Lords Sitting of 23 February 1998

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.
Viscount Younger of Leckie (Lord Younger of Prestwick)—Presented his writ as Viscount Younger of Leckie, and took the Oath.

Royal Assent
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:
Greater London Authority (Referendum) Act.

Gas and Electricity: Deregulation Proposals
Lord Ezraasked Her Majesty's Government:
When the domestic markets for gas and electricity are likely to be deregulated and under what conditions.
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, the timetables for opening the domestic markets for gas and electricity to competition are published by Ofgas and Offer respectively. In each case the market is being opened as soon as the relevant authorities are confident that the arrangements for administering the market will work reliably.
In the gas market, trials have been carried out in the South West, Kent and East and West Sussex. The remainder of the market is being opened in tranches across the country.
It is intended that the electricity market will open area by area, starting in September 1998. In the first areas to open, approximately 10 per cent. of customers will be free to choose their supplier straightaway; approximately half the customers will be free after three months and all customers after six months.
Lord Ezra: My Lords, is the noble Lord aware that a certain amount of confusion and concern has been created in the marketplace and among consumers at the delay in the opening-up of the electricity market, and is he satisfied that there will be no further delays? Furthermore, can he give an assurance that those customers who are disadvantaged for financial reasons,
396
particularly those with prepayment meters, will be suitably safeguarded, as they were in the past, when the markets are opened up?
Lord Clinton-Davis: My Lords, before coming to those difficult points, perhaps I may take this opportunity, on behalf of the whole House, to congratulate the noble Lord on his birthday.
Noble Lords: Hear, hear!
Lord Clinton-Davis: My Lords, we thank him for his long devotion to the House and his unrestrained interest in energy matters.
The Government are not happy about the delay in opening the electricity market. However, the important thing is to get the answer right, as my honourable friend Mr. John Battle has made plain in the other place. We remain committed to seeing competition in electricity so that consumers can benefit. It would not be helpful to attempt to apportion responsibility for the delay.
We are carrying out a review with regard to help for poorer customers in the competitive market. There will be a consultation period in which all interested parties will have a role to play. So far as concerns electricity, the position of customers with prepayment meters has been protected by measures in the electricity price controls, which will run from 1st April until 31st March 2000. Under those controls prepayment customers should benefit to a broadly similar degree as should other customers from reductions in public electricity supply tariffs. The matter will be kept under review by Offer.
Lord Evans of Parkside: My Lords, is my noble friend aware that in the North West, where the gas market is soon to be deregulated, considerable confusion is being created among consumers by the high pressure salesmanship of certain companies and the conflicting claims about how much the consumer will benefit if he or she signs up with a different company? Will my noble friend give an undertaking that the Government will ensure, through the regulator, that customers will at least be able to compare like with like regarding the claims of different companies?
Lord Clinton-Davis: My Lords, I am aware of the difficulty that has arisen over the marketing tactics of a number of companies and rogue salesmen. This issue is being actively addressed by Ofgas through a new marketing condition in the licences of all gas supply companies. This will put responsibility where it lies—with the companies concerned.
Baroness Miller of Hendon: My Lords, do the Government agree that if the gas and electricity industries continue to make profits, whether by deregulation when it comes, increased capital investment or greater efficiency, those profits should not be confiscated by way of selective penal taxation?
Lord Clinton-Davis: My Lords, with respect to the noble Baroness, whom the House greatly admires,

397
I believe that she has got this wrong. There was a case for a windfall tax, and that tax has been levied. It led to no proclamations of undue dissent, even from those who were required to pay it.
Lord Ezra: My Lords, I thank the Minister for his kind felicitations. However, can he say, in connection with the review that the Government are undertaking in relation to the position of those on low incomes—particularly with regard to electricity—whether he is aware of the proposal made by the electricity companies for raising a levy from all users of electricity which could then be used for the benefit of poorer users?
Lord Clinton-Davis: My Lords, I am aware of that proposal. It is a consideration which will be taken into account in the review to which I referred. I thank the noble Lord for raising that matter.
Lord Stoddart of Swindon: My Lords, is my noble friend aware that that is a dangerous road down which to go? Poverty should be relieved through general taxation and not taxation on one specific industry. If we do that for one, where will we stop?
Lord Clinton-Davis: My Lords, I am not sure whether my noble friend is referring to the supplementary raised by the noble Baroness, Lady Miller of Hendon, or to that raised by the noble Lord, Lord Ezra. I have not said that the Government will accept the proposition; I said that it will come within their deliberations in the review being undertaken and I go no further than that.

Bus Lanes: Motorcycle Use
2.45 p.m.
Lord Rotherwickasked Her Majesty's Government:
What measures they are taking to encourage local authorities to make bus lanes available to motorcycles.
The Parliamentary Under-Secretary of State, Department for the Environment, Transport and the Regions (Baroness Hayman): My Lords, the Government do not believe that allowing motorcyclists to use bus lanes is something that they could or should generally encourage at present. We are concerned that the disadvantages, particularly to other vulnerable road users such as pedal cyclists and pedestrians, may outweigh any benefits to motorcyclists. However, pilot schemes are operating in Bristol and Reading. We are watching those with interest and welcome further proposals for fully monitored trials.
Lord Rotherwick: My Lords, I thank the noble Baroness for her reply, though it disappoints me. The review has been ongoing for a long time. Can the Minister say when the Bristol bus lane scheme, which has been ongoing since 1995, will produce results? Further, can she say what other proposals her Government intend to bring forward in light of the fact
398
that they have been reviewing the situation for over a year and those reviews have shown what a wonderful means of transport a powered two-wheeler vehicle is?
Baroness Hayman: My Lords, I am not sure that any government review said what a wonderful means of transport a powered two-wheeler is. We said that we are anxious, first, to make sure that those who use powered two-wheelers do so safely and, secondly, to improve the safety of their chosen means of transport. We have also said that we will look, in the context of an integrated transport policy, at the potential that exists in terms of reducing congestion and pollution and improving safety for the powered two-wheeler.
I stress to the House that we must assess that proposal as rigorously as we assess any other claims to contribute towards those aims. It is difficult fully to assess the specific schemes in Bristol and Reading because no monitoring was undertaken before the shared bus lanes were introduced. It is difficult therefore to know what effects they have had on safety and the speed of buses. That is why some fully monitored trials with before and after studies would be extremely helpful.
Lord Berkeley: My Lords, given the proven success of bus lanes in encouraging people to leave their cars and take the bus, does the Minister share my concern that the increase in bus lanes in London of only 10 per cent. in four years is much lower than she would like? Does she agree that the first priority is to provide more bus lanes before adding motorcycles or any other type of vehicle to the existing ones?
Baroness Hayman: My Lords, we are committed to enhancing the role of the bus as part of the balanced transport policy and development of quality public transport systems. That means that we have to look at the role that bus lanes can play in making sure that bus services are reliable and speedy. The department encourages local highway authorities, which are responsible for deciding whether or not to introduce bus lanes, to consider using them to ensure just that.
Baroness MacLeod of Borve: My Lords, perhaps I should declare an interest in this Question in that I can drive a double decker or a single decker bus. I can assure the House that any move in the direction of this Question will make it almost impossible for a bus driver to see a motorcyclist behind him. To allow that situation on our roads would be a great disadvantage not only to the bus drivers, but also to the motorcyclists.
Baroness Hayman: My Lords, I note the comments of the noble Baroness and particularly the expertise from which she draws them. It is important to maintain the credibility of bus lanes for their primary purpose; that is, enhancing bus journeys. That is why we have to look rigorously at the proposals for extending the use of bus lanes to any other vehicles.
Baroness Nicol: My Lords, does my noble friend accept that pedal cyclists would be dismayed and alarmed at any suggestion that motorcycles should use

399
bus lanes? It is already extremely difficult to cycle safely on our roads. Pedal cyclists would be competing with motorcycles for the left hand edge of the road and would be overtaken by them. I hope the Government will resist any such suggestion.
Baroness Hayman: My Lords, I am very well aware of the concerns of pedal cyclists about this possibility. They feel as strongly as those who use powered two-wheelers and who feel that this would be an advantage. That is one of the reasons why we have to be careful in this area and make certain that we do not take any steps without having evidence that to allow motorcyclists into bus lanes would be to the advantage of all the travelling public.
Lord Strathcarron: My Lords, does the noble Baroness agree that motorcycles should be encouraged, particularly in urban areas, because they are efficient, practical and very economical? Furthermore, three motorcycles take up the space of one car. As by the nature of things there have to be three people on three motorcycles, and as there is likely to be one driver in perhaps quite a large car, motorcyclists are doing a service in helping to prevent traffic congestion.
Baroness Hayman: My Lords, the noble Lord uncovers a number of interesting areas. The effect that increased motorcycle usage has on congestion and on pollution depends on a number of factors, including how highly powered the two-wheeler is. There is a vast difference between low powered scooter-type vehicles, which can be useful in urban settings, and very highly powered vehicles. It also depends very much on how many people are in the car and whether the motorcyclist is transferring from a car or transferring from walking, cycling or public transport.
Lord Stoddart of Swindon: My Lords, is my noble friend aware that I live on the Bath Road in Reading and that we have a bus lane along that road? We are most concerned that, as bus lanes are clear of other traffic, there is a great temptation for motorcyclists to use them as race tracks, which they often do. Since there are side roads off the bus lanes in most cases, the danger to motor vehicles coming from the side roads is very great indeed. I hope my noble friend will utterly reject the proposal that bus lanes should be used by motorcyclists.
Baroness Hayman: My Lords, I note the comments of my noble friend, again from personal experience. One of the points his comments highlight is the need for proper and effective enforcement regarding the use of bus lanes if they are to carry out their proper purpose.
Lord Rotherwick: My Lords, is the Minister aware that no adverse effects were caused by the motorcycles being in those bus lanes and no accidents were caused in the bus lanes in Bristol during that six-month period?
Baroness Hayman: My Lords, I cannot comment specifically on the factors to which the noble Lord
400
referred. However, it comes back to the issue of evidence. It is particularly important that we have evidence not just of what happened during the trial, but that we are able to contrast the situation before and after the trial.

CFSP: High Representative
2.53 p.m.
Lord Wallace of Saltaireasked Her Majesty's Government:
What consultations they are undertaking on the method of appointment, and the potential functions, of the secretary-general of the council as high representative for the common foreign and security policy, as agreed in the Treaty of Amsterdam, and on the establishment of a policy planning and early warning unit responsible to the secretary-general.
Lord Whitty: My Lords, the method of appointment and functions of the secretary-general and the high representative are set out in the treaties. Under Article 151.2 of the treaty establishing the European Community, the secretary-general of the council is appointed by unanimity by the council. That has not changed in the draft Amsterdam treaty. However, Articles J.8.3 and J.16 of the Amsterdam treaty define the new functions of the secretary-general as high representative as contributing to the formulation and preparation of common foreign and security policy decisions, and assisting the council and the presidency in implementing and representing them. The broad functions of the policy planning and early warning unit are set out in a separate declaration adopted by the Amsterdam European Council. The UK presidency is actively taking forward in the political committee consultations on its implementation. The objective is to ensure that the unit is operational when the Amsterdam treaty comes into force.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that Answer. Can he confirm that the Government see this as a constructive step forward and that we should be thinking of someone of the same calibre and quality as the secretary-general of NATO for this appointment? Can he also confirm that the British Government do not see the policy planning unit as something which should be kept as small as possible and as long term as possible but as something which should be adequately staffed to serve its function in assisting the high representative?
Lord Whitty: My Lords, I would agree with the noble Lord that this appointment is an important one for the co-ordination within the European Union of common foreign and security policy. As far as concerns the size of the unit, the key issue is its effectiveness rather than the size of its staffing. We are very keen to see an effective unit performing this function.
Lord Garel-Jones: My Lords, given that common foreign and security policy remains an intergovernmental activity, can the Minister assure the House that those who will be manning this secretariat and advising the secretary-general will, as a general principle, be diplomats on secondment from national governments for three to five years rather than full-time functionaries from the European Union?
Lord Whitty: My Lords, there will no doubt be an element of such people. The key issue is to appoint the best people for the job. We intend to use our influence to ensure that happens.
Lord Hardy of Wath: My Lords, will my noble friend consider the question of duplication? The Western European Union's planning cell may be unsung but it does some useful work, involving distinguished contributions from the United Kingdom. Would it not be a mistake if there were excessive duplication in this area?
Lord Whitty: My Lords, I entirely agree with my noble friend. A closer relationship between the EU policy-making function and the WEU is envisaged in the Treaty of Amsterdam, and certainly duplication is to be avoided in this area. But the combination should be at its most effective in support of the member states in the council.
Baroness Ludford: My Lords, is the Minister satisfied that the Government are putting enough effort into securing a common foreign policy? I am thinking not only of Iraq but also of the summit that has just taken place between Chancellor Kohl, President Chirac and the Polish president. A similar one is scheduled with the Russian president, Boris Yeltsin. Did the UK Government seek to be present at those meetings, either as the UK or as the presidency of the EU? It seems to me that they ought to have been present.
Lord Whitty: My Lords, the common foreign and security policy exists where the member states of the European Union have a consensus that they wish to pursue a particular line of policy. Bilateral arrangements by other member-states will continue to take place. It is not a matter for the UK, either as the UK Government or as the presidency, to move in on other member states' foreign policies any more than we would expect them to move in on ours. However, the whole point of these changes is to ensure that there are greater areas and better support for those areas where we can agree between the member states on a common policy.
Lord Beloff: My Lords, does the Minister agree that we have a splendid candidate for the job of high representative in the noble Lord, Lord Wallace of
402
Saltaire, since it would enable him to learn the truth about his Europhilia in perhaps an expensive and dramatic way?
Lord Whitty: My Lords, deeply appreciative as I am of the contribution of the noble Lord, Lord Wallace, any words from me would hardly improve his candidature for that post.
Lord Bruce of Donington: My Lords, in view of the deafening silence in some quarters of the European Union during the Iraqi crisis, which still continues, is it not a little premature to talk about a common foreign and security policy? Is the noble Lord aware that the security of Europe has depended very largely on the existence of NATO, with the support of the United States, and more particularly so far as we are concerned on Great Britain's undertaking in 1954 to underwrite the security of the whole of Europe by agreeing to commit its own forces without reference to anybody else to the defence of Europe?
Lord Whitty: My Lords, I do not dissent at all from the contribution made by NATO over past decades to the security of Europe referred to by my noble friend. However, we are now in an era when Europe as a whole would benefit from greater co-ordination between member states of the European Union on foreign policy whether we are talking about an immediate crisis or in the longer term. That is what these changes are designed to achieve.
Baroness Rawlings: My Lords, I agree with the question of my noble friend Lord Garel-Jones. Can the Minister say to whom the high representative of the common foreign and security policy will be accountable, and what will his role be in promoting decisions on which there have been constructive abstentions?
Lord Whitty: My Lords, as regards the first point, it is clear that the high representative will continue, as the secretary-general, to be responsible to the council. It will be the member-states on the council who will decide the policy. As regards constructive abstentions, the new mechanism will apply when a member state does not wish to prevent the council as a whole moving forward, but does not itself wish to participate in that policy. In those circumstances, the high representative will remain responsible for carrying out the position adopted by the majority of the council.

Asylum Seekers: Financial Support
3.1 p.m.
Earl Russellasked Her Majesty's Government:
What financial support will be available to local authorities to discharge their responsibilities to asylum seekers under the National Assistance Act 1948 for the financial year 1998–99, and whether they believe the present system is working well.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, local authorities are discharging the duties imposed upon them as a result of court judgments as best they can. The Government recognise the financial and administrative burden placed on them as a result and do not believe that the National Assistance Act is a suitable vehicle for providing support to asylum seekers. The Government are reviewing the whole asylum process including the way in which welfare support is delivered. The review team will be reporting shortly. Meanwhile, the Government have listened to representations from local authorities and have considered the costs that they are facing in arranging accommodation and support. The Government have announced that funding for 1998–99 will be increased by almost 18 per cent. to £165 per accommodated single adult asylum seeker per week: obviously, subject to parliamentary approval. That restores the level to that paid in 1996–97.
Earl Russell: My Lords, I thank the Minister for small mercies. Is she aware that, according to the Medical Foundation for the Care of Victims of Torture, the cost of supporting asylum seekers in London alone last year was £109 million, whereas, according to Mr. Paul Boateng speaking in a committee of another place last Wednesday, the total government support for asylum seekers came only to £89.6 million? Does the Minister agree that that helps to quantify the extent to which the Government are passing the buck of a central responsibility to local authorities? Why does not the buck stop at 10 Downing Street?
Baroness Jay of Paddington: My Lords, I believe I indicated in my original Answer that the Government are extremely concerned about the plight of asylum seekers. I am sure the noble Earl realises that for some months a review has been in progress on the whole of both asylum and immigration policy. A review of the benefits connected with them is taking place and a report will be made. That has led to a high level of activity within the Government; the lead department being the Home Office. As regards costs, we have decided, as I said, to accept the suggestions made by a number of local authorities, particularly in central London, about the costs imposed on them through their responsibilities in this field. That is why we have restored the grant to £165 a week.
The noble Earl referred to my honourable friend Mr. Boateng. Officials in the Department of Health estimate that the cost related to adult asylum seekers, to which I referred, on the basis of estimates of increased numbers will be about £89.7 million for the coming year. That does not include specific grants addressed to unaccompanied children or children in families.
Baroness Gardner of Parkes: My Lords, is it not a euphemism to say that the Government have listened to local authorities when in fact the appeal to the House of
404
Lords against the original decision was to be heard in February and that it was withdrawn because the Government agreed to increase the sum to £165 a week under that pressure?
Is not the Minister aware that the five inner London boroughs formed a consortium and are working together to try to resolve this problem? Does she agree that £165 a week is insufficient for caring for someone in the centre of London and that every effort to move people to where accommodation would be available more cheaply and of a better standard is thwarted or resisted very often by threats of judicial review? What can the Minister do to prevent these procedures stopping any innovative scheme coming forward? Will those matters be considered in her review? Is the Minister further aware that the need for space in central London is so desperate that thoughts are now being given to having floating accommodation in the form of a ship?
Baroness Jay of Paddington: My Lords, as I said in my original Answer to the noble Earl, the present situation under the National Assistance Act is unsatisfactory. Unfortunately, we inherited that situation because of legislation introduced in 1996 under the previous government. I repeat that we have tried to address the problem on an across the board basis. I am aware that there is a particular issue in central London. That is why we have been concerned to raise the grant for 1998–99.
One of the problems that has occurred is that we hoped cheaper accommodation would become available, but because local authorities—and quite rightly, because the review is taking place—see this as a relatively short-term problem which they need to address, they have felt unable to undertake longer-term accommodation arrangements which might have reduced costs.
Lord Mackay of Ardbrecknish: My Lords, does the noble Baroness recall the opposition which her side of the House undertook to the proposals on immigration put forward by the noble Baroness, Lady Blatch, and myself in the last Parliament? Why is it that 10 months later the Government still have not reversed the policy, as they said they were going to do? Is this another U-turn?
Baroness Jay of Paddington: My Lords, it is certainly not a U-turn. The problem is that the complexities and difficulties which we have inherited have led to a proper, sensible and sustained inquiry into the whole issue. For example, we have heard my noble friend Lord Williams of Mostyn describe in some detail the situation on immigration appeals, where we have inherited many thousands of such appeals since 1993 that have not been heard. We are addressing this problem. As I indicated in my original Answer to the noble Earl, it will be a matter of weeks, not months or years, before we produce a solution.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Hayman will, with the leave of the House, repeat a Statement that is to be made in another place on planning for the communities of the future. I would like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to,
"brief comments and questions for clarification".
There is a mandatory limit of 20 minutes from the end of the Minister's initial reply to the Opposition spokesmen.

Teaching and Higher Education Bill [H.L.]
3.8 p.m.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I beg to move that the Report be now received.
Moved, That the Report be now received.—(Baroness Blackstone).
Lord Topehad given notice of his intention to move, as an amendment to the Motion ("That this report be now received") to leave out from ("That") to the end and insert ("the Bill be re-committed to a Committee of the Whole House in respect of Clauses 16 to 18.").
The noble Lord said: My Lords, I say at the outset that it is not my intention to move this amendment, but I do intend to give an explanation of my reasons to your Lordships. This morning I received a letter from the Minister which I am sure she will not mind me—
The Lord Privy Seal (Lord Richard): My Lords, I am sorry to rise and interrupt the noble Lord, but I do so on advice and instructions. I am told that it is not in order for the noble Lord to speak to the amendment when he has not moved it.
Noble Lords: Oh!
Lord Richard: My Lords, I think that the noble Lord, Lord Tope, can speak to my noble friend's Motion, but he cannot speak to his amendment if he does not move it.
Lord Harris of Greenwich: My Lords, the noble Lord the Leader of the House and I are in agreement. My noble friend Lord Tope is speaking to the Motion moved by the noble Baroness, Lady Blackstone. He has referred briefly to an amendment which appears on the Order Paper, but it is perfectly reasonable to speak on the Motion, which is what he is doing.
Lord Tope: My Lords, I am, as always, grateful to my Chief Whip for telling me my intentions before I have discovered them for myself. I was, of course,
406
intending to speak to the Motion and to explain why I am speaking to that and not to what some noble Lords might have expected me to speak.
As I was saying, this morning I received a letter from the Minister which I am sure that she will not mind if I read to your Lordships because it is pertinent to the whole House, and not just to me. The noble Baroness wrote:
"Following your request that more time be made available for debate on some of the key issues in the Bill, I have given further consideration to this and I am now able to tell you that we expect to spend about two and a half days on the Report Stage of the Teaching and Higher Education Bill. As I said in my earlier letter, I would be happy to allow maximum debate of Clauses 16–18 of the Bill at Report within the rules of the House, and also if possible as first business. I undertake to respond very flexibly to interventions from Peers asking questions further to elucidate points raised in the debate. I hope you can accept this assurance. I am keen to press ahead with the consideration of this Bill. I am now clear that recommitting the Bill would not prevent implementation this summer, but it would have the effect of delaying the Government's remaining legislative programme, much of which your party support. I appreciate we disagree on certain aspects of the Bill, not least in relation to Clauses 16–18, which at Report you may continue to wish to amend or delete".
I shall! The letter continues:
"I hope however, that with your and your colleagues' constructive contributions, we will be able to work towards securing the objectives we share for schools and further and higher education".
I believe that it was a common view throughout the House that Committee stage was deeply unsatisfactory for quite a number of reasons, not least the skeletal nature of the whole of the Bill. With regard to Part II, I believe that all noble Lords found it difficult to frame an amendment that would allow any principled debate on tuition fees and, when we finally reached that stage, it was a little after midnight. I recognise that in themselves none of those is a reason for re-commitment, but to compound all that, whatever the causes, there was considerable confusion and great difficulty in getting clear answers from the Government about the legal basis on which they were intending to proceed on the question of student payment of tuition fees.
My purpose in suggesting re-commitment was to allow more time to debate and to clarify those important points. My reason was not particularly to delay the implementation of the Bill, although the thought that it might have had the effect of delaying the implementation of tuition fees this summer was something of a temptation. However, the Minister has now made it clear that that would not happen, even if we re-committed the Bill.
We wanted more time. The Government have now given us an additional day for Report stage so, in practice, Report stage will be virtually the same length as Committee stage. That meets one of my requirements in tabling my amendment. I wanted to have a full and proper debate. We are assured that we shall now have that debate as "first business"—in other words, when the House is full, we hope, when there is much interest, and when noble Lords can be present to press their points.
My next purpose for tabling the amendment was the need to probe and question the Minister. I recognise that we cannot, and should not, change the rules of

407
procedure of your Lordships' House but within that constraint the Minister has undertaken to be "very flexible" with regard to interjections from noble Lords seeking further clarification. I hope that that will go a considerable way to meeting our requirements.
Those are major concessions by the Government and they substantially meet my procedural concerns, if not my political concerns. I am strengthened in that view by a letter which my honourable friend in another place, Mr. Don Foster, has received from Douglas Trainer, the national president of the National Union of Students. I should like to read that letter also to your Lordships because it is important that the House knows the view of the NUS on this matter. Douglas Trainer stated:
"The issue of re-commitment of the Teaching and Higher Education Bill is something my colleagues and I have considered carefully. It is clear from both Hansard and the level of residual confusion amongst Peers that the initial Committee stage was insufficient. Indeed it is hard to understand how the Bill could have been debated in any truly meaningful way until Peers and others were clear about the Government's power to charge fees. For this reason there is a strong case for re-commitment. However, the central issue for NUS remains our ability to oppose many sections of the legislation and to affect major change for the benefit of our membership. Re-commitment would be a victory but NUS would rather secure a guarantee of suitable time to table amendments with Peers given the optimum chance for debate. For these reasons we would fully support a move to have the Bill debated in full session with a relaxation of the relevant procedures to facilitate a debate at report stage rather than the false dawn of re-commitment".
As I said earlier, I recognise—I understand that the NUS is not so familiar with this—that we cannot relax our procedures, but we do have a very generous offer from the Minister. However, I remain unhappy about the skeletal nature of the Bill. That unhappiness will become clear during further stages. My party remains totally and fundamentally opposed to the imposition of student payment of tuition fees, and we shall pursue that opposition to the fullest degree at the appropriate stages.
I am grateful to many noble Lords from all sides of the House who have offered me support on re-commitment because they share the concerns that I have expressed previously and, I hope, today. However, we have had significant concessions from the Government which go a long way to meeting my procedural concerns. I am concerned that any further delay with this Bill would not have any effect on the imposition of tuition fees, but could have a serious effect on other government legislation, some of which, it is true to say, my party supports, at least in principle. In all those circumstances, it would be churlish of me, at this stage, to press ahead with re-commitment and that is why I have decided not to move the amendment.
3.15 p.m.
Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, can he tell the House why his great concern about Clauses 16 to 18 does not extend to Clauses 21 and 22 which do exactly the same for Scotland? Is the noble Lord completely ignoring the situation in Scotland?
Lord Tope: No, my Lords. I share the concern about Clauses 21 and 22. I am sure that the noble Baroness will have noticed that my original amendment referred
408
to the whole of Part II. That was for precisely the reason that the noble Baroness has outlined. I reduced the terms to "Clauses 16 to 18" in an attempt to meet some of the concerns expressed to me earlier by the Minister; namely, that if we re-opened the debate on the whole of Part II, all sorts of other issues would also be re-opened. I hoped and believed that further reconsideration of Clauses 16 to 18 would enable us better to understand and better to respond to the clauses relating to Scotland.
Lord Renfrew of Kaimsthorn: My Lords, since my name is on the Order Paper below that of the noble Lord, Lord Tope, I am advised that it is permissible, in debating the Motion that the Report be now received, to follow the noble Lord and to express some of the anxieties about the very nature of this Bill which emerged clearly in Committee and which made that Committee one of the least productive that I have known in your Lordships' House.
Lord Carter: My Lords, I think that the noble Lord will remember that in Committee I reminded him that he should not speak from the Gangway.
Lord Renfrew of Kaimsthorn: My Lords, I apologise to the noble Lord. He did, indeed, do that and I should have remembered his words with greater attention. I shall endeavour to do so in future.
What deeply troubles me about the Bill, and I know that it troubles quite a number of your Lordships, is its very nature. It is an all-purpose enabling Bill which seems to allow the Government to do almost anything in the field of higher education without further reference to Parliament, and to do so by means of financial controls which appear sweeping and unrestricted—unbridled. The Bill hardly outlines any policies whatever. It could be described as a monumental and sustained King Henry VIII clause. I wish that the noble and learned Lord, Lord Simon of Glaisdale, was still in his place and active on the battlefield to challenge it. Many of us here remember the battle to amend Section 68 of the 1992 Act which, if left unamended, would have seriously infringed the academic independence of universities. As the noble Earl, Lord Russell, argued in Committee in moving that Clause 18 do not stand part, that clause is a threat to academic independence.
It is not my purpose at this point either to argue against government policies—which, as I indicated in Committee, are not disclosed in the Bill and have to be gleaned from other sources—or to speak about individual clauses at Report stage. Instead, I should like to make two points of a more general nature to accompany the Motion that this Report be now received. First, I remind your Lordships that in Committee there was also on the Order Paper consideration of the 9th Report of the Select Committee on Delegated Powers and Deregulation. That committee said:
"We invite the House to consider whether the subject matter of the regulations under Section 16 is so important that the Bill should be amended to require affirmative procedure for the first regulations …"
It goes on to say that everything of importance will be in the regulations.

409
Referring to Clause 18, the committee said:
"The Committee is aware that this clause is controversial…the imposition of conditions…might be regarded as the exercise of secondary power".
The House has not yet fully addressed this important point, although attention was drawn to it in Committee by my noble friend Lady Blatch who has tabled Amendment No. 54 at Report stage. I believe that the House should encourage the Government to frame more clearly just what they are trying to achieve rather than approve legislation that would allow them simply by regulation to achieve anything that they wanted without reference to anyone now or in the future. That task was not adequately undertaken in Committee; nor was a single Division called.
My second and final point is an important example of the vague yet sweeping powers that the Bill may confer. The example relates to the colleges of Oxford and Cambridge. As a former master and continuing professorial fellow of one Cambridge college I declare an interest and apologise for any apparent parochialism. These colleges are self-governing institutions established by charters and governed by statutes, all approved by the Privy Council, of up to seven centuries' standing. Financially they are separate entities. My own college, Jesus, has been in existence for more than 500 years.
Lord Campbell of Alloway: My Lords, with respect to my noble friend, is his speech on the Motion that this Report be received in order?
Lord Richard: My Lords, it is not for me to be the arbiter of what is or what is not in order in this House. However, I can only tell the noble Lord who asked the question and the noble Lord who is on his feet that I am advised that the latter is veering very much in the direction of being out of order, and very shortly will be, if he continues as he has in the past.
Lord Renfrew of Kaimsthorn: My Lords, I am disconcerted by the remarks of the noble Lord the Leader of the House. If I am permitted by the House to do so I should like to take just two minutes to outline why this is a very difficult Bill to debate. It is precisely because the substance is not in it. Therefore, it is very difficult to amend the Bill. I make the point—I shall make it from the proper position—that the Bill may impact directly on the standing of the colleges of Oxford and Cambridge in a manner which it is not possible to amend because there is no statement to that effect in the Bill. With the permission of the House, I shall take perhaps two or three minutes to conclude the point.
The statutes of some of these colleges, for example Trinity Hall, not only empower them but require them to charge fees for tuition and other facilities that are offered to students. What are the intentions of the Government in respect of college fees? Since the colleges are not in receipt of grants from the Higher Education Funding Council for England, which go directly to universities, how are college fees to be controlled under the mechanism of the Bill? There are
410
moments when it looks as if the Government regard college fees as falling under the new anathema that they have pronounced upon top-up fees. But have not college fees been charged with government approval for centuries?
I have been shown a draft government amendment to Clause 20 that seeks to include college fees within the definition of "fees" as set out in that clause, but that particular element does not appear in Amendment No. 67 tabled by the noble Baroness, Lady Blackstone. Is the whole future of the colleges of Oxford and Cambridge to be determined by the vagaries of what is or what is not set down in the definition of "fees" at Report stage by the noble Baroness? Do the Government have a policy on this matter, or are they writing a Bill and inventing the policy afterwards?
That is an example—it is my only example—of why the amendment that has been withdrawn would have been welcome. Our problem is not simply that we disagree with government policy but that we are not sure what the policy is, and the Bill certainly does not tell us. There is no way in which this nebulous Bill, with its sweeping yet ill-defined powers, can profitably be amended to deal with such matters, because it is not at all clear whether or not it refers to them. We cannot effectively discuss these matters at Report because they are not in the Bill, yet the Bill is so sweeping that if the Government so choose they are covered by it.
That is all I have to say. I simply draw to the attention of the House my grave misgivings about a Bill which comes to Report stage when many of the policies which it allegedly contains are not at all clear.
Baroness Blatch: My Lords, I rise to speak to the Motion that this Report be now received. I found the speech of the noble Lord, Lord Tope, extraordinary in the extreme, although not surprising. The love-in between the Liberal Democrat Party and the Labour Party is almost complete. There is no doubt that there have been high level discussions and the Labour Party has said, "Keep the Liberal Democrats off our backs. We want this legislation quickly". Therefore, there has been a capitulation over the weekend.
I ask the noble Lord—perhaps it is an answer that he owes this House when he comes to sum up—what the noble Lord knows today that he did not know on Thursday. I shall answer for him. Nothing. The noble Baroness said in a meeting that I had with her—I know that the letter had already been written to the noble Lord, Lord Tope—that the rules of debate during Report stage could be relaxed. I ask the Minister directly: on what authority can the Minister in this House determine that the rules for Report stage should be relaxed? My understanding is that rules govern Report stage, Committee stage and Third Reading and that no Minister alone has the unilateral power to relax those rules. If noble Lords want to ask questions with the leave of the House it is not for the Minister gratuitously to say that she will give way to those. Noble Lords have the right to ask questions under those rules.
Beyond that, the noble Lord, Lord Tope, is easily pleased if he has accepted that as a concession. If it is a concession the noble Baroness should explain to the

411
House on what authority she has made it. The other reason for the remarkable about-turn of the noble Lord, Lord Tope, having had an amendment on the Order Paper for 27 days, is that he has said that noble Lords have two-and-a-half days for the Report stage of this Bill. That is simply not true. This Bill will be curtailed at about five o'clock this evening. The reason the proceedings have gone into a third day is that we are giving way to the Competition Bill today. I readily agreed to that because I understood that the Government were in difficulties over timetabling. We were offered part of Thursday. It is my understanding that this is not first business on Thursday. I understand that first business on Thursday is the Third Reading of the Late Payment of Commercial Debts (Interest) Bill. We also share the day with the Unstarred Question of the noble Lord, Lord Ashley of Stoke. Therefore, we have part of Thursday, not all of Thursday, and finish on Monday.
Lord Carter: My Lords, the Unstarred Question is in the dinner hour, and Third Reading of the Late Payment of Commercial Debts (Interest) Bill will be brief.
3.30 p.m.
Baroness Blatch: My Lords, when I was talking to the usual channels about how the Bill could be accommodated, I was told that it had a short time today. That is not half a day. We also have a Statement this afternoon. I was told, secondly, that we have a short time on Thursday, and that we would be given time on Monday to complete the Bill. That does not add up to two days, let alone two-and-a-half days. That is not a good reason for accepting what has been offered. The reason for accepting it is that Mr. Ashdown has been told by Mr. Blair that he must capitulate or else.
I do not know this, because I have not had an opportunity to ask my noble friend Lord Renfrew, but I do not know whether he has been shown the discourtesy that I have been shown. I had not been told that the intention was not to move the amendment. I heard it informally. I heard it rumoured around the place. One Liberal told me that it was not to be moved, another told me that it was to be moved, and the Liberal Chief Whip just shrugged his shoulders and said, "I do not really know what is going on". That is a discourtesy.
I shall further explain why it is a discourtesy. The noble Lord, Lord Tope, knows that my name would have been on the amendment. I was happy to support him and his colleagues on the Liberal Benches in pressing the amendment, because he knows that I believe strongly that we have had the most unsatisfactory Committee stage of any Bill in my experience since I entered the House in 1987. I understand that there is a technicality. I was not allowed to add my name to the amendment, because only one name is allowed on such an amendment. I think there should have been at least the courtesy of telling me this morning, or making some attempt to contact me this morning, to say that the amendment was not going to be moved. I repeat my question: what do we know today that we did not know on Thursday?
412
My noble friend Lord Renfrew has attended to put his amendment to the amendment. I suspect that he was not aware that that was going to be the case until he arrived here. In speaking to the Motion, That this Report be now received, my noble friend made the point most powerfully that we are still in the process of asking questions about the Bill; students are asking questions about the Bill; I receive letters daily asking me questions about the Bill; students are ringing up their colleges and their local authorities. They are being told that the Bill is only part way through its passage through Parliament. It still has to go to the House of Commons. Until it has gone through both Houses, we cannot pre-empt with certainty the outcome of the Bill. That is an unsatisfactory state of affairs.
We have exhausted the Committee stage. That is a more relaxed stage of a Bill which the House enjoys and which enables there to be discussions on amendments. Instead, we have had to use every kind of device to elicit information from the Minister. In fact we received a letter from the Minister, after the Committee stage, setting out in more detail the answers to some, but not all, of the questions that had been posed in Committee. We have now reached Report. I ask the Minister again: on what authority is she promising to relax the rules of the Report stage? If she is asking us to behave within the rules, that is not a concession. Nothing changes. We always act within the rules of this House. It is a matter on which the whole House should take a view, or at least the Procedure Committee should make a recommendation to the House.
The very fact that the Minister has written a letter to the noble Lord, Lord Tope, suggesting that there would be some relaxation of the way in which we conduct ourselves on Report, and that we would be given two-and-a-half days—it does not add up to two-and-a-half days—is because she is conceding that we need more time, and need a more relaxed stage of the Bill during which to conduct our discussions on the Bill. The Minister has, in principle, conceded the argument, but, in practice, she is going to stick to the promise she has given to her leader, that she wants to deliver the Bill and that she will not be thwarted by the Liberal amendment.
Earl Russell: My Lords, in speaking to the Motion, That this report be now received, I must repeat the declaration of interest which I made on Second Reading. I speak as a serving university teacher. I have the greatest confidence in the political judgment of my noble friend Lord Tope, but the questions I have to ask are inevitably somewhat different from the ones he has to ask.
He has to make a political judgment, but if the Bill is as badly drafted and as badly thought out as I believe that it is, I will have to help clear up the mess when my noble friend and the Minister may well have moved on to other briefs. For that reason, among others, I am sorry that we are not going to get the chance, in a proper Committee stage, to investigate exactly what the legal situation is.

413
That regret will be shared widely in university circles. The House will believe that I have not spoken on the Bill without taking a considerable amount of academic advice. In that advice, I have found that the doubt about the legal foundation for tuition fees is spread far outside the confines of the House.
In expressing my agreement with the point made by the noble Baroness, Lady Blatch, that procedure is a matter for the House, and not for the Government, I shall ask the Minister whether, in writing her letter to my noble friend, she took the advice of the Table before sending it. It is a material point, and the House is entitled to an answer.
It is clear that whenever we have a framework Bill before us, it leads to an ill-regulated Committee stage. That is an old rule, and it has been repeated. On the point about the timetable, I shall ask the Minister whether we are, after all, too late. I imagine that the Minister has seen the Times Higher Education Supplement for last Friday. She may have noticed the view of Mr. Dennis Farrington, deputy secretary of the University of Stirling, and author of The Law of Higher Education, that students could mount successful legal challenges against universities which fail to state in their offers to applicants for admission the exact details of any tuition fee to be paid. I have been making offers since before the Second Reading of the Bill. Was the Bill already too late when it was introduced?
Baroness Young: My Lords, I have just two points to make on this important Motion. First, I am sure that I am not alone in having received a letter from the noble Lord, Lord Tope, setting out his reasons for the amendment which he has put down today. I did not find his remarks a satisfactory answer to that. I echo what my noble friend Lady Blatch said. There is a way in which Members of your Lordships' House behave to one another. If one is not going to press an amendment, it would at least be a courtesy to write to say that one is not going to press it, rather than to leave everyone to come here uninformed. Furthermore, many have had to do homework over the weekend for something which is now clearly not going to take place. I am sorry that the noble Lord should have behaved in that way, because I agree with his object in tabling the amendment.
That takes me to my second point. I hope that the Minister will consider carefully her reply as to whether or not she can make a promise about relaxing arrangements on Report. I am bound to say that if, when I was Leader of the House, I had made such a statement, the House would have been very surprised indeed. The criticisms from the then Opposition would have been considerable. I am someone who believes profoundly in the self-regulation of this House. It is a matter for the House to decide, and it works very well indeed. Once we start having points of order, let alone Ministers deciding on the conduct of the House in changing the arrangements, we shall all suffer. Perhaps I may offer a little political advice and say that the Government will probably suffer more than the Opposition because two can play that game once it is started. However, it is a
414
most undesirable game to play and I hope that the Government will not go down that path. It would lead us into great difficulties.
I am particularly sorry that the Bill is not to be recommitted. I hope that the Minister listened carefully to what was said by my noble friend Lord Renfrew. It is difficult to overestimate the anxiety in universities. It exists not only among students, although the situation is difficult for them. They are young and inexperienced and face considerable financial problems. However, the situation is just as serious for those who teach and take part in universities. The House has not been treated well in respect of this Bill and it does not augur well for the future of higher education.
Lord Baker of Dorking: My Lords, I wish to express support for the sentiments of the noble Earl, Lord Russell. In Committee he, more than anyone else, questioned the legality of the powers that the Government were seeking to take in Clauses 16 to 18, and he did so very effectively. The Committee stage was nearly a month ago—23rd January—and since then there has been no clarification of the Government's intentions. Various amendments have been tabled which do not add any light to those intentions. The amendments are fairly minor. Not only are we, as part of the legislative authority of our country, in the dark, but the universities are in the dark. There is considerable anxiety and confusion as to what the Government intend and what will be the effect of their intentions. I would have hoped that at some stage Ministers would have made that clear.
If the Liberal Democrats have done some kind of deal with the Government not to have a recommittal, that is a matter for them. However, the noble Lord, Lord Tope, said that part of the deal was that the crucial Clauses 16 to 18 should be taken at "prime time"; namely, when many Peers are in the House. It may not be possible to reach those clauses at prime time on Thursday. That depends upon the progress of the House today—and there are pressures on the House today. Can we have an undertaking that Clauses 16 to 18 will not taken at some late hour on Thursday, but that the House will be adjourned then so that we can take them at prime time on whichever day the Government select?
Lord Glenamara: My Lords, I wish to say only two or three sentences. I am glad that the noble Lord, Lord Tope, has withdraw the Motion. I could not see much point in it. Furthermore, I have been in Parliament for 47 years and this is probably the worst Bill I have seen during those years not only in the way it is drawn up but in what it proposes.
The Bill will impose considerable financial burdens on large numbers of people at the beginning of their working lives. Those numbers will grow year by year. There will be debts of £12,000 a year on young people—teachers, nurses, midwives and so forth—so the Bill is wrong from that point of view. During the weekend, I discovered that large numbers of MPs and, I fear, some Members of your Lordships' House, believe that the Bill will introduce a graduate tax. It does no such thing. The amount which young people will have

415
to pay for their tuition will depend not on what they are earning but on the income of their parents in their family home which they left years before. Therefore, a barrister earning £200,000 a year might pay nothing; but a teacher earning £15,000 might have to pay the full amount. That is ridiculous, but that is what the Bill does.
I also oppose the Bill because of the way in which it is drawn up. It gives no details of its proposals; it is a purely skeletal Bill. It imposes financial burdens without explaining how that will be done and without giving any details. It is a ridiculously unfair Bill. I hope that the noble Baroness will listen carefully to my suggestion that the Government take it away, withdraw it, think it over again and bring another Bill back in the next Session. But, my Lords, please do not proceed with this Bill. The Government will lose it in the House of Commons if they do.
3.45 p.m.
Lord Peyton of Yeovil: My Lords, the noble Lord, Lord Glenamara, said that this is the worst Bill he has experienced in 47 years in Parliament. I wish to associate myself with the words spoken by my noble friend Lady Blatch. She is never one to be discourteous; but in speaking of the speech of the noble Lord, Lord Tope, she chose her words with lethal effect: extraordinary, but not surprising. Furthermore, I endorse the words spoken by my noble friends Lady Young and Lord Renfrew. Both were lethal in their effects.
I wish to ask the Minister one question, but I am not sure whether it has already been asked. Precisely when and precisely how did the Government communicate the so-called "concessions" to the noble Lord, Lord Tope? Was it so late in the day that they had no opportunity of informing other parties in opposition in this House?
I am afraid that I was not here for much of the Committee stage, but I gather that I did not miss very much. There are two aspects of legislation which I find objectionable. The first is regulatory powers taken freely and liberally—I am sorry. I did not mean to use that word—taken freely by Ministers on the quite unfounded assumption that they will be trusted to use them with wisdom and care. When my party sat on the other side of the House, I objected constantly to Bills containing regulatory powers which I thought were totally unjustified and unsuitable to present to Parliament.
Secondly, when Ministers offer concessions—I must admit that we know of this concession only through the medium of the noble Lord, Lord Tope—one needs to examine them very carefully. When they contain the word "flexibility" and when we are assured that Ministers will be flexible, my goodness, I become exceedingly suspicious! "Flexibility" is a word used by Ministers almost as a claim to the possession of virtue. "Flexibility" usually means not that Minsters will bow to the will of the House or listen to opinions, but that they will twist and turn in their efforts to get their own way.
I rejoice in this short debate because I hope that it has gone some way to teach Ministers a lesson in humility and good manners. As for the noble Lord, Lord Tope,
416
I do not believe that anyone need bother to add to what was said by my noble friend Lady Blatch, particularly the words "not surprising".
Lord Peston: My Lords, my noble friend the Leader of the House might tell us whether it is out of order for anyone to speak in favour of the Minister or of the Motion before the House. I am somewhat appalled at those who say they are sticklers for our rules but they still felt able to make Second Reading speeches in connection with the former Motion before the House. However, it is for them to reflect on that.
I spoke at Second Reading but I do not recall most of my noble friends and noble Lords opposite being present. At that time I made it clear that I did not care for tuition fees. But it seemed to me from that point on it was up to the Opposition to put up some opposition at the Committee stage. I have forgotten which noble Lord said that it was an appalling performance but I agree, it was. That appalling performance was not down to my noble friend the Minister, it was down to the fact that we discovered afterwards that the Opposition had not the faintest idea about the Bill or about university and higher education finance. I remember making this point not long ago. It did not seem to be my job to give them lessons on the subject. It was clear that they totally bungled the Committee stage because they did not know what they were talking about. They now seek to blame my noble friend the Minister because somehow she did not do their job for them.
I do not have a copy of the letter with me, but my last point is that it did not seem to me, when the noble Lord, Lord Tope, read it out, that he was for one moment suggesting that my noble friend was proposing that we break our rules. She was simply saying that she thought she had behaved reasonably. If she had consulted me purely on a friendship basis I should have said—and this is my whole attitude—"Never behave reasonably when you are dealing with the unreasonable". She is now being attacked for behaving reasonably. The noble Lord, Lord Tope, is being attacked for trying to respond to a reasonable offer, it seems to me.
I hope that my noble friend will now say: "Enough's enough; the whole thing is preposterous". She should suggest to noble Lords opposite that they start doing their job of tabling meaningful amendments and arguing the case. Some of us would be rather interested in taking part in that argument, but not to have this constant crying: "Oh, we bungled it, but it's not our fault".
Lord Campbell of Alloway: My Lords, perhaps I may make a brief point. By what authority does a Minister of the Crown offer flexibility affecting the rules of procedure of your Lordships' House? To me this is almost beyond credibility and belief. What did the noble Lord, Lord Tope, imagine he was getting other than a pig in a poke? There is absolutely no power, no sense and no force in an undertaking to use flexibility if it means in any way changing the procedures of this House on Report.
I came here to support the amendment. The essence of the problem was that we required the seriousness of debate at Committee stage where one can speak more than once and entertain discussion. That is what we needed, but

417
it has been given away in accepting an undertaking which, whatever the noble Baroness said, is worthless. It is a worthless, sterile, useless undertaking by which a kind of compromise has been accepted between the two parties so that the right action—to recommit the Bill—has not been taken.
Lord Desai: My Lords, I sat through the Committee stage of the Bill till late at night because I cared about higher education. If other people had cared about it, they would have been here and not asked for what is called "prime time". Prime time is when a Bill is being discussed that you care about you should be here to discuss it and not ask for special concessions. I should also add that we have now wasted 45 minutes of prime time.
Baroness Blatch: My Lords—
Noble Lords: Order!
Baroness Blackstone: My Lords, I wish to begin by thanking the noble Lord, Lord Tope, for not moving his Motion for re-committal. He and I have had a couple of constructive discussions recently and I can assure your Lordships' House that I shall be happy to allow maximum debate on Clauses 16 to 18 during Report stage within the rules of the House.
Baroness Blatch: My Lords, I believe that I am within the rules of the House to intervene when the noble Baroness is speaking. I wish to ask her this: since when has it been the lot of a Minister to allow maximum debate at any stage of a Bill? The Minister gave a hint that somehow this Report stage would be different from any other Report stage. I come to this House, whether it is to the Committee stage, the Report stage or Third Reading, and expect to have the maximum opportunity within the rules of the House as an individual Member of the House. I do not expect to be condescended to, and I do not expect the Minister to be condescending about allowing us to have maximum debate within the rules of the House.
Baroness Blackstone: My Lords, I feel that I am in one of those "damned if you do, damned if you don't" situations. I am trying to respond to some of the concerns that Members opposite, both in the Liberal Democrat Opposition and in the Conservative Opposition, have expressed about the Committee stage. I wrote to the noble Lord, Lord Tope, but since he was out of the country last week—and this is in answer to one of the questions put by a Member on the opposite Benches—he only received my letter this morning. I hope that that is a helpful explanation of the timing.
Perhaps I need to repeat what I said in the letter. I said that I would stick to the rules of the House and would also try to make it possible—because this question was also raised—to deal with the crucial clauses, Clauses 16 to 18 in the second part of the Bill, at first business. That is the Government's intention.
It is also the Government's intention to allow two-and-a-half days for the debate, if that is the time taken up by the amendments that are tabled. Of course, I accept
418
what the noble Baroness, Lady Blatch, said. The exact length of time will depend on how many people speak and how many amendments are put down; but the Government will stick to what we agreed.
Baroness Blatch: My Lords, again with the leave of the House, is the noble Baroness suggesting that we could negotiate more time, if there are sufficient amendments? We are talking about a very short time today, a relatively short time on Thursday and one day on Monday. Does the Minister suggest that that is the offer, over and above what we have at the moment? We do not have two-and-a-half days at the moment.
Baroness Blackstone: My Lords, this is a matter for the usual channels and not for debate across the Floor of the House. I have simply said that I have made an offer to the noble Lord, Lord Tope, that there would be two-and-a-half days available. The noble Baroness, Lady Blatch, queried whether that was the case. I wish to provide the reassurance that it is the case and we will make the time available.
I was asked whether we had consulted the Table. The answer is no. We did not need to consult the Table as there was no attempt or no wish in any way to relax the rules of the House. I simply said that I wished to be flexible. It is perfectly legitimate for any Ministers speaking in this House to be flexible in the way they interpret the rules. That is the issue. It is a matter of how many interventions—
A noble Lord: No!
Baroness Blackstone: My Lords, I am sorry, but I have heard many debates in the House at Committee and Report stages and Third Reading where, when Members of your Lordships' House rose to elucidate a point, the Minister speaking said that that Member had already spoken and it was not right at Report stage to take further questions of elucidation. That is all I am trying to do.
I found the remarks of the noble Lord, Lord Peyton, a little offensive, if I may say so. He accused me implicitly of lacking both humility and good manners. I say this in all humility. I do not wish to be rude or not to display good manners. I am attempting to find a way round the issue. In responding to the debate I hope that noble Lords will accept that it would not be right for me to become involved in the substantive matters raised as though it were a Second Reading debate; that is, on questions of policy. This is a procedural debate and we should stick to procedural matters.
I accept that the policy concerns of the noble Lord, Lord Tope, and many other Members of your Lordships' House will not be met by the Bill. We have different views on what should be the right policy. However, those noble Lords who have suggested that the higher education sector does not accept some of the principles behind the Bill are not right in making that claim. Of course, there will be

419
some members of the higher education sector who take that view. However, today I received from the CVCP briefing a statement which said:
"Vice Chancellors broadly support the principles of the new funding scheme".
That is an important point which we need to take on board. However, we are not here to debate that.
I should remind the House that the Companion to the Standing Orders provides for two situations in which re-committal may take place: where important amendments were tabled too late in Committee for that stage; or where amendments on a subject which had not been considered in Committee were tabled at a later stage and required detailed examination. Neither of those two situations applies in this case.
I have not heard any arguments which would lead me to believe that the House had not had sufficient opportunity fully to debate the provisions of the Bill and that it should not pass now to Report stage. I find it extremely difficult to understand how it can be argued that the Government have not been clear about the legal basis for the new fee regime. Both the Explanatory Memorandum and Notes on Clauses published on the same day as the Bill made clear that Clause 16 gives the Secretary of State power to provide substantial support to students in respect of fees. Clause 18 gives the Secretary of State power to make it a condition of grant from the funding council that institutions charge certain students fees at the level of the maximum support payable under Clause 16; that is, it gives him a reserve power to control top-up fees.
Again, I understand that some noble Lords do not agree with the Government's decision to take that reserve power. But we shall debate that at length on Report when further amendments have been tabled to Clause 18. Indeed, we have already had a debate about it in Committee. The Government believe that it is right to take that reserve power because of their commitments to parents that they would not have to pay any more than they do at present and also the commitments they have made to students.
I return to the issue on which there is confusion. Fees have been charged by universities, not the Government, for years and the Bill does nothing to affect that position. Moreover, exactly the same device has been used to secure contributions from students and their parents as is planned under this Bill; that is, the means-testing of government support for fees from 1963 to 1977 under the 1962 Act.
Our Second Reading debate on 11th December did not indicate any misunderstanding of our plans. At the end of that debate there was nothing to indicate to me that there was a misunderstanding on the charging of fees. Moreover, I said in relation to the Bill:
"It does not give the Secretary of State power to set university fees".—[Official Report, 11/12/97; col. 257–8.]
420
The noble Earl, Lord Russell, seemed to indicate his understanding of the status of universities when he said:
"Universities are not nationalised industries. They arc private corporations".
Later, when referring to fees, he said:
"I appreciate that the noble Baroness is technically right that the university is still free to set its own level".—[Official Report, 11/12/97; col. 286.]
In view of that, I was genuinely unaware that the noble Earl, Lord Russell, believed that the Government thought that they had power to charge directly. I can only apologise for the fact that I was unaware of that. The noble Earl's misunderstanding, which first came to light in Committee, seemed to have stemmed from his misinterpretation of my department's memorandum to the Delegated Powers and Deregulation Committee. Before that time, I did not know that there was a misunderstanding. Had I done so, I should certainly have agreed to meet the noble Earl to try to clarify the position. When the misunderstanding became apparent, the noble Earl will recall that I took the first opportunity, at about five o'clock on 26th January, to meet him and his noble friend Lord Tope, together with the senior legal adviser from my department, to clarify the matter. Of course, any misunderstanding is always regrettable and I know that the noble Earl was grateful to my officials and thanked them for their assistance in trying to put the matter right.
From the Delegated Powers and Deregulation Committee memorandum, the noble Earl came to the conclusion that the Government believed that they had the power to charge fees. I do not wish to go into more detail about that because it would not be particularly helpful at this stage.
I shall now deal with one or two points raised by other noble Lords. I am rather puzzled by what the noble Baroness, Lady Blatch, said. During our Second Reading debate she asked some 37 quite specific questions but none of them related to the charging of fees. I should certainly have responded before the Committee stage had she raised a question on such an important point. But again I had no idea that there was any misunderstanding of the provisions of the Bill on her part until the noble Earl, Lord Russell, intervened on that point in Committee.
The noble Lord, Lord Renfrew, will forgive me if I do not become involved in the issue of college fees at Oxbridge. That is quite a different matter. It is not an issue for this Bill. No legislation is required for the Government to respond to the recommendation made by the noble Lord, Lord Dearing, and his committee of inquiry but it is a matter that should be looked at by the Government. The Government have referred it to the HEFC.
The noble Lord, Lord Renfrew, my noble friend Lord Glenamara and the noble Baroness, Lady Blatch, have objected to what they consider to be skeletal provisions. However, we have had extensive debate about the nature of those provisions during the passage of the Bill. I have tried to explain that it is right that we should put much of the detail of a Bill of this sort into regulations.

421
I believe that that is right so that when the higher education system changes, as it may well do, we do not have to come back with primary legislation.
I should say to the noble Lord, Lord Baker, that there really can be no doubt that the Government have made quite clear what they intend to do. I do not believe that the noble Lord took part in the Committee stage of the Bill, although he spoke on the Second Reading. We have provided extensive documentation in relation to our intentions and have set out at length what is likely to form the vast bulk of the regulations. We have done that in language which is rather easier to follow and understand than draft regulations would be.
Lord Denham: My Lords, perhaps the noble Baroness will forgive me. I should like to ask the Leader of the House a question. Is not this procedure indicative of the fact that it is absolutely essential that the rules of order of this House be maintained? The noble Lord the Leader of the House suggested quite properly that the noble Lord, Lord Tope, was not in order to say that he would not move his amendment.
When the noble Lord decided not to press his amendment he had two options which would have been proper in this House. One would be—the least satisfactory option—to say "not moved" and then the House would have moved into Report in the normal way.
The second would be to move his amendment to the Motion, whereupon the noble Baroness on the Woolsack would have put that Question. The matter would then have been debated and he would have asked leave to withdraw the amendment. The House would then have had an opportunity to refuse him leave to withdraw it and come to a vote on it. We have had all this discussion purely because the rules of order have been allowed to be widened far more than they should have been. That is not at all the fault of the noble Lord the Leader of the House because he set about the matter in the right way. However, is it not absolutely essential that the rules of order in this House should be obeyed; otherwise, we enter a totally unjustifiable general debate on what is, after all, a procedural Motion?
Lord Richard: My Lords, the noble Lord invites me, I suppose, to give judgment on the proposition he puts to me. I can say only that I am advised that the Motion that this House do now move into Report is a debatable Motion. I tried to confine the limits of the debate upon that Motion in as polite a way as I could. We have had a series of Second Reading speeches. If the House wants to indulge itself in this way, it is difficult to see what I as Leader of the House can do to stop it.
Baroness Blackstone: My Lords, I have just tried to respond to some of the procedural points.
Lord Denham: My Lords, could not the Question be put, because if this debate continues we shall exacerbate the breaches of order in this House?
Lord Richard: My Lords, I believe that the debate is just about coming to a conclusion. I have great hopes
422
that it is. My noble friend the Minister is on her feet. I anticipate, and trust, that she is coming rapidly to a conclusion. In those circumstances the Question will then be put. I am advised that the noble Lord. Lord Tope, will not be entitled to say anything else in the course of this debate.
Lord Strathclyde: My Lords, I support very much what my noble friend Lord Denham said. We have got ourselves into a procedural muddle. That has been caused by the decision of the noble Lord, Lord Tope, not to proceed with his amendment. Will the noble Lord the Leader of the House examine how this has happened and try to make sure that the House does not get itself into the kind of mess in which it now finds itself, particularly as we are about to commence a Statement before reverting to the Bill? Am I also right in thinking that there is every likelihood that we shall not continue with this Bill after the Statement because it will then be time to discuss the Competition Bill?
Lord Richard: My Lords, I shall certainly take into account and ponder deeply the circumstances in which this debate has taken an hour and four minutes. I am bound to say that I regard it as basically the self-indulgence of many of those people who have spoken in it who have chosen to turn what is a narrow procedural point into a major Second Reading debate.
Baroness Blackstone: My Lords, I end by saying that obviously Bills are not, and could not possibly be, drafted with a view to assisting the Opposition to table amendments. Bills are drafted to give effect to government policy. The noble Baroness, Lady Blatch, seemed to expect the Government to spell out what the Bill does not do. However, I believe that is rather at odds with the normal mode of explanation where one explains what the legislation does. I am pleased that the noble Lord, Lord Tope, has decided not to move the Motion. I believe that the higher education sector would prefer not to see this Bill re-committed. Plenty of time has been made available for discussion on Report today, on Thursday and on Monday of next week. I very much look forward to that discussion.
Baroness Blatch: My Lords, before the noble Baroness sits down I raise a point which is important to the House. I understand that the noble Baroness wrote a letter on Friday, 20th February to the noble Lord, Lord Tope. Was the letter copied to me and was it copied to my noble friend Lord Renfrew?
Baroness Blackstone: No, my Lords. The Motion on the Order Paper was in the name of the noble Lord, Lord Tope. I did not think it appropriate for me to copy that letter to either the noble Baroness, Lady Blatch, or the noble Lord, Lord Renfrew.
On Question, Motion agreed to.

Planning for the Communities of the Future
4.14 p.m.
Baroness Hayman: My Lords, with the leave of the House, I shall now repeat a Statement being made by my right honourable friend the Deputy Prime Minister in another place. The Statement is as follows:
"Madam Speaker, I wish to make a Statement on planning for the communities of the future. A document setting out our approach is published today and has been placed in the Libraries of both Houses. This document includes a response to the public consultation on the previous administration's Green Paper, Household Growth: Where Shall We Live?
"I hope we can refocus this debate and, in doing so, change some of the language we use in it. To my mind, much of the debate so far has been clouded by unhelpful language, crude figures and confused statistics. For example, the term 'brownfield' is not helpful. I propose to talk about recycled land, which can, of course, be in cities, towns or villages. Greenfield is too often confused with green belt, as if the two were always the same. Most importantly, while the technical term 'household growth' is sometimes necessary, it does not adequately describe our main concern, which is to develop sustainable communities now and in the future.
"I hope that, following today's Statement, the Opposition will join us in a sensible debate about how to achieve that aim, while recognising the real difficulties involved in meeting household growth in a sustainable way. My department published the latest projections of growth in the number of households in March 1995 under the previous administration.
"The projections suggest that around an extra 175,000 households a year will form in the 25 years from 1991 to 2016. This is because of population growth and because people are living longer and couples are separating more often. Household growth has been outstripping population growth increasingly since the turn of the century.
"The dilemma is clear cut and affects us all—how to accommodate more households and, at the same time, protect our precious countryside, without rents, house prices or homelessness spiralling upwards. It is not just a matter of how many households but where they will live.
"There are four key elements in our new approach: first, increased flexibility. We shall emphasise that the projections are guidance not building requirements. Secondly, more decentralisation. Regional planning conferences will have more responsibility and accountability in deciding the most sustainable way of meeting the needs of their communities. Thirdly, making the best possible use of previously developed land and existing buildings. We must put the heart hack into our cities and put cities at the heart of our strategy. Fourthly, what I set out today is part and parcel of our determination to get better integration of a range of policies which affect communities.
424
"In order to achieve greater flexibility, we are determined to get away from a simplistic 'predict and provide' approach in housing, as we have done for road building. We will treat the household projections as guidance, not house building requirements. Moreover we will allow for greater flexibility in adjusting regional and local plans to ensure local provision is meeting local need over time.
"Decentralisation is an essential aim of this Government whether in devolution, in establishing the regional development agencies, or in our proposals for London. We therefore propose to strengthen the role of the regions in translating projections into regional planning guidance. The regional planning conferences will work together with the government offices to determine how much extra housing is needed in their regions.
"The aim will be to increase the local ownership of the figures so that local authorities translate this new regional guidance into plans and actions on the ground. I want to see better public information on the consequences of decisions on releasing land for housing, so that those responsible can be held accountable and the public debate can be better informed. I want this to be a truly bottom-up approach.
"The conferences may be able to justify lower or higher housing figures than those implied by the projections, but we will expect local authorities to monitor and report on the effects of their decisions. If the effects are damaging, authorities will need to act—or we may need in the last resort to intervene. But the whole philosophy of our new approach is to strengthen local responsibility and to have a bottom-up approach.
"We will move to this new approach as quickly as possible—in the reviews of regional planning guidance which are already underway.
"As soon as new regional planning guidance is ready, possibly as early as next year, it will be open to local authorities to review their development plans.
"In considering development plans in advance of new regional planning guidance, I will continue to treat each case on its merits, taking account of this statement.
"It is our firm policy to protect our countryside and revitalise our towns and cities, by maximising the use of recycled land and existing buildings. One of the most effective ways of relieving the pressure on the countryside is to revitalise our cities and improve the quality of urban life. That is why I have called for an urban renaissance in Britain.
"This will require a whole range of measures. It is not just a matter of urban housing, let alone planning. It is about tackling the range of problems affecting the quality of urban life—whether it is crime, education, jobs, transport or the environment. Many of these same problems also affect rural communities, to which we must also direct our attention.
"Last Wednesday, I unveiled the winner of the millennium village competition. This is a flagship scheme, providing 1,400 homes on recycled land at

425
Greenwich. The development will be built to the highest quality of architectural and environmental design. Energy use will be 80 per cent. better than average. Every home will be linked to the Internet, opening new horizons of communication. This will be a development for a whole community. There will be homes for rent as well as homes to buy, with provision for jobs, shops, public transport, health and schooling.
"The millennium village will point the way for urban regeneration in the future and I have asked English Partnerships to seek out other similar sites for urban villages to share the benefits throughout the country.
"This initiative will run alongside our other main programmes—nearly £1 billion under the capital receipts initiative, £250 million announced last week under the Estates Renewal Challenge Fund and our other urban regeneration programmes.
"These sorts of initiatives will help to meet a higher proportion of future housing need on recycled land in our towns and cities, rather than in the countryside.
"The target set by the previous administration was `that, by 2005, half of all new housing should be built on re-used sites'. In practice, it was able to achieve an average of 42 per cent. between 1985 and 1995—rising from 38 per cent. in 1985 to 50 per cent. in 1995. Those figures are national averages—ranging from 33 per cent. in the East Midlands to 83 per cent. in London. But the target was not based on any assessment of the availability of recycled land.
"In future, we will expect each regional planning conference to make a proper assessment of land availability and set regional targets for the use of recycled land. This has never been done before and is an important change. It will sharpen the focus of policy and action on the ground.
"Last week, I asked my department to work with English Partnerships and local government to create a national database of land use which will give local authorities reliable information on the amount of recycled land available for housing.
"Today, I can go further. Local authorities, developers, builders, and the professions have all been looking for a lead. To spearhead this unprecedented collective effort, I have established a Task Force to help make better use of recycled land. I have asked my noble friend Lord Rogers of Riverside to lead it. It will co-ordinate and develop the wide range of activity and innovation underway.
"I consider that a national target for the use of recycled land can help guide regions and local authorities, and help them improve on their performance. With our new policies in place, we expect local planning authorities to be able to raise the national proportion of new homes to be built on previously developed land to 60 per cent. over the next 10 years. We will come back to refine the national target in the light of regional targets when they are known and when our database is established.
426
"We also want for the first time to measure separately the re-use of previously developed land in urban areas and in rural areas, so we can get a better focus on urban re-development.
"Many of the respondents to the Green Paper accepted that 60 per cent. would not be easy. No-one should underestimate the problems and costs of redeveloping some sites, such as those which are contaminated. Indeed, it cost over £100 million to clean up the Greenwich millennium peninsula alone.
"If we are to make our towns and cities attractive places to live and work in, we must ensure a good quality of life. That is why we reject so-called 'urban cramming' and pressure to build on green spaces in towns. Our parks and green spaces are part of what makes town living attractive. That is why we have strengthened the protection against building on school playing fields.
"I now come to an important new element in our proposals. We propose to follow a sequential approach to the location of new housing and a phased approach to the release of land. Whenever possible, recycled land in urban areas should be built on first, provided it can be well linked to public transport, jobs, shops and other facilities. The same tests will also apply to the sequence of development of greenfield sites. We will also need to allow for release of empty property and so called 'windfall sites'.
"Some of the responses to the previous Government's Green Paper called for economic instruments, such as a greenfield tax, to be introduced. As a first step, we want to open up debate on the use of this type of measure. Final decisions on taxation are, of course, a matter for the Chancellor.
"Much of the debate has concentrated on urban housing, but we must also allow for the housing needs of people in rural areas. Many country people are deeply concerned at the lack of affordable housing, often while houses are bought up by wealthier commuters or bought as holiday cottages. A young couple in a village have every much a right to a decent home as their counterparts in the town.
"Members will be aware of the recent report by the Rural Development Commission, the '1997 survey of rural services', which highlighted specific problems in the rural economy. Communities fall into decline and are no longer able to sustain jobs and essential local services. These problems are particularly acute in our former coalfield communities, which are often in rural areas, where the pit closures left those communities devastated. We must find new ways to address these problems. We want to see thriving communities in our rural areas—a living countryside.
"It was the post-war Labour government which laid the foundations of the modern town and country planning system, including green belts and national parks.
"The Government remain committed to protect the green belts and the wider countryside—protection of the green belt is as strong as ever.

427
"Any new development, whether in town or country, must he sustainable development. And there will be exceptional cases—such as in Hertfordshire—where pursuing the most sustainable solution leads to adjustments to green belts.
"Nevertheless I would point out that since we came into office, more green belt—over 30,000 hectares—has been added than taken away by changes to boundaries. I anticipate that trend will continue during this Parliament.
"Finally, successful community development depends on a wide range of policies. We will tilt the balance in favour of urban development—not only through the planning process itself, but through fairer regional development, improving our public transport, raising standards in our schools and tackling crime.
"We shall now consult on how best to implement these proposals and take them forward in partnership with those most involved, especially the regional planning conferences.
"This statement represents a break with the past on one of the most important issues facing us today: how and where we should live. We want to replace the top-down 'predict and provide' mentality of the past, with a system which is more responsive, more accountable, and better able to revitalise our towns and cities and protect a living countryside, which we can all enjoy.
"I believe these proposals will help us achieve our twin aims of an urban renaissance and of ensuring we hand on a green and pleasant land for future generations."
My Lords, that concludes the Statement.
4.30 p.m.
Lord Bowness: My Lords, I thank the noble Lady for repeating the Statement in this House. The Statement represents a significant change of heart on the part of the Government. It is regrettable that it had not been made before several disastrous decisions.
In the light of this review, can the Minister say whether the extra 12,000 houses that were permitted in East Sussex, the 150 acres of industrial development of green belt near Sutton Coldfield, the 12,000 acres of green belt released for house building near Newcastle and the 10,000 houses to be built on green belt land at Stevenage covering 1,000 acres will be reconsidered? Will the Minister acknowledge that the then Shadow Minister for Housing, Mr. Raynsford, was clearly wrong when he described the target of 60 per cent. as a recipe for disaster and, perhaps more important, confirm that the belief that the green belt is "up for grabs", as referred to by another present Minister, no longer exists in the Department?
The Statement says that more green belt has been added than taken away. Whatever definitions of land one uses, whether "green belt", "greenfield" or "recycled land", the fact is that when green and undeveloped land is lost through boundary changes, that undeveloped, open and green land is taken away. It is
428
no good saying that one has increased the amount of land classified as green belt; when what I have described occurs, there is a net loss of undeveloped land.
I hope the Minister will agree that, in the light of the Statement, there is now some common ground. The previous government doubled the amount of green belt, toughened the restrictions on green belt development and made it clear that the projected 4.4 million homes could not be achieved by the use of greenfield sites. The previous administration pushed up the proportion of new homes being built on brownfield sites, as the Statement acknowledges, to some 50 per cent. Indeed, the Conservative Party made a manifesto commitment that more than 60 per cent. of the required homes should be built on brownfield sites. We suggested two-thirds; Friends of the Earth and the United Kingdom Round Table on Sustainable Development suggested 75 per cent.
The statement refers to planning tools. Perhaps the Minister will be kind enough to tell the House whether account will be taken of planning procedures. If the building targets are to be achieved, there is a need for as many decisions as possible to be made within the statutory time. But they should be real decisions, not refusals by local authorities with a request for resubmission in order to keep up the number of decisions made within the eight-week period.
The Statement also mentions a greenfield tax as having been referred to in the responses to the previous administration's consultation paper. I hope the Minister will acknowledge that there may be grave doubts about such a tax in that it would somehow give acceptability to the idea of developing open sites and would probably not be effective unless levied at a penal rate.
The Statement also refers to decisions being taken at a regional level. I hope that the Minister will be able to tell the House a little more about how the regional targets are to be set. Perhaps she can at some time confirm that the planning powers dropped last week from the Regional Development Agencies Bill will not be introduced under cover of decisions by regional planning conferences. Given the statutory planning role of local authorities, we need to know how the regional planning conferences will interact with local authorities, which are the accountable planning authorities in the area.
The involvement of the noble Lord, Lord Rogers of Riverside, will, I am sure, be welcomed on all sides of the House. His views about cities for people, and how they need to be revitalised and the quality of life improved, should be an influence for encouraging imaginative developments in cities to provide the homes needed in centres near to facilities and employment rather than outside, which lower targets for inner city housebuilding would mean and which one clearly wishes to avoid.
The Statement refers to the Millennium Village. Perhaps the Minister can at another time tell the House more about the density of that development, what provision for open space will be made there and how the contamination of the site has been dealt with. Matters of that kind will be important with regard to the development of many sites in city centres.

429
The conversion of the Government to the cause of the green belts is welcome, but the unfortunate decisions made since they have been in office, which have been more in line with Statements made previously than in this Statement, have left people wondering about their real intentions towards green belt and greenfield sites. We hope we shall see real progress towards achieving the target, reconsideration of some of the more unfortunate decisions, and evidence of a real commitment to preserving green belt and urban renewal. Those two aspects must go hand in hand if we are to achieve the aims of the Statement.
4.35 p.m.
Baroness Hamwee: My Lords, I too thank the Minister for repeating the Statement and welcome it from these Benches. We welcome the commitment to changing the language and the effort to turn action on these problems into a co-operative venture, not one of confrontation.
The Minister referred to the confusion between "greenfield" and "green belt". While she and her right honourable friend are correct about that, I hope that she will be able to confirm that the protection of the green belt and, in London, metropolitan open land remains a matter of important consideration, as will the protection of areas of outstanding natural beauty, which at present do not have the statutory protection that many of us believe they should have.
We welcome all efforts to ensure that projections are as up to date as possible. We regard it as essential that they should command confidence. It would be welcome if they could be rolling projections; namely, projections which remain the working figures, not projections taken as a snapshot which become out of date.
We welcome the focus on regional decision-making, though we, too, are concerned about how that decision-making will interrelate with decisions at the level of local planning authorities who want to protect their precious areas, whether in town or country, and who want to achieve affordable housing but at present do not have the mechanisms to do so. However, perhaps I may inject a note of concern and caution about whether the regional structures at present and as foreseen in the short and medium-term will be adequate. The regional planning conferences, made up of people indirectly representing local areas rather than people elected to deal with regional planning as their primary job, are probably of variable quality and certainly variable in their approach to the problems.
We also welcome the comments on the simplistic predict-and-provide approach, although I believe it has not been so much predict and provide—because the provision of affordable housing has not been achieved—as predict and prepare; or perhaps not even as much as prepare.
We note that decentralisation is an essential aim, but we note also that much of the thrust of the Statement is on centralised decisions, and certainly a centralised structure and framework.
430
We warmly support the aim to increase the local ownership of the figures, as indicated, but there is a dilemma that ownership—to use the jargon term—takes time; community participation is not a speedy process.
We note the problems affecting the quality of urban life and agree with the list. However, we note too that tackling crime requires attention to police numbers. Though I appreciate that that is not a matter for the Minister's department, tackling crime will require more investment in our police forces than the Government have attempted to provide—adopting as they have previous Treasury plans.
Much of the Statement causes me to ask how the proposals are to be achieved. How can the cost of cleaning up be met? How can good social mixes in housing be achieved, both in town and country, particularly when the investment in social housing leaves an enormous shortfall?
I note the establishment of the task force and welcome the appointment of the noble Lord, Lord Rogers of Riverside. In view of his commitment to lively urban areas I shall be interested to know more of his remit to co-ordinate and develop a wide range of activity and innovation. It is a huge task hut, at any rate in the Statement, not a well-defined task.
I note the reference to the release of empty properties and to allowing for such release. I assume that that is in connection with the statistics. I hope that the Minister can say something more about how the use of empty properties—particularly that in public ownership—can be encouraged. I hope, too, that in the whole debate attention can also be paid to the refurbishment of our housing stock. Not to attend to the condition of housing stock will mean increasing, not reducing, the problem.
As I indicated, though we welcome the Statement, we regard it more of a Statement than a set of proposals. We look forward to discussing mechanisms to achieve the laudable objectives, particularly the measures which I accept are within the aegis of the Exchequer rather than within the Minister's department. I hope, too, that there will be some carrots in the proposals as well as sticks. I do not believe that, without carrots, any of the sticks can work. We welcome taking forward this difficult issue.
4.43 p.m.
Baroness Hayman: My Lords, I am grateful for the welcome given, with differing degrees of grudgingness from the two Front Benches opposite, to the Statement, and particularly to the announcement of the appointment of my noble friend Lord Rogers of Riverside to lead the task force. The task force will play an important role in the identification of recycled land that can be used.
A number of detailed questions were raised and the noble Baroness, Lady Hamwee, was right to point out that we are at the beginning of a process. This is very much setting out the framework that the Government wish to see; the policies that we believe will enable the framework to develop, and for us to meet our aims. But it is a matter on which we must consult, particularly with those who will have the prime responsibility for implementation and particularly at a regional level.

431
There is, therefore, a lot of work still to be done, but we believe that we have a firm foundation on which to build.
The noble Baroness also said that we should be setting ourselves robust targets on figures in which we all have confidence. That has been one of the problems that undermined some areas of the debate in the past, particularly in relation to the key issue of targets for re-used land by 2005. Those targets are based on evidence of what is achievable and that is why we are proposing a database of land uses. It will be crucial in establishing exactly what can be done at local and regional levels.
In that regard we are talking about achievement, and that must be the crucial point. With the greatest respect to the noble Lord, Lord Bowness, it is not a question of saying, "Our target is bigger than your target"; it is about what we manage as a nation to achieve and how we manage to strike the real balances that must be struck between the need for affordable homes and housing to meet household growth and the desire both to protect the countryside and regenerate urban areas.
I stress again something that is accepted in this House; that is, that it is important that we do not believe that we protect the countryside simply by maintaining it in aspic as it is now. There are rural housing needs, particularly for local families, just as there are needs for rural transport, rural shopping, rural education and rural jobs. We must look at those communities as well as the urban communities.
On the question of looking at regional planning conferences and how they take the situation forward, it is essential that they are strong enough to do that work; to command confidence among the local authorities with the targets that they set; and, as I said, to monitor the results. The government offices for the regions will be working with the regional planning conferences because we do not want it to be an exercise in centralisation—a danger to which the noble Baroness alluded. We want to reach agreement with regional planning conferences rather than having to overrule them.
It was a shame that the noble Lord, Lord Bowness, chose to categorise the decisions that have been taken as "disastrous". It is important to look both at the overall commitment of this Government to the green belt and the overall increase in green belt provision that has happened in the past months. For example, there was the creation of a whole new green belt around Durham. It is important that we look not at boundaries that are unchanging and unchangeable, but at the functions that the green belt is meant to fulfil and at how effectively it is doing that. We cannot lose sight of the overall aims which concern sustainability.
Decisions that have been made were made on that basis. In terms of reconsidering those decisions—for example, in relation to Newcastle—the changes to the unitary development plan have been adopted. In relation to West Sussex, the authority sought judicial review and therefore it would be wrong for me to comment. We have no plans to review other decisions. However, it is open to local authorities to review their own plans in the light of the new regional planning guidance, once it has been prepared.
432
Moving from 50 per cent.—the House should remember that the achievement under the 50 per cent. target was actually an average of 42 per cent.—to a 60 per cent. target for new homes on recycled land is a challenging target. That was recognised by those who responded. Those targets need to be based on hard information and that is what we will get through the land use database.
Regarding the details of the millennium village, I shall write to the noble Lord on the issue of density. However, as I pointed out in the Statement, the cost of the reclamation was very high. We were talking of £100 million. It is the relative costs as between greenfield and recycled land development which have led many people to raise the issue—although the Green Paper did not—of economic instruments. Many people argued that local authorities would need adequate tools in order to achieve higher rates of recycling. They suggested greenfield taxes, incentives in relation to the use of recycled land or a greater use of planning obligations. The recent Statement that we issued, Modernising Planning, proposes examining the issue and holding discussions. I note the comments of the noble Lord, Lord Bowness, and repeat mine: ultimately these are issues for the Chancellor of the Exchequer.
Finally, turning to the specific point about the regional development agencies' reserve planning powers, in another place my honourable friend the Minister for the Regions, Regeneration and Planning agreed that in the light of arguments put on behalf of the Local Government Association from our own side during the Committee stage of the Bill, he would re-examine the need for reserve planning provisions—the provisions in Clauses 24 to 27 of the Bill to be transferred from English Partnerships are very much "reserve" provisions—and bring forward amendments in time for Report stage.
4.51 p.m.
Lord Swinfen: My Lords, the Minister said that one of the problems causing a shortage of housing was couples separating. Without going into any Budget secrets (because I know that she cannot) can the Minister assure the House that the Government are examining both their fiscal policy and their social security policy to ensure that every possible help is given to couples to encourage them to stay together? That will help in reducing the demand for separate housing.
On another point, there are centres of cities and towns which are dead, particularly after the shops close. They used not to be. I am sure that there is a lot of old residential accommodation above shops which is now not used. Can encouragement be given to the owners and lessors of those shops to ensure that that wasted accommodation is brought back into residential use? Not only will it help to house people; but also, because people will live regularly in those areas, it will help to make those centres safer in the evening in relation to both individuals and property.
Baroness Hayman: Yes, my Lords, we have discussed previously in this House the need to ensure

433
that residential property over shops is brought into use wherever possible. I very much accept the noble Lord's point. If we are to regenerate city centres, we must make them places where people want to live, where they are able to live in retirement and where they feel safe to bring up their children. That means examining a whole range of issues. People will not wish to live in places which are desolate wastelands at night, where they do not feel secure and where the environment is not one in which they and their families wish to conduct their lives. It is important to examine specific issues and ensure mixed developments—shopping, residential and leisure developments—and that feeds into the sequential approach to planning permissions for other developments, particularly those that are out of town in terms of matters such as shopping.
Turning to the issue of marital breakdown increasing demand for household formation, it is an example of how wide the policies to be considered need to range. The social factors that contribute to housing demand go far wider, as the noble Lord pointed out, than simply the responsibilities of any one government department.
Baroness Nicol: My Lords, I warmly welcome the Statement, and I am sure that it will be widely welcomed in the country. I wish to put two very brief questions. I was pleased to hear that there will be a presumption in favour of using recycled land in localities first before greenfield developments are encouraged. Will any kind of advice or guidance be issued to local authorities to make sure that they are aware of the desire for that presumption? Secondly, have the Government made quite sure that everyone is aware of the polluter pays principle? In many cases, the authors of the contamination of land can be traced, and we have a firm commitment to use that principle wherever possible. It would be of considerable help in encouraging development on recycled land.
Baroness Hayman: My Lords, I note my noble friend's point regarding the importance of ensuring that all possible resources are brought in to clean up the land that needs to he used again. On the point about advice to local authorities, it is right that, although much is going on, there is also a need for a lead in this area, and for examples of good practice for local authorities, developers, builders and the professions to know where they can go in order to ensure that their efforts contribute to the national effort. I am sure that the task force led by my noble friend Lord Rogers of Riverside will include in its agenda not only how it can co-ordinate and develop the wide range of activity and innovation that is under way, but also how it can make sure that advice is disseminated to those who need to implement it.
Lord Rix: My Lords, several references have been made to the millennium village at Greenwich and the clearance of the millennium site at a cost of £100 million. Does the Minister agree that if urban development is to take place successfully, particularly in the millennium village, it would be a tragedy if the
434
Greenwich Theatre, which is already in place there, were to be allowed to close for the want of a quarter of a million pounds? I should have thought that the theatre would provide much-needed help to the infrastructure of the millennium village when it is finally built. Secondly, will the Minister assure the House that in the millennium village and in other urban developments of a similar nature, there will be due reference and that due care will be taken to provide housing for those in need and under care in the community?
Baroness Hayman: My Lords, I congratulate the noble Lord on raising two issues which I know are dear to his heart in the context of this Statement and the millennium village. So far as the theatre is concerned, I know that my right honourable friend the Deputy Prime Minister is anxious that this should be a rounded development in which people can take leisure, receive education, do their shopping and everything else. While in no way committing the Government to the expenditure that the noble Lord suggests, I will certainly draw to the attention of my right honourable friend the needs of the theatre.
On a broader point, it is proper to remind us that, when we talk of communities, developments have to be inclusive and meet the needs of a wide range of citizens.
Lord Howell of Guildford: My Lords, now that the famous 4.4 million figure for housing projection has in effect been declared redundant, or indeed watered down, does the Minister agree that it would be sensible to advise all the county authorities which are busy reviewing their structure plans, holding public inquiries and spending quite a lot of public money on the basis of those figures, to freeze their plans for the time being since, clearly, they are based on invalid figures which are to be revised?
Baroness Hayman: My Lords, I am not sure that the noble Lord is right to say that the figures are to be revised and are necessarily invalid. The technical figures for household projection and projected growth will still have a role to play. What we are doing is making sure that those figures are for guidance, and are not requirements for building. In fact, many of the development plans coming forward at the moment are based not on the 4.4 million figure from 1995, but in fact the earlier, 1992 figures.
Lord Taylor of Gryfe: My Lords, I congratulate the Minister on these exciting and imaginative plans. In her peroration she said something about restoring England's land. I should like to ask whether this is a devolved subject. Will the imaginative plans that have been outlined this afternoon apply to the Scottish parliament, which is to be set up in May of next year? If that is so, and if considerable public funds are involved—the millennium village will call for a large investment of public funds—will appropriate financial arrangements be made? That would enable us not only to talk about England's green and pleasant land but also about the United Kingdom's green and pleasant land.
Baroness Hayman: My Lords, I am almost 100 per cent. certain that the Statement refers to

435
England. I should know better than to come to your Lordships' House without adequate territorial briefing on all aspects of the matter. Perhaps I may undertake to write to my noble friend on this issue.
Lord Monkswell: My Lords, I thank my noble friend most warmly for repeating the Statement, which I think the whole House will very much welcome. I was particularly pleased by the reference to urban renaissance in Britain. In answer to the previous questioner, the Statement refers to Britain, and I think we should be glad about that. The Minister also said that this was the beginning of a process. I should like to press the Minister slightly on the subject of increasing household growth, which is happening mainly because people are living longer and couples are separating more often, whereas in the original projections it was said that young people tended to leave home and set up on their own. Can we hope that the Government will engage all their activities—whether it is fiscal policy, social policy, architectural policy and planning policy—to ensure not only that we have urban renaissance but also that we have a social renaissance? We can build on the idea that people should live, work and play together.
Baroness Hayman: My Lords, I am aware of my noble friend's interest in this subject. We should not take the social trends that have led to increased household formation as irreversible or as necessarily to continue. A whole range of different factors influences the numbers of households, factors such as younger people living away from home earlier, marriage breakdown and elderly people living on their own rather than in groups, an issue which we discussed in your Lordships' House last week. There are significant factors at work which can ebb and flow and which can change the figures. However, there is a trend of household growth going ahead of population growth which has been apparent from the beginning of the century. Although these figures may not be absolutely right and factors may change within them, we should not assume that the tide will be completely turned back.
Lord Graham of Edmonton: My Lords, perhaps I may take the Minister back to the golden years of 1974 to 1979, when she and I had the privilege to represent constituencies in another place, and remind her that one of the most depressing aspects of a surgery was to sit there time after time and hear the wretched and heart-rending cases of those in housing need. Therefore, I look upon this as a Green Paper of courage and vision. I congratulate the Government and the Minister on showing that courage and vision and on bringing forward what I consider to be a comprehensive plan. Does she agree that under the fourth direction of the basis of the paper, which I took down as a range of policies which affect communities, careful consideration should be given to stimulating and encouraging the growth of co-operative housing in its many forms? Co-operative housing needs stimulus, direction and guidance. The housing corporation and the Government can do a great deal to encourage that. When the Minister and her colleagues are considering
436
what advice they should give to the various levels, I very much hope that they will be able to encourage the use of tenant management policies and objectives whereby the tenant—the member of the housing co-operative—has a far better opportunity to influence the policies than he has under any other system.
Baroness Hayman: My Lords, I am well aware of my noble friend's longstanding interest in matters co-operative, which even pre-dated 1974 to 1979. I very much take his point about the potential role of co-operative housing. I am sure that those representing it will contribute to the consultation on how we implement these proposals and take them forward in partnership with the range of organisations—voluntary and local authority organisations and regional planning conferences—that will need to take them in. Throughout the Statement and the formulation of policy we are looking to implement twin ends.
There is the important issue of protecting the countryside, for all the reasons that are very often expounded in your Lordships' House. But we have to do that in a way that does not create enormous stress on those who are without homes. We have to find ways of doing it that do not allow rent levels and house prices to go spiralling upwards and put even more people into the kind of housing distress which is suffered by too many in our community today.
The Earl of Harrowby: My Lords, the Minister should be congratulated on her defence of the green belt. However, I wonder whether she is aware that abuse of the green belt comes from other sources as well. I particularly refer to the West Midlands, where foreign concerns involved in industrial development are interested only in the use of green land and solely for aesthetic reasons. The department should be aware of that.
Baroness Hayman: My Lords, I note the points made by the noble Earl. Green belt decisions are essentially local ones. They are matters for local authorities and regional planning conferences to weigh up. The competing demands of housing and industry are best considered at a local level, with intervention only as very much the last resort.
The Earl of Harrowby: My Lords, when a £100 million subsidy is at stake it does not quite work like that.

Business
Lord Carter: My Lords, it has been agreed through the usual channels that consideration of the Teaching and Higher Education Bill will now proceed for about one hour. The rest of the groups of amendments on today's list will be taken on Thursday and consideration on Monday will begin with Clause 16. The Report stage

437
of the Competition Bill will continue today after the Teaching and Higher Education Bill, and the social security orders will be taken in the dinner adjournment.

Teaching and Higher Education Bill [H.L.]
5.10 p.m.
Consideration of amendments on Report.
Clause 1 [The General Teaching Council]:
Baroness Carnegy of Lour Baroness Carnegy of Lour moved Amendment No. 1:
Page 1, line 11, after first ("Council") insert ("for England and Wales").
The noble Baroness said: My Lords, we begin the Report stage of the Bill with consideration of the clauses creating a new general teaching council. This is a simple amendment and, I believe, it should not detain the House long. However, the amendment is important. Its intention is simply to change the name of the council from the general teaching council, as the Bill proposes, to the General Teaching Council for England and Wales. In studying the record of the Committee stage of this part of the Bill, it struck me—and it has since struck the registrar of the GTC for Scotland—that it is in the interests of all concerned that there should be no confusion between the existing General Teaching Council for Scotland and the new one which the Bill sets out.
In the early stages of the council I suggest that this will be especially important. Unless the Government relent and take on board some of the amendments on the Marshalled List, such as those of my noble friend Lady Young, the new general teaching council will have virtually no executive powers while the Scottish general teaching council has many. The two bodies will be very different indeed. It will be important that nobody mixes their functions.
I appreciate—and for this I apologise—that the amendment on its own, if accepted in principle, will necessitate further amendments elsewhere in the Bill. I am sure that the noble Baroness will castigate me on that point. I am sorry that I have not sorted out the consequential amendments. That is particularly important in order that the change is valid when the general teaching council for Wales separates from the parent body.
I hope that the wording is not a stumbling block and that the flexibility which the noble Baroness is aiming to bring to the Report stage will extend to some of the amendments as well as to the procedure. This is a matter on which she should be flexible. I hope that the Government and the House will feel able to change the name of the general teaching council in this way. I beg to move.
Lord Butterfield: My Lords, I support this amendment. It is not recognised in this country how much work the General Teaching Council for Scotland has been doing. It is very important that because of the
438
differences which will undoubtedly emerge between the general teaching councils in the different countries that they are recognised by their names. I strongly support this amendment.
Baroness Blackstone: My Lords, I am very happy to accept the principle that the GTC's name should reflect its territorial responsibilities to avoid confusion between the councils covering different parts of the United Kingdom. The last thing I would wish to do is castigate the noble Baroness for what she has said. However, I am advised that the wording would need to provide both for the council to be called The GTC for England and Wales in the first instance and also for it to be re-named The GTC for England once a separate GTC for Wales has been established under Clause 6. I believe that the noble Baroness has already alluded to that and I fully understand. If the noble Baroness is prepared to withdraw her amendment, I will undertake to bring forward an appropriate amendment at the next stage to achieve what she is seeking.
Baroness Carnegy of Lour: My Lords, I thank the noble Baroness very much indeed for that response. It was the problem of how to word the Bill for the circumstances that she identifies. It was impossible for me to do that. This is a very good start to the Report stage and I am sure that the House appreciates it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blackstone Baroness Blackstone moved Amendment No. 2:
Page 1, line 11, at end insert—
("() The principal aims of the Council in exercising their functions are—

(a) to contribute to improving the standards of teaching and the quality of learning, and

(b) to maintain and improve standards of professional conduct amongst teachers,

in the interests of the public.").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 3, 12 and 14. During debate a number of amendments were tabled by the noble Baronesses, Lady Young and Lady Maddock, and the noble Lords, Lord Northbourne and Lord Tope, which sought to set out on the face of the Bill an objective for the GTC. I agreed to consider the proposed amendments further. I have now done so and I am returning to the House with Amendment No. 2, which sets out a principal aim for the council.
The GTC will be the professional body for teachers. It will represent the highest professional standards. I believe that we can all agree that it will promote a positive image of teaching both within the profession and outside. It will play a vital role in improving standards of teaching and the quality of learning and will maintain and improve standards of professional conduct among teachers. The amendment I am proposing sets this out clearly as a principal aim for the council.
I also believe it is right that the GTC should be a body not just concerned with protecting the interests of its own members. It should be outward-looking and

439
speak out where standards are not as they should be. It will be working to raise the quality of teaching and learning in our schools for the benefit of parents, pupils, and the wider public. There are few professions as important as teaching. Teachers are responsible for the success of future generations. Any objectives for the GTC must therefore have these responsibilities to the wider public at their heart.
The amendment I have brought forward I believe reflects the principles behind the amendments tabled by the noble Baronesses and the noble Lords during Committee stage. There was some debate then about whether the GTC should also have an overall aim about enabling the profession to exercise responsibility for the standards and quality of its professional service and to offer advice. There were mixed views about that. In my view the GTC will achieve this by fulfilling its wider aims and its functions, as set out in the Bill. Therefore, I do not believe it is necessary, or indeed appropriate, to state this as an aim in itself.
I also indicated during debate in Committee that I was very sympathetic to the proposal made by the noble Lord. Lord Jenkin of Roding—I do not believe that he is in his place—that the council should be required to take into account the needs of disabled people in the course of its work. I have therefore brought forward Amendment No. 3, which will require the GTC to have regard to the requirements of disabled people when carrying out its functions. This parallels an existing duty placed on the Teacher Training Agency. I am grateful to the noble Lord, Lord Jenkin of Roding, for raising this very important issue, with his customary force and eloquence, through his amendment at Committee stage.
I should add, that I have also introduced a further amendment, Amendment No. 5, which we will be discussing later. This further amendment requires the Secretary of State to have regard to the need to reflect the interests of persons concerned with the teaching of persons with special educational needs when making regulations about the composition of the council. The Government are determined that their crusade for higher standards should encompass all learners. I believe that, taken together, Amendments Nos. 3 and 5 will ensure that the GTC will have regard to the interests of those with disabilities and learners with special educational needs when carrying out all its functions.
I turn now to Amendments Nos. 12 and 14, proposed by the noble Lord, Lord Tope, and his colleagues. The existing Clause 2 sets out what we believe should be the advisory functions of the GTC. This will be the professional body for teachers and it will be able to advise the Secretary of State on a broad range of matters related to teaching. These include standards of teaching; standards of conduct for teachers; the role of the teaching profession; the training, career development and performance management of teachers; recruitment to the teaching profession; and medical fitness to teach. It may also advise on individual cases of teachers' misconduct.
Amendment No. 12 suggests an expanded and reworded version of those responsibilities. On a number of points I believe our intentions are exactly the same,
440
and much as I respect the noble Lord's drafting skills I am not altogether persuaded of the case to amend or adjust the present wording.
There are also a number of significant additional responsibilities here which we would not see as properly falling to the GTC—at least in the first instance. I do not think it would be right, for example, for the GTC to take a role in advising on grounds for suspending and dismissing teachers. We have recently agreed new procedures with employers and unions for dealing with teachers who are not up to the job. It is for line managers and employers to identify teachers who are not performing to standard or who ought to be dismissed for other reasons. Suspending someone or dismissing them from a particular post is quite different to barring them from the profession. The Bill gives the GTC a power to advise on the latter, but I do not think it would be helpful to start cutting across the relationship between employer and employee. Responses to our consultation exercise last year displayed a wide range of views on this topic with many urging us to tread very carefully where employment matters were concerned.
I do not believe it would be right either for the advisory role of the GTC to be expanded to cover other aspects of education such as funding or the curriculum. In the initial years, at least, the focus of the GTC should be on teaching. We need to give the GTC time to develop and establish itself before its role expands any further.
In particular we should not set out to duplicate the advisory functions we have given to other public bodies. Other public bodies, such as the Qualification and Curriculum Authority, will certainly look to the GTC for advice on issues, but it would not be right to give the GTC a principal function of advising on the school curriculum, syllabuses, examinations and testing. Many of the advisory functions presently envisaged for the GTC will involve questions of resources, but I do not think that advising on the funding of the education service should be set out as a principal advisory function of the GTC.
Amendment No. 12 also provides for the GTC to establish such committees as it thinks appropriate. The GTC will already have this power under paragraph 9 of Schedule 1, so that part of the amendment is unnecessary.
Finally, I note that the amendment provides for the GTC to determine which other bodies it should advise. It is certainly not our intention to constrain the council's ability to play a full part in the national education debate. Where there are issues on which the council would be expected to have a professional perspective to offer, it should be able to do so. In practice, I do not think that Clause 2 would unduly limit the GTC. We have already provided in Clause 2(5) for the GTC to publish its advice, so it would be open for any other body to take note of it. The amendment appears to remove that power from the GTC. I am not sure whether that was intentional. However, I am persuaded that we should consider further whether Clause 2 fully secures our intention that the GTC should be a major partner in the national drive to raise standards in schools.
I must also resist Amendment No. 14, again proposed by the noble Lord, Lord Tope, and his colleagues. It seeks to provide that the GTC should be given a greater role in promoting teaching as a career and in the continuing professional development of teachers. In England, those functions currently rest with the Teacher Training Agency. I do not think that it would be a good idea to see the TTA's statutory responsibilities weakened or its critical work in any way undermined. The TTA is doing a good job. We have recently given it a major new remit to ensure that good quality candidates are attracted to the teaching profession and receive the training and professional development they need throughout their careers. If experience shows that we need to consider the balance of statutory duties between the GTC and the TTA we may return to that in the next Parliament. It may be that the case proposed by the noble Lord, Lord Tope, and his colleagues is drawn from the clauses referring to the GTC for Wales. However, the situation in Wales is rather different because there only a small TTA unit has responsibility for a very limited range of functions. I beg to move.
Baroness Maddock: My Lords, when I wound up for my party at Second Reading—at nearly midnight—I forecast that the Bill would have a rough ride. I did not expect, however, that it would be quite as bad as it has been, as today has shown.
I begin by being positive. I welcome the government amendments. The Government have listened to what we said in Committee and we thank the Minister for that. It would be most ungracious not to do that because I notice that the phrases, "principal aims", "standards of teaching", and "quality of learning" have been incorporated in the government amendments.
I realise that it may sound a little pedantic but I do not apologise for what I am about to say because other noble Lords agree with our concern. Indeed, the way in which the teaching profession has been treated in past years means that we have to be careful now. That is why I am disappointed that the Minister has not adopted our phrase, "to maintain and enhance", but has used instead the term, "to maintain and improve". We believe that the word "improve" has a slightly negative implication which is not helpful.
I turn now to our amendments, Amendments Nos. 12 and 14, which we hope will become Clauses 2 and 4. In doing so, I stress once again the importance of having as a general teaching council an independent professional body which can give the teaching profession status and authority. Many of us fear that, if we are not careful, such a body may become merely an arm of government. In passing, I must add that we warmly welcome Amendment No. 3 which ensures that the specific requirements of persons who are disabled are included on the face of the Bill.
Amendments Nos. 12 and 14 set out fully what we see as the functions of the council and the activities we believe it is right for the council to carry out. We feel that the present proposals give the GTC far too limited a role. Indeed, it is mainly an advisory role. Perhaps I
442
should have referred to "the present proposals as far as we know them" because regulations are to follow and we do not quite know what will be the end result.
I believe that everyone, including the Government, is agreed that the setting up of the GTC is intended to have the effect of raising the status and esteem of the teaching profession. I believe that our two proposed new clauses leave teachers in no doubt that that is what we on these Benches want to see happen. Whether the Government have the same vision is open to question. The Minister has spelt out the differences between her vision and ours. I am not particularly optimistic that all that we would like will be taken on board so that we can have a truly effective general teaching council. This is particularly disappointing, because what we propose is precisely in line with the words of the Minister for School Standards when launching the consultation document on the Government's proposals for the general teaching council. He said that the aim was,
"to enhance the standing of teachers by giving them a clear professional voice, independent of government hut working with us to raise standards".
That is what we seek to achieve by many of our amendments.
As the Minister pointed out, subsection (2) of the proposed new Clause 2 seeks to do very similar things to those proposed in the Government's clause. We make no apologies for that, because we have removed the Government's clause and included it in our new clause. Subsection (3) of our new clause makes clear that it is for the council to decide which other bodies it advises, not the Secretary of State. That point was discussed in Committee. Our proposed subsection (4) reintroduces some material. In part this was supported by the noble Baroness, Lady Young, when discussing amendments in Committee. Originally they were tabled to amend Clause 1. It emphasises standards and commits the profession to putting pupils first. We have grouped the functions in order. Paragraphs (d), (e) and (f) deal with developing the profession, which we feel is very important, while (g) (h) and (i) deal with the disciplinary code and the striking off of teachers.
Having listened to the Minister, I believe that there is some confusion. We do not envisage that the general teaching council should become involved in the individual appointment of teachers but rather that it should be fully involved in the way that this takes place. Paragraphs (j) and (k) deal with the wider aspects of the profession's work in the education service. We believe it is vital that it has a public say. That point is also picked up in our new Clause 4 which may well not be discussed today.
I turn to Amendment No. 14 which proposes our new Clause 4. Most of this is borrowed from Clause 7 of the Bill. It gives powers to the Welsh general teaching council which are not given to the English council, as the Minister said. Subsection (1) enables the GTC to take independent action on its own behalf to promote recruitment. Perhaps it can improve on some of the efforts that have been made so far. We think that this is an opportunity to deal with the real crisis that we face in teacher supply, retention and recruitment. Subsection (2) is particularly vital because it gives the general

443
teaching council in England legal power to act publicly. Without that right it would not be able to publish material in any form, which effectively would be gagging the general teaching council. This reinforces our point that we want the council to be independent and not an arm of government.
If the Minister is still not minded to accept what we propose, we remind her of some of the issues raised last week in another place when a debate took place on the first report of the Education and Employment Select Committee for the 1997–98 Session. That report was entitled Teacher Recruitment: What can he done? The chairman of that committee, the honourable Margaret Hodge, when speaking in the debate in the other place last Wednesday, made two or three telling points. I repeat them for the benefit of the Minister and hope that they have some effect when she responds to the points that we make about the general teaching council. First, it was said that the teaching profession lacked self-esteem and struggled to meet the needs of children and the demands of policy-makers. Another point, which is very relevant, is that the Government must respond more enthusiastically than they have done so far to the report of the committee about standards and the need for teachers.
The chairman said that the committee had advanced radical and practical ideas to head off the growing crisis in teacher supply and was very disappointed by the Government's lukewarm response to the report. I suggest that when the Minister responds she takes that on hoard. I believe that many of the proposals that we have made to enhance the role of the general teaching council will go a long way towards convincing teachers that this is a profession to which they want to belong because the council will regulate that profession, work in its interests and lead to better working between government and teachers in the ensuing years.
5.30 p.m.
Baroness Young: My Lords, I begin by thanking the noble Baroness, Lady Blackstone, for Amendment No. 2 which is clearly designed to meet the first amendment that I tabled at Committee stage. She gave an undertaking that she would look at it. I should like to be the first to express gratitude that she has tabled this amendment, which puts into rather better language the point that I sought to make at Committee stage. I believe that it is valuable to set out in these terms the aim of the general teaching council. Although my noble friend Lord Jenkin is not in his place this afternoon, I am quite sure that he would want me to thank the noble Baroness on his behalf for tabling Amendment No. 3. I believe that we all acknowledge it to be a very great improvement on the Government's proposals.
I turn to the other two amendments tabled by the noble Lord, Lord Tope, but spoken to by the noble Baroness, Lady Maddock. I recognise that Amendment No. 12 is in many ways designed to be similar to my Amendment No. 8, which I shall move later in the proceedings. I share some of the concerns about this amendment that have been expressed by the noble Baroness, Lady Blackstone. Although I accept entirely the principles that lie behind it, on which I shall
444
elaborate when I move my own amendment—namely, the importance of giving to teachers the responsibility which such a teaching council would give if it had powers to do the things that I believe it shouldI—I would be unhappy, for example, about the funding of the education service, which would lead us into difficulties, and the details about the curriculum syllabuses, and so on. I do not believe those to be matters for a general teaching council except very much in an advisory capacity. Many people will have a view about that. I am not quite sure that that is right.
However, I share some of the concerns in relation to Amendment No. 14, which applies to the teaching council in Wales. One quite worrying area is the recruitment of teachers. We are very short of men to teach in primary schools, for example. We all know how extremely difficult it is to get people to agree to be head teachers. That is something which emerges from talking to almost any teacher now in the profession. I believe that we must look at imaginative ways to improve the position. I quote just those examples but there are others that should be looked at.
I said in Committee—I apologise for repeating myself—that I thought very highly of the Teacher Training Agency. I know Professor Clive Booth personally, for whom I have a very high regard. I am quite certain that he is doing a very good job. This is not intended in any way as a criticism of him, but I should have thought that there was a role for the teaching council in recruitment, if only on the general principles set out here of helping, explaining and encouraging young people to consider taking up teaching at all.
We have to face the fact that although all of us here this afternoon are interested in education, and believe being a teacher to be one of the most important things one could ever do, the picture painted to young people in the outside world is not one of a life of interest and ease. I am reminded of a novel which I read many years ago which told of the young girl who wished to teach in a poor school in New York. I think that the title of the novel was Up the Down Staircase.In a way it summed up the position well. When she reached the class and was longing to explain to it the joys of literature, replies she got were not what she expected. The reality of teaching is different from the ideals.
The serious point about all that is the problem of recruitment, and the need to get across to young people that this is something of importance; that when one does it well it is very enjoyable, but extremely hard work for very little pay. There is definitely a down side to it. Any further ways of increasing recruitment will be an advantage. I am not here to pick holes in all this. I thank the Minister for accepting my original amendment. I shall return to the whole question of the principles of the GTC later in the debate.
Baroness Darcy de Knayth: My Lords, I took no part in the earlier stages of the Bill because I was abroad. I extend a warm welcome to Amendment No. 3 which gives the GTC a duty to have regard to the requirements of disabled people, which brings it into line with the Teacher Training Agency and the HEFCs.

445
It has been useful way of reminding large organisations what a major impact their decisions can have on individual students. It will be important in this case for the GTC, which will be responsible for the medical-fitness-to-teach regulations, which in the past have been responsible for barring many disabled people from becoming teachers.
I have a question for the Minister. The GTC in Scotland, which already exists, does not have a duty to have regard to the requirements of disabled people. Does the Minister have any plans now to remove that anomaly? As she mentioned Amendment No. 5 relating to the composition of the council and the desirability of including someone concerned with the teaching of persons with special educational needs, I extend it a warm welcome to save time at a later stage.
Earl Baldwin of Bewdley: My Lords, I, too, welcome the amendment. The Minister has been as good as her word and brought it back. I think that it is thoroughly satisfactory. I have just one small point. It is no more than a schoolmasterly quibble, if you like. Perhaps I am reverting to type. I wonder whether one can "maintain" and "improve". Are they not in some sense mutually exclusive? Ought one perhaps to say "or improve as appropriate" or something like that? It may have got past the draftsman already, but it struck me that they were two rather different things, and you could not do them both at the same time. However, in principle, obviously, this is an amendment to be welcomed.
I would say the same about the amendment standing in the name of the noble Lord, Lord Tope, because I believe we need a good deal more—if you like—beefing up on the face of the Bill for this council from the moment that it starts. I am also in two minds about one or two things that appear in the amendment. I shall not go over that ground. I rather wish that the amendment tabled by the noble Baroness, Lady Young, had been grouped with these amendments, so that we could have heard her arguments at the same time, and I could have heard those before deciding on this matter, because it covers a great deal of the same ground. Having said that, I certainly approve in principle much that has been put in the amendment tabled by the noble Lord, Lord Tope.
Earl Russell: My Lords, I join my noble friend Lady Maddock in offering a welcome to Amendments Nos. 2 and 3. So far as they go, they are significant improvements. I am glad to see that they are going to be in the Bill. I said "so far as they go", because I must say a word in support of Amendments Nos. 12 and 13 to which I have put my name.
One of the key advantages of those amendments is that they get us away from the straitjacket of the existing Clause 2, which is the one that restricts the GTC entirely to the job of giving advice to the Secretary of State. I have always said that legislators, like parents, must learn to let their offspring grow up. They must learn to let the legislative progeny evolve, grow and develop in their own way, rather than perpetually seeking to control them.
446
Clause 2 treats the GTC like a toddler who is put in leading reins. I know that in dense traffic with a young child that occasionally may be necessary, but to keep them perpetually in leading reins as they grow older, seems to me to be unnecessary. It is likely to diminish the status of the GTC and its usefulness.
The key words in Amendment No. 14 are:
"The Council may of its own volition".
The words, "of its own volition" cross a crucial watershed which the Minister's amendments have not approached.
I should like to say a few words in support of the particular points in Amendment No. 12. I must admit that I am a little surprised by the Minister's reading of subsection (4)(h) which provides:
"grounds for suspending and dismissing teachers".
I cannot see anywhere in those words any intention to address individual cases. That was not in our minds. "Grounds" is a legislative rather than a judicial notion. It is general reasons why dismissal or suspension may be justified. The cases are different.
When the Minister talked of matters not on syllabuses or the curriculum, she reminded me a little of a former professor in the university of London—part of what is still known 30 and four years later as the ancien régime—who once said in the History Board of Studies:
"This proposal originates with the teachers of the subject which I regard as a most improper matter".
I do not share that attitude. It is a little out of date. I was sorry to hear it from the Minister.
I was sorry, though not surprised, to hear what the Minister had to say about funding. That is a ministerial litany. If Ministers in the DfEE, or whatever name it may from time to time be known, have one signature tune it is not "Never on a Sunday", it is "Never on funding". I have been moving similar amendments to education Bills since 1988. They have been turned down every time, but I think that the results show that I was quite right to move them, and I wish that they had been accepted.
5.45 p.m.
Lord Peston: My Lords, the amendments put forward by my noble friend the Minister improve the Bill considerably. I think that they enhance the Bill. I particularly like the expression:
"in the interests of the public".
I hope that noble Lords have noticed that that is what is said there. That is enormously useful. The distinction between the aims and functions is needed, as was pointed out, and my noble friend has dealt with that. Of course there is no disagreement between any of us on the amendment dealing with discrimination. That was obviously needed. It is a pleasure to see it there.
I agree, although I do not think that it is fundamental, with the noble Baroness, Lady Maddock. I prefer the word "enhance" to the word "improve", but, to use her other word, is a bit pedantic. I would have chosen "enhance" but I do not think that we need to die in the last ditch between the words "enhance" and "improve".

447
On the remainder, I disagree with the noble Baroness. I stand second to none in my desire to see a considerable increase in funding of education. I think that my record in proposing that, which I have not forgotten now that I am on this side of the House, is not a minor one. I strongly support the need to improve the funding of the education service, but, until I saw Amendment No. 12, it had not occurred to me that that would be a major role for the GTC. When it comes into existence, it will probably find it irresistible to make the odd comment on funding, because all bodies do, but it would not have occurred to me to write that into the Bill.
I also find paragraph (k) confusing. It does not identify the curricula, syllabuses, examinations and testing. My inclination would be to exclude them from the Bill because I do not believe that Clause 2 is constricting. In that respect I disagree with the noble Earl, Lord Russell. On the contrary, I believe that at this stage it gives the general teaching council a massive role.
As we debated in Committee, this is the first stage in the development of the general teaching council. To use the noble Earl's analogy, it is the toddler in reins which many of us wish to see striding ahead on its own. There was some disagreement between us on how powerful the body should be. As my noble friend the Minister knows, I would have gone further, although I believe that the Government's position is within the bounds of reasonable discourse in not going further. If there were ever a matter on which one should agree to disagree this is it.
I share the anxiety of the noble Baroness, Lady Maddock, that one does not want to see the general teaching council as an arm of government or in the pocket of the Secretary of State. It is worth getting that on the record. However, it will depend to a considerable extent on who is appointed as chairman, chief executive and members of the council. My noble friend is introducing an amendment relating to the number of teachers who will be members. However, my limited experience shows that the idea that any such person will end up in the pocket of the Secretary of State is unfounded. As soon as the body gets going, led by the chairman, it will start making trouble for the Secretary of State because that is exactly what such bodies do. Perhaps I should not have said that because he might change his mind about whether he wishes to go ahead with the proposal.
However, the reason for the body's existence is to do exactly what is proposed and I believe that it will. For that reason, I believe that Clause 14 is less important than the noble Baroness, said. The body is intended to enhance the professional development of teachers. I am convinced that it will do so. That is one of the most important paths towards improving the recruiting problem. The present trouble is that teaching does not look like the kind of attractive profession that a would-be professional wants to enter. I strongly believe that, even at this early stage, the general teaching council will he capable of returning us to the view that teaching is a noble profession of which one can be proud. However, that does not solve the problem expressed by the noble Baroness, Lady Young. I have
448
seen teachers working in the most adverse physical and psychological circumstances, trying to explain to a group of oversized boys the pleasures of "Romeo and Juliet". The role of the council is to give enhancement to the profession.
I believe that my noble friend's amendment improves the Bill. We have our points on the record, which is helpful, but I am not persuaded that we need to go further at this stage. My noble friend has spoken of the next Parliament and new legislation, and I am convinced that we might have to do more in due course. However, I believe that we can tread a little carefully at this stage.
Lord Northbourne: My Lords, I welcome Amendment No. 2 and I am grateful to the Minister for taking on board the points enshrined in the amendment tabled in Committee by the noble Baroness. Lady Young, and myself. The noble Baroness, Lady Maddock, referred to raising the standards of the teaching profession and enhancing the standing of teachers. They are desirable objectives, but they cannot be achieved in a vacuum. I suggest that Amendment No. 2, which sets out the principal aims of the council, will set in context the enhancement of teachers' standing and will help to achieve the objective of improving the status of teachers. I strongly support the amendment.
Lord Butterfield: My Lords, perhaps I may make a small criticism of Amendment No. 2. I am anxious that when the teachers of this country read about the general teaching council they do not feel that it is lording things over them. I suggest that it might be more diplomatic to change the wording in subsection (b) of her amendment. The words,
"to maintain and improve standards",
imply that in some cases the professional conduct among teachers is in need of improvement. I should prefer wording such as, "to encourage the highest standards of professional conduct among teachers". That leaves out any question of judgment of the present position.
Baroness Carnegy of Lour: My Lords, perhaps I may draw on my experience of Scotland and give the benefit of that to the noble Baroness, Lady Maddock. If a general teaching council is to achieve all the objectives in her Amendment No. 12 it will need to have many committees and spend a great deal of time at a central point discussing them and deciding what to say. One of the problems for the general teaching council in Scotland is that members must be sure that it is worth paying their membership fees. They believe that if the council has executive powers and is taking actions which affect the issues it is worth doing so. They find no satisfaction in funding a talking shop. That applies also to teachers who must fill in for school teachers who are absent because they are members of the general teaching council. Therefore, from a local authority point of view, I doubt whether Amendment No. 12 is wise.
Lord Pilkington of Oxenford: My Lords, too, join the choir of praise for Amendment No. 2. It may therefore seem ungracious if I am then critical of what

449
has been omitted. The Minister may remember that when we discussed the Bill on Second Reading I supported the Government's evolutionary approach. But when it emerged that their evolution was at a dinosaur-like pace and that we had to wait until the next Parliament I began to worry. When I discovered that evolution was blocked by the fact that the Bill cannot be altered except by primary legislation—and we know that there is little possibility of that in this Parliament—my worries became considerable.
I should have liked the Minister to include in Clause 2 powers to control the register on the grounds of professional conduct. I and my noble friends will support her amendment to that extent at subsequent stages of the Bill. However, I believe that the Government are making a great mistake and that teachers will be resentful of paying money to a general teaching council which will have no powers. It will become a source of discontent. I have spoken to my own union, the National Association of Head Teachers, and to two other unions and all of them share my opinion on the matter. Even at this late stage, I urge the Minister to discuss with her colleagues in the other place the possibility of at least giving the teachers some control over the register as regards standards of teaching and the quality of learning. Otherwise, I see great problems ahead.
My noble friend Lady Young will debate the issue later when we return to it, but it is important. The council will become not only a talking shop but a discontented talking shop. The teachers will not be pleased that the Government have created a council with such limited powers. Like everyone else, I welcome the support given to the disabled and to the whole intention of the Bill, but without powers it is a sorry business.
The Lord Bishop of Ripon: My Lords, I wish to make a point which I made in Committee but which has not been made on Report. I, too, welcome Amendments Nos. 2 and 3. I listened carefully to the noble Lord, Lord Pilkington, and to the noble Earl, Lord Russell, about the powers of the general teaching council. I particularly noted the point made by the noble Earl, Lord Russell, about the words in Amendment No. 14:
"The Council may of its own volition undertake activities".
That distinguishes it from the parallel clause for the General Teaching Council in Wales. Although many phrases are the same, there it is the Secretary of State who instructs the council to undertake work.
The point I wish to make is not unlike that made about teachers paying fees. I wonder who will consider it worth belonging to the general council. It is clear that if the general council is to be effective it must have people of the highest calibre, but they will only be attracted to it if they feel that it can undertake work of real significance. In my view, unless greater powers are given to the General Teaching Council in the Bill I am not clear that people of calibre will be willing to serve on it.
6 p.m.
Baroness Blackstone: My Lords, I am sorry that Members of your Lordships' House have not been entirely in support of Amendment No. 2, although I am grateful to the noble Baroness, Lady Young, and the noble Lord, Lord Northbourne, who supported it, as did one or two others who have spoken in the debate. In my view the amendment clearly states the principal aim of the General Teaching Council, showing how it would represent professional standards and promote a positive image of teaching. Of course I accept how important that is in the current teacher supply situation. The council will play a vital role in improving standards of teaching and professional conduct and will raise the quality of learning.
I believe that the amendment fully reflects the principle behind the amendments tabled at Committee by the noble Baronesses, Lady Young and Lady Maddock, and the noble Lords, Lord Northbourne and Lord Tope. It was intended to do so. However, I am delighted that Amendment No. 3 is widely supported by noble Lords. It will ensure that needs of disabled people are taken into account by the GTC in the course of its work.
Perhaps I may deal straight away with the point made by the right reverend Prelate. He asked whether it would be likely that people of high calibre would come forward if the powers of the GTC were limited in the way that we suggest. I cannot judge what will happen in the future, but the Government believe and hope that after so many years of waiting for a GTC, something which the teaching profession has wanted for a long time, excellent people will come forward who are willing to serve and will do so.
I add that we have said all along that we wanted an evolutionary approach, as the noble Lord, Lord Pilkington, said. The NUT which is the largest teachers' union takes that view. I received a letter recently from the General Secretary of the NUT which said:
"The Union believes that the establishment of the GTC…should he by way of a small number of enabling clauses, followed by subsequent regulations…
"As the largest teacher organisation, we believe that the creation of a body which is entirely new requires a 'step-by-step' approach which seeks to achieve consensus. Placing all the powers of a GTC in primary legislation could create division rather than consensus".
Although I do not always agree with everything that Doug McAvoy says on all matters, on this occasion he has set out in a clear and succinct form some important reasons for supporting the Government's approach.
The noble Lord, Lord Butterfield, criticised Amendment No. 2 on the grounds that it might be slightly insulting to teachers. I do not believe that. We can all improve our standards and I say that as someone who was a university teacher for a long time. Good teachers believe that it is always worth looking at how to do things better and how to improve.
Lord Butterfield: My Lords, perhaps I may interrupt—
Baroness Blackstone: My Lords, that brings me to the question raised by the noble Baroness,

451
Lady Maddock. Should we use the term "enhance" or "improve"? I do not see much difference between them, they seem to be similar and I am not strongly wedded to one or the other.
The noble Earl, Lord Baldwin, said that in a schoolmasterly way he would question whether we could say both "maintain" and "improve", and that in some way they are contradictory. I see his point, but the wording has been through the parliamentary draftsmen. They think it reasonable and not contradictory, and I hope that the noble Earl can accept that.
The noble Baroness, Lady Maddock, raised one or two questions about whether we would be jeopardising the independence of the GTC in the way in which we have worded our amendment. My noble friend Lord Peston suggested that that was not the case and I strongly agree. The Government wish to see a strong and independent GTC giving independent advice to the Secretary of State. It would defeat the object if that were not the case.
The noble Baroness and other Members of your Lordships' House raised the issue of whether what her amendment says in relation to individual appointments and dismissals cuts across employers. The noble Baroness said that there was no intention to do that. I can take the matter away and examine it, but my advice is that the way in which it is currently drafted means it could well be interpreted to cut across the role of employers.
Baroness Maddock: My Lords,—
Baroness Blackstone: My Lords, as this is Report stage, the noble Baroness may wish, before I sit down, to ask a question for elucidation. In that case I should be happy to answer it. Would she like to do it now?
Baroness Blatch: My Lords, we are dealing with a point of order. My understanding is that on a point of order the Red Book says that one can intervene for clarification. The noble Baroness has just refused to allow my noble friend Lord Butterfield to do just that on a point of clarification. Having given the promise that she would be accommodating on points of clarification, she has now accepted a question from a Member of the Liberal Benches.
Baroness Blackstone: My Lords, I was not aware that the noble Lord, Lord Butterfield, wished to ask a question on a point of clarification. I thought he was going to make a further point. He did not proceed to ask a question but, if he wishes, I am happy to accept a question, as I am from the noble Baroness, Lady Maddock. That is, if it is a point of clarification on what I have been saying.
Baroness Maddock: My Lords, I wish to clarify whether the Minister understood that what we are saying is that the provision concerns advice and teachers advising on what the standards should be and no more.
Baroness Blackstone: My Lords, if the point concerns advising, I am happy to take the wording away
452
and ask for its re-examination, to see whether it can be drafted in such a way as to make it absolutely clear that it concerns advice. I shall then come back to it. I am happy now to give way to the noble Lord, Lord Butterfield.
Lord Butterfield: My Lords, I am grateful to the Minister. I merely wished to ask what was the difference between the Minister's amendment and my suggestion that the provision be worded: "to encourage the highest standards of professional conduct". That is perhaps a little less pejorative of the professional standards of the profession today.
Baroness Blackstone: My Lords, the government amendment makes it clear that that is what we want to do. I hope that the noble Lord, Lord Butterfield, will accept that that is what the Government have in mind.
The noble Baroness, Lady Young, and the noble Baroness, Lady Maddock, raised questions about teacher supply. I agree with them that that is a serious problem—both trying to recruit more men into primary schools and to make sure that more people come forward for headships. That is a particular problem in the primary sector and much less of a problem at the secondary level.
The Government are taking a number of actions to try to deal with the problem of boosting recruitment. The TTA has that very much at the forefront of its current work. As I mentioned in Committee, a number of advertisements have been shown in cinemas to which there has been quite a good response. But clearly we must monitor the position and continue to do more.
I believe that the very existence of a GTC which speaks for the profession will raise its status and the self-esteem of teachers which has been referred to. However, we must remember that the TTA also has the primary responsibility for teacher supply and I am very grateful to the noble Baroness, Lady Young, for what she said about the work of the current chairman, Professor Booth, because we all have the highest regard for what he is doing.
The noble Baroness, Lady Carnegy of Lour, asked about disabled people in Scotland and the Scottish GTC.
Baroness Carnegy of Lour: My Lords, I was not speaking about disabled people. I suggested that Amendment No. 12 might be very time consuming for teachers and therefore very expensive for local authorities and schools. I did not address the government amendments which I believe are excellent.
Baroness Darcy de Knayth: My Lords, I asked the question about whether the duty should be attached to have regard to the Scottish Teaching Council.
Baroness Blackstone: My Lords, I am most grateful for that. I have come to assume that any reference to Scotland comes from the noble Baroness, Lady Carnegy of Lour, who is so assiduous, and rightly so, in promoting the position of Scotland. I shall have to write to the noble Baroness, Lady Darcy, about that. There is

453
a question as to whether that would be within the scope of this Bill, which is not about setting up a GTC for Scotland but about setting up a GTC for England and Wales.
I have tried to respond to all the issues that have been raised. I regret that I cannot support Amendment No. 12 as it would add a significant number of additional responsibilities which we do not see falling properly to the GTC at present. However, as I said earlier in the debate, I am prepared to consider further whether Clause 2 fully secures our intention that the GTC should be a major partner in the national drive to raise standards in schools, if that helps the noble Lord, Lord Butterfield.
As regards Amendment No. 14, I am pleased that your Lordships value the work done by the TTA and accept the importance of the TTA working in harmony to raise standards in the teaching profession. I am sure that all noble Lords in this House will agree that that is a very desirable objective. On that basis, I hope that the noble Baroness will not press her amendment.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 3:
Page 1. line 17, at end insert—
("() In exercising their functions, the Council shall have regard to the requirements of persons who are disabled persons for the purposes of the Disability Discrimination Act 1995.").
On Question, amendment agreed to.
Lord Whitty: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly and. on Question, Motion agreed to.

Competition Bill [H.L.]
6.15 p.m.
The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Simon of Highbury.)
On Question, Motion agreed to.
Clause 48 [Appeals on point of law etc.]:
[Amendments Nos. 153 to 154E not moved.]
Schedule 8 [Appeals]:
[Amendments Nos. 155 to 158 not moved.]
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 159:
Before Clause 49, insert the following new clause—
("Advisory body for the Director
ADVISORY BODY ON FUNCTIONS OF THE DIRECTOR
.—(1) The Secretary of State shall, prior to the coming into force of Chapters I to IV of this Part, establish an advisory body for
454
functions exercised by the Director under this Part, and the body so established shall consist of such members as the Secretary of State may from time to time appoint.
(2) It shall be the duty of the advisory body established under this section to advise the Director on any matter—

(a) in respect of which the Director exercises functions under this Part; and

(b) which is referred to it by the Director or is a matter on which it considers it should offer its advice.

(3) The advisory body established under subsection (I) shall, as soon as practicable after the end of 1998, and in each subsequent calendar year, make a report to the Secretary of State on its activities during that year.").
The noble and learned Lord said: My Lords, important as this amendment is, it is more important that at long last we should reach our deliberations on this Bill. It does not seem to me that the conduct of the business in your Lordships' House this afternoon has been at its most edifying, particularly as this Competition Bill is extremely important. To reach it only at quarter past six does not indicate to the world outside, which is keen to see how we are to deal with competition, that we are taking the matter as seriously as it warrants.
Amendment No. 165 is grouped with this amendment. That seems to me to be extremely appropriate because, although both amendments are in my name and relate to advisory bodies, it would be a superfluity of advisory bodies to have them both established. The amendments are essentially alternatives.
Amendment No. 159 would require the Secretary of State to create an advisory body to provide advice on the exercise of functions under the Bill to the Director General of Fair Trading or to any regulator exercising those functions concurrently. Advice would be provided at the request of the director general or any regulator or on the advisory body's own initiative where it considered that it was appropriate to do so.
As I am sure that many noble Lords will appreciate, the sectoral statutes already provide for the Secretary of State to establish such bodies to advise regulators in respect of certain functions and enable regulators to establish advisory bodies in respect of other matters. I understand that the Director General of Telecommunications has already established such a body in relation to the application of licence conditions which are based upon Articles 85 and 86 of the treaty.
The proposal in Amendment No. 165 is that the Secretary of State would create an advisory body to provide advice to the sectoral regulators alone without going back to the director general, and to advise them on the exercise of their functions under the Bill. The advice would be provided on the request of the regulator or on the advisory body's own initiative where it considered it was appropriate to do so.
An example of the type of arrangement which is already in place is under Section 54 of the Telecommunications Act 1984 which authorises the establishment of an advisory body on matters affecting small business. I understand that such a body has already been established.
Once those amendments appeared in my name, I received a letter from the Director General of Telecommunications who said:
"While I believe it is important that regulators have access to independent advice on issues, I do not believe that formal provisions for such arrangements needs to he written into the Bill".
At the same time, I received a communication not just from the regulator but from those who are to be regulated.
A document from the Cable Communications Association states,
"While the CCA believes it is important that regulators have access to independent advice of the highest quality, we do not believe that provision for formal arrangements needs to be written into the Bill … Oftel already makes extensive use of advisors on legal and economic issues … Introducing a formal advisory body would risk introducing unnecessary bureaucracy and delay into the decision making process"
of regulators. The association further states:
"In our own experience Oftel already makes extensive use of advisors on legal and economic issues and we believe that the Director General of Telecommunications and other sectoral regulators should have the freedom to seek specialist advice as required on a case by case basis".
On one view it might seem a happy coincidence that the regulator and the regulated should agree, but such is the coincidence of language that if I were an examiner for an examinations board I might think that someone had seen someone else's paper.
The more important point is that if there is that coincidence of view it would appear to be unnecessary to explore the matter further if the approach that was proposed met with everyone's approval. I think it is clear that we should not believe that that is the only view that has been expressed by those who have an interest in these matters. I take a little time to explain this because the same point will arise in relation to a number of the groupings we are discussing this evening.
As I am sure the Minister will have seen, there is an article in today's Times by Mr. Thomas Sharpe QC, who is a specialist in United Kingdom and EU competition law and utility regulation. The Minister may not have read the article but I am sure he has seen his own beaming face smiling out from the pages of The Times today. It is worth recording that Mr. Sharpe, a distinguished Silk, states that this is a major Bill and it is a major achievement for the Government. He compliments the Government on introducing it into the Lords rather than the Commons, which reflects its technical nature and cross-party support.
However, what begins to emerge clearly from the article is that there are a number of risks as regards the way the Government are approaching this matter, particularly in relation to concurrency. The clear proposal is that the director general should have a continuing and important competition law function but that all the regulators should be similarly involved. While from time to time in the course of our deliberations we have dealt with one regulator or another, the fact of the matter is—as the article points out—that there will be no fewer than eight other
456
regulators who from time to time may have to exercise competition law policy approaches. In our view there is a real risk, as Mr. Sharpe states, that,
"As it stands, the Bill will lead to duplication of scarce resources among regulators; the certainty of inconsistency of treatment between regulators and difficulties over which regulator should have jurisdiction in any situation".
It is in that set of circumstances that we believe it to be desirable that there should be one advisory board that offers advice both to the director general and the sectoral regulators, or to the sectoral regulators alone. As I indicated, it is my understanding—I am open to correction—that Oftel has already established such an advisory board to give specific advice on the issue of conditions in licences where there is an Article 85 or 86 point. There would be a real risk of inconsistency. Each and every one of those regulators who sought to impose conditions within licences—all those which had an Article 85 or 86 point—and each different advisory committee could potentially come up with a different variation. That seems to me to be undesirable. It would lead to a great deal of uncertainty and duplication. The simplest and best way forward to eliminate the inconsistency I have mentioned would be through the establishment of an advisory body.
As I say, this proposal is not wildly out of line with the scheme of things as they are at the present time. It is my understanding that in most, if not all, of the sectoral statutes such a power already exists. But if there is to be this more distinctive, clearer, concurrent competition law responsibility in those circumstances, particularly where multi-utilities will operate—if we do not have them already—it is desirable that there should be some arrangement for a single body. We have proposed alternatives. I hope that the Government will consider that one of them is a desirable way to proceed. I beg to move.
Lord Desai: My Lords, I take it that the noble and learned Lord prefers either Amendment No. 159 or No. 165. I think that Amendment No. 159 is better because Amendment No. 165 would add too many advisory boards.
The noble and learned Lord referred to concurrency. While that is an important issue, I am not clear that the amendment will deal with it. I shall clarify the problem. I believe that the concurrency problem will arise. At Second Reading I said that we should have an over-arching regulatory body rather than Snow White and the Seven Dwarfs, as it were. I do not see that the advisory board that the noble and learned Lord proposes will have any binding power to say, "This is our judgement and therefore this particular problem falls in the path of a sectoral regulator". If it is not to have that kind of power, I do not know that the advisory body will add much more to what the director general and various other regulators already seek by way of informal advice on a retail basis from time to time. That is my only comment.
Lord Simon of Highbury: My Lords, I am grateful to the noble and learned Lord, Lord Fraser, for pointing out that there is an article in The Times today on this

457
subject. I shall hasten to read it. Perhaps in view of recent debates I have not been reading the paper as closely as I should have done. In any case, the thinking is not that with which I would be totally at one.
I believe that the thinking behind Amendments Nos. 159 and 165 although clear is flawed. The noble and learned Lord has, in my view, underestimated the mechanisms in the Bill for ensuring that the director takes account of the views of those affected when he exercises his powers, and for ensuring that his decisions may be appealed. The advisory bodies proposed in the amendments would also, if I may say so, add an unnecessary layer to the decision-making process, particularly that suggested at Amendment No. 159. I shall return to Amendment No. 165.
The Bill already makes provision to make the director accountable for his actions and to oblige him to take into account the views of affected persons. He must publish applications for decisions, consult those likely to be affected and take into account their views—I refer to paragraph 5, Schedules 5 and 6. In investigation cases he must give written notice to those most likely to be affected and provide them with an opportunity to present their case—I refer to Clause 31. Most importantly, his decisions may be appealed by the parties concerned, affected third parties and their representative bodies. The appeals tribunal may conduct a full rehearing of the merits of the case. Thereafter, appeal lies on a point of law to the Court of Appeal and your Lordships' House, as noble Lords are aware.
It is worth pointing out that the accountability mechanisms are much more extensive than those which exist at EC level. In contrast to the full rehearing of the case by the appeals tribunal, the European Court of Justice is in certain respects more akin to judicial review. Similarly, the class of third parties which can appeal a director's decision is highly likely to be wider than the class which may appeal Commission decisions.
The noble and learned Lord mentioned the advisory body for Oftel. It is true that it was established to advise on the application of the fair trading conditions in licences granted under the Telecommunications Act, which are similar to the prohibitions in the Bill. But under the Telecommunications Act there is no comparable appeal body to that established under the Bill. The situation is therefore quite different.
I find it difficult to see what benefit can be gained by adding an additional layer to the decision-making process as suggested by these amendments. That is not to discuss the issue of concurrency formally; I quite understand that there are separate arguments that will run this evening in relation to concurrency. My submission is that the noble and learned Lord's submission will only add a layer to the consultative process, which has already benefited from the way in which we have shaped and structured the Bill. I have tried to explain why I believe the position of Oftel is different; namely, that there is no recourse to appeal in its circumstance as there is in the circumstances of the Bill. I hope therefore that on reflection the noble and learned Lord will recognise that and not press his amendments.
6.30 p.m.
Lord Fraser of Carmyllie: My Lords, first, perhaps I may say to the noble Lord, Lord Desai, that I entirely agree with him. The establishment of an advisory body, whether under the proposal in Amendment No. 159 or my alternative proposal in Amendment No. 165, does not eliminate the problem of concurrency. However, if the policy is to be that concurrency should exist, it would seem to us desirable to avoid the duplication and inconsistencies which we would predict, unhappily, are almost inevitable, and that there should be a single advisory body to do what it could to avoid that. I return to the particular example I used. If Oftel already has an advisory body, advising specifically on where Articles 85 and 86 might impact on conditions in licences, it is to be presumed that the other regulators will wish to address much the same problem. If they are going to do that, there would seem to be a powerful case for there being a single body providing that advice rather than up to eight separate bodies on this technical matter.
The noble Lord, Lord Simon, has a good point in this respect. I would certainly not wish there to be an additional layer. I appreciate that it would be something of an absurdity if Oftel had its own advisory committee on Articles 85 and 86 and there was also a broad regulator's one also offering advice on those articles. If that is the noble Lord's only objection, I believe that I can go away and table amendments before Third Reading to eliminate the right of Oftel and others to have their own separate independent advisory bodies. I shall withdraw the amendment. I wish to reflect on the noble Lord's remarks. I did not quite understand his point about there being rights of appeal under the Bill. No doubt it is my fault, but I shall want to read those remarks carefully in order to determine whether or not we wish to return to the matter at Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 [Rules]:
Lord Kingsland Lord Kingsland moved Amendment No. 159A:
Page 24, line 40, at end insert—
("() The Director shall, prior to the coming into force of section 52, make rules under this section which specify (by means of objective criteria set out in those rules) the circumstances in which the Director rather than a regulator shall exercise the powers conferred by or under Part I.").
The noble Lord said: My Lords, Amendments Nos. 159A, 170, 171, 171B and 225 all refer to the problem of overlapping jurisdiction between the Director General of Fair Trading on the one hand and the individual regulators on the other when enforcing their competition responsibilities. Amendment No. 164E refers to a much wider matter which reflects an amendment made by the noble Lord, Lord Ezra, in Committee.
As the Minister is only too well aware, the problem of concurrency has a number of manifestations. Much of this evening's debate will be about those. This particular one relates to which regulator—or, if not a regulator, the director—is responsible for a particular alleged anti-competitive activity.
Of course it is simple if a matter is within the gas sphere, once a satisfactory definition of "gas" has been decided on, or within the electricity sphere, once a satisfactory definition of "electricity" has been decided, and so on. But, as the Minister knows, the real world is not like that at all—especially when we are seeing the growth of utility conglomerates and we know that many of these agreements will cross the lines of responsibility of the regulators. Which regulator should be responsible?
That is not merely an academic question. Since it is proposed to give individual regulators concurrent jurisdiction enabling them to exercise both regulatory and competition power at the same time, which regulator might determine the degree of severity with which he enforces his powers? If it becomes known that the gas regulator is "softer" on competitive matters than the electricity regulator, or that both are softer than another regulator, it is almost certain to lead to forum shopping by the regulatees. In order to prevent that, these amendments seek to establish ab initio and a priori a means of dividing up responsibilities. It is the belief of Her Majesty's Opposition that the rules for that dividing up should be clear and determined, and known to this House before the Bill becomes law.
In the course of the Committee stage, I recall the Minister referring to the undesirability of a hierarchy of powers. However, I should like him to reflect for a moment on any other solution but a hierarchy. The great danger that the Minister faces is that this Bill will be applied in seven or eight different ways by seven or eight different people, which will, quite apart from the discomfort of the regulatees, cause enormous confusion to the appeal courts which can apply only one set of rules; namely, the rules in the Bill.
I therefore say to the Minister that what is required is some careful thought about where the boundaries ought to lie, and some clear, at least draft, rules before the Bill becomes law setting out those boundaries beyond peradventure. I beg to move.
Lord Borrie: My Lords, I have great sympathy with some of the points made. Certainly it is extremely valuable to have had a debate initiated on the whole question of concurrency and consistency. If there is one point on which everyone in the Chamber agrees, it is the desirability of consistency in decision-making whichever regulator is involved, so that competition law develops, with the aid of the competition commission's appeal tribunal. I think that that is everyone's intention.
But the amendments immediately under discussion seem to proceed from gentle to harsh rigidity. They start with the notion of the director making rules, and proceed to amendments such as Amendment No. 170, which would lay down at some length and with great rigidity in the Act itself the intention as to precisely where the demarcation lines should be. If noble Lords believe that consistency is desirable, there is another technological matter on which we may agree and that is the current convergence in the field of broadcasting, telecommunications, information technology, and so on. I challenge noble Lords to say where we will be in five or 10 years' time. It therefore follows that it would be
460
wholly undesirable to lay down, in either modest or rigid form, the demarcation lines. The noble Lord, Lord Kingsland, is concerned with the regulatee. I am not sure about that word but I think I understand what he means. Business and industry want to know where they stand. At this stage of a developing convergence in technologies and at this stage of regulation, before the Government's utilities regulation review, which will almost certainly change some of the regulatory arrangements, it would be unwise to lay down demarcations which may be suitable in February 1998 but which will almost certainly be unsuitable in February 1999 or in five years' time.
The arrangement whereby the Director General of Fair Trading chairs informal meetings to discuss rules and procedures is the kind of concordat which has existed for many years in the more limited concurrent jurisdiction of other regulators. The concordat is made public and can be altered from time to time. It would be much more helpful than laying down the precise rules proposed by the noble Lord, which may or may not be right.
Lord Desai: My Lords, I support the comments of my noble friend Lord Borrie. I have been worried about concurrency for some time. It is untypical of the noble Lord, Lord Kingsland, and the philosophy of his party to impose a vast number of rules on a changing scene. The present arrangement will not last and we will need new arrangements in three or four years' time. We need, not a hierarchy of rules, but a hierarchy of authority so that one knows who is the top dog who can be consulted by those who are lower in the hierarchy. The current arrangement may not be perfect but the Director General of Fair Trading can talk to other regulators and resolve matters. However, I still believe that this is a transitional arrangement and that we will have to decide the matter after the utilities review and then introduce binding rules. Inventing vast numbers of rules now is not the way forward.
Baroness O'Cathain: My Lords, just because something is going to change does not mean that it should not be controlled now. New customer practice can develop over a very short period of six to 18 months, after which time it is very difficult to get it back on track. Although we are dealing with a new technological area, telecommunications, it is a bit of a cop-out to say that we should not lay down precise rules because everything changes so rapidly.
During the debate on the Broadcasting Bill many noble Lords stated that the Broadcasting Act would be superseded by another Broadcasting Act because everything changes so rapidly. The same could apply here, but that did not stop us from acting in relation to the Broadcasting Act. I have a great deal of sympathy with the idea that in order to stop excesses this area should be regulated now and not retrospectively.
Lord Fraser of Carmyllie: My Lords, in putting forward an amendment containing a set of rigid rules we thought that we would be appealing to the philosophy of the noble Lord, Lord Desai, not to our own. The

461
proposals we have put forward are not entirely consistent. We are seeking to improve the Bill, to find the best way forward which will meet with broad support and avoid issues of concurrency in relation to issues that we do not as yet fully grasp.
It is difficult to define what will be the jurisdiction of Oftel. I do not know what the area of telecommunications will encompass in five or 10 years' time. Without being particularly skilled in gazing into the crystal ball of technology, there is every prospect that Oftel might seek to regulate everyone from Microsoft to Asda and Sainsbury. The amendment is a better way forward and avoids the risk of returning in three or four years to make further changes in primary legislation. It would be better to take the extremely complicated area of telecommunications competition away from Oftel and put it under the direct and exclusive authority of the director general.
I rose to speak to the further amendment in this group, Amendment No. 225, which the noble Lord did not directly address. It proposes that the Secretary of State should be prevented from making an order to bring Clause 52 into force until the review of the function of regulators has been completed and a report made to Parliament. One could probably accurately predict parts of the review particularly in the energy field but elsewhere it might be more complicated. Before that clause is brought into force Parliament should know what has happened. I appreciate that there are great difficulties and no doubt a very extensive review has been undertaken. The Minister has been open enough at each stage of the Bill to make clear that, however desirable, it would not be possible to complete that review before the Bill leaves this House. We accept that situation but suggest that there should be a provision, as proposed, which would delay commencement.
Lord Simon of Highbury: My Lords, it is worth making one or two general points about concurrency. In my last response I managed to put it off and talk to why I believe that another advisory committee would not be advisable at this stage. The noble and learned Lord, Lord Fraser, has probably addressed the factors of concurrency that he really wanted to talk about so I can put it off no longer; but I am glad that he is going to reflect on my previous answer.
The principle of concurrency is right. This is a Bill about competition. Regulators need to have powers in order to encourage and maintain competition in their sectors and to co-ordinate their use of sector-specific regulation with these powers. We have said that we do not believe that a "bright line" of jurisdiction is practical. We do not want gaps or litigation about who has jurisdiction. Hence, powers have to be exercisable concurrently by the regulator and the Director General of Fair Trading to ensure the competitive marketplace which I know all noble Lords are seeking via the powers of this Bill.
The marketplace is dynamic, as we have repeated many times. We have already talked about the scope of Oftel, though we shall return to that in further
462
amendments. It is true that the legal scope of Oftel's remit needs to be kept under review. It must he clear, but it must be wide enough and it must be up to date. As many noble Lords and the noble Baroness, Lady O'Cathain, have stated, this is probably the most dynamic marketplace that we are currently trying to regulate. We are prepared to respond to the concerns expressed in Committee to propose a clarification and widening of the powers of Oftel, but within the current framework of Oftel's existing powers and concurrency. We do not believe that a more radical review of Oftel's powers would be appropriate for the Bill. It needs to be dealt with in the context of telecommunications and broadcasting generally, which the Government are reviewing. We expect to launch a consultation on these matters in the spring. We shall talk about the scope of Oftel; we shall talk about the telecommunications sector and broadcasting generally; but we must have a starting point in a very dynamic market, and this is about the starting point.
To help define the starting point we have said clearly that flexible rules need to be drawn up to make clear within the prescribed legal scope who does what. Rules need to change and adapt as necessary. I am slightly fearful that my noble friend Lord Desai has already defined only five years as the lifetime of the rules; that worries me. But, who knows, in five years' time I may be elsewhere. Let us define the rules that we need today and make clear as part of the rules to whom notification should be made. This is a matter for the Director General of Fair Trading, consulting regulators, to decide in the first instance, under Clause 49 of the Bill. Rules are, however, to be subject to consultation, approval by the Secretary of State and the parliamentary process, so there will be further opportunity to make sure that they are clear and adequate. They will not drop like pennies from heaven; they will be consulted on. There is further scope for clarification of the role of individual regulators in the advice and information to be prepared under Clause 50.
We have tried to describe a framework in which, as I believe I observed at Committee stage, in a dynamic marketplace sensible men will speak and work together under a format of rules which will be flexible and capable of taking into account the dynamism of the marketplace, which we all wish to encourage and make more competitive.
I believe that that is wholly consistent with everything we have said to date on the subject of concurrency, but I believe it will be helpful for the record if I now turn to Amendments Nos. 170 and 171. Those amendments would very substantially limit the ability of the Director General of Telecommunications to use his concurrent functions under the Bill. If this kind of restriction were right for the Director General of Telecommunications, by implication it would be right for the other regulators. The Government do not accept that it would be right to have any such restriction.
Each of the utility statutes provides that before either the regulator or the director general exercises concurrent functions in a particular case he shall consult the other; and once one of them has taken action the other is barred from doing so. When they consult, I would expect the

463
regulator and the Director General of Fair Trading to be able to reach agreement on which of them is best placed to take action. This will be in a context where procedural issues on concurrency will be dealt with in rules under Clause 49 and advice and information under Clause 50. The letter of 6th February from the Director General of Fair Trading, to which I referred on the second day of Report, described the progress which has been made by the working party of the Office of Fair Trading and regulators which is already considerable. For example, they have agreed on a central public register of notified agreements and a single notification point.
These amendments would put an override on the consultation between regulator and the Director General of Fair Trading. Effectively it would mean that wherever it appeared to the director general that a matter fell, even partly, within a set of criteria, he would have exclusive jurisdiction, to the exclusion of the regulator. There would be no consideration as to which of them was more appropriate; only the director general would be able to act. Freely adapting the words of my noble friend Lord Desai, I think we would have defined the chief honcho. And, in each of these amendments, some of the criteria seem wide enough to suggest that the director general could end up dealing with a large proportion of the matters which would otherwise fall within the scope of a regulator's concurrent powers. I do not believe that such a mechanistic approach is appropriate; and I certainly do not believe it would be right to provide concurrent functions for regulators and then allow a large part of those concurrent functions to be clawed back.
Similarly, I do not believe it would be right for rules to prescribe whether it is the director general or the regulator who should act on a matter which falls within the scope of the regulator's concurrent jurisdiction. It is the Bill which prescribes the scope of concurrent jurisdiction. I am advised that it would not be possible for rules to prevent the director general or the regulator from acting on a particular matter which falls within the scope of the regulator's concurrent jurisdiction.
I do not believe it would be right to provide for the scope of concurrent jurisdiction of the Director General of Electricity Supply to be limited in the way that Amendment No. 171B would seem to do. The amendment would limit the scope of concurrent jurisdiction of the director general in a way which would undermine his powers to act under the Bill. If he acted on a matter which related mainly but not exclusively to commercial activities connected with the generation, transmission or supply of electricity, he would be exposed to the risk of legal challenge. This would he unacceptable.
However, I should like to refer back to a commitment I made during Committee on the issue of sensible men talking to sensible men and finding a sensible way to work together, to reflect on whether an amendment to the Bill may he needed to provide flexibility for a regulator and the director general to work together on investigations where both agree that this would be helpful (Official Report, 25/11/97: col. 915). We have therefore been considering the particular provisions in
464
utility statutes that require the regulator and the director general to consult before either takes action; and for one to he barred from taking action once the other has done so. These seem to raise concerns about preventing the director general and regulators from working together, even where that would clearly he helpful, and about preventing a case being switched between a regulator and the director general even where a change of circumstances makes that appropriate. We are continuing to reflect on these provisions but, if we decide that changes are needed, they will have to be brought forward in another place. We are reflecting seriously on this issue which was raised in Committee.
Amendment No. 164E would not have the effect of removing concurrent functions. In any event, I have made clear that the Government believe it is right for regulators to be able to exercise functions concurrently with the director general.
Amendment No. 225 seems to be looking for yet another bite at the issue of concurrency right at the point where provisions of the Bill are being brought into effect. I could not accept that. The issue is being fully debated during the passage of the Bill. There will be wide-ranging consultation following publication of the utilities review Green Paper. I do not accept that there is any need for further debate at Report stage.
I have tried to recapture again—I hope just one more time—the reason why we believe concurrency to be fundamental to achieving true competition. I set out as per the letter of 6th February how the director general and the regulators are going about setting up a process of flexible rules that make clear that we are attending carefully to the issues on the table. Also, we are reflecting on an amendment to make the working together of the director general and a specific regulator under certain circumstances more flexible and supported. In those circumstances, I urge the noble and learned Lord, Lord Fraser, and the noble Lord, Lord Kingsland, to withdraw the amendment.
7 p.m.
Lord Kingsland: My Lords, I thank the Minister for that comprehensive reply in which he not only dealt with the amendments, but also with the wider aspect of concurrency.
In dealing with that wider aspect, the Minister made an observation to which I feel compelled to respond. He talked of the desirability of concurrency in the context of competition. In so saying, he made an assumption that the responsibilities for competition under the Bill are the same as the responsibilities for competition under whatever specific regulatory regime is under review.
The truth of the matter is that those responsibilities—for example, in the telecommunications sector—could not be more different. Under the Bill the responsibilities of the regulator will be reactive and adjudicatory, almost quasi-judicial, and very clear procedures will be set out to enable the regulator to fulfil that function. On the other hand, the competition responsibilities that the regulator has under his specific regulatory statute are quite different. They are not reactive; they are not

465
adjudicatory; they are what I understand economists term "structural". He is there under his Telecommunications Act to promote competition; to change the structure of the industry if necessary; to make it more competitive. This is competition in an entirely different context. It would be extremely dangerous for the telecommunications regulator to confuse the two. That is just one example of why putting a bridge into the Telecommunications Act which was not there before is so dangerous. I have not heard the Minister address that specific matter. I hope that at some time in the course of the evening—these amendments are perhaps not the most appropriate—he will give your Lordships' House the benefit of some further reflections on the matter.
A second related but distinct point is that if the telecommunications regulator, the electricity regulator, the gas regulator or whichever regulator we are discussing, seeks to enforce against a regulatee, once the Bill is on the statute book, he now has not only one set of legally enforceable rules, but two. He has complete discretion as to which one he chooses, to enforce whatever he chooses to enforce. He is entitled to address himself not just to his responsibilities under the Bill, but also to his responsibilities under the regulation Act at the same time. That is a recipe for uncertainty among the enterprises subject to his jurisdiction. Inconsistency and uncertainty are enemies of enterprise and competition. If the Minister tells your Lordships' House that concurrency is a good thing, he must rebut those two allegations.
I listened to the noble Lord, Lord Borrie, with great interest. He has unmatched experience in this area. For 10 years he was Director General of Fair Trading. I shall certainly not accuse him of not keeping up with what has been going on since then. He has been most assiduous in attending all the stages of this Bill before your Lordships' House. But up to now the role of the Director General of Fair Trading has been a preliminary role in the adjudicatory process. He looked at the problem; made an assessment; took a decision and passed it on to somebody else. That is a very different world from the world into which Her Majesty's Government are about to take us. The informal arrangements—the casual chats on the telephone; the ad hoc meetings summoned in order to resolve a particularly knotty problem—may be highly appropriate to the old informalities of competition law, but it will not do where there are eight or nine regulatory directors who have jurisdictional enforcement powers in addition to those possessed by the Director General of Fair Trading.
I apologise to the Minister, but the offering that he served up in summing up the debate was too potent to resist. I had to reply more generally. I do not ask him to come back all at one go now. I thank him for the noble concession that he made on consultation. I hope that he will reflect on Amendment No. 159A and, in those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel Lord Haskel moved Amendment No. 159B:
Page 24, line 41, leave out from ("section") to end of line 43 and insert ("he must consult such persons as he considers appropriate.
() If the proposed rules relate to a matter in respect of which a regulator exercises concurrent jurisdiction, those consulted must include that regulator.").
The noble Lord said: My Lords, we spoke to this amendment when it was grouped with Amendment No. 135B and we considered it on day two. I beg to move.
On Question, amendment agreed to.
Schedule 9 [Director's Rules]:
Lord Haskel Lord Haskel moved Amendments Nos. 160 to 162:
Page 68, line 2, after first ("the") insert ("documents and").
Page 68, leave out lines 24 and 25.
Page 69, line 30, at end insert—
("Directions withdrawing exclusions
. Rules may make provision as to the factors which the Director may take into account when he is determining the date on which a direction given under paragraph 4(1) of Schedule I or paragraph 1A(3) or 6A(3) of Schedule 3 is to have effect.").
The noble Lord said: My Lords, we spoke to these amendments with other amendments on day two. With the leave of the House I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 162A:
Page 69, line 30, at end insert—
("Disclosure of information
.—(1) Rules may make provision as to the circumstances in which the Director is to be required, before disclosing information given to him by a third party in connection with the exercise of any of the Director's functions under Part to give notice, and an opportunity to make representations, to the third party.
(2) In relation to the agreement (or conduct) concerned, "third party" means a person who is not a party to the agreement (or who has not engaged in the conduct).").
The noble Lord said: My Lords, we brought forward this amendment in response to points made in Committee about the need to warn third parties before publishing information which they had disclosed to the director.
The question of the protection of information obtained under the Bill is obviously an important one. We shall debate it further later. It was debated at length in Committee and there are later amendments tabled which relate to the same issue. We have, of course, taken great care in framing the provisions in the Bill which restrict the disclosure of information. However, we felt that there was considerable force in the argument put to us in Committee that third parties should be forewarned before the director published information provided by them. In particular, my noble friend Lord Graham spoke of a,
"procedure whereby the director who intends to disclose confidential information would advise a third party of his intention before the information was published".—[Official Report, 25/11/97; col. 954.1
My noble friend Lord Haskel undertook to reflect on that point.
We concluded, in the light of the debate in Committee, that it is right that there should be some procedure for third parties along those lines. The amendment therefore makes clear on the face of the Bill that the director's rules may include provisions requiring that he give notice, and an opportunity to make representations, to third parties, before disclosing information which they provided.
The opportunity to make representations is something which was not specifically discussed in Committee, but the Government believe that it would be a useful further safeguard. It would give third parties an opportunity to put to the director any objections they have to particular information being disclosed. The precise details are a matter to be dealt with in preparing the rules, which are of course subject to annulment by either House. There may be some circumstances in which it would not be right for notice and representation procedures to have to apply; for example, where it is necessary for the director to act very quickly. However, it is the Government's clear intention that the director's rules will include rights for third parties of the kind I have explained. I beg to move.
Baroness Nicol: My Lords, I welcome the amendment, which responds to some of the worries we raised at an earlier stage. We shall return to the edges of this subject a little later on. In the meantime, I am grateful for the amendment.
Baroness O'Cathain: My Lords, I welcome the amendment but wish to ask a question. It states:
Rules may make provision as to the circumstances in which the Director is to he required
Why not say that rules "will" make provision?
Lord Borrie: My Lords, I welcome the amendment, but the issue raises a question in my mind. The third party is usually what one might call the complainant, who is alleging that there is a cartel agreement or some conduct which the director ought to examine. In providing confidential information the amendment is wholly desirable in that he will be consulted before that confidential information which may disclose the identity of the complainant is made known. But one of the other things the complainant may wish to know—indeed, it may be helpful to the director—is the response of the person against whom it is alleged that he has engaged in a prohibited agreement or has engaged in prohibited anti-competitive conduct. I do not see in the amendment any obligation on the director general to disclose back to the complainant the response that has been made so that he may answer it. I wonder whether that is catered for somewhere else. It is surely something in which the complainant will be interested.
Lord Simon of Highbury: My Lords, perhaps I may respond, first, to the issue of "may" and "will". I have stated—I hope clearly—that it is the Government's intention that the rules will include rights for third parties in relation to notice and opportunities to make representations. That is a clear commitment to the House. However, the precise details are best left to rules.
468
We need to be careful not to write into the Bill something which will make the director's job impossible in certain circumstances. The new provisions as drafted retain the flexibility needed to address such points in the detailed rules. However, there will be rules on this matter and those rules will be subject to consultation and parliamentary scrutiny. I hope that that assurance is sufficient to meet the noble Baroness's query.
Perhaps I may turn to whether there is a reconsulting process with the director general. This has not been stipulated, but it is a query to which I pay strong attention and I shall return to the matter with the noble Lord.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 163:
Page 69, line 45, at beginning insert ("the documents and").
The noble Lord said: My Lords, we considered this amendment on day one, when it was grouped with Amendment No. 32. I beg to move.
On Question, amendment agreed to.
Clause 50 [Advice and information]:
[Amendment No. 164 not moved.]
Lord Haskel Lord Haskel moved Amendments Nos. 164A and 164B:
Page 25, line 36, leave out from ("section") to end of line 37 and insert ("he must consult such persons as he considers appropriate.
() If the proposed advice or information relates to a matter in respect of which a regulator exercises concurrent jurisdiction, those consulted must include that regulator.").
Page 25, line 42, at end insert ("; and
(c) such other persons as he considers appropriate.").
The noble Lord said: My Lords, we considered these amendments when we debated Amendment No. 135B on day two. I beg to move.
On Question, amendments agreed to.
Clause 51[Fees]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 164C:
Page 26, line I, leave out subsections (2) and (3) and insert—
("(2) Rules may, in particular, provide—

(a) for the amount of any fee to be calculated by reference to matters which may include—

(i) the turnover of any party to an agreement (determined in such manner as may be specified);

(ii) the turnover of a person whose conduct the Director is to consider (determined in that way);

(b) for different amounts to be specified in connection with different functions;

(c) for the repayment by the Director of the whole or part of a fee in specified circumstances;

(d) that an application or notice is not to be regarded as duly made or given unless the appropriate fee is paid.

(3) In this section—

(a)"rules" means rules made by the Director under section 49; and

(b)"specified" means specified in rules.").

The noble Lord said: My Lords, as my noble friend Lord Haskel explained in Committee (at col. 907 of the Official Report on 25th November) it was put to us

469
when we consulted on the draft Bill that it might be useful if fees could be set in relation to a person's ability to pay. This amendment would enable that to be done. I should say that Ministers have not decided that the power to charge fees on any basis should be exercised, but we agree it would be useful were the director to have this additional option of setting fees by reference to a person's turnover. Any rules to set fees would be made by the director under Clause 49. They would therefore require to be approved by order by the Secretary of State before coming into operation and could be modified, varied or revoked by the Secretary of State as provided for in that clause. The order would be subject to annulment by resolution of either House of Parliament.
The amendment amends Clause 51 in two further ways. First, it provides that the rules may make provision for the repayment of the fee in whole or in part by the director in specified circumstances. This might be appropriate, for example, where a fee was set for the giving of guidance on an agreement and the application was withdrawn shortly after it was made. Secondly, the amendment provides that the rules may provide that an application or notice is not to be regarded as duly made or given unless the appropriate fee is paid. I beg to move.
Baroness O'Cathain: My Lords, perhaps I may ask a question for clarification. I am really arguing against myself now, having listened carefully to the Minister on the previous amendment about "may" and "will". The amendment states,
for the amount of any fee to be calculated by reference to matters which may include … the turnover.
I take it that that means that the Government are allowing flexibility. I am sure that the Minister is as aware as I am that turnover does not necessarily indicate a person's ability to pay.
Lord Simon of Highbury: My Lords, I quite agree. That is why we have used the word "may".
On Question, amendment agreed to.
Clause 51, as amended, agreed to.
Clause 52 [Regulators]:
The Deputy Speaker (Lord Skelmersdale): My Lords, before calling Amendment No. 164D, I should say that if it is agreed to, I cannot call Amendment No. 164E.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 164D:
Page 26, line 6, leave out subsection (1).
The noble Lord said: My Lords, with the leave of the House, I should like to speak also to Amendments Nos. 164F, 168A, 171E, 171F, 174B, 174D, 174F, 174H and 174J.
Amendments Nos. 174D and 164F are drafting changes. They provide a reference in Clause 52 to the separate parts of Schedule 10 on concurrency. Amendments Nos. 171E, 171F, 174B, 174D, 174F,
470
174H and 174J relate to disclosure provisions in utility statutes and are for clarification. Because the concurrent powers of utility regulators are provided within their utility statutes, it might be argued that where they obtain information in exercising functions under this Bill it is nevertheless the disclosure provisions of the utility statutes that apply rather than Clauses 53 and 54 of the Bill. These amendments make it clear that it is the disclosure provisions of the Bill that are to apply, not those in the utility statutes. We shall be discussing disclosure more fully a little later. Meanwhile, I hope that noble Lords will be content to accept these amendments for clarification.
I now turn to Amendment No. 168A. At Committee stage I said, in response to an amendment from the noble Baroness, Lady Dean, to the scope of the Director General of Telecommunications' concurrent powers, that while I was not convinced that any change was needed, I would reflect further. I have now done so and I have come to the view that, in response to the concerns raised, a small technical change would be a necessary and useful addition to the scope. This change represents both a clarification and a widening of the scope of concurrent powers, but it is within the current framework of Oftel's existing powers and concurrency.
The proposed amendment replaces the phrase,
which relate to commercial activities connected with telecommunications
with
which relate to the production, supply or acquisition of telecommunication apparatus or the supply or securing of telecommunication services.
The term,
commercial activities connected with telecommunications
is a defined term in the Telecommunications Act 1984 and the proposed amendment essentially takes the elements of the defined term and adds the words "or securing" before "telecommunication services".
This is a modest amendment that would extend concurrent powers under the Bill but not beyond those conferred by the Telecommunications Act 1984 and would reflect the 1984 Act wording used in respect of concurrent powers under the Competition Act 1980. I beg to move.
Lord Fraser of Carmyllie: My Lords, we have no difficulty as regards the large number of amendments proposed by the Government. As the noble Lord will have anticipated, we have a difficulty with Amendment No. 168A. The noble Lord was full enough in his explanation to admit that the change of definition would have the effect of extending concurrency within the Bill itself. It would be to run against the grain of all that we have been arguing for, not only at this stage of the Bill but earlier, if we were to say that we approved of this amendment. I would prefer that the noble Lord did not move Amendment No. 168A when we reach it. I am not entirely convinced from the argument that he advanced that it is necessary even to meet his own needs. It would certainly be objectionable to us.
I appreciate that the noble Lord intends to move it only as a clarifying amendment, but to some extent it is somewhat inflammatory as we begin to get into the

471
debate about concurrency. Any proposal, far from being any attempt to meet us on the points of concern that we have about concurrency and in fact extending what is going on, makes us extremely uncomfortable.
Lord Simon of Highbury: My Lords, I quite understand the position that the noble and learned Lord puts to me. I shall reflect very strongly on the issues. It is an amendment for clarification relating to sets of competences together. If it is thought that we have not achieved the right clarification, I am certainly willing to take the matter away and reflect again.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 164F:
Page 26, line 9, at end insert:
("(2A) Parts II and III of Schedule 10 provide for functions of the Director under this Part to be exercised concurrently by regulators.
(2B) Parts IV and V of Schedule 10 make minor and consequential amendments in connection with the regulators' competition functions.").
My Lords, we have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 165 not moved.]
Schedule 10 [Regulators]:
Lord St. John of Bletso Lord St. John of Bletso moved Amendment No. 166:
Page 70, leave out lines 24 and 25.
The noble Lord said: My Lords, in moving this amendment I shall speak to Amendment No. 167. I understand that the noble and learned Lord. Lord Fraser, and the noble Lord, Lord Kingsland, will be speaking to Amendments Nos. 168, 171H. 171J and 171K. I also understand that they may be speaking to Amendments Nos. 172. 173, 174 and 174A.
While I recognise that the Government are committed to introducing concurrent powers to the regulators in this Bill, these amendments would ensure that the functions under the Bill, when exercised by the Director General of Telecommunications, are exercised on the same basis as they would be exercised by the Director General of Fair Trading.
These amendments are specific to the information technology field. Amendments Nos. 166 and 167 would reverse changes which Schedule 10 to the Bill proposes should be made to the Telecommunications Act 1984 to merge the job of the DGT as a regulator with his new job under the Bill. The amendments, therefore, would concern the important issue, which we debated at Second Reading as well as in Committee, of the relationship between the new jurisdiction of regulators under the Bill and their continuing jurisdiction under the various statutes that created their offices and set out their statutory remits.
As I see it, the current situation is that Section 3 of the Telecommunications Act 1984 sets out the DGT's regulatory—if I can call it—"job description". The Act sets out how the DGT can achieve those objectives. Essentially, he has the powers to enforce licences granted under the 1984 Act. The DGT is vested with the same competition functions as the DGFT. Under the
472
1984 Act there is a distinct separation of powers. The regulatory job was kept separate from the competition law job. Therefore, when the DGT acts as a competition authority he acts as if he had no other job in the same way as the DGFT would.
In essence my amendments would preserve the existing legal arrangements under the 1984 Act whereby the two jobs are kept separate and would ensure that the powers to be vested in the DGT under this Bill could not be used to achieve his regulatory objectives or job description. This would in no way prejudice the efficacy of his concurrent functions under the Bill but would ensure consistency when the DGT exercises his powers under the Bill (including enforcing the prohibitions) since he would do so on the same basis as the courts, the DGFT and the tribunal within the competition commission would do. This argument was eloquently rehearsed by the noble Lord, Lord Kingsland, in speaking to the group of amendments with Amendment No. 159A.
Following my recent meeting with the Minister, I believe that he shares my concerns that the Bill should provide a simple, workable and effective arrangement for the new competition laws. My amendments would further these objectives. They would ensure that concurrent jurisdiction exercised by the DGT with the DGFT under the Bill would be exercised on a consistent basis. I do not believe that Section 3(3) of the 1984 Act should be narrowed as paragraph 2(3) of Schedule 10 proposes. Amendment No. 166 would achieve exactly that.
I recognise the Minister's concern that when a regulator discharges his functions under the Bill he must treat those functions as paramount. In other words, when he acts as a competition authority, pursuing the objectives of the Bill, any conflict with his objectives as a regulator should be resolved in favour of the Bill. I am not convinced that the current drafting of paragraph 2(4) of Schedule 10 achieves that objective.
It seems to me that the purpose of regulation and the purpose of competition law are different. Competition law protects the competitive process. Regulation is concerned with many other and varied objectives. There should not be confusion between the creation of competition and the protection of competition.
The noble and learned Lord, Lord Fraser, referred to a letter which was sent to various noble Lords by Oftel. In that letter, dated 17th February, the director general stated of Amendments Nos. 166 and 167:
These amendments identify a distinction to be drawn between a regulator's sectoral statutory duties and those under the Bill. They are correct to do so. Under the existing framework I am unable to have regard to my Telecommunications Act duties when acting under general competition law. I believe that I would, as a matter of practice, be hound to maintain that approach to cases under the Bill. Therefore, although the Bill, as drafted, would not prevent me from doing so, there is a case for putting the matter beyond doubt".
If the DGT exercises powers under the Bill and leaves his sectoral objectives to one side, it seems to me that the functions that he is exercising—that is, those under the Bill—will then be "paramount".
If the amendments are not accepted, Schedule 10 would enable the DGT to have regard to matters even if they would not otherwise be relevant when exercising

473
Bill powers, and would appear to allow the DGT to base his decisions upon matters which the courts, the DGFT and the tribunal would not be able to base their decisions upon. There would, therefore, seem to be an incompatibility between the provisions of Schedule 10 and the governing principles set out in Clause 58. Rather than Clause 58 prevailing, which I believe is the Minister's intention, it seems that Schedule 10 would prevail. I beg to move.
7.30 p.m.
The Deputy Speaker: My Lords, as Amendment No. 167 is grouped with Amendment No. 166, I should advise the House that if Amendment No. 167 is agreed to, I shall not be able to call Amendment No. 168.
Viscount Trenchard: My Lords, I should like to speak in support of Amendments Nos. 166 and 167. We have come a long way since we debated the Bill at Second Reading. I welcome the co-operative approach which the Government have in general adopted in seeking to improve the Bill and to remove the imperfections in it which compromise the paramount need for consistency and clarity in the application of competition law. Unfortunately, however, the concurrent powers which the sectoral regulators and the DGFT will exercise under the Bill remain a potential cause of confusion and muddle. I wholly agree with what my noble friend Lord Kingsland said a little earlier on the subject.
As noble Lords are no doubt aware, investment decisions in a competitive environment require a clear and unambiguous regulatory framework with as little room as possible for uncertainty and inconsistency in the application of laws and regulations. The Bill as presently drafted vests new and comprehensive competition law powers in the sectoral regulators, but does not clearly separate those powers from those which sectoral regulators already possess, and will continue to possess, for a variety of purposes, some of which overlap and others of which may conflict with the objectives enshrined in the Bill.
I suggest that that is a recipe for confusion and uncertainty which may well tend to delay or prevent investment decisions, thus weakening the competitive position of British businesses with a consequent negative effect on both employment prospects and customer services. It is surely undesirable that the Bill does not specify clearly the respective circumstances in which powers will be exercised by the DGFT and the sectoral regulators.
I recognise, however, that the Government are committed to granting concurrent powers. The more serious problem, as the noble Lord, Lord St. John of Bletso, clearly pointed out, is that sectoral regulators may, or are possibly required to, have regard to their various other functions when they exercise their powers under the Bill. This clearly means that their conclusions may not always be the same as would be those of the DGFT who does not have other, possibly conflicting, responsibilities deriving from powers granted otherwise than in the Bill in considering the same matters.
474
The sectoral regulators have responsibilities to seek to achieve objectives which have no connection with the principal purpose of this Bill, which is to protect competition. These responsibilities should be clearly isolated from their responsibilities under the Bill. The new powers granted to the sectoral regulators under the Bill are considerably greater than those which it has been felt that they should exercise hitherto. It is, therefore, all the more important to define clearly the circumstances and contexts within which they may be used.
In order to thrive in today's competitive market, business undertakings need certainty and consistency in the application of the law. These laws include unclear terms such as "abuse". The provisions for the issue of procedural rules contained in Clause 49 will not explain what abuse of dominance is. Any advice or information provided by the director under Clause 50 will be only non-binding and cannot be comprehensive. Certainty cannot be obtained through the alignment provisions of Clause 58 because EU case law remains under-developed, patchy and in part conflicting. Much will, therefore, be left to the discretion of those applying the new laws on a case-by-case basis.
Amendments Nos. 166 and 167 are necessary to ensure that when the Director General of Telecommunications acts under his Bill powers he does so consistently with the way in which the Director General of Fair Trading would act.
Amendment No. 168, which has been tabled by my noble and learned friend Lord Fraser of Carmyllie and my noble friend Lord Kingsland, and which I also support, establishes consistent treatment with what would be the case in the European Court.
These amendments, if adopted by your Lordships, will help to remove confusions and to procure a greater degree of clarity and consistency in application of the extensive powers granted by the Bill. They would promote alignments with the European law principles referred to in Clause 58. They would avoid the perhaps unintended situation where regulators and regulatory goals depart from the Bill's objectives and processes.
Schedule 10 should be amended to avoid misalignment with European law principles and to ensure that Clause 58 is not overridden. These amendments will not have any adverse or inhibiting effect on the effectiveness or the working of the Bill. I hope that the Minister will support their introduction.
Lord Kingsland: My Lords, Amendment No. 168 is a second-best amendment. It refers also to the telecommunications sector. The noble Viscount, Lord Trenchard, has already alluded to it. Essentially, where there is a conflict between the objectives of the Bill and the objectives of the Telecommunications Act, it seeks to require the Bill's objectives to be paramount except in circumstances where the regulatory objectives are "relevant". "Relevant" is defined as what would be relevant to the European Court of Justice if it were directing its mind to the matter. That is not an ideal solution but it offers the Minister an alternative should he have any reservations whatsoever about the previous two amendments.

475
The telecommunications sector is not the only one with worries about the bridge. In the Telecommunications Act there is no bridge; that is what distinguishes it from all the other utility sectors. But the bridge that exists in the other utility sectors is very different from that which the Minister proposes. There are two reasons for this. First, the competition component that forms part of the bridge in the other sectors is much weaker than the one proposed in the Bill. It is an alloy of the Fair Trading Act 1973 and the Competition Act 1980. Secondly, the present powers of the regulator under the existing bridge in those two Acts are very light indeed; in particular, they are not enforcement powers. What is proposed by maintaining the bridge in all these other sectors, therefore, is much more dramatic than it seems superficially. In effect it is as dramatic a change as that proposed by the Minister for the telecommunications sector.
It is absolutely clear that many of the regulatory objectives, desirable though they are in their own context, are in flagrant contradiction to the objectives of the Bill. One example of that, which I believe has been described to your Lordships in the course of the Committee and Report stages, is the provision of universal service in the world of telecommunications. That is a laudable objective which clearly conflicts with the competition objective.
I say to the Minister when looking at these amendments that it is not too late to think again about the wisdom of what is proposed with respect to the bridge. With the greatest respect, it certainly deserves deeper reflection than it appears to have received so far.
7.45 p.m.
Lord Simon of Highbury: My Lords, I am very grateful to the noble Lord, Lord St. John, the noble and learned Lord, Lord Fraser in a previous debate, the noble Lord, Lord Kingsland, and the noble Viscount, Lord Trenchard, for again raising the issue of the relationship between duties under the utilities statute and exercise by the Director General of Telecommunications and other regulators of concurrent functions under the Bill. I certainly do not accept the comment of the noble Viscount, Lord Trenchard, that this is a muddle. It is not. We seek to explain, as we have been challenged to do yet again by the noble Lord, Lord Kingsland, how we can have a framework Bill for competition and at the same time a regulatory process running in parallel.
To date, clearly I have failed to explain my reasoning to the noble Lord, Lord Kingsland. He says that on the one hand an adjudicatory and reactive system, which is what the prohibition is, and on the other hand an interventionist and active system are two separate bodies of thought that can never meet. I do not agree. I believe that we should strive to make them meet. It is most appropriate in dynamic market places to have a framework for a Competition Bill that encourages businesses to run their affairs in the most competitive manner, but with a very large stick to beat them if they do not do that in markets which for years have had none of these opportunities due to the very strange systems that have been adopted in the past for running the utilities. I should not go into that. However, because of
476
that they have had none of these opportunities. We are giving them the opportunities, and I am pleased that we are doing so. The issue is how to bring the dynamic new markets within the framework of the Bill. I do not perceive here polemics that cannot be resolved but opportunities that challenge us.
I do not feel at all muddled. I have listened with very great care to what noble Lords on the Opposition, Liberal Democrat and Cross Benches have put to us as to how best to shape the Bill, particularly in regard to the position of the Director General of Telecommunications who has focused this argument, and other regulators who have a bridge whereas he does not. I have pondered, reflected and listened. In the light of all that I have thought about the provisions of Schedule 10. The result that we wish to achieve is that each regulator must regard his functions under the Bill as paramount and act in accordance with the governing principles set out in Clause 58. That was the point so clearly made by the noble Lord, Lord St. John. At present we have provided that he may have regard to his statutory utility duties although he is not required to do so.
Our policy is that in exercising the functions under the Bill a regulator and the director must each apply the same considerations as to what he may or may not take into account. The reference to "having regard to the statutory duties" was intended to show that the regulator could look at them but was to be circumscribed by the paramount duties under the Bill in doing so. I understand that the Divisional Court in a case involving British Telecom held that the effect of the existing disapplication of the duties of the Director General of Telecommunications under the Telecommunications Act was that he was not entitled to look at them. However, that interpretation was obiter and the court in some future case might come to a different conclusion. We do not believe it is right that a regulator exercising concurrent powers should be prevented from looking at matters covered by his duties; nor that the relationship between the duties and the functions under the Bill should be left subject to uncertainty.
Noble Lords opposite and the noble Lord, Lord St. John, have not accepted that "have regard to" achieves our mutual desire for the regulators and the director to apply the prohibition in the same way as to minimise inconsistency. I have listened carefully to the points that have been made that the ability of a regulator to have regard to statutory duties raises the possibility, however small, of inconsistency in the basis on which the prohibitions are to be applied by the director and each regulator.
The position that we wish to achieve is that a regulator applying the prohibitions is to do so on precisely the same legal basis as the director general. We wish to make that clear on the face of the Bill. I accept the argument that the Government need to table amendments to the Bill in order to achieve that. I hope that with that assurance the noble Lord will be content to withdraw his amendment at this stage.
Lord St. John of Bletso: My Lords, I am grateful to the Minister for his detailed response. Obviously,

477
I found it a little disappointing. He appears to have given me a bit of a stonewall response. I am encouraged to hear that the Minister will consider tabling amendments at a later stage. However, the Minister does not appear to have taken on board my key themes, which are: the separation of powers; the need for certainty in the parameters of those powers; and the need for consistency in the operation of those powers. I believe that there is no such thing as sector specific competition law. It is vital that there is only one uniform national competition law that must be adjudicated on the same basis by all. The Minister recognised the importance of that principle in debate on the first day of Report stage. There remains widespread concern that the mixing of regulatory objectives and those of the Bill is fundamentally flawed. I give notice that I intend to revert to this matter on Third Reading. I am grateful to the Minister for the assurances that he has given. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 167 and 168 not moved.]
Baroness Farrington of Ribbleton: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that we do not return to Report stage before 8.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Social Security (Incapacity for Work) (General) Amendment Regulations 1998
  Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1998
    Social Security Benefits Up-rating Order 1998

      Guaranteed Minimum Pensions Increase Order 1998
      7.50 p.m.
      Lord Haskelrose to move, That the draft regulations and orders laid before the House on 5th February be approved [22nd Report from the Joint Committee].
      The noble Lord said: My Lords, I beg to move the four draft orders and regulations standing in my name on the Order Paper en bloc. I understand that that is acceptable to those of your Lordships who take part in such debates. The orders we discuss today are to give effect to new rates of social security benefits from April. They also include the consequential re-rating of national insurance contributions, the amendment of levels concerning guaranteed minimum pensions and an increase in the level of therapeutic earnings allowed in incapacity benefits.
      478
      The orders that are the subject of this debate are part of the normal business of this House and the Department of Social Security. We are required annually to review the rates of benefit and the rates of contributions. These orders would bring the revised rates into effect. It has also been the convention at this time to look more widely at social security, especially focusing on expenditure. After all, the uprating, which this year will cost nearly £2.5 billion, is the most significant feature of the department's spending plans.
      As noble Lords know, a recurring theme of these debates, and one which has troubled many people, is that, despite growing prosperity, spending on social security has also continued to grow. While an effective social welfare system is the bedrock of an inclusive society, the evidence shows that our system has increasingly failed to match the needs of our people.
      Spending on social security has increased dramatically in real terms. It is now nudging £100 billion, an increase of £43 billion over the period 1979–1996—an annual growth rate of 4 per cent.
      And yet society is less equal. One in five people lives on less than half average income today, compared with one in 10 in 1979. The proportion of households where no one is working, now just under 20 per cent; has doubled since 1979. And the system has failed those who want to help themselves.
      There are over 1 million sick or disabled people of working age living in workless households. Yet more than a quarter of the people on sickness and disability benefits are either looking for work or have aspirations to work. It is clear that if we are going to meet the needs of the people we must re-cast welfare. We need to use it as an investment to empower people so they can help themselves.
      Our New Deal strategy, with its emphasis on caseworking, with supporting people to make the best of the labour market, has been an immediate and powerful response. Helping people to get the best out of themselves is a great challenge for this Government. The welfare reform that is needed to achieve this is more than the New Deal. It is a recognition that the system itself is a barrier to empowerment. Its complexity, especially the overlays of work and non-work benefits, of tax and national insurance, means that many people who should be in work cannot see the clear financial advantages of doing so. This particular area has been of concern for many years. The frustration is that the perversities of the system are plain to see, but oh so difficult to overcome.
      We now have a manifesto commitment:
      to examine the interaction between the tax and benefit systems so that they can he streamlined and modernised so as to fulfil the objectives of promoting work incentives. reducing poverty and welfare dependency, and strengthening community and family life.
      The Chancellor in his pre-Budget Statement announced that the Government propose moving towards a more integrated tax and benefit regime. A lop starting rate of income tax and a reform of benefit tapers will be introduced when it is prudent to do so. The Government will also consider the scope for bringing national insurance payments for the low paid

      479
      more closely into line with income tax to raise their income from work. And a working families' tax credit is planned, with cash paid through the wage packet to families on low incomes.
      The important work of Martin Taylor should ensure that the "drag factors" of unemployment traps and of swingeing deduction rates which form poverty traps are fully exposed. The conclusions that emerge from the Taylor review will inform the judgments made in the Chancellor's Budget next month.
      This emphasis on people of working age is not to ignore older citizens. I will come to that later. But getting people back to work is a pressing need. Work is the only sustainable route out of poverty for most people. But there is more to it than that. The concentration of unemployment in certain areas, plus the marked differences between working families and non-working families, has led to inter-generational dependency and social exclusion.
      For that group there is little of the dignity of belonging to mainstream society; the disciplines of work which especially for young people can mark their way in life are missing; the opportunities for advancement, career progression and the learning experiences of work are not there; and also missing is the example that work gives—the example of providing an order for children to follow their parents and youngsters to follow their peers.
      For all those reasons it is right that the major investment in welfare to work is our number one priority. A working and busy society is an inclusive society. It can support the right level of investment that the great public assets of the health service and education greatly need. Equally important, a working society provides the wherewithal to support those who cannot support themselves. For all our hopes of releasing people to fulfil their potential, there will always be those who will not be able to manage, and I can assure noble Lords we have no plans to abandon that group.
      Work gives young people and families the freedom to invest in the future by building decent pension provision. If there is one area that can provide the best examples of how self-reliance can revolutionise people's lives it is the example of pensioners' income. In recent years pensioners as a group have on average enjoyed faster income growth than any other broad group of the population. Between 1979 and 1995/96 pensioners' income grew by 64 per cent. compared with a growth in average earnings of just under 40 per cent. But not everything is as rosy as might appear at first sight. While a third of pensioners have net income to place them in the top half of income distribution, around one in four in the bottom 20 per cent. of income distribution are pensioners. Even while a combination of state and private provision now means that millions of pensioners can enjoy a life in retirement on a decent income, some one in four pensioners have to rely on Income Support, or even worse fail to claim their entitlement.
      To ensure that all pensioners in future will be able to retire with income security, one of our first tasks in government was to set in process the pensions review.
      480
      It was clear to us, however, that immediate action was necessary to ensure that all pensioners had need of help with heating. A significant winter fuel bill is so unwelcome an event in some pensioner households that heating is rationed to the extent of prejudicing well being. Our strategy has been twofold. First, to reduce the costs of energy. We have made significant progress with this. We have reduced VAT on domestic fuel from 8 to 5 per cent.; reduced the gas levy, which should result in lower prices; encouraged competition in gas and electricity suppliers to the consumer; extended energy efficiency grants to include cavity wall insulation and the upgrading of heating system controls; and announced the setting up of the environmental task force, as part of our welfare to work programme. Furthermore, we have made a start by releasing almost £800 million to local authorities in England over the next two years to help meet pressing housing needs, which is expected to feature improved energy efficiency in many areas. Similar provisions have been made in Scotland, Wales and Northern Ireland.
      Secondly, immediate and significant cash help has been made to pensioners dependent on income support; £50 to each household and £20 to other pensioner households. There is to be a comprehensive package of practical measures which will make a significant difference to the most vulnerable in our society.
      There will be one group which will get £20 and should have got £50. These are the estimated near 1 million pensioners who do not claim the income support to which they are entitled. As with the assistance for winter fuel bills, the Government felt that early action was required to get help to this group. Research is being carried out to establish why pensioners are so resistant to taking up their entitlement. Shortly we will be issuing further details of the pilot initiatives announced by the Chancellor in November. Fifteen million pounds will be invested to test the best ways of identifying pensioners with apparent title and the best ways of getting them to claim.
      These reforms that will give new hope to many of working age, and security to many in retirement are but one side of what we want from a modern welfare system. To achieve a modern welfare service, we must also reform our approach to managing social security. We need to provide better information. Rights and responsibilities will underpin welfare for the 21st century. If welfare develops as a mix of the best between what the state and the private sector can provide, it will become more and more critical that people understand their position in relation to the state. We need to link the services we provide. The system fails to recognise that our customers should be busy people. No need for them to be involved in the paper chases between systems and organisations, or for them to be victims of inflexible technology.
      We need to support our staff better. Their's is a tough job. They have been at the sharp end of people frustrations over economic exclusion and of the changes in society. The success of welfare in the future depends on our staff providing effective interventions at the right time through caseworking.

      481
      Why are we in the process of such significant and major change? My right honourable friend the Minister for Welfare Reform suggested an answer in his thoughtful speech on a similar Motion to this on 18th February. He described the four stages of welfare. For some 400 years there has been a national programme to combat destitution; that is the first stage. For the most part of this century the focus has been on relieving poverty; that is the second stage of welfare. We are now in the third stage. This is where policies have been increasingly directed at the prevention of poverty. The fourth stage—and this is our ambition for welfare for the 21st century—is to deliver services and make opportunities so that individuals can live up to their potential.
      A key to achieving this ambition to match the aspirations of people is to engage them in the process. We hope that the publication of the Green Paper on welfare reform will be the beginning of that engagement. I commend the orders and regulations to the House. I beg to move.
      Moved, That the draft regulations and orders laid before the House on 5th February be approved [22nd Report from the Joint Committee].—(Lord Haskel.)
      Lord Higgins: My Lords, in my short time in your Lordships' House, I have been impressed by the versatility of its Members. It would seem that the noble Lord, Lord Haskel, can transfer seamlessly from a debate on the Competition Bill, to this debate and, presumably, back to the Competition Bill. I fear that he may go to bed hungry and, if so, I regret that.
      As the noble Lord rightly pointed out, this is a traditional debate. The four orders increase the level of various social security benefits either in line with the retail price index or the more relevant Rossi index. Correspondingly, they increase the contributions and have important indications for the operation of the Pension Schemes Act 1993, to which I shall return in my remarks.
      There is no more fashionable a subject than that of welfare reform. Indeed, the Prime Minister has been in the forefront of it. There was a great fanfare in the press that he was to launch a national campaign and was to tour the country putting forward his views. There were two curious aspects about the campaign. First, almost every aspect of welfare in this country was under review and therefore it was not clear how the content of the great speeches would appear. Secondly, a great national campaign was announced in the first speech made on 15th January. However, the Prime Minister opened the second speech by saying that it was the second of his party meetings to debate the reform of the welfare state. If it is to be a national debate, it is far from clear why all the audiences are to be restricted to what one might call "the party faithful". At Question Time last week, I sought on two occasions to obtain from the noble Baroness, Lady Blackstone, an assurance that they would become public meetings, but, alas, I received no reply. Perhaps the noble Lord, Lord Haskel, can enlighten us tonight. We are debating important issues
      482
      and if the Government put forward reasonable and sensible proposals we on these Benches will not oppose them.
      However, we must note that at the meetings to which I referred there was a considerable air of dissent, even given the restricted nature of the audience. To a large extent, that reflects a widespread fear that the reforms are driven largely from the Treasury. Indeed, at times it seems as though the Treasury and the Chancellor have taken over the whole issue of welfare reform.
      That is not surprising because the abolition of the ACT reliefs on pension funds, the rebates to which I shall refer later and in particular the issue of single parents, have rightly raised suspicions that this is likely to become a cost cutting exercise. Surely, that is not what it ought to be about. During the debate on the Statement on these orders I raised at length what can only be described as the Government's U-turn with regard to lone parents.
      It seems that that decision was taken to reverse temporarily the line that the Government had taken in opposition. However, we have had no explanation whatever as to why that change took place. It is one of the reasons why there is considerable undermining of the Government's credibility on these issues. No doubt we can refer to those matters in the Committee stage of the Social Security Bill and I shall therefore not press the Minister on the point. However, we need an explanation—if fears about the change being Treasury-driven are to be allayed—of why the Government changed their mind on a matter on which they had clearly taken a position in opposition.
      Perhaps I may pick up the point made by the Minister on heating allowances. Having represented for 33 years the constituency with the oldest population in the country I am well aware of the problem. However, one should put the record straight in one respect. While it is true that the previous government introduced VAT on fuel, they also introduced generous compensation arrangements for pensioners on low incomes. In the event, because of the success of the deregulation process, the price of fuel did not go up at all so people were compensated for an increase which did not happen.
      I listened with great interest to the various points mentioned by the Minister in that context and many are welcome. However, I was puzzled by a remark he made with regard to the heating bonus and even more surprised at the inclusion of a reference to it in the Prime Minister's speech. In the second speech made in the course of his campaign, he said:
      "We've already paid a fuel bonus to over a million pensioners".
      As I understand it, the statement which the Prime Minister made on 30th January is simply not true. The bonuses had not been paid. No doubt the Minister will be able to tell us whether that is so. Moreover, if I understand the position correctly, the bonuses are not being paid to all pensioners. Perhaps the Minister can confirm the point because it is important. If the bonus is not paid until the weather has improved—though, goodness knows, the weather has been good enough already this winter—it is a matter of concern. However, we may reasonably welcome the other measures to which he referred.

      483
      At the moment we have little idea what the outcome of the Government's various reviews will be. Some indication at least was given by Mr. Frank Field in opening the debate on the orders last week in another place. He made a similar reference in his distinguished and elegant Beveridge Memorial Lecture on 18th February. As I understand it, he said that the Government intend to reform and extend welfare but consensus now favours,
      "a mixed economy of welfare … while we shall aim to increase welfare expenditure, we shall aim also to decrease the proportion of the budget that is covered by taxpayers through benefits guaranteed by the Government.—[Official Report, Commons, 18/2/98; col. 1102.]
      As regards pensions it seems clear that the Government's intention is that more private provision should be made rather than the normal social security budget bearing as heavy a load as it does at the moment. The pension budget is 40 per cent. of the total social security budget, which is, as noble Lords know, a very large item.
      What is curious is that, having indicated that that is the way the Government's thoughts are going, the actions which have been taken seem inconsistent with the aims they declare. In particular, with regard to the limitations on PEPs and the move to ISAs, many people who have made pension provision through PEPs will find that they are no longer receiving the same reliefs as they expected and on which they made decisions with regard to pension relief.
      I have already referred to the serious effect amounting to something like £5.4 billion which the abolition of the ACT dividend credit will have on pension funds. Here I must declare an interest because for many years I have been a trustee of a company pension fund. But some of the Government's actions have been puzzling in that respect. The effect of the ACT change did not appear to be appreciated either by the Chancellor or by the Department of Social Security when the changes were announced.
      The result of the change made in the Budget is to downrate the rebate which is given to occupational pension schemes. The Department of Social Security, as I understand it, asked the Government Actuary to produce some figures to show what will be needed to he done to adjust that. The Government Actuary duly replied. But, as I understand it—and no doubt the Minister can clarify the point—the Government did not do what the Government Actuary recommended. I do not understand why that should be so. What they have done seems clearly to be inconsistent with the aim which the Minister for Welfare Reform has clearly stated: namely, to move more towards private provision of pensions.
      The effect of the decision not to implement the recommendations of the Government Actuary in full will, it seems, tend to push people from some company schemes into personal pensions or back into SERPS. Personal pensions which the Government have previously criticised seem to do rather well on the deal.
      Therefore, I ask the Minister why is it, if the aim is to move towards more private provision and away from the taxpayer carrying the whole burden with regard to SERPS in particular, they appear to have taken the
      484
      decision. It has an adverse effect on people's pensions, but the amounts of money do not seem so large—about £0.5 billion over the life of a Parliament. At the very moment the Government were saying that they would move in one direction, they took actions which seem to move in precisely the opposite direction. Perhaps the Minister can, in the context of the orders which are relevant, explain why that appears to have happened. Once again one is left with the impression that it is all driven by the Treasury who seek to get back money here, there and wherever they can without regard to the longer term objectives which the Department of Social Security has set up.
      I turn to two other points. The first is the real fear over the National Insurance pension and whether it should be means tested. Just before Christmas we had the sudden introduction of the hitherto unknown expression "affluence testing". That seems to have been clobbered and, if so, it is welcome. I speak from many years of constituency experience. There is a real fear among pensioners that at some stage there will be a situation where the National Insurance pension will be subject to affluence testing, means testing, come what may. I hope that the Government will be able yet again to state the view that that is not their intention, although a statement by the Secretary of State for Health recently caused some doubt about it.
      The second of my last two points is that we anxiously await a Green Paper on welfare reform. We were told that it would be published much earlier, at the turn of the year. Then, when the matter was debated last week in the House of Commons, the best Ministers could do was to say that it would be published before the next annual uprating. That seems to me to be a strange, almost contemptuous, way of putting it. Shadow Ministers and others in the other place reasonably said: "Are we going to have it before the Budget, on Budget day, or after the Budget?" To give a contemptuous answer that it would be some time before the next uprating does not seem to me to be satisfactory. It may be that the Minister can enlighten us further on that.
      The Minister for Welfare Reform, in the recent distinguished speech to which I referred, suggested that it will be concerned largely with principle rather than detail. Nevertheless, in the context of the forthcoming Budget, that is something which we shall obviously await with great interest.
      If the proposals in that are consistent and compatible, we shall welcome them if they are likely to improve the lot of people and also bring about the move to which the Minister has rightly referred, from welfare to work—always provided that the position of those who are unable or who do not wish to work is protected.
      Having said that, I thank the Minister for his opening remarks and I shall look forward to his reply.
      Earl Russell: My Lords, by long convention, this debate is treated as an occasion for a general discussion on the social security system. That has never been more appropriate than it is this year. The orders themselves, I am thankful to say, contain nothing particularly extraordinary. I assure the Minister that I shall not make

      485
      another speech on single parents. I have made a good many; there are more to come; but this is not the occasion for another.
      I shall touch on two points in relation to the orders. First, I am pleased to note the verdict of the Government Actuary that there is no need for a Treasury supplement for the National Insurance Fund this year. That does a little to dispel the atmosphere of crisis which is occasionally generated around that subject.
      The other matter is that, not for the first time, I wish to deplore the failure to uprate the capital limits for eligibility for benefits. That failure is a disincentive to saving and I hope that that is not what the Government want.
      It is possible that this may be the last statement that we have in this form, and that suspicion can only be increased by the Prime Minister's rather curiously-worded threat to "go the full Monty" on welfare reform. I wonder why the Prime Minister had the vanity to think that that would be a turn on.
      There is always a need to review the social security system. On these Benches, we are well aware of that and we are in the middle of reviewing our policy. We are particularly concerned with the elimination of poverty traps. The Minister will remember that in an Unstarred Question on 3rd June, I wished the Taylor Committee a fair wind. That is without prejudice to any comments that I may make on its ultimate conclusions.
      We cannot prejudge the welfare reform. Government policy on social security seems to be still in the period of "Let 100 flowers bloom", and they even have a field to grown them in. We shall have to judge what they are doing when they ultimately do it.
      What is increasingly concerning—and concerned me more as I listened to the Minister this evening—is the fear that they are setting out on the operation starting from a mistaken diagnosis. Mistaken diagnosis does not always lead to mistaken treatment. Were it so, it is likely that none of us would be here now. Our ancestors would have died long ago before our previous ancestors were born. But when I listened to the Minister, he gives the number of people in poverty as an indication of the failure of the welfare state. I do not see how that can be so unless he is proposing to increase benefit levels, and I do not believe that he is.
      He gave the number of people and the number of households who are workless as an indication of the failure of the welfare state. It simply passes my understanding how the Government can suppose that that is so. I should have thought that that was rather a failure in the general economy—a failure to generate a sufficient number of jobs. Blaming the welfare state for that is simply a case of shooting the messenger.
      I share the suspicions of the noble Lord Higgins, that the exercise may be Treasury-driven, especially having noticed, well before the election, the number of occasions on which the Prime Minister expressed the hope that he could spend more on health and education by reducing the social security budget.
      486
      We can reform the welfare state or we can cut costs but there is a potential conflict between those two objectives. While we should all like to cut costs, we should be careful of portraying an atmosphere of crisis. If the Minister cares to look at the current Social Trends, he will see that in the Eurostat figures for the spending on social protection in the EU—if he wishes, he may point out that that is not quite the same as social security but the pattern does not differ very widely—we come ninth out of 11 countries listed. The four missing are Luxembourg, the Republic of Ireland, Greece and Spain. While I believe Greece and Spain come below us. Luxembourg comes above us, and with the Republic of Ireland it depends precisely which method of measurement is used. Therefore, we are certainly not at the top.
      The increase in social security spending has been a global trend over the past 20 years or so. Because it is a global trend, it is most mistaken to put it down to a particular failure of the British welfare state. It is a regular rule of explanation that the explanation must be as wide as the phenomenon it explains. The Minster's speech failed to pass that test.
      Also, if we look at what the Government Actuary said in his Politeia Lecture of 27th January, when he was talking about the actuarial basis for pension reform, he said:
      "The fact that future costs of social security in the UK look much more manageable than in most other countries reflects relatively low benefits which can he expected from the public system".
      He pointed out—and the point bears repeating—that the financing method will not alter the way in which the population ages or obviate the need to transfer resources from the working population to the retired population. Transferring costs to the private sector is not a cost-free option.
      If we look at what is causing all that, it is fairly obvious what are the main global causes: ageing, which the Government Actuary reminds us is a matter of reduced fertility as well as reduced mortality, relationship breakdown and the flexible labour market. I remind the Government that we live in a global market in which there is free movement of capital but not free movement of labour. That is something which must tend to reduce the value of labour and therefore must tend globally to increase the costs of social security.
      We live in a world with a cult of what is nowadays misleadingly known as efficiency. That means that the costs of, if I may so put it, the warehousing of labour are shifted regularly from employers on to the state. Those costs must fall somewhere. I am not necessarily arguing that the state is always the right place to put them but, when the Prime Minister describes the flexible labour market as the real world, he should be prepared to foot the bill which results.
      If one wants to try to tackle any of that, one should, as far as one can, tackle the global trends, which are involved. If the causes of the increase in social security spending are outside the social security system, then many of the cures should be also.
      Let us take, for example, spending on disability, which is causing concern. I wonder whether increasing the enforcement powers of the Health and Safety

      487
      Executive would do more to reduce the costs of disability to the social security system than any welfare reform you could imagine. At least that is a point worth considering and it is worth costing.
      It seems to be a problem that the economy is not generating enough jobs for the people who want them, and this is particularly true in individual pockets of high unemployment. The Scottish Select Committee has recently reported that a third of all young unemployed in Scotland are in the City of Glasgow. One wonders whether repairing the west coast main line, which needs doing anyway, might do more to reduce the social security budget than any measures brought in through welfare-to-work.
      In one of these pockets where the local economy has in effect collapsed, it is no good blaming the unemployed and telling them that they ought to look harder for work. That is only telling the rats to run round the treadmill faster. It does not get them anywhere. In that kind of situation I cannot help feeling that the notion of welfare dependency, now so fashionable, is something of a mirage. We all depend on something, whether it is an employer, a pension, inherited wealth or the benefit system. If we say that someone suffers from welfare dependency, I think we are saying no more than that he has nothing else to depend on.
      On one occasion I have seen my son submitting 100 job applications in one week. Not a single one of them got so much as an acknowledgment. In a situation like that you see the truth of the maxim that hope deferred maketh the heart grow sick. If people talk in a way which encourages people to think that they are feeding welfare dependency, they may be saying no more than the proverbial jolly miller,
      "I care for nobody, no, not I, If nobody cares for me".
      The state is sometimes mistaken to take that sort of remark at its face value.
      The Scottish Select Committee also found that 20 per cent. of the young unemployed were suffering from some form of handicap such as illiteracy, a criminal record, a physical disability or a drug addiction. In those cases, simply chasing people will not get us far. When we assess the kind of reviews we want and the kind of objectives we want, we must accept that there is a possibility of conflict between the objectives. The European Convention on Human Rights is a constant balancing of objectives which have to be weighed against each other. For example, if one thinks about poverty traps, one has to weigh the good objective of encouraging people into work against the good objective of reducing costs. The things that need to be done to remove poverty traps are extremely expensive, especially the lengthening of tapers on housing benefit, which is one of the most urgent things that needs to be done. I am not arguing for indiscriminate spending but am arguing for an attempt, difficult though it may be, at sensible cost benefit analysis.
      In talking about encouraging people into work, I must say that I think it necessary to allow an exemption for people who have to care for young children, especially for children under five. I do not think it is the state's
      488
      business to intervene in anything where the judgments that are needed are so personal. The Social Security Select Committee on a recent visit to Wisconsin reported on the requirement that in Wisconsin people must seek work when their youngest child reaches 12 weeks old. It stated,
      "We regard that 12 week requirement as potentially damaging for both mother and child. It could he argued that this requirement is also inefficient, in that by making the mother work outside the home, the State has to pay for child care (possibly expensive and possibly low quality)".
      It is not the state's business to teach people how to live; it is the state's business to help them to make their own choice effectively. If anything like that should ever come into force here, it would be deeply regretted. I am pleased to see the Minister nodding in sympathy at what I have said.
      One of the matters that we on these Benches are determined about is, in the words of our previous manifesto, that we should encourage people to work without compulsion. That is a view that has been forcefully supported recently by the Scottish Select Committee, on the ground of employers' reluctance to have a conscript workforce, on the ground of efficiency and on the ground of common humanity. Those words "without compulsion" are our policy and they will remain our policy for so long as I have the privilege to speak for this party on this subject.
      Concern is expressed in government circles about the problem of consent for social security taxation. Mr. Field in his Beveridge lecture observed that,
      "the poor no longer have enough votes to win an election."
      But Mr. Field out of date if he thinks those who need to think about their right to social security are only the poor. One needs only to look at the history of income support for mortgages to see that that is not so. We are told that between the previous two elections 8 million people suffered a spell of unemployment. We all know that that could happen to any of us. That is the basic reason for taxpayers to consent to the social security system. They pay their taxes for the same reason they buy lottery tickets; namely, "It could be you".
      Lord Haskel: My Lords, I was advised by my noble friend the Minister to listen carefully to the remarks made by noble Lords this evening because these contributions would help stretch our understanding of the complex and difficult issues which will challenge us as we develop our approach to welfare. As usual, my noble friend the Minister was not wrong and I thank noble Lords for their contributions this evening.
      I shall try to respond to some of the points. I thank noble Lords for having given me some notice of what their points might comprise. The noble Lord, Lord Higgins, asked about the road shows. They are by invitation because they debate the need for welfare reform. However, the press will be present to report what goes on. Welfare reform will, of course, be subject to the widest consultation and will not be debated only at these various road shows. The noble Lord asked who pays. It is certainly not the Government. The Labour Party pays for some of them and some are sponsored.

      489
      Noble Lords asked about lone parents. This is not a Treasury driven matter. In the past lone parents have not been given the opportunity to leave benefit and move into work. The Government's strategy is not to leave lone parents on benefit but to address the barriers they face in moving into work. A key to helping lone parents into work is to provide practical help with job search, with building their confidence and with motivation, with developing their skills and with finding the right childcare. The Government are already providing that through our new deal for lone parents and our national childcare strategy. Some lone parents will choose not to take a job immediately, perhaps because they have a young child. However, these measures will allow those parents to return to work sooner, reducing the duration of benefit receipt and reducing the hardship associated with lengthy spells of benefit.
      The noble Lord, Lord Higgins, also asked about heating payments to pensioners. Who is eligible? People receiving income support or income based jobseekers' allowance for at least one day in the week commencing 5th January 1998 and whose benefit includes a pensioner premium have received £50. People over state pension age (60 for women and 65 for men) receiving one of the many benefits during the week commencing 5th January will also receive a winter fuel payment. Those benefits are: attendance allowance; constant attendance allowance; disability living allowance; graduated retirement benefit; incapacity benefit; industrial death benefit; invalid care allowance; retirement pension; severe disablement allowance; unemployability supplement; war disablement pension; widow's benefit; war widow's pension. Those people, where there is only one eligible person in the household or that eligible person is of no fixed abode, will receive £20. Otherwise, each person will receive £10.
      The Government want to have payments issued as quickly as possible. Payments of £50 to the 1½ million eligible pensioners receiving income support or income-based jobseeker's allowance have been made. The vast majority of payments to others will be made by the end of March.
      The noble Lord also asked—
      Lord Higgins: My Lords, I am extremely grateful to the noble Lord for giving way. Was the statement made by the Prime Minister, in the speech to which I referred, correct? That is to say, had all those payments been made at the time when he was speaking? In that context, what is the argument for the meetings not being public? I could not quite understand that.
      Lord Haskel: My Lords, I do not have the Prime Minister's remarks in front of me so I would rather not comment on that. The position regarding the payments is as I have just said. The reason why the meetings are not public is that they are by invitation, to discuss the need for welfare reform. Those are discussions that take place as part of ordinary political activity.
      The noble Lord also asked about pensions and the insurance rates. The measures in the July Budget are intended to ensure that the Government create and
      490
      maintain the conditions for long-term investment and growth. They consider that that is the way to ensure that wealth is created to sustain pensions in the future and aid the companies that provide occupational schemes.
      The noble Lord is quite right. John Denham did write to the Government Actuary asking him for advice on the effects changes to some of the factors might have had on the levels of the rebates. The Government Actuary concluded that in relation to the tax changes, in order for the rebates to continue to match the benefits forgone, an increase to all rebates is required. In the light of both that advice given by the Government Actuary and the impact of recent trends in the pensions industry on the resources available to the National Insurance Fund, my right honourable friend John Denham recently announced that. from April 1999—the first opportunity available—he proposed to increase age-related rebates for appropriate personal pensions and adjust the rebates for COMPS by replacing the current loading for expenses with the same as that contained within the rebate for the contracted out salary related schemes. Orders will be laid shortly and will be subject to debate in both Houses. That will give noble Lords an opportunity to debate the matter further.
      The noble Earl, Lord Russell, spoke quite eloquently on a number of philosophical matters. He asked whether children living in poverty and the high number of workless are failures of the welfare state or failures of the economy. I am not sure which; one thing I am sure of is that they are in fact failures. That is why we are introducing a new deal for the unemployed and for the sick and disabled, and comprehensive spending reviews to examine every part of the social security system.
      The noble Earl asked a similar question regarding the Government Actuary. I believe that the answer I gave to the noble Lord, Lord Higgins, covers his point.
      If there is one clear message from today's debate, it is that people are not benefiting as they should from the unprecedented level of social security expenditure. Our task is to reform the system so that it is the engine that powers social policy, so that the money spent is used as a kind of investment—an investment in an active welfare system which seeks to influence people's behaviour and which encourages self-reliance where appropriate; an investment in customer focused service responding to people's needs.
      We have made plain that welfare has a clearly defined role in supporting fully those who are unable to support themselves. The mark of an inclusive society is the extent to which people feel honour bound to pool their resources to help the needy. But we have also made clear that the importance of work, with its wage and non-wage values, is fundamental. The failure of welfare is in part due to the inability to distinguish between the needy and those who can support themselves. I am sure that today's debate has advanced our understanding of the tensions that arise when trying to place welfare in the context of a society that wants to move on from the past. I welcome the support that noble Lords have given to the general principles of the business in hand and commend the orders to the House.
      On Question, Motion agreed to.
      Lord Haskel: My Lords, I beg to move that the House do now adjourn during pleasure until ten minutes before nine o'clock.
      Moved accordingly, and, on Question, Motion agreed to.
      [The Sitting was suspended from 8.47 to 8.50 p.m.]

Competition Bill [H.L.]
Consideration of amendments on Report resumed on Schedule 10.
[Amendments Nos. 167 to 168A not moved.]
Lord St. John of Bletso Lord St. John of Bletso moved Amendment No. 169:
Page 70, line 45, at end insert—
("(3B) Where the Director is entitled to exercise any of the functions assigned to him by subsection (3) above in respect of any matter he shall deal with that matter by exercising those functions and not by exercising any functions provided by or under Part II of this Act or any licence issued under that Part.
(3C)Where the Director proposes to exercise any of the functions assigned to him by subsection (3) above, before doing so he shall give written notice that he proposes to exercise those functions to any person likely to he affected.
(3D)Where the Director exercises any of the functions assigned to him by subsection (3) above in respect of any matter, any duty imposed upon him by any other provision of this Act to take enforcement action in respect of that matter shall not apply."").
The noble Lord said: My Lords, this amendment, like Amendments Nos. 166 and 167, is specific to the information technology field. It deals with the problems posed by the overlap of jurisdictions where the DGT acts as regulator under the 1984 Telecommunications Act and as competition authority under the new powers in the Bill. The amendment ensures that the DGT, when exercising powers to deal with anti-competitive behaviour within the Bill, should do so under and strictly within the scope of the Bill.
While I accept the Government's commitment to give new, comprehensive powers to regulators on a concurrent basis with the DGFT, I am concerned that those powers could make the regulators the investigator, the prosecutor, the judge or even the jury. It is therefore important that the Bill establishes and clearly defines how and when the regulator will exercise those powers.
I refer again to the letter which was sent by Oftel. The DGT, in his commentary on the amendment, said:
"I believe this amendment would unnecessarily restrict my freedom to use the most appropriate legislation in a particular case".
The DGT also wrote in the Financial Times last week expressing concerns on a number of the amendments to Schedule 10. He was concerned that the amendments might threaten the ability of sectoral regulators to tackle anti-competitive behaviour effectively. I do not entirely agree with his concerns. The amendments are not aimed at reducing the efficacy of the sectoral regulators' powers to tackle anti-competitive behaviour but—and I stress this—that they determine and define exactly when and how those powers should be exercised. The amendment would promote the use of powers under the Bill and ensure that anti-competitive behaviour within the Bill was tackled in accordance with the provisions
492
of the Bill. It would promote consistency and certainty about how anti-competitive behaviour within the scope of the Bill should be dealt with. It would ensure that the provisions of the Bill were not avoided or circumvented by use of alternative overlapping powers which might be available to the DGT from time to time. To mix up the different roles and powers and to make no provision about when each set of powers should be used would encourage conflict and potential confusion. If the wrong tools are used for a job, the nature of the job itself can become confused.
The amendment would avoid any problem if decisions were based on mixed jurisdictions. There would be severe difficulties for a tribunal dealing with any appeal from a decision based on mixed jurisdictions. The amendment would not prejudice the new powers under the Bill or disturb the continuing regulatory powers of the DGT to deal with any matters, including competition matters, falling outside the scope of the Bill.
As I mentioned in my previous two amendments, the jobs of a regulator and of a competition authority under the Bill are different. As indicated by the noble Lord, Lord Kingsland, the purposes of competition law and regulation, and their regimes of enforcement, are different. It is likely that it is for those reasons that the 1984 Telecommunications Act gave the DGT general powers as a competition authority on a concurrent basis with the DOFF in addition to his regulatory objectives and powers. If the DGT is to have two jobs it is essential that it is clear when he will do one and when he will do the other. When the jobs overlap, the Bill, with this amendment, should prevail.
The second part of the amendment deals with whether a matter is within the scope of the Bill or outside the scope of the Bill. The amendment would ensure that the DGT consider at the outset whether to proceed under the Bill's powers or under other powers. The DGT should give written notice of the cases where he proposes to exercise functions under the Bill rather than other functions.
The third part of the amendment ensures that where the DGT exercises functions under the Bill, any duty which might arise under the 1984 Act to deal with the same matter under the separate enforcement provisions in that Act shall not apply. I refer again to the DGT's letter of 17th February where he stated on this subject:
"I would agree with concerns highlighted in the last part of the amendment about the Director General of Telecommunications being required, as a result of obligations in the Telecommunications Act, to take enforcement action against a breach of a licence condition even if he decided that it was more appropriate to deal with the situation under the new Competition Act."
My amendment would clarify how the regime should work in a complementary and commonsense way. I beg to move.
9 p.m.
Viscount Trenchard: My Lords, I speak in support of Amendment No. 169 which seeks to ensure that the Director General of Telecommunications, in pursuing the objectives of the Bill, must decide whether he wishes to exercise powers granted under the Bill or powers granted under other legislation. It also requires him to

493
use Bill powers to deal with matters within the scope of the Bill and to make clear that he is acting under Bill powers alone.
For the reasons I gave earlier when speaking in support of Amendments Nos. 166 and 167—namely, the need for consistency and certainty, particularly in the information technology field—this amendment is important. As Mr. Thomas Sharpe QC pointed out in his article in The Times today, it would be a fundamental mistake to regard competition and regulation as having no real difference between them. I hope that the Minister may have had time to read the article during the dinner-hour.
I believe it is essential that the business community should know that anti-competitive behaviour of the kind dealt with by Articles 85 and 86 of the Treaty of Rome should be dealt with under the Bill. I hope that, after further consideration, the Minister may decide to support the amendment.
Lord Kingsland: My Lords, this line of amendments deals with another aspect of concurrency. Until now we have been discussing the problem of bridging. Here we confront a situation in which a regulator can opt either to go down the regulatory route in terms of enforcing a licence obligation or down the Bill route in terms of determining whether a prohibition exists and, if that is determined to be the case, to inflict a penalty.
On the assumption that the regulator has these two powers, how ought he to conduct himself? In my submission, the regulator ought to opt at the earliest possible phase to go down one route or the other. One of the difficulties that the Minister faces in seeking to find an appropriate formula to ensure that this happens is the following. If I were a regulator, I would find the early phases of the procedures laid down in the Competition Bill very attractive: I have draconian powers of search and seizure; I can knock down somebody's door if I want to; I have the widest possible powers to get my hands on documents if I want them. On the other hand, when it comes to the procedure at the end of the Bill, I am much more hedged about by my Bill powers than I would be under my regulatory powers: I am subject to an elaborate and—I say in parenthesis—highly desirable appeal procedure; I can be subject to judicial review; and I have a range of other obligations which make the end phase of the procedure quite demanding.
Therefore, if I were a regulator, I should like to start my investigation under the Bill because of my extensive investigative powers but I should like to avoid going the whole way. At some stage I should like to switch to my regulatory powers so that I can complete my objectives by enforcing under the regulatory regime.
I do not suggest for a moment that that course has occurred to any regulator, but it might do so at some stage once the Bill becomes an Act. Therefore, in my submission, it is extremely important that provisions should be included in the Bill to prevent that happening and to require each regulator to opt at an early stage for the route down which he wishes to travel.
494
I give one example of the difficulties that the noble Lord will encounter if he does not face up to this problem. Widespread information-pooling powers are given to the director under Clauses 53 and 54 of the Bill. What is to stop a regulator going on a fishing expedition? He starts off by using his Bill powers, extracts a lot of information from the regulatee and spreads it around to other regulators. All of a sudden someone finds something that entitles him to go off in another direction. Is that conducive to certainty and consistency in the system?
Following on from what the noble Lord, Lord St. John, and the noble Viscount, Lord Trenchard, said, Amendment No. 172 in my name deals with the problem that faces the electricity industry. It is not a problem that is unique to the electricity industry; other former utilities face exactly the same problem. That amendment was tabled at Committee stage and I thought I detected some sympathy from the noble Lord when he responded to my promotion of it at that time. It seeks to give the regulator an option if he would prefer to use his Bill powers rather than his enforcement powers under the Electricity Act. But it is crucial that he opts clearly for one route or the other and, once he has opted, he ought not to be allowed to switch back.
Lord Simon of Highbury: My Lords, noble Lords, refreshed from a period of contemplation and. I hope, dinner as well, seem to have returned with but one thought on their minds: that concurrency still raises certain problems. I should like to point out to the noble Lord, Lord St. John. that, in replying to his previous two amendments, I thought I had made two matters absolutely clear: that the duties under the Bill are paramount for a regulator and that we wish to carry over Clause 58 with the maximum consistency. Those issues in his otherwise generous response seem to have been missed.
It is important, when we are talking of concurrent powers, that we understand that the Bill and the prohibitions are paramount for the regulator, and that we are subsequently talking about the duties which may arise under the licence conditions. Indeed, when the noble Lord, Lord Kingsland, was eloquently talking of how he would behave as a regulator—my mind immediately started to "boggle" at the thought of what the noble Lord might do were he to become a regulator—I felt that I would have but one comfort: that is, that as a consumer I would be sure that once he had done his business I would have the most competitive supply of whatever commodity it was that was available to me. I remind the House that, whichever way we twist and turn on the use of the powers, the outcome is likely to be that, however the information is exchanged between the regulators or the director general, with the proper provisions we will be in a position where the industry will become more competitive and the offers to the consumer more attractive. That must always be our focus.
I do not intend to return to a justification of concurrency. In Committee, the noble Lord, Lord Kingsland, spoke to an amendment that was the same as the present Amendment No. 174. I said that that

495
amendment seemed to make a valid point about the interaction between Section 25 of the Electricity Act and the enforcement of the prohibitions. I said that I should therefore like to reflect on the issue it raised and come back to the matter at Report. The noble Lord struck a kernel of understanding.
I have indeed reflected on the matter and concluded that it would be right to bring forward government amendments in respect of each of the utility statutes to deal with the point. I am happy to give a commitment to bring forward amendments at Third Reading.
I believe that the Bill should be amended to remove the obligation on each of the regulators to take action under his utility statute to enforce licence conditions, if he were already taking action under the prohibitions and he was satisfied that that would be the more appropriate course of action to deal with the breach or threatened breach. That is clearly right.
We consider that the regulator should not be committed, once and for all, to taking action only under the provisions of the Bill. If circumstances change, or indeed his assessment of the situation changes, he has to retain the ability to take action to enforce the licence condition. A breach of licence condition cannot be allowed to continue just because a regulator had started to take action under the prohibitions and then found, for whatever reason, that that was not an effective route for dealing with the breach. I therefore concede on one point but wish to clarify the situation on another.
In this context it has been helpful to hear what has been said about Amendments Nos. 172, 173, 174 and 174A. However, Amendments Nos. 169 and 224 seem, in different ways, to go further in seeking to reduce a regulator's flexibility. Amendment No. 169A relates to a different aspect of the relationship between the prohibitions and the utility statutes.
As I said, I believe it is right to make amendments to remove the duty that would require a regulator to take parallel enforcement action. But I do not accept that it would be right to impose the restrictions on regulators' powers that are in some of these amendments. It is for the judgment of the regulator as to which enforcement route to pursue. I certainly do not accept that a regulator should be precluded from taking licence enforcement action because he can take some action on the same matter under the prohibitions, even if that is clearly less effective. Nor that he should be precluded from taking licence enforcement action because he started taking action under the prohibitions and circumstances changed. I believe that the proposal in Amendment No. 169 for a regulator to give notice before he exercises any concurrent function under the Bill is unworkable. Some requirements for notice to be given are set out in the Bill, others will be specified in director's rules. Of those, some may relate to the exercise of concurrent powers; for example, in relation to notification for guidance or a decision. But a blanket notice requirement on regulators is neither desirable nor workable.
I feel that some of the concern about overlap between the prohibitions and licence conditions may not be justified because the licences in place may in some cases
496
need to adapt to the strengthened competition law that will be in place when the prohibitions are brought into effect. The Director General of Telecommunications told me that a number of licence conditions were removed when the Fair Trading Condition, based, like the prohibitions, on Articles 85 and 86, was introduced into telecommunications licences. He went on to say that, in the light of the implementation of the Competition Bill, Oftel will continue to consider the removal of licence conditions that are no longer necessary. Similarly, the Director General of Gas Supply told me that she will be considering the extent to which licence conditions, such as those which control prices, can fall away.
Perhaps I may quote from the letter of the Director General of Gas Supply:
"I would like to take this opportunity to confirm that once the competition legislation is in place, and as competition becomes more effective in gas supply and in activities ancillary to transportation, such as storage, I will be considering the extent to which licence conditions, such as those which control prices, can fall away on the basis that I can rely instead on the new, more effective powers under general competition legislation".
The letter from the Director General of Tele-communications states:
"In the future, particularly in light of implementation of the Competition Bill, Oftel will continue to consider the removal of licence conditions that are no longer necessary".
I quote those letters in order to show to the House that this will be a moving circumstance and that we should construct both a series of rules and therefore subsequent guidance which is able to take account of the way the market place changes with the experience of the new competition law. I do not regard this as fixed in stone. We should look at the rules that the director general and the regulators bring forward and comment on them, as we will have appropriate occasion to do, in the future.
Amendment No. 169A creates a wholly inappropriate link between telecommunications sectoral regulation and the Bill. It is not realistic to treat action in relation to licence conditions as decisions under the Bill. They are not decisions under the prohibitions and it would not be right to treat them as such.
I make a distinction between the paramount objective of looking to the prohibitions in bringing the new competition law into place and the separate role of the regulators in applying licence conditions. As I said in a previous answer, although I do not believe these to be what the noble Lord, Lord Kingsland, would like to see, I do understand that we will have to pay great attention to the relationship between these two bodies of law in order to achieve the most effective development of competition in very differently behaving market places. I hope that, with a commitment to bring forward the government amendments for Third Reading on the particular issue of the Electricity Act, the noble Lord will be willing to withdraw the amendment.
9.15 p.m.
Lord St. John of Bletso: My Lords, I am grateful for the Minister's considered response and I fully take on board what he said about the duties of the regulator and the prohibitions being paramount. The Minister referred

497
to the need to retain flexibility for the DGT. My amendment would not remove flexibility for the DGT. The DGT would still decide whether a matter was to be dealt with as anti-competitive behaviour within the scope of the Bill or as something else under the other powers. Once the DGT decides to proceed on the basis that he is addressing anti-competitive behaviour within the scope of the Bill he will be obliged, with this amendment, to use the Bill's powers. If there is any difficulty at the initial stages of investigation it may be that the amendment should be redrafted slightly to impose the requirement to use the Bill's powers at the earliest practical moment—certainly before any substantive decision is taken.
The new competition laws are very different from the old. They give extremely wide discretions. As I have said, the powers are so wide that anyone wielding them is essentially investigator, prosecutor and judge, all in one. It therefore follows that the relationship between the new competition laws and the continuing regulatory powers is very different from that between the existing laws and the regulatory powers. The new relationship causes new problems and, in that event, should be dealt with in the Bill. It should be clear from the Bill that all anti-competitive behaviour within the scope of the Bill must be tackled by the Bill. The Bill will have primacy and will not be circumvented by alternative powers.
Finally, the Bill will not be mixed with other powers, but will be operated by the DGT on precisely the same basis as by the DGFT. Although the Minister says that in his opinion the provisions of this amendment would, in his word, be "unworkable", I remain convinced that an amendment such as this is necessary. I shall need to return to the issue perhaps at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland had given notice of his intention to move Amendment No. 169A:
Page 70, line 45, at end insert—
("(3B) If, in the exercise of his functions under this Act, the Director decides to impugn a matter on grounds within the Chapter I prohibition or Chapter II prohibition of the Competition Act 1998, that decision shall he treated as a decision for the purposes of section 45 of that Act.
(3C)The Director shall give written notice to any person likely to he affected by any decision made in accordance with subsection (3B) above.
(3D)Following the making of a decision in accordance with subsection (3B) above, the Director shall not take any enforcement action under this Act in respect of the matter which is the subject of that decision—

(a) until the end of the period for giving notice of appeal against the decision; or

(b) if such an appeal is made, until that appeal is determined or withdrawn."").

The noble Lord said: My Lords, I have already spoken to this amendment, but I have heard the Minister's response. While thanking him very much indeed for the specific remarks he made about the electricity industry in the context of Amendment
498
No. 172, I am extremely disappointed about the manner in which he dealt with the issue of parallel jurisdiction exercised by the regulator.
The effect of what the Minister said is this: by this Bill he will be amending the regulatory Bills. Through his interpretation of what the regulator can do, the Minister will be handing over a whole range of powers to each one of the regulators that they do not have in the Act. It also seems to break the fundamental code of sportsmanship which ought to apply to the exercise of the regulatory regime. It is very important that enterprises are given a fair chance. Fairness is now part of our constitution. It has become part of it through decisions made in a series of cases in judicial review. It is now going to be part of it in statutory form through the incorporation of the Bill of Human Rights. That fairness has to be reflected in the Competition Bill just as it will have to be reflected in all Bills that are made by your Lordships' House in future.
I have reflected on what the Minister said. I am certainly not going to press the amendment to a vote, but it is a matter to which the Opposition will be returning at Third Reading.
The Deputy Speaker (Baroness Lockwood): My Lords, is the noble Lord moving Amendment No. 169A?
Lord Kingsland: My Lords, no.
[Amendment No. 169A not moved.]
[Amendments Nos. 170 and 171 not moved.]
[Amendment No. 171A had been withdrawn from the Marshalled List.]
[Amendments Nos. 171H, 171E and 171J not moved.]
[Amendment No. 171C had been withdrawn from the Marshalled List.]
[Amendment No. 171K not moved.]
Lord Haskel Lord Haskel moved Amendment No. 171D:
Page 76, line 29, leave out from beginning to first ("the") in line 30 and insert ("In selecting a group to perform the Commission's functions in relation to any such reference,").
The noble Lord said: My Lords, we have already debated this amendment on Day 2. We considered it with Amendment No. 142A. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendments Nos. 171E to 171G:
Page 76, line 50, at end insert—
("() At the end of section 101, insert—
(6) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to subsections (I) to (5) of this section.'"').
Page 77, line 34, at end insert—
("() At the end of section 42, insert—
"(7) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to subsections (1) to (6) of this section."").
Page 78, line 20, leave out from beginning to first ("the") in line 21 and insert ("In selecting a group to perform the Commission's functions in relation to any such reference,").
On Question, amendments agreed to.
[Amendments Nos. 172 to 174A not moved.]
Lord Haskel Lord Haskel moved Amendments Nos. 174B to 174D:
Page 78, line 47, at end insert—
("() At the end of section 57, insert—
"(7) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to subsections (1) to (6) of this section.'"').
Page 79. line 28, leave out from beginning to first ("the") in line 29 and insert ("In selecting a group to perform the Commission's functions in relation to any such reference,").
Page 79, line 50, at end insert—
("() After section 206(9) (restriction on disclosure of information), insert—
"(9A) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to subsections (I) to (9) of this section."").
The noble Lord said: My Lords, we debated this group with Amendment No. 164D. I beg to move.
On Question, amendments agreed to.
Lord McNally Lord McNally moved Amendment No. 174E:
Page 80, line 45, leave out from beginning to end of line 14 on page 81.
The noble Lord said: My Lords, your Lordships will be aware how assiduous an attendee my noble friend Lord Ezra has been at our deliberations on this Bill. He cannot be here this evening and it is with his leave and on his behalf that I am moving this amendment which he thinks deserves clarification from Ministers.
The amendment concerns the interaction between the Bill and the Railways Act 1993. Under that Act, a train operating company which enters into an agreement to use the railway network, or a station, or a maintenance depot can do so only in accordance with directions issued by the railway regulator. The so-called "access agreements" are scrutinised carefully by the rail regulator who normally requires changes to be made to a proposed agreement when he directs the parties to enter into it. In giving his directions, the regulator has a duty to follow a number of criteria set out in the Railways Act, including acting,
in the manner which he considers best calculated … to promote competition in the provision of railway services.
The result is that access agreements are entered into only on the direction of the railway regulator, following detailed scrutiny and with the object of promoting competition.
In those circumstances, it would not make sense for the agreements to be subject to the prohibitions in this
500
Bill. It is my noble friend's understanding that they are excluded by Schedule 3(3). This excludes agreements made,
in order to comply with a legal requirement.
I hope that the Minister will confirm that that is his understanding.
If my noble friend is right that access agreements are excluded from the prohibitions, then sub-paragraphs (5) and (6) of Schedule 10(15) are redundant. They introduce consequential amendments to the Railways Act which would specifically empower the rail regulator to require amendments to be made to an access agreement entered into on his direction if it has infringed a Chapter I or Chapter II prohibition, but an agreement which is excluded from the prohibitions cannot infringe them.
Amendment No. 174E removes that unnecessary change to the Railways Act. If the amendment is not made, the changes to the Railways Act will not only undermine confidence in the commercial and regulatory arrangements underpinning the restructured railway industry, but will also cast doubt on the effectiveness of Schedule 3 in excluding agreements made to comply with a legal requirement. I beg to move.
Lord Simon of Highbury: My Lords. the last time that the noble Lord, Lord McNally, and I exchanged views in a quiet and thoughtful manner in this House, and I made what I thought was a quiet and thoughtful response, the noble Lord said, "What the Minister means is 'get lost"'. I am warning the noble Lord that I shall try again.
As the noble Lord described, the Bill inserts a provision into the Railways Act 1993. I have some sympathy with the concerns raised by the noble Lord. To the extent that the terms of access agreements are required by the regulator, they will be excluded under Schedule 3. The provision in Schedule 10 is not intended to cast doubt on that. It would apply only in circumstances where the provisions of access agreements are not legal requirements. I am advised that that might apply in the case of amendments to access agreements.
Amendment No. 174E would not produce the result of precluding the application of the powers in the Bill to access agreements to the extent that they were not legal requirements. Instead, it would leave uncertain whether the bar in the Railways Act on the regulator requiring amendments to such agreements did or did not apply to the powers of the regulator under the Bill so far as concerned any provisions of an access agreement that were not legally required.
I am not therefore persuaded that the Bill is wrong as drafted, but I am prepared to reflect carefully on the points that the noble Lord has made to assess whether any change to the Bill would be desirable. With the assurance that we will reflect upon this matter, I invite the noble Lord to withdraw his amendment.
Lord McNally: My Lords, perhaps I may seek to clarify my "get lost" remark. The Minister will recall that Billy Budd's excuse was a moment of impulse

501
instantly regretted. I am sure that that was the case. I am sure that my noble friend Lord Ezra will carefully read the response and reflect upon it. He has drawn attention to a possible conflict. I am sure that when he reads the Minister's response he will be assured that his concerns are to be examined. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.30 p.m.
Lord Haskel Lord Haskel moved Amendment No. 174F:
Page 81, line 19, at end insert—
("() After section 145(6), insert—
(6A) Information obtained by the Regulator in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to subsections (I) to (6) of this section."").
The noble Lord said: My Lords, the House has already debated this amendment. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendments Nos. 174G to 174J:
Page 82, line 15, leave out from beginning to first ("the") in line 16 and insert ("In selecting a group to perform the Commission's functions in relation to any such reference,").
Page 82, line 42, at end insert—
("() At the end of Article 61, insert—
"(7) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to paragraphs (1) to (6)."").
Page 83, line 29, at end insert—
("() At the end of Article 44, insert—
"(8) Information obtained by the Director in the exercise of functions which are exercisable concurrently with the Director General of Fair Trading under Part I of the Competition Act 1998 is subject to sections 53 and 54 of that Act (disclosure) and not to paragraphs (1) to (7)."").
The noble Lord said: My Lords, I beg to move Amendments Nos. 174G to 174J en bloc.
On Question, amendments agreed to.
Clause 53 [General restrictions on disclosure of information]:
Lord Kingsland Lord Kingsland moved Amendment No. 175:
Page 26, line 17, leave out ("subsection (2) is") and insert ("subsections (2) and (4A) are").
The noble Lord said: My Lords, Amendment No. 175 and the other amendments in this grouping were dealt with at Committee stage. Clause 53(3) of the Bill exempts quite widely from the rules of confidentiality disclosure of information made for the purpose of facilitating the performance of any relevant functions of a designated person. "Relevant functions" and "designated persons" are dealt with in Schedule 11 to the Bill. We debated this matter at some length in Committee. I believe that the Minister will agree with me if I describe his reaction to my submissions as pretty dusty.
I have retabled the amendments that I tabled in Committee. Amendment No. 176 seeks to remove Clause 53 (3)(a)(i) from the Bill. By so doing it removes the associated designated persons and relevant functions listed in Schedule 11. Given his reply in Committee the Minister may not feel that he can go as far as to agree with me totally this time. I have therefore presented him with some alternatives.
The first is in Amendment No. 175 itself, which seeks to cut down the circumstances in which Clause 53(3) applies, requiring a delayed period before any information given to one of those designated persons can be passed on to another designated person.
The problem is that if, together with the schedule, the clause stands in its present form, a huge pool of information will be created, consisting not just of the Director General of Fair Trading and the regulators, but a whole range of other people over whom there will be no control or discipline with respect to how they disseminate that information. So any regulator who has grounds for suspecting that something is going on in his particular sector, can tap into that pool, as it is presently established, without any constraint on his ability to do so, or any protection for the person to whom the information in the pool refers.
If the Minister is not prepared to accept the blockbuster amendment, he has the option of going for Amendment No. 175, connected with Amendment No. 178, which will require a period of notice before information given for one purpose is allowed to be used for another purpose. Alternatively, there is a series of amendments which can be made to Schedule 11 itself, which would cut down and control the definition of "designated person" and "relevant function".
Clause 53 is an enormous gap in the system of protection to which an individual is entitled if he is under investigation. I hope that the Minister will look carefully at these amendments and respond positively. I beg to move.
Lord Simon of Highbury: My Lords, we are dealing here with a large group of amendments which cover various aspects of confidentiality. That confidentiality of information is an important issue is not doubted by either side of the House. The noble Lord, Lord Kingsland, should be in no doubt that I understand that this is a sensitive matter, especially for business. It is for sure, and my memory is still fresh on those issues. We have accordingly framed the relative provisions in the Bill carefully.
Some of the amendments in the group are new. Nevertheless, I was slightly disappointed that we have again to go over the ground that we debated in Committee, but I shall. It was not that I thought that I was dusty. It would have been difficult to have read that into my mind at that time. I was desperately hoping

503
that I was clear, but clearly I was not. So dusty may mean a certain way of being cloudy in vision. I am not sure, but we will get to it.
Lord Kingsland: My Lords, perhaps I may help the Minister: by the expression I meant "dismissive".
Lord Simon of Highbury: My Lords, no, that would not have been right. This is an important issue and I would not have been dismissive about it. We have explained carefully the basis for our position on these points. The disclosure provisions in the Bill are fully in line with the type of disclosure provisions contained in many other UK regulatory statutes. Let us make no mistake about it, we agree that the provisions are tough, but they are carefully balanced and closely defined.
The sanction for infringing these provisions is also very tough. Unlawful disclosure of information obtained under the Bill will be a criminal offence. Whether or not a great pool of information is available to the regulators as a result of the Bill and the exchange of information, they will still be subject to a—and I would use the word—"draconian" regime of punishment for improper use.
Amendments Nos. 175 and 178A are to do with information passed by a person who obtains it under the Bill to one of the regulators specified in Schedule 11. There is no case for imposing the restrictions set out in this amendment on such co-operation. We have explained before that the provisions for disclosure between regulators in this Bill are entirely within the mainstream of UK regulatory statutes. There are no such restrictions in those other statutes and nor should there be. Our view is that the provisions of Clause 53 as to disclosure will continue to apply to information obtained under the Bill when it is disclosed to another regulator for the purposes of this Act. The information is therefore fully protected against being used except for authorised purposes.
Amendment No. 175A relates to subsection (2) of Clause 53. Subsection (2) is a very restrictive provision. It requires that information may not be disclosed without the consent of both the person who initially provided the information and, if they are different, the person or business to whom that information relates. That is a tougher restriction than appears in most other regulatory statutes. The amendment seems to me to add nothing. The relevant person will have to be told the purpose for which the information is to be used in order to secure his consent. If he does not wish to give consent, he need not do so.
We discussed a similar amendment to Amendment No. 176 in Committee. We explained on that occasion that this amendment would wreck the Bill. That remains the case. The amendment would prevent any disclosure of information for the purposes of functions under the Bill, except with consent. It would prevent, for example, the disclosure of information between the director and the competition commission to assist the Commission to hear appeals. It would likewise prevent the director from disclosing to parties who were subject to an investigation the information necessary for them to
504
understand the accusations against them. I hope the House will therefore agree that the new regime would be unworkable with this amendment.
Amendment No. 177 is another that we discussed in Committee. It would delete subsection (3)(a)(ii) of Clause 53, which enables information to be disclosed to the European Commission to help the Commission perform its functions under European competition law. As my noble friend Lord Haskel explained in Committee, we believe it is right to give the director the power to help the Commission to enforce community competition law.
Amendment No. 177A relates to similar territory. We think it is unnecessary. If disclosure of information is not required to meet a Community obligation it cannot be disclosed under Clause 53(3)(d). Unlawful disclosure is a criminal offence.
Amendment No. 179 would remove subsections (5) and (6) of Clause 53. These provisions enable the Secretary of State to specify additional persons and purposes to whom and for which disclosure is to be permitted. This power is exercisable by order, subject to annulment by either House. The purpose of this power is to ensure that there is sufficient flexibility in the Bill to respond to developments in regulatory and competition policy without need for fresh primary legislation.
Amendment No. 179A, like 177A, misses the point that disclosure of information obtained under the Bill is prohibited unless it is specifically permitted. The subsection (5) power enables an order to be made permitting information to be disclosed for the purpose of specified functions. Information not meeting those purposes may not be disclosed. I am glad of the opportunity to make this clear. I hope the noble Lord will therefore agree that the amendment adds nothing to the firmness of that position.
Turning to Amendments Nos. 180 and 180A, they seek to impose a statutory duty on the recipients of information passed through the disclosure gateways in Clause 53. As I have already explained, our view is that the provisions as to the disclosure in Clause 53 will continue to apply to information obtained under the Bill when it is disclosed to another regulator for the purposes of the Act. The information is therefore fully protected against being used except for authorised purposes.
In the context of information passed to the European Commission, such a provision cannot be made to apply. However, such information will be subject to European law, which will restrict its disclosure. If we turn to Clause 53(3)(c), for example, do noble Lords think that if a policeman is passed information about an offence he should not be allowed to disclose that further? No, it would be quite wrong to interfere with disclosure in criminal proceedings, which must remain a matter for the criminal law and the courts dealing with those proceedings.
Turning to the persons listed in Schedule 11, it would frustrate the whole purpose of the gateways in the Bill if a regulator were to be prohibited from disclosing information provided to him to perform a statutory function if such disclosure were needed in order to

505
perform that function. We are quite clear that appropriate restrictions will apply to any further disclosure of information that they have received under Clause 53.
As I understand it, the purpose of Amendment No. 180B appears to be to apply the duties contained in Clause 54 to any disclosure of information made under Clause 53. That is already the effect of the Bill as it stands. I hope that that clarification is helpful.
Amendments Nos. 180C to 180E, 181, 182 and 182A all seek in one way or another to interfere, in differing degrees, with the ability of those who obtain information under the Bill to disclose it to other persons specified in Schedule 11 for the purposes of their statutory functions. For those reasons, noble Lords will understand that I do not believe that they add to the safeguards that are already introduced into the gateways.
Amendment No. 183 is another which relates to the confidentiality of information obtained under the Act and passed to another person. The same points as I made in relation to Amendment No. 180 apply.
I have gone fully through the system because, as I said when I started, we regard the balance of safety in the area of confidentiality for the individual and the business as being an important matter to which we must all attend with due seriousness. I have tried to attend to it in that way.
I hope that having heard what I have said noble Lords will accept that what we have set out in the Bill strikes the right balance between the importance of protecting information and the need to ensure that the new regime is fair, transparent and workable.
We have taken considerable care in framing them, recognising that this is indeed an extremely important issue, particularly the issue of fairness which the noble Lord, Lord Kingsland, put to me so clearly. We think that the Bill is entirely in line with existing UK precedents. I therefore urge the noble Lord to consider the withdrawal of the amendments.
9.45 p.m.
Lord Kingsland: My Lords, I wish to thank the Minister very much for going through each amendment so carefully and assiduously. I am especially grateful to him for his reaction to Amendment No. 180B, in which he made it absolutely clear that Clause 53 is subject to the contents of Clause 54. I would prefer it to be on the face of the Bill, but, if the Minister is not prepared to do that, I shall take his statement as being absolutely clear from an interpretive point of view.
The purpose of this group of amendments is to reinforce the point that I was aiming to make at an earlier stage of our proceedings today about the importance of keeping distinct the jurisdictional powers which relate on the one hand to the Bill and on the other hand to the regulator. My concern was that the pool of information that would be gathered under Schedule 11 should be used strictly for Bill purposes and should not seep into the regulatory sphere. That would be including things in the regulatory acts which it was not the intention of Parliament to do.
506
I have listened as carefully as I could to the Minister's response. I shall read Hansard with equal care and reflect as to whether I should return to the matter on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 175A to 177A not moved.]
[Amendment No. 178 had been withdrawn from the Marshalled List.]
[Amendments Nos. 178A to 180B not moved.]
Schedule 11 [Interpretation of Section 53]:
[Amendments Nos. 180C to 183 not moved.]
Baroness Nicol Baroness Nicol moved Amendment No. 184:
Page 27, line 15, leave out ("the Director") and insert ("any designated person or specified person (as defined in subsections (4) and (6) of section 53 respectively)").
The noble Baroness said: My Lords, yet again I am afraid that I shall invite the Minister to canter round a course that he has covered before. I wish to move Amendment No. 184 and to speak in particular to Amendments Nos. 185 and 208. The effect of this group of amendments would be to protect the commercial secrets of innocent third parties—that is my particular concern—during investigation and thereby to encourage more transparency when detailed information is required by the authorities.
Amendment No. 184 seeks to ensure that the obligation to protect commercial secrets is extended also to designated or specified persons involved in the investigation. Amendments Nos. 185 and 208 introduce those obligations.
The amendments would also promote harmonisation of approach in respect of investigation across the EU and would reduce the bureaucratic burden on businesses by introducing consistency in documentation.
Your Lordships will remember that I raised those concerns in Committee and I am aware that the British Retail Consortium has since had an encouraging dialogue with the Bill team. However, I have tabled these amendments so that the Minister can clarify and record assurances which he has given during those discussions.
Of course, investigations are necessary to ensure that there is no abuse of power and that consumers have access to a free and competitive market. But it cannot be right that business secrets of innocent third parties are revealed to their competitors. The amendment would introduce a system which is used currently by the competition directorate of the European Union—DGIV—in its investigations.
Article 214 of the Treaty of Rome imposes a general duty on all EU officials not to disclose information which,
"by its nature is a professional secret, and, in particular, information relating to enterprises and concerning their commercial relations or components of their production costs".
That is reflected in the detailed regulations setting out the rules for investigation in Regulation 17/62.
Articles 19(3) and 21(2), which deal with the publication of detailed reports, specifically bind the Commission to have regard to the legitimate interests of

507
undertakings in the protection of their business secrets. That system seems to work effectively for DGIV and for businesses themselves. It is surely in the interests of both business and authorities to have a transparent approach to investigations. If businesses are confident that their commercial secrets will be respected, it is more likely that they will be co-operative with investigators. I beg to move.
Lord Kingsland: My Lords, the difficulty is that there are a whole lot of other amendments in the group and if I do not speak to them now, I shall not have an opportunity to do so.
This really is a continuation of the exchanges that I had the privilege of having with the Minister a few moments ago. He conceded that Clause 53 was subject to Clause 54. That was extremely good news. We now have the added problem of examining Clause 54 to see whether its terms are strong enough to bear this immense responsibility. I trust the Minister will agree with me that on a true construction of the terms of Clause 54 it is inadequate to bear the heavy responsibility placed upon it. I draw his attention particularly to Clause 54(3)(a)(i) and (ii). I am particularly concerned about the expression "in his opinion" which is inserted into both these paragraphs, as that introduces a subjective element into the application of the director's judgment which is, I think, in contrast with what the Minister has sought to introduce in other parts of the Bill. My amendments seek to remove that.
Moreover, my amendments also seek to remove the expression,
"must also have regard to the need for excluding".
Perhaps I can give the Minister the benefit of the doubt by suggesting to him that what he really means is exclude, no more and no less, and that the "have regard to" and "the need for" are simply otiose.
Lord Simon of Highbury: My Lords, these amendments focus us directly on the question of the proper balance between the protection of information and the demands of efficiency, transparency and fairness under the new regime. This balance is, as I said in answering the previous group of amendments, an important issue, and I am grateful to my noble friend Lady Nicol and to the noble Lords opposite, for providing us with another opportunity to examine it in such clear terms before the Bill leaves this House. I say "clear terms" because the amendments propose a radical shift in the balance. Indeed, I fear that the proposals illustrate the risk of hampering the operation of the new regime to a degree which unbalances the options.
It is right that the director should be under a duty to have regard to the need to exclude business secrets. This is what the first part of Amendment No. 185 appears to propose. The duty is already contained in Clause 54. Under Clause 54 the director is required to balance that need against the extent to which disclosure is necessary for his purposes under the Bill. When I say the "director" I also mean the regulators acting under the Bill. The Government believe that this is the right duty.
508
We should not under-estimate the seriousness of the matter. The director will have to weigh carefully the potential harm to the interests of business and individuals before disclosure. I might point out that it would also not be in the director's interest to disclose information unnecessarily. To do so would clearly discourage co-operation in any future cases.
But these issues must be weighed against the necessity to disclose information in certain circumstances; for example, to enable a party to have sufficient details of the case it has to meet so as to be able to respond. If the director failed to follow this principle it would certainly be grounds for legal challenge. This also applies to publishing decisions that there have been infringements where other parties have a clear interest in knowing the facts about that infringement.
Amendment No. 185 would impose a further, far more onerous restriction to demonstrate that the public interest in disclosure outweighed the business's interest in confidentiality. I fear that this would be a recipe for paralysis. It would give infringers fertile ground to obstruct and to delay the director's procedures, challenging him at every turn that he has not produced a sufficient demonstration of the public interest. The scope for delay could be almost endless. We have to give the director some discretion, although clearly, as I said, within strict bounds, if the system is to work.
The amendment imposes a rigid requirement for notice. In some circumstances 14 days' notice may be right. In others, however, it will not be. We have already debated a proposal to impose a notice requirement on confidential exchanges of information between regulators. This amendment would impose the same requirements on every function under the Bill where disclosure is necessary. It makes no allowance for the differences. What if, for example, the director needs to move urgently to impose interim measures to stop an abuse? He could be hamstrung by this proposal.
We have accepted the argument that it is right for third parties to have notice and an opportunity to make representations in some circumstances. But the right way to approach this is through the Director's Rules, which will be sufficiently detailed to cater for different scenarios, and which can be more readily refined. This is not a matter for primary legislation. The rules will of course be subject to consultation, so people will have an opportunity to say if they do not believe the rules cover the right matters in the right way.
My noble friend Lady Nicol referred to the practice under the EC system of enabling business to identify which pieces of information are confidential. Again this is a matter of procedure best left to the Director's Rules. It does not strike me as the sort of detail which is necessary or sensible to put into the primary legislation, and indeed I do not believe it appears in Regulation 17/62 either. It is the Commission's implementing regulations, equivalent to the Director's Rules, on the making of notifications under Regulation 17 that provide for parties to identify business secrets and to justify that treatment in making applications.

509
I now turn to the amendments tabled by the noble Lord, Lord Kingsland, Amendments Nos. 184A and 184B, and Amendments Nos. 185A to 185D. The effect of these amendments is to remove requirement for the director and the Secretary of State to balance the relevant considerations. I have already noted that some discretion is necessary for the system to work effectively and clearly.
More damagingly still, the amendments will make it unlawful for the director or Secretary of State to disclose any information which might damage the legitimate interests of business or individuals. I believe this proposal to be unworkable. Disclosure may sometimes be necessary. I have already mentioned, for example, the need for parties under investigation to have sufficient information to enable them to understand the case against them. It would be quite wrong to limit that right in this way.
If I may turn quickly to Amendment No. 208, there is already an established system in place for protecting confidential information under the FTA. Interested parties are given an opportunity to make representations to the MMC as to whether information that they have provided should remain confidential, before the MMC sends its report to the Secretary of State.
I do not in any way seek to play down the importance of the arguments raised by noble Lords and my noble friend Lady Nicol in respect of the disclosure provisions in the Bill. On the contrary we have taken considerable care to get the balance right. What we have produced in the Bill is entirely in line with existing UK precedents. We have also brought forward an amendment recognising the force of the arguments about notice to third parties and an opportunity to make representations.
It is important to recognise that the director or Secretary of State will only wish to disclose information where that is properly justified under the tests we have set out in the Bill. It would hardly be in their interests to disclose confidential information without proper justification. Companies would soon become unwilling to co-operate and the effectiveness of the system would be compromised. Nevertheless, we do not believe that the system would be workable without some discretion, albeit circumscribed as we have provided. I am grateful for this opportunity to explain our position once again. I urge my noble friend Lady Nicol to withdraw the amendment.
Baroness Nicol: My Lords, I am grateful for the careful answer that the Minister has just given. I am persuaded by the arguments to withdraw my amendment. It is comforting, too, that there is an opportunity in the formation of the rules to clarify even further some of the matters that he mentioned. I can quite see his point about not wanting the provision in primary legislation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 184A to 185 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 185A:
Page 27, line 21, leave out from ("also") to ("so") in line 22 and insert ("exclude,")
The noble Lord said: My Lords, I beg to move Amendment No. 185A. I have spoken to this amendment. I do not think the Minister responded to my point about the subjective judgment of the director. It related to the expression "in his opinion". However, I have no doubt that the noble Lord will reflect on that matter and, in that spirit, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 185E to 185D not moved.]
Clause 56 [Findings of fact by Director]:
[Amendment No. 186 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 186A:
Page 28, line 4, at end insert ("; or
(b) conducting an investigation under section 25.").
The noble Lord said: My Lords, as I explained on the third day of Committee, it is the Government's intention that Clause 56 should apply to findings of fact made by the director in all decisions. It should not be limited to decisions resulting from a notification for a decision. The amendment gives effect to that intention. I beg to move.
On Question, amendment agreed to.
Clause 57 [Interpretation]:
[Amendment No. 186B not moved.]
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 186C:
Page 28, line 36, at end insert—
("" dominance" does not include any ability to act independently which might exist but for a legal requirement arising other than under this Act;").
The noble Lord said: My Lords, Clause 57 concerns interpretation of governing principles. It immediately precedes Clause 58, the Eldorado Clause in the Bill which will provide a goldmine for lawyers for at least the next decade.
We hope by Amendments Nos. 186B and 186C to reduce by a small margin the opportunities for digging away at that vein. Amendment No. 186C proposes that included within this interpretation clause "dominance" should be clearly defined. The definition we have offered is that "dominance" should have the same meaning as within the EC treaty.
It might shorten proceedings if I say that in relation to my next amendment, Amendment No. 187B, which relates to undertaking, we will be adopting the same position. I cannot believe that anyone would wish to see anything other than clarity being given to the interpretation of the Bill. I beg to move.
Lord Simon of Highbury: My Lords, I was not clear from the drafting of the amendment what its purpose was. I understand from the noble and learned Lord's explanation that it is partially to stop lawyers earning

511
money and to disapply the Chapter II prohibition from an undertaking in so far as it occupies a dominant position because of a legal requirement.
We cannot accept this proposal. We intend that the fundamental question of dominance should be interpreted in accordance with Article 86 jurisprudence. The proposal would interfere with that interpretation to a degree. I remind the noble and learned Lord that the Chapter II prohibition will catch abuses, not dominance itself. Dominant companies have a responsibility not to abuse their market position, howsoever the dominance arises. If the concern is that the conduct may be caught as an abuse, even if that conduct is required under statute, the Bill ensures that that will not be the case.
Paragraph 3 of Schedule 3 provides that the Chapter II prohibition does not apply to conduct carried out in order to comply with the legal requirement. It would not, however, be right to disapply the prohibition from all conduct carried out by an undertaking which occupies a dominant position under a statutory regime.
In the light of that explanation, which I hope is a fair conclusion as to the answer that the noble and learned Lord required for clarification, but in no certainty that I have given it correctly, I invite him to withdraw his amendment.
Lord Fraser of Carmyllie: My Lords, that is not a wimpish answer by the Minister but I do think it is a slightly wimpish answer by the draftsman. I can see no reason why he should not have been prepared to see dominance. If I am wrong and it does not accurately reflect the terms of the EC treaty, I would retreat immediately. If, however, the definition I have attached to it is a correct one, I believe it would have been helpful to have that placed on the face of the Bill. As the noble Lord might expect, I am not concerned to press the amendment at this time. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel Lord Haskel moved Amendment No. 187:
Page 28, line 43, at end insert—
("'information" includes estimates and forecasts;").
The noble Lord said: My Lords, this amendment was debated on day one. I beg to move.
On Question, amendment agreed to.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 187A:
Page 29, line 6, at end insert—
(""person", in addition to the meaning given by the Interpretation Act 1978, includes any undertaking;").
The noble Lord said: My Lords, this is a technical amendment which provides that in the interpretation of Part I of the Bill "person" is to include any undertaking.
As your Lordships will be aware from our earlier discussions on this Bill, the prohibitions are modelled on Articles 85 and 86 which apply to undertakings and, as a result of Clause 58, words in the Bill such as "undertaking" are to be interpreted by reference to EC law. However, it is not appropriate for all of the provisions
512
of the Bill to be drafted in terms of "undertakings". For example, Clause 20 provides that persons may apply to the DGFT for guidance or decision about the application of the Chapter II prohibition to their conduct. The applicant may seek to argue in that application that the Chapter II prohibition does not apply to it because it is not an undertaking. But there may be undertakings that are not regarded by our legal system as persons. We therefore felt that we should make clear through this amendment that a "person" is to include any undertaking. I beg to move.
On Question, amendment agreed to.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 187B
Page 29, line 17, at end insert—
(""undertaking" includes a person who, or body which, requires, causes or connives in an infringement of the Chapter I prohibition or Chapter II prohibition.
() Except where the context otherwise requires words and expressions in this Act shall have the same meaning as in the Treaty.").
The noble and learned Lord said: My Lords, I have already explained the reasoning that lies behind Amendment No. 187B. It is an attempt to place on the face of the Bill what I understand to be the definition to be found in the treaty. I move it shortly because I anticipate exactly the same response as previously. I beg to move.
Lord Simon of Highbury: My Lords, my response will not vary on this occasion. I do not think I have a wimpish draftsman this time; but, given the late hour, my response stands as the noble and learned Lord predicted.
Lord Fraser of Carmyllie: My Lords, with that compelling argument, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel Lord Haskel moved Amendment No. 188:
Page 29, line 18, leave out ("the production of').
The noble Lord said: My Lords, we have already debated this amendment. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendments Nos. 189 and 190:
Page 29, line 20, leave out ("the production of").
Page 29, line 21, at end insert—
("() Any power conferred on the Director by this Part to require information includes power to require any document which he believes may contain that information.").
The noble Lord said: My Lords, we have already debated Amendments Nos. 189 and 190. I beg to move en bloc.
On Question, amendments agreed to.
10.15 p.m.
Clause 58 [Principles to be applied in determining questions]:
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 191:
Page 29, line 23, leave out from beginning to ("questions") in line 24.
The noble and learned Lord said: My Lords, in many respects this is as important a group of amendments as we have discussed this evening, and again it is regrettable that we come to it at this late stage.
Perhaps I may look back at the history of Clause 58. If we reflect on what was said at Second Reading, I do not recall any contribution to that Second Reading debate where it was said that it was not desirable in one form or another to include Clause 58 within the Bill; that if Articles 85 and 86 of the Treaty were to be incorporated into our domestic law, so far as possible it should be clear that we understood where the jurisprudence of the European Court would be followed in the United Kingdom and where it would not be followed.
That broad proposition found no dissent in any part of your Lordships' House. However, I know that along Competition Street the noble Lord has the reputation of being a model Minister in terms of being prepared to listen to representations from all quarters. If I may say, by all reputation the noble Lord has been exceptionally patient with all representations that have been made to him from quarters that are clearly conflicting in their ultimate objectives. It is worth placing on record that we have a great respect for him for that.
However, it must be clear to the Minister as it is becoming clear to me that, while nobody wishes to see Clause 58 in any sense removed from the Bill, there is a growing anxiety—not only among those who are experts in this area of law, but also more broadly in the CBI and elsewhere—that we are potentially about to encounter a risk that, far from Clause 58 being of assistance to the courts of the United Kingdom—that is the ultimate stage of any competition law process—more importantly, it also will not help at an early stage when companies have to determine whether or not the conduct in which they are engaged is in breach of the provisions of the Bill. It is important that they are able to determine as clearly, effectively and as quickly as they can whether or not they will be in breach.
As more people look at the situation, there is a growing unease about the clarity of the definition or the extent of what the clause provides. When I said earlier in a slightly flippant way that it was a sort of "Eldorado" clause. I meant that with some seriousness and sincerity. It sounds a good, simple idea that lawyers and judges in the United Kingdom should know immediately to what jurisprudence they might refer. But the first thing that one finds in the clause—the purpose is simply enough stated—are the words,
"The purpose of this section is to ensure that so far as is possible (having regard to any relevant differences between the provisions concerned). questions arising under this Part in relation to competition within the United Kingdom arc dealt with in a manner which is consistent with the treatment of corresponding questions arising in Community law in relation to competition within the Community".
Before we get into the wording in the brackets, we already have the qualification,
514
"The purpose of this section is to ensure that so far as is possible".
No sooner do we finish with that qualification, than we have the greater qualification within the brackets—
"(having regard to any relevant differences between the provisions concerned)".
A similar issue arises as soon as one reaches subsection (2) which states,
"At any time when the court determines a question arising under this Part, it must act (so far as is compatible with the provisions of this Part and whether or not it would otherwise be required to do so) with a view to securing that there is no inconsistency".
We start by thinking it is all going to be seriously helpful. What concerns me is that those who appear before the competition courts and deal in competition law would not even begin to engage in a debate before the court as to what is the jurisprudence of the ECJ. They would spend a considerable, if not interminable, time in trying to discover whether or not what was being discussed was in the area described as "relevant differences" or issues of compatibility. This is a very real question. It would be helpful for the future development of competition law within the United Kingdom if we could discover before the Bill concludes its passage through Parliament just exactly where those issues of compatibility or incompatibility are said to arise.
I do not want at this hour to deal with this matter exhaustively but the jurisprudence of the ECJ has developed in such a way that there are detailed decisions about procedure and about how things are to be taken forward. However, as soon as we get to this Bill, we see in Clause 49(1), which we have not been too distantly considering, that,
"The Director may make such rules about procedural and other matters in connection with the carrying into effect of the provisions of this Part as he considers appropriate".
In isolation in a domestic context one would have regarded that as being a perfectly sensible and sound provision to include within any Bill. However, because the ECJ has already developed an elaborate set of decisions about what is procedurally permissible and correct, there is immediately an issue of inconsistency, incompatibility, difference and the like. Furthermore, Clause 34 spells out the requirement for the director to give interim relief—interim measures. Again, the ECJ has developed a significant body of jurisprudence about that. Similarly, in relation to Clause 35 on fines, there are major matters which have been the subject of ECJ jurisprudence.
We would probably settle for an undertaking from the Minister that he will at least write to us to spell out where in Clause 58 the Government, in the way they have put together the framework of the Bill, recognise that there are indeed relevant differences or issues of incompatibility. I have given three examples and I have no doubt that my noble friend Lord Kingsland would be able to identify a large number of other issues. I hope I have emphasised sufficiently to the noble Lord that we are not hostile to the basic approach of having such a provision, but we are extremely concerned that, far from achieving simplification and uniformity with European law, we suffer the very real risk that our domestic law

515
will become even more complicated than would be the case if the clause were to be omitted. We are not suggesting that as an approach but we are anxious that real complications might emerge. I beg to move.
Lord Borrie: My Lords, at this hour I will not delay the House because I am sure that we would like to hear the Minister. I believe that the noble and learned Lord, Lord Fraser, in his usual charming and helpful way, has made some fundamental errors as regards the way in which the Government have sought and explained throughout the debates on this Bill how they see its purposes in relation to European law. For example, he has ignored the differences between substantive law and procedural law. He has ignored the fact that in the set-up for the United Kingdom we have the Director General of Fair Trading and the other regulators. We also have the commission on appeal. We have a structure, system and procedures which are not precisely the same as in the European Union. Therefore, it is inevitable that one has to use words like "as far as possible" and others of that kind. I shall not elaborate further on the speech that I was most interested to hear, because, like everyone else, I would like to hear from the Minister, too.
Lord Kingsland: My Lords, I had not intended to intervene in this phase of the debate until I heard the noble Lord, Lord Borrie. He is quite wrong in accusing my noble and learned friend Lord Fraser of clouding the issue because it is perfectly straightforward. Either Her Majesty's Government intend the procedural jurisprudence of the European Court of Justice to apply to our own competition law or they do not. It is not clear on the face of the Bill because it refers to decisions of the court. The court makes many decisions on procedure, remedies and third party rights. As the Bill stands, we do not know to what extent they apply. These are important matters. We need to be clear that we understand exactly what the Government's interpretation is; otherwise we are not in a position to draw sensible conclusions about many other clauses. The noble and learned Lord, Lord Fraser, mentioned Clauses 34 and 35 of the Bill. I shall add to that Clause 36 on third party rights.
Lord Simon of Highbury: My Lords, in the spirit of the hour and the way this debate on Clause 58 is developing and which is absolutely crucial, I do not believe that I need to refer extensively to the amendments that have been tabled. I could but I shall not because, first, I appreciate the way in which the Opposition have credited me with listening so far during the course of this Bill and, secondly, I wish to make clear that I have listened to their last statements. So I am not going to go into the amendments. I shall, however, comment on the general proposition that is being put to me, as I understand it. It is that the construction of Clause 58 is confusing. I understand the proposition but I cannot agree. As I said in Committee, the purpose of the governing principles is to ensure that as far as possible the UK prohibitions are interpreted and developed consistent with EC prohibitions. That is of crucial importance in minimising the burdens on business. They already deal with EC prohibitions that
516
have applied in the UK for over 20 years. We must seek to maintain the domestic prohibitions on parallel tracks. That is the purpose of Clause 58.
The noble and learned Lord, Lord Fraser, is, I know, a highly professional and extremely well-trained lawyer in his own right. He said to me that he finds the clause confusing. As a mere businessman my problem is that I thought it was clear. Therefore, I am left with something of a problem, which is the statements which purport to bring across the fundamental prohibitions. In my previous life I dealt with them for 20 years. I did not find much difficulty in understanding them because I believe that most businessmen understand what an abuse is. In my view much difficulty has been made of the complexity of this notion. I do not think that it is so complex for most businessmen. Therefore, when reading the clause, I believe that I would have understood that it carries across into our law the basis of the law which I have had to consider for 20 years when conducting my international business. I thought that it was clear.
There must be some doubts in the minds of the Opposition—doubts which they have not in any way reflected in their discussion on the amendments, which I appreciate—and, from a very legal construct, doubts about the relationship of this clause to other parts of the Bill. We have had a clear statement from my noble friend Lord Borrie that we have to differentiate between the fundamental construct of the law, the procedural aspects and the rules flowing from that. Indeed, this is a different argument from the clarity of Clause 58 in carrying across the jurisprudence and the construct of European law. The point is well taken that those are two different issues. I do not want to go into the issue of procedural coherence as opposed to the coherence of Clause 58. They are different debates and they can be taken one by one, as we have taken them. I want to stick with the view that has been proposed that Clause 58 is not clear in carrying across the basic body of jurisprudence in Europe.
I shall reflect carefully on the general statement that has been made because it has been made by an eminent lawyer and if, on a careful reading of the text, I find that this is a real problem rather than a construct about how procedure flows, I shall reconsider whether I can say anything further to elucidate what I take to be a clear clause to help the noble and learned Lord in this matter. I shall attend to that, but I can give no promises at this stage because I must reflect carefully on the noble and learned Lord's confusion.
10.30 p.m.
Lord Fraser of Carmyllie: My Lords, the noble Lord might now find that this will take a little longer to resolve, because it is not a confusion that I have; it is a confusion of the Confederation of British Industry and it is a difficulty which one of the most prominent law firms in the City has. It is not a matter to be dealt with too lightly. I thought that I had taken the trouble, as briefly as I could, to summarise an argument that I believe requires a serious answer. As I have not had a serious answer, I now intend to go over it so that the noble Lord can reflect on it at his leisure.

517
In my opening remarks, I pointed first to Clause 49(1), which states:
"The Director may make such rules about procedural and other matters in connection with the carrying into effect of the provisions of this Part as he considers appropriate".
I commented that if that were to be a solely domestic provision, with no reference to any other jurisprudence or legal system, it would be a perfectly standard and obvious provision to include in the Bill. However, I am invited to look to the whole of the Bill against the provision of Clause 58. The difficulty seems to arise because the European Community has developed both its procedural and remedial rules not, as we might sometimes see it, simply from a procedural basis but from fundamental principles derived from the treaty itself. If the noble Lord wishes to write to me before Third Reading to tell me that with regard to Clause 58 we in the United Kingdom shall never have to look to the jurisprudence of the ECJ (and all the other decisions attaching to that primary source), I would be very satisfied.
More importantly, there are very prominent lawyers in the City who have entered into this debate, not in any childish way or for any short-term, narrow party-political reasons, but because they are concerned that the competition law of the United Kingdom should be as clear and as lucid as possible. I have no doubt that they would be even more interested to hear the noble Lord's answer. If that is the course that he contemplates I hope that he will spell out that neither procedural nor remedial matters are to be construed in the context of Clause 58 and explain in the fullest possible detail the legal basis on which he reaches that conclusion. If he does so I doubt that your Lordships will have time to return to this matter, but because of the broad concern, not hostility that Clause 58 should be as clear as possible it would be helpful if the Minister could provide me with that information, and preferably before we reach Third Reading. I beg leave to withdraw Amendment No.191.
Amendment, by leave, withdraw.
[Amendments Nos. 192 to 198B not moved.]
The Deputy Speaker (Baroness Hooper): My Lords, there is a printing error in the Marshalled list. Therefore, I must call Amendment No.199 before Amendment No.199A. In doing so, I draw to the attention of noble Lords that if Amendment No. 199 is agreed to Amendment No.199A is pre-empted.
Clause 60 [Power to enter premises: Commission investigations]:
Lord Haskel Lord Haskel moved Amendment No. 199:
Page 30. line 38, leave out from beginning to ("by") in line 39 and insert ("A judge of the High Court may issue a warrant if satisfied, on an application made to the High Court in accordance with rules of court").
The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
[Amendments Nos.199A and 199B not moved.]
Lord Haskel Lord Haskel moved Amendment No. 200:
Page 31, line 5, at end insert—
("() A Commission investigation is also being obstructed if there are reasonable grounds for suspecting that there are books or records on the premises—

(a) the production of which has been required by an official of the Commission exercising his power in accordance with the provision under which the investigation is being conducted; and

(b) which have not been produced as required.").

The noble Lord said: My Lords, I beg to move Amendment No. 200 and speak also to Amendments Nos. 203 and 210. These amendments ensure that the provisions concerning warrants issued in relation to investigations concerning Articles 85 and 86 of the EC Treaty reflect the corresponding provisions relating to investigations under the domestic regime. It is our intention that the procedures set out in Part II should be equivalent to those proposed for domestic investigations in this Bill with differences only to reflect the different nature of the investigation at issue. It makes administrative and regulatory sense for similar procedures to be available to ensure that a competition investigation can be conducted effectively irrespective of whether an EC or domestic competition investigation is taking place.
On Question, amendment agreed to.
[Amendments Nos. 200A and 200B not moved.]
Lord Haskel Lord Haskel moved Amendment No. 201:
Page 31, line 34, leave out from first ("to") to end of line 37 and insert ("the High Court are to be read as references to the Court of Session.").
The noble Lord said: My Lords, we considered this amendment on day two. I beg to move.
On Question, amendment agreed to.
Clause 61 [Power to enter premises: Director's special investigations]:
[Amendment No. 202A not moved.]
Lord Haskel Lord Haskel moved Amendment No. 202:
Page 31. line 38, leave out from beginning to ("by") in line 39 and insert ("A judge of the High Court may issue a warrant if satisfied, on an application made to the High Court in accordance with rules of court').
The noble Lord said: My Lords, we have already debated this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 202B not moved.]
Lord Haskel Lord Haskel moved Amendment No. 203:
Page 32, line 4, at end insert—
("() A Director's special investigation is also being obstructed if—

(a) there are reasonable grounds for suspecting that there are books or records on the premises which an authorised officer of the Director has power to examine;

(b) the officer has produced his authorisation to the undertaking, or association of undertakings, and has required production of the books or records; and

519

(c) the hooks and records have not been produced as required.").

The noble Lord said: My Lords, we have already debated this amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 203A and 203B not moved.]
Lord Haskel Lord Haskel moved Amendment No. 204:
Page 32, line 29, leave out from first ("to") to end of line 32 and insert ("the High Court are to be read as references to the Court of Session.").
The noble Lord said: My Lords, we debated this amendment on day two. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 205:
After Clause 61, insert the following new clause—
ENTRY OF PREMISES UNDER SECTIONS 60 AND 61: SUPPLEMENTARY
(".—(1) A warrant issued under section 60 or 61 must indicate—

(a) the subject matter and purpose of the investigation;

(b) the nature of the offence created by section 62.

(2) The powers conferred by section 60 or 61 are to be exercised on production of a warrant issued under that section.
(3) If there is no one at the premises when the named officer proposes to execute such a warrant he must, before executing it—

(a) take such steps as arc reasonable in all the circumstances to inform the occupier of the intended entry; and

(b) if the occupier is informed, afford him or his legal or other representative a reasonable opportunity to be present when the warrant is executed.

(4) If the named officer is unable to inform the occupier of the intended entry he must, when executing the warrant, leave a copy of it in a prominent place on the premises.
(5) In this section—

"named officer" means the officer named in the warrant; and

"occupier", in relation to any premises, means a person whom the named officer reasonably believes is the occupier of those premises.").

The noble Lord said: My Lords, we debated this amendment on day two. I beg to move.
On Question, amendment agreed to.
Clause 63 [Monopoly investigations: general]:
[Amendment No. 206 not moved.]
Clause 64 [Investigations: complex monopolies]:
Lord Haskel Lord Haskel moved Amendment No. 207:
Page 35, line 12, at end insert—
("() If a person is charged with an offence under subsection (4) in respect of a requirement—

(a) to provide an explanation of a document, or

(b) to state where a document is to be found,

it is a defence for him to prove that he had a rasonable excuse for failing to comply with the requirement.").
The noble Lord said: My Lords, we debated this amendment on day two. I beg to move.
On Question, amendment agreed to.
[Amendment No. 208 not moved.]
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 209:
Before Clause 66, insert the following new clause—
CONTRACTS AS TO PATENTED PRODUCTS ETC
(" . Sections 44 and 45 of the Patents Act 1977 shall cease to have effect.").
The noble and learned Lord said: My Lords, I may have some knowledge about some areas of the law, but I have to say that I have virtually no knowledge of that area of the law which is encompassed by the Patents Act. This is an important amendment. I look forward to the Minister's response. I beg to move.
Lord Haskel: My Lords, I shall speak also to Amendment No. 223. I am most grateful to the noble and learned Lord for raising the position of Sections 44 and 45. In a very few words he made an extremely strong case. So we are prepared to accept his amendment. Clearly we shall have to address the transitional arrangements, such as the position of agreements currently in force which are affected by Sections 44 and 45 of the Patents Act. We will also have to consider any savings which may need to he made affecting the respective territorial extent of the Patents Act and the Competition Bill. Such matters can be dealt with under our powers in Clause 70 or in another place.
Lord Fraser of Carmyllie: My Lords, I knew that I was articulate and fluent, and all the rest, but I have been quite bowled over by the Minister's response for which I am very grateful.
On Question, amendment agreed to.
Lord McNally Lord McNally moved Amendment No. 209A:
After Clause 66, insert the following new clause—
TRADE MARKS, NAMES ETC: UNFAIR COMPETITION
(" . —(1) Any of the acts and practices referred to in sections (Trade marks, names etc: confusion) and (Trade marks, names etc: damage to goodwill or reputation) of this Act shall constitute an act of unfair competition and shall be actionable as such.
(2) In an action for unfair competition under this Act all such relief by way of damages, injunctions, accounts or otherwise shall be available to the plaintiff as is available in respect of the infringement of any property right.
(3) Nothing in this Act affects any of the laws relating to passing off or malicious falsehood or to the protection of any intellectual property right.").
The noble Lord said: My Lords, I do not know whether that means the shorter the speeches the more chance we have of convincing Ministers. The Minister will know that my broad philosophical approach to the Bill is that a competition Bill should be about competition and that we should use the opportunity to see whether we can advance the cause of competition. It is in that spirit that I move Amendment No. 209A and speak also to Amendments Nos. 209B to 209D.
When I raised the question of lookalikes earlier in the passage of the Bill, a number of noble Lords—most vigorously the noble Lord, Lord Peston—assured me that it had already been dealt with in earlier legislation. I can only say that if that is the case it was dealt with inadequately. The grievance remains about lookalike products and in proposing the amendments it is my

521
intention to suggest to Ministers that those grievances are legitimate and that the Bill is an appropriate opportunity to right the wrongs done by lookalikes.
Lookalike products trade parasitically by mimicking the package of brands. They use the brand's imagery and reputation to persuade consumers that their products are related to the brand. Lookalike packaging is most commonly used by retailers who seek to gain market share by associating their products with the brand leaders. There is no doubt that authoritative polling has shown that shoppers are confused and believe that when they are buying similarly packaged products they are buying the genuine goods.
I believe that an investment in a brand which may take years to be associated in consumers' minds with quality, taste or value should be protected on behalf of the consumers. In this case, imitation is not the sincerest form of flattery. It is a form of theft and should be treated as such. The amendments seek to prevent lookalike products by ensuring that unfair competitive practices are outlawed.
Amendment No. 209A would allow unfair competition to be actionable, just as other property rights are. Amendment No. 209B would prevent unfair competition practices which are likely to cause consumer confusion over product and services. Amendments Nos. 209C and 209D would prevent parasitic trading on brand goodwill and reputation by protecting the distinctiveness of product packaging.
Since I and other noble Lords first raised the matter, discussions have taken place with Mr. Nigel Griffiths, Minister for Competition and Consumer Affairs. He agreed to discuss the problem of lookalike products. That initiative was most welcome and I am glad to see that after some prodding the Government have been persuaded to consider the issue. However, we do not yet have on record any public statement confirming that the Government see this as an existing problem or that they are prepared to act on it. That is why I again raised the matter this evening.
The decision to produce a draft paper on potential solutions is useful, but I would welcome clarification from the Government on whether they think that the study of the problem rules out action under the Competition Bill. If the Government now accept that it is a problem, why not use this opportunity to legislate upon the issue?
If the Government do not take the opportunity to address the problem in this Bill, then when will there be legislative opportunity to tackle it? Ministers must be well aware of the difficulty of securing parliamentary time. Brand manufacturers would be extremely concerned if the issue were allowed to fall by the wayside again after years of campaigning for change.
Before I close, perhaps it would help noble Lords if I explained what the amendment will not do. It will not reduce consumer choice or raise prices. I was rather disappointed that my old employers, the British Retail Consortium, suggested that in its briefing about lookalikes. I humbly suggest to my old bosses that it is no part of their job to protect imitators because imitators
522
are no friends of retailing or quality. I am pleased to see that Tesco have agreed to stop producing lookalikes. That is an advance.
However, the amendments would not restrict the use of visual clues which indicate a product category. Such category indicators—for example, yellow bottles indicating lemon-scented detergent—would not be affected. Brand manufacturers are not seeking to limit category indicators which are an important aid to the consumer. This misunderstands the issue. It is neither the purpose nor the effect of the amendments. Lookalikes involve a whole range of features from one brand being copied closely to create a strong resemblance and an apparent link with another brand.
It is also palpable nonsense to suggest that any court would be incapable of differentiating between a category indicator and a lookalike which closely mimics the brand. As I said before, what we are dealing with here is a kind of theft, a theft of good name which has often taken years of investment to create. I beg to move.
Lord Islwyn: My Lords, in considering the amendments and new clauses moved by the noble Lord, Lord McNally, the basic question which I think needs to be asked is whether the Government recognise that there is a problem. If they do, then it follows that I should ask: what are they going to do about it? I feel it is essential to recognise what a lookalike product is. As I understand it, a lookalike product is one with packaging which deliberately imitates, mimics if you like, that of a brand.
In putting these few points to noble Lords, I wish to point out that I have no financial interest whatever. The imitators have similar colours, pack shapes, labels and names which are used to achieve the deception. The lookalike products are produced by retailers, domestic manufacturers and overseas manufacturers. I should have thought that this commercial piracy should be outlawed.
The products are not to be confused with own label supermarket products, which are distinctly packaged. Needless to say, consumers are confused by the packaging, they tend to believe that there is a connection between the brand and the lookalike when none exists. Consumers face far less choice through the disincentive to innovate because of incessant copying.
So far as I am able to ascertain, this Competition Bill does not cover that issue of lookalikes. My understanding is that the World Intellectual Property Organisation—a United Nations body—has put forward proposals which would answer the problem. Those would tackle the lookalike problem and consumer confusion, and, not least, the damaging of a competitor's goodwill and reputation. Distinctive packaging costs as much to produce as lookalike packaging, so there will be no additional cost to the consumer.
We should all recognise that brands are important in a free market economy. They are the basis on which a differentiation can be made between products and the basis on which there is competition. By comparison, lookalikes distort competition by deceiving consumers and by reaping a financial reward from a competitor's

523
ideas, investment, effort and risk. There would seem to be a weakness in UK law which makes this country particularly vulnerable to lookalikes.
The Bill and the amendment put forward could deal with the problem once and for all. I urge the Government to consider the issue seriously.
Baroness O'Cathain: My Lords, I oppose this amendment and in doing so, I declare an interest as a non-executive director of Tesco. But that is really not why I am speaking on this issue.
First, the noble Lord, Lord McNally, said that shoppers were confused. I assure your Lordships that shoppers are not confused. I pray in aid of that comment the fact that the Consumers' Association and the National Consumer Council—and I believe we all have great respect for both bodies—do not believe that shoppers are confused. At present there is an Institute of Grocery distribution code; there is the Trade Marks Act 1994; and there is the tort of passing off. That provides the trademark owners with adequate protection against infringement.
The noble Lord who has just spoken said that own-label products are not the same as lookalikes. But part of the argument seems to be that lookalikes are own-label products. Own labels are brands that have been built up by the retailers themselves. I believe that there is more confusion about this issue on the Floor of this House than there is outside on the part of the canny shopper buying the goods in the supermarket. I hope that this amendment will not be accepted.
Lord Fraser of Carmyllie: My Lords, after that brief intervention, I rise with some trepidation to say to the noble Lord, Lord McNally, that he has no need to apologise for having tabled these amendments again. My noble friend Lady O'Cathain is correct to say that this is far from an easy issue to resolve immediately.
However, from the last time we discussed this matter, it seems that some profitable progress has now been made because the Minister, Mr. Nigel Griffiths, has, I understand met with the British Brands Group and has given some indication of the recognition of a problem existing. If that is the Government's position, it would certainly be worth while to have that recognition placed on public record.
It may be that the Minister will have to say that that is not the appropriate time or there is not sufficient time to incorporate an amendment into the Bill. However, perhaps he will bring us up to date on where matters stand after that apparently useful meeting with Mr. Nigel Griffiths. I have no doubt that a large number of people and concerns would welcome such a statement from him.
11 p.m.
Lord Haskel: My Lords, as other noble Lords have pointed out, we discussed this matter in great detail in Committee. Then, as today, we have heard a range of opinions and I am grateful to noble Lords for giving us the benefit of their experience in this matter and for explaining to us their views about lookalikes. Clearly, it
524
is important that a consensus is reached on the need to change and, if so, on the extent of any change. There obviously is a divergence of opinion and we have heard that reflected in the Chamber this evening.
These amendments would add a substantial new dimension to the Bill. They would create new rights and remedies which are far more extensive than those which owners of existing intellectual property and similar rights already possess. Under the guise of unfair competition they will widen the rights of the owners of such rights, amongst other things, to exclude their competitors from offering products that are similarly got up but not so as to confuse the consumer. I am not sure that the noble Lord. Lord McNally, is right when he says that his amendment will advance the cause of competition.
Amendment No. 209C in particular goes well beyond providing protection for branded goods from lookalikes. In effect it covers virtually any commercial activity which lessens or would be likely to lessen the distinctive character or advertising value even of the appearance or the presentation of a product or service. This would create a new right of action of an extremely wide scope. Much has been made of the confusion that consumers might suffer as a result of the practices which these amendments are designed to address. However, these amendments would create rights of action whether or not the act or practice causes confusion.
These amendments would effectively make redundant almost all existing trade mark legislation because of the much larger range of activities that would be actionable than is currently the case. Indeed the UK might find itself out of step with other member states in granting greater protection to registered trade marks than is provided under the EC Trade Marks Directive. Clearly, the implications of this need to be considered very carefully, in particular the impact that the adoption of very rigid unfair competition laws would have on the consumer. It is therefore important that all parties are given the opportunity to put their views forward.
Nevertheless the Government recognise the concerns which brand owners have expressed about the current remedies available to protect their products. The noble Lord is quite right: following the debate on this issue at the Committee stage, the Competition and Consumer Affairs Minister, Mr. Nigel Griffiths, met representatives of the British Brands Group and another trade group, Anti Copying in Design, which has similar concerns.
While it remains our view that this Bill is not an appropriate vehicle to deal with this issue, it has been agreed that those two groups will make further representations to Ministers on this matter. These groups are in touch with officials. I should again point out that there is not a consensus on this issue; in particular the Government are concerned to ensure that the interests of the consumer are fully represented and considered.
Opportunities to discuss unfair competition have also arisen since the Trade Marks Bill was debated in 1994, notably before the Standing Advisory Committee on Industrial Property. That committee has not

525
recommended that there is a need for unfair competition legislation. The committee is continuing to review the issue as further evidence is presented.
I hope noble Lords will see that we are prepared to explore with the industry and consumers the appropriate response to the concerns that have been raised this evening. Meanwhile, there are effective remedies in common law and under the Trade Marks Act 1994 where confusion is caused in the mind of the consumer. I gave examples in Committee. Lookalikes in the form of the alleged imitation of packaging can be dealt with by the common law tort of passing off, which has proved effective. I referred to the Penguin v. Puffin case.
As I have said, these amendments in any instance would go well beyond the issue of defining unfair competition as acts or practices which would cause confusion to consumers. Given this, as well as the lack of consensus on what, if any, further remedies are needed in this area, and the Government's willingness to consider the representations I mentioned earlier, I invite the noble Lord to withdraw his amendment.
Lord McNally: My Lords, I am grateful for the support I received from the noble Lord, Lord Islwyn. Also, but for a bereavement, my noble friend Lady Hamwee would have been here this evening to speak in my support.
Picking through the Minister's reply, there were signs of some encouragement and some movement on this issue. I cannot agree with the noble Baroness on this. The amount of effort that goes into imitating a brand into which tremendous investment has already poured is the give-away. The own-brand products of the supermarkets stand and stand (I almost said "fall") because they are quality products based on the name of the supermarket. For example, people associate the names Tesco and Sainsbury with quality. We do not object to that. We are objecting to what has always seemed to me to be quite blatant passing off.
The Minister has gone through his brief pointing out that there have been attempts at legislation and that there are opportunities in the courts. I did receive one "behind the chair" intervention from the Government Chief Whip, which in the circumstances either reveals the horrid reputation I have in this House or his own suspicion. He asked me whether I intended to divide the House. Ministers already know that my interventions are meant only to be helpful in making progress so far as this Bill is concerned. I know that at five minutes past eleven the Minister is already considering whether there are not better ways of earning a living, such as running an international oil company. So in those terms and in the light of the noble Lord's reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 209B to 209D not moved.]
Clause 67 [Offences by bodies corporate etc.]:
Lord Haskel Lord Haskel moved Amendment No. 210:
Page 36, line 18, leave out from ("under") to end of line 19 and insert ("any of sections 41 to 43, 53(8) or 62.").
The noble Lord said: My Lords, e have already considered this amendment. I beg to move.
On Question, amendment agreed to.
Clause 68 [Crown application]:
Lord Haskel Lord Haskel moved Amendment No. 210A:
Page 37, line 8, at end insert—
("(3A) If, in respect of a suspected infringement of the Chapter II prohibition or of the Chapter II prohibition otherwise than by the Crown or a person in the public service of the Crown, an investigation is conducted under section 25—

(a) the power conferred by section 27 may not be exercised in relation to land which is occupied by a government department, or otherwise for purposes of the Crown, without the written consent of the appropriate person; and

(b) section 28 does not apply in relation to land so occupied.

(3B) In any case in which consent is required under subsection (3A), the person who is the appropriate person in relation to that case is to be determined in accordance with regulations made by the Secretary of State.
(3C) Sections 60 and 61 do not apply in relation to land which is occupied by a government department, or otherwise for purposes of the Crown, unless the matter being investigated is a suspected infringement by the Crown or by a person in the public service of the Crown.
(3D) In subsection (3C) "infringement" means an infringement of Community law relating to Article 85 or 86 of the Treaty establishing the European Community.").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 210B:
Page 37, line 15, at end insert—
("() Any amendment, repeal or revocation made by this Act hinds the Crown to the extent that the enactment amended, repealed or revoked hinds the Crown.").
On Question, amendment agreed to.
Schedule 12 [Minor and Consequential Amendments]:
Lord Haskel Lord Haskel moved Amendment No. 210C:
Page 84, line 40, at end insert—
("() In section 81 (procedure in carrying out investigations) —

(a) in subsection (1) —

(i) in the words before paragraph (a), omit from "and the Commission" to "of this Act)";

(ii) in paragraph (b), omit "or the Commission, as the case may be," and "or of the Commission";

(b) in subsection (2), omit "or the Commission" and "or of the Commission"; and

(c) in subsection (3), omit from "and, in the case," to "85 of this Act" and "or the Commission, as the case may be,".").

On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 210C:
Page 85, line 18, at end insert—
("() In section 135(1) (financial provisions)—

(a) in the words before paragraph (a) and in paragraph (b), omit "or the Commission"; and

(b) omit paragraph (a)." ").

On Question, amendment agreed to.
[Amendment No. 211 had been withdrawn from the Marshalled List.]
Lord Haskel Lord Haskel moved Amendment No. 211A:
Page 85, line 21, at end insert—
("The Estate Agents Act 1979 (c. 38)
. In section 10(3) of the Estate Agents Act 1979 (restriction on disclosure of information), in paragraph (a)—

(a) omit "or the Restrictive Trade Practices Act 1976"; and

(b) after "the Coal Industry Act 1994", insert "or the Competition Act 1998".").

The noble Lord said: My Lords, I shall speak also to Amendments Nos. 211B, 212A, 223A, 223B and 223C. These are minor consequential amendments. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 211B:
Page 88, line 9, at end insert—
("The Consumer Protection Act 1987 (c. 43)
. In section 38(3) of the Consumer Protection Act 1987 (restrictions on disclosure of information)—

(a) omit paragraphs (e) and (f); and

(b) after paragraph (o) insert—

"(p) the Competition Act 1998." ").
On Question, amendment agreed to.
[Amendment No. 212 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 212A:
Page 89, line 16, at end insert—
("The Cool industry Act 1994 (c. 21)
. In section 59(4) of the Coal Industry Act 1994 (information to be kept confidential by the Coal Authority) —

(a) omit paragraphs (e) and (f), and

(b) after paragraph (m), insert—

"(n) the Competition Act 1998."").
On Question, amendment agreed to.
Schedule 13 [Transitional Provisions and Savings]:
Lord Morris of Manchester Lord Morris of Manchester moved Amendment No. 213:
Page 91, line 21, after ("determined") insert—
("(a) in the case of proceedings under the RPA, before the date of enactment; and
(b) in the case of proceedings under the RTPA,").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Order Paper.
While it may be helpful for me very briefly to recall the case for this group of amendments, I shall not, of course, repeat tonight the arguments with which I commended these amendments to your Lordships' House in the short debate made possible by my paving amendment to Clause 1 of the Bill on 9th February.
What was established then, by speeches from all parts of the House, was that this Bill will determine whether community pharmacy has any future in Britain. Independent researchers have shown that as many as 3,000 local pharmacies are today barely viable. But if Retail Price Maintenance (RPM) on over-the-counter medicines was abruptly to end, thousands more would
528
face closure at a time when the public service they provide has never been more important to local communities, more especially to millions of elderly and disabled people, mothers with small children and the less well-off with no private means of transport, who rely so crucially on their chemists' shops.
The tabling of the amendments had two purposes. Briefly stated, the first was to stay the Director General of Fair Trading's legal proceedings under the old Act: for not to do so would put community pharmacies in double jeopardy. My second purpose was to secure RPM for over-the-counter medicines for a minimum 5-year period of transition before it could be tested by the director general under the new Act, so as to provide time for a proper analysis of the pharmacy market; to allow community pharmacies to develop their role in the Government's healthcare agenda; and to facilitate due consideration of the effects of the large and growing body of European case law.
In response to the wide-ranging support given to my amendments on 9th February, my noble friend the Minister undertook to look sympathetically at the case for RPM to be granted for a minimum 5-year transitional period once his Bill comes into force. He has been as good as his word and I am most grateful to him for tabling his amendments, thus making it possible for me not to press my amendment on the issue. In 34 years at Westminster I have rarely known a Minister go to so much trouble both to consult and help a parliamentary colleague.
There still remains, however, the highly important issue of staying, for a limited period, the legal proceedings which have now been commenced by the director general under a law that, not improbably, will be replaced on the day the court action is concluded. The director general would then have a second opportunity to litigate under the provisions of the new Act. That classically is double jeopardy and is what my amendments to Schedule 13 sought to avoid. For their part, not surprisingly, the community pharmacists want the case for RPM to be tested only once, under the new law, and against up-to-date criteria for determining the public interest.
They have overwhelming public support, as the MORI poll demonstrates, and already 108 Members of another place, of whom 99 are Labour Members of Parliament, have put their names to an Early Day Motion supporting the community pharmacists. It is worth stressing as well that to force the closure of thousands of community pharmacies would be to act in flat contradiction of the Government's stated policy of promoting small businesses. For so many such businesses to be forced to close to the advantage of big business is also surely both socially and morally indefensible.
But there has now been an ugly and disquieting new development in relation to my amendment on staying the director general's legal proceedings under the old law. In Last Thursday's Evening Standard it was reported that:
"The Office of Fair Trading today launched a fierce rearguard action as the drugs industry scented victory in its fight to keep price-fixing for over-the-counter medicines.

529
"The House of Lords was set to debate an amendment to the Competition Bill … which, if passed, would enshrine price-fixing in law for non-prescription drugs.
"Last month the OFT launched legal action in the Restrictive Practices Court to have price-fixing for drugs outlawed—although the case will not be heard until next year at the earliest. If the amendment successfully passes through Parliament the legal action will automatically fail.
"The director general, John Bridgeman, set out to lobby peers, concerned that in the past the Labour Party had supported the pharmacists' case for keeping the status quo. Last year there was cross-party backing in the House of Lords for exempting pharmacists …"
The newspaper goes on to report the director general as directly implying that the "drug giants" are behind my amendments, even although they sell medicines as readily to hypermarkets as they do to local pharmacies, and quotes him as saying that,
"drug companies are among the biggest spenders on advertising",
as if our debate tonight was one between drug companies and the consumer.
I most strongly repudiate the suggestion of involvement by drug companies of any size in the drafting or tabling of any of my amendments. I am not retained by the drug companies or by anyone else, nor have I ever been retained by any drug company, large or small, giant or dwarf, in all my years in Parliament. My commitment is to community pharmacy and the most vulnerable of its customers. If the Evening Standard report is accurate—and I have seen no attempt by Mr. Bridgeman to correct what it says—I have been very seriously misrepresented; and indeed in the view of experienced parliamentarians who have discussed it with me, the report is grossly contemptuous of your Lordships' House. Mr Bridgeman's remarks are at once partial and unfair and constitute a blatant and unprecedented attempt by a public official to intervene in the parliamentary process.
His remarks also imply that those who support my amendments are seeking special protection. They are not. In fact they fully accept that community pharmacy should ultimately have to make its case under the provisions of this Bill after it becomes law. But they believe that the director general's action in bringing proceedings under an Act that is about to be repealed and replaced by new legislation is oppressive and unjust.
It is demonstrably wrong for Mr Bridgeman to suggest that these amendments are either inspired by, or aimed at supporting, the drugs industry. It is wrong for him to quote as a fact, and then exaggerate, an assumption made in one study, which is completely baseless, that price-fixing costs consumers
"at least £180m per annum".
It is also wrong for him to say that pharmacy is seeking special protection when it is simply seeking to argue its case once, under this Bill's provisions, and thus to avoid double jeopardy. And it is wrong again to suggest that the British public pay too much for their medicines, when in fact local pharmacists can help them to get the right medicine at the right price, together with good advice.
I am reminded of Lloyd George's famous dictum that war is too important to leave to the generals. Those who know most about Lloyd George's private life might say that there were some things too important to leave to Lloyd George. But we must profoundly hope that what Mr. Bridgeman has now done will not have influenced too many people to conclude that fair trade is too important to leave to the Office of Fair Trading.
Clearly, his attempt to influence this debate ill-becomes a public servant and merits comment from the department. I trust that my noble friend shares my concern about its implications and am sure that he appreciates how strong and genuine feeling is in this House and beyond about allowing the director general to continue, at vast expense to the public purse and to small businesses alike, with legal proceedings that are so widely regarded as a waste of public money.
If the Minister is unable to respond conclusively tonight to my amendment on staying those proceedings—I know that he is still in dialogue about it with colleagues in other departments—I urge him and them, when they are free to act, to do so as parliamentary and public opinion want and expect them to do. In that regard I can hope for no better outcome than that, when we come to Third Reading and the need then for a definitive decision from this House, my noble friend will be seen to have done as well for us as he did in satisfying the call for a five-year transitional period under the new law. I beg to move.
Lord Fraser of Carmyllie: My Lords, I can deal briefly with this amendment. First, I say to the noble Lord, Lord Simon, that the next group of amendments also deal with issues of community pharmacy—Amendments Nos. 215 and 216. I indicate to him now that I shall not move those amendments when we reach the next group.
Briefly, I should like to offer a number of observations. I certainly do not believe that this is an appropriate time—almost the last group of amendments on Report—to be dealing with something which the noble Lord, Lord Morris, is right in describing as an issue attracting a great deal of concern in the wider world. As he also pointed out, that concern is also felt in another place where over 100 Members of Parliament signed an Early-Day Motion indicating their concern for the continued existence of community pharmacies.
Perhaps I can also place on record that I have known the noble Lord in another place as well as here, and I do not suppose that we will always agree on political issues. However, the idea that the noble Lord would table amendments and spend the time that he has for any purpose other than pursuing the belief and desirability of maintaining community pharmacies is an outrage. If that is indeed what Mr. Bridgeman told the Evening Standard, I hope that he will retract it. It would seem to me that, for an admired public servant, for once he has lost a sense of objectivity and ought to reflect carefully on the matter.
All I say to the Minister is that I do not believe it to be necessary or appropriate for him to give a full reply tonight. I simply want to indicate that, rather than

531
pursuing the line of amendments in my name on the Order Paper, we will look to him coming back with amendments to meet the full case advanced by the noble Lord, Lord Morris of Manchester. That is not in the nature of a threat; it is in the nature of a proper response to public demand that if we do not obtain that reply the noble Lord should anticipate that we shall certainly want to test the will of the House when we return at Third Reading.
Finally—this is not a complaint addressed to the Minister—I have said repeatedly that it is not a matter of competition policy that concerns us; it is a matter of the Government's declared health policy. It is a good health policy. If the noble Lord is again going to reject the amendments moved by his noble friend Lord Morris of Manchester, I hope that we shall see on the Government Front Bench health Ministers so that we can look them straight in the eye and discover whether or not they truly believe that what they are asking their noble friends to vote for coincides with the policy which the Department of Health truly believes to be the correct one.
Lord Graham of Edmonton: My Lords, I rise to support my noble friend Lord Morris. I am sure the Minister senses that this is one of those issues on which one has to take a direct and focused point of view. As I said earlier, I am concerned as a consumer and as someone interested in retailing about the inevitable way in which small shops have been gobbled up by the big ones. I declared an interest then, as I do now, in the Co-operative movement. We are the proud possessors of big shops as well as little ones. But when one looks at what has happened on the high street of the village or the small town, one cannot help but come to the conclusion that if one lifts the protection for the small community pharmacy there will be closures.
The figure of 3,000 has been quoted, which seems too precise to be true. Whether that figure will stand up remains to be seen. In the town of Loughton in Essex there is one very large supermarket, Safeway, a company for which I have the highest respect. In the high street there are two or three chemists, one of which is a Co-op chemist. If the supermarket is allowed to reduce the charges, the Government may say, "This is what competition is all about—to reduce the cost to the consumer." I think that Parliament is about more than simply reducing the cost. It ought to be about protecting the consumer. Medicines are not like pounds of cheese, the cogs of wheels or newspapers. The Government should take on board that medicines are in a special category. Very often the small pharmacy is looked upon by its users as a place in which they can have confidence. The pharmacist gives advice freely and serves the community well.
I noticed in the newspaper today that Asda has placed a large advertisement asking that the amendments be rejected. Asda believes in what it calls "fair prices." I read that to mean "fair profits." Big companies like Asda are motivated almost completely by the desire to become bigger and bigger and more profitable. Inevitably, that is at the cost of the small businessman or consumer.
532
I do not demur from anything said by my noble friend or by the noble and learned Lord, Lord Fraser. The Minister has time to reflect on finding some means to satisfy the House. The Minister has gone a long way. I believe that he can go just a little further. It would be a tragedy if the Government got the reputation of believing in removing the barriers to competition but also carried out the long process of eliminating or reducing choice for the consumer. The case that has been made should very much impress the Minister. I look forward to hearing what he has to say.
11.30 p.m.
Lord McNally: My Lords, since the noble Lord, Lord Morris, called Lloyd George in aid in his remarks perhaps I may remind him of the cartoon showing a young Liberal outside a conference calling on people to make love and not war. The old Liberal passing said that Lloyd George did both. But I do not believe that the noble Lord, Lord Morris, need worry about his own reputation as regards some of the remarks that he reported to the House. I believe that he stands far too high for anyone to cast doubts on why he tabled these amendments.
I intervene only briefly because when he raised the matter earlier my colleague, the noble Baroness, Lady Ludford, from these Benches, gave support. We have here a genuine case of the danger of an important policy falling between departments. It is clear that the Department of Trade and Industry, with its push for competition, may not be full square with the Department of Health. It was very interesting when this issue was first raised at Question Time. I believe it was the health Minister, the noble Baroness, Lady Jay, who responded in an inadequate way because she said that these were matters for the DTI. It is not good enough for an issue of such importance as the role of the community pharmacy to shuttlecock between departments without its role in the community being adequately defended.
The noble Lord, Lord Morris, made a powerful case. He has had support from all Benches in this House. I hope that we shall have an assurance from the Minister that if the matter cannot be dealt with fully at this time of night and at this stage of the debate the message will go back firmly into Whitehall that allowing this issue to fall between departments is not good enough. We want a comprehensive response which gives what the public want—a guarantee that the community pharmacy is to be protected in order to fulfil a role which is needed in our community.
Lord Islwyn: My Lords, I applaud the efforts which have been made by the Minister to resolve this issue. I, too, resent the attacks on my colleague and friend, the noble Lord, Lord Morris. He is above reproach. I have always admired his sincerity in espousing so many worthy causes over the years. At all costs we must avoid the closure of local pharmacies. It would be highly detrimental to many communities, as I know from personal experience and through my career in the other place. There are isolated estates with low wage earners

533
and no personal transport. If the local pharmacy was closed they would be highly disadvantaged. The Government should look very seriously at the issue.
Lord Hughes: My Lords, I do not often speak in your Lordships' House nowadays and I have picked a rotten time to depart from my usual rule. At the beginning of these proceedings I indicated an interest and said that I would not speak or take any further part in them. That was based on my experience in local government more than half-a-century ago when the advice was that if one had an interest one could declare it but one must not take any further part. It was not very often that a councillor was in that position. However, recently, two company directors declared an interest in an amendment and then proceeded to vote; so I do not believe that I need deny myself any further.
My experience and knowledge of what takes place in the community pharmacy makes me aware that the fear within such pharmacies of what this provision will do to them is real. I give the example of the over-the-counter sales in a community pharmacy. They represent anything from 25 per cent. to 30 per cent. of its income.
It has been said that anywhere between 25 and 50 per cent. of the total number of community pharmacies might have to close. Their income might diminish by anything from 7.5 to 15 per cent. Few community pharmacies could survive a loss of income on that scale. If they do not survive, people will have to go elsewhere for more than their over-the-counter products because there is also the matter of prescriptions. In many cases, the only other place to go for a prescription is Boots or its equivalent, which can be anything from 10 to 50 miles from some villages. I believe that when we last considered this matter, the noble Lady, Lady Saltoun, spoke of experiences in her area and of having to put people on the bus. However, in many cases, the cost of getting a bus there and back would be more than the saving that might be made by using the supermarket.
I told the noble Baroness, Lady O'Cathain, that I would be referring to what she said in Committee about prices. I apologise to the noble Baroness if that is all that has kept her here at this unearthly hour. If she proposed to be here anyway, so much the better. The noble Baroness said in Committee that a 24-pack of Asprin is sold in supermarkets for 39p while in a community pharmacy Disprin is £1.50. If I can read my own writing, she also said that Nurofen cost £4.69 in a community pharmacy and £1.99 in a supermarket.
I wondered why in the first case the noble Baroness compared Asprin with Disprin, rather than Asprin with Asprin, whereas in her second example she compared like with like, so I made further inquiries. Supermarkets sell such products in packs of 24, which is supposed to safeguard against overdosing. Community pharmacies sell in lots of 100 tablets and they sell 100 for 99p which is equivalent to less than 25p for 24 as compared to the supermarkets' 39p, so there is not much incentive to go to a supermarket to buy Asprin.
534
In the second case, the noble Baroness compared like with like. I am absolutely certain that the prices which the noble Baroness quoted are correct, but sometimes one can quote something which is absolutely correct and yet create a false impression. I wondered why in the second case the noble Baroness compared like with like because the difference was so great. I have found that just as Disprin is an alternative to Asprin, so too the pharmacist has an alternative to Nurofen, Ibuprofen. Local pharmacies can sell that for £1.39. Once again, that is cheaper than the figure quoted for the supermarket.
My noble friends Lord Morris of Manchester and Lord Graham have spoken of all the other advantages of community pharmacies as compared with supermarkets. A case in point which has occurred to me relates to one of the most widely used drugs, which is beneficial when properly used, paracetamol. But two other products can be bought, Lemsip and Night Nurse, which both contain paracetamol. The community pharmacist would tell a customer that if he used both products he should be careful because he might unwittingly overdose. Would a salesperson in a supermarket be in a position to give that advice to a purchaser?
My noble friend referred to the remarks of the director general on the radio. I did not hear them. I do not know what he meant by "considering my position". It is possible that he meant that he would have to consider whether he was doing it the right way. However, it is perhaps more likely that he meant he would have to consider whether he should continue as director general. Considering the impropriety of what he said on the radio, if they have to choose between losing hundreds, perhaps thousands, of local pharmacies or losing the director general, I believe that the public would prefer to see the director general tendering his resignation.
Baroness O'Cathain: My Lords, I certainly had no intention of misleading the House. I saw figures. In my view, aspirin and Disprin are the same. I try to avoid taking either, but there it is. I never for one moment suggested the closure of community pharmacists. I made the point that this was a competition Bill and I could not understand why over-the-counter medicines were the only items subject to retail price maintenance. On a previous occasion the noble Lord, Lord Morris, said that the difference between over-the-counter medicines in a community pharmacy and elsewhere was about 50p. I shall not go into the difference, but I suspect that it is good deal higher than that. If the article in the Evening Standard, which I have only just seen, is true and over-the-counter medicines account for only 5 per cent. of the total turnover of these pharmacies, what are we worried about? We are talking about 5 per cent. If community pharmacies are so valued by members of the community there is no competition problem; the community will support them. I do not believe that the nonsense of having retail price maintenance on certain

535
products should create a problem under the Competition Bill. I believe that the Competition Bill is right and the amendment is wrong.
Lord Simon of Highbury: My Lords, I thank my noble friend Lord Morris both for the charming way in which he has spoken of the efforts that we have made to resolve the real issues that lie behind his amendments and the clarity of his position.
It is worth making one or two points despite the lateness of the hour because these are very important issues, as the noble and learned Lord, Lord Fraser, said. The development of our policy is important. The Government wholly accept the importance of community pharmacies. We fully understand the interests of those who wish to press their arguments. I do not mean "interests" in the wrong sense of that word. I am referring to those who are seriously concerned about the role of pharmacies in health policy. I have said before from this side of the Chamber when speaking for the Government that we fully understand the very important health policy issues in this debate, but they are different from the competition issues. I shall not be drawn into a discussion of health policy at seventeen minutes to the hour. I believe that the issue in competition terms is not whether retail price maintenance in this sector is good or bad, but whether the independent bodies which have been set up to look at such matters under statutory provision should be allowed to do so, or whether the RPM for OTC medicines should be removed from scrutiny under the Resale Prices Act and the Chapter I prohibition in the Bill until 2004. That is the purpose and likely effect of my noble friend's amendments. It is a point to which I shall return with regard to the position of competition in this sector, and. in particular, its European aspects.
My noble friend raised also, correctly, the question of double jeopardy. He then kindly acknowledged that I have been trying to respond to that issue through the government amendments. In looking at the position that we have now reached, I can see the case, although it is not what the Government propose, for saying that RPM of OTC medicines should be considered under the new regime only, in which case it would benefit from the one-year transitional period we are providing for existing agreements. I can also see the case for saying, as we have proposed, that the present action should be allowed to continue to a conclusion, and if the result of the proceedings is that OTC medicines are exempt, RPM on those goods should benefit from a generous five-year transitional period from the Chapter I prohibition.
However, it is difficult to see the case for saying that the present action, seeking a review of the exemption, should be stayed, and that RPM for OTC medicines should benefit from a five-year exclusion. As I said, I shall return to that point in terms of competition law in general.
The existing exemption of RPM for OTC medicines has always been subject to possible review by the court, if there is prima facie evidence of a material change in the relevant circumstances since the court took its decision in 1970. My noble friend's amendments take
536
the opportunity of the Bill effectively to ask whether the practice could be exempt from consideration until 2004. As I have said, we recognise the public interest in a plentiful and well-distributed supply of pharmacies. We would hope, as well as expect, that the court would consider most carefully any evidence that they might be put at risk by the prohibition of RPM.
It is only fair to point out that the director general has studied the issue long and hard, and therefore has proposed a review. I shall not go into the points that he has made in calling for the review. All I will say is that they are clearly serious and important. I shall let the matter rest there for tonight, except to return to a final point—that my noble friend's amendments would obviously prevent proper consideration of them by a court until 2004.
To what avail is that likely to be? I said that I wanted to return to competition law in general, and I have to remind noble Lords that over and above whatever we may provide in domestic competition law, there exists Article 85 of the Treaty of Rome, which is directly applicable in the UK. If RPM for OTC medicines in the UK were to be removed from any form of competition scrutiny under domestic law, it is entirely possible that the Commission would seek to examine it under Article 85.
So I have to warn the House that the consequences of passing the amendments, as tabled by my noble friend, are unpredictable and may not necessarily be to the advantage of the sponsors of the amendments. It would be better were we to leave the matter to be dealt with on its merits by the court, and to provide that if, but only if, the proceedings result in an exemption from RPM for OTC medicines, they should enjoy the benefit of a five-year transitional exclusion from the Chapter I prohibition from the end of the proceedings, and the director should not be able to propose to terminate the transitional period early. That is the double jeopardy issue which I believe will be the effect of the Government's amendments.
Those are the issues that we have been carefully weighing. They are difficult issues, as my noble friend Lord Morris rightly put to us tonight. I commend to your Lordships the approach as tabled in our amendments. We have considered long and hard what are the most appropriate ways forward and what they might be. I hope that my noble friend Lord Morris will agree to reflect further on our proposals and I ask him not to press his amendment at this stage.
Lord Morris of Manchester: My Lords, it is clearly the sense of your Lordships' House as a whole that the Minister should have due time to reflect on what has been said tonight by noble Lords all across the House. My noble friend the Minister's track record encourages me to think that, if anyone can make our case against placing small business in double jeopardy, it is my noble friend. Thus, I am content that my amendment should not be pressed at this stage, so that he can use his best endeavours before Third Reading to achieve acceptance of the amendment, if not in its present terms then in some other form to the same effect. Meanwhile, I strongly urge him, as did the noble Lord, Lord

537
McNally, and others, to emphasise to his colleagues the wisdom of ensuring full and effective co-ordination between Whitehall departments on an issue of such importance both socially and morally. That, too, is clearly seen as a most important consideration by your Lordships on both sides of the House. For those reasons, I shall not be pressing the amendment at this stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 214 and 215 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 215A:
Page 92, line 14, at end insert—
("(1A) There is no transitional period for an agreement, decision or practice in respect of which there are continuing proceedings to the extent to which the agreement, decision or practice is, as a result of those proceedings, void or unlawful.").
On Question, amendment agreed to.
[Amendment No. 216 not moved.]
Lord Haskel Lord Haskel move Amendments Nos. 217 to 217B:
Page 92, leave out lines 27 and 28.
Page 92, line 30, leave out ("and") and insert ("the transitional period is five years.").
Page 92, leave out lines 31 to 33 and insert—
("(5A) In the case of an agreement, decision or practice relating to goods which immediately before the commencement date are exempt under section 14 of the RPA, the transitional period is five years, unless sub-paragraph (1A) applies.
(5B) In the case of an agreement, decision or practice relating to goods—

(a) which at the commencement date are the subject of continuing proceedings, and

(b) which at the conclusion of the proceedings are found to be exempt under section 14 of the RPA,

the transitional period is five years.").
On Question, amendments agreed to.
[Amendment No. 218 not moved.]
Lord Haskel Lord Haskel moved Amendments Nos. 219 to 222:
Page 92, line 39, leave out (" 25(2)").
Page 93, line 9, at end insert—
("() If, by virtue of paragraph 8(5A) or (5B), there is a transitional period for an agreement, decision or practice relating to goods—

(a) which immediately before the commencement date are exempt under section 14 of the RPA, or

(b) which at the conclusion of continuing proceedings are found to be exempt under section 14 of the RPA,

the period is not affected by sub-paragraphs (1) to (5) of this paragraph.").
Page 93, line 21, at end insert ("documents and").
Page 93, line 37, at end insert ("regardless of whether or not it will be exempt").
Page 94, line 3, at end insert ("regardless of whether or not it will be exempt").
On Question, amendments agreed to.
Schedule 14 [Repeals and Revocations]:
Lord Haskel Lord Haskel moved Amendments Nos. 222A and 222B:
Page 95, line 22, column 3, at end insert—

("In section 81(1), in the words before paragraph (a), from "and the Commission" to "of this Act)"; in paragraph (b), "or the Commission, as the case may be" and "or of the Commission"; in subsection (2), "or the Commission" and "or of the Commission" and in subsection (3), from "and, in the case," to "85 of this Act", and "or the Commission, as the case may be,".")

Page 95, line 22, column 3, at end insert—

("In section 135(1), in the words before paragraph (a) and in paragraph (b), "or the Commission", and paragraph (a)."")

On Question, amendments agreed to.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 223:
Page 95, line 34, at end insert—
("1977 c. 37. The Patents Act 1977. Sections 44 and 45.")
The noble and learned Lord said: My Lords, I believe that following the acceptance of Amendment No. 209, the amendment is accepted. I am prepared to stand corrected. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendments Nos. 223A to 223C:
Page 95, line 34, at end insert—

("1979 c. 38.

The Estate Agents Act 1979.

In section 10(3), "or the 1979. Restrictive Trade Practices Act 1976."")

Page 96, line 44, at end insert—

("1987 c. 43.

The Consumer Protection Act 1987.

In section 38(3), paragraphs (e) and (f).")

Page 98, line 20, at end insert—

("1994 c. 21.

The Coal Industry Act 1994

In section 59(4), paragraphs (e) and (f).")

On Question, amendments agreed to.
Clause 70 [Consequential and supplementary provision]:
[Amendment No. 224 not moved.]
Clause 71 [Short title, commencement and extent]: [Amendment No. 225 not moved.]
House adjourned at six minutes before midnight.