Coal Industry Bill

HL Deb 28 April 1994 vol 554 cc815-71

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 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—

1. (a) the range of services provided by the Coal Industry Social Welfare Organisation immediately prior to its winding up, and the associated costs;
2. (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
3. (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 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". 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. 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 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.

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 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 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.

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 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.

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 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 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 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 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 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—

1. (a) provision for a relevant surplus, and the assets representing it, to be apportioned between—
1. (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
2. (ii) the remainder ("the distributable part") of the surplus;
2. (b) provision for the management of assets representing an investment reserve and for the manner in which any such assets are to be applied;
3. (c) provision for the manner in which assets representing the distributable part of a relevant surplus are to be applied; and
4. (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—

1. (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
2. (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—

1. (a) the surplus is one determined as at a time on or after 31st March 1994, and
2. (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, 833 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 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 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?

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 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 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 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."). 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—

1. (a) any such apportionments or allocations as are mentioned in the preceding sub-paragraphs,
2. (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
3. (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 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 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—

1. (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
2. (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 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—

1. (a) of preventing the Secretary of State from incurring any liability under arrangements entered into as mentioned in paragraph 2(5) above;
2. (b) of keeping to a minimum the amount of any liability that is incurred under any such arrangements; and
3. (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 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.

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 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 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 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 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 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.

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.

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 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 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 moved Amendment No. 42: Page 21, line 26, after ("shall") insert ("—

1. (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
2. (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 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 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 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.

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 —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 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 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 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.

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 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 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.

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 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 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 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.