Lords Sitting of 28 April 1994

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Lichfield: The LORD CHANCELLOR on the Woolsack.

Pergau Project
Lord Judd Lord Judd asked Her Majesty's Government:
What lessons they have learned from the Pergau hydro-electric project and what action they are taking to ensure proper administration of projects financed under the aid and trade provisions in future.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, a number of lessons were learned from the Pergau project. They were taken into account in the wide-ranging review of ATP announced last year. The appraisal, approval and monitoring procedures for ATP projects have been brought into line with those applied for other bilateral aid projects.
Lord Judd: My Lords, quite apart from the sad diversion of aid money to pave the way for arms sales, does the Minister now agree with the evidence given by her former Permanent Secretary to the PAC that this vast project was,
"unequivocally a bad one in economic terms [and] would not be …[an] effective use of aid"?
Does the Minister accept the PAC findings that the project appraisal was unacceptably rushed and that, because of the extraordinarily rapid and large rise in the contract price, her department should have used the long interval before the project finally went ahead to try to strike a better deal in the interests of the Malaysians and of the British taxpayer? Above all, can the Minister categorically assure the House that no projects under the important aid and trade provisions will go ahead in future unless they are both economically and developmentally sound?
Baroness Chalker of Wallasey: My Lords, the noble Lord's last point is the very point that we took up in the ATP review. It was a wide-ranging review. We concluded not only that the scheme should continue but that it should focus on countries with a 1989 per capita income of under 700 dollars. That means that we now have a system which can benefit the countries which most need aid as well as helping British companies to gain contracts overseas.
As regards the noble Lord's remarks about the PAC findings, he will know that it is a convention of Parliament not to comment until the Government respond formally in a Treasury minute to the report. So far as my former Permanent Secretary is concerned, I gave evidence in similar terms to the Foreign Affairs Committee, and that is all on record. I believe that we have learned from the Pergau project. However, I also know that the project will provide electricity to the Kelantan part of Malaysia which badly needs it; that the
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project is on time; that it is entirely within budget; and that it will start to produce electricity for the people of that very poor region in August 1996,
Lord Judd: My Lords, is the Minister saying that she disagrees with the judgment that her former Permanent Secretary gave to the Public Accounts Committee?
Baroness Chalker of Wallasey: My Lords, I can only refer the noble Lord to the evidence that I gave for over two hours to the Foreign Affairs Committee. In giving that evidence, I made it perfectly clear that I did not think that one could look at the project on economic grounds alone. I also made it perfectly clear that there were wider considerations. I abide by the Government's decision on the matter. The ODA accounting officer made it absolutely clear that, in his view, no issue of propriety was raised by the decision to fund Pergau. That is an important point.
Lord Avebury: My Lords, the decision to impose a 700-dollar per capita income limit on ATP projects is presumably designed to further the Government's policy of helping poor countries. However, does the Minister agree that the concentration of ATP money should be on countries which are well below the threshold of 700 dollars? Bearing that fact in mind, does the Minister also agree that ATP projects in Indonesia —only just below the threshold of 700 dollars—are not within the spirit of that limit?
Baroness Chalker of Wallasey: No, my Lords. The answer to the first question of the noble Lord, Lord Avebury, is, yes. We believe that there should be a. sharper focus on poorer countries. But in order to have any successful project of that type, there has to be both a willingness on the part of the government concerned and an ability to utilise the project. That severely restricts the number of countries which may benefit from ATP. It is concentrated on those with below 700-dollars per head income per annum. It will continue to be looked at in the light of the very strict rules now in force.
Lord Campbell of Alloway: My Lords, does my noble friend the Minister agree that, to some degree, charity begins at home and that it is legitimate in such affairs to take into account the employment prospects in our own country?
Baroness Chalker of Wallasey: My Lords, there is room for charity at home and for giving British companies the opportunity to win those contracts abroad for which the German, the French and other governments all give far more help than we can through the ATP budget. It is interesting to note that, although work is still under way on the Pergau project, we estimate that over 2,400 man-years of employment are being generated by the project and much of that work is benefiting sub-contractors throughout Britain.
Lord Cledwyn of Penrhos: My Lords, can the Minister say when our relations with the Malaysian

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Government are likely to improve and when she thinks that trade links between ourselves and that country will be renewed?
Baroness Chalker of Wallasey: My Lords, the noble Lord, Lord Cledwyn, is asking me to look into a crystal ball. It is much easier to say that we all hope that it will be soon. We are certainly working to that end because Malaysia is a very important export country for British firms.
Lord Jenkins of Putney: My Lords, as the Minister said, we obviously cannot look into the future. However, can she at least give the House in a few sentences the basic cause of the bad feeling which arose between the Malaysian and the British governments over the issue because, if all that the Minister says is true, one would have thought there would only have been a good feeling generated all around? Why is that not the case?
Baroness Chalker of Wallasey: My Lords, I am sure that the noble Lord reads newspapers that I no longer read. They probably had rather more to do with the problems regarding Malaysia than anything done either by this Government or, indeed, by individuals. It is interesting to note the Malaysians' very keen attention to diversifying their whole power provision. While we were seeking to get them to look at means of providing power other than by a hydro-electric dam, they wanted such a dam in order to diversify their means of providing power, especially to the Pergau region.
Lord Bruce of Donington: My Lords, is the Minister aware that most Members of the House are familiar with the doctrine of collective government responsibility in this whole sordid affair? Is the Minister also aware that, after reading the evidence, noble Lords will be satisfied with the honourable part that she played?
Baroness Chalker of Wallasey: My Lords, I am extremely grateful to the noble Lord. He knows very well that there are times when, inevitably, one takes one view from an economic stance and another view because there are wider considerations involved. That is exactly what happened in the present case.
Lord Judd: My Lords, will the Minister not accept that the aid and trade provision, which is important, must be based upon sound development priorities? That is what it is about in the aid budget. Will she not therefore accept that this money could have been put to far greater use for humanitarian purposes elsewhere in her aid budget in Africa and Asia instead of being directed to a project which was so economically unsound?
Baroness Chalker of Wallasey: My Lords, if the House will forgive me, I am getting a little tired of being lectured by the noble Lord, Lord Judd. I have made it my business to make sure that ODA money is efficiently spent. This project will bring power to an area of
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Malaysia which is short of power. The way in which it was done may not be the way the noble gentleman would have done it—
Noble Lords: The noble Lord!
Baroness Chalker of Wallasey: I should have said the way the noble Lord would have done it. I remember his earlier life. I do indeed say that I believe we spend our money well. Even if not exactly the same figures were involved, money would have been spent anyway on providing power in Malaysia.

Agricultural Aid: Claim Forms
3.10 p.m.
Lord Carter Lord Carter asked Her Majesty's Government:
What steps they are taking regarding errors by the Ministry of Agriculture, Fisheries and Food on Integrated Administration and Control System forms (IACS) in the light of the heavy penalties for farmers who complete the forms wrongly.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, it is the responsibility of farmers to ensure that their claims for aid are accurate, complete and submitted by the deadline. Where errors have been identified in the field data printout, we have contacted affected applicants, notifying them of the section of the printout in which mistakes occurred, offering help and advice where necessary. We will deal with errors on claims as sympathetically as we can within the rules.
Lord Carter: My Lords, I thank the Minister for that Answer. Is he aware that farmers went to considerable trouble and expense last year to get their IACS forms completed correctly and submitted on time? Does the Minister agree that it is extremely disappointing that after all the trouble taken by farmers these forms are now coming back to them with a large number of Ministry errors, some trivial and some serious? Can the Minister confirm that it is the responsibility of farmers to point out these errors to the Ministry, and if they fail to do so, and thereby submit incorrect forms, could be liable and lose out quite heavily? Is that fair?
Earl Howe: My Lords, as I pointed out, there have been errors on the field data printouts and in the minority of cases where those errors have occurred we have notified farmers accordingly. I am sure the noble Lord will understand that IACS is an anti-fraud measure and it is very important that farmers take the trouble to fill in their forms correctly. They have time to do so. We will, as I say, be as understanding as we can over simple clerical errors but there comes a point where, if the error is a substantive one, we have to abide by the rules and I think that is in the interests of not only the UK but farmers in general across the Community.
Lord Stanley of Alderley: My Lords, can my noble friend tell me how many farmers have submitted their forms so far? If farmers submit their forms right at the very last moment are they not, just this once, just a little bit to blame?
Earl Howe: My Lords, I am grateful to my noble friend and I endorse what he says. Farmers should not leave their applications until the last minute because where applications are received close to the deadline and are found to be incomplete it could then be difficult for the applicants to amend and return the forms before the deadline. Therefore, I urge all farmers to make as much speed as they can in submitting the forms.
Lord Carter: My Lords, will the Minister confirm that the Ministry of Agriculture is, I believe, using satellite sensory testing to check on the accuracy of farmers' IACS returns? With the number of errors which are now being found on these forms, does the Minister agree that some sensory testing might not come amiss in the Ministry of Agriculture?
Earl Howe: My Lords, we have said publicly that we will be using satellite surveillance to check farmers' claims. We will not, however, be relying solely on those checks. On the ground inspections will also take place to verify the satellite imagery. But I would just say to the noble Lord that I would have a little more sympathy with his argument if it were a case of farmers paying the Government money rather than the other way round.
Lord Mackie of Benshie: My Lords, will the Minister tell the House whether the Government now consider it more important for farmers to plough, sow, reap and mow, or to fill in the forms correctly? Will he also say whether the measures taken across the Community that he spoke of are as severe as the measures applied in this country?
Earl Howe: My Lords, as the noble Lord will know, the IACS is a major tool in the maintenance of the level playing field across Europe, which I am sure noble Lords welcome. With regard to the first part of the noble Lord's question, farmers are left in no doubt that upon the IACS exercise hinges a great deal of money and it is in their interest therefore to approach the exercise with due care and diligence.
Viscount Addison: My Lords, does my noble friend the Minister agree with me that farmers would be better managers for having the IACS?
Earl Howe: My Lords, I am sure that my noble friend is right. For one thing it is always of benefit to a fanner to know the acreage that he is farming and to concentrate on the options for husbandry with which the EC rules present him.
Baroness Robson of Kiddington: My Lords, does the Minister agree that for many farmers it is difficult to fill in these forms? One needs to be almost a chartered accountant to do so. Does he agree that for certain farms about four ordnance survey maps are needed to work out the acreage accurately, and that cannot be done very quickly? It is a difficult form to complete.
Earl Howe: My Lords, I would say to the noble Baroness that the simple truth underlying this is the more flexibility that one builds into agricultural schemes and the more options one gives to farmers, the more boxes one needs to print on the form. Having said
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that, we have gone to some trouble to make the forms as user friendly as we can. We also trialled the form with a number of farmers and I must say the feedback was positive.
Lord Dixon-Smith: My Lords, does not my noble friend the Minister agree that the time spent making sure that the IACS return is correct is extremely worthwhile and pays a considerable dividend?
Earl Howe: My Lords, I completely agree with my noble friend.
Lord Carter: My Lords, I apologise for coming back to this matter, but it is the errors by the Ministry that we are talking about. Of course it is important for farmers to complete their forms correctly, but it is their job to point out the Ministry's errors to the Ministry, and if they do not they are liable.
Earl Howe: My Lords, as I said, there have indeed been some errors on some field data printouts, but I think that the noble Lord is in danger of making rather a meal out of this. A mistake, if it occurs, should be pretty obvious to anyone affected by it. We have written to all the farmers involved and, in general, I would say that farmers are well aware that the onus is on them to complete the forms accurately.

Council Tax: Banding Appeals
3.17 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
How many dwelling-houses have been placed in bands for council tax purposes; how many of these have been placed in bands G and H; and how many appeals about banding decisions are outstanding.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley): My Lords, 21.3 million dwelling-houses have been placed in bands for council tax purposes in England and Wales. Some 780,000 of these were placed in band G and 123,000 in band H. Some 614,000 appeals about banding decisions were outstanding at the end of March.
Lord Boyd-Carpenter: My Lords, is not my noble friend concerned at the very large number of appeals still outstanding, and is it not a fact that many of these were submitted many months ago and have not been dealt with, while the tax is being demanded in full at the rate in advance of appeals being decided?
Lord Henley: My Lords., I start by saying that some 96 per cent. of householders have accepted their bandings, which is a pretty good percentage when one considers how unobjective some people can be about the valuation of their property. As to the number of appeals, I can assure my noble friend that almost 33 per cent. were cleared by the end of March, which was well within our target, 80 per cent. will be cleared by the end of the year and the remainder will be cleared in the early part of next year.
Lord Eatwell: My Lords, is it not clear that the entire procedure of appeals is in a shambles and that many people are paying large sums of money which are then being held in local authority accounts, to those authorities' benefit, for substantial periods of time? Could the Government at least show some good faith in this matter, admit their liability and agree to pay interest on sums awarded in the case of successful appeals?
Lord Henley: My Lords, the noble Lord is talking about relatively small amounts of money, and to pay interest on those relatively small amounts when someone has merely shifted from one band down to another would not be within the realms of practicality. As I said, we set ourselves pretty demanding targets and we have met those targets, as I made clear. Almost a third were cleared by the end of March; we hope to have 80 per cent. cleared by the end of the year and the remainder in the early part of next year.
Lord Orr-Ewing: My Lords, can my noble friend say whether if you have paid too much you get the money back, and get it back promptly?
Lord Henley: My Lords, I can give my noble friend that assurance. If you pay too much you get your money back.
Lord Swinfen: My Lords, if banks and building societies with computers can work out rates of interest on very small sums of money, can my noble friend say why that cannot be done by local authorities as well? It does not need a quill and ink and lots of paper.
Lord Henley: My Lords, I quite accept my noble friend's point. It does not need a quill and other such old-fashioned means. But what I am saying is that the cost of doing so would be more than it is worth. It would add to the length of time taken to process these matters and to the total cost of administering the appeals.
Lord Eatwell: My Lords, is it not clear that what may be a small sum of money to the noble Lord may be very significant in the budget of many householders? Is it not also clear that the cost of doing this should be borne by the Government, who are holding large sums of money from various householders over significant periods of time? If the Inland Revenue can charge interest on small sums of taxation which are paid late, why in the case of successful appeals against the council tax cannot interest be remitted to householders who have overpaid?
Lord Henley: My Lords, the noble Lord knows perfectly well that the Inland Revenue does not start charging interest until one gets up to a certain figure. When we are talking about interest on the difference between one band and another, which is a relatively small amount when there are eight bands, I do not think that it is in the realms of practicality to start charging interest on such amounts. I believe that the noble Lord will find that that would be well within the limits which the Inland Revenue itself sets in terms of charging interest on its own debts.
Lord Boyd-Carpenter: My Lords, is my noble friend not concerned at the enormous figure which he gave of 614,000 appeals outstanding, some apparently not to be dealt with until next year? Are the Government doing anything to expedite the matter, or are they content that quite a lot of money has been paid which will be found not to have been due but which people have been deprived of for some considerable time? Are the Government not being a little complacent about this?
Lord Henley: My Lords, I do not accept my noble friend's accusations of complacency. As I said, we set certain fairly demanding targets and we have met those. We have made available a certain amount of extra money—about £2.5 million—in terms of additional resources for this task. But simply providing yet more money or yet more officers to deal with the appeals process would not necessarily speed it up. New staff would obviously have to be trained by the existing staff, and taking the existing staff off their duties would slow down the process.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that in Reading whole streets of houses were put in the wrong band? Does not that show that the whole business of valuation was a shambles? Will not the situation be even further exacerbated when people find that when a house similar to theirs is sold in their area their house may suddenly go up one or perhaps even two bands without them even knowing?
Lord Henley: My Lords, I am afraid that the noble Lord is wrong on that last point. If a house is sold now, that might possibly lead the valuation officer to look at the figure. But we are talking about the valuation not as of now but on 1st April 1991.
As regards the allegation that far too many houses were in the wrong band, as I said, 96 per cent. of householders have accepted the bands that they have been put into. I should like to refer to the NAO report, but I shall do so only briefly because it has not yet been in front of the Public Accounts Committee. It suggested that only something of the order of 4 per cent. could possibly be too high and 5 per cent. could possibly be too low but 91 per cent. were banded correctly. It praised the level of accuracy, which met acceptable professional standards.
Lord Kenyon: My Lords, will my noble friend explain why, when 100 per cent. of the country was banded within a matter of a few months, it is going to take more than two years for a mere 4 per cent. to be rebanded?
Lord Henley: Because, my Lords, the actual process of banding was very simple, but any appeals process dealing with individual arguments will take longer because every individual case has to be dealt with separately. When we introduced the council tax we did so on the basis of having eight bands, that the whole process would be simple and easy to operate and that one would be able to bring in those eight bands relatively quickly.
Lord McIntosh of Haringey: My Lords, does the noble Lord's last answer not confirm that when the legislation was introduced our assertion that the banding was not being done properly was in fact right? Were we not also right to say that the very fact of having wide bands with large differences between them would encourage a large number of appeals, another claim which has been proved right and which was blandly denied by the Government at the time?
Lord Henley: My Lords, the noble Lord will not be surprised that I totally and utterly reject his allegation. I made it quite clear earlier on that some 96 per cent. of households have accepted their bandings. When one considers the rather odd views that many people have about the value of their homes, I think that that figure is pretty good.

Transport Research Laboratory
3.25 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn asked Her Majesty's Government:
What representations they have received from 13ACMI (British Aggregate Construction Materials Industries) about the privatisation of the Transport Research Laboratory.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish): My Lords, my right honourable friend the Secretary of State for Transport received representations last year from BACMI on various aspects relevant to the privatisation of the Transport Research Laboratory, which he considered before reaching his decision that the laboratory should transfer to the private sector.
Baroness Castle of Blackburn: My Lords, is it not a fact that that association represents the suppliers of raw materials for the construction and maintenance of our roads and therefore plays a vital role in our roads programme? Did it not in its representations to the Secretary of State urge that the laboratory should be left as an independent executive in the public sector because it is, the association maintains, a world class, indeed, the leading highway laboratory, first, because of its quality, and, secondly, because of its links with the Government, which privatisation will destroy?
Lord Mackay of Ardbrecknish: My Lords, in its letter to my right honourable friend last year BACMI welcomed the agency status and the improvements which that had brought to TRL. It did indeed express the reservations which the noble Baroness mentioned. However, my right honourable friend and I do not believe that the quality of research, nor indeed the reputation of the laboratory, is in any way affected by its ownership. We do not believe that its reputation depends on it being in the public sector.
Lord Clinton-Davis: My Lords, will the Minister indicate what was the cost of the undoubtedly expensive report from KPMG? Do the Government believe that
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consultants are always right, and are they therefore prepared to deny the evidence and support of most people who are against the proposal? Is the proposal based simply on the assertion that TRL is suffering from cumulative decline? Is it not rather the case that it is the Government who are suffering from cumulative decline?
Lord Mackay of Ardbrecknish: My Lords, certainly there is something cumulative about this Question, as it comes round again and again. KPMG Peat Marwick pointed out that if the laboratory remained in the public sector it would run a real risk of entering a cycle of cumulative decline. We feel that the: only way to prevent that is to move the laboratory into the private sector. As regards the noble Lord's first question, I am afraid that I cannot tell him the cost, but I shall certainly write to him on the subject.
Lord Clinton-Davis: My Lords, was any scientific evidence forthcoming? Did the Government bother to take advice from a firm of scientific consultants rather than a firm of accountancy consultants?
Lord Mackay of Ardbrecknish: My Lords, I have explained to the House on a number of previous occasions that KPMG took advice from a wide range of experts, including experts in this particular field, as many of the major consultancy firms such a; KPMG do.
Baroness Castle of Blackburn: My Lords, is it not a fact that KPMG recommended in its report that the only possible form of privatisation which could preserve the integrity and expertise of TRL would be through the setting up of a non-profit distributing company? Have not the Government rejected the advice of their own consultants? Are they not proceeding to examine the possibilities of a competitive sale which KPMG said could not have any chance of succeeding unless the Government were to give massive contracts and support to the private company which they are refusing to TRL?
Lord Mackay of Ardbrecknish: My Lords, in the future, when TRL is in the private sector, the Department of Transport will be putting out contracts for research, as indeed it does at present. TRL will be able to compete for those contracts. It will then receive the money if it wins those competitions. On the other point, yes, indeed, KPMG suggested one specific method of moving TRL to the private sector. We have not decided against that. However, we think that we should have a wider competitive situation before we necessarily come to a conclusion agreeing with KPMG.
Lord Stoddart of Swindon: My Lords, the noble Lord stated that the reputation of the laboratory did not depend upon it being in the public sector. However, is he aware that in such matters the reputation may well depend on the laboratory being in the public rather than the private sector. Why should an organisation which has been in cumulative ascendency for the past 60 years now go into cumulative decline? We need an answer to that.
Lord Mackay of Ardbrecknish: My Lords, I have answered that point, too, on a number of occasions. In

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creating an agency status, the Department of Transport decided that it would become more the customer of TRL and would be prepared to look elsewhere in setting out its research needs so that other people as well as TRL would be able to compete in meeting those needs. Against that background, KPMG advised strongly that the construction of TRL within the public sector would make it increasingly difficult for it to compete, and that is what would cause the cumulative decline.

Coal Industry Bill
3.31 p.m.
The Minister of State, Department of Trade and Industry (Lord Strathclyde): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Strathclyde.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Schedule 4 agreed to.
Clause 22 [Pensions and miners' welfare organisations]:
Lord Ezra Lord Ezra moved Amendment No. 40:
Page 18, line 28, at end insert:
("(4) In exercising his powers under that subsection, the Secretary of State shall have regard to—

(a) the range of services provided by the Coal Industry Social Welfare Organisation immediately prior to its winding up, and the associated costs;

(b) the ability of the proposed successor body or person to meet the anticipated cost of services likely to be required in the medium and long term, taking particular account of the social dislocation caused by large scale job losses in the industry; and

(c) the administrative framework required to maintain the quality of social welfare hitherto provided by the Organisation.").

The noble Lord said: In moving the amendment I speak also to Amendment No. 40A.
The amendments deal with the Coal Industry Social Welfare Organisation (CISWO). The coal industry, as Members of the Committee are well aware, has long had a caring tradition. It is a hard, arduous and at times dangerous profession, and the tradition of caring has been developed over many decades. In the case of social welfare, with which we are specifically concerned in the amendment, the social welfare consideration goes back to the early 1920s when the Miners' Welfare Commission was set up. In 1952 the Miners' Welfare Act was passed which sets out in greater detail the welfare responsibilities of the coal industry, then under public ownership.
What is proposed in the Bill is that that miners' welfare organisation should be abolished; and nothing else is said. I wish to say something about the activities of CISWO, and then to indicate what the Government, despite the terse reference to the matter in the Bill, have agreed to do, and then to consider whether that is adequate.
Initially, CISWO's activities centred upon developing the social infrastructure of coalfield towns and villages, such as village halls, sports fields and miners' institutes. That function remains prominent today and CISWO, in partnership with more than 400 miners' welfare trusts, oversees a substantial proportion of recreational and sporting provision in coalfield areas. Those facilities are not additional to sports grounds and halls provided by local authorities and others, but form the bulk of such provisions in many coalfield communities. They serve not only miners and former miners but are available to all local people.
In addition to providing and administering recreational facilities, CISWO operates a complex network of personal welfare services in mining communities, particularly focused on elderly and disabled former mineworkers and their dependants.
The radical restructuring of the coal industry has had a profound effect on miners' welfare. Closures and job losses have led to major cuts in income from voluntary subscriptions and loss of support and expertise from the colliery personnel who have disappeared. However, at the same time demands on welfare, sporting and recreational facilities have grown, as the number of retired and unemployed miners continues to rise.
In the past, colliery closures have taken place at a steadier and more predictable rate and the resultant changes to welfare provision could be absorbed. The massive pit closure programmes over the past 18 months has meant that the effects of those closures are being felt more widely and intensely than ever before and that CISWO's activities and services are in more demand than ever.
That is the position with which we are faced today. There has been a massive increase in closures on the one hand, leading to a reduction in resources from voluntary sources because those voluntary sources dried up, and at the same time the need for the services has massively increased.
What is the position under the proposed privatisation measure? Currently CISWO's activities are funded by a levy on each tonne of coal produced by the coal industry, which brings in an income of £2.3 million a year. That is not entirely adequate to undertake its increased task but nevertheless enables it to get by. As I have indicated, the Bill initially proposed the complete abolition of CISWO. It was to disappear totally. However, in response to widespread concerns expressed by politicians, local authorities, users of CISWO services and others, the Government have made an offer which would give CISWO limited future funding. What we have to consider is whether that limited future funding is adequate for the task.
The Government proposed to establish CISWO as a charity and to provide it with a £10 million endowment with a further £1 million per year for the first five years of operation payable from the new coal industry operators. That would give CISWO an income of around £1.6 million per year, which would leave the organisation with a shortfall of income and it would be forced to cut back on some of its activities. The Minister for Energy has already stated that CISWO should concentrate on its personal welfare work with sick and

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elderly miners, former miners and their dependants. However, that emphasis would immediately put the provision and maintenance of CISWO sports facilities at risk. 'That situation will be compounded after the first five years when CISWO's only income will come from the endowment and still more CISWO's services would have to be cut. Underlying that are actuaries' predictions that the peak in demand for many CISWO's services will come some time in the second decade of the next century. At the very time when there is a peak in demand for those welfare services, the income will have been cut to shreds. CISWO and miners' welfare trusts are the major, indeed sometimes the only, providers of recreational and sporting facilities in coalfield areas.
While many miners' welfares own the freehold of their land, a substantial proportion of their sports grounds are leased from British Coal. So they own some freehold; some land they have leased from British Coal. It would be inappropriate to pass the freehold from British Coal to the new successor companies which could regard such property as merely another asset on the books. The freehold should be passed to CISWO on the privatisation of the industry. That is our proposal.
There is also a significant amount of British Coal land which is used on an informal basis for sport and recreation and is not established formally on a lease. British Coal and, before that, the National Coal Board in which I was involved have been very supportive throughout the whole of their existence of CISWO activities. It would be helpful if those lands could also be transferred to local CISWO management.
I have spelt out, perhaps at some length, what is involved; it is a human, social and welfare matter. It is an issue which I believe should be thoroughly considered at this important opening of a new chapter in the history of the coal industry. I beg to move.
3.45 p.m.
Lord Morris of Castle Morris: It will come as no surprise to the Committee to learn that we on these Benches entirely and warmly support everything which the noble Lord, Lord Ezra, has just said. I said at Second Reading that we consider the Bill far more as a human picture than as a financial proposition. In preparing for these debates in your Lordships' House we, like everyone else, receive a great weight of briefing material, most of which has to be ploughed through in some form or another and some of which is more valuable than other parts. On the subject of CISWO, I settled down some days ago to read the advice of the Coalfields Community Campaign, always well informed and fair minded. It began predictably, "CISWO —Background". Then I read:
'The Coal Industry Social Welfare Organisation … was established by the 1952 Miners' Welfare Act. It succeeded and formalised the Miners' Welfare Commission which had been in place since the 1920s".
My mind began to wander, but I read on:
"Initially CISWO's activities centred upon developing the social infrastructure of coalfield towns and villages—village halls, sports fields and miners' institutes. This function remains prominent today and CISWO, in partnership with more than 400 Miners' Welfare Trusts, oversees a substantial proportion of recreational and sporting provision in coalfield areas".
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It took my mind back to 1941 when my home town, Cardiff, was being blitzed and I was evacuated at the age of 10 to live in safety up in the valleys with relatives in Pentrebach, a little pit village near Merthyr Tydfil. At that age I soon learnt the vital importance to the community of the miners' welfare institute. It is an out-dated myth that everywhere in Wales there is a male voice choir which meets every Tuesday and a chapel which is the total centre of everyone's social as well as religious life. Would that that were so! But it is not, and has not been for a long time. The miners' welfare was the social centre in the evenings; there was nowhere much else to go. We boys were not allowed in unless, of course, as a member of the junior boxing club, which I smartly became—and never lived to regret a moment of it. So we were concerned and curious about what went on in the miners' welfare. The pit and the welfare were the social centre of Pentrebach.
Nearly 50 years later, as chairman of the Museums and Galleries Commission, I returned on a "hands behind the back" tour of a village in the Rhymney Valley, to see whether it would be possible for one of the few miners' welfare organisations left in South Wales to be saved as a possible museum of miners' welfare institutes, so few are now left.
Times change. As the Latin poet had it:
"Tempora mutantu, nos et mutamu in illis".
Times change, and we change with them. CISWO has inherited the responsibilities. It has had a great deal to do and still has.
After lengthy and passionate debate in another place, the Government are proposing to establish CISWO as a charity and to provide it with a £10 million endowment with a further £1 million per year for the first live years of operation payable by the new coal industry operators. Good! This will give CISWO an income of about £1.6 million per year, leaving the organisation with a shortfall of income. It will be forced to cut back on some of its activities since it is highly unlikely to be able to raise a great deal of money by sponsorship or in any other way, having had no experience of that. Members of the Committee will know that money is not easy to come by for such organisations, even in the relatively more affluent times of the past couple of years. The Minister for Energy has kindly advised CISWO that it should concentrate on its personal welfare work with sick and elderly miners, former miners and their dependants. Yet, as the noble Lord, Lord Ezra, said, underneath that splendid advice lies the actuaries' advice that in the first decade of the next century we shall reach a peak in demand for the services that CISWO is currently providing. The Minister for Energy has his cart before his horse. I need say no more in praise of the activities of CISWO or of its importance because others—notably my noble friend Lord Mason of Barnsley—most certainly will.
I turn then to Amendment No. 40A. which seeks to permit a charitable trust to have,
"power to transfer land … where [that would ensure] its continued use as a public sports or recreational facility".
There are two broad categories of welfare sports facility. First, there are the facilities now owned by and held in trust by the individual miners' welfare committees.

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Those facilities cannot be included in any sale of assets by British Coal as part of the privatisation process. Secondly, there are the facilities still in the freehold ownership of British Coal. Included in that category should be those facilities which British Coal leases from a third party. Those facilities may be included in the assets for sale by British Coal. Both categories of sport and recreation facility may be vulnerable to future loss, and that quite soon.
Our understanding of the Bill and of the assurances from the Minister for Energy is that the British Coal freeholds currently leased by miners' welfares will not be included in the privatised assets. British Coal, the Department of Trade and Industry and CISWO will undertake a review of those assets to determine what their future ownership will be.
The facilities already owned by miners' welfares are also vulnerable to loss. While held in trust, a welfare that is struggling to survive financially against the background of the fundamental structural change which it will go through may feel that it is necessary to realise an asset. In fact, it is bound to take that view. In the past, sports facilities have been sold to help protect other elements within the welfare. The welfare trustees, CISWO and the Charity Commissioners must, of course, act in the best interests of the welfare. They are legally required to do so, and, as one ancient lawyer once pointed out to me, the law knows no higher status than that of a trustee.
Statistics relating to losses are complex because of the efforts made to retain the sports facilities. But since 1985, I am informed that in the East Midlands area alone 10 welfares have closed completely. Since 1980, at least 12 sports grounds have been transferred to local authorities, at least seven sports grounds are now completely lost and three have been transferred to the area trust funds. In the light of that, we cannot be confident that welfares are going to retain sports and recreation facilities into the future.
We would have more confidence if CISWO were to be reconstituted as a charity and with a full remit that includes sports and recreation, as now. CISWO could then build upon existing partnerships and forge new ones that would underpin its advisory and support role to the welfares and bring in some new skills and some new knowledge. That would be a good thing, and the welfares might survive without having to consider the rapid sale of their assets.
The energy Minister has proposed that CISWO will be reconstituted as a charity but with a core business related to the old, the ill and the disabled. I am not sure that we feel too happy about that, important as those groups are. There are also the needs of the young, the fit and the unemployed in those communities which must be given real weight. The future funding of CISWO is generally thought to be substantially short of that required to support the current range of CISWO functions into the future. The energy Minister has expressed the pious hope that CISWO will be able to work outside its core business and create new partnerships. But he recognised that that is going to be an extremely difficult task. It would be eased if CISWO
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were endowed with a more generous settlement by the coal industry, and these two amendments encourage the Government to increase their generosity to move in that direction. I strongly support Amendment No. 40 in the name of the noble Lord, Lord Ezra, and I shall move Amendment No. 40A in my own name.
The Lord Bishop of Sheffield: It is difficult to exaggerate the extent to which so many of the mining communities came into existence for coal. The houses were built for the pit. There is no reason for people living there other than the pit. For the closure of the pits it would have been convenient, as in the decline of the lead mining industry In Swaledale, if those who lived there could have been persuaded to emigrate and we could have visited those places with some quaint interest as places where people once lived, and now just have the occasional reminders of an industry that is no longer needed. In practice in today's world it cannot be like that.
People with their families, the homes that they own and the absence of work elsewhere are tied to those communities. They have lost the opportunity of the work that created them. They need the other areas of support that help to make life possible, desirable and reasonable. In CISWO there is a machinery that gives so much of that support to those communities. It really does seem rather extraordinary that we should cut down on that work at the very time when the hurt to the communities by what has happened—no doubt inevitably, one might say—has led to an increase in the requirements.
I was impressed the other day by the list of billions of pounds which had been struck off at privatisation. We are not talking here about billions. We are barely even talking about millions. It seems to me that a very modest increase in the endowment could enable the work that is at present being done to go on being done as long as it is needed.
As a nation we owe those communities something. They have made their contribution in the past to the welfare and the industrial heart of the nation. In a curious way they are making a contribution now, as the industry has shrunk and become so much smaller. I plead with the Government for generosity in this matter. It will not make a great deal of difference to them or to the taxpayer, or even to the successor companies. But it will make a lot of difference to the people who live in those towns and villages.
Lord Mason of Barnsley: I rise to support Amendment No. 40 by the noble Lord, Lord Ezra, and in particular that,
"the Secretary of State shall have regard to … the range of services provided by the Coal Industry Social Welfare Organisation",
which covers health, welfare, social provisions and numerous sporting and recreational activities.
We all recognise that during the Committee stage in another place the Government sympathised with the problems of CISWO and have been prepared to offer some financial assistance. The noble Lord, Lord Ezra, mentioned that, as did my noble friend: £10 million, plus £1 million for each of the next five years.

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But we have to bear in mind the size of the problem. CISWO providers social welfare and benefits for 500,000 beneficiaries. It covers mostly the aged, the frail, the ill and disabled miners, who are usually on small incomes. There are 72,000 people in receipt of benefit who suffer from pneumoconiosis, and thousands more who have chronic bronchitis and emphysema. CISWO also helps miners' widows; it provides holidays for disabled miners; special aids and adaptations for disabled people; convalescent homes; and holidays for mentally and physically handicapped children. It services charitable trusts and welfare schemes in many mining communities. It is unlikely that private owners will contribute to this organisation, which finances throughout the whole of the coalfields help, welfare and social activities for miners, former workers and their families, not to forget the playing fields and sports fields, support for brass bands and particularly the paraplegic centre.
One can recognise therefore that the whole framework and social structure of our mining communities are very much dependent on the activities of CISWO. I say to the Minister: there ought to be further sympathetic assessment by the Government. CISWO cannot possibly maintain its existing commitments and level of essential services in the long term and in addition cope with the new wave of pit closures.
CISWO is in partnership with more than 400 miners' welfare trusts. It provides recreational and sporting facilities in the coalfield areas—and, it is important to note, not just for miners and their families but for all the local people. The Committee should also be aware that pit closures and job losses have meant a reduction in the voluntary subscriptions to CISWO, while at the same time the demands on sporting, recreation and welfare facilities have grown due to the rising numbers of unemployed.
I know from what has already been said during the course of the debate and from what happened in another place that the Government perhaps want to establish CISWO as a charity; and they have offered the sums of money that I have already mentioned. It is estimated that CISWO would have an income of about £1.6 million. At the moment it expends £2.3 million a year, so that amount would be totally inadequate to cover the range of its activities. I gather that the Government want CISWO to concentrate on its health and welfare work. But that means that all the sporting and recreational activities within our coalfields would be under threat. They would be at risk. I hope that when the Minister replies he will be able to give some assurances on that score.
What is the position of the miners' welfare educational fund, which helps working miners or retired miners to obtain grants for university education? Will that be affected too? What will happen in regard to non-vocational training and education? What will happen to the young employees who are linked to the youth clubs? There are 14 youth clubs, 11 of which are based at welfare schemes; attendance is four nights a week and the membership is 1,500. We are also concerned about the maintenance of one of the cultures of the coalfield: the brass bands. We should like to see
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those kept in being as they are part of the coalfield culture. I fear that many of CISWO's activities which are not just health and welfare work will be substantially reduced.
The East Midlands Council for Sport and Recreation has raised its concerns with Ministers. Along with CISWO, it wishes to see sport and recreation as part of the continuing remit of CISWO's operations.
What of all the regional sporting competitions and events held throughout all our coalfields? There are a lot of activities—such as darts, football, cricket, golf, fishing, snooker, squash, badminton, playing in brass bands and athletics—in every coalfield in the country which are supported and promoted by CISWO. Nationally, it has organised the mineworkers' national art competition, the national golf competition and the miners' marathon in conjunction with the Great North Run, in which 28,000 runners participate. There are also the national competitions: squash, five-a-side football, badminton and fishing. Thousands of miners and their families enjoy sporting and recreational activities organised and financed by CISWO.
If those activities go, our coalfield communities will become barren of sport and the nation will be all the poorer for it. Therefore, I hope that the Minister will appreciate and recognise the enormous size of the problem, be more sympathetic to CISWO's plea and support the amendment so ably moved by my friend the noble Lord, Lord Ezra.
4 p.m.
Lord Dormand of Easington: I shall not repeat what has been said by the previous speakers about the facilities and services provided by CISWO. I am one of thousands of people who have benefited from all those facilities. Indeed, it is just impossible for people like myself to imagine a local community that did not have the facilities and all the other activities referred to by my noble friend. It is unbelievable that we could live without such things.
I am not sure that the Government appreciate the rich culture which the mining areas and the coal industry itself have produced. I am sure that some. Members of the Committee are thinking or saying to themselves, "Why the coal industry?" I have already suggested one reason. But there are other industries which provide such facilities. Those of us who have done quite a hit in the way of sport and have travelled around the country playing on different playing fields with other industries and indeed single factories have been aware of what has been provided. I see that the Minister recognises that as part of the argument.
I should like to say a couple of words about solutions to the problem, should the Government intend to press the matter, which I hope they do not. First, there is the question of local authority provision. On the surface one could ask, "Why don't the local authorities take things over?" The short answer is that it has been done in many places, in particular by parish councils or what are now known as local councils. The Committee will appreciate the immediate problem for them; it is a question of money. The parish council can levy only a very low rate on the council tax in order to provide such facilities. It

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simply cannot be done on the scale of which we speak today. I need not remind the Committee that local authority expenditure has been cut to the bone. Some of us argue that it will be cut even further. I do not feel that that is an answer to the problem.
It is necessary to make two further points. My noble friend Lord Mason has already made one of them. These facilities were provided by the coal industry. In fact a local authority cannot provide the services that have been provided by CISWO—for example, educational grants, some of the social services for pensioners, disabled miners and miners with chest diseases, and so on. It simply cannot be done by the local authority.
I turn to what appears to be the solution that the Government have produced; namely, the financial provision whereby they say that they will make a £10 million endowment and provide £1 million for the next five years. I repeat what has already been said. That seems to me to be absolutely inadequate for the provision of what is at present being undertaken. One would hope that at least a large part of the facilities would continue.
I have a specific question for the Minister to deal with: how have those two figures been reached? I look forward to hearing his answer.
I have said sufficient on this matter. I did not want to repeat points that have already been raised. But I must say once again, as we said on the first day of Committee, that the Government do not appear to produce their policies in the context, indeed the whole ambience, of what the coal industry has provided for its communities. I hope that on this issue we can have something better than is being provided by the Government.
Lord Prys-Davies: The Bill is totally silent on CISWO. Therefore it is not surprising that the Minister was totally silent about CISWO at Second Reading. Although I addressed to him half a dozen questions, he did not consider them worthy of a reply at the end of the debate. I reminded the noble Lord the Minister that my questions were unanswered. They are still unanswered. I hope that they will be answered this afternoon.
With this Bill CISWO has entered a critical phase of its history. There is now considerable concern in the mining communities—or perhaps I should more accurately say the former mining communities—about the prospects for the long-term future of its successor body. I listened to the contribution from the Front Benches. But CISWO's contribution to the well-being of those communities extends far beyond recreational grounds, sports facilities and welfare halls. That point was made very successfully by my noble friend Lord Mason and other Members of the Committee.
Fortunately, the Government have recognised that there is a continuing responsibility on the part of the Government toward that organisation. Indeed, governments have recognised that since 1920. So we do not ask for a precedent. We do not ask for generosity. The principle that there is a responsibility on behalf of the Government to the coal mining facilities, which have been dependent upon a single industry, should continue in the future.
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What is important about Amendment No. 40 in particular is that it sets out criteria in the light of which we can decide whether the funds on offer are adequate. The financial support referred to by my colleagues has to be quantified in some rational and objective way. If we do not have a definable role for CISWO, there is no means of determining what the department should pay to the successor body to enable it to do its work.
Paragraph (a) suggests that the role of the successor body will be to continue the services at present provided by CISWO. Is that agreed? Or does the department say, "No, some of these services have to be axed"? If so, which services are to be axed? It should be borne in mind that this concerns far more than a welfare hall or a sports ground. It comes back to what my noble friend Lord Mason asked: are the educational services to be axed, and, if so, upon what grounds?
It seems to me, from reading the speeches of Ministers in another place, that they assume that some services will be abandoned. I am advised by CISWO in South Wales—the source of my knowledge and information—that if existing services are to be maintained for the foreseeable future (probably into the second decade of the next century) then the expenditure will exceed the financial resources now on offer. We are therefore entitled to ask: if the existing services are not to continue, which services are to be abandoned and why?
The second link of Amendment No. 40 refers to the additional burdens that may be placed upon CISWO. Nowhere have I seen in the other place a suggestion that additional services may have to be undertaken by this body. The third link of the amendment is also interesting because we have no idea about the administrative framework of the successor body, except that we are told that it will be a charitable body. But we want to know a great deal more about the framework. Perhaps the Minister can seek instructions on that from the Box.
I should like to ask specific questions, having regard to the position in Wales and Scotland. Will there be within the proposed framework a provision for direct links with Wales and Scotland so that Wales and Scotland will be able to speak directly for their areas? Will they be the recipients of allocations from the centre? In future will they be eligible for receipt of funds from the Scottish or the Welsh Office? I ask that in the light of the way the housing associations were treated in 1990–91. Perhaps the Minister will take note of that.
I shall be extremely sorry if, in Committee, we leave the impression that the financial package in general is merely a matter of the department's largesse or munificence. The usefulness of the miners to society may be over. But we cannot forget their needs, as the industrialists forgot the tips when the valleys were no longer of use to them. That is our function in this Chamber; that is, to ensure that the finances are adequate and to ensure that the successor body will undertake the functions spelt out in paragraphs (a) and (b) of Amendment No. 40.
4.15 p.m.
Earl Bathurst: There seems to be little voice from this side of your Lordships' Chamber. But I ask my noble friend on the Front Bench who will be replying to think sympathetically and ask his colleagues to think sympathetically on Amendments Nos. 40 and 40A.
I am perhaps an unusual Member of your Lordships' Committee who can speak with some little knowledge on the matter. Believe it or not a piece of land— Bolsover Colliery—was made over by my family, I do not know when, for miners' welfare clubs. Not all that long ago there was a decision to sell a part of the land in order to expand what I understand was a flourishing club. With the prospect of the mine being run down its finances were not so good, and there was an argument within the club. The permission to sell the land had to be given by myself. After much correspondence through solicitors to the miners' club I wrote back to say that provided a majority of the membership agreed that the sale would be an advantage to the members of the club, I would not object to it. Apparently that all went through.
My point is that I wonder how many other parcels of land there are, whether or not in the hands of what is now the Coal Board as mentioned by the noble Lord, Lord Ezra, that might be at risk if private operators take over. How many hectares or acres of land would be under some form of private management or ownership? It may be that the land is owned or rented by the clubs. Will the amount of money mentioned in the Bill be sufficient to solve the problem which I believe exists? It is a serious problem concerning miners both present and future, and above all retired miners and those who are injured or have bad health. Gratifying though it may be to know it is there, will the sum be sufficient?
Can my noble friend give an answer to the noble and expert Lord, Lord Ezra, and other noble Lords who have spoken? Can he put his hand on his heart that the amount is sufficient? Or can he tell us what can be done to make it larger and, above all, to ensure that the private operators contribute properly to the fund in the future, as the noble Lord, Lord Morris, said?
Lord Strathclyde: I am grateful to Members opposite, particularly the noble Lords, Lord Ezra, and Lord Morris, for introducing the amendment. I join all noble Lords who have spoken in saluting the admirable work carried out by CISWO over a considerable period of time. I hope to deal with all the issues raised.
I briefly touch on a point made by my noble friend Lord Bathurst. I believe my noble friend is under a serious misconception. We are not selling land directly to the private sector; and that includes land currently used by this welfare organisation. On divesting date all the land currently owned by British Coal will go to the Coal Authority and it will be carefully worked out what is to be done with it. Uppermost will be the interests of the welfare organisations, sports facilities, and so forth, so that we ultimately produce a package which is fair to those people in the mining communities and to the tax payer.
The right reverend Prelate asked whether we could have a modest increase in the endowment. The noble
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Lord, Lord Morris, talked of times changing. They do indeed and I hope that I can deal with those issues during the course of my reply. As has been pointed out by many Members of the Committee, and therefore the Committee is aware, the Government have made provision for the future of CISWO. I appreciate the concerns expressed by a number of noble Lords during Second Reading and I apologise if the noble Lord, Lord Prys-Davies, has not yet received my reply. That is my fault and certainly not his.
We considered carefully over the course of the past few months what was put to us by some noble Lords, Members of another place, British Coal, CISWO itself, local authorities, trade union branches and individual beneficiaries, about the continued provision of the coal industry social welfare services. I believe that our approach meets the central concern of those representations —that the core services provided by CISWO to the old, the disabled and the ill should continue into the longer term. Indeed, I gather that our proposals were given a welcome, albeit a cautious welcome, when the Minister for Energy met members of the CISWO council on 17th March.
The Committee will forgive me if I reiterate what some noble Lords have already said about our approach. It involves arranging guaranteed funding of £15 million —£5 million taking the form of an annual payment of fl million for five years, and £10 million taking the form of a capital endowment which could be invested with only the income from that investment available for current expenditure.
These two sources of income should be sufficient to fund for five years the core services to which I have referred. Indeed, there could be some margin which could be used to fund non-core services while either other sources of funding are secured for them or they are phased out. With prompt and vigorous action in the later years it might even be possible to make some addition to the capital endowment. That endowment would, of course, remain available to provide a substantial level of permanent base funding, and there would be a period of five years in which to build up alternative sources of supplementary funding, though we recognise the magnitude of the challenge that this would represent.
Before I move on from funding perhaps I may answer the specific question raised by the noble Lords, Lord Dormand of Easington and Lord Prys-Davies, about how we achieved the settlement level. I have already said that we believe that the settlement provides a sound and sensible basis for meeting the central concerns for CISWO's support to the old, infirm and disabled. CISWO spends approximately £2 million annually. We believe that it justifies support up to about £1.4 million per annum. This takes into account more than £950,000 allocated to nine area welfare committees and CISWO centrally for essential welfare work supporting and counselling the disabled, the old and infirm; an allocation of about £250,000 for administration and management support for trusts and funds whose annual expenditure exceeds revenue and for the Coal Industry Benevolent Trust; and an allocation of about £200,000 for unallocated overheads.
Lord Dormand of Easington: I am grateful to the Minister for giving way. As my mental arithmetic is very poor, can he give the total of all the figures which he has just given to the Committee? The total is obviously related to the point we are raising.
Lord Strathclyde: The total figure is £1.4 million per annum. I shall now come on to the gap that appears in funding—the point raised by the noble Lord, Lord Mason. As the noble Lord mentioned, CISWO provides an admirable range of other services. But it would be unreasonable, particularly when health and welfare budgets are stretched, to provide for the range of recreational pastimes, competitions, sports, games and so on, directly from the taxpayers' purse. Furthermore, such services are of the nature provided already by established charities in the voluntary sector and through sponsorship. Clearly a settlement on CISWO must reflect what is existing practice in the voluntary sector.
Also, it is reasonable that trusts and funds having a surplus of income over expenditure should reimburse CISWO for its administration services. Overall the net assets in miners' social welfare across the coalfield communities exceeds some £30 million.
As the Minister for Energy indicated in another place, we do not wish to be overly prescriptive in defining what is covered by those core welfare services: those decisions, naturally enough, should be taken by the CISWO community.
I move on briefly from funding. We believe that there is widespread agreement that CISWO's status as a limited company in the midst of a network of charitable trusts is a positive handicap to the constructive development of the coal industry social welfare system. It is therefore an essential element of our approach that CISWO should be replaced by a charitable trust, which would be the recipient of the funding to which I have referred.
We do not envisage changing the constituency eligible for social welfare help, but we think it important to seize the opportunity presented by the move to a charitable trust to establish a governance structure that takes full account of the changes that are already taking place or are a realistic prospect in order to establish a robust organisational foundation for the future.
Finally, there is the question of transition from CISWO to this charitable trust. As we see it, the provisions of Section 12 of the Miners' Welfare Act 1952 would suggest that CISWO should be put into voluntary liquidation and that the Secretary of State should then make an order under Section 12 (3) of that Act.
The noble Lord, Lord Mason, stressed the need for sympathetic discussion. The Minister for Energy's meeting with the CISWO council on 17th March was constructive. There is a general recognition of the need for some change. It gave a cautious welcome to the idea of replacing CISWO with a charity. It agreed to see how far it could make its contribution to securing the future of CISWO services by raising external funds; through some restructuring to make better use of the funds available within the CISWO structure as a whole, and through administrative savings.
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Perhaps I may turn briefly to the amendment of the noble Lord, Lord Morris—
Lord Mason of Barnsley: Perhaps I may intervene on this important point because it appears that the Minister is going to move away from it. Discussions took place between the department and CISWO on 17th March and the proposals put to CISWO received a cautious welcome in spite of the fact that it may have been told to what extent the hiving off, if I may use that phrase, of sports and recreation is going to take place after the Bill is enacted. Do I take it that discussions are still continuing and that we might have a final report from the Minister, perhaps at Report stage?
Lord Strathclyde: I do not know about a final report. I feel that the way forward is to continue a constructive dialogue. When that dialogue will finish, I do not know. That is why I believe that the amendment of the noble Lord, Lord Ezra, and indeed the amendment of the noble Lord, Lord Morris, sit very uncomfortably with the kind of dialogue that the noble Lord, Lord Mason, and I agree should continue. I very much understand the purpose of the amendments but, as I said, there is already a recognition of the need and a willingness to embrace change. The amendment does not sit comfortably with that. That is my main objection to the amendment.
Perhaps I may comment briefly on the amendment of the noble Lord, Lord Morris —
Lord Prys-Davies: Before the Minister leaves this important Amendment No. 40, he has not dealt at all with the role of CISWO in the educational field. He has dealt at length with the other two sectors—social welfare services and sports and welfare grants—but what about education? Does the department suggest that CISWO or its successor, a charity—and education is ahead of charity—will not be able to undertake work in the educational field? Secondly, what is the significance of a five-year period? Why not a six-year period, or a ten-year period? We have had no explanation of the significance of a five-year period.
Lord Strathclyde: I do not suppose for one moment that Members of the Committee opposite will let me get away with not coming back to this subject, either later on this afternoon or indeed at later stages of the Bill. I shall come back to the noble Lord's point but, having had a go twice at answering the point raised by the noble Lord, Lord Morris, perhaps I may just conclude it. It is very relevant to the point about charity law. I understand that existing charity law is adequate to deal with the situation foreseen by the noble Lord, Lord Morris. The law as it stands allows the trustees of a charity to consider special factors, such as continued charitable use as against price, when considering the disposition of the land. That is a very important consideration. Secondly, putting the emphasis on continued use for public sports and recreation may be incompatible with CISWO's basic purpose to serve members and former members of the coal industry and their families.
I should add that I recognise the current concerns of local communities over what will happen to British Coal land and property used for sports and recreation

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purposes, and we want to be sensitive to those concerns. Therefore we have asked British Coal to identify the land it owns and which is currently used for the coal industry's social welfare purposes, including sports and recreation. We shall make decisions on the disposal of the land identified, who shall receive the benefits of the use of that land and any safeguards required. I hope that that goes at least some way towards alleviating the anxieties of Members of the Committee opposite.
The trustees of CISWO's successor body, in exercising their obligations, will need to keep in mind the best interests of the mining and the former mining communities they serve. The trust will serve miners, former miners and their families' interests. Its obligations will be to them and not to the public at large. I accept that in some communities there may be a fine distinction between the public and the mining community. However, the trustees must be allowed to take decisions which are for the greater good of social welfare in mining communities. It will not be CISWO's role to preserve public sport or recreation unless that is in the interests of the trust's beneficiaries.
4.30 p.m.
Lord Prys-Davies: Have I followed the Minister correctly? Is he saying that the Charity Commissioners will approve a sale for an alternative charitable purpose even though that sale is below the highest value available? Is that the present state of the law?
Lord Strathclyde: I understand that that is precisely the case and that the Charity Commissioners would agree with what the noble Lord says.
Lord Morris of Castle Morris: I am grateful to the noble Lord for giving way. Perhaps I may offer him a little cheer. If what he has said is so, then it is the best news I have heard today. I am extremely grateful to the Minister for giving it.
Lord Prys-Davies: This point should be made to the Committee. Amendment No. 40A refers to welfare halls and recreation grounds. There is no ready alternative user for the welfare hall in Maerdy at the top of the Rhondda Valley. I welcome Amendment No. 40A very much and support it, but it has limited opportunities.
Lord Strathclyde: I answered the noble Lord, Lord Prys-Davies, very quickly as regards the Charity Commissioners. Perhaps I may go more fully into the matter. We have received advice from the Charity Commissioners which confirms what I have said. I do not wish to put any fears into Members of the Committee and perhaps I can go a little further in saying why. The Charity Commissioners say that the existing law is adequate to deal with the situation because a properly constituted charitable trust could have in its governing instrument power to make dispositions of land to charities for charitable recreation or sports purposes at less than market value.
Section 36(9) of the Charities Act 1993 contemplates such specific powers being reserved by charities. The law as it stands allows the trustees of the charity to consider special factors such as the continuity of charitable use as against price when considering the
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disposal of land. There exists in any case the power of the Charity Commissioners under Section 26 of the Charities Act to authorise by order a transaction at less than market value if it is expedient and in the interests of the charity to do so. I hope that that: relatively full. explanation will continue to give comfort to the noble Lord, Lord Morris, and his friends.
I return to two other points raised by the noble Lord. Lord Prys-Davies. The first concerns education. It is my understanding that it is not CISWO which directly provides education; it is the Miners' Welfare National Education Fund. That is a separate and independent trust and has its own rules. On occasions CISWO gives grants to that body, as I understand it, and helps with its administration. That is dealt with in the point I made earlier.
Secondly, I refer to the period of five years. We had to make a decision about what a reasonable period should be to allow CISWO to deal with the change which is taking place within the mining industry. We felt that five years at £1 million a year provides time for CISWO to develop an income stream within the voluntary sector. I believe that that is; a reasonable period. Of course, Members of the Committee opposite can make a perfectly valid case for a different period, but I believe that five years is right and the most reasonable one.
In responding to these amendments I hope that I have been helpful. I particularly hope that I have convinced my noble friend Lord Bathurst that we are very serious about CISWO and cognisant of the tremendous work that it does.
Lord Prys-Davies: Perhaps I may ask the Minister one further question on the last point. Assuming that the five-year period in practice turns out to be too short, under the Bill or under the agreement to be negotiated between the department and CISWO will there be an opportunity to extend the intermediate arrangement?
Lord Strathclyde: There is nothing to stop the intermediate arrangement being reviewed. I go back to the point I made to the noble Lord, Lord Mason. What we are seeking is a continuing and constructive dialogue. That is the best way for CISWO to deal with these issues.
Lord Ezra: I thank the noble Lord, Lord Strathclyde, for the sympathetic way in which he has dealt with this matter. His heart is in the right place although for the time being his pocket is not as open as we would like. I am puzzled by one thing; perhaps the Minister can enlighten me. The Bill is quite straightforward and appears rather heartless in that it merely winds up the Miners' Welfare Act 1952 and says no more. Yet there are discussions going on for a successor body which we believe is not adequately funded. Nevertheless there is a move in that direction. Is it the Government's intention to introduce amendments to cover whatever arrangement is finally made at a subsequent stage? We move next to amendments dealing with another important issue; pensions. Those amendments are of a very positive nature. They have been introduced by the Government. I would like to know whether at a

831
subsequent stage we can come back to this matter and consider amendments tabled by the Government when the discussions which appear to be ongoing have reached a conclusion.
Lord Strathclyde: I am always delighted to consider further amendments to clarify the situation. Our view is that the issue should be dealt with as the Bill proposes with the clarification provided through the commitments we have made to CISWO and to both Houses of Parliament, as I have done today. But I am more than happy to consider the point made by the noble Lord. It may well be that it would be beneficial to CISWO and its beneficiaries to retain a certain level of flexibility which, as we all know, is not allowed in statute.
Lord Ezra: Perhaps we shall have some sort of amendment to look at at the next stage. In any event, as the discussions are ongoing and as the Government have already made a move and are now well aware, from the discussions in another place and here, of the concern that this is only half a move and not the full move which we would like, it would not be proper to divide today. We would like to return to the matter later. I hope that by then further discussions will have persuaded the Government to move a bit further than they have to date. I beg leave to withdraw the amendment.
Lord Merlyn-Rees: I do not know whether technically I am in order. I have been listening to the debate largely because I have benefited in the past from the work which I view as miners' welfare. It was not very clear and indeed it did not matter to me what the various structures were before nationalisation in the days of the private industry. I am interested in the educational side and the questions raised by my noble friend. The Minister said that educational funding does not come under the heading that has been spoken about today. He named an organisation and a trust. Will that work go on? Will the educational opportunities in mining villages still go on for the very reason which the Minister has just given; namely, that there will be a separate trust?
Lord Prys-Davies: Perhaps I may ask a supplementary question. Unless there is provision in the trust deed for the successor body to contribute the occasional grant for educational purposes, to which the Minister referred, will it be lawful for the successor body to spend its resources on educational functions?
Lord Strathclyde: I can confirm to noble Lords opposite what I said about the Miners' Welfare and National Education Fund, which is the trust that deals with education. It is an independent trust. It has nothing to do with the Government. It has its own funds. I do not know how much it has in the way of funds, but they will no doubt be substantial. In the past, the Coal Industry Social Welfare Organisation has helped with some of the administration of the trust without charge. I believe that in the future CISWO could charge for some of the administrative work that it carries out for the trust. In addition, it has provided some grants. I do not have any details of those grants. In the longer term, it will be up
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to CISWO to decide how it dispenses its own money, but looking at it from the point of view of the Government and the taxpayer, we have decided that the money spent by CISWO should be spent on the most needy groups, as I mentioned earlier.
Amendment, by leave, withdrawn.
[Amendment No. 40A not moved.]
Clause 22 agreed to.
Schedule 5 [Pensions Provision in connection with Restructuring]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 40B:
Page 102, line 50, leave out sub-paragraph (4) and insert:
("(3A) The modifications of an existing scheme that may be made by regulations under this paragraph shall include modifications making such provision as the Secretary of State considers appropriate for cases where either—
(a) there are assets of the scheme representing a relevant surplus, or
(b) the assets of the scheme are insufficient for meeting pension obligations under the scheme.
(3B) The modifications mentioned in sub-paragraph (3A) above may contain—

(a) provision for a relevant surplus, and the assets representing it, to be apportioned between—

(i) the part (if any) of the surplus which is to be retained in a reserve ("an investment reserve") as an asset of the scheme, and

(ii) the remainder ("the distributable part") of the surplus;

(b) provision for the management of assets representing an investment reserve and for the manner in which any such assets are to be applied;

(c) provision for the manner in which assets representing the distributable part of a relevant surplus are to be applied; and

(d) provision, for the purposes of any provision under paragraphs (a) to (c) above, for modifying any decisions as to the way in which relevant surpluses determined as at times before the restructuring date, and the assets representing any such surpluses, are to be treated.

(3C) The provision as to the apportionment of any surplus or assets to an investment reserve that may be contained in modifications made by virtue of sub-paragraph (3A) above shall not include any provision authorising the allocation to such a reserve of any part of a surplus determined as at a time after 31st March 1994, or of any assets representing any part of such a surplus, except where the allocation is made for making good amounts applied from the reserve in meeting a deficiency that arose as at any time by reason of the other assets of the scheme having been insufficient as at that time for meeting pension obligations under the scheme.
(3D) The provision as to the application of assets representing an investment reserve that may be contained in modifications made by virtue of sub-paragraph (3A) above shall include provision for the Secretary of State to become entitled where—

(a) any such arrangements as are mentioned in sub-paragraph (5) below have been entered into in relation to pension obligations under the scheme in question, and

(b) the value of the assets representing the reserve exceeds the aggregate amount required for the purposes for which the reserve has been retained,

to assets of the scheme representing the amount of the excess or, where those purposes have ceased, the value of the reserve.
(3E) The provision as to the application of assets representing the distributable part of a relevant surplus that may be contained in modifications made by virtue of sub-paragraph (3A) above shall include provision for the Secretary of State to become entitled where—

(a) the surplus is one determined as at a time on or after 31st March 1994, and

(b) any such arrangements as are mentioned in sub-paragraph (5) below have been entered into in relation to pension obligations under the scheme in question,

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to assets of the scheme representing no more than one half of the distributable part of that surplus.").

The noble Lord said: At Second Reading I said that we may be able to come forward with amendments in Committee. I apologise that they are quite lengthy amendments, but I make no apology for their content which I hope will be most welcome to the whole Committee and especially to noble Lords who have an interest in these matters.
Over the past six months, there have been intensive negotiations between my department and the British Coal pensions schemes on future arrangements for coal pensions following the privatisation of British Coal.
The trustees, British Coal and the Government have all welcomed the agreement that has now been reached in those negotiations. The package of proposals that has been agreed with the trustees achieves the necessary balance between securing in full the pension entitlements of scheme members and protecting the interests of the taxpayer as ultimate guarantor of the schemes. I gave the House details of the agreement in a Written Answer to my noble friend Lord Brougham and Vaux yesterday. There has also been an exchange of letters between my honourable friend the Minister for Energy, Tim Eggar, and the chairmen of the pension scheme trustees, Sir Norman Siddall and Mr. James Cowan, which sets out the agreement at greater length. Copies of these letters have been placed in the Libraries of both Houses.
Amendments Nos. 40B to 40L result from the negotiations with the trustees. The amendments would enable the agreement that has been reached to be put into effect. The drafting of the amendments that the Government are proposing to the Committee has itself been agreed in detail with the trustees in order to ensure that their proper concerns are met.
Amendments Nos. 40B to 40G have four purposes which are all interlinked with the agreement reached with the trustees. First, the amendments will enable the Secretary of State to extend the guarantee that the Government are to give to the British Coal pension schemes. It had been proposed that the pensions and deferred pensions would be guaranteed to increase annually in line with the retail prices index from their level at privatisation. Any additional bonus enhancements awarded to beneficiaries out of future scheme surpluses would not be guaranteed and could be reduced if the schemes subsequently went into deficit.
It is now proposed that the government guarantee should be extended to ensure that if a deficiency arises and bonus enhancements are reduced the overall pension in payment (guaranteed RPI-linked pension plus bonus enhancement) will not fall in cash terms.
The second purpose of the amendments is to provide for an "investment reserve" to be set up within each fund. This reserve will be the repository for the unused amounts of British Coal's share of the surpluses declared at the most recent valuations as at April 1992 in the staff scheme and as at September 1993 in the mineworkers' scheme. If a deficiency arises, the investment reserve will provide the first source of funds to balance the deficiency and the reserve will therefore act as an additional means of protection for bonus
834
enhancements. The first use of any surplus fallowing a deficiency would be to make up the investment reserve to the level that it would have been at had no deficiency payment been made.
The investment reserve will be run down over not less than 25 years by transfers to government, and the third purpose of the amendments is to enable government to receive such transfers. It will be for the scheme actuary to recommend at each triennial valuation what transfer, if any, should be made, taking account of total liabilities and the smooth-running of fund arrangements. Any individual transfer could be spread over a period of three years on the advice of the actuary.
The fourth purpose of the amendments is to further limit the Secretary of State's powers to modify the schemes. He has to have such powers in order to put into effect the solvency guarantee and the other elements of the agreement with the trustees. The powers are already limited to ensure that they cannot be used to reduce guaranteed pensions. The amendment further restricts his powers by limiting their use to two years from the commencement of the guarantee. The trustees attach great importance to this limit.
These amendments are essential to the agreement that has been reached with the pension scheme trustees. I recommend them to the Committee and hope that: they will be warmly welcomed. I beg to move.
4.45 p.m.
Lord Peston: I thank the Minister for what he has just said and, if I may use an expression that he used about a previous group of amendments, I give the amendments a welcome, "albeit a cautious welcome". The reasons for the caution are, first, that I am not an expert on pensions. Secondly, I have had little time to examine the amendments or the Written Answer that was given to the noble Lord, Lord Brougham and Vaux. I have at least read the latter and, since it is written in English (unlike the amendments), I believe that I have some glimmering of an understanding of it. However, I should still like to reflect on it a little more. The Minister referred to an exchange of letters. That was the first that I have ever heard of them and I have not the remotest idea of what is in those letters. Lastly and not surprisingly, I need to read the Minister's speech.
All that leads to caution and to my need to consult my own advisers. Also, not surprisingly, I have not spoken to the trustees, but I take it from what the letters say that they are happy. However, I think that the Committee will agree that although the trustees are bona fide, excellent and sympathetic people, they are not the only people involved. I should like to ask those who represent miners what they think of the matter.
It also leads me to a few questions on which we ought at least to reflect. This is not with a view to saying that the amendments are not satisfactory. I genuinely seek clarification. I take it—I hope that the Minister will confirm this—that what we are really discussing is the position of past and present employees of British Coal and the position of those who continue to be employees, who will be employees of the new lessees, or who leave the industry and have deferred pensions or of various

835
other people who are currently connected with the industry in one way or another. In other words—I think this was made clear in the Notes on Clauses and by the Minister's right honourable friend the President of the Board of Trade—this has nothing to do with new employees of the lessees: we are not concerned today with the pension position of anybody entering the industry from now on as a miner. I hope that the Minister will be able to clarify that when he replies.
That leads me to the question of whether we have any thoughts about the pension position of new entrants to the industry. It also leads to the question of how we define a "new member". I should like the Minister to tell us something about that.
In that connection and with regard to the future, perhaps I may add that examination of the Rothschild document (which, I agree, is only a broad-brush document) reveals no mention of the word "pensions". There is no mention in that document of pensions or of any responsibilities of the licensees in respect of pensions.
I think that I am right, but perhaps I should put this interrogatively and ask: is such a thing as a pension fund involved here? This is not a pension scheme where there is no fund. There is a fund and the trustees are responsible for it. The Committee may think that my question is naive, but who owns that fund? In particular, who will own that fund after the Bill becomes law? It is not a trivial amount. There has been talk of a sum of money upwards of £14 billion.
Lord Ezra: It is more than that.
Lord Peston: On Second Reading, the noble Lord, Lord Ezra, said £17 billion, but either way it is not tuppence ha'penny, if I may put it as crudely as that. Who owns that fund? More to the point, if the Bill were to become law, is there any way in which henceforth the President of the Board of Trade, or I suppose in practice the Treasury, could lay their hands on that fund, because under the earlier arrangements they could not get near it? Has anything happened, or is anything likely to happen—if I may use the crude expression—so that the Treasury could do a Robert Maxwell on any or all of the fund? I know that that is a shameful suggestion, and I withdraw it immediately. I am not suggesting that the Treasury would do that; I am merely asking whether anything could possibly happen. In other words, is there any way in which the Treasury could get its hands on money which in my judgment does not belong to it? I should like a straight yes or no answer to that rather than a maybe or maybe not.
Another question arises—I should probably reflect upon this a bit—because the Minister referred to the new position with regard to the Secretary of State's powers to intervene. I thought that I heard him say that that was necessary for one purpose, and one purpose only, and had to do with the guarantees on efficiency. Will he say in terms that that is all that the Secretary of State would remotely be able to do; that he would be ultra vires in trying to use his powers for any other purpose? Will the Minister tell us that?
836
I come last to the point which I agree is a difficult one to answer, which is all to do with this real term stuff and what is happening to surpluses and all of that. But if I were a miner, or already a pensioner—I know at least one person who has testified to being a pensioner—my straightforward question would be: if the Bill becomes law —and I now look at the time pass of my pension—will my pension be higher, lower or the same as it would otherwise be? I ask this question not just for the noble Lord, Lord Ezra, but for several hundred thousand other people. Will the Minister say categorically that those people will, at the worst, be as well off as they would be and perhaps even better off? Those are my main questions.
Lord Ezra: I very much welcome the amendment. I have been following this matter closely, partly for the reasons mentioned by the noble Lord, Lord Peston, because I am personally involved as one among 600,000 pensioners and deferred pensioners—we are a large group of people—and also because of my past association with the industry. I have been in close touch with the secretaries and the chairmen of the two schemes. I have heard from them today that they are well satisfied with what has now been agreed. There were a number of reservations about Schedule 5 as originally drafted.
First, there was grave concern that at certain points pensions might fall in cash terms—a thing that has never happened before. That possibility has now been withdrawn totally and completely, as I understand it. I welcome the establishment of the investment reserve fund which is a balancing fund to ensure that that can never happen. But what I welcome above all is the limitation on the Secretary of State's powers of intervention, because as drafted there was the ominous phrase that he could intervene on grounds of national policy.
As I said on Second Reading—this links in with what the noble Lord, Lord Peston, has just said—it might be considered to be in the interests of national policy that the whole £17 billion could be transferred to deal with a major financial crisis with which the Government were faced. I believe that that possibility has now been totally removed and that the Secretary of State's powers of intervention will be limited to two years and merely in order to cover the transitional period, and that thereafter his involvement will be for what I consider to be a pretty beneficial purpose. I paraphrase the words. The aim will be to see that the twin objectives of minimising the risk and maximising the investment returns will be achieved. In my small way, with the limited investments I have at my disposal, I have tried to achieve those objectives—with varying success, I may say. If the Secretary of State, the trustees of the two pension funds and their numerous advisers can manage over the years without any variation to minimise risk and maximise returns, then that is an endeavour that is well worth while.
I am very pleased with the amendment. The Government have done well to avoid in the case of coal pensions the misunderstandings that arose over railway pensions. There will be many pensioners who will be

837
very pleased at what has been done today. But I shall of course be interested to hear what the Minister says in response to the noble Lord, Lord Peston.
Lord Haslam: As a modest critic of various parts of the Bill, I should like to add my praise for the Government. A good solution has been arrived at. Like the noble Lord, Lord Ezra, I have been in touch with the trustees throughout. I think they are as satisfied as they ever could be that this is a good deal. I, too, am one of the 600,000 pensioners, so I am a beneficiary of this outcome. I have now retired about five times so I have four pensions and my old age pension. I have to say that my British Coal pension goes up quicker than any of my private sector pensions. That is a tribute to the way in which the funds are handled. I thank my noble friend the Minister.
Lord Strathclyde: I am delighted by the welcome that has been given by my noble friend Lord Haslam. As Minister responsible for the Bill, at least while it is going through this place, I try to please and I am delighted to make the announcement. I am also pleased by the welcome given by the noble Lord, Lord Ezra. He is right about how we have changed the Secretary of State's duties. That, as the noble Lord knows, has been a sticking point in previous Bills. Paragraph 5(5) only enables the Secretary of State to secure that the trustees should have proper regard to the interests of the taxpayer as a guarantor in performing their fiduciary duties.
The noble Lord is of course equally correct about the powers of direction to the trustees. They will be focused on the twin objectives of avoiding and minimising fund deficiencies and maximising the potential for fund surpluses. I wish them good luck in being able to do that.
As for the noble Lord, Lord Peston, his welcome for the amendments was less effusive than it might have been, particularly in the light of what my noble friend Lord Haslam and the noble Lord, Lord Ezra, said.
Lord Peston: Perhaps I might interrupt the Minister. The main reason for my being less effusive as compared with the noble Lords, Lord Ezra and Lord Haslam, is that they made it clear that they think that they understand the amendments. I have to be honest; I cannot make head or tail of them. Therefore I tend to be a little cautious, because I tend not to agree with things until I have found out what they mean. I shall probably be effusive when I eventually understand what is there.
Lord Strathclyde: The noble Lord, Lord Peston, asked a series of questions, some of which I shall seek to answer. I shall follow up the others by letter because they deal with some complicated issues. I share the noble Lord's concern about being able to understand the amendments. They are difficult. As I said when introducing them, they came to the sight of this place only late last night. First, I can confirm that what we are dealing with today is not the pension rights of new miners coming into the industry or miners obtaining new pension entitlements as a result of their
838
employment changing; we are talking about former employees—those who have retired and those who are currently working in the mining industry.
The pension fund is under the control of the trustees. I am not sure about the ownership of the fund, but I suppose that control must confirm some form of ownership. The Treasury has no right to the funds but —and this is where we get into the difficult question of the yes, the no and the maybe —the Government have reserved a share of the surpluses. That is quite straightforward, because by guaranteeing the British Coal pension schemes the Governments are taking on a massive contingency liability. Therefore, it is only fair that in return the beneficiaries should share any surpluses with the taxpayer.
The agreement was struck after a great deal of detailed negotiation between the Government and the trustees, with plenty of advice from many other people. It is a good agreement. No doubt we shall be able to return to the subject on Report when the Members of the Committee will have considered the amendments at their leisure. I look forward to that.
Lord Peston: Before the Minister sits down, I wish to ask one further question. I understood the Answer to the Written Question tabled by the noble Lord, Lord Brougham and Vaux. I understand the Minister to say that the amendments are the Bill's counterpart to that Written Answer—at least, that is what the Government hope they have done. Is it right that the amendments correspond to that Answer to the noble Lord, Lord Brougham and Vaux?
Lord Strathclyde: Absolutely. There was no point burdening my noble friend Lord Brougham and Vaux with the amendments and therefore it was better to explain them in what the noble Lord, Lord Peston, called "plain English". I hope that my explanation gave not only the noble Lord but the whole Committee the comfort that was required. It also confirmed that the amendments put into place my Answer to my noble friend's Question.
Lord Ezra: Before leaving the amendment, it would be desirable to put on record the tribute that we owe to the trustees and staff of the two pension funds and, indeed, to the staff of the DTI for having worked this out, albeit at the last minute, and for having come to what appears to be a satisfactory conclusion.
Lord Strathclyde: For the record, I entirely agree with the noble Lord, Lord Ezra. My job was made considerably easier today by being able to come forward with these amendments.
On Question, amendment agreed to.
5 p.m.
Lord Strathclyde Lord Strathclyde moved Amendments Nos. 40C to 40G:
Page 103, line 3, leave out from ("to") to end of line 25 and insert ("any existing scheme, that the assets of the scheme are at all times sufficient for meeting the principal pension obligations and such other pension obligations under the scheme as are obligations to which he considers such arrangements should apply.").

839
Page 103, line 29, leave out ("(6)") and insert ("(3D) or (3E)").
Page 103, line 30, at end insert:
("(8A) Regulations under this paragraph may provide for—

(a) any such apportionments or allocations as are mentioned in the preceding sub-paragraphs,

(b) any determination for the purposes of any existing scheme of the amount of, or of any part of, any surplus or excess or of the assets for the time being to be treated as representing the whole or any part of any such surplus or excess, and

(c) the determination of any other matter falling to be determined for the purposes of any provision relating, in the case of any such scheme, to the management or application of the assets representing any reserve or surplus,

to be made as at such times, on such basis and by reference to the opinion of such persons as may be prescribed.").
Page 103, line 37, at end insert:
("(10A) The power to make regulations under this paragraph shall not be exercisable at any time after the end of the period of two years beginning with the restructuring date; but this sub-paragraph shall be without prejudice to any regulations made before the end of that period or to anything done (whether before or after the end of that period) under any regulations so made.
(10B) In this paragraph "relevant surplus", in relation to an existing scheme, means any surplus determined as at any time on or after 31st March 1992 of the assets of the scheme over the amounts required, as at that time, for meeting the obligations which (apart from the surplus) either have arisen or may arise as pension obligations under the scheme.").
Page 103, line 42, leave out from ("any") to ("; and") in line 43 and insert ("relevant surplus determined as at any time on or after 31st March 1994").
On Question, amendments agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 40H:
Page 104, line 21, after ("the") insert ("existing").
The noble Lord said: I shall speak also to Amendments Nos. 40J and 40K. The purpose of these amendments is to ensure that employees in the new industry-wide Mineworkers' Pension Scheme and Staff Superannuation Scheme can move between the schemes on a change of duties without loss of protected person status. British Coal employees commonly move between the SSS and the MPS when the duties performed by them change due to promotion to or, more exceptionally, demotion from a staff grade. For the good management of the industry, it is desirable that under the new arrangements moves between the schemes should be able to continue without any loss of pension entitlements. The amendments will ensure that and I therefore commend them to the Committee. I beg to move.
Lord Peston: These amendments are more technical than the previous amendments and I wish to ask only one question. If, having been an employee of British Coal and therefore eligible in the sense that we are discussing today, an employee of one lessee moves to the employment of another—from one region, say, to another—will the amendments preserve his pension position? In other words, it is not merely a matter of changing status within the employment of one lessee but of moving from the employment of one lessee to that of another. Is that what the amendments are meant to cover?
Lord Strathclyde: That is the case in any event because the successor schemes to the British Coal pension fund will be the new industry-wide schemes. It will give mineworkers commonality across the board.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendments Nos. 40J and 40K:
Page 105, line 21, after ("scheme") insert:

("(aa) a person the duties of whose employment with the same employer have changed so that he has ceased to be eligible to participate in a scheme in relation to which he has been entitled to protection under paragraph 4 below but has become a person who satisfies, by reference to his new duties, a condition of eligibility for participation in the new scheme;").

Page 106, line 9, at end insert:
("(2A) Regulations under this paragraph may make provision for securing that a person entitled to protection in relation to a scheme to which this paragraph applies who—

(a) ceases, by reason of any change in the duties of his employment with the same employer, to be eligible to participate in that scheme, but

(b) by reason of the change becomes a person who satisfies, by reference to his new duties, a condition of eligibility for participation in another such scheme,

is afforded the equivalent protection with respect to his participation in the other scheme as was previously secured, by virtue of this paragraph, with respect to his continuing participation in the scheme for which he has ceased to be eligible.").
On Question, amendments agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 40L:
Page 108, line 7, leave out from second ("powers") to end of line 18 and insert ("shall be treated as conferred for purposes that include securing that trustees and other persons concerned in the administration of the scheme exercise and perform their powers and duties in such manner as appears to the Secretary of State to take account, to the extent that he thinks appropriate, of the desirability—

(a) of preventing the Secretary of State from incurring any liability under arrangements entered into as mentioned in paragraph 2(5) above;

(b) of keeping to a minimum the amount of any liability that is incurred under any such arrangements; and

(c) of managing the scheme so as to produce the largest practicable surpluses at the times as at which determinations of any relevant surpluses (within the meaning of paragraph 2 above) fall to be made.").

The noble Lord said: Amendment No. 40L addresses an aspect of the pensions schedule that has caused the trustees of the British Coal pension schemes great anxiety.
If the Government are to guarantee the pension schemes, it is essential that the Secretary of State should be able to secure, if necessary, that the trustees have due regard to the interests of the guarantor. The schemes could, after all, potentially make very heavy calls on public funds and it would be irresponsible of the Secretary of State to overlook the need to obtain a proper balance between the regard shown to the interests of the schemes' beneficiaries and that shown to the taxpayer as ultimate guarantor. The trustees, on the other hand, have been rightly concerned that as far as possible their fiduciary duties should not be overridden.
It has not, however, been easy to strike a balance which is acceptable to both sides. We have, nevertheless, finally been able to find such a balance and this is enshrined in this amendment. The key to the new draft is that it focuses the Secretary of State's power to

841
direct the trustees on the twin objectives of avoiding and minimising fund deficiencies and maximising the potential for fund surpluses.
The trustees have been assisted in their acceptance of the amendment by the comfort that I was able to give them on this subject yesterday in my Answer to my noble friend Lord Brougham and Vaux. I explained that the Secretary of State, as guarantor, would expect to exercise the powers conferred on him to intervene in the day-to-day management of the fund only in the most exceptional circumstances. Any use of his powers would, therefore, normally arise only in the context of strategic investment policy or strategic investment decisions. He would intend to use his powers in circumstances (which would hopefully be rare) only where he considered it is necessary to do so to secure either of the two objectives of minimising the risk and extent of calls on the guarantee or maximising surpluses. The scheme would also provide that he would, in any event, exercise his powers only after consultation with the trustees, unless in exceptional circumstances such consultation was impractical. The Secretary of State would also consult the trustees before changing the stated policy.
The amendments were touched on in our earlier debate. I hope that we can agree them without further ado. I beg to move.
Lord Peston: I thank the Minister, who covered the matter in his earlier remarks. I was a little taken aback as to the need for this provision in the Bill. The trustees are trustees and are limited by law in many ways. They have a fiduciary duty and, in particular, they must behave prudentially. I speak as a layman, but I am surprised that without this clause the trustees are not obliged to take into account the interests of the guarantor; in this case, the Secretary of State.
I shall try to obtain legal advice. I shall not oppose the clause, but I am a little taken aback that the Secretary of State considers that he needs such a belt-and-braces approach, which another guarantor would not be able to have and would not ask for. I do not seek to oppose the provision because I seek to achieve what the Minister is seeking to achieve.
Lord Strathclyde: Agreement was struck only after a great deal of time and negotiation. I am convinced by my advisers that the amendment is necessary.
On Question, amendment agreed to.
Schedule 5, as amended, agreed to.
Clause 23 agreed to.
Clause 24 [Abolition of the Domestic Coal Consumers' Council]:
On Question, Whether Clause 24 shall stand part of the Bill?
Lord Ezra: The noble Lord, Lord Strathclyde, has been most helpful during the past several minutes. I hope that he will be equally helpful as regards the issue that we are about to discuss. We are now going to talk about the interests of domestic coal consumers. The only reference in the Bill to domestic consumers of coal—of whom there are still a large number—is the abolition of the Domestic Coal Consumers' Council.
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I am very surprised at the way consumers are dealt with in the Bill. In privatisation of electricity and gas, not only was an obligation put on the regulator to safeguard the interests of consumers, but consumer councils were also established. In the gas industry, it is a totally independent council with considerable powers and authority.
Electricity and gas are single products. There are no variations in the quality of electricity you can buy; indeed, it is all one type of product. The same is true of gas. However, that is not so with coal. Coal is a variable and natural product drawn from under the ground. There are variations of house coal—three groups—which look the same to the naked eve but, of course, the expert knows that there is a difference. And they command different prices. There is also a whole range of smokeless fuel; for example, anthracite and manufactured smokeless fuels. At present, there are coals used in this country which are produced here and those which are imported.
Over the years, the Domestic Coal Consumers' Council—I was a member of it for several years—was there to safeguard the interests of consumers as to price, quality, and, indeed, safety. There are ways in which solid fuel can be used which may be harmful and, in some cases, lethal if wrongly used. The council has performed an excellent task. The present chairman Ms. Ann Scully has done a very good job and many of us know her individually.
I am surprised that the Government should pay so little regard to the interests of consumers of coal, especially domestic consumers, that they simply abolish the council. As I understand it, they have some idea of replacing it with another body. However, that is not at all clear. Therefore, we want to raise the matter as we consider it to be a most serious issue.
When dealing with an amendment on Tuesday putting an obligation on the Coal Authority to have regard to energy efficiency, the Minister said that we had misunderstood the role of the authority and that it had no responsibility whatever for consumers. So the authority does not have responsibility for consumers; we are abolishing the Domestic Coal Consumers' Council; and we may or may not have some other body in its place. I regard that as being a totally unsatisfactory situation. In view of the variability in the quality of coal sold on the domestic market, of the need to safeguard the interests of consumers and to maintain their interest in continuing to buy coal, and of the need to safeguard their health and safety, it is essential that the Government tell us more about what they have in mind regarding domestic consumers.
Baroness Lockwood: I support the noble Lord, Lord Ezra, in this matter. There are about 3.5 million people who use coal. The majority of them are dependent on coal as their main fuel. In Northern Ireland, which is a completely different situation from the mainland of Britain, about 70 per cent. of households use solid fuel for their main heating. It is a very important and serious matter.
As the noble Lord, Lord Ezra, said, in most legislation we now include some provision to cover the

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interests of consumers. Indeed, it was the Coal Industry Nationalisation Act 1946 which established the Domestic Coal Consumers' Council with the very purpose of protecting consumers' interests. In a Bill that seeks to transfer the ownership of the coal mining industry back to the private sector, I believe that we need a similar provision to ensure that there is a body responsible for consumer interests.
I understand that some discussion has taken place between the Domestic Coal Consumers' Council and the Minister for Energy. The latter indicated that he had some sympathy with the concern of the council and went on to say that the purpose behind Clause 24 was to see what alternative provision could be made. It would be helpful if the Minister in this Chamber can tell us what those alternative provisions are likely to be. It would be even more helpful if we can be assured that there is something on the face of the Bill that protects consumers.
5.15 p.m.
Lord Haslam: I totally endorse the sentiments expressed by the noble Lord, Lord Ezra, and also the remarks made by the noble Baroness. I, too, have a high opinion of the organisation. I believe that it has been very effective in its role of protecting the interest of domestic consumers on the safe use of solid fuel. The council is obviously currently responsible for some activities which will not be valid following privatisation; for example, participating in negotiations on domestic coal prices with British Coal. Surely, rather than creating a new body or system, a slimmed down and focused Domestic Coal Consumers' Council would be the best alternative and would preserve the great amount of experience which exists within the organisation.
Lord Morris of Castle Morris: I support everything that has been said. The Labour Party's policy on the Domestic Coal Consumers' Council is perhaps best represented by the amendments that we previously intended to move. We intended to insert into Clause 24 the words:
"The Secretary of State shall consult the Council in good time before making an order dissolving the Council",
and the words:
"The Secretary of State will ensure that adequate arrangements for the protection and safety of domestic coal users are in place before the Council is abolished".
I hope that the Minister will be able to tell the Committee what consultations have taken place and what arrangements have been put in place. Many solid fuel users are the elderly and the less well off in the community. It is essential that they should continue to receive the same level of protection following privatisation as they currently receive. They deserve no less.
Lord Strathclyde: I am slightly surprised by the excitement that this rather humble clause has produced. Perhaps I may spend some time explaining in more detail its background and purpose. First, we must recognise that, especially in Great Britain, coal represents a relatively small and declining part of the
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domestic heating market. Added to that, it is a market already open to competition. Domestic coal consumers buy, and have bought, their coal for a number of years from merchants and other outlets in the private sector. At the same time, coal merchants themselves purchase their supplies competitively in the market from importers as well as UK coal producers. Consequently, the arguments raised in favour of consumer representative bodies in the electricity, gas, telecommunications and water industries do not apply to coal because we are not talking about monopoly suppliers. I am very confident that the competition which already exists in the domestic coal market will ensure that the trade is responsive to customers' needs.
Secondly, the Domestic Coal Consumers' Council has a purely advisory function. The statutory protection for consumers is provided by the general body of consumer protection legislation, notably the Consumer Protection Act 1987. That is a very important Act because it puts a duty of care onto those who are selling products and of course the whole panoply of consumer protection legislation that is now in place in the 1990s did not exist in the 1940s when this body was set up.
Thirdly, it is common for trades to develop voluntary consumer protection arrangements to complement the legislative safeguards. That of course is the case too in the coal industry, and the trade is actively addressing how to continue those arrangements in the absence of British Coal, a process in which the Domestic Coal Consumers' Council is closely involved. My officials are keeping in close touch with progress on this matter.
In those circumstances, we see no need for the continuing existence of a statutory, advisory body. But perhaps I can offer a small light shining in the darkness for Members of the Committee who have spoken against this clause because the Bill provides for the abolition of the Domestic Coal Consumers' Council on an "appointed day". We do not envisage that the council will be abolished immediately. We understand the importance for domestic coal consumers to be confident after privatisation that effective arrangements are in place to replace those presently involving the council and British Coal. We accept the need for a smooth transition to new arrangements being developed by the trade for its customers before abolishing the council. I believe that that is the best way to proceed. I am sorry if I do not offer any comfort to the Committee. I do not believe that Members of the Committee have made a case for preserving this body and I hope that they will agree with me and thus withdraw their objections to this clause.
Lord Sefton of Garston: I do not know whether I fit the description of the three million people who rely on solid fuel to heat their homes. I certainly fit the description of being elderly as I am 79 and I am certainly less well off.
There is a case for saying that the Domestic Coal Consumers' Council, which has the specific task of looking after people who use solid fuel in their homes, should be kept in existence. It cannot be compared with a council set up to protect electricity users. It cannot be compared either with a council set up to protect gas

845
users. If one lives 800 feet up in the hills of this island one cannot obtain electricity at as cheap a rate as coal when one takes into consideration capital costs, and if one has any consideration at all for the environment one will not want to use oil heating. I do not know whether people appreciate that it is not a good thing to transport oil into the countryside.
A service for solid fuel users which is based upon tradition and long practice is still necessary for those who live in the rural areas of this country. Solid fuel differs from all the other fuel supplies because of that simple fact. It is now becoming more and more difficult to establish competition between the various traders who are responsible for the distribution of coal to householders because they are less and less willing to travel to the outer rural places.
I hope I have managed to highlight the difference between this consumer council and other consumer councils. I see no earthly reason at all why the Government cannot ensure that the Domestic Coal Consumers' Council—they say it will remain in existence during a transitional period—remains in existence, if only to ensure that certain people still receive supplies when those in the trade are perhaps not willing to transport coal to certain outlying areas. The Government's attitude on this matter seems to be the same as their attitude towards post offices. The Minister seemed to suggest that this provision is not a very important part of the exercise but he completely ignores the fact that it is an important part of the exercise for people who live in the rural areas of this country.
Lord Strathclyde: The noble Lord, Lord Sefton of Garston, says there is a case for preserving this council. There is a case but it is not a very compelling one.
Baroness Lockwood: The Minister says that we have not convinced him of the need to continue with this council. I am afraid that he has not convinced me, at any rate, that the Government have a case for closing it down. He pointed to the need for competition. The coal industry will have to compete for consumers with electricity and gas in the future. Both of those two industries have consumer protection. The coal industry will not have this consumer protection and there are still some dangers relative to coal being used as a domestic fuel. That needs to be taken care of. The Domestic Coal Consumers' Council has been responsible for research in this area and has co-operated with the Coal Board and latterly with British Coal to ensure that there is safety in the home. The Minister has given no assurance that that protection will continue. That is an unsatisfactory situation.
Lord Prys-Davies: I really do not think, with the greatest respect, that it is good enough for the Minister to say to my noble friend Lord Sefton that he has not made out a compelling case. The Minister did not answer a single point made by him. That is not good enough. If my noble friend says that we need this council—for example, to ensure a supply of domestic coal —what is the answer to that in the absence of the council? The Minister cannot, at the end of the day, just get up from the Front Bench and say that my noble
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friend has not made out a compelling case. Will he please answer the particular point made by my noble friend?
Lord Wyatt of Weeford: I think the noble Lord in charge of this Committee is taking rather a cavalier attitude towards this matter. After all, it cannot be very expensive to run a consumers' council and it is important, as many Members of the Committee who have been involved in the coal industry know. It is important that consumers should know what their rights are, how they can obtain their coal and so forth. It must be of benefit to anybody who buys a coal mine to have a wider distribution and more access to the coal than if there is no coal consumers' council. I should think it costs about tuppence-halfpenny to run the council and surely the Government could provide that out of their own funds, or impose a levy on the new owners.
Baroness White: Has the Minister taken into account that there are a number of people who will be entitled to concessionary coal but, possibly, it will not come from the pits from which they are accustomed to receive it? They may have to take coal of an entirely different quality and have it brought in a different way to their homes. The matter is more complicated than the Minister gives it credit.
Lord Strathclyde: I am sorry the Committee thinks I have been cavalier in my approach towards the consumers' council. I believe that consumers' groups have a good and valid point and a voice that should be heard. The difference between this industry and the other industries that we have privatised in the past is that normally they are monopoly industries. What we are talking about here is not a monopoly industry. It must be in the interests of the coal merchants and of the successor companies to sell their coal in the best possible way. That was not always true when it was a nationalised industry, when there was clearly a need for the consumers' council. I do not think this is a great point of principle. I simply think that when we are reorganising statutory bodies we should look carefully at the kind of powers that we give them. I simply said —I hope that the noble Lord, Lord Sefton of Garston, did not think I was being flippant—that I did not think the case he was making was a particularly compelling one and that is why I thought we should maintain this clause in this Bill.
Lord Sefton of Garston: I thank my noble friend for establishing the fact that he at least believes the Minister treated this matter in a cavalier fashion. I would not dream of suggesting that, because treating something in a cavalier fashion means that one understands the problem and then completely and utterly ignores it.
The point is that the noble Lord does not understand the problem. He said in another debate that the Coal Bill bore no relationship whatever to oil and other forms of fuel. He seems to try to remove that completely from his mind saying, "I can't accept that argument because it has nothing to do with the Coal Bill". Therefore, he does not grasp the whole perspective. I do not blame him for that. After all, he must be drowned by the amount of paper that comes down in the form of briefings, and

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when he gets to the Dispatch Box if he dares to depart one bit from that briefing he knows that he is in trouble when he gets back to the real bosses.
I tried to point out that the delivery of coal to rural areas and in areas such as where I live, 800 or 900 feet up in the hills, is becoming more difficult. I could relate my personal experience of relying on competition between traders to get the best deal. It becomes involved. You have to find out when they deliver and whether you can be there to ensure that you get the right number of coal bags delivered to your place. In other words, the less we use coal in those rural areas the less competition there will be among traders to supply it. We could well end up with a similar situation as has occurred with the postal service and the pension service in rural post offices. We could find that people living in rural areas who would prefer to use solid fuel in their cottages will be compelled to turn to oil. That is not a very good thing.
I did not expect for one minute that the Minister would apply himself to the wider problems of the community, because this Government have got themselves into such a position that the only thing they consider is the question of cash, knowing the price of everything and the value of nothing.
5.30 p.m.
Lord Wyatt of Weeford: Why does the Minister think that the intention when the telephone system was privatised was to leave it as a monopoly? The service is now being divided up between a number of organisations. The terrible monopoly that BT once had is being broken up and the place is stiff with regulatory bodies, commissions and so forth which see to it that the consumer gets a fair deal. If he cannot get a telephone when he ought to be allowed to have one they do something about it. Therefore, why does he draw an analogy with something which is quite inaccurate?
Lord Strathclyde: In 1984 when we privatised British Telecom we were dealing with a monopoly situation. The regulator, who is not necessarily the voice of the consumer—there is a separate consumer consultative body to deal with that aspect—had the power to introduce the competition which we see bringing so much benefit today.
The point that I tried to make is that the domestic coal market is already highly competitive, and therefore there is no need for a consumer council to tell people where to get the best deal.
Lord Haslam: The Minister is confused. We are not discussing competition. We are discussing the fact that coal is used from a variety of sources in many houses and different appliances. It is the protection of the consumer which we are concerned about and which we want to preserve. I said in my remarks that I do not believe that the element of price involvement which the organisation had previously should be preserved. One can have a slimmed down organisation which will deal with precisely the matters which noble Lords are asking for without creating something new.
Lord Ezra: I was disappointed with the noble Lord's reply. He will have gathered from interventions from all sides of the Chamber that none of us is convinced by the reasoning of the Government on this occasion.
I cannot understand how a Government who have set so much store by the Citizen's Charter to safeguard the interests of consumers cannot accept this small thing for which we are asking in relation to the coal industry, namely that a limited, on-going consumer organisation should continue. We would be supporting what I believe is the thrust of the Government's policy in relation to individuals.
The noble Lord, Lord Haslam, was absolutely right. This is not a question of competition. This is a question of safeguarding the interests of those who have expressed their preference for an important source of energy and who are obtaining it from a variety of sources. They want to feel that there is an independent body to which they can turn to safeguard their interests. That is what we are talking about.
It is quite wrong to suggest that there was no competition in the days when the industry was nationalised. There was intense competition within the distributive trade. You could shop around and buy from whichever coal merchant you liked. That will not change. It will remain exactly as it is. Indeed, in my day, and certainly in the day of the noble Lord, Lord Haslam, there was a great deal of imported coal. There was all the more reason to have a body to which you could turn so that you could say to the coal merchant, "You have sold me this coal from Morocco, or wherever, and it is not up to the standard that was offered". There would be expert opinion to advise on that.
I do not see that that situation has changed one little bit. The coal trade will still be there, as it was. It will be offering competitive terms. There will still be the fact that coal is a natural commodity whose quality varies, and people want to be sure that when they pay for a certain quality of coal they are actually getting that quality and not an inferior quality. They want to be sure that when they run into difficulties with their appliances that is not due to the coal they use but to a fault in the appliance.
The Domestic Coal Consumers' Council has built up expertise over the years. I am worried that with the Bill many of the good things which have been developed in the many years of public ownership are being thrown out, and I do not know the reason. Why not preserve the good and the positive aspects? This is a small matter. The noble Lord could help us a great deal this afternoon if he would say that he will think about the matter again and come forward with proposals at Report stage. I put that to him before I decide what to do in relation to this issue.
Lord Strathclyde: I am always delighted to try to be as helpful as I can. It would be unfair if I gave the impression that there was very much further that I could go. We are very much relying on on-going discussions among ourselves, British Coal, the consumers' council and the trade, which plays such an important role in this, as the noble Lord mentioned.

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It would be unfair if I gave any assurance that I could come back with amendments. I must leave the noble Lord, Lord Ezra, to decide what to do.
Lord Ezra: Regrettably, in those circumstances, I believe that the time has come to ask the House to decide.
5.37 p.m.
On Question, Whether Clause 24 shall stand part of the Bill?
Their Lordships divided: Contents, 114; Not-Contents, 59.

Division No. 1

CONTENTS

Addison, V.

Kimball, L.

Aldington, L.

Kinnoull, E.

Alexander of Tunis, E.

Lane of Horsell, L.

Allenby of Megiddo, V.

Lauderdale, E.

Annaly, L.

Long, V.

Archer of Weston-Super-Mare, L.

Lucas of Chilworth, L.

Arran, E.

Lyell, L.

Ashbourne, L.

Mackay of Ardbrecknish, L.

Astor, V.

Mackay of Clashfern, L. [Lord Chancellor.]

Balfour, E.

Blatch, B.

Marlesford, L.

Blyth, L.

Merrivale, L.

Boardman, L.

Mersey, V.

Boyd-Carpenter, L.

Milverton, L.

Brabazon of Tara, L.

Monson, L.

Braine of Wheatley, L.

Mottistone, L.

Brookeborough, V.

Moyne, L.

Brougham and Vaux, L.

Munster, E.

Bruntisfield, L.

Murton of Lindisfarne, L.

Burnham, L.

Napier and Ettrick, L.

Butterworth, L.

Nelson, E.

Cadman, L.

Norfolk, D.

Campbell of Croy, L.

Orkney, E.

Carnegy of Lour, B.

Orr-Ewing, L.

Carnock, L.

Oxfuird, V.

Cavendish of Furness, L.

Park of Monmouth, B.

Chalker of Wallasey, B.

Pender, L.

Chelmsford, V.

Prior, L.

Clanwilliam, E.

Rankeillour, L.

Clark of Kempston, L.

Reay, L.

Colwyn, L.

Renton, L.

Courtown, E.

Rodger of Earlsferry, L.

Craigavon, V.

Romney, E.

Cranborne, V.

Seccombe, B.

Crathorne, L.

Shannon, E.

Crickhowell, L.

Skelmersdale, L.

Cumberlege, B.

Skidelsky, L.

Denton of Wakefield, B.

Spens, L.

Dundonald, E.

St. Davids, V.

Eden of Winton, L.

Stanley of Alderley, L.

Elibank, L.

Stewartby, L.

Ellenborough, L.

Strathcarron, L.

Elles, B.

Strathclyde, L.

Elton, L.

Strathcona and Mount Royal, L.

Ferrers, E.

Strathmore and Kinghorne, E. [Teller.]

Fraser of Carmyllie, L.

Fraser of Kilmorack, L.

Swansea, L.

Goold, L.

Swinfen, L.

Goschen, V.

Tebbit, L.

Gray, L.

Trefgarne, L.

Halsbury, E.

Trumpington, B.

Hardinge of Penshurst, L.

Ullswater, V. [Teller.]

Henley, L.

Vivian, L.

Hives, L.

Wade of Chorlton, L.

HolmPatrick, L.

Wakeham, L. [Lord Privy Seal.]

Howe, E.

Waverley, V.

Ironside, L.

Wharton, B.

Kenyon, L.

Young, B.

NOT-CONTENTS

Addington, L.

Beaumont of Whitley, L.

Barnard, L.

Blackstone, B.

850

Bonham-Carter, L.

Llewelyn-Davies of Hastoe, B.

Brooks of Tremorfa, L.

Lockwood, B.

Campbell of Eskan, L.

Longford, E.

Carmichael of Kelvingrove, L.

McIntosh of Haringey, L.

David, B.

Merlyn-Rees, L.

Dean of Beswick, L.

Mishcon, L.

Dormand of Easington, L.

Morris of Castle Morris, L.

Eatwell, L.

Nicol, B.

Ezra, L. [Teller.]

Peston, L.

Geraint, L.

Pitt of Hampstead, L.

Gladwyn, L.

Prys-Davies, L.

Gould of Potternewton, B.

Richard, L.

Graham of Edmonton, L.

Rochester, L.

[Teller.]

Seear, B.

Greene of Harrow Weald, L.

Sefton of Garston, L.

Grey, E.

Sheffield, Bp.

Hanworth, V.

Shepherd, L.

Haskel, L.

St. John of Bletso, L.

Haslam, L.

Stoddart of Swindon, L.

Hughes, L.

Taylor of Blackburn, L.

Hylton-Foster, B.

Thomson of Monifieth, L.

Jay of Paddington, B.

Tonypandy, V.

Jay, L.

Turner of Camden, B.

Jeger, B.

White, B.

Jellicoe, E.

Williams of Elvel, L.

Jenkins of Putney, L.

Williams of Mostyn, L.

Judd, L.

Winchilsea and Nottingham, E.

Listowel, E.

Wyatt of Weeford, L.

Resolved in the affirmative, and Clause 24 agreed to accordingly.
5.46 p.m.
Clause 25 agreed to.
Clause 26 [Grant of licences]:
Lord Morris of Castle Morris moved Amendment No. 41:
Page 21, line 9, leave out ("or is proposing to acquire").
The noble Lord said: With this amendment we move effortlessly into Part II of the Bill and address ourselves to the question surrounding licensing in all its glory. I hope that noble Lords might find it helpful if I begin by setting out briefly the background facts as we see them from these Benches. The operation will take two minutes starting now.
Since coal nationalisation in 1947, the National Coal Board, now British Coal, has acted as a licensing body for all private mining operations. The mines operated by' British Coal have not required operating licences as the corporation's duties and responsibilities were clearly set down in the Coal Industry Nationalisation Act and other statutes. For private mine companies licences would only be granted after obtaining planning consent and if the prospective operator was considered by the licensing authority—that is, British Coal—to be a fit and proper person to operate a mine.
The passage of the present Coal Industry Bill will fundamentally transform that regulated set of procedures. With Royal Assent, licensing powers will transfer to the Secretary of State for the interim period during which the Coal Authority will be set up. The new licensing regime will require all coal mining operations to be licensed with the Coal Authority as the sole licensing authority.
While that would appear to be a simple arrangement, what is proposed is a complex and bureaucratic system replacing two simple licences underground or opencast with two leases and two licences. At the same time the existing small mines Section 36 licences will be allowed to continue. The proposed new licences were set out in

851
draft form and issued for consultation by the DTI. Licence and lease conditions do not appear in the Bill and will therefore not receive the scrutiny of Parliament. Of particular concern to us is the absence of planning consent as a necessary condition of a licence being granted.
I turn now to Amendment No. 41. On the grant of licences, Clause 26(2), states:
"An application for a licence under this Part may be made by any person who has acquired, or is proposing to acquire, (whether from the authority or some other person)".
That is a radical departure from the present process which requires a prospective coal operator first to obtain consent from the local planning authority and then to make a licence application. So the new system will inevitably result in areas of the coalfields being blighted, particularly where coal is shallow enough to be extracted by opencast methods and where the Secretary of State could overrule the local authority by making a compulsory rights order.
As the licensing authority, the Coal Authority will not be required to consider such matters as local development plans or local planning conditions before granting a licence. The proposed licensing arrangements will result in a fundamental clash and necessary, obvious and unavoidable opposition between the licensing and the planning procedures. It is bound to happen. It will result in a situation where the only qualification required of an applicant will be to bid for a licence on a competitive tendering basis. Winner takes all. So if blight, conflict and confusion are to be avoided, the granting of licences must be tied to prior planning consent. It is therefore important that the words,
"or is proposing to acquire"
are deleted from Clause 26(2) of the Bill. I beg to move.
Lord Strathclyde: I only hope that I can answer as quickly and succinctly as the noble Lord proposed his amendment. His explanation was clear. However, I think he is wrong and I shall explain why. The amendment would have the effect of preventing potential operators applying for a licence unless they had acquired such interests and rights in land or coal as would be needed in order to enable them to carry on coal mining operations. So far, the noble Lord and I agree. However, as a result of that, potential operators would need to have committed themselves irrevocably to the substantial expenditure needed to acquire property rights in either the surface land or the coal in relation to the licensed area before having any assurance that they would be granted a licence in relation to that area. I cannot believe that that is either necessary or desirable.
In deciding whether or not to grant a licence, the Coal Authority can take into account what the applicant has done to acquire those rights. The authority will need to consider whether his application constitutes a serious intention to mine and therefore whether granting a licence would be consistent with its duties. In addition, if an applicant has yet to acquire all the necessary rights and interests, the authority will be able to issue a conditional licence. The authorisation to mine in that licence would not come into effect until certain conditions specified in the licence had been satisfied within a specified time limit, which would be assessed
852
in relation to the circumstances of the particular site. Those conditions might include obtaining planning permission. That would ensure that licensees could not be granted a licence and then sterilise the coal for an indefinite period by failing to carry out coal mining. The way in which it is envisaged the Coal Authority will carry out its licensing functions is explained in more detail in the explanatory note which was made available to the House before Second Reading.
I take almost exactly the contrary view to the noble Lord, Lord Morris. I wish to explain that, because I should like to bring him with me on the matter. I suggest to him that the flexibility which I propose is positively advantageous. Allowing prospective operators to apply where, for example, they have obtained options for land and other necessary rights and giving them an assurance that they will eventually have exploitation rights by means of a conditional licence before seeking planning permission must make it easier for people, especially smaller operators, to apply.
In addition, it will enable the authority to invite competing applications for a particular area. That will help secure a larger rather than a smaller industry—an outcome which I think would be in the interests of noble Lords opposite. I hope that I have explained the matter sufficiently clearly to the noble Lord and that he will withdraw his amendment.
Lord Morris of Castle Morris: I would love to come to meet the noble Lord on the issue; nothing would give me greater joy. Unfortunately, I cannot. I hear what he says and understand it. It is clear where he and the Government stand. He is keen, understandably, to ease the way for any potential bidder. As we have said at all stages of the Bill, loud and clear, particularly at about this time on Tuesday, he will need all the help he can get because bidders will be very worried by the amount of liabilities they are likely to inherit. We still have a long way to go on the issue of clarification if anyone is to be satisfied.
I am concerned about the people and communities in the areas in which these great financial bids will be made. The proposal that the bidder has to have planning consent and has to commit funds for the purchase of land seems a small price to pay when one considers that the licensed bidder will need to have substantial funds. He will have to show to the Coal Authority or the Secretary of State—we shall come to that later—that he is in possession of funds of such depth that his pocket must be almost down to his shoes before he can put in any kind of bid. To include what I propose seems a small price to pay.
Planning permission in those areas is so sensitive and important that while I do not wish to divide the Committee again so soon on the matter, we shall want to come back to it at a later stage. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lytton The Earl of Lytton moved Amendment No. 42:
Page 21, line 26, after ("shall") insert ("—

(a) certify to the Authority that he has served notice of the application on all those with an interest in any land

853
included within the application and given to each person the details of the application and the address of the Authority, and

(b) ").

The noble Earl said: In moving Amendment No. 42 and speaking to the amendments grouped with it, I wish to make it clear that my not having previously spoken on the Bill should not be indicative of a lack of interest in the subject. However, perhaps it is appropriate that I declare my position. Other than that my forebears gained some of their family fortunes from possibly sending under-age people down into the bowels of the earth together with the product of sweated labour, I have no interest to declare in the primary subject matter of the Bill. I am a chartered surveyor. I am also a landowner. There are matters which should properly be raised in that context. I acknowledge the help I have received from the Country Landowners' Association in respect of aspects of the Bill. The amendments are not put forward simply from a landowning standpoint. I believe that there is larger public interest.
On Amendment No. 42, I believe that it would be quite unjust for a landowner or, for that matter, any property owner or occupier to find that a licence had been granted to an operator without his knowing anything about it. The landowner may have had quite different plans for his land. He is essentially one of the parties who must be consulted on the matter, and he should be entitled to make representations before the Coal Authority reaches any decision on the grant of a licence. That would encourage the Coal Authority to secure competitive bids and obtain the best terms, one of the thrusts of the Bill. No formal consultation procedure is proposed but there should be an obligation on the prospective licensee to have served an appropriate notice. It would be wrong for information about a licence application to be obtainable only by searching the public register. The other amendments relating to Amendment No. 42 are consequential.
The grant of a licence to work coal is a great deal more than the type of thing envisaged in a planning application where notification procedures are already built into the statute. It is a confirmation of the interest to work the coal and of the authority's satisfaction concerning the financial strength and competence of the applicant. So it is an important stage in the process. I feel that in creating a legal interest in the property that cannot properly be done without serving an appropriate notice on the landowner that an application for the licence has been made.
I now turn to Amendment No. 43, to which I should also like to speak. This amendment provides for a period during which the Coal Authority shall,
"not determine an application for a licence".
The purpose behind that is to enable a period for all those other interested persons to make appropriate representations to the authority. Again, the analogy is similar to, but not identical with, that which applies in town and country planning legislation. It would be wrong for the authority to approve an application without giving time for those who may also be interested in a licence or are otherwise affected to make representations.
Again, I go back to the need to obtain competitive bids, to obtain the best value and to maintain the obligation on the Coal Authority to maintain the register. I do not believe that the 12-week period that I am supposing can seriously imperil the procedures or the timetable of the Coal Authority in its work.
Finally, at the same time perhaps I may speak to Amendment No. 57. It is grouped with the other two amendments. The purpose of this amendment is to recognise that it may not always be possible for an applicant for a licence to identify the landowning parties. Therefore, the intention is to provide what amounts to a fallback provision whereby the Coal Authority has ultimate responsibility to assess; whether the applicant for a licence has taken the appropriate steps, and, if necessary, for the Coal Authority itself to direct that further steps be taken; namely, that the applicant should serve notice or carry out other measures. So when the wording says,
"the Authority shall take such steps as it sees fit",
that might include giving a direction to the applicant. It is not intended that that stipulation should put an unreasonable burden on the coal authority. It is first and foremost a safety procedure. I have said enough on these amendments. I beg to move.
6 p.m.
Lord Stanley of Alderley: I support this amendment. I rather gather that the Government may accept the principle of it, in which case I hope that they might put down their own amendment. In that case it would perhaps be wise for the Committee to wait until we see the colour of the Government's amendment, when I. very much hope that I for one will be able to support it.
Lord Prys-Davies: I support these amendments, and in particular Amendment No. 57. The noble Lord who moved the amendment referred to the "landowning" parties. But there is also concern about the identity of the owner of the minerals, excluding coal as such. The amendment draws attention to a very difficult situation and to a problem that arises from time to time in an area such as South Wales.
In the 19th century when owners of land sold off the surplus land, they invariably reserved the mines and the minerals to the trustees of the settlement and their successors. But nowadays it can be extremely difficult to identify who is the owner of the minerals. You can start with the position back in the 19th century, and you can write to the solicitors of the trustees of the settled estate—such as the Tredegar estate in South Wales, or the Beaufort estate in South Wales—but it is extremely difficult to trace the devolution of the ownership of the minerals since the 19th century. It may have been devolved to a property company or a pension fund. So the problem does arise.
I am not quite certain that Amendment No. 57 solves the problem. It does not tell us precisely what is to happen where the applicant has been unable to trace the identity of the owner of the minerals. I suggest to the Minister that the amendment identifies; a problem—although I am not quite certain how best it should be resolved.
Lord Peston: We are indebted to the noble Earl, Lord Lytton, for putting down these amendments. They expose essentially what is wrong with this Bill, and we shall come to that in a moment. This is an example of the essence of the error of the Bill. I say that as an independent person. If I had any large capital funds at my disposal I certainly would not use them to acquire a lease on a coal mine. There are many more profitable opportunities than that in our economy. Secondly, I do not own any land, so I am not threatened by any of this. But the fact is—and this is as good an example as any —that this Bill is enormously threatening to owners of land. It is astonishing that such a Bill comes from that side of your Lordships' Chamber rather than this side. If one were to adopt a Marxist view, it is essentially a threat to the landowning classes. Essentially it says that someone could apply for a licence that could affect the land that people legitimately own with no obligation whatsoever to let them know. There is no obligation whatsoever, so far as I can see, on the part of the applicant, the Coal Authority or the Secretary of State.
On Monday, noble Lords—certainly on the Conservative side —were perfectly happy, for the moment at least, to let the whole liabilities question drift through, a matter which is at least as threatening as all of this. The general point is the same. It is threatening. But we shall come back to that at Report, when noble Lords on the other side of this Chamber might be able to save the position of what I take to be their friends. It is possible for someone to come along, apply for a licence and then go to people and say: "I now have a licence to mine coal on your land". He does not even have to tell them that. They can discover it for themselves.
I was enormously cheered up by the noble Lord, Lord Stanley, because obviously he has more sympathetic contact with the Government than I have. If the Government are going to say, "Yes, we now recognise how wrong we are on a matter of principle in matters of this kind and we are coming back with our own amendments", then it is never too late for sinners to repent. But, as I said, I do not know that. The noble Lord, Lord Stanley, says that he does. So I look forward to the Minister's reply. In the end, I suppose, I really do not care. As I said, I do not own any land and I am not going to buy a coal mine. But if noble Lords opposite take their own interests seriously they ought to care about this amendment and many others that are similar to it.
Lord Strathclyde: It is nice to have an opportunity of taking a part in this Bill. I thank the noble Earl, Lord Lytton, for having introduced his amendment. The speech of the noble Lord, Lord Peston, was quite extraordinary. The idea of the Labour Party representing the defence of landowners in this country is preposterous. But the noble Lord came out with it at the end of his speech when he said that frankly he did not care. He does not care for this Bill; and he does not really care for the people who are affected by it, because he wishes the coal industry to remain in public ownership.
Lord Peston: I have learnt that one should never be sardonic in this Chamber. It is really far too subtle. What I am trying to get over to the noble Lord is that it is his responsibility to care for matters of this kind. I merely sit on the Opposition Benches and do the best that I can in very difficult circumstances. What I am hoping is that the noble Lord will himself show that he cares for the interests of the people whom his party, at least traditionally, has represented.
Lord Strathclyde: The noble Lord having put his views right, I shall go on to demonstrate very clearly how much I care for the people who are affected by this Bill and for those who work in the coal mining industry.
What this amendment would do is to place a statutory obligation on any applicant for an operating licence to certify to the Coal Authority that he had notified all persons with an interest in the land that is contained in the licence application. I understand quite clearly the intention behind this group of amendments. In the vast majority of cases, I should expect the prospective opencast operator to establish contact with all persons who have interest in the land well before he puts in a licence application, whether in the context of a planning application or while assembling the necessary rights of access to the land. Nevertheless, I entirely accept the principle that a landowner or tenant should be aware as early as possible if someone is seeking an interest in his land, so that he can protect his negotiating position.
While I cannot accept the noble Earl's amendment, I intend to set out an alternative proposal which I hope will meet the desires of the noble Earl, my noble friend and Members opposite. That would be very good news as well. In setting out the role and duties of the Coal Authority the Government have deliberately refrained from prescribing by statute the Coal Authority's detailed licensing procedures. Clause 30 of the Bill would require the authority to publish the procedures that it intends to follow. I hope that that is the way forward.
The Government's proposal is that the Coal Authority, as part of its licensing procedure, should observe the following practice. Any applicant for an opencast operating licence should be required first of all to make all reasonable efforts to notify any person with an interest in the surface land above the area which is the subject of the licence application of the fact that he has applied. That deals with the noble Earl's Amendment No. 42. Secondly, where it is not possible to identify those persons, an applicant should make reasonable attempts to leave a notice on the land giving the same information. Thirdly, he should be required to certify to the Coal Authority that he has carried out the first two steps. That deals with Amendment No. 57.
We envisage that the new authority will not consider any application for an opencast operating licence unless it receives such a certificate from the applicant. In addition, any person to whom an opencast licence is transferred will be required, as a condition of that licence, to notify all those with an interest in the land.
With regard to Amendment No. 43, I hope that the noble Earl will not find me remiss if I say that I disagree with him. I hope that we would agree that the authority

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should endeavour to process licence applications quickly, subject to its statutory duties. Processing licence applications will in any case be a potentially lengthy process. To require the authority to delay dealing with a licence application for a period of 12 weeks would extend that process unnecessarily. Furthermore, it is not beyond the bounds of possibility that all interested parties, including landowners and planning authorities, will want an application processed as a matter of urgency.
In the light of what I have said and particularly the proposal on the noble Earl's Amendments No. 42 and 57, I hope that it gives the reassurance that he and my noble friend Lord Stanley require. I hope that he will withdraw the amendments.
The Earl of Lytton: I am extremely grateful to the noble Lord the Minister for his comments. I was greatly relieved to hear his comments on Amendments No. 42 and 57 in particular. I shall read very carefully what he said on those amendments. Certainly it is not my intention to press them at this juncture. I feel that the response that he gave is on the whole satisfactory, though obviously I should like to see more on the face of the Bill than perhaps he is prepared to concede. Nonetheless, that is as far as I wish to take the matter at this juncture. On those two amendments I wish to reserve my position until I have considered further. However, I welcome very much what the Minister said.
I shall take up one point made by the Minister with regard to Amendment No. 43. He talked about the authority delaying "dealing with" an application. With respect, that is not what the amendment says. The word used is "determine". The word "determine" has an element of finality about it; it infers that the process is completed, whereas "dealing with" means any handling that leads up to the determination. I hoped that the Minister would have seen that the amendment does not set out to prejudice the procedures. I hope that in due course he will think again and agree that it is a proper safeguard. On the basis that two out of three on this particular "bun" is certainly a great deal better than no bun at all, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 43 nor moved.]
6.15 p.m.
Lord Ezra Lord Ezra moved Amendment No. 44:
Page 21, line 40, at end insert:
("( ) The Authority shall only grant a licence under this Part if it is satisfied, after full consultation with the Health and Safety Executive, that the applicant can and will maintain high standards of health and safety in accordance with existing United Kingdom and European community legislative provisions.").
The noble Lord said: This amendment has been grouped with Amendments Nos. 48, 50, 51, 53 and 54. This group of amendments comes back to the matter of safety, to which, as the Committee will recall from our proceedings last Tuesday, a great deal of importance is attached so far as concerns the mining industry. The Government have said that they also attach importance to safety and that it will be the responsibility of the
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Health and Safety Commission with the Executive. Therefore they do not consider that the importance of safety should be spelt out on the face of the Bill.
That is where we disagree. We feel that safety is so important that, even if it is decided (we do not dispute it) that the Health and Safety Commission and Executive should continue to exercise their responsibilities on safety in mining just as they do in safety in other industrial activities, its importance should clearly be stated on the face of the Bill. In that connection it disturbs us that in granting licences no reference whatsoever is made to safety.
In Amendment No. 44 we propose that the authority should only grant a licence:
"if it is satisfied, after full consultation with the Health and Safety Executive, that the applicant can and will maintain high standards of health and safety",
in accordance with the legislative provisions both here and from the Community. We feel that that fully safeguards and indeed specifies the position of the Health and Safety Executive. But it emphasises the need for a safety competence check to be made before licences are granted. That is not an unreasonable proposition. After all, it is already laid down in the Bill that the authority has to satisfy itself as to the financial capacity of the applicants. In view of the great importance of safety, as well as money, why should it not satisfy itself that they are capable of exercising the safety provisions?
There is one further important aspect to this series of amendments. Amendments Nos. 51 and 53 propose that it should be made a condition of licensing that the licensees submit full information about their safety record. Hitherto, very careful records of safety in the mining industry have been maintained. Keeping the records is part and parcel of the business of maintaining a high standard of safety. If that obligation is not put on licensees, how will the information be collected?
We attach considerable importance to this series of amendments. We do not in any way dispute the responsibility of the Health and Safety Executive for ensuring that safety standards are maintained. But we consider that the matter of safety should be included as a condition of the licences and equally the collection of safety information. I beg to move.
Lord Morris of Castle Morris: This group of amendments concerns the one subject of safety in mines. Few things could be more important. Whenever one goes underground, either as a worker or as a visitor, it is like going through security at an international airport, and rightly so. It used to be the colliery deputy who was responsible for safety when one came up. He was responsible for you handing in your lamp and getting your little tag checked and hung up on its hook. He had to make sure that everybody was back. It was like the conclusion of a military operation. The first time that I went underground as a visitor—I have never worked there—I thought that it was rather like checking back an infantry patrol that had been out into enemy territory. One had to be sure that one counted in everyone who had been counted out. Safety is an absolutely crucial matter.

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I should like to comment and ask a few questions on three of the amendments in this group. Two questions relate to Amendment No. 48. First, the Government rejected internal proposals to introduce minimum safety requirements as part of the licence conditions. On the other hand, we believe that that is the only way that operators guilty of substandard safety levels can be kept out of the industry. Can the Minister tell us whether known offenders against safety regulations—people with bad records elsewhere in the country or in the world—can obtain a licence simply because they bid the highest price?
Secondly, under the Bill the Government abrogates all responsibility for safety to HMI. We do not believe that that is enough. That is shown by the rates of accidents in private mines. Between 1988–89 the five-year average fatal accident rate was five times greater than that for the British Coal Corporation. In 1992–93 it was 20 times greater. We have been through the statistics before and I realise that it does not present the whole picture. Somehow or other the presence of a dead person seems to me to be somewhat more significant even than that of a seriously injured person. Perhaps I put too much weight on that. But what evidence is there that HMI alone is fully and properly resourced to perform that role to the same high commendable standard as it was performed heretofore? I hope the Minister will be able to give me some assurance that it will be properly resourced and fully looked after so that those standards can be maintained.
Turning to Amendment No. 50, on all matters of health and safety in the Bill the noble Lord, Lord Ezra, when he puts his mind to it, gets it absolutely right. When death and disease and lifelong disability are weighed in the balance against profit and economic health and prosperity, we must be very careful. Perhaps on this side of the Chamber our instinct is to protect vulnerable people even before considering the true and necessary economic success of the country. The two are not incompatible, but perhaps our instincts work that way.
Health and safety are vital emotive issues. Despite all the assurances that we continue to receive from Her Majesty's Government—we had them in another place for 65 hours in Committee—the people personally concerned in the industry remain worried that so little appears on the face of the Bill and so great is the reluctance of the Government to put anything there. More and more we receive letters and telephone calls relating to this issue. They ask what is behind it and what is going on. They ask why it cannot be done and why the Government continue to refuse to do what looks to us like a simple matter.
Lord Strathclyde: I thank the noble Lord for allowing me to intervene. This is a subject we have discussed several times already and at Second Reading. The noble Lord opposite is in danger of slightly confusing the Committee about our unwillingness to put anything on the face of the Bill. The point on dealing with safety is that we decided—noble Lords have yet to put forward an argument as to why we should not do so
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—to take the advice of the Health and Safety Commission, which is quite unequivocal. It said that there should be no confusion about who is responsible for health and safety matters; it should be firmly in its hands as are so many other industries.
Lord Morris of Castle Morris: I am grateful to the noble Lord for that explanation. Perhaps I can help him. It is perhaps because, as the Government so frequently say, when something goes wrong, "We have failed to get our message across". I can assure them that in this instance they failed to get their message across. Perhaps their best course now is somehow or other to put a subsection into the Bill, even at this stage, making the point crystal clear. That might reassure people and, again, it would cost nothing beyond a little drafting time.
First, and still in relation to Amendment No. 50, licensing conditions as they are set out in Clauses 28 and 29—most of which are optional; there is a lot of "may" and very little "shall"—are inadequate because again they make very little mention of safety. Secondly, draft licences provide for the withdrawal or revocation of licences for a whole area of vague and general breaches of conditions and failure to conform. But once again nowhere does any draft licence say, so far as I have been able to read them—I hope that the noble Lord will correct me immediately if I am wrong—that a licence may be withdrawn tout court if safety regulations are not adhered to.
Thirdly, it appears in the draft licence as I read it that the Coal Authority could—I do not say it would, but it could—ignore a known, substantial and flagrant breach of conditions. I looked at the passage in paragraph 15(1),
"the Authority may give notice to the Operator and any Approved Chargee specifying the failure to comply or breach in question and requiring it to be remedied within such period as the Authority may reasonably require (being not less than [ten] Working Days)",
and so forth. Even the language does not reassure. I believe that that is at the bottom of the unease that people throughout the country feel. They ask why there is a need for such caution and why we have this long timid process. Safety is too important to be so hedged about with processes and we feel still that clearer, stronger assurances should be written into the Bill on that topic.
I tabled Amendment No. 54 because we were concerned about the maintenance of standards. Much of existing mining safety legislation is based on the fact that British Coal, over a long period, defined and maintained high standards of work and conforms to the best known mining practice. It runs a pretty tight little ship. At the current time we can see no statutory obligation on private operators to follow suit. With coal privatisation and the eradication of British Coal we are afraid that those standards will disappear or at the very least slip. We still believe that there should be a central body that ensures that the role of British Coal is continued into private ownership.
To give an example, at present when British Coal mines for coal it does so according to central standards in relation to things like the width of passageways, the

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types of pit prop and the pumping mechanisms that are normally used. We are anxious that those standards, both general and particular, are preserved and maintained after privatisation because lives depend on it. I find no assurance in the Bill in that regard. I hope that the Minister will be able to reassure me on all those matters when he replies to the amendments in this group.
6.30 p.m.
Lord Haslam: We are addressing safety for the second time and I apologise if some of my remarks are a little repetitious. Nevertheless, I want to emphasise yet again my belief that the most important thing that comes out of all this is that the rump of British Coal is privatised. I equally believe that it ought to be privatised in the unitary form. That would ensure a quality buyer, which is the best way of ensuring that the best possible safety standards are maintained. If the industry is fragmented, as could happen, that will markedly heighten the safety problems.
Competition from imported coal and from other energy sources has already been extremely intense in the industry and productivity has improved by some 400 per cent. since the miners' strike. That is hardly a recipe for requiring more competition. But the Bill urges the Coal Authority that one of its objectives should be to increase internal competition within the country. That policy will be an extremely destructive one, as I explained on an earlier occasion.
Sadly, however, that position has already been created by leasing a number of British Coal pits before privatisation. One has to emphasise that the pits in this country which have been under the control of British Coal have very varying cost structures. Selby and a number of other pits can now compete with opencast coal and the best of imported coal. Many other pits have not reached that happy standard at this point in time. If there is fragmentation and if there is internal competition the strong will obviously go after the weak and the weak will have only two ways to respond. First, they will stop all development work; and, secondly, they will stop investing in safety in all its aspects. That leads to a rape and pillage culture which causes a spiralling down. That is exactly what was happening in the private sector industry in which I was employed prior to 1947.
Safety is not just a matter of regulation and inspection, as tends to be the focus in the Bill. It is a maintenance of cultural standards which have been established for a long period of time. It is a matter of management example and policy. These are more important than regulation. There also has to be a willingness to invest in projects specifically focused on enhancing safety, which only have a marginal impact on cost. It is a very important factor and one needs to exercise great discipline to do it. I believe therefore that in the granting of a licence the Coal Authority should weigh heavily the ability of the recipient to maintain the safety standards on which we have just been touching. I support Amendment No. 44.
Lord Strathclyde: All the amendments in this group would require the Coal Authority to play a role in regulating safety in the coal mining industry, either in respect of its consideration of a licence application or in its role as licensor.
I have explained in the past—and I explained briefly just now to the noble Lord, Lord Morris—why I thought the amendments should not be accepted. Perhaps I may now explain in more detail. The noble Lord, Lord Morris, brought forward some statistics. I dealt with the point at Second Reading but it is not helpful to the debate in any sense at all for us to bandy around statistics about the relative merits of death or great injury in the private sector or the public sector. It is a dangerous industry and what we are trying to do is to make sure that the successor regime to that which governs British Coal is as safe as and, it is to be hoped, even safer than the very excellent regime that is currently run by British Coal. I do not suppose there is any disagreement on that view from any side of the Committee.
The health and safety regulations are quite properly policed through the Health and Safety Commission. It has an important role to play and is in a position to shut down mines if it believes that safety procedures are being broken. The Health and Safety Commission has given the Government comprehensive advice about the post-privatisation health and safety regime in the coal mining industry. The commission gave careful consideration to the kind of concerns that have been expressed about absence of safety provisions in the Bill. Nevertheless, the commission's advice is quite clear —there must be no duplication between the role of the Coal Authority and the role of the commission and its executive. It has stressed that any such duplication could only jeopardise safety.
The Government cannot ignore this strong advice. I ventured to suggest earlier in the Committee stage that, had we ignored it, Members of the Committee opposite would be the first to suggest that we should take it. I have listened carefully to Members of the Committee who have suggested that safety should appear more prominently on the face of the Bill in order to demonstrate a recognition of the importance of health and safety. However, nothing could demonstrate the Government's recognition of its importance more than our early approach to the commission for advice; our absolute determination that health and safety issues are, and will remain, paramount; and our unqualified acceptance of the commission's comprehensive advice, which we have made widely available.
I am also sure—I hope the Committee will agree—that it would be wrong and extremely difficult to put a provision on the face of the Bill which had no effect. Bills are intended to enact legislation and not to provide publicity for people's views. Amendment No. 44 is contrary to the commission's advice. In particular, Chapter 10.9 of the commission's report states that the grant of a licence should not be taken to imply any prior safety endorsement either by the HSE or the authority. On a practical level, let us consider how a judgment of the type required by the amendment could be made. Suppose an applicant for a licence is new. How could a

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judgment be made then? Suppose another mine belonging to the company had a bad safety record—the point raised by the noble Lord, Lord Morris—but the Mines Inspectorate had used its powers successfully to ensure that improvements were made. How should the authority behave towards a new application from that company after that had occurred?
Lord Morris of Castle Morris: There is more joy in Heaven over one sinner that repenteth than over 99 just men that need no repentance. There is no problem. He has put himself in the clear. He would be perfectly all right. It is the known sinner who has not repented and who has not been put right that we are after.
Lord Strathclyde: I quite agree with the noble Lord's point, but what would be the benchmark for deciding whether a safety record in the past was acceptable? The noble Lord's amendment is not flexible on that issue—if the safety record is bad, he should not get a licence. My point was that, if the safety record was bad but had now improved to the satisfaction of the Mines Inspectorate, what would the authority do? It would be put into an impossible position where there would be no sensible or consistent answer.
Lord Morris of Castle Morris: Perhaps I may have another little go. Where someone has repented, we are agreed that the repentance would be taken into consideration in the application. What we are concerned about is those places that have bad safety records and are suspect but are nevertheless putting in a big bid in financial terms. I shall try to put my question as directly as I can. Does the biggest bid win regardless of any safety considerations?
Lord Strathclyde: We shall evaluate the bids when we get them. We shall look at considerations other than the pure monetary value. There must be other considerations. But what we shall not be able to take into consideration is the record of health and safety because there is no guarantee that simply winning the bid from the Coal Authority allows anyone to continue mining or even to start mining. There must be the certificate from the Mines Inspectorate in order to do that. If someone was to put forward a very substantial bid which he believed would be the winning bid—and could well be the winning bid—it would be in his interests to make sure that he satisfied the Mines Inspectorate before he could continue to mine.
Lord Morris of Castle Morris: I am grateful to the noble Lord. He is performing a great educational service. He is teaching me something that I did not previously know. He said—and it has gone through part of what he has been saying in the past few minutes—that the HSC will be able to police the operators in health and safety matters. That word "police" rang in my mind. Can he go a little further? This is a genuine question and not a debating point. I should like a little information. The noble Lord said that the Mines Inspectorate would have power to shut down a mine. Does it have power, as it were, to arrest the villain? Does it have power to keep the mine shut? If it does and
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if it has power to do everything but withdraw the licence, it will of course bankrupt the offender, which would achieve very much the same effect as I have been looking for in the first place.
Lord Strathclyde: The commission's report makes quite clear that the Mines Inspectorate has all the powers necessary to enforce the comprehensive body of health and safety law. As the noble Lord spotted, that includes the power to prevent a mine owner from operating a mine until all relevant requirements are complied with. It is a very strong power which is backed up by the sanction of criminal law. If, by saying that, I have satisfied the noble Lord, Lord Morris, and I hope everybody else, we can go into Report stage and Third Reading without having to deal with the safety issue.
I now turn to Amendment No. 48 which obliges the Coal Authority to require its licensees to maintain British Coal's existing standards of health and safety. That is a very commendable idea, but British Coal's standards are established and maintained under the current health and safety statutory framework which is enforced by the Health and Safety Executive. That position will not change after privatisation and therefore there is no reason to believe that there will be any change in those standards.
Amendment No. 50 again suggests the use of the Coal Authority's licensing regime to enforce the health and safety regulatory regime. Again, the amendment as drafted would cause significant difficulties for the Health and Safety Executive and mine owners from a practical perspective.
Amendment No. 51 would impose an additional requirement on the coal industry to which no other industry is subject. The commission's report argues that the use of a rate of accidents per 1,000 employees is a better option because it is more reliable, it offers a better measure of the risk to the individual and allows for ready comparison with other industrial sectors.
Lord Ezra: I did not quite understand what the alternative was that the noble Lord was suggesting as regards the collection of statistics. Statistics on mining accidents have been collected since time immemorial on the basis of 100,000 man-shifts. Is the Minister suggesting that that should now be changed?
Lord Strathclyde: The Health and Safety Commission's report argues that the rate per 100,000 man-shifts is less than ideal as a measure because it does not readily allow comparison with other industries and is affected by changes in absenteeism, overtime working and so on. This will be even more so should there be a widespread introduction of a working week with fewer but longer shifts. It was on that basis that the report argued that the use of a rate of accidents per 1,000 employees is a better option because it is more reliable, offers a better measure of the risk to the individual and provides for this comparison.
In this debate I sense that perhaps I have not made available the report, The Framework for Health and Safety in Britain's Coal Mines. I shall make sure that the noble Lord, Lord Ezra, has a copy of it, if he has not already received it.

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Amendment No. 53 suggests there is a need for the Coal Authority to ensure that all information necessary for safety is maintained at the mines which it licenses. There are already very clear duties on employers to obtain the information necessary to ensure the safety of their employees. The existing duties on mine owners cover the provision of information more than adequately.
There are significant obligations on mine operators for the provision of information under health and safety law which is enforced by the Mines Inspectorate. Placing a duty on the Coal Authority duplicating these requirements is unnecessary. I also understand that the intention of Amendment No. 54 is to help preserve existing safety standards. However, the method by which the amendment would achieve this does not accord with the advice of the commission. Furthermore, while I am sure that it was not the intention of the noble Lord, the effect of this amendment would also be to prevent the new owners in the industry from instituting higher standards in their own specifications and acceptance schemes.
It is right that we deal with these issues at length because, as I have admitted and as has been recognised by all Members of the Committee who have spoken in this debate, this is an immensely important issue for an industry which in the long-distant past has been blighted with a very poor safety record. I believe that the advice that we have received from the HSE is correct. I am not blaming noble Lords for continuing to raise these issues, but I hope that they too feel that the advice which we have received from the HSE is appropriate.
6.45 p.m.
Baroness White: Can the Minister find some way of putting somewhere in this Bill an indication of where we stand? This is a moral issue which is very worrying. We are asked to pass this Bill, but on the face of it there is nothing to reassure us on safety issues. I can understand the difficulty in drafting a Bill which covers the Health and Safety Executive as well as the other authorities. Surely the Minister can use a little—skill, shall I call it?—to find some way. This Bill will become a statute of Parliament, but it will be very difficult for people outside to recognise all the matters about which the Minister is reassuring us but which will be very difficult to make public.
Lord Strathclyde: I am delighted that the noble Baroness acknowledges that I have any skill whatsoever and I am very grateful to her for having said that.
Baroness White: In certain directions.
Lord Strathclyde: I want to be helpful here. Health and safety in this country are governed by the Health and Safety at Work etc. Act 1974 and there is no quibble about that. The noble Baroness has made an interesting suggestion and asked whether we could find some way in which to signpost people to the legislation. I am quite happy to look at that and consider it with my advisers. The problems which we are discussing are causing almost more trouble than they are actually worth in the
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light of the fact that the legislation covers all possible loopholes. But I said that I would try to be. helpful and I shall be.
Lord Prys-Davies: I thank the Minister for his very full replies to the questions raised by my noble friend. Like my noble friend Lady White, I am also concerned that the Minister seems to be saying that the Coal Authority, exercising its duties as a licensor, cannot take into consideration issues of health and safety. It should be possible, in exercising those functions and in deciding who is to be a licensee, or in revoking its licence, for the Coal Authority to take into consideration what is known of the health and safety record of the licensee without being in conflict with the Health and Safety Commission. I shall be very grateful if the Minister will still think about that. Meanwhile, for my part I would not like to question the Minister any more closely today. I shall be grateful for sight of the document to which he referred.
Lord Strathclyde: I shall certainly make sure that the document is made more widely available than perhaps it has been.
Perhaps I may deal with the central point made by the noble Lord that the Coal Authority should somehow have a role. If we were to decide that it should have a role we would have to give it the people who can fulfil that role. But we already have a body under statute which does that very adequately, and that is the Health and Safety Commission. That is the point of that body. If we gave the Coal Authority that role there could be disagreement, there would almost certainly be confusion and there could also be dilution of the very important health and safety role that should be governed by the primary body; namely, the Health and Safety Commission.
Lord Jay: Without claiming any drafting skill, perhaps I may make a constructive suggestion to the Minister. He will be well aware of the fact that much of our legislation, particularly Finance Bills, contains phrases which frequently occur such as "in the opinion of the Inland Revenue" or "after consultation with the Inland Revenue". It is never argued that such phrases are an infraction of the rights of the Inland Revenue to do so, but it establishes the fact that it has a high authority in all these matters.
Lord Strathclyde: The noble Lord has far greater experience of Finance Bills than I do, and his. suggestion is helpful. I have made a commitment to the noble Baroness, Lady White, that I shall consider how we can possibly solve the problem without creating the confusion envisaged by the HSE, and I shall do so.
Baroness Turner of Camden: Surely one of the problems is that the HSE does not grant the licences; the Coal Authority grants the licences. There does not seem to be any mechanism whereby a company or operator which does not have a good safety record can be prevented from getting a licence because the HSE does not have the licensing power; the Coal Authority does.
Lord Strathclyde: But surely the noble Baroness will admit that an operator, even though he has a

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licence, cannot operate an unsafe mine which has not been given a clean bill of health by the Mines Inspectorate.
Baroness White: Then why not say so?
Lord Ezra: I am surprised that the Minister has not responded to the very important points made by his noble friend Lord Haslam, who occupies a unique place in this Committee in being, as far as I am aware, the only Member who has experience of working in the mining industry both before and after nationalisation. Despite my long time in the industry, I knew it only under nationalisation. I believe that the points made by the noble Lord, Lord Haslam, should be taken into account.
Lord Strathclyde: The noble Lord, Lord Ezra, is absolutely right. It was not that I wanted to ignore my noble friend Lord Haslam. I had made a little note at the top of my pad to remind me to respond to him but my eye failed to meet it.
My noble friend Lord Haslam takes a different view about how privatisation should take place. He believes that British Coal should be privatised as a single unit, and although we believe that it could be privatised as a single unit, we believe that it should first be offered in five separate regional packages. Therefore, it is not surprising that my noble friend should advance the health and safety argument to buttress his views about the role of privatisation.
The noble Lord, Lord Ezra, is absolutely correct that my noble friend Lord Haslam has a great deal of experience in the industry both pre-nationalisation and post-nationalisation. But in those dark days there was not the Health and Safety at Work etc. Act 1974 playing the important role that it plays today. That is why we are having this debate against a very different background than would have been possible several decades ago.
Lord Ezra: I was going on to say that I thought that the most important thing that the noble Lord, Lord Haslam, said was that we are concerned not only about the safety regulations and about people ensuring that those regulations are kept, but also about the whole concept of the safety culture which was developed over nearly half a century in the publicly owned enterprise. Those of us who have spoken so fervently on this matter are concerned about the safety culture. We feel that the safety culture in mining could be eroded under the new arrangements. I thought that I would explain to the Minister what we are concerned about. That is our concern. It is not a question of the regulations. We know what the regulations are. I have received the document that was prepared by the Health and Safety Executive, which in many ways makes a lot of sense, but I am afraid that we shall probably keep returning to our concern about maintaining the safety culture.
However, I am pleased that in response to the noble Baroness, Lady White, the Minister has said that he will use his undoubted drafting skills (or those of his advisers) to prepare something which will have regard to this issue on the face of the Bill. I hope that it will also take account of the very important point about the safety culture to which the noble Lord, Lord Haslam, referred.
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With the Minister's assurance that he will think a bit more about this, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 45:
Page 22, line 10, at end insert ("and accordingly the Secretary of State shall be under the same duties and liability as the Authority in relation to the exercise of any such powers").
The noble Lord said: Aware as I constantly am that the hour normally appointed for refreshment is approaching, I wish that I could deal with this amendment particularly speedily but, alas, I cannot. This is a serious issue, although not in the same way as the previous group of amendments. They were concerned with a sensitive, cultural and emotional issue. This is an intellectual problem which in some ways is far more to my taste.
Amendment No. 45 returns to the issue which we raised on Tuesday—the question of the Secretary of State and the Coal Authority—but today we address the powers of the Secretary of State in the issue of licences. The question has to be asked: How many of these licences will be granted before the Coal Authority comes into existence, or at any rate before the magical restructuring date?
Clause 12 gives the Secretary of State powers to transfer anything he likes to whoever he likes without paying the slightest regard to any of those matters. The Government have said that they plan to offer the industry for sale in five job lots, which may be bid for in any way or in any combination of ways by, as far as one can see, any number of people. However, one scheme created by the Secretary of State could make all that pointless. He could dispose of the whole industry without any of those duties or obligations (which have been the subject of so much scrutiny) ever becoming relevant.
At the risk of sounding like Sinn Fein, I should like to obtain a little clarification about the role and power of the Secretary of State because it is becoming a general, political issue of large proportions far beyond the confines of this Bill. Members of the Committee may recall my noble friend Lord Prys-Davies and I exploring this matter in every nook and crevice of the Local Government (Wales) Bill, and it crops up elsewhere all the time.
At about 11.48 p.m. on the night before last, the noble Lord the Minister, replying to my Amendment No. 36 said this:
"Clause 26(6) is drafted in terms of the Secretary of State issuing licences in exercise of the Coal Authority's powers to grant a licence. It follows that the Secretary of State in so doing will be subject to the authority's licensing duties. That is the key aspect and it means that he cannot act in any other way".—[Official Report, 26/4/94; col.653.]
Granting for a moment that that may be so—but I am not convinced that it is—why does the Bill not say so? Why have we had to ferret it out in, I should think, probably about an hour of discussion between us and in many hours of discussion behind the scenes no doubt on both sides of the Committee? Why does not the Bill state that simply and straightforwardly?
I repeat that the Minister said that the Secretary of State in so doing will be subject to the authority's licensing "duties". But the licensing duties of the authority are more or less nil in any case, are they not? Clause 26 is about "powers", not about "duties". Once again, it is all "may" and very little "shall".
Since last Tuesday night, I have disinterred three questions which seem to me to be unanswered. I should be grateful if the Minister would take them on board and provide me with answers to them. I do not expect him to do that just before dinner tonight, but if he can do any of it straightaway, well and good. However, I should be grateful if he did not simply dispose of me but agreed to take away these questions which will appear tomorrow morning in Hansard, I have no doubt, and, if possible, either talk to me outside the Chamber at a later date or preferably write to me with what answer his officials can provide him.
The questions are these. On the ability of the Secretary of State to reorganise the industry and dispose of property rights and liabilities before the restructuring date, neither in the many hours of debate in the other place nor on Tuesday night was that uncertainty over the reorganisation of the industry resolved. Clause 12(2) as written would allow the Secretary of State to dispose of interests and liabilities before the restructuring date, and it is only the relevant coal and coal mines of the corporation on that date that are caught by Clause 7(3). The Government have implied throughout that the trigger for any change is the restructuring date. Will the Government propose or accept an amendment to restrict the power in Clause 12(2) so that it cannot apply before the restructuring date? The Official Report (cols. 636 and 652) records the questions. There are no answers.
Secondly, the Minister has said that the freehold of the coal will be retained except in exceptional circumstances. Would the Government accept that such a freehold transfer should be subject to the approval of the Secretary of State to ensure that it is only in exceptional and justified cases that such a transfer is made? That will accord with the statement in the Official Report (col. 631).
Thirdly, I should be grateful for any answer that can be provided on one of the early points. Why does the Bill distinguish between the transfer of liabilities under Clause 12 at the restructuring date or as part of a scheme (under Clause 12(2)) and not in relation to the Coal Authority? That remains one of the causes of real unease and uncertainty on all sides of the Chamber, and that cannot be dissipated until we receive a satisfactory explanation.
The Minister went on on Tuesday night to say:
'The actions of the Coal Authority and the Secretary of State will also be equally open to challenge in the courts". —[Official Report, 26/4/94; col. 654.]
I felt there that his arguments were—if I may say so in all charity—getting just a little bit thin; that is, that had a note of desperation about it. It does not seem to be a strong safeguard. Resort to litigation must be the last-ditch defence. After all, we can all have recourse to the courts for anything at all. If the Minister stepped on my toes as we walked out of the Chamber, I expect that
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I could have recourse to the courts. One would hope on a serious issue like this that there is rather more that can be said.
Surely the Bill, and not the courts, should decide the limits of the Secretary of State's powers in the issuing of licences. As I understand it, he can sell off the industry in one, or five, or more lot or lots before the restructuring date, before the Coal Authority is ever even born. He can then also issue the licences to extract coal, taking into account "the terms" mentioned in Clause 26(5). His powers seem to be total. Is that what will in fact happen? I hope not. I beg to move.
Lord Strathclyde: I wish to be as helpful as possible to the noble Lord, Lord Morris, on this question. I shall try to be so. He has raised some issues which go marginally wider than the amendment, and so if I do not answer all of his questions, I shall accept his kind invitation and write to him with the detailed answers, But on the generality of the situation envisaged by the noble Lord, I am advised that he is wrong. While licences will normally be granted by the Coal Authority, it is necessary to provide for the Secretary of State to grant licences in some circumstances on grounds of practicality. Those powers are intended to deal with two situations: first, British Coal will require licences to continue its coal mining operations immediately the authority begins to carry out its functions. It would not. be practical for the authority to grant those licences. Secondly, those taking over British Coal's coal mining operations on privatisation will require licences: the grant of those licences is an integral part of the privatisation process being undertaken by the Secretary of State.
The amendment seeks to make the Secretary of State, if he grants a licence under Clause 26(6), subject to the authority's duties and liabilities relating to licensing. Clause 26(6) is drafted in terms of the Secretary of State issuing licences in exercise of the Coal Authority's powers to grant a licence. It follows that the Secretary of State, in so doing, will be subject to the authority's licensing duties. I believe that that deals with the point that the noble Lord made, although I may have misunderstood it.
The noble Lord said that it was a bit thin to rely then on the fact that the actions of the Coal Authority, and, indeed, the Secretary of State, will of course be equally open to challenge in the courts. It is not thin when one is a Minister making decisions which one knows can be subject to judicial review. I can assure the noble Lord of that. Having said that, I am sure that the noble Lord will withdraw his amendment. I should like to follow this up and perhaps I can deal with the proposition in another way.
Lord Morris of Castle Morris: I am grateful to the Minister for a very helpful explication of this position. I understand it a little better. I think that he is wrong, but in a way it is his advisers having a scrap with my advisers. I shall not go on any more because I gather that there are some scratching noises from behind me from people who want to get on with the business which has nothing to do with the Coal Industry Bill. Quite clearly

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I must heed that. I am grateful to the Minister for his offer to write to me. I am happy to accept it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Goschen: My Lords, I beg to move that the House do now resume. In moving the Motion, perhaps I may suggest that the Committee stage begin again at five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Isle of Wight (Structural Change) Order 1994
7.7 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran)The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran) rose to move, That the draft order laid before the House on 22nd March be approved [14th Report from the Joint Committee].
The noble Earl said: My Lords, this is the first structural change order to be put before the House as a result of a review by the Local Government Commission for England. In general, local government reorganisation is an area in which your Lordships have taken a keen interest, and we had a wide-ranging debate on the subject on 30th March. We must now turn our attention specifically to the Isle of Wight.
The draft order gives effect to the commission's main recommendations for structure on the Isle of Wight, contained in its report Final Recommendations on the Future Local Government of the Isle of Wight, submitted to the Secretary of State of the Environment on 23rd April 1993. After considering the commission's recommendations for the island and the representations made, the Government announced their decision on 2nd November. This order gives effect to that decision.
We believe that more effective and convenient local government on the Isle of Wight will be achieved by establishing one unitary authority for the whole island —the first of the commission's recommendations—and that that will reflect the identities and interests of local people. That recommendation has received all-party and all-tier support from the local authorities on the island. The draft order provides for the unitary Isle of Wight council to be up and running by 1st April 1995. On that date the functions and powers of the two borough councils on the island will transfer to the Isle of Wight County Council, which will then become the sole principal council for the island and be renamed the Isle of Wight Council.
To ensure a smooth transition to the new structure, the county council will be given extra powers from 3rd May this year. During this shadow period the county council will be able to make the necessary preparations, including budget setting and appointment of staff, for the assumption of borough council functions in the following April. The powers which the county council
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will be given are set out in the Local Government Changes for England Regulations 1994, which came into effect on 12th April.
All the other commission recommendations are given effect to, except the one for planning which has been modified. The commission recommended that the unitary authority should continue to produce separate local and structure plans. We believe, however, that planning needs on the island will be better served if the unitary authority were to prepare a unitary development plan rather than to continue with a two-tier planning system. The draft order for the Isle of Wight therefore states that, for the purposes of Part II of the Town and Country Planning Act 1990, the unitary island authority shall be treated as an authority to whose area Chapter I (unitary plans) of the Act applies, rather than Chapter II.
We have undertaken to give local people on the island the opportunity to elect a new unitary council in May 1995 in order that councillors with a fresh mandate may take over responsibility for providing all local authority services. These unitary authority councillors will be elected on the basis of the new warding arrangements set out in the schedule to the draft order. Forty-eight single-member electoral divisions will replace the existing borough and county wards and electoral divisions.
I commend this order to your Lordships' House. I beg to move.
Moved, That the draft order laid before the House on 22nd March be approved [14th Report from the Joint Committee]. —(The Earl of Arran.)
7.11 p.m.
Lord Mottistone: My Lords, I wish deeply to thank my noble friend the Minister and his colleagues for having "got a move on" to lay this order and its parent order, Local Government Changes for England, in time to enable the preliminary work of preparing for a unitary authority to be elected and introduced in a year's time. I wish to add special thanks to my noble friend Lord Arran for his contribution in persuading his colleagues that any further delay would be harmful.
The study by the Local Government Commission was conducted with great sympathy and expertise. I have the highest regard for the way in which the commission carried out its duties. From the beginning of the study there has been a large measure of agreement in principle in the Isle of Wight to the creation of a unitary authority. However, there have been difficulties in detail. The most important of these has been the understandable wish of both the county and the boroughs not to be thought to be "taken over" by the other tier of the present local government. In passing the 1992 Act it seems that Parliament failed to spot that that situation might arise, although the department was warned of the possibility by the Isle of Wight. Sadly, that warning was dismissed. Thus, we have no proper separately elected shadow authority, which some see as not properly democratic.
In particular, the employees of all existing authorities, especially the boroughs, are worried that their interests will in some way be harmed. I have much sympathy with that, but I am confident that the county

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council will take immense trouble to handle employment matters fairly. I do not believe that those involved need worry that the situation would have been different had a shadow authority been elected during the past three months or so.
The appearance of a totally new authority, which the Local Government Commission recommended and the Isle of Wight in particular wanted, is achieved on paper by naming the new council the "Isle of Wight Council" and dropping the designation "county". I am full of hope that, with the orders approved and with the introduction of a new title made to meet our sensibilities, we can now get on and prepare for our new authority with it being safely elected in a year's time.
If have explained this particular difficulty to your Lordships at some length—and it is not the only one —because I believe that it might be a helpful lesson to my noble friend and his colleagues. Although the establishment of a unitary authority for my island has been relatively simple, there is much evidence that on mainland England there are many difficulties even where people welcome, as many do, a simpler local administration than is currently in use with two tiers. It is not clear, for example. how any changes will affect some Lord Lieutenants. It is not clear whether districts that were split from neighbours 20 years ago can go back to their old friends. It is not clear whether the countryfolk are to be bossed around by the "townies" of large cities.
As I have shown in relation to the Isle of Wight, it might be helpful to make some amendments to the 1992 Act so as to make it more flexible with regard to matters of description and status, which are sometimes of pressing, even passionate, importance to people in a local community but which seem minor matters of detail to officials of a great government department. To its credit, the Local Government Commission has never suffered from that failing so far as we islanders are concerned.
Having pressed for a more sympathetic approach in managing the welcome introduction of more simple local administration, I conclude by again thanking my noble friend for introducing this order and by inviting your Lordships to accept it. Someone suggested to me that the title of the order—the Isle of Wight (Structural Change) Order—was not necessary because the structure of the island (and the coastline below my house) is changing at the rate of one yard per year and has been for the past 150 years. Our structural change happens naturally and does not require an order, but I do not believe that my noble friend uses the phrase in that way.
7.17 p.m.
Baroness David: My Lords, I am speaking not as a resident of the Isle of Wight, although some time ago I sailed into one of its harbours, but as someone very interested in local government and in this particular reorganisation. Everyone agrees that the proposal for one unitary authority on the island is sensible. But what is causing considerable concern is that the new
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authority, established exactly on the boundaries of an existing authority, will not be elected anew. The noble, Lord, Lord Mottistone, spoke of that.
In the opinion of the Association of County Councils —and I agree with it—it is wrong in principle to set up a new authority in shadow form without a democratic mandate. I am aware that there will be elections in May 1995. What is very important is that the staff of the existing councils must fear that they will not be treated in a fair manner. That seems to me a very reasonable fear.
The Government argue that due to the drafting of the 1992 Act wholly new unitary authorities can be established only where the authority is not based on the same boundaries as an existing district or county. But this sets a precedent for future review areas which will be detrimental to the good working of local government, both in the approach to reorganisation and thereafter.
In other possible reorganisations—for instance, Cleveland —the boot would be on the other foot because the district council as the unitary authority could be the continuing authority. In these cases, it is possible that authorities with responsibility for less than one-fifth of local government expenditure could assume the power to plan single-handedly for the whole range of local government functions in the new authorities. Both the ACC and the ADC agreed to take part in the review on the basis that any unitary authority resulting from it —even those with exactly the same boundaries as an existing authority—would be new authorities with new members, new officers, new policies and so on. The associations received encouragement in this view from the Department of the Environment. The Minister, Mr. David Curry, wrote to the chairman of the ACC on 4th August last year stating:
"In those cases where a district or a county takes over the functions of the other tier, without any significant boundary change … the inheritor authority could not be considered as a new authority".
This seems to be a complete reversal of policy and is not acceptable.
I remind your Lordships that at the time of the last big reorganisation of local government in 1973–74, the new council started completely afresh. As shadow vice-chairman of the Education Committee of Cambridgeshire County Council, I recall—and I may say that we took hours and hours about it—that we appointed the officers, the heads and the deputy heads of schools, and that was right. People felt that they had been treated fairly. Unless the new councils are, to start afresh, there will inevitably be the feeling that it is unfair and an injustice to the staff of councils that are to be abolished—and, to a lesser extent, perhaps, to the members.
The order before the House is the first to be proposed; so it deserves wide attention. Further reorganisation proposals are likely to be highly controversial. Will the Minister give an assurance that there will be adequate time given to debate future orders on the Floor of the House? He must realise that, if people are to have confidence in the new councils, they must be based on a proper democratic mandate.
7.22 p.m.
Lord Brabazon of Tara: My Lords, as a resident of the Isle of Wight I should like warmly to welcome the order before the House tonight. I join my noble friend the Governor and Lord Lieutenant for the Isle of Wight, Lord Mottistone, in thanking the Minister for his timely production of the order. For some time I have felt that, with a population of just over 126,000, the Isle of Wight has been rather over-governed with two district councils and a county council. I should point out that a population of 126,000 is less than half that of the next smallest county and under one-tenth the size of some of the largest counties. I believe that it is about the average size of a district council. I should stress that such figures relate only to England. Moreover, in terms of area, it is the smallest county in England comprising an area of some 38,000 hectares; indeed, there is only one other with an area below 100,000 hectares. For all those reasons, it is a good idea that there should be a unitary authority for the island.
However, I also believe that it will be good for democratic accountability. At present, I do not know —nor, I am sure, do many residents of the Isle of Wight —who is responsible for what; in other words, whether it is the district council or the country council. Therefore, people do not know who to blame when something goes wrong or, similarly, who to praise when something goes right. In particular, when the council tax bills come round, I believe that one has to pay through the district council for the county council. Again, I believe that the district council receives the blame if the country council is charging too much and, perhaps, praise if it is charging too little. For all those reasons, I warmly welcome the order. Although I have not examined the transitional arrangements, I hope that the transitional period to which the noble Baroness referred will be a great success.
7.24 p.m.
Baroness Hamwee: My Lords, tonight is one of the occasions when my noble friend the late Lord Ross of Newport is sorely missed. I am sure that he would have joined in the debate and made some very pertinent comments. I speak as someone who is not a resident of the Isle of Wight and who has not even visited it in the rather glamorous way described by the noble Baroness, Lady David. I have sailed into the Isle of Wight, but I did so on a commercial ferry. I have not sailed into an island seeking refuge from a storm or in the circumstances experienced by the noble Baroness, whatever they were.
It is clearly appropriate that the island should be governed by one tier of government, subject, as everyone agrees, to any parish arrangements. The question of praise, blame and understanding—although, perhaps, transparency is the most significant—is very important. I shall not take up time by taking issue with the noble Lord, Lord Brabazon of Tara, as to whether praise or blame for the level of council tax is a matter that should be laid at the door of a county council, a district council or at the door of central government, given the grant structure which underlies it.
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However, as has already been said, bluntly by the noble Baroness, Lady David, and both tactfully and sensitively by the noble Lord, Lord Mottistone, I have to say that it is a pity that, in proposing the order now before us, the Government have managed to get it wrong even where there is a consensus as to the structure of government for the island in the future. I refer to the issue of a continuing authority.
I turn now to the lack of democracy. The electorate is strong-minded and knows its own mind. It may decide some time between the start of the functioning of a shadow authority and the reorganisation date that it would like a different party to control the island's government. Some noble Lords will appreciate that that is an argument which I may be making against my own party; but things do change. I am perfectly happy to use arguments against my party, not suggesting that they will change, but simply to highlight the absurdity of the situation.
This is not a joking matter. I am quite serious about the undemocratic way in which the change is being approached. The county council and the new island council will have different functions. However, it seems to me that that fact is barely recognised in the explanatory note to the order which says that,
"the Isle of Wight County Council is renamed the Isle of Wight Council, and takes on the functions of the two abolished councils as well as continuing with its existing county council functions".
I believe that the position is a good deal more complicated than is explained in that note. The practicalities of moving from the functions of a county council to the more varied functions of an island council will require a great deal of work which should properly be done by those who have the responsibility in the period immediately following the reorganisation. The points made by the noble Baroness, Lady David, as regards practical experience are most important.
So far as concerns the staff, one would expect that the county would take great care to ensure that staff at all levels are properly looked after and that decisions are made in a proper manner. However, it is stretching credibility to expect either the staff or the public to believe that decisions have not somehow been skewed. The staff commission is there to advise the Government. Perhaps it needs more powers of intervention. I remember many fine words being spoken during the course of the Local Government Bill as to understanding the problems of staff involved in reorganisation. I should tell the noble Lord, Lord Mottistone, that it is not just a matter of something being done properly; indeed, there are many occasions when something needs to be seen to be done properly.
As has been said, while it is an issue for the Isle of Wight, it is and will be far more of an issue where a county tier will go and there will be unitary authorities at a district or, at any rate, a sub-county level. Moving functions in that direction will be extremely complicated. I join with the noble Baroness in asking for assurances from the Government that they will not replicate the complications, difficulties and concerns that have been roused by the proposals in the order.
7.28 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the Minister for introducing the order. As other speakers have said, this is a happy occasion where, on the whole, we all agree with one another that the order before us is welcome. It is certainly welcomed from this Bench. We have consistently said for the past 20 years that we support unitary authorities. I believe that it was said very clearly by my noble friend Lady Hollis in the recent debate on the Local Government Commission that that is still our attitude. As the order is the first to be laid under the Act, I think it might be useful to your Lordships if I set out one or two principles on how we will wish to deal with the orders as they come through—which, presumably, will come through in rather large numbers as we move forward.
My first point—and I hope that the noble Earl and the Government business managers will accept this—is that I believe orders of this nature (as indeed most orders are) should be debated in another place before being debated here. I say that because they do have electoral implications and boundary implications, and I would much rather be standing at this Dispatch Box with the knowledge that another place has had its view on a particular boundary, or a particular change in a boundary, rather than get up de novo—if I may use that expression—and try to express a view that may be overturned by any right honourable Member or Member of another place. So I hope very much that the Government business managers take on board the fact that we would prefer these orders to be introduced first of all in another place.
Having said that, there are a number of other points that I would like to make. As my noble friend Lady Hollis said, we do support the Local Government Commission and its review and the emphasis on unitary authorities but we will examine each order as it comes on its merits. I cannot give the noble Earl any commitment at all that we will approve each order as it comes automatically in the way that I am about to approve the order on the Isle of Wight. There are certain conditions that we would like to see observed and I will enumerate them as follows. First of all, that the review, and the orders that come out of the review, will be thorough and genuinely cover the country as a whole, not what is called cherry-picking of areas such as Cleveland, Humberside, Derbyshire or Avon; that the review will be completed and the Government will not abandon it halfway through; that the recommendations will be acted upon; and that consistent principles will be adopted throughout. It seems to me that that is an important element in supporting this first order and subsequent orders that may come.
Secondly—I hope I do not have to say this in front of your Lordships but sometimes one has to say these rather brutal things—there should be no gerrymandering of specific boundaries for party political advantage. I hope the noble Earl and I are at one on that and I hope all your Lordships agree that that is undesirable; but it is a condition that we wish to see properly observed as these orders come forward.
Thirdly, we believe that in shadow authorities—I
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shall come back to the question of the shadow authority —there should be all-out elections from day one. As my noble friend Lady David said, it is very important that there should be a democratic authority for the shadow authority from the first day that it is set up.
Fourthly, we believe that in subsequent years a third of the unitary authorities that are being set up should be up for election annually. Now that may be contrary to what the noble Baroness, Lady Hamwee, would like to see and perhaps that is in favour of her party or against her party; I am not entirely certain whether she was arguing in favour of her party or against her party Nevertheless, I think that the principle should be observed that a third of the authority should be up for election annually. Fifthly, the Government should meet any reasonable representation made to them by the Staff Commission about the way staff are treated when jobs have been changed as part of the reorganisation under any order produced as a result of the commission's review.
Having laid down a certain number of rather broad principles about how we will handle the orders when they come before your Lordships in the future, I now welcome the Isle of Wight order and rejoice, if I may say so, with the Governor and Lord Lieutenant for the Isle of Wight, the noble Lord, Lord Mottistone, and indeed the Deputy Lieutenant for the Isle of Wight, the noble Lord, Lord Brabazon of Tara.
There are only two slightly niggling points that I would like to make. One is to support my noble friend Lady David when she—and indeed the noble Baroness, Lady Hamwee—said it was really quite absurd that the Government, in the first order under the 1992 Act, had got it wrong and we could not have a shadow authority because the Act did say that where the new unitary authority was in the boundaries of the existing authority there could not be a shadow authority. That arouses, as the noble Lord, Lord Mottistone, and others have said, all sorts of fears about take overs and all sorts of difficulties. If the noble Earl were to come to the Dispatch Box and say, "Well, we respect the views of all noble Lords who have spoken in this debate and we are prepared to bring forward a one line Bill to change the Act", I can assure him that from this Front Bench there would be no problem about that whatsoever. We would help them in the way that we have helped the Government on other occasions in introducing amendments to legislation where the primary legislation was defective.
There is an importance in this beyond, of course, the Isle of Wight. It is that this is the first order, and Cleveland may come next and others will come after, and it is therefore essential in our view that shadow authorities should be set up and should have elections so that the whole process can start oil with a proper democratically supported base.
There is one lesser but still important point about town and country planning that I wish to make. There are two paragraphs in the order (6 and '7), which will mean that the island changes from its present system of a structure plan —as I think the noble Earl pointed out —obviously setting out the strategic policies for the whole island, and detailed local plans for each of the two

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districts, to a single combined unitary plan similar indeed to those which exist in the London boroughs. In the relatively unique context of the Isle of Wight we believe that this will probably work, but I would be very worried if this were taken as a precedent for future different areas of the country because it may well not work in other areas other than the Isle of Wight. I think it will work in the Isle of Wight but I would just issue a small warning to the Government that we may wish to look rather more carefully at the town and country planning arrangements in future orders.
So while welcoming the order and congratulating the Lord Lieutenant, the Deputy Lieutenant, and others, resident or non-resident, or those who have sailed into various harbours in the Isle of Wight, on this order, I would just issue what I call a yellow light to the Government. Because we approve of this order, do not think that we are not going to issue a red light on others as they come forward.
7.38 p.m.
The Earl of Arran: My Lords, I thank all noble Lords who have contributed in an authoritative way to the debate this evening. Before I go on to answer some of the points that have been raised I would add that other shire areas of the country would do well to mirror the dedication and co-operation of people on the Isle of Wight in reaching agreement on the structure which best serves their local communities. The commission does not have an easy task in reviewing the structure of shire England but it has been much aided by all those on the Isle of Wight. I know that my noble friends Lord Mottistone, the Governor, and Lord Brabazon, the Deputy Lieutenant, will appreciate the points that I make.
There was some discussion by my noble friend Lord Mottistone, by the noble Baronesses, Lady David and Lady Hamwee, and certainly by the noble Lord, Lord Williams, on the new and continuing authorities. The unitary authority will be the technical continuation of the county council after reorganisation. The terms of the Local Government Act 1992 will not permit any other alternative. The terms of the Act mean that we cannot create a wholly new authority where an existing council takes on the functions of the other tier without a substantial boundary change. There is no realistic prospect of amending primary legislation, which would be very complex. But we do not see this as a serious problem for areas where that happens. We have ensured a fresh start for the island unitary authority with elections in May 1995. It will then be up to the new elected representatives to take the initiative and press forward with innovative ideas.
We have also sought to encourage consultation with the two borough councils during the period of forward planning preceding reorganisation so that there can be fresh thinking about the way in which the unitary authority should be structured. We want fair treatment for all staff. We issued the Staff Commission revised guidance clarifying the original guidance in cases where district or county authorities continue after restructuring as a unitary authority.
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The noble Baroness, Lady David, asked whether we would continue to have adequate time for debate when future orders come before your Lordships' House. Of course that will be the case. I can reassure her on that point.
My noble friend Lord Mottistone asked particularly about the future standing of Lords Lieutenant. All Lord Lieutenants will be consulted by the Local Government Commission on the draft recommendations for their counties. County areas will remain even where a county council is abolished unless there are changes to county boundaries. We shall not make changes which would affect the jurisdiction of Lords Lieutenant, whether by the creation of a new county or the alteration or disappearance of an existing county without full consultation with all interested parties.
I suppose that we have to be grateful for small mercies in that the noble Lord, Lord Williams, has given his approval to the first order introduced so far. He made the point about his wish for future orders to be debated in another place first. As the noble Lord, Lord Williams, knows full well, orders are laid down at the same time in both Houses. As he said, it is then up to the business managers as to which House comes first. It is normally another place which comes first.
The noble Lord, Lord Williams, rightly asked about staffing. As part of realising the savings, we expect that the Isle of Wight County Council during the shadow period will wish to take a completely fresh look at its existing organisational structure and staffing in planning for unitary status, in consultation with the borough councils.
The Government intend that the vast majority of South Wight and Medina employees providing a service direct to the public, such as housing officers, will be transferred to the Isle of Wight Council on 1st April 1995 on existing contractual terms and conditions through the mechanism of statutory transfer orders. The Staff Commission for England will be providing guidance on this in due course. For those staff who do not transfer by transfer order it will be for the Isle of Wight County Council, in consultation with South Wight and Medina borough councils, to decide whether any of them will nevertheless transfer on 1st April 1995 under existing employment legislation. Again, the Staff Commission will be available to offer advice to the island authorities and their staff on the subject.
I hope that I have gone into some detail on many of your Lordships' questions this evening. I commend the order to the House.
On Question, Motion agreed to.
Viscount St. Davids: My Lords, I beg to move that the House do now adjourn during pleasure until 8.5 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.44 to 8.5 p.m.]

Coal Industry Bill
House again in Committee on Clause 26.
Lord Renton Lord Renton moved Amendment No. 46:
Page 22, line 10, at end insert:

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("(7) Where the Authority proposes to grant a licence, the Authority shall, before it does so—

(a) refer the proposal to the National Rivers Authority and the River Purification Authority whose area includes any land comprised in the area with respect to which an application for a licence has been made; and

(b) consider any representations which the National Rivers Authority or a River Purification Authority makes to it during the period allowed for in subsection (8) below.

(8) The period allowed under subsection (1) (b) above is the period of 28 days beginning with the day on which the proposal is received by the National Rivers Authority or River Purification Authority, or any such longer period as may be agreed in writing between the Authority and the National Rivers Authority or the river purification authority, as the case may be.").
The noble Lord said: On behalf of the noble Lord, Lord Moran, who is unable to be with us tonight, I beg to move Amendment No. 46. Amendments Nos. 47, 49 and 55 are grouped with it. However, I should point out that Amendments Nos. 47 and 55 are merely consequential. The substance of the case that I wish to put forward is contained in Amendments Nos. 46 and 55.
The broad purpose of the amendments is to ensure that the Coal Authority consults the National Rivers Authority or, in Scotland, the appropriate river purification authority in respect of proposals to grant coal mining licences. It is suggested that the consultation should also relate to some of the conditions of those licences. The reason for that, I should have thought, was very plain to all those who have some knowledge on the subject. In coal mining there are underground water supplies which have to be got rid of before coal can be mined and sometimes before galleries can be made in the pits. The normal way is to pump that water out of the coal mine. If it is not too impure it eventually finds its way to the nearest river.
While any minewater discharges from new operations would no doubt require a discharge consent, it is possible that an operator taking over existing workings might not be aware of the full implications of the mining activity which had gone on before, or groundwater or pumping regimes. From the point of view of improving the quality of our rivers, it is important that we should not have unexpected and unwelcome discharges. That is one of the points about which, naturally, the National Rivers Authority and the river purification authority would be worried.
Therefore, before a licence is granted at all there should be consultation with whichever body it may be—the NRA or the RPA in Scotland—and consultation not only as to the grant of the licence but as to the conditions attached to it with regard to the discharge and pumping of water.
I am sure that the Committee will agree that Amendment No. 55 is also of considerable importance. It refers to what might happen when a mine to which a licence relates is abandoned. The amendment says:
"Conditions included in a licence under this Part shall contain provision requiring the holder of the licence to provide to the National Rivers Authority or the river purification authority not less than 90 days prior written notice of the holder's intention to abandon a mine to which the licence relates".
In case any Member of the Committee wonders why there should be that condition of 90 days' notice, the cessation of mineworking could be accompanied by pressure—and I give one example of the many which
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could arise—or could give rise to pressure being maintained on pumps which continue to discharge after the working ceases and might discharge impure water, Other examples could be found.
I would not dream of dividing the Committee tonight on this probing amendment. It is to give the Government an opportunity of outlining their policy on the important matter of consultation in granting a licence and the conditions to be attached to it. I beg to move.
Lord Prys-Davies: I wish very much to support this series of amendments. I believe that there is widespread interest and support for the thrust of the amendments. There is a growing conviction that the NRA, as the rivers control agency, should have the opportunity of commenting on an application when it is made and then to recommend, where necessary, what conditions, if any, should be included in the licence. That is to ensure that the mine itself does not become a source of water pollution when the mine operations cease at some time in the future.
The NRA, on examination of an application and determination of the local plans, will have a pretty good idea of what is likely to happen if the mines are closed and the pumps are switched off. It cannot guarantee that, but it has a pretty good idea of what will happen. It seems to those of us who live in the vicinity of the rust-coloured rivers that the issue should be addressed right at the beginning when the application for a licence is under consideration and not left until closure, when it becomes extremely difficult to find a solution.
I believe that there is evidence from the courts—we had a recent case in the Crown Court in Cardiff at the end of last year—showing how difficult t is to prosecute the mine-owner under Section 85 of the Water Resources Act 1991. I believe that the noble Lord, Lord Renton, has fulfilled a service to the coal mining communities and those affected by the rivers in introducing the amendment. I hope that the Minister can give sympathetic consideration to the amendments.
Lord Strathclyde: I understand entirely why my noble friend moved the amendments on behalf of the noble Lord, Lord Moran, and I am grateful that he has done so. It gives me an opportunity to explain exactly what our policy is. I aim to be helpful and hope that. I shall be reassuring.
Amendment No. 46 seeks to give the water regulatory bodies a special role in the grant of licences. It would require all proposed licences to be referred to the appropriate body and they would have a fixed time in which to make representations to the authority.
This raises the same basic question as we have faced on the many amendments tabled during this Committee stage. The question is: what is the proper role of the authority in the granting of licences under this Bill and what is the role of other regulatory bodies? There is a tendency—a perfectly understandable one—to heap more and more responsibilities on any new body which the Government propose to create. In particular, there is a tendency to heap on such a body increasing responsibilities for the environment. As I said, that is

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very understandable, but it is nevertheless potentially a recipe for duplication, at the very least, and, at worst, confusion and muddle.
Our approach is based on the premise that bodies which have been given particular responsibilities should have the right duties and powers for the role that has been conferred on them. In this case, it means that the NRA and the corresponding Scottish bodies should have the powers to discharge their roles. I think they do. My noble friend Lord Renton made the point, quite rightly, that all discharges to controlled waters must have their consent and, moreover, that they are statutory consultees on any planning proposal. They are then able to make any appropriate representations to the planning authority about the implications of any new development, including coal mines, for the water environment.
I refer back to a debate that we had earlier this evening. All the licence does is to give the mining company the licence to mine coal, but not permission to do so; because it still has to go through the other hurdles, in particular planning permission, before it is entitled to do so.
It is, of course, appropriate, that the coal licensing arrangements should fully support the statutory framework which already exists. It will therefore be made abundantly clear that it is the responsibility of the applicant to obtain and comply with all necessary consents, including NRA consents. Schedule 8 to the lease contains a covenant by the tenant, at his own expense, to execute all works and to provide and maintain all arrangements, whether affecting an owner tenant or occupier, which are directed or required by any statute in force or by any competent authority. It seems to me that these are the necessary and appropriate steps to provide proper protection of the water environment.
The amendments will add potentially more bureaucracy to the licensing powers. Moreover, it seems to me that the amendment gives the authority an additional role of an environmental regulator which could already conflict with the bodies able to do so. Environmental regulation should be the business of the bodies which have specifically been given those roles. The authority should co-operate with those bodies and I am entirely confident that it will do so.
Amendments Nos. 42, 43 and 57 are meant to ensure that there will be proper consultation with the appropriate water regulatory body before a licensed mine is abandoned by its operator. It is of course desirable and necessary that such consultation should have taken place before abandonment, and we have not overlooked the question. As I explained on Tuesday in the discussion on the first group of amendments, the approach which we envisage will then be followed.
The eighth schedule to the lease contains a covenant from the tenant that he will keep the mine in a satisfactory condition (which is defined as the condition required to ensure that no immediate or potential liabilities fall on the authority). If he wishes to close any part of the mine, he has to give the authority six months' notice and a report on the possible consequences of the closure and details of the steps which he will take to secure that the mine remains in a satisfactory condition.
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The authority will ensure that the NRA is fully consulted in this process. Before agreeing to termination of the lease, the authority will expect the operator to institute any reasonable treatment measures identified and to make an appropriate payment for any continuing costs. Once the lease has come to an end, the authority will of course be responsible for the mine as for any other abandoned coal mine.
I think that the process I have described is the most effective way of proceeding. The leases of the mines and the responsibilities of the authority will not only secure proper consultation with the environmental regulatory bodies but, what is much more important, will secure that appropriate measures are taken to protect the environment in these circumstances.
My noble friend raised a very important issue. It is one that we have spent considerable time thinking about. That is why we have come up with the regime that I have outlined. I believe that the ends that it will achieve are exactly the same as those which would be achieved by the noble Lord's amendment; namely, to protect the water environment.
Lord Dormand of Easington: Perhaps I may clarify my mind on what was said; this is an important matter. I believe that the Minister said that the National Rivers Authority and the river purification authority are statutory consultees. My next point is: are they statutory consultees in these particular circumstances? I say that because we are talking about a new authority that will come into being, the Coal Authority, and it may just be that the legal situation will not provide for that. If that is the situation, then I can see the Minister's point of view that this would be a duplication or an unnecessary emphasis on what has to take place anyway. If I can be clear in my own mind about that matter, then I shall be very happy.
Lord Strathclyde: In my reply I explained the procedures that would take place in regard to the NRA. I hope that that satisfies the noble Lord.
To turn to the noble Lord's primary point as to the NRA's role as a statutory consultee, that is its role in statute when planning permission is required. Since planning permission is required to undertake opencast coal mining, that is when the NRA will be involved in the decision whether to give planning permission. I maintain that that is exactly where it should be present. It should not be in the decision as to whether to grant a licence. That quite properly is a role for the Coal Authority. But when it comes to granting planning permission, when there are so many other statutory consultees, when there might be the prospect of a public inquiry, and so on, that is where the NRA and the bodies in Scotland have a very important role.
Lord Renton: Perhaps I may supplement what my noble friend has just said. When planning permission is granted, necessarily it is granted subject to various conditions. My noble friend is suggesting that the same sort of conditions could be applied then as is proposed in these amendments. Is that the position?
Lord Strathclyde: That is exactly what I understand to be the case. The main point is: at what stage of the

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process should the NRA and other bodies be involved? I maintain that it should be at the planning permission stage rather than at the licensing stage. The licensing stage is purely a moment when the Coal Authority decides who should receive the licence once it has decided on certain safeguards which are quite properly outlined in the Bill.
Lord Prys-Davies: Clearly we shall have to study very carefully the words of the Minister. In reference to Amendment No. 55 in particular, will the Minister help the Committee to this extent? Can the Coal Authority impose a condition in the licence that will require the licensee to provide notice to the NRA?
Lord Strathclyde: I think I explained in my original reply that part of the lease explains that it is the responsibility of the applicant to obtain and comply with all necessary consents, including NRA consents. That is the important point.
Lord Prys-Davies: In Amendment No. 55 we are dealing with the abandonment of the mine. The licensee is required to serve notice if he proposes to abandon the mine. Can the Coal Authority insert that condition in the licence?
Lord Strathclyde: When it comes abandonment, again the eighth schedule to the lease contains a covenant from the tenant that he will keep the mine in a satisfactory condition. When the owner gives notice that he is going to abandon the mine, the authority will at that point ensure that the NRA is consulted in the process to make sure that the mine either remains in a satisfactory condition or that suitable decisions are taken to reduce water pollution.
Lord Renton: I am grateful to the two noble Lords opposite who have shown an interest in this matter and for the questions that they have put. I am very grateful to my noble friend Lord Strathclyde for his very full explanation of the Government's attitude towards what I believe are very important amendments. It is satisfactory to note that we are agreed upon objectives. The Government, the National Rivers Authority and the noble Lord, Lord Moran, have the same objectives. My noble friend said in effect that those objectives do not need to be fulfilled in the way that is suggested in Amendments Nos. 46 and 55 because they will anyway be fulfilled by other means. I am not in a position to challenge that at this moment. I shall want, and others will want, to study very carefully what he said.
I was a little puzzled by his references to—did he say Schedule 8 of the Bill? I am concerned that Schedule 8—
Lord Strathclyde: I can help my noble friend immediately. If I said that, I confused him. I did refer to the eighth schedule; but it is the eighth schedule to the lease, not to the Bill. We have produced a draft lease in a separate document. I shall make sure that my noble friend receives a copy.
Lord RentonI am very grateful for that clarification, because it did not seem to me that the eighth schedule to the Bill fulfilled the prophecies that he or I had in
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mind. With the satisfaction that at any rate the Government intend to achieve these purposes, and that it will be for others concerned to consider whether those services are adequately fulfilled by the way that the Government suggest or whether something still needs to be written into the Bill, with that further matter to be considered, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clause 27 [Authorisation contained in licence]:
[Amendment No. 47 not moved.]
Clause 27 agreed to.
Clause 28 [Conditions of licence: general]:
[Amendments Nos. 48 to 51 not moved.]
Lord Peston Lord Peston moved Amendment No. 52:
Page 23, line 49, at end insert:
("( ) Conditions included in a licence under this. Part shall contain provision requiring the holder of the licence to take out and maintain a policy or policies of insurance insuring against all loss, damage and liabilities arising from the operation of that mine.").
The noble Lord said: Amendment No. 52 has two roles. One is in its existence as an amendment in its own right. But it also exists in order that I can say a few words on the whole context in which it is placed, namely the context of licences.
My general view of the Bill, which is commonly referred to as the coal privatisation Bill, is that the name is something of a misnomer. It is not a Bill about selling pits. It is a Bill about selling licences. I regard licences as the essence of the Bill. When I examined the various paragraphs of the clause—Clause 28—to which my amendment refers, and the contents of Clauses 29 and 30, I tried to think of a suitable adjective to describe them. I thought of calling them "vague"—but that is not the right word. Then I tried "broad brush"—but that: is not right either. I thought about "vacuous". These: paragraphs occupy a lot of space but they say little or nothing.
That is the nature of the problem when debating the Bill. If I am right that licences are what matter and that what will happen in the real world when the Bill is passed into law will be dependent on the licences, then in terms of the statute itself we need to know a good deal more about the detail of the licences. Butt we do not have that information in the statute. What we have—I draw the Committee's attention to Clause 30(3)—is:
"the duty of the Authority to publish model provisions".
As the noble Lord, Lord Strathclyde, pointed out, there are already in existence documents of a sort that give some indication of what would be in the licences.
Earlier amendments, as well as my own amendment, seek to ensure that, because licences are so important, there ought to be rather more specific matters about licences in the Bill, particularly if I am right and the Bill is about licences and not about pits. I emphasise my specific amendment, which concerns insurance, because it relates to the question of liability and how there is any protection against that, which the Minister, when we, met in Committee last Tuesday, felt was not as important as I considered it.
I tabled the amendment in the deliberately provocative way of stating that the coal authority should

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demand insurance against all those things. I do not think for one moment that any rational insurance company would want to sell such insurance. But if no rational insurance company would want to sell such insurance, what rational person would want to buy a licence? That seems to me to be the essence of the Bill.
The Minister becomes very cross with me as I tear the Bill apart. But the fact remains that, in my opinion, this piece of legislation is as badly flawed as any that one could come across. I am afraid that if anybody buys a licence, he will find that he has certain statutory responsibilities anyway, as part of company law, to deal with insurance. My point is that because of the nature of the Bill he will simply discover that it cannot be bought. That is why I want to have put on the face of the Bill the requirement that it must be bought. Otherwise, how could he possibly allow himself to incur the liabilities?
At 8.30 p.m. I do not happily put down such an amendment on purpose. I would much rather debate such an issue at 3.30 in the afternoon. But 8.30 is the time at which we have reached the amendment. Therefore I emphasise to the Committee and those Members who have turned up, not in great numbers, to look at the Bill that this is the kind of question that it is our duty to put before the Committee so that at least the Minister can tell us how we get out of this little problem. I beg to move.
8.30 p.m.
Lord Strathclyde: I dare say that more of my noble friends and colleagues would come to listen to these debates if there were amendments which were rather more interesting to deal with. The noble Lord, Lord Peston, asks how we are to deal with the problem. But there is no problem. The only problem that I can see is the one quite naturally foreseen by the noble Lord when he tabled the amendment requiring insurance as a statutory duty. The insurance industry may well be more than happy to pick that up. But if it does not, and if for one reason or another it does not do so in one year, that closes down the mine and makes sure that the private sector cannot operate.
I come back to the point that I have made time and again when dealing with amendments tabled by the noble Lord, Lord Peston; namely, the noble Lord's desire to make sure that privatisation does not occur. This amendment is one of the noble Lord's insincere and non-serious amendments rather than one of his more helpful ones.
All industrial activity is capable of giving rise to "loss, damage and liabilities". Where it is economically viable to do so, the industry will not want to place itself in a position in which it is unable to meet its obligations and will buy insurance. There is something much more important in what the noble Lord, Lord Peston, said. He said that in this Bill and the privatisation process the most important thing is the licence; licences are not found in the Bill and therefore there is a huge gap. I disagree entirely with him. He said that because he knows that there cannot ever be a close and detailed examination of the licences as they are not in the Bill; and he said that therefore it is a flaw in the Bill. It is not.
The role of the authority and the way in which it disposes of the duties that we have given the authority in terms of the Bill is the important matter. All that the licence does is to give to the successor company, the mining company, the ability to go ahead and do its mining. Within that operation there are a lot of obligations for the mining company, some of which I have set out and some of which are laid down during the course of the licensing. It is entirely fair to cross-examine on its intentions.
I am not sure what more I can say to the noble Lord, Lord Peston, since he has quashed his own amendment in a way. There are questions that need to be answered. What is to be done if insurance cannot be obtained? Would the noble Lord seek to compel the insurance industry to provide the insurance? Is that what he has in mind for the insurance industry? If that is the case, he will have to propose further amendments to establish such powers over the insurance industry. I believe that what I said at the beginning is correct.
The noble Lord believes that no one in his right mind would wish to operate a coal mine or become a licensee. That is his opinion. We believe that the expressions of interest already made in the coal industry justify our very positive attitude toward the industry. We hope that it will be successful.
Lord Prys-Davies: Before my noble friend decides what to do with the amendment, perhaps I may invite the Minister to be a little more specific. At least I can give him one question which needs to be answered. As I understand the matter, the Coal Authority is empowered to require the operator to lodge an insurance guarantee of a bond against liability for subsidence damage to the surface of the land and buildings on the land. However, I understand that the Coal Authority cannot require the licensee to lodge a restoration bond for the restoration and treatment of the surface of the land after his licence for opencast mining has been completed. It seems to many of us that there is a strange degree of contradiction between requiring an insurance bond to meet a claim for subsidence damage to the surface of the land and denying the authority to obtain a bond against the failure to restore.
Lord Strathclyde: The noble Lord has picked out the case of subsidence, which is an important one. There is not any contradiction. The point is that subsidence is a very good example of where one needs to secure future liabilities because the withdrawal of support and subsidence damage to private property are more or less unavoidable consequences of modern mining. It is because lawful mining will result in damage to people's homes that we have proposed the strongly worded duty in Clause 2(1) (c) which means that security will have to be provided by the operator if required by the Coal Authority. The amendment of the noble Lord, Lord Peston, says they must insure against all loss, damage and liabilities, whether or not those liabilities would occur in practice.
Lord Peston: I am not certain that the noble Lord understands either my amendment or anything that I

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have been saying. As someone who has been teaching for the past 40 years, that is not an unusual experience for me.
The point I am trying to make about the Bill has nothing to do with my sincerity or insincerity; it is that the Bill is not very good in terms of what it is seeking to do. As I understand it, the Government, as part of their manifesto, pledged to return coal to private ownership. I have already pointed out that the Bill does not do that; it sells licences and not pits. At this stage that is what we are discussing.
I am saying that one of the reasons why the Bill in practice will not work—as the noble Lord says, we shall see what happens both to people who bid for licences and how long they survive subsequently—is because buying a licence means buying a series of potential risks. Normal good business practice is to buy insurance against those risks. It is in the nature of the Bill that one will not be able to buy the insurance one requires. The reason I tabled the amendment was to make that clear, rather than to help the insurance industry, which we can do on another day.
I am trying to explain to the Minister that he and his right honourable friends have not done the job in the Bill that they think they are doing. There is no point in going over the ground again, especially as we shall be coming to subsidence in a few moments, on which again a question of liability of a serious kind arises. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 53 to 55 not moved.]
Clause 28 agreed to.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 56:
After Clause 28, insert the following new clause:
("Conditions as to employment terms
.—Conditions included in a licence under this Part shall include provision requiring the holder of the licence to ensure—

(a) that the terms and conditions of employment of persons employed in the coal-mining industry in Great Britain shall be no worse than the terms and conditions in existence immediately before the restructuring date;

(b) that any arrangements in existence immediately before the restructuring date with regard to concessionary coal or cash in lieu for existing workers shall be maintained; and

(c) that there shall be full recognition of and consultation with trade unions if this is requested by a majority of persons employed by the licence holder in coal-mining operations.").

The noble Baroness said: Paragraph 7 of Schedule 2 to the Bill provides for the Transfer of Undertakings (Protection of Employment) Regulations 1981 to apply to any transfer resulting from privatisation. That means that contracts of employment will be transferred to the successor companies.
It is true that the TUPE regulations, which the Government have to apply anyway as they are based on the EC's acquired rights directive, offer certain safeguards to employees in the event of takeover or merger. In fact, they were deliberately devised to give such protection. Not only must the new employer take over and implement the contracts of employment for staff; it is now accepted that comparable pension provision must also be given—we discussed pension provision earlier this afternoon. Existing collective
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agreements with the unions must be honoured and there must be consultation with representatives of the workforce prior to transfer.
However, in important respects the TUPE regulations do not go far enough. Companies will be able to bypass the regulations by giving notice or by relying on a number of subterfuges which are known to exist. Indeed, the guidance issued by the Minister in March 1993 sets out ways in which a dismissal could be regarded as fair even under TUPE. He cites the technical and organisational reasons which could be relied upon in such an event. Moreover, as the Minister has often told this House, it is open for an employer to terminate a recognition agreement when he thinks it appropriate. TUPE does not prevent that happening after the event. Furthermore, there is no protection in the event of insolvency.
It is our submission that coal is a special case. It requires a stable industrial relations framework and wages stability. If those are not provided, companies will simply compete on the basis of low wage levels and the industry will degenerate into a low wage ghetto. Furthermore, low wages and low wage systems based primarily on piecework are not conducive to safety. That was recognised in 1946 and is why the legislation introduced then provided explicitly for recognition and national conciliation schemes to govern terms and conditions of employment.
That principle currently extends to the private licensed mine sector. Under Clause 15 of the licence, private owners must observe every local and national agreement or settlement reached by British Coal and the relevant union. If the Government are serious about protecting miners' terms and conditions, if they mean what they say about "no worsening", then Amendment No. 56, which stipulates that successor companies must offer terms and conditions no worse than those existing just prior to privatisation, should be accepted. Successor companies should honour agreements already in existence as a condition of their being granted a licence. Arrangements in regard to concessionary coal and other conditions should be honoured. There should be full consultation with and recognition of appropriate unions if a majority of the people employed by the licence holder want that.
All that is important. Without protection for terms and conditions of employment in what remains of the UK mining industry, there will be competition, not on the grounds of high technology and productivity but by undercutting wage costs and working conditions. We are in danger of creating a series of sweatshops. I believe that, in an industry as important to us as the coal industry, that is profoundly unacceptable. As my noble friend Lord Peston said, the Bill is about licences and what should be in them. I hope that the Minister will agree with me and be prepared to accept the amendment. I beg to move.
8.45 p.m.
Viscount Goschen: The Government fully recognise the concern to protect the interests of those currently working in the industry, as expressed this evening by the

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noble Baroness, Lady Turner of Camden. But we believe that the Bill already provides suitable protection.
The amendment attempts to protect such interests through the Coal Authority licence. I must clarify the purpose of the coal operator's licence. The licence gives to fit and proper persons authorisation to mine and imposes on them obligations for the treatment of liabilities arising from subsidence. It does not cover health and safety, which is governed by health and safety legislation. It does not cover environmental obligations, which are governed by environmental legislation. Similarly, it would not be appropriate to use the Coal Authority licence to ensure compliance with employment law.
I can assure the Committee that there are safeguards in the Bill to protect the interests of British Coal's employees. As the noble Baroness said, Schedule 2 contains provisions to ensure that the Transfer of Undertakings (Protection of Employment) Regulations 1981—(TUPE)—apply to any transfer of an undertaking, or part of an undertaking, under a restructuring scheme or modification agreement. Those employees who transfer in this way with the undertaking or the part in which they are employed can, therefore, be confident that all their terms and conditions of employment will be safeguarded on restructuring. As the noble Baroness said also, special rules apply to pensions and are accordingly dealt with separately in the Bill.
After a transfer there will be scope for changes to terms and conditions, subject to the normal protection offered to all employees under United Kingdom employment law. That protection includes an obligation on employers to obtain the agreement of employees to any such change. I hope that the Committee will accept that it is essential that there should be scope for changes to terms and conditions—for example, to allow the introduction of new technology and working methods —if the industry is to be competitive.
TUPE will transfer British Coal contracts of employment to private sector successors. Thereafter, they can only be amended by agreement with relevant employees. Continuing employees' entitlements to concessionary fuel and cash in lieu are contractual entitlements which will therefore be protected by the provisions of TUPE. So any change in such entitlements will need to be agreed with the relevant employees.
The noble Baroness raised the point of trade union recognition. The right to belong to a trade union is a right of all employees. That will not be affected by the Bill. However, it has always been government policy that employers should be free to decide whether to recognise, or to continue to recognise, trade unions or any particular trade union. If employers wish to change their bargaining arrangements, then it is a matter for them. Equally, trade unions are free to convince employers of the merits of recognition.
TUPE will transfer the vast majority of contracts of employment of British Coal staff who will move to successor companies. I hope that in the light of the explanation of the TUPE provisions which I have
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detailed, the noble Baroness will accept that her amendment is not necessary. I would urge her to withdraw it.
Earl Bathurst: Can my noble friend confirm that any coal miner who has contracted some wretched disease or suffered an injury resulting from an accident during his time of employment with the Coal Board and then has troubles with the new licensee because of an accident or some condition will have his rights carried on when he is working for the new licensee? I think my noble friend has said that that is the case, but I am not quite sure.
Viscount Goschen: This specific issue was dealt with on the first day of Committee. It was spelt out by my noble friend Lord Strathclyde that in the event of an employee moving to the successor company and then having the medical problems that my noble friend Lord Bathurst detailed he would take up the matter with his new employer, the successor company.
Earl Bathurst: I am most grateful to my noble friend. I was not quite certain.
Baroness Turner of Camden: I am not at all certain whether the successor company would have the obligation to settle with such an employee. If it were pneumoconiosis, there is a pneumoconiosis scheme which covers the rights. But if the individual concerned suffered an accident and has a common law claim, my understanding is that the situation is very different. The successor company would have to deal with such an issue under the terms, presumably, of employers' liability insurance. Will the Minister be good enough to confirm that that is the case?
Viscount Goschen: The noble Baroness is correct about the provisions which she detailed on pneumoconiosis—the disease that is so difficult to pronounce. That was the main thrust of the arguments that took place. I believe that she is correct on that matter.
Baroness Turner of Camden: I am sorry to come back on the point. Miners suffer not only from pneumoconiosis. There are injuries which come about as the result of mishaps in the mine. Such injuries can give rise to claims at common law. At the moment the Coal Board has to deal with such a common law claim within the terms of its own employers' liability insurance. The successor company, however, will presumably have to have its own employers' liability insurance for which it will have to pay probably a higher premium plus of course the taxation on premiums which are now a part of government policy. It will have to pay those costs, and that insurance will have to cover, I assume, any common law claim arising in one of the successor companies.
Lord Prys-Davies: To summarise, are the Government drawing a distinction between a miner who suffers an industrial disease and a miner who suffers an industrial accident? Is there a distinction between industrial disease and industrial accident?
Viscount Goschen: We discussed this complex issue in great detail at an earlier stage of the Committee on Tuesday. My noble friend Lord Strathclyde is writing to the noble Lord's noble friend Lord Callaghan detailing chapter and verse on the issue. What I can say to the noble Baroness is that the liabilities for the past injury, including under common law, are not covered by TUPE but are transferred by the scheme. That is the important issue.
Lord Dormand of Easington: The Minister said earlier that the main reason why the amendment would not be acceptable to the Government was that its three parts are taken care of in the Bill itself. I do not profess to know the Bill word for word. Can he tell us which part of the Bill deals with it?
Viscount Goschen: My point was that the amendment was unnecessary because of the Transfer of Undertakings (Protection of Employment) Regulations which are contained in Schedule 2. That is why we believe that the amendment is unnecessary. We already have adequate provision in the Bill.
Baroness Turner of Camden: The noble Viscount will not be surprised to learn that I am not entirely satisfied with his response to my amendment. We must be grateful for the existence of TUPE; otherwise, individuals, faced with the consequences of privatisation, might find themselves in a very much worse position than they do now. However, the whole thrust of my argument was that TUPE is not sufficient. It is certainly not sufficient to guarantee a continuation of the right to recognition and to consultation with the appropriate unions, which is part of the amendment. Of course, the agreements will be carried over in the beginning, but there is no reason why they should be maintained, as the Minister made clear. It is very unlikely that they will be maintained in some instances if there is not an insistence in the licence that there should be the basic minimum safeguards for employees proposed in the amendment.
It is not my intention this evening to press the amendment —the Chamber is thinly attended—but I shall look with interest at what has been said by the Minister both in regard to the particular amendment and also to the points made about industrial injury. I should be most grateful if a copy of the letter which is being sent to my noble friend Lord Callaghan could also be sent to me. The position is by no means entirely clear to me, although I think I understand it. I think I understand it, and I am not happy about it. But that is a different matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Conditions for the provision of security]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 56A:
Page 24, line 13, leave out ("may") and insert ("shall").
The noble Lord said: As I eat my cornflakes at breakfast time, it is my custom, unless there is some Bach or Vivaldi, or Couperin or Handel on Radio 3, to
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listen to the "Today" programme on Radio 4. This morning it ran a most interesting item on the Child Support Agency and the alleged ineffectiveness of its attempts to ensure that errant fathers did not escape their responsibilities. We have the same thing here because Amendment No. 56A is a substantive amendment designed to ensure that licensed operators cannot escape their obligations. I put it down in an attempt to be helpful in enforcing something which I think is only loosely present in the Bill as it stands.
A licensed operator will have liabilities to the Coal Authority in respect of payments due under his lease and licence. He is also likely to incur obligations to other people totally outside the contract between himself and the authority; for subsidence, and for impacts on the environment and on his neighbours' property. The Government recognise that the authority should be concerned to ensure that the neighbouring communities of mining operators and indeed the public in general are recompensed for any damage they suffer, but they make a distinction between subsidence damage and other kinds of liability.
In the case of subsidence, it is proposed to give the Coal Authority a discretion to insist that an operator make financial provision for meeting his liabilities. In respect of other obligations the authority's duty is weaker. It merely has to satisfy itself that the operator is able to finance the discharge of his liabilities.
This distinction between subsidence and the other kinds of damage is a theme which runs through this Bill like a golden thread in a fabric—like a leitmotif in the music dramas of that much overrated German composer, Richard Wagner—though why the neighbour of a coal mine should mind less if his water is contaminated than if his house sinks into that water is not at all clear. In practice, the neighbour will want recompense for whatever damage has been done and will be just as concerned that the mine operator has the means to pay the proper compensation.
Nor do the Government in this Bill make clear where the authority will obtain its crystal ball to foresee the future financial position of the operator. The Bill is not concerned only, or even chiefly, with the compensation which may be payable when a licence is granted. Damage, and especially environmental damage, may manifest itself at any time during coal mining operations or indeed long after they have ceased.
We are all aware of major and reputable companies and businesses—in which the Coal Authority, or anyone else, might have every conceivable confidence—which have found themselves nevertheless in the hands of the receiver or otherwise insolvent. How can the Coal Authority or the Minister be confident that the same will not happen to an operator licensed by the authority; and what recourse will the neighbour or the public have then?
That question has been raised in another place and the Minister has said that in the last resort, taking one thing with another, boiling it down and straining off the water, the Coal Authority would be responsible. He said that in the Official Report of Commons Standing Committee D on 10th February 1994 at col. 175. If that is the case, why can we not have this made clear on the

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face of the Bill? When pressed on that matter the Minister produced (Official Report, Commons Standing Committee D, 3/3/94; col. 532) what he called a "convoluted"—and what might much more accurately be called a tortuous and unsatisfactory—chain of responsibility in relation to subsidence damage.
First, he said that the authority would be responsible for subsidence damage under Clause 43(3) (b), which in fact says that the authority is responsible for subsidence damage if no licensed operator is responsible. It says nothing about the authority being responsible if the operator is unable to meet his responsibilities. Secondly, the Minister said that under Clause 37 the Coal Authority could terminate an operator's area of responsibility for subsidence, whereupon the authority would be responsible for subsidence claims in that area. That is tortuous but possible and in a way neat. But there is no way that the authority can be made to do this by an aggrieved claimant, and since the main effect of such a termination would be to add financial liabilities to the authority, we might perhaps expect it to be at least reluctant to do so.
Even if the chain of events envisaged by the Minister, hard pressed in Standing Committee D, should occur, what effect will that have on claims already made, and perhaps even agreed? Will not the claimant simply be an unsecured creditor of the insolvent operator? There is nothing in the Bill about transferring the debts of an operator if his area of responsibility for subsidence is terminated, and it would be rather surprising if there were. And even the unsatisfactory chain of responsibility set out by the Minister above does not apply to damage claims not based on subsidence. The Minister has repeatedly said that in the last resort the Coal Authority will be responsible for at least subsidence claims. As far as we can see, the wording of the Bill simply does not provide this.
It would be preferable, in our view, simpler and better all round—and amendments are tabled to this effect—if the Coal Authority were to be responsible for settling all subsidence and environmental claims, reclaiming the costs from licensed operators. That way we know which way we are going. If that strategy is not to be adopted, the public are surely entitled to have their interests safeguarded by the provision of proper financial security for the payment of third party claims.
This issue was raised by a number of Peers at Second Reading of the Bill in your Lordships' House on 11th April, including my noble friend Lord Mason (Official Report, 11/4/94; col. 1312), the noble Lord, Lord Ezra (col. 1305), the right reverend Prelate the Bishop of Sheffield (col. 1315) and the noble Viscount, Lord Caldecote (col. 1333), not all of whom are fully paid up members of the Labour Party so far as I am aware.
Concerns about financial security were also expressed in the debates at Report stage of the Bill in another place. Many people are worried about this. Their worries have not been laid to rest. I beg to move.
Lord Strathclyde: I believe that as the evening goes by the noble Lord becomes even more eloquent, and indeed more elegant in his choice of phrase and
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language. I was delighted to hear about his cornflakes in the morning. But as he went on I slightly lost the thread of what he was saying. I suspect also that he strayed into the areas of some of the amendments that we shall come to in the next few minutes.
I understand that his basic anxiety is what we are going to do about the potential financial liabilities arising out of subsidence. We already know that the Coal Authority has a special duty under Clause 2(1) (c) to seek appropriate subsidence security where this is necessary. It also has a duty under Clause 2(1) (b) as to the financing of liabilities generally. Clause 29 assists the authority to discharge these duties. Making the security requirement mandatory, which is the basis of this amendment, would not only unnecessarily constrain the authority in performing its duties but also burden financially robust parts of the industry. Every pound of capital which is tied up in security will be a pound less available for other things such as investment in new equipment for the mines.
I am not surprised that the noble Lord should be taking this belt and braces approach because again he does not trust the private sector. However, the question of whether one trusts the authority should not be the premise. The authority has a duty to make sure that the mining company is financially viable and that it has methods of generating enough cash to look after its liabilities, and particularly its subsidence security. However, at least that provision puts the responsibility into the hands of the authority and it can make up its own mind. The effect of the amendment would be entirely negative. It would simply place that additional and unnecessary overhead on all financially robust operators, and even some very big companies would be obliged to put down a security.
As far as insolvency is concerned, the Bill provides that these arrangements can be set up to ensure that the security is effectively ring-fenced for the protection of subsidence claimants. If there were an insolvency, subsidence claimants would be able to obtain their compensation through the financial security arrangements, if necessary.
The Bill gives the Coal Authority the right to apply for the deferral of a dissolution of a mine operator. It is intended that this will stand in the way of a coal operator who wants to escape his subsidence responsibilities by engineering his own dissolution. For the same reason, the Bill also makes it clear that a liquidator cannot disclaim the operating licence, and with it the area responsibility for subsidence, so as to escape subsidence liabilities. However, the licence will nevertheless be transferable subject to appropriate conditions. It will also be possible for the insolvency practitioner himself to carry on the mining.
As is the case with so many of these amendments, I can understand why noble Lords have tabled them and it is right that these matters should be debated. It could well be that the Government have not thought of every single eventuality, but I think that we have covered most of them. I am satisfied that the whole regime for dealing with the effects of subsidence has been extremely carefully thought out and is the very best protection available.
Lord Morris of Castle Morris: Interesting; helpful in parts; makes progress; gets us forward but not fully satisfactory, especially on the distinction between subsidence and other damage. We shall return to it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 agreed to.
Clause 30 [Publication of licensing arrangements]:
[Amendment No. 57 not moved.]
Clause 30 agreed to.
Clause 31 [Enforcement orders]:
Viscount Goschen Viscount Goschen moved Amendment No. 58:
Page 26, line 42, at end insert:
("(8) This section and sections 32 and 33 below shall be without prejudice to the right of the Authority, where the conditions of any licence under this Part contain provision for a sum determined by or under those conditions to be paid to the Authority, to enforce that condition in proceedings for the recovery of the sum as an amount due to the Authority by virtue of an enactment.").
The noble Viscount said: The purpose of this amendment is to give the Coal Authority power to recover sums due to it under coal operating licences as civil debts. The authority would anyway be able to recover such sums through the enforcement order procedure in Clauses 31 to 33 of the Bill. However, this will be a relatively complex process which would not be appropriate for the simple recovery of debts. I therefore commend the amendment to the Committee. I beg to move.
On Question, amendment agreed to.
Clause 31, as amended, agreed to.
Clauses 32 to 41 agreed to.
Clause 42 [Subsidence damage to which 1991 Act applies]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 58A:
Page 37, line 26, at end insert:
("( ) For the avoidance of doubt, any reference in sections 42 to 48 of this Act to "subsidence" shall be read as including references to disused former colliery mineshafts, shafts or adits and "damage" shall include a diminution in value or a reduction in prospects of sale of any property.").
The noble Lord said: In moving Amendment No. 58A, I should like to speak also to Amendments Nos. 64 and 65. We are talking here about blight. Blight is a form of uncertainty which can cause damage, loss and misery. A typical example in the ambience of this Bill would be an uncapped mineshaft 20 metres away from a property which the owner is wishing to sell. There is no subsidence yet, but it is now a well-attested fact that mortgage companies simply will not lend on such properties, and the owner cannot sell. That could well apply to hundreds of properties in all the coalfields of this country.
I have had a lot of correspondence about this matter, especially on individual cases, and Members of another place have received vast amounts of correspondence. Noble Lords on all sides of the Committee will be familiar with the phenomenon whereby when something is being debated in your Lordships' House, it is an
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excuse for Members of another place to dump sackfuls of constituency correspondence on to our tables on the grounds that they are sure that it is going to be helpful.
One of my honourable friends wrote to me as follows:
"This is a complicated and difficult issue which has only properly come to light since the property market started to move, although it relates back to the 1991 Subsidence Act.
In a nutshell, an area like ours"—
it does not matter where it is—
"has former disused colliery mineshafts and adds literally everywhere—on football pitches, under pavements, in back gardens and on school playing fields.
Where former colliery land has been made good under Derelict Land Grant schemes, then the former mineshafts/adits have been capped and made good too. However, the real problem lies with the numerous shafts and adits peppered about the entire length and breadth of this county. You will see from the House of Commons Library that it is only as a result of the voluntary agreement between British Coal and the Law Society that the location of these shafts and adits is now coming to light. As no one is able to say whether these former shafts have been made good or continue to present problems of possible future subsidence, properties are becoming blighted".
My honourable friend enclosed a large number of letters, some of them handwritten cries for help; some of them complaints and moans; some of them from people who should have known better. One struck me particularly, and I have permission to quote from it. The correspondent said:
"We bought our house in June 1989 in good faith with a clear mining report, and were given a mortgage by Britannia Building Society for £38,000. In January 1993 we decided to put our house on the market as our family has grown and we needed extra space".
These, by the way, obviously are not people of high education and social standing. Even the spellings in the letter could do with a little attention. She goes on:
"Due to the recent change in mining regulation reports we found that we could not sell our house as an adit has shown on the current mining report and is not acceptable to building societies to lend out a new mortgage.
If we could establish whether the adit has been capped British Coal will add this to the mining report and our problem should be solved. If the regulations were to be changed back then our problem would definitely be solved. I have desperately tried td find this information out but cannot find anyone who will provide me with this information".
She then lists a number of places to which they have gone. She continues:
"As you can see we have tried to find out the information we need but cannot get satisfactory help. We feel that we just cannot afford to pass this on to a solicitor as we do not qualify for legal aid. Please can you help us as we do not know where to turn next. Yours hopefully".
Are the Government aware of the scale of the problem? Within the context of the Bill, what do they propose to do about it? I beg to move.
9.15 p.m.
Lord Strathclyde: The noble Lord, Lord Morris, produces an interesting problem. I am aware of it, and a part of it has of course been caused by the alteration of the form in 1991. That means that in some cases shafts some distance away from the property will now be disclosed. I had gathered that the number of properties in that category is small, but the noble Lord does not think so. I do not know what the reality is.
In considering the first of these amendments.., it might be helpful were I briefly to summarise the present position. If lawful coal mining subsidence damage

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occurs, then British Coal has an obligation under the Coal Mining Subsidence Act 1991 to remedy it, including where the ground movement is attributable to an old mineshaft.
The issue of old shafts usually arises if such a shaft is disclosed on a mining search provided by British Coal to the solicitor acting for a purchaser. The information is generally provided on a search form agreed between the Law Society and British Coal.
I appreciate fully the need to remedy actual damage caused by coal mining subsidence damage. That is why Clause 43 preserves the position under the Coal Mining Subsidence Act 1991 that the owner or occupier is entitled to have the damage put right or be paid to put it right himself. But the amendment would go beyond that. It would mean that claimants could seek compensation against private coal operators to which they are not currently entitled against British Coal. That is the point the noble Lord is making. Because it is virtually impossible to predict the level of compensation with any degree of accuracy, that could place an intolerable burden on the coal mining industry.
The 1991 Act, which received considerable all-party support, struck what was in my view an entirely reasonable balance between the interests of British Coal and subsidence claimants. It provides not only for subsidence damage to be remedied but also for a number of other remedies; for example, for compensation for inconvenience during works and home loss payments. Those remedies will be carried forward entirely after privatisation. To amend that Act so as to grant additional remedies would upset the balance of interests to which I have referred. I understand the noble Lord's intention, but that would be difficult.
I turn now to Amendments Nos. 64 and 65. It might assist if I were to explain the thinking behind Clause 45. The mining companies will have to notify all those who may be affected by subsidence and include information on how to claim. However, that does not guarantee that everyone who wants to claim will have the notification to hand, particularly if some time has since elapsed.
We have therefore proposed Clause 45 and made available proposed draft regulations under it. The purpose is to oblige mining companies and the Coal Authority to supply any owner or occupier who could claim against them with the information they need to make a claim. I agree that prospective purchasers may wish for information. But the regulations under Clause 45 are not the right channel for that. I oppose Amendment No. 64 because prospective purchasers could not claim anyway because they would not yet have suffered damage. At present prospective purchasers can obtain a mining search from British Coal, as I have explained.
As to Amendment No. 65, the proposed draft regulations we have published require that, if an inquiry is received from outside the area for which that operator —or the Coal Authority—is responsible, it is to be forwarded to the Coal Authority, which will pass it on or deal with it as the case requires. In other words, we
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have already provided for inquiries from elsewhere and this will of course include inquiries from owners and occupiers of adjacent land.
The noble Lord began with the question of blight. I apologise for dealing with the issue at some length, but it is important. He referred to the disclosure on the search form of the presence of old mine shafts. He mentioned in particular the circumstance where a shaft may be disclosed on the current version but would not necessarily have been on earlier versions. The issue has caused some public disquiet. The Law Society and British Coal have commendably acted to advise those concerned. In December they issued a joint press release advising that, if an old shaft had been or can be located and properly treated in normal circumstances, there should be no problem. That is worth emphasising because it shows that the impression that has gained currency in some quarters that such a disclosure renders that property worthless is in fact wrong.
I hope that that will help the noble Lord in replying to his honourable friend's constituents. Although it will always depend on the circumstances of the case, there may be instances where the property owner has a right to remedy. The Law Society and British Coal have made available the names and addresses of a number of firms which at no charge will supply initial advice to concerned members of the public. I have been encouraged to learn that British Coal and the Law Society have found that to date there have been very few cases of people living in houses where shafts have recently been disclosed which were not disclosed when they originally bought the property. It would appear, therefore, that the problem is not as severe as I thought it was when I got to my feet. I hope that that explanation is helpful.
Lord Morris of Castle Morris: I am grateful to the Minister for that reply, which was most helpful. I am pleased he agrees that we have uncovered a problem. The fact that I have enunciated it and he has replied to it might go some way to reassure those who are in the blighted position, though I am not sure that we have solved the problem completely. We shall need to think about it and to take further and better particulars and advice from our advisers. I thank the noble Lord for all that he has said and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 42 agreed to.
Clause 43 [Persons responsible for subsidence]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 59:
Page 37, line 30, leave out from ("substitution") to end of line 32 and insert:

("(a) in relation to any claim for compensation for subsidence damage, for references to the Corporation of references to the Authority; and

(b) in relation to any subsidence damage otherwise for references to the Corporation of references to the person who is the responsible person for that damage.").

The noble Lord said: In moving Amendment No. 59, I shall speak also to Amendments Nos. 60, 63, 90, 91 and 92. They are somewhat more distant but appear to

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have been grouped with everyone's consent. I hope that Members of the Committee opposite will not consider that they are in any way irrelevant; they are connected.
We are concerned to focus on Clause 43, which sets out responsibilities for subsidence after the restructuring date in relation to the Coal Mining Subsidence Act 1991. Presently, in the event of any surface damage, there is a single point of contact: good old British Coal. British Coal's Surface Damage Unit officers conduct regular advisory and consultation meetings with representatives of the planning authorities in various areas, who, in turn, are able to assist subsidence claimants with their claims.
When the restructuring date has passed, the responsibility for subsidence will pass to a number of persons where active coal mining continues. For damage subsidence arising from past mining operations and redundant mine sites with no boundary with an active mine, the Coal Authority will assume all responsibility. Private coal operators will continue to be responsible for subsidence arising from mining operations prior to their ownership or leasehold of a mine—that seems clear.
The DTI's Coal Division maintains that those proposals are simple and workable and that operators will continue to be bound by the 1991 Act. In the event of a lease of licence being transferred, the responsibility will also be transferred. Where different operators share boundaries with each other, then responsibility will be a matter of mutual interpretation of the interaction agreement to which both (or all) will be parties.
In the event of insolvency, the Coal Authority will assume responsibility and claimants will then be required to file their claims with the authority. Operators will be required annually to inform residents within their areas of responsibility of their rights—that is, the residents' rights—and the name and address of the operator will be clearly stated in the locally issued Guide to Claimants' Rights. Operators are also required to file, with local authorities, their projected five-year extraction plan, which they must update and amend on an annual basis. In the event of a claimant failing to obtain proper redress, he or she may appeal to the subsidence advisor who may consider the case and make due recommendations. What a lot of things to do!
The procedures set out in Clause 43 could perhaps be described by the ill-intentioned as a bureaucratic recipe for confusion and, above all, delay. If the Coal Authority, as the licensing authority, requires compensation claims to be met as a licensing condition, the authority itself should be the single point of contact for claimants. Also, considering the extent of subsidence responsibility that the authority will assume after the restructuring date and the extent to which it will continue to inherit such responsibilities as mines exhaust, it would seem to be an obvious and simple solution for all subsidence claims to be referred through the Coal Authority.
In recent weeks further detail has emerged on the issue of subsidence in the form of six statutory instruments and a draft subsidence guide to claimants. It is, perhaps, unfortunate that the content of the statutory instruments was not drafted into the Bill from the very
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beginning—indeed, that would have helped—thus enabling both Chambers to have the opportunity of full and proper scrutiny.
To us, it is essential that the Coal Authority from the outset should have the power to obtain indemnity against all payments and expenses incurred under subsection (1) of the clause by the person who is the responsible person. In the event of insolvency or the transfer of a licence, the authority should have the means by which claimants can be compensated with the compensation recovered by the authority from the subsequent operator. Accordingly, we propose Amendment No. 59.
Amendment No. 60 inserts a new subsection (1A), which reads:
"The Authority shall be entitled to be indemnified against all payments, costs and expenses made or incurred under subsection (1) above by the person (if any) who is the responsible person under subsection (2)".
The purpose is to provide one respondent—that is, a one-stop shop—for all claims made in respect of subsidence damage, and to ensure that claimants do not suffer by any failure of licensed operators to pay proper compensation.
The Government may argue that elegant simplicity such as we propose is not preferable to the Byzantine ingenuity of Clause 43 because they have thoughtfully, and in their wisdom, provided a subsidence adviser. But, the draft, Subsidenc: Guide to Claimants' Rights, recently issued by the DTI clearly states that the subsidence adviser will have no statutory powers and that his rulings will,
"not have the force of law".
The guide goes on to say that the prospect of the involvement of the adviser may be enough to force operators to settle disputes as quickly as possible. If you believe that, you will believe absolutely anything. This is at least, and at best, wishful thinking. The sad fact of human nature is that we are all sinners, and people often do not do what they know they should do until they are threatened with certain dire consequences if they do not —witness the Serbs in Bosnia.
Having stated that the adviser has no more than the powers to make critical judgments, and having failed to indicate clearly the stage at which he or she will intervene, there is very little reason to believe that: the, appointment of this terrifying ombudsman will have any deterrent effect whatever on a colliery operator who is intent on delaying or deferring costs, as well he might. It is the absence of a uniform procedure for claimants and the reliance on the claimants to obtain compensation claim documents from operators which is bound to complicate and prolong the claims procedure.
We suggest that if the scheme is to work effectively it should be simple and operated from the beginning by a public body in whom the public can have confidence. The Coal Authority, which from its inception will inherit the bulk of historical liabilities and which will continue to inherit subsidence liabilities as collieries close in the future, should be that public body to which all surface damage claims are referred. I beg to move.
Lord Prys-Davies: I am glad to support the amendment which has been moved by my noble friend

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and I am also glad to acknowledge that the subject of mining subsidence claims is dealt with at some length in the Bill—that I readily acknowledge. I welcome the six draft SIs, but of course we do not know how well they will work in practice. I also welcome the appointment of the subsidence adviser, but of course that particular appointment presupposes that there will be disputes between the householder who submits his or her claim and the mine operator. I suspect that, in practice, difficulties may arise in two main areas. First, there is the obvious example where the mine operator appoints a receiver and eventually goes into liquidation. If a claimant is caught up in that net there will inevitably be a long period of uncertainty where it will be impossible to get a decision on the claim. In my view, a claimant ought not to be a part of that net.
The second situation which will present problems is the case where the licensee is entering into an area which in the past has been heavily mined. I am advised by chartered surveyors who have immense experience in settling subsidence claims in South Wales that in that kind of situation, where the operator enters into such an area, there can be arguable cases as to the cause of the subsidence; or, to put it in the language of causation, which is the proximate and which is the remote cause? It seems to me that the Minister in another place did not really address those difficulties in this potentially troublesome area. We would say—as my noble friend said—that we would much prefer householders to be able to look to the Coal Authority to judge their claims, subject obviously to the Coal Authority being indemnified by the licensed operator if the responsibility is his.
I believe that the amendment has two other advantages. These have been referred to by my noble friend. We have to accept that we are moving from a situation in which all claims for subsidence are now considered by a single central body for Great Britain, the Coal Board, to a situation in which they will be dealt with by tens if not hundreds of different operators, most of whom will have no experience of handling claims for subsidence damage. Therefore, it follows that there will be great variation in the way claims are treated.
It seems to me wrong that the way your claim is treated depends on the part of the country in which your claim originates. In certain parts there are likely to be operators who will be very resistant to claims. They will want to incur the minimum expenditure possible on subsidence.
Therefore, we invite the Minister to consider the principle that in future the treatment of claims should not vary in any significant way in different parts of the country. For claimants to be treated differently depending on the area in which they live is unfair. We believe that the best way of achieving parity of treatment is to place the responsibility for testing claims on the Coal Authority.
I turn to the second advantage. It is relevant to remind ourselves that in certain circumstances the Coal Authority will have responsibility for subsidence. That is clear. That being so, the authority will need to
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maintain a substantial claims investigation department. I believe that that claims department should also handle the claims made against the private operators.
Against that background it would be in the best interests of all householders and claimants if the Coal Authority continued to have sole responsibility for the investigation and payment of all claims, subject to a right of recovery where appropriate, against the operator.
The Earl of Lytton: As Amendments Nos. 90 to 92 inclusive are included in the grouping I should like to speak to those amendments specifically. However, before I do so I wish to say that I believe that Amendment No. 59 moved by the noble Lord, Lord Morris, represents a case which needs to be answered.
The Minister's right honourable friend in another place said in Standing Committee D on 10th February something along the lines that if an operator could not meet the obligation, then, first, there would be a remedy through the courts. If that failed and there was insolvency, the Coal Authority would pass the mine on to a new operator, although I cannot see who would wish to take it on in those circumstances. Thirdly, financial security should have been ring-fenced and available to cover those costs. If none of those worked, then, and only then, the claims would be handled by the Coal Authority. That is too long-winded. It makes for a very indirect line of responsibility. I was particularly interested in the comments that the noble Lord, Lord Prys-Davies, made about chartered surveyors dealing with such cases. I have never dealt with a coal subsidence case, so I cannot speak on that subject.
In cases of insolvency it is my experience—and I have some experience in this area—that it is seldom the result of just bad luck and financial mismanagement. These are companies which have tended to cut corners. They cut environmental corners; they cut employment corners; and they cut insurance corners. One needs to consider the whole background.
I do not believe that the steps outlined by the Minister's right honourable friend can do anything other than impose unreasonable delay and great uncertainty. It looks very much like a bureaucratic version of pass the parcel. Unless some reassurance can be given, I do not believe that the Bill can be left as it is. I shall be interested to hear what reassurance the Minister can give.
Perhaps I may speak to Amendments Nos. 90 to 92 which stand in my name on the Marshalled List. I had anticipated that they would arise on Schedule 9. However, I am happy that they are dealt with as they apply to subsidence. The amendments make further changes to the Coal Mining Subsidence Act 1991. The provisions extend the entitlement to compensation for consequential losses to all property and remove the limit which restricts compensation to small firms only. I remind the Committee that small firms are those employing 20 or fewer people.
In another place, in Sub-Committee D on 10th February, the Minister for Energy said:
"The Bill deals with the subsidence because it allows for the continuation of an extraordinary right—the right to undermine other people's property".

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That has been referred to previously in the debate. It is an exceptional matter of which we have to take account.
The 1991 Act made provision for dealing with small businesses but it does not cover all businesses. That is my concern in this group of amendments. It is a narrow point. It has never been explained to me why this uniquely discriminatory and arbitrary approach is adopted. Are larger companies in some way better breeched to shoulder the losses for themselves? Why is that? I shall be interested to hear what the Minister says.
The Bill gives unique powers to a private operator. In the hands of the state, those can be justified only for reasons of overriding national interest. I believe that it is wrong to pass those powers on in the context of the Bill without some good explanation as to why such provisions should remain. Leaving matters as they are is not an option in the absence of an explanation.
I am advised that there is clear evidence to support the view that the risks of subsidence to larger businesses —if we are talking of those employing more than 20 people, they may not be very large—are real. They are not speculative. I do not believe that there will be a realistic possibility to insure against those risks. I have some professional experience of dealing with insurance companies and with insurance valuations. Therefore I can speak with some authority, coming from an area of heavy weald and clay in the middle of Sussex where we know a thing or two about structural movement.
I find it difficult to accept that the polluter pays principle, about which we hear so much, is being properly applied even if that polluter is a nationalised industry and the pollution took place some considerable while ago. However, on Amendments Nos. 90 to 92, the real point is this. There is a grave economic disincentive to inward investment in the very areas which may be most in need of reinstatement both physically and economically. I cannot underscore that point too much. What large employer will take the risk in those areas which so badly need investment? How many businesses employing fewer than 20 people will be necessary to make good that deficiency? I suspect that it is a large number.
I look forward with great interest to hearing what the Minister says in the context of the acknowledged need to attract new business in deep-mine areas.
9.45 p.m.
Viscount Goschen: As has been described, the six amendments deal with various aspects of coal mining subsidence. Amendments Nos. 59 and 60 would give the Coal Authority the job of meeting all subsidence claims, including those which are the financial responsibility of licensees. We cannot agree that that would be desirable. In our view, it is essential that coal mining companies should have, and be seen to have, real and meaningful responsibility for their own subsidence. They must accept their responsibility to meet claims for damage due to their mining.
There are real practical difficulties in separating the meeting of subsidence claims from the actual liabilities themselves. The liabilities, I believe it is agreed, must rest with the mining companies. Even if the authority were to settle claims, the companies would still have to
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pay the bill and would, no doubt, have an understandable desire to be involved in the way in which claims were settled. The Government maintain that that would be a recipe for confusion in which claimants would be unclear as to who they were really dealing with.
That is the principal concern on which the noble Lord, Lord Morris, bases his argument. The companies must be seen to have real and meaningful responsibility for the subsidence which they cause. If the Coal Authority meets the claims, that will take away the direct link which ought to exist between the mining company and those who are affected by its activities.
There are, of course, strong provisions in the Bill designed to make sure that companies meet their responsibilities. I am sure that the companies will see the benefit of establishing good relations and good reputations for the handling of claims, both in terms of their standing in the local communities and in relation to future applications which they might make for planning consent.
For those reasons it would be wrong, in the Government's view, to obfuscate the real responsibilities of the companies to the local community by placing the Coal Authority as a buffer between the two parties.
To address the point raised by the noble Lord, Lord Prys-Davies, who focused on the question of blame and responsibility for the subsidence, under the provisions of the Bill the blame is not really an issue, The issue is whether the subsidence occurred within the, area of responsibility of the operator, in which case it is the responsibility of the operator, or without that area, in which case it is the responsibility of the Coal Authority.
I turn to the question of the possible insolvency of an operator. We believe that it would be quite wrong to start from the position where everyone is implicitly turning to the taxpayer. The Coal Authority will have a statutory duty to look carefully at the financial standing of mining companies, especially in relation to their ability to meet subsidence liabilities. Where necessary, the authority will require operators to form special. financial security arrangements and the Bill provides that those arrangements can be set up so as to ensure that the security is effectively ring-fenced for the protection of subsidence claims.
Subsidence liabilities can, of course, generally be predicted and we expect operators to budget for and, meet their own liabilities. No business would conduct its mining except on the basis of confidence about the amount of any consequent liabilities and its ability to meet those liabilities.
If an operator attempted to avoid his obligations to subsidence claimants it would be for them in the first instance to seek redress in the courts. If an operator cannot meet his liabilities—for example, because of insolvency; the point addressed by the noble Lord, Lord Prys-Davies—the mine could well pass on to a new operator who would pick up subsidence claims in the usual way. Alternatively, the financial security would be available.
In the end, if an area of responsibility were to be terminated rather than re-assigned in the process that I have described, then claims would be handled by the

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Coal Authority in the same way as claims from other parts of the country where no company was allocated an area of responsibility.
Turning to Amendment No. 63, the present position is that British Coal have very considerable expertise in matters relating to mining subsidence, from predicting its incidence to remedying its effects. They have developed this expertise because they need it to run their business and meet their obligations.
The concern behind Amendment No. 63 seems to be to ensure that such expertise is not lost. But it will not be lost. It will be preserved, and developed, for reasons very similar to those which led British Coal to develop it in the first place. It is quite right that that expertise and that resource should be retained. And the reason they should be retained is that they will be vitally important. The mining companies will be obliged by their licences to provide regular, detailed forecasts of expected subsidence and the costs of the damage. The Coal Authority will have to approve those proposals regularly as a condition of consent to continuation of mining. Both will need expertise and resources, therefore.
So far as remedying subsidence damage is concerned, both the Coal Authority and the operators will have to meet the detailed requirements of the 1991 Act, which have been described this evening. They must be equipped to do so, including in terms of expertise, resources and experience.
Not only is Amendment No. 63 unnecessary; it is positively unhelpful. By requiring the authority to retain sole responsibility for these matters it would deny the licensees the resources that they need to meet their obligations, as well as placing a needless duty on the authority. Thus Amendment No. 63 manages at the same time to disadvantage the companies, their subsidence claimants and the authority.
Turning to Amendments Nos. 90 and 91, these would continue the position currently facing British Coal in relation to the payment of compensation due under Sections 27 and 30 of the Coal Mining Subsidence Act 1991. These sections deal with compensation for crop losses and consequential losses for small firms.
The present position is that operators are liable to pay interest even where payment was delayed because of the claimant's failures. The Bill would put an end to that, but would preserve the right of claimants to interest for any periods where payment is delayed by the operator.
Finally, I turn to Amendment No. 92, which would impose a general requirement to pay consequential loss in respect of all claims. As was described by the noble Earl, Lord Lytton, the Coal Mining Subsidence Act 1991 already makes considerable provision for consequential loss. In the case of house-owners it provides for the provision, in appropriate circumstances, of alternative accommodation and home loss payments and, as the Committee is aware, Her Majesty's Government propose to make regulations under the Act in respect of inconvenience payments and blight.
In the case of businesses, the 1991 Act provides for payments to farmers in respect of loss of farms and crop
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losses. It also imposes a general consequential loss obligation on British Coal in respect of small businesses —currently defined as those employing up to 20 people.
This all amounts to considerable provision in respect of consequential loss. What the 1991 Act does not do is provide for general consequential losses incurred by larger businesses, which are by nature of their size better placed to deal with localised problems. To require the coal industry to make payments to reimburse loss of profit in respect of businesses generally would impose a crippling burden on it. In addition, general consequential loss is very difficult to predict and extending the right to claim it would make it much harder for the industry to predict subsidence costs. Indeed, there would be a risk that coal would be sterilised by the cost and uncertainty.
During the passage of the 1991 Act a compromise was reached. It was accepted that claims for consequential loss should be allowed in specific cases, such as small firms, where undue hardship might otherwise result. The Bill preserves that position, and there is nothing inherent in the changes that we have proposed for the industry which would justify altering that position. In the light of those explanations of this broad group of amendments, I invite the noble Lord to withdraw his lead amendment.
Lord Morris of Castle Morris: I have carefully examined the noble Viscount's reply. My examiner's report must be: It will not do. It is not convincing. The candidate has not fully addressed the question and has sadly failed to consider the manifest advantages of changing the system of subsidence compensation that we have put forward. He must try harder next time when we re-visit this question at Report stage, as we assuredly shall do. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 60 not moved.]
Lord Ezra Lord Ezra moved Amendment No. 61:
Page 37, line 42, at end insert ("or

(c) in respect of any land or property referred to in paragraphs (a) or (b) above, any other person who has at any time had responsibility for subsidence affecting that land.").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 62. We have already dealt at some length with the whole question of subsidence. The more I have listened to the explanations, the more I have been concerned at the convoluted and complex system with which claimants for subsidence compensation will be faced. Putting forward a claim for subsidence in any case is complicated. British Coal and the Coal Board before that could not accept every claim as soon as it was submitted. A process had to be gone through. But at least people knew where they had to go. Now they are very uncertain. There could be delay and doubt.
We heard the Government's reasons why they feel that the obvious solution, which many from this side of the Chamber have put forward—namely, that the Coal Authority should deal with the claim in the first instance and then recover as appropriate—would not work. Nonetheless, we remain very concerned. There was a

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great deal of sense in the point made by the noble Lord, Lord Prys-Davies, that the Coal Authority would have to retain a large subsidence section or group in order to deal with the claims that inevitably would come its way, and therefore why not deal with the lot and then reclaim.
The two amendments to which I speak do not go so far as that. They are a kind of half-way house. Amendment No. 61 seeks to provide a further degree of assurance for claimants by including in the list of persons by whom claims may be made those who:
"at any time had responsibility for subsidence affecting that land"
That gives further protection to possible claimants.
I should like particularly to emphasise Amendment No. 62. If the Government are adamant that they do not wish the Coal Authority in the first instance to deal with all the claims, they ought at least to consider whether, after an interval of delay on the part of the operating company—we have said three months—the claimant could turn to the Coal Authority. The noble Viscount spoke about going to the courts. He knows as well as we do that that is a lengthy and costly business which increases the degree of uncertainty. I believe that, after a certain period of time has elapsed and when it is quite obvious that the operating company is seeking to delay, as well it might, there ought to be a right that the claimant could turn to the Coal Authority for compensation. The Coal Authority could then reclaim, including the costs of delay, from the operating company.
In those circumstances the operating company would not be able to argue at all about whether the claim was properly settled. It would have been given the chance to settle the claim but would deliberately have delayed (in the supposition that I make) and therefore it would have to bear the consequences. On this issue I should like to emphasise to the Government that there is a great deal of uncertainty among the people whom presumably this measure is intended to help. The provisions, as they are laid out in the Bill at the moment, are not at all satisfactory. If the Government are not prepared to go the whole length that we are proposing, at least there should be a half-way house to give claimants some degree of reassurance. I beg to move.
10 p.m.
Lord Peston: Perhaps I may intervene briefly on these amendments as my name appears on them. We shall probably have to return to them on Report but there are some additional points that need to be made.
One point in particular must be made in connection with the response of the noble Viscount to the previous amendment. It is obvious that any subsidence caused until the Bill becomes law must be the responsibility of the state—of British Coal—which means the taxpayer. There can be no doubt about that. A public operation will have caused the subsidence and there is no way that one can argue that a blank cheque cannot be written for it. The blank cheque has already been written because the organisation was in the public sector. I hope that when the noble Viscount gave his answer he was not trying to back away from that.
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The only question that arises in relation to Amendments Nos. 61 and 62, as the noble Lord, Lord Ezra, said, concerns what happens in the future. 'The 1991 Coal Mining Subsidence Act, which I remember dealing with from these Benches, is most satisfactory. We went to a lot of trouble to congratulate the Government on the Act and say that they had at long last solved a problem which had troubled many people for a long time. What worries me is that in this new phase we may be undermining—that is not meant to be a pun—a perfectly good piece of legislation.
I shall come back to this matter. My only point is that in so far as the licensee is the cause of the subsidence, the licensee must be responsible. The Coal Authority will have granted the licence and, speaking as an outsider, I do not see how the Coal Authority can suddenly say that the matter does hot concern it. Without conjuring up the usual images, we are concerned with a lot of relatively small people whose lives may be ruined by subsidence. It cannot be said that it is only a small matter. It may be small to the Treasury, but it can ruin people's lives.
That is why Amendment No. 62 is vitally important. The Coal Authority must be pressurised to intervene. Even if the problem is felt to be the fault of the licensee, the Coal Authority must act on behalf of those affected, bail them out and, if necessary, get their money back. At this late hour I do not expect the Minister to say that he can do that, but in terms of the impact of the Bill it is serious enough for the Minister to at least reflect on the matter and see what can be done. In particular, we do not want to undermine the 1991 Act.
Lord Strathclyde: Something interesting is happening in the course of this debate. There is a substantial difference of opinion about the regime between myself, the noble Lord, Lord Ezra., and the noble Lord, Lord Peston. The new regime is as clear as crystal. I find it surprising that noble Lords opposite somehow think. it is confusing or that people will not know where they stand. It is absolutely plain. My noble friend Lord Goschen explained it rather well, but I shall do so in my rather more humble tones and that may help.
When the Coal Authority gives a licence to someone to take over a mine, a line will be drawn on the ground. On one side of the line the claim goes to the Coal Authority and on the other side of the line it goes to the mining company. The reason why it must go to the mining company is because the mining company must bear some responsibility for dealing with the claims. We made absolutely clear under Clause 2 that the mining company only obtains its licence when the Coal Authority is satisfied that it has the right kind of financial backing to deal with the claims.
If that is not simple then nothing is. People will know exactly where to go to have their claims sorted out. Noble Lords opposite may pose the problem of the licensee going bust or not dealing with the issues, but then again the Coal Authority is under an obligation to make sure that the problem is sorted out. That deals with the remains of my noble friend's explanation.
Lord Ezra: I can quite see that if the company goes bust the Coal Authority will come in. However, I am not

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sure where it is stated in the Bill that if there is undue delay on the part of the licensee the Coal Authority will intervene in any way.
Lord Strathclyde: It cannot be in the interests of the mining company to indulge in undue delay. It will agree to the same kind of good neighbourly policy under which British Coal has always operated. When the noble Lord, Lord Ezra, comes up with Amendment No. 61, which allows claims to be made against anyone who had previously been the licensee in the area, I suspect he thinks he is being helpful. However, I think the amendment would have a profoundly negative effect on the scale of future deep-mining activity. That is because in the event of a sale the vendor would never be completely free from the risk of future claims. I have explained the regime which we propose and which I think is simple and clear.
A major advantage of that regime is that claimants know the identity of the person responsible for subsidence in their area. The noble Lord's amendment would remove this clear structure since it would not be clear who would bear the primary responsibility for subsidence damage. Therefore, his amendment is unnecessary.
Amendment No. 62 appears to be intended to deal with possible delays in the discharge of subsidence damage claims by mine operators. However, again its effect could be to delay and increase the cost of such remedies in many cases. It forces the Coal Authority to step in and take over the discharge of any claim which was not completely dealt with within three months of a claim being accepted as valid. This would happen regardless of whether the mine operator was actively dealing with the claim. Again I foresee real disadvantages for everyone concerned. I am not just trying to protect the privatised company. I am trying to protect everyone involved in the chain.
A claimant whose repair was proceeding satisfactorily towards completion would at the very least face delays arising from the handover in any case where the repair needed more than three months to complete. The Committee will appreciate that to ensure that they are done to a proper standard, many repairs take longer than three months. Worse still, the amendment might provide an incentive to corner-cutting in order to complete work within the three-month time limit. I understand that when the noble Lord writes "three months" into his amendment he does not necessarily mean three months. It could be six months or 12 months. But again I think the same point applies.
As I said at the beginning, the Bill provides a simple and clear structure for claimants which avoids unnecessary delays. The Bill gives licensees a strong incentive to establish a good reputation in their discharge of subsidence claims. Householders will have rights of access to quick, cheap and effective dispute resolution procedures and the help of the subsidence adviser if their claim is mishandled. This includes complaints about delays.
Our proposals would bring forward the essential features of the arrangements currently operated by
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British Coal, which everyone welcomes. Each mine operator will be responsible for claims involving subsidence damage which arise within his area of responsibility. Making mining companies directly responsible for claims will ensure that they are aware of the damage for which they are responsible and deal face to face with the persons affected.
In conclusion, our proposals already contain adequate measures to deal with delay. Mine operators and the Coal Authority will be liable to investigation of such complaints by the subsidence adviser, whose recommendations might result in the award by the Lands Tribunal or arbitrator of an inconvenience payment. Under the operators licences, mining rights will be conditional on continued compliance with their subsidence obligations.
I like to think that we have covered the problems envisaged by Members of the Committee opposite and by the noble Lord, Lord Ezra, and I hope that they agree.
Lord Peston: I am sorry, but I certainly do not agree. I am not sure whether the noble Lord is being wilful in refusing to understand the argument, but I shall try again. If there is a unitary authority called British Coal and there is subsidence, one knows exactly who is responsible and who is causing it. One goes to them. It does not mean that one just writes a letter, "Dear Sir, I have had subsidence. Please send cheque by return". But at least one knows who one is dealing with and how to set about dealing with them.
We now have a new problem. Perhaps I may first make the logical point where I agree with the Minister. The person responsible should be the person who then has to bear the cost. That is not at issue. The Bill says that because it refers to the responsible person. The trouble is that there are two responsible people from now on; there is the Coal Authority responsible for subsidence, looking backwards and the licensee responsible for subsidence, looking forwards. That is the nature of the problem. If I say that I am suffering from subsidence the licensee can say, "Don't tell me about that. That is not being caused by my activities; that was caused in the past". I put the matter differently: if that is not the case—namely, there can never be any argument as to who the responsible person is—then there is no trouble. My reading of the Bill is perfectly clear. Not only can there be argument but there always will be.
Lord Strathclyde: When the noble Lord possibly accused me of being wilful I thought that the noble Lord was, but that is not the case. The noble Lord has misunderstood the situation. When I explained about the line being drawn around the area of responsibility, the mining company takes on the liability and responsibility for all claims for all subsidence—it does not matter when it was caused—within that area. Everything outside it is dealt with by the Coal Authority. If the noble Lord misunderstood that point, I suspect that by now he is deeply comforted.
Lord Peston: I am not comforted. I certainly did not understand that point. I am now wondering whether the licensees will understand it when it comes to obtaining

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licences. Is the noble Lord seriously saying that someone is going to bid for a licence incurring the complete liability for all subsidence within the pits from that point on? If he is saying that, then it is news to me. I certainly hope that Rothschilds make clear beyond a doubt that that is what you are buying when you buy a licence. I go back to my earlier point: who in their right mind would buy such a licence? That is completely beyond me.
Lord Strathclyde: it would be up to the private sector to decide. This point was made absolutely clear by my noble friend Lord Goschen. Even I understood what he was saying so that I was able to explain it just now.
Lord Prys-Davies: I should like to reserve my position as regards this area of liability. I note what Mr Eggar said:
"It will be possible within an area designated for lease and licensing precisely to determine where the contingent liability would lie for new operators".—[Official Report, Commons Standing Committee D, 10/2/94; col. 175.]
The advice which I have received is that the area is blurred and that these words of Mr. Eggar, with the greatest respect to him, border on unreality. I am instructed that there is an area of possible argument here. I wish to read what the Minister has said, take advice on that and reserve the right to come back to it at Report.
Lord Peston: Before we conclude this matter, perhaps I may make sure that I understand the point because it is very serious. A licensee will be responsible for all subsidence damage from the moment he gets a licence for the pits. At that point the taxpayer will cease to have any responsibility for that. Is that what the Minister is saying? He is saying that the licensees will know that and that at this time they do know that. If the noble Lord says that, I find it quite interesting.
Lord Strathclyde: Whether the licensee will know that or not will be up to him and his legal advisers. As far as I am concerned, it is clear to me and my noble friend. I hope that by now it is clear to the noble Lord. Let us imagine that the Palace of Westminster is a mine and the noble Lord, Lord Peston, is given a licence to mine it. The Coal Authority will draw a line around the Palace of Westminster and all subsidence liabilities within that area will fall to the noble Lord, Lord Peston, as the representative of the new mining company.
Lord Peston: And that will be so no matter when the subsidence was caused?
Lord Strathclyde: No matter when the subsidence was started off. The operators accept all the subsidence which subsequently occurs no matter when it may have occurred. It is a pity that my noble friend Lord Crickhowell is not here. It would not matter even if the mine had originally operated in the Phoenician era.
10.15 p.m.
Earl Bathurst: Not too long ago the noble Lord, Lord Peston, very much amused the House and was, in fact, extremely funny. However, with his usual charm
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and great expertise my noble friend Lord Strathclyde put him down. I would not like to try to be funny and, if I was, my noble friend would put me down. But it seems extraordinary to me that noble Lords opposite are looking after and attending to the interests of landowners and people who will be potentially damaged by both deep mining, new or present, past or future, and opencast mining, yet on this side of the Committee the Government and my noble friend seem to be going entirely against their interests.
Perhaps I may beg my noble friend to recognise that, as the noble Lords, Lord Ezra and Lord Peston, have said, many people affected by the provisions of the Bill are not landowners in any way but small householders, small people, with interests, and they will believe—whether rightly or not—in what my noble friend has just said and in what the noble Lord, Lord Peston, has just extracted from my noble friend—because it was certainly not understood previously by many of us that the operators would be entirely responsible for what went on within what he called the "circle" of their responsibility. We must be most grateful to my noble friend the Minister for making that clear, to the noble Lords, Lord Peston and Lord Ezra, for getting that statement from my noble friend and, of course, to my noble friend Lord Goschen.
Lord Ezra: We have had a long discussion on this issue and I think that it is time to draw it to a close. should like to be clear on only one small point. Am right in supposing that if a claimant against one of the operating companies (which has the responsibility that has been fully described) feels that his case is not being properly or expeditiously handled, he can have recourse to the Coal Authority for help?
Lord Strathclyde: He can go to the subsidence adviser if the claim is mishandled. Ultimately, the mine operators will be liable to investigation of such complaints by the subsidence adviser, whose recommendations might result in the award by the Lands Tribunal or arbitrator of an inconvenience payment. In other words, the answer to the noble Lord is yes.
Lord Ezra: As we shall return to this issue at the, next stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 62A not moved.]
Clause 43 agreed to.
Schedule 6 agreed to.
Clause 44 agreed to.
Clause 45 [Information to be provided by responsible persons]:
[Amendments Nos. 63 to 65A not moved.]
Clause 45 agreed to.
Clause 46 [The subsidence adviser]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 66:
Page 40, line 20, leave out ("may") and insert ("shall").
The noble Lord said: I shall speak briefly also to, Amendments Nos. 67 and 68. The purpose of the amendment is to ensure the appointment of a subsidence adviser with powers and resources and teeth. The

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Government hope that self-regulation by means of an interaction agreement will lead to speedy agreement in matters of dispute and subsequently redress. It is our view that such a light hand of regulation will only encourage bad practice and unaccountability. It is for that reason that a subsidence adviser with powers of intervention and enforcement is required. Mandatory powers as opposed to discretionary functions should be put in place from the beginning in order to ensure that the public is confident that best and speediest practice will prevail. A subsidence adviser who can do nothing but offer good advice will be worse than useless.
Amendments Nos. 67 and 68 have the object of ensuring that the subsidence adviser can obtain all the information necessary to carry out his investigations. There seems to us no reason why the information to be supplied by the authority should be restricted to information relating to subsidence claims for which it is responsible. Since the authority will be holding considerable information from its licensees, it is likely to be administratively simpler and therefore cheaper for the subsidence adviser to obtain information from the authority, whoever is actually responsible for it.
The subsidence adviser should, in our view, be able to look at the sequence of information provided by an operator to the authority and compare it with any matters put forward by an operator in defence of a subsidence claim to check the consistency of that information. The subsidence adviser will hardly be able to carry out his functions unless he is entitled to obtain information from all those operators who may have contributed to any damage, including those who may not be the current designated responsible person. That seems to us to be perfectly clear.
If we make the comparison, in other privatised industries regulatory procedures are based upon the fullest disclosure of commercial information. We can see no possible reason why in the case of the coal industry information regarding operators' activities could not be scrutinised by a statutory body, in confidence, in exactly the same way. That would give the subsidence adviser some powers, some information, some teeth and some authority. I beg to move.
Lord Strathclyde: We come here to the amendment dealing with the subsidence adviser about which we have talked to some extent earlier. The Bill gives the Secretary of State power to appoint a subsidence adviser. The amendment would seek to give him a duty to do so. But, as the Committee knows because it has seen the draft regulations, we intend to use the power to put the subsidence adviser in place at the first opportunity. The amendment is therefore unnecessary.
Turning to the obligation to assist the adviser, I think it would help the Committee if I explained the position under the Bill and the operating licences. The Bill places the Coal Authority under a duty to assist the adviser where it is the responsible person; that is to say, when he is looking into matters to do with claims against the authority. The same duty is placed on responsible persons by their operating licences, model drafts of which have been published. The duty on operators
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appears in licences, not the Bill, because the appropriate method of enforcing against bodies subject to private rather than public law is through the licence enforcement machinery. The Coal Authority will thus have powers to make a reluctant licensee co-operate with the adviser.
The amendment seeks to incorporate in the Bill the duty on licensees. As the Committee will have gathered, I would be the first to agree that the duty should apply to licensees. But I do not think that it should appear in the Bill because that would make it harder for the adviser to make progress if an operator were uncooperative. Is the adviser supposed to take the operator to court? Is there to be a criminal sanction, with the high standard of proof necessary for conviction? Resort to those mechanisms would almost certainly involve significant delay. In other words, they would worsen what may very well be the problem that the adviser is attempting to investigate. I agree with the noble Lord, Lord Morris, that we are trying to find the right kind of mechanisms to solve those problems if they were to arise.
The last limb of the amendment would oblige the Coal Authority to provide the adviser with information and assistance in any case rather than only those where the authority is the responsible person. This proposal is flawed because in practice the kind of information the adviser will want in connection with investigations into licensees' claims handling will not be in the possession of the authority. But I take the spirit of the amendment to be that the Coal Authority should be subject to a duty to assist the adviser in all areas of its activity, and not only in its role of discharging subsidence claims.
The amendment is unnecessary because, as I said, it is already proposed that the authority should enforce the obligation on licensees to assist the adviser through the licence enforcement mechanism. As I explained, that is the appropriate approach and why the obligation appears in the licences rather than the Bill.
I understand the noble Lord's anxiety and I believe that we have met it through a different mechanism. I hope that he agrees.
Lord Morris of Castle Morris: I am grateful to the Minister for that explanation. No, I do not agree. If I were offered the job of subsidence adviser on the terms currently laid out I would instantly demand a salary of not less than £1 million per annum to take it on. It would be no job at all. I would have no authority, no staff and no mandatory power to get anything done. At present, the situation would be difficult to fill because no one who was any good would want the job as stated.
I thought that I detected a chink of charity in the Minister's voice. I may be wrong; perhaps it is late at night and he is not proposing to weaken. Will he go so far as to say that, without commitment to anything further, he will take the question away and see whether in the blinding light of hindsight the subsidence adviser should not have slightly more power and authority? If he considers that there is anything in that, will he come back with an amendment at a later stage or consider concocting one with me? That would be helpful.
Lord Strathclyde: The noble Lord has made a kind offer. He is right that sometimes the light of hindsight is blinding. It could be that the idea behind the noble Lord's amendment is worth merit. Therefore, I would like to accept his offer without commitment. I will look carefully at the issue and if we consider that there is something which we have overlooked I shall produce an amendment or suggest an amendment for the noble Lord.
Lord Morris of Castle Morris: I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 67 and 68 not moved.]
Clause 46 agreed to.
Clause 47 [Disputes etc. as to subsidence matters]:
Viscount Goschen Viscount Goschen moved Amendment No. 69:
Page 42, line 14, at beginning insert:
("Subject to subsection (4A) below,").
The noble Viscount said: In moving Amendment No. 69, I shall speak to Amendments Nos. 70, 71 and 72. The need for Amendments Nos. 69, 71 and 72 is simply to clarify certain matters relating to enforcement where an arbiter in Scotland requires a person with responsibility for subsidence to take steps for remedying any contravention of a subsidence requirement.
Amendment No. 70 would rectify a minor drafting defect. Clause 47(4) provides that where a dispute about subsidence has been referred to either the Lands Tribunal, under Clause 47(1), or an arbitrator, under regulations made under Clause 47(2), they are to have the power to award compensation for inconvenience caused by the contravention of a subsidence requirement where this does not otherwise fall to be compensated. Clause 47(4) (c) refers to compensation not falling to be compensated for apart from "the regulations" when it should have referred to "this paragraph". The amendment puts this right.
If hope that the Committee will accept these somewhat technical amendments. I beg to move.
Lord Peston: I entirely accept that the amendments are technical. Certainly, I am totally lost as to how Scots law got into the matter all of a sudden. However, having freely admitted that my understanding of the Bill was rather limited in regard to the previous amendment, I cannot forbear to point out that the Minister told me that
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there can never be any question of who is responsible. The whole clause is about dealing with the situation where just who is responsible is in doubt; in other words, it must be possible if we need Clause 47.
As the Lands Tribunal will include any question as to who is the person with responsibility, it simply cannot be right. Either we do not need Clause 47 or the Minister must be wrong in telling me that there can never be any doubt as to who is responsible. I made that comment just to amuse myself at this late hour. Perhaps, in due course, the Minister and I can have a chat about that aspect. As I said, I have no objection to the present amendments which seem to me the most admirable, technical amendments that I have seen for many a long day.
On Question, amendment agreed to.
Viscount Goschen Viscount Goschen moved Amendments Nos. 70 to 72:
Page 42, line 29, leave out ("the regulations') and insert ("this paragraph").
Page 42, line 29, at end insert:
("(4A) In the application of subsection (4) (b) above to an arbitration in so far as relating to subsidence affecting land in Scotland, the words "by order" shall be disregarded and the reference to requiring the person to take remedial steps shall not be construed as prejudicing any other provision of Scots law as respects enforcement of a decree arbitral.").
Page 43, line 12, after ("above") insert ("(or, as respects the application of that subsection mentioned in subsection (4A) above, a decree granted by virtue of subsection (4) (b))").
On Question, amendments agreed to.
Clause 47, as amended, agreed to.
Clauses 48 and 49 agreed to.
Schedule 7 agreed to.
Clauses 50 and 51 agreed to.
Viscount Goschen: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Intelligence Services Bill [H.L.]
Returned from the Commons agreed to, with amendments and with a privilege amendment; the amendments ordered to be printed.
House adjourned at twenty-eight minutes before eleven o'clock.