Lords Sitting of 24 February 1994

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford
Lord Marks of Broughton—Took the Oath.

Royal Assent
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act"
Non-Domestic Rating Act.

European Commission 1992 Budget: Discharge
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
What would be the practical and legal consequences if the EC Budgetary Authority refused to grant the Commission a discharge in respect of the 1992 Budget.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish): My Lords, the European Parliament may postpone the decision giving discharge in respect of the implementation of the budget and, if it does, the Commission is bound to make every effort, as soon as possible, to facilitate removal of the obstacles to that decision. However, there is no provision in the treaty for the European Parliament to refuse to grant the Commission a discharge. Failure by the European Parliament to do so would be a matter primarily for the Commission. The legality of the budget, as opposed to its implementation would not be in question.
Lard Bruce of Donington: My Lords, I am most grateful to the Minister for that Answer, but is he aware that this is a question to which Her Majesty's Government will presently have to address themselves very seriously, particularly in view of the provisions of Article 209 of the Treaty of Maastricht? Is he aware that, in addition to the matters complained of by the Court of Auditors in its report on the accounts for 1992, there has recently come into my hands the report of the Court of Auditors into the whole of the tobacco regime, No.4311 of 1994, which reveals that the Commission had the arrogance to decline to produce documents when required to do so by the Court of Auditors? That raises a totally different question altogether. Will the Minister give the House an assurance that the utmost pressure will be brought to bear and that, instead of acting as "Little Sir Echo", ECOFIN will take up this
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matter without delay and will, if necessary, bring proceedings against the Commission under Article 175 of the Treaty of Rome?
Lord Mackay of Ardbrecknish: My Lords, I can assure the noble Lord that all the matters that are brought to ECOFIN's attention by the Court of Auditors' report on the 1992 budget will be considered seriously by ECOFIN at its meeting on 21st March. In the time leading up to that meeting of ECOFIN the United Kingdom Government are pressing our partners to take a serious view of the contents of the Court of Auditors' report.
Lord Jenkins of Hillhead: My Lords, does not the Minister agree that while it is quite frequent for totally different questions to be raised in supplementaries it is rare to announce that one is doing so, as the noble Lord, Lord Bruce of Donington, has done? Is the Minister aware that the circumstances described in the original Question are not without precedent? I am surprised that with his encyclopaedic knowledge of these matters the noble Lord, Lord Bruce, does not recollect that a similar consideration arose in 1977 and again in 1979 when the European Parliament was protesting not against the Commission (although it refused the Commission a discharge) but had a dispute with the Council of Ministers and that it was owing not to the arrogance but—how shall I put it?—to the tact and hard work of the then President of the Commission that matters were sorted out satisfactorily.
Lord Mackay of Ardbrecknish: My Lords, I always appreciate it when the heavy cavalry rides to my protection on these matters, as the noble Lord, Lord Jenkins of Hillhead, has just done. After his illustrious tenure of office in Europe was over, in the 1982 financial year the European Parliament refused to grant the Commission a discharge on 14th November 1984 for the 1982 budget. It eventually accepted a closure of the accounts after receiving information from the Commission and accordingly gave a discharge for 1982 on 15th March 1985.
Baroness Robson of Kiddington: My Lords, is the Minister able to assure the House that if the Council accepts the recommendations of the Court of Auditors' report on 1992 when it considers them, that will be fine; but that if it does not accept them the Council will state its reasons for not doing so?
Lord Mackay of Ardbrecknish: My Lords, I understand that if ECOFIN has any doubts it will return to the Commission and ask for clarification of those doubts. At the next stage, if the Parliament in its turn has doubts, it is expressly allowed to go to the Commission to ask for clarification of those doubts before it discharges the budget.
Lord Tugendhat: My Lords, does not my noble friend agree that if the European Parliament had made full use of its powers over the discharge in the past there would be very little need for many of the demands for further powers that are being made at present?
Lord Mackay of Ardbrecknish: My Lords, I am grateful to my noble friend. It certainly is true that if over the years the budgetary authorities, both the Council and the Parliament, were to have taken seriously the probity of the budget we should be in a better position today. We are making progress on that subject and I assure your Lordships that Her Majesty's Government are in the forefront of ensuring that the budget is properly and effectively dealt with.
Lord Bruce of Donington: My Lords, is the Minister aware that it is most unlikely that the European Parliament will take any such drastic action, even though it may receive a recommendation to do so from its own budgetary control committee? Is the Minister further aware that the matter should not be confined to the Court of Auditors' report on the 1992 accounts but extended to the specific report dated 20th January, to which I drew his attention? That is now in the hands of the Minister of Agriculture. It raises wholly different questions of principle and shows the widespread fraud and irregularities in connection with the whole common agricultural policy relating to tobacco. That matter has been raised for many years by the noble Lord, Lord Boyd-Carpenter, and myself, and action should be taken upon it.
Lord Mackay of Ardbrecknish: My Lords, the Government have been determined to ensure that there is proper budgetary control on the CAP, which represents the largest part of the expenditure of the European Community. If the noble Lord casts his mind back to some months ago he will remember that I too expressed my anxiety about the way in which the tobacco regime operates. I know that the Government are equally anxious about that regime.

Army Pay
3.15 p.m.
Lord Howell Lord Howell asked Her Majesty's Government:
Whether it is the case that all Army ranks above second lieutenant have received real-terms increases of salary between April 1978 and April 1993, but that privates, lance-corporals, corporals and sergeants have suffered a real-terms decrease; and if so, how this can be justified.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, the Answer to the first part of the noble Lord's Question is no; the second part does not therefore arise.
Lord Howell: My Lords, in view of that extraordinary Answer, will the Minister say why official statistics issued by HMSO show that brigadiers and colonels received a rise in wages in real terms of 18.4 per cent. while lance-corporals and privates took a decrease of 14.4 per cent.? Is that not deplorable, and even more deplorable on the day when many of them have lost their job security at the behest of the Treasury rather than the Ministry of Defence? Does the Minister understand that this nation wishes to reward those people who serve in heroic circumstances in as generous
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a manner as possible and not see them lose out compared with officers? We do not begrudge officers a proper salary because we know that we must attract quality people. However, that must not be at the expense of people who are doing the real job in areas such as Northern Ireland and Bosnia.
Viscount Cranborne: My Lords, as regards the final sentence of the noble Lord's supplementary question, I could not agree more. I emphasise that no rank experienced a real-terms decrease in pay between April 1978 and April 1993, in spite of the figures which the noble Lord quoted. It may be of assistance to the noble Lord if I give two examples, drawn, of course at random. During the period quoted by the noble Lord, a lieutenant—who, as your Lordships will be aware, is a commissioned officer—received a pay rise in real terms of 39 per cent. and a staff sergeant received a pay rise of 49 per cent. One of the reasons why the AFPRB has been the cornerstone of Armed Forces' pay awards is that its judgments are trusted entirely by servicemen and women. As a result, a great deal of the controversy which the noble Lord is trying to stir up has been eliminated from pay rises awarded in the Armed Forces.
Lord Vivian: My Lords, is my noble friend aware that many people believe that all ranks of the armed services are fairly paid and that the Armed Forces Pay Review Body is a highly efficient body to advise on pay scales?
Viscount Cranborne: My Lords, I am grateful to my noble friend, whose military experience is well known to the House. Perhaps his evidence will be somewhat more persuasive to the noble Lord, Lord Howell, than mine.
Lord Williams of Elvel: My Lords, will the Minister reconsider his answers? Will he take the opportunity of looking at the Defence Statistics for 1993, which are produced by HMSO. The Statement on the Defence Estimates 1983, Volume 2, Command 8951, the Central Statistical Office data base, shows illustrative rates of military salary in terms of Army ranks, first, in current and, secondly, in constant prices. The Minister will see that the change between April 1978 and April 1993 is as my noble friend reports. The pay of a brigadier is up 18.4 per cent. and that of a private is down 13.4 per cent. in real terms. A lance-corporal's pay is down 14.4 per cent. and that of a corporal is down 3 per cent. Will the Minister please look at the figures which the Government themselves have published?
Viscount Cranborne: My Lords, the figures which the Government themselves have published for the period between the base date given by the noble Lord, Lord Howell, which was April 1978, and April 1993 were those I quoted. I am confident that they are accurate. The relative rates of increase change depending on the base date chosen. If a different base date is chosen, a different rate will be found. Moreover, if the noble Lord, Lord Williams, took a different base date, he would find one category of soldier who had suffered a real-terms decrease; namely, the untrained private. All others have seen real-term increases.
Lord Williams of Elvel: My Lords, does the noble Viscount agree or disagree with the figures I have in front of me, which were published by the Government? I agree with his point about base dates. That is common knowledge. But these figures are published by the Government. Will he agree with them or disown them?
Viscount Cranborne: My Lords, I merely repeat what I said a few moments ago. The figures which I quoted are, so far as I am aware, wholly accurate. If they are not, I am quite prepared to come back to your Lordships' House and duly apologise. However, I am confident that the figures that I have been given are accurate in the teens in which the Lord, Lord Howell, asked for them.
Lord Mayhew: My Lords, does the noble Viscount agree that a large number of serious anomalies have arisen over the years in connection with pay, conditions and structures in the Armed Forces? Does he agree also that there is a case for an inquiry to get rid of such anomalies, provided that such an inquiry is not part of a cost-cutting exercise and is not a civilian inquiry such as the disastrous inquiry carried out into the police force?
Viscount Cranborne: My Lords, I am well aware of the anxieties of the noble Lord, Lord Mayhew, about these matters. I hope that he will accept that the Armed Forces Pay Review Body does an extremely fine job. The members of that body are principally civilians. They look carefully at comparables elsewhere. During the course of its existence, its recommendations have earned it the trust and approbation of the Armed Forces at all levels. The fact that the Government have always accepted the recommendations of the AFPRB has added to that trust, subject, of course, to the occasional phasing of its recommendations, as has been the case this year. Nevertheless, the accepted award this year has been entirely satisfactory to the Armed Forces, particularly when compared with the award given to other people under other pay review bodies.
Lord Ashley of Stoke: My Lords, is this not one time when the Ministry of Defence should come out with its hands up, surrender and pay reparation to the other ranks?
Viscount Cranborne: My Lords, I hoped that I had made it clear that as far as we know, other ranks are satisfied with the work of the AFPRB.
Lord Molloy: My Lords, does the Minister agree that the non-commissioned officer is commonly and correctly known as the backbone of the British Army? Those NCOs will be very angry when they realise that on retirement, having fulfilled their service, they will receive less money than an officer who has seen the same kind of service? Will the department look again at the matter so that it does not cause anger and strife within the British Army?
Viscount Cranborne: My Lords, I readily associate myself with the sentiments expressed in the first part of his question by the noble Lord, Lord Molloy. I should point out that the pay rates of senior warrant officers
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exceed the rates of the most junior officers. That reflects the considerable experience and value of those senior non-commissioned officers.
Lord Howell: My Lords, is the Minister aware that I am grateful to him for agreeing to look again at the figures he gave to the House, in view of the official figures of his department published by HMSO? I do not take kindly to being told, when I am endeavouring to protect the interests of serving men on the ground, that I am trying to stir up trouble. If it is necessary to stir up trouble in order to achieve justice and fairness for the troops, then I shall do so.
Viscount Cranborne: My Lords, I hope that the noble Lord, Lord Howell, will accept my humble apologies if he feels that I have insulted his motives. That is the last thing that I wanted to do. Moreover, I certainly do not wish to mislead your Lordships' House. I am confident that the figures that I quoted are accurate and if that turns out not to be so I am quite prepared to apologise to your Lordships' House.

Westminster Council: District Auditor's Report
3.26 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether, in the light of the Earl of Arran's statement on 1st February (H. L. Deb., col.1183) that, if the allegations of the District Auditor in respect of Westminster City Council are proved true, they will "unreservedly condemn the actions of the councillors responsible", they stand by Baroness Blatch's statement of 1st July 1991 (H. L. Deb., col.770) that Westminster City Council's proposals on housing "appear to be sensible and… do not conflict with government policy".
Viscount St. Davids: My Lords, the district auditor's investigation into the allegations in relation to Westminster Council is not yet complete. He has made it quite clear that his findings are provisional. He has given the councillors and officers concerned an opportunity to respond to his provisional findings, and has indicated that there may be an oral hearing. Until those proceedings are complete, it is quite wrong to prejudge the issue.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that detailed reply. Will the Minister join me in criticising Conservative Members in another place and a Member on his own side in this House who have attempted to denigrate the role of that extremely distinguished district auditor? Is the Minister aware that before the 10 people involved were asked to meet the district auditor, they were told that they were entitled to be accompanied by a legal adviser? Only one chose to follow that course. Is it not time that we accept that the district auditor is a man of high professional standing and character who is doing a job as a public servant and who, therefore, cannot answer for himself?
Viscount St. Davids: My Lords, the district auditor carries out duties as laid down by law. Those duties are to be found in the Local Government Finance Act 1982 and in the Code of Audit Practice for Local Authorities and the National Health Service in England and Wales. I have no reason to believe that the district auditor has not carried out those duties according to the law.
Lord Boyd-Carpenter: My Lords, does my noble friend's answer mean that each and all of those councillors against whom the district auditor appears to have made quite serious allegations will have an opportunity to defend themselves and, if possible, to clear themselves of those charges?
Viscount St. Davids: My Lords, those against whom accusations have been made have a right to reply. They may do so in writing by 29th July or orally by 28th February.
Lord Jenkin of Roding: My Lords, is there not something profoundly unsatisfactory about a procedure which allows district auditors in those circumstances to name names, often in the most denigratory sense, when Section 30 of the Act to which my noble friend referred states that a report must not be published without the consent of those named in it? Is there any evidence that any of the people named in the district auditor's preliminary report consented to the publication of that report?
Viscount St. Davids: My Lords, what was published was a statement. The district auditor published a note of provisional findings and views. Copies of those documents were made available to the council, to six of the objectors and to the 10 respondents against whom he had made provisional findings and about whom he held adverse views. Those were made by him totally in accordance with the law.
Lord Hailsham of Saint Marylebone: My Lords, is it not highly desirable that we should abstain from coming to conclusions before the proceedings are at an end, because some of us have grave disquiet about the matter?
Viscount St. Davids: My Lords, my noble and learned friend is absolutely right.
Lord Bruce of Donington: My Lords, is the noble Viscount aware that it would have been a good thing if the advice of the noble and learned Lord, Lord Hailsham, had been taken when other auditors' reports have appeared in respect of other cities and authorities in the country? Is he further aware that many of the difficulties that have arisen in the matter (and which fall directly within the Local Government Finance Act 1992) were actually pointed out by me and other Members on this side of the House to the Government at the time that the legislation was passed? However, the Government chose to ignore our advice on some of the difficulties which we knew at the time would arise.
Viscount St. Davids: My Lords, the noble Lord, Lord Bruce of Donington, has raised both points recently in the House. I believe that they were adequately replied to.
Lord Campbell of Alloway: My Lords, can my noble friend say whether there is any statutory authority for making so-called "provisional findings" which on the face of it do not appear to be quite so provisional in the form in which they were produced?
Viscount St. Davids: My Lords, the findings have been made according to the law as it stands. It would require the law to be changed for them to be produced in any other manner.
Lord Hylton: My Lords, will the incidents which arise out of the right-to-buy policy prompt the Government to reflect with urgency on the need for a socially adequate housing policy for all areas of the country?
Viscount St. Davids: My Lords, I do not think that I can reply to that without calling into question the Government's impartiality in such matters.
Lord Clark of Kempston: My Lords, if the matter does fall within the law, is it not about time that it was changed in view of the unfairness of the allegations and the fact that the people so charged have not had a chance to refute them?
Viscount St. Davids: My Lords, I must tell my noble friend that changing the law is a matter for this House and another place.
Lord Williams of Elvel: My Lords, we are grateful that the noble Viscount has reaffirmed that the district auditor acted in accordance with the law and quite properly. He should not in any way be criticised for what he has done. The allegations are not unfair; they are allegations. However, to move on to a perhaps less contentious subject, is the noble Viscount satisfied with the information that the Government have received, especially in the light of my noble friend's Question regarding the statement of the noble Baroness, Lady Blatch, in July 1991? Further, are the Government satisfied that they were receiving proper information from Westminster City Council about the proposals that the council were in fact acting upon?
Viscount St. Davids: My Lords, I can tell the noble Lord, Lord Williams of Elvel, that Westminster City Council provided information to the department of my noble friend Lady Blatch as was required by law.
Lord Dean of Beswick: My Lords, I do not want to detain the House much longer. However, I must point out that I received two different Answers. I am not suggesting that there is any dubiety in the matter; but, at the very least, when one reads both Answers one can see that there is a great deal of ambiguity in them. Does the noble Viscount agree that they are almost totally different?
Viscount St. Davids: My Lords, I have nothing further to add.

Swiss Haulage Ban
3.34 p.m.
Lard Tordoff Lard Tordoff asked Her Majesty's Government:
To what extent the ban on foreign trucks travelling through the Swiss Alps will affect trade between the United Kingdom and Italy.
The Minister of State, Department of Trade and Industry (Lord Strathclyde): My Lords, there will be no immediate impact: the ban is not due to come into force for another 10 years. We will be considering the full implications of the decision with our European Community partners.
Lord Tordoff: My Lords, I am grateful to the noble Lord for that Answer. Of course, I was aware that the ban would be phased in over a 10-year period. However, does the noble Lord agree that that will give us a breathing space to gear ourselves up to what could be a serious disruption of road traffic between here and Italy? Further, does it not put pressure on the need to have the Channel Tunnel rail link working more effectively— and sooner than otherwise would be the case—and also the West Coast route to the manufacturing industry of the North-West and Scotland?
Lord Strathclyde: My Lords, the noble Lord has asked some interesting questions. However, they are not entirely relevant to the decision taken by the Swiss. British hauliers have traditionally used the French route in order to get to Italy rather than the Swiss route. That is because there is an existing limit of 28 tonnes on lorries in Switzerland and British hauliers tend to use rather bigger-sized lorries.
Lord Beloff: My Lords, does my noble friend agree that the Swiss have shown their usual good sense in staying out of the European Union and are thereby able to protect their magnificent scenery against the depredation of foreign juggernauts, which we are not allowed to do?
Lord Strathclyde: My Lords, the Swiss have just had a referendum on the issue. Indeed, some years ago the United Kingdom also held a referendum on whether or not we should be members of the Community. At that time, the British people voted to do so.
Lord Stoddart of Swindon: My Lords, does that not show how democratic the Swiss people are, and how they have the opportunity to have an influence on their Government? Despite the noble Lord's remarks, would it not have been very much better if the people of this country had had the opportunity to have a referendum on Maastricht? Perhaps then they could have instructed the Government on how to behave, and how to ensure that the people of this country are governed democratically?
Lord Strathclycle: My Lords, I believe that the noble Lord, Lord Stoddart of Swindon, is being rather self-indulgent by raising, yet again, the question of a Maastricht referendum. Each country has its own
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constitution and way of dealing with the issue: we have ours and the Swiss have theirs. Basically, I believe that we do things pretty well.
Lord Monson: My Lords, does the noble Lord agree that it is most refreshing to see a small group of individuals successfully stand up to and defeat the big battalions? Can he give the House an assurance that, under no circumstances, will Her Majesty's Government play any part in trying to bully or otherwise intimidate the Swiss into caving in to the demands that the EC will surely make upon them?
Lord Strathclyde: My Lords, we are not in the business of bullying. However, we shall certainly be discussing the issue with our European partners.
Lord Aldington: My Lords, will my noble friend inform the House that the referendum by the Swiss was not on Maastricht but on the European economic area, which is something that noble Lords opposite, and some of the Europhobes, quite liked? Therefore, is it not irrelevant to the matter that we are now discussing?
Lord Strathclyde: Yes, my Lords; the referendum was specifically about lorries travelling through Switzerland.
Lord Peston: My Lords, I am not in the least worried if we bully the Swiss if they are wrong, although I do not think that we should go as far as massing troops on their frontiers; but that is another matter. Surely this is nothing to do with the European Union. Is it not a GATT matter? Can the noble Lord remind the House as to whether or not the Swiss are members of GATT? I have a feeling that they are not. Therefore, those of us who are members could take retaliatory measures against the Swiss if we feel that the ban is damaging to free trade in Europe. Can the noble Lord enlighten us in that respect?
Lord Strathclyde: My Lords, the Swiss are indeed members of GATT. However, they are not members of the UN. The Swiss proposal appears to be compatible with the terms of GATT as it will apply equally to the haulage of both domestic and foreign goods.

Whitsun Recess
Viscount Ullswater: My Lords, it may be for the convenience of the House to know that, subject to the progress of business, it is expected that the House will adjourn for the Whitsun Recess on Thursday 26th May. It is expected that the House will sit at 11 a.m. on that day. It may also be for the convenience of the House to know that it is expected that the House will return on Monday,6th June.

Trade Marks Bill [H.L.]
3.40 p.m.
Lord Strathclyde: My Lords, I beg to move that this Report be now received.
Moved, That this Report be now received.—(Lord Strathclyde.)
Baroness Hamwee: My Lords, it would clearly be of great inconvenience to your Lordships and to many other people if the Report were not received, but I wonder whether the Minister could at least give some assurances as regards further stages of the Bill and how the Government will deal with amendments. Those of your Lordships who have seen the Marshalled List of amendments to be debated today will have seen that 60 of the 73 amendments are government amendments.
This is a highly technical Bill and all of us who have been involved with it have been pleased to deal with it in an entirely non-partisan manner. However, we had hoped to have received government amendments rather earlier than Tuesday—or even perhaps late on Monday—of this week, given that the Committee stage of the Bill concluded on 20th January. I hope that the Minister will at least acknowledge that this has caused a great deal of difficulty for those outside your Lordships' House who are much involved with the detail of this matter and who wish to ensure that the Bill is a good Bill. However, they have not had adequate time to consider the amendments which the Government have put down.
Lord Strathclyde: My Lords, I understand that the government amendments were put down on Monday evening but that they may not have been received by the noble Baroness until Tuesday. However, I would say in response to the substantive point that we are dealing with a detailed Bill and we decided to put down all the amendments en bloc rather than in a piecemeal fashion so that people could see how they melded together. These amendments have been put down in answer to questions that were raised in Committee, as I believe the noble Baroness will discover if we obtain the agreement of the House to continue to Report stage.
On Question, Motion agreed to.
Clause 3 [Absolute grounds for refusal of registration]:
The Earl of Harrowby The Earl of Harrowby moved Amendment No.1:
Page 2, leave out lines 16 to 19.
The noble Earl said: My Lords, this amendment seeks to leave out three particular lines. However, I do not wish to leave out three lines at all. What I want to do is to place on record my view that certification trade marks are not the same thing as trade marks in generality, and that it is unwise to incorporate them and let them be covered by the clause to. which I refer.
I am anxious to hear the response of my noble friend the Minister. He knows the point that I am going to make. Because the certification trade marks are excluded under paragraph 3 of Schedule 2, I personally would have preferred that the certification trade marks were excluded altogether from the effects of the clause that we are discussing. If I had to make any particular amendment— I would have liked the Minister to do so as he could have provided the proper wording— I would have added the final words,"provided also that a certification trade mark shall not be refused by virtue of paragraph (c) above". I fear that in times to come we shall regret the inclusion of certification trade marks in this prohibition, although I cannot give any examples of where that might arise. Nevertheless I cannot see that
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excluding them altogether from this particular clause can do any harm. I wanted to place that view and the Minister's reply to it on record. I beg to move.
3.45 p.m.
Lord Strathclyde: My Lords, I recognise that my noble friend does not wish to remove the lines listed in his amendment. I understand that he is more particularly concerned about the position of certification marks under the Bill. I assure him that there is nothing in Clause 3, and in particular subsection (1) (c), which will make it difficult for such marks to continue to be registered. The reference to quality is a very direct one. It is intended to prevent registration, prima facie, of marks which consist of words such as "Best" and "High Grade", which would directly indicate the quality of goods and services sold under the mark, in other words, where the meaning of the words which make up the mark is actually to do with quality. The quality and reputation of goods or services provided under certification marks arise not from any inherent reference in the mark itself but from the standards laid down in the regulations governing their use.
My noble friend mentioned certification marks. Certification marks such as, for example,"Sheffield","Stilton" and the "Woolmark" would all qualify for registration under the Bill in the same way as they did under the present Trade Mark Act. While the goods which bear these marks have to comply with certain quality standards, the words of which the marks consist do not indicate or designate quality. They do not therefore fall foul of Clause 3(1) (c). In any case, Clause 3(1) is a directive obligation, and we cannot change it. The directive does contain some special provision relating to certification marks, concerning such marks with a geographical connotation. Full advantage has been taken of these special provisions in paragraph 3 of Schedule 2.
I know that my noble friend's intention was to place his view on record. I hope that my response has clarified the position and has given him some comfort. I hope that on that basis he will feel able to withdraw his amendment.
The Earl of Harrowby: My Lords, I thank my noble friend the Minister for his reply. However, with regard to the examples that he has given, were "Woolmark" to come up afresh, it would be banned under the present regulations. That is an example of what I am talking about. As I hope my noble friend will turn this matter over in his mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Relative grounds for refusal of registration]:
Lord Strathclyde Lord Strathclyde moved Amendment No.2:
Page 3, line 33, leave out from ("because") to end of line 37 and insert:

(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or

(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,").

The noble Lord said: My Lords, in moving Amendment No.2. I wish to speak also to Amendments Nos.3 and 7. As I said in Committee, our aim must be to use the wording of the directive whenever possible in the Bill in order not to introduce ambiguity as between United Kingdom law and other Community national law, also to ensure that the interests of UK owners of trade marks are not put at risk. But, where it would be appropriate in all the circumstances to use a different term we would seek to do so. Two amendments in this group illustrate the point.
Clause 5 sets out the relative grounds on which an application for registration may be refused. Clause 9 sets out what constitutes infringement. In subsection (2) of these clauses the same tests apply. In Committee the noble Lord, Lord Peston, drew our attention to the fact that in subsection (2) of Clauses 5 and 9 the words "identity" and "identical" were used as were the words "similar" and "similarity". He was concerned lest the lawyers stumbled over the meaning of these words. He urged us to consider using only "identical" and "similar". I have so considered and am satisfied that the amendments which I have put down meet his points. The amendments clarify the clauses by improving their grammar, but they do so without in any way affecting the purpose of the clauses, or indeed their alignment with the directive. I was therefore most grateful to the noble Lord, Lord Peston, for drawing this to the Committee's attention. I hope that the amendments meet with your Lordships' approval.
The second amendment, to subsection (3) (b) of Clause 5, is necessary to meet fully our obligations under Article 6 bis of the Paris Convention to protect well-known marks, which is implemented by Clause 52. As it stands, the subsection applies only to marks which are actually registered. By replacing the word "registered" with the word "protected", the clause will fully reflect our obligations under the Paris Convention and enable well-known marks, whether or not they are registered in the United Kingdom, to oppose the registration of the same or similar mark by another party. I beg to move.
Lord Peston: My Lords, Amendment No.3 makes perfectly good sense and obviously one must support it. However, the other two amendments in the group, Amendments Nos.2 and 7, are, as the Minister has said, the Government's response to an amendment which I tabled at the Committee stage. I welcome them and I am grateful to the Minister for responding positively and constructively to my concerns. We shall discuss later several other amendments in the name of the Minister which similarly reflect the Government's willingness to respond to other issues which I placed before them. I hope that noble Lords will agree therefore that it would not be discourteous of me, but would be in the interests of the efficient dispatch of business, if I simply thank the Minister now en bloc, so to speak, for all the subsequent amendments and do not jump up and down some 10 times repeating exactly the same speech.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.3:
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Page 3, line 43, leave out ("registered") and insert ("protected").
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.4:
Page 4, line 1, after first ("the") insert ("European").
The noble Lord said: My Lords, in speaking to Amendment No.4 I should like to speak also to Amendments Nos.13,30 to 32,38,60,62 to 64 and 73.
These amendments form a group of what I would like to describe as European amendments. For example, Amendments Nos.31 to 73 insert into Clause 47 and into the Title of the Bill the full title of the Community trade marks regulation, which has been adopted since the Bill was introduced. Amendments Nos.13 and 38 are consequential on the coming into being of the European Economic Area. The remaining amendments in the group are essentially drafting amendments to various references to the European Community. I beg to move.
On Question, amendment agreed to.
Clause 8 [Rights conferred by registered trade mark]:
Lord Peston Lord Peston moved Amendment No.5
Page 5, line 24, at end insert ("In particular, the proprietor has the exclusive right to use the mark on or in relation to the goods or services for which it is registered in the course of business so as to indicate a commercial connection with such goods or services.").
The noble Lord said: My Lords, I placed this amendment before your Lordships in Committee, when it was discussed. It relates to the question of whether we ought to make clear on the face of the Bill the function of a trade mark. I argued that perhaps we should. The Minister was doubtful and he went away to think about the matter.
I believe that it is still his view, as he will say in a moment, that the amendment is not necessary. However, I tabled the amendment again because in the preamble to the directive and in the Government's own White Paper statements are made which make it clear what the function of a trade mark is. Therefore, I have put the matter before your Lordships for a second time in the hope that the Minister can convey some, if not all, of the meaning in his own words, from the directive and from the White Paper, so that it appears formally in your Lordships proceedings. I believe that that is important. I beg to move.
Lord Strathclyde: My Lords, I thank the noble Lord, Lord Peston, for his introductory comments on the amendment. I know that he expressed some concern on this issue during the Committee stage. I am grateful to him, therefore, for giving me the opportunity to say why the Government cannot accept the amendment.
Article 5 of the directive sets out the rights conferred by registration on the owner of a trade mark, together with the right to take action for infringement. The rights conferred by registration, which are mandatory, are implemented in Clause 8 and are the same rights as conferred by registration in all other member states. The amendment seeks to qualify the rights given by registration in Clause 8 by adding a sentence which points to the fact that the use of the mark must be in the course of business and "to indicate a commercial connection" with the goods or services for which the

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mark is registered. In summary, what he is suggesting is that the use of the mark is what is known as "trade mark use".
As a matter of general trade mark law it is implicit that use of a registered trade mark must be trade mark use in order that the rights given by the Bill may be enforced. The content of the 15th recital to the directive also makes that quite clear.
Therefore, in our view the amendment is unnecessary. Importantly, too, to put a gloss on the directive in the way suggested by the amendment would introduce ambiguity and uncertainty as between the directive and United Kingdom law.
This is an area where we seek to adhere to the directive. On the basis of the explanation I have given to the House I hope that the noble Lord, Lord Peston, will feel able to withdraw his amendment.
Lord Peston: My Lords, perhaps I may ask the noble Lord whether he wishes to add another remark about the fact that this matter is dealt with in the White Paper. Will he confirm that what is said in the White Paper on this matter is the Government's view?
Lord Strathclyde: My Lords, with the leave of the House, I am in a position to confirm that that is the case.
Lord Peston: My Lords, I thank the noble Lord for that confirmation. I beg leave to withdraw the amendment.
Amendment by leave, withdrawn.
Lord Strathclyde Lord Strathclyde moved Amendment No.6:
Page 5, line 35, leave out ("fraudulent use, & c. of trade mark") and insert ("unauthorised use of trade mark, & c.").
The noble Lord said: My Lords, in moving Amendment No.6, I wish also to speak to Amendments Nos.39 to 43,46 and 49. The substance of the amendments concerns Clause 86. The matter is being raised at this early stage in the Report stage only because Amendment No.6 makes a consequential amendment in Clause 8.
The amendments are grouped with an amendment in the name of the noble Lord, Lord Monson, who will no doubt wish to speak in a moment.
Clause 86 as introduced was criticised as going too far in that it could have caught the innocent infringer. Reaction in Committee to the revised version, which was better focused on acts of deliberate counterfeiting, suggested that although the policy was right there was still some criticism of the drafting. In particular, some noble Lords were critical of the use of the word "fraudulently". It was suggested that that might make the offence difficult to prove. Accordingly, Amendments Nos.40 to 42 replace the word "fraudulently" in subsections (1) to (3) in Clause 86 by the words of the word-saving provision presently found in subsection (4). Amendment No.43 merely removes subsection (4) since it becomes redundant.
A similar change will be made to the title of Clause 86 in the margin of the Bill. It will refer instead to "unauthorised use of a trade mark". That change can be
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made editorially. However, it is necessary to amend those other provisions which refer to Clause 86. That is the effect of the other amendments in the group.
I shall obviously have an opportunity when I wind up the debate to reply in detail to the points that will be raised by the noble Lord, Lord Monson. I beg to move.
Lord Monson: My Lords, I am grateful to the noble Lord, Lord Strathclyde, for explaining Amendment No.6 and the consequential amendments. I have not had an opportunity to study them but I am sure that they are a great improvement on what went before.
Nevertheless, I am worried by subsection (4) of Clause 86, which makes it an offence punishable by a substantial term of imprisonment to make, sell, or even to have in one's possession with a view to eventual sale, goods with a bogus or misleading trade mark without the consent of the proprietor of the registered trade mark, either with intent to gain for oneself or another, or with intent to cause loss to another, or both.
It is quite right to make it an offence if there is any intention to cause loss to another. I would not dispute that for one moment. But is it right to make it an offence merely because the prospective vendor seeks to make a gain for himself or another which may be a trivial gain—10 pence an item, perhaps— without any intent to cause loss to another and without actually causing loss to anybody else?
There are at least two, and perhaps more, circumstances where that could arise. The first is where those in possession of what one might term suspect goods do not succeed in selling any. The second is where the fake goods are so obviously bogus that they fool nobody and are sold at a price which reflects their relatively trivial value and not at a price which reflects the value of the genuine goods. The purchaser will buy them because he gets a kick from sporting bogus goods, but neither he nor anybody else is fooled into mistaking them for the genuine article. For example, it is rather like stencilling a Bentley Continental logo on to the boot of a Mini or Ford Fiesta.
I should be grateful to hear what the noble Lord has to say on that point.
Baroness Hamwee: My Lords, can the Minister clarify one matter which relates loosely to his amendment? Replacing the word "fraudulently" with the words on the Marshalled List may suggest to the reader of the Bill that in some way that is no longer the offence which it was. My question, which may have been raised with the Minister previously, relates to police enforcement.
Clause 88, which is also the subject of an amendment in this group, deals with enforcement by trading standards officers. There appears to be some anxiety that the provision means that the police are out of the frame entirely when it comes to enforcement. Will the Minister confirm whether or not it remains a matter for the police as well as for trading standards authorities?
4 p.m.
Lord Strathclyde: My Lords, perhaps I may deal briefly with that point before responding to the more substantive amendment in the name of the noble Lord,

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Lord Monson. It is my understanding that because it will be a matter of general law, the matter is perfectly capable of being enforced by the police authorities. I believe it is quite right that that should be so. The noble Baroness will no doubt remember that in Committee I defended valiantly the use of the word "fraudulently" and the way it was interpreted in the clause. I came under sharp criticism from many Members of the Committee for doing so. It was on that basis that I believed we might try to find another way of defining the issue. This is tie view we have now taken.
I do not believe that the provision substantially alters the meaning of the clause as we discussed it in Committee. It is another way of wording the matter and removes the rather emotive word "fraudulent" from the main part of the clause. That is why we have made the change.
I am most grateful to the noble Lord, Lord Monson, for speaking to his amendment at this stage. It makes it easier to deal with the issue of principle. I understand the point that the noble Lord makes. However, removing the requirement of "intent to cause loss" in the offence of unauthorised use of a trade mark in relation to goods would be a substantial change to the clause and might well send the wrong signals to counterfeiters, enforcement authorities and the courts. At present it is an offence to apply unauthorised trade marks to goods. However, if we were to accept the amendment of the noble Lord Lord Monson, it would be necessary to prove, in order to gain a conviction, that actual loss had occurred when the act of applying the mark itself took place. At present intent is also considered a key requisite of the offence of counterfeiting so as to ensure that the provision of the clause does not bite on the "innocent infringer".
The noble Lord, Lord Monson, makes a point on which perhaps I may reflect between now and Third Reading. In the meantime, I hope that he will allow our amendments to go forward and will not move his amendment when we reach it.
On Question, amendment agreed to.
Clause 9 [Infringement of registered trade mark]:
Lord Strathclyde Lord Strathclyde moved Amendment No.7:
Page 5, line 42, leave out from ("because") to end of line 2 on page 6 and insert:
("—

(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or

(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,").

On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.8:
Page 6, line 26, at end insert:
("() Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee.
But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.").
The noble Lord said: My Lords, during Committee there was a lively debate on the subject of comparative
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advertising. At that time I indicated that any government amendment which might be set down on this provision of the Bill was likely to deregulate and be more liberal than the existing proposal. That, however, is not the purpose of the amendment before your Lordships.
The Government intend to allow comparative advertising with proper safeguards for the owner of a registered trade mark. Our policy has been clear since the White Paper on trade mark law reform in 1990. Noble Lords supported this approach in Committee. However, on further reflection we believe that the provision and its relationship with the directive would be clearer if it were set out in Clause 9, which deals with infringement and enacts Article 5 of the directive, rather than in Clause 10.
Paragraph 5 of Article 5 of the directive allows national provisions to protect the use of signs,
"other than for the purposes of distinguishing goods and services"
where use of that sign,
"without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark."
Thus we believe that Article 5(5) enables us to provide for comparative advertising but to make dishonest comparative advertising an infringement of the trade mark. The provision therefore sits more appropriately in Clause 9 which deals with infringement than in Clause 10 which limits the effect of a registered trade mark.
The new subsection continues to make clear that use of a registered trade mark in comparative advertising must be in accordance with honest practices in industrial or commercial matters but that it will be an infringement of the registered mark if, without due cause, it takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.
The amendment ensures that the provision fully squares with the directive and is consistent in its principles. It also confirms the Government's approach to a liberalising but fair approach in respect of comparative advertising; that is, allowing it with safeguards.
Amendment No.8 is grouped with Government Amendment No.10 and with Amendment No.11 in the name of my noble friend Lord Reay. If the noble Lord cares to speak to that amendment, I should like to reply on that basis. I beg to move.
Lord Airedale: My Lords, my noble friend Lady Hamwee wishes me to inquire whether it will be the first instance in an Act of Parliament that a paragraph begins with the word "But".
Lord Reay: My Lords, I should like to speak to this group of amendments, in particular Amendment No.11 which stands in my name. Although the noble Lord on the Woolsack did not say so— perhaps he will do so later—I believe that Amendment No.11 will fall if Amendment No.10 in the name of my noble friend Lord Strathclyde is adopted. Amendment No.11 is an amendment to a subsection which he proposes to take out of the Bill. My amendment is therefore an amendment to the Bill as drafted. I suspect that it should have been an amendment to Amendment No.8. If I had

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realised that my noble friend was recasting that part of the Bill in the way that he has, my amendment no doubt would have been tabled accordingly.
Amendment No.11 is a probing amendment which I do not intend to press. If the Government decide to incorporate the principle of my amendment into the Bill, having heard the argument for doing so, I have no doubt that a way can be found to do so at a later stage.
Clause 10 of the Bill (it is Clause 9 in my noble friend's amendment) opens the door for comparative advertising but makes it subject to two provisos. Those provisos are contained in the Bill as drafted in Clause 10(1) (a) and (b) and in my noble friend's amendment in the single paragraph, which constitutes the last paragraph of new Clause 9. Indeed, not only is that a single paragraph, it is also a single complex and somewhat inelegant sentence. I suggest that it represents a deterioration rather than an improvement on what we had before with regard to clarity and comprehensibility.
At Committee stage I sought to introduce a third proviso which would have required anyone wishing to use another proprietor's trade mark to obtain the prior consent of that proprietor. The Minister expressed the view that that would be too restrictive. Amendment No.11 does not go so far as that. It provides that any would-be user of another's trade mark must first give written notice to the proprietor of that trade mark of his intention to use it.
The CBI has considerable reservations about Clause 10(1) of the Bill as drafted (the last two paragraphs of the new Clause 9). It has considerable reservations about the provisions appearing in the Bill. The extension of comparative advertising is certainly not required by the EC directive on trade marks. It is presumably in the Bill in anticipation of the proposed EC directive on comparative advertising which I understand the European Commission has now announced that it intends to reintroduce later this year. It seems to me unwise to seek to anticipate the final provisions and wording of an EC directive which has not yet been agreed.
It seems to me that it would have been much more sensible if the Government had waited until they knew what the new law would be before seeking to change our law. We now run the risk of having to change it twice. Let there be no doubt that the Bill will change our law. At present comparative advertising is not permitted under UK law. Under the Trade Marks Act 1938, a trade mark owner can sue and obtain an injunction to prevent the use of his trade mark. So comparative advertising, when it does take place— for example, in the motor trade— does so apparently as a result of an agreed convention between manufacturers not to sue each other.
This Bill, however, will enable comparative advertising to take place subject to the provisos contained in the last paragraph of my noble friend's amendment and, if my noble friend were to accept my amendment, subject to the proviso that it contains. The requirement that a would-be user of a trade mark should first notify the proprietor would at least enable the proprietor of that trade mark to take any action that he
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thought appropriate to protect his trade mark and to mitigate any unfavourable effects that its use by a third party might have.
I might add that this is the direction in which the law on the subject seems to be moving on the continent of Europe. Under recent French law, a trade mark may only be used for purposes of comparative advertising after there has been a period of consultation between the owner and the would-be user. I understand that UNICE, the European employers' federation, would like to see a notification clause in the European Commission directive. So, also, I believe would the French and Dutch Governments and so also would the CBI.
If the Government are not prepared to wait until the EC directive on comparative advertising is agreed before legislating in the area, then at least it seems to me that the next most sensible thing they could do is to legislate in the direction favoured by the main thrust of European opinion in the field. I beg to move.
Lord Strathclyde: My Lords, I am grateful to both noble Lords who have just spoken. I accept what the noble Lord, Lord Airedale, said: this could well be the first time that a paragraph in a Bill starts with the word "But". I cannot confirm that that is the case because I do not know, but I am sure that the parliamentary draftsmen would not have allowed it through if they did not feel it to be an entirely appropriate word to use in this instance. But my noble friend Lord Reay suggested that in any case it was rather an inelegant sentence.
I have to say to my noble friend that we have come a long way since Committee. I accept that his amendment is not entirely trying to draw the potential sting of comparative advertising; in fact it accepts the premise that comparative advertising is here to stay.
My noble friend makes much of the fact that we are not following the European directive in the matter and we are not waiting for any future European legislation, but that is because this is inspired not by a Europeanisation of our United Kingdom law but an entirely freestanding and liberalising measure which we, as a government, believe is in the best interests of competition and therefore in the interests of the consumer.
Perhaps I may specifically turn to my noble friend's amendment. He seeks to insert a requirement that the owner of a registered trade mark should be informed in advance of any use of his mark in comparative advertising. While this, on the surface, may seem to be quite fair, I have some reservations and difficulty in understanding how such a requirement could be enforced. What, for example, is a reasonable period of notice? Which of the parties will determine what the reasonable period of notice is?
More generally, the amendment would not be helpful. The provision in the amendment that I put forward this afternoon states that use should be,
"in accordance with honest practices".
I think that as a matter of principle we should leave industry and commerce to determine those matters themselves. They are usually in the best position to be able to deal with such issues themselves and I therefore have to say to my noble friend Lord Reay that if he

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moves Amendment No.11, I shall be obliged to resist it. However, he said that it was a probing amendment and I hope that he accepts what I have to say.
Lord Peston: My Lords, before the noble Lord sits down and we end the discussion, I ought to go on record as saying how much I agree with the Minister on the question of competition and the consumer and the use of trade marks. It seems to me to be essential to the competitive process in a modern market economy that one ought to be able to say: "My product"— naming its name— "and its trade mark are better than that product"— naming its name— "and its trade mark". I take an example from the newspaper this week which looked at food processors. The consumer page ranked them in order, using trade marks. I cannot remember which was rated as the five-star best, but nonetheless it seems to me perfectly reasonable, in the interests of the consumer— and I emphasise that— that the owners of the product should be able to say: "This newspaper said that ours was the best— better than the others".
Therefore if any of us believes— I certainly do and I am glad that the noble Lord does— that the consumer is essential to the issue, one ought to resist the amendment of the noble Lord, Lord Reay (I say that unhappily, but I have to say it). Equally, I am extremely disappointed to hear from him that his amendment is supported by the CBI. If there were a body that ought to take the other view in favour of competition and the consumer, I should have thought that it was the CBI.
On Question, amendment agreed to.
4.15 p.m.
Lord Strathclyde Lord Strathclyde moved Amendment No.9:
Page 6, line 27, leave out subsection (6).
The noble Lord said: My Lords, in moving Amendment No.9, I should like, with leave, to speak also to Amendments Nos.61 and 67.
During Committee we considered what was at that time Amendment No.25A, tabled by my noble friend Lord Reay. He drew attention to the fact that Clause 9(6) is somewhat restricted in its scope. It is limited to providing that the spoken use of the words making up a trade mark (for example, by a salesman or in a television advertisement) is an infringement. My noble friend pointed out that it is expected to be possible to register as trade marks distinctive sounds such as musical jingles. He therefore proposed a broader provision which would catch any audible use of a mark.
Perhaps I should refer in passing to the fact that the idea of registering audible trade marks was questioned by some noble Lords. It might therefore be helpful if I briefly explain the position as the Government understand it. Clause 1 requires that a trade mark be:
"capable of being represented graphically".
That does not necessarily mean that the trade mark must be graphical. As the White Paper, Reform of Trade Marks Law explained, citing the Commission's own Explanatory Memorandum, the definition of what constitutes a mark is intended to be open-ended. It is up to the Patent Office or ultimately the courts (including possibly the European Court of Justice) to decide whether that interpretation of the directive is correct.
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To return to these amendments, the issue here is not audible use, but the use of a trade mark in a form other than the graphic representation which appears on the register. The proposed new subsection (2) to be included in Clause 99 therefore covers not only audible use, but any use of a trade mark which is by other than graphic representation. That would, for example, apply where a trade mark is encoded electronically in a video cassette. It is not visible at the time of sale, and only becomes so when the purchaser plays it. Another instance which has been mentioned is where goods, for example, jewellery, are actually made in the shape of a protected trade mark. All those would be caught by the new provision.
Moreover, by dealing with the matter in Clause 99 rather than Clause 9, and making it apply for all purposes of the Bill, it applies to other situations besides civil infringement. That definition of use will apply also to Clause 86, dealing with the criminal offence of trade mark counterfeiting. I wish to draw attention to the fact that the new provision which the amendment will add refers to:
"use (or any particular description of use)."
Thus, for example, it applies to any of the forms of use mentioned in Clause 86(1); namely, applying the mark to the goods or their packaging, selling the goods or otherwise dealing in them, or possessing such goods with a view to dealing in them.
It will also mean that a proprietor will be able to rely on any non-graphic use which he himself or a licensee has made in order to defend himself in an action for revocation on the ground of failure to use the mark. I am sorry to have to explain the amendments at rather great length, but I hope that they meet with the approval of the House. I beg to move.
Lord Reay: My Lords, I am extremely grateful to my noble friend. My amendment seems to have stimulated some creative thinking from him and his department. He has come up with an amendment which deals not only with the point that I had to make at Committee stage, but also much more widely with a number of other instances which he and his department have managed to think of. I am very grateful. It fully takes care of the point that I have and I thank the Minister for what he has done. I support the amendment.
On Question, amendment agreed to.
Clause 10 [Limits on effect of registered trade mark]:
The Deputy Speaker (Lord Aberdare): My Lords, as the noble Lord, Lord Reay has already stated, if Amendment No.10 is agreed to I cannot call Amendment No.11.
Lord Strathclyde Lord Strathclyde moved Amendment No.10:
Page 6, line 31, leave out subsection (1).
On Question, amendment agreed to.
[Amendment No.11 not moved.]
Lord Strathclyde Lord Strathclyde moved Amendment No.12:
Page 6, line 37, at end insert:
("() A registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered (but see section 43(6) (effect of declaration of invalidity of registration)).")
The noble Lord said: In moving this amendment I shall speak also to Amendment No.69.

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The noble Lord, Lord Peston, brought to our attention in Committee the fact that Section 4(4) of the 1938 Trade Mark Act states that, where two or more identical or similar trade marks are registered, infringement action cannot be taken by the owner of one mark against use of the others. He pointed out that this Bill did not contain such a statement. The Government had in fact thought it was unnecessary.
However, on reflection, we can accept that there is justification for including a substantive provision, as suggested by the noble Lord. I am happy therefore to move Amendment No.12. In consequence, there is no longer any need to continue to provide in the transitional arrangements for those marks registered under the provisions of Section 12(2) of the 1938 Act. By including a provision in the substantive part of the Bill, the rights of the proprietors of such registrations are fully protected. Therefore, a consequential amendment is proposed to Schedule 3, omitting the final sentence of paragraph 4. I beg to move.
On Question, amendment agreed to.
Clause 11 [Exhaustion of rights conferred by registered trade mark]:
Lord Strathclyde Lord Strathclyde moved Amendment No.13:
Page 7, line 17, leave out ("Community") and insert ("European Economic Area").
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.14:
After Clause 13, insert the following new clause:
Order for erasure, & c. of offending sign
(".—(1) Where a person is found to have infringed a registered trade mark, the court may make an order requiring him

(a) to cause the offending sign to be erased, removed or obliterated from any infringing goods, material or articles in his possession, custody or control, or

(b) if it is not reasonably practicable for the offending sign to be erased, removed or obliterated, to secure the destruction of the infringing goods, material or articles in question.

(2) If an order under subsection (1) is not complied with, or it appears to the court likely that such an order would not be complied with, the court may order that the infringing goods, material or articles be delivered to such person as the court may direct for erasure, removal or obliteration of the sign, or for destruction, as the case may be.").
The noble Lord said: Amendment No.14 introduces a new clause which makes clear that a court can order the obliteration of the infringing trade mark as an alternative to delivery up.
During discussion on Clause 14 in Committee there was a feeling that the remedy of delivery up in Clause 14 as drafted would, in some circumstance at least, be too draconian. The Committee felt that the list of remedies which were available to the court when considering action to be taken following infringement proceedings should include the possibility of having the trade mark removed from the infringing goods.
The new clause is effectively declaratory of the court's inherent jurisdiction. It is at present within the court's inherent jurisdiction to make such an order for obliteration of the mark as an alternative to one for delivery up. Clause 13(2) was intended to preserve that power. The feeling in Committee was, however, that
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express provision should be made, and that has been done by introducing a new clause in Amendment No.14. I beg to move.
On Question, amendment agreed to.
Clause 16 [Rights and remedies of exclusive licensee]:
Lord Strathclyde Lord Strathclyde moved Amendment No.15:
Leave out Clause 16.
The noble Lord said: I beg to move Amendment No.15, and in so doing to speak to Amendments Nos.16,17,19 to 22,24 to 29,65,66,70 and 71.
There are good reasons for this very large group of amendments. In Committee a number of comments and submissions were made on what are complex and detailed provisions. The Government, having agreed to consider these, have concluded that rather than amend the Bill piecemeal the licensing provisions should be restructured. In so doing, five clauses have been deleted to be replaced by four. I shall explain as concisely as I can the reason for, and the effect of, these changes.
The first of the new clauses therefore introduces the idea that a trade mark may be licensed. This largely follows existing Clause 23, but with a small but significant change in subsection (1). It now provides that a licence may be limited "in particular" as to goods or services, or manner or locality of use. In other words, this is a non-exhaustive indication of the ways in which a licence may be limited.
In Committee we considered an amendment from the noble Baroness, Lady Hamwee, that would have made explicit provision for a licence to be limited in time. As I told the Committee, there has never been any doubt that a licence can be limited in this way, and the way in which the provision is drafted is not intended to preclude it. We are however inhibited from making explicit provision for time-limited licences, because this provision implements Article 7 of the directive. The amended clause, however, makes clear that the forms of limitation to which it refers are by way of example.
The second of the new clauses supersedes Clause 24. It maintains the idea of an exclusive licence; that is, a licence under which no one other than the licensee (not even the proprietor) is entitled to use the trade mark. The new clause makes clear that an exclusive licence, like a non-exclusive licence, can be either general or limited. Thus, the proprietor may grant exclusive rights in respect of certain goods to the licensee and exclusive rights in other goods to another licensee; or he may grant a franchisee the exclusive right to run a restaurant under his mark, within, say,20 miles of Brighton, with other franchisees having similar exclusive rights in other localities. That was always the intention of Clause 24, but it had been suggested to us that there could be doubt. The new clause removes that doubt.
Another change to which these amendments give effect concerns the rights of exclusive licensees. In Committee we considered two amendments— one from my noble friend Lord Reay, and one from the noble Baroness, Lady Hamwee— which bore on this subject. The effect of those amendments would have been that

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Clause 16 (which provides for the rights and remedies of an exclusive licensee) would have been subject to the terms of the licence contract.
The Government took the view that an exclusive licensee should have the same rights and remedies as the proprietor. This was because, in granting an exclusive licence (which entails the proprietor disclaiming the right to use the trade mark himself) the proprietor has, in effect, placed the licensee in sole control of the mark. It was felt illogical that, at the same time, he should retain the right, for example, to decide on the launching of infringement proceedings. The Government have, however, listened to the views expressed in this House and elsewhere and do not wish to second-guess trade mark owners and licensees. Accordingly, the third of the four new clauses is cast in general terms and deals with the rights of all licensees, whether exclusive or non-exclusive. It also takes account of points made by the noble Baroness, Lady Hamwee, in Committee that where the proprietor refuses to take action the licensee need not wait before bringing proceedings himself.
This does not mean, however, that no special provision is needed to deal with exclusive licences. This is the subject of the fourth of the new clauses. I draw the attention of noble Lords to the fact that it provides for an exclusive licensee to have the same rights as if the licence had been an assignment, but only to such extent as may be provided by the licence. In other respects, this new clause largely repeats what is at present in Clauses 16 and 17.
The remaining amendments in this group are consequential on the changes which I have described. Paragraphs 12 and 14 of Schedule 1 and paragraph 14 of Schedule 2 deal respectively with the rights of authorised users of collective and certification marks. These are persons whose goods or services comply with the regulations governing the use of the collective or certification mark. An authorised user of such a mark is analogous to a licensee under an ordinary trade mark. The effect of Amendments Nos.28 and 29 is to adapt the relevant paragraphs of Schedules 1 and 2 in line with the new clauses on licensing.
Amendments Nos.22,65,66,70 and 71 are purely consequential on the renumbering of the clauses, with no substantive effect.
That leaves Amendment No.19 to Clause 21. This provision is not about licensing at all, but about jointly-owned trade marks. In subsection (5), however, it provides that a co-proprietor "is not liable" for costs. Analogous provisions in the clauses on licensing have been changed to say "shall not be made liable", and Amendment No.19 achieves the same result here.
I apologise to the House for having spoken at such length and in such detail. However, these provisions are important and the changes fully reflect the points made to the Government. With, as I hope, the agreement of the House, I beg to move.
Lord Reay: My Lords, the amendment which I had down at Committee stage and to which my noble friend the Minister referred, sought to ensure that an exclusive licensee had the same rights and remedies as the proprietor unless the licence provided otherwise. Those
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last five words, though common in other parts of the Bill, were missing from Clause 16(1). That meant that in the Bill as it originally stood, there was no way for a proprietor to avoid handing over to a licensee all rights with respect to the protection of his trade mark, including, for example, decisions to take legal action, even though such decisions might run counter to the proprietor's policy toward his trade mark and its protection and even though he would have to be brought in at a later stage.
Under the new Clause 27(1), the licensee's rights and remedies will depend upon provisions in the licence. Therefore my point has been covered and am grateful to the noble Lord for taking it on board. I support the amendment.
4.30 p.m.
Baroness Hamwee: My Lords, it would be churlish not to thank the Minister for having taken on board the points that I made in Committee. That is not to try to claim credit but truly to express gratitude. I am sorry that we still have to have a list of examples of a limited licence. As I believe I said in Committee, it would be a pity if we should start to go down the American route, which cannot resist giving examples of almost everything. However, if we are required to follow that course, so be it.
I feel that the amendments will prove to be extremely helpful. I tabled some amendments almost as a matter of instinct and was told afterwards that I had alighted on points that I had not appreciated were quite so important.
On Question, amendment agreed to.
Clause 17 [Exercise of concurrent rights]:
Lord Strathclyde Lord Strathclyde moved Amendment No.16:
Leave out Clause 17.
On Question, amendment agreed to.
Clause 18 [Rights of non-exclusive licensees in relation to infringement]:
Lord Strathclyde Lord Strathclyde moved Amendment No.17:
Leave out Clause 18.
On Question, amendment agreed to.
Clause 21 [Co-ownership of registered trade mark]:
The Earl of Harrowby The Earl of Harrowby moved Amendment No.18:
Page 11, line 22, leave out paragraph (b).
The noble Earl said: My Lords, I am in the same position as for Amendment No.1. I am scheduled to move that Clause 21(4) (b) be omitted. I do not want it to be omitted. I want first of all to point out that in certain circumstances it is not capable of implementation. Secondly, given that fact, it is necessary to add some proviso to deal with the situation. For instance, in a receivership, a liquidation or a bankruptcy the paragraph could not be implemented.
I do not believe that one ought to argue that an Act of Parliament, especially a new Act which we are placing on the statute book, should be left incomplete. It must be qualified by covering the situation. Nor can it be legitimately argued that the matter is covered in the bankruptcy Acts and therefore it does not matter. One might ask which of them takes precedence.

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The Government have to face up to the issue. I was not prepared to table an amendment, largely because I would get the wording wrong. I hope, however, that my noble friend the Minister will be prepared to look once again at the issue. I beg to move.
Lord Strathclyde: My Lords, I am always keen to consider the points made by my noble friend. The Bill deals only with the general law governing trade marks. Clauses 21 to 27 establish that a registered trade mark is an object of personal property and also that it may be assigned, licensed, charged, and so on, as are other forms of property. Clause 21 lays down how the trade mark as an object of personal property is to be disposed of, in the absence of any agreement to the contrary, when it is owned by two or more persons.
My noble friend is concerned that subsection (4) of Clause 21 does not accurately reflect what would happen, for example, in a bankruptcy situation. In the event of one co-proprietor being declared bankrupt, any personal property which is part of the bankrupt's estate would vest in a trustee in bankruptcy without the consent of the other co-proprietor. That is because the provisions in the Bill do not prejudice the operation of any other statute which may bear on the trade mark as an object of personal property.
My noble friend Lord Harrowby may well have a point here which I am willing to consider further. But the best advice that I have at the moment is that the position is as I have laid it out. With the assurance that I shall continue to consider my noble friend's point, I hope that he will agree to withdraw his amendment.
The Earl of Harrowby: My Lords, I thank my noble friend the Minister for his helpful remarks. I should be most grateful if he would look again at the matter. It is wrong in principle to lay down something in an Act of Parliament which would lead to difficulties. I am grateful to him for saying that he will look at the matter again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Strathclyde Lord Strathclyde moved Amendment No.19:
Page 11, line 28, leave out ("is not") and insert ("shall not be made").
On Question, amendment agreed to.
Clause 23 [Licensing of registered trade mark]:
Lord Strathclyde Lord Strathclyde moved Amendment No.20:
Leave out Clause 23.
On Question, amendment agreed to.
Clause 24 [Exclusive licences]:
Lord Strathclyde Lord Strathclyde moved Amendment No.21:
Leave out Clause 24.
On Question, amendment agreed to.
Clause 25 [Registration of transactions affecting registered trade mark]:
Lord Strathclyde Lord Strathclyde moved Amendment No.22:
Page 13, line 21, leave out ("16 or 18") and insert ("(General provisions as to rights of licensees in case of infringement) or (Exclusive licensee having rights and remedies of assignee)").
On Question, amendment agreed to.
Clause 26 [Trusts and equities]:
Lord Strathclyde Lord Strathclyde moved Amendment No.23:
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Page 14, line 4, leave out subsection (2) and insert:
("(2) Subject to the provisions of this Act, equities in respect of and other rights in relation to a registered trade mark may be enforced in like manner as in respect of or in relation to other personal or moveable property.").
The noble Lord said: My Lords, the purpose of Clause 26(1) is to make it absolutely clear that the trade marks register does not contain details of all possible rights and interests in and under a registered trade mark. Subsection (2), however, provides for such rights and interests to be enforceable in the normal manner.
Amendment No.23 is a technical amendment to clarify the wording, so that the effect of the clause in Scotland is the same as that in the rest of the United Kingdom. In order to achieve that, the former definition of the rights covered, which was contained in the expression "equities" has been enlarged, since this is a term not used in Scottish law. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendments Nos.24 to 27.
After Clause 27, insert the following new clause:
Licensing of registered trade mark
(".—(1) A licence to use a registered trade mark may be general or limited.
A limited licence may, in particular, apply—

(a) in relation to some but not all of the goods or services for which the trade mark is registered, or

(b) in relation to use of the trade mark in a particular manner or a particular locality.

(2) A licence is not effective unless it is in writing signed by or on behalf of the grantor.
Except in Scotland, this requirement may be satisfied in a case where the grantor is a body corporate by the affixing of its seal.
(3) Unless the licence provides otherwise, it is binding on a successor in title to the grantor's interest.
References in this Act to doing anything with, or without, the consent of the proprietor of a registered trade mark shall be construed accordingly.
(4) Where the licence so provides, a sub-licence may be granted by the licensee; and references in this Act to a licence or licensee include a sub-licence or sub-licensee.").

After Clause 27, insert the following new clause:
Exclusive licences
(".—(1) In this Act an "exclusive licence" means a licence (whether general or limited) authorising the licensee to the exclusion of all other persons, including the person granting the licence, to use a registered trade mark in the manner authorised by the licence.
The expression "exclusive licensee" shall be construed accordingly.
(2) An exclusive licensee has the same rights against a successor in title who is bound by the licence as he has against the person granting the licence.").
After Clause 27, insert the following new clause:
General provisions as to rights of licensees in case of infringement
(".—(1) This section has effect with respect to the rights of a licensee in relation to infringement of a registered trade mark. The provisions of this section do not apply where or to the extent that, by virtue of section (Exclusive licensee having rights and remedies of assignee) (1) below (exclusive licensee having rights and remedies of assignee), the licensee has a right to bring proceedings in his own name.
(2) A licensee is entitled, unless his licence, or any licence through which his interest is derived, provides otherwise, to call on the proprietor of the registered trade mark to take infringement proceedings in respect of any matter which affects his interests.
(3) If the proprietor—

(a) refuses to do so, or

(b) fails to do so within two months after being called upon, the licensee may bring the proceedings in his own name as if he were the proprietor.

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(4) Where infringement proceedings are brought by a licensee by virtue of this section, the licensee may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant.
This does not affect the granting of interlocutory relief on an application by a licensee alone.
(5) A proprietor who is added as a defendant as mentioned in subsection (4) shall not be made liable for any costs in the action unless he takes pan in the proceedings.
(6) In infringement proceedings brought by the proprietor of a registered trade mark my loss suffered or likely to be suffered by licensees shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of licensees.
(7) The provisions of this section apply in relation to an exclusive licensee if or to the extent that he has, by virtue of section (Exclusive licensee having rights and remedies of assignee) (1), the rights and remedies of an assignee as if he were the proprietor of the registered trade mark.").
After Clause 27, insert the following new clause:
Exclusive licensee having rights and remedies of assignee
(".—(1) An exclusive licence may provide that the licensee shall have, to such extent as may be provided by the licence, the same rights and remedies in respect of matters occurring after the grant of the licence as, if the licence had been an assignment.
Where or to the extent that such provision is made, the licensee is entitled, subject to the provisions of the licence and to the following provisions of this section, to bring infringement proceedings, against any person other than the proprietor, in his own name.
(2) Any such rights and remedies of an exclusive licensee are concurrent with those of the proprietor of the registered trade mark; and references to the proprietor of a registered trade mark in the provisions of this Act relating to infringement shall be construed accordingly
(3) In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the proprietor of the registered trade mark.
(4) Where proceedings for infringement of a registered trade mark brought by the proprietor or an exclusive licensee relate wholly or partly to an infringement in respect of which they have concurrent rights of action, the proprietor or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as a plaintiff or added as a defendant.
This does not affect the granting of interlocutory relief on an application by a proprietor or exclusive licensee alone.
(5) A person who is added as a defendant as mentioned in subsection (4) shall not be made liable for any costs in the action unless he takes part in the proceedings.
(6) Where an action for infringement of a registered trade mark is brought which relates wholly or partly to an infringement in respect of which the proprietor and an exclusive licensee have or had concurrent rights of action—

(a) the court shall in assessing damages take into account—

(i) the terms of the licence, and

(ii) any pecuniary remedy already awarded or available to either of them in respect of the infringement;

(b) no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and

(c) the court shill if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them.

The provisions of this subsection apply whether or not the proprietor and the exclusive licensee are both parties to the action; and if they are not both parties the court may give such directions as it thinks fit as to the extent to which the party to the proceedings is to hold the proceeds of any pecuniary remedy on behalf of the other.
(7) The proprietor of a registered trade mark shall notify any exclusive licensee who has a concurrent right of action before applying for an order under section 14 (order for delivery up); and the court may on the application of the licensee make such order under that section as it thinks fit having regard to the terms of the licence.
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(8) The provisions of subsections (4) to (7) above have effect subject to any agreement to the contrary between the exclusive licensee and the proprietor.").
The noble Lord said: My Lords, I beg to move Amendments Nos.24 to 27 en bloc.
On Question, amendments agreed to.
Schedule 1 [Collective marks]:
Lord Strathclyde Lord Strathclyde moved Amendment No.28:
Page 46, line 41, leave out paragraph 12 and insert:
("12.—(1) The following provisions (which correspond to the provisions of section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) have effect as regards the rights of an authorised user in relation to infringement of a registered collective mark.

(2) An authorised user is entitled, subject to any agreement to the contrary between him and the proprietor, to call on the proprietor to take infringement proceedings in respect of any matter which affects his interests.

(3) If the proprietor—

(a) refuses to do so, or

(b) fails to do so within two months after being called upon, the authorised user may bring the proceedings in his own name as if he were the proprietor.

(4) Where infringement proceedings are brought by virtue of this paragraph, the authorised user may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by an authorised user alone.

(5) A proprietor who is added as a defendant as mentioned in sub-paragraph (4) shall not be made liable for any costs in the action unless he takes part in the proceedings.

(6) In infringement proceedings brought by the proprietor of a registered collective mark any loss suffered or likely to be suffered by authorised users shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of such users.").

On Question, amendment agreed to.
Schedule 2 [Certification marks]:
Lord Strathclyde Lord Strathclyde moved Amendment No.29:
Page 49, line 35, leave out paragraph 14 and insert:
("14.—(1) The following provisions (which correspond to the provisions of section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) have effect as regards the rights of an authorised user in relation to infringement of a registered certification mark.

(2) An authorised user is entitled, subject to any agreement to the contrary between him and the proprietor, to call on the proprietor to take infringement proceedings in respect of any matter which affects his interests.

(3) If the proprietor—

(a) refuses to do so, or

(b) fails to do so within two months after being called upon, the authorised user may bring the proceedings in his own name as if he were the proprietor.

(4) Where infringement proceedings are brought by virtue of this paragraph, the authorised user may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by an authorised user alone.

(5) A proprietor who is added as a defendant as mentioned in sub-paragraph (4) shall not be made liable for any costs in the action unless he takes part in the proceedings.

(6) In infringement proceedings brought by the proprietor of a registered certification mark any loss suffered or likely to be suffered by authorised users shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of such users.").

On Question, amendment agreed to.
Clause 47 [Meaning of "Community trade mark" and other EEC expressions]:
Lord Strathclyde Lord Strathclyde: moved Amendments Nos.30 to 32:
Page 21, line 23, at end insert ("and").
Page 21, line 24, leave out ("the Council Regulation (EEC)") and insert ("Council Regulation (EC) No.40/94 of 20th December 1993").
Page 21, leave out lines 26 to 31.
The noble Lord said: My Lords, I beg to move these amendments en bloc.
On Question, amendments agreed to.
[Clause 52 [Protection of well-known trade marks: Article 6bis):
Lord Strathclyde Lord Strathclyde moved Amendment No.33:
Page 23, line 44, at end insert:
("(3) Nothing in subsection (2) affects the continuation of any bona fide use of a trade mark begun before the commencement of this section.").
The noble Lord said: My Lords, this amendment provides relief for any mark which is currently being used in a bona fide manner but might otherwise be subject to action from the owner of a well known mark under the provisions of the clause as it stands.
The Bill will fully honour our obligations under Article 6bis of the Paris Convention but it is only fair and sensible to safeguard the interests of proprietors of marks which are in use now, but which would have been at risk once the Bill is enacted. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No.34:
After Clause 56, insert the following new clause:
("Unfair competition: Article 10 bis.
.—(1) Where any goods of the proprietor of a trade mark bearing the trade mark are associated in the course of trade with any label, packaging or container having an overall appearance of a distinctive character it shall be an act of unfair competition actionable as such for any person in the course of trade to supply or offer to supply any such goods with or in any label packaging or container which is similar in overall appearance, whether by reason of name, shape, colour, design or any combination thereof or otherwise, to the overall appearance of that of the proprietor's goods if the use of the label, packaging or container either

(a) is likely to cause confusion, which includes a likelihood of association with the proprietor or the proprietor's goods; or

(b) without due cause takes unfair advantage of, or detrimental to, the distinctive character or repute of the appearance of the proprietor's goods or trade mark.

(2) In an action for unfair competition under this section all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff (in Scotland, pursuer) as is available in respect of infringement of a registered trade mark or other property right.").
The noble Lord said: My Lords, I must declare one interest and disclaim another. The interest that I must declare, as I did in Committee, is that I am a consultant to a major British food and drinks manufacturer, which, in company with a large number of other consumer product manufacturers, would like to see an amendment along these lines adopted in the Bill.
The interest that I must disclaim is that, although I am a consultant also to the CBI, the CBI in fact has no single view on this subject. For reasons which noble Lords will be able to understand, the amendment is opposed by other commercial interests represented in the CBI.
The amendment addresses the growing problem of product look-alikes; that is to say, the practice of major retailers offering for sale their own-brand products in packaging that is deliberately designed to resemble that
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of well known brand leaders thereby taking unfair advantage of those brands' reputations, reputations which have been acquired and maintained at great expense by the manufacturers.
I seek to take account in the amendment of objections raised in Committee to my previous amendment on this subject. It was argued forcefully, particularly by my noble friend the Minister, that the practice to which I refer was not or should not be trade mark infringement, where our room for manoeuvre is strictly circumscribed by the EC directive, but unfair competition, and that any remedy lay in a new law in that area.
A little further research has shown that the Bill gives us that opportunity. The Long Title of the Bill indicates that one of the purposes of the Bill is to give effect to certain provisions of the Paris Convention for the Protection of Industrial Property, as revised and amended. Indeed, Clauses 52 to 56 of the Bill do exactly that, the articles of the convention on which those clauses of the Bill are based appearing again in the margins of the Bill.
Amendment No.34 is based on Article 10 bis of the Paris Convention, the opening paragraphs of which read,
"The countries of the Union are bound to assure the nationals of such countries effective protection against unfair competition.
"Any act of competition, contrary to honest practices in industrial or commercial matters, constitutes an act of unfair competition".
And paragraph 3 reads,
"The following in particular shall be prohibited:
(1) All acts of such a nature as to create confusion by any means whatever with the establishment, the goods or the industrial or commercial activities of a competitor".
It seems to me quite clear from that, first, that we in this country are bound by the Convention to have effective laws against unfair competition; and, secondly, all such laws should cover the problem of look-alikes, to which the amendment is directed. Many would argue— indeed many have argued— that we in this country have long been in breach of that article of the Treaty. We have no competition law as such in this country. Actions in common law for passing off, about which I shall say more in a moment, are notoriously difficult to bring and do not provide an effective remedy.
By adopting the amendment we would be further fulfilling our obligations under the Paris Convention, as the Government have properly sought to do in other areas. There is nothing in the EC directive on trade marks which should prevent or discourage us from taking action in that way. The EC directive states that it, itself, must conform with the Paris Convention. It also expressly recognises the right of member states to provide protection against unfair competition. So I hope that my noble friend the Minister will concede at least that an amendment along these lines is not out of place in the Bill.
I am sure that many noble Lords will be familiar with the practices which I have in mind. Over a wide range of products— from toothpaste to deodorant, from instant coffee to bars of chocolate, from shampoos to wines to baked beans— supermarkets have developed the practice of putting on their shelves their own products packaged in a way that is designed to resemble the

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overall appearance of leading brands which, as a result of the reputation built up and maintained for them by their manufacturers, are familiar to every shopper. They do that by combining in one way or another features of the packaging of the leading brands; combinations of colours; shape of container; the position or the shape of the label or the logo. In any or all of those or similar ways the retailers aim to give a general impression of a leading brand. They mislead not by using a trade mark, but by association. The shopper is likely to think that he is buying a leading brand specially packaged for the retailer by the manufacturer. In fact, that is rarely the case. No one is objecting to retailers marketing their own products. But what I suggest they should not do is mark et them in the guise of some other brand.
Currently there is no adequate remedy in British law for that kind of unfair trading. A leading firm of trade mark lawyers to whom I spoke estimates that in many cases the chances of a manufacturer securing an injunction to prevent the sale of a look-alike product may be no higher than 40 to 50 per cent.—not much of an encouragement to launch what may be an expensive action. From the way that judges have tended to interpret the law of passing off, manufacturers are required to prove misrepresentation. And the best, if not the only way, to prove misrepresentation is to prove that shoppers have in fact been misled. Not surprisingly, manufacturers have found the necessary evidence hard to collect. Supermarkets will commonly evict from their premises those who are discovered attempting to collect such evidence. Consumer surveys, when shoppers are stopped in the street as part of a general survey and presented with look-alikes and asked whether they would be misled by them, have not proved satisfactory as evidence. They are hypothetical and can be depicted as being unrepresentative. In addition, the commercial power of supermarkets is such that manufacturers are loath to seek injunctions and risk incurring retaliation against their products.
It was argued that the Bill will provide a remedy; that manufacturers in future will be able to register their packaging as a trade mark. But that is highly questionable. To be registrable a trade mark must be distinctive and we cannot be sure how much of the packaging the registrar will accept as distinctive. In any case, manufacturers change the packaging of their products frequently, perhaps every six months, as fashions change. According to the registrar, it typically takes 12 to 18 months to register a trade mark. So it seems most unlikely that manufacturers will be able to register packaging fast enough to keep up with the changing requirements of the market place.
Beyond that, one only needs to contemplate the vast quantity of trade mark registration that would be required, if all possible forms of packaging that a manufacturer might wish to use were to be registered, to realise that in terms of cost or the bureaucracy involved, such a course is neither possible nor desirable. So we cannot expect the Bill, as it is, to provide a remedy for the problem.
In other member states of the European Union there are today legal remedies. In France an action can be brought for parasitic trading in a situation like this;
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British manufacturers have successfully done so in French courts against French manufacturers. Benelux countries and Germany also have strong laws against unfair competition which are used regularly in such cases. Last year Proctor & Gamble, through action in a Belgian court, managed to secure, within one week, the withdrawal from the market of a product packaged similarly to one of their own.
Only in this country is there no effective remedy. One of the purposes of the Bill is to harmonise the trade mark laws of Europe. It would be strange, surely, if we failed to take this opportunity to bring our laws closer to those of Germany and the Benelux countries where strong laws against unfair competition are to be found. My noble friend the Minister said in Committee that the Government,
"are sympathetic to the problems that this amendment seeks to remedy".—[Official Report, Public Bill Committee,18/1/94; col.32.]
I hope that that sympathy will extend to accepting the amendment that we are now debating. I beg to move.
4.45 p.m.
Baroness Hamwee: My Lords, the noble Lord, Lord Reay, fully explained the reasoning behind the amendment so I shall not take up the time of the House by repeating points which he made, but which I should like to record as heartily endorsing.
I feel quite strongly about this issue because I realise how, in the real world, when faced with a choice of products, one can be so affected by the packaging. Decisions made by shoppers are made within split seconds and the thought processes are probably quite complex— perhaps more complex than any of us realise at the time. It has been after the event, on more than one occasion, that I realised that I myself, faced with a choice of product, made assumptions in relation to the contents of the packaging which were quite unjustified. I assumed that because one package looked like another, the contents must be the same, perhaps made by the same manufacturer. I doubt that I am the only shopper who reacts in that way.
It is therefore a serious issue which needs properly addressing. I believe that a way has been found in the amendment to address it. I hope that it will receive understanding and support.
Baroness Hooper: My Lords, at the Committee stage of the Bill I was concerned that consumers' choice should not be restricted or affected as a result of provisions such as those contained in the amendment. On considering the matter further I realised that there was considerable anxiety among manufacturers who are affected by this type of unfair competition. As my noble friend Lord Reay said, the tort of passing off does not adequately meet the problem which is compounded by the virtual impossibility of obtaining evidence of confusion between products. Understandably, retailers do not permit surveys of this kind in or close to their premises. One can ascertain the views of manufacturers, but it is a little difficult to know exactly where consumers stand on the matter.
On balance, I feel that I can support my noble friend's amendment as it will make it easier to tackle the

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problem. In spite of that support in principle some details of the amendment could be tidied up. The words in subsection (1) (b) "without due cause" should be removed because they would in my view make it rather a dead letter. Having said that, I hope also that my noble friend will listen to what my noble friend the Minister has to say today, that he will not press the amendment to a Division and that the issue will be considered at future stages either here in your Lordships' House or indeed in another place.
Lord Jenkin of Roding: My Lords, I did not take part in the Committee stage of the Bill or indeed in any of the earlier stages, but I read the debate on the similar amendment moved by my noble friend Lord Reay in Committee. Like the noble Baroness, Lady Hamwee, I do not want to repeat all the arguments that he put, to my mind, so forcefully and compellingly today.
My noble friend advanced an argument in Committee which struck me as having some substance. He said that this is not part of trade marks law; it is effectively unfair competition. His argument was that the Bill is about trade marks and is not about unfair competition. Many years ago, when I was a pupil at the Bar, I was involved in one or two passing off cases and so I am not totally unfamiliar with the nature of that form of unfair competition. Indeed, after that, I worked for the Distillers Company, and some of the imitation bottles which the company's competitors produced— mainly, I have to say, overseas and not in this country— formed a remarkable museum in the trade marks department cupboard.
I well remember a bottle with a label that looked exactly like White Horse whisky until one looked at it very closely. It was in fact a white elephant. It will be said,"No one would mistake a horse for an elephant", but imagine it upside down on a bracket at the back of a bar and it might be quite difficult to see that it was an elephant and not a horse. There were many other examples; huge labels "Made in Scotland". It turned out that what was made in Scotland was the label, not the whisky. One is aware of the extent to which people will sometimes go in order to cash in on the reputation of a product.
The look-alike is a very good example. I have been shown a number of products. Like the noble Baroness, Lady Hamwee, I occasionally have to do the shopping in the supermarket. I find the speed with which one has to go to avoid being run over a very alarming process. One example I have been given is of Nescafe and a virtually identical jar of Sainsbury's full roast. I cannot believe for a moment that if my eye was caught by the Sainsbury's full roast when I had been sent out to buy a jar of instant coffee I would not immediately pick it off the shelf and assume that it was the same thing. Indeed, I have heard my wife complain that when she has got home from the supermarket she has found that what she has taken off the shelf was not what she thought she was buying because it was a look-alike.
There is another example; Mr. Kipling cakes, eight French Fancies; underneath there is Safeway's eight Fondant Fancies. Why does Safeway choose to market
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them in a box of identical colour? It does so because it hopes that it may be able to cash in on the benefit of Mr. Kipling's advertisements. Another example is of le Piat D'Or and an almost identical bottle Cuvee Prestige. I am all for competition— I agree entirely with what has been said about that— but I do not agree with unfair competition. I think that this is unfair competition.
It has been argued that this is not a trade mark matter, but is essentially one of unfair competition. My noble friend Lord Reay, in referring to Article 10 of the Paris Convention, has blown that argument out of the water. It is within the Long Title. It is open to this country to introduce a provision to protect against unfair competition. There is nothing to prevent it being done in this Bill. It may well be that my noble friend will require time to look at the matter again. It may well be that the question of my noble friend Lady Hooper about subsection (1) (b) should be looked at. It may well be that we shall come back to this on another occasion. However, I think it would be very sad if the House did not now take advantage of the initiative of my noble friend Lord Reay and others who have been pursuing the matter and insert into the Bill a provision to protect manufacturers against the unfair competition of the look-alike product. It has become something of a menace in the supermarkets. I am all for them having their own brands but they should not make them look like the competition brands in order to try to fool the customer.
Lord Monson: My Lords, I think it is time that a discordant note was struck. What is interesting about the illustrated examples submitted by those who back the amendment, cited just now by the noble Lord, Lord Jenkin, is that in my judgment in only five out of the nine examples is there a genuinely close resemblance between the packaging and overall design of the original brand and the packaging and overall design of the competitor brand. Of those five, in only two cases are the resemblances so close as to risk deceiving a purchaser. I have to agree with the noble Lord, Lord Jenkin of Roding, about Mr. Kipling cakes. The resemblance is very close indeed.
Moreover, the sponsors have to some extent shot themselves in the foot in their zeal for what they purport to be fair play by citing as one of their examples the wine called le Piat D'Or. Those who market that wine in Britain do so under the slogan,"Les Francais adorent le Piat D'Or". Nothing more economical with the truth could be imagined. Very few self-respecting French men or French women would touch the stuff with a barge pole; so that was not the best of choices.
Finally, as the briefing reminds us, the noble Baroness, Lady Hamwee, posed the question in Committee: when one looks at the similarity of the packaging, one asks oneself was it really necessary to choose the same colour cap, the same shape bottle or the same handle for a container. While I would agree that if taken to extremes she has a very good point where the resemblance is almost total, I would argue that if, for example, a convention were to grow up whereby all brands of ordinary instant coffee had a green cap, all brands of premium instant coffee had a gold cap and all

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brands of decaffeinated coffee had a red cap, it would be of positive benefit to consumers who at the moment are far more worried about accidentally picking up a jar of coffee packed with caffeine in place of a decaffeinated brand or the other way around, instead of the actual brand which they purchase.
Viscount Caldecote: My Lords, I support the amendment. There is no doubt that there is a real problem of look-alikes. I had some small personal experience of it, first, in making and marketing simple electrical equipment where very often competitors came along and dressed up their equipment to look like the equipment that my firm was making. I have also had the unfortunate experience, as suggested by my noble friend Lord Jenkin, of being sent out by my wife to buy some instant coffee and coming home to make it only to find that I had bought the other kind of coffee simply because the two jars looked very alike. So this problem applies not only to consumer goods but to any product where the potential purchaser does not have any detailed knowledge of the product.
I submit that the practice of look-alikes is widespread. If the amendment is opposed on the ground that no misunderstandings occur, the question must be asked why competitors go to so much trouble to produce look-alikes. It is clearly unfair competition and its effect nullifies any registered trade mark which has been attained. As my noble friend Lord Reay said, the present law is inadequate provide proper protection. I support the amendment and if, as I very much hope, it is carried, perhaps my noble friend will be able to say whether the effect will also apply to look-alike imports.
5 p.m.
Lord Cawley: My Lords, when I practised in this branch of the law (although I ceased to do so 20 years ago) we always found that the action for "passing off" in the case of blatant look-alikes was quite satisfactory. You issued a writ and moved for an interlocutory injunction. You supported that by affidavits, which did not need to be very extensive, and the judge then took a prima facie view whether it was "passing off". Only on very rare occasions did I find the defendant or the plaintiff challenge the judge's interlocutory decision. Certainly in the cases of elephants and white horses, the judge would certainly find a prima facie case. The procedure was very satisfactory, so I do not feel that this amendment is necessary.
Lord Vivian: My Lords, I rise to support this amendment, as I believe it could redress the unfair practice of marketing look-alike products, with packaging and labelling deliberately designed to resemble the overall appearance of existing branded products. The deliberate marketing of look-alike brands takes unfair advantage of consumers and manufacturers of well-known branded products. For instance, when I have been in a hurry, I have been confused and have bought a look-alike product, as have many of your Lordships, in mistake for the branded product it resembles. On occasions I have believed, and I think many consumers also believe, that the overall appearance of a look-alike product implies that the
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product inside the package, albeit sold under a different name, is actually made by the manufacturer of the branded product.
I believe it to be utterly wrong, and I would go so far as to say that it is very sharp practice, that retailers should save themselves considerable investment of time, expertise, and large sums of money which have been expended by the manufacturing firm in developing a package design which is successful in the market-place. I consider that another company which benefits from this investment by marketing a look-alike obtains an unfair advantage, and that represents unfair competition. Surely this is parasitic behaviour, unacceptable to all of us and morally wrong; and it should be prevented. I strongly support this proposed amendment, as I believe it will prevent this parasitic behaviour and it will prevent the consumer being deceived. It may also accord with regulations that already exist in Europe.
Lord Lyell: My Lords, I should like to add my support to the amendment of my noble friend Lord Reay. Like the noble Lord, Lord Jenkin, and others, I try to do my own shopping in a supermarket but I do read what is on the label as well as checking the price. However, sometimes it is only when one consumes the contents that one discovers the proof one way or the other. Examples have been quoted by my noble friend Lord Jenkin— perhaps I have had more luck than he has, whether with jars of coffee or not— but colour is among many of the similarities that I have found. For those of your Lordships who may be colour blind— I am not myself, and so colour might affect me in a different way from someone who may be entirely colour blind— colour might be one aspect. But where there is a clearly distinct design for a particular package, then my noble friend's amendment should have particular force.
In packaging, advertising and marketing, there is one other aspect which is relevant to the Bill and this amendment: that is the use of distinctive logos on packaging. If I may digress for 30 seconds, it will not have escaped your Lordships' notice that during these past three or four days we have seen on our televisions a great deal of sport from the Olympics slopes. I think it was my noble friend Lord Reay who mentioned that various designs, trade marks and signs can be changed once every six months. But when one looks at the types of skis, both cross-country and alpine, used by various sportsmen, one finds that those logos appear on particular brands of skis. They are quite identifiable in black and white or whatever image, and they have been identifiable for 30 years. That gives a degree of distinctiveness such as is mentioned in my noble friend's amendment. It is in that respect that the amendment has considerable force. It has merit and I support my noble friend's amendment.
Lord Finsberg: My Lords, I also support this amendment, not merely as someone who occasionally helps with the shopping but because it is perfectly true that one goes rushing through a supermarket and picks things up quickly so that, as has already been said, one is in danger of having an errant trolley damage one's ankles. However, if you stop and look at the products,

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then there is less chance of being misled. Most people do not have the time to do that. Many people, like me, would have to put their glasses on to look at the very small print, and that is not why people go into shops. Therefore I strongly support this amendment.
I take issue with the noble Lord, Lord Cawley, who made the point about interlocutory injunctions and said that he thought the amendment was not necessary. He cannot guarantee that in every case the judge would take the right decision. Therefore I would rather have belt and braces and have this clause in the Bill so as to be safe. I wonder whether I am right in suspecting that the Minister has in his brief an instruction saying,"resist this amendment". If there is some pressure and new ideas are put forward by noble Lords, as my noble friend Lord Reay has done, I hope he will say that he will look at the matter again. His brief might say that the language is wrong and the parliamentary draftsmen do not approve of it; but I hope he will not use that excuse merely to say that we must not accept this amendment. I do not think he would; but that is occasionally the refuge of many ministers. Indeed, I have used it myself. I hope that on this occasion my noble friend will not do SO.
The Earl of Harrowby: My Lords, I too should like very briefly to give my support to my noble friend Lord Reay. I shall not give a whole lot of reasons because they have all been mentioned, and I have my own axes to grind later, but I have just one point to make about the remark of the noble Lord, Lord Cawley. The law may be adequate at the moment; the fact remains that the abuse is there and I therefore suggest that the amendment of the noble Lord, Lord Reay, deserves support.
Lord Strathclyde: My Lords, I am very glad that we have spent a certain amount of time discussing this issue. It comes as no surprise to me that we have done so because we also did that in Committee. I am not sure that we are much further down the road towards finding a solution to the problem; but I must say I am incredibly impressed by the number of my noble friends who go shopping on a regular basis. I am rather depressed that quite so many of them find themselves so confused and often find that they have returned home with the wrong product. In the Strathclyde household, if I return with the wrong product, I am sent back to get it changed.
My noble friend Lord Reay makes a very good case for what he is trying to do. In Committee my noble friend sought to demonstrate that the problem was one of trade mark infringement— which it plainly was not. I note the change of approach here. I also note that the ultimate objective is the same: to enable trade mark owners to take action against those who, while not using their trade mark, are using labels, and so on, which are similar in colour and design to those which they use on their own products. Despite the fact that it came up in Committee, this is basically an entirely new issue. It was never raised during the extensive consultation which took place over a period of five years on the White Paper and the draft Bill. It was not in fact mentioned to us at all until last December. The Government would find it
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difficult to support the introduction of a new cause of action of unfair competition unless there was a clear majority in favour of it.
My noble friend Lord Reay started by considering the directive and the Paris Convention. It is true that the directive
"does not exclude the application to trade marks of the application of law of the Member States other than trade mark law, such as the provisions relating to unfair competition".
That is in the sixth recital. But tying the right to sue to the existence of a trade mark runs into problems vis à vis the directive, which aims to ensure (under the ninth recital) that registered trade marks have the same protection under the legal systems of all member states. However, even if the directive does not prevent us from introducing unfair competition as a general cause of action (should there be a groundswell of opinion in favour of it) I do not think that we should necessarily do this under this Bill since it is all about trade marks. Therefore, I have difficulty in conceding the point to my noble friend.
Although we do not have an unfair competition law, we do have a number of remedies which deal with specific instances of unfair trading practices. Some have been mentioned, particularly by my noble friend Lord Jenkin of Roding. Passing off, for instance, deals with the selling of goods which cause confusion with those of another manufacturer. Consumer protection laws, such as the Trade Descriptions Act, also play a part as does the action for trade libel when someone disparages another's product. The Government therefore believe that they meet their obligations under the Paris Convention in a number of different ways rather than by dealing with this in the same way as other countries.
I turn now to the more practical aspects of the amendment itself. It aims to prevent someone from using packaging, or a label, or a container with an overall appearance which resembles packaging which is associated with a trade mark belonging to a competitor. Under this amendment, the trade mark does not even have to be registered; it could in fact be an unregistered mark of which the trader caught by this new offence is totally unaware. It means that if I, as a trader, want to put shampoo in a square bottle with a green and yellow dotted label, either using my own trade mark or with no trade mark on it at all, I can only do so if I am sure that someone else is not already selling shampoo in just such a bottle, but under their own trade mark. That certainly seems draconian.
Although I do not want to use the defence of saying that this is a badly drafted amendment— my noble friend Lord Finsberg accused me of possibly using this defence— (it is badly drafted but that is an entirely different matter), I notice that the new clause would permit the look-alike to sue the brand leader. I wonder whether that was really my noble friend's intention.
My noble friend referred to using current remedies under the law, and said that "passing off", for instance, is a difficult remedy to work in practice. That may well be true. My noble friend also said that manufacturers change their packaging on a very regular basis— sometimes every six months— in which case I am not sure that the problem exists. I thought that the words of

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the noble Lord, Lord Monson, speaking from the Cross Benches, were compelling: that it is a positive aid to the consumer to know that certain types of product are packaged in certain general types of packaging.
Perhaps the most compelling speech— and one of the shortest— was that of my noble friend Lord Cawley who has a great deal of experience in these matters. He said that he did not think that the new clause was necessary.
In Committee, the new clause received relatively little support. I notice that today it has received rather more support in e House. There are two sides to this issue and before taking any action, the Government must seek the view of industry generally, and carefully consider what is being proposed. Even then, if there is general support from industry, I cannot promise that we shall be able to solve the problem in this Bill.
My noble friend has made a case that needs to be answered by the Government. I have sought to do so during this short debate. I am happy to consider his point further. I have grave difficulties and some concerns about his amendment, but I hope that, in the light of what I have said, he will not press his amendment. Perhaps it is something to which we can return at a later stage.
5.15 p.m.
Lord Reay: My Lords, we have had a lively debate and 1 am extremely grateful for the strong support that I have received— almost exclusively from these Conservative Benches. We have also heard some interesting evidence about shopper confusion, which is hard to come by. Some noble Lords may find themselves being approached by firms which are considering collecting evidence when they need to press for an injunction.
I listened carefully to my noble friend's reply and it seems that he has left the door open. He used the phrase,"before taking any action". I take that to mean that he does not consider that action has yet been taken. He said that he is happy to consider the matter further. In those circumstances, I think that it would be wrong for me to press the matter to a Division this afternoon. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 74 [Fees]:
The Earl of Harrowby The Earl of Harrowby moved Amendment No.35:
Page 30, line 40, at end insert ("in the recognised form").
The noble Earl said: My Lords, your Lordships will see some perfectly clear English in the first two lines—that is, subsection (1)— of Clause 74. Referring to fees, the second line states:
"other matters under this Act such fees as may be prescribed".
That, to me, is perfectly clear. It is perfectly clear that we are providing an open cheque. The wording authorises somebody to charge fees, but does not put any limitation upon those fees.
I am aware that there is a custom in legal circles, in the Civil Service and probably among politicians whereby the word "prescribed" has a meaning which is quite different from its ordinary meaning. It means "prescribed in accordance with this, that or the other". I submit that an Act of Parliament must be readable and understandable by people such as me, by the general
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public, by anybody. It must be interpretable and its wording must mean what those words mean ordinarily in English. The word "prescribed" is a perfectly understandable word.
I do not believe that it is reasonable or adequate to leave in an Act of Parliament an open-ended cheque for somebody— and the clause does not define who although, in effect, it undoubtedly means the head of the Patent Office at the moment, but that may not always be the case because one can easily envisage the trade marks section being made into a quango. The word "prescribed" contains no limitation as to the person to whom that authority is given. Whatever the conventions in the law or within the Civil Service, I do not believe that it is acceptable to leave the provisions open to an interpretation which none of us may want.
Lord Strathclyde: My Lords, my noble friend is concerned that the Bill appears to give the Patent Office licence to charge fees without restriction, or supervision as to their level.
As an executive agency of the Department of Trade and Industry, the level of fees is set by Ministers based on recommendations from the Patent Office and after consultation with bodies representing users of the system and with the Patent Office Steering 13oard. As an executive agency, it is required to set its fees at a level both to cover the costs of the operation and to make a return on capital employed. The rate of return is set by the Treasury and the DTI and is currently 6 per cent. per annum.
Against that background, Clause 74(1) requires that the fees to be charged be "prescribed". Under Clause 73(l) (b), anything to be prescribed by the Bill is to be in rules made by the Secretary of State. Clause 73(3) requires that these rules will be in the form of a statutory instrument and subject to a negative resolution by either House. I believe, therefore, that the fees charged by the Patent Office are subject to a satisfactory framework of controls and that public interests are fully safeguarded without the need for any further qualification to the clause.
I hope that I have clarified the point and that my noble friend is reassured not only by what the word "prescribed" means but what our intention is and what the Bill lays out in Clause 73.
The Earl of Harrowby: My Lords, in the light of what my noble friend said, I beg leave to withdraw the amendment. I believe that that is wrong, but nevertheless I withdraw it.
Amendment, by leave, withdrawn.
Clause 77 [Recognition of agents]:
Lord Strathclyde Lord Strathclyde moved Amendment No.36:
Page 31, line 18, at beginning insert ("Except as otherwise provided by rules,").
The noble Lord said: My Lords, in moving Amendment No.36 I shall speak also the Amendment No.37. They concern Clause 77, which relates to the recognition of agents.
The present practice is that the Patent Office assumes that any agent filing and signing papers on behalf of an applicant is authorised to act and will process those papers without further ado. If, however, the applicant

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changes his agent during the processing of an application the new agent files a form to say that he has taken over the handling of the case. Again, this is a very simple matter and the form in question is signed by the agent. These amendments will ensure that applicants can continue to benefit from the existing simple procedure when authorising agents to act for them. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.37:
Page 31, line 20, leave out from ("done") to end of line 21 and insert ("by or to an agent authorised by that person orally or in writing.").
On Question, amendment agreed to.
Clause 83 [Infringing goods, material or articles may be treated as prohibited goods]:
Lord Strathclyde Lord Strathclyde moved Amendment No.38:
Page 34, line 13, leave out from beginning to (", and") in line 14 and insert:

("(i) from outside the European Economic Area, or

(ii) from within that Area but not having been entered for free circulation,").

On Question, amendment agreed to.
Clause 85 [Power of Commissioners of Customs and Excise to disclose information]:
Lord Strathclyde Lord Strathclyde moved Amendment No.39:
Page 35, line 14, leave out from ("below") to second ("or") and insert ("(unauthorised use of trade mark, & c. in relation to goods)").
On Question, amendment agreed to.
Clause 86 [Fraudulent use of trade mark, & c. in relation to goods]:
The Deputy Chairman of Committees (Lord Aberdare): My Lords, I must point out that if Amendment No.43 is agreed to I cannot call Amendment No.44.
Lord Strathclyde Lord Strathclyde moved Amendments Nos.40 to 43:
Page 35, line 17, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor").
Page 35, line 25, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor").
Page 35, line 37, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor").
Page 36, line 1, leave out subsection (4).
On Question, amendments agreed to.
[Amendment No.44. not moved.]
Lord Monson Lord Monson moved Amendment No.45:
Page 36, line 19, leave out ("ten") and insert ("five").
The noble Lord said: My Lords, the purpose of the amendment is to reduce the maximum sentence of imprisonment upon conviction on indictment from 10 to five years. I should have preferred an even lower maximum but calculated that that would have no chance of acceptance.
It is common knowledge that Britain has the highest prison population in Europe. Do we really want to make things worse? The offence in question, though not necessarily trivial, causes no physical injury to any individual, causes no mental anguish, does not
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undermine the security of the state and, I should guess, causes no serious financial harm to any corporate body. It causes pinpricks, yes, but serious harm, no.
Although technically it is a criminal offence, I suggest that in essence it is almost a civil offence and should be punished accordingly by a fine coupled with damages; in serious cases, a massive fine coupled with massive damages. If thought necessary, that could be backed up by a couple of hundred hours community service in serious cases or a short, sharp shock of six months or so imprisonment. I submit that a sentence of three, five, seven or 10 years is totally inappropriate and unnecessary, apart from it being so very expensive to taxpayers. Although it is not entirely relevant, I wonder how many of our European Community partners provide such a high maximum sentence for this offence. Perhaps in reply the Minister will be able to tell us. I beg to move.
Lord Strathclyde: My Lords, the 10 year maximum term of imprisonment for counterfeiting offences is what is prescribed under the present law. It is, of course, a heavy penalty and I would expect sentences approaching it to be imposed only very rarely; for example, where the counterfeit goods are actually dangerous or there are other aggravating circumstances. It is evidence of the seriousness with which the Government regard counterfeiting. Reducing this penalty in the way suggested by the noble Lord could send the wrong signals not just to counterfeiters but also to the enforcement authorities and the courts.
I listened carefully to the noble Lord, Lord Monson, and recognise his anxieties. However, I believe that as regards counterfeiting, which is so prevalent and such a problem in this country, we should not seek to lessen the offence in the way which the noble Lord described. I feel strongly about the matter and therefore I ask the noble Lord to withdraw the amendment, having heard what I have said.
Lord Monson: My Lords, I am grateful to the Minister. I confess that I had not realised that the 10 year maximum sentence was already in existence for similar offences. I was glad to hear him say that that term would be imposed only if there were other aggravating features. It would be deplorable if that sentence were imposed in any other circumstances. With that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 87 [Delivery up of offending goods, material or articles]:
Lord Strathclyde Lord Strathclyde moved Amendment No.46:
Page 36, line 21, leave out ("fraudulent use of trade mark, & c.") and insert ("unauthorised use of trade mark, & c. in relation to goods").
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.47:
Page 36, line 23, leave out ("infringing").
The noble Lord said: My Lords, in moving Amendment No.47 I shall speak also to Amendment No.48. These amendments follow from the changes that were made in Committee to Clause 86.

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As introduced, Clause 86 made the scope of the criminal offence of trade mark counterfeiting as broad as the civil wrong of trade mark infringement. Clause 86 was criticised as being too broad in scope. Accordingly, the clause was amended in Committee so that it catches the unauthorised use of a trade mark only where the mark used is identical to or likely to be mistaken for a registered trade mark and is either used in connection with goods for which the mark is registered or, where it is used on other goods, takes unfair advantage of the mark's reputation. This is narrower than the definition of (civil) infringement.
Clause 87, however, still provides for the delivery up of "infringing" goads, material or articles. This would allow a court to order delivery up of goods in respect of which a criminal conviction under Clause 86 could not have been obtained. That cannot be right. Amendment No.47 therefore changes paragraph (a) of subsection (1) of Clause 87 so that it bites only on goods, material or articles that are identical to those in respect of which a charge was actually brought.
Amendment No.48 replaces paragraph (b) of subsection (1) of Clause 87. In order to be caught by it, goods, material or articles must be similar to, or of the same description a;, those in respect of which the charge was brought. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No.48:
Page 36, line 25, leave out paragraph (b) and insert:
("(b) goods, material or articles of the same description as or similar to those in respect of which the offence was committed, and bearing a sign identical to, or likely to be mistaken for, the registered trade mark in relation to which the offence was committed,").
On Question, amendment agreed to.
Clause 88 [Enforcement function of local weights and measures authority]:
Lord Strathclyde Lord Strathclyde moved Amendment No.49:
Page 37, line 13, leave out ("fraudulent use of trade mark, & c.") and insert ("unauthorised use of trade mark, & c. in relation to goods").
On Question, amendment agreed to.
Clause 89 [Falsification of register, & c.]:
Lord Strathclyde Lord Strathclyde moved Amendment No.50:
Page 37, line 38, leave out second ("an") and insert ("a false").
The noble Lord said: My Lords, in moving Amendment No.50 I shall speak also to Amendments Nos 51 to 54. Amendments Nos.50 to 53 concern Clause 89, which makes it an offence knowingly to make a false entry in the register of trade mark, to make anything which falsely purports to be a copy of an entry in the register, or to produce such a copy in evidence. The amendments have the effect that it is not necessary for the prosecution to demonstrate actual knowledge; it is sufficient to show that the person had reason to believe that the entry was false.
Amendment No.54 reflects one which was tabled in Committee by the noble and learned Lord, Lord Oliver of Aylmerton. Although the noble and learned Lord's Amendment No.57R was not moved in Committee, we have taken the opportunity to consider his point.
Clause 90 deals with the offence of falsely representing a trade mark as registered. Subsection (1)
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re-enacts the same provision in the current law and I am advised that, in considering cases of false representation of a trade mark, the courts have always required proof of knowledge and intent; they have never considered it as an absolute offence.
In order to put the position beyond doubt however, Amendment No.54 inserts the condition that, where someone represents falsely that goods or services sold or supplied under a trade mark are covered by a registration, it must be shown that they knew or had reason to believe that the representation was false, in order for guilt to be established. I beg to move.
On Question, amendment agreed to.
5.30 p.m.
Lord Strathclyde Lord Strathclyde moved Amendments Nos.51 to 53:
Page 37, line 39, leave out ("which he knows to be") and insert (", knowing or having reason to believe that it is").
Page 37, line 41, after ("anything") insert ("falsely").
Page 37, line 45, after ("knowing") insert ("Or having reason to believe").
On Question, amendments agreed to.
Clause 90 [Falsely representing trade mark as registered]:
Lord Strathclyde Lord Strathclyde moved Amendment No.54:
Page 38, line 9, at end insert ("knowing or having reason to believe that the representation is false").
On Question, amendment agreed to.
Clause 97 [Offences committed by partnerships and bodies corporate]:
The Earl of Harrowby The Earl of Harrowby moved Amendment No.55:
Page 41, line 5, leave out subsection (3).
The noble Earl said: My Lords, this is almost a drafting amendment, and is not of great importance. However, I submit that subsection (3) is superfluous. It follows automatically that if a partnership is found guilty, the penalty, financial or otherwise, is imposed on the partnership's assets. Therefore, I suggest that subsection (3) serves no purpose whatever. I beg to move.
Lord Strathclyde: My Lords, I believe that my noble friend would find it helpful if I were to explain the practical purpose of Clause 97(3).
The Earl of Harrowby: My Lords, I should have mentioned that I have asked whether we may take Amendment No.55 separately from the other amendments.
Lord Strathclyde: My Lords, I received that message and I am happy to comply with my noble friend's request.
As regards Amendment No.55, it is necessary to deal with the question of how or out of what funds a fine is to be paid where a court finds that an offence has been committed by a partnership— for example, pursuant to Clause 80— rather than how it is to be paid by a partner who will be liable personally for a fine imposed upon him. That subsection states exactly the position. It is supposed to be helpful to those seeking to discover exactly what the position is. I hope that that meets with my noble friend's agreement.
The Earl of Harrowby: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Baroness Serota): My Lords, in calling Amendment No.56, I should point out that if it is agreed to, I cannot call Amendment No.57.
Lord Airedale Lord Airedale moved Amendment No.56:
Page 41, line 10, leave out from ("offence") to end of line.
The noble Lord said: My Lords, it may be for the convenience of the House to discuss Amendments Nos.56,57 and 58 together. The amendment arises from a matter which occurred to me in Committee. The Minister was kind enough to write to me about it, but I am sorry to say that I remain unrepentant.
It is no doubt essential to point out in subsection (4) that if people do certain things, they commit an offence. But is it necessary to say:
"and liable to be proceeded against and punished accordingly"?
To begin with, the subsection does not set out the position in full. One is not punished after being proceeded against; one is punished only if one is convicted. Therefore, for this matter to be correct the subsection should say:
"and liable to be proceeded against, convicted and punished".
Are those words really necessary? We complain bitterly that the statute book is already too fat. I hope that this is not setting a precedent for future Acts. It is not necessary to insert every time that people who commit offences are liable to be prosecuted, convicted and punished. We all know that.
I have consulted several lawyers about those two subsections. So far, none has explained to me that he can see any reason at all for the necessity of telling people in a clause of a Bill that those who commit offences are liable to be prosecuted and convicted. It is unnecessary. Let us leave it out. I beg to move.
The Earl of Harrowby: My Lords, I believe that subsection (4) is a mess. I am aware that the wording of subsection (4) follows that contained in other legislation. However, under no circumstances can one be guilty and then be liable to be proceeded against. It does not make sense.
I am told that if a partnership is found guilty, it means ipso facto that the partners are guilty. Therefore, we start with that premise. Therefore, they cannot be proceeded against. They are guilty and they may be punished. I suggest to your Lordships that if the Minister were to think about the wording of the amendment, upon which he may be able to improve, he would solve the dilemma in which he finds himself because he has copied other legislation. Just because the provision is contained in other legislation does not mean that it is right. As the noble Lord, Lord Airedale, pointed out, the whole subsection has become totally twisted. It is not logical and it does not make sense in English.
Lord Strathclyde: My Lords, I thank the noble Lord, Lord Airedale, and my noble friend Lord Harrowby for their words. We should recognise immediately, as was recognised by both noble Lords,
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that we are not setting a precedent. The provision appears in several existing statutes dealing with the liability of partnerships.
This clause makes it clear that where a partnership is guilty of an offence every partner is also guilty of that offence, unless he can prove his ignorance or that he sought to prevent the commission of the offence.
In the case of a body corporate where the directors or an officer of the company have consented to or connived in the commission of an offence they, too, are guilty. In each case the clause makes it clear that such individuals as are identified cannot escape liability for such offences merely because the partnership or body corporate has been convicted of such an offence, which argues for the retention of "liable" in this clause. Those individuals are therefore expressly made liable to be prosecuted for exactly the same offence as that in respect of which the partnership or body corporate is convicted.
It should be noted that the provisions make the partners or directors guilty of the offence, but a conviction will only follow upon a prosecution, and in these unusual circumstances of "double liability" for the same offence, it is important that the provision creating such criminal liability should be expressly and clearly set out at length.
Both noble Lords obviously feel extremely strongly about this matter. I am happy to look again at the cause of the problem. I shall not commit myself to bringing forward an amendment at a later stage because I am not entirely convinced that there is a problem. Perhaps in the light of my explanation, the noble Lord, Lord Airedale, will feel relieved and will withdraw the amendment.
Lord Peston: My Lords, will the noble Lord explain what it is that he is going to look at. I am advised— and noble Lords agree— that this is standard wording and there is nothing new about it. Does the noble Lord intend to look at all legislation dealing with partnerships with a view to changing it? I congratulate the noble Lord on being sympathetic to the wishes of noble Lords. I have looked at the amendment and see the logic of what the noble Earl said. Despite that, I am advised that the wording is standard, and I am not clear what the noble Lord, Lord Strathclyde, intends to do.
Lord Strathclyde: My Lords, with the leave of the House, perhaps I may clarify the matter. I believe that I outlined the correct position. However, I do not pretend to be an expert in that area of the law. It is possible that my noble friend and the noble Lord, Lord Airedale, may have found a specialist point. I am happy to consider what they said. However, I stand by the words that I used in explaining my rejection of the amendment with which I believe the noble Lord, Lord Peston, agreed.
Lord Airedale: My Lords, I am much obliged to the Minister for his answer. There are numerous examples of unnecessary words being repeated in successive statutes ad nauseam. Eventually, someone is bold enough to say,"It is really not necessary to go on repeating such words in similar statutes for the rest of time". I hope that the Minister is bold enough to consider whether he can agree that the words in the

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subsection are really unnecessary. I always urge that we should do our best to keep the statute book as concise as we can. However, with those words, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.6
[Amendments Nos.57 and 58 not moved.]
5.45 p.m.
Clause 99 [Minor definitions]:
Baroness Hooper Baroness Hooper moved Amendment No.59:
Page 41, line 40, at end insert:
(" "services" includes retail services").
The noble Baroness said: My Lords, I move the amendment in the unavoidable absence of my noble friend Lord Lucas of Chilworth. I wish to raise again the issue of having an express reference to "retail services" in the Bill. I do riot believe that they are unnecessary words in the sense put forward by the noble Lord, Lord Airedale. It is a matter that we discussed in Committee. Moreover, it has also been the subject of further consideration and correspondence with my noble friend the Minister. I wish to make clear that certainly both I arid my noble friend Lord Lucas fully recognise that a genuine attempt to find a solution to accommodate the wishes of retailers has been made, although, so far, it has been unsuccessful.
I should make clear that I do not intend to press the amendment today. However, as it is an important issue for many people, I believe it helpful to raise the matter now and to seek further clarification with a view, at the very least, to leaving the door open rather than to allow a signal to be given that there is no scope for any registration of such services.
At present there is no specific provision or definition of "retail services". That means that retailers are disadvantaged because they have no easily accessible legal right to protect the name of their shops and services from being copied. Of course, retailers are at liberty to take action against anyone who, they believe, is copying their style or services by taking a passing-off action in common law. However, that can be both expensive and fraught with difficulties mainly because the claimant must prove conclusively that the consumer has been confused, as we discussed earlier in relation to the unfair competition amendment.
I understood that the intention of the Bill was to reduce costs wherever possible by providing clearer procedures and more streamlined services to enable owners of trade marks to enforce their rights. Indeed, my noble friend the Minister has indicated that that was very much the intention. I believe that retailers would register more of their services but for current costs. It would certainly be of considerable assistance to retailers if they were able to register only once in order to protect their goods and services. In view of the Government's wider deregulation initiative, it would certainly seem to be a suitable opportunity further to assist retailers in that way.
In discussions that have taken place, my noble friend the Minister indicated that such a definition cannot be included in the Bill because it moves away from the harmonious effects of the European Community directive which seeks to harmonise the national
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provisions of all the member countries. However, I know that my noble friend is aware— and, again, the matter was raised in Committee— that such definitions are in existence in at least two other Community countries; namely, Spain and France. I am sure that my noble friend is also aware that, for example, Mothercare has registered its retail and mail order services in Spain under Class 35 and that it has also apparently applied for registration under Class 42. The company has also registered Mothercare retail and mail order services in France.
Apart from other European Community members, I have already referred to the fact that in other parts of the world— such as Australia, New Zealand, Hong Kong and the United States— the registration of retail marks is permitted. Therefore, the suggestion that any difficulties may arise in arriving at a suitable definition seems discredited. I understand also that there are moves to revise the Nice classification system to include a registrable retail section. If that is the case, we may well be asked to consider the issue. Therefore, why should we not take the opportunity presented by the Bill to make the clarification now? I beg to move.
Lord Strathclyde: My Lords, I congratulate and thank my noble friend Lady Hooper for her speech on the amendment. However, I regret that I am unable to accept it as, in the Government's view, it is incompatible with the directive. In saying that, I should emphasise that I have taken careful note of the views expressed either in this House or in letters to my department by those who support the principle behind the amendment.
Defining services as including retail services, as does the amendment, would be placing a gloss on the directive's words and as such is unacceptable. We cannot define the words used in the directive unless by so doing we are merely "translating" them into wording which is used in United Kingdom law in order to make an obscure meaning clear. However, in doing that we have to be careful that such "translation" only translates and does not interpret. What my noble friend proposes here is in fact an interpretation of the word "services" as it appears in Article 1 of the directive. Interpreting the directive's wording is undoubtedly something which will take place in the member states once it is in force and cases come before the courts. Such interpretation is not, however, a matter for us when implementing the directive in the Bill: it is for the courts and, ultimately, the European Court of Justice.
Although the directive simply provides for a trade mark to be registered for goods or services, the third recital states that one of its aims is to harmonise those provisions of national law which most directly affect the functioning of the internal market. If we were to define services as including retail services— and we understand that that is not the view taken in Europe generally and that it is not expected to be the view taken by the Community Trade Marks Office— there would thus be a serious risk of our moving away from harmonisation.
It has been argued that, as it stands, the Bill allows registration for "retail services" because it does not contain the requirement that they be supplied,

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"for money or money's worth"
which is in present law. That is something on which I find it difficult to comment. Any obligation to register such a mark once the Bill becomes law will be considered on its merits; and the law would be applied in the first instance by the registrar of trade marks, and ultimately by the courts. As I have said, in view of the Community dimension, this may include the Court of Justice.
I have not lost sight of the fact that some Community countries and non-Community countries register marks for retail services. They are however in a different position. For instance in Spain, so far as we understand it, shop names are registered as trade or business names and not trade marks. These do not carry the same rights as trade marks. The fact that they are put on the same register as the trade marks does not, as I understand it, make any difference. My noble friend has said that she would probably not seek to press the amendment to a Division. I have explained that the Government have considered long and hard the points that she and her noble friend Lord Lucas of Chilworth have made. However, we are unable to accept the amendment.
Baroness Hooper: My Lords, I am grateful to my noble friend for his further clarification. However, I still find it strange that it should be incompatible for us to make a further definition when that is not the case in Spain or France, even taking into account the explanation that my noble friend gave vis-á-vis Spain. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Strathclyde Lord Strathclyde moved Amendments Nos.60 and 61:
Page 41, line 43, at end insert:
("() References in this Act to a Community instrument include references to any instrument amending or replacing that instrument.").
Page 41, line 43, at end insert:
("(2) References in this Act to use (or any particular description of use) of a trade mark, or of a sign identical with, similar to, or likely to be mistaken for a trade mark, include use (or that description of use) otherwise than by means of a graphic representation.").
The noble Lord said: My Lords, I beg to move Amendments Nos.60 and 61 en bloc.
On Question, amendments agreed to.
Clause 100 [Index of defined expressions]:
Lord Strathclyde Lord Strathclyde moved Amendments Nos.62 to 67:
Page 42, leave out line 10.
Page 42, line 12, column 2, leave out ("and (2)").
Page 42, leave out line 24.
Page 42, line 25, column 2, leave out ("24(1)") and insert
("(Exclusive licences) (1)").
Page 42, leave out line 37
Page 43, line 7, at end insert:
("use (of trade mark or sign) section 99(2)")
The noble Lord said: My Lords, I beg to move
Amendments Nos.62 to 67 en bloc.
On Question, amendments agreed to.
Schedule 3 [Transitional provisions]:
Lord Strathclyde Lord Strathclyde moved Amendment No.68:
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Page 51, leave out lines 31 to 33 and insert:
("(2) It is not an infringement of—

(a) an existing registered mark, or

(b) a registered trade mark of which the distinctive elements are the same or substantially the same as those of an existing registered mark and which is registered for the same goods or services,

to continue after commencement any use which did not amount to infringement of the existing registered mark under the old law.").
The noble Lord said: My Lords, this amendment aims to close a loophole in the transitional provisions. Paragraph 4(2) provides for any use of a mark which would not have been an infringement under the 1938 Trade Marks Act to continue after commencement of the Bill. This is important because infringement rights under the Bill go wider than under the 1938 Act. However, by seeking re-registration of an existing registered trade mark it may have been possible for the owner of a registration to frustrate the intention of the original provision. The proposed new subparagraph (2) in paragraph 4 closes that loophole by making it clear that anything which did not amount to infringement currently would not be so under the Bill in relation to a registered trade mark which is the same or substantially the same as an existing registration. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendments Nos.69 to 71:
Page 51, leave out lines 34 to 36.
Page 51, line 42, leave out from ("(1)") to ("to") in line 43 and insert ("Section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) of this Act applies").
Page 52, line 39, leave out ("23 and 24(2)") and insert ("(Licensing of registered trade mark) and (Exclusive licences) (2)").
On Question, amendments agreed to.
Schedule 4 [Consequential amendments]:
Lord Strathclyde Lord Strathclyde moved Amendment No.72:
Page 57, line 10, at end insert:
("Law Reform (Miscellaneous Section 15(5)") Provisions) (Scotland) Act 1985
The noble Lord said: My Lords, this amendment puts right an omission from the list of provisions in Schedule 4. I beg to move.
On Question, amendment agreed to.
In the Title:
Lord Strathclyde Lord Strathclyde moved Amendment No.73:
Line 4, leave out ("the Council Regulation (EEC)") and insert ("Council Regulation (EC) No.40/94 of 20th December 1993").
On Question, amendment agreed to.

Sunday Trading Bill
Brought from the Commons; read a first time, and to be printed.

European Convergence Criteria: Deficit Assessment
5.54 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley)The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley) rose to move, That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, Her Majesty's Government's assessment as set out in Chapters 2,4 and 5 of the Financial Statement and Budget Report 1994–95.
The noble Lord said: My Lords, as the House will recall, Section 5 was introduced in another place as an amendment at Report stage of the Bill. Although the Government did not believe that the amendment was necessary— we had no intention, as we said at the time, of being secretive a pout the basis of the information we are required to submit to the European Commission on multilateral surveillance or excessive deficits— we were prepared to go along with the will of Parliament. And in this House my noble and learned friend the Lord Advocate made it clear that the Government interpreted the amendment as requiring a debate before information was submitted. Such a debate will need to take place each year, and as I shall make clear shortly, soon after the Budget. This is the first of these annual debates.
Section 5 is about the provision of information to the Commission on economic matters. The context is as follows. Under Stage 2 of EMU, economic and monetary policy remains the responsibility of member states. But there has been a role for the Community in economic matters from the outset. The Government believe that greater convergence between the economies of member states is both necessary and desirable, and see the Community's role as an important means of bringing that about.
The House therefore may find it helpful if I say something about the Community procedures themselves. First, multilateral surveillance. Although the treaty provisions are new, the idea, and indeed the basic procedures, have a long history. The concept was inherent in the Community from the outset. Article 2 of the Treaty of Rome gave the Community the task of,
"approximating the economic policies of member states to promote throughout the. Community a harmonious development of economic activities".
A Council decision of 1974 provided for mechanisms to strengthen economic convergence, recognisably the ancestors of present procedures. These included the requirement that, in the light of annual reports, the Council should,
"adopt guidelines on economic policy which the community and each member state are to follow in order to achieve harmonious economic development".
The Single European Act of 1987 extended the treaty base by adding a new Article 102a dealing with co-operation in economic and monetary policy,
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"in order to ensure the convergence of economic and monetary policies which is necessary for the further development of the Community".
This was followed by a further Council decision in 1990 which replaced the 1974 decision and set up multilateral surveillance arrangements very similar to those which are now in place post-Maastricht.
On multilateral surveillance, the Maastricht Treaty brought little practical change to the existing arrangements. It does lay down a new requirement on member states to,
"forward information to the Commission about important measures taken by them in the field of their economic policy".
But in practice the Government have always sought to help the Commission when it has asked for advice, and it has received copies of the FSBR in the past. 'The treaty also provides for the Community to adopt "broad economic guidelines" which in effect act as a framework within which multilateral surveillance takes place. The first guidelines were adopted by the Council in December last year and a copy has been placed in the Library.
On excessive deficits, the treaty provides that during Stage 2 of EMU member states are to,
"endeavour to avoid excessive deficits".
This is an objective that the Government would fully support. Sound public finances are at the heart of this Government's economic policy. My right honourable friend the Chancellor has taken the view that the size of the Government's borrowing requirement had become the biggest threat to economic recovery. His November Budget tackled that threat. Because of the Government's actions, the fiscal position should move into broad balance over the medium term. FSBR projections show the government deficit falling by 1996–97 below the 3 per cent. of GDP reference level which is set out in the treaty; and at no time does the government debt exceed the 60 per cent. of GDP reference level set out in the treaty. I should remind the House that at present only Luxembourg is within both reference values.
So much for the procedural background. But the real concern of this debate is with the substance of the assessment of the medium term economic and budgetary position which Section 5 requires. So I now turn to the economic issues. The Government's best view of short-term prospects for the economy was set out in the Budget Statement. My right honourable friend the Chancellor of the Exchequer is confident that we remain firmly on course to achieve those expectations. Growth is expected to broaden and strengthen this year, with output rising 21/2 per cent. Underlying inflation is expected to remain within the 1 per cent. to 4 per cent. target range.
The figures published in the past two weeks show a combination of economic recovery continuing and inflation remaining low. Over the past year, industrial production has risen 31/2 per cent., sales in the high street have risen nearly 4 per cent. and the unemployment figures have fallen by over 200,000. At the same time, underlying inflation has been at its lowest for more than 25 years.
We cannot promise that every figure or that the news every month will be uniformly good. That is not the way with any economy. But with low inflation, low interest

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rates, flexible markets and competitive business, we are in no doubt that we are well placed to turn recovery into lasting growth. The clear message from business surveys and forecasters is that they expect recovery to continue.
The FSBR which the Chancellor presented last November has been thoroughly debated and approved in another place. Since today's Motion asks us to approve the Government's assessment as set out in Sections 2,4 and 5 of that report, we are covering well-trodden ground. But I think it is worth reminding the House of the key elements of the assessment.
My right honourable friend the Chancellor made his policy objectives clear when he presented the Budget. These were: first, to sustain the economic recovery now under way and to create the right climate for lasting growth, more jobs and rising living standards; and, secondly, to take no risks with inflation. To achieve those objectives the task was to set the Government's finances on a sustainable path for the rest of the decade.
It is because one of the major risks to the recovery in Britain is the public finances that the Government decided their immediate and overriding need was to place the public finances on a sound footing. Business can plan ahead with confidence only if it knows that government borrowing is under control. The FSBR sets out how that is to be achieved.
Economic growth is generated by businesses and employees, not by governments. But governments have to ensure that markets work properly and they need to establish a macro economic framework which offers the stability that businesses require in planning for the future. Domestic policies which keep inflation down and bring about sound public finances create the right conditions for growth. Under the Government's medium-term financial strategy, monetary and fiscal policy are thus directed at two key objectives: permanently low inflation and sound public finances.
As the House will be aware, the Government have a target of between 1 per cent. and 4 per cent. for the underlying rate of inflation. The aim is to bring it down to the lower half of that range by the end of the present Parliament. Currently, underlying inflation, at 2.8 per cent., is well within that range.
Chapter 2 of the FSBR sets out the Government's projections over the medium term. It is explained there that spare capacity is expected to continue to put downward pressure on inflation over the medium term, with underlying inflation projected to fall to the lower half of the target range by 1996–97.
Those projections also show the economy continuing to gain momentum over the next few years. Growth rises year by year and reaches a rate of increase of 3 per cent. by 1996–97, which is projected to be sustained for the rest of the medium-term financial strategy period. The medium-term outlook is thus one of steady, sustainable growth and low inflation.
But that positive and enduring outcome could not have been projected without the tough measures that the Chancellor took in his Budget. A public sector borrowing requirement of £ 50 billion, as is expected for this financial year, even if largely a legacy of the recent
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recession, could not have been left to sort itself out. Its sheer size was a threat to economic recovery and the November Budget was devoted to tackling that threat.
That Budget was the first in Britain for many years to set out the Government's tax and spending plans at the same time. The Government took the opportunity to act on both sides of the account, cutting spending and raising taxes. That is all spelt out in Chapters 4 and 5 of the FSBR.
As a result of those firm and sensible measures it is now expected that the FSBR will fall to £ 38 billion in the coming financial year. Government borrowing should be eliminated altogether by the end of the decade.
The medium-term assessment, as set out in the FSBR, is a prudent and realistic one. It sets out clear measures by which government borrowing is to be reduced, leading towards a balanced budget. It confirms that the goal of monetary policy is low inflation, on which we have already made very substantial progress. Above all, it offers a credible path by which the economy can return to sustained non-inflationary growth and on which higher employment and living standards so critically depend.
It is on the basis of that medium-term assessment that, subject to the approval of the Motion before the House, the Government will submit to the Commission the information required under the treaty. But while the treaty requirement to submit information to the Commission on multilateral surveillance is not precise, the requirements on excessive deficits under secondary legislation are. Some noble Lords will have noticed that we have given some additional information on the government deficit and on the level of government debt in order to provide figures in the FSBR on something very close to treaty definitions. I should tell the House that in addition the Central Statistical Office published on 18th February historical data for the United Kingdom for deficits and debt levels based on treaty definitions. We will, of course, take that on board in the numbers we provide to the Commission. I beg to move.
Moved, That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, Her Majesty's Government's assessment as set out in Chapters 2,4 and 5 of the Financial Statement and Budget Report 1994–95— (Lord Henley.)
6.6 p.m.
Lord Eatwell: My Lords, Clause 5 of the European Communities (Amendment) Act requires that:
"Her Majesty's Government shall report to Parliament for its approval an assessment of the medium-term economic and budgetary position in relation to public investment expenditure and to the social, economic and environmental goals set out in Article 2"
of the treaty. This report does not fulfil that requirement. Any references in the report to the environment and social protection are cursory, and the Article 2 goal of a high level of employment is not mentioned at all.
In putting forward chapters of the Red Book as a substitute for a proper report the Government are displaying a contempt for Parliament. Perhaps, given that this is the first time such a report has been required, the Government may be excused some improvisation.

775
But will the Minister give an assurance that this ersatz report will not create a precedent and that in future the Government will produce a proper report as required by the Act?
Even this pseudo-report is a revealing document. It reveals the Government's economic objectives, and it reveals that they have no idea how to achieve them.
Let us take the Government's economic objectives first. The noble Lord, Lord Henley, quoted the objectives as set out in the report. On page 15 we are told:
"the Government … directs monetary and fiscal policy towards two key objectives: low inflation on a permanent basis and sound public finances".
What a contrast with the objectives set out by the Government led by an earlier Conservative Prime Minister. That Government's commitment was uncompromising. It read:
"The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment".
That was the primary aim and objective of Sir Winston Churchill's Government, and of every government, Conservative and Labour, from the end of the Second World War until 1979. It is not, clearly, the objective of Mr. Major's Government.
Instead, as Mr. Lamont told us when he was Chancellor of the Exchequer, for Mr. Major's Government, unemployment:
"is a price well worth paying".
But who is paying the price? Or, as the Prime Minister himself described his economic policy:
"If it isn't hurting, it isn't working".
But who is getting hurt?
Today, 2.8 million of our fellow citizens are claiming unemployment benefit. At least a million more are unemployed, seeking work but ineligible for benefit. They are paying the price. They are getting hurt. Yet still the Government do not, and will not, accept as one of their primary aims and responsibilities the attainment of a high and stable level of employment. They have not even mentioned that objective in this report, as they were required to do by the Act.
Instead, unemployment today is just another tool of economic policy. In this report the millions of our fellow citizens on the dole are defined by means of the comfortable euphemism used by the noble Lord, Lord Henley, "spare capacity". We are told that:
"Spare capacity will continue to put downward pressure on inflation over the medium term".
Translated into ordinary language, that means that the Government confidently expect the high level of unemployment to persist, see unemployment as their main weapon against inflation, and have no intention of doing anything about it. They can see the good side of unemployment— spare capacity keeps the workers in their place and, as an undoubted bonus, it solves the servant problem.
Of course unemployment is not costless. The current level of unemployment costs the Exchequer around £ 28 billion a year in lost revenues and higher benefit payments. That is a heavy burden. But the report makes clear that this burden will not fall on the richest members of our society.
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This Government have an instinctive hostility to fairness. That is why the costs of unemployment are pushing up the tax bills of the middle classes to record heights, and driving down the real living siandards of the poor to levels below those of 1979.
And on top of the record income taxes that the report outlines are to be piled record levels of VAT— VAT on household fuel, higher excise duties, a new tax on home insurance, a new tax on car insurance, a new tax on air travel, all adding up to a higher tax burden than ever before.
But that burden will not be borne by the better off. The top I per cent. of income earners, those earning an average of £ 120,000 a year, will pay only 4 per cent. of the increased taxation having enjoyed 30 per cent. of all the tax cuts of which the Government used to be so proud.
And what do the ordinary families of this country receive for the record taxes they are paying? Do they have better hospitals, more generous pensions, better schooling, a railway system that would be the envy of the French? No, of course they do not. They do not even have the extra motorway toilets that the Prime Minister promised at the 1992 Conservative Party Conference.
The paradox of Conservative taxation is that the more you pay the less you get. While taxes go higher and higher, services, as the report makes clear, go lower and lower. That is a situation with which the Government appear eminently content. The speech which we have heard from the noble Lord, Lord Henley, was indeed a model of contentment. But is his contentment well founded? We know that the Government do not care about unemployment. But is the Government's economic policy likely to achieve the goals they apparently care about? Will it achieve "low inflation on a permanent basis and sound public finances"?
In the report the Government's interpretation of what exactly "sound public finances" might actually be is, to say the least, a little confused.
Paragraph 2.08 states:
"The objective of the Government's fiscal policy is to bring the PSBR back toward balance over the medium term"
That seems clear enough. But then the very same sentence continues:
"and in particular to ensure that when the economy is on trend the public sector borrows no more than is required to finance its net capital spending",
which is not the same thing at all. Either the objective is for the PSBR to be zero, to balance, or the objective is for the PSBR to be equal to net capital spending. You can have one, or the other, but not both. Not, that is, unless the Government plan to cut net public spending to zero— which perhaps even this Government do not plan to do. So which is it? I hope that the Minister will be able to tell us. The Government ought to sort out the confusion, and correct the report before it is forwarded to Brussels.
Leaving aside the fact that the Government's economic thinking is so confused that they do not know exactly what their objective is, will the swingeing increases in taxation which are planned actually reduce the massive public sector deficit which the Government's policies have produced? Here the report is helpful. It states:

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"the pace at which the PSBR declines will also depend significantly on the growth of the economy over the medium term".
That is quite right.
To make that point the report provides some charming optimistic scenarios of the relationship between the growth and the PSBR."Illustrative paths", they are called. They are not projections, as the noble Lord, Lord Henley, claimed in his remarks. In those illustrations, the PSBR is reduced to zero in four years, assuming that is that the economy grows at 3 per cent. year after year. Then there is also a "low growth" scenario in which the economy grows at 2.5 per cent. and the deficit falls to just 2 per cent. of GDP by 1998–99.
That is all well and good, except that those scenarios look decidedly out of place when compared with the average growth rate of the British economy actually attained under the Government, which is a little over 1.5 per cent. What is the point of illustrating the effect of sustained 3 per cent. growth when the Government have demonstrated beyond all reasonable doubt that they do not have the faintest idea of how to achieve such a growth rate?
It may be amusing for officials in the Treasury to generate scenarios which bear no relationship whatever to the likely economic performance of the British economy under current policies. But for this House to play a part in forwarding such a piece of elaborate fiction to the European Commission is little short of humiliating.
Can the noble Lord treat the issue with the seriousness that your Lordships' House deserves? When he sums up, will he tell us what the prospective deficit would be if the average growth rate to 1998–99 is the average growth rate achieved in the past 14 years; namely,1.5 per cent.?
We need to know that figure because there is nothing in the report to suggest that the future will be any different from the past. The economy may be recovering from recession, but recovering from 14 years of Tory economic policy is a little more difficult.
The report displays a depressing lack of concern for the fundamental economic problem of this country: the lack of investment. The lack of private investment in new capacity, which the President of the Board of Trade tells us results in British productivity being anything from 25 per cent. to 40 per cent. less than our major competitors, is not addressed.
The appalling backlog of public investment in infrastructure which is so vital for a competitive industry is to be made even worse, we are told, by cuts in capital spending in real terms of 25 per cent. below the level of 1990.
As for the low skills of our labour force that cripple our performance in markets at home and abroad, the report tells us that there will be a new apprenticeship initiative for 40,000 young people. However, it fails to mention that it was the abolition of training boards by the Government which cut the number of apprentices by 120,000. So it is plus 40,000, minus 120,000.
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Yet everyone except this Government knows that without new investment in capacity, infrastructure and people,3 per cent. growth is certainly not attainable in the medium term. Everyone knows that without a commitment to investment, the current trends of declining exports and rising imports will engulf the balance of payments. Everyone knows that without high levels of new investment the low inflation which is the Holy Grail of the report will be attained only by persistent recession. Everyone knows that the scenarios of the report are a more imaginative fiction than the colourful writings of the noble Lord, Lord Archer of Weston-super-Mare, and somewhat less interesting.
Without sustained investment in productive capacity, millions of our fellow citizens face a lifetime of unemployment. The Government should make tackling unemployment their first and overriding objective. They should be rallying our European Union partners in a concerted campaign to bring down the appalling levels of unemployment throughout Europe— levels of unemployment which are threatening the very fabric of European society.
But instead, as this complacent and confused report makes abundantly clear, the Government are trapped by their own prejudices, unwilling to act and incapable of constructive thought. The sooner we get rid of them, the better for all concerned.
6.19 p.m.
Lord Cockfield: My Lords, we have listened to an interesting and highly political speech by the noble Lord, Lord Eatwell. However, it has only marginal reference to what is contained in Section 5 of the European Communities (Amendment) Act 1993. That section is very narrowly drawn. It merely requires a report on the Government's responsibilities or reaction under certain named articles in the Treaty of Rome. It does not require a wandering across the whole vast field of economic, monetary, social and every other form of policy. In fact, if the noble Lord cares to refer to the treaty— I am sure that he is familiar with it; he has it in his hand; it might be better if he opened it— he might find the articles that he quoted appear under economic policy. They do not appear under monetary policy or indeed under anything else.
However, having said that, I started from the point of view that three lines on the Order Paper was a somewhat scanty response to a statutory requirement on the Government to report to Parliament. Nevertheless, if we look at the actual provisions of the treaty, the provisions of the sections and the report as presented, the references to the appropriate chapters in the Financial Statement and Budget Report cover the ground. They cover the ground; they do not require anyone to indulge in the kind of political tub-thumping with which the noble Lord has been entertaining us.
I have two specific points I wish to make on the Motion. First, chapters 2,4 and 5 extend to 70 pages. Admittedly, it may be good discipline for people to have to wade through those 70 pages to find the points which are relevant to the report which has been submitted to the European Community. However, it would have been helpful, at least to those of us more interested in the facts

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than in the political rhetoric, if we had had a document of possibly two or three pages, similar to what is normally called an executive summary, which brought out the important points involved. That might have helped us to concentrate on the relevant parts of the Motion and the report.
The second point I wish to make is this. Despite the debate that occurred in another place and what was said when Section 5 was accepted in another place at Report stage, I do not think that this is the right place in which to have a wide-ranging debate on the budget, economic and monetary affairs. That view is shared by noble Lords in general, if one looks around and counts not only noble Lords present tonight, despite the rousing speech of the noble Lord, Lord Eatwell, but also the length of the speakers' list. Unfortunately, it has now lost its most prominent star because the noble Lord, Lord Jay, has removed his name from it. I am sorry about that, I was greatly looking forward to his contribution which might have been more constructive than that of the noble Lord, Lord Eatwell.
I and a number of noble Lords— among them the noble and learned Lord, Lord Simon of Glaisdale and the noble Lord, Lord Bruce of Donington— have protested on many an occasion at the reluctance of the Government to give us adequate opportunities to debate the Budget and Finance Bill. I still strongly hold that view. However, what we ought to have is a proper debate, not one brought in on a side wind, which is what the noble Lord, Lord Eatwell, is trying to do.
Having been put in the position by the wording of the Motion of having to read the Financial Statement and Budget Report, I wish to raise a further matter. The financial statement deals with our financial relationships with the European Community only in a very sketchy way. In a document extending to 143 pages, only about half a page in total covers our financial dealings with the European Community. Adding all the parts together, it comes to a grand total of about half a page. All we are given is a single simple figure showing the amount of our net contribution to the Community. What we need to know, even to start with, is what our gross contribution is; how much we get back by way of subsidies and grants; how much comes back in the British budget rebate and what the net contribution is. After all, in a large degree, the Community is acting as a cash circulating enterprise. It collects a lot of money from the taxpayer in this country and the other member states. That money. or most of it, is then given back by way of agricultural subsidies, regional grants, grants for the support of science, research and technology, grants in structural funds, grants towards road transport, and so on. If we are to understand those matters, it is relevant that we know not only what those grants are but who gets them.
I wish to illustrate the point I am making in this way. I start— not just because the noble Lord, Lord Bruce of Donington, is here— with the common agricultural policy. I take it because it is the only grant on which anything specific was said in the Financial Statement and Budget Report. In fact, it is generous. It devotes two very brief and bland paragraphs to the subject. Paragraph 5.39 says:
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"Expenditure on CAP agricultural market support in the United Kingdom increases substantially largely due to the depreciation of sterling since Autumn 1992".
At least someone has benefited from Mr. Norman Lamont's activities. The next paragraph is equally long—six lines. Paragraph 5.40 states:
"Against a background of higher farm incomes, support for domestic agriculture has been reduced".
But no figures are given for what higher farm incomes amount to. Nothing is quantified about support. for domestic agriculture or by how much it has been reduced. According to the press, farm incomes have increased by 64 per cent. If that figure is true, Mr. Norman Lamont emerges as the patron saint of the farming sector in the British economy. He also emerges as one of the biggest spenders of all time. But we are given no figures to check that.
When we come to the statement on the amount by which support for domestic agriculture has been reduced, I have some problems. Ploughing through the great document, I find in Table 5. B.3 that expenditure by MAFF has increased from £ 2.198 billion last year to £ 3.050 billion this year. That seems to me to be a somewhat peculiar definition of how one reduces expenditure. That is the CAP. I simply say I should very much like further elucidation of such matters.
When we come to other departments, we are given no information at all. Therefore, I pick one subject at random. Central government are making grants of £ 29 billion to local government. But in addition to the grants from central government, there are substantial moneys going to local government from the European Community. We need to know what those grants are if we are to get a balanced view of the state of local authority finance.
I cite those two examples not in any sense to be critical but because I feel that it would greatly help discussion on matters affecting the European Community if the Government gave us the figures in an easily ascertainable form. I realise that it may well be said that the figures are available "somewhere"; but one has first to know where that "somewhere" is. It may need a great deal of research to get the figures out.
I suggest the following, not in any spirit of criticism but merely in order to bring the debate down to earth so that we know what is going on and can form proper judgments on matters. I suggest that it would be helpful if next year the Red Book contained a relatively brief chapter on the financial relationships between the European Community and the United Kingdom Government. If we had that, we would be able to get away from rhetoric and deal with some of these matters on the basis of hard ascertained fact.
6.30 p.m.
Lord Bruce of Donington: My Lords, the House is most grateful to the noble Lord, Lord Cockfield, for having brought this whole matter down to what I would term its more correct perspective. Having said that, I most humbly congratulate my Front Bench colleague on his very admirable demolition of the case put forward by the Government in their Budget Statement as summarised by him. It is very good indeed to be able to

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mark at this very critical time that there are, after all, some fundamental differences between my Front Bench and the Government opposite.
There is, of course, a lot of background to this matter. Noble Lords will have known that one point was avoided by both Front Benches; namely, the whole question of the United Kingdom balance of payments. I venture to suggest to both noble Lords that there is a very great cloud on the horizon at the present time, so far as the United Kingdom is concerned, in that there is a current deficit on visible trade of some £ 8 billion, of which £ 7 billion is with what is euphemistically called "the rest of the world", and no less than £ 1 billion is with Europe. However, that position may be altered somewhat because trade with Europe is subject at the present time to some degree of estimation, following the breakdown, or the deliberate abolition, of the various customs checks on which we have in the past relied to get overseas trading figures.
Any discussion of these economic matters, admirable though my noble friend's contribution was, which avoids the whole question of the looming balance of payments crisis is more or less meaningless. If the position continues in this way, there will be a withdrawal of capital from the United Kingdom— a further withdrawal outside that which British finance already sends abroad— which will mean a rise in interest rates to stem the flow. That will make our exports less competitive and will, of course, make our imports cheaper. And if there is any increase in imports at all—bearing in mind the considerable tax increases that will take place this year, next year, and the year after that— it will probably produce yet a further incursion into British manufacturing capacity.
The reason why both Front Benches have avoided the issue is clear. It is because both parties are already quite thoroughly enmeshed in the Treaty of Maastricht. And of course, in amplifying what noble Lords have said about Section 5 of the European Communities (Amendment) Act 1993, I venture to draw the attention of the House to the preceding Section 4, which tells us what it is all about:
"In implementing the provisions of Article 103(3) of the Treaty establishing the European Community, information shall be submitted to the Commission from the United Kingdom indicating performance on economic growth, industrial investment, employment and balance of trade, together with comparisons with those items of performance from other member States".
Section 5, under which this debate has been initiated, is concerned with the submission to this Parliament of the Government's views of their economic progress prior to their making a report to the European Commission as required in Article 103 of the treaty, to which I should like to draw your Lordships' further attention. It indicates why both Front Benches have avoided any reference at all to the balance of payments situation.
Article 103(1), as noble Lords will recall, refers to Article 102a, which states:
"Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Article 103(2)".
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Article 103.2 states:
"The Council shall, acting by a qualified majority on a recommendation from the Commission, formulate a draft for the broad guidelines of the economic policies of the Member States and of the Community, and shall report its findings to the European Council".
Paragraph 3, which specifically relates to Section 5 of the European Communities (Amendment) Act, states:
"In order to ensure closer co-ordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment".
The paragraph continues with the words:
"For the purpose of this multilateral surveillance".
The purpose, therefore, of the information that will be provided by the Government is that of "multilateral surveillance". In other words, what we are really doing—and indeed what we did by Maastricht, as we pointed out at the time— is surrendering control of our macro-economic policy, in effect, to the Commission, as the Council acts on the basis of proposals coming from the Commission.
Before we consider the implications of carrying on further with what has now become a ritual dance of this Parliament in regard to Europe, we ought to consider just who these people are to whom we are delegating this extraordinary task of making recommendations as to the macro-economic policy that the Community, including ourselves, should be required to undertake. They are not God. They are ordinary human individuals. How is it that there is this extraordinary degree of reverence towards a commission— the members of which are very largely unknown to the general public—comprising various directorates?
I have in my hands at the moment the Directory of the Commission of the European Communities. I have been searching through it to see just which of the commissioners will be involved in considering the reports that come from the United Kingdom and elsewhere (on whatever basis the reports come) in order that the Commission can ultimately be persuaded to adopt a view for communication to the Council as to what kind of economic policies we ought to be carrying out. There are two commissioners. There is Henning Christophersen, who is a member of the Commission and who is in charge of economic and financial affairs and monetary matters (in agreement with M. Delors). Then there is another gentleman involved, Mr. Peter Schmidhuber, who is in charge of budget, financial control, anti-fraud measures and cohesion fund co-ordination and management. These two gentlemen are, I would think, possessed of the most admirable qualifications— I do not query them in any way—and they are assisted in the process by Directorate-General II, which deals with surveillance of the Community economy. Here we have Mr. Ludwig Schubert; Mr. Fabio Colasanti; Mr. Johan Hodes; Mr. Alain Morisset; Mr. André Louis Dramais; Mr. Jean-Fran¢ois Pons; and Mr. Andre Louw. They are all very estimable gentlemen. These are the intellectual resources of the Commission upon which Her Majesty's Government

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and all the other governments will consider reports as to how all those countries should conduct their economic affairs.
In fact, we have abandoned any concept that we shall carry out policies in the United Kingdom which are adapted to suit our own particular needs—in collaboration, one would hope, with other countries. That is what we have done. What we are doing today is merely to take the initial steps in the ritual dance towards the determination of policies in Europe, to which we shall inevitably subscribe because the other place will barely debate them. This place, to its eternal credit, will at any rate debate them, but not with any particular enthusiasm.
I pass to other matters in the financial statement itself. The noble Lord, Lord Cockfield, was good enough to raise the whole issue of Britain's net contribution which appears in Chapter 5 of the Budget Report itself. One ought to say perhaps that Britain's net contribution in the years 1994, 1995, 1996 and 1997 are likely, on the figures given in the appendix, to amount to £ 8.9 billion. That is not bad going. That is a net contribution of taxpayers' money out of the consolidated fund and after taking into account any abatement under the negotiations concluded at Fontainebleau. On current levels, according to the explanatory memorandum issued by Her Majesty's Government, the benefit of rebate amounts to some £2 billion to £2.5 billion a year. Consequently, without the rebate the contribution out of our taxpayers' pockets every year is likely to be in the region of £4 billion to £5 billion. If noble Lords wish me to document that, I shall be happy to do so on the basis of the Government's own explanatory memorandum to their own instruments and regulations. Is that the state of affairs that we wish to continue?
But more than that—I do not know whether your Lordships are aware of it—there are already moves to eliminate the abatement. True enough, the Government will take it as a matter of high priority to resist any such pressures and will bring all possible pressures to bear at the heart of Europe in order to avoid such an event. However, I must inform the House that according to a statement issued only a fortnight ago by the German Social Democratic Party, it came out wholesale for the complete abolition of the abatement. That is part of a very substantial party in Europe.
In the course of a visit to the Budget Committee of the European Parliament, which I revisited on Monday and Tuesday of this week, the European Parliament is quite openly coming out in favour of the simplification of the budget arrangements for Europe, in the interests of fairness. Those are the realities.
So in approving the Budget Statement made today, as one way of expressing our position and without prejudice to the final report that will be made or submitted to the Commission under Section 4 of the Act, we can agree that this debate has served a useful purpose. However, I sincerely trust that it will dispel from anybody's mind the illusion that the Government have done anything other than abandon any kind of hope
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of control— even on the assumption that they have the policies— over the development of British economic policy.
Baroness Elles: My Lords, before the noble Lord sits down, I wonder whether he would be kind enough to confirm that, during his visit to the European Parliament in Brussels this week, the British Conservative Members on that committee strongly rejected the idea that there was any question of abandoning the British rebate. I should be most grateful if the noble Lord could confirm that.
Lord Bruce of Donington: Yes, my Lords, I am very happy to confirm that. The British Member to whom I spoke from the Conservative Party was, I believe, Mr. Cassidy. He confirmed that in fact he intended to oppose that. But I have to draw the attention of the House to a resolution passed by the European Parliament on 20th June 1992 which spoke in rather different terms. I can only hope that the ideas of Mr. Cassidy (and, I am bound to say, also Mr. John Tomlinson) ultimately prevail. Whether or not they will prevail, heaven only knows.
6.45 p.m.
Lord Thomson of Monifieth: My Lords, I thank the Minister for his useful explanation of the European Community procedures in this matter. In fact it is almost the only thing for which I want to thank him.
The Minister made a very important point in response to the noble Lord, Lord Bruce of Donington, namely, that the multi-racial surveillance which sends up the noble Lord's blood pressure considerably is not a product of the Maastricht Treaty. It has been inherent in the commitments that we have freely accepted in this country and the treaty obligations that we have accepted as members of the European Community over a very long time.
Having said that, in its brief way this is a very curious Motion that is before the House and, as a result, we have had rather a curious debate. The Motion asks us in one sense to approve the Government's Red Book, to which quite properly the noble Lord, Lord Eatwell, applied himself. On the whole the Minister also applied himself to seeking to defend the Government's Red Book and the Government's general Budget policy. We are being asked to approve the Government's assessment of their medium term strategy for communication to the Commission.
I agree very much with the noble Lord, Lord Cockfield, that this does not seem an appropriate method of fulfilling our obligations under the treaty as set out in Sections 4 and 5 of the Act referred to. We always listen with great interest to the noble Lord, Lord Cockfield. He explained that his speech was not delivered in any spirit of criticism. That simply encourages us to look forward to speeches in which he does speak in a spirit of criticism, such as we have enjoyed on some previous occasions. However, on the point that he made about the method chosen by the Government to make their communication to the Commission, the noble Lord was absolutely right.
The real purpose of the Motion, however drafted, is to deal primarily with the Government's obligations to

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the economic convergence provisions of the new European Union treaty. As the noble Lord, Lord Bruce, reminded us, the question of Britain's adhesion to that treaty is still a matter of considerable controversy. The question of our seeking to join in the processes of convergence leading to economic and monetary union in a single currency is a matter on which the noble Lord, Lord Bruce, and others, who have not spoken— I see that the noble Lord, Lord Pearson, is now in his place—have retained deep hostility.
For myself, the least controversial and most objective way in which I can comment on that aspect of the remarks made by the noble Lord, Lord Bruce, is that whenever one thinks of British membership of the ERM, or ultimately of participation in EMU and the single currency, convergence around the Maastricht criteria seems to me to remain important and indeed is the most sensible policy in its own right in order to promote a more stable growth path for the United Kingdom economy. Without dissenting at all from the trenchant criticisms of the noble Lord, Lord Eatwell, that general proposition is in fact right. We have a tremendous interest in terms of the British economy in forming the convergence criteria set down in the Maastricht Treaty.
But from these Benches we would want to go a good deal further. The timetable for economic and monetary union and a single relationship may now be in question as a result of the recession. But the realities remain. I am bound to say that, listening to the speech of the Minister, one would not have thought that he was applying himself to fulfilling that specific obligation under the Maastricht Treaty in any serious way a few months after the beginning of the second phase of economic and monetary union to which the Government committed themselves. I hope the noble Lord will not mind if, in that sense, I suggest that the Government would be well advised to return to basics in regard to British adherence to the European Community and to the Maastricht Treaty.
France and Germany— we read with interest the speech of Chancellor Kohl this week— remain committed to marching down the Maastricht path of economic and monetary union. Our view from these Benches is that if Britain is to be at the heart of Europe, she should be with them. In terms of the European Union it is in the interest of the British people that the leadership of the Community should be Franco-British-German and not simply Franco-German. It is there wherein lies the welfare of the British people. We should play a major part in the shaping of future developments in the European Union and not be an offshore, semi-detached member, adapting ourselves to a union shaped by others in their interest.
Exchange rate stability is not some form of invention against our interests. It is very much in the interests of a trading nation like the United Kingdom. Competitive deregulation and competitive devaluation would be the road to ruin in Europe, returning it to the kind of situation between the two world wars which became a major contributor to the Second World War.
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We need to combine and integrate our national economies if we are to compete with the United States and Japan and the new countries of the Pacific Rim. Information highways, I notice, are the flavour of the month and may even be the flavour of the decade. I came across a chilling statistic from the OECD the other day which pointed out that the European share of world product generally is around one-quarter, whereas our share of information technology product is around one-tenth. It was said that South Korea is producing four times the number of information technology graduates that the United Kingdom and Germany together produce. It is that kind of search for a greater European economic integration on which the living standards of the people of Europe will depend over the next generation.
The way ahead is not an easy one. The Community is suffering from recession. We are thankfully emerging from it but our neighbours on the mainland of Europe are still in its throes. That recession will pass for them as it is blessedly passing for us. As the noble Lords, Lord Bruce of Donington— I totally agree with him— and Lord Eatwell said, after the recession passes we shall be left with a western European society with a residual degree of structural unemployment of a totally unacceptable level. It is that which the European Commission and the European Council are trying to tackle in the White Paper that the Commission produced. It is a good deal easier to analyse the situation than it is to produce effective remedies. Indeed, some of the remedies are likely to widen the degree of convergence rather than to narrow it and to postpone rather than hasten the point at which one can have a single currency and an economic and monetary union.
I believe that the leading countries of the Community will move ahead on that path. The question is whether or not we will be part of it. I do not know whether any noble Lord has ever enjoyed having a pet tortoise in his garden. It is an interesting pet. It is peaceful and produces a mood of tranquillity as one sits in one's deckchair under the apple tree. It never seems to move. But if one closes one's eyes and falls gently asleep, on waking up one finds that it has moved a great distance. Sometimes it goes the wrong way and gets lost in the flower beds that one should have been weeding. But it goes on moving. The whole history of the European Community is that that is the way forward. For Britain the biggest single issue remains whether we are wholehearted participants in that process or nagging critics on the white cliffs of Dover.
Lord Henley: My Lords, I am sure that we can all take note of the analogy of the noble Lord, Lord Thomson, concerning the Community. Whether the noble Lord, Lord Bruce of Donington, would be happy with that analogy is another matter. I do not intend to take the matter further.
It has been an interesting debate— so much so that it will probably help if I remind the House again of the Motion before us. It is to approve the Government's assessment of the medium-term economic and budgetary position for the purposes of Section 5. Section 5 is about the basis of the material to be

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submitted to the Commission under the multilateral surveillance— not "multi-racial", as I believe the noble Lord, Lord Thomson, accidentally described it, although I suspect that I too made one or two slip-ups with "FSBRs" and "PSBRs", the difference between which is known to all of us— and excessive deficit procedures.
It follows that the issue is not about the principle of submitting information to the Commission. That is something that was decided when we debated the Maastricht legislation—in great detail I should add— and indeed in some cases long before that. As I mentioned in opening, the process of multilateral surveillance has a long history.
The principle of the Government submitting information to the Commission on multilateral surveillance and excessive deficits was accepted by Parliament when we passed the Maastricht Bill last year. I do riot think it was the intention, in having this debate, necessarily to go back over that principle. The noble Lord, Lord Eatwell, in criticising the report we produced, described it as a contempt of Parliament in one of his less kind expressions. When he was feeling kinder he described it as a mere ersatz report. My noble friend Lord Cockfield to some extent criticised the use of the FSBR, as did the noble Lord, Lord Thomson of Monifieth, as not necessarily providing the right amount of information on European expenditure and receipts. My noble friend in particular used the example of the common agricultural policy.
I take the point regarding the importance of the right and appropriate information being available. Unfortunately, constraints of both time and space— I believe the noble Lord, Lord Eatwell, recognised the constraints of time—impose real limitations on what can be included in the FSBR. The detail of public expenditure information is given, as it has been for the past three years, in the departmental reports. I am pleased to be able to tell my noble friend that all the information he seeks on the CAP will be in the MAFF departmental report to be published tomorrow. That explains how spending on CAP market support is increasing because of a switch to direct payments to farmers. It details the revised lower provision announced in the Budget for domestic agriculture programmes. Nevertheless, I note the comments made by all three noble Lords regarding the use of the report. We believe that it is satisfactory. Obviously, I shall draw your Lordships' comments to the attention of my right honourable friend the Chancellor of the Exchequer.
As I expected, we heard much this afternoon from the noble Lord, Lord Bruce of Donington, on the familiar theme of alleged dictation of our policies from Brussels. I should like to remind the noble Lord of two points. First, as I explained in opening the debate, there has been a long history of Community interest in the economic activity of member states. That goes back to well before we joined the Community in 1972. The record shows that this has not led to dictation of economic policies from Brussels. Secondly, the Maastricht Treaty makes it clear that in Stage 2 of economic and monetary union, responsibility for economic and monetary policy remains firmly in the
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hands of member states. It is only under Stage 3 that responsibility for monetary— but not economic— policy would pass to the Community. And as even the noble Lord, Lord Bruce, will be aware, the United Kingdom has an opt-out, negotiated by my right honourable friend the Prime Minister, which allows the United Kingdom to decide whether, and if so when, to participate in Stage 3. Under the terms of the Maastricht legislation, a further Act of Parliament would be needed were the Government to decide to exercise that option.
Nor do I believe that the broad economic guidelines, to which the noble Lord referred, in Article 103 take economic policy out of United Kingdom hands. They are quite simply non-binding recommendations which happen to coincide closely with government objectives on economic policy; for example, price and exchange rate stability, low interest rates and sound public finance. The Government retain primary responsibility for economic and monetary policy.
Perhaps I may also at this moment refer to the noble Lord's remarks about the abatement, negotiated, as the noble Lord will remember, by my now noble friend Lady Thatcher when she was Prime Minister some years ago. That abatement now reduces our net contribution by about £ 2 billion a year, and since 1984 has saved this country some £ 14 billion. I have to say to the noble Lord—and I repeat it because I think the noble Lord would like it repeated from the Dispatch Box and probably would like it repeated as often as possible— that the United Kingdom abatement is preserved unchanged under the agreement reached at the Edinburgh Council. That UK abatement is preserved unchanged until the year 2000, and even after that date could not be changed without United Kingdom agreement.
Lord Bruce of Donington: My Lords, I am grateful to the noble Lord for giving way.
Is he aware of the attitude of the European Parliament, living in cloud cuckoo land though it may be, that it will, if necessary, take Britain to the European Court of Justice on the basis of its interpretation of the application of the UK abatement rules agreed at Fontainebleau? The European Parliament regards the abatement as ending in 1995, and it may be prepared to take Britain to the European Court in order to establish that.
Lord Henley: My Lords, unlike the noble Lord, I should not like to accuse the European Parliament of living in cloud cuckoo land. But I can assure him— and I take the opportunity of doing so again— and the European Parliament that we believe we have the abatement as was agreed at the Edinburgh Council until the year 2000. We also maintain that any further changes in the abatement after that date would require unanimity; in other words, would require the agreement of this country. We stick by that. I do not think that the European Parliament would have much success— I trust that it would have very little success— in the European Court.
The real issue is the economic assessment. The background is that the recession has been the dominant fact of European economic life for the past three years. In much of Europe, it dominates still. In Britain we have

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had the good fortune to be the first country to leave it behind. The British economy grew by 2 per cent. last year and is set to grow somewhat faster in 1994. And if activity in the rest of Europe picks up— as we certainly hope it will— growth will be faster still.
Some commentators are worried that we have not yet broken our old inflationary tendencies. I must tell the House that the evidence suggests that we are beginning to break the habit of inflation. Over the period of our ERM membership, inflation fell from more than 10 per cent. to around 3.5 per cent. Sterling's depreciation, following our exit from the ERM, might have threatened that progress. But inflation continued to fall, currently to around 2.5 per cent,—2.8 per cent., as I quoted in opening the debate. That testifies to the success of the Government's new monetary framework, but it also shows that even as the economy began to recover, inflationary pressures remain subdued. The Government mean to ensure that the economic growth we are now experiencing will continue, and will not be impeded by an outbreak of inflation.
The other vital element to sustained economic recovery must be sound public finances. The Chancellor's view was that the size of the Government's borrowing requirement had become the biggest threat to the economic recovery. The November Budget was devoted to tackling that threat by acting on both sides of the account: cutting spending and raising taxes. We make no apology for that. On this occasion taxes quite simply had to be raised. The noble Lord, Lord Eatwell, accused us of unfairness in the imposition of the tax burden.
I should like to quote one figure to the noble Lord. I think he will accept that he will now find that the top 10 per cent. of earners are now paying some 45 per cent. of income tax; in 1979 it was a mere 35 per cent. of income tax.
Lord Eatwell: My Lords, would the noble Lord accept that one of the reasons for the high level of taxation being paid by the top 10 per cent. is that many members of that group have awarded themselves very high pay rises so that the distribution of pretax incomes in this country has become more unequal than at any time since the late 19th century?
Lord Henley: My Lords, I simply do not accept that last figure, which the noble Lord has used on other occasions, about the imbalance of incomes. The simple fact is that reducing higher rates of tax has increased the net take from that group. Certainly, the figures I have quoted go on to prove that.
Secondly, we have had both to cut spending and raise taxes. As a result, government borrowing, we believe, should be eliminated altogether by the end of the decade. I shall have a word or two to say in due course about the growth figures that the noble Lord, Lord Eatwell, questioned.
The noble Lord also criticised our employment policy. He claimed that our figures for unemployment were highly inaccurate and that the figures were 1 million higher than the official figures that we quote. I do not accept that. Nor does the leader of the noble
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Lord's party, Mr. John Smith, accept that in that he himself quoted the figure of somewhere a little below 3 million when he spoke to the CBI some time last year. If one uses international definitions, in its latest summer survey the Labour Force Survey showed United Kingdom unemployment at about 2.8 million. That was very close to the claimant count, as published monthly which shows a measure of 2.8 million. It is true that 1 million of the Labour Force Survey measure are not claimants, but that is virtually offset by 1 million claimants who are not unemployed for the Labour Force Survey measure. The noble Lord cannot take 1 million from one measure and not take 1 million from the other. The one that comes out quarterly and is based on the survey which is internationally agreed gives a figure which is broadly comparable with the unemployment count which, as the noble Lord appreciates, is purely a count of those in receipt of the various forms of benefit.
Lord Eatwell: My Lords, I am delighted to hear that the Government accept that the population defined as unemployed by the number of claims and the population defined with respect to the international standard are different. The noble Lord claims that the two cannot be added together. However, if one recognises the two definitions together as defining those unemployed, he will reach a figure of 4 million.
Lord Henley: No, my Lords, I do not accept that. One includes one set; one does not include the other. The two figures are measuring different things. They both have their advantages and disadvantages. What is interesting about them is that both produce roughly the same figure. We can say with some certainty that unemployment is about 2.8 million, give or take a few, and falling. The noble Lord, Lord Bruce, laughs. But as I said earlier, what is interesting is that the leader of the noble Lord's party, Mr. John Smith, accepts those figures and used them when he spoke to the CBI.
Lord Bruce of Donington: My Lords, I am indebted to the noble Lord. The reason I was smiling was because I have had the opportunity— which I am sure he has too of reading Mr. Alan Clarke's book on the subject when he was in the Department of Employment. He noted with amusement the way in which the figures were fiddled month by month. I recommend the noble Lord to read his diaries which are very readable indeed.
Lord Henley: My Lords, I have read Mr. Clarke's book. I do not accept what the noble Lord is saying— that we fiddle the figures. That is a quite unfair slur on the statisticians in the department that I have the honour to serve. If the noble Lord would like to come along and have a talk with our statisticians, they will explain exactly how the two figures are produced and why there is no fiddling of those figures whatsoever.
We have two broad counts. One comes out quarterly, based on a survey of employees. The other is a direct count in respect of those in receipt of benefit, whether unemployment benefit, income support or national insurance credit. It strikes me that those are two perfectly valid ways of achieving a count, but they both use slightly different bases—
Lord Bruce of Donington: My Lords, and invalidity benefit?
Lord Henley: My Lords, the noble Lord mentions invalidity benefit. As he will appreciate, invalidity benefit is not giver to those people who are available for work. It would be quite wrong to count people—
Lord Bruce of Donington: My Lords, —
Lord Henley: My Lords, people in receipt of invalidity benefit are not unemployed because, if the noble Lord knows anything about the conditions for receipt of invalidity benefit, he will know that it is for those who are incapable of work. If they are incapable of work, by definition one cannot include them in any count of those in work. No set of figures, in this country or internationally, would ever include people who are incapable of work among the unemployed.
Perhaps I may go on to say that the noble Lord, Lord Eatwell, criticised our policy on unemployment and said that we had a bad record on unemployment. Again, I do nor accept that. Our labour market policies have protected the interests of the unemployed as well as the employed. There is now greater diversity of hours and patterns of work in the United Kingdom than anywhere else in the Community. We have a far higher proportion of people of working age in jobs— some 71 per cent.—compared to any of the other major European countries. Self-employment and the rate of participation by women in the labour force have both increased and we have now virtually the highest participation rates in Europe. In the United Kingdom labour market the difference between unemployment rates for different age groups again is relatively low unlike, for example, France, where we believe the minimum wage has contributed to youth unemployment rates of some 23 per cent. That is far. far higher than the equivalent youth unemployment rates that you would find in this country.
Further, unemployment in this country is now coming down, and coming down far, far earlier than any of the economic pundits predicted a year ago. It is coming down against the trend in Europe, and it is coming down largely because of the reforms we made to the labour market in the 1980s, virtually all of which Labour opposed. Also, as the noble Lord knows perfectly well, further measures were announced in the Budget, which I do not think I need elaborate on now, which will bring yet further improvement as regards unemployment. Again, I simply do not accept his figures: the cost of unemployment being some £ 26 billion a year. The estimate is based on a number of assumptions, all of which are unsupported. This would assume that—
Lord Eatwell: My Lords, I am sorry: that is Her Majesty's Treasury's figure.
Lord Henley: My Lords, there is no figure from the Treasury that suggests unemployment costing anything like £ 26 billion, and we have never made any—
Lord Eatwell: I am sorry, my Lords. It is a parliamentary Answer.
Lord Henley: My Lords, if the noble Lord can point me to that, I shall appreciate it. Her Majesty's Government have never said that the cost of unemployment is of the order of £ 26 billion a year. We have always maintained that is impossible, because of the assumptions one has to make, to have such a costing. I simply do not accept what the noble Lord has said; but if he can point me to the Answer I shall certainly look at it.
Turning to growth under the Conservative Government between 1981 and 1989, the United Kingdom had eight successive years of economic growth averaging some 3 per cent. per year. The noble Lord, Lord Eatwell, quoted growth over the whole of the period of Conservative Government since 1979 which averaged, as has been said, some 1 Y2 per cent. The noble Lord is an economist, and he should know better than most that you simply cannot compare different points in an economic cycle. Even the noble Lord will accept that it is only fair to compare like with like. Looking at a comparable period under the last Labour Government, growth averaged 1.7 per cent. a year compared with 2.3 per cent. under the Conservatives. That is looking at peak-to-peak comparisons of GDP. I certainly believe there is no reason why we cannot continue to see growth over the next few years in terms of meeting our targets to eliminate the public sector borrowing requirement.
We have also heard a number of views about the convergence of the economies of member states. We heard from the noble Lord, Lord Bruce, about the broad economic policy guidelines, which are one of the new elements introduced by the Treaty. As I said to the noble Lord, I do not believe there is anything sinister in the convergence criteria on inflation or government deficits or on the policy guidelines. As I said to the noble Lord, in no way are we bound by them. The fact is they are consistent with the Government's own objectives on low inflation and sound public finances. Both aims are formalised in the convergence criteria of the Treaty of Maastricht. These criteria are thoroughly sensible in their own right, and they are an accompaniment to achieving greater exchange rate stability within the single market that we all wish to see.
Governments across all of Europe understand the importance of these matters because it is only this route which offers the prospect of steady, non-inflationary growth, more jobs and higher living standards. In the medium term financial strategy set out in the: PSBR, we have provided a clear framework for achieving our objectives of sustained growth and higher living standards based firmly on low inflation and sound public finances. The economy is at present still in a recovery phase, but adherence to the firm policies pursued by this Government will pay further dividends. In short, our assessment of the medium term is economic growth rising towards a rate of 3 per cent. a year, inflation falling further to 2 per cent. and the public finances moving back towards balance. We believe that is a highly promising outlook, and I commend it to the House.
Lord Eatwell: My Lords, before the noble Lord sits down, may I refer him to the important question I raised

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concerning paragraph 2.8 of this report? This is not a party political matter: it is a matter of the reputation of this country for putting forward coherent and logical arguments. Paragraph 2.8 expresses the objective of the Government's fiscal policy, and in the first part of the paragraph— just one sentence—we are told that the Government's objective is that the PSBR should return to zero and should balance over the medium term. In the second part of the paragraph we are told that the PSBR should not return to zero but should finance government's net capital spending. Those two propositions are contradictory. I quite understand that the noble Lord may not want to clear up this confusion at this moment, but could he refer this question to his right honourable friend the Chancellor and perhaps bring back to the House a redrafting of this paragraph, which removes the internal contradiction which is there at the moment?
Lord Henley: My Lords, I do not believe there is an internal contradiction there; but certainly I would prefer, rather than responding to the noble Lord's point from the Dispatch Box, to write to him. Obviously, if it was necessary to redraft, we would be quite prepared to do that. I beg to move.
On Question, Motion agreed to.

Building Societies (EFTA States) Order 1994
7.19 p.m.
Lord Henley Lord Henley rose to move, That the draft order laid before the House on 19th January be approved [5th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move that the order be approved.
This order is made under Section 14 of the Building Societies Act 1986, which allows the Treasury to designate countries or territories outside the United Kingdom where building societies may lend on the security of land. The order designates all the EFTA states: those which have joined the European Economic Area; namely, Austria, Finland, Iceland, Norway and Sweden, together with Switzerland— which has voted against entry— and Liechtenstein, whose entry will be delayed.
We believe that the order represents a further useful and sensible measure to deregulate building societies' activities and to ensure that they can take full advantage of the expanded single market. I commend it to the House.
Moved, That the draft order laid before the House on 19th January be approved [5th Report from the Joint Committee].—(Lord Henley.)
Lord Eatwell: My Lords, I thank the Minister for that explanation of the order, about which I have two technical points and one more general point to make. I turn first to the technical points. Are the Government satisfied that the foreign exchange exposure that is implied by the measure will not endanger the position of
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building society depositors? Will the noble Lord explain the Government's agreement to or promotion of Article 4 of the order because that suggests that power conferred by the order is not revoked by the cessation of availability of a qualified asset holding? That sounds to me as if a building society could no longer have a qualified asset and yet be exposed in foreign exchange terms. Are the Government content that in those circumstances depositors will be adequately protected?
More generally, can the Minister tell the House how the order fits into the general review of the building societies industry which the Government announced on 20th January? Are the Government contemplating a further deregulation of the industry and, if so, what new powers do the Government intend to take for the protection of depositors, particularly as far as foreign exchange risk is concerned? Indeed, why have the Government brought forward this order at a time when they are contemplating a review of the industry? Will the Government take note of the very huge losses that have been suffered by the savings and loan industry in the United States, which is equivalent to our building societies industry, and take care that the deregulation that they seem to be proposing does not produce a similar crisis here?
Lord Henley: My Lords, as regards foreign exchange risks, building societies will be subject to supervision by the Building Societies Commission, a statutory body which will ensure that societies hedge any foreign exchange rate risk as necessary. Further, as regards protection for their members in this respect, obviously any investment abroad is a matter on which building societies would have to consult their members. They would have to adopt the new power by amendment to the memorandum which requires a special resolution to be passed by a 75 per cent. majority of investing members who vote.
The noble Lord also asked whether we were bringing the order forward somewhat prematurely when, as he said, we have made noises— or rather, my honourable friend the Economic Secretary announced in January—that the Treasury and the Building Societies Commission would be reviewing the Building Societies Act. As regards timing, the main reason for the order is to allow building societies to take advantage of the extension of the single market to the European Economic Area. The Swiss referendum result put the future of the EEA agreement into doubt and, until the position was clearer, it made sense to postpone the order. So we have been delaying the order, rather than bringing it forward prematurely.
As regards the announcement that my honourable friend the Economic Secretary made, all that I can say at the moment is that discussions have begun between officials and representatives of the industry. The aim is to make recommendations to Ministers later in the year, possibly in the summer. If a case is then made that major changes are needed to the legislation, obviously there will be wider consultation following consideration by Ministers. It is certainly intended, whatever should happen, that that process should be completed by the end of 1994.
Lord Eatwell: My Lords, do the Government intend that there should be a Green Paper?
Lord Henley: My Lords, obviously I cannot comment at this stage. The idea at the moment, following the announcement of my honourable friend, is that, as I said, there should be discussion between officials and representatives. They will then make recommendations to Ministers. It is for my right honourable and honourable friends in the Treasury to consider the matter further before there is any wider consultation. Obviously, if there was wider consultation, there would be some form of Green Paper, the "greenness" of which would depend on a number of factors, but it would be a matter for my honourable friends to consider in due course.
On Question, Motion agreed to.

Return of Cultural Objects Regulations 1994
7.25 p.m.
Baroness Trumpington Baroness Trumpington rose to move, That the draft regulations laid before the House on 15th December be approved [4th Report from the Joint Committee].
The noble Baroness said: My Lords, your Lordships may remember the important debate that was held in your Lordships' House on 3rd November 1992. This followed on from the report of the Select Committee on the European Communities on the draft EC Regulation and Directive on Cultural Goods. These instruments were to be on the agenda of the Internal Market Council the following week.
Your Lordships paid particular attention to the provisions in the directive, calling for several improvements. Particular concern had been expressed in the committee, and reiterated again by my noble friends Lord Carrington and Lord Gowrie, that the provisions of the regulation and directive would be onerous for the art trade. giving rise to greater uncertainty in its operation, adding to costs and bureaucracy, and having little direct benefit to the United Kingdom.
Introducing the debate, my noble friend Lady Elles spoke of five features needing improvement. The first was the removal of coins and other archaeological items of minor value from the EC licensing regime. We achieved this with.1 derogation in Article 2(2) of the regulation, and have since produced guidelines on how this derogation should work. These guidelines were agreed between the British Museum and the relevant trade associations.
Secondly, the burden of proof, which originally lay on an owner to prove his good faith, is now according to the procedures in each member state. For this country, it would mean the onus would be on the requesting member state to establish that the owner did not act in good faith, just as the member state will also have to prove that the object is a national treasure which was illegally removed after 1st January 1993. As the noble Viscount, Lord Colville of Culross, rightly surmised, the exact working of this would be for the courts and not for these regulations.
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Thirdly, my noble friend called for clarification of how decisions on costs and compensation will operate. It will be vital not to deter potential purchasers. We have left it to the courts to decide the factors that they will have in mind in assessing the amount of compensation. Unfortunately, we could not achieve a provision for compensation for the initial periods of two months and one year where a case is either not proceeded with, or where the requesting state loses its case before the relevant court in the UK.
Fourthly, my noble friend and several other noble Lords expressed anxiety on how the search and enter powers would work. The necessity of being able to enter premises unexpectedly, both private and business, was accepted, provided that we applied for an order to at least a Crown Court. We have gone one better and specify in the regulations before your Lordships tonight the High Court in England, Wales and Northern Ireland, and the Court of Session in Scotland.
Finally, my noble friend Lady Elles asked that the time-limit within which a requesting state must notify the requested state might be reduced from two months to one month. This, I regret to inform her, was not part of the Government's negotiating position, and thus the provision remains at two months. What was on the negotiating agenda, however, was the absolute time-limits for lodging requests for return of unlawfully exported items. These are 30 years for objects. in private hands,75 for museums and ecclesiastical institutions. The United Kingdom had reluctantly to agree these as part of the overall political compromise, though a number of states wished to have no time limits at all.
So, the final texts of both the regulation and directive had regard to the wise proposals of your Lordships, and the Government were indebted to your careful scrutiny.
Tonight, I hope that your Lordships will be content with the way we have transposed the provisions in the directive into these regulations. If your Lordships had an opportunity to read the debate in another place on 14th February, you will know that there were a number of questions put to my honourable friend the Parliamentary Under-Secretary for National Heritage. He did not have time to respond, but I hope that your Lordships will find it in order if I take the most important of those questions now. It may be that your Lordships also intend to address some of the same issues.
I would like, first, to clarify three apparent misconceptions. These regulations create the framework in the United Kingdom which will allow member states to request the return of their national treasures. We must rely on all other member states enacting the provisions of the directive into their national domestic law so that we too can request the return of a UK national treasure. To date only Denmark has done so; after tonight we shall, I trust, be the second member state to do so. Most other member states are reported to be well on the way to completing their respective legislative processes.
Your Lordships will be wondering how the United Kingdom can make use of the directive, given that we do not have, nor ever want to have, a list of national treasures. I know that my noble friend Lady Elles will be interested in what I say next. We assume that most Waverley standard objects are already well known to

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our expert advisers. If one of these appears in another member state, having left the United Kingdom after 1st January 1993 without a UK export licence, and the Department of National Heritage as the competent authority is told of this, we would ask that member state to take the necessary measures to hold the object until our relevant expert checked. That will cover archaeological objects and all other works of art. This would be within two months of our knowing its whereabouts and the possessor. Also within that two months we would ask the reviewing committee to consider whether or not that object satisfied one or more of the Waverley criteria. If it did, we would consider commencing an action in the court of that member state for its return, unless an agreed settlement could be arrived at prior to that. What then happened to the object on its return to the United Kingdom would depend on the circumstances of each case.
Clearly, we would have greater difficulty in identifying unknown objects, whether they are "sleepers", such as was the portrait of Sir Joseph Banks by Benjamin West, or the Paul Viannen plaque. We would have equal if not greater difficulty in identifying objects with an archaeological provenance and proving the date of their removal from the United Kingdom. These difficulties will be shared by most other member states and are inherent in the nature of these kinds of objects.
Another misconception concerns private collections in the UK. Some maintain that the directive applies only to objects which are the property of public bodies or ecclesiastical institutions. That is not so. The distinction between public and private lies only in the absolute time limits beyond which requests are time barred: 30 years for privately-owned objects,75 years for public.
The third misconception concerns stolen works of art. The European Union is not competent in criminal matters. Hence, the only trigger for requests for restitution will be unlawful export. It may well be that requests for restitution will be for objects which have been stolen and unlawfully removed. But I must stress to your Lordships that the member state from whence such an object came would have a choice: either to use the existing procedures for identification and recovery of stolen works of art, or the directive. It will no doubt choose according to the circumstances of each case.
There is a fourth point, not really a misconception so much as a ghost which I would like to lay to rest early in this debate. The directive has an optional provision in Article 14(2) for member states which wish to make the provisions of the directive retrospective; that is, prior to 1993. The regulations which are before your Lordships deliberately do not take up this option. This is not just because of the Elgin Marbles but because of good principles of law making. The art trade, nervous as it is of the possible effects of the directive, at least knows where it stands in checking the provenance of objects which come into its hands after the 1st January 1993. It would be totally wrong and disruptive to catch objects in the United Kingdom, whether in trade or not, before that date.
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The Government's commitment to these regulations and to the provisions of the directive which lie behind them has been both praised and viewed with perhaps a little scepticism in another place. As the old song goes, "what a difference a phrase makes". My honourable friend was not so much sceptical as prudently cautious in his introductory remarks. These regulations break new ground in many respects in international cultural property law and their operation in practice will be watched most carefully by the wider international community. The United Kingdom has participated fully in the drafting of the UNIDROIT convention on stolen and illicitly exported cultural goods, but I have to tell your Lordships that the present draft, finalised in October last year, may yet go through many changes when it is discussed at the diplomatic conference, probably early in 1995. Thus it is far too early to say whether the United Kingdom does or does not agree with UNIDROIT when it cannot know the final outcome of the conference. But I can assure your Lordships that the United Kingdom delegation will treat the substance of the draft convention with the utmost seriousness, as it has done in recent years.
In the same way, we were members of the drafting party for the Commonwealth Scheme on the Protection of the Material Cultural Heritage, now adopted by the Commonwealth and known as the Mauritius Scheme. In November 1993 the Attorney-General made it clear in Mauritius at the Commonwealth Law Ministers Meeting that we had every sympathy with the principles which lie behind the scheme but that we wished to see how the European Community instruments worked in practice. The large and legitimate art trade in the United Kingdom must be allowed time to settle down with these regulations before we introduce further and wider considerations. And it may well be that the provisions of UNIDROIT overtake those of the Commonwealth scheme.
We have no means of knowing how frequently these regulations will be used by other member states, nor in turn how much use we will need to make of the regulations of other member states. What we are however fairly confident of is the restricted use that we would expect to make of the powers of entry and search. As your Lordships will appreciate, an application to the High Court for an order will be subjected to rigorous scrutiny; and applications will be, we expect, very much the exception and not the rule.
We are entering important but uncharted seas when we introduce these regulations, but I believe that we are doing so in the tested, time-honoured manner of good British administration. We are proceeding carefully, but conscientiously, in the spirit of mutual co-operation with other member states, which lies behind these regulations. The review in 1995–96 should not be seen negatively but as a positive opportunity to adjust what needs adjusting and affirm our concern and commitment towards both an open and free art trade as well as mutual assistance in protecting the national treasures of the European Union. I commend these regulations to the House. I beg to move.

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Moved, That the draft regulations laid before the House on 15th December be approved [4th Report from the Joint Committee).—(Baroness Trumpington.)
Lord Donoughue: My Lords, I welcome the measure. The illegal or unauthorised traffic in cultural treasures is huge and is growing, and it should be regulated. Therefore, we commend the Government on the progress that they have made, especially on having made improvements since the original proposals were before the House. I note that the commencement date is January 1993. That may worry some as being retrospective legislation. However, it will probably please more people in that it does not open up contentious older history. Apparently, England has not yet lost its marbles, despite much evidence to the contrary.
In that context, perhaps the Minister can touch on the matter of losses from private enterprise digs on archaeological sites. That issue has arisen before. Those are often of great heritage value, although not always of great financial value. If those objects turn up in collections in France or Germany, it is not clear to me whether, under these regulations, we can recover them. I am told that some such objects have been smuggled through Switzerland to France and now appear on the French list of national treasures. I am not sure how we protect ourselves from that. I suppose that it is a question of definition.
One extremely important question of definition concerns public collections. The Minister has helpfully clarified a problem in that regard. Many professional people in the trade to whom I have spoken felt that the regulations applied only to public and not to private collections. I am sure that those people will look with great care at what the Minister said; namely, that the difference is one of timing in the application of the regulations.
I should like to be reassured that that applies also to what we may call public private collections. In principle, many collections— for example, university, hospital and military regimental collections— are funded privately but they are also in receipt of public funds. Are those collections covered by the regulations? I know that extremely important people in the museums' collection trade are unclear about that. Of course, I do not refer to great treasures about which there could be no question. I am thinking of lesser well-known objects. For example, what if valuable books from the Bodleian, which is a private university collection, or treasures from the Ashmolean, turn up in Belgium or Germany?
Also in relation to clarity, do the Government intend to publish an official booklet of guidelines? I believe that a reference book should be published which would help all those involved in the trade to obey the regulations and to assist in their enforcement. I have in mind, in particular, curators of museums and so on.
The policing of the regulations is an interesting and difficult question. Our police are overstretched and I am not sure who will do the follow-up work. Curators of museums seem to be the obvious agents. A book of guidelines would help them to be on the look-out for
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cultural objects that have been transferred without authority. What plans do the department have for administering and policing the regulations? That may require extra resources and I wonder whether provision has been made for extra staff and the training of them. Can the Minister say what that will cost?
There is also the tricky question of search and entry. We are grateful for what has been agreed about that. We are pleased that those matters will be dealt with by the High Court rather than, as some of us feared, a cultural equivalent of the environmental health officers— a local authority Waffen SS— who have recently spread terror throughout the English countryside. Therefore, we are relieved by what has been achieved in that regard.
Seriously, there seems to be an extension of existing powers and procedures provided in these regulations. Hitherto, search and entry took place only if there was a reasonable suspicion that an offence had been committed under existing UK law. That seems now to be extended to irregularities under foreign law. We trust that further abuse in that connection will be avoided.
Anxieties had been expressed by the noble Lord, Lord Carrington, and the noble Earl, Lord Gowrie, in the earlier debate that the regulations could damage our valuable art trade. The Minister said something about that. There is always a danger that there may be vexatious attempts to reclaim objects which would delay sales and disrupt business. I am grateful to the Minister for what she said about that and it would do no harm to say more. We do not want Britain to become the sole policeman for other states, protecting their treasures while they do less to protect ours. The history of enforcement of EC regulations throughout the Community in various member states is not always encouraging.
I welcome the regulations as a step towards controlling unauthorised art traffic. I hope that they will help to stem the losses sustained by Britain's archaeological heritage and that the Government will be more active in that endeavour. I look forward to some clarification on the definitions of public and private collections and I suggest that the Government should publish guidelines to assist in the implementation of the regulations. I trust that the search and entry provisions will not be too Gestapo-like in style and that our art trade will not be damaged.
7.45 p.m.
Baroness Elles: My Lords, I express my gratitude to the Minister for explaining so carefully and clearly the content of the regulations. Many of the issues touched upon by my noble friend meet the anxieties expressed in the report produced by the European Communities Select Committee which was debated in your Lordships' House in November 1992. That seems a long time ago.
I express gratitude on behalf of the Select Committee for the way in which the Government have negotiated on many of the problems which we were able to point out in our brief and cursory examination of them. Considering the difficulty of and the timescale in which

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the negotiations took place, the Government are to be commended and congratulated warmly on their achievements.
We were concerned in particular with the question of the power of search and entry because, in many cases, dealers undertake their activities in private premises. We had to make sure that they would be protected by the need for at least a High Court order before any such search and entry should be allowed. The regulations are tightly drawn in that sphere, which is to be welcomed.
I understand that not all our objectives have been attained but my noble friend stressed the fact that the regulations do not cover criminal activities and stolen objects. During the debate, my noble friend Lord Renfrew expressed considerable anxiety, in view of his expertise in the matter, about the looting of archaeological sites. Other member states list all their national treasures but perforce, by its very nature, an object looted from an archaeological site is not on a national list and would not be covered by the regulations. As my noble friend and other noble Lords pointed out, no export licence would be sought for an object stolen from a site. Therefore, I was glad to hear the Minister emphasise that those matters would be covered by the national criminal law.
I am grateful also to my noble friend Lord Renton who introduced a Bill concerning the law of market overt. That Bill has passed through this House and is now before the other place. We could not have honoured our obligations to restore goods which had been brought through unlawfully from another country if they had been sold in market overt, because those goods would have been protected by that law. Therefore, I look forward to the day when the loophole with regard to market overt is closed.
I welcome the review which is proposed in 1995–96 to see how the regulations are affecting the art trade, in particular in this country. Of course the art market in this country is considerably larger than that of any other member state in the Community.
Lord Jenkins of Putney: My Lords, I must apologise to the noble Baroness for the fact that I missed the first two minutes of her opening speech. I hope that during that time she did not cover the point that I should like to raise. This seems to be the first international enforceable agreement on the art trade of which I am aware. In my own experience, we previously had the United Nations arrangements whereby museums in different parts of countries, under the aegis of their own governments, have been trying to restore to some extent from the third world the treasures which the first world—if that is what it is— has accumulated over the years.
I have always been in favour of the return of the Elgin Marbles. Indeed, I remain of that view. I do not know whether the position in that respect is affected in any way by the present legislation. I rather gather that the answer is probably not. I am bound to say that I wish it was. It seems to me that the process of the return of objects which are of specific national importance to countries should be carried out.
On that basis, we have very much been dragging our
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feet. Internationally, the United States has returned large quantities of art material to Latin America; Australia has returned a great deal of material to Papua; and the French have returned a great deal both to the East and to North Africa. We alone, up until now, have refused to participate in that international process of beginning to return only those objects which are of national importance for the country concerned. Therefore, I regard the attitude of the British Museum in the matter as being like that of a dog in a manger; that is, refusing in any way to consider the possibility that the Greeks might be right in asking for the return of the marbles. I believe that that clarifies my point.
Having said that, I join in my noble friend's welcome for the legislation. Like EC general legislation, it may perhaps be over directive. Previously it was merely voluntary: in the existing situation on the international field, you return the items if you want to do so; but, if you do not wish to do so, you do not. I believe that we are now moving into a situation where, if we are not very careful, we shall once again be involved in a great deal of international wrangling. I sincerely hope not. I also hope that the prosperous art market in which we have a pre-eminent position will not be gravely affected, although in some ways I would not mind affecting it a little myself.
Finally, I repeat my welcome to the legislation. It is a step in the right direction. In due course, I hope that it will prove possible to establish more firmly, without being over directive, a process whereby those countries which have historically over the years acquired very large quantities of the artistic material of other countries will, at any rate in some cases, be ready to consider the possibility of returning such items. I also hope that we shall be able to take a more leading part in that process as, indeed, we have this evening by virtue of the legislation now before the House.
Baroness Trumpington: My Lords, I am most grateful to your Lordships for giving such a general welcome to the regulations— warts and all, notwithstanding. They are a step in the right direction towards controlling the trade in illicitly-removed cultural items. I thank the noble Lord, Lord Jenkins, for his most interesting remarks. I should tell him that I spoke for quite long enough at the beginning of my speech. I am sorry that he missed my opening remarks. However, I did deal with the Elgin Marbles, and the regulations do not affect them. However, perhaps the noble Lord would care to read in Hansard the detail of what I actually said.
Lord Jenkins of Putney: My Lords, I shall do so very closely.
Baroness Trumpington: My Lords, the noble Lord, Lord Donoughue, very kindly gave notice of his questions. Some of them, whether or not on private collections, are covered by the regulations. I have covered the use of search and entry powers and the impact on the art world. However, I should just like to mention the important issues that the noble Lord raised. He referred to the difference between public and private collections. As I said in my introductory remarks, the regulations apply to Waverley standard items whether

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they are from a public or private source. I accept that that is a grey area in the definition of what constitutes a "public collection". However, that will have to be taken on a case-by-case basis. I can assure the noble Lord that we shall have the next 30 years in which to debate this thorny subject. Although the noble Lord, Lord Donoughue, may still be counting his marbles at that time, I fear that neither of us will be involved in the resolution of that problem. The museum world will certainly look a little different in 30 years' time.
We definitely include the national museums and galleries, local authority museums, university collections and bodies registered with Museums and Galleries Commission. The point raised about staffing was actually answered by my honourable friend in another place. The answer is that we do not think that we will have to take on new staff. We have taken on two new staff so that applications for export licences can be dealt with as quickly in the future as they have been in the past. The answer depends on the amount of work arising from the regulations.
I was grateful to the noble Lord for mentioning guideline booklets and the possibility of publishing them. That is perhaps a good idea. The department is considering extending and revising its existing guidance to exporters at present and will take up that point in that particular context
In a speech to the Society of Antiquaries, my right honourable friend the Secretary of State said the other evening that he, too, was most concerned about the lack of export licence applications for archaeological items coming from this country. Naively, I should like to think that smuggling of these items is not a popular pastime. But with the enthusiasm of the metal detector fraternity and the increasing number of finds, I rather doubt that. Her Majesty's Customs and Excise act promptly on intelligence reports. I believe that there is at least one
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case pending. But, more to the point, we are thinking of ways of encouraging finds to be reported and for the archaeological community to accept that items of minor archaeological or scientific importance are legitimate objects for collecting. Co-operation on all sides, collectors, finders, and the antiquities trade is the way forward.
Regrettably, the regulations now before us will not in themselves stop looting of archaeological sites, but they will enable us to get objects back from elsewhere in the European Union.
I have also explained to your Lordships that I believe the damage to the art trade will be limited. expect that only a few items will be claimed by other member states as the art trade is already diligent in researching the provenance of objects. Those concerned do not wish themselves to handle any which have been unlawfully removed from other member states in the European Union. But we will be monitoring the use of the regulations very closely and we will have the benefit of the review in 1995–96 of both the regulation and the directive.
In concluding my speech, which has gone on for rather too long, it gives me pleasure to know that wonderful objects like the Roman statue unearthed near Rome with a JCB can be returned to Italy under the regulations and that any similar UK national treasure can be returned in a reciprocal and definitive way. I commend the regulations to the House.
On Question, Motion agreed to.

Hill Samuel Bank and United Dominions Trust Bill [H.L.]
Committed to an Unopposed Bill Committee.
House adjourned at one minute before eight o'clock.