to the making of the appropriate regulations. They will allow authorities to recover from applicants the whole of an authority's advertising costs and up to £400 in respect of its actual administrative expenses in making a public path order and, where an order covers more than one proposal, a further £75 for each additional path.
The orders provide for the diversion or stopping up of public footpaths and bridleways. They are made by county and district councils for a number of purposes, but primarily in the interests of the owner or occupier of the land or of the public (in the case of diversions), or to enable development to take place, or because the path is not needed for public use (in the case of extinguishment). The local authority must advertise such orders in at least one local newspaper. If there are no sustained objections the local authority can confirm the order. If there are objections, however, the order may be referred to the Secretary of State for the Environment and a public inquiry may be held.
The principle of charging is a simple one. A landowner or developer who may reasonably expect to benefit from the stopping up or diversion of a public path should be expected to pay for the order which achieves this. The power to charge is nevertheless discretionary and authorities can choose to waive part or all of the charge; for example, in cases of hardship or where a proposed diversion brings with it additional benefit to path users. Authorities are also specifically required to refund charges in certain circumstances; for example, where they fail to proceed with an order or where the order proves subsequently to have been made invalidly.
We believe that these regulations are needed and that the proposed charges are fully justified. They will

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enable authorities to recover a significant proportion of their costs while providing applicants with a clear indication of what they may reasonably expect to pay. They will also encourage applicants to put forward proposals that are demonstrably of benefit to the public, which will gain general support and which may secure a reduction or waiver of the charge and should therefore help to secure positive changes to the rights of way network which will benefit landowners and users alike. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 18th January be approved [16th Report from the Joint Committee].—(Viscount Goschen.)
Baroness Hollis of Heigham: My Lords, we thank the Minister for that clear explanation of the order. I wish to emphasise, first, that we welcome the fact that the DoE is clarifying the position for local authorities in the light of the Richmond judgment. Until then, most authorities had charged for such orders but subsequently many felt unable to do so. Therefore we welcome the regulations in principle. As the Minister rightly said, they will benefit specific individuals. For the most part, we are not talking about the making of footpath orders for the benefit of ramblers or the public, although occasionally that might happen. We are talking about the making of orders which are for private gain, which is perfectly proper, and for private enjoyment. Therefore, it is right that local authorities should seek to recover their costs and they are right to charge.
My primary concern is that the maximum £400, plus the recovery of advertising costs, is too low. In cases where the order is uncontentious £400 may well cover the administrative costs. However, where an application may generate a public inquiry, where it is controversial and where it may involve lengthy consultation, a maximum charge of £400 nowhere begins to cover the costs, even though the gain may go only to one individual. After all, in highways legislation, for example, no maximum charge is levied for applications to magistrate courts under Section 116.
We should like to have seen a higher maximum limit. Local authorities need not be required to make that charge; it is merely that a higher maximum limit would ensure a more equable recovery of costs. If the costs are not recovered from the person enjoying the benefit they must be recovered from other charge-payers and taxpayers at a time when local authorities' budgets are capped.
I fear that, in consequence, in cases where a path order is controversial and where the other arguments are equally balanced, the officers of local authorities will be minded to refuse the application in order to avoid the costs of a contentious inquiry in respect of which the charge will not recover the outgoings of the local authority. We hope that the Minister will review the figure of £400, preferably annually. Furthermore, we hope that if the evidence suggests that that figure is reasonably low, as we believe it to be, the Minister will consider imposing a more realistic charge. Nonetheless, we welcome the order as a sensible first step.
Viscount Goschen: My Lords, I thank the noble Baroness for her general support for the principle of the regulations. The Government believe that the figure of £400 strikes the correct balance and that a higher figure cannot be justified. Applicants should have some idea of the maximum amount that they can reasonably expect to pay. Furthermore, there should be some incentive for local authorities to keep down their costs. However, we have indicated that we shall review the regulations within two years of their coming into force.
On Question, Motion agreed to.

Licensed Betting Offices (Amendment) Regulations 1993
3.32 p.m
Lord Newall Lord Newall rose to move to resolve, That this House invites Her Majesty's Government to revoke the Licensed Betting Offices (Amendment) Regulations 1993 and to lay in their place other regulations maintaining current opening hours for licensed betting offices on Saturdays.
The noble Lord said: My Lords, I move the resolution as a result of the Government's recent decision to allow betting offices to open after 6.30 p.m. Between April and August they will be allowed to do business for six days a week until 10 o'clock at night. At the outset I must declare my interest, which is probably well-known in your Lordships' House. I am chairman of the British Greyhound Racing Board, which is directly affected by the Home Office decision.
I make no secret of the fact that those involved in greyhound racing have been opposed to the extension of the licensing hours of betting shops since October 1991 when the Home Office produced a consultative document on the subject. The argument is that if, rather than going greyhound racing, more people are attracted to betting shops in the evening, attendance at the tracks will fall and they will lose a significant proportion of their revenue. Greyhound tracks are in the main in urban locations but horse-racing gathers its following from both town and country. Therefore, greyhound tracks are more vulnerable to losing some of their clientele to high street betting shops.
However, in respect of this measure the biggest difference between the two sports is the off-course levy. The Jockey Club and the Race-course Association are in favour of the Home Office decision because they are likely to receive more revenue from the off-course market if betting shops open in the evening during the summer months, when horse-racing stages some evening meetings. The crucial difference is that horse-racing benefits from the 1 per cent. levy on all off-course bets while greyhound racing does not. There is no off-course levy on greyhound racing and therefore the more money that is taken by bookmakers, and the more opportunities that betting offices have to compete with tracks and woo the punters away from them, the less greyhound racing stands to gain.
For those reasons we have opposed the deregulation of betting shop opening hours. We would not be

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against the deregulation in principle, but greyhound racing will receive nothing for the increased use of its product in return for falling attendances. Greyhound racing track promoters make their money through the turnstiles, the bar and restaurant facilities and a percentage of the turnover from their own greyhound totalisator. A reduction in the number of punters going racing, in particular on Saturday nights, will have a devastating effect on the profit margins of all National Greyhound Racing Club tracks in the country.
For that reason I hope to persuade the Government today to remove Saturdays from the measure in order to give greyhound racing an even chance of survival; especially while it is still constrained by many regulations of the Government's making which prevent the industry from competing with the bookmakers on equal terms.
The arguments that we have put to government during the past two years about the likely impact on greyhound racing of the evening opening of betting shops have not been alarmist or over-the-top. They are a true assessment of what we fear will be the consequences for the industry. We have a precedent which is all too vivid in our memories; that is the introduction of betting shops in this country in 1961.
Between 1960 and 1970 National Greyhound Racing Club attendances at greyhound tracks slumped from 15 million to 7 million. Afternoon greyhound racing was wiped out without any compensation because of competition from betting shops. Greyhound racing then moved to become largely an evening sport. We predict that there will be a similar drop in evening attendances of at least 15 per cent. as a result of the evening opening of betting shops. In fact, the loss is likely to be greater because the introduction of SIS—live television—into betting shops in 1989 greatly increased their attraction.
When the consultative document was published, the racecourse promoters of the National Greyhound Racing Association conducted a survey of all 36 tracks in the country. The tracks were asked for the best estimates on their business if they suffered a 15 per cent. fall in attendance. All but two of the stadia which took part in the survey revealed that they would lose at least 50 per cent. of their profits. The GRA, the country's biggest greyhound racing promoter, pointed out that a loss of 10 per cent. in attendances would seriously deplete its profits, while a loss of 15 per cent. would wipe out half of its profits.
The fact that the evening opening of betting shops has been limited to five months per year—that is April to August —might limit some of the damage which will be caused to the greyhound tracks. We do not want to be prophets of doom, but your Lordships can imagine what even a fraction of these losses will mean for track closures and loss of jobs.
In order to understand the problem I must describe to your Lordships one more factor in the makeup of the commercial world surrounding greyhound racing, which will make the latest development even more difficult to live with.
The big three bookmakers—that is, Ladbrokes, Corals and William Hill—own a total of five greyhound tracks between them. Therefore, they will be in a position to supply evening greyhound racing to their shops at the fraction of the true market price. Those bookmaker tracks, plus a few others, will be in a position to enter into contracts with the bookmaking industry to provide an evening equivalent of the day-time Bookmaker Afternoon Greyhound Services —which is known as BAGS—which will supply the needs of off-course betting with televised racing to the shops in the evening, leaving the remainder of the tracks out in the cold. There is a real fear that greyhound racing could become a specialised bookmaker controlled sport, even more so than it is today, existing for the sole purpose of supplying betting shop needs.
It is for that reason, and only that reason that I hope to limit the damage by deleting Saturday from the provisions of the order, while leaving in the other weekdays. Every track throughout the country holds race meetings on Saturday nights, apart from Wembley which does not always stage greyhound meetings when it has commitments to other sports and entertainments. Fifty per cent. of the business of greyhound racing takes place at greyhound tracks on Saturday nights when attendances are the highest of the week. The clientele is different on Saturday evenings, when more people go to enjoy the restaurant and refreshment facilities. However, greyhound racing would still be affected by betting shop competition. Twice as much money is taken on Saturdays as on weekday race days. Therefore, it costs half as much to stage a greyhound meeting on a Saturday night.
In making the case for this change and how it would help greyhound racing, it is not my intention in any way to cause any difficulty to horse-racing. We believe that even the opening of betting shops will not necessarily bring the bonanza which horse-racing connections seem to believe. It is questionable whether there will be a large increase in the off-course levy to the benefit of horse-racing. It is likely that bookmakers will increase their coverage of greyhound racing in the evenings where their margins are higher —they make the same deduction on greyhound bets as they do on horse-race bets without having to pass back the 1 per cent. statutory levy—and there may be a similar pattern as there has been in afternoon betting, when the ratio of bets on greyhound racing has steadily increased to the detriment of horse-racing and its levy revenue. Greyhound races take about 30 seconds and are shown on the television about every nine minutes in the shops, providing bookmakers with a quicker turnover than horse-racing. It is also probable that betting shops opening in the evening could have a negative impact on attendances at evening horse-race meetings.
At present the situation is that not many horse-race meetings take place on Saturday evenings in the summer months. Therefore, if the present pattern of evening horse-race meetings is maintained, the levy would not be seriously affected if the betting shops remained closed on Saturday evenings. Recent discussions with the chairman of the Fixtures

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Committee revealed that his opinion was that most extra evening horse-racing would take place mid-week rather than on Saturdays, but perhaps that has yet to be decided. There has not been a large increase in evening horse-race meetings. In the past five years it has increased only from 82 to 88. Therefore, there is no great demand.
I have often argued in this House that the only future for greyhound racing is for it to be treated in every way in a similar fashion to horse-racing. That means that there should be the ability to place a bet on a horse-race tote at one track for a race taking place at another; the ability to transfer tote bets from off-course to on-course; and last but not least, the introduction of an off-course levy or similar market mechanism for greyhound racing which will ensure that betting shops contribute to the sport from which they derive £1.6 billion worth of bets each year while returning virtually nothing.
This is not the time or the place to go into the arguments for a greyhound levy or some other kind of compensation such as that recommended by the House of Commons home affairs Select Committee the year before last. However, it is government legislation which prevents greyhound racing from obtaining a levy such as that returned to horse-racing.
I do not seek to prevent betting shops opening on weekday evenings. I am speaking only of Saturdays, when the staff are most likely to want to be at home. Many workers are women and they have been forced by the strong-arm tactics of large firms to work late in the evening. Their social lives and, above all, their family lives, will be greatly affected. They have been told that they must either sign their new contracts or face immediate retirement. Therefore, many have had to sign. Many letters have been written complaining of that. In fact, 4,167 staff were consulted about evening opening of betting shops and 4,046 voted against it. It is not a popular idea. The staff do not want evening opening and 96 per cent. of independent bookmakers do not want evening opening of betting shops. Not long ago the Association of Chief Police Officers advised against it. Greyhound racing does not want it.
Therefore, I ask your Lordships to support my Motion to maintain the status quo at least as regards betting shop licensing hours on a Saturday so that between April and August, as well as for the other seven months of the year, they are not allowed to open beyond 6.30 p.m. I beg to move.
Moved to resolve, That this House invites her Majesty's Government to revoke the Licensed Betting Offices (Amendment) Regulations 1993, and to lay in their place other regulations maintaining current opening hours for licensed betting offices on Saturdays.—(Lord Newall.)
3.45 p.m.
The Viscount of Falkland: My Lords, I rise to support the noble Lord's Motion. I shall not go along the road which the noble Lord followed because he has explained clearly to your Lordships his own particular interest and objections to the Government's regulations as they affect greyhound racing. He has argued that so clearly that I do not believe it is possible
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to misunderstand what he says; namely, that the opening of betting shops on Saturday evenings would deprive greyhound racing of an important part of its attendance and be damaging to it.
I am not as familiar with dog racing as I am with horse-racing but I am happy to say that in recent years dog racing has become more of a family activity. Racecourse authorities have done a great deal to attract families and to make facilities for children much better. Racing is expensive because in this country it does not receive the kind of financial support from government which it receives in other countries; but that is not the problem facing us today.
Nevertheless, it is a wonderful day out if you can afford it. You can take in your children at reduced cost. The general standard of catering is better and the ability to park is very much improved. As the noble Lord said in his opening speech, evening racing has not grown to an enormous extent and yet there are popular evening meetings. For example, Windsor is a very well attended Monday evening meeting. Despite the obvious problems of traffic, many people go there for meetings which are, surprisingly, often conducted in good weather. Every year more and more people attend those meetings.
The Jockey Club's position—and I shall be interested to hear noble Lords speak on behalf of the Jockey Club—is understandable. I expect noble Lords who speak on its behalf will support the regulations and oppose the noble Lord's Motion because racing is in such a parlous financial state that any possibility of raising more financial support from the levy is welcome. The Jockey Club estimates that opening betting shops in the evening from 6 p.m. to 10 p.m. will generate for racing an additional £5 million of revenue per year. That is not an enormous amount taken against the amount of money required for racing, nor is it a great deal in terms of the kind of money available to racing in other countries. However, for understandable reasons the Jockey Club has not taken into account all the factors which should have been taken into account when considering the Government's action in introducing those regulations.
Before I deal with the social implications of opening betting shops in the evenings on a Saturday from 6 p.m. to 10 p.m., I should like to discuss the employees' position. I do not suppose that many of your Lordships have been in betting shops. The doubtful advantage of a Chamber like your Lordships' House is that there are hereditary Peers. I am not a reformed reprobate but I admit that I have spent some time in betting shops in my youth. I dare say that had I not been an hereditary Peer I would not otherwise have built up such a profile of public service to give me the opportunity to be here. However, I have a small advantage in this debate because I can tell your Lordships something about betting shops and how they operate.
By and large, betting shops are fairly squalid and dispiriting. Nobody, if they had an opportunity to do otherwise, would really want to go into a betting shop. Betting shops are largely populated by poor people who rarely have any means of transport, or indeed the inclination to go elsewhere to indulge their betting passion. Betting is without doubt not a family activity.

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Betting shops are mainly populated by men. A few women go into them but they are mostly employees. Those employees are contracted to the big chains which now run betting shops. There are few small, individual betting shops left. Most of them are owned by Ladbrokes, Coral and William Hill.
When the betting shop employees were consulted about these changes and were asked whether they were in favour of working the additional hours from 6 p.m. until 10 p.m. a staggering 97 per cent. of them voted against the changes. The reason for that vote is quite simple. Women have family lives. That applies equally to single women as to married women. They all have the same entitlement to enjoy their private lives. Furthermore, there is the problem of safety at night. I challenge anyone to walk within a one-and-a-half or a two mile radius of a betting shop in this area on a Saturday night between the hours of six and 10 o'clock and feel safe. When one also considers that late night drinking is taking place in pubs, one realises what an unattractive prospect it is for employees in betting shops to find their way home after 10 o'clock on a Saturday evening, or to deal with clients who may have been drinking in the pubs.
Most people who bet are losers. Most people in betting shops are chasing their losses. The Government are telling us we need to reconsider our attitude towards family values. Is it desirable therefore, particularly in inner city areas, that men and women should be able to enter a betting shop on Saturdays at mid-day and continue punting—that is the popular expression—with their limited funds until 10 o'clock at night? Where is the safeguard for family life in that exercise? It is odd that the Government should seek to introduce these regulations and not think of their effect on family life.
Even in this neighbourhood I believe it is asking for trouble to open betting shops between six and 10 o'clock in the evening. That action constitutes a muggers' charter. I do not know what the police or the betting shop owners think about this measure. As regards employees' contracts, it is odd that the big three bookmakers asked their employees to sign new contracts of employment which involved longer working hours before these regulations were even known about. I suggest there was an exchange of information between the Government and the big three bookmakers before these regulations became a reality. How many licensing authorities in the kind of areas I have described would have granted licences to betting shops had they known their opening hours were to be extended? I believe a high proportion of those licences would not have been granted.
This measure offers no social benefit at all. In fact, much social benefit would be gained from supporting the noble Lord as at least that would ensure that on Saturday nights punters would have to stop chasing their losses and would have to wait fretfully until Monday. They may be in a bad mood or in a good mood, depending on whether they had won—I imagine they would mostly be in a bad mood—but at least they would be with their families.
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Successive governments have always faced a dilemma as regards gambling. They have never understood gambling. In the early 1960s there were long and erudite discussions on whether roulette was a game of chance or a game of skill. Anyone who wishes to introduce legislation to govern gambling but who does not know whether roulette is a game of chance or of skill deserves to be relieved of his duties. Some dotty remarks have even been made about the lottery. Some people have said there is a difference between a gamble and a flutter. It seems to me that people who are responsible for introducing legislation to govern gambling are usually the least fitted to do so as they have no experience of it.
I believe family life will suffer as a result of these regulations. We are all concerned about the moral fabric of society and I believe that anything that disrupts family life and encourages men to become incarcerated in smoke filled rooms and encourages them to bet, or to borrow money from friends to bet —I can guarantee that any noble Lord who entered a betting shop today and stayed there for more than an hour would be touched at least two or three times for a loan—should be discouraged.
Betting shops are full of pathetic dreamers—I do not criticise that—people in debt and petty criminals. As I said, the atmosphere in betting shops is seedy and dispiriting. The Government should not lightly consider extending the hours in betting shops. I vouchsafe my support for the noble Lord. As I said, no one will benefit from these new regulations, certainly not betting shop employees. The punters will not benefit from the extended opening hours—at least, very few of them will—and their families will certainly not benefit from them. Neighbourhoods surrounding betting shops will not benefit from the extended opening hours as crime rates are likely to increase. As we have heard, the greyhound industry will not benefit from these new regulations. There may be a marginal benefit to the racing industry, estimated at £5 million, but I doubt whether it will be as much as that. Without doubt the bookmakers will benefit from the regulations, particularly the big three bookmakers that I have mentioned. However, I have had just about enough of watching bookmakers benefit from gambling.
3.58 p.m.
Lord Howell: My Lords, I am glad of the opportunity to have this discussion, which has been provided by the noble Lord, Lord Newall. I have much sympathy with some of his arguments on the way greyhound racing is restricted, and is not treated on an equal footing with other racing. I shall return to that point in a moment. However, I do not have sympathy with his view that we should oppose the new regulations for the reasons I shall discuss.
First, I declare an interest—I am not quite certain how great an interest it is. I am a director of Wembley Stadium where greyhound racing takes place. The noble Lord, Lord Newall, may be surprised at the view I am expressing. I am pleased to follow the speech of the noble Viscount, Lord Falkland. That was one of the most extraordinary statements I have heard on this

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subject for some time. The whole of his argument seemed to consist of opposing betting in any form, at any time and in any place. That cannot be what the nation desires. I must say with respect that if the noble Viscount is of the opinion that all betting shops are squalid places, he cannot have been in one for some time. That is not my experience of betting shops. If opening betting shops on Saturday evenings constitutes a muggers' charter, that must be the case as regards opening them on any evening. If the noble Lord agrees with me, he ought to oppose the order in toto rather than restricting his opposition to Saturday evening opening.
I have a personal connection with issues concerning betting shops which goes back a long time. I served on the Watch Committee of Birmingham City Council as a young man. As a result of our experience of being unable to control illegal betting, the Watch Committee, with my agreement, and on the advice of a famous Chief Constable of the time, Sir Edward Dodds, we advised the Home Office that they should stop the nonsense of illegal betting for working people and make betting lawful. I am glad to say that was done, with many benefits for the majority of the public.
Nor do I necessarily take the view that bookmakers are to be castigated as they have been. I conducted an inquiry for some 12 months on behalf of the Labour Party immediately before the last election and drew up a policy which suggested that the bookmakers and the Tote should be recognised as some of the main financial supporters of horse-racing and should therefore have a proper place in the ruling bodies of that sport. That has not happened yet, but I still believe that that should happen.
There is a very strong case for equality of treatment of greyhound racing and horse-racing. The noble Lord said that horse-racing is a rich man's sport. In terms of the ownership of horses, I suppose it is. One of the attractions of greyhound racing is that it allows people of more modest means to own a dog and to have an interest, through ownership, in a sport which they follow and which they support financially. I hope that Ministers will take account of that. As people can own a dog and have an interest in the sport, there is an argument for asking the Government to go much further than they have to date in ensuring equality of treatment.
My principal reason for supporting the order and the reason for my fundamental objection to what the noble Viscount said, is that I believe that in this country we have to trust the people. One has to trust them in their betting just as in their drinking, and just as one has to trust people in many other spheres of activity. One cannot lay down regulations and restrictions for the public in general because one believes that one or two people have to be protected from themselves. I accept that there is some problem in that direction; but in order to protect a small percentage of people, one has to place considerable restrictions on the whole population. I do not believe that that is right. Therefore, I have sympathy with the
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Home Office's desire to remove the restrictions if possible and to allow people to use their own judgment in these matters.
I turn now to the difficulties which greyhound racing faces. In introducing his proposal, the noble Lord mentioned the levy deducted by bookmakers and the Tote from all bets, which in the case of horse-racing is the lifeblood of the sport. In the case of greyhound racing, that money does not come back to the sport. Therefore, £20 million goes into the satchels of the bookmakers. That cannot be right. That £20 million ought to be made available for the development of the sport of greyhound racing.
When I conducted my inquiry on behalf of the Labour Party, I repeatedly asked those who want a levy board for greyhound racing what its programme would be and what it would spend its money on. Would it develop the tracks or increase prize money? We know exactly what the racehorse industry wishes to do with its increased levy. It is a criticism of the greyhound authorities that they have not yet produced a significant programme as to how they would spend the £20 million levy, which has been mentioned, if it was available to them. I hope that the noble Lord, Lord Newall, will persuade them that they ought to meet that challenge.
The question of television in betting shops has been raised. It is a problem for greyhound racing and I do not know the solution. If we extend the hours in the evening, it remains to be seen whether 10 o'clock is the right time. Although I support the order, I incline to the view that 10 o'clock is a little late. It may well be that market forces will provide the answer, and that people will not want to be in betting shops after 8 o'clock or 8.30 in the evening. I hope that the Home Office will keep the matter under review.
If television is to be available in betting shops in the evenings and greyhound racing is televised, there is anxiety that a monopoly might exist. Such a monopoly would not be in the interests of bookmakers or anyone else. That aspect needs to be considered carefully when the experiment takes place, and I hope that the Minister will give an undertaking in that regard.
I share many of the views expressed by the noble Lord in opening the debate as to what should be done. The restriction on inter-track betting in greyhound racing—which is permitted in horse racing—ought to be removed. Another small but not insignificant point is the requirement for a public auditor to be present at every greyhound race meeting. That seems to me to be expensive bureaucracy. I can see no justification for it and I hope that the Home Office will look at that matter in due course as part of their review of these matters.
There is also the question of the legislation which bans racecourse owners from involvement in bookmaking on race tracks. The greyhound racing authorities tell me they think that restriction ought to be removed because they consider that the ownership of certain tracks by bookmakers is contrary to such legislation and that there should be equality of treatment for both bookmakers and greyhound tracks.

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Finally, I return to the point about the main clientele of greyhound racing. They do not come from the same social strata as the people who normally go to the more fashionable horse-race meetings, although I do not believe that can be said of run-of-the-mill racecourses. Racing, in my judgment, is pursued moderately and is a perfectly valid and honest interest for large numbers of people in this country. One only has to consider the amount of coverage given to these matters in our newspapers to understand what a great interest it is for a large section of our population. It is a perfectly legitimate interest which helps life along. Therefore, we ought to help our fellow citizens to enjoy the opportunity to take an interest and place a bet. We ought to do so in terms of equality between one part of the sport and another. We certainly ought to trust our fellow citizens to moderate their betting according to their means and to enjoy a modest flutter when they wish to do so. For all those reasons, I support the order which is before the House.
4.10 p.m.
Lord Leigh: My Lords, when I first received a plea from my noble friend Lord Newall for support for his amendment to the Government's draft order on the opening of betting shops to omit Saturday evenings, my first reaction was to file it away with my ex-wife's letters under "Rubbish for Burning". But yesterday I thought, "No, this is more important, and an ideal opportunity for me to make my maiden speech". I should therefore like to thank my noble friend Lord Newall for keeping me posted on this issue.
I then had to make a feverish search of my desk, which at the best of times is chaotic; but it was worse than that, after our "daily" and my wife had been at it under the guise of tidying up—at least, that is what they call it. Putting it as mildly as I can, I call it sabotage. First, I had to check that I had read correctly that the deadline for names to be included in the speakers' list for debates, etc., had been brought forward to 12 noon on the day of the debate. I then had to check the instructions for making a maiden speech, which I had put in a safe place—the trouble was that I had to find a safe place first. Having found both, and by then having forgotten most of my thoughts, I had to start again and find Lord Newall's plea, which by that time had been buried under my other searchings.
I found included in the instructions on making a maiden speech that their Lordships are not expected to refer to notes unless they are government statistics or similar. This reminded me of two separate occasions when I was invited to present a cup named after my brother to the same local village clubs for darts, dominoes and cribbage, of which I have only a scant knowledge. These invitations were something like six years apart. Having read the speech on the first occasion, I gave the second one off the top of my head. I was congratulating myself afterwards and I asked the club president how he thought it had gone. He said, "Very well, my Lord, except you said exactly the
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same thing last time you were here." I have not spoken here before, and I hope that I shall not repeat myself this afternoon.
I do not hold myself up as a great expert on greyhound racing. Indeed, I have been only once in my life. I suppose the closest I came to it was 15 years of amateur steeplechase riding, which, together with the fact that I am a treated alcoholic, may account for a somewhat addled mind. However, be that as it may, I was shocked to learn that greyhound racing receives no benefits from the tax on betting, whereas a large proportion goes into horse-racing.
It seems that punters who bet on greyhounds have deductions made from their bets for the major benefit of other sports supported by the betting shop proprietors. I shall not insult genuine racecourse bookmakers by calling betting office owners "book-makers", especially as the betting shop proprietors, siphon a large amount of their profits into supporting holiday camps, casinos, hotels, beauty contests, besides cricket and other sports which are not associated with racing.
If greyhound racing cannot have Saturday nights solely to itself, surely it should have a share of the levy —even 1 per cent.—which might be more profitable than having a monopoly of Saturday evening racing. Having said that, I should like to again thank my noble friend Lord Newall for giving me this opportunity to speak today. I fully support his amendment and anything that will help greyhound racing flourish.
4.14 p.m.
Viscount Allenby of Megiddo: My Lords, it is always an honour and a pleasure to congratulate a maiden speaker. As your Lordships know, it is always an horrendous experience having to speak to your Lordships on the first occasion. I thought that the noble Lord, Lord Leigh, spoke with great aplomb in military terms, in military voice, and I am certain that we shall hear a great deal from him in the future. He certainly made his points pertinently. He comes from a line of true military background, his father having been in the 11th Hussars, Lord Newall's regiment, so there is obviously a link there, and he is currently married to the daughter of an 11th Hussar, which is a great tradition to carry forward.
He probably will not remember this, but he once saved one of your Lordships a great deal of embarrassment. When one of your Lordships found that he had not got the correct set of robes for the State Opening of Parliament, the noble Lord lent his robes at the last moment. It may have been his wife who did it, I am not certain. The noble Lord concerned is not at present in his seat, but he turned up appropriately dressed in Lord Leigh's robes. I hope that he will be showed the customary help and good behaviour in your Lordships' House, and we look forward to seeing and hearing him in the future.
I apologise to your Lordships for not being in my place at the beginning of this debate, but I was otherwise detained in a Select Committee. I hope that I shall not repeat a number of things that have already been covered in this debate. I start by saying that the

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essential ingredients of any racing occasion are animals, be they greyhounds or racehorses, and of course a venue. If you have few people attending a meeting it does not make for a very good meeting. If you have a lot of people it makes for a good occasion. The race meeting or greyhound meeting goes well as a result of a good attendance, and of course the organisation benefits financially.
The Home Secretary's initiative by way of a Statutory Instrument approved by the Standing Committee on Statutory Instruments is a most welcome boost to the horse-racing industry, an industry that is suffering tremendously at the present time. Already a number of successful meetings that have been referred to will be able to expand their contribution to racing finances. We are told that the gain to horse-racing will be in the region of £12,000 per fixture, leading to an overall net gain of some £5 million. The horse-racing industry has been presented with what I would term a window of opportunity to improve its financial position.
I point out that 30,000 people rely on the horse-racing industry, which is very much dependent on people buying and owning race-horses. Despite what has already been said about horse-racing being the sport of rich people, I put it to your Lordships that there are more and more racing syndicates being drawn up and brought into existence every day. Anyone who is interested in horse-racing—and I speak about horse-racing as applied to greyhound racing—can own part of a horse, or have an interest in a horse or a greyhound. Therefore, I do not go along with the argument that it is the sport of rich people.
Having said that, facts have to be faced. There is an economic decline, which is affecting racing. In 1991–92 there was a 10 per cent. decline in the ownership of race-horses. It looks as though that decline is set to continue in 1993. I believe that the order that the Secretary of State has brought into existence will benefit those employed within the industry—which I would point out to the House is the sixth largest employing industry in the country—and it will also be of benefit to the levy.
We have already heard a great deal about the levy. We are all aware that greyhound racing does not benefit from that levy because of government legislation. I put it to the noble Lord, Lord Newall, that we should earnestly consider going back to the Government and asking for greyhound racing to be involved in that levy. I do not believe it to be beyond the bounds of possibility that there should be a levy for greyhound racing in the future.
Racing, be it greyhounds or horse-racing, is a family activity. I do not agree with the noble Viscount, Lord Falkland, that betting shops are squalid places. There are squalid betting shops, but on the whole the conditions and standards of betting shops, particularly of the big betting chains, are improving. I regularly visit a betting shop opposite my office in Reading, not as a big punter but as a small punter. The shop is a small place run for the community. Although the majority of people in the betting shop are men, many are old age pensioners and those who enjoy listening
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to the commentary and having a small punt of a few pence. I do not believe that that harms anyone; and to prevent it would be a great pity.
My anxiety relates to security and drink. Keeping betting shops open until ten o'clock at night presents a security problem for the people who work in the betting shops which needs to be carefully watched. The betting organisation realises its responsibility for looking after employees. Alcohol-related problems too could increase as a result of keeping betting shops open late at night. However, for the good of the sport, and for people's enjoyment in the future, it is right and proper that betting shops should remain open for the limited period during the summer months, otherwise betting will go underground. People will bet by telephone to bookmakers and the losers will be the sport, the levy and the bookmakers. I therefore do not go down the same road as the noble Lord, Lord Newall. I support the original Motion with a number of reservations.
4.21 p.m.
The Marquess of Zetland: My Lords, I too congratulate the noble Lord, Lord Leigh, on his entertaining and amusing maiden speech. First, I declare an interest as a current steward of the Jockey Club and as chairman and manager of a northern racecourse. Therefore to a certain extent what I say represents the horse-racing industry as opposed to the greyhound industry.
Your Lordships will be aware that our racing industry is going through hard times. That is not exclusively due to the recession. I hope that noble Lords will forgive me for again going over old ground. However, I believe that it is important that we all realise that every successful racing industry in the world depends to a large extent for its finance on the betting that it generates. In the United Kingdom racing receives a far smaller proportion of that betting turnover than in any other country, due largely to the fact that large chains of bookmaking firms dominate the marketplace. Those bookmaking firms have shareholders who naturally are thirsty for profits and dividends.
The receivers of what is left over from betting turnover, once the punters have been paid out, are threefold: the Government, in the form of betting duty, the bookmakers, and racing. From a total spend of just over £4 billion last year, the Government took a sum approaching £350 million, bookmakers collectively took £160 million, and racing £47 million. Clearly there is a serious imbalance.
Racing was extremely grateful for the famous double act in last year's Budget when the Home Secretary and the Chancellor between them managed to reduce the rate of betting duty by a quarter of 1 per cent., and to pass on the benefit of approximately £12 million to the racing industry. That was hugely appreciated by racing. It was whispered that the go-between was a certain noble Lord sitting not far from me now on the Cross-Benches. However, if he and the Government can be persuaded to repeat the

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exercise, but this time to reduce the rate of betting duty by 1 per cent., then it is fair to say that racing could get off the Government's back once and for all.
However, in the meantime racing continues to suffer serious problems of underfunding. Its case is not being helped at present by the very real worries over VAT or by the prospect of a national lottery, which inevitably will divert money away from betting on horses and will therefore deplete the levy on which racing depends.
It is therefore hardly surprising that the racing industry has welcomed enthusiastically the Home Secretary's decision to allow the opening of betting shops in the evenings between April and September. Racing is extremely popular on summer evenings. The fact that people will now be able to bet off-course on those evenings will bring a badly-needed boost to the industry in the form of increased betting turnover and, therefore, of increased levy. Saturday evening is of course the most popular evening of the week. We would not wish the betting shops to be shut on Saturday evenings.
We support the Home Secretary's measure because it will give greater choice to the punter by allowing him to bet on every race meeting that takes place. We support too the move towards the deregulation of our gambling laws which we believe are so outdated.
Racing desperately needs owners. Without owners there is no racing. There is a belief in certain circles that owners grow on trees and will always be around. Unfortunately, that is simply not so. The modern owner requires to know that if things go right he will receive at least some return on his investment in the form of a reasonable level of prize money. The increased levy which will result from the extra betting turnover generated during the evening opening of betting shops will undoubtedly help to increase prize money levels—most likely by about £6,000 per fixture as opposed to the £12,000 to which my noble friend referred. That will help enormously to retain the current level of owners. It may even help to attract new ones. It is absolutely crucial that we encourage owners to come into the industry if racing is to survive and prosper.
I confirm what my noble friend said. I emphasise the part that our racing industry plays in the rural economy. As your Lordships have heard, the industry employs 30,000 people directly and 100,000 indirectly in ancillary businesses. Noble Lords have heard that the racing industry is the sixth largest employer in the country. If racing goes any further into decline, those jobs will be threatened and the knock-on effects on the rural economy will be very damaging.
For those reasons we argue against the proposal of my noble friend Lord Newall that Saturday evenings should be omitted from the scheme.
4.27 p.m.
Lord Lyell: My Lords, noble Lords may be surprised that a Scot, an accountant and an enthusiast for virtually every sport except that of four-legged racing—I refer to dogs and greyhounds—speaks today. However, my noble friend Lord Newall
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presented his case professionally and well. Indeed, I became mildly interested when I heard that bookmakers' shops and betting shops were to be opened late in the evening on Saturdays during the summer.
I congratulate my noble friend Lord Leigh on what I am sure noble Lords will agree was an outstanding and witty maiden speech. I hope that we shall hear many more speeches from him.
My noble friend Lord Newall asked that the measure before us today should give the greyhound racing industry an even chance. First, despite everything that I have heard from speakers with great experience of the horse-racing industry and consequently of betting shops, will the order give the greyhound racing industry the even chance that my noble friend seeks? Secondly, will the extended opening of betting shops do as much as we have heard to promote horse-racing? Thirdly, is the amount of evening racing on Saturdays so crucial as to require extended opening every Saturday evening in the summer months?
I was particularly struck by the outstanding remarks of the noble Viscount, Lord Falkland. I am not an habitué of betting shops but I was interested in his description of smoke-filled rooms with male-dominated populations. I hope that he was not referring to your Lordships, let alone the people touching one for loans. When either walking or driving along the streets and finding betting shops one similarity comes to mind, that is, the windows tend to be blanked out. It appears to me that the only other shops of this nature are sex shops. To me, both betting shops and sex shops seem to involve an outpouring of a great deal of money to not much purpose, especially in view of what the noble Viscount, Lord Falkland, has said. I accept that the bookmaking industry provides a great deal of support to the horse-racing industry. We have heard from my noble friend and others that there are five greyhound tracks that are part of the bookmaking enterprises. There is a great deal of interest in the bookmaking industry at least in terms of giving some support to the greyhound industry.
I was interested by the moving tribute paid to betting shops by the noble Viscount, Lord Allenby. He made everything appear to be sweetness and light. He was a great proponent of late opening. However, the noble Lord mentioned one obstacle, and I wonder whether the noble Viscount, Lord Astor, will be able to confirm that extended opening as proposed in the order has the full support of the Association of Chief Police Officers. That is one point on which I should like to be reassured. With that, I wonder whether my noble friend who is to reply for the Government can leave to the greyhounds the advantage that they may have and may seek with the remarks of my noble friend Lord Newall.
4.32 p.m.
Lord Peyton of Yeovil: My Lords, I hope that your Lordships will forgive me if for a few minutes I intrude myself into the space that is allowed on the list of speakers. I should like to say how, with others of your

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Lordships, I enjoyed the maiden speech of my noble friend Lord Leigh and was engulfed with sympathy when I heard of the terrible intrusions that had been made upon his desk. I hope that it will be better defended in the future.
I would have supported this Motion had it not been for my recently-expressed conviction as to the jeopardy in which horse-racing now found itself and my very strongly held view that something needed to be done about it. Therefore, even this marginal measure of support is to be welcomed, but I hope that my noble friend on the Front Bench will warn the Commissioners of Customs and Excise against extending what I have previously described as the catalogue of piffling measures that they have put forward to help racing, as opposed to taking effective action.
I was interested to hear by way of some interpolation the noble Viscount's account of the horrors of betting shops. I am not a regular frequenter of betting shops, but I recall that when the measure was first going through Parliament I listened with fascination to the debates that took place in another place. They seemed to be indicative of the schizophrenia that regularly affected governments when they embarked upon dangerous reforms. At one and the same time they were resigned to the need for betting shops but determined to make them as uncomfortable, repulsive and unwelcoming as possible.
The Government's amendment of the regulations will undoubtedly benefit bookmakers. What is less certain is how much of that benefit will be passed on by bookmakers to racing. Very few people love bookmakers, for the obvious reason that bookmakers are regular winners and punters are regular losers—I speak for myself. I am not sure how much the bookmakers are concerned with the present parlous state of the industry or, if they are concerned, how much it has led them to increase their financial support, or even to support those arguments put to the customs and excise to relax their present narrow view. I make no apology for repeating the view that has already been expressed in this House that if the racing industry and all those whom it employs are allowed to go into terminal decline—and it is nearly in that state already—the epitaph carved on the gravestone of the industry will undoubtedly be "17.5 per cent. VAT did for them". The Government and the Commissioners of Customs and Excise will be cast in the role of monumental mason and undertaker and will be remembered for the way in which they performed that role.
4.36 p.m.
Lord Wyatt of Weeford: My Lords, perhaps I may also be forgiven if I intrude into the gap in the speakers' list. I should declare an interest. I am chairman of the Horserace Totalisator Board and I also sit as a member of the Horserace Betting Levy Board.
I begin by joining others of your Lordships in congratulating the noble Lord, Lord Leigh, on his most instructive and entertaining speech. I hope to
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hear him often. I do not think that P.G. Wodehouse could have described better the state of his desk or his family fight over it. I am sure that the noble Lord will be able to illuminate us with wit as well as information.
I was amazed by the noble Viscount, Lord Falkland, who seemed to be recounting some visits to queer places in Victorian times. He was completely out of date about betting shops. It is true that there may be some "grotty" ones here and there; but the punter is provided for by bookmakers—and we have 160 betting shops of our own—by way of entertainment. Consequently, as the Government started to relax the rule which determined that betting shops were to be squalid, hole-in-the-corner places that people went into furtively and one was not to know what was going on inside, so the shops were allowed to serve non-alcoholic beverages and provide television screens showing the position race by race. The quality of the betting shops dramatically improved.
The noble Viscount said that he did not see women in betting shops. I go to a great many betting shops. The percentage of women going into betting shops is rising all the time. In the main, the shops are very comfortable and quiet places. One does not get very much roughness or violence in betting shops, apart from those occasions when people come in with guns, or mock-guns, in order to try to raid the till, as happens with any other establishment.
The idea that in some way betting is immoral is absurd. Bookmakers are part of the entertainment industry. After deduction of the levy and tax, the gross amount that the punter may expect to lose is about 20 to 21 per cent. or just a little over one-fifth of what he has bet. We know from experience that the remainder that is left to the bookmaker after all the tax and expenses that he has incurred is probably not more than 3 per cent. per shop. Betting is a high, moral occupation. Your Lordships may laugh, but I have even convinced an archbishop of that point.
Somebody who spends his time in a betting shop is not spending it in a pub—one is not allowed to drink alcohol in a betting shop. Placing a bet is one of the few democratic decisions a person can make. He is told what to do by the foreman; or he is told (or used to be told) by his shop steward to go on strike, and his soul is not his own; when he gets home, he is probably told to do the washing up. In a betting shop he can do exactly what he likes, and can study form. It is much more difficult getting that right than doing The Times crossword puzzle. He studies form, the course, the nature of the owner, the trainer and the jockey, and whether the horses are trying that afternoon. He makes his own mistakes and starts again next time round having learnt from his mistakes. Every now and again he gets a dramatic coup and tells you: "I have been following that", or, "I believe the horse is really trying today; it has a really good chance", and "My God, it's marvellous! Odds at 15 to one". That makes him very happy, like the fisherman who catches the very big salmon.
It is harmless entertainment. I have been told of dramatic cases of people touching you for money in betting shops. But all they ever touched me for was a

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tip. They seemed to think that I would know what was going to win. If I knew what was going to win, I would not bother to go round betting shops.
The Viscount of Falkland: My Lords, I thank the noble Lord for his courtesy in giving way. I invite him to come to some of the betting shops that I go to; I shall certainly go to some of those that he visits. The point is surely that, even given the satisfactory environment described by the noble Lord, should not the women and the men who go to his betting shops be somewhere else other than a betting shop between six o'clock and 10 o'clock on a Saturday night? Are there not more desirable things that they could be doing, such as going home to their children and their families?
Lord Wyatt of Weeford: My Lords, I understand the noble Viscount. He belongs to that great tradition of the middle and upper middle classes, like Beatrice Webb and others. They thought that they knew better how the working classes should spend their money and their time than the working classes themselves did, and that they should be protected against themselves; therefore all temptation must be removed from them, otherwise they would get into severe trouble. That has always been great nonsense. But it is endearing to see that the Liberal Party still retains its wonderful intention to reform everybody and prevent them ever doing anything wrong.
To go back to what happens in a betting shop, it is a harmless entertainment of an intellectual kind. A chap can make up his own mind and profit from his mistakes. That is why so many people go to betting shops—and, incidentally, why so many women go there. The atmosphere has altogether changed from what it was some 10 years ago. We should stop believing that betting is an awful thing. By the way, not only does it stop people going into pubs but possibly stops them from doing things that are much worse, such as stealing motor cars and driving them recklessly, and killing other people while they do it. Betting shops are one of the good things in our society, not one of the bad things.
I turn to what the noble Lord, Lord Newall, said. I am very fond of the noble Lord. I believe he would agree that I have tried to help as best I can to get the greyhound racing fraternity a fairer share of what is going. Indeed, we got the extra bit taken off the tax. What the bookmakers and the Tote are giving to the greyhound racing club is mainly voluntary. I led the way and put the cat among the pigeons by saying: "Nobody else is going to do it. We have already set aside our quota and the Greyhound Racing Association can do what it likes with it. Let us get it off the ground".
Roughly speaking, I believe the greyhound racing club will get some £3 million a year as a result of that reduction in the tax. It already gets about £4 million a year from the "BAG" (the bookmakers' afternoon greyhound racing service). I should mention that I am also a member of that organisation and declare my interests. We pay certain selective greyhound tracks large sums of money to be allowed to take pictures and
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so forth from them. I know that some of the tracks are owned by bookmakers. It does not make any difference who owns them. All bookmakers contribute to the amount that goes under that agreement to the greyhound track owners.
When we get evening betting, as I am sure we shall, there should be another substantial amount available to the greyhound side of the business. I do not think that the noble Lord, Lord Newall, would disagree with that. The Tote estimated—and we have rather good statisticians—that there will be an increase of leviable turnover of something like £5 million, arising from the levy board. Out of that, I reckon that greyhound racing will get up to £200,000 of the addition. So it is not doing quite so badly as the noble Lord was anxious to portray it as doing. He was quite right to fight his corner and make sure that everybody understands that it has not altogether had a fair crack of the whip.
I do not believe that showing greyhound racing in the evening in betting shops will make the difference he fears to attendance at greyhound meetings. It has usually been the case that when you show anything on television people get more and more interested in seeing it live, as they do Wimbledon, football, or whatever else it may be. I suspect that, contrary to his pessimism, we may find that more people become interested. It will very often be a different kind of person going into the betting shops in the evening —one who will say: "I shall go to a greyhound track and have a look to see what it is like. It is rather fun". Indeed, it is rather fun. It is very agreeable to eat in some of the restaurants provided at the better tracks and watch the greyhounds go by very speedily. I do not think the noble Lord needs to be as worried as he appears to be at the moment.
Lord Graham of Edmonton: My Lords, I wonder whether the noble Lord would allow me to point out that speeches in the gap are by convention, brief, short and to the point. The noble Lord has already spoken a lot longer than many people who put their names down to speak.
Lord Wyatt of Weeford: I apologise; but I think I have a certain knowledge of the matter and it might be of interest to the House.
As to the difficulties of the staff working in the evening in betting shops in the summer, I agree that is a serious point. We shall certainly be taking precautions at the Tote to make sure particularly that female staff—and it may apply to male staff as well —are sent home in cabs, or that other measures are implemented to protect them in the rougher areas. Nobody will be compelled to work terrible shifts. It will all be done by agreement. People will not be put in a desperate position thinking that they will lose their jobs if they do not do exactly what the betting shop owner says. That will certainly not be the case so as far as we are concerned. I am sure that will be the general approach in the business.
As the noble Marquess, Lord Zetland, very effectively said, there is a case in the difficult time that horse-racing, which is an enormous employer, is having, for that additional help. It will be a real

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benefit. It will be another £5 million or so going into the levy. It does not in any way damage my view of greyhound racing. It gives it more money as well. I hope that the House will not agree to the amendment of the noble Lord, Lord Newall, much as I admire his stance.
4.50 p.m.
Lord Weinstock: My Lords, the gap in the list of speakers is becoming a little crowded, and I apologise for intruding further into it, but I shall not keep your Lordships long. This has been a wide-ranging debate and I wish to add my congratulations to the noble Lord, Lord Leigh, on his maiden speech. A great deal of ground has been covered by your Lordships, but the Motion is about whether betting shops should be open on Saturday night. I have heard nothing from your Lordships which suggests that Saturday night is, in principle, different from any other night. Nor have I heard anything which suggests that people working in betting shops on Saturday night would be exposed to any more danger than people working anywhere else on Saturday night.
It was suggested by the noble Viscount, Lord Falkland, that people who go to betting shops, these Dickensian dens of vice and depravity, are in some way inferior to people who go to other places. That seems to me slightly insulting. I am sorry that it should have been suggested. I do not know that the people who frequent greyhound racing tracks on Saturday nights would, from social or other points of view, be considered to be "better class" people. I see no reason to suppose that it should be so.
The fact is that horse-racing is in serious financial straits, as we have heard, and badly needs the extra revenue which may accrue as a result of the Saturday night opening of betting shops. If I may say so with respect, the Motion proposed by the noble Lord, Lord Newall, does little more than suggest that people should be driven out of betting shops into greyhound-racing tracks. Of course, that argument could be applied to any occupation. If greyhound racing needs the money and that is a good enough reason, why should we not close cinemas at six o'clock on Saturday night or any other form of entertainment? It seems to me to be a parti pris argument which is not sustainable. Essentially it involves infringement on the liberty of choice of the individual. I urge your Lordships to reject the Motion.
4.51 p.m.
Lord Elton: My Lords, perhaps your Lordships will permit me not more than three minutes to clarify something which I thought I understood before I listened to the debate. Can the Minister, in his reply, tell me whether I am right in the following proposition? British people are greatly dedicated to racing various kinds of creatures, particularly pigeons, dogs and horses. However, those who race pigeons do it under their own resources; and those who race dogs and horses need some kind of subsidy for the benefit of the sport. That subsidy comes from the pockets principally of those who bet. In the case of horses, it comes indirectly by means of a levy, and in the case of
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dogs it comes directly by people coming through the gate and paying for entrance principally on nights when betting shops are shut.
Is not this debate about whether people will desert greyhound-racing in sufficient numbers on Saturday nights, for the betting shop, and so entirely disable that industry? If that is the question before the House at the moment, as I believed it to be and still hope that it is, can the Minister tell us—and give great satisfaction to my noble friend Lord Peyton in the process—whether the way of rescuing horse-racing is not by removing the subsidy from greyhounds and placing it on horse-racing but by removing value added tax? It seems to me that that would be a constructive way of avoiding this difficult issue and we should not have to pursue the Motion at all.
4.53 p.m.
Lord Plant of Highfield: My Lords, on these Benches we are most grateful to the noble Lord, Lord Newall, for facilitating this debate on an issue of substantial importance which will affect the lives of significant numbers of people. It is particularly important since the proposed changes in the regulations went before another place on 10th February as a statutory instrument. I think that it is vitally important that the proposals are fully debated in your Lordships' House and we are grateful to the noble Lord, Lord Newall, for giving us the opportunity to do so.
Unlike many noble Lords, perhaps I may declare a more or less total lack of interest in both horse-racing and greyhound-racing. That is not for moral reasons, it is just that I spent three years as an undergraduate studying the theory of probability. Having been set a number of essays on the Monte Carlo fallacy, I assumed that betting and gambling was, in the proverbial phrase, a mug's game and I was not going to get into it. Therefore, I am afraid that all the impartiality I bring to this debate is as a result of more or less total ignorance.
What I bring to bear on the issue is a general principle in favour of the libertarian outcome, that on the whole people should be free to live their lives in their own way provided that in doing so they do not harm the interests of other people. In this case, it seems to me, we are concerned with extending the freedom of choice to the consumer or the punter. The question is whether that extension of freedom of choice to the punter will harmfully affect the interests of others.
What we have to do, in judging the Motion, is to consider three kinds of harm that have been identified by noble Lords in the debate. The first is the potential harm to the greyhound industry; the second is the potential harm to those employed in betting shops; and the third is the potential harm to the environment within which betting shops operate and are situated—in inner cities and on estates.
There is no point in my repeating in detail the point made by the noble Lord in his opening speech, explaining what he thought would be the likely consequences of the proposed changes on the greyhound-racing industry. I shall reiterate one or two

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points from the range of comments he made because they are worth bearing in mind when noble Lords reflect on how to vote, if the noble Lord presses his Motion.
First, as he pointed out—and this is undeniably true—the 15 per cent. drop in attendances at greyhound-racing meetings in the two years following the introduction of betting shops in 1961 wiped out afternoon greyhound-racing. Attendances at those meetings dropped from 15 million in 1960 to 7 million in 1970. Of course, it may be difficult to say that the introduction of betting shops was the sole cause or factor. Nevertheless, it would be difficult to deny some significance to that development.
The industry expects a similar drop of at least 15 per cent. in evening attendances as a result of the evening opening of betting shops. The loss is likely to be greater since the introduction of television into betting shops in 1989. That greatly increased their attraction. That is the first point: the likely effect on the industry itself. The noble Lord made a good case, I thought, for being seriously worried about it.
It is easy to say that that is just a defence of producer interests and that we should be more concerned with the interests of the consumer. On the whole, I sympathise with that general point. However, the fact is that if the pessimists in the industry are correct that the future of the industry depends upon the proposal not going through, then it is in the interests of the consumer of greyhound-racing. If there is no industry to consume, it can hardly be in the interests of the consumer.
Thus, although that looks like a defence of producer interests, there is a case for saying that it is also in the interests of the consumer. I believe that the main reason given to the greyhound-racing industry as to why it should not enjoy equal levy status with horse-racing was that the races were primarily in the evenings when betting shops were not open. But that situation has now changed and the key plank of the argument of those who do not wish to see greyhound-racing have an off-course betting levy similar to that enjoyed by horse-racing has been removed. There is now, it seems to me, a strong case for considering the extension of the levy to greyhound-racing.
I turn now to the likely effect of the changes on staffs employed in betting shops. First, as was pointed out by my honourable friend Mr. Graham Allen, who speaks on these matters for my party in another place, at least one of the three large bookmaking firms has insisted that employees in its betting shops should sign new contracts relating to the extended hours on pain of dismissal or retirement. That seems to be rather harsh behaviour in the circumstances and, as he pointed out in another place, might be a premonition of what could happen under the extension of Sunday trading. Certainly there is a case for saying that the working conditions of those working in betting shops might deteriorate under those circumstances. That is another potential harm to the interests of a particular group of employees.
40
Secondly, as has been pointed out, many of those who work in betting shops are women and they work in small groups of two or three. There must be concerns about their safety, even accepting the point made by the noble Lord, Lord Weinstock, both in terms of their safety within the office itself and also on the journey home. Those concerns were relayed, as the noble Lord, Lord Lyell, said, to the Home Office by the Association of Chief Police Officers. If ACPO is making such representations to the Home Office, we need some reassurance from the noble Viscount about the response that his right honourable friend the Home Secretary made to ACPO's representations on those points. We cannot just dismiss them as being irrelevant or unworthy of consideration.
Finally, in terms of the potential harm to interests, we have to be concerned about the environment within which betting shops are situated and the effect of the current proposals on that environment. Betting shops are situated in all kinds of places; in urban centres, in large villages, on estates and in suburbs. As any casual observer can see, groups of people, particularly young men, congregate around such offices, and they will do so late into the evening if the proposals are accepted. Alongside that is drinking late into the evening. Those living close to betting shops are not likely to see the noise, the litter and the associated behaviour adding to the quality of their lives. We need to be concerned about that in the context of the current general worry about the level of crime in society.
Overall, therefore, there are three kinds of potential harm that we should weigh in our minds when we think about how to vote if this issue comes to a vote —the harm, or the potential harm, to the industry; the impact on the working conditions of those who work within the shops; and the impact on the environment of the areas in which betting shops are situated.
The Minister will no doubt argue that the proposed changes will extend consumer choice. In that sense there is a great deal to be said for them. We accept that. It is just that that extension of choice has to be balanced against the possibility of harm. One of the points that my honourable friends in another place raised when they were debating this subject in the Fifth Committee on Statutory Instruments earlier this month was the measurable demand from punters for this development. It was clear that many of those on the producer side of the argument—the employees, the betting shops, the small bookmakers, and so forth —definitely did not want the change. But if one is looking to balance those producer interests against consumer interests, what kind of evidence is there on the part of consumers for the deregulation that is the subject of the debate today?
The Betting Office Licensees Association commissioned a poll, conducted by Gallup, which showed that 56 per cent. of punters were in favour of evening opening. However, it was a rather small sample. Without wanting to go into the details, some rather telling points were made in another place about the validity and design of the poll that Gallup had conducted. It had been taken back by those who commissioned it for a certain amount of remodelling.

41
We should like some assurance from the noble Viscount that there is a strong surge of consumer demand for this proposed level of deregulation.
Overall, these are clearly matters which involve deep feelings. We have had a good debate which has brought out most of the issues. It is a case of striking a balance between consumer demand and the potential harms that I have mentioned. It is a matter of judgment for noble Lords. For that reason we on these Benches do not seek to impose a Whip. If there is a vote, it will be by a free vote of my noble friends.
5.5 p.m.
Viscount Astor: My Lords, I should like to congratulate my noble friend Lord Leigh on an excellent and interesting maiden speech. I am sure that both your Lordships and indeed the greyhound industry look forward to his participation in future debates.
I should like to explain to your Lordships why the Government have decided that the changes which are proposed in these regulations are justified. Before I respond, however, I should like to say that I realise that my noble friend Lord Newall, who has spoken against the regulations, reflects the very strong views which have been raised by the greyhound industry and others about the changes in betting office hours. My noble friend has set out very clearly many of the objections which have been raised against evening opening and we took serious account of those views.
The Government's proposals have not, though, been sprung on an unsuspecting industry and public. The possibility of evening opening has been around for quite a long time. Indeed, it was even considered by the Rothschild Royal Commission which reported back in 1978. Times have moved on. In 1978 there were only 62 evening horse-race meetings. By 1992, that had more than doubled to 144.
There are, therefore, many more horse-races which are now being held in the evening. A quarter of all meetings from April through August are held in the evening. As a result, the horse-racing industry, off-course bookmakers and consumers have continued to urge the Government to allow evening opening of betting offices.
Evening race meetings became the subject of renewed attention by the Home Affairs Select Committee of another place in 1991. Two reports—one on the horse-race betting levy and one on the financing of greyhound racing—both recommended in principle that evening opening should be allowed. The Government's view was that all interested parties should be consulted before a final decision was made. They were consulted.
In October 1991, we issued a consultation document setting out the issues both of principle and of practice on which views were invited. We received responses from all the interests who would be affected by it and we made ourselves available for subsequent discussions and representations, including meetings with my noble friend Lord Newall. The final decision by the Home Secretary was based on a full and careful consideration of all the views which had been put forward.
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I should now like to address some of the main arguments which were advanced during that long consultation process, and to which my noble friend and other noble Lords have referred in this debate. First, why should we allow evening opening at all? The answer is simple. Removing unnecessary regulations encourages competition and it gives all businesses, large and small, the flexibility to meet the changing requirements of their customers, and that means greater consumer choice. Gambling must, of course, be properly regulated, to ensure that it is conducted honestly. But the Government also believe that adequate facilities should be available for those who want to bet when they want to do so for the benefit of racing and the punter alike. Whether bookmakers decide to open in the evenings and, if so, whether their customers make use of their services, is a matter which is best decided by the bookmakers themselves—and not by the Government. It will be their choice.
There are those in the off-course bookmaking industry—and not just the big three—who believe that their businesses and their customers will benefit from evening opening. If they are right—and that is a commercial judgment for each bookmaker to make —evening opening could help to secure jobs and to create new employment opportunities.
The prospect for betting offices of increased turnover from evening opening will offer them new opportunities. There are those who also argue that the change will benefit the big bookmakers disproportionately. Also it will adversely affect the working conditions of their staff, which is something which concerns the noble Lord, Lord Plant, and the noble Viscount, Lord Falkland, who quite rightly felt strongly about the anxieties of the betting office staff in that they would be forced to work longer hours against their will or for no extra benefit.
I noted the sharp criticism of the way in which some companies have dealt with their staff. I would wish that all bookmakers treat all employees in a positive and sympathetic manner. It is in the interests of both to maintain good relations. I hope that the industry will follow the Tote's attitude to its staff.
It is a fact of life that businesses have to respond to changing circumstances; betting offices cannot be exempt. Changes in conditions of service are a matter between each company and its staff: they are not a matter for the Government. But any sensible employer wants to retain his experienced staff and will take account of their wishes as far as possible. Satisfactory arrangements will be made in most cases, but if an employer acts unlawfully there are remedies available under the existing employment protection law.
If the employer unilaterally imposes new terms which the employee is unwilling to accept, employees who have completed at least two years' continuous employment may resign and take the employer to an industrial tribunal. Any employee, however short his service, can sue the employer for breach of contract. I believe that it is not the function of parliamentary regulations to attempt to control the structure of the bookmaking industry. The function of the regulation is to regulate the activity of betting.

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Evening opening will provide additional income for horse-racing. Evening racing has increased because it has proved popular with racegoers. If it increases further, that would be good both for racing and for bookmakers, and also for the public who will be going to the racecourses. The racing industry needs to be competitive to maintain its market and for the industry to prosper. How this new opportunity is developed is a matter for negotiation between both sides, horse-racing and bookmaking. The Government's role is just to remove unnecessary regulations which stifle initiative.
Set against the arguments in favour of evening opening, the Government had in mind the objections to which my noble friend Lord Newall referred. Greyhound racing fears that it will suffer because its customers will prefer to go to the betting office rather than to the dog track. That is a very pessimistic view of the attractions of dog racing and the loyalty of its present clientele. It is not one which is shared by all sections of the dog-racing industry.
Perhaps I may now turn to attendances to which noble Lords referred. Attendances at greyhound racing peaked in the late 1940s and declined throughout the 1950s before betting offices were legalised. The fall in attendances after 1961 simply continued the established pattern. It is really not possible to attribute the decline simply to the legislation for betting offices.
I should declare an interest. I go to evening race meetings at Wembley when I am able to escape from the long hours that your Lordships' House imposes on me.
Noble Lords: Ah!
Viscount Astor: My Lords, an evening greyhound racing offers a night out combining live racing with dinner and tax-free betting. An evening spent in a betting shop—even one operated by the noble Lord, Lord Wyatt—is really not a comparable form of entertainment. Greyhound racing has much more to offer: an exciting, varied and enjoyable evening. I will, however, leave it to the noble Lord, Lord Wyatt, to expound the view that betting is a high, moral occupation.
Greyhound tracks have a range of facilities which betting offices cannot possibly offer. It is clear that some track owners, at least, intend to market those attractions vigorously and reports in the press suggest that attendances have risen recently.
Even so, we did take account of the concerns which were expressed by greyhound racing and that was a significant factor in the Government's decision to confine evening opening to the five months of the summer horse-racing season. That is the period when the greatest demand for evening betting is likely to exist. We believe that this represents a very fair compromise between the claims of all parties. Greyhound racing's future now rests in its own hands. It is up to the sport to develop and to market its attractions. We want it to flourish.
My noble friend Lord Newall is now seeking to substitute regulations which would force betting shops
44
to remain closed after 6.30 p.m. on summer Saturday evenings. My noble friend argues that this would protect greyhound racing from competition from the off-course betting industry on Saturdays, which is greyhound racing's most popular night. Closing betting offices early on Saturdays would, he has argued, protect the industry's revenue from track attendances and Tote betting.
The Government canvassed opinion on this in their consultation document. Of those who expressed an opinion on this question, most favoured a uniform closing time for every night of the week. In particular, the police anticipated enforcement difficulties if betting offices had different closing times on Saturdays. The Government clearly had to accept their advice on that.
My noble friend Lord Lye11 asked me about the Association of Chief Police Officers. I can tell my noble friend that in a letter to the Home Office dated 12th November, that organisation said:
"The general principle of evening opening is acceptable to ACPO and there is no reason to suppose that the level of policing commitment to licensed betting offices would increase significantly as a result, although extended hours could increase the risk of robberies and theft, but to what level is a matter for conjecture".
It is an important factor against closure on Saturdays that Saturday nights are the popular evenings for horse-racing. There are horse-races on most summer Saturday evenings. To close betting shops early on Saturdays would be to deny punters the freedom to bet on occasions when there is popular demand for off-course betting and it could lead to illegal betting. That is why we chose 10 p.m. as the closing time for all nights of the week. The last race is often at 9 p.m. or later and it must make sense that punters can collect their winnings on the same evening and not, as the noble Viscount, Lord Falkland, suggested, wait fretfully until Monday.
I must remind your Lordships that the regulations governing greyhound racing have been relaxed in recent years; for example, the removal of the restrictions on the number of racing days, and allowing prize money to roll over. Proposals for further changes have been accepted in principle; for example, track-to-track betting. The industry has also recently come forward with other proposals which we are considering. And we will have further discussions with the industry about off-course post betting.
The Government have played their part too, as my noble friend Lord Zetland reminded us. Last year my right honourable friend the Chancellor of the Exchequer cut betting duty by one quarter of 1 per cent. Following that reduction, the greyhound and bookmaking industries have agreed to a voluntary mechanism to collect and administer the money released in respect of greyhound betting turnover. A new body, the British Greyhound Racing Trust Fund, is expected to raise up to £3 million a year in additional funding for the greyhound industry. As a result, greyhound racing will receive a direct benefit from every additional bet struck on the sport as a result of having evening opening.
I am sure that the Chancellor has also taken note of the regular and close interest taken by my noble

45
friends Lord Peyton and Lord Elton as regards VAT on bloodstock. As both my noble friends know, it is a matter for the Chancellor and I certainly cannot say anything more to your Lordships this afternoon.
However, that is not the only benefit accruing to the greyhound industry. The introduction of a Bookmakers' Evening Greyhound Service similar to the afternoon service, could provide additional fee income for the sport which will also benefit from the increased public exposure of evening race meetings. Of course, the televising of evening race meetings is a matter for negotiation between the greyhound industry and the bookmakers.
I am grateful for the support of the noble Lord, Lord Howell, who brings to your Lordships' House a wealth of experience of all sporting matters. He discussed both a levy and track ownership. Gambling legislation does not regulate the issues of track ownership, but the usual rules of competition policy apply.
Let me turn to the question of a statutory levy. The Government's position is quite clear. A levy can only be justified if, as is the case with horse-racing, that is the joint wish of racing and bookmaking. There is no such voluntary joint agreement between dog-racing and the bookmakers. I am afraid, therefore, that I have to tell my noble friend that I do not think that it would be right for the Government to impose one, and we do not intend to do so.
I hope that I have been able to allay some of the fears which your Lordships have expressed. I believe that your Lordships welcome the changes to extend opening hours, but that issue is separate from that raised by my noble friend Lord Elton in relation to VAT.
No sport or business can afford to stand still, and evening opening will enable bookmakers to improve the service which they offer to their customers, and that means greater consumer choice, something which is dear to the Government's heart. To close on Saturday evenings would be to deny punters a popular betting opportunity to the detriment of the whole industry.
In the light of the explanation of the Government's reasons for this change, I hope that my noble friend will see that this is not an attack either intentionally or unintentionally on the industry that he represents. As I have said, we want greyhound racing to flourish—we believe that it can—and we are looking carefully at the proposals suggested by the industry. I hope therefore that my noble friend will now be able to support these regulations, and withdraw his Motion.
5.21 p.m.
Lord Newel: My Lords, we have had a very interesting debate this afternoon and I am most grateful to all noble Lords, from all sides of the House, who have taken part. I am especially grateful to my noble friend Lord Leigh for his witty and amusing maiden speech. I hope that we shall hear him on many occasions in the future.
I am sure that your Lordships will be glad to hear that I have no intention of mentioning all those who have spoken, but I should like to make one or two
46
small points to put the matter straight. The noble Lord, Lord Howell, asked what we would spend the levy on if we had one. I am sure that he realises that no politician answers hypothetical questions and we do not have a levy. However, I assure him that there is a list in the office and that there are many things that we could spend it on, such as integrity services, security, dope-testing, or the Retired Greyhound Trust. There are lots of things on the carpet, but we do not talk about it because we do not have a levy.
Many noble Lords have referred to the parlous state of horse-racing, to which I shall return in a moment. As my noble friend Lord Lyell said, greyhound racing does not have an even chance, but I think that I have explained that carefully.
The noble Lord, Lord Wyatt, is one of the House's best-known bookmakers. He is always very kind to me and I am grateful to him. Obviously, he will know that a great many betting shops are now located alongside pubs, so there is a danger. I am not trying to close down betting shops—far be it from me to try to do that—I am simply trying to prevent too much betting, particularly on a Saturday evening. I am afraid that his comment that £4 million comes to greyhound racing from BAGS is rather sad because greyhound racing receives only about £350,000—all the rest goes to the BAGS tracks which are mostly owned by the bookmakers themselves. That is the answer to that point, but we can talk about it again.
The noble Lord, Lord Weinstock, made a brief contribution and apparently does not know the difference between a cinema and a betting shop. I can assure him that betting shops have far more screens than cinemas.
Finally, I come to my noble friend the Minister who sounded extremely reasonable and gave all the usual government answers. He probably knows that it takes two years to get an answer from the industrial tribunal, so anybody who is sacked for not signing on may have to wait two years. That is not a satisfactory situation. As most of those concerned are non-union members, that does not help them very much.
My noble friend also mentioned the 0.25 per cent. reduction in betting duty—a marvellous idea—but it was introduced in April and greyhound racing has not yet seen one penny. Although some agreements have been made with the bookmakers, at the moment nothing has come through. On the point about the levy needing an agreement between the bookmakers and the greyhound industry, I can assure him—I realise that he knows this—that when the original levy was introduced the bookmakers were under great threat of being wiped out altogether and of there being a Tote monopoly. That is why they gave in to a levy. There is no such threat now, so why should they give up all those millions of pounds just to help greyhound racing which they can run in their own way, if they want to, just by using their own tracks. That is not a very satisfactory method.
I said that I would return to the point about racing being in a parlous state. All racing—horse-racing and greyhound racing—is in a parlous state. I am a great fan of horse-racing as many of your Lordships know. Indeed, for many years I was an amateur steeplechase

47
jockey and enjoyed it very much. As I said, I am keen on all racing and it is not just horse-racing that is in a parlous state. The horse-racing industry is sad that it is getting only £47 million. Now it will get another £5 million, making £52 million. Greyhound racing gets absolutely nothing. Therefore, if I can use that ghastly expression, it is not a "level playing field"; but it is an important point. Greyhound racing does not have the same weight. It is therefore important to try to save greyhound racing from going under by not opening betting shops in the evenings.
It is government legislation that has meant that there is no levy and it is government legislation that confines greyhound racing in all sorts of ways. Therefore, I hope that noble Lords will support me. I hope that I shall not impinge on our next debate, but I should like to test the water and to take the mood of the House.
5.26 p.m.
On Question, Whether the Motion shall be agreed to?
Their Lordships divided: Contents, 56; Not-Contents, 110.

Division No. 1

CONTENTS

Addington, L.

McNair, L.

Airedale, L.

Mason of Barnsley, L.

Beaumont of Whitley, L.

Merrivale, L.

Bonham-Carter, L.

Moran, L.

Bridges, L.

Morris of Castle Morris, L.

Bruce of Donington, L.

Mottistone, L.

Clanwilliam, E.

Munster, E.

Cocks of Hartcliffe, L.

Newall, L. [Teller.]

Dainton, L.

Nicol, B.

Donaldson of Kingsbridge, L.

Norrie, L.

Elton, L.

Ogmore, L.

Ezra, L.

Plant of Highfield, L.

Falkland, V. [Teller.]

Rankeillour, L.

Geraint, L.

Redesdale, L.

Gladwyn, L.

Rennell, L.

Graham of Edmonton, L.

Richard, L.

Hampton, L.

Saint Oswald, L.

Harris of Greenwich, L.

Shaughnessy, L.

Hayter, L.

Simon of Glaisdale, L.

Judd, L.

Spens, L.

Kilbracken, L.

Stoddart of Swindon, L.

Kinnoull, E.

Swansea, L.

Kirkhill, L.

Terrington, L.

Leigh, L.

Teviot, L.

Lockwood, B.

Tordoff, L.

Lyell, L.

Turner of Camden, B.

Macaulay of Bragar, L.

Underhill, L.

Mackie of Benshie, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Acton, L.

Carter, L.

Allenby of Megiddo, V.

Charteris of Amisfield, L.

Annaly, L.

Clark of Kempston, L.

Astor, V.

Craigavon, V.

Astor of Hever, L.

Croham, L.

Auckland, L.

Cullen of Ashbourne, L.

Bessborough, E.

Cumberlege, B.

Blackstone, B.

Davidson, V.

Borthwick, L.

De La Warr, E.

Boyd-Carpenter, L.

Dean of Beswick, L.

Broadbridge, L.

Denton of Wakefield, B.

Brooks of Tremorfa, L.

Devonshire, D.

Butterworth, L.

Dormand of Easington, L.

Cadman, L.

Elliott of Morpeth, L.

Campbell of Alloway, L.

Erne, E.

Carnegy of Lour, B.

Fairhaven, L.

48

Ferrers, E.

Orkney, E.

Finsberg, L.

Palmer, L.

Fraser of Carmyllie, L.

Park of Monmouth, B.

Fraser of Kilmorack, L.

Pearson of Rannoch, L.

Goschen, V.

Peston, L.

Gowrie, E.

Peyton of Yeovil, L.

Halsbury, E.

Plumb, L.

Harrowby, E.

Plummer of St. Marylebone, L

Hayhoe, L.

Rathcreedan, L.

Hesketh, L.

Reay, L.

HolmPatrick, L.

Renton, L.

Hothfield, L.

Rippon of Hexham, L.

Howe, E.

Rodger of Earlsferry, L.

Howell, L.

Romney, E.

Hylton-Foster, B.

St. Davids, V.

Ingrow, L.

Seccombe, B.

Jay of Paddington, B.

Selborne, E.

Jellicoe, E.

Shannon, E.

Jenkin of Roding, L.

Shrewsbury, E.

Jenkins of Hillhead, L.

Stedman, B.

Johnston of Rockport, L.

Stewartby, L.

Kinloss, Ly.

Strabolgi, L.

Lauderdale, E.

Strathclyde, L.

Lawrence, L.

Strathmore and Kinghorne, E. [Teller.]

Layton, L.

Lindsay, E.

Sudeley, L.

Long, V. [Teller.]

Swaythling, L.

Lucas, L.

Swinfen, L.

Lucas of Chilworth, L.

Taylor of Blackburn, L.

McAlpine of West Green, L.

Thomas of Gwydir, L.

Mackay of Ardbrecknish, L.

Ullswater, V.

Mackay of Clashfern, L.

Vaux of Harrowden, L.

Manton, L.

Wakeham, L.

Marlesford, L.

Weinstock, L.

Mersey, V.

Westbury, L.

Middleton, L.

Wise, L.

Milverton, L.

Wyatt of Weeford, L.

Mountgarret, V.

Wynford, L.

Mowbray and Stourton, L.

Zetland, M.

Mulley, L.

Resolved in the negative, and Motion disagreed to accordingly.

Water Metering
5.35 p.m.
Lord Cocks of Hartcliffe Lord Cocks of Hartcliffe rose to ask Her Majesty's Government what evidence there is that the introduction of domestic water metering will benefit the domestic consumer.
The noble Lord said: My Lords, I am grateful to those colleagues who have put down their names to take part in a debate upon what I regard as an important consumer matter. On 21st October last year, the noble Lord, Lord Clifford of Chudleigh, initiated a debate on the water industry. In the course of my remarks then, I declared an interest as a holder of shares in Wessex Water. I went on to say that I understood that it had recently acquired a large manufacturer of meter. Subsequently I received a letter from Wessex Water noting my comments, and saying:
"To our knowledge no metering company has been purchased by any water company—and certainly not Wessex Water—this would appear to be nothing but a common rumour that has been circulating for over a year."
I am therefore grateful to your Lordships' House for giving me the opportunity to put straight the record with regard to my remarks on that point.
During that debate there was talk about the role of the regulators of the various privatised industries. I was interested to see an article in the Observer last

49
Sunday which reported that the new Director General of Fair Trading had said that he was unenthusiastic about the prospect of further specialist regulators, and that he turned a deaf ear to them and so forth. Also in the text I saw that Sir James McKinnon, "the controversial gas regulator", was often at loggerheads with BT. That explains to me why I have heard references to that gentleman from time to time as the,
"skinhead of the regulatory profession."
Leaving that aside, the matter is important. In the other place, when my colleagues have asked Questions of the Government about the introduction and controlling of metering, Ministers have leg-glanced them to the boundary with all the grace of Ranjitsinhji, giving the regulator a big boost. My reference to Ranjitsinhji is apt today with the news that we are receiving from Bombay.
The Earl of Longford: My Lords, what is the news?
Lord Cocks of Hartcliffe: My Lords, 108 for three. The Minister referred to Ofwat considering ways to alleviate the hardship and difficulties experienced by a small proportion of customers who are metered. He went on to say:
"The Director General of Water Services has a general obligation to look after customers and consumer interests." —[Official Report, Commons, 27/1/93; col. 1034.]
He was content with the way he was doing his job.
I am sure that the Government will be pleased to hear that further regulators will not be appointed, although they might have had them up their sleeve as one way of denting the rising unemployment figures. I have often thought that there should be a collective noun for regulators. It was suggested to me that "a pride of regulators" might be suitable. I warmed to that suggestion initially, because I thought that a conceit element was involved, but then I realised that it was associated with lions. The best suggestion that I have heard so far is the use of an "arrogance" as a collective noun, because to some extent that gives the idea of the olympic heights from which judgments are dispensed; the intellectual quality, and so forth.
The latest Ofwat paper entitled Paying for Growth, which appeared in February this year, refers throughout to domestic metering as taken for granted. I am sure that if challenged, the Government would call in aid the surveys which are being conducted. There is the general assumption that the argument about metering is over and done with.
Perhaps I may weary your Lordships by quoting from the 1991 Ofwat Annual Report. The Director General launched a consultation exercise. In response five of the customer service committees supported metering as the most appropriate long-term method. The remaining customer service committees were opposed to universal metering, four expressing a preference for a system of banded charges. The report goes on to deal with the two surveys which Ofwat undertook. The first was a questionnaire which was sent out with the water bills in March 1991. The second was conducted by the Office of Population Censuses and Surveys.
I shall deal with the results of those surveys in a moment. However, the general assumption about metering appears to be reinforced. Today I was
50
contacted by people on behalf of Anglian Water who wished to give me some background literature on the question. In view of the previous debate, one might say that that was nobbling the horse in the stable. However, in the course of their remarks, they stated:
"Ofwat has acknowledged that metering is generally regarded as the fairest method of charging".
It has "acknowledged that metering is generally regarded". That is the assumption that we are up against and I believe that it is not correctly founded. Perhaps we may look at that issue closer.
The water metering survey was included with the water bills sent out to 18 million households, and it took the form of a questionnaire. The response, which I mentioned to your Lordships in a previous debate, was only 1.6 per cent., or 290,000 out of the 18 million. The National Consumer Council claimed that those who replied were below-average water consumers who could expect to pay less rather than more once meters were installed. Virginia Matthews observed that large-scale surveys such as that administered by Ofwat are a self-selecting sample and are not representative of the population as a whole. The magazine Consumer Voice stated:
"In none of the surveys were the respondents told that the average leakage is about 25 per cent. of the water supplied by the water companies".
That was reported in the Financial Times on 7th July 1992 under the heading "Polls on Water Metering Mislead".
The questionnaire which was circulated with the bills gave the customers three choices. They were asked to comment on flat-rate charges, metering, banding (or "stepped-charges"). As regards the flat-rate charge, the text states:
"The company charges each household the same amount irrespective of its size. If your water usage is very small, it may be worthwhile opting for a meter".
The leaflet then deals with metering. In respect of banding, it states, under the reasons for metering:
"you would still have an option to meter (as now) which would be worthwhile if your use was significantly less than for your type of property".
The questionnaire asks five questions. A small user is pointed towards the answer which gives one an advantage. Therefore, I do not believe that the results of the questionnaire, pitiful though they were in terms of response, can be used as any form of criterion because people were pushed towards the answer which probably the regulator wanted.
After the debate in this House, the regulator, Ian Byatt, wrote to me stating:
"I fully share your views over our questionnaire to customers and its statistical shortcomings".
The regulator's biography shows that he is a distinguished economist and statistician. One is bound to ask why, if he was aware of the statistical shortcomings, was the questionnaire sent out in the first place? His letter continues:
"Far more weight has been given by my office to the findings of the survey conducted for us by the Office of Population Censuses and Surveys".
The OPCS Omnibus Survey shows that the results need to be treated with caution. Many respondents had not thought through the issue before the interview and they modified their views as the interview progressed. In dealing with the issue, I am obliged to

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Dr. George Gaskell, senior lecturer at the London School of Economics. His name was quoted in an article which appeared in the Independent on 26th October 1991. He supervised the survey on metering in the Sutton area. Commenting on the OPCS Omnibus Survey response about the need to treat the results with caution, Dr. Gaskell stated:
"OPCS estimates that at the beginning of the interviews 54 per cent. favour metering and after about seven questions (perhaps two to three minutes) the percentage drops to 46 per cent.".
Dr. Gaskell went on to say:
"Initially, most people are ill-informed about water charging and until there is a public debate which covers equity and costs to the consumer, etc., I do not think we can reach any conclusion about the likely distribution of preferences in an 'informed public'".
Paragraph 4.1 of the OPCS Omnibus Survey Paying for Water states:
" … it is to be expected that respondents coming unprepared to the subject of water charges and indeed some of the others might modify or alter their views during the course of an interview".
The first survey was conducted by OPCS in January 1991. There are 13 pages of questions before those on metering and they relate to smoking and home ownership. People are selected and then taken through a screed of questions. Buried deep in the heart of the questionnaire—that is, from question 53 onwards—are questions about metering. One wonders about people's stamina and endurance in going through such a screed. Most of the questions pertaining to the above-mentioned issues are straightforward and do not require much thought. Furthermore, it is not necessary to have read about those subjects because the answers are based on personal experience. However, that is not the case in respect of water metering.
The second OPCS survey was distributed in February 1991. On that occasion there were only eight pages of questions before those relating to water metering; that is a mere 36 questions. They were general, personal questions requiring little thought.
In response to the results of the survey and its consequences, the publication Using Water Wisely states:
"The introduction of metering will tend to benefit small households, especially people living in a house or flat with a relatively high rateable value. It is likely to increase the cost of water for people, especially large households, living in a house or flat with a relatively low rateable value. The effect on large households will be magnified if a rising block tariff is used".
The publication continues:
"An important finding from the survey is that customers often have a poor understanding of the most effective ways in which they can reduce their use of water and therefore save costs. This highlights the need for more public education about using water wisely".
An article published in the Daily Telegraph on 12th September 1992 headed, "Water Meters Bring Tension at Bath Time" stated:
"Households with five members or more experience the greatest financial difficulty, often because of unemployment".
If universal metering were adopted, substantial resources would be required. It has been estimated that the metering of 95 per cent. of properties with external meters would involve sums in the region of
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from £3 billion to £5 billion. It is doubtful whether those kinds of sums can be spared at the moment in view of all the other calls on the national purse and Exchequer.
The question of hardship is not difficult to identify. There have been trial metering areas. By far the largest was the Isle of Wight. It must be said that pleasant though it is, the Isle of Wight is hardly typical of the communities which we have in this country. The number of people there on income support is well below average, and the average income of people is well above average. There are numerous well-documented cases of the problems caused to large families by water metering. Those have been well publicised by the National Consumer Council. It says:
"thousands of families will face severe hardship once metering is introduced, and fears that poorer households will sacrifice bathing or clean clothes in order to preserve their spending power. Taken to its logical conclusion, the argument is that dirt and disease among the poor would return to levels seldom seen since the last century".
Small businessmen have been badly hit by metering, and there are stories of some of them being pushed almost to the point of bankruptcy by the unexpectedly high bills.
In the Financial Times on 31st July the Secretary of State for the Environment was reported as being anxious about the impact of metering on poor families, and he stated that that matter clearly needed attention. The Opposition spokesman on environmental protection said that under pilot schemes in areas such as Blackburn:
"metering has nearly doubled water bills for large families with children".
Therefore, basically, there is a problem in that the people who will be adversely affected by metering are those in society who are least able to defend themselves in terms of spending power.
The water regulator, Mr. Byatt, wants customer-friendly schemes to be put in place by companies by early 1993. He says:
"Metering customers is not about payments. It is about giving people choice and saving water where it is needed".
I have spoken about the fact that trial areas were not representative. There are other areas in the country where that can equally be said to be true. I shall not weary the House with those details, but I am sure that we can all imagine that the same objections which there were to the old rating system in many cases will apply in reverse. Households of only one or two people will benefit, but large families will not. Frankly, if the director general is making such a big deal about water meters and how wonderful they are, we should ask why more people are not asking for meters. In the Guidelines on Optional Metering 1990–91 he states:
"25,000 meters were installed at the customer's request — less than 0.3 per cent. of all existing unmeasured households".
As regards installation, I am afraid that this may give rise to fruitful territories for cowboy plumbers— if one can imagine such a thing. I have some anecdotal evidence for the House. A young friend of mine who lives in London told me that he had heard from Thames Water about customer meter reading and he had been asked to read the meter himself. A form was issued on which to do so. My friend tells me that those meters are under a heavy cover out in the

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road and it is very difficult to lift the cover without a special tool. I 'phoned my friend last night and he told me that two of his friends and himself went out and had great difficulty trying to lift off the cover. That raises the question of whether or not there is an interest in this matter for the Health and Safety Executive because it may be that Thames Water will have to issue surgical trusses for people trying to read meters out in the road. Indeed, in future we may see reference in medical literature to Byatt's Syndrome or Regulator's Rupture.
We need a proper public debate about this matter. In the Ofwat publication Guidelines on Optional Metering it states:
"Some companies who allow customers to install their own meters insist on the meter being provided by the company … while some confine the charge to the meter only".
It sounds rather like some building societies which insist on customers insuring with a particular insurance company. We are all familiar with that.
On timescales, it states:
"It would appear from a review of the companies' literature that it is the practice of some companies to request payment in advance while allowing themselves up to 6 months to carry out the work (ie, survey within three months, followed by installation within three months). Such undue delay cannot be considered acceptable commercial practice, even less so where payment has been made in advance".
I do not wish to weary your Lordships longer, but I believe that there has been inadequate public debate and information about this matter. The last point that I wish to put to the House and the Minister is this —and it seems to be quite interesting. In the National Rivers Authority's response to the consultation paper Using Water Wisely, after the introduction, it deals with domestic metering. Paragraph 2.2 states:
"Where it can be shown that proper attention has not been given to the introduction of selective metering, the NRA will not grant licences for new sources".
That seems to me to be the mailed fist in a not particularly velvet glove because pressure is being placed on the water companies by the NRA—that is, not granting licences for new sources—to introduce selective metering. When I was a boy, there was a very crude word that one could apply to that: it was "blackmail". Here we have a further variable introduced by the NRA, and it is the first time that I have seen any reference to it. Therefore, I ask your Lordships to consider very seriously whether we are going down the road which could lead to hardship for large numbers of our citizens without giving the matter proper thought and consultation.
5.57 p.m.
The Earl of Lindsay: My Lords, I am grateful to the noble Lord, Lord Cocks of Hartcliffe, for raising this subject. It may be premature because in a few months we shall have the results of the three year national water metering trials. Nevertheless, metering domestic water supplies raises issues which we can explore in principle. Some data is already available, although it is incomplete.
The price of water is an emotive subject. Many see the water which comes out of our taps as an act of God for which anything other than a nominal charge is iniquitous and unprecedented. Others point to the fact that at present this country has enough water to
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meet all reasonable needs. That may be theoretically correct. However, it overlooks the current situation on regional bases where equating demand with supply is far from simple.
Consumer demand, which is rising steadily by between 1 per cent. and 1.5 per cent, per annum, can be high where water sources are least available and low where they are most plentiful. One area of high and rising demand which is stretching existing resources extends through much of the south and east of England. Furthermore, across those regions the four years up to last autumn saw the lowest rainfall in 200 years. That included unusually low winter rainfalls, which is the season in which water resources are naturally replenished.
Some water is already transferred from one region to another but only where distance and logistics make it cost effective. To embark on a national water grid as envisaged by the British Waterways Board is quite a different matter. For example, re-engineering the canal system to distribute Cumbrian water to the South East and pumping it over three or four watersheds en route requires an investment of such magnitude that it is unlikely to stand up to cost benefit analysis compared with other options.
Such comparative analysis is vital to the interests of the consumer. Existing resources will not last indefinitely and there is already an urgent need in some areas for additional sources of public water; for example, Thames Water is planning a new 33,000 million gallon reservoir in Oxfordshire. London, incidentally, uses 33,000 million gallons of water approximately every 60 days. With the land take for such a scheme measuring five-and-a-half square miles, the planning, environmental and engineering implications are considerable and if the project goes ahead the cost will run into hundreds of millions of pounds. Given such costs, it is obviously crucial that we make the most economic use of existing water supplies. Efficient practice and the elimination of waste among both producers and users must be an integral part of the demand and supply equation. As regards the water companies, the infrastructure required to supply the consumer has needed, and is now receiving, considerable investment in terms of maintenance and renewal.
In 1989, when the water companies were privatised, £8 billion was budgeted over the following decade for the renewal of water distribution networks, with the reduction of leakage as one of its principal objectives. That programme is on target, although if water had not been transferred to the private sector one wonders whether it would have survived current Treasury reviews intact. The investment specifically targeted at leakage in the mains grid will, however, reach a point where it is no longer cost-effective to pursue. At that point attention inevitably turns to the water leakage that occurs in the service piping which connects the consumer to the mains and which is owned not by the water companies but by the consumers themselves. That piping is not at present the focus of much leakage control but is estimated to be the source of perhaps one-third of all leaks.

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That brings me to the need for better practice from the consumer. The water companies consider it part of their duty to make sure that water is not wasted but is used wisely. In fact they have a vested financial interest, which is shared by their consumers, in avoiding or delaying the huge capital costs that attach to new reservoirs or long distance transfers. But how does one promote better practice and discourage waste among domestic water consumers? Without some kind of price mechanism it is difficult. Pleas and exhortations for greater responsibility are of limited effect, human nature being what it is.
Water charges for 99 per cent. of domestic consumers are presently based on the rateable value of their property and in most cases the charge does not distinguish between the over-indulgent and the prudent. Large or excessive usage, bad practice and waste are neither identified at source nor paid at source but are averaged out across consumers in a particular region.
Water charges based on rateable values cannot, by law, be used after the end of the century. In the pursuit of better practice therefore, how appropriate is it to introduce demand-related price mechanisms employing water meters?
There are, I believe, three important issues. The most critical is the extent to which metered charges for water will affect levels of demand and patterns of consumption over the longer term. Initial results from the national trials suggest that metering may reduce domestic demand by between 5 per cent. and 15 per cent. A September 1992 interim report by the Water Metering Trials Group adds the following:
"if there is a two part tariff, which charges more for water at certain times or for higher consumption, then this tends to have a greater effect on demand. Many people suggested before the trials that any impact on demand would not last, but as yet there is no evidence of it tailing off.
The impact on peak consumption is more noticeable. Consumption in summer, when demands would normally be high, fell by as much as 30 per cent. in some of the trial areas. This could be significant, as the cost to the water industry (and its customers) of coping with peaks is considerable".
What is also relevant is that metering domestic supplies should have an impact on the significant leakage that occurs in consumer-owned piping. An externally fitted water meter, close to where a domestic service pipe leaves the mains, will give the consumer an immediate vested interest in making good any serious leaks thereafter; and it is in the interests of all customers in that water region that overall leakage is reduced to a minimum. In some cases, the water pressure may be such that an unknown leak is the equivalent to three times that property's actual domestic usage. I take the noble Lord's point about the weight of the inspection hatches that may have been placed over external water meters that are already in place. Presumably water companies will seek to improve that situation.
If metering tempers demand and if it reduces leakage and waste, the benefits to the consumer will go further than a mere reduction in his or her quarterly bill. The pressure faced by some water companies to
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invest in vast capital projects may be slowed or actually reduced; and for every project deferred there is a saving to the customer.
The second issue raised by metering domestic consumers is the cost to the industry of installation and administration. On the one hand, we can be sure that if we already had meters today we would not be getting rid of them, but, on the other, introducing them on a substantial scale .is not a welcome prospect for the water companies. I believe I am making a rather different point to the noble Lord.
It is estimated that for most domestic properties the installation cost will be between £160 and £200, and that some £3 billion or £4 billion would be needed if all domestic consumers in England and Wales were to be metered. The administration would attract running costs though perhaps one day these could be streamlined with remote reading technology. The sums involved in the widespread introduction of meters are probably irrelevant. Few expect it to be either practical or necessary. What is more likely is that, initially, only certain types of user might be metered. On the domestic front, research may show that those properties with higher rateable values, or those over a certain size, or those with grounds exceeding certain dimensions, may comprise a significant proportion of the higher users.
Thus, meters would probably only be installed on a selective basis. However, it is also likely that the pattern of their introduction would reflect regional circumstances with certain water companies employing meters as a strategic response to specific pressures of demand over supply in their own areas. Some regions already have sufficient infrastructure and resources to cope with forecast increases in demand and will therefore be less enthusiastic about incurring the expense of installing meters.
A marginal benefit may not be sufficient justification for metering. Where the benefit to producer and consumer would become significant is when the consequence of metering existing consumption either delays the need for costly new capital projects or reduces the need for imposing restrictions on certain practices, such as the use of hose pipes and car washes in dry summers.
Metering, therefore, may only be needed among certain types of property in certain areas as part of a balancing act between demand, supply and investment. One estimate from Thames Water, for instance, is that should metering be phased in at least 70 per cent. of its domestic consumers would not be affected.
If metering is so selective, confined to perhaps 15 per cent. to 20 per cent. of some areas, two questions remain. On what basis will the remainder be charged, given that it cannot be on the rateable value? Will some companies opt for a single standard charge while others choose banded charges based on the size of a building or on the number of its occupants or the size of the garden? Would some charges be based on the council tax bands, which I believe Scotland is opting for? The Government are rumoured to oppose this latter option and it would be interesting if my noble friend the Minister would explain why. The second question is that if metering is proved to encourage

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better practice and less waste but is only introduced selectively, how can one reform the habits of those who remain unmetered?
The final fundamental issue raised by the introduction of domestic water meters is that charges based accurately on consumption will hit certain people disproportionately hard, such as large families on low incomes who have been living in houses with low rateable values. The noble Lord, Lord Cocks, highlighted that concern. The water companies have addressed that point and are, I believe, in discussion with the Government on what provision could be made in cases of genuine hardship or unacceptable increases in charges. Also hit might be those who have been used to watering their gardens liberally every day of the summer and washing both their cars every Saturday throughout the year. Below average users, however, such as the owners of small properties, the elderly and two people families will be beneficiaries.
In the national trials, incomplete results to date suggest that the majority have paid roughly the same or less than before the trials started, with two out of five paying 20 per cent. less and only one in five paying a bill that was over £20 greater than their former bills. Of great importance to the noble Lord's Question, however, is that the majority of customers in the trial areas now accept metering as being the best method of charging. An Ofwat survey recorded 72 per cent. of customers in trial areas being in favour compared with 50 per cent. in unmetered but similar trial areas. I know the noble Lord doubted that survey on the grounds of statistical science. He also doubted whether the Isle of Wight was a representative region. The Isle of Wight was just one of 12 areas chosen for the trials.
If domestic water meters improve consumer practices and reduce wastage, if their benefits outweigh their costs and if they are seen to be fair, their introduction must be of benefit to the consumer, the industry and the environment. It is not claimed that domestic metering will solve single-handedly all the problems of equating demand with supply. It might, however, temper unnecessary pressures on the domestic front. Should such pressures remain unrestrained the need for greater and more rapid investment elsewhere will simply accelerate, attracting substantial costs which will eventually have to be borne by both producers and consumers alike.
In conclusion, I believe that we can trust the water companies and Ofwat to come up with the right answer as the industry is reluctant to take on the installation and running costs of domestic water meters unless a clear benefit will result.
Lord Rea: My Lords, before the noble Earl sits down perhaps he could clarify a point. I have learnt a great deal from his extremely well-informed speech. However, he mentioned wastage beyond the point where the water supply goes to the domestic consumer, but I did not hear him say what proportion of water is lost in the mains before it reaches the domestic consumer, but I do not have the figures with me but I understand that in some cases the loss is as high as 25 per cent. Can the noble Earl say how much of that loss occurs in the mains pipes and how much
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is lost by the domestic user after the water leaves the mains? Can he also say what would be the cost of reducing that wastage by the water companies prior to the point at which the water reaches the consumer and how that compares with the cost of introducing widespread metering for domestic users?
The Earl of Lindsay: My Lords, I shall tell the noble Lord, Lord Rea, what I can, but I should point out that I am a disinterested observer and I do not speak on behalf of the water companies and do not have a full brief. I believe that everyone who has studied the water industry knows that leakage from the mains grid has been substantial and was growing until 1989 owing to a shortage of investment. In 1989, when privatisation occurred, a substantial investment programme was put in place and, despite the recession, that investment programme remains on target. The water companies are confident that in time they will reach a point where they have tracked down and corrected all leaks that are economic to repair. Thereafter, if they continued to pursue small leaks with expensive machinery and expensive man hours they will not do the consumer any favours because bills would rise without any benefit.
As water companies reach that stage of solving the problem of major grid leaks, the leaks which occur in service pipes owned by consumers—which are currently estimated to account for one-third of all leaks—will grow as a proportion. I stress that I am not an interested party and my noble friend the Minister may have more information.
6.13 p.m.
Lord Bridges: My Lords, I am sure that we are all grateful to the noble Lord, Lord Cocks, for putting down this Question. It raises a number of issues of considerable importance, which I believe will come closer to the centre of the political arena in the next few years. This is a valuable opportunity for us to increase our understanding of some of the problems that will arise. I too learned a great deal from the speech which we have just heard from the noble Earl, Lord Lindsay.
I should make it plain at the outset that I have no personal interest in this Question except as a small shareholder in one of the regional water plcs and as a domestic metered consumer.
The origins of the current charging system go back a long way, to the great improvements in the public water supply which occurred in the last century associated with the large programmes of municipal improvements which were then undertaken. It is my understanding that it was decided then as a matter of policy not to meter private consumers on public health grounds. It was argued that if the poorest families had to pay for water consumption on a metered basis they might either decline to be connected to the safe public water supply or would use water very sparingly. In either case the public health would suffer. That was a time of explosive population growth in our big industrial cities and of an alarming increase in water-borne diseases. Therefore access to clean water at minimal cost to the poorest was a very desirable

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social objective, as it is in the developing world today. Hence the adoption at that time of a system of charging for water which we have today, still based largely on the concept of the net annual value of the property.
It is interesting that, in contrast, other industrial countries, arriving at a decision some years after we did, generally adopted a quite different system of paying for water based on a metered supply. In the course of the past 40 years I have lived in seven different capital cities around the world. The only country which did not adopt a metered supply was Russia where water charges were set so artificially low that water usage has become profligate and very wasteful. Washing everything under a running tap is now the rule in Russian society. The consumption of water per head in Moscow is, I believe, the highest in the world. Financing the use of water on that scale is one of the many severe problems facing the public authorities in that country. Elsewhere metered supply is the norm and does not seem to produce any particular social or political problems. From an international viewpoint it is our situation which is unusual and our practice appears to be based on historical experience rather than on current needs.
It is worth examining those current needs briefly. Water consumption has been increasing very rapidly in this country as a result of the rise in the standard of living, the number of washing machines now to be found in our homes and improved hygiene. Also, as has been said, much water is wasted because of leakages in the mains. Therefore it is inevitable that the water undertakings have to undertake major investments in order to meet the higher standards which are now set for them by the EC directives. Recent droughts have brought home to us the small margin between normal supply and consumption and the desirability of increasing that margin in many parts of the country. There is a great deal of work to do, involving substantial capital investment by the water companies. That is the core of the matter.
How are we to cope with those needs? The cost of meeting the investment targets can be decreased substantially if we can reduce the quantity of water which is wasted. As was made plain by the noble Earl, part of the problem is already being tackled by the water companies in their extensive programmes of mains renewal, but the consumer can help and reduce his bill by using less water. The best way of doing that is by moving to a generally meter-based system. We are all much more likely to be conscious of the need to stop waste if we pay for what we actually use in the same way as we pay for other utilities. There is no logic in paying for water on the basis of the artificial tax base which is now employed. I believe that the Government were right to include in the Water Act a provision which phases out that system by the end of the present decade. It would be possible to use the new council tax assessment in its place as a basis for payment for water but I would be strongly opposed to that. I too believe that payment should be related directly to consumption as the only sensible long-term solution.
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We must not overlook the social consequences, which were rightly stressed by the noble Lord, Lord Cocks. What will be the effect on the poorest members of society with large families? Those who are users of large amounts of water will undoubtedly need some practical assistance. There are two possible ways of doing that. One way would be through the social security system. While that would perhaps be feasible, I suspect that it would be extremely expensive to devise a scheme which delivered help where it was really needed without a great deal of individual calculation of personal needs and the high administrative costs that would be caused. But perhaps this is something that might be looked into before we get into the debate that is certainly going to break over our heads nationally before very long.
Another possibility might be to relieve certain categories of citizen, such as those on income support, or pensioners over a certain age, from payment of the standing charge when metered supply is delivered. Relief from this charge for the least well off would of course mean an extra burden on the water companies, and that could perhaps be met by adjustment of the K factor to take account of the additional expense. That solution might be more acceptable to the Government than a straightforward compensating payment by the Exchequer.
I should perhaps comment on the question raised by the noble Lord, Lord Cocks, about the difficulty of reading water meters. I had a water meter installed at my house 10 years ago. I lift the grid without any difficulty at all. I am not suffering from Byatt's Syndrome, and I do not see why others should. If these meters are installed in a new system rather than those of 100 years ago, I do not think there need be undue difficulty about that, although of course the cost of installation remains a problem.
I have no idea how the Government intend to reply to this question. But my own suggestion is that the domestic consumer needs a reliable supply of water of high quality and reasonable cost, and that a metered supply will form an essential element in making that possible.
6.22 p.m.
Lord Howell: My Lords, I too join in thanking the noble Lord, Lord Cocks, for giving us the opportunity to discuss these matters. I wish to start by raising moral questions about a charge on water, which is one of God's greatest gifts to us. It is essential to mankind and womankind, as is the air we breath. In view of the entrepreneurial pleas—ideological and theological—that we have heard in this Chamber already, some of your Lordships no doubt still regret that it has not been found possible to bottle the air we breath so that it can be charged for as well.
These are important questions. I thought so when I was Minister of State in the Department of the Environment dealing with water, a subject to which I shall return in a moment. I had urged upon me the need to go for water meters, and I turned it down. I regret that before I became a Minister the Isle of Wight experiment had started. I could not stop it, but I certainly prevented any water authorities from

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extending it. I did it for the good reason that water is supplied by nature, by the Almighty if we are Christians, and therefore it should be freely available to the people of this country.
We all know that it has to be collected, purified, and transported to our doorsteps, and that has to be paid for, but the amount of water that comes through the taps should not be artificially restricted by some payment system such as has been suggested. Water itself should be freely available to the people of this country. That is why I take a fundamental objection, for example, to the views of Mr. Ian Byatt, the director of water regulation, in a paper recently published for Ofwat. He said:
"Water companies should look at compulsory metering for households as one way to meet the growing demand."
I fundamentally object to that. I want the growing demand to be met. There is no reason in this country why the growing demand for water should not be met. When we are dealing with additional factors, such as people using hoses for cars or gardens, or washing various items, it is reasonable to charge additionally in those cases, but as regards the domestic water consumer, he has a right to water.
In 1976, when I was given some responsibility for the drought at that time, I provided the water for the nation. That is something that apparently this Administration is unable to achieve. I reached the conclusion then that there is no shortage of water in this country at all. None at all. There is plenty of water in the North and plenty in the West, and a great shortage in the South and in the East. The question to be considered therefore is the transporting of water from the North to the South and from the West to the East, about which the noble Earl, Lord Lindsay, was talking.
I therefore devised a plan called the national grid by which this would be brought about. I am sorry to say that from the moment I left office after the unfortunate events of 1979 that plan never saw the light of day again. It was soon murdered by incoming charlatans telling us that they were trying to solve the problem of the shortage of water, but they were doing no such thing. Under my plan, although we would use canals where it might be appropriate, the main purpose of a national grid, unlike electricity and gas, was to use the river system. If your Lordships will take time to look geographically at maps you will see that the rivers run conveniently for this purpose. For example, the Severn, a marvellous river, coming from mid North Wales down to the Bristol Channel—
Lord Williams of Elvel: My Lords, it rises on Plynlymon.
Lord Howell: My Lords, I am told that the Severn rises on Plynlymon. Obviously my noble friend has greater knowledge on the precise location than I have. But the point I want to make —and I started to do this when the drought was on—is that we should get water out of the great reservoirs (which incidentally had been supplied by the ratepayers of Birmingham, and great municipal socialists like Mr. Joseph Chamberlain, who is now rejected of course in government circles) and put it in the River Severn, and
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then take it out where we want to take it out. Of course it is too simple a solution for many involved minds. We could then in fact pump it into the Thames. My noble friend Lord Williams will no doubt tell me exactly where the Thames rises, although I think there are different views about that. Water could be easily pumped from the Severn into the Thames, where it then flows eastwards and can be taken out for the benefit of Kent or the benefit of Norfolk, and so on.
The noble Baroness who is to answer this debate will be familiar with the flow of the Tame and the Trent. The Trent flows from West to East, and therefore it would again be possible to put water into the Trent and take it out where we want to take it out towards the east coast. These schemes are feasible, and it is my great regret that they have never been carried out.
What happened instead was that all the new vested interests known as regional water authorities persuaded Ministers that they would all have a regional grid. I then said, "If you are going to do this by means of regional grids, it could conceivably work if each region is connected to the next region" so that water could go round in that way. To its credit I think that the Northumberland water authority did that, and was connected to the Yorkshire water authority. I am not sufficiently up to date to know exactly how that scheme is going, but it is possible to have such a system. Some authorities indicated that they would do that. However, the present Government decided to do away with national planning for water by closing down the national planning department. They allowed almost every region to be autonomous. The idea of a national strategy for our water affairs went out of the window.
The noble Lord, Lord Bridges, and the noble Earl, Lord Lindsay, concede that there could be social consequences from water metering, as does Ofwat. However, the noble Earl stated that the water industry and Ofwat are now talking to the Government on how to deal with the undoubted problem of large families in poor circumstances who are unable to pay.
I make this point on hygiene: that large families in poor circumstances are the very people for whom we wish to provide more water. I should have thought that the provision of water is essential when considering the morality of providing basic services to people in this country. Water meters for such families impose a tax. Neither Ofwat nor anyone else who recognises the problem has ventured to state how the industry should deal with the problem. Those bodies do not say, "We want to put water metering in but we recognise that there will be great social consequences as a result and therefore we as a great industry, a statutory body, will produce a scheme to meet that situation". No, my Lords. As the noble Lord, Lord Bridges, hinted, they say, "This is one more piece of service legislation which we wish the Government to adopt". If I have not carried the Government with me on anything else, I hope that they will agree that the cost of helping the poor and large families to use as much water as they need should not be imposed on the social services system of this country.

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Let us consider Ofwat's hardship survey. It states that 8 per cent. of the population would find it difficult to pay a water bill—that is, 535,000 households. We are not referring to a small problem; that is a considerable number of people. It is a large problem.
A large number of people in this country with medical problems need to use a considerable amount of water. In providing water meters, the bureaucracy must meet the needs of those urgent medical cases which impose difficulties on the families concerned.
At one stage the reason given for water metering was that the rateable value system was ending. I understand that argument. But the scheme which was to take the place of the rateable value system has now been replaced. We shall not have the poll tax. We have gone back to a modified form of rateable value and a banding system. I believe that the ground has been cut from under the feet of people who say that water metering is the only way to deal with the situation left as a result of the collapse of the rateable value system.
I refer to the cost of the operation. I know, because I was involved in the matter that 25 per cent. or more of water was being lost in the mains system. I listened with great interest to what the noble Earl said. However, I doubt whether the investment programmes in such large conurbations as Liverpool and Glasgow have broken the back of the problem relating to the dangerous use of lead piping to transport water. I doubt whether that problem will be solved for a long time. The cost of installing water meters is likely to be considerable and will not justify the fuss that is being created.
What about the army of water meter inspectors who will be required? In the past I have had cause to ask, "Can't we do something about the army of inspectors knocking on the doors of houses all over the country?". I refer to gas and electricity meter inspectors, and now there will be water meter inspectors. It is bureaucratic nonsense. I do not understand how any government who wish to restrict unnecessary expenditure in such areas can entertain the idea. At one Cabinet meeting we considered whether we could have one group of inspectors to view all the meters. However, the uproar from the vested interests which had their financial affairs put into the hands of people not directly responsible to them was interesting to behold at the time. However, more and more people are becoming anxious about the number of people who knock on their doors, saying that they are inspectors of one kind or another. It is a hazard of our modern society whose growth we ought not to encourage.
I am grateful to my noble friend for raising the matter. I do not believe that water metering is necessary for domestic purposes. The charging system can make allowance for the additional use of water for gardens, cars and so on, as it used to in the old days. Let us realise that providence has provided a good, clean water supply to the people of this country. I believe that it should remain freely available to them.
6.37 p.m.
Viscount Mountgarret: My Lords, I am grateful for the courtesy of the House in allowing me to speak briefly. I have been away for a few weeks and had not realised that this interesting and important Question tabled by the noble Lord, Lord Cocks, was on the Order Paper.
The noble Lord, Lord Howell, seems to be living in a country called Utopia. If I heard him aright, he suggested that the water in this country belonged to everyone and that they should have it virtually free. If I have misquoted him, I apologise. But that suggestion has to be impractical.
Lord Howell: My Lords, I am grateful to the noble Viscount for allowing me to intervene. I said that water was provided by the Almighty. If that is regarded as a Utopian proposition, I have to plead guilty.
Viscount Mountgarret: My Lords, I thank the noble Lord for the clarification. However, at the end of the day, , water has to be paid for, and paid for substantially, in particular nowadays when further requirements emanate from that remarkable organisation in Brussels which wants us to improve our water —and I had always believed that our water was substantially better than theirs. Such a provision costs a substantial sum of money.
I do not understand why we are considering the difference between the introduction of national metering of water, leaving matters in status quo, or having the cost based on rateable value (for want of a better word). The situation is no different from that of electricity or gas. There may well be hundreds of inspectors checking up on consumption of electricity or gas. I see no reason why there should not be some check on the amount of water consumed by individual customers. That seems entirely fair and right.
What are we trying to do? Are we trying to save water; or do we consider that it is a commodity available for all in unlimited quantities? I suggest that the former is more realistic. The only way that one can save water is to monitor it. To monitor water, it has to be metered. It is not a difficult matter to have check meters. I believe that I answer the question put to my noble friend by the noble Lord, Lord Howell. Check meters are an efficient and simple method of discovering leaks in a main or sub-main supply before it reaches consumers. If consumers with meters wish to use an unlimited amount of water to water their gardens or wash their cars that is entirely their decision, but they will have to pay for it. It does not seem to me to be fair or right for the next door household to feel that they should be more circumspect about saving water and therefore not water their garden or wash their car to the same extent as their neighbours just because they are not metered. They will pay the same if both houses are rated—I use that expression in advance of the council tax banding which we would probably go onto if we were talking about rateable values. If one wants something in this life one should pay for it; if not, one does not pay for it. Metering is a very good way to check on whether

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there is wastage or unwarranted use of water. Obviously, difficulties can arise in the case of large blocks of flats, and so forth. However, if the electricity and gas boards can get the system right surely it is not impossible for the water companies to devise a sensible and satisfactory system to all concerned. The average household is thought to use approximately 100 gallons of water per day per person. In terms of present charges, that equates approximately to £150 a year for each household, assuming that each household has two people living in it.
The cost of the installation of meters has been blown out of all proportion. The cost is thought to be between £160 and £200—possibly a total figure of several billion pounds. A capital investment is required but in return there should be a charge made for the rent of meters. Speaking on the basis of a very small experience at home where I supply a substantial number of people with water, since the collapse of the rateable value system in the country I put every single property, water trough, and what have you, onto a meter. I have not had one single complaint. I have come across only two cases where elderly persons living on their own have had to pay more for their water during the year than they would have done had it been based upon rateable value. I do not know whether or not that would occur in future if charging was based upon banding under the council tax arrangements, but I do believe that there is some iniquity where the meter rate is of the order of £66 a year and one uses only £75 worth of water per year as a single person. I accept that that seems somewhat out of proportion, but there are probably ways in which that can be overcome.
This matter should be taken seriously. Metering is effective. It will obviate unnecessary leakage and people will be left to decide how much water they want to use. I very much hope that the matter will be given great attention and that we shall see metering as a necessary part of the provision of water to all our people.
6.44 p.m.
Lord Monkswell: My Lords, I apologise to the House for not being able to get my name on the list this morning. For that reason I will not make a long contribution.
First, I should like to thank the noble Lord, Lord Cocks of Hartcliffe, for putting down this Question which is very timely. One asks why the Question had to be asked at all. Fundamentally, the reason seems to me to be that we have attempted to get rid of the rates. I believe it is recognised that the separation of water rates from domestic rates, and the provision of separate bills for households for the supply of water have given rise to many problems. We have a situation where the number of disconnections for the non-payment of water bills has escalated since the introduction of the change. That was virtually unheard of in this country prior to a couple of years ago. We appear to be going further down the road that will lead to problems. Water metering will bring problems to the most vulnerable members of our society and it will be unfair. Other citizens will also
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experience problems. Mention has been made of the large family particularly with small children. Do the Government believe it is sensible to institute a charging system that will penalise manual workers and their families more than white-collar workers and their families? I am not sure that that is the Government's intention but that is how it will be seen.
Water supply is a long-term business requiring high capital investment that is paid for over a large number of years. The investment made in the last century to supply water to the main industrial and urban conurbations is still being used today. One has only to think of the water supply to Manchester or Birmingham to realise the long-term nature of the water supply industry. The use of water depends very much on long-term factors. One thinks of the toilet systems installed in our houses that may last for 30 or 40 years. They determine water usage. Washing machines also determine water usage. One thinks of the difference between showers and baths. They determine water usage. The capital facilities within a household will determine the water usage to a large extent.
Another relevant factor is that water usage will change over time within a particular family. One thinks of a family with young children where frequent nappy changes are required. That will require the high use of water. As that family grows up and changes, the use of water by the household will also change. Why should the payment for water be determined by the situation of a household at one particular point in time when water usage will vary over the years? We need to recognise that the payment for water in our country will be best determined by a system of taxation —as it has been historically for over 100 years —based on the ability to pay. Allusion has already been made to the introduction of the poll tax. That was introduced as a system which was seen to be fairer. Yet in a society where the extremes of income and wealth are getting greater that system of payment is palpably unfair. That has been recognised by the British people and Parliament has sought to change it. We have changed it. We are bringing back a system much more akin to the old rates system. I would argue that between now and the end of the century that system will become much fairer, and much more equitable across society as a whole. In the future, between now and the end of the century, we should look to paying for water by some mechanism associated with the system of fair rates.
6.50 p.m.
Lord Ezra: My Lords, I should like to declare an interest. I have a connection with a company which is developing a system for the remote reading of meters (electricity, gas and water) that might help to solve the problem that the noble Lord, Lord Howell, referred to a moment ago.
The noble Lord, Lord Cocks, in introducing the debate, said that he considered that there ought to be a public debate on the issue. He is quite right, and we are indebted to him that he has given us the chance to

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have a preliminary canter tonight. We have dealt with many of the issues that are likely to arise in the wider debate which will certainly come.
I do not believe that the question of water metering can be taken in isolation. It has to be seen in the whole context of our water strategy. I regard the objective of our water strategy to be to supply consumers with adequate supplies of water, of suitable quality, at lowest practical cost and on a sustained basis. I imagine I have got it about right. Anything that contributes to that end is in the interests of the consumer.
The first thing that has to be done is to make sure that there will be adequate supplies of water to meet the prospective needs. As the noble Lord, Lord Howell, rightly said from his great experience, there are adequate supplies of water in this country, taken as a whole, to meet the current and perhaps projected needs of the country. But I must say that, looking a bit further ahead than perhaps he thought of doing, we might have to contemplate the possible impact of global warming if that should come. If we have an increase in temperature of two or three degrees both in summer and winter, what impact will that have on water supplies? That is something that ought to be studied. But leaving that aside, there is the question of regional imbalances to which various noble Lords referred. The noble Earl referred to it, as did the noble Lords, Lord Cocks and Lord Howell, and others.
I am very pleased that efforts are being made to carry out transfers of water. Over the past year or two during the period of drought many questions have been asked on the Floor of this House about these transfers. I certainly think that they ought to be carried forward as much as possible.
I regret that the concept of a national grid was not pursued more vigorously at the time when it was proposed by the noble Lord, Lord Howell. It would certainly have cost less then than if we were to do it now. That is something very much to be said in its favour. I think that we would be much better off if we had one. But we have not, and perhaps the cost now would be considered too much.
Apart from the question of making sure that there are adequate water supplies both nationally and regionally, we have to make sure that we have an adequate and effective distribution system. The question of loss of water was referred to by many noble Lords. The average leakage in the public supply system is estimated, as I understand it, to be of the order of 22 per cent., varying from 6 per cent. to 36 per cent. That seems an appalling loss of water. Much is now being done, I believe, to put it right. The estimated loss through leakage in consumers' premises is estimated to be of the order of about 8 per cent. Obviously it is in the interest of consumers to try to get that put right. Altogether, one-third of the water that is distributed in this country is lost. That represents a major challenge.
Another aspect of the matter—I believe that the noble Lord, Lord Monkswell, referred to it—is efficiency in the use of water once it gets into the home. There could be technical developments to bring about
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that efficiency. The use of water in toilet systems, for example, could be much improved, as could the use of water in washing machines, and so on. The suggestion has been made that these various items of domestic equipment could well have labels on them showing which were water-efficient and which were not. That would be in the general interest.
All these things lead naturally to the question of charging policy. It fits into the whole pattern of water strategy. The issue in the debate today is whether there should be a metered system such as is adopted in most other countries and in industry and commerce in this country, or whether we should continue to have the kind of system we have now which at the moment is related to rateable value and, after the year 2000, according to the Government's proposals, should relate to some other basis.
There is not the slightest doubt that if the objective is to try to make the best use of water, metering is a much better way of doing it than making a standard charge. Therefore I feel that there is a strong case for metering in those regions which have been, and are likely to continue to be, short of water. It is a sensible thing to do, and Anglia Water are indeed going ahead with a metering system.
Having said that, a very strong case was made—an indisputable case—for those who would be likely to suffer from a metered system; namely, families on low incomes with large numbers of children. There is no doubt that something would have to be done for them. There is absolute agreement among everybody who has spoken tonight that that question has to be dealt with. But in indicating that there is such a social problem, I do not think it destroys the case for metering in general. There is a problem; it has to be dealt with. But I believe that particularly in regions of the country that are likely to run short of water and where other ways of overcoming that could be more costly, metering would be desirable.
Furthermore, I believe that metering ought to be available to people as of choice. Reference was made, apart from to people on low incomes with many children, to elderly people and where there are just two of them living in a small house. I happen to come into that category. Some years ago I changed to a meter. My small house happens to be located in a highly rated area and we are away from it a lot. Within one year I got the money back on the meter. That was a very satisfactory transaction. I feel that people who are in that situation should have the choice of going onto a meter if they wish. I believe that that is generally proposed.
It concerns me that, if we are to go to a system in which some areas are to be metered, let us say those where water is likely to be in short supply, it would raise the question of what type of charging would be applied to the remainder of the country. Clearly we cannot continue ad infinitum on the rateable value basis. There are no rateable values any more and it has been decided—rightly in my opinion—that that system should no longer be used after the year 2000.
I do not think that transferring from rateable value to a council tax basis solves anything. It just goes back to the same type of system. To have a standard charge

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for every household does not seem to me to be a very sensible way of proceeding because one gets wide variations in usage. So the question of banding is suggested. That would be desirable if to some degree the banding could reflect the likely usage. One gets into difficulties there. One can band according to the type of house and according to the occupancy at a certain date, which would presumably have to be declared. But I believe that a lot of thought has to be given to the alternative to metering. We are not there yet. I have looked at most of the documents on the case, as we all have, and I cannot see that much attention has been given to the matter.
In conclusion, I think the noble Lord, Lord Cocks, was absolutely right to raise the matter at this time. I think certain factors in regard to what must be done are becoming very clear.
We must take account of social circumstances. I believe that metering needs to be applied in those regions where there is likely to be a water shortage, but above all we must give a great deal of thought to what kind of charging system would apply elsewhere if there is not to be a general metering system.
7.00 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to my noble friend Lord Cocks of Hartcliffe for raising this matter this evening. I too have to declare an interest, not as a director of a company that reads meters but as one who has a water meter. I have one from Welsh Water in Wales and I shall come back to the problems associated with metering—not that I wish to pursue a personal vendetta against Welsh Water, but I shall return to the point as a matter of general principle in a minute.
The question of metering was fundamental to the Water Act 1989. As the noble Lord, Lord Bridges, pointed out, it was assumed at that time—and it was a fairly easy assumption —that, with rates disappearing and the poll tax arriving, any idea of a rateable value being a possible basis of charging for water was absurd. Even allowing for the fact that it was unconstitutional for private companies to charge taxes, the rateable value was considered absurd since the rateable value would disappear. Thus, it was an easy assumption at the time.
Since then, we have had a rather interesting debate. First, the poll tax disappeared—and we must all be grateful for that. We have got back to a banding property tax and I think we are probably on the right lines, although I could argue with the Government on various aspects of the council tax. Nevertheless, the Government and the Director of Ofwat seem, in all kinds of documents—and your Lordships have most recently had the one called Paying For Growth—to insist that water meters are the right way of setting about charging for domestic use.
Your Lordships have put forward many arguments this evening: they fall into four categories, in my view. First, metering is immoral; secondly, it is inequitable; thirdly, it is impractical; and fourthly, it is unhealthy. I shall address those arguments as I go forward and on the whole I agree with them.
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First, equity: the problem is that if water metering is introduced under the terms of the Water Act 1989, as it is on new properties, it can be introduced only partially. Perhaps I may give your Lordships an example of what I mean. A consumer advice bureau in Essex reports that a man who moved into a new property was told that he had to have a water meter as there was no rateable value on the properties. The resulting bill was roughly twice what people in similar older properties pay under the rateable value system. A consumer advice bureau in South Yorkshire reports that tenants on a new estate have been advised to put aside £7 per week for water. The rateable value would have meant a bill of £3.50 per week.
It has been documented by citizens advice bureaux on many occasions that in each case where water metering is introduced, it appears to give rise to an enormous increase in charges. That is noted by the director in the document Paying for Water: the way ahead and in the document Paying for Growth. I am sure that the Government have noted it. So why should we have the introduction of water meters which give rise to an increase on what people would otherwise pay?
The second point about equity concerned partial metering. The noble Lord, Lord Ezra, gave examples of where there might be reasonable differences, but it seems to me that it is more than a question of reasonable differences: it is the mere fact that in new properties there has to be metering but in old properties there does not. That will give rise to a two-tier system all over England and Wales and probably in Scotland, should the Government decide to get their Bill through to privatise Scottish Water.
The noble Earl, Lord Lindsay, raised the question of responsibility for leakage in the system. Here again, we come to the problem of equity. In the old days, if I may use that expression, under the system of rateable values, the water board was responsible for leakages. In the new days under metering, anyone on the domestic side of the meter is responsible for what happens on their side of the meter. The water company is only responsible for what happens on the water company's side of the meter. I hope the noble Baroness will forgive me, but here I come back to my experience in Wales. I have a water meter. Fortunately, we have a spring so most of the year we use the spring. When I got home I received a bill from Welsh Water plc for £20,000. It so happened that that weekend I was speaking to the Welsh Heart Foundation and I thought that I would probably be a candidate for treatment by the foundation when I received that bill for £20,000. It turned out that they were claiming that it was all due to leakage on my side of the meter. I said that it was impossible, it simply could not be true. However, they responded, "Yes, it is". I said, "Well, you must take me to court, I'm not going to have this". Then they changed their minds and said, "Oh yes, the meter got stuck, so we won't worry you any more and we will put in a bill for £20". I said, "That's fair enough, I'll settle for £20". Nevertheless, they had been prepared to send bills at random around the country. Fortunately, I was in a position to argue about it and they accepted my

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argument. I should have been able to take them to court but people who are less advantaged than I do not have that privilege. That is again where equity comes in.
The second point is that meters are impractical. The Water Act states simply that all households should have access to supplies. That is an excellent principle. The problem is that the rise in water prices and the extraordinary rise in the number of disconnections —and the noble Baroness no doubt has the figures —mean that houses which are disconnected as a result of the appropriate procedures stop being houses which are habitable under Section 604 of the Housing Act 1985. So the more metering and disconnections continue, the fewer houses there are which are habitable. The result is that environmental health officers will have to come into the matter and argue with the water companies about the process of disconnections which we all thought had been established in the code of practice under the Water Act.
The third argument is that metering is basically immoral. There I agree with my noble friend Lord Howell. I feel that water is a gift of God—if one believes in that kind of thing—and we should not put a burden on those who are less able than others to pay for their water.
The last point is that it is unhealthy, and a number of noble Lords have made that point. Because of increased prices, the combination of high tariffs and metering will almost certainly lead to an unhealthy decline in water use. There will be less washing of clothes; fewer baths; people with eczema will suffer, as will people with other skin infections. Again, the intervention of environmental health officers will lead to enormous extra costs.
All this could be fairly easily handled were it not for the attitude of the water companies themselves. In this respect I come back to Welsh Water. If water companies see it as their duty to satisfy their shareholders, to award large salary increases to their chairmen and executive directors, to take over hotels, to take over electricity companies, to operate as entrepreneurial institutions, they are displaying an arrogance which is not permissible to custodians of what is a natural monopoly on which life depends.
I shall give the House one example of the arrogance of Thames Water. One would have thought that it would be anxious to encourage urban development corporations, a subject very near to the Minister's heart. Thames Water insists to the urban development corporation in London that, unlike all other utilities, there have to be advance payments for construction for connection to the mains. In the case of all other utilities the UDCs are generally able to negotiate "pay-as-you-go" arrangements. Only water differs in this respect. That is an example of the rather unpleasant attitude of the water companies.
What are the conclusions that arise from my noble friend's Question? The first is that the main plank for the argument for metering—that rateable values are to disappear—has now been removed, a point made by the noble Lord, Lord Bridges. We are now going back
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to a banded property-related and income-related tax. Incidentally, I add one rider to the point made by the noble Lord, Lord Bridges, that these matters are satisfactorily dealt with in other countries. The noble Lord, as a distinguished member of the foreign service, no doubt had the benefit of living in apartments organised by the Foreign and Commonwealth Office. I lived in Paris as an ordinary citizen for four years, in Brussels for 18 months and in Rome for a year. I never knew what on earth I was paying for the water because it was all subsumed in the rent that I was paying—and the concierge fiddled the figures anyway. So the idea that the system works in any meaningful sense for the private individual in the great continent of Europe is one of which from my personal experience I can fairly easily dispose.
Pre-payment meters are even worse because they lead to self disconnection. If one cannot afford the penny in the slot, the shilling in the slot, or whatever it may be, pre-payment meters, which are now being adopted by two water companies, will lead to self disconnection with all the problems involved. That is the first conclusion.
I turn to the second conclusion. I agree with the noble Earl, Lord Lindsay, that leakage is all important. I am sceptical about the Isle of Wight evidence. I do not believe that what is coming out of the Isle of Wight is necessarily true for the country as a whole. Furthermore, we have seriously to address the problem of leakage control, not on an economic basis, as the noble Earl tried to imply —the idea that we should do everything economically viable to stop leakage in the system—but on the basis of stopping leakage in the system, full stop. As my noble friend Lord Howell said, water is not an economic commodity.
My next conclusion is that a two-tier system of metering and non-metering is, as the noble Lord, Lord Ezra, pointed out, in some way inevitable and that we must cater for that. But, if there is to be metering—this is my fourth conclusion—there must be, in spite of what Mr. Byatt of Ofwat said in his report, some adjustment for the social costs of what is happening. It is no good simply saying that water is an economic commodity and that we do not care about the social costs of the introduction of metering. That is the way forward to disaster. The fact of the matter is that privatisation of water as a natural monopoly, a commodity without which life cannot exist, has led to all the muddle which the Government now find themselves in.
I need hardly say that not only has the debate been useful but I do not think that the Government have even started to take the problem seriously. I suppose we should not be surprised about that but I hope that the noble Baroness, when she comes to answer, can assure us that the Government are taking seriously a problem which, as the noble Lord, Lord Bridges, said, will be on the agenda politically—right at the top perhaps—over the next four or five years. If they cannot ensure access to supply at all times for everyone at a fair price they will find that people will

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tell them to pack their bags and go. The issue is that important. I hope the noble Baroness recognises that and I look forward to hearing what she has to say.
7.16 p.m.
Baroness Denton of Wakefield: My Lords, I am grateful to the noble Lord, Lord Cocks, for giving the House the opportunity to discuss the question of water metering and for giving me the opportunity to examine the issue from the consumer's point of view. The noble Lord made reference to cricketing skills. I am beginning to wonder whether the noble Lord's own sport is regulator baiting. If it is, I am sure that we shall be able to bet on the evening.
The use of meters as a means of charging for water and sewerage services is not new. A substantial number of households in the Malvern area have had their use of water metered and have been charged on that basis for more than 100 years. As several noble Lords have pointed out, it is indeed commonplace in Europe and the United States. However, it is only in recent years that water companies have been looking seriously at the potential of installing water meters as a method of charging for their services.
Your Lordships will be aware that all water companies must move to a new method of charging for their services by the year 2000 when charging for water and sewerage on the basis of rateable value of property will be prohibited. The companies are considering a number of options which include metering, a flat rate charge and charges which are related to the classification of property into a number of bands based on certain criteria. It is for each water company to decide on its preferred method of charging according to the particular circumstances in its operating area. It must, however, satisfy the Director General of Water Services that the charging method it chooses and the associated tariff does not give undue preference to or unduly discriminate against any class or group of customers. I agree with the noble Lord, Lord Ezra, when he says that the alternative means of charging other than metering require close attention.
I have heard the matter disputed by noble Lords on the Opposition Benches, but I believe that water metering is potentially the fairest method of charging. There are matters that have to be analysed and worked upon in association with this; but water metering would seem to offer that. Ofwat is not suggesting that it is a universal solution. The director general's published conclusions following consultation on Paying for Water set out a strategy that aims among other things to respond to the views expressed by many customers that they should pay in relation to the volume of water used. I hasten to reassure the noble Lord, Lord Cocks, without indulging in an analysis of which are the most successful market research methods and questionnaire methodology, that the main purpose of the survey was to give customers an opportunity to express a view. Indeed, there is no firm evidence to back up the NCC's suggestion that those who replied were not average water consumers or were only those who could expect to pay less under metering. Perhaps I may also point
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out that the surveys were only one part of the whole consultation exercise. Views were expressed from 30 consumer organisations, and individual letters were received from about 2,000 customers as well as from the 10 regional Ofwat customer service committees who have a statutory duty, as your Lordships know, to represent the views of customers.
The aim of the director general's strategy is to extend metering selectively in places where the overall benefit to customers outweighs the cost of installation; and to improve the customer's awareness of the right to opt for a meter at their own expense, as many of your Lordships have, in order to save money on their bills. I was pleased to note that as regards noble Lords who have benefited from that system, the balance was rather better than for those who seem, momentarily, unbenefited. There is also the strategy to develop tariff structures so that payments are more closely related to water use and rely less on standing charges and lump sum contributions for connection to the system.
It is important—I believe that my noble friend Lord Lindsay drew attention to it—to appreciate that we are dealing with a precious commodity, the supply of which must be used efficiently. We are asking that the consumer has the opportunity to choose between the volume of water used, which metering allows them to know, or the cost of an additional reservoir which, put on to their bills, would create infinitely greater hardship than some of the charges talked about by your Lordships.
The director general concluded that a rapid switch to metering would be unnecessarily expensive and advocated a selective approach, concentrating on areas where supplies are short and where the discretionary use for such activities as watering gardens by sprinklers is high or where the cost of installation is low; for example, in new properties or when work is being carried out on existing service pipes.
Most water companies have introduced metering for new or converted properties which do not have a rateable value. Three companies in the South and East have recently announced plans to compulsorily meter existing properties. Other companies in the South with water resource problems may follow that lead.
The Question tabled by the noble Lord, Lord Cocks, asks specifically about the benefits which metering will bring to the domestic consumer. I am sure that he would like to think that those with swimming pools, sprinklers and Range-Rovers to clean, will pay more than the person living alone in a small flat. All water companies are required to operate a meter option scheme whereby customers may opt to have a meter installed at their own expense. Many customers who have taken advantage of that scheme have indeed benefited from savings.
The impact of compulsory metering on customers' bills is in general less than many people expected. Unfortunately, I cannot share the noble Lord's "Betjeman" view of the Isle of Wight. The recession has hit the Isle of Wight as well as other places. Data from the metering trials has indicated that about

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two-thirds of the customers paid about the same or less than they would have done under the rateable value system of charging.
Paying for the volume of water used also gives customers an element of control over the size of their bills. I accept that water is essential to life, and that there are minimum requirements for the maintenance of health and hygiene. Unfortunately, I cannot accept the comparison with air made by the noble Lord, Lord Howell. That seems to require rather less—if any—infrastructure compared with water. I fear that although it is God-given, I have yet to view God as an effective plumber. Beyond that, paying by volume means that customers are in a position to decide how much they want to spend on water, and they can influence the level of their bills by reducing discretionary use.
The noble Lord, Lord Monkswell, gave a very good argument for metering in drawing attention to the fact that people with washing machines and other equipment can make the decision as to the amount of water for which they will be charged. But the director general is ensuring that increases in water charges are kept to the minimum necessary. They may well increase by more than the rate of inflation—at least up to the end of the century—in order to finance improvements in water quality and sewage treatment required to meet EC standards, and for the restoration and maintenance of the existing system.
In this period of rising prices, the ability to influence the size of water bills will be welcomed by many customers. In areas where water demand is increasing and supplies are scarce, the compulsory metering of households, even for part of the company's area, may allow the costly development of new resources to be deferred and then result in lower bills. Water service from the installation of meters may also produce benefits to consumers during periods of low rainfall. Again, evidence from the Isle of Wight shows that where meters have been progressively installed, during the recent drought in the South-East it was possible to maintain supplies without any of the restrictions such as hosepipe bans which were enforced in many areas on the mainland. There can be wider environmental benefits where a reduced demand from metering can lead to lower abstraction and consequently an improvement in maintenance and water flow in rivers.
I can understand that many people, and everyone in your Lordships' House, has reservations about the impact of metering on large, low-income families and households containing someone who needs to use unusually large amounts of water because of a medical condition. As a result of these worries, we conducted a survey jointly with the Office of Water Services on the social impact of water metering. It was conducted in the 12 metering trial areas, and about 6,000 households were interviewed.
Your Lordships will be interested to know that the survey found that most households have not experienced difficulties as a consequence of metering, and that a large majority thought it reasonable to meter water. Only about 3.8 per cent. of the customers
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interviewed could be regarded as having suffered some form or degree of hardship. I agree with noble Lords that the matter must be dealt with. I believe that it is a larger problem than that identified by your Lordships because not only is the cost of water expensive for large families—possibly single parent families—but we also have to be concerned about the heating costs for that water. There is an issue here which is not by any means restricted to water.
I accept that the metering trial areas are not representative of the country as a whole and that metering in other areas could possibly result in higher rates of hardship than were found in the survey. I am pleased to assure noble Lords that we are looking at the findings of the study and considering possible ways of alleviating the kinds of difficulties experienced by some households.
Lord Monkswell: My Lords, I am grateful to the noble Baroness for giving way. She mentioned the inquiry into the effects of water metering. She seems to have spoken only in terms of the effects on individual households. Have any measures been taken to judge the general effects on society of water metering? I am thinking in terms of the effect of the disconnection of water from a block of flats which resulted in an enormous smell in the surrounding neighbourhood. Can the noble Baroness say what is the effect likely to be on society at large and not just on the individual household?
Baroness Denton of Wakefield: My Lords, the overall effect has to be taken into account. Moving to the subject of disconnections, the Government believe that customers should pay their bills. We support the actions that the director general has taken following the increase in the number of customers who were disconnected for the non-payment of their water charges during the year 1991–92. There has been some welcome improvement in the recorded level of disconnections in the six months to 30th September, but it is too early to predict the impact of the director general's actions on the number of disconnections. We believe that disconnections should be limited to those who can pay but who choose not to. Such people should not fall as a cost on those who genuinely cannot pay or on those who make every effort to pay. It is important that that is understood.
I understand that there was an unusual case of tenants being disconnected, and perhaps that is what the noble Lord, Lord Monkswell, was referring to. The case involved 16 out of 114 tenants. The local authority was alerted and all those who were contactable had their supply restored quickly. Local authorities have the powers to deal with such matters and, as can be seen in this case, can deal quickly with them.
Perhaps I may thank my noble friend Lord Lindsay for bringing his usual well-informed views on this matter before your Lordships' House and for drawing attention to the enormous infrastructure spend which is essential in relation to water. The noble Lord, Lord Bridges, drew attention to current needs, to the situation as it is now and to the fact that householders have been happy to be able to measure their

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consumption of other utility services. The noble Lord, Lord Ezra, raised a point which I hope answers that of the noble Lord, Lord Howell. He said that technology will soon mean that meter reading does not have to take place inside a house. That will be a great social benefit for all concerned.
I have to admire the knowledge of the noble Lord, Lord Howell, on water matters. It is perhaps greater than that of most of your Lordships, but I certainly do not suggest that that would ever allow him to be categorized as a "wet". However, I have to be philosophically opposed to his views. I must advise him that the long-distance transfer of water, using rivers and canals, has been considered, and although it was not rejected out of hand it could, however, cost several billion pounds. The National Rivers Authority continues to examine the possibility of other forms of long-distance transfer and whether it would be beneficial. Again, it is important that costs are kept down. There have been some criticisms of the use of the word "economically", but I believe that for the benefit of the users we should be looking at the economic delivery of water. We are talking about the cost to and the load on families.
My noble friend Lord Mountgarret referred to the need for efficiency in the delivery of this service. I was pleased to hear the noble Lord, Lord Ezra, identifying the fact that water is used most efficiently in areas of shortage if it is metered. Everything that we are seeing leads to that conclusion.
My noble friend Lord Lindsay asked about council tax valuations. We are aware that some water companies have asked about using council tax valuations as a basis for their future methods of charging for water. Your Lordships may recall that during the passage of the Local Government Finance Act 1992 we said that, as a general rule, it was not our policy that whole valuation lists should be sold to third parties which compile data bases of personal information. Regulations will be necessary if the valuations are to be used for other purposes. We shall consider whether to allow the use of valuation lists for
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water charging purposes as part of our deliberations on the consultation paper which seeks views on these issues.
The noble Lord, Lord Williams, referred to the concern about prepayment meters. They are intended to help customers to budget and to avoid getting into debt. A water key budget system has been developed and is currently being trialled by Severn Trent Water plc in the Birmingham area and is being monitored closely by the Office of Water Services. It is similar to the scheme which is used by the gas and electricity services. It enables customers to buy as much water as they can afford when recharging the water key. I am pleased to tell the noble Lord that if a customer fails to recharge the water key before the credit runs out, the system allows water to be obtained for a further seven days. It is well recognised that we do not want to put such people at a disadvantage.
The noble Lord also referred to company profits, dividends and directors' salaries. The water companies need to be profitable if they are to fund the considerable capital investment programmes that we need. The remuneration of directors and senior managers is a matter for the companies and their shareholders. However, we have made it clear that customers are entitled to look to the leaders of the regulated water companies to set an example. I endorse that view wholeheartedly.
The failure to pay bills is not currently restricted to areas where there is metering. Nearly 1 million summonses were issued for the non-payment of bills in 1991–92. For some people, paying water bills is a problem whichever method of charging is used. As I said, we should endeavour to deal with that problem.
I close by once again thanking the noble Lord, Lord Cocks of Hartcliffe, for tabling this Unstarred Question. I thank also all noble Lords who have spoken and brought extremely well-informed views to the debate. Whatever the views expressed, it can only be to the benefit of consumers when matters such as this are discussed in your Lordships' House.
House adjourned at twenty-two minutes before eight o'clock.