Lords Sitting of 30 October 1997

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Oxford.): The LORD CHANCELLOR on the Woolsack.
Lord Janner of Braunstone
Greville Ewan Janner, Esquire, QC, (commonly called the Honourable Greville Ewan Janner), having been created Baron Janner of Braunstone, of Leicester in the County of Leicestershire, for life—Was, in his robes, introduced between the Lord Morris of Kenwood and the Lord Merlyn-Rees

Lord Hunt of Wirral
The Right Honourable David James Fletcher Hunt, MBE, having been created Baron Hunt of Wirral, of Wirral in the County of Merseyside, for life—Was, in his robes, introduced between the Lord Walker of Worcester and the Lord Weatherill.
Lord Polwarth—Took the Oath
Lord Gifford—Took the Oath.

Higher Education: Fees
3.20 p.m.
Lord Wallace of Saltaireasked HerMajesty's Government:
What is the rationale for the imposition of a uniform fee for all students in higher education from 1998 onwards, regardless of course or institution chosen.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, we believe that it would be against the best interests of both students and institutions if different levels of fees were charged for full-time undergraduate courses according to the subjects studied, qualification sought or institution attended. That might encourage students to opt for particular courses or institutions because of the level of fee rather than the suitability of the provision offered. In particular, it would be neither fair nor educationally desirable if the annual tuition fee for students were higher for more expensive subjects than others.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that reply. If the fee is to have no relationship to the quality of a course or a particular institution, are we in effect talking about a head tax (one might call it a poll tax) on students as a standard fee—not a fee, therefore, but a standard levy? Do the Government propose to insist, if there is a standard fee
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for every course, on paying the same amount to universities for every course provided, or is that not part of the same egalitarian principle?
Baroness Blackstone: My Lords, no, of course not. First, on the point about quality, it is very important that we have procedures in place to ensure that the quality and standards offered by individual universities and individual courses are as high as possible. For that reason we will expect the agency set up to take on this work to do its work rigorously.
On the second point, no, the Government will of course be supporting those universities that are responsible for running more expensive courses, such as medicine or engineering, and the additional money that universities receive for those courses from the Higher Education Funding Council will continue.
Baroness Blatch: My Lords, are the Government comfortable with the consequence of this policy: that students from England, Wales, and Northern Ireland will have to pay more money than students from Scotland and southern Ireland?
Baroness Blackstone: Yes, my Lords. The reason for the difference between Scotland and England, Wales and Northern Ireland is that in England, Wales and Northern Ireland students will have taken a two-year A-level course in the sixth form and, if they are school-leavers going into higher education, will enter university at the age of 18 or more. Many students in Scotland will have done a one-year course and will not have done A-levels. Therefore the first year of their university course can be regarded as equivalent to the final year at school in the rest of the UK.
Perhaps I could add that students who come from low-income homes will, of course, not pay the fee, whether they are on a three-year course or a four-year course.
Lord McNally: My Lords, is the Minister aware of the Whitehall gossip that the Treasury is in favour of top-up fees because it could claw back those fees from the universities and thereby achieve a cut in spending?
Can she assure us that among those with whom she is having discussions is the National Union of Students, which has got these matters right as often as have the vice chancellors?
Baroness Blackstone: My Lords, I never listen to Whitehall gossip. As far as top-up fees are concerned, the Government's view is that they would lead to a hierarchy of institutions emerging, with those from well-off families better able to afford degree courses at particular universities. I believe that that is something that all Members of your Lordships' House would want to avoid.
Baroness Young: My Lords, will the Minister clarify the answer which she gave to my noble friend Lady Blatch regarding the differential between students from Scotland and those from England, Wales and Northern Ireland who go to Scottish universities? Is she

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in effect adumbrating a new policy that no English, Welsh or Northern Irish student requires to do more than three years at a Scottish university and conversely, presumably, every Scot will be expected to do four years in England? This seems to me to be a complete change of policy and I wonder whether the Minister can explain it.
Baroness Blackstone: My Lords, a number of Scottish universities already admit students with A-levels to the second year of their courses. This is not a new policy. This is a matter for the Scottish universities, of course. It is up to them to decide at what point they will allow students with A-levels on to their courses. There is a growing proportion of courses at Scottish universities which take English students with A-levels on to the second year.
Lord Annan: My Lords, is not the principle which the noble Lord, Lord Wallace, adumbrated somewhat extreme, and would it not lead to great bureaucracy? In student unions, whether you play chess or football, whether you read the newspapers or you do not, whether you debate or have other ways of entertaining yourself, you pay the same fee. Surely that should be the case with tuition fees?
Baroness Blackstone: Yes, my Lords. The Dearing inquiry recommended that a standard contribution should be paid regardless of subject of study in order to avoid the risk that students would choose cheaper subjects which met either their or the nation's needs. We share that view.
Baroness Blatch: My Lords, given the policy of equal access within European countries, can the noble Baroness say whether legal advice has been taken with regard to allowing students from England, Wales and Northern Ireland to be disadvantaged not only against Scottish students but also against students from other EU countries?
Baroness Blackstone: Yes, my Lords, I can confirm that legal advice has been taken. It is the case that the new system which will be introduced next year will require students in England to pay a fee of £1,000, if their parents' or family's income allows it, for every year of the course they are on, up to and including a fourth year. There will be separate and different arrangements for students on courses such as medicine and dentistry for a period beyond the fourth year.
Earl Russell: My Lords, does the Minister agree that universities are private and not public bodies; that therefore they need enter into agreements with the state only to the extent that they believe the deal is in the interests of both parties; that they have the legal right to charge top-up fees; and that to restrict that right might draw accusations of interference with private right or, if the Government were unlucky with their press, of worse?
Baroness Blackstone: My Lords, I see that there is considerable difference of opinion on the Liberal Democrat Benches on this matter. I am sorry to see these party splits emerging. Universities are in receipt of huge amounts of public funding and I believe that it is absolutely right that the Government should take an interest in questions of how much might be charged to a student studying at university in those circumstances. The Government are considering whether they should introduce legislation on the question of top-up fees and will make a decision about that when the time is right.

The Doctor-Patient Partnership
3.30 p.m.
Lord Colwynasked Her Majesty's Government:
Whether they will support the current campaign by the Doctor-Patient Partnership to encourage people to self-medicate for cold and influenza symptoms after having sought the advice of their local pharmacist, thereby helping to relieve the pressure this winter on general practitioners.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the Government support the overall aims of the campaign as part of a long-standing process of encouraging people to take responsibility for treating their own minor ailments. However, I emphasise that the Doctor-Patient Partnership is meant to promote sensible and appropriate use of GPs and not to discourage the use of GP services when they are needed. In particular relationship to influenza, there are certain groups of people for whom influenza may have serious consequences. Influenza immunisation is another important way of cutting down the level of illness which may be seen in connection with 'flu. I know that both we and the Doctor-Patient Partnership are encouraging GPs and indeed practice nurses to make sure that this year's 'flu vaccine is given to as many people as possible.
Lord Colwyn: My Lords, I thank the noble Baroness for that Answer. I am sure that pharmacists throughout the country will be delighted to hear that the Government endorse the fact that they are professionals providing a professional service. In view of her reply, would it be appropriate for the Government to consider providing some direct funding for this initiative? Would it be possible for a three or four-year period to make the campaign more effective and to allow fuller development of the programmes and take even more pressure from general practitioners with a view to allowing them to act as an effective filter to the secondary system and perhaps take some of the strain from hospital admissions?
Baroness Jay of Paddington: My Lords, under an initiative from the British Medical Association a number of health authorities are already contributing about £1,000 a year from their patient publicity funds to fund a national co-ordinator for this programme and support a range of shared initiatives. I also point out that the

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Government are investing in the United Kingdom over £40 million this year in an out-of-hours development fund which will meet some of the requirements to which the noble Lord refers.
Lord Walton of Detchant: My Lords, I warmly commend the establishment of the Doctor-Patient Partnership and the principles outlined in the Question of the noble Lord, Lord Colwyn, subject to the provisos mentioned by the Minister. Nevertheless, does the Minister agree that it is important not to discourage patients from seeking medical advice for serious 'flu-like symptoms such as headache and fever which may be the first manifestations of meningitis, a condition requiring urgent medical treatment and one which even the most skilled and dedicated medical practitioners sometimes find difficult to diagnose?
Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord for offering us that very authoritative view. It is indeed the case that the Chief Medical Officer, in recommending to all GPs that they should be using influenza vaccine, names a number of conditions where, regardless of age, people should look for an influenza vaccine rather than self-medication. I can list those to the House if any noble Lords feel that they themselves are at risk but they cover a large number of chronic and other diseases.
Lord Winston: My Lords, does my noble friend agree that, rather than spending public money on such a campaign, it might be a good idea to devote resources to preventive medicine, perhaps methods of hygiene such as washing hands and, if your Lordships will forgive me, preventing people picking their noses, especially during the winter months?
Baroness Jay of Paddington: My Lords, that is another authoritative question from one of my distinguished medical colleagues in your Lordships' House. Given that my noble friend has given me encouragement, perhaps I may draw attention to a wonderful booklet, circulated widely by general practices and health authorities, called What Should I do? It is not for general reference, I may say. The sub-title is, Do I Need to go to the Doctor? I am not sure whether the two situations that my noble friend described fall into that category. But I take his point.
Baroness Miller of Hendon: My Lords, I welcome the Minister's agreement that the independent pharmacist has a role to play. But does she know of the initiative of High Speed Health which we started in Barnet some six years ago? Further, if the Government are interested in promoting the work of the independent pharmacists, how do they think they will be helped by the clause in the Competition Bill which will remove from the independent pharmacist the exemption for retail price maintenance?
Baroness Jay of Paddington: My Lords, I am grateful to the noble Baroness for drawing attention to what I am sure was a very successful local initiative.
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I am afraid that I am not immediately familiar with it, but I know that all the local initiatives which apply the concepts of high street medication are often very successful. With regard to the Competition Bill, the Department of Health is at the moment neutral on the issue of how the RPM clause in the Competition Bill will affect over-the-counter medicines and community pharmacies. If the Competition Act does result in smaller pharmacies going out of business, the Department of Health already has the essential small pharmacy scheme which subsidises small pharmacies, for example, in rural areas, to allow access for the public in areas which might otherwise be difficult and that model, if necessary, could be developed.
The Countess of Mar: My Lords, is it not the case that the vast majority of patients are very considerate of their GPs, as I understand a recent survey showed, but there are a few troublesome families who repeatedly appear in GP surgeries? If money is to be spent on education, would it be better to concentrate on the troublesome ones?
Baroness Jay of Paddington: My Lords, I am not sure that I would necessarily be competent about describing any group of patients as "troublesome". But the noble Baroness refers to a point which is very close to my interests; namely, promoting the concept of patients' responsibilities about healthcare as well as their rights to it. I have been intrigued by the numbers of local patients' charters I have seen in the past few weeks. Perhaps I may quote from one in Lancashire: a doctor states in his local charter that patients should learn how to treat their own minor illnesses and keep some basic household medicines in a safe place. The doctor also asks patients not to bring bicycles into the surgery or enter wearing dirty boots.

Carbon Dioxide Emissions
3.38 p.m.
Lord Ezraasked Her Majesty's Government:
What practical measures they have in mind to achieve the target of reducing emissions of carbon dioxide by 20 per cent. by the year 2010, and how soon these measures will be introduced.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, the Government are convinced of the need to tackle climate change, as stressed by the Deputy Prime Minister in his evidence to the Select Committee in another place yesterday. For our ambitious proposals for reducing carbon dioxide emissions in the UK to have maximum impact globally, it is essential that all developed countries sign up to significant reduction targets at Kyoto. The Prime Minister has asked my right honourable friend the Secretary of State for the Environment, Transport and the Regions, Mr. Prescott, to take the lead in visiting the key players in the negotiations in order to assess their positions.

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We have already started to take action to reduce carbon dioxide emissions at home. The Chancellor's announcement in the last Budget that the real increase in fuel duty would be raised to 6 per cent. a year is an important first step. We are currently developing a new climate change programme on which we will consult next year. Measures likely to be included are improvements to business and domestic energy efficiency, an integrated transport strategy and a large increase in the amount of electricity generated from renewables and combined heat and power schemes.
Lord Ezra: My Lords, I thank the noble Baroness for that very encouraging and positive report. I wish the Government well in their forthcoming programme. However, is she aware that there is considerable concern among many people about the present operation of the regulatory system in the electricity and gas industries? Is it not the case that the impact of the way in which that system works is that, far from encouraging more efficient use of those two fuels, it encourages greater use of them? That applies particularly to the gas industry where the present regulator withdrew the energy efficiency measures introduced by her predecessor.
Baroness Hayman: My Lords, I am aware of the concerns that the noble Lord expresses and I am grateful for his general welcome of the measures that the Government are introducing. It is important that we deliver big improvements in domestic energy efficiency, as he points out. It would help in delivering important environmental and social objectives, cut fuel bills and improve comfort in poor housing. We are looking at a variety of options, one of which is a self-financing energy efficiency scheme to be run by the energy supply companies. Another would see a standards of performance scheme run by the gas and electricity regulators. The Government's review of utility regulation is looking at and considering those options.
Lord Hardy of Wath: My Lords, will my noble friend and her ministerial colleagues reconsider the use of petrocoke for power combustion? Does she think that that would in any way provide the help that is obviously necessary, given the present inadequacy of the systems for clean combustion, to attain the targets mentioned in the noble Lord's Question?
Baroness Hayman: My Lords, I am aware that National Power has put in an application to vary authorisation in regard to petrocoke. It is an issue which will have to be decided by the Environment Agency, which has responsibility in those matters. My right honourable friend the Minister for the Environment, Mr. Meacher, is taking a close interest in the issue.
Viscount Mersey: My Lords, can the noble Baroness say what measures the Government are pursuing in two specific special new clean coal techniques? The first is the pressurised fluidised bed and the second is the gasification of coal.
Baroness Hayman: My Lords, I shall do my best. We are continuing to support the R&D programme
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aimed at developing clean coal technology. The Department of Trade and Industry is actively encouraging industries and universities to work together to maintain UK expertise and know-how in this field. The overall strategy for clean coal technology is directed at securing a strong industrial base to commercialise the technologies by encouraging collaboration between industry, universities and overseas organisations, which are particularly important in this area. Perhaps I can write to the noble Lord on the specific question he asked.
Lord Judd: My Lords, does my noble friend agree that if this problem is to be solved, a successful international strategy is essential? There is a real problem about developing countries being told to do as we say rather than as we have done. Can my noble friend assure the House that in his remit the Secretary of State for the Environment will be discussing with other industrialised countries the need to transfer resources to developing countries so that they can build up their development in an environmentally friendly way, something that we in the already industrialised world conspicuously failed to do?
Baroness Hayman: My Lords, the House is well aware of my noble friend's long-standing interest in these areas. It is the Government's view that everyone, including developing countries, must play a part in controlling emissions in the medium to long term. However, in the short term it is for the developed countries to take a lead to fulfil their existing commitments and to sign up to significant reductions in Kyoto. It is for that reason that the Prime Minister asked the Deputy Prime Minister to press for action on visits to the United States, Japan, Australia and New Zealand as well as to chair a crucial meeting of developed countries in Tokyo. My right honourable friend the Minister for the Environment will also visit Washington next week as part of the EU troika. We hope that in that way we can make progress in the run-up to Kyoto to make the success that is essential.

Asylum Seekers
3.42 p.m.
Earl Russellasked Her Majesty's Government:
What deficiencies in the present system of controls on asylum seekers the changes they announced on Monday 27th October are intended to address.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, the length of time at present taken to resolve an asylum claim can make it attractive to claim asylum to those motivated by economic reasons. This is because a good number of claimants who make abusive asylum applications at ports of entry are primarily motivated by the access this affords, pending a decision on their asylum claim, to United Kingdom welfare benefits.
On 27th October we announced new procedures to speed up the decision-making process in abusive asylum claims. Those asylum seekers making abusive claims at

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the port of entry will now only be allowed five days in which to submit further evidence after their interview instead of the 28 days previously allowed. But the final decision on how long to allow for the submission of any further material relevant to the individual's claim will remain with the Asylum Directorate's caseworker in the light of all the available evidence.
This new procedure will enable faster decisions to be taken in abusive cases, maintaining the integrity of our asylum system against those who would seek to abuse it, which is so essential for the protection of the genuine refugee.
Earl Russell: My Lords, the Minister has proved himself to be one of the best advocates in a House which is used to distinguished advocates. Is his skill sufficient to explain to the House how the Home Secretary, having regard to the principles of natural justice, may know a claim to be abusive when its substance yet remains to be heard? Or how the Roma in Slovakia and the Czech Republic have no well-founded fear of persecution?
Lord Williams of Mostyn: My Lords, some claims which are made bear self-evident hallmarks that they are likely not to be well founded. In those circumstances it is reasonable, in the public interest—not least public funds and the interests of genuine refugees—to introduce a curtailed period for making further representations. There is no suggestion that natural justice will be breached; quite the reverse. The opportunity to make further representations is specifically allowed. That is what natural justice requires. It does not require delay, which is simply intended for improper purposes.
Lord Renton: My Lords, is the Minister aware that the Government will receive wide support if they succeed in reducing the number of bogus asylum seekers? Is he further aware that, owing to the increase of oppression in many countries of the world, the ease of international travel and the fact that people find it easier to be accepted in this country than in other countries to which they might go, there has been an addition to our social problems which must be dealt with?
Lord Williams of Mostyn: My Lords, I am grateful for the initial observations made by the noble Lord, Lord Renton. These are extremely serious questions. Your Lordships may be interested to know that at the present time there is a backlog of cases of over 50,000, 12,000 of which go back to 1993 or 1994. That is an indication of the scale of the problem. On 21st August my right honourable friend the Secretary of State for Home Affairs announced an inter-departmental study. Your Lordships may agree that dealing with the problem on a single department basis is not appropriate and therefore the Home Office is leading that review. It intends to report in the earlier part of next year. The review includes the Cabinet Office, the Foreign and Commonwealth Office, the Lord Chancellor's
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Department and all the other relevant departments that have a specific interest in the problems the noble Lord accurately described.
Lord Avebury: My Lords, is the Minister aware that in September 1994 at an ODIHR seminar, chaired by our ambassador Audrey Glover, a number of recommendations on the treatment of Roma were made? Subsequently the ODIHR set up a contact point for Roma and recommended that a European charter for Roma be set up. In view of all the work that has been done by the ODIHR on the question of Roma, not just in the Czech Republic and Slovakia, but throughout the region, does the Minister agree that it is unlikely that claims made by those people are likely prima facie to be abusive? Is not the correct answer to try and strengthen the mechanisms for enforcement of OSCE declarations such as the Copenhagen declaration which would enable the rights of those minorities to be dealt with in their countries of origin?
Lord Williams of Mostyn: My Lords, as I indicated earlier, there is no single answer to what is a complex problem. I am not able to agree with the noble Lord, Lord Avebury, that it is unlikely that one will encounter abusive claims from the Czech Republic or Slovakia. Perhaps I can give some figures. On 24th October there was a total of four asylum claims made by Czechs and Slovaks at Dover; the next day a total of 28; on the 26th, five; on the 27th, two; on the 28th, seven; and yesterday, none. I suggest that there may be a causal connection between the Home Secretary's announcement and the figure of nought yesterday, not simply a statistical one.
Lord Campbell of Alloway: My Lords, can the Minister confirm that a decision on interview that this is an abusive application is subject to appeal and judicial review? Can he also state what the status is of the new five-day procedure referred to in Monday's Hansard in another place?
Lord Williams of Mostyn: My Lords, any decision which is made is subject to the usual review and appeal procedures. I stress that the decision to curtail the period for further representations is subject to the immigration caseworker's decision. The effect, therefore, to which the noble Lord, Lord Campbell, refers is to curtail the period from 28 days to five days. The Government's judgment—I hope your Lordships think it is a reasoned and reasonable one—is that five days in many instances is amply sufficient for further representations to be made.
The Countess of Mar: My Lords, I declare an interest in that I have been a member of the Immigration Appeal Tribunal since 1985. Is the noble Lord aware that the delays are not only on the part of asylum seekers? There are also delays within the Home Office administration and the appellate authority's administration and from the lawyers who represent the appellants. Is the review committee looking at all those factors?
Lord Williams of Mostyn: My Lords, I take entirely the noble Countess's point. Delay in any administrative

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system is wrong in itself. I have indicated to your Lordships the scale of the problem—a backlog of more than 50,000, some of them of very long standing. Delays will be one of the central features of the interdepartmental review which was announced by my right honourable friend on 21st August.
Earl Russell: My Lords, the Minister congratulated himself on reducing the number of Slovak applications in Dover. Is he aware that he congratulated himself on what, under Section 2 of the Asylum and Immigration Appeals Act 1993, may well be an illegal objective?
Lord Williams of Mostyn: My Lords, I did not congratulate myself on anything. I simply indicated the general understanding in your Lordships' House that this is an extremely serious problem and I ventured to offer a mild, pacific suggestion that the Home Secretary's announcement might have had something to do with the fact that yesterday there were no applications at all.

Permanent Counter-terrorist Legislation
3.52 p.m.
Lord Williams of Mostyn: My Lords, with the leave of the House, I shall now repeat a Statement on the plans for permanent counter-terrorist legislation which is being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"Madam Speaker, in the past 25 years terrorism has exacted a terrible toll. Many have lost their lives. More than 3,000 people have died in Northern Ireland alone. Businesses have been destroyed. Substantial damage has been wrought on our towns and cities. The very infrastructure of our nation has been attacked.
"This is not just the result of Irish terrorism. International terrorists too have cost us dear. In the past 20 years there have been more than 80 international terrorist incidents in this country. No one here today will forget the shooting of WPC Fletcher outside the Libyan People's Bureau in St. James's Square, London in 1984 or the attack in 1988 on the Pan Am airliner over Lockerbie, when 270 people were killed by the blast. More recently, there have been the attacks on the Israeli Embassy and on Balfour House in 1994. Only last January letter bombs were sent to the London offices of an Arabic language newspaper which seriously injured two security guards.
"In combating this threat we owe an enormous debt to the vigilance of the police and the security forces. They have had many successes in capturing and prosecuting terrorist suspects. The convictions of six IRA terrorists at the Old Bailey last July are but the latest in a long line.
"In Northern Ireland there has of course been a very welcome change for the better. There, the IRA and a number of loyalist groups have declared ceasefires. Currently these are holding. Substantive
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talks between the parties have begun. There is real cause for optimism that a lasting peace may be achieved in Northern Ireland. A negotiated political settlement is, as we are all agreed, the only way forward.
"But the ceasefire in Northern Ireland and the possibility of achieving lasting peace there does not mean that we no longer need special legislation to investigate, to disrupt and to counter terrorism. There are extremists on both sides of the divide in Northern Ireland who are opposed to the present ceasefire and who want the talks process to fail, as this morning's explosion in Londonderry shows. On the international front, there is ample evidence of the activities of terrorists, whether sponsored by unfriendly governments or acting in more or less organised groups. Some may commit acts of terrorism within the United Kingdom; or raise funds here; or otherwise use the United Kingdom as a base from which to launch attacks elsewhere in the world.
"In the face of such threats, we cannot—and we will not—drop our guard. Terrorists change their tactics all the time. Therefore we must remain vigilant at all times and ensure that the police and the security forces have the powers which they need.
"The current legislative framework for combating terrorism in the United Kingdom is contained principally in the Prevention of Terrorism (Temporary Provisions) Act 1989 and the Northern Ireland (Emergency Provisions) Act 1996. Both Acts represent the latest versions of emergency legislation first introduced in the early 1970s in response to the very serious attacks which had taken place within the United Kingdom. This legislation has been regarded by successive governments as exceptional but temporary, to be removed as soon as circumstances would allow.
"But 25 years of attacks and the continuing threat from terrorists make a mockery of the suggestion that legislation to combat terrorism can or should any longer be regarded as only temporary. What is needed is permanent legislation to deal with continuing threat from terrorism and the terrorist. I shall first explain the Government's intentions, in advance of new legislation, in relation to the exclusion powers in the 1989 Act.
"As the House well knows, the exclusion powers in the Prevention of Terrorism Act enable the Secretary of State to exclude from the whole of the United Kingdom, or a part thereof, anyone whom he is satisfied is or has been concerned in the commission, preparation or instigation of acts of terrorism in connection with the affairs of Northern Ireland. Unlike powers to exclude under the immigration Acts, these powers apply equally to British citizens as well as to the nationals of other states.
"In recognition of this, they have been used sparingly in recent years. Let me give the House the figures. In 1982 there were 248 orders in force. By 1994, just before the last ceasefire, the number had dropped to 74. During that ceasefire the then

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Secretary of State for Northern Ireland revoked all the remaining 10 orders which he had made. No orders were made in 1996 or 1997 by my predecessor against anyone who had not been previously excluded despite the ending of the ceasefire. When I took office on 2nd May, the number had fallen to 22. For some years now, therefore, the power has been withering on the vine. During the past six months I have considered 12 cases as the law has required me to do. I have renewed two orders and either revoked or allowed to lapse another 10.
"As the House knows, this Government have long been opposed to these powers on the grounds that they were of limited utility and amount to a form of internal exile without trial—a view, I may say, shared by many. The noble Viscount, Lord Colville, in his 1987 review of the legislation, urged that the powers which he described as draconian be removed. Others both at home and abroad have called for the same reforms. The powers have not only exposed the United Kingdom to severe criticism from our friends but they have also provided an easy argument for the apologists for terrorism to use against us.
"Taking into account the view of those who advise me on security matters, I can tell the House that I am minded, assuming the situation does not change, to allow the powers to lapse when the Act comes up for renewal next year. I can also tell the House that, in the light of the recent developments in Northern Ireland, I have come to the conclusion that at the present time the exercise of these powers is no longer expedient to prevent acts of terrorism in relation to each of the 12 cases in question. I have therefore today revoked the last 12 orders.
"In taking a fresh look at the whole of the legislation to see how it can be improved and strengthened, much of the groundwork has been done for us by the inquiry team led by the noble and learned Lord, Lord Lloyd of Berwick. The House will recall that he was asked in December 1995 to consider whether there would be a need for specific counter-terrorism legislation in the United Kingdom in the event of a lasting peace in Northern Ireland. His report was published in October last year. He concluded that there would be a continuing need for permanent United Kingdom-wide legislation. He made a number of detailed recommendations for changes: to the definition of terrorism, to the powers to proscribe terrorist organisations and to the powers of the police to investigate and arrest those suspected of terrorism. His report was, of course, predicated on there being a lasting peace in Northern Ireland. That desirable state of affairs has yet to be achieved. But this does not mean that we cannot consider his recommendations and, if appropriate, implement them in the interim.
"My right honourable friend the Secretary of State for Northern Ireland and I therefore intend to present proposals to replace both the current Acts with permanent United Kingdom-wide counter-terrorism legislation. We intend to publish these proposals in the form of a consultation paper early in the New Year. The paper will draw on, but not be constrained
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by, the most helpful analysis and recommendations of the noble and learned Lord, Lord Lloyd. I hope that he will contribute further to our thinking.
"In the interim the police and the security forces must have the powers which they need to combat terrorism. I therefore intend to seek the agreement of this House in March next year to the renewal of the Prevention of Terrorism Act 1989. Similarly, my right honourable friend the Secretary of State for Northern Ireland intends to renew the Northern Ireland (Emergency Provisions) Act. The current Emergency Provisions Act expires in August next year, so she will be bringing forward a Bill to extend its life and to make some amendments to it. The introduction of the Bill will follow later today.
"Terrorism is not now a temporary phenomenon anywhere in the world. We need a robust and clear set of powers which will enable the police, security forces and the courts to deal effectively with all forms of terrorism for the foreseeable future, with the flexibility to respond to emergencies should they arise.
"Like the noble and learned Lord, Lord Lloyd, the Government envisage that some existing powers will be confirmed and placed on a permanent footing, that some will be strengthened and that others will substantially be changed. For example, it has long been our view that there should be a judicial element in the extension of detention process. The aim will be a framework of laws which are both effective and proportionate to the threat.
"This Government will never drop their guard in the fight against terrorism."
My Lords, that concludes the Statement.
4.2 p.m.
Lord Henley: My Lords, I start by thanking the noble Lord, Lord Williams of Mostyn, for repeating the Statement. We also echo the last sentence of the Statement that,
"This Government will never drop their guard in the fight against terrorism".
As long as the Government remain true to that belief and desire, we shall certainly support them in their activities.
I also pay tribute, as did the noble Lord in repeating the Statement, to all those who have suffered from the horrors of terrorism in both Northern Ireland and the rest of the United Kingdom over the past 25 years. Let it never be forgotten that it has affected people in all parts of the Kingdom and at all levels. My noble friend Lady Thatcher will remember with horror the experiences of some 13 years ago in Brighton. A later Cabinet suffered an attack only seven years ago. We live in a strange world where terrorism, which hardly existed 25 years ago, has left its mark on the whole of society.
Like the noble Lord, I pay tribute to all those in the police and security forces for all they have done over the past 25 years in combating the threat of terrorism. I too would like to emphasise the fact that they have had many successes in capturing and prosecuting terrorist suspects.

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There are only one or two points that I wish to make at this stage as regards the Statement. As the noble Lord made quite clear, there will be a consultation period and a paper coming forward from the Government. We shall have a degree of time to debate it, as agreed by the usual channels, in a fuller manner later on.
But the noble Lord would expect me to comment on the idea that the power to make exclusion orders should lapse. As I understand it, the Prevention of Terrorism Act will be renewed next year, as he made clear, and it will come before both Houses in March to be renewed for a further year. Should there be some delay in the permanent legislation, I presume that there will be a commitment to renew the Act for a further year, and the year after and the year after should it be necessary. What I find alarming is that the power to make exclusion orders should be, as it were, unilaterally given up at a time when, although the Government are making considerable progress in Northern Ireland, it is still not clear that the ceasefire is permanent.
Will the noble Lord at least comment on whether he can see a case for retaining the power to make exclusion orders—whether his right honourable friend wishes to make use of them is another matter—until the ceasefire seems more permanent or at least until the new legislation is in place? There does not seem to be a case for, as I put it, unilaterally removing the provision at such an uncertain stage.
The second point I wish to make is about the consultation period. Can the noble Lord say when it will begin and how long it will continue? When does he think that he or his right honourable friend will be in a position to put legislation before the House and on what sort of timescale does he believe that that legislation will proceed? When can we hope to see that legislation on the statute book? That comes back to the earlier point that I made about the temporary legislation being renewed and whether that can be done for one year, two years or as long as necessary.
I thank the noble Lord for repeating the Statement and, like him, I pay tribute to all those who have suffered and who have served in the fight against terrorism over the past 25 years.
Lord Harris of Greenwich: My Lords, I, too, welcome the fact that the noble Lord, Lord Williams of Mostyn, has repeated the Statement. I intend to be extremely brief. The Government announced that there will be a consultation period followed by the introduction of permanent legislation. I believe that to be highly desirable, particularly in the light of the report of the noble and learned Lord, Lord Lloyd of Berwick. It will also give Parliament the opportunity to consider the details of that legislation, which is quite impossible in the circumstances where we merely have a renewal order once a year which is, of course, unamendable.
Having said that, I thank the noble Lord. We shall reserve our position until we see the details of the Government's legislation.
Lord Williams of Mostyn: My Lords, I am deeply grateful for the approach which has been adopted by
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both the noble Lord, Lord Henley, and the noble Lord, Lord Hams of Greenwich. The noble Lord, Lord Henley, asked whether there was danger in lapsing the powers. The powers having lapsed, if the Secretary of State comes to the conclusion that it is necessary to bring them back into force as a matter of urgency, I am happy to reassure your Lordships that the Act allows the Home Secretary to make an order reactivating the powers. There is the in-built mechanism in the Act that the order must then be confirmed by both Houses within 40 days or the powers will lapse again.
I entirely echo what the noble Lord, Lord Henley, said about terrorism not being limited to a certain part of the United Kingdom. Perhaps one's mind is particularly put to that when one goes to the party conferences and realises, rather dismally, that in a mature, civilised democracy party conferences are unable to be held without the assistance of armed police and very heavy security. A further dismal consequence of terrorism is that we almost come to accept it without question.
The noble Lord, Lord Henley, also asked about consultation, as did the noble Lord, Lord Harris of Greenwich. The intention is that we should have the consultation paper out in the early part of next year. The present thought is that a consultation period of about three months would be appropriate. We do not want the timescale to slip. On the other hand, we want the opportunity to have informed consultations with everyone who has a legitimate interest in these matters, bearing in mind the very useful basis provided by the Lloyd Report to which I referred earlier. It is not possible for me to speculate on the timescale for the introduction of a new Bill.
All that I can reiterate to your Lordships—I hope that this finds favour—is that this is something that we must build which must be capable of lasting a significant period of time. One of the problems historically has been that we have responded on a piecemeal basis, often entirely understandably and perhaps inevitably, to specific terrorist outrages. Legislation has often been introduced within a very short period of time. I have been a witness to that even in the five years that I have been a Member of your Lordships' House. That was inevitable and when we were in opposition we supported the Government while expressing reluctance. As the noble Lord, Lord Henley, said, we want to bear in mind that this is not a limited problem; it is a global problem and we want to equip ourselves with the tools with which we can deal with this great vice of our time.
4.11 p.m.
Lord Callaghan of Cardiff: My Lords, the Government's approach is entirely appropriate and ought to command our support. At the risk of labouring the obvious, may I ask the Minister whether it is quite clear that on the day the Home Secretary decides that it is necessary, if unfortunately it should be, to reactivate the so-called "Temporary Act", he can reactivate it by signing an appropriate order which will operate

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immediately and continue for up to 40 days, during which time the Home Secretary will ask Parliament to support him in what he has done?
Lord Williams of Mostyn: My Lords, my noble friend is right. The Home Secretary has that power. I have referred to a mechanism in the Act which requires confirmation within 40 days. Failing such confirmation, the powers lapse. I entirely accept that the important point is that in the meantime the Secretary of State is entitled in law to make any exclusion orders which may be required.
Lord Molyneaux of Killead: My Lords, I support the point made by the noble Lord, Lord Callaghan, who has vast experience in these matters because otherwise he and I would have been able to picture terrorists reading about—and they can now view it on television—a lengthy debate on the introduction of replacement measures. It is good to know that the Government have retained the power to introduce measures immediately and without the need for further debate. I commend the decision to maintain the permanent powers, which is something that my colleagues and I have advocated for a long time. It will bring a great deal of satisfaction to people in all parts of the United Kingdom to see that the powers will be applied uniformly throughout the United Kingdom. Although it has been said that the main terrorist bodies are for the time being observing a ceasefire, the reality is that there is no shortage of what I might call "sub-contractors" to continue carrying out the evil deeds.
Lord Williams of Mostyn: My Lords, I am most grateful for those comments from the noble Lord, Lord Molyneaux. Friends and colleagues in Northern Ireland have expressed the same view to me—that the powers should be United Kingdom-wide. I believe that the way forward is on the basis of consultation. There may be occasions when it is more prudent not to discuss on the Floor of your Lordships' House the thinking of the party of either the noble Lord, Lord Henley, or of the noble Lord, Lord Harris of Greenwich, or the thinking of any other interested party with legitimate concerns. I am always open to private consultations if any noble Lord thinks that that would be a wiser and safer course which is in the general public interest during the discussion period which is bound to be delicate and difficult.
Viscount Waverley: My Lords, I congratulate the Government on addressing this world-wide phenomenon in this manner. This country has for too long been considered a safe haven for terrorist organisations. Will the Minister please consider at the appropriate time those 30 organisations listed by the counter-terrorism section of the United States State Department and clarify whether, if it is ever considered or determined that they have a presence in the United Kingdom, a mechanism exists to deport those individuals whether or not they have applied for asylum in the UK?
Lord Williams of Mostyn: My Lords, the existence of designated organisations in the United States
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legislation is well known to my right honourable friend. One of the points of the consultation exercise is to identify precisely the problem of which the noble Viscount spoke; namely, international terrorist groups. We tend to think of international crime too narrowly and perhaps in the context of international drugs crime, which I know is a particular concern of the noble Viscount, but we have to be vigilant against prospective terrorist attacks apart from what we know about historical actuality. One of the purposes of the consultation exercise is to consult with law enforcement agencies overseas. Obviously, we are in close liaison with many friendly nations on this matter and we want to learn from the experience of others to see whether we can improve upon our present armoury of weapons.

Public Processions etc.

  (Northern Ireland) Bill [H.L.]
  4.16 p.m.
  The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs): My Lords, I beg to move the Motion standing in my name on the Order Paper.
  Moved, That the order of commitment of Tuesday last be discharged and that the Bill be committed to a Grand Committee.—(Lord Dubs.)
  On Question, Motion agreed to.

  Competition Bill [H.L.]
  4.17 p.m.
  The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, I beg to move that this Bill be now read a second time.
  I am delighted to be bringing forward legislation to reform and strengthen competition law. I am pleased to be able to do so so soon after the Government have come into office, fulfilling the manifesto promise to make it an early priority.
  It has been widely acknowledged for a decade that our competition laws are not working well and that reforms are needed. Over the years, there have been Green Papers and a White Paper, consultation documents and even a draft Bill last year, but legislation has not been forthcoming. I am very pleased that this Bill will now take the process forward.
  The Bill shows our commitment to ensuring effective and fair competition. It would benefit both consumers and business.
  It is perhaps more obvious that competition provides value and choice for consumers. But, as Minister responsible for trade and competitiveness in Europe, I feel just as strongly about the spur which strong competition in the UK and continental Europe provides to the competitiveness of our companies in overseas markets outside the European Union; that is, in the global market. The European Union should be the most competitive joint market in which our companies can

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  prepare for global competition, particularly in the fast developing markets in the Americas and Asia. Time is short and, as we all know, world competition is accelerating.
  In our manifesto we said that we would adopt a tough prohibitive approach to competition law to deter anti-competitive practices and abuses of market power. This Bill would fulfil that commitment. It would do so by introducing two prohibitions, following closely the models set out in Articles 85 and 86 of the Treaty of Rome, with which those companies whose business affects trade in Europe already have to comply. Indeed, they have done so for many years.
  To ensure smooth interaction between the EC legal and business environment and the UK prohibitions, we intend that the UK prohibitions would be interpreted in a manner consistent with the equivalent provisions under EC law. Clause 58 of the Bill has this effect. Such consistency would be of great benefit to so many of our businesses that currently have to worry about two different approaches to competition policy. It delivers a level playing field for our business community in the UK as firms become more and more engaged in European home markets.
  I am pleased that, in the short timescale available for the drafting of this Bill, in August we were able to publish a consultation document and working draft of the Bill. I am grateful to all those who have offered their comments. We have received over 150 responses, some from organisations themselves representing large numbers of companies. Many have suggested that we change particular provisions of the Bill. That is the purpose of consultation. But the thrust of our proposals has generally been welcomed by companies, consumer groups and legal practitioners.
  I should like to emphasise that this is not only an important Bill but also a complex and technical one. It is vital for the health of the UK economy that we get it right. That is why we were determined to go out to consultation on a draft Bill, albeit a preliminary version. We said in the August 1997 consultation document that where we are persuaded by points from the consultation responses that have not been taken into account in the Bill as introduced to Parliament we would be willing to consider making changes by government amendment. We anticipate that with the benefit of the consultation the number of these amendments will be quite considerable. I shall be inviting opposition spokespersons of all parties to discuss this with me before Committee stage.
  I believe that the right approach to a Bill of this kind is to take a flexible attitude based on the knowledge that there is much common ground given the previous government's past intention to introduce legislation in this area. In particular, we are still consulting on how the prohibition of anti-competitive agreements should apply to agreements relating to land. We are also consulting with interested parties on how our proposed exclusion of vertical agreements, such as those between a manufacturer and a dealer, distributor or concessionaire, might be framed.
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  I turn now to the first prohibition: the prohibition of anti-competitive agreements. While Britain can be proud of its tradition in developing laws aimed at safeguarding competition and the public interest, we all recognise the need to update the framework in certain important respects. In particular, the regime operated under the Restrictive Trade Practices Act 1976, which was based upon legislation passed in the 1950s, has become ineffective and, in part, outdated. The Bill will repeal this Act and the Resale Prices Act 1976, replacing them with a prohibition of anti-competitive agreements between undertakings. Clause 2 of the Bill gives effect to the prohibition. As I have said, this is based on Article 85 of the Treaty of Rome. A domestic prohibition which operates consistently with Article 85 would keep the burden on business to a minimum. It would reduce some of the regulatory overload and paperwork.
  As is the case under Article 85, the Bill would allow certain categories of agreements to be exempted on a block basis. It would also be possible for agreements to be exempted on an individual basis. The exemption criteria are set out in Clause 9. In addition, any agreement which already benefits from an EC exemption would be automatically exempted at the domestic level. This would also apply to agreements that would have qualified for exemption at the EC level if they had affected trade between member states. The effect on trade between member states is the key factor that brings Articles 85 and 86 into our legal system. This effect is achieved by Clause 10.
  I now turn to the second prohibition: the prohibition of abuses of a dominant market position. The prohibition is modelled on Article 86 of the Treaty of Rome and is given effect in Clause 18 of the Bill.
  The current regime under the Fair Trading Act needs strengthening. It does little to deter dominant firms from abusing their position. Worse, serious anti-competitive behaviour can continue unchecked while lengthy investigations are conducted. A period of nine years is not unknown. As a result firms can sometimes be driven out of business unfairly before abuses can be investigated and stopped. Consumers and competitors who are harmed by such abuses have no redress or right to compensation.
  The new prohibition will put right these shortcomings and provide a strong deterrent against abusive behaviour. It will enable the Office of Fair Trading to impose interim measures to bring seriously damaging anti-competitive behaviour to an end rapidly, and it will give businesses and consumers effective rights of redress.
  The new prohibition will become the primary weapon against abuses of dominance. However, we do not believe it is right to dispense entirely with the current approach to dealing with monopoly power. There is a strong case for maintaining powers to investigate markets in cases where competition issues arise from the structure of the market rather than from anti-competitive agreements or specific abuses by a dominant company. The current regime under the Fair Trading Act enables such situations to be investigated independently by the

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  Monopolies and Mergers Commission and enables wide-ranging remedies to be imposed if matters are found to be contrary to the public interest.
  We think that these powers would have value as a back-stop to the new prohibition regime. We therefore propose to retain the monopoly provisions of the Fair Trading Act. However, Sections 2 to 10 of the Competition Act would be repealed. In addition, with the introduction of the prohibition regime we believe that the use of the Fair Trading Act monopoly powers should in future be restricted to circumstances where there have been prior findings of abuse of dominance. If we are to have an effective system of competition law it is vital that we give the necessary powers to those with responsibility for enforcing the law.
  We believe that the Director General of Fair Trading should have prime responsibility for enforcement, with utility sector regulators having responsibility in their specific sectors. It would be a parallel system. They should have appropriate investigatory powers to enable effective enforcement. There would limits on these powers. They would be given a power to enter premises, by force if necessary. But forcible entry will be exercisable only under the authority of a warrant obtainable in specified circumstances—essentially where the parties concerned are hostile to the investigation, for example where it is reasonable to suspect that there are relevant documents on the premises but if they were required to be produced they would instead be concealed, destroyed or tampered with. The provisions relevant to investigations are contained in Clauses 25 to 30 of the Bill.
  Furthermore, we believe that as a matter of equivalence of procedures the procedure for obtaining warrants authorising forcible entry and search in the UK in relation to EC competition investigations should be similar to that which is provided for in respect of domestic competition investigations, with variations reflecting only the different nature of the investigation at issue. This makes both administrative and regulatory sense. The DGFT would therefore be given powers to enter premises under a warrant, by force if necessary, in certain specified circumstances in connection with an investigation under Articles 85 and 86 of the EC Treaty.
  The provisions relevant to EC investigations are contained in Clauses 59 to 62 of the Bill.
  If the new regime is to work effectively and to command the confidence of business and consumers, it is essential that it is fair and transparent, and that there are effective rights of appeal. Appeals against the DGFT' s decisions under the prohibitions would be made to a new body, the competition commission. Further appeal would be possible to the Court of Appeal on points of law, or on the level of penalty.
  Any party with a sufficient interest would be able to appeal against the decisions of the DGFT or the tribunal. That includes consumers and consumer representatives. We believe it is right that consumers should have a clear voice under the new regime. The tribunal will, however, be able to reject frivolous or vexatious appeals.
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  The competition commission would be established under the Bill as the successor to the Monopolies and Mergers Commission. It would take over the existing functions of the MMC. The MMC's staff and members will transfer to the new body. We are very conscious of the need to draw fully on the goodwill and expertise vested in the MMC.
  Appeals under the prohibition would be heard by a new appeal tribunal within the competition commission. The tribunal will have its own president, and its functions would be separate and discrete from the rest of the commission. We believe that that arrangement would make the most efficient use of the expertise and resources available, and would serve to promote a consistent approach to all competition issues across the piece. We believe that it is important that the procedures and decisions of the DGFT and the tribunal should promote transparency as far as possible.
  The Bill would require the publication of reasoned decisions, which would serve to elucidate the reasons for individual decisions, and the application of the prohibitions more widely in the community at large. It is important that there should be the maximum amount of clarity in the way that the prohibitions will apply. The Bill places a duty on the Director General of Fair Trading to publish guidelines, and for the regulators to do so for their sectors.
  The Office of Fair Trading and the regulators have agreed joint working arrangements for the preparation of guidelines, and the process will involve thorough and extensive consultation with practitioners and other interested parties. The OFT expects to be able to issue guidelines well before the prohibitions come into effect.
  As I have said, we also believe it is an important part of the new regime that businesses and consumers who have been seriously harmed by anti-competitive behaviour should be able to seek redress. To that end, we are including provisions to facilitate rights of private action in the courts for damages. As is the case with the EC competition laws, we would be setting much store in the deterrent effect of the prohibitions. The DGFT would have the power to impose financial penalties on businesses which are parties to behaviour which infringes the prohibitions. It would be possible to impose a fine up to a maximum limit of 10 per cent. of the turnover of the offending business. The provisions giving effect to that policy are contained in Clause 35.
  On that point, I should like to draw your Lordship's attention to Clauses 38 and 39 which confer a provisional immunity from penalty in respect of small agreements and conduct of minor significance. That is a sensible sorting of the wheat from the chaff.
  The benefits of the approach set out in the Bill are clear. We would be updating competition policy, as everybody agrees we should. We are doing that by aligning our system with the major parts of the EC competition laws in order to create a unified system of competition regulation. We are replacing the parts of the domestic system that have outlived their usefulness; and we would be retaining those aspects which have worked well and which are still relevant to today's commercial environment.

  1149
  We are taking a balanced approach to the requirements of both business and consumers, competitors and customers: stronger investigatory and enforcement powers and increased third party rights on the one hand; adequate checks on the use of those instruments and a proper appeals procedure on the other. In doing that we have listened carefully to a wide range of views that have been aired. The reforms the Bill would introduce are important and long overdue. I commend the Bill to the House.
  Moved, That the Bill be now read a second time. — (Lord Simon of Highbury.)
  4.35 p.m.
  Lord Fraser of Carmyllie: My Lords, when it was announced in the Queen's Speech that the Government proposed to introduce a Competition Bill, it was reasonable to assume that the President of the Board of Trade was going to build on the work that her predecessor in office had undertaken. Indeed, I recognise the provenance of some of the provisions in the Bill. It was reasonable to assume that she would then produce a Bill upon which there would have been extended consultation and an emergent consensus. When she then produced in August a consultation paper, together with a draft of the Bill, it was reasonable to assume that once she had received all the responses to that consultation, we would have a Bill which prevented and remedied anti-competitive behaviour more effectively, and which did so efficiently, avoiding placing unnecessary burdens on business. That was, after all, the test that she had set for herself in the foreword to the consultation paper.
  However, I am bound to say that applying the test that the President of the Board of Trade set herself to the Bill as presently drafted—it is a test not without merit—she has so far failed dismally. The proposals are half-baked and ill thought out. In many key areas they are thin on detail, create more uncertainty than they resolve and overlap. In at least one crucial area there is a complete absence of any detailed provision or test for its solution.
  It will not do to introduce such important legislation in that state. As the Minister rightly observed, this is undoubtedly an exceptionally complex area of our law. Of course, we are bound to have regard to the relevant articles of the treaty. Going through the Bill, one is left with the uncomfortable impression that the Government are still desperately indecisive about the particular model they wish to introduce and, faced with tough choices, have opted for all of them. The consequence is that in relation to those provisions modelled on Article 86, they are at least duplicatory in effect, and in relation to those utilities which are subject to a regulator, the provisions as they currently stand are possibly even triplicatory in effect.
  The Government might think that that is an excessive response from me. They might wish to discount it. But I hope that they might be more troubled that one of the most eminent legal
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  practitioner groups in this country, particularly well-versed in this area of the law, has stated:
  "One major drawback of the Competition Bill is the hydra which it has produced".
  It will be the proper function of this House to subject the Bill to the keenest of scrutiny to eliminate as best we can that duplication, that uncertainty, and the disproportionate assumption of new powers.
  In her press release of 16th October, the President of the Board of Trade made much of the 150 responses that there had been to her consultation paper. Indeed the Minister repeated that point. The President of the Board of Trade claimed that the Government's approach, or "thrust", as the Minister described it, has been widely welcomed. That is a fair assessment of the opening paragraphs of representations that we have received from a wide range of groups. But I am also bound to observe that the publication of the Bill provoked a torrent of responses to rival those which the Secretary of State claimed welcomed her Bill. There is serious alarm over the structure of parts of the Bill and the detail within it, or, as I indicated earlier, the absence of detail.
  What must be most disconcerting for the Government is that representations expressing unease do not come from those who in their heart of hearts are monopolists or closet members of cartels; they come from a wide range of companies, business organisations, consumer groups and legal practitioners. Perhaps I may give an example—that of the CBI—because in part it coincides with the Minister's comments. It indicated in its briefing that the reform of UK competition law is long overdue. It stated that a clear and effective framework benefits consumers and business alike. Thus far, the Government can derive some comfort from its statement. However, going further into the detail of the Bill, the CBI stated, in particular with regard to the generally worded prohibition on abuse, modelled on Article 86 of the treaty:
  "Uncertainty as to the reach of the prohibition will not contribute to its intended deterrent effect and could have a chilling effect on commercial activity and innovation".
  The Government may be indifferent to the additional costs and burdens which the over-elaborate provisions may impose on businesses, both large and small, but in the national interest they cannot afford to be indifferent to such a chilling effect on commercial activity and innovation. We must scrutinise the Bill in order to ensure that no such unintended consequence arises from it.
  I do not wish to labour the matter, but a similar point arises in respect of possible damage to the innovatory impetus within large companies. That point has been made repeatedly to Members on this side of the House.
  I turn to what we see is the most extraordinary omission from the Bill—
  The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, I am grateful to the noble and learned Lord for allowing me to intervene. Of course, he is entitled to express whatever criticisms he wishes about the Bill. I shall do my best tonight and in the course of subsequent

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  argument, together with my noble friends Lord Simon and Lord Haskel, to deal with those points. As my noble friend said, we shall be listening to criticism with great care because we see this as a continuing process of consultation. However, perhaps after all those strictures the noble and learned Lord would care to explain to the House why his government took no action to deal with the matters which were of great concern to British industry and business.
  Lord Fraser of Carmyllie: My Lords, if we had secured a response from the CBI and others that this change would bring about a chilling effect on innovation in industry and commerce we would have thought long and hard about it. I believe that the noble Lord's intervention was unworthy. Rather than trying to make a cheap point he should be concerned about exactly what prompted those anxieties in the business community. If he does not yet know that they are keenly felt he will discover very soon how deep they are.
  I hope that we can eliminate those matters, but the issues of duplication and overlap are a problem. There appears to be an underlying feeling that somehow to be big or dominant is to be bad. It is not a fault to be big or dominant, but a problem arises when one abuses that position. We need to scrutinise the Bill in order to establish a restricted test that there will be no risk of business believing that it cannot innovate or take things forward because it might subsequently be penalised for such activity.
  I was pointing to an extraordinary omission from the Bill. I derived some comfort from what was said by the noble Lord, Lord Simon, in opening this Second Reading debate. The Secretary of State in her consultation paper in August stated:
  "I see a good case for excluding most vertical agreements from the scope of the prohibition—something that I know business will welcome".
  That was an accurate statement and squares with every representation that has been made to the Opposition. Mrs. Beckett may have seen a good case for exclusion, but we have not yet seen how it is to be achieved. Some three months have elapsed since she offered up that observation, but we regard the omission as unfortunate, to say the least. And it is not a simple technical point. If, for example, the beer tie were to be prohibited and not excluded, thousands of pubs would close and tens of thousands of jobs would be destroyed. Not surprisingly, that is a matter of real concern to the industry. We look forward to discovering as soon as possible how the Government intend to approach the issue. I do not pretend that there is necessarily an easy solution but the issue must be confronted because that and many other industries are deeply concerned. On the one hand, they have an expression of opinion from the President of the Board of Trade; on the other hand, they know perfectly well that respectable bodies such as the National Consumer Council have vigorously argued that there should be no such exclusion. I am sure that the noble Lord, Lord Simon, will appreciate that until we see a provision in the Bill, those businesses, some of which
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  are very small, will be deeply concerned that their petrol station, news agency or whatever will be under threat.
  Related concerns are those of community pharmacies. We have real sympathy with them and will certainly return to the issue of such pharmacies in Committee. In the meantime—I wrote my speech before Question Time today—I hope that the Government will recognise that it will not be acceptable to destroy the smaller chemist shops, not least because that would undermine their own public health strategy. However, in answer to a question from my noble friend Lady Miller, I heard the noble Baroness, Lady Jay, say today that the Department of Health is neutral on the destruction or closure of community pharmacies. I hope that at least the DTI understands the desirability of having a public health strategy based on the inclusion of community pharmacies rather better than it appears does the Department of Health.
  More generally, we are concerned that the Bill does not appear to recognise the effect of the proposals on smaller businesses. Only limited protection is afforded to them. They remain open to third-party action and even the immunity from fines is effectively only provisional because it can be ended by the Director General of Fair Trading without return to Parliament. Again, we should wish to review that matter in Committee. I give the noble Lord some indication, that in our view, it would be right to exclude them entirely, not least to reduce the burden of compliance that would be imposed upon them.
  What troubles us is that the cost of compliance is one the DTI now seems to be revising upwards massively, and it is far from clear to us at present what is the current estimate. While I ask that only one question of mine should be answered in winding up, it would be helpful to us if, in so doing, the noble Lord, Lord Clinton-Davis, could give the latest estimate on an annualised basis of what would be the cost of compliance.
  I turn to the issue of enforcement and sanctions. I say immediately that we agree entirely with the Government that a necessary part of any change in regime is effective enforcement and sanctions. But we shall have to consider very carefully whether fines of up to 10 per cent. of turnover—typically, for an efficient company, a whole year's profits—are not grossly excessive. We must consider also whether the powers of investigation included in the Bill are not similarly grossly excessive. We want to ensure that that is properly analysed. As I understand it, a power is to be given to use force to enter premises, including vacant premises and private homes, to interrogate former employees and to allow also for certain confiscatory powers.
  It is extremely important that we analyse those proposals carefully. After all, we are not dealing with a set of criminal complaints or activities. We looking at a set of administrative actions. If we are to allow the introduction of powers, which some have described as draconian, we must be satisfied, when the Bill leaves this House, that those powers are not unnecessary or inappropriate.

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  We are concerned about a wide range of points. We want to analyse them carefully. We shall listen to what the Government say. I say immediately to the noble Lord, Lord Simon, that it is with gratitude that we accept his invitation to discuss matters not only with us, as I understand it, but with interested parties. It would be helpful for us to know in advance what amendments the Government intend to propose. I have complained about duplication in the Bill but it would certainly be desirable to avoid duplication of effort in trying to determine what changes should be made. I shall listen carefully to what is said about Clause 58 and consider whether we regard it as being quite so satisfactory as the noble Lord seems to believe it is.
  As I said, we are concerned also about steep compliance costs. But we want to be constructive in a number of other areas. There is one matter on which I do not expect an answer from the noble Lord, Lord Clinton-Davis, but it may be helpful if I signal it now. We understand that an amendment is likely to be tabled which seeks to use the Bill as a vehicle for tackling the problem of inadequate protection against what are described as look-alike products. I understand that an amendment may be introduced to include limited unfair competition provisions along the lines of the World Intellectual Property Organisation's model law, Articles 2 and 3. I mention that because I hope that the noble Lord's department officials may begin to look at that issue and not try to dismiss our submission at a later stage by saying that they have had inadequate time to consider whether or not that provision might be introduced.
  We shall participate as vigorously and scrutinise as effectively as we can, but before we do so I hope that the noble Lord's department and the noble Lord will indicate to those concerned about the Bill's provisions as soon as possible where they propose to make changes. Otherwise, I fear that we are at a real risk of drowning in a sea of representation. If some of that concern is unnecessary, it would be helpful to put it aside before we reach the Committee stage of this most important Bill.
  4.55 p.m.
  Lord Ezra: My Lords, I do not share the wide-ranging criticism which the noble and learned Lord, Lord Fraser, has just expressed. The noble Lord, Lord Simon, said that the Government would welcome close scrutiny of the provisions of the Bill. It is one thing to have close scrutiny but another to condemn the Bill in total, as I believe the noble and learned Lord, Lord Fraser, was doing.
  I believe that the noble Lords, Lord Simon and Lord Clinton-Davis, were right to draw attention to the long delay that there was under the previous government in introducing legislation which most people concerned considered to be long overdue. As we all recall, there were Green Papers and a White Paper. There had been a commitment in the Conservative election manifesto as far back at 1987 that legislation would be introduced, but in fact there was none. The present Government
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  deserve credit for so quickly getting to grips with the problem, having introduced a consultative document in August and a Bill, which we are now considering, in October.
  There are three overriding reasons for changing existing competition policy—the long overdue reforms that we are looking for: first, there is a need to simplify and strengthen measures on anti-competitive behaviour; secondly, to make rulings more transparent; and thirdly, to bring the UK more into line with EU law.
  I believe that the Bill achieves those three objectives in general terms. As we know, the main change proposed is a prohibition approach to anti-competitive agreements and abuse of dominant power based on Articles 85 and 86 of the EC treaty. The current regime is based on warnings and protracted negotiations, some of them lasting for years. The new Bill introduces swifter investigations and heavy fines for abuse. It also introduces a formal appeals procedure through the new competition commission.
  But if the main thrust of the Bill is acceptable, we must also be sure that it will be right in its application, and here I join in some of the points raised by the noble and learned Lord, Lord Fraser of Carmyllie. I propose to examine this aspect from the point of view of business interests on the one hand and consumer interests on the other. As the noble Lord, Lord Simon, said, there should be a proper balance of impact on those two interests. In an ideal world, that balance would be achieved automatically in fair, open and widespread competition from which both enterprises and consumers would gain in equal measure. But we do not live in an ideal world, as Adam Smith pointed out two centuries ago. There are grey areas and even some black ones. Therefore, there must be clear and effective competition legislation.
  From the point of view of enterprises, the rules of competition must not only be fair, but their application must be clear and speedy. In that respect, we shall need to face up to a number of issues as we reach subsequent stages of the Bill. First, there is the problem of jurisdictional overlap. Although the declared purpose of the legislation is to bring British law into line with EU law, the problem of possible overlap between EU jurisdiction and UK jurisdiction is left in large measure unresolved. Indeed, Clause 8 allows the UK authorities to impose stricter requirements than those in EU exemptions. In my experience, there seems to be an in-built tendency for UK authorities to go for a stricter application of EU law than is the case elsewhere. For example, there are some who feel—and the noble and learned Lord, Lord Fraser, referred to this—that the investigatory powers granted to the authorities under the Bill exceed those available under EC law. I believe that this situation should be avoided, if indeed that assumption is proved to be correct. Moreover, there should as far as possible be a distinction drawn between the jurisdiction of the EU and the UK in competitive cases, and the two jurisdictions should be run on a compatible basis.
  Another jurisdictional problem is created by the intention to give the utility regulators what are described as "concurrent powers" in their particular sectors;

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  indeed, the noble Lord, Lord Simon, referred to that fact. It is one thing to have the provisions of the new legislation applied and enforced by one authority—namely, the Director General of Fair Trading—but it is quite another to have this function exercised by him concurrently with no fewer than seven regulators in the privatised utility sector. That must surely inevitably result in lack of consistency. While it is desirable that the experience of the regulators in their particular sectors should be brought to bear on particular cases of possible infringement of the prohibitions, surely this could he made available to the DGFT which could then reach a decision based on experience in cases in other sectors. We could thereby achieve greater consistency. I therefore suggest that the DGFT should be responsible for reaching decisions in all cases, including the privatised utilities.
  There is a further problem relating to the utilities. They are subject to their own particular Acts of Parliament; they will also be subject to the new and more stringent competition law. It will be essential to ensure that the two legal regimes do not overlap and that the jurisdictional impact is clear. I have received representations from a number of these privatised utilities which fear that such confusion may arise from the issue.
  In adopting the framework of EU competition law, which is certainly desirable, we should nevertheless avoid the pitfalls which the EU has run into. One of these appears to be that the block exemptions under Article 85 have not been drawn effectively enough. The result has been a flood of notifications with which the Commission has been unable to deal. As I understand it, only a handful of those cases can be investigated and decided within the course of a year. The rest are left pending, creating much uncertainty for the enterprises.
  Within the UK it will therefore be necessary for the exemptions to be drawn in such a way as to avoid unnecessary notifications. Further, it will be necessary to work out in detail the procedures to be applied. After having put in place the necessary exemptions and procedures, in my opinion an adequate transitional period of at least a year should be allowed for the new system to apply. The important first step is for the legislation to be put forward. The Government have now done this. The second essential step to make is to make sure that it will be applied effectively. If more time is required for this than originally anticipated it should, I believe, be readily granted.
  I turn next to consumer interests. These are that anti-competitive agreements and abuses of dominant positions should be quickly identified and dealt with. The Bill goes a long way in that direction. Indeed, it might be argued that the whole purpose of the legislation is to protect consumers' interests. However, there are a number of ways in which these can be more specifically safeguarded. One of them would be to provide for consumer representation within the Office of Fair Trading, as has been proposed by the National Consumer Council. That would mean that any issues of specific consumer interest could be highlighted during the course of inquiries conducted by the DGFT and by the competition commission. This is linked to the
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  question of consumer representation in the privatised utilities. Generally speaking, this is inadequate, with the possible exception of the Gas Consumers' Council. I believe that the Competition Bill provides an opportunity for getting this right and establishing effective consumer representation within the regulatory framework.
  The Bill represents an important step in clarifying and improving competition law in Britain and in bringing it closely into line with EU law. It deals with many of the weaknesses of the present system and establishes a well-defined framework. The challenge is to make it work satisfactorily. That is why it is necessary to clarify the various jurisdictional responsibilities, to set in place the detailed regulation and to establish the exemptions. What must be avoided is a flood of unnecessary notifications and uncertainty in the minds of enterprises about which jurisdiction they should turn to. An adequate transitional period is required to ensure that all these operational matters are clearly sorted out. It is my opinion that, if this procedure is adopted, the new legislation could be of considerable benefit both to enterprises and to consumers.
  5.5 p.m.
  Lord St. John of Bletso: My Lords, competition law is a technical subject which many noble Lords speaking today know a lot more about than I do, principally the noble Lord, Lord Borrie, with his distinguished career as past Director General of Fair Trading. Like others, I welcome the move towards a workable—a word used by the noble Lord, Lord Ezra—a practical and an effective system of protecting competition in our economy. It is the practical effects of competition law, and the need for a simple and workable regime, which I wish to comment upon. I propose to address three key areas. First, what is competition? Secondly, why does it matter? And thirdly, by introducing this Bill, how will competition be controlled?
  From my own experience as a stockbroker in the City, I know that competition is the best way to create innovation, improve quality and choice and drive up efficiency. The competitive spur is the best way to drive down prices for consumers and create the innovations that will change the way we live. The information technology revolution is a classic example. Competition is of key importance in improving the economy generally. When I say "improving the economy" I should point out that I believe the competitive process applies to both national and international trade.
  Competition law holds the ring between competing businesses and the various interested parties concerned. Here, of course, the parties include, first, the shareholders who invest their money and who stand to lose if companies go out of business as a result of anti-competitive behaviour; secondly, the employees whose jobs depend on the success of their employers; and, thirdly, the customers for the products and services of the competing companies.
  Competition law provides the framework for competitive activity. It protects the process of competition. As such, it is of vital importance. But it

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  must be predictable and workable. Abuses need to be clearly defined. As we all know, the competitive process means that some succeed and that, obviously, some do not. Those who succeed should not do so by preventing others competing. However, a healthy competitor should not be disabled by practices which are unacceptable. How, therefore, can we determine what is fair and unfair in competition? In considering what is fair and unfair, the interests of consumers, those of shareholders and, indeed, those of the general public ought to be weighed up.
  In essence, as I see the difference between the old competition regime and the new proposals for trying to control competition in this Bill, it appears that in the old law competitive activities were allowed unless prohibited whereas now those activities will be prohibited unless allowed. This begs the natural question: who is responsible for deciding what is allowed? As several noble Lords have said, the Bill seeks to align the United Kingdom's competition law with that of the European Union, in particular Articles 85 and 86 of the EU Treaty. As the Minister, the noble Lord, Lord Simon, outlined, the Bill introduces two main prohibitions: first, those that prohibit agreements that restrict, prevent or distort competition; and, secondly, those that prohibit conduct which amounts to an abuse of dominance.
  Clauses 2 and 18 set out the prohibitions in broad terms. The prohibitions are essentially open-textured and include wide discretions. It can often be difficult to recognise a "distortion" of competition or an "abuse" of dominance. I feel that there needs to be more definition of abuse other than may be derived from case law.
  The result of any wide discretion is that there may be uncertainty. Uncertainty is not in the interests of this Bill. As several noble Lords have mentioned, uncertainty is undesirable—a point made by the noble and learned Lord, Lord Fraser. Uncertainty in laws such as these where the competitive process is at stake and where heavy fines can be imposed is most undesirable. Uncertainty should therefore be minimised. I believe that previous proposals for reform of competition law did not include the second prohibition because of the concerns about uncertainty. The current proposal seeks to reduce uncertainty through a general principles clause in Clause 58.
  It appears that notwithstanding Clause 58, the prohibitions still give rise to uncertainty about their scope and application. I have sympathy with the concern of the noble and learned Lord, Lord Fraser, that the Bill is thin on detail. To address that, Clause 50 provides for guidelines to be issued by the Director General of Fair Trading about the way he would expect the prohibitions to be applied. Guidelines, by their nature, are not binding. I believe that it is essential for these matters to be incorporated into the Bill to provide clarity of definition.
  The prohibitions are likely in practice to have significant effects on the behaviour of companies. The Bill is intended to create strong deterrent effects. I agree that deterrence of behaviour which is clearly anti-competitive is necessary. Prevention is certainly
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  better than cure. But if it is unclear whether or not the behaviour is anti-competitive, then deterrence may be a bad thing.
  Several noble Lords have spoken about innovation. It is an important benefit of the competitive process. Competition law should not act as a brake on, or undermine, the incentive to innovate. Fear of infringement should not deter legitimate innovation. Competitors may allege infringements where none in fact exists.
  Whether or not a company decides to take the risk of investment in some innovative venture may depend on whether or not it would expect the venture to be regarded as infringing the prohibitions. The right signals are therefore critical to investment. Who applies those laws is of great importance. The Bill provides for a number of different routes to obtain redress. The right of action in the courts is an alternative to making a case before the Director General of Fair Trading or one or more of a number of sectoral regulators.
  My concern is that this series of parallel procedures has the weakness that all the different bodies could potentially reach different conclusions. There appears to be no mechanism for achieving consistency among those applying the law. When applying the prohibitions, the courts will be concerned only with the legal issues before them and will apply legal process. The Director General of Fair Trading will also adjudicate on the prohibitions. It is essential that he should approach that matter in the same way the courts do while applying competition policy objectives.
  However, the Bill also proposes that some, but not all, sectoral regulators, should have the same powers as the Director General of Fair Trading to investigate and adjudicate on the application of the prohibitions within certain fields. I feel that special arrangements for those sectoral regulators should be introduced only where they are justified as an exception. The discretionary nature of the prohibitions means that uncertainty and inconsistency are bound to be increased if there are multiple enforcers. I am not convinced that more "policemen" will mean better enforcement.
  In essence I am concerned that the regulators and the Director General of Fair Trading could potentially trip over each other. Unlike the courts and the Director General of Fair Trading, sectoral regulators have a separate statutory remit which could make the application of the prohibitions more complex or could cloud the purpose of their application. The statutory remits of the sectoral regulators are broad. Their objectives may not readily be reconciled with the objectives of the prohibitions. The prohibitions should not therefore be applied to achieve regulatory purposes.
  If the sectoral regulators were to deal with competition matters under the Bill in very wide parts of the economy—I note, for example, that the Director General of Telecommunications would have jurisdiction in relation to,
  "commercial activities connected with telecommunications",
  which I should have thought an extremely wide field—this could be detrimental to the workability and effectiveness of the new prohibitions.

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  I note that the joint working group of the Law Society and Bar Council concluded that the sectoral regulators should not have adjudicatory powers in applying the prohibitions. Any sectoral expertise possessed by sectoral regulators which might be relevant to the application of the prohibitions could be made available to the Director General of Fair Trading. The sectoral regulators could assist the Director General of Fair Trading, or the courts, by providing advice or perhaps by carrying out investigations and reporting to the Director General of Fair Trading. They could provide competition analysis and a recommendation, as they do currently in the case of mergers. But the decision should be for the Director General of Fair Trading.
  Despite the Minister's assurance that the tribunal would preserve a consistent approach, I am not convinced that the need for systematic recourse to appeals to the tribunal within the competition commission would be in the interests of efficient administration.
  I welcome the findings of the DTI's current review of utility regulation before deciding conclusively on the extent of the powers of the various regulators.
  In conclusion, I hope that the arrangements will be as simple and as certain as possible to ensure that they are workable and effective. A nightmare of uncertainty, duplication and inconsistency would discredit the administration of competition law, would be damaging to business and innovation, and must be avoided. While I warmly welcome the Bill, I hope that these concerns will be given further consideration and that the Government will show flexibility in the amendments brought forward at Committee stage.
  5.20 p.m.
  Baroness Nicol: My Lords, I must first declare an interest as chairman of the All Party Retail Group. That explains why I am taking part in discussion on this very important Bill. The issue of competition and a free and competitive market is of fundamental importance if we are to continue to have a thriving retail industry.
  Retailers have for some time acknowledged, as my noble friend said in opening and the noble Lord, Lord Ezra, reiterated, that competition law in the UK needs reform. They welcome the introduction of the Bill as a vehicle to implement more effective enforcement, to prevent the use of anti-competitive agreements and the abuse of dominant market position.
  The British Retail Consortium—which represents some 90 per cent. of retailers in this country—has indicated that it considers the Bill an important measure both for retailers and their customers. There are, however, some points that I should like to raise and some clarification that I wish to seek. It is obvious from my noble friend's introduction that he intends to be helpful during the Bill's passage and that he is open to suggestions. Nevertheless, it might be helpful if I put these concerns on the record now.
  First, the British Retail Consortium recognises that there is a strong case for strengthening the powers of the Director General of Fair Trading. It is, however,
  1160
  concerned that the powers proposed under the Bill are excessive. It would like to see the inclusion of a system of checks and balances, and in particular clear legal justification for unannounced entry to premises supported by a warrant. Some concern has been expressed that application for entry warrants during investigations should be made to the High Court rather than a magistrates' court. As a magistrate for many years, I am inclined to support that view. The issuing of a warrant and the interruption of a business is a very serious matter. It is not to be entered into lightly. I hope that the Government will give sympathetic consideration to that point.
  In addition, in the interest of fairness, companies under investigation should have reasonable access to their documentation and computer systems during the investigation and without incurring excessive costs to the business. I understand the need to seize documents and to seize the computer system; but businesses must be allowed reasonable access to them.
  Secondly, retailers, and indeed all businesses, will need to be clear about their responsibilities, and will need to check that agreements already established will be acceptable under the Bill. It will therefore be imperative that the director's rules and guidance are in the public domain. My noble friend indicated that the guidance will be open to discussion and that it will be in the public domain, but he has not said anything about the rules. I wonder whether that point could be cleared up.
  As the noble and learned Lord, Lord Fraser, indicated, it is important that businesses should have an appropriate transition period to renegotiate agreements where necessary before the commencement date of the Act. As the noble and learned Lord said, compliance costs are likely to be high. Therefore it would be appropriate to allow for an extended transition period if businesses are adequately to meet the terms of the Act.
  It would also be helpful to be given some indication as to when the rules and guidance are likely to be published. Furthermore, following investigations I would seek clarification about the criteria that the director or the Secretary of State will use in deciding what information should be disclosed in the public interest. That is particularly important for third parties, who can be obliged to provide information that is commercially sensitive. Anti-competitive behaviour should be exposed, but sometimes innocent parties caught in the middle can suffer. It is right that we should seek to safeguard their interests.
  Finally, while I understand that this is an enabling Bill, I should like clarification as to what exemptions and categories will be allowed. We had some discussion, for example, on vertical agreements. Both the British Retail Consortium and the CBI have suggested that vertical agreements, including distribution, are generally benign, and, it is to be hoped, beneficial to the consumer. It would be helpful if the Minister could offer a definition as to which vertical agreements would be exempt under the terms of the Bill as it stands. The Minister indicated that

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  this aspect is open to discussion. I hope that we can reach agreement on all these points before Committee stage.
  5.25 p.m.
  Lord Lucas: My Lords, I, too, welcome the Bill. I particularly welcome the attitude that the noble Lord, Lord Simon, proposes to take towards it. I believe that, between us, we have the opportunity to do a great deal of good to the Bill in the course of the Committee and later stages. Many businessmen fancy "a bit of corporate nookie"—cuddling up to a competitor or abuse of a dominant position. After all, that is only human nature. It is reasonable for the Government to want to control those urges in the interests of us all and in the end the health of the business community.
  The Bill clearly needs improvement. The noble Lord, Lord Simon, admitted as much. It certainly needs elucidation, as my noble and learned friend Lord Fraser said. There is a great deal that we do not know about the Government's proposals which ought to be made clear in the course of our considerations. I hope that we shall also be able to spend some time making certain that the powers that the Government have kept for themselves or their regulators are sufficient to adapt the Bill over the course of the next 10 or 15 years, so that we do not have to return to the subject in further primary legislation.
  I wish to cover fairly briefly some particular issues that concern me in relation to the Bill, and give notice to the Government that I propose to raise them in Committee. Perhaps it may be possible to receive some sort of reaction by way of letter before we arrive at that point.
  As the Bill stands, it risks an enormous volume of applications and clearances. We need a far better understanding of what exemptions are proposed by the Government. The question of vertical agreements was raised on all sides—"in out, shake it all about". We just do not know where we are. That is not satisfactory. The point has to be cleared up before Committee stage.
  The position of small firms is such that this legislation could impose enormous burdens upon them. Long-term vertical relationships can be very important to small firms; they can be the anchors of the business, the way in which they climb the ladder to success. It is inappropriate that they should be challenged under this sort of heavyweight legislation. The launch by a small company of a new product, if that product is sufficiently innovative, can immediately place it in a dominant position in the market. It is inappropriate that such firms should be subject to the full rigours of this law—and especially inappropriate given the powers that the Bill provides to third parties to challenge companies which may infringe it. If a large competitor has this power in relation to a small, innovative company, under the Bill as it now stands it is possible for that large company to abuse it in a way that makes innovation extremely difficult.
  Under Clause 38, or whatever version of the clause may emerge in the future, I should like to see a good turnover limit, to make sure that when we talk about
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  companies that come within the scope of the Bill, we are talking about the sort of company that will have the administrative resources to deal with the burdens that the Bill imposes.
  We also have to deal clearly with the matter of uncertainty. That point was raised by the noble Lord, Lord Ezra, and others. Guidance must be swift, and it must be clear. In all matters we need speed. I can see that we shall not get any provision onto the face of the Bill. However, I should like to see the Government committed to setting targets by which the Director General of Fair Trading should produce his guidance, and to make sure that, if he is unreasonable in delaying, there are swift remedies for companies to have their agreements passed.
  The Bill gives rise to particular problems for agricultural co-operatives and possibly for enterprises involved in horizontal agreements rather than vertical ones. One thinks of Spar, Toymaster and others in the retail sphere, where retailers or others—essentially small businesses—band together to give themselves the market power to deal with competition from much larger enterprises, whether they be vertically or horizontally opposed to them. It would be a great pity if the Bill were to disturb some of those relationships. I believe that they operate very much in the public interest. Certainly, agricultural co-operatives require them in order to have access to some very substantial EC funds. I should be fascinated to know whether the noble Lord thinks that the general attack on horizontal agreements would apply to agreements between political parties, which also serve to reduce competition!
  Those who are out and about on the high streets at the moment will see that there is an arrangement between Disney and McDonalds whereby, if you go into McDonalds and buy a particular meal, you are given some Disney memorabilia to do with its latest film. Those are two firms in a dominant position. How is that sort of agreement affected by the Bill? Will Disney have to offer the same terms to Burger King? Will McDonalds have to go to Warner Bros. and offer it the same? The relationship which Disney and McDonalds have seems to me perfectly reasonable. It is not clear to me how the Bill will affect it.
  As the noble Lord, Lord Simon, said, planning will be a big issue. There will be all sorts of restrictions: "We have too many supermarkets in this town; no, you cannot have another one". I am sure that my noble friend Lord MacLaurin will have something to say about that. We shall be fascinated to see what comes by way of government proposals.
  One of the great principles of running large businesses these days seems to be partnership sourcing. That is something which has given a great deal of strength to our car component companies, for example, which they never had before. The idea is that they can work with the car manufacturers, to mutual benefit. Obviously such relationships become very strong and long term and difficult for competitors to break into, but clearly they are in the interests of this country as a whole and of its overall competitiveness. I hope that such

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  agreements will be safe and free from challenge under the Government's proposals, but that is not clear at the moment.
  Another form of agreement which I think is generally to be welcomed is that which involves facilities management by utilities companies. For example, an electricity company will agree to supply and maintain a heating plant and at the same time supply the electricity to run it. I appreciate that that kind of agreement can have anti-competitive aspects to it. I hope that the Government will confirm that they intend to follow the European practice of having standard black, grey and white clauses so that a company making such an agreement can know whether it is likely to be clean or to come under question under the provisions of the Bill. My noble and learned friend Lord Fraser went in some depth into the question of the interplay between the Bill and regulators. I very much share his concerns.
  With regard to Clause 18 and the related clauses, there is a question as to whether the DGFT has power to give guidance on whether a particular company is in a dominant position. It is not clear to me that he has. I think it would be helpful if that were the case.
  Clause 18(2)(d) talks of "no connection". Looking at what the European Commission has decided in practice, one could effectively insert the word "necessary" between "no" and "connection". It seems to me that on a strict interpretation of "no connection" one could get away with almost anything. I hope the Government will confirm that they intend the clause to have a wider effect than that. This is where the Bill gives us the opportunity to strike at the practice of "bundling", which it seems has evolved from a quaint 17th century Puritan practice—a bit eyebrow-raising for those who know about it—to one of the most irritating and inconvenient uses of competition regulations from the consumer's point of view that we have in this country today.
  What is the position of the Bill with regard to companies with a dominant position in a market which begin to integrate vertically? Is there anything in the Bill which is intended to strike at that or to have an effect on it?
  What about suppliers of a service who restrict the choice of their customers with regard to other services? One thinks of building societies which say that a borrower may use only one insurer, or McDonalds, which sells only Coca Cola? Are such practices held to be reasonable under the Bill or do they come under attack by it?
  I strongly agree with the noble Baroness, Lady Nicol, that it should be a High Court judge who issues a warrant for entry of premises. The powers proposed by the Bill are enormous and it would be entirely unsuitable for a magistrate to issue a warrant. Given the effect on the companies that could be subject to them, it must surely be a High Court judge.
  Finally, will the competition commission have sufficient powers to prevent a retrial? If someone complains to the competition commission that an investigation has been inappropriate or that the verdict reached was inappropriate, can the commission give a
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  summary judgment on that, or does it have to go into the whole matter again, with all the costs that that would involve?
  That is a brief list of the matters that I intend to raise at Committee stage. I hope that the Government find it helpful.
  5.35 p.m.
  Baroness Turner of Camden: My Lords, I should like, first, to welcome the Bill and to thank my noble friend the Minister for his very comprehensive introduction of it. As he said, the Bill fulfils a manifesto commitment. I understand that the Government are intent upon the protection of the consumer. With that aim in view, the use of monopoly power to dominate the market and to impose higher prices than might otherwise be the case will be curbed. The Bill is against the abuse of monopoly power. I am sure that most of us would agree with that; I certainly do.
  There are, however, some issues that arise from a perusal of the Bill, and the extremely helpful guide issued by the DTI, to which I should like to refer. I note that the intention is to align UK domestic prohibition with the EC regime so as to avoid inconsistency and potential conflict. I hope that in doing so the Government will move more closely to the philosophy that has informed much of EU practice. That philosophy has always acknowledged employees' rights and the rights of their organisations. In EU terminology, unions are social partners. That has always seemed to me an appropriate way in which to regard employees. It is an indication that workforce and employees are not simply disposable items whose welfare is entirely dependent upon the untrammelled rigours of the market.
  I note that the Bill dissolves the Monopolies and Mergers Commission, the MMC. Its existing functions are to be transferred to a new body, the competition commission. There will be changes to the Fair Trading Act 1973 in order to strengthen the investigative powers of the Director General of Fair Trading in respect of monopoly. However, it seems that the law in relation to mergers will remain unchanged; the administrative structures will simply be altered.
  I well remember that very shortly after I became a Member of your Lordships' House I attempted in 1987 to introduce a Private Member's Bill. I was concerned about what in the 1980s had begun to be called "merger mania". The year 1986 had been a record one for mergers, mainly in the industrial sector. There were 695 recorded acquisitions that year, 50 per cent. more than in the preceding year. The livelihoods of about 500,000 employees had been bound up in those deals. I complained at the time that this merger activity had not produced new jobs, nor had it stimulated our manufacturing base. Quite the contrary.
  The intention of my Bill, which of course made no progress, was to try to provide some protection for people caught up in this merger activity. I drew attention to the merger code existing, for example, in the Netherlands, which provides for employees' organisations to be informed, first, of merger talks at an early stage; secondly, of the reasons for the merger;

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  thirdly, of the likely social, economic and legal consequences; and, fourthly, of measures designed to alleviate their effects. Even though it attracted the support of the noble and learned Lord, Lord Denning, and of my noble friends Lord Wedderburn and Lord Monkswell, the Bill, as I said, made no progress.
  For a while, in the succeeding years, merger mania appeared to abate. But more recently there has been a spate of mergers, many of them in the financial services industry. Again, there has been the complaint that employees do not hear of these moves until they are all but completed and then, as in one notable case, they hear an announcement at breakfast time on the morning radio along with a statement that there will be 5,000 redundancies.
  The companies in question claim that the takeover code operated by companies listed on the Stock Exchange makes any advance consultation or even notification impossible. Therefore mergers and takeovers are planned in secret and invariably announced without any consultation with staff or their representatives. Any form of meaningful consultation about the social consequences, and particularly about the impact on employment, is prohibited. This renders completely ineffective the 22 year-old protection intended to be afforded by the EU's collective redundancies directive requiring prior and meaningful consultation designed to reach agreement on proposals to declare mass redundancies, including consultations on the numbers to be affected. The voluntary takeover code operating in the United Kingdom excludes any possibility of discussions between the social partners. It therefore appears to be quite contrary to the spirit of EU legislation in general.
  In only a few cases where public interest is manifestly at risk are references made to the MMC, and presumably the same will apply in relation to the new competition commission. It would appear that the major concern in regard to such references is a somewhat narrow definition of "competition". That was the standpoint of the previous government. Once a reference has been made, it is open to the MMC to take other factors into account and presumably the same will apply to the new competition commission. But, of course, only a minority are referred anyway.
  I appreciate that the Bill before your Lordships this evening does not include any reference to the concerns that I have raised. It would appear that the intention is that the legislation in relation to mergers and takeovers will remain as it is now, presumably with the present "voluntary" takeover panel still operating within the framework of current Stock Exchange regulations. The only change is that the legislation will be administered by a different body, the competition commission.
  I think that is a pity. This is an opportunity, in an otherwise excellent Bill, at least to make provision for regulations which could, at some future time and after adequate consultation, replace the present arrangements with a code more in line with best EU practice. There is an important social element here. Mergers and takeovers do not always help with the problems of unemployment; quite the contrary. They can often
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  import an element of general insecurity into workplaces which itself has a negative social effect. Nor are they always to the advantage of the consumer. They may in fact limit consumer choice or perhaps result in branch closures, causing problems for local people, particularly the elderly, who no longer have a local branch to visit.
  I urge my noble friend to look at this issue within the context of the debate on this Bill. There is an opportunity to do something about the problems to which I have given voice this evening. So, although I welcome this excellent Bill, for all the reasons that were stated when my noble friend introduced it, I believe that there are issues which could also be addressed.
  5.42 p.m.
  Baroness O'Cathain: My Lords, I must admit that I have had certain difficulties with this Bill. I suspect that the fault is mine, not having a lawyer's training. I found it exceptionally difficult to read through the 98 pages of close type legal presentation, and comprehension was an added problem. However, I was encouraged when I heard the Minister describe the Bill as "very complex" and a "technical" Bill. I shall have to listen very carefully to all the arguments during Committee, Report and Third Reading stages.
  I find it difficult to determine whether it is a good, bad or indifferent Bill. But, in essence, I support anything which encourages greater competition. My level of support and enthusiasm for greater competition is exactly the same, whether I examine the issue from a consumer standpoint or from the standpoint of someone who works in and with business and commerce.
  I am sure that throughout the passage of the Bill I shall find issues on which I have concerns. But today I wish to register one concern and give my support to a series of clauses on which I seem to take a different line from business and some of the legal profession.
  Let me deal first with my concern. I worry that hidden within those 98 pages (that total includes the 14 schedules) there could be hidden costs which business will have to bear. It will come as no surprise to your Lordships that I smell hidden costs; neither will it surprise noble Lords that I warn, yet again, against any additional costs that are not accompanied by additional efficiency, thereby affecting our overall international—and national—competitiveness. It would be ironic if a Bill, which was supposed to increase competition, turned out to have a negative effect on competition by virtue of the burden of costs imposed on business in following through the Bill. From a business point of view, I urge caution on imposing more costs as a result of compliance with the measures contained in the Bill. I hope that the noble Lord. Lord Clinton-Davis, will be able to give strong assurance on that point.
  An extension of that concern relates to the possibility that the Bill will undo some of the work done by the previous government in the area of deregulation. It is not so long ago that measures introduced to reduce the burden of regulation received support from all sides of this House, particularly on the need to reduce bureaucracy. Again, I hope that the noble Lord will give us the assurance that that is still official policy.

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  Before I come to the area in which I should like to give support to the Bill, I want to make an observation about the widely held perception that there is little competition in our economy. I frequently hear policy-makers and journalists stating that there is little competition and that manufacturers, retailers and suppliers of goods and services have the market all sewn up. In my experience, the reality is quite different. I have been operating at different levels in the business and service sectors for over 30 years and can avow that competition is fierce and cut-throat. It has become even more fiercely competitive over the past 20 years or so and some areas are almost gruesomely competitive—food retailing, for example.
  Yet the perception remains that cartels exist in this area. "Why is it," I am asked, "that baked beans are exactly the same price in supermarkets A, B and C?" The baked beans are the same price in supermarkets A, B and C, because as soon as supermarket A, say, reduces the price of baked beans, the shopping sleuths in supermarkets B and C will have those prices reduced within minutes. The bush telegraph in the food retail and distribution sector is very effective. Then, if supermarket C, for example, decides to increase the price of baked beans, does that sequence happen too? No it does not. The supermarket might have a very short-term advantage by getting an additional margin on those baked beans but the other two supermarket chains will not follow. And, of course, the canny customer, who, we must not forget, is the most important person in this situation, will march to those supermarkets supplying the cheaper baked beans. I have to tell noble Lords that competition certainly exists in that sector.
  But I am not naive, and irrefutable evidence exists that cartels have been operating until very recently. Those are the ones that have been found out. What about the ones that are still hidden? Cartels are the enemy of the customer and competition; cartels are also the enemy of overall UK competitiveness. They have existed and still exist and must be resisted and stamped out. It is to assist that stamping out that I support Clauses 25 to 30.
  Briefings that I have received have commented unfavourably on the investigatory powers contained in the Bill. Comments include the statement that "no case has been made" and that the investigatory powers are "not necessary".
  However, one has only to read the press notices from the Office of Fair Trading to realise that it has been a tortuous task to uncover the workings of cartels. The paint makers' price fixing cartel, which was ended by an undertaking to the Restrictive Practices Court in early June this year, had been going on for years. It was quite obvious that the companies involved knew exactly what they were doing and knew that it was illegal. Why else would they have used assumed names to book hotel conference facilities? Some companies blamed employees for price collusion without authorisation by the companies. But this House ruled in 1994 that such an argument is not acceptable.
  Just eight days ago, five suppliers of protective polyester film used for glazing as part of bomb-proofing gave undertakings to the Restrictive Practices Court that they would no longer collude on tenders nor share information about prices to be charged or quoted.
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  Last month, it was revealed that sales managers of two high technology firms involved in the manufacture of filters used for removing impurities from liquids swapped information on product prices charged to customers and put a limit on the extent to which they undercut each other. The Director General of Fair Trading said that it was difficult to put a figure on the cost of the cartel but costs will:
  "in the end have been paid by taxpayers and consumers".
  Sadly, there appear to be few lengths to which cartel-seeking companies will not go. Subterfuge is the name of the game and many have proved very adept at it. Some cartel investigations have gone on for years—the noble Lord, Lord Simon, mentioned nine years in one case.
  Both as a deterrent to those who may be tempted to become involved in cartels and as an expedient to bring such cartels to an end as quickly as possible, the investigatory powers contained in Clauses 25 to 30 are needed and I support them, but with one caveat. There are concerns about invasion of privacy. An amendment to the Bill requiring warrants to be issued by a High Court judge rather than by magistrates would offer greater safeguards against such concerns. The noble Baroness, Lady Nicol, raised this matter. I support her. My noble friend Lord Lucas also made the point. At Committee stage I shall support any amendments which cover that matter.
  Other than that point, I cannot see at this stage why there is opposition to Clauses 25 to 30. It has been stated that other member states of the European Union do not have such powers. That is not strictly true. Germany has criminal investigatory powers and only the UK does not currently have the power to make on-site investigations. The anxiety has been expressed that with the powers contained in this Bill the UK would be leading the way. The noble Lord, Lord Ezra, referred to that. I do not know whether that is true; but if it is, does it matter? I guess it would be quite nice to be in the lead on some issues in Europe for a change. It would be particularly good if it was a genuine effort to stamp out uncompetitive practices. I look forward to following this Bill on its passage through this House.
  5.51 p.m.
  Lord Borrie: My Lords, I regard this Bill as providing the radical reform of competition law that has been overdue for a long time. I congratulate the Minister on bringing it forward to this House so soon after the general election and after the reasonable consultation period from August.
  The Bill emerges after years of what I can only call procrastination on the part of the previous government. From the forthright and imaginative White Paper of 1989, we were time and again promised legislation by that government, but they delivered nothing. From my experience as Director General of Fair Trading, during the whole of the 1980s I repeatedly said to successive Secretaries of State that the weaknesses and inadequacies of the existing law must be dealt with. I was therefore delighted by the 1989 White Paper. However, lack of political will meant that repeatedly the government excused themselves and pleaded lack of

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  parliamentary time—an excuse which the all-party trade and industry committee in another place said in 1995 had worn a bit thin.
  We have had some sort of legislation dealing with monopolies and competition matters in this country since 1948 to combat monopoly abuse and cartels. We had an anti-cartel law in 1956—the Restrictive Trade Practices Act—which was intended to bring to an end all price fixing and other anti-competitive agreements and informal arrangements between firms unless they could be proved to be exceptionally in the public interest. It was a useful piece of legislation. It resulted in a significant number of price fixing and other major cartels in manufacturing industry either biting the dust following court proceedings or, alternatively, being abandoned by the manufacturers as they knew that to fight the case would be a hopeless task.
  But by the 1980s it was apparent that secret cartels could operate for years to the detriment of business, private customers and the economy as a whole because the law was slow to operate, the investigative powers in the Office of Fair Trading were extremely limited and the sanctions were so mild as to constitute nil deterrent. Even the failure to register a cartel with the Office of Fair Trading, which was a requirement of the law, attracted no penalty under the law. If a cartel agreement was discovered, usually as the result of a tip-off from an employee or from one of the participants in the cartel who had fallen out with his colleagues, the restrictive practices court would prohibit the agreement. But again there was no penalty; only a slap on the wrist—that is, an order was made to say, "If you do it again, you will be in contempt of court and will be penalised". The most blatant contempt of court by 17 ready-mixed concrete companies resulted, in 1995, in fines totalling £8 million. But I had first brought legal proceedings against those companies in the late 1970s, so it had taken 17 or 18 years before they were finally brought to book.
  The present Director General of Fair Trading, Mr. John Bridgeman, recently gave another example. It was mentioned briefly along with a number of other examples by the noble Baroness, Lady O'Cathain, but I want to refer to it also. During 1995 and 1996 two hi-tech companies making filters for removing impurities from liquids entered into an unlawful price fixing agreement. They swapped information on the prices that they charged and limited the extent to which they might undercut one another. Obviously that caused financial loss to their customers. Who were those customers? They were hospitals, water companies, chemical companies and food and drink companies. As Mr. Bridgeman put it in a speech he made on the whole subject of competition law last month,
  "We need to be able to act quickly and forcefully against firms which collude to deny customers the benefits of fair competition".
  The Office of Fair Trading had got to hear of those agreements as a result of exposure by a whistle-blowing employee.
  The noble and learned Lord, Lord Fraser of Carmyllie, refers to those matters as not being criminal but only administrative. I suggest that that conduct is
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  conspiracy; it is as near criminal behaviour as one can get. It deserves proper investigative powers in the Office of Fair Trading and adequate sanctions as a deterrent to ensure that it does not happen again.
  The CBI, as we heard, raised objections to the investigative powers contained in the Bill and the possibility of imposing fines up to 10 per cent. of turnover. But that example of a price-fixing agreement as recently as 1995 and 1996 is one of many where over the years the sheer lack of adequate power of investigation has meant that the OFT has had to rely on the chance occurrence of information being forthcoming from disgruntled employees or disgruntled participants in the cartel. I welcome the support of the noble Baroness, Lady O'Cathain, for strong investigative powers within the OFT.
  With all that history it seems to be remarkably late for the CBI and the Opposition Front Bench to be raising objections. Up to now the law has been that the Office of Fair Trading can only demand and require the production of documents from suspected companies if it has "reasonable cause to believe" that there is a cartel. But that has been interpreted by the courts in such a way that it creates a Catch-22 situation. To my mind there is an almost Gilbertian absurdity about a requirement for the Office of Fair Trading to have to have firm evidence of the existence of a cartel before it can issue a notice in order to find out whether the cartel exists.
  Any business that is anxious, as it is perfectly entitled to be anxious, especially if businesses are encouraged by the Opposition Front Bench, about Office of Fair Trading powers should be somewhat comforted by the requirement in the Bill that the power to force entry into someone's premises is permissible only on a magistrates' warrant. I know that several participants in this debate referred to the need for a High Court judge to give that warrant. But that no doubt is a Committee matter and will be discussed at the next stage.
  As to the maximum fine that can be imposed, major UK firms engaging in trade with other EU countries will have been well aware for many years now that precisely the same maximum applies to breaches of Articles 85 and 86 of the Treaty of Rome, on which the prohibitions of the Bill are modelled. The fine is no surprise and should cause no amazement to the leading members of the CBI, who are perfectly familiar with that law to which they have been subject when trading with other countries in Europe for a very long time. After all, we are not talking about penalties actually being imposed. We are talking about deterrence. That is the whole point. Adequate deterrence is what the United Kingdom competition policy up to now has so patently lacked.
  It is clear from the Bill that the Office of Fair Trading is to have the key role of front line enforcement of the new law and of giving guidance. I hope the noble Lord, Lord St. John of Bletso, notices that the Bill provides that the director general should give general advice. Before the Bill becomes law he will no doubt give general advice to help to create certainty on what is lawful and what is not. But in addition to that there are clear provisions in Clauses 13 and 21—I looked them up while the noble Lord was speaking—to deal with the

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  ability of individual businesses to ask for guidance from the director general as to whether their agreements or conduct could possibly be regarded as illegal, and when they get the guidance—assuming the guidance is that it is okay—that it is binding and that it provides a certainty of being able to continue with that conduct without fear of contradiction later.
  Noble Lords might expect me to make my next point because of my previous contact with the Office of Fair Trading, but I make it to the Minister with some deliberation. It is vital that the Government should make available adequate resources to the Office of Fair Trading and to the competition commission, with its important appeal function to which the Minister referred. We want speedy but also effective and fair decision-making. We do not want those who have to make the decisions to be lacking in resources. Unless I have missed something in the Bill, it seems to need a provision to give the Director General of Fair Trading power to require persons to attend and give evidence. If he does not have that power, it seems to me that something is missing.
  When the Bill becomes law, both business and the public will expect the director general to maintain a fair and consistent approach. I rather agree with the noble Lord, Lord Ezra, who was doubtful about the desirability of the provisions in Clause 52 for the sharing of powers with the seven different specific industry regulators in such utilities as telecommunications, energy and water. Those regulators have considerable experience in their respective industries but not—I mean no insult to them—in UK or EU competition law. Might it not be better if their expertise were fed into the Office of Fair Trading, as indeed it is now, and will continue to be, in that important field of competition law concerning mergers and takeovers? There is not concurrent jurisdiction but they feed their expertise and understanding of the industry into the director general before he proceeds.
  It is proper, given the enlarged powers to be vested in the OFT, that there should be adequate safeguards and rights of appeal. Hence the importance of the competition commission, and its tribunal function, hearing appeals both on the decisions and on the amount of penalty. I mention that because, in addition to that appeal, there is a further appeal on a point of law to the Court of Appeal. That seems appropriate. I just wonder whether one needs a further appeal on the matter of penalty. Surely an appeal from the DGFT to the Competition Commission should be sufficient.
  Those are detailed queries which I ask the Minister to consider. As to the Bill as a whole, I commend it strongly, including the provisions to retain the possibilities of making references to the competition commission on so-called scale or complex monopoly inquiries. As the Minister said, structural or divestment requirements may sometimes, albeit unusually, be needed. I welcome too the possibility of court action for compensation at the instance of those businesses and individuals that have suffered loss from cartel activity or from predatory pricing or other anti-competitive activities by dominant companies. The Director General of Fair Trading should not be the only gate-keeper to
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  open up an inquiry into business misconduct and abuse. I am not sure precisely where the Bill deals with private actions. I thought I heard the Minister say in his introduction that there would be further provisions on that matter.
  6.6 p.m.
  Lord Chapple: My Lords, I wish to make two brief points on this important Bill. I declare an interest. I am President of the British Radio and Electronic Equipment Manufacturers Association. Our members are deeply interested in the Bill.
  Having got the details of the Bill out of the way, my first point concerns the people who are to operate the structure. If they are not sensitive to the problems of the industry and they make a mistake, that mistake may be costly in jobs and investment.
  In the Bill the Government say that the removal of the four items from the statute book will bring us more into line with Europe. I cannot see any mention of loss leaders or predatory pricing. I ask the Minister to deal with those points in his reply.
  6.7 p.m.
  Lord Berkeley: My Lords, I welcome the Bill. It is a major step forward in competition legislation. I warmly congratulate the Minister on the way he introduced it. Even I understood it.
  As in so many things, the devil is in the detail. I wish to explore the exemptions and exclusions. I am pleased that the net for the Chapter II exclusions appears to be very much less wide than that for Chapter I. However, as we have heard already, there will be pressure for those involved who have an interest to declare to widen the exclusions and exemptions still further. The noble and learned Lord, Lord Fraser, said that every representation he had received was against vertical restraint. I received representations from the Independent and from the National Consumer Council saying exactly the opposite. Perhaps I have it wrong. Certainly, from the consumer's point of view, there is an opposite view.
  I believe that competition is good for business. Monopolies, or near monopolies, are less good for the consumer. They stop innovative ideas and cost-effective performance happening. Monopolies argue that there are economies of scale. We are told that all the time. We are told that economies of scale outweigh the lack of consumer choice. We heard that from British Telecom five or six years ago. Professor Carsberg knocked that one on the head, and I think that things are much better in telecoms now.
  I strongly believe that we must resist any pressure to extend the exclusions and exemptions included in the Bill. I would like to illustrate that by giving a few examples on transport. I hope that they will illustrate some of the problems, and also that I shall receive assurances from the Minister either tonight or at a later stage confirming my concerns are groundless.
  Perhaps I may now declare an interest. I am an adviser to Adtrans and chairman of the Railfreight Group. Having said that, I wish to start with buses. They

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  are not regulated at all except in London. Sometimes one has an operator who buys up all the competition in an area or town. He may produce a wonderful service or a terrible service. I went to a lecture last night by Brian Souter, who is the chairman of Stagecoach. He has had one or two run-ins with the Office of Fair Trading. Surprise, surprise: he was very much against this Bill. He said that it would stop him buying buses. He would say that, would not he? I am sure that other people will buy buses. It is back to the same old question; namely, "We shall not invest unless we remain a monopoly". Of course, he is not a monopoly, but he may be in some areas. There is no strong case for exemptions or exclusions here, but there may be a strong case—and that may be something to discuss in the transport forum—for looking into bus routes being franchised in the future rather as they are in London. As regards competition, we must be wary of exclusions.
  I turn now to trains. As several noble Lords have said, relationships with the regulators are of concern. The noble Baroness, Lady O'Cathain, spoke in favour of deregulation, and quite so. But I believe that if there is a monopoly involved it needs strong regulation. I shall seek to demonstrate a few examples where it has gone wrong. As regards the railways, we start with a very inconsistent policy which has been inherited from the previous government. We have spoken about it many times in your Lordships' House, and the matter needs clearing up.
  Perhaps I may give one or two examples. The first is the Channel Tunnel rail link. It is a vertically integrated railway; in other words, the operator and the infrastructure provider are the same company. They are trying to build some Chinese walls and they may be successful. But they are not regulated by the rail regulator who regulates the competing parallel railway. Is not that a bit odd? Why should they not be regulated? For that matter, why should they not come within the scope of this Bill? I hope that they do. I do not know the answer. My solution would be that the scope of the rail regulator should be extended to include the Channel Tunnel rail link and that both should come within the terms of this Bill.
  I now move to the Channel Tunnel. Half of it is in the United Kingdom so I suppose that that means it comes within the limits of this Bill. I have been fighting for quite a few months now as regards the concern that the price that Railfreight is charged to use the tunnel is about three times the price that Roadfreight is charged. The reason is quite simple. Roadfreight through the Channel Tunnel is in competition with the ferries but Railfreight is not in competition with anyone. I suspect that the same problem applies to passenger trains. We have seen high prices, with no new competition or services being brought in.
  Eurotunnel in this context is an infrastructure provider of railway services which is the only unregulated monopoly of rail services infrastructure in this country. There is an historical reason for that. But why should it be excluded? I do not know whether it is included under Article 85 or 86 of the Treaty of Rome. Perhaps the Minister will be able to tell me or write to me later about
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  that. There is a contract between the railways, which was British Rail, SNCF and Eurotunnel, behind which everyone hides, saying that they cannot drop their prices. But if lorry prices can come down as a result of competition, why should not Railfreight prices come down, too?
  To me that is an abuse of a dominant position. I am no lawyer or competition expert. Rail is a monopoly in its own services. Therefore, I very much hope that the Minister will be able to assure me that in future consideration will be given to bringing certainly the United Kingdom half of Eurotunnel within the rail regulator's responsibility, as well as within the limits of this Bill.
  I do not know whether the matter will come up under freight freeways or anything else, but it is extremely serious. The consequences are that the Channel Tunnel is taking only 3 per cent. of the unitised traffic between Britain and the Continent. That compares with 30 per cent. of freight going to Southampton by rail. There is a long way to go to catch up in price. It is price that is the problem.
  The last example I wish to give concerns the rolling stock leasing companies (called ROSCOS for short). They were set up under the Railways Act 1993. They were to take over all British Rail's passenger rolling stock and lease it to the train operating companies. There were three of them and they got about one-third each. We have heard stories in the past year that two of the companies have been sold off by their original owners. Some of the directors involved have apparently grossed tens of millions of pounds for themselves. There is nothing illegal about that. They have sold the companies.
  The latest prospectus that I have seen for the third and last one, Angel Trains, which is being sold off by Morgan Stanley, states that in 1996 the turnover of the company was £291 million, out of which it made an operating profit of £134 million. That is 46 per cent. of the turnover as operating profit. The company has done nothing illegal. It is perfectly legal to do that. But even more worrying for me is that the 20-year forecast shows the trend continuing.
  Of course, some profit is necessary, but it should be related to risk. The risk to these companies is virtually zero. If the train operating companies cease to pay the rentals, I believe that the Government will pick up the problem. So it is almost a licence to print money because there is no regulation. That is the key to the matter.
  When the Government set up the privatisation of the railways they regulated Railtrack and the passenger train operating companies, but the people in between, the rolling stock companies, were not regulated. So if one grosses up that sum to the three companies, it is equivalent to about £300 million which is taken out of the industry every year. What can one do with that sum of money each year in a railway company? I could go on for years, could I not? It would certainly pay for my favourite project, which is a piggy-back route from London to Glasgow, and that could be done in one year. It would probably be possible to drop rail fares by 20 per cent. for ever. It is big money.

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  I do not know whether it is a cartel, three monopolies or a combination of both. I do not know whether the existing contracts with the railways mean that this must be one of the exclusions or exemptions. However, I believe that it is against the public interest and that something needs to be done about it. I would like to see that done in this Bill rather than waiting for the possible legislation on transport which might come in a few years' time.
  Lastly, as we have been discussing who complains about some of these issues, it is not clear to me in this Bill whether a third party can make a complaint about these matters. I suggest that none of these ROSCOS customers would be likely to complain, because if they then took the trains back into their ownership, the train operating companies could not perform the contracts that they have with the franchising director. These trains are not tradable. They are not fixed to one line, but they cannot be traded around the country between different people. There is a great shortage of them because it takes three to four years to build them. There is a serious problem here. It may be just an example, but I very much hope that the Minister will be able to give me some comfort that the issue can be addressed. I have given your Lordships three examples.
  In conclusion, I welcome this Bill. I hope that the Government will resist the temptation to water it down or delay its implementation too much. I shall obviously wish to explore some of the matters I have mentioned, and a few more, during the next stages of the Bill.
  6.18 p.m.
  Viscount Trenchard: My Lords, I am grateful to the noble Lord, Lord Simon of Highbury, for introducing this debate on the Bill today. I am aware of the wealth of experience and knowledge on competition issues which exists on all sides of your Lordships' House and so it is with some trepidation that I address your Lordships this afternoon.
  As an investment banker, these measures are of great concern to me and my City colleagues. Nowadays an increasing proportion of the mergers and acquisitions in which City firms are interested involve more than one jurisdiction. By far the largest proportion of such transactions involve other European Union countries, and I would therefore broadly welcome steps which bring about greater alignment between regulations applied across the European Community and British regulations, where such greater alignment serves to improve further the system of regulation which currently protects the public interest against abuse of a dominant market position in this country. Whatever its imperfections, our system is well regarded by our trading partners around the world. Unfortunately, however, I do not believe that the Government's proposed Bill will have the effect of improving the protection of the public interest against anti-competitive behaviour.
  Under our present system of competition regulation, it is impossible for a merger or acquisition to be blocked unless both the President of the Board of Trade, having received advice from the Director General of Fair
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  Trading, and the Monopolies and Mergers Commission, after an independent investigation, consider the proposed transaction to be contrary to the public interest. The important point is that the MMC is independent and must publish its report. If the MMC considers that the transaction is not against the public interest, the President of the Board of Trade has no powers to block it.
  However, if the Bill should be enacted, the effect will be a significant transfer of control away from the MMC to the President of the Board of Trade. The current investigative approach will be replaced by one based on prohibitions, and particularly on Articles 85 and 86 of the EC Treaty. Under the proposed system, the primary responsibility for enforcement will be vested in the Director General of Fair Trading, whose decisions will be binding unless overruled as a result of an appeal to the competition commission, which is to be created as the successor body to the MMC. However, the DTI's guide to the Competition Bill describes the competition commission as a "specially created appeals body". I believe it may lack the teeth that the MMC has and the centre of the review process will move away from an independent commission towards the Office of Fair Trading and the President of the Board of Trade. The effect of this move will be to diminish the importance of the public interest and to increase the effect of political influence on merger decisions.
  Under the present arrangements, it is possible to obtain confidential guidance from the Office of Fair Trading as to the likelihood of a referral in any particular case. The Bill is not clear as to whether the provisions for guidance as to possible infringement of either prohibition continue to offer guidance on a confidential basis.
  Indeed, this is only one area in which this Bill is less than clear. As my noble and learned friend Lord Fraser said, there are several areas where the way in which competition law will actually be applied remains uncertain. Among others, the CBI is rightly concerned that the Bill grants excessive powers to officials of the Office of Fair Trading. The Bill bases prohibition of abuse of a dominant position directly on the vague and general wording of Article 86. Indeed, neither the Bill nor the commentary on it give any real detail about exactly what kind of behaviour the Government intend to prohibit. It is still unclear whether vertical agreements, such as those involving tied public houses, will receive exemptions or not. The Bill does not resolve conflicts resulting from overlap between EU and UK jurisdictions. The treatment of vertical agreements under Article 85 is in any case under review in Europe.
  I would also bring to your Lordships' attention the powers available to the Director General of Fair Trading for imposing penalties. Penalties may not exceed 10 per cent. of turnover. This provision discriminates against low margin, high turnover companies as compared with high margin, low turnover companies. It would surely be fairer to devise a maximum penalty which would have an equal effect in its application to all companies.

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  I do not wish to claim that everything about competition law is perfect at present, but I am surprised that the Government should seek to make such fundamental changes to such an important area of the law in such a hasty manner and before sufficient consultation has taken place. Confidence in the City and in the legal framework that governs it must be maintained, not just in Brussels, but all over the world. The Minister, with his extensive business experience, knows this as well as anyone. This is an area where it may well be that the British flexible approach works better than the European model, which is based on prohibitions, and rather than throw away our own tried and tested methods, perhaps we should try to persuade the European Commission to develop its own system of regulation to be more like our own.
  I was heartened to hear the Minister say that the Government continue to discuss the Bill with interested parties. I sincerely hope that on this occasion the Government will listen to the opinions that have been expressed by many noble Lords on all sides of the House and that they will take the necessary steps to amend their proposed legislation. I thank your Lordships for your attention.
  6.25 p.m.
  Lord Desai: My Lords, I rise to speak more as an academic economist than as a practitioner. The only other economist to have spoken so far has been the noble Baroness, Lady O'Cathain, but she has much practical experience and I have none.
  I rise to express certain doubts and general views because I do not understand some of the Bill's provisions. Everybody thinks that competition is marvellous, as if it were an unambiguous notion, but it is not. Some of our difficulties about defining "competition", especially in economic terms, go back a long way and have not yet been resolved. Most economists think of competition as something perfectly static. Perhaps I may give an example. It could relate to baked beans. A commodity could have one price either because it has a monopoly supplier or because of competition.
  Perhaps I may give another example of the problems of defining "competition" which we may want to distinguish from economic efficiency, which delivers low cost. One may want to encourage those firms which deliver low-cost products as against those with high margins. It is possible for a company to deliver lower prices despite higher margins if its costs are low enough. I do not know which way people would choose to look at this, but the position may vary considerably if we consider only the margins and a high cost/low margin firm would be encouraged compared to a low cost/high margin firm.
  Dynamic competition is different from static competition. Having said that, I do not have any operational tricks up my sleeve, but I should like to turn to a specific case in which some of these issues arise. No doubt my noble friends Lord Simon and Lord Clinton-Davis know that there has been much new
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  research recently into what is called "industrial organisation". There has been a flurry of work on that subject in the past 15 years, but despite the best efforts of some very brilliant people, we have not advanced very far in terms of establishing operational rules which may be consistently applied with regard to framing the law.
  When it comes to putting such a law onto the statute book, we must ask about, for example, the criteria and rules that will be used to define the "dominant position". As far as I can see, "dominant position" is here defined in relation to the UK market. Unlike my noble friend Lord Borrie, I am neither a lawyer nor a regulator and I do not know how that phrase will relate to a company which is in global competition. We all like global competition, but very large local firms may be only small minnows in global terms. Their ability to survive global competition may depend very much on their ability to be large in the UK domestic market while remaining small in relation to the global market. In today's world, where there is much innovation and where R&D expenditure is necessary for a firm to survive, even dominant firms have to work hard to survive global competition. That is why I am not sure whether some of the rules, which are based on the static notion, may not do more harm than good. I hasten to add that I do not know how they will be applied.
  I give the example of the proposed merger between Nestle and Perrier in the mineral water market. Last week a paper appeared which was written by some French economists, one of whom was in charge of French competition policy. In this industry there were three very large companies which between them had 76 per cent. of the market. If Nestlé and Perrier had merged they would have controlled more than half the market, leaving the third company, BSN, with one-third. The Commission insisted that if Nestlé and Perrier were to merge they would have to divest themselves of part of their businesses and sell it to BSN so that in the result both parts would be of equal size.
  This looks very nice, but those economists have shown that it is the wrong way to encourage competition. Although the paper is a preliminary, theoretical work, I am convinced by it. The authors tried to show that in such a case two approximately equal duopoly firms had more reason to collude and stop competition than if one were larger than the other. By creating one big firm with a half-market share and another with one-quarter of the market one does more for competition than if one has two firms of equal size. That goes against so much of our traditional thinking; namely, that a monopoly is bad, two firms are less bad but still bad but 100 firms are very good. It does not work like that.
  I have vague and metaphysical doubts about what this Bill will achieve, in particular because my noble friend Lord Simon said that one of its purposes was to make UK firms more globally competitive than they are. If the Commission in deciding on monopolies and mergers uses criteria that can be shown not to be encouraging competition and we adopt that kind of case law, we must be careful and think more about dynamic competition than static competition.

  1179
  I have one small practical point to make. Perhaps my point is not very practical but it is slightly less academic than what I have already said. Some noble Lords have said that the OFT must co-ordinate with the utility regulators and that somehow there must be a greater ability to feed in information from public utility regulators to the OFT. This point may be completely irrelevant. However, in the financial services industry, having set up a number of matters, later on we have had to create an overarching body within which particular SROs are nested. We are still going through the process.
  Perhaps my noble friend, maybe not now but later on, will give some thought to this matter. He does not necessarily have to give me an answer. But are there any advantages in thinking about setting up an overarching structure now so that two years later we do not discover, having set up this framework, that further primary legislation is required to put the public utility regulators within the OFT framework, requiring another building, another name and another director general for this great body? If this Bill is as large and as technical as it is and it is to be thought through and amended, some of these issues should be looked at now rather than later.
  6.34 p.m.
  Lord MacLaurin of Knebworth: My Lords, as a past chairman of Tesco with some 38 years' experience of the retail industry, I wish to make some brief observations about competition policy drawing upon my knowledge of that industry. I am also chairman of the England and Wales Cricket Board, where competition policy has another but equally important meaning. In many ways, however, it is more controversial. I am also conscious that I am speaking in the same debate as the noble Lord, Lord Borrie, who has such an outstanding record of representing the public interest in all these issues.
  To many people outside this House the subject of the Competition Bill will be dry, and they must feel that it is irrelevant to them. That view could not be more mistaken. Competition policy has an exceptionally important impact on the atmosphere in which industry conducts itself. It sets out the parameters for the practical, day-to-day behaviour of thousands of individuals and companies. Competition policy also determines the mechanics of any government policy for competitiveness, enterprise and even wealth creation. You cannot encourage companies to seize commercial opportunities if the competition policy is not right. You cannot reduce the cost of living for the man or woman in the street if you do not have strong competition policy. You cannot foster innovation or greater choice if these actions are not encouraged by the right legal framework.
  The President of the Board of Trade, in her speech to her own party conference, spoke of the importance of using competition policy to ease the pressures on family budgets. This is a matter with which all parts of your Lordships' House will, I hope, agree. Much of the thrust of the legislation from my own Benches has always had this in mind. Allowing access by businesses to new markets and encouraging the discounting of goods plays a role in creating a popular faith in our whole economic
  1180
  system. It underpins wider consent for the market economy as a whole. This is very important in a democracy. Price cutting by its very nature also helps to build an inclusive society. Lower prices allow more people to benefit from the goods and services we all desire.
  Your Lordships only have to think of the recent liberalisation of the air markets within Europe to see how falling prices allow more people to extend their horizons and expectations. A competition policy that promotes lower prices will also help more people to share in some of the popular cultural symbols of our day. Those of your Lordships who have grandchildren or young children will know at first hand of their obsession—I do not believe that that is too strong a word—with the latest designer fashions and the "right" logo. Not all of society is able to enjoy those goods. I have no doubt that that can exclude people, particularly children from disadvantaged backgrounds whose parents simply cannot afford to pay these high prices. Designing a policy which helps people to have wider access to the nicer things in life can, however, be complex.
  In the field of sport, it is essential to have the ability to secure a fair price for our broadcasting arrangements. It is also right that there should be a balance between satellite and terrestrial television in sports coverage. In cricket some change is needed in the Government's listed events to allow us to strike the right balance between the needs of the sport, viewers and broadcasters.
  Strong competition and innovation will help to bring about the goal shared by all governments of rising living standards. The use of competition to deliver these objectives means that government does not always have to use our very limited tax resources.
  With the right competition policy, the private sector can help to ensure that the state is not burdened with the task of trying to make society more equal. Competition between companies can do part of that for the state. There is an important point here. The more goods you allow to be sold by a diverse and large number of retailers the more you will improve the quality and standard of living of the population as a whole. You will also bear down on inflation—a goal shared by every government that I can recall.
  I hope that the Minister, the noble Lord, Lord Simon, will take the opportunity offered by the Second Reading of this Bill to expand on the Government's attitude to selective distribution agreements. There is a failing in competition here. I am specifically referring to those arrangements which discriminate against certain retailers and their outlets. Those restrictions result in higher prices in the UK than in, say, North America. The result is that supermarkets and others cannot obtain adequate supplies of cultural symbols such as trainers, designer T-shirts, fine fragrances, and fashionable jeans. Poorer families, like everyone else, aspire to those products but cannot afford them.
  The current competition regime tolerates the existence of selective distribution agreements by some manufacturers which mean that retailers—large or

  1181
  small—are not always allowed to sell or even discount categories of products. Selective distribution artificially restricts the number of retailers in any one market, and previous experience might suggest to your Lordships that that is not always in the public interest. I am not an expert on competition policy, but I look forward to taking a constructive part in the detailed scrutiny of this important Bill and helping your Lordships to ensure that the Bill serves the public interest.
  I must apologise for being unable to stay until the conclusion of the debate as I have another speaking engagement.
  6.42 p.m.
  Lord Cocks of Hartcliffe: My Lords, first, I must declare an interest, registered in your Lordship's Register, in British Telecom and say that I am particularly pleased to be associated with BT because it is one of the flagship industries on which the future of this country depends.
  This is a landmark Bill in a difficult area, and all those with an interest in this important matter are grateful to the Government for providing time in the first Session of Parliament to consider the Bill. I am grateful to my noble friend Lord Simon for his introduction to the debate.
  All sides of the House will agree that telecommunications in the UK has been a success story. The UK telecommunications markets are widely recognised as the most open and competitive in the world. Note, I refer to "markets"—not "market". This is part of the issue which I wish to consider.
  The recent press coverage of global alliances has demonstrated the scale and international importance of telecommunications. Telecommunications is a key part of the information technology revolution which the Government are already using for education, training and job creation, bringing fresh hope to a new generation. The UK has a lead in this field and innovation is the key to keeping it. New products are in the shops every day, computers are able to send and receive fax and e-mail, and portable telephones and computers are integrated. Many noble Lords will share my experience of being led by the hand through these mysteries by young children, some of them not even 10 years old yet.
  Financial trading and the strength of our City financial institutions are underpinned by the revolution that has taken place. The use of technology and the application of information are huge growth industries in the UK and in the world. Why is that relevant to the Competition Bill? A topical example is the current inquiry by the United States competition authorities into the practices of Microsoft packaging Internet software with its other computer software.
  Is that unlawful abuse of a dominant position or is that new product innovation? Whatever the answer, if it is the wrong one it could devastate the industrial landscape for years to come; and whatever the answer
  1182
  it will impact on the industrial picture. We need a structure for competition which optimises the prospect of delivering the right answers.
  We need the right structures to deliver the right answers. One of the major problems in devising the right structures for telecommunications is that it is no longer clear what the industry is. The traditional markets of broadcasting, telecomunications, computing and media are converging. I have here a quotation from a recent statement by Oftel. I am sorry to weary the House, but it is important.
  "Thirteen years is a long time in the telecommunications and information technology industries of which telecoms is an important part. Telecoms no longer remains a discrete industry sector nor the relevant market for a number of competition issues. Developments in digital technology mean that traditional market distinctions between telecoms, IT and broadcasting are fast breaking down.
  "Telecommunications is now but part of the new digital communications market which encompasses content production, storage, processing, packaging, distribution and the delivery over networks of electronic information or entertainment to customers. Telecoms has changed from a domestic monopolistic utility to an international competitive industry".
  Those are the words of the Director General of Telecommunications only last month. They demonstrate how far we have come since the days of the General Post Office.
  A further major change is the emergence of effective competition. There are now over 200 telecoms licences issued and cable TV franchises cover 75 per cent. of the country. Those cable companies have over 2.5 million telephone customers.
  No sector of the market is closed to competition. Many large international players are investing in the UK. Investment is currently running at about £5 billion a year. Competition is crossing national boundaries. It is increasingly a global business. There will be a single European market in telecoms in the EU from January 1998.
  These high-tech markets are very different from traditional commodity utilities such as gas, water and electricity. Digital information can be processed, packaged and stored and applied as new products which appear in "cyberspace". The processing power of personal computers can be provided in central computer systems sitting within communications networks. The power on the desktop can be replaced by the power within the system. That is not so true of water, gas and electricity, essential commodities which can be ring-fenced and separately regulated.
  I therefore note with concern that under the Bill the Director General of Telecommunications would have concurrent jurisdiction with the Director General of Fair Trading in relation to,
  "commercial activities connected with telecommunications".
  This is a very broad remit. Virtually every commercial activity in the UK is connected with telecoms. The overlap between the OFT and Oftel will create jurisdictional issues, unnecessary frictions and unconstructive confusion. Most important of all, it will cause delay and I believe lessen the prospects of producing the best decisions for the country.

  1183
  The communications and information technology revolution has limitless boundaries and we should not create a recipe for rivalry between different authorities. The OFT should be a one-stop for the application of competition policy in telecommunications. That is the best way to ensure that we have the best structure to deliver the right answers on those questions which are so vital to our industrial future. I hope that the Government will give full consideration to that matter.
  6.48 p.m.
  Lord McNally: My Lords, this has been, in the usual jargon of the House, a wide-ranging and informed debate. I was especially interested in the contribution of the noble Lord, Lord Lucas. I suspect that, like me, he has a young family, and that that was the reason for his many references to McDonalds. Like me, he knows that Big Macs on a Saturday morning are not price-sensitive. We also had the pleasure of attending, yet again, one of the seminars of the noble Lord, Lord Desai, and we are all the better for that.
  In introducing the Bill the Minister said that it was complex and technical. That made us all a little bit more comfortable. We could hide behind that assurance. We also welcome the Minister's generous approach and that the Government are open to consultations as the Bill progresses.
  My starting point for the Bill is not the noble Lord, Lord Desai, but another academic economist, Adam Smith. I did not believe that we would get this far in the debate without him being quoted. He said that people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in conspiracy against the public or in some contrivance to raise prices.
  The experience of the intervening century and the examples given by the noble Baroness, Lady O'Cathain, show that the old boy's assessment was not too far off. These days, we have the added fig leaf of maximising shareholder value to justify all manner of corporate greed. However, as the debate has made clear, the need to control corporate greed and outlaw competitive practices is only one side of the coin. I must admit that, like the noble Lord, Lord Desai, I have probably mellowed over the years. In looking at market position we must look at national, European and global points of view in terms of operation. In the presence of the noble Lord, Lord Borrie, I say with deference that I do not always see the watchdogs and regulators as the good guys. In the American deep south there is a saying that when you are up to your armpits in alligators it is sometimes difficult to remember that the plan was to drain the swamp. By the same token, in business it is sometimes difficult to remember that the name of the game is producing the right products of the right quality at the right price at the right time when you are up to your armpits in regulators.
  Tonight there has been a general consensus that a new Competition Bill is timely. As my noble friend Lord Ezra made clear, the Government can expect overall support for the measures from Members on these Benches. However, as has also been made clear tonight,
  1184
  the Committee stage will require us to examine in detail the three tests which my noble friend set for the measure; namely, that it should operate simply and transparently and bring us into line with EU law.
  We will want to examine in detail the powers and effectiveness of the Director General of Fair Trading and the new competition commission. My experience of the MMC investigations is that they have sometimes been over-academic and over-leisurely. Only certain people in a company—even a very large company—have the experience and knowledge to respond to an OFT or MMC investigation and they are often the same people at the sharp end of making a particular business a success. A long drawn out and other-worldly investigation may seem par for the course for the investigatory body, but it may be a daunting diversion of scarce management time for the company concerned.
  In another context of law reform, the analogy has been made of replacing the blunderbuss with an armalite. Whether in this context that analogy is completely fair I am not sure, but I am sure that industry will want Government and Parliament to make every effort to deliver a Competition Act which is understandable and clear about what is expected of companies and which produces efficient and focused investigations. At the same time, Parliament will want a full debate of the scrutiny and powers of search and entry requested in the Bill, which seem very far reaching.
  My noble friend Lord Ezra dealt with the problems of concurrent and overlapping powers and I noted that he was supported by the noble Lord, Lord Borrie. Again, I put my swamp analogy to Ministers and say that it is bad enough that you have to deal with the alligators, but it becomes double jeopardy if you have to deal with snakes too. I hope that Ministers can give the House a reassurance on that matter, which is concerning a large number of companies. In so doing, Ministers should beware of turf wars and empire building by regulators. It is totally unfair to companies trying to run a business if they end up being tugged this way and that by regulators anxious to establish jurisdiction over them.
  As was indicated by the noble and learned Lord, Lord Fraser, another area where the impact of the Bill will be scrutinised is that relating to small businesses. The Government have recently committed themselves to a vigorous and positive policy towards small businesses, yet the Federation of Small Businesses has sent us a powerfully argued brief setting out the various competitive difficulties it faces in this important sector. Indeed, in its brief the federation called for an end to the continuation of a situation in which small businesses are penalised for conforming to Government rules and regulations when those with real market power operate with unfair commercial advantage. Both tonight and in Committee we will want Government assurances about the needs and concerns of small and medium-sized enterprises.
  As my noble friend Lord Ezra indicated, the other interested party in competition law is the consumer. We believe that it would be an opportunity missed if the Government did not build effective consumer representation into the regulatory framework.

  1185
  Tonight we have heard about a number of anxieties; namely, the impact on pubs, pharmacies, retailers, transport operators, the City of London and sports rights on TV. Perhaps I may add two other dogs which have not barked in the night. First, we received representations from the Food and Drink Federation and the British Brand Group, among others, about the fact that lookalikes and loss leaders are not dealt with in the Bill. That was dealt with briefly by the noble and learned Lord, Lord Fraser. Surely, this is a missed opportunity which Ministers should rectify in Committee.
  Finally, the noble Lord, Lord Cocks, spoke of the media. During the discussions which the Minister offered I should like to examine whether we have an opportunity to deal with predatory pricing, loss leading and abuse of power in the newspaper industry. As the noble Lord, Lord Cocks, emphasised, we are told that we are on the dawn of the information age; a post-industrial society of great power and influence. It seems to me that in terms of guaranteeing freedom, independence and access, the rules governing the big players are little better than those controlling 19th century mill owners before the Factory Acts. We need to be very sure that the powers to control abuse of power—power which is often global as it affects the control, access and independence of our media—are effective.
  We are told that it was fear of the Sun which caused the Government to take their cautious approach to EMU. Perhaps a media obsessed government are too scared to address the issues of abuse of power, predatory pricing, dominant position, cross-media ownership and so forth. But how we regulate and control the concentration of power in the information age is as big a challenge to Parliament and our democratic process in the 21st century as was bringing order and responsibility to unfettered capitalism in the 19th.
  From the size and complexity of the Bill, from the wide range of submissions made tonight and sent to us and the Government from consumer groups and industries of all sizes, it is clear that we are heading for a very interesting Committee stage. Perhaps I may finish, therefore, by explaining a question posed by the noble Lord, Lord Lucas. He asked how vertical arrangements between political parties worked. Perhaps I may explain that in respect of this Bill, Ministers can look forward to constructive support from candid friends.
  6.59 p.m.
  Lord Kingsland: My Lords, having heard the noble Lord, Lord McNally, wind up for his party, I hesitate to say that this has been a constructive and wide-ranging debate. However, I certainly believe that it has. Indeed, I find myself in agreement with almost everything that almost everyone said tonight. If the debate had been twice as long, I am sure I would have agreed with almost everything that everyone would have said had they had the opportunity to say it.
  If one speech remains etched particularly sharply on my memory it is that by the noble Viscount, Lord Trenchard, who said, in the course of a spirited
  1186
  intervention, that he thought the right approach was to persuade the European Community to adopt our principles of competition law. I think that that reflects his distinguished service antecedents by following the great dictum that when everything about you seems to be collapsing, you go on the attack.
  We have had a good debate on the general principles. It is now time to look ahead to the work of the Committee sessions. In a few moments, I wish to pick up a few points that have been made and try to show the direction in which Her Majesty's loyal Opposition would wish them to be taken.
  First, I deal with the question of the conflict between various regulation regimes. That is a serious point. The existing proposals invite order, counter-order, disorder. I suggest that the way ahead is to create a hierarchy between the OFT and the five regulators. I believe that the Government must grasp the nettle firmly and put the OFT at the top of the hierarchy because there must be a common competition jurisprudence which infects the work of all the regulators. Otherwise, there will be discrimination between the work of many important, what I would call, public utility operators.
  However, there is another confusion which has not yet been mentioned in the debate. Although the OFT will be responsible for the Part II prohibition on monopolistic practices—the abuse of a dominant position—it appears that what will become the competition commission, but what was the MMC, will retain responsibility for dealing with complex monopolies. There is surely a serious danger that the decisions made by the MMC and the decisions made by the OFT in a particular sector which exhibits monopolistic tendencies will conflict.
  We support the retention of the complex monopoly provisions but believe that it is a recipe for disaster if they are handled by a different organisation. Therefore, our firm recommendation is that the former MMC responsibilities which, under the current draft, will become competition commission responsibilities, should be given to the OFT. The MMC has done sterling work for the nation over many decades but it has not exhibited consistency in its decisions. Therefore, it is perfectly reasonable for the OFT to take over that work and carry it on in conjunction with its work on the Part II prohibition.
  There is another reason that I say that. I do not think it right that the competition commission should have, on the one hand, an investigatory role and, on the other hand, a judicial role. I know that the Government intend to compartmentalise them but justice must be seen to be done as well as done. It would he much cleaner if the Competition Commission concentrated uniquely on its judicial role and the whole investigatory procedure were left to the OFT. Those are my reflections on potential confusion in the regime.
  I turn now to the matter of procedure. There is a great bugbear in passing modern legislation—and I readily admit that in the course of 18 years' very distinguished service to the nation, Her Majesty's Opposition, when in government, were sometimes guilty of this too—containing general enabling clauses when the real bite

  1187
  turned out to be in the statutory guidance which frequently did not appear for several months or even years.
  The real bite in this legislation will be contained in the procedural safeguards for the companies to be subject to the investigation by the OFT. It must be laid down absolutely clearly in the guidance what rights the companies or individuals will have if they are subject to investigation.
  It must be made absolutely clear what offence they are said to have committed in a reasoned statement; and they must have plenty of time to respond to that reasoned statement. It must be clear also, since the OFT will conduct the investigations, that there will be an opportunity not just for written submissions but also for oral submissions and that the OFT official who adjudicates at those oral hearings has nothing whatever to do with the investigation. I say this because there is a clear danger that the OFT, which is investigator, prosecutor, judge and jury, will confuse those responsibilities.
  It must be made clear also that, except in cases of established confidentiality, there is full discovery of documents on both sides; that is to say, including the OFT. And, of course, the basis upon which penalties are made must be set out very clearly.
  I hope that all those matters will appear in a form at which this House can look in Committee. I do not ask for final statutory guidance but we must have an idea of how the government thinking is developing in that area.
  As the Government well know, there has been a considerable amount of jurisprudence in relation to the rights of individuals in the European Court of Justice and more recently in the European Court of first instance. It is fairly clear from the decisions of the courts that they have not always followed the standards that we would expect as a free and democratic society when individuals are accused of offences. And we are talking about criminal offences because there are fines at the end of them.
  In that respect, the European Community has not fully incorporated the principles laid down in the European Convention on Human Rights. I understand that it is the Government's intention in due course to introduce a Bill which will have the object of incorporating the provisions of the European Convention on Human Rights. I trust that in formulating procedures for investigations by the OFT, the principles which lie behind that convention will be fully incorporated; because it is not clear from Clause 58 of the draft Bill that they will. It is clear that the general rules of Community law will be incorporated but it is not clear that that goes to procedure.
  If we just have the jurisprudence of the European Court of Justice on procedure incorporated, that will not meet our existing and, perhaps, future incorporated obligations under the European Convention on Human Rights. I suggest that that area will need some thought by the Government.
  I make one final point on the question of jurisprudence. I said earlier that we are talking about potentially criminal offences because a fine lies at the end of them. Are we right in making the court, which is the competition commission, just a commission? Should it not be a full branch of the High Court in the same way as the restrictive
  1188
  practices court is a full branch of the High Court? There are suggestions in the jurisprudence of the European Court of Human Rights that where criminal offences are concerned, that is the only way in which a state can meet its obligations to the accused.
  I turn now to what is a very difficult area. I was very struck by the remarks of my noble friend Lord MacLaurin on vertical agreements. I do not know what the answer to that is. It is a pity. I wish I did. But I can speak even less confidently about that than I can about what I just said. It is clear that in some circumstances there can be what I would call Article 85 transgressions and so an absolute prohibition would be at least premature.
  How does one handle the situation? There are two ways in which to handle it in principle. One is to exclude all vertical agreements, subject to a discretion by the OFT to include those it finds offensive. The other is to take the opposite approach and say that basically all vertical agreements are in there subject to very generous block exemptions and to wait to see what the European Commission will decide about that—as I understand the general idea of the legislation, which I fully endorse, it is to approximate with what has been done at European Community level. Therefore, this is one of the areas where we need to make haste slowly. If we rush ahead too much, we may find that we have to change everything that we have done in the light of what the European Commission has done. I hope that we shall make progress in this area in Committee. However, in principle, the debate today has not taken the Government very far, hard though we have all tried to do so.
  There is a point on exemptions that I should like to make. It is one that I believe the Government ought to find easy to deal with—namely, whether or not an exemption granted by the OFT should be backdated to the date of the agreement. It is pretty clear to me that it should be. I believe that there is somewhere in the Bill, although I cannot recall where, a clause which suggests that there will be no penalty for the period between the moment that the agreement was made and the notification. If that is so, logically it seems to me that the exemption should be backdated unless there was some good reason for not doing so, in which case the OFT would have to give clear reasons for not giving the general exemption.
  I believe that I have said enough for Her Majesty's Government to be going on with. In conclusion, I should like to say how much we appreciated the way in which the noble Lord, Lord Simon, presented the Bill. We have great respect for his industrial record. We are particularly lucky that he is taking the Bill through the House. We very much look forward to working closely with him on it.
  7.11 p.m.
  Lord Clinton-Davis: My Lords, I should like to begin by welcoming my noble friend Lord Kingsland—if I may call him thus; indeed, he has been a friend for a very long time—to the Opposition Front Bench. I hope

  1189
  that he enjoys a long tenure in that position. If I may say so, his approach was a very reflective one and one which I and my noble friend Lord Simon much appreciated. I shall, with my noble friend Lord Simon, ponder on the points that the noble Lord made about jurisprudence, about the rights that companies will have, about exemptions and, indeed, about the backdating of exemptions. I say that without making a clear commitment. However, I believe that they are interesting points and ones which will be appropriately dealt with in Committee and during the other stages of the Bill.
  I also very much appreciate the points that the noble Lord made about my noble friend which were in stark contrast to the remarks made by his right honourable friend in another place. I believe that such personal comments would not have been introduced in this place by any Member of the Opposition Front Bench of whom I can think. I have been in this House long enough to know them; indeed I knew many of them in another place and also from my many visits to the European Parliament when I first saw the noble Lord, Lord Kingsland.
  The noble Lord's approach was in marked contrast to that of his right honourable friend who leads on such matters in another place. He appeared to reject the whole purpose of the Bill, the way in which it has been drafted and the consultation process, with his usual ability to disgorge any sort of reflective approach to the sort of matters with which he is dealing. Indeed, one could hardly say that his approach was constructive.
  I thought that the noble and learned Lord, Lord Fraser, with whom I have jousted over some period of time in a number of respects and in interesting debates—and this will certainly be one of them—seemed to be walking a tightrope between the instructions he received from his right honourable friend the shadow Secretary of State and his more usual, characteristically reflective way of approaching such matters. The fact that the noble and learned Lord did not wholly succeed is not entirely his fault; indeed, he faced an impossible task.
  One thing seems overwhelmingly clear from today's debate; namely, that this Bill is overdue and that the reform of competition laws has, as the Economist put it,
  "languished on the Whitehall agenda for over a decade".
  It is not always easy for trade and industry Ministers to get a slot for such matters. They may try to do so but often their efforts are unsuccessful in the legislation committee. I do not know whether that is the case, but over a long period of time when it was plain from experience that reform was overdue and should have been introduced, it was not. If I may say so, that point was made most effectively by the noble Lord, Lord Ezra.
  The other introductory point that I should like to make is to repeat what I said in my intervention during the speech of the noble and learned Lord, Lord Fraser, which was reiterated by my noble friend Lord Simon. We have engaged in what I believe to be an appropriate consultation process. We have tried to address the
  1190
  concerns and indeed have met many of the concerns of those who have made submissions to us. However, the process of consultation continues. The voice of Parliament has only now been heard for the first time. This is not a party politically contentious Bill. It follows, therefore, that when my noble friend and I see the word "Resist" on briefs which will accompany the Committee stage, we shall view that word with a degree of reserve. That is not to say that it is, "Open Sesame", and that we will accept everything that noble Lords put forward.
  However, many constructive points have been made in today's debate. It is appropriate, therefore, that the Government should reflect very carefully on the matter. When the Bill is ultimately enacted it will have a great effect on business and enterprise in this country. No speaker in the debate spoke to the detriment of those objectives. There was of course a philosophical intervention from my noble friend Lord Desai upon which I shall certainly muse; indeed, I also listen very seriously to him. I believe that all of us are determined to produce legislation in this area. We may not ultimately agree in the final analysis, but we shall do our best to produce an Act which is effective and in the interests of our business community and consumers. That is what the legislation is about, as a number of noble Lords said.
  Today has been a very important part of the process that we have sought to conduct to ensure that the Bill will work effectively. It is important that practitioners, as well as business and consumers, should also receive an Act which they are capable of understanding, thus enabling them to pass on the best advice about it to those whom they are serving.
  I am most grateful for all the interventions made during the debate. I should now like to turn to the impossible task of replying to at least some of the points raised. I cannot possibly deal with all of them, nor shall I promise to write to noble Lords individually on certain points. Indeed, we shall tackle them at the appropriate time—that is, during the subsequent stages of the Bill. However, if any noble Lords who participated in the debate wish to pursue a matter by way of correspondence or discussion with my noble friend and/or myself before Committee stage, we shall be happy to meet them, as my noble friend said earlier.
  I start with specific references to the speech of the noble and learned Lord, Lord Fraser. He said that the Bill was half-baked and short on detail. That is all Redwood stuff, of course. But he suggested that we had honed inertia to a fine art. I do not think that he is entitled to talk in those terms. While those were not his exact words, it was the effect of what he said. I should not have to remind the noble and learned Lord of the detailed consultation—I do not simply refer to the 150 letters, and so on—that we have had. I was disappointed—I say this in the friendliest possible way—that he had little, if anything, to say about the shortcomings of the present law: about the massive delays in dealing with abusive practices; and the inadequate powers of the investigating authorities. He

  1191
  did not deal with the point that I think he should have considered in advance—it was made by my noble friend Lord Borrie—about the effective absence of deterrence. But perhaps we shall get together further. Perhaps he will think about the matter, and I hope come more into line.
  The noble and learned Lord raised points about the chilling effect, as he called it. It is part of the submission made by the CBI. I believe that it coined the phrase the "chilling effect". I have seen no evidence in support of that proposition. It is incumbent upon those who put forward arguments to address further and better particulars when an allegation or assertion is made. But I have no doubt that we shall come back to that matter. Perhaps the CBI will be able to elucidate what it says to rather more effect. The CBI is not against the Bill. It has some reservations about it. I hope that we shall be able to deal with them in the course of amendments put before us. The CBI welcomed the Bill initially. Curiously, too, some might have thought, the Institute of Directors has given general support to the Bill. Therefore, with respect, I believe that the noble Lord was not right to assert that somehow or other many people are opposed fundamentally to what we are doing.
  If I may, I shall deal with questions on the pharmaceutical sector and the detailed matters to which the noble and learned Lord alluded at Committee stage. I am sure that he will come back to them. They are concerns which have been notified to us.
  I do not accept the point the noble and learned Lord made that SMEs should be completely excluded from competition law. Consumers suffer frequently from the activities of small firms, as they do from large ones. One has only to think of the cartels that have been found among the small cement makers to which reference was made. I do not believe that it would be right to exclude SMEs from the powers altogether. But we have said that we are considering the way in which SMEs will be brought into the whole process. We shall do so with sympathy as regards the SMEs, and when considering the detailed points later.
  The noble and learned Lord also referred to compliance costs. We have stated clearly the position on compliance costs. I have now found the note. I loved the way in which my noble friend Lady Farrington referred recently to the fact that she was in considerable difficulty in answering a question because she was short of her glasses. I wish to be accurate on this issue because the noble and learned Lord is entitled to a reply. My noble friend Lord Haskel intervenes effectively by turning on the light. I shall be able now to cast some light on the subject. I believe that in general terms the benefits of the regime that we propose to introduce will outweigh the costs substantially. It is not our wish to put any unnecessary burden on business beyond that which is necessary for the working of the regime.
  We provided the House with an estimate of the compliance costs to business as well as the potential benefits to the economy from the legislation proposed. That has been put to business and we have taken account of what business said to us. However, one of the aspects of compliance costs is to gain some coherence between
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  our own rules and those of the EU. I refer to Articles 85 and 86 of the treaty. Consistency in complying with those domestic and European levels, I believe, will save costs rather than cause companies to incur them. Our estimate is that the on-going cost of the regime to business will be minimal, ranging between a reduction of £2.2 million and an increase of £4 million per annum. One-off costs linked to the introduction of the regime are estimated at between £6.4 million and £14.3 million, a significant proportion of which is attributable to the cost to business of reviewing agreements previously considered under the RTPA. We are looking closely to ensure that the exercise will be cost effective. Perhaps the noble and learned Lord, Lord Fraser, will welcome this point. We shall consider whether there is a need to bring forward a government amendment to alleviate any burden on business which might arise in that connection.
  I should deal with one other matter in relation to the utility sector regulation. It is a point which the noble and learned Lord and others raised. The prohibitions will apply to the regulated utility sectors—telecoms, water, electricity, rail and gas. We have kept in close touch with sector regulators as the Bill developed. They will be able to exercise concurrently most of the powers of the Director General of Fair Trading in relation to prohibitions in their sectors. The sector regulators already have concurrent powers under the Fair Trading Act 1973 and the Competition Act 1980. They will be able to issue advice and information about the application of prohibitions in their sectors. They will do that in consultation with the Director General of Fair Trading. It is not our intention to make changes to the nature of sector regulation via this Bill. The matter is being considered in a different context; namely, the review that we are making of the powers of the regulators.
  I shall not deal with the pharmaceutical sector. I turn immediately to a matter raised by the noble and learned Lord, Lord Fraser, and many others about the powers of investigation. I very much agree with my noble friend Lord Borne. The noble Baroness, Lady O'Cathain, referred dramatically in many ways to this issue. Those powers have to be adequate. They have to be effective; and they must provide an immediacy about the way they will be applied. Clearly, the powers available at present lack effectiveness. Of course the House is right; and if I were on the other side I should raise a number of issues. The House should not believe that Ministers are unconcerned about civil liberty rights in this respect. We want to get the balance right. We do not in any way dismiss the fact that the powers that we seek to invoke are very tough.
  The question therefore is: how do we achieve the right balance? We have had a good "first go" at that, but I do not deny that it may be right, for example—a point raised by the noble Lord and by a number of my noble friends, Lady Nicol among them—to consider whether the authority, the warrant to enter premises, should be sought from a High Court judge rather than from a magistrate. The noble Baroness, Lady O'Cathain, also referred to that matter. We will examine the issue further. We have been examining it. The House will be entitled to share in our deliberations.

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  The noble Lords, Lord Ezra and Lord St. John of Bletso, raised some important points in relation to the guidelines. Both noble Lords wanted them incorporated into the Bill. Our immediate reaction is that they should not be. But there is a need for the House to be consulted about the guidelines. I do not know whether I can comply with demand in regard to the time limit prescribed by the noble Lord, Lord Kingsland. Perhaps I might attract the noble Lord's attention—I have been rebuked for a similar offence. I rather doubt that I can. The guidelines are a matter of concern for the House. However, we have quite a long time in which to deliberate on these matters. The courts will apply the prohibitions. That is the backcloth and the protection that is available.
  The noble Lord, Lord Ezra, liked the idea of regulators doing the investigation, and of adjudication falling to the OFT. What is intended is that regulators should have the full powers of the director general to apply the prohibitions. We are not satisfied that it would be right to create separate stages of investigation and adjudication for cases in the regulated sectors. The decisions of the Director General of Fair Trading and the regulators are subject to appeal to a tribunal.
  The courts will apply the prohibitions consistently with the Director General of Fair Trading and the regulators. The application of the prohibitions is clearly a matter of law, and the courts, the regulators and the director are all subject to the governing principles clause.
  I turn to the points made by my noble friend Lady Nicol. I have already dealt with her point about safeguards before entry. We have dealt with the matter of the transition, and are prepared to look carefully at whether we have made any errors in our calculations in that regard. I am sure that we shall return to the matter as a result of my noble friend's intervention at a later stage.
  As to SMEs, the noble Lord, Lord Lucas, in a characteristically helpful and thoughtful speech, raised a number of important points. I am glad that the noble Lord said that they are essentially matters for Committee stage. I thank him for giving notice of those points. However, time marches on, and it would be appropriate for me to take advantage of his invitation not to deal with them on the Floor of the House tonight.
  Lord McNally: My Lords, I am sorry to delay the proceedings, but this is the second time that the Minister has rather skidded over the problems that may arise from this legislation in regard to small and medium-sized enterprises. I hope that he and his colleagues will be left in no doubt as to the concern felt in this sector and the need for reassurances from Ministers.
  Lord Clinton-Davis: My Lords, I want to make it very clear that we are deeply concerned about SMEs. I give an assurance that we will consider any representations made on their behalf.
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  I shall not deal with agricultural co-operatives. I have been reminded by the Chief Whip that time is rapidly moving on, that this is a Thursday and that we have other business to transact. He is entitled to make all those points.
  Lord Carter: The effect is another matter!
  Lord Clinton-Davis: My Lords, my noble friend Lady Turner raised questions about mergers. The Bill is targeted at those areas where competition law reform is most urgently needed. We certainly cannot set about reforming every aspect. I believe that I dealt with the essential points raised by the noble Baroness, Lady O'Cathain.
  We take note of the points made by my noble friend Lord Borrie. The contribution that he has made over so many years in this field is greatly appreciated. But we do have to consider such questions as adequacy of resources. It is not easy to deal with all these points. I thank my noble friend for being so supportive of the purposes of the Bill and take note of the criticisms he made in so far as they are criticisms at all.
  In reply to the noble Lord, Lord Chapple, the prohibition of abuse is a general prohibition. Specific abuses such as predatory pricing will therefore be covered. I shall refrain from going into the specific cases raised by my noble friend Lord Berkeley. It would not be right to do so in the context of this winding-up speech or in our deliberations on the Bill as a whole. However, I thank my noble friend for mentioning matters that are of great concern.
  The noble Lord, Lord MacLaurin, made a most useful intervention. I can only hope that he will be greatly encouraging the days when, in cricket terms, we shall regain a dominant position. I do not care about abuse after that. Again, his points were detailed and are more appropriate for the Committee and Report stages.
  I note the remarks of the noble Lord, Lord McNally, and my noble friend Lord Cocks. Effectively, their point is that prohibition should not be operated by the OFT. I dealt with that issue in part. It is right to say at this stage that we do not wholly agree with the conclusions that they reached. We shall return to the matter at a later stage.
  I wish to conclude on a point about consumers. The consumer needs to have a clear voice under the new regime. The Bill ensures that that will be the case. The Office of Fair Trading will be the primary enforcer of the new regime. The outward objective of the work of the Office of Fair Trading as a competition authority is to benefit consumers. That is essentially what it is about. The Director General of Fair Trading has to take full account of the impact on consumers in assessing whether behaviour is anti-competitive.
  We believe that it is an essential part of a fair and transparent system that there should be recourse to effective appeal. We have extended that right under the Bill to consumers. That is the most effective way of recognising the rights of consumers. We have ensured that third parties with a sufficient interest and organisations representing such people will be able to

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  appeal to the tribunal against decisions by the director general. That is a conclusive way of illustrating how our reflections on the considerations put to us over a very wide field have been taken into account.
  It is time for the proceedings to move on. I thank noble Lords for the contributions they have made. We have clearly benefited from them. I look forward to the Committee stage, which will start quite shortly. I hope that as a result of these deliberations we shall be in a position to emerge with a better Bill. It is a good Bill, but there is room for improvement. I commend it to the House.
  On Question, Bill read a second time, and committed to a Committee of the Whole House.

  Tourism on the Thames
  7.40 p.m.
  Lord Lukeasked Her Majesty's Government what plans they have to improve the potential for tourism on the River Thames in and near London.
  The noble Lord said: My Lords, as this is an Unstarred Question debate, I should like to start by thanking all those who will speak later. In particular, I should like to welcome the noble Lord, Lord Gordon of Strathblane, who is to make his maiden speech. We very much look forward to hearing what he has to say. I should also like to thank my noble friend Lady Wilcox, who has come down from Scotland this afternoon to take part in the debate. I should like to thank too all those who have helped me learn about the subject, in particular the research department of your Lordships' Library which started me off on the right track. I should like to thank the Port of London Authority, whose help was essential and whose hospitality was most welcome. The London Tourist Board too provided a lot of useful information. Finally, I should like to thank the noble Lord, Lord McIntosh of Haringey, who has been most encouraging and enthusiastic.
  Many great cities have come into existence beside waterways and have flourished because of them. That is very true of London, which was probably first settled some few hundred years before the advent of the Romans. Under their rule, it became a leading port and trading centre and has remained so ever since.
  However, this debate is not about the port of London as a commercial port but about the use of the Thames itself for tourism. Why is it the case that every casual mention of the Thames seems to provoke a response that it is under-used and unappreciated? I think that response is at least partly based on the perception that in central London there is not much visible activity other than the rather unsightly rubbish barges and a rather motley collection of passenger vessels, each one announcing that it is, of course, the official sightseeing boat.
  It is clear that there are few individual users of the river through the City and central London. It is only further upstream, where the river becomes more residential and recreational in character, that one sees some rowers, sailors and motorboats, and that mainly at
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  weekends. Perhaps the advent of river taxis and water buses may correct this, I think somewhat false, impression.
  London welcomes some 26 million visitors during the year, roughly half of them from abroad. Most of them depend on coaches. Only about 2 million go on the Thames. Very few indeed come to London with the primary object of a trip on the Thames. And yet some of the most popular sites for visits are associated with the river—for example, Greenwich, the Tower, St. Paul's, the Globe Theatre, the Festival Hall, the Houses of Parliament, Westminster Abbey, Hampton Court, Windsor and even Oxford. How many visitors set out to "do" all or many of these by water?
  One of the most important factors for a tourist visiting London is that there should be plenty of photo opportunities. Surely the best ones for most of the prime sites are from the river. Londoners, and those who come to work in London, dislike tourists, mainly because their coaches clutter up the roads adjacent to the main tourist attractions. Would it not be possible to direct coaches onto a "line of route" to major new car parks and encourage tourists to take boats to visit these sites?
  Another idea might be to follow what is a growing activity on the Seine, the Rhine, the Rhône, the Danube, the Elbe and the Loire etc., where tourists use large, powered barges to move up and down waterways—in other words, as floating hotels—to visit attractions beside the river, also using coaches for excursions further afield.
  Possibly bridges are too low on the Thames and the locks too small. Certainly most canals are much too narrow. But I am sure that these problems could be overcome with imagination, innovation and, above all, the will to co-operate of the private and public sectors.
  There are two major obstacles to greater use of the Thames: the tidal ebb and flow and access. The difference between high and low water at Tower Bridge is seven metres. I am surprised that this was not, it seems, adequately considered when the flood barrier was built. Surely it could have been designed with a dual purpose in mind: to retain the flow as well as to prevent flooding?
  The PLA is right to be constantly concerned with safety. We had an excellent example of an unfortunate accident in the fog earlier this week when a heavy barge crashed into the barrier. There are strong currents, low bridges and mud which can be very slippery and sticky and can swallow people if they walk in the wrong places. I must mention the large number of derelict jetties and piers, particularly below Greenwich. Not only are they potential hazards but they also contribute to the general air of tattiness which pervades the lower river and takes away from the great, prosperous enterprises which are such a feature of that part of the river.
  In the past year some 20,000 visitors arrived in London by cruise liner, disembarking at the cruise port of Tilbury and at the Pool. We must do all we can to encourage these visits. We should make it easy, comfortable and a rewarding experience to come to the centre of London by river.
  Access to the river is the most important and difficult problem. Piers, and particularly new piers, are most welcome. But London man and London woman have stood, and stand now, figuratively with their backs to the Thames. It is there, but it is not part of their lives; they cross it and drive alongside it; but they do not include it in their conscious plans. They cannot bring their cars to the Thames, park and go for a trip. They have to come by train and/or bus, and many do so. If they could bring their cars, I am sure that many more would come more often. If we can get Londoners to appreciate and use the river more, it will be all the easier to persuade visitors to do so.
  The millennium exhibition at Greenwich is, of course, the catalyst for much optimism and new thinking about the Thames. New piers, the dome, new car parks at Barking and Thamesmead, revived water buses, improved bridges, water taxis etc. all need enthusiastic support. I am glad to say that the Deputy Prime Minister is giving a welcome lead in this area.
  I have also been agreeably surprised at the energy and dedication that officials at the Port of London Authority show in their approach to the many challenges that they are meeting. For instance, there is a plan to flood the moat and re-open Traitors' Gate at the Tower. That should be another way of persuading tourists to visit the tower by water. There are also plans to recreate one of the many multi-oared barges which were such a feature of the city in the 17th and 18th centuries. That is to be done by some of the livery companies in the City and will be a very exciting project.
  Why not go further and consider building a brand new pier between the two Houses of Parliament? It could bring in tourists on a new line of route, massively relieving congestion in and around Parliament Square. It could also be used for state visits. It would surely be a better place than Victoria Station for the Queen to greet her guests.
  I look forward to the time when, as a result of the extremely good news on the fish situation in the Thames, the noble Lord, Lord McIntosh, and I may be together on the new pier catching fish for one of the restaurants—it sounds like a nice idea. Another good start might be if the very unattractive mooring barges opposite your Lordships' House were cleaned up and given a coat or two of paint.
  I look at the time and see that I have gone on for far too long; it is late. But, after all, the Thames is a liquid and living history. It is always changing. It will still be rolling along down to the mighty sea whatever we do or say.
  7.50 p.m.
  Lord Gordon of Strathblane: My Lords, I hope your Lordships will not think it presumptuous of me to rise and address the House so soon after my introduction to this Chamber only two days ago. My natural diffidence—I feel more than a little diffident, which is entirely proper in these somewhat awe-inspiring surroundings—has been overcome partly by my enthusiasm for the subject which the noble Lord raised,
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  but also, and much more importantly, by your Lordships' already high reputation for courtesy and kindness which has been far surpassed by my experience in the past two days. I thank your Lordships for that. I also congratulate the Officers of the House for their almost intuitive sense of when I was totally lost, no matter how purposefully I may have appeared to be walking in one direction or another.
  It has been reassuring to see quite a few familiar faces from my previous career, first, as a presenter of political programmes on Scottish Television 30 years ago. Some at that time had not yet graduated from another House. But more recently I have been running a local radio station in Glasgow and, more recently still, have been chairman of a company running a group of radio stations. It has also been a delightful and indeed rejuvenating experience to find so many of my contemporaries at Glasgow University in such fine form and to see the Glasgow University mafia—or "Scotia Nostra" as we sometimes called it—still in good operating order.
  I am grateful to the noble Lord, Lord Luke, for raising this Unstarred Question, which gives me the opportunity to make my maiden speech on tourism and, in particular, on its effects on a great river. It will not have escaped your Lordships' notice that I am a Scot, and I should perhaps open by allaying any fears that my intervention on a debate on the Thames might produce that I have some territorial aggrandisement proposals to bring before the House at a later stage, even though my first names are James Stuart. Even Bonnie Prince Charlie stopped at Derby.
  I regard the Government's proposals for the better governance of Scotland as essentially removing an irritant which was in danger of destabilising the Union and in no way as Scotland turning its back on the rest of the UK. I am glad to intervene in a debate on tourism on the Thames because tourism is one of the issues which affects the whole of the UK. A bad experience in a London hotel or a Highland croft equally will leave a nasty taste in the mouths of our visitors.
  The previous Government were kind enough to appoint me to the Scottish Tourist Board earlier this year, so I am still very much on a learning curve. However, I hope to make it one of my special interests in this House. It will not surprise the noble Lord, Lord Luke, to learn that many of the subjects he raised in regard to the Thames have preoccupied the citizens of other great cities—Glasgow and the Clyde and so forth. I have no doubt that there will always be legitimate differences of opinion as to the use of our great rivers as an industrial artery or a leisure facility. But I hope that they will not be thought of as incompatible.
  I know that the Thames in its upper reaches has a beautiful, tranquil, leisurely appearance to it. But there is also excitement for tourists and Londoners alike in seeing great ships berthed at working docks. There is a certain drama about them—not as beautiful as stately galleons in a bygone age perhaps, but they are a reminder to the credit card carrying citizens of a

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  centrally-heated metropolis that we are a great trading nation and that the food chain does not start at the local supermarket depot.
  It is important to see attention focused once again on the positive aspects of the rivers running through our city centres. I share the regret of the noble Lord, Lord Luke, that for too long they were regarded as unfortunate obstacles to be bridged over or tunnelled under. In some cases—not rivers perhaps, but canals—they were even filled in, now making the job of reopening them (which is the current fashion) even more expensive. It is significant that the people who built the Houses of Parliament built the terraces facing the river. I believe that cities which do not have rivers will create artificial watercourses in the centre to provide an attraction simply because flowing water is attractive to look at.
  The rediscovery of the pleasures of cruising, to which the noble Lord referred, is another important aspect of tourism because it is one of the fastest growing sectors in the tourist industry. There will be an important role for rivers which are fortunate to be navigable as far as city centres. It will heighten the experience of visiting tourists if boats can be berthed close to the sights of a great city.
  It is important that London, however rich it is in pageantry and history, is never complacent. A share of the world's tourism market does not come automatically. Competition is increasing all the time from other destinations. Fortunately, so is the size of the market. Indeed, by the turn of the century tourism will be the biggest industry in the world and it is vitally important for all of us that we fight to ensure that the UK gets a bigger share of that market.
  An unfortunate by-product of the renaming of the Department of National Heritage as the Department of Culture, Media and Sport was the omission of the word "tourism". Obviously it would have meant a telephone directory title if we had included all its functions. But tourist boards can only do so much. They can market destinations, and do so very well. They can persuade rather than regulate the practitioners in the industry into providing a better quality of service. But, at the end of the day, the visitor's experience depends on links in the chain much further down and they are entirely independent operators, whether it is large hotels or small bed and breakfast concerns; whether it is taxi owners or the providers of mass transportation.
  The noble Lord, Lord Luke, referred to converting Londoners into seeing the Thames differently. I could not agree more. We must convince the citizens of all our cities and countryside that tourism is in their best interest. After all, tourism amortises the cost of living in an area over a much wider population base than its native residents. The Society of West End Theatre estimated that if tourism disappeared half the London theatres would shut. Tourism earns foreign currency as surely as any manufactured exports. It provides one in five new jobs and they are more likely to be permanent jobs than in some other sectors. Any attempt to increase pay and improve training will only heighten the reputation of tourism. It is also friendly to the environment.
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  But most important of all is not the revenue returns or the jobs it provides, but the pride it engenders in the citizens of the host country. As we show visitors the attractions of our cities or our countryside, we heighten our own appreciation of them. That pride—not in any way chauvinistic or jingoistic—reminds us all that we in our lifetimes are only trustees of our environment, our historic buildings and our fine traditions. It makes us all the more grateful for being fortunate enough to live in this country. That feeling of legitimate pride can only be good for society as a whole.
  I thank the noble Lord for raising this Question and your Lordships for allowing me to address the House this evening.
  7.59 p.m.
  Lord Gladwyn: My Lords, on behalf of the whole House it is my pleasurable duty to congratulate the noble Lord, Lord Gordon of Strathblane, on his excellent and fluent maiden speech in which he brought his experience of the Clyde to help us solve the problem of the Thames. He comes as a leading authority on radio and with a wide career in public service. As he told us, he was educated at Glasgow University in the company of other distinguished members of his party. We look forward to hearing him frequently in this House. I note that he lists geniality among his recreations, for which he will doubtless find ample opportunity for study in your Lordships' Chamber.
  I congratulate the noble Lord, Lord Luke, on initiating this debate. Although well aware that I lack the special qualifications of several other speakers, I feel impelled to participate as the author of two walking guide books to the Thames.
  From the humble point of view of a pedestrian, it is fair to say that the enjoyment of the Thames, as implied in the Question put by the noble Lord, Lord Luke, has already achieved its full potential in the Thames Path, from source to barrier, which, in most of its tidal reaches extends along both sides of the river and is now virtually completed.
  In considering first that tranquil stretch of the tidal Thames from Kew up to Teddington and the non-tidal river from there to Windsor, my main concern is lest the Thames should be overrun by excessive tourism. I am relieved that the Millennium Commission rejected the idea of a string of intrusive tourist centres between Kew and Hampton. I am apprehensive about the concept of a cycle route, as predicated by the Government earlier this year; a surfaced route running parallel to the tow path would severely detract from the rural scenery in those stretches of the river.
  Also, I am concerned about the plethora of motor launches, whose speed restriction of 8 km an hour is so generally flouted. Motor cruising stands out against other leisure uses because of its damage to the environment, because it is mechanical, visually and audibly intrusive and conflicts with the interests of all the active aquatic recreations. I should like to see the Environment Agency gradually increasing the fees and charges, so as to reduce over time that dominant usage of the tidal river.

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  Turning to the more central issues of this debate, we certainly live in exciting times. We have recently witnessed the opening of important new riverside attractions—the London Aquarium, the Globe and the Golden Hinde—and we now await such marvels as the Battersea Entertainment Complex, the Ferris Wheel, the National Theatre development, the Bankside Tate Gallery and, last but not least, the Millennium Experience, formerly referred to as the Millennium Dome. That promises to be a truly amazing experience, even though, as the noble Lord, Lord St. John of Fawsley, informed this House, it is not truly a dome in the traditional sense. Thereby, it is altogether different from another millennium dome—fortunately never built—planned in Berlin in the early part of the war for the inauguration of the so-called 1000 year Reich.
  Together with all London's famous existing monuments along the river, those attractions have been compared to a row of pearls, a row which includes many much smaller gems. Here, I declare an interest as I am president of one of the smallest—the Brunel Exhibition on the embankment at Rotherhithe, describing the construction of the original Thames Tunnel.
  So, there are pearls aplenty, loosely strung along the river. The problem, as I see it, relates not to a shortage of gems, but to the string: how to make use of the river as a highway? The Thames 2000 initiative is welcome and timely. We can all hope that, despite previous failures, regular passenger services will be established between central London and Greenwich. But obviously there are formidable hurdles for private operators considering investment in such services. Prominent among those are the conflict of interest between dedicated services and stopping services; and the transitory nature of the special demand in the year 2000.
  All are dependent on the provision and quality of piers and the convenience of their links with the London transport system. The Port of London Authority's new Charing Cross pier will admirably fulfil those requirements. But several others involve awkward transits, thus limiting the potential for mass tourism on the river, about which one has to be realistic. One area where growth seems to be assured is in the demand for cruise ships coming up the Thames to London, and the proposed new liner terminal at Greenwich Reach would greatly increase that potential.
  Grandiose schemes for creating a linear park are surely misconceived. The facts of geography will inevitably prevent the line of the Thames in London from ever becoming the busy, bustling centre of the surrounding urbanisation. Nor is it really a single entity, being so diverse in size, usage and architecture. That disparity is, of course, true of London as a whole, in notable contrast to Paris, where the entire city comprises an architectural entity and where the Seine from the Ile de la Cité to the Eiffel Tower does indeed comprise a kind of linear park.
  The other great contrast between London and Paris is that our river is tidal. I am certainly among those who want to see it kept that way. I should deplore its conversion to a lagoon by means of closing the Thames
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  Barrier, other than when necessary to prevent flooding, although that might well assist tourism. Even if at first confined to high days and holidays, the practice would probably increase insidiously. The tidal foreshore is a precious habitat for fish, birds and molluscs, all of them increasing in numbers and species now that the river has so admirably been cleaned. To block the tide would serve to emasculate the hoary Thames and deprive London of its twice daily penetration by untamed nature.
  Incidentally, some will recall the remarkable exploit of the late Lord Noel-Buxton, who, in 1952, walked at low tide across the river bed just here without getting his head wet, to the general admiration of his fellow parliamentarians assembled on the Terrace, in order to prove that there had once been a ford. If any very tall Member of this House would like to follow in his steps, I have no doubt that it would be an excellent tourist draw.
  The foreshore is, anyway, under constant pressure from development schemes which encroach upon it, although the creative designs around the millennium site provide an admirable example of how to preserve and, indeed, enhance the river bank.
  Many are the great architectural and engineering projects that have arisen beside the Thames in London. One of the most notable was Brunel's "Great Eastern" steamship, the largest ship in the world for 40 years. Unfortunately, there were terrible problems in launching it, which almost doubled its cost and caused the death of its creator. I only hope that all our newly impending projects will be launched without such dire trouble.
  8.7 p.m.
  Lord Mountevans: My Lords, I too am grateful to my noble friend Lord Luke for raising this interesting—perhaps I may say enchanting—subject. I welcome the noble Lord, Lord Gordon of Strathblane. I believe he is a member of the Scottish Tourist Board; I very much hope that we do not cross swords in the future and that we fight shoulder to shoulder for the greater interests of the tourist business.
  The river, like London's buses, is one of our great under-utilised resources in transport terms. It is under-utilised by residents because it twists, turns, bobs and weaves; and it is also under-used by tourists, whom I should very much like to see making more use of it. But, if one thinks of the Thames and transport, one must remember that there are very few instances in this world where tourism provides the bread. If there is to be transport on the Thames, it must be the residents of London who make use of it and the tourists will then ride on its back. They are the icing on the cake.
  It is the same with the buses. Neither London Transport buses nor indeed London Underground run very much specifically for tourists. Indeed, the Underground runs nothing for tourists. In the old days, pre-franchising, London Transport buses ran the Round London Sights Tour and the Airbus. But it made £40 million or £50 million a year from tourist revenue, using facilities which were already there for the residents, particularly in the off-peak hours.

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  As some noble Lords will remember, there was a river bus service. I believe that it used to go up and down from London Docklands to Chelsea Harbour. It ran a 15-minute service each way each day. But if noble Lords had sat on the Terrace or in the Guest Room, they would have seen that those utterly reliable vessels were absolutely empty, except on one or two days when both London Underground and London Buses went on strike. So the river bus became the line of last resort.
  Why did it die? It died on cost grounds. Its fares were too high and could not be integrated into the GLC/London Transport fares system. It died on convenience grounds. I cite one example; namely, Whitehall-bound passengers. Whitehall is not a residential area. People going to Whitehall come in in the morning to work and go out to home in the evening. Unfortunately, at that time they had to get off in Lambeth. If you are heading for Whitehall, you will not use a boat that sets you down in Lambeth. You might as well take the Underground, the bus or anything else that is available.
  How then do we make residents more keen on using the Thames? We have to make the use of it as a transport medium more attractive to Londoners. If the service is provided for Londoners, the tourists will then use it. They become marginal revenue and profit, which is very important if we go to the private sector. The first thing we have to do is address the fares structure. The river bus was always much dearer than the services provided by London Transport.
  We have to look also at the factor of frequent stops. I mentioned the fact that the many thousands of people who worked in Whitehall did not have access to Whitehall and Westminster. They had to get off on the other side of the river. We need convenience stops. We need a frequent service. But which comes first: the chicken or the egg? If the service is good, more people will use it. If the service is bad, they will stick to their old habits—the car, the tube or the bus. We need a convenient service. I almost come back to my remark about piers. We need services that take people from where they want to go to where they want to reach.
  The only way to make a riverbus run on the basis of more frequent stops, more convenient stops, more frequent services and more convenient services would be to provide those four things. If you did that, you would justify higher fares. Noble Lords will know that I work the transport scene quite hard. I cannot see that you can make the river attractive as it does not fit into the fare zones. It will always be more expensive. Therefore, you have to make it more attractive, as I say, by means of frequent stops, convenient stops, frequent services and more convenient services.
  There is an option which the noble Lord, Lord McIntosh, who is to reply, might just pass on to his colleagues. A car use tax would make the river more attractive. We could have a travelcard variant. Although it has not been done here, it has been done elsewhere. I think in particular of Stockholm, where I spent a number of years in my youth. The county of Stockholm had a county-wide travel card, which is what the GLC brought us in the early 1980s. The GLC did a great deal
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  for public transport and a great deal to take traffic off the roads. Public transport was made attractive on price grounds.
  Stockholm is a city between lakes, which are fresh water, and the Baltic, which is modestly tidal—so modestly so that when I was promoting tourism to Britain in Stockholm we got a charter operator to go to Jersey and Guernsey, and there the tidal variant at certain times of the year is 50 feet. The people from Stockholm had never seen a tide like that. They went for the English speaking, the cheap shopping and all kinds of other things, but they actually held parties on hotel terraces in order to watch the water go up and down.
  Stockholm ices up seriously at about this time of the year and stays iced up until April or May. In May people want to commute to the lakes. That is where their second homes are. They want to commute out to the archipelago, which runs up to 30 or 40 miles. The county of Stockholm produced one travel card, which cost the equivalent of, say, £5 per month. In the summer there was a £9 travel card which gave access to the boats.
  That might be the route whereby we get the residents to accept that the Thames is a viable and attractive transport means. If we do that, we can take the tourists with us. I am not aware of any place in the world where tourism provides the water-borne transport. But if the residents provide it, the tourists will provide the profits.
  8.15 p.m.
  The Earl of Carlisle: My Lords, it is a great pleasure to take part for once in an apolitical/non-political debate in your Lordships' House. I thank the noble Lord, Lord Luke, for introducing this Unstarred Question. I salute him on his appointment to the Front Bench. It will add ballast to that slightly leaky ship. He inspired me to speak in this debate. It happened in May in, of all places, the Salisbury Room where I work. The noble Lord also works there. I sit with my back to the Thames. That is not lèse majesté to a majestic river. It is simply that if I look towards the Thames I do no work and I spend my life looking at the water. One day in May, around eleven o'clock, the noble Lord got up, walked across the room, looked at the Thames, and said amusingly, "I do not see any tourist boats." He was right.
  I congratulate the noble Lord, Lord Gordon of Strathblane, on his maiden speech. We have not previously met. I owe him a debt. For one year I lived at Strathclyde Graduate Business School. I enjoyed it. Ten years previously I walked from the Firth of Forth to the Firth of Clyde. That, as the noble Lord will know—the thirty eight and-a-half miles—is the Antonine Wall. The place was a mess. The canals and the great River Clyde were very polluted. Ten years later it had improved. I say with certainty that the noble Lord made a magnificent contribution to that improvement. We look forward to hearing from him often, and we hope that a man who has cleaned up the River Clyde can give your Lordships great advice on how to improve the Thames for tourism.

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  I salute the noble Lord, Lord Pilkington of Oxenford, who is not in his place. I was brought up at various schools and academies alongside the Thames. The noble Lord, Lord Pilkington, was my history master at Eton College. Among his many duties, he taught me history. Occasionally, I was not an apt pupil. I would take what was called French leave and row up the River Thames—on one occasion from Windsor to Marlow. It is, I think noble Lords will agree, one of the most beautiful stretches of the Thames. I use that—my first introduction to the river—to say that the Thames must be considered an entity, from its source to a great estuary and on into the ocean. I hope noble Lords will realise that what happens at one point in the Thames affects other parts of the Thames, and vice versa.
  I am delighted that the noble Lord, Lord McIntosh of Haringey, is in his place. He is the successor of another very great Londoner. I refer to one of his predecessors, the late Lord Morrison of Lambeth. He was a Londoner. I call him a Labour statesman. I am wrong—he was a national statesman. He did an enormous amount for London. He cleaned up London. He was of course the Home Secretary during the Blitz. The noble Lord, Lord Donoughue, is not in his place, but he is the biographer of Lord Morrison. I think I am right in saying that such was Lord Morrison's love for London and for the River Thames that he asked for his ashes to be scattered in the Thames. I wish the noble Lord every success in overseeing the work that will have to be carried out on the Thames.
  Noble Lords will remember that the noble Lord replied to a debate on Stonehenge earlier this year. I regret that I did not speak. Noble Lords referred to the point that Stonehenge is our oldest national monument. Yes, noble Lords are right. It is indeed the oldest man-made national monument. I suspect, however, that noble Lords will agree with me when I say that the Thames is our oldest natural national monument. Please correct me if I am wrong.
  I have recently read in the newspapers that already ministries are moving to restore Stonehenge to its great glory. I suspect that the noble Lord, Lord McIntosh, who gave that commitment in the earlier debate, had something to do with that. I hope that at the end of this debate he will give a commitment from the Government to co-ordinate the work on the Thames.
  I hope that we shall see bold and imaginative measures to increase and improve tourism on the river. I looked carefully at the Question put down by the noble Lord, Lord Luke. It says "on the Thames". So far so good. But, as the noble Lord, Lord Pilkington of Oxenford, said in my history report—because I spent so much time on the Thames—"Not good enough". I suggest that we should also consider "Along the Thames"; pathways up and down the Thames from source to estuary; and "under the Thames" for snorkelling and marine life. The noble Lord, Lord Gladwyn, mentioned Brunel, as he did in his maiden speech. The noble Lord has written a book for tourists about the Thames. I suggest that in many ways he has made as valuable a contribution as his great ancestor did.
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  I wish to focus on one thing called "Over the Thames". Noble Lords will remember two incidents which occurred in London during the summer. One was very tragic. Noble Lords will know what I mean. There was a national funeral where we expressed certain emotions. The other incident was very exhilarating. I believe that it was on 14th September that two enterprising, highly skilful, risk-taking gentlemen, Mr. Didier Pasquette and Mr. Jade Kindar-Martin, crossed this great river from the Savoy hotel to the Oxo building on a tightrope. Journalists pointed out that 10,000 people watched the event. But that is only half right. I was in the Baltic states at the time and I know that the world looked on with fascination at what was happening over the Thames. I mentioned that the event was bold, imaginative and skilful. I hope that any future plans and ideas for the Thames will be bold, imaginative and skilfully carried out.
  I shall add one other word—safety. Up and down the Thames, in the churches and public places, there are monuments to those who, through misfortune or carelessness or through other people's carelessness, lost their lives on the river. Noble Lords may have visited Southwark Cathedral and will have seen the most moving monument to the victims of the "Marchioness" disaster and tragedy. So I implore those who are responsible for leisure and pleasure on the Thames to first consider safety.
  I look forward to the noble Lord's reply. I congratulate all those who publicise the future for tourism on the Thames and I wish all those involved well in their projects.
  8.25 p.m.
  Lord Cocks of Hartcliffe: My Lords, I should first tell the House that for nearly 10 years I have been a member of the board of the London Docklands Development Corporation. The corporation was established in 1981 to try to regenerate the East End of London. It had not only suffered through the closure of the dock industry, which employed about 60,000 workers, because of the change to container traffic, but it also suffered substantially during the Blitz when the German Luftwaffe pilots followed the Thames as a silver arrow pointing into the heart of the East End of London on their night raids.
  There was a lot of work for us to do, but throughout this time we made it our business to try to make the Thames more effective and attractive. Indeed, we preserved a number of the water features because we stopped the in-filling of the large dock basins which was in progress, and we have preserved those and made them accessible. We have refurbished locks, and the larger ones are now available to ships. We have also tried to use the river as much as possible, requiring developers to bring in materials by barge and boat wherever possible and to get rid of spoil in the same way in order not only to use the river but to make sure that the surrounding road system is not loaded down with heavy lorries.
  We have also established marinas in the Surrey Docks and Limehouse, which one can see from the light railway as one goes through. We have restored slipways

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  for leisure craft, although I must say that, in my capacity as chairman of safety in Docklands, I sometimes wonder about the swimming which takes place without official sanction during hot weather. We wonder whether we have done the right thing. We have also funded and supported water sports in Millwall and Surrey Docks. There will be substantial developments in the Royal Docks, where there is going to be an Olympic-size rowing course in due course.
  The question of passenger services on the river is a vexed one. I plead guilty to having been chairman of the Docklands Use of the River Group for some years. I can assure the noble Lord, Lord Mountevans, that we have spent a great deal of time trying to save the river bus and to encourage Londoners to use the service. But unfortunately what he said is absolutely true. When there were difficulties with the regular transport on the Tubes and buses, people flocked onto the river bus, but as soon as things improved they went back to their old habits. It was impossible to change their travelling habits. So whoever tries to do that will face a difficult job. The truth of the matter is that some form of public subsidy is required to make the service viable. But public subsidies are not a popular topic at the moment.
  The anomaly is that the subject on which we get most publicity and favourable comment in Docklands concerns the bird rafts which we have floated out into the main dock areas. These are extremely attractive, popular and successful. We are getting birds back into the area now which disappeared a long time ago. We are also getting substantial stocks of fish. In fact, my committee had to deal with a case of poaching—is that the right word for fish?
  Noble Lords: Yes!
  Lord Cocks of Hartcliffe: Someone was laying out substantial nets and rather overdoing it. That is a little different from just slinging out a line and hoping for the best. That is enough anecdotal evidence.
  The corporation has tried extremely hard to make the riverside attractive to people. In that context we have provided whole stretches of landscaped riverside paths for pedestrians and cyclists. Where possible in new developments we have tried to create a strategic Thames path. On the planning committee we are meticulous in that where permission is applied for we insist that the riverside pathway is incorporated as part of the development. There have been one or two incidents where people have tried unilaterally to block off the path. We have had to be fairly firm with them. In fact, we have always kept it open, but after a bit of trouble, sometimes.
  We have built bridges over some areas. Noble Lords probably know Limekiln Dock, Limehouse and St. Saviour's Dock, Bermondsey, so that we have a continuous path. Some of the bridges have won awards. So we are really trying down there. We have signposted riverside walks so people going through the streets can see where they can get easy access. Noble Lords will know that we have promoted the refurbishment of the warehouses. We have preserved them to keep the history of the river alive and to turn them into accommodation.
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  Anybody who visits Canary Wharf now during the day will note the activity there because the project is now almost entirely let and the riverside cafés and restaurants are bustling. It is a great pleasure to visit the area. If noble Lords have not been there recently, I suggest that they do go because the whole place is vibrant. That is bound to reflect on the river, its use and value as a tourist attraction. Hotels are also being developed at Canary Wharf and Surrey Docks. There are also to be substantial hotels at the Royal Docks.
  Perhaps I may mention also "TourEast London" which is a partnership for tourism led by the London Docklands Development Corporation and chaired by our energetic marketing director, Sunny Crouch. Together with colleagues and other organisations, she is promoting the use of the River Thames as something which unites, rather than divides, the whole of the area. The project is attempting, in all sorts of ways, to attract people down here not only because the River Thames is an enjoyable feature in itself, but because, without being immodest, the corporation has done a remarkable job there. Its work is well worth seeing.
  8.31 p.m.
  Lord St. John of Bletso: My Lords, I am grateful to my noble kinsman Lord Luke for having introduced this most topical debate. It is a great pleasure for me to refer to "my noble kinsman" and this is the first time that I have been able to do so in this House. My noble kinsman was right when he said that there is a perception that the Thames is under-used and not fully appreciated. I certainly welcome his call for more co-operation between the public and private sectors with regard to the commercial and tourist opportunities that the river offers. At the outset, I must also congratulate the noble Lord, Lord Gordon of Strathblane, on his outstanding maiden speech. I agree with his warning that London should not be complacent about tourism.
  It is easy in a debate of this nature to get bogged down by the raft of statistics from the London Tourist Board, the Joint London Tourist Forum, the Port of London Authority and other bodies on the numbers of tourists and the benefits to the local economy. What I did find of interest, however, is the statistic that 30 per cent. of visits to London attractions are to facilities, venues and galleries at riverside locations. My noble kinsman mentioned that 26 million tourists visit London every year, but only 2 million take a trip on the Thames, of whom 55 per cent. come from overseas.
  There is no doubt that there is huge potential for using the river as a linking device as well as for the expansion of river trips in their own right. As my noble kinsman pointed out, there has been a rapid expansion in the activity, holiday and leisure market on the Thames, with an increasing number of sports such as sailing, windsurfing, rowing and water skiing. All of these attractions have created visual interest and activity on the river, attracting additional visitors to the riverside.
  Many of those interested in the development of tourist and commercial activities on the Thames welcomed the previous government's initiative earlier this year when John Gummer launched a planning guidance for the

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  river which, in his words, was aimed at bringing the Thames "back to life" and providing a coherent planning framework to maximise the potential of the river. It was therefore heartening that the Deputy Prime Minister in July this year spearheaded the Thames 2000 initiative to boost river transport and upgrade the piers and moorings at key places to enable tourists to travel by river to London's main historic and cultural riverside landmarks as well as to promote more commercial freight transport along the Thames.
  Reports such as the LTB's Tourism Strategy for London and BTA's Overseas Visitors to London report in 1993 suggested that London as a whole and the Thames itself did not necessarily require more visitor attractions. They believed that what was required was an improvement in quality and standards of service as well as visitor management and marketing to match visitors' constantly rising expectations. There have been many criticism about the shabby appearance of many of the sites along the Thames as well as about many of the "unsightly rubbish barges", to use the words of my noble kinsman.
  It is therefore most encouraging that the Deputy Prime Minister has promoted an integrated river transport system for the Thames which should address the concerns of the London Tourist Board that many activities on the Thames which are tourist-orientated have been fragmented due to no overall strategy and very limited co-operation and co-ordination between the tourism businesses and local government.
  As noble Lords will have noticed, over the past few years there has been an array of high profile developments and refurbishment of buildings along the Thames. These were discussed in an excellent article in the Sunday Times of 6th April 1997 which highlighted 13 ambitious schemes from the proposed £500 million entertainment and leisure centre to be built at Battersea power station to the Millennium exhibition in Greenwich. These should potentially transform the Thames into a gigantic playground. I warmly welcome the 180-mile Thames path. I am sure that my noble friends will be pleased to know about that. I welcome also the opening of the Thames cycle route. I am a cyclist, a rambler and a runner so I have an interest in all such developments and I am pleased that we, as Londoners, now have more opportunities to make the most of the paths along the Thames.
  The potential for utilising the Thames to offset the transport headaches of London are enormous. The noble Lord, Lord Mountevans, made some extremely interesting suggestions about that. There is a commonly held view that the Thames is London's most under-utilised transport asset. It is therefore most encouraging that the Thames 2000 initiative has focused on boosting river transport for both tourism and commercial freight transportation. It will certainly be a major environmental benefit.
  As the noble Lord, Lord Mountevans, also mentioned, there have unfortunately been a number of failed scheduled river commuter services. It is hoped that future proposed ferry services, if properly promoted to London's residents, will be much more commercially
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  viable. Perhaps the Minister will comment on the suggestion of the noble Lord, Lord Cocks—I see that he is now seated on the Woolsack—for a public subsidy. I hope that the Minister will comment also on the concern of my noble kinsman that there is currently poor public access to the Thames. Will there be any improvement in that regard? Can the Minister also comment on what plans are afoot to build new bridges across the Thames and on any plans for repairing Hammersmith Bridge?
  In conclusion, there is no doubt that there are excellent opportunities for sustainable tourism through the revitalisation of the Thames as well as for increasing the huge transport potential along the river. I hope that this debate will highlight not just the potential benefits of the river, but also the benefits of an integrated strategy for the Thames.
  8.38 p.m.
  Baroness Wilcox: My Lords, I start by congratulating the noble Lord, Lord Gordon of Strathblane, on his most entertaining and informed maiden speech. My own maiden speech is fairly recent in my memory, so I know how pleased the noble Lord must be feeling to have got it out of the way. That means that we can now look forward to him springing up on all sorts of occasions because he is now free to speak in your Lordships' House whenever he chooses. So, congratulations and welcome!
  I must declare three interests in the debate. First, I am a tourist. I am not a Londoner, so for part of this winter, to keep fit, I am walking the Thames path from its source deep in the Cotswolds in a field one mile from Cricklade Station to the mouth of this mighty river, some 180 miles downstream, taking the Thames Barrier as the finishing point. I shall check later to see whether I am using the book written by the noble Lord, Lord Gladwyn. I am sure that it would be enormously useful to me.
  Next Sunday I shall reach Oxford, where the river suddenly becomes the Isis. I cannot work out whether it is a tributary there or not, but it becomes the Isis. I am becoming very aware that The Wind in the Willows country river of Ratty and Moley, of reeds and ducks, and of match fishermen has already changed. As I have walked, it has changed into an ordered set of locks, barges and motor cruisers. It is about to move on serenely to punts and picnics before it arrives at Teddington where the tidal Thames starts to transform itself into the play place of the rowers and sailors before we come to the tripper boats and cruisers and it then gets down to the serious business of being the country's busiest commercial port. It transships and transports over 50 million tonnes of cargo a year. Massive quantities of oil, forest products, sugar, food, aggregates, sand, refuse, cement and much else travel right into the heart of our city on this very fast tidal river. The river runs at three knots, which is faster than you or I can walk, and dips down and up by seven metres. It rises and falls by 22 feet on a tide.
  I declare my second interest. I serve on the board of the Port of London Authority, whose statutory duty is to be the conservancy and navigation authority of the

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  Port of London and the tidal Thames all the way to Teddington Lock. I know that the chief executive and crew of the "Royal Nore" were delighted to transport my noble friend Lord Luke both up and down the full reach of the Thames. They were delighted that so much interest was being shown in the subject. They very much look forward to reading the report of today's proceedings.
  While this mighty river flows up and down at such speed all of the working traffic upon it proceeds from east to west. That traffic must cope with other tourist boats which nip across from north to south. That can be a very dangerous procedure.
  There is no doubt that people see the commercial and industrial activity. That is why London turns away from the river. It is a mucky river. That is what a working river should look like. People try to compare the Thames with all kinds of rivers. It is not right to compare it with the river that runs through Paris. If one is to make a comparison it should be between Paris and Oxford. London should be compared with Rouen because that is where the heavy work is carried out. Certainly, the work is not done in pretty Paris.
  People try to turn the Thames into something else. Of course, Venice is a lagoon. The noble Lord, Lord Gladwyn, has expressed concern at the suggestion by the Port of London Authority that the Thames barrier should be raised in order to make a lagoon for just one day, or just 18 hours, for the purposes of the millennium. That suggestion has been met with an intake of breath on all sides and great worries by bird lovers and conservationists, of whom the noble Lord is obviously one. That suggestion has received no response as yet from the Deputy Prime Minister, who will be the one to decide on what will be possibly the greatest tourist venture of the century on our mighty river. My noble friend Lord Luke, in his splendidly informed speech, said that each year two million people took a river trip. He would like a lot more people to do that. That concerns me.
  I declare my third interest. I am president of the National Federation of Consumer Groups. In this case they are consumers of tourist facilities. Tourists have six requirements: choice, access, information, safety, fairness, and redress. From what we have heard, choice is improving. Access is not so good. My noble friend Lord Luke has said that parking is very bad and that the piers could do with a little help. More bridges are being built but it is all a very slow process. Noble Lords also heard from the noble Earl, Lord Carlisle, about safety, quite rightly.
  There are rules of the rivers, but not everyone abides by them. Not all boats are registered. At the moment any one can buy a motor boat, yacht or rowing boat and take it out on the river without a single lesson, any registration or anything else. He can go right down the Thames and out into the wide open sea. If we are to make greater use of our working river as a playground the Government must be encouraged to look at proper registration and forms of testing before people are allowed to take boats out
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  on to the river. At the moment accidents are prevented because many other boat owners are aware that there is a danger and take avoiding action.
  As to equity, is there value for money on the river? How does one compare like for like on the basis of what is being charged? Noble Lords may be interested to know that in Henry VIII's time when there was only one bridge on the river there was a good deal of trouble. The lightermen and watermen, of whom there were thousands, were brought into order by one price being set by the King and his Council. As to the question of redress, I do not believe that there is a regulator or ombudsman. I apologise if what I have just said is incorrect. A sea and a shore appear to be two very different matters.
  I believe that if the proposed GLA is set up correctly the Government have the opportunity to provide co-ordination and better regulation of river services. Like my noble friend Lord Mountevans, I believe that if there is to be a new and integrated transport system for London there must be a public subsidy to make that happen. Not only will we have to subsidise the actual journeys but a good deal more access points must be built.
  My noble friend Lord Luke is to be congratulated on tabling this Question at a time when London and its life and governance are under serious consideration. The River Thames is a main artery to the heart of London. It is big, fast and powerful, and at least once a week someone dies in it. People earn their living from it, are fed by it and play on it. The river is already a magnet for tourists. My noble friend Lord Luke wants a lot more. Given good governance, planning and generosity on the part of the Government, the future tourist potential is enormous.
  I should like to finish with a warning. Much of my life has been spent in docks or afloat on ships, because I come from the fishing industry. Fast-moving water is a dangerous highway. Slippery steps and missed footings can kill and injure. People understand the dangers of other highways. As far as concerns road-borne traffic, people understand their rights and responsibilities as pedestrians and car owners, but afloat that is not the case. I urge the Government to take time to carry out a consultation exercise which brings together the port authorities, riparian councils and consumer, health, safety and tourist representatives before they raise the expectations of tourists to our tidal Thames and its environment.
  8.48 p.m.
  Baroness Hamwee: My Lords, I too should like to thank the noble Lord, Lord Luke, for introducing such an enormous subject. It is not a subject to which one can possibly do justice in the hour and a half that has been allotted to it. It is not one subject but two. Further, this debate gives the House the opportunity to hear the maiden speech of the noble Lord, Lord Gordon of Strathblane. It is conventional to say how interesting and informative are maiden speeches. But I learned a good deal this evening about matters that I did not expect to hear. I congratulate the noble Lord.

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  Both the Thames and tourism have many aspects. In preparing for this evening it appears to me that perhaps, like other topics, they break down into three headings: strategy, sustainability and mechanisms to deal with various issues. I should also declare an interest. I am a councillor of a London borough which is a riparian borough. Apart from Docklands, my borough is the only London borough on both banks of the Thames. If I refer to Kew and Hampton Court noble Lords will understand my interest in tourism and the interconnection of the Thames with my own borough of Richmond-upon-Thames. I am also very lucky to be able to live on the Thames. My little stretch of the Thames is not typical of others. The river is by no means homogenous. I am able to observe daily some of its uses and, I am afraid to say, some of its abuses. Irresponsible movements by boat owners is something about which I feel strongly.
  Tourism, as noble Lords have said, on and around the Thames is not just an issue for central London. We have heard of the rural stretches upstream. Downstream there are enormous opportunities for regeneration; for instance, new conference facilities. I dare say that that will be one of the developments which may be in the minds of those who look at further development in that area. We have new bodies which will be taking these matters on board. They are strategic issues, as the noble Lord, Lord St. John of Bletso, rightly said.
  The noble Baroness, Lady Wilcox, referred to the new greater London authority. I, too, look forward with great expectation to its involvement in this big issue and to that of the London Development Agency, which I hope will quickly come under the aegis of the new authority. I am sure that those bodies will look at the river, as the noble Lord, Lord Cocks, said, not as a dividing line or boundary but as a focal point. We are apt to look at rivers as though they are geographical boundaries. River basins of course are not. People look towards the river and not away from it.
  We have talked about the use of the river for tourism. Comments about day visitors—Londoners visiting their own river—are well made. The noble Lord, Lord Gordon of Strathblane, said that showing visitors around heightens one's own awareness. That is a telling point. The noble Lord, Lord Mountevans, made a similar point.
  There is also tourist-related employment. Here there is an issue of sustainability, not in the environmental but in the social sense. We are all aware that employment in the tourist sector is often low paid. There are then all the issues related to the wider economy.
  I talk about sustainability in the social sense, but there is also sustainability in terms of location, land uses and movements. I was fascinated by the comments of the noble Lord, Lord Gladwyn. We must be wary of totally demand-led development. I am thinking especially of hotels, but they are only one example. There is undoubtedly a demand in London
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  for more hotel beds, but indiscriminate building could do a great deal of harm, depending on its location. We must not destroy what is so precious to our city. It is precious in so many ways, including its industrial heritage and trading character. I welcome every move to conserve and enhance them.
  We must consider the whole quality of the built environment as well as the natural environment; the setting and quality of buildings. I include bridges. When I chaired a committee in Richmond upon Thames, I was much involved with a major development on the river there. The most gratifying aspect was seeing the public enjoying access to the river in an urban setting. There were different views about whether the building was of the right type. I should have liked to have seen a modern building. It would be good to see more up-to-date buildings on the river. The public were able to enjoy the facilities of an interesting setting and the river all in one.
  Tourism is essentially not a sustainable activity because it encourages travel. Many comments have been made about transport. I shall add one about tourist boats and the noise that they create. It is not the noise of their movements but the noises that comes from them. It sounds as if I am being rather a kill-joy, and in fact I am a kill-joy about this because disco noise—I can hardly call it music—as it is heard from the river bank is more intrusive than social.
  I turn now to mechanisms and resources. I end by commending to noble Lords and to those who are involved in such matters the Thames landscape strategy—the work in the area from Hampton to Kew—which was a partnership of local authorities, supported by a number of organisations. I do so because it is an interesting piece of work and one which is continuing. The policies it identifies indicate to me how important it is to be detailed and specific about one's ideas for taking forward what is important. It includes policies such as—I pick these almost at random—identifying areas where fishing is not in conflict with nature conservation and the integration of jogging routes in path circuits.
  The noble Lord, Lord St. John of Bletso, is a jogger, walker and cyclist in one. With cycling along the Thames, detailed waymarking is required. There are different modes of transport which need piers and other forms of access to the river in the right places. Other aspects of the strategy include promoting river tourist transport services, improving publicity and, where appropriate, rebuilding piers and jetties to increase access and linking services into the existing public transport and car parking network, controlling tourist boat noise and wash levels to minimise impact. That is a tiny selection of the policies which illustrates the balance that needs to be struck when considering the issues that your Lordships have been debating.
  8.58 p.m.
  Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Luke, has rightly been congratulated on introducing this debate. Those congratulations are not due just to him but to the other well-informed

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  speeches that have been made, notably that of my noble friend Lord Gordon of Strathblane who did not sound as if he was making a maiden speech. It was a speech of great command and enormous interest.
  I understand that the noble Lord, Lord Luke, prepared for the debate by travelling on PLA vessels up and down the Thames. When I served on the GLC, I do not remember that being offered, except in the form of visits to the estuary on sludge vessels. I am told that any possible unpleasantness from the sludge was mitigated by a plentiful supply of alcohol which was internalised, shall we say, as the voyage to and from the dumping grounds proceeded. I never went on those trips, but I am, and have been, an admirer and lover of the Thames all my life. I have benefited greatly in knowledge and understanding from the speeches this evening.
  The Government are in no doubt about the importance of tourism on the Thames. Tourism in London is of great importance to the economy, not just of London but the whole country. After all, 54 per cent. of overseas visitors to this country spend some time in London. The numbers last year were a record. The statistics show that £7.5 billion was spent by visitors to London. So far as concerns the London economy, that represents 7 per cent. of our GDP. So, as I say, we do not underestimate its importance.
  I was challenged by the noble Earl, Lord Carlisle, to make a commitment to co-ordinate work on the Thames. He is right; I do not know whether I can give him a clear and unequivocal answer. However, I hope that my comments about some of the aspects of tourism on the Thames will give him encouragement.
  Perhaps I may first talk about new riverside attractions. The point about attractions on the side of the Thames—the phrase "string of pearls" has been used to describe what has been done and what is being proposed—is not only what they do for themselves (I am talking about galleries, museums, sports attractions and so forth) but the way in which they act as a catalyst for other developments, provide jobs and contribute to the surrounding communities.
  A remarkable number of attractions have opened during the past 25 years. I pay tribute to the work of the noble Lord, Lord Gladwyn, in his reference to Brunel. More are planned. There is to be a multi-purpose entertainment centre at Battersea, a Royal Artillery Museum at Woolwich, a Docklands Museum at Canary Wharf, a wonderful proposal for the Tate Gallery of Modern Art at Bankside and, above all, the new Millennium Experience. Surprisingly, little attention has been paid to that in tonight's debate. It is not only that the new Millennium Experience will exist for a year or however long some of the facilities can be kept open but that there will be permanent development—what has laughingly been called "Presserville" after the Deputy Prime Minister—alongside the Millennium Dome, which will provide an ecologically sound community of 1,000 homes for a long time after the dome is no longer with us.
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  A number of noble Lords referred to the river links and we recognise their importance. From my experience on the GLC, I recall the problems with the river buses, which were referred to by the noble Lords, Lord Mountevans and Lord Gladwyn. It is true that more could be done for river transport if there were more piers. Indeed, more piers are proposed and there is to be a new footbridge from Charing Cross to the South Bank. Furthermore, the more attractions there are on the river the more likelihood that river buses will be successful.
  I take seriously the warning of the noble Lord, Lord Mountevans, and the noble Baroness, Lady Wilcox, about the problem of regular commuter traffic. I am afraid that that will not be eased because the Jubilee Line and the Docklands light railway extension to Lewisham will provide effective competition to what could otherwise be river bus traffic. Therefore, emphasis is likely to be on the infrastructure rather than on subsidising river bus services. Of course, there will be a huge boost from the millennium because it is planned that of the 12 million visitors 1 million will go from central London by river bus and 600,000 could use downstream park and sail facilities. Perhaps from that investment in infrastructure there could be a spin-off which will continue.
  A number of noble Lords, notably the noble Lords, Lord Gladwyn and Lord St. John, referred to the need for better access to the Thames, and my noble friend Lord Cocks gave a very encouraging account of the work of the London Docklands Development Corporation, which has certainly contributed greatly to access to the Thames and to use of the Thames in the area of the London Docklands.
  I was asked about piers. The new Millennium Experience Company and the Cross River Partnership have proposals which are still in preparation for new piers. We are confident that there will be new piers at least at Blackfriars and Waterloo and that they will have Underground and rail links.
  A number of noble Lords, notably the noble Baronesses, Lady Hamwee and Lady Wilcox, and the noble Lord, Lord St. John, referred to the need for co-ordination and a simpler structure of authority. Of course, that is what is planned for the London mayor and the greater London authority. The consultation document raises the question of whether the London transport authority which is to be set up should have the power or the duty to promote river transport.
  If one looks at the Government Office for London's strategic planning guidance for the River Thames, many of the ideas are good but the recommendations all say that planning authorities should give consideration to this or that. That is not very powerful. The document from Thames 2000 is excellent in many ways but it is a wide range of bodies which is supposed to take action and it does not seem to me to be a recipe for co-ordination.
  In the very short time available to me, I shall refer briefly to specific points made by noble Lords. My

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  noble friend Lord Gordon referred to the need for a working river and not just a tourist river. I take that issue very seriously. He said that it is important to persuade Londoners to value their river because it is a pride of Londoners. I know that the Government agree with that.
  The noble Lord, Lord Gladwyn, referred to work on the Thames path and my noble friend Lord Cocks made the same point. There was some disagreement between my noble friend Lord Cocks and the noble Lord, Lord Luke, about the desirability of turning the Thames into a non-tidal pool. I rather sympathised with the noble Lord, Lord Gladwyn. Perhaps it is
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  worth experimenting with just for the millennium, but I do not think that it would be the Thames that we know and love if we used the barrier in that way.
  In dealing with the various issues, I have dealt with most of the points raised, except that made by the noble Baroness, Lady Hamwee, when she referred to the need for standards and safety standards in particular. That is further evidence of the need for a greater London authority which could take over control of those matters.
  In the 30 seconds which I have left, I repeat my thanks to all noble Lords who have taken part in the debate. I assure them that their suggestions, comments and opinions will be taken seriously by government.
  House adjourned at nine minutes past nine o'clock.