Sitting of 19 February 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  COUNTY OF MERSEYSIDE BILL [Lords].
  Order for Third Reading read.
  To be read the Third time this day at 7 o'clock.

  BRITISH RAILWAYS BILL (By Order.)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 26 February.

ORAL ANSWERS TO QUESTIONS
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Redundancies
    Mr. Harry Ewingasked the Secretary of State for Employment how many redundancies have been notified to his Department since 3 May 1979.
    The Under-Secretary of State for Employment (Mr. Jim Lester): The number of proposed redundancies notified to my Department under the redundancy handling provisions of the Employment Protection Act 1975 during the period May 1979 to 31 January 1980 was 471,645 and involved 7,610 establishments. During the same period 91,376 redundancies at 1,280 establishments were formally withdrawn.
    Mr. Ewing: Is the Minister aware that a large proportion of the half million redundancies he has announced are in the
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    Falkirk company of Glynwed Limited? We have been notified that, owing to Government policies, that company will have to declare a fair number of employees redundant. As that company gave £10,000 to the Tory Party election fund and has obviously been misled, could the Minister make arrangements for the £10,000 to be refunded?
    Mr. Lester: Matters concerning Central Office are not the responsibility of my Department.
    Mr. Kilroy-Silk: Does not the Minister accept that the figures he has just given are extremely disturbing? Are they not a disgraceful commentary on nine months of Conservative Government? Many thousands of those redundancies have been in the North-West, not least in my own constituency. When will the Government stop confronting trade unions and workers and begin to deal with the real, deep-seated industrial problems that confront our society, many of which have been created by this Government?
    Mr. Lester: I agree that the figures are disturbing, and many of our policies are designed to deal with this changeover in industry. Perhaps I could put those figures in perspective by pointing out that there is no statutory requirement for people to notify withdrawals of redundancies. The Manpower Services Commission figures for the same period are 150,273. Set against 8 million job changes a year, I think that that puts the matter more into perspective.
    Mr. Heifer: Is it not clear that the Government's policy of non-intervention in economic matters, and the failure to help those who are put on the dole in areas such as Merseyside, is causing great difficulty and poverty? Is it not time that the Government changed their policy?
    Mr. Lester: As regards my Department, the £360 million that my right hon. Friend announced in terms of special measures can hardly be described as nonintervention.

    Job Release Scheme
    Mr. Knoxasked the Secretary of State for Employment whether he is in a position to make a statement about the future of the job release scheme.
    The Secretary of State for Employment (Mr. James Prior): I refer my hon. Friend to my statement to the House on Thursday 14 February 1980.
    Mr. Knox: Does my right hon. Friend agree that the job release scheme is one of the best short-term means of dealing with unemployment without incurring continuing long-term obligations? Does he not think that it is unfortunate that it has proved necessary to curtail this scheme in this way, especially in view of the likely increase in unemployment?
    Mr. Prior: I agree that it would have been better if we could have found the money for this scheme. But I had to adjust, examine and balance a number of priorities and I decided that youth employment should have top priority at present.
    Mr. Hooley: Does not the Secretary of State agree that there is a repercussive effect in favour of providing jobs for our youth through the job release scheme? By allowing people to retire earlier vacancies are provided for young people and the so-called savings may be illusory.
    Mr. Prior: I agree that there is some spin-off through which young people obtain jobs as older people retire under the job release scheme. That is one of the better parts of what I think is a good scheme. But the scheme that I inherited had only just been introduced the previous April and unfortunately it was being paid for out of the Contingency Fund and no proper forecasts for expenditure had been made.
    Mr. John Grant: Does the Minister recall that he said he had done well with his package? Does he agree that the best judges of that will be the people who will be on the industrial scrap heap as a consequence of the Government's policies? What will be the net savings of the overall package? The Minister has never given a precise figure.
    Mr. Prior: The net savings for the coming year will be about £25 million. As the hon. Gentleman should know, the scheme that his Government introduced just before the election was based on the Contingency Fund, with planned expenditure for the next two years for which no allowance had been made in the Estimates.

    Retirement Schemes
    Mr. Stallardasked the Secretary of State for Employment what representations he has received from employers' organisations on the need to introduce flexible retirement schemes.
    Mr. Bowdenasked the Secretary of State for Employment what representations he has received from employers' organisations on the need for flexible retirement schemes to be introduced.
    Mr. Jim Lester: My right hon. Friend has received the CBI's views on flexible retirement, which were set out most recently in its discussion document "Jobs —Facing The Future". My right hon. Friend the Secretary of State for Social Services has also been considering representations from the CBI and other interested bodies on this subject in response to his Department's discussion document "A Happier Old Age".
    Mr. Stallard: I am grateful for that reply. Does the Minister accept that there is a great deal of interest among trade unions and the many thousands of trade unionists who are not affected by the existing early retirement schemes? Does he agree that now, more than ever, there is an immediate priority need for flexibility of retirement if we are to maintain job opportunities and seek improved mobility of labour?
    Mr. Lester: I accept that there is a balance to be struck between those who want to retire early and those who want to continue at work. We have always had flexibility of retirement between the ages of 65 and 70 for men. The question now is the cost of extending that flexibility below the age of 65. It is astronomical but it is something to be considered.
    Mr. Bowden: Does my hon. Friend agree that firms that rigidly adhere to a retirement age are often losing highly experienced people of whom they could be making good use? The nation cannot afford to lose such people now.
    Mr. Lester: I agree with my hon. Friend. The accent must be on flexibility and on arrangements made with employers and employees, in particular in industries undergoing technological change.

    Job Vacancies
    Mr. Woolmerasked the Secretary of State for Employment what are the unemployment and job vacancy figures for the latest available date; and if he will make a statement.
    Mr. Prior: In January there were 1,404,389 people registered as unemployed in Great Britain and the numbers of notified unfilled vacancies were 184,626 at employment offices and 19,147 at careers offices. I am naturally concerned about the current level of unemployment, but our economic policies are aimed at providing the right climate for an expansion of genuine employment.
    Mr. Woolmer: Will the Secretary of State confirm that the Government are working on the assumption that there will be 2 million unemployed by early next year? Has he studied the business forecast by the Charterhouse City group, which predicts 500,000 more unemployed this year? Will the Secretary of State assert his responsibility in the Cabinet and join his anonymous colleague by rejecting the A-level of economics of the Treasury Bench and placing the economic policy strategy emphasis on growth and higher employment instead of deflation, unemployment and confict?
    Mr. Prior: The public expenditure White Paper announced that the figures that the Government were working on for the year 1980–81 were 1·65 million unemployed. That is consistent with the forecast made by the Manpower Services Commission which was available recently for the Select Committee. I have never sought to conceal from the House the fact that unemployment in the present world situation is bound to rise.
    Mr. Scott: Does my right hon. Friend agree that it does not lie in the mouths of right hon. and hon. Members on the Opposition Benches, to raise the question of unemployment when they presided over its doubling when they were in office? Will he further say that the two obstacles in the way of reducing unemployment are the present high levels of wage settlements and interest rates?
    Mr. Prior: The last two matters are of great importance. Part of the reason
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    for our policy of reducing public expenditure is to enable the PSBR to come down. That will be an enormous aid to reducing unemployment and it is a factor that I take into account. I agree with the other point that my hon. Friend made.
    Mr. Robert C. Brown: Does the Secretary of State understand that in the appalling figures he has quoted he hides the disaster of areas such as the North-East? Does he realise that it is high time he fought his corner in the Cabinet in an effort to spend more money on job creation schemes in regions such as the North-East?
    Mr. Prior: I fully appreciate the serious problems of the North-East. We shall not resolve the problems of unemployment and so on by thinking that we have only to spend more Government money. That is precisely why interest rates are so high and why unemployment is created, because of those interest rates.
    Mr. Bob Dunn: Does my right hon. Friend accept that the unemployment figures from his Department are fundamentally bogus because they make no distinction between those who are genuinely and unwillingly unemployed and those who are willingly unemployed and members of the black economy?
    Mr. Prior: There is always a great deal of argument about how unemployment figures are computed. As a trend, the figures are reliable. Regrettably, that trend is upwards and it will remain so until, first, the world situation improves and secondly, until we stop buying other people's goods and make them buy more of ours.
    Mr. John Evans: Which of the Government's present economic policies is the Secretary of State confident will reduce unemployment in areas such as the North-West, which have lost assisted area status?
    Mr. Prior: A general upturn in the economy. That will come about only when we reduce our unit costs, sell more abroad and stop importing so much.
    Mr. Varley: Does the Secretary of State recall that he made a bold forecast a year ago that a Tory Government would stimulate the economy and create a better climate for industry and commerce? Has

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    not the opposite occurred? We now have soaring inflation while production and investment are falling. Record interest rates are destroying small businesses and jobs and we are heading towards 2 million unemployed and the collapse of the economy. Should not the right hon. Gentleman be hanging his head in shame?
    Mr. Prior: The only mistake that I made was to be more optimistic than I should have been about the state of the economy when we took it over from the right hon. Gentleman.

    Pay Comparability
    Mr. Christopher Priceasked the Secretary of State for Employment when last he met Professor Hugh Clegg.
    Mr. Prior: I last met Professor Clegg on Wednesday 23 January.
    Mr. Price: When the right hon. Gentleman met Hugh Clegg did he discuss teachers' pay with him? Will he tell us whether the principles laid down in the Houghton report will be adhered to or abandoned? What has been the cost of the debacle in which the consultants hired to work out the teachers' settlement made such a dog's breakfast of their task that it had to be abandoned and the Commission had to start from square one again?
    Mr. Prior: I did not discuss individual cases with Hugh Clegg. I am certain that he would have regarded it as an improper use of my function if I had done so. Therefore, the second part of the hon. Gentleman's question does not arise. The Commission hopes to report on its work on school and further education teachers in April, as it has always said it would.
    Mr. Hal Miller: Did my right hon. Friend tell Professor Clegg that he was going to wind up the Commission after the current round of inquiries?
    Mr. Prior: No, I did not tell him that. Professor Clegg has performed an important role for both this Govenment and the previous one. It is far too early to say whether there will be other cases that we might wish to put to the Commission.
    Mr. Stokes: Is my right hon. Friend aware that the learned professor may lead him into a quagmire and that sup-
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    posed comparisons between the risk-taking private sector and the rather more comfortable public service will cause nothing but trouble for himself and the Government?
    Mr. Prior: A lot of people are trying to lead me into quagmires at the moment. I shall always acquit my hon. Friend of any such attempt. He has made a serious point. A comparability that merely results in one set of public sector wages following a private sector set of wages provides no answer to our problems. Our problems are largely the result of high wages.

    Unemployed Persons
    Mr. Hardyasked the Secretary of State for Employment how many people have entered unemployment since the beginning of the current year.
    Mr. Jim Lester: Between 6 December 1979 and 10 January 1980 the number of people registered as unemployed in Great Britain rose by 43,700 from 1,233,700 to 1,277,400, excluding school leavers and seasonally adjusted.
    Mr. Hardy: Is it not clear that that relatively modest increase will be dwarfed by the increase we shall experience in the next six or seven months unless Government policy is changed and in particular, unless the level of sterling is reduced? Is the hon. Gentleman aware that the present level of sterling allows other countries to export unemployment to us in ever increasing numbers?
    Mr. Lester: I accept the seriousness of the hon. Gentleman's last point. However, there is a long way to go before we reach the increase of 600,000 in the number of unemployed for which the previous Labour Administration was responsible.
    Mr. Knox: In view of the lag of 12 to 18 months between the time when measures concerning unemployment are taken and when they have an effect on the levels of unemployment, will my hon. Friend confirm that the level of unemployment would have been just as high if the Labour Party had remained in power?
    Mr. Lester: I agree that it would have been quite as high, if not higher.
    Mr. Radice: Given the prospects of employment for next year, why are the Government cutting back the budget of the Manpower Services Commission by £130 million?
    Mr. Lester: The Manpower Services Commission cannot be exempt from overall expenditure cuts.
    Mr. Radice: Why not?
    Mr. Lester: The Government have ensured that the MSC budget is more effectively used. No apprenticeship places have been lost and, as a result of special measures, efficiency has been increased.
    Mr. Tom Ellis: Does the Minister realise that the commercial facts surrounding British Leyland mean that if the company does not receive further Government subvention, it will inevitably go to the wall? What proposals does the Minister have in mind to cater for such a catastrophe?
    Mr. Lester: British Leyland is the concern of the Department of Industry. However, we already have a temporary short-time working scheme that will be made available to British Leyland should it need to use it.

    Advisory, Conciliation and Arbitration Service
    Mr. Needhamasked the Secretary of State for Employment in how many disputes the Advisory, Conciliation and Arbitration Service has been involved since the beginning of January.
    The Under-Secretary of State for Employment (Mr. Patrick Mayhew): I am advised that during January the service was involved in providing assistance by way of conciliation in 199 cases throughout the country.
    Mr. Needham: Does my hon. and learned Friend agree that ACAS is well qualified to deal with difficult and complicated disputes and that we should not rely on the intervention of Ministers or Prime Ministers over coffee and sandwiches at No. 10, as so often happened during the previous Administration?
    Mr. Mayhew: I certainly agree that the resolution of an industrial dispute is best left to those party to it. However, it is
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    wise to invoke the expert and impartial assistance of ACAS.
    Mr. Kilroy-Silk: Can the Minister tell us how much more money has been put aside for the development of ACAS since the change in the law on picketing that has been announced today will exacerbate industrial disputes?
    Mr. Mayhew: Changes in the law on picketing are embodied in the Employment Bill that was published on 7 December. It is expected that those proposals will considerably reduce the disruption and abuses to which picketing gives rise. I shall write to the hon. Gentleman about the budget for ACAS.
    Mr. Michael Brown: Has my hon. and learned Friend received any request from the BSC or from the Iron and Steel Trades Confederation to act as an arbitrator in the current dispute?
    Mr. Mayhew: No, Sir. I have received no such request. ACAS has been involved in the steel dispute. It has held several meetings, the most recent of which was held on 13 February. Unfortunately, no progress was made.
    Mr. Edwin Wainwright: Does the Minister realise that the information requested by the hon. Member for Chippenham (Mr. Needham), relates to the lack of Government interference in the steel industry? Why do the Government refuse to intervene on behalf of an industry for which they are greatly responsible? Is it not time that the Minister used his good offices, together with the Prime Minister, to ensure that the steel dispute is settled as it should be, and not according to the attitude of the Prime Minister?
    Mr. Mayhew: The pay dispute in the steel industry is extremely painful and serious. However, it is the same in character as any other pay dispute. It will be best settled by those who are party to it.

    Short-time Working Compensation Scheme
    Mr. Strawasked the Secretary of State for Employment what decision he has now made on the future of the temporary short-time working compensation scheme for the textile industry.
    Mr. Jim Lester: I refer the hon. Member to the statement made by my right

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    hon. Friend the Secretary of State on Thursday, 14 February 1980.
    Mr. Straw: Is not the Minister aware that, in the light of the Government's failure to secure adequate protection for the textile industry—which was condemned by all parties yesterday—there is an urgent need for conditions relating to the scheme to be improved? Will he at least consider improving the scheme?
    Mr. Lester: We are always prepared to consider improving any of our schemes within the budget allowed.
    Mr. Robert Atkins: Will my hon. Friend take note that the measure to increase the amount of money allocated to the industrial language training scheme for those on short-term work and those who are unemployed has been widely accepted and welcomed in my constituency?
    Mr. Lester: I shall be delighted to take note of that. It demonstrates that we change the rules where beneficial.
    Mr. Jim Marshall: Does the Minister accept that many thousands of jobs in the textile industry have been lost during the past few months? Does he further accept that tinkering about with such schemes provides no solution? Will he impress upon his colleagues in his Department and in the Department of Trade that there is no substitute for more stringent controls on imports into the United Kingdom, particularly from low-cost countries?
    Mr. Lester: As my constituency is close to that of the hon. Gentleman I recognise clearly that the textile industry has not contracted only during the past few months. It has been contracting during the past few years. It is the most protected industry in Britain. I recognise that imports cause a grave disturbance in the textile industry. Basically, the textile industry is a good industry. It works well and has a high productivity rate. However, there has been a change in world demand. The question of low-cost countries producing goods without subsidies for sale in Britain and competing with our factories, must be dealt with. The future of the textile industry depends on the up-grading of its products. We must concentrate on higher quality and higher technology, as that side of the industry is still expanding.

    BSC Plants (Jobs Loss)
    Mr. Spriggsasked the Secretary of State for Employment if he will estimate how many jobs will be lost in the period immediately following the closure of British Steel Corporation plants in each part of Great Britain, including those most likely to be affected in small businesses and the retail trade; and if he will make a statement.
    Mr. Jim Lester: Employment levels depend on many factors which cannot be forecast with any degree of certainty. It is not, therefore, possible to estimate how many jobs will be lost following the closure of BSC plants. I can, however, assure the hon. Member that all the resources of the Manpower Services Commission will be available to help those workers affected by the closures.
    Mr. Spriggs: Will the hon. Gentleman consider allowing the British Steel Corporation to offer another 1 or 2 per cent. above that already offered to the trade unions involved? After all, the Government gave the higher taxpayers £4 billion in tax relief. Is he aware that there is a danger of growing unemployment becoming a danger to the State?
    Mr. Lester: I am not in a position to offer the steel workers 1 or 2 per cent. That is a matter for negotiation between the management and unions involved. The hon. Gentleman will be aware that there has already been an increase of 1 or 2 per cent. on more than one occasion.
    Mr. Sever: Will the Minister agree to undertake research into the likely effects of the problems surrounding steel on small manufacturers and engineering shops, particularly in areas such as Birmingham? Those firms are desperately worried about the steel industry's difficulties. While the Minister has admitted that the figures are not readily available, will he take steps to find out what they are?
    Mr. Lester: I accept that there is a need for research. My Department is researching into the position of the longterm unemployed. As a result of the closure announcements, local authorities have come together with the Government and with the steel industry to try to secure the future on a better and broader basis.

    Secondary Industrial Action
    Mr. Michael Brownasked the Secretary of State for Employment if he will make a statement concerning the Government's current policy regarding secondary picketing.
    Mr. Prior: Our proposals to limit lawful picketing to an employee's own place of work are already contained in the Employment Bill, which is before the House.
    I have today written to the TUC, drawing its attention to the widespread public concern about some of the recent incidents of mass picketing in the current dispute, and pointing out the extent to which much of this is already contrary to the criminal law. I have made it clear that the Government look to the TUC to reaffirm its advice to all member unions to observe the TUC's own guidance on picketing, which it produced last winter.
    Mr. Brown: Will my right hon. Friend accept that his helpful reply will be greeted with enthusiasm by many people in the country? Does he agree that secondary picketing is a symptom of a wider malaise—that of the closed shop? Is he aware that in my constituency people who are still at work are being requested in letters from the union to pay £5 to cross the picket line? Does he agree that consultations should take into account those gross abuses of the closed shop, which amount to industrial blackmail?
    Mr. Prior: That matter does need examining. My hon. Friend will be well advised to ask those who are being requested to pay such sums to check union rules to see whether that is within the rules. I agree with much of what my hon. Friend said about the closed shop. It is necessary to strengthen those parts of the Employment Bill dealing with the closed shop, such as arbitrary exclusion or expulsion from a union, which underly the fear that many people have that, if they cross a picket line or take the action that my hon. Friend mentioned, they will lose their union card and their job. I do not believe that such action is supported by either side of the House.
    Mr. Alexander W. Lyon: Does the right hon. Gentleman recall that Lord Salmon in Hunt v. Broome said that the
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    provision in the 1974 Act gave a narrow but real criminal immunity for peaceful picketing? Does he concede that clause 14 will involve more people in the threat of criminal prosecution than he has so far admitted?
    Mr. Prior: I do not accept that. I had the matter checked, following the hon. Gentleman's remarks on Second Reading. The Bill does not make picketing a criminal offence. It gives employers the remedy to take civil proceedings to restrain secondary picketing in the way that I have described on many occasions.
    Mr. Budgen: Does my right hon. Friend agree that, on reflection, clause 3 of the Employment Bill is weak and inadequate in dealing with the closed shop and poses a fundamental constitutional danger? Will he accept that it leaves the judges to decide a most important political principle, and will bring them, once again, into the political arena, thus damaging the rule of law?
    Mr. Prior: I do not accept that clause 3 is too weak. Nor do I accept that, when seen alongside a code of practice, there is any need for it to bring judges into the political arena. The truth is far from that. I believe that many people will abide by what is good practice with regard to expulsion or exclusion, and we may have many fewer cases than people expect.
    Mr. Speaker: Order. There is to be a statement on this matter at the end of Question Time.
    Mr. Heifer: Not on this.
    Mr. Speaker: Order. I am hoping that those hon. Members who, I know, are interested in the subject will be called after Question Time.
    Mr. !feller: The statement is not on this point.
    Mr. Speaker: I want to be fair to the House. I shall call two more hon. Members from either side, if they wish to catch my eye now. Those who are called now will not be called after Question Time.

    Young Persons (Training Opportunities)
    Mr. Roy Hughesasked the Secretary of State for Employment if he has

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    any specific proposals to assist young people with training opportunities in urban areas where there has been a rundown of existing industry.
    Mr. Jim Lester: I am informed by the Manpower Services Commission that a wide range of training courses is already available under the youth opportunities programme to unemployed young people in urban areas. The programme, as my right hon. Friend announced on 14 February 1980, has been expanded to provide about a quarter of a million opportunities in 1980–81. Planned provision in the coming year will take account of changes in industrial structure.
    Mr. Hughes: Do I need to remind the Minister of the critical situation obtaining in South Wales? Will he accept that, if the area is not to be turned into an industrial desert, we need more than an extension of the youth opportunities programme? Will he prevail on senior ministerial colleagues to intervene now, as a matter of urgency?
    Mr. Lester: The hon. Gentleman's main question refers to training opportunities for young people. In South Wales, as in the rest of the United Kingdom, there is a commitment to give young people adequate training. The schemes are designed to fit young people for the areas in which there are job opportunities.
    Mr. Madel: In looking at the role of skillcentres, will my hon. Friend consider not only the shortage of instructors but the age at which a young person may enter a skillcentre for training?
    Mr. Lester: As my hon. Friend knows, we are undertaking a review of training generally, including skillcentres. The Departments of Employment and Education and Science are considering together how to encourage young people to work in the best way possible. In that context, we shall consider my hon. Friend's point.
    Mr. Eastham: Does the Minister agree that it is time that we had a fresh look at the formula whereby the Department issues figures relating to the travelto-work areas? Does he accept that the formula distorts the real figures? Is the
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    hon. Gentleman aware that in Manchester, where the overall unemployment figure is 6·1 per cent., in certain areas it is double that? Does he agree that it is time that we altered the travel-towork formula to show the true urban position?
    Mr. Lester: It is not very long since the travel-to-work formula was arrived at. I shall be visiting Manchester on Thursday to look at the problems raised by the hon. Gentleman. However, he is quoting figures based on where people live and not where they work.
    Mr. Haselhurst: Does my hon. Friend agree that we should concentrate on the enterprise workshop training programme? Will he accept that that gives the chance to found an enterprise that will have a permanent effect on an area?
    Mr. Lester: We are delighted to concentrate on any scheme that is enterprising and makes a profit.
    Mr. Harold Walker: Does the Minister agree that the review of the skil /centre programme is being carried out by the Manpower Services Commission as a result of his Department's proposal to close 20 skillcentres? Will he confirm that his Department is also proposing to cut the training opportunities programme from the 99,000 places of two years ago to 60,000 for next year? Will he accept that that is foolish at a time when unemployment is soaring and when we have skill shortages that training could, to some extent, remedy?
    Mr. Lester: The review of the skill-centre programme was started under the right hon. Gentleman's Government. It was designed to try to make effective use of existing facilities. I do not accept that altering the numbers of the TOPS scheme will reduce overall training opportunities. The areas in which there is a proposed reduction can best be covered by industry.

    Voluntary Unemployment
    Mr. Ralph Howellasked the Secretary of State for Employment what steps he has taken to identify the extent of voluntary unemployment; and what is his latest estimate of the numbers involved.
    Mr. Jim Lester: The application of rules about the unemployed accepting suitable jobs has been under review and

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    I am awaiting the views of the Manpower Services Commission. The work of DHSS unemployment review officers has continued on the greater scale already announced. As I explained to my hon. Friend on 4 December, I do not have an estimate of the extent to which there are people on the unemployment register who may be described as voluntarily unemployed.
    Mr. Howell: I thank my hon. Friend for that helpful reply. Is he aware that about 750,000 vacancies are still unfilled? Will he accept that employers throughout the country are having difficulty in obtaining staff? Does he agree that a great many people are caught in the unemployment trap and simply cannot afford to work? What steps do the Government intend to take?
    Mr. Lester: The unemployment trap is a matter for the DHSS, which is reviewing the problem. If we are told of specific cases of unfilled vacancies we shall be pleased to consider them. It is a complex issue. Frequently, it is a problem of a mismatch of skills. The matters that employers raise are not quite so simple when looked at in detail. I have investigated many cases and I could give chapter and verse on the problem. I do not want to minimise the fact that it is a serious situation when vacancies are notified but people remain unemployed. We hope to announce proposals to deal with the problem in the near future.
    Mr. Haynes: Bearing in mind that the country is in a serious situation because of Government policies, will the Minister give thought to the Government Front Bench opting for voluntary unemployment?

    Trade Union Legislation
    Mr. Winnickasked the Secretary of State for Employment what further representations he has received over trade union legislation.
    Mr. Prior: I have received a number of further representations about the Employment Bill since it was published on 7 December.
    Mr. Winnick: Is it not clear that legal battles against the trade union movement will no more succeed now than did the 1971 Tory legislation? Would
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    it not be far more sensible for the Cabinet hawks, such as, for example, the Prime Minister, to drop policies which are now provoking strikes in industry?
    Mr. Prior: An overwhelming majority of people, including trade unionists, wish to see a sensible framework of law in which trade unions, employers and workers can operate. If Labour Members continue to take the view that they have taken in the past, they are doing themselves and their country a great disservice.
    Mr. Bulmer: Does not the union decision at Longbridge—in the case of Mr. Robinson—to call for a mass meeting rather than hold a secret ballot, with all the possibilities of intimidation that will follow, demonstrate once more the need for individual workers to have the right to call for a secret ballot? What representations has my right hon. Friend received, and is he in sympathy with them?
    Mr. Prior: I am greatly in sympathy with the holding of secret ballots. A number of trade unionists, including Conservative trade unionists wish to see such ballots made compulsory. So far, I have taken the view that it is better to have voluntary acceptance of secret ballots, and that is the way in which the Bill is framed. I hope that when the Bill is enacted, and money is made available, more and more people will make use of postal ballots and workplace ballots held in employers' time.
    Mr. Heller: Is the right hon. Gentleman aware that many Labour Members find it regrettable that he, whom we have all liked and understood—and who has fought a rearguard action in the Cabinet—has nevertheless succumbed to the pressures of his colleagues? If the working party document that was sent out today is included in legislation trade unionists will be worse off than they were prior to 1974, particularly on the basis of the suggestion in (a) dealing with the test. Is not that likely to lead to greater confrontation in industry?
    Mr. Prior: I do not accept what the hon. Gentleman has said. Furthermore, there is overwhelming acceptance in the country of the need for certain immunities to be limited. At the moment they go too far, and they cannot even protect employees who wish to work but who are not able to do so.

    Industrial Relations Hearings (Employee and Employer Representation)
    Mr. Greville Jannerasked the Secretary of State for Employment what percentage of employees and what percentage of employers are represented by lawyers, by union officials or by other industrial relations advisors, respectively, at industrial relations hearings.
    Mr. Mayhew: For statistics on the percentages of employers and employees represented by lawyers and trade union representatives in industrial tribunal hearings, I refer the hon. and learned Member to the answer that I gave on 29 January. Statistics for representation by "other industrial relations advisers" are not available.
    Mr. Janner: Is it not correct that, whatever the representation, the failure rate of cases concerning unfair dismissal which now reach industrial tribunals is 72 per cent.? Nearly three out of four cases fail. If that is correct, will the Minister reconsider the Government's proposal to remove the burden of proving fairness from employers in cases which are already heavily weighted in the employers' favour?
    Mr. Mayhew: We must look at the matter in the context of encouraging employers, particularly small employers, to create new jobs, and to maintain existing jobs. There is another side to the figures given by the hon. and learned Gentleman. Employers have been brought to the tribunal to answer claims for unfair dismissal which, in 70 per cent. of the cases, have proved to be unsustainable. That is part of the problem which must be faced.
    Mr. Archie Hamilton: Will my hon. and learned Friend accept that the reason why so many cases are turned down by industrial tribunals is that they are fatuous cases in the beginning?
    Mr. Mayhew: There is a widely held feeling that a mechanism needs to be instituted to filter out the truly hopeless case before the employer has to go to court with his foreman, his production manager and so on, and spend a day or two days there, only to find, having won the case, that he receives no costs.
    Mr. Best: Is my hon. and learned Friend aware that one of the grave imperfections of the present law on industrial tribunals is that employers can be brought before them, and yet no costs can be awarded? Does not that militate unfairly against employers who have to spend considerable time and effort in attending industrial tribunals, often to defend wholly fictitious claims?
    Mr. Mayhew: Although it is not quite accurate to say that no costs can be awarded, they are awarded in 2 to 3 per cent. of cases only—cases in which the claim is shown to be frivolous and vexatious. The Government are aware of the concern that is felt, and we propose to make certain improvements.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Greville Jannerasked the Prime Minister if she will list her official engagements for Tuesday 19 February.
    The Prime Minister (Mrs. Margaret Thatcher): In addition to my duties in this House, I shall be having meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Janner: Has the Prime Minister had time to consider the forecast of the Manpower Services Commission that shortly there may be over 2 million people unemployed, and that the number of unemployed school leavers is likely to double? If the Prime Minister accepts those figures, does she not think that now would be a good time to release thousands of jobs to younger people, by allowing men over 60 who wish to retire to do so?
    The Prime Minister: As the hon. and learned Gentleman knows, I have never made forecasts of unemployment. I hope that those for the first quarter of 1981 will turn out to be unfounded. I cannot emphasise too strongly that if people continue to make excessive wage claims, those claims can, by pricing goods out of the market, lead to increased unemployment. I trust that that will not happen.
    Mr. David Steel: In view of the fact that the people of Canada yesterday voted out of office a Government

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    obsessed with the same disastrous economic doctrines as those of the right hon. Lady—after a mercifully short spell in office—will she provide at least some of the British electorate with a similar opportunity to pass judgment by delaying no longer the writ for the Southend, East by-election?
    The Prime Minister: The right hon. Gentleman forgets that we were returned to power with a very convincing majority.
    Dr. Mawhinney: Will my right hon. Friend find time today to meet Sir Michael Swann, and to convey to him the increasing unhappiness over proposals to discontinue regional broadcasting. Those proposals are particularly unacceptable while allegations persist of wasteful programming on the networks, and while there is a suspicion that local radio is to be financed at the expense of regional radio.
    The Prime Minister: I shall certainly draw my hon. Friend's views to the attention of Sir Michael Swann. The way in which the programmes are arranged must remain a matter for the BBC, but it must be sensitive to public opinion.
    Mr. Stoddart: Does the right hon. Lady recall promises to families during the general election campaign? Does she realise that families with children are now ravaged by inflation, high rents, high mortgage charges and additional school meal and transport charges? They are getting a very bad deal. Will she instruct the Chancellor of the Exchequer to increase child benefits substantially from 1 April?
    The Prime Minister: With regard to child benefit, as the hon. Gentleman knows, such decisions are usually announced in the Budget. I ask him to await the statement of my right hon. and learned Friend the Chancellor of the Exchequer. I also ask him to consider that the moneys to pay these benefits so often come from the breadwinners of the families, and it does not always make good sense to take in tax, put it through big bureaucracies, and to pay back rather less.
    Mr. David Price: Will my right hon. Friend, in any further consideration of the middle ground of industrial relations reform, consider implementing a former
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    Government White Paper of January 1969 entitled "In Place of Strife"? If she did this we would get a general agreement on the matter.
    The Prime Minister: There is widespread agreement on that matter. We are making a very good start in the Employment Bill and there is a consultative document which will take the law a little further on the matter of protecting law-abiding citizens and firms.
    Mr. Newensasked the Prime Minister if she will list her official engagements for Tuesday 19 February.
    The Prime Minister: I refer the hon. Member to the reply which I have just given.
    Mr. Newens: Will the Prime Minister condemn the apparent involvement of Rhodesian security forces in the bombing of churches by terrorists? Does she agree that this incident underlines the need for Lord Soames not to rely on the security forces to the extent to which he has done so far? What action will she take, in view of recent events, to ensure that he does not have to rely on them?
    The Prime Minister: I shall condemn bombing and intimidation from whatever quarter it may come. My noble Friend Lord Soames has done his best to eliminate intimidation in Rhodesia. On the particular incident that the hon. Member mentioned, I cannot give a report yet because investigations are not fully completed.
    Mr. William Shelton: Have my right hon. Friend's thoughts turned to the Common Market and the British contribution to it? If so, will she consider taking the "empty seat policy" of De Gaulle until our case is recognised?
    The Prime Minister: With great respect to my hon. Friend, I believe that I am more effective by being in my seat than by leaving it empty.
    Mr. Ashley: Despite so many heavy commitments, will the right hon. Lady consider making a personal visit to areas of high unemployment and poverty so that she can see the grim reality? Will she agree that we are now heading for economic and social unrest which will damage the social fabric of this country

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    unless the present abrasive policies are changed?
    The Prime Minister: I do not in any way accept the right hon. Member's premise that we are heading for economic and social unrest. I get about the country a lot and I shall continue to visit all areas. Increasing unemployment is not part of Conservative policy.
    Sir Graham Page: Will my right hon. Friend waylay the hon. Member for Liverpool, Walton (Mr. Heffer) and ask him how many civil servants have responded to his request to become "deep throats"—which apparently means that they should give the Labour Party information about Britain's security services?
    The Prime Minister: I saw the reports in the press. I very much hope that they are not true because any such request would severely undermine the very best traditions of the Civil Service in this country.
    Mr. Faulds: Having paid lip service to St. Francis, at the instigation of Saatchi & Saatchi when she first entered No. 10, will the Prime Minister ponder today—
    Mr. Nicholas Winterton: Speak up.
    Mr. Faulds: I think that hon. Members can hear me, but just in case they cannot I shall repeat the question—
    Mr. Speaker: Order, the House heard the hon. Member.
    Mr. Faulds: Will the Prime Minister ponder today on whether she is really enamoured of the selfish, self-concerned and uncaring society that she is trying to create?
    The Prime Minister: I was not aware that Saatchi & Saatchi were experts on St. Francis. If they are, I must consult them more often. Self-reliance and self-sufficiency are qualities that one would expect of most families in this country. If those who are able and fit can keep their families and keep them well and then have a little over to help others, we shall have a much better society than we have now.
    Mr. Marlowasked the Prime Minister whether she will list her official engagements for 19 February.
    The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.
    Mr. Marlow: In the interests of manufacturing industry, will my right hon. Friend take whatever action is necessary to lift the blockade of steel supplies either through the ports or from the steel stockholders, and tell the workers at Hadfield's that they can go back to work tomorrow because the Government will take the necessary action to ensure their protection?
    The Prime Minister: A great deal of steel in still moving, and production throughout manufacturing industry in this country has kept up remarkably well. With regard to the incidents that we saw on television outside Hadfield's, I cannot condemn them enough. Those incidents bore no relation to peaceful picketing, which is the only kind protected by the law. If we are to get scenes like that—and this appeared to be more a criminal matter than a civil one—we must leave enforcement in the hands of the police. We should give the police our full backing in their difficult duties.
    Mr. James Callaghan: Is the right hon. Lady aware of increasing concern that is being expressed about the decision of the British Steel Corporation to run down the size of the industry to 15 million tonnes? This is regarded as too low by many people who should know. Do the Government intend to stand aside from this decision, irrespective of the consequences to our nation, which is so dependent on external trade? Will she confirm that the Government intend to ask a leading American business man to run the British Steel Corporation? Is that not a remarkable way of dealing with the industry at a time when the chairman and the other directors are engaged in negotiations? Is she not, in fact, telling the workers that their chairman will be sacked in a short while? Is not the real trouble that Sir Charles Villiers and Mr. Scholey have been too zealous in carrying out Government policy? That is their real crime.
    The Prime Minister: The management of the British Steel Corporation is charged with the duty of running the corporation and so far we do not intend to interfere with its decisions. As the right hon. Gentleman knows, there have been some

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    difficult decisions to face on running down the industry. He himself had to take some in his constituency. He knows that we provided £48 million for Wales, to help with the effects of the run-down in steel there. The position of the chairman of British Steel Corporation must not be undermined—I entirely agree with the right hon. Gentleman. The chairman and the trade union leaders have the job of settling this strike and we have every confidence in his doing so.
    On the question of the appointment of the chairman, we would be culpable if we were not looking for someone as a possible replacement for Sir Charles, bearing in mind that he goes towards the end of the year.
    Mr. Callaghan: But surely the chairman's position is undermined if these stories are allowed to leak from Government sources. It seems that the chairman is to be replaced in the middle of the negotiations that he is conducting. Has the Prime Minister any idea from which of her Ministers this story came? On the first question, The Prime Minister has a direct responsibility for th, size of the industry. It is a strategic industry, and investment cannot be left to the test of market profitability in our country. Surely the Government should satisfy themselves about the future size of the industry?
    The Prime Minister: I shall take the right hon. Gentleman's questions in order. There is no question of undermining the authority of Sir Charles Villiers as chairman of the British Steel Corporation. I express my confidence in him, and I hope that he and the steel unions will get together to sort out this strike. The right hon. Gentleman mentioned the size of the steel industry. The size of an industry is determined by what it can sell and the quality and delivery dates of its products. Other steel industries on the Continent that have gone through difficult times have steadily come through to profitability. I believe that ours can do the same.
    Mr. Donald Stewart: Since the Prime Minister entered No. 10 Downing Street reciting the prayer of St. Francis of Assisi, will she take time to consider why, instead of bringing an answer to that prayer, she has brought discord, error, doubt and despair to the country?
    The Prime Minister: The right hon. Gentleman would not expect me to agree. I hope, however, that he will agree, as a Scot, that it is not easy to get a nation to learn to live within its means when it has been living outside its means for a long time.

    PICKETING LAW
    The Attorney-General(Sir Michael Havers): With permission, Mr. Speaker, I will make a statement on the criminal law on picketing.
    The recent events outside the private steel firms have renewed public anxiety about the law on picketing and intimidation. I must emphasise that the law on picketing does not, in any real way, change the criminal law and in no way diminishes the rules that govern public order.
    The criminal law of the land applies to pickets as it does to anybody else. Let there be no illusion that the immunity provided under the civil law enables pickets to break the criminal law.
    Peaceful picketing in contemplation or furtherance of a trade dispute is lawful so long as it is the honest belief of those involved that their action will advance the interests of those in dispute. This does not mean that the freedom to picket is a licence to obstruct or intimidate. The law permits picketing solely for the purpose of peacefully obtaining or communicating information or of peacefully persuading another person to work or not to work.
    The immunity from civil proceedings given by section 15 of the Trade Union and Labour Relations Act 1974 does not extend to any wrongful act such as violence, threats of violence or similar intimidation—whether by excessive numbers of pickets or otherwise, or molestation amounting to a civil wrong. In those circumstances it may be open to the employer, on his own behalf or on that of his work force, to take action in the civil courts. In addition, the criminal law is perfectly clear. Each of us has the right to go about his daily work or pleasure free from interference by anybody else. Each one of us is free, as an individual, to come and go as he pleases to his home or to his place of work.
    The law specifically protects our enjoyment of those rights. If anyone tries

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    to deter us from exercising those rights by the use of violence or intimidation. or obstruction, he is breaking the law and may be punished.
    The freedom to picket does not confer or imply any right to stop vehicles; still less do pickets have the right to stop people going about their lawful business. Pickets have no right to link arms or otherwise prevent access to the place that they are picketing. This is not a new situation. The present law was made clear by my predecessor on 25 January last year, in column 706 of the Official Report and by my noble and learned friend Lord Rawlinson in 1972, when he was Attorney-General.
    If pickets by sheer numbers seek to stop people going to work or delivering or collecting goods they are not protected by the law, since their purpose is to obstruct rather than persuade. Are large numbers really necessary in the name of lawful, peaceful persuasion? They are more likely to lead to unlawful assembly, or even an affray.
    So far as excessive numbers are concerned, the courts have recognised that the police may limit the number of pickets in any one place where they have reasonable cause to fear disorder. In my view, this includes, in the appropriate case, not only asking some of those present to leave but also preventing others from joining the pickets.
    The enforcement of the law is, and must remain, a matter for the police and the courts. I recognise the difficult task that chief officers of the police have in deciding how order can best be maintained so as to ensure that ordinary people can exercise their own rights.
    It is the function of the law to protect the rights of people—employers and employees—to go about their daily business, to work or not to work, and to make their own decisions whether to exercise those rights. If we let go of that principle we risk abandoning the rule of law and risk surrender to the rule of violence.
    I hope that by stating the main principles of the law, with which the Lord Advocate agrees, I have removed the doubts and encouraged all those concerned, whether pickets or others, to respect and uphold the law. I am sure that
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    the great majority in this country will support this.
    Mr. Archer: The House will be grateful to the Attorney-General for his statement of the present law, but, for the avoidance of misunderstanding in the country, will the right hon. and learned Gentleman make clear that what he said purports to be a statement of the law and is not concerned in any way with changing it?
    Does the right hon. and learned Gentleman agree that it is a matter for chief constables and others concerned with law enforcement to ensure that the criminal law is administered, bearing in mind, as they do, that emotive situations are not always improved by introducing criminal sanctions?
    Will the right hon. and learned Gentleman impress on his right hon. and hon. Friends that their task is not made easier by inflammatory pronouncements by politicians? Will he confirm that there is a well recognised tradition that Ministers of the Crown, including Law Officers and Lords Chancellor, do not seek to instruct chief constables in the way that they should carry out their duty.
    The Attorney-General: The statement that I made set out the law as it is today. The right hon. and learned Gentleman referred to chief constables. I think that all hon. Members have great admiration for the way in which the police have dealt with the problems facing them. It is the duty of chief constables to administer the law. The man on the spot is best able to judge what action he must take. I agree that no help is ever given to any situation by inflammatory statements. We on the Government side would also like to see a little support for the upholding of the law from the Opposition Benches.
    Mr. Edward Gardner: Does my right hon. and learned Friend have the least doubt that if the pickets who have been responsible for violent and alarming disturbances of the peace outside factory gates had not been members of a trade union but ordinary members of the public they would have been arrested and exposed to the risk of a sentence of imprisonment? Does he agree that there is not only no immunity in law but that there should be no immunity in practice to trade unionists or others who cause

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    an unlawful assembly, an affray, or a riot?
    The Attorney-General: As I said in my statement, the criminal law applies to all, whether he be a picket or anyone else. In every case, in my view, it must be for the senior police officer on the spot, bearing in mind the number of people there and the pressures facing him, to make the difficult decision about what action to take.
    Mr. Cyril Smith: Does the Attorney-General agree that his statement amounts to an assertion that the present criminal law on picketing is adequate to deal with the situation? If that is what his statement means, how do the Government propose to ensure that the law is administered in this country? Will they have particular regard, in that context, to those people joining picket lines who are not members of trade unions but who are there purely and solely for the purpose of trouble making?
    The Attorney-General: The hon. Gentleman is right. One of the problems always is that Rent-a-Mob, or those who simply want to have a beat-up, sometimes join picket lines. When those who have been arrested in the past appear in court, one may find that this is the case. I made the statement to remove some doubts that appear to exist about the criminal law. I can tell the House that my right hon. Friend the Home Secretary will be meeting the representatives of chief police officers tomorrow, at their request. My right hon. Friend will hear their views on their problems in enforcing the law. It is not for me to comment on that.
    Mr. Fletcher-Cooke: Will my right hon. and learned Friend keep an open mind on the recommendations of Sir David McNee on amending the Public Order Act 1936, in which he suggests that mass picketing, as at Grunwick and other places, might be considered in connection with such amendments?
    The Attorney-General: I have discussed the matter with my right hon. Friend the Home Secretary, who is undertaking a review of the Act. He is considering a consultative document on the complex issue.
    Mr. Allen McKay: Does the Attorney-General agree that sometimes the media
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    bear a responsibility for inflaming a situation by giving the wrong interpretation of incidents? In mitigation, will he consider a report in the Morning Telegraph today in which Geroge Moores, the chairman of the South Yorkshire police authority, states that the incidents that occurred at Hadfields were not intimidation, and that the chief constable of that area carried out the law to its full intent?
    The Attorney-General: I have not seen a copy of the newspaper referred to by the hon. Gentleman. There are occasions—not only in this aspect but with IRA parades, and so on—where the television cameras appear to see things that others do not see, sometimes for reasons that can only do harm. It is something that should be borne in mind when watching television programmes.
    Sir Paul Bryan: Will my right hon. and learned Friend explain to the House the position under the law of an individual or organisation that actively organises disorder by assembling pickets by the busload and directing them in such overwhelming numbers to a site that disorder is bound to follow?
    The Attorney-General: That is a problem to he dealt with by police at the site. If they consider that there are enough, or too many, pickets they can stop the buses. The position of those who organise the pickets must depend each day on the circumstances. It may be that when the busloads were organised there were only half a dozen pickets at the site. If the busloads are organised and sent to a site where there are hundreds of pickets, a different situation arises.
    It may be a matter of conspiring to incite, but each case would have to stand upon its own merits.
    Mr. Urwin: The Attorney-General's statement has been precipitated by the secondary picketing in the steel industry. Does the right hon. and learned Gentleman not feel that it would have been more to the benefit of the whole country if a statement had been made by one of his ministerial colleagues? An early intervention by the Government in the steel industry pay dispute would have

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    removed the cause of secondary picketing.
    The Attorney-General: The Law Officers owe a duty to the House to express a view on the law. Clearly there is some doubt in various areas about the law. If one looks at the newspapers over the past few days one finds that that is amply demonstrated.
    I thought that it would be helpful to the House and to the public if a clear, simple exposition was given of the law as it relates to secondary picketing.
    Mr. Mellor: My right hon. and learned Friend's statement made it clear that much of what has happened over the past few years on the picket lines has always been unlawful, and that the law has not been enforced. Is it not the case that there has been disorder outside football grounds that has been dealt with by the police with the normal weight of the criminal law, while the same sort of disorder outside factories has been tolerated? Should not the criminal law be applied equally to both cases?
    The Attorney-General: The law has been clear for a number of years. I pay tribute to the TUC for the guidelines that it laid down last year, which were similar to those that I have set out today. My regret is that those guidelines are no longer being observed by trade unionists, although they are perfectly clear. On individual cases, it is rather like comparing the sentences between two cases. Unless one knows all the facts, it is difficult to take a firm view.
    Mr. Anderson: As the Attorney-General says that the law has been clear for a number of years, what, with all respect to him, is the purpose of today's announcement? It neither adds to nor detracts from one's knowledge of the existing law. Does it not rest essentially on the fact that a decision whether to prosecute in an individual case rests upon the judgment of a chief constable on the question whether it will cause more or less aggravation in a complex situation?
    The Attorney-General: I would have thought that the hon. Gentleman, having read the newspapers, would agree that there is no apparent agreement on the interpretation of the criminal law. I felt
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    that it was useful to make the position clear.
    Mr. Mates: In congratulating my right hon. and learned Friend on his lucid statement of the law as it stands, may I ask him to take whatever steps are necessary to ensure that a full copy of his statement is put into the hands of every chief constable in the land as soon as possible? Does he not agree that far from exerting pressure on chief constables during this confused time it is important that they should all be absolutely clear about their rights and duties under the law, so that it can be enforced firmly and impartially?
    The Attorney-General: I am grateful for my hon. Friend's remarks. I understand from my right hon. Friend the Home Secretary that it will form part of a Home Office circular.
    Mr. S. C. Silkin: I am grateful to the Attorney-General for making the law clear by repeating what I said last year. I agree that each case has to be judged on its merits. Will the right hon. and learned Gentleman tell the House what are the special doubts, to which he has referred several times, that led him to make the statement?
    The Attorney-General: The newspapers often influence the view of the public, and if one reads them it appears, for example, that lorries may be stopped by the pickets from entering works. They express a view that an excessive number of pickets is not contrary to the law and cannot be interfered with by the police. Those are two typical examples of the way in which the law is misinterpreted. The criminal law is sufficient to cover the various offences that have been demonstrated by the pickets over a number of years.
    Sir Bernard Braine: If the criminal law is adequate, why are some chief officers of police expressing doubt and anxiety, and saying that the law should be strengthened? Is my right hon. and learned Friend satisfied that his statement will remove those fears? To put the position in perspective, bearing in mind the widespread anxiety across the country, will he say why chief police officers are to be seen by the Home Secretary tomorrow—after this statement—and why they were not seen before?
    The Attorney-General: My right hon. Friend the Home Secretary has no power to require chief constables or chief officers to see him. It is at the request of the association that the meeting takes place tomorrow.
    My hon. Friend has proved my point by demonstrating the doubts expressed by police officers. That is why I have put into a clear and unmistakable form what the criminal law is on picketing.
    Mr. Flannery: Does the Attorney-General realise that what he intends to do will exacerbate on a grand scale the existing position? Does he know that on the 1 o'clock television news Mr. David Basnett gave his opinion on behalf of the general council, and that he described Government proposals as a re-run, in slow motion, of the Industrial Relations Act 1971? He pleaded with the Government to arrive at a consensus because, he said, it would result in the gaoling of trade unionists, with all the ills that would flow from that.
    The Attorney-General: If ever one wanted proof that my statement was necessary, the hon. Gentleman's question is proof.
    Mr. Kershaw: May I bring my right hon. and learned Friend back to the issue? What Britain finds intolerable is that what the right hon. and learned Member for Dulwich (Mr. Silkin) calls "legal intimidation" is getting away with it? Will he remind his colleagues that something must be done about that?
    The Attorney-General: I hear what my hon. Friend says. I assure him that there is no need to remind my colleagues about that.
    Mr. Heffer: In view what the right hon. and learned Gentleman said, is it not clear that most of the contributions from the Government Benches have been criticisms of the police? The right hon. and learned Gentleman explained what the law is now. Will he take into consideration the fact that when workers are involved in an industrial dispute they hope to win that dispute? The attitude of solidarity between workers, especially workers in other industries, to help their fellow workers is a fundamental feeling. I have the greatest sympathy with workers who are involved in disputes. Is
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    the right hon. and learned Gentleman aware that he and his right hon. and hon. Friends would be much better engaged in settling disputes rather than displaying the attitude that we have been witnessing?
    The Attorney-General: I do not know whether the hon. Gentleman subscribed to the guidelines on picketing that were issued by the TUC a year ago.
    Mr. Heifer: Of course I did.
    The Attorney-General: If he did—he assures the House that he did—it is a great shame that he is not vociferous in saying that the guidelines should be followed at the various sites that are being picketed.
    Mr. Amery: In view of newspaper reports this morning, will my right hon. and learned Friend confirm that his statement fully supports and in no way differs from the speech made during the weekend by the Lord Chancellor?
    The Attorney-General: Perhaps my statement was more detailed. However, there is nothing that contradicts in any way what my right hon. and noble Friend said.
    Mr. Stallard: Has the right hon. and learned Gentleman read reports in today's newspapers that some chief police officers are advocating the use of the Northern Ireland (Emergency Provisions) 1978 Act against pickets in industrial disputes? Will he assure the House that the Government have no intention of extending that Act into the industrial world?
    The Attorney-General: I have seen no such report, and I have heard no mention of it.
    Mr. Moate: As the Lord Chancellor has said that what happened at Had-field's clearly involved breaches of the criminal law, and as certain trade union leaders have stated their intention of doing to Sheerness Steel what was done to Hadfield's, surely it must be right for chief constables to feel that they have the power, clearly established on a proper legal basis, to prevent excessive numbers gathering to create further breaches of the criminal law? Is my right hon. and learned Friend satisfied that chief constables have the power to prevent excessive numbers gathering and to ensure that such events do not recur?
    The Attorney-General: One of the matters about which there are some doubt was an excessive number of pickets. I hope that my statement will resolve these doubts and make the police aware of the powers that they have in those circumstances.
    Mr. Arthur Davidson: As the law is so simple, and as it has been expressed as such by three successive Attorneys-General, would it not be better if people stopped demanding tougher penalties and tougher laws and allowed the police to administer on the spot the law as it now is?
    The Attorney-General: The demand for tougher penalties and tougher action has arisen because people did not realise how effective the criminal law is. That was one of the purposes of my statement.
    Mr. Stokes: My right hon. and learned Friend has assured us that chief constables know what the law is. Is he aware that what worries the public is whether chief constables have the means to enforce the law? In view of the disgraceful violence of last week, why, for instance, were the special patrol groups not used?
    The Attorney-General: As I understand it—this was definitely the position in South Yorkshire—the resources were quite adequate to deal with the situation.
    Mr. Leighton: Will the right hon. and learned Gentleman confirm that there is a clear distinction between picketing, where numbers are restricted, and demonstrations, which are something quite separate and legitimate?
    The Attorney-General: Too often picketing has turned into a demonstration. That is where the problem arises. A picket that is sufficient peacefully to persuade and to communicate does not need 1,000 or even 100 people. In my view it is a demonstration when we end up with 500 or 1,000 people.
    Mr. Nicholas Winterton: Does my right hon. and learned Friend agree that while the police have an outstanding reputation for impartiality the law places them in serious difficulties? Does he accept that the power and abuse of the closed shop enables pickets to intimidate those who seek to carry on their proper business and
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    to undertake their work? Will he, together with his right hon. Friends, consider further amendments to the law on the closed shop as well as on picketing?
    The Attorney-General: I agree entirely with my hon. Friend that we must never underestimate the difficulties that the police have, especially in situations such as those to which reference has been made. Those situations have been unlike some of the demonstrations and parades with which they have to deal.
    The closed shop or the loss of the union card arises only in circumstances in which the person who is threatening the loss of the card is not able to enforce its loss. If the rules of the union permit the loss of the card, that would be a course that could be taken. If the rules do not permit the card to be withdrawn, the person who suffers its loss in such circumstances will have his remedy in the courts.
    Mr. English: The right hon. and learned Gentleman was rather plaintive in his answer to my right hon. and learned Friend the Member for Warley, West (Mr. Archer), the former Solicitor-General. The right hon. and learned Gentleman seemed to think that he should have more political support on both sides of the House. Does he not think that as a junior Minister he should stop trying to steal the thunder of the Secretaries of State for the Home Department and Employment, who are willing to be properly cross-questioned before Select Committees? Does he agree that he should stop issuing statements on the Floor of the House when he knows that he cannot be properly cross-questioned on them? Does he not think that he should cease to be the only Minister, apart from his deputy, who refuses to allow Select Committees to cross-question him on his statements?
    The Attorney-General: The way in which the hon. Gentleman manages to find every opportunity, whether relevant or not to the matter that we are discussing, to get at me about that is almost a miracle.
    Mr. English: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I was kind to the hon. Gentleman. His intervention was not relevant, but I thought that I would let him complete his statement.
    Mr. Kenneth Lewis: If my right hon. and learned Friend is correct and the police have powers to limit the number of pickets, would it not be helpful if the police and trade union leaders were to meet, when they expected difficulty, to agree among themselves on the number of pickets that should be sent to a dispute? Would it not assist if trade union leaders and the police were to come to such agreements? That would demonstrate whether the trade unions want to make an impact through peaceful picketing or through demonstrations.
    The Attorney-General: Anything that will enforce and promote peaceful picketing is desirable. If responsible trade union officials with senior officers of police can between them decide what is a peaceful number that is not excessive, that will encourage peaceful picketing and make breaches of the peace less likely.
    Mr. Cryer: Does the right hon. and learned Gentleman accept that his statement makes clear that the law is entirely adequate to deal with the existing position? Does he agree that the law will never solve industrial disputes and that bitterness in the dispute is being generated by the Government? The Government are making militants out of moderates. Does the right hon. and learned Gentleman agree that the basis of the dispute is the criminal neglect by the Secretary of State for Industry and the Prime Minister, and the rest of her cronies, in not bringing the steel dispute to an amicable and decent conclusion, which could be done in moments if the Government would show some sense?
    The Attorney-General: It is rather sad that the hon. Gentleman asked that question. The questions before it had been devoted to the matter about which I was speaking. The hon. Gentleman's question has nothing to do with that.
    Mr. Cryer: Yes, it has.
    The Attorney-General: I am seeking to explain to the House my view of the criminal law on picketing. The solving of industrial disputes does not have a bearing on the powers of the police and the duties of those who picket.
    Mr. John H. Osborn: Most members of the public would regard what happened outside Hadfield's as a demonstration and
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    not a peaceful picket. Will my right hon. and learned Friend explain the extent to which the leaders of trade unions can recruit members of unions other than those involved in the dispute and pay them and be within the law?
    The Attorney-General: As one looks at the guide—I come back to that because it has so much in common with the criminal law—one finds that it is laid down, as I recollect it, that one trade union in a dispute should not be involved with another union that comes to its aid without the union in dispute seeking that aid. When the situation goes far beyond that—where assistance is provided not at the request of the trade union concerned, and against its wishes—that is another matter, which will have to be considered when we look, for example, at the issue of excessive numbers.
    Mr. Spriggs: Is the right hon. and learned Gentleman aware that the House thanks him for making his statement even though it repeats the law as it stands? Are he and his right hon. Friends aware that it is unfair to put the police in the position in which they now find themselves? The police are having to bear the brunt of a policy that could be overcome overnight if only the Government would test out the trade unions by allowing the British Steel Corporation to add a further 1 per cent. or 2 per cent. to its offer. The Government should at least give it a trial.
    The Attorney-General: Once again we are diverted from the important point. Some people think that it is unfair to put the police in to deal with violent demonstrations. However, that is their job, and they undertake it. They are there to enforce the law and to protect the ordinary citizen. Perhaps, on occasions, they have a very dangerous job and on other occasions and more often they have jobs that they find distasteful, but they carry them out and have done so over the years, to the great admiration of the British people.
    Mr. Eldon Griffiths: I welcome my right hon. and learned Friend's clarification of the law and the support that the Prime Minister gave earlier to the police, but may I tell him that it is a great deal easier to define the law in this place than it is to enforce it on the picket line? Will

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    he recognise that, far too often, caught between their duty to uphold the right of pickets lawfully to picket and the public to go about their business in peace, the police are placed in an impossible position?
    The Attorney-General: I believe that I have made it clear—I hope I did—that the police are in a particularly difficult position. That position has been clearly expressed by my hon. Friend. The police recognise that position and no doubt it will be a matter for discussion with my right hon. Friend at the meeting tomorrow. Ultimately the duty of the police is to enforce and uphold the law. That they have done in the most difficult situations, and they have gained the admiration of us all.
    Mr. Faulds: Is it not a fact that the right hon. and learned Gentleman made his statement this afternoon not to clarify the bewilderment of the press, which is not an unusual condition, nor to correct press reportage in its muddledness, which is not an unusual situation, but to placate the hard-liners in the Cabinet and the bemused backwoodsmen on the Tory Benches?
    The Attorney-General: No, Sir.
    Mr. Bill Walker: Does my right hon. and learned Friend agree that his statement and the subsequent questions have been helpful to ordinary trade union members who are deeply concerned at the conditions in which they find themselves particularly where they are exposed to the unsolicited involvement of other trades unions in their dispute? It was necessary that a statement of this sort should be made so that the views of this House could go out to the country.
    The Attorney-General: I am grateful to my hon. Friend, and I think that he is right. There are too many barrack-room lawyers talking about the issues. It is easy for someone who has no knowledge of the law to accept what he is told by someone who is trying to persuade him to break the law without his realising it.
    Mr. Homewood: Will the Attorney-General take the opportunity of clarifying to his right hon. and hon. Friends and the public in general that what he said
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    this afternoon applies to the police and their attitude to the Hadfield's pickets, and that the Hadfield's pickets were not secondary pickets? They were pickets who had been legitimately called out by their trade union.
    The Attorney-General: It was quite clearly secondary picketing as we define it, but that is not the point. Whatever the form of picketing, the same rules apply, under the law, to the behaviour of the pickets.
    Mr. Latham: Did my right hon. and learned Friend hear the "Today" programme, broadcast yesterday? Mr. Alan Goodson, chief constable of Leicestershire and chairman of the Association of Chief Police Officers, said in that programme that while of course the police would do their duty, picketing was an extremely difficult area for them to be involved in. Will the Attorney-General therefore confirm that when the police are involved in dealing with mass picketing they will receive the full support of Her Majesty's Ministers? Hopefully, they will receive the support of the Opposition leaders as well.
    The Attorney-General: I can give that assurance. I can go further, and say that the police have received that backing throughout the dispute.
    Mr. Harry Ewing: Will the Attorney-General accept that we are interested in and support the view that there should be no tension between the police and pickets, or, indeed, between the police and any other section of the community, but that we are not sure that a parliamentary statement in response to press stories is the best way of easing tension? The right hon. and learned Gentleman said that his statement had the support of his noble Friend the Lord Advocate. Will he make it abundantly clear that he is not changing Scottish law and that it is not the job of the police in Scotland to prosecute? Prosecution there is the job of the procurators fiscal. In order to avoid any doubt that may prevail in the minds of people in Scotland tonight, will the Attorney-General clear up that point?
    The Attorney-General: As I recollect, I have not spoken in terms of who prosecutes; I have spoken of the obligations of the police. Of course, a different

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    situation prevails in Scotland. In this country if there is a serious affray the Director of Public Prosecutions will almost certainly take the case over. My statement was seen by the Lord Advocate and he agreed to it. That is why I said what I did.
    Mr. Cormack: As there has been a general welcome for the clarification given to the House by my right hon. and learned Friend, will he consider inviting the leaders and general secretaries of all the trade unions to a special meeting so that he may explain the law to them?
    The Attorney-General: It is a tempting prospect, but it is not one for me to undertake.
    Mr. John Evans: Will the right hon. and learned Gentleman confirm to the House that he has not had one request from chief constables in Great Britain to clarify or restate the law relating to criminal activity on picket lines? Will he reject the criticisms of his hon. Friends that the constabulary of this country is not carrying out its duty and will he point out to his hon. Friends that though there have been one or two arrests and subsequent prosecutions for criminal activity on picket lines, the overwhelming majority of pickets are peaceful and law-abiding citizens?
    The Attorney-General: There are many occasions on which a small picket carries out its function properly. It is able to communicate and peacefully persuade. Quite often faced with a small picket, lorry drivers and others intending to go into a works will stop and discuss the matter and then make up their minds whether they wish to go on. It is only when there is massive picketing, with all the shouting, jeering and everything else, that the atmosphere changes. It is in those circumstances that the criminal law begins to play its part. I agree with the hon. Gentleman that there are any number of pickets whose activities never hit the headlines, but they achieve their purpose. Those who meet them are able to communicate with them and make up their minds what to do.
    Mr. Ian Lloyd: Does my right hon. and learned Friend agree that this dilemma conceals a much more fundamental contradiction? Can any recognisable system of the rule of law long
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    endure when significant and influential leaders of economic society are widely encouraged to behave on the basis that the wealth of particular groups in the country can be enhanced by destroying the wealth of society as a whole?
    The Attorney-General: That is a wider political matter. I am concerned with the actual enforcement of the law.
    Mr. Maclennan: Does the Attorney-General accept that the House would much prefer to hear from him a statement of what the law is rather than hear—with growing frequency—statements from chief constables throughout the country on what they think the law should be?
    The Attorney-General: There is no doubt—thinking particularly of the written evidence given by the Commissioner of Police of the Metropolis—that it is a sensible thing for those concerned in administering the law that if they have ideas that they think might improve the law they should express them. This is how the law develops. Similarly, if the hon. Member feels strongly that the law is in some way inadequate he will no doubt make use of his membership of this House to express his views. Chief constables have the same right as anyone else to express their views.
    Sir Frederic Bennett: I agree that my right hon. and learned Friend's statement will do a great deal to restore lost confidence among the public, and to restore the public's confidence in the fact that the law is adequate as it stands, but does he realise that that restored confidence can soon be eroded if scenes which took place at Hadfield's are repeated elsewhere and if no penalties are visited upon those who commit the offences?
    The Attorney-General: Any law which is so frequently broken without any punishment being inflicted upon those who break it becomes a bad law, which is unenforceable. That is one of the reasons why I have made the statement, not only to clarify the law but to seek the support of all members of the public, pickets as well, to uphold the law in the future.
    Mr. Alexander W. Lyon: Is the Attorney-General aware that the only doubt introduced by his statement was in

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    relation to his assertion that there was no criminal immunity under the 1974 Act and that that was in contradiction to the view of the Law Lords in the case of Hunt v. Broome? Perhaps I can put the argument in a practical form. If a person attends outside someone else's place of work in order peacefully to picket, and does no more than that, is such a person in breach of the criminal law now, and will he be in breach of the criminal law if clause 14 of the Employment Bill is passed?
    The Attorney-General: The hon. Gentleman misquotes me. I used my words with some care. I said that I must emphasise that the law on picketing does not in any real way change the criminal law. So far as I can see, the only way in which the immunities given in the existing law on picketing changes the criminal law is that it permits an obstruction of the highway. That is not a serious obstruction. The law permits one to stand on the pavement or in the road outside the place of work where ordinarily one would not be permitted to do so because the highway is meant for passing and repassing. That, I think, is the limit. It is only to that extent that the immunity would be removed if clause 14 became effective.
    Several Hon. Members rose—
    Mr. Speaker: Order. If those hon. Members who have been rising will be brief, I shall do my best to call them all.
    Mr. Adley: Has my right hon. and learned Friend seen early-day motion No. 428? If he has not, will he please look at it? It has been tabled by six Labour Members. Does he agree that perhaps one of the most useful things which the House could do today would be to send a message to the police from both sides of the House stating that we support them in the difficult job that they are trying to do? When my right hon. and learned Friend has had a look at that early-day motion, will he perhaps seek support for it from both Front Benches?
    The Attorney-General: I have not seen it, but I have seen a report in the press about it. I hope that, as a result of my statement and the debate that we have had, there will be an indication that there is widespread support in the
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    House for the police. There certainly is on the Conservative Benches.
    Mr. Jeffrey Thomas: In view of some of the interventions of the Attorney-General's hon. Friends, and some of the wilder press stories today, will the right hon. and learned Gentleman make it absolutely plain that it would be constitutionally obnoxious, and a disaster for industrial relations, if his statement were to be taken as encouraging chief constables to crack down on those exercising the right to picket?
    The Attorney-General: If the hon. and learned Gentleman had listened, as I am sure he did, with care to what I said, he would have realised that I made no such suggestion either in my statement or in the answers that I have given.
    Mr. Gummer: Does not my right hon. and learned Friend agree that the rule of law depends on the support of all of us, and that the position of the police becomes intolerable unless they have the support of all hon. Members? Is it not surprising that we have not had a public statement of support for the police in this difficult situation from the Leader of the Opposition and his Front Bench?
    The Attorney-General: I agree with everything that my hon. Friend has said. I would go a little further and add not only support for the police but condemnation of illegal picketing.
    Mr. Marlow: Is it legal, intimidatory or lawful intimidation to take down the personal details and particulars of a lorry driver with a view to withdrawing his union card, thereby throwing him out of work? Furthermore, what advice would my right hon. and learned Friend give to a lorry driver who does not want to stop at a picket line and the picket does not get out of the way?
    The Attorney-General: Each of those events must be decided upon the facts of the case. If the union rules permit it, if the union has called the driver out and if it permits his card to be withdrawn, unfortunately, under the present law, that card can be withdrawn. If the rules do not permit it and the card is withdrawn, a driver will have a civil remedy in the courts.
    Mr. Budgen: As my right hon. and learned Friend asserts that the criminal

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    law has frequently been broken recently by people on picket lines, has he any information that the chief constables are giving priority to the collection of evidence so that those who break the law in this way may be prosecuted?
    The Attorney-General: I have no knowledge of that. It is not within the usual scope of my knowledge. But no doubt it is one of the matters that my right hon. Friend will be discussing at his meeting tomorrow with leaders of the police forces.
    Mr. Michael Brown: Can my right hon. and learned Friend say whether it is a criminal offence for a union to extort money from someone in return for allowing him to cross the picket line in order to carry on his business? That is a threat. While I recognise that the law is as it stands, surely we must concern ourselves with the threats that are being used in connection with the closed shop.
    The Attorney-General: If money is extorted in order to allow someone to do something which in law he is absolutely entitled to do, that would be illegal extortion.
    Mr. James Callaghan: No doubt the Attorney-General recognises that any criticism which has emerged of the failure to administer the law in this difficult area has not come from the Opposition Benches. If there has been any, it has been implicitly by the Lord Chancellor, who has appeared to criticise the police service, and it has come more expressly from some of the right hon. and learned Gentleman's hon. Friends. There is no disposition on the Labour Benches to criticise the actions of the police, who have support in this difficult area, as the hon. Member for Bury St. Edmunds (Mr. Griffiths), who represents the Police Federation, said. If the police have shown restraint, as they have done, is it not because they recognise the difficulty of trying to administer the law where large bodies of men who, rightly or wrongly, feel indignant about the situation gather together to express their views about it? My own attitude on this matter has been made quite clear on a number of occasions both last week and this week.
    As a result of all this discussion, has not the Attorney-General come to the conclusion that if the rule of law is being
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    placed in some jeopardy, and if the police service is being placed in an impossible position, there is a responsibility upon the Government not just to deal with the symptoms of picketing but to deal with the fundamental issue, namely, how the steel strike is to be resolved? Is there not a responsibility upon the Government to intervene in this matter now and to bring the two sides together in order to solve the fundamental issue instead of scratching about on the question of picketing?
    The Attorney-General: The right hon. Gentleman talks about support for the police. The police would have been helped much more if he and his colleagues had emphasised even once—and, much better, more often—what the duties and obligations placed upon pickets were so that the police could lend their weight to those who wished to picket peacefully and discourage those who wanted to break the law. The right hon. Gentleman said that the rule of law is placed in jeopardy and that it is the responsibility of the Government to change that. As I understand it, he is really saying that we must surrender.
    Mr. Callaghan: The right hon. and learned Gentleman has quoted many times from the TUC guide. Is he not aware of the support that has been given to it by Labour Members, when it was negotiated, at a time when some of his right hon. Friends were pouring scorn on it a year ago, when we entered into the agreement? Is he not aware of paragraphs 13, 14, 17 and 18 in the guide, which we ourselves negotiated with the trade unions, some of which he has repeated this afternoon?
    We want full support for the code. Indeed, last night I called for it myself, not for the first time, to anybody who happened to be watching or listening. Is not the right hon. and learned Gentleman aware that this is part of a much wider contract with the trade unions? If the trade unions are to be invited to give their full support to this matter, they should not be shown the door of No. 10 Downing Street and shut outside on all the other economic and financial issues. Is not the Prime Minister failing to show a proper sense of responsibility in this matter?
    The Attorney-General: That was a rather belated political intervention by the Leader of the Opposition. The proposals formed part of a White Paper or joint statement issued in February last year. It contained a number of useful aids to peaceful picketing. I have no recollection that we poured scorn on it. [Interruption.]. The right hon. Gentleman made two interventions. Now he seeks to make a third from a seated position.
    I find interesting, but absolutely unacceptable, the fact that, while we have the present troubles, none of the support that the Opposition were prepared to give to their joint paper last year is repeated now.

FRONT-BENCH SPEECHES
Mr. English: I wonder whether you, Mr. Speaker, would take under advisement the events of yesterday. After some discussion the House resolved that you should have the power to decide that between 7 pm and 9 pm on Second Reading debates we could make 10-minute speeches. That was intended to allow more Back Benchers to speak in such debates. Yesterday two Front Benchers spoke in that period. That meant that for 20 minutes Back Benchers were precluded from doing so. That would not matter—but for the fact that it meant that there were six Front-Bench speakers in yesterday's debate.
I ask you, Mr. Speaker, to consider this matter. The power of selection is one of the basic powers of the Chair. It has long been customary for a debate to be opened by two Front-Bench Members and closed by two Front-Bench Members. Often, in a repetition of yesterday's circumstances, a home affairs Minister might open a debate and a Welsh Minister close it. However, that did not happen yesterday. There were six Front-Bench speeches in the whole period. If that practice is repeated, the time of Back Benchers is eroded.
I do not ask for an answer now, Mr. Speaker, but I ask you to consider the matter.
Mr. Speaker: I am willing to give an answer now.
The House knows that I always deprecate having to call three Front-Bench speakers from both sides of the
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House in a debate. The Front Benches have a good opportunity with the Minister who opens and the Opposition spokesman. They usually take their full time.
I should like to place this on the record. It is fairer to both sides of the House, when there is a third element such as there was yesterday on the Welsh question, for it to be borne in mind who winds up at the end of the day. I hope that the occupant of the Chair will not be put in the position of having to call six Front-Bench speakers in one debate.
Mr. Arthur Lewis: Did I understand you, Mr. Speaker, to say that you had to call speakers? Am I not right in saying that Mr. Speaker and other occupants of the Chair are entitled to do exactly as they wish? Would not it be welcomed by hon. Members on both sides of the House if the occupant of the Chair did not call the Front-Bench speakers? Then everyone would be happy.
Mr. Speaker: I am much obliged to the hon. Gentleman. On two previous occasions I exercised that authority and discretion. I indicated to the usual channels that if more than two Front-Bench speakers rose to speak I would not call them. However, yesterday I felt that there were special factors. I want the House to know that I deprecate calling six Front-Bench spokesmen in a debate.
Mr. English: I am grateful for your ruling, Mr. Speaker. I appreciate the reasons for your action. It is worth putting on the record that the Front Benchers concerned were not as courteous as you were. They chose to speak for one hour and eight minutes in the first case, for 50 minutes in the case of those who replied, and for 20 minutes in the case of those in between. They could easily have rationed out the time between them, but did not choose to do so.

STATUTORY INSTRUMENTS &c.
Ordered,
That the draft Export Guarantees (Extension of Period) (No. 2) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Wakeham.]
Mr. Speaker: I remind the House that the first major debate on Supply will be abbreviated.

INSURANCE POLICY HOLDERS PROTECTION
4.26 pm
Mr. Greville Janner: I beg to move
That leave be given to bring in a Bill to remove the effect of certain exclusion clauses on insurance policies; to remove the right of insurers to avoid liability under policies for non-disclosure of certain information not sought by them; and otherwise to amend the law so as to provide further protection for insurance policy holders.
Mr. Speaker: The hon. and learned Member for Leicester, West (Mr. Janner) is not bound to take his 10 minutes, but he is entitled to do so.
Mr. Janner: I shall take much less than 10 minutes.
I seek leave to introduce the Insurance Policy Holders Protection Bill which, however brief, may nevertheless be important to literally millions of people. These include Members of Parliament who may one day have cause to bring a claim on an insurance policy, only to find that they do not have the protection which they thought that they had acquired.
Insurance policies, which are excluded from the effects of the Unfair Contract Terms Act, are all too often misleading in their titles, insidious in their content and wicked in the power given to insurers to avoid liability where the insured does not answer questions which he is not asked.
As to the titles, I have only to refer to "all-risks" policies which so many of us have and which certainly do not cover all risks; and to the "comprehensive" policy which comprehends what it says it does—and sometimes rather less.
As to the contents, the warranties contained in the policies are in language which most people do not read—and even if they read a clause they do not or cannot understand it.
The disclosure rule is archaic and wrong. People should not be forced to reveal information which is not sought, and which may not even be relevant to their claim and to lose their rights if they do not reveal it.
Those wrongs have been so obvious that the Law Commission, in its working paper No. 73 on insurance law, last year, denounced nearly all of them. The Law
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Commission, which can scarcely be accused of being staffed by the extreme Left wing, regarded these insurance policies in the words of judges quoted by it as "all too often shocking", "mean", and "contemptible" and said that the public should be warned against the policies. In this House, it is not only possible to warn the public but also to change the rules.
A change may be brought in by removing the exclusion of insurance policies from the Unfair Contract Terms Act. That exclusion should not have been there in the first place. It can have been put in only as a result of powerful pressure by British insurers. That protection of insurers should now be removed and given back to policyholders. They must be entitled to say that the warranty is null and void if it is "unreasonable"; that is all. If it does not "satisfy the test of reasonableness", it should go.
As to the disclosure rule, the suggestions made by the Law Commission are reasonable and simple. The Law Commission suggests that the insured should continue to be subject to a duty of disclosure but that this should be modified and should differ according to whether or not a proposal form has been completed. Where there is no proposal form he should be under a duty to disclose those facts which a reasonable man in these circumstances would be bound to disclose; but where he has completed a proposal form the insurer should be taken to have waived the insured's duty in regard to any fact outside the scope of the questions asked. In other words, if they ask a question, they are entitled to a fair, honest and complete answer. If they do not ask it, they should have done.
At the moment, a travel policy, a road traffic policy, a home owner's policy or a life assurance policy—each is very likely to mislead and not to provide the peace of mind which the insured believes he has bought and whereby has paid for. These policies have deserved the denunciations of the Consumers Association and, last week, of Gordon Borrie, the Director General of Fair Trading. Reputable insurers say they do not often rely on these policies, so they should not object to the Bill.
The general secretary of the British Insurance Association said last week that

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ultimately the consumer gets what he pays for. In this area, he often not only does not get what he pays for but he may not even get what he believes he has paid for.
In these circumstances, I have pleasure in seeking leave to introduce this Bill, on an all-party basis, within less than half the time allocated to me.
Question put and agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. Arthur Davidson, Mr. W. R. Rees-Davies, Mr. Stephen Dorrell, Mr. Hugh Dykes, Mr. Eric S. Heifer, Mr. Geraint Howells, Mr. Edward Lyons, Mr. Austin Mitchell, Mr. John Sever and Mr. Frank R. White.

INSURANCE POLICY HOLDERS PROTECTION
Mr. Greville Janner accordingly presented a Bill to remove the effect of certain exclusion clauses on insurance policies; to remove the right of insurers to avoid liability under policies for nondisclosure of certain information not sought by them; and otherwise to amend the law so as to provide further protection for insurance policy holders: And the same was read the First time; and ordered to be read a Second time on 4 July and to be printed. [Bill 146.]
Mr. Speaker: I should like to thank the hon. and learned Member for Leicester, West (Mr. Janner) for his cooperation.

ORDERS OF THE DAY SUPPLY
[11TH ALLOTTED DAY]—considered

BENEFIT PAYMENTS (SUB-POST OFFICES)
4.32 pm
Mr. Stanley Orme: I beg to move,
That this House, recognising the importance of the sub-post office network in the life of urban and rural communities, is against any moves by the Government which could weaken the system of weekly payments to pensioners, mothers and other benefit recipients through these offices.
This issue has caused a great deal of controversy. There has been very little information on it. If we are to believe what was discussed last night by the right hon. Gentleman and his hon. Friends, and not least their amendment today, the pressure which has been exerted from this side of the House—and, I acknowledge, from the other side—has had some effect upon the Government.
The leakage which came from the rain of proposals, and the silence of the Secretary of State, until finally Mr. Norman Taylor, on behalf of the National Federation of Sub-Postmasters, wrote to Members of Parliament and, not least, to the Prime Minister, receiving a reply from the Prime Minister that the matter would have serious consideration, are all indications that this subject is of major importance and involves other issues than the matter of public expenditure, important as that is.
The Secretary of State for Social Services (Mr. Patrick Jenkin): The right hon. Gentleman says "silence" but is he aware that my hon. Friend the Under-Secretary answered at some length a written question on the subject on 18 January? During Question Time when the right hon. Gentleman was present, on 29 January, my hon. Friend answered a whole series of questions from hon. Members on both sides of the House and explained exactly what point we had reached. It is not right for the hon. Gentleman to say that the Government remained silent. Nothing could be further from the truth.
Mr. Orme: The exchanges in the House and the answers that the hon. Lady gave did not give comfort to some Members. In fact, people were more disturbed following her answers than before because she tried to deflect attention from the issue, and no assurances, such as had been asked for, were given to the House.
The payment of benefits in this country has traditionally been on a weekly basis and people have become accustomed to this. The main benefits are paid to pensioners and mothers in receipt of child benefit. I stress that these two large groups are receiving long-term benefits and are, therefore, distinctly different from those receiving short-term benefits, such as sickness and unemployment benefit. About 70 per cent. of all social security payments are made through sub-post offices. The network now consists of 20,000 post offices throughout the country.
While I am on the subject of post offices, may I say that I think it is rather strange that in the so-called consultations that have taken place Sir William Barlow, chairman of the Post Office, had, at least before 31 January this year, not been consulted. It is rather odd that on a major proposal such as this, on which Sir Derek Rayner intimated that he wanted widespread consultations with the Secretary of State, Sir William Barlow was not consulted.
The network of 20,000 post offices throughout the United Kingdom gives a basic service to the community. I do not think there is a similar service to the community in any other modern State where post offices and sub-post offices play such a key role. I am talking now of both the rural and urban post offices. The benefits they give go far beyond the mere paying out of the weekly benefit, because when someone goes to a post office not only does he or she receive the benefit, but it is possible to be given advice on changes in legislation, and leaflets are available about benefits. The hon. Member for Harrow, West (Mr. Page) may laugh, but I think he would acknowledge that the friendly post office is something to be cherished.
Pensioners, mothers and disabled people can also purchase from a post office national savings stamps and stamps for television licences and many other things. A vital service is thus given to
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the community. The help and advice which is sought by the public and given by the staff, who know many of their customers personally, is very welcome indeed.
Mr. John Page: Will the right hon. Gentleman give way? He did refer to me—
Mr. Orme: Perhaps the hon. Gentleman will forgive me and allow me to get on with my speech in the interests of other Members.
There has been a reduction in recent years, as many hon. Members on both sides of the House know, in the number of post offices. A few years ago, the figure was about 26,000. Today it is nearer 21,000. The Post Office was investigated in 1977, as a result of which we had the Carter report, to which I should like briefly to refer. On page 87 of the report, paragraph 11.2 says:
"The scale-payment system has provided Britain with the convenience of a dense network of post offices; in contrast the United States, with 17 times the area, has only 30 per cent. more outlets."
In paragraph 11.7 the question is asked:
"Could the social security payments be made in a different way, for instance by cheques cashable at commercial banks or at shops? This is thought to be an inferior alternative: most recipients want cash, weekly, obtainable without extra charge at a place near their homes. The post office network provides much better for suburbs and rural areas than the banks, and shops would probably want some return for cashing cheques;
(b) Is the present post office network about right, from the point of view of the Departments which use agency services? The answer is Yes: there is no active demand for a bigger network, but the intensity of the protests at post office closures suggests that a significantly smaller network would be regarded as inadequate".
The report continues:
"No one was able to see any advantage from such a transfer; the Post Office has long experience of running the system, and it would be wasteful to upset the administration in this way".
That was the unanimous conclusion of the Carter committee which made a thorough investigation into the Post Office.
We are told by the sub-post offices and by Mr. Norman Taylor that if the payment of benefits were transferred from sub-post offices that could lead to the

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closure of about 3,000 sub-post offices throughout the United Kingdom. That would have a detrimental effect upon the network and could also have repercussions well beyond the 3,000 sub-post offices.
What would it mean? It is not just a question of the loss of money earned by the sub-post offices to which they are entitled. It would mean severe inconvenience for pensioners, the disabled and mothers, many of whom might have to travel a long distance to get their benefit. They would also find that the post offices to which they had to travel were overcrowded.
Mr. Michael Latham rose—
Mr. Orme: I am afraid I cannot give way. I am not being discourteous; I just want to be fair to hon. Members.
I made an investigation in my constituency, which is an urban area, and I found that the post offices were very crowded. People had to queue for their benefits. I have found that the pressure has been for more post offices, not fewer. Great regret has been expressed when sub-post offices have been closed for economic reasons. To break up the network would not be in the interest of the people we represent.
On the question of fortnightly or monthly payments, unless there was a huge transfer of payments into bank accounts, which is unlikely, post offices would still have to carry the same amount of money. If the recipient has a bank account, it is likely to be a post office savings account, and those accounts too would be affected by the widespread closures of sub-post offices. I am talking not about people with bank accounts who can have benefits paid into those accounts but about a large percentage of the people who live in rural and urban areas who need their benefits weekly, who spend the money weekly and do not have bank accounts. I am talking about a service. If that service were transferred, great inconvenience and expense would be caused.
Mr. Tim Eggar: Will the right hon. Gentleman give way?
Mr. Orme: If the hon. Gentleman will allow me to make my speech, I am sure
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that later he will be able to catch Mr. Speaker's eye.
Sir Derek Rayner, the joint managing director of Marks and Spencer, is carrying out this exercise, which is one of 29 exercises covering Government Departments. I believe another 39 projects are also in hand. The Labour Party has no objection to efficiency in the public service, but I feel that the House is entitled to more information. Will the Secretary of State say whether the Rayner reports will be published and made available to hon. Members?
Sir Derek Rayner has been seconded by the Government to make these investigations. He represents a nationally known store which provides what the customer wants and works on the principle that the customer is right. We are entitled to ask Sir Derek what consultations he has had with the customers in this area.
Mr. Patrick Jenkin: I am anticipating what I shall say, Mr. Deputy Speaker, if I catch your eye, but I must make clear that studies of these matters are done by officials in the Department, for which Ministers take responsibility. Advice is available from Sir Derek Rayner, who has great expertise in these matters, but he does not undertake the studies and does not take responsibility for them. We do.
Mr. Orme: The Secretary of State should not criticise us for mentioning Sir Derek Rayner. His secondment received a great deal of publicity and it was said that his investigations would result in a saving in public expenditure. I suggest that the right hon. Gentleman is downgrading the task which Sir Derek Rayner has been set. I am not making a personal attack on Sir Derek; indeed, I pay tribute to the company of which he is joint managing director. All I ask is that he should treat the customers of the sub-post offices in the way he treats the customers in his store.
No doubt reference will be made to Labour's experiment of paying unemployment benefit on a fortnightly basis with the agreement of the claimant. I emphasise that that represents only a tiny proportion of payments made, it is a short-term benefit and the sub-postmasters raised no objection to the experiment.

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There is a world of difference between that short-term benefit and the long-term benefit received by pensioners, mothers and the disabled.
Mr. Toby Jessel: Will the right hon. Gentleman give way?
Mr. Orme: No, I cannot give way.
I am also disturbed by what Mr. Norman Taylor says on page 5 of his letter:
"We have received reports from sub-postmasters of beneficiaries, having been advised to ask for weekly benefit to be paid, either being told it was not possible or being told that … they would have to attend at the unemployment office weekly to obtain it. Faced with the extra expense to obtain their money they have reluctantly had to accept fortnightly payment".
I feel sure that the Secretary of State will be able to tell us about the working of the system. I mention that passage from the letter to show the problems which would be created if beneficiaries felt that they were under pressure to transfer payment. Pensioners, for example, have enough to put up with without pressure of that type.
We have all had correspondence on this issue. We all hear of hon. Members who have had several letters on a particular issue and, though we believe them, we sometimes doubt the number.
Mr. Jessel rose—
Mr. Orme: We have all had correspondence on the present issue. I will quote, very briefly, two letters from my constituency. The first reads:
"Dear Sir, We would like our pension to be left as it is weekly, as it is not wise for old people to have money in the house these days".
Neither should they be expected to carry larger sums from the post office.
The second letter came from a mother in my constituency. It reads:
"Dear Sir, I was absolutely disgusted to read the current notice in my local post office. With four children I need my family allowance to help me manage through the week."
—and she needs it weekly. That is a cry from the heart of a mother with four children who depends upon child benefit being paid weekly as at present.
Let me deal first with the pensioner. It is not propaganda to say that pensioners are genuinely worried. They are worried not only about the threat to local
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sub-post offices but about carrying two weeks' benefit or more away from the post office at any one time, as was evidenced in that letter.
The letter from the mother highlights an important aspect. If the benefit were to be paid monthly, economic problems would arise because of lack of weekly finance. The House agreed that a mother should have child benefit paid to her as a right, so that she could use it. In a happy family there will be no problem if it is transferred to a bank. Unfortunately, we are dealing not with happy families all the time, but with mothers who have to eke out their money during the week and they may possibly be exploited by their husbands.
Let us consider a mother who has three or four children. If she draws the benefit monthly she will receive £50 or £60. What if she has a feckless husband who is drinking or gambling and who says "You can give me £20 or £30 of that"? That would mean an absolute reduction in the standard of living and rights of that mother and those children. That is what we must guard against. That is why the House decided, after a great deal of debate and pressure from outside, that child benefit should be paid to the mother as of right.
We are not dealing with the mother who can afford to leave the money in the bank for six or eight weeks and perhaps use it in some other way. We are dealing with the working-class mother who has to go to the post office weekly to collect her child benefit. In many instances child benefit is a lifeline to a family. I do not think that any hon. Member can deny that. We all have constituents who face these problems.
With the current rate of inflation, the threat of the increased cost of school meals, and payment for school transport that the House is sanctioning, it would be laughable, if it were not so serious, to suggest that this payment should be made monthly. To suggest it at present, when people are struggling, would be entirely wrong.
This issue also gives rise to wider social implications. We are seeing in our society the continued transfer from the small to the large. It is happening in local government and with public transport. There is a reduction of facilities and offices are

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being moved into the next town, which can be 10 or more miles away. There is a need to travel, and therefore the cost of that travel must be taken into account if a person does not have personal transport. All that adds up to making life more complicated and more expensive.
I will give a parallel example to the Secretary of State. He is aware of the present argument about pharmacies and the difficulties that the closure of chemists' shops throughout the country will cause. Pharmacies are being transformed into supermarkets and multiple stores. If we continue along this road the same will happen to sub-post offices. The supermarkets and multiple stores are excellent for many things, but they are not capable of being turned into part-chemists' shops or part-sub-post offices. They would not be able to give the type of service that one receives at present. Therefore, this is an important issue.
Reading the reports last night—one can only go by reports; I am not saying that they are absolutely accurate but perhaps the Secretary of State will tell us—I saw that the Secretary of State assured his Back Benchers that rural sub-post offices would not be affected in any way. Does that also apply to urban sub-post offices? I think that we are entitled to know.
Will not the transfer of benefit to a bank—which the right hon. Gentleman sanctions—mean that the post office network would become more expensive and that costs for other services would have to be increased to compensate for that transfer? I am thinking of the cost of the savings unit and the provision of licences that are presently dealt with in post offices. Will it not also mean that the cost of rates, heating and rent will have to be met by the Government?
What about a pensioner or a mother with a small bank account who, for instance, has a credit balance of below £100? There would be a charge, would there not, to that claimant of 20p a time if the account was below £100 in credit—which is what the banks require at present? That would be a large charge, which would be transferred from the Government to the claimant. That would be absolutely wrong. Is it not a fact that the cost per unit going to sub-postmasters
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is approximately 2·5p? I understand that there are three units to a pension, so that amount will become 7·5p for a pensioner. Does the Secretary of State think that it is possible to obtain a cheaper and more efficient service, as well as the social service about which we are now talking?
I heard the Secretary of State this morning mention using sub-post offices for other means, such a the payment of gas and electricity charges. I am sure that he does not want to put the lid on one hornet's nest and take it off another. He would have real problems with the employees in the gas and electricity industries if there were not wide consent to such proposals after consultation, because such a proposal would affect the living standards and jobs of people in those industries.
The Opposition were absolutely right to choose this subject for debate. We know that there is widespread interest in this matter throughout the country and it is surely the purpose of the House to reflect that interest. I think that we have made an overwhelming case for sub-post offices to remain as they are at present.
Mr. Jessel rose—
Mr. Orme: I remind the House that whilst we have made a great deal of progress with the Government we are not yet home and dry. The motion in the name of the Opposition would finalise the problem and make it clear. There would be no dubiety about the matter. Therefore, I ask the House to vote for the motion at 7 o'clock.
4.59 pm
The Secretary of State for Social Services (Mr. Patrick Jenkin): I beg to move, to leave out from 'communities' to the end of the Question, and to add instead thereof,
'insists that the Government, in making any changes in the system of paying pensions and benefits intended to give recipients wider choice as to the method of payment and to save administrative costs, ensures the continuance of that network, welcoming the Government's commitment to explore ways of bringing new business to sub-post offices, for instance through the National Girobank and wider opportunities for the payment of bills'.
The House will have listened with some interest to the right hon. Member for Salford, West (Mr. Orme) as he made his case in favour of the Opposition motion.

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I shall come to our objections to the motion later on. I also hope in the course of my remarks to be able to answer all the questions that he raised.
Let me say at once that I entirely understand why anxieties have arisen about the Government's intentions, particularly on the part of sub-postmasters and sub-postmistresses. I will come in a moment to the way in which the Government's study—which has not yet been published but will be published—came into the public domain, but I fully accept that the information which reached sub-postmasters has caused them to worry about their future. It might be helpful if I can put the whole issue into context and say where the Government stand.
The Government came into office committed to examine the cost and efficiency of the public sector and, wherever possible, to make savings in administration. As the House knows, Sir Derek Rayner was appointed by the Prime Minister to advise the Government in this field in which he has considerable expertise. I stress the word "advise" because, as I said in my intervention in the right hon. Gentleman's speech, it is Ministers—the Government—who retain responsibility in the matter. The method adopted was that each Department was asked to select a project for study by a team of officials, whose proposals would in due course be considered by Ministers.
The project identified by my Department was the system of paying social security benefits. Some have asked why we chose this topic. There is a little history which is worth putting on the record. Under the Opposition, a fact which the right hon. Gentleman did not make entirely clear in his speech, the DHSS was considering its future operational strategy for social security. With a system as big as ours, on which nearly a quarter of public expenditure goes and which requires an overall staff of 100,000 to administer, we have to plan major operational changes many years in advance.
One thing that struck the planners at an early stage was how the present system relies heavily on weekly payments by order books cashed over post office counters. It is common knowledge that many would prefer to have their payments paid direct into bank accounts. As more and more people are paid salaries
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and occupational pensions monthly, there is a growing trend in society away from weekly payments.
As long ago as 1976—under the previous Government in which the right hon. Gentleman was Minister for Social Security—a joint working party of DHSS officials, the banks and National Giro was set up to consider the possibility of automatic credit transfer of social security benefits into banks and other accounts. It may not have been entirely clear from the right hon. Gentleman's speech that the working party that was set up by his Government concluded that there were no insuperable obstacles to paying benefits by this method and that it would be significantly cheaper.
Indeed, the previous Government went further. They indicated their acceptance in principle of paying benefits directly to bank accounts provided that a number of administrative aspects could be sorted out. My hon. Friend the Member for Twickenham (Mr. Jesse!), who hopes to catch your eye, Mr. Deputy Speaker, has been assiduous over the years in pressing successive Governments on the matter of paying credit into bank accounts. The House may remember that shortly before the last election on 6 March 1978 my hon. Friend the Member for Twickenham asked the right hon. Member for Salford, West at Question Time:
"if he can now announce arrangements for retirement pensions to be paid on request direct into pensioners' bank accounts."
The right hon. Gentleman referred to the working party that I have just mentioned. My hon. Friend pressed the matter again and asked:
"why do not the Government get on with it? It is now 18 months since I raised the matter with the Minister. What is the reason for the delay?"
The right hon. Gentleman replied:
"I am expecting a report by the end of the month…I am much in favour of the principle, and the introduction of such an arrangement would cover child benefit as well as retirement pensions…I hope to make some progress in the near future."—[Official Report, 6 March 1979: Vol. 963, c. 1077–78.]
Mr. Orme: There is a world of difference between those remarks and fortnightly and monthly payments made in the way suggested by the Secretary of State and Sir Derek Rayner.
Mr. Jenkin: The right hon. Gentleman would carry more conviction if he had

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been frank with the House at the outset of his speech.
We have found that much progress has been made and I pay tribute to the Opposition for that. Therefore, when officials suggested to me in response to the Rayner exercise that it was a proper subject for further study, I had little difficulty in agreeing. Our study has focused attention closely on more precise suggestions for bringing about the changes which our predecessors initiated. [Interruption.] I can understand the indignation of the hon. Member for Ormskirk (Mr. Kilroy-Silk). I do not suppose that he was present at the Question Time during which the remarks to which I have referred were made.
Mr. Robert Kilroy-Silk: What the right hon. Gentleman says about the previous Government's preparations is correct. I know because I saw some of the documents. However, the fact that the previous Government anticipated and planned the proposals does not make them right. We would probably have been more successful in stopping that Government from implementing them than Conservative Members will be tonight in stopping the right hon. Gentleman from implementing his proposals.
Mr. Jenkin: I shall not intervene in the sensitive matter of the quarrel between the hon. Member for Ormskirk and his right hon. Friend. The right hon. Gentleman said:
"I am much in favour of the principle."— [Official Report, 6 March 1979; Vol. 963, c. 1078.]
It is typical of the Opposition that when they see a chance of taking political advantage they quickly—oh so quickly—forget their past.
I shall remind the House of the scale of the operation of our social security system. About 1,000 million payments are made each year by the social security system to about 18 million people and their dependants. The administrative costs of the entire exercise amount to no less than three-quarters of a billion pounds—£750 million—a year. One third of that, about £250 million, is the cost of paying out the benefits—putting the cash in the hands of the people. That is roughly equivalent to the cost of building five big
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new hospitals every year. That is the measure of the cost of paying benefits.
The more order books that are issued, the more it costs the taxpayer. In a system that has been virtually unchanged for a number of years, it seemed to us that even small improvements in efficiency could save the taxpayer worthwhile sums. It also seemed to us that the present methods offered little choice to the public and that we could do better. Officials were asked to conduct their review. Like the Rayner studies, fundamental questions about the way things are done were asked, such as, "Why is the work being done in the way that it is? Could the arrangements be made simpler and more efficient? Have the arrangements changed with time to reflect changing conditions in society?" Underlying the whole operation was the question, "If we were starting from scratch now, what systems would be devised?" When such questions are asked, interesting and perhaps disquieting facts emerge.
The overwhelming number of benefit payments—something like 95 per cent.—are made weekly despite the fact that almost half the working population, over half of working mothers and almost all occupational pensioners, are now paid monthly. As the House knows, the Department of Employment changed from paying unemployment benefit weekly to fortnightly in September 1978. The individual has a choice: he can register for work fortnightly and collect a fortnightly payment. If he wants a weekly payment, he must sign on weekly. That is the choice. It does not appear to have caused great difficulty although about 95 per cent. of those in receipt of unemployment benefit are now paid fortnightly.
The study also found that paying benefits by direct credit into banks, including the National Giro bank and other accounts every four weeks would be considerably less expensive to the taxpayer than even the cheapest of the existing four-weekly or weekly payment arrangements. I shall give an indication of how much more efficient it would be. The annual cost of making payments weekly by order book is about £10, whereas payment by direct credit into a bank would cost about £2 a year. I must make it clear that I am dealing with a study by

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officials and not with any Government decisions.
Although some beneficiaries have their pensions paid by monthly or quarterly order, the order still has to be presented to a bank to be cashed. There is as yet no right to have benefits credited direct to a bank account. It may be all the more surprising that we have made no progress in this direction. The study found that half the adult population now uses an ordinary bank account and about three-quarters of the population has access to a cheque account, savings bank, building society and so on.
Finally, the study found that sickness benefit is already paid fortnightly in 20 per cent. of cases. Mobility allowance is paid four-weekly. About three-quarters of a million retirement and war pensioners are paid monthly or less frequently. Nearly half the mothers already cash their child benefit less frequently than once a week. Indeed, one-third cash it every four weeks or less often.
Against that background, it is perhaps not surprising that the study suggested that benefits might be paid less frequently and that the public should be able to have benefits paid directly into a bank, National Girobank or other account if they so choose. The study also found that that could eventually result in savings of up to £50 million a year at today's prices. However, the study made clear that such savings might not be fully achieved for five years or more.
I shall turn now to the status of the report. The simple fact, and I must make this abundantly clear, is that Ministers have as yet reached no decisions. The report has been in our hands for a matter of weeks only and DHSS Ministers have been discussing it with Sir Derek Rayner, as we were asked to do. As yet, there has been no collective discussion by Ministers of the issues raised by the report, let alone any agreement on how or whether to carry the matter forward. If we decide to go ahead, it will inevitably be a fairly long and drawn out process. At present, all we have is a review that has been conducted by officials; no more. Still less is there any commitment to the details in the report. I referred a moment ago to the saving of £50 million. The House will see, when the public expenditure White Paper is published next month that no credit whatever has been taken
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in the figures up to 1983–4—the last year to which the Paper will refer—for these possible savings.
Mr. Kenneth Marks: Will the £50 million savings suggested by the report come from savings in the Civil Service, or from savings in post office and sub-post office staff?
Mr. Jenkin: It will be a question of savings in the overall operation.
Mr. Tam Dalyell rose—
Mr. Jenkin: I shall not give way, as many hon. Members wish to speak. I wish to give three absolutely clear assurances. The Government will initiate no changes pursuant to this review, until the review has been published. The leading article in The Guardian today is pushing at an open door. It was always our intention to publish the report.
Secondly, the Government will consult widely on the proposals in the report including, of course with the Post Office, representatives of sub-postmasters and with any other interests that may be affected. We wish to consult also representatives of pensioners and other beneficiaries.
Thirdly, there will be no decision to go ahead without a full debate and without the full consent of the House of Commons.
Mr. Percy Grieve: I apologise for interrupting my right hon. Friend so early in his speech. When the Government consider what action to take on the report, will they bear in mind that many pensioners go in fear of being robbed of their pension when they take it in the form of cash from post offices? That fear has been justified by the number of robberies. Many pensioners urgently desire to have their pensions paid less frequently and to have them paid direct into bank accounts.
Mr. Jenkin: I am grateful to my hon. and learned Friend for his remarks. I shall make suggestions with that consideration in mind in a moment.
The impression seems to have got around that the Government have already made decisions and are committed to major changes. That simply is not true. There is no question of any early reforms

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or of a fait accompli. Certainly there is no question of our trying to do anything by stealth. I hope that the House will accept that.
Mr. Dalyell rose—
Mr. Jenkin: Indeed, one of the difficulties faced by the House is that the report has not yet been published. The House is having to consider these matters on the basis of press reports, answers to parliamentary questions—to which I referred in my earlier intervention—and statements such as that which I issued last week.
Mr. Dalyell rose—
Mr. Jenkin: Many hon. Members wish to speak.
Mr. Dalyell rose—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The right hon. Gentleman is not giving way.
Mr. Jenkin: Much of the concern turns, of course, on the likely effect of any such changes on the future of the sub-post office network. The right hon. Member for Salford, West made that point clear and I know that many of my right hon. and hon. Friends are concerned about sub-post offices. Ministers are fully alive to this problem and have been from the beginning of the study. We know that sub-post offices, particularly in rural areas, but also in suburban areas—I take the right hon. Gentleman's point—provide an essential service to the public. They are often run in conjunction with shops that sell food and other household necessities. If the sub-post office were not on the premises, many of those shops would cease to be viable.
The Government fully accept that any significant closure of sub-post offices would be wholly inconsistent with our aim of sustaining local communities, and the services on which they depend. The review in no way reflects doubts about the quality of the service provided by sub-postmasters under the present system. Hon. Members will know that the Prime Minister made that clear in a letter to Mr. Norman Taylor of the National Federation of Sub-Postmasters. The letter was sent to him last week.
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The Prime Minister's father was a sub-postmaster. He ran a sub-post office in conjunction with the shop in Grantham where she spent her youth. Few hon. Members have had more direct personal experience than my right hon. Friend. The village post office is often the meeting place of the community. The postmaster or postmistress is often the friendly adviser of others in the community. From the beginning of the Rayner study Ministers were clear that the post office and sub-postmasters would have to be involved in any consultations from the earliest stage. It was suggested that Sir William Barlow had not been consulted. It is now becoming clear that my officials' early approaches to the Post Office were greeted with some alarm. The fact of this study quickly reached the ears of Sir William Barlow and at a meeting in the West Country last November—of which unfortunately there seems to be no verbatim record—Sir William felt it right to warn his audience in terms that clearly aroused the gravest anxiety among sub-postmasters and sub-postmistresses.
Mr. Bob Cryer rose—
Mr. Jenkin: If I may say so, the consequences are to be found in the post bags of virtually every right hon. and hon. Member.
More recently, in response to public anxiety, Sir Derek Rayner was authorised to give interviews to the press and tele, vision on the progress that he was making and how his projects were being tackled The report has not yet been published, although it is the Government's firm intention to do so.
Mr. Orme: The Secretary of State will be aware that Sir William Barlow gave evidence to a Select Committee this year. He stated categorically that he had had no consultations with the Government on that issue.
Mr. Jenkin: I spoke to Sir William Barlow in a casual meeting—[HON. MEMBERS: "When?"] Some months ago, before Christmas. I should not for one moment describe it as a consultation, but I made it perfectly clear to Sir William Barlow that these were serious proposals that he would do well to take seriously.
Mr. Cryer: They are being seriously opposed.
Mr. Jenkin: Perhaps that remark should be addressed to Sir William Barlow.
Mr. Dalyell rose—
Mr. Jenkin: I hope that the House will agree that the Government would be failing in their responsibilties if they did not consider very carefully the proposals emerging from the review. We know that there is a growing demand for direct payment into bank accounts. Growing numbers of people are becoming used to budgeting fortnightly or monthly and the great majority of occupational pensions are paid monthly. As part of the study, the Department carried out a market survey. Although these figures have to be treated with caution, it found that about three-fifths of pensioners and four-fifths of mothers said that they would have little difficulty if payments were made fortnightly.
Ministers have made it abundantly clear to officials that some groups, including the very old and the poor—perhaps those on supplementary benefit or in receipt of family income supplement—must be able to continue with weekly payments, if they wish. We also made it clear, and I give this complete assurance to the House—I know that it has not been clear to postmasters—that there is no question of requiring anyone to use a bank account who does not choose, of his own free will, to adopt that method. Anyone who wants to continue to draw cash over the post office counter may do so, although the proposal in the study is that it would be fortnightly rather than weekly for most people.
It is against that background that I turn to the Opposition motion. As the House will recognise, we can entirely accept the sentiment in the opening passage. However, when one turns to the rest of their motion, it seems to me that it is not only wholly inconsistent with what the Labour Government were up to but, far more important, on any reasonable interpretation, it would tie the hands of the present Government by linking the undoubted need to protect the income and ensure the viability of sub-post offices solely to the weekly cash payment of social security benefits. I do not see
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how the words that they have carefully chosen could have any other meaning.
It simply cannot be right to argue for the perpetuation of the present system of paying benefits as if it were the only way to protect the income of sub-post offices. If it is possible to give people more choice, save the taxpayer money and at the same time protect the network of sub-post offices, surely the Government must be free to explore the options.
As I read the Opposition's motion, any new option to allow payment by direct credit could be said to weaken the system of weekly payments and, as such, would have to be ruled out. Any move to allow payment at less frequent intervals would equally be ruled out. I do not believe that such a complete bar makes any sense at all. The Government must be allowed to continue their study to see if there are ways of giving wider choice and securing the administrative savings in such a way as to safeguard the position of sub-postmasters.
That may have to be done by looking more widely and seeking other ways. I mention two possibilities but make it clear there could be others. First, there could be much wider use of the National Giro Bank.
Mr. Gregor MacKenzie: rose—
Mr. Jenkin: For instance, if pensions were paid by direct credit into a giro account, pensioners would be free to draw cash in the amounts and at the times to suit their own convenience. There is no way under the present system that the pensioner can draw less than the full weekly pension and leave the balance to accumulate. There is no way that a pensioner who does not wish to carry his full week's cash on his person can draw his pension in two tranches. If pensions were paid direct into giro accounts, a pensioner would be entirely free to make a weekly, or, if he chose, an even more frequent visit to the post office to draw out the cash that he would need, and the rest would be safe in his account and not be at risk being stuffed in his mattress or his teapot where it would be at the risk of housebreakers.
Mr. F. A. Burden: If the proposal is that pensions should be drawn every fortnight, what arrangements

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will there be so that there is no lag between the time when people finish drawing the old pension and start drawing the new one? That time-lag might cause considerable difficulties to some families.
Mr. Jenkin: I accept that. If it were fortnightly and I stress the word "if" —there would be a week in arrears and a week in advance. There would be no gap. My hon. Friend's point is perfectly fair.
A much wider use of the National Giro Bank would bring post offices substantial additional business and therefore commission.
A second possibility concerns the payment of fuel bills. I recognise that there can be no question of moving down that road without the fullest consultation with the energy industries. That goes without saying. At the moment there is a statutory bar in the Post Office Act against nationalised industries using the Post Office on an agency basis, as Government Departments use it. For example, the only way that people can pay gas or electricity bills through the Post Office is by paying them into the industry's giro account, and being charged 20p for the privilege. I believe that there are better ways of helping the public to pay bills which would bring business to post offices.
One possibility that could be explored is the question of fuel stamps. That could well bring additional business. There may be other ways to make use of this most valuable social network of sub-post offices in our towns, villages and suburbs. All these possibilities will have to be explored with the various interests—the Post Office, sub-postmasters and the National Giro Bank—before decisions are taken.
What must be clear is that there can be no question of the Government taking decisions—even if we could persuade the House to accept them—to go ahead with major changes in the system of paying social security benefits if we were not at the same time able to assure sub-post offices of the continuance of the sub-post office network. That does not mean complete ossification—and I hope that no one is suggesting that. Every year some sub-post offices close, but others are opening.
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The network of sub-post offices is essential. Of that let there be no doubt. Village communities depend on the services that that network makes possible. The Government are determined to preserve it.
The Government's amendment therefore makes it clear that we must be free to carry forward our study and explore all the options with the Post Office. The Opposition's motion seeks to tie our hands firmly by refusing to countenance any change.
If ever there were a case of the Labour Party living in the past while the Conservative Party is looking to the future, surely this is it. I ask my right hon, and hon. Friends to vote against the Opposition motion and to support the Government amendment in the Lobby tonight.
5.29 pm
Mr. Charles R. Morris: I wish to declare an interest. I have held a number of positions with the Post Office, not least a long period as a postal officer serving on post office counters.
I listened to the Secretary of State's speech with fascination and interest. I accept that it is right, indeed it is understandable, that he and the Government should concern themselves with seeking to identify savings in Civil Service manpower and Government administration. But I suggest that the Department of Health and Social Security is not entitled to consider the matter of fortnightly and monthly benefit payments in isolation from the Post Office. Consideration must be given to the impact of the proposals on the lives of elderly pensioners, the disabled, and those who rightly claim family benefits and supplementary benefits.
We are entitled to consider the impact of the proposals on the 21,300 scale payment post offices and the 1,500 Crown post offices which will be affected by the proposals. The Secretary of State said that no final decisions have been made. He said that the decisions will be made by the House, and that consultations are proceeding. I hope that the Secretary of State will give consideration in the discussions to a recent academic report on the subject which was made available last month.

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The Secretary of State rightly drew attention to the actions of the previous Labour Government in making unemployment benefits payments payable on a fortnightly basis. The report examined the consequences of that procedure. It examined the impact of fortnightly payments of unemployment benefits on the staff of post offices. It reached the conclusion that the effect would be to reduce post office counter staff by 1 per cent.
But, he went on to suggest that if the analysis was carried further, and the whole area of benefit payments was examined—benefits for the elderly, family benefits, supplementary benefits and the whole gamut of supplementary benefits—fortnightly payments would produce a reduction of 17 per cent. in the staffing of post office counters. Monthly payments of such benefits would produce a reduction of 25 per cent. Translated to posts, this academic study indicated that we face the possibility of redundancies on the scale of about 5,000 stall on the counters of Crown post offices and scale payment post offices.
Reference has been made to the signal contribution that scale payment post offices make. Scale payment post offices have been established for a number of reasons. In recent years they have been encouraged to the detriment of the establishment of Crown post offices. That is why there are 21,000 scale payment post offices and 1,500 crown post offices. They have been encouraged because they are cheap, and because scale payment postmasters are not treated generously in terms of salary and remuneration. Some postmasters receive salaries as low as £1,200, while the average payment is about £5,500. Out of that postmasters have to provide money for staffing and for all the essential prerequisites which are involved in providing the service.
My right hon. Friend the Member for Salford, West (Mr. Orme) and the Secretary of State paid tribute to the service given by the scale payment post offices. I should like to associate myself with those remarks. I should also like to pay tribute to the service given at Crown post office counters.
In many areas, post offices are an essential part of the fabric of community life. It is too easy to claim that the change envisaged by the Government will
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not be forced upon people. The Secretary of State claimed that £50 million would be saved if the proposals were adopted. He cannot have it both ways. If he argues that there will be a potential saving of £50 million, he cannot argue that the system will not be imposed. It will be imposed on elderly pensioners, as it was imposed on those in receipt of unemployment benefit. The Secretary of State nods. If he means that, he will create a great deal of anxiety and distress for many elderly pensioners.
When the method of payment for unemployment benefit was changed, the Secretary of State said that it would widen the choice. People receiving unemployment benefit had no choice. The Secretary of State claims that 95 per cent. of people receiving unemployment benefit opted for fortnightly payments. If people sought to exercise a choice and receive weekly payments, they had to go to the employment office. If that obtains for elderly pensioners and disabled people, will the Secretary of State seriously argue that they will be obliged to troop to the local office of the DHSS in order to opt out of fortnightly and monthly payments? That is the natural and logical follow-through of his argument. The Secretary of State is shaking his head. He cannot have the argument both ways.
Mr. Patrick Jenkin: The right hon. Gentleman is descending into fantasy when he talks about people going along to the local office of the DHSS every week. He is talking utter nonsense. The proposal in the report is that payments should be made fortnightly. The Government have made it clear that there are categories, including the very old and the very poor, for whom weekly payments should continue.
Mr. Morris: With great respect, the Secretary of State should listen more carefully. I did not suggest that elderly pensioners, the disabled, and mothers with large families would have to go to the local office of the DHSS every week. I argued that if benefits were paid on the same basis as the unemployment benefit is paid, people would have to go to the local office of the DHSS to opt out. If that system will not obtain the Secretary of State will have to invite everyone to exercise a choice before he

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brings the scheme into operation. With respect, the Secretary of State completely misrepresented my point.
If the proposals go ahead I believe that they will cause distress and anxiety to the most vulnerable sections of the community. It is no use arguing that the same procedures that are used for the payment of unemployment benefits will be used. That represents a cut of only 1 per cent. in post office counter staffing. This will represent a 25 per cent. cut if it is done on a monthly basis, and a 17 per cent. cut if it is done on a fortnightly basis.
There is an even more interesting point. The Secretary of State told us that the Government would seek to find alternative work for skilled post office workers. The post office itself has been trying to find alternative work for post office counters for many years. The Secretary of State puts these ideas forward, yet he says that if the Government make it possible for gas and electricity accounts to be paid at post office counters, there will need to be a change in legislation. Has he had the Prime Minister's authority for saying that legislation will be brought in to give effect to the changes? If there is a possibility of extra work for post office counter workers, it should be identified.
This whole measure has been put to the House on the basis of allowing a wider choice. However, many vulnerable sections of the community have little choice over weekly payments. I have two wards in my constituency in which more than 40 per cent. of the families are on family incomes at or below subsistence level. The thought of fortnightly or monthly payments fills these vulnerable people with anxiety. It should also fill hon. Members with anxiety.
5.43 pm
Mr. Bill Walker: I am very grateful for having caught your eye, Mr. Deputy Speaker, and I welcome the opportunity to speak in this important debate. I welcome the Government amendment, and I am delighted to note that the Opposition are at one with the Government in recognising the importance of sub-post offices to the community. I should also like to take this opportunity to congratu-
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late my right hon. Friend the Secretary of State, because his amendment sets out the Government's position very clearly. They have shown that they have in mind the best interests of the Post Office, the National Health Service and the public in making their intentions known today.
It is right that any Government should examine the options open to them. It would be wrong not to do so. They must be sure that the services that they provide are more effective and efficient.
My right hon. Friend the Secretary of State was right in saying that the sub-post office enjoys a unique and special position in the life of many communities. In Perthshire there are 15 town sub-post offices. The town sub-post office on a council estate or a small communal estate is as important as the post office in a rural area. There are 71 sub-post offices in the rural areas of Perthshire, and therefore I have an interest in both types. They are unique in many ways, because they serve a large number of small communities. Some of these communities are isolated from the centre of the town because of the inadequacy or expense of public transport. This should not be overlooked.
Many sub-post offices are situated at considerable distances from the nearest habitation or village. Hon. Members should visit some of the beautiful spots in my constituency, where we have some very good post offices. The sub-post office is a splendid example of a small business that provides a unique and essential service. It caters for a variety of needs. In addition to providing postal facilities, it sells groceries, stationery, newspapers, tobacco and many other goods.
Mr. Dalyell: Is it not true that in many parts of the hon. Member's area, and in some parts of mine, such sub-post offices would no longer be viable if they did not receive agency fees from the Post Office?
Mr. Walker: I was just about to come to that point. Sub-post offices are very important small businesses, which provide these services to the community, and they do so because they are convenient to the public. The additional services can be carried out only because the small businesses are made viable by the regular cash flow contributed by the post office section of the business.

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The network of sub-post offices is vital to the life of rural and urban communities, and it is right that the Government should explore ways of bringing new business to these sub-post offices. That is important. While examining areas for additional business, I trust that the Government will recognise that the nationalised industries and other utilities, such as electricity and gas, and local government should be encouraged to accept payment of accounts by instalments through sub-post offices. That would make it easier for the public and would help to expand and make more secure the network of these fine small businesses.
I recognise that in many EEC countries, and in North America, retirement pensions and family benefits are paid monthly. It is just possible that more and more people in this country will opt for such payments—but the important thing is the word "opt". The Government scheme, as I understand it, will give these options, of which I heartily approve.
I acknowledge that an increasing number of people are used to being paid monthly through their bank accounts, and therefore they are accustomed to budgeting on a monthly basis. However, in my constituency many pensioners have never had a bank account. Indeed, some of them do not trust banks, and even today they keep their savings in a tin box. That is not unusual in some rural parts of Scotland.
There are some people who have always budgeted weekly. To many working-class families this is a way of life, and it will take time for it to change. I welcome the assurance that the Government are allowing for this period of change. Consequently, I welcome the Government's intention to publish their proposals on social security payments—proposals that are being prepared by Sir Derek Rayner. I like the idea of any improvement in services. I like the idea of more efficiency and better value for money. I am a Scot, and therefore I wish to see the money used more effectively and efficiently.
The firm with which Sir Derek Rayner is associated has been reported to have said in the past that it always took decisions on the basis of good human relations. That had always turned out to be good economic and business practice, as well. If this same philosophy were
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applied to the running of post offices and making payment to the various Government agencies, we would find that it worked to the advantage of consumers. That is what both sides of the House would wish. But we must not condone a system that says that because we have done it a certain way in the past we must continue to do it that way for ever. That is not sensible. It is not acceptable. I am surprised at the noises coming from the right hon. Member for Western Isles (Mr. Stewart), because people in the Islands are very enterprising. Most of them, however, leave the Islands to go elsewhere, to give the benefit of their inherent skills to the nation at large and to the world. Looking down the list of names where changes have occurred, one sees that a substantial number have come from the Islands. They welcome change. They accept that change is good.
I am confident that Sir Derek's proposals, when examined in the light of the factors that I have mentioned, will be found to be good economic and business practice for the country, for the Department of Health and Social Security and for that important sector with which this debate is concerned, the sub-post offices.
5.51 pm
Mr. David Penhaligon: This is one of a series of debates in the House that pose the question "Do we or do we not wish to destroy villages?" I do not. But the Government clearly do. They are already charging people for their children to go to school and closing village schools. Their next target is obviously village sub-post offices. It is clear that villages do not fit into urban man's interpretation of sensible life in Britain. Villages are, therefore, being asked to pay.
The right hon. Gentleman asked whether any hon. Member could beat the Prime Minister's father, who was a sub-postmaster. My claim is that I probably can, having been a sub-postmaster at Chacewater for seven years before retiring shortly before the October 1974 general election and handing over to my wife. I can assure the Secretary of State that the one-third of the country receiving supplementary benefit, consisting of the people who wish to budget weekly—the percentage was higher in my village

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—draw their money weekly automatically. It would not occur to them to do anything else. Indeed, a queue forms outside the sub-post office before it opens at the appointed hour.
Mr. Alec Woodall: Do the hon. Member's constituents who receive their pension and benefits weekly often run out of money, like mine, before they have run out of week?
Mr. Penhaligon: I suspect that that is so. We did not supply weeks in the sub-post office. The Government cannot get away with this. There are only two ways to save money. One is to close sub-post offices and the second is to reduce the amount of pay given to sub-postmasters for carrying out a service. One of the ironies about being a sub-postmaster is that one is on duty for 40 hours a week, whether or not one is doing business.
Mr. Douglas Hogg rose—
Mr. Penhaligon: If the Minister wishes to save money and to reduce the work content he will not simply close the sub-post offices that the Post Office give instructions to be closed; he will go further and close some sub-post offices simply because they are no longer economic to run.
Sub-postmasters have no contract; they are paid for results. I recollect, as a sub-postmaster, the time that national insurance stamps were scrapped. Few other groups have been similarly treated. They are too responsible to strike. To the present Government, they seem a sitting target for what are minor economies.
Mr. Nicholas Baker: rose—
Mr. Penhaligon: I cannot give way to the hon. Gentleman. If the elderly are forced to go to the nearest town to collect their cash and forced to incur expenditure going there, it is obvious that they will spend that money in that town in order to recover some of the loss of the forced journey. That money will not, therefore, be spent in the village. It will not be spent on the estate. The argument is the same. If the money is spent in the town, the local shopping community will be destroyed.
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The Government may save money, but they are looking to save money from the disabled, from the retired and from the unemployed. I humbly submit that if the Government are looking for areas in which to save money, those three categories do not quickly and obviously come to mind. This is a disgraceful proposal. What the Secretary of State said did not give me one iota of reassurance. If the right hon. Gentleman wishes to reassure the elderly and the sub-postmasters and sub-postmistresses, he need only come to the Dispatch Box and say "We were looking into this. I have now given instructions to stop it". That is all that is required.
5.55 pm
Mr. Paul Dean: Two sensitive issues have combined to produce fears and anxieties. The close link between the payment of pensions and the future of sub-post offices, particularly in rural and suburban areas, has been clearly demonstrated. Rumour and speculation have fed upon each other. People have assumed that the Rayner axe is about to fall. Such has been the unhappy story so far. It has proved yet again that politics are more than economics and that we have to remember the natural reactions and emotions of people.
I believe that my right hon. Friend, in his speech today, has gone a long way to dispel the fears and to remove the fog surrounding the issue and to reassure both pensioners and sub-postmasters.
The village post office is a vital hub of activity in many villages and is often also the village shop. Neither would be viable in many cases without the other. It would be a false and short-sighted economy to drive this traditional British institution out of business. The Western Daily Press, one of my local newspapers, put the matter concisely in a leading article on 16 February, when it said:
"We have lost too much from our villages already, with children being transported to distant schools: lost bus services; even closed churches and inns. The survival of the post office is the best hope for the revival of other amenities."
That is very effectively put. Were these closures to happen, there would be problems for pensioners who would have to go further to collect their pensions. This would involve greater expense with all

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the inadequacy of rural transport services and the additional cost in fuel.
I welcome the reassurance by my right hon. Friend in his speech and the possibilities that he opened up of new business for the post offices through the Giro and the payment of fuel bills. If the leaks from the Rayner report have done nothing else, they have at least enabled my right hon. Friend to open up new possibilities for new business for our rural and suburban post offices.
On the payment of pensions, the essence, in my view, is that there should he greater freedom of choice but not compulsion. I can see that it makes good sense that the pensions of those with bank accounts should be paid direct into those accounts if the recipient so wishes. I can also see considerable benefit for many people to receive payment by Giro and other credit account arrangements if they so choose.
I suggest, however, that matters should stop there, at any rate for the time being. We should see how many people take advantage of the new arrangements, the savings that accrue and the difficulties that may arise.
We must remember that there are still many pensioners and others who budget on a weekly basis and who wish to collect their money each week from the post office. The Government would be wrong to stop that. I do not care for the idea of compelling some to draw their money fortnightly, while others are allowed to draw it weekly.
I do not accept that the payment of unemployment benefit on a fortnightly basis is a good analogy. Unemployment benefit is paid on a fortnightly basis because people sign on on a fortnightly basis.
It would be difficult to know where to draw the line between those paid fortnightly and those paid weekly. How could there be a hard and fast rule which would be sufficiently sensitive to the variety of circumstances and conditions that obtain?
What about the widow who receives supplementary benefit for the first time? She is distressed, confused and probably has had no previous contact with the social security system. Is she to be paid fortnightly? I doubt whether that would be an effective arrangement for her.
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If we follow that road, there is a real risk of invidious comparisons being drawn in streets and in villages between those paid weekly and those paid fortnightly. If we tried to draw such a line, vulnerable people would be paid on a fortnightly basis. If that were to happen, I fear that the savings would be quite small because of the additional problems that would be created for those people and which would have to be picked up by the social security system.
I suggest to my right hon. Friend that it would be better to take one step at a time. As a first step, let us offer a wider range of choice to pensioners. We should find ways to bring new business to the sub-post offices. Both of those suggestions are in the Government amendment. Both were emphasised by my right hon. Friend in his helpful and sympathetic speech when he opened the debate. On those grounds I shall have no hesitation in voting for the Government amendment.
6.2 pm
Mr. Donald Stewart: In spite of the statements made by the hon. Member for Somerset, North (Mr. Dean) in favour of the Government amendment, he, together with many of his hon. Friends, have made a case for the Opposition motion. They were all at great pains to point out how disastrous it would be if the present position were changed. They stressed how many people were dependent on weekly budgeting. The message received so far in the debate, apart from the speech of the Secretary of State, is, in modern parlance, "It's not on".
Even though the proposals have not yet been implemented, it is right for the House to send a shot across the bows of the Government.
Mr. Douglas Hogg rose—
Mr. Stewart: No, I shall not give way. Certain stringent actions taken by the Government at this time could be reversed when times are easier, if that time ever occurs. However, the proposed action would inevitably close rural post offices. It would be an irreversible action that would do a great deal of damage to the rural areas.

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Apart from one town, my constituency is rural in nature, with isolated communities. One person in four is over 65, as against one person in eight for the rest of Scotland. We face an exceptionally difficult problem. I know that other hon. Members face similar problems which would be exacerbated if the proposals were implemented. It is all very well for Sir Derek Rayner to make suggestions for saving money. It is interesting to note that although weekly, fortnightly or monthly payments would make savings, there is no suggestion that PAYE national insurance contributions should be paid monthly. That is money which is due to the Exchequer.
Mr. Patrick Jenkin: I wish to make it clear that the proposals in the report are not those of Sir Derek Rayner. They are proposals by a team of officials in my Department. They are, therefore, proposals for which I—and not Sir Derek—take responsibility. Sir Derek's role is that of an adviser. I wish to make that clear. I hope that the House will accept that.
Mr. Stewart: That statement makes the Government's position all the more responsible. As well as taking into account areas where economies could be made, they have a responsibility to consider what would happen to the social fabric of our rural communities if the proposals were implemented. They cannot consider such matters in isolation regardless of any proposals from their advisers.
I was amused by the thought—although it would not be true in my constituency —of many pensioners fiddling about between bank accounts. Most of them do not have bank accounts. When they receive their weekly pension every penny has already been allocated and committed. They cannot stretch their pension any further than a week. They must receive their payments weekly.
The Government's proposals would encourage the Post Office to close down rural post offices, and that is what it wishes to do. Anything that reduces the income of the sub-post offices would assist in that end. The Government must prevent that from happening.
It would be ridiculous to claim that the Government are running a vendetta against rural areas, but it is beginning to
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look that way with the removal of school transport, and so on. The proposals would be another nail in the coffin of the rural areas.
The Government appear to be an Administration without a heart or a soul. If they proceed with the proposals they will be an Administration without a head.
6.8 pm
Mr. T. W. Urwin: shall be brief because of the short time available to debate this important matter. I wish to remind the Minister, despite what he has said, that, since the Rayner proposals became public knowledge through the media, there has been an enormous volume of opposition. In my constituency—and I am sure this has occurred in other constituencies—there has been a steady flow of correspondence from not only sub-postmasters, but from those who would be directly affected if the proposals become effective—pensioners, widows and the disabled. That correspondence has built up in the last few days to batches of 200 letters at one time. If the Minister and his colleagues have not had that experience, I should be happy to send them my batches of correspondence so that they can read and understand the depth of feeling that exists among so many about the fact that the payment of pensions and social security benefits will be withdrawn from sub-post offices.
As many hon. Members have already said, the proposals threaten the viability of sub-post offices, and could put them out of business. I endorse the remarks of the right hon. Member for Western Isles (Mr. Stewart) about the dependence of pensioners on a weekly payment. They work to a tight budget, knowing full well in many cases that the money will be exhausted before the next weekly payment arrives.
To suggest that they should wait for two or four weeks between payments, and be compelled to open a bank account, is absolutely preposterous. I cannot imagine how Rayner, the Minister, or anybody else could arrive at such a conclusion in a mad bid to save a few pounds. It is the wrong area in which to seek cuts in public expenditure.
I suggest to the Minister that, instead of pursuing this course of action, the

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acknowledgement of a social responsibility and obligation to pensioners and other recipients of social security benefits would far outweigh any other responsibilities with which the Government have to contend. They should withdraw completely from, and forget for ever more any suggestion of any change in the existing system of payment of benefits.
6.10 pm
Mr. Tim Eggar: It is unfortunate that the debate is taking place today. Having heard the Secretary of State's remarks, it is unfortunate that the idea ever spread that the Government were intending to force pensioners and others in receipt of benefits to receive the payments fornightly or monthly. Rumour and speculation have already caused distress to many thousands of the elderly throughout the country. That rumour and speculation has deeply concerned many sub-postmasters, who have seen their livelihoods threatened.
The way in which the Opposition have chosen to treat the subject is unfortunate. They have deliberately set out to frighten the elderly. They have deliberately set out to feed the rumours. They have done so although the National Federation of Sub-Postmasters has made it clear that the one thing that it does not want is for this to become a political issue.
I stress that I am broadly in sympathy with the Government's overall economic policies. I recognise that that support involves cutting public expenditure. I recognise also that it is no good Conservative Members supporting the Government's general economic policies while on every occasion trying to resist public expenditure restrictions.
I remember the advice that I was given by a Labour Member soon after I entered the House. He told me that if I wished to criticise the Government I should do so on the big issues and not on the minor ones. Why am I speaking in the debate?
Mr. Douglas Hogg: Why, indeed?
Mr. Eggar: The issue that we are discussing involves much more than the £50 million that will be saved during the year. It goes much further than that. It calls into question the Government's attitude. The way in which the issue has been approached and handled is symptomatic
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of an attitude and approach to governing that, if it is permitted to continue, will go far to undermine the Government's economic strategy and the Government themselves.
There are two major criticisms of the Government's treatment of the Rayner proposals. The first is that the proposals were allowed to reach the Floor of the House without the Government previously having explained their viewpoint. The second criticism is that any undermining of the sub-post office network goes contrary to the Conservative belief in the family, the community, and the support of small business men.
In May the Government received a mandate to cut public expenditure. Despite that, we have to rule with the consent of the electorate. We must carry the people with us. If the voters do not understand, or do not have explained to them, the reasons for the measures that we are taking in relatively small areas—such as the one that we are discussing—in our efforts to restrict public expenditure, they will begin to doubt not merely that Government proposal but the Government's overall economic policy.
There is a danger that we are forgetting that there is a reverse side to the Conservative approach—a side that stresses the need for a reduction in public expenditure. I refer to the approach that stresses the importance of self-help, of family life and of the community. It is not much good if, in our enthusiasm to save public money, we destroy the social fabric and the way of life that prospered well before the explosion in State expenditure that was brought about by Governments of both the main parties in the past 20 years.
In many areas in my urban constituency—I do not represent a rural area—I sec the way in which the local sub-post offices provide a valuable social and economic function.
Mr. Douglas Hogg rose—
Mr. Eggar: No, I shall not give way to my hon. Friend. I know that other hon. Members wish to participate in the debate.
In most areas the sub-post offices are providing the only remaining local general stores. They are important local meeting places. They are a source of local

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information that is second to none. They are an unseen and unsung corner of an efficient system of self-help and mutual help in the community that is preferable to visits to DHSS offices.
The importance of sub-post offices to the community may best be judged by the number of people who consciously prefer to collect their pensions at a sub-post office, even if a Crown office is nearer to them. They can be judged also by the public outcry that follows when any sub-post office is threatened with closure. For many people the sub-post offices, even in the urban areas, are the centres of communities. They are centres of community life that would disappear if the sub-post offices were not present. They are worthy of our support.
Despite those submissions, I support the Minister's argument that pensioners and child benefit recipients should have the right to be paid fortnightly or monthly. However, there must be choice. Many pensioners in my constituency could not manage on other than a weekly budget. I accept the argument against transporting large sums of cash throughout the country to sub-post offices. However, if we wish to break the extraordinary British habit of weekly budgeting and the use of cash, we should do so by introducing an amendment to the Truck Acts. We should not start by altering the basis of payment to those who are in retirement.
I welcome the Minister's commitment to the continued viability of the sub-post office network. I hope that I detected a strong undertaking from the Minister that he will not do anything to undermine the viability of the present network. I merely say to the Government that there is always a danger that we shall win all the battles but finally lose the war.
Mr. Speaker: I remind the House that the Front Benches have agreed that they will not seek to catch my eye until 6.38 pm. If hon. Members make five-minute speeches I shall be able to call four more hon. Members to participate in the debate.
6.17 pm
Mr. Robert Kilroy-Silk: In common with my right hon. and hon. Friends, I am against any move on the part of the Government that will weaken
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the system of weekly payments to pensioners, to mothers and to other benefit recipients.
The Secretary of State made great play of the Government's amendment, which states that the proposals are
"intended to give recipients a wider choice as to the method of payment and to save administrative costs".
To widen the area of choice would seem to be an acceptable objective. However, by giving choice to some—by definition the "some" will be a minority, the relatively rich recipients of pensions and social security benefits who will want their pensions and benefits paid at other than weekly intervals—we shall limit the choice that is available to others.
In the first instance, there would necessarily be a loss of business to the sub-post offices. If a significant number wish to exercise their option to have other than weekly payments, that will have a significant impact on the viability of sub-post offices. If there were large savings and a sufficiently significant impact, the viability of sub-post offices would be threatened. Therefore, the choice open to the majority who want weekly payments would not exist.
Mr. W. R. Rees-Davies rose—
Mr. Kilroy-Silk: As many hon. Members have said, sub-post offices in urban areas as well as rural areas provide an essential service. They are the hubs around which the whole community thrives. In the urban areas in my constituency, and in the rural areas, of which there are many in my constituency, the village shops and all that goes with them exist only because within the same premises are sub-post offices. if the sub-post office is threatened by the payment of benefits other than at weekly intervals the shop is threatened and with it the rapport, the ethos and the atmosphere of that area.
Already 6,000 sub-post offices have closed. The number is now down to 21,000 and 3,000 more are threatened by the Government's proposal. There is another important aspect of the issue. If it were accepted that people should now have freedom of choice to exercise the option to have benefits paid other than at weekly intervals it would not

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only damage the viability of the post Office; it would also mean that any future Government could say that there would be harmonisation and rationalisation of the system. Having forced in this thin end of the wedge it would be very much the prerogative of a future Government to say that the system should be extended because only a minority of people were being paid benefits on a weekly basis.
The Secretary of State did not give any assurance to my hon. Friends and his hon. Friends who insisted on a guarantee that those who wished to continue with weekly payments would get them and that they would not be compelled to do otherwise. It is all right to widen choice —albeit at the expense of the many for the benefit of the few—but it is not acceptable if the widening of the choice for the few eventually implants in the minds of future Ministers the use of compulsion to ensure that the minority who want weekly payments should now comply with the new system of payment into the bank. I do not say that that is in the mind of the Secretary of State but it might happen in future.
Many of the constituents of hon. Member's on both sides of the House cannot manage other than on weekly payments. Pensioners have already been clobbered by increases in VAT, the price of gas, rates, and all the other changes brought on by inflation. They cannot manage without weekly benefit payments. That also applies certainly to the vast majority of my constituents who receive child benefits. They need that money each week. The week is long enough as it is without their being threatened by the Secretary of State that benefits will be paid out over a longer period and paid into a bank account.
Those people have already been clobbered enough by this Government by the prospect of paying more for transport and school meals for their children; by having to pay increased prescription charges and increases in prices in every conceivable sector. Those increases are the result of the deliberate policy of the Government. It ill becomes the Secretary of State, therefore, to propose to clobber them even further by suggesting that in future they will not receive child benefit payment weekly.
This Government have already cheated the pensioners out of the increase
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that they would have received under the Labour Government. The Government have cheated them out of the increase that they should have received had the Government made correct assumptions about the levels at which earnings would increase this year. Pensioners have been swindled dramatically by this Government. They should not, along with those in receipt of child benefit or other social security payments allow themselves to be swindled by these proposals. My hon. Friends will oppose this, as we would have done had a Labour Government brought forward such proposals. I hope that Tory Members will similarly have the courage of their convictions.
6.23 pm
Mr. Dudley Smith: It is admirable that the Government should seek to improve the public service by making it more efficient, but I think it is rather unwise to start a hare running such as this one that has caused a great deal of anxiety to those affected. Public discussion about possible ideas is one thing but suggestions that there may be implementation of policy is entirely another.
I was worried to hear my right hon. Friend speaking about the part played by Sir William Barlow the chairman of the Post Office. If Sir William Barlow has made the speeches my right hon. Friend suggested he has made I believe that he has acted reprehensibly. I support the idea of wider choice in methods of payment and support the Government's amendment. I regret that it was necessary for the Opposition to bring forward this motion today. But I do not blame them. They are playing politics with the issue. However, I do not think that the motion would have been necessary had the problem been handled better from the start.
Any suggestion that we should move even gradually toward the payment of pensions and other benefits on a monthly, or even fortnightly, basis must be resisted particularly where rural areas are concerned. I must tell my right hon. Friend that if this proposition comes before the House I will not give the proposal my support.
I wonder sometimes whether the bureaucrats and the efficiency experts live in the same world as ordinary people.

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Certainly I wonder whether they live in the world of those who are confined to rural areas. Our rural areas are part of our heritage and they have been badly undermined by successive Governments over the last 30 years. If we believe in anything, surely we must believe in preserving and stabilising village life.
It is true that the villages have changed considerably in recent years because of weekend residents, but there are still large numbers of people, many of them old, still living in the villages. Surely it is realised that changes of the type originally mooted would be impractical anyway. Few villages nowadays have even the tiniest branch of a bank and most of them have an unreliable bus service or no bus service at all. Surely it is realised that the sub-post office is much more than a cash counter; much more than a paying-out machine. Sub-post offices are nearly always the focal point of the village and they combine many other services alongside that of being a shop.
I had a letter this morning from one of the sub-postmistresses in my area. She said
"I am in close contact with my pensioners and often I am the only source of advice."
In those circumstances I hope that these proposals will be forgotten after this debate. Sub-post offices provide excellent facilities, though I believe that the Post Office would like to see large numbers of rural post offices phased out. I am not impressed by that idea, because I do not admire the judgment of the Post Office which in so many other respects has proved to be fallible. I hope that my hon. Friend the Minister of State, Department of Industry (Mr. Butler) will call Sir William Barlow to account over this issue.
Let us by all means bring in new business to the rural sub-post offices—
Mr. Rees-Davies rose—
Mr. Smith: No, I cannot give way because I have promised to make my speech short. Let us by all means bring in extra business to the sub-post offices and let us do all we can to help rural populations where life is very different from the life which is lived in Whitehall. While we are reforming, preaching
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efficiency and cutting out waste—a policy I fully support—can we at the same time apply the principles of common sense?
6.27 pm
Mr. John Maxton: The debate so far has concentrated on the problems of the rural areas. There have only been passing references to the towns and to smaller council schemes. I think that the House should be aware of the dangers to the large council house schemes in our industrial cities that are posed by these proposals.
One of the largest council house schemes in Europe, with a population of 38,000, is in my constituency. Taking supplementary benefits, child benefits and old-age pensions together, I would have thought that almost 60 per cent. of those people will be receiving benefits in some form or another. Within that area there is not one bank to serve a population of 38,000. For the payment of their benefits those people, therefore, rely absolutely on the sub-post offices.
I received a letter from a sub-postmaster in one of the poorest parts of that area. I have not managed to check his figures, but he says that 85 per cent. of his income comes as a result of the payment of benefits to people in the area. It would need only a small number of those people to decide that they would use banks and have their benefits paid fortnightly to make his business non-viable. He would have to give up. It is not a matter of his being told by the Post Office that he would have to give up. He would have to give up because he could not operate—there would be no profit in it for him.
My correspondent made the point that he is one shop in a row of 10. He said that if his shop, as a sub-post office, closed because it was no longer viable, the people who received benefit from him would no longer be able to shop in the other nine shops. They would have to go elsewhere, outside Castlemilk altogther, in order to obtain their money. As a result, they would also do their shopping elsewhere. Therefore, not only the sub-post office but a large number of the other shops would close. A major social benefit would be taken away if sub-post offices in such areas were to close.
I am trying to be brief, because I am well aware that other hon. Members wish

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to speak. We should bear in mind the problems associated with large housing schemes where, let us be honest, private enterprise has failed to provide basic services. In the area to which I have referred, there are no banks, and the shops are of a poor standard compared with the chain stores. Incidentally, there is no Marks and Spencer's to serve the population of 38,000. There are no cinemas, theatres or bingo halls. There is very little.
The sub-post offices provides a valuable service in those circumstances. What people in areas such as that want is not fewer sub-post offices but more. I recently received a petition from several thousand people asking that another shop in the area be given the right to have sub-post office facilities. I therefore urge the Minister to bear in mind the problems associated with the large housing schemes within our bigger urban areas.
6.31 p.m.
Mr. Paul Hawkins: I shall try to be brief, Mr. Speaker. I am grateful to you for calling me. The importance of sub-post offices is recognised by everyone. I represent an enormous rural area, which has 120 villages. I should like to stress two things. Village post offices and the shops that go with them are viable only if people shop in them. That point must be remembered, because people are inclined only to buy the last packet of fags on a Saturday night there and to do all their other shopping in the supermarket, 10 or 11 miles away. That is how people can assist in helping their own sub-post offices.
I entirely agree with my right hon. Friend that we must find out all the ways of cutting out waste and unnecessary expenditure. I do not agree with my hon. Friend the Member for Warwick and Leamington (Mr. Smith) that we cannot find ways of giving sub-post offices extra jobs to do while at the same time cutting out the undoubted waste that exists in the Post Office system. One way would be to allow sub-post offices to sell road fund licences. I have never been able to understand why that has not been done, and I hope that that possibility can be explored by the Department of Transport.
I should like to ask my right hon. Friend whether Sir William Barlow and the Post Office are paying out to sub-post offices a fair share of the £132½ million
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that they receive from the DHSS. That information must be found out in order to ensure that sub-post offices receive their fair share of the total sum that is paid to the Post Office.
A point that is often forgotten is that many rural areas—there are several villages in my constituency alone—are without any post offices at all. The idea of paying by cheque or paying monthly could help those villages considerably. As has been pointed out, the cost of transport from such a village—generally they are the smallest villages situated a long way from a small market town—is more than £1. If payment could be made fortnightly or into a bank account, I believe that would help those who live in such villages. We always try to get sub-post offices to re-open, but without a big enough community they are just not viable.
The Government have done the right thing in moving the amendment, which I shall certainly support. However, we must find ways and means of modernising and returning to the village some of the life that has been lost through losing the parson, the shops and perhaps some of the bigger farmers. We must try by all means possible to return life to the village. One way is to support the village post office, which is of such a great help to the community.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that it is hoped to start the winding-up speeches at 6.38 pm.
6.35 pm
Mr. Kenneth Marks: I seem to be setting the standard for being called immediately before the Front-Bench speakers. When last I spoke I was allocated four minutes, and today it is three. Having listened to some of the speeches by Conservative Members, and read again the early-day motions which they signed, I am amazed that they can go into the Lobby with the Secretary of State tonight.
The Government must learn that the combination of cuts in public expenditure and the play of free market forces means that certain groups in the community make more sacrifices than others. They are the groups who can least afford it, such as less-well-off old people, the

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disabled and parents with young families, especially those families who have one parent working for below average earnings.
There are a number of aspects to this problem. Transport is one of them. Car ownership is fine for those who have cars. It is convenient and logical to use them. But it means that bus services, particularly in rural areas, are reduced, and those who cannot afford cars can no longer afford the bus fares, even if there is a bus service left. Shopping has also been mentioned. The better-off can buy weekly in supermarkets and can go by car. They can use freezers. But the extension of that kind of shopping means that small village shops either close or put up their prices. It is the same group of people who must pay the higher prices.
The problem of sub-post offices applies equally to towns; it is not confined to villages and suburban areas. The three-quarters of a mile journey to a sub-post office in a city area can be extremely hazardous for old people. To us, sub-post offices may just be places where we can buy stamps and the occasional greeting card, but to old people and others they are the link with the community. They are their advice centres on national bureaucracy, and they mean much more to such people than they do to the rest of us.
It has been argued that 60 per cent. of people would be quite happy to have their pensions paid monthly. I do not doubt that. I am sure that when hon. Members come to draw their parliamentary pensions they will say "Pay it into the bank". But by doing so we deprive those who have lived on weekly earnings all their lives. There are those of us who have done the switch from weekly wage to monthly salary, be it for promotion purposes or whatever. That switch is hard at first, because there is too much month at the end of the money. But, as some of my hon. Friends have pointed out, we are talking about people with too much week at the end of the money.
The Secretary of State has not been clear about where the proposed £50 million cuts will come from. He has said that there will be no significant closures, but we do not know what "significant" means in that context. I urge him to re-
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think the whole matter. He should recognise the importance of the sub-post office, even if it is not the absolutely efficient place which everyone would hope it to be. He should remember that what is convenient and logical for us can spell disaster for the people about whom we are talking. I assure the Secretary of State that we shall keep a very close eye on him.
6.39 pm
Mr. J. W. Rooker: The speeches of Conservative Members have shown that this has been an admirably suitable subject for debate. It is quite clear that the Secretary of State has had a drubbing from his own Back Benchers. Incidentally, he has sought through interventions to make something of a scapegoat of Sir William Barlow and to downgrade the work of Sir Derek Rayner.
I do not believe that any hon. Member can accept that it is fair and just to give a so-called freedom or wider choice to a minority of people which has the consequential effect of removing a freedom —namely, that of using the local sub-post office—from the majority of our citizens. That is an unacceptable arrangement to the Opposition and to many of the Government supporters who spoke. It is unacceptable to a vast array of bodies in this country, including the National Consumer Council, which wrote to every Member of Parliament. That is the record.
Mr. Patrick Jenkin rose—
Mr. Rooker: I shall give way only once.
Mr. Patrick Jenkin: I understand the hon. Gentleman's reluctance to give way. He is speaking from the Front Bench. Speaking from the Government Front Bench before the election, his right hon. Friend the Member for Salford, West (Mr. Orme) said:
"I am much in favour of the principle, and the introduction of such an arrangement would cover child benefit as well as retirement pensions."—[Official Report, 6 March 1979; Vol. 963, c. 1078.]
Is the hon. Gentleman now entirely resiling from that?
Mr. Rooker: I expected that. In the words of the present Chief Secretary to the Treasury—[HON. MEMBERS:

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"Answer the question."] I do not have to answer the question. My right hon. Friend made it clear. We were not talking about the same issue. We were not talking about compulsory fortnightly payments of old-age pensions and compulsory monthly payments of child benefit. They are two separate issues. The Secretary of State knows that. A record number of early-day motions were tabled by hon. Members on both sides of the House on this subject. At the last count, eight had been tabled. There is one tabled by Scottish Members today. That shows that the matter is highly charged. Our constituents are aware of it.
The Secretary of State was a little less than fair when he started to talk about how he would secure the savings. If the average payment for a transaction in a post office is 7p or 12p—it was 12p according to one parliamentary answer that I received—it does not matter. The answer, to save that money, is to put the burden on the individual citizen who cannot keep £100 in a bank account and who will be forced to pay 20p for every transaction. The savings will come from the poor and needy, who will be forced to use a system not of their own choice.
If Government supporters are in any doubt about whether there will be freedom of choice for the majority of pensioners, they need to look only at the exchanges at Question Time on 29 January, when the Under-Secretary of State for Health and Social Security, in answer to a question by the hon. Member for Brentwood and Ongar (Mr. McCrindle), said:
"Other people may need to adapt to a different payment period that will strike a better balance between their wishes for fairly frequent payment and the needs of taxpayers who have to foot the bill."—[Official Report, 29 January 1980; Vol 177, c. 1106.]
If that is not an indication of compulsion, I do not know what is. That is what is proposed for pensioners.
The Secretary of State gave examples of people who did not collect their child benefit for weeks on end. There are examples in every hon. Member's constituency, certainly in my own, of mothers with one child, who collect only £4, queueing up at sub-post offices at 8.30 am, half an hour before they open. There are many occasions when constituents
310
have come to me at holiday time—especially at bank holidays, including Christmas—telling me that they received a double payment of their old-age pension. They argued with the sub-postmaster that they did not want a double payment that week because of the problems it caused their family budget and the security risks involved.
This is not a rural problem. There are urban villages in our great cities where one sub-post office, whether in a grocer's or a draper's shop, can mean viability for that shop and for half a dozen other shops as well. Without the sub-post office, the other shops will not have customers. They will close. That will lead to urban decay and to the growth of the multiples. People will have to go to the multiples for the sub-post office function.
Recently this winter in Birmingham every sub-post office co-operated with the local authority social services department in distributing a leaflet to pensioners, the elderly and the disabled on how to get through the winter. That was done free of charge. A copy was received by every person who needed it. There was no charge by the sub-postmasters. That important social service will not be available if there is a diminution in the number of sub-post offices which must carry an extra work load. There may be a diminution of Crown post offices. We have not talked much about that today. However, there could be a spin-off effect on to the Crown post offices. This is not just a village problem in the rural areas. It is also a major problem in the urban areas.
Pensioners may now be paid, if they wish, at four-weekly or 13-weekly intervals. Many, not the majority, are paid in that way under the social security claims and payments regulations 1979. The assessment of the advice I am given from the Library is that it would be necessary to amend the regulations if the Government wanted to stop weekly payments. It seems that they already have the power to make monthly payments through bank accounts as an option. However, I have a feeling that after today we shall not hear too much about this issue. This will be one of the matters that slip to the bottom of Ministers' in-trays. It is clear from the speeches of some Government supporters that these proposals will not be passed.

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We heard a lot about the attitude of Sir Derek Rayner. He said that he did not propose to close any post office. He said that that was not his job. It is neither the job of the Government nor that of the Post Office to close sub-post offices. The decision to close a sub-post office is that of the sub-postmaster. That is not within the sphere of the Government to organise.
I do not know how the Government have the effrontery to propose an amendment to the Opposition motion, claiming that there will be loads of new business for the State bank, the National Giro, and work for the State fuel companies, the gas and electricity organisations, all of which have workers under threat. We presume that their own payments systems are efficient. If not, they would have been belly-aching before.
It is clear that there have not been many consultations by the Government on this matter. This has been hatched up as a result of Back Bench pressure, the lobby of sub-postmasters, who will come to the House tomorrow in vast numbers, the correspondence that hon. Members have received, and the petitions organised in the sub-post offices. The people in the country understand a threat. They do not need sanctimonious speeches of the type that they heard from the Secretary of State today, implying that the Opposition did not understand the problem. The people outside the House, the elderly and the disabled, understand the problem. This is a classic chance of being able to nip the matter in the bud.
The Secretary of State has not answered every question. He did not tell us from where the saving of £50 million would come. If the Government had done their work properly, they would know on what basis the saving of £50 million would be made. They would know the possible percentage take-up and how much of the savings would come from the workers, many of whom are part-time women workers in sub-post offices. They would know what the savings would be from rent and rates and the cutback in civil servants at the DHSS.
Unless the Government can answer those questions, we shall know that this is a half-baked scheme, as one Government supporter described it to the Prime Minister re-
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cently. The right hon. Lady replied that some half-baked schemes could become fully baked. The House does not often have the chance to nip in the bud a crazy half-baked scheme. The vote at 7 o'clock is a golden opportunity for us to do so. Even if the scheme were presented to the House half-baked, fully baked, dressed up like a turkey, wrapped in a Japanese kimono and with a free copy of Men Only, it would still be thrown out.
6.48 pm
The Minister of State, Department of Industry (Mr. Adam Butler): The motion is typical of an Opposition bereft of ideas. They thought that they saw disarray on the Government Benches. They therefore put down a highly opportunistic motion. But like many opportunists, they have ended up with egg on their faces; and in the process they have caused a great deal of unnecessary alarm outside the House among sub-postmasters and postmasters.
There were some serious contributions from the Opposition, but most of the serious contributions came from Government supporters, who spoke eloquently and with experience about the important part that the village post office, and those in certain urban areas, play in the community.
I also speak with some experience because Bosworth, despite its industries, has many village post offices whose staff have written to me as others have written to my colleagues. In addition, I have lived for more than 20 years in a small village of some 400 souls. So I have a double experience in this matter. I do not therefore need any lectures from the Opposition on this, nor charges from the hon. Member for Truro (Mr. Penhaligon) that the Government want to destroy villages—what a ridiculous and unsubstantiated accusation.
The village is an essential part of our national life, and I suggest that local planners have a special responsibility to ensure that villages are given a chance to prosper. They should make a conscious effort to ensure that villages are of a viable size to survive with a population to support a village shop, a village hall, a church—this is a random order of priorities—and a pub. These things are essential to give a village a life of its own, to make it self-sustaining and to

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persuade people who wish to use it purely for commuter purposes to live in it properly and make their contribution to it.
However, it cannot be denied that in the smaller villages, and in some urban areas, the local post office is struggling and, even in combination with a shop, the income it provides is too low. In urban areas, residents are attracted away to the town centres and it is the elderly, the carless, and the mothers with young children at home who have to patronise the local store. Yet there are dedicated sub-postmasters and sub-postmistresses who continue, in the face of these financial difficulties, to serve the public; and we must do our best to support these men and women.
One of the benefits of high fuel costs is that out-of-the-way shops and post offices have gained business. They have benefited, too, from the special prices of the bulk wholesale groups, and so their prices now stand better comparison than they once did with those of the town centre supermarkets. This at least provides them with one reason for hope. Nevertheless, they are under pressure. The fact is that 15 per cent. of sub-post offices are on the Post Office's minimum scale-payment. For one-third of these, it has been possible to find takers by agreeing special conditions, such as shorter than normal opening hours. It is also true that over the last three years the Post Office network has been reduced by some 400 sub-post offices. Against this background, any change affecting the income of sub-postmasters and sub-postmistresses, and the lives of the local communities, must be considered very carefully indeed.
Yet the starting point has to be the potential savings of any change in arrangements; and the choice to those who receive benefits which is so mocked at by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and many of his colleagues, the choice which should be available to the individual and which is presently denied. However, we know well that the right hon. Member for Salford, West (Mr. Orme) accepted in principle that this choice should be given.
The weakness of the Opposition motion is that it displays the rigidity of the Socialist approach. Apparently nothing must change. There is, according to the
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right hon. Member for Salford, West, an overwhelming case for things to remain as they are. So the Opposition demand that all benefits must be paid weekly, regardless of the fact that two-thirds of wage-earners are now paid monthly, and that unemployment benefit is paid fortnightly. It was they who brought in the pilot scheme regarding fortnightly unemployment benefit payments in the full knowledge of the consequences of this in possible loss of revenue to sub-post offices.
That is why the motion is so opportunist. The Opposition sought to exploit our concern and mistook a sincere anxiety in our ranks for dissension. How wrong they will prove to be when we vote tonight!
Mr. Rooker: Will the hon. Member give way?
Mr. Butler: I am sorry, I have no time.
There is no mention in the motion of cost savings, athough that was the philosophy of the Labour Party when it was in government and still is as it continues in opposition today. As the Leader of the Opposition made absolutely clear to me on steel matters, it did not matter a tuppenny damn to him whether the taxpayer had to find another £10 million or £20 million. That is an attitude of mind which we are not prepared to adopt.
We welcome the opportunity to have administrative costs in the operation of the social security system. However, this must not prejudice the sub-post office network; we must ensure its continuance. It is the job of the Post Office management to run the network and it has to come to the best commercial arrangements it can, but if the Rayner proposals are to be brought in—and no decisions have yet been taken—the Government must and will examine what ways exist of finding replacement income.
My hon. Friends mentioned some of the possibilities. Certainly we have to consider whether we should change the 1969 Act, as my right hon. Friend said, to allow the sub-post offices to deal as agents with the bills from nationalised industries. My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) asked about vehicle licensing. This is something which my right hon. Friend the Minister of Transport is actively considering at the moment. I do not believe

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that this will bring a vast amount of extra business, because not every sub-post office will be able to deal with vehicle licensing, but if it were extended to another thousand or so it would help. We need to adopt an imaginative approach. Fuel stamps have been mentioned. The sale of Government stock is another possibility, together with the sale of lottery stamps. Those who have any breadth of imagination would agree that all these matters should be examined.
My right hon. Friend has made it clear that we have every intention of ensuring the continuance of the sub-post office network, but it will need an effort from all concerned, including the Post Office and sub-post offices; and the Giro bank where there is scope for an increase in activity. There must be an effort by the Post Office to compete for additional business on commercial terms.
Local communities must also have regard to their sub-post offices. It is within the power of the local authorities, and indeed of the parish councils, to make money available to ensure the future of sub-post offices in their local community. If a local community believes that it is essential to retain a particular sub-post office, then surely it is not unreasonable to ask that local community itself to make a contribution to what it believes
—and rightly—to be one of its social assets.
Mr. Eggar: Is my hon. Friend saying that, because he is going to undermine the viability of the present sub-post office network, the local authorities will have to pick up the bill?
Mr. Butler: I was delighted to give way to my hon. Friend because he made a very good contribution two hours ago. I have made it clear that we shall not undermine this network. The amendment says that we will ensure the future of the network. However, I say again that it is not an unreasonable proposition that, as with rural buses, the local authority should be asked to make a contribution to ensure the continuance of a social asset.
The Government have not made any decisions on the Rayner proposals. As my right hon. Friend has said, before any decisions are made there will be full and proper consultation and a debate in the House.
I commend the amendment to my hon. Friends.
Question put, That the orginal words stand part of the Question:—
The House divided: Ayes 269, Noes 317.

Division No. 190]

AYES

[7 pm

Abse, Leo

Cant, R. B.

Douglas-Mann, Bruce

Adams, Allen

Carmichael, Neil

Dubs, Alfred

Allaun, Frank

Carter-Jones, Lewis

Duffy, A. E. P.

Alton, David

Cartwright, John

Dunlop, John

Anderson, Donald

Clark, Dr David (South Shields)

Dunnett, Jack

Archer, Rt Hon Peter

Cocks, Rt Hon Michael (Bristol S)

Dunwoody, Mrs Gwyneth

Armstrong, Rt Hon Ernest

Cohen, Stanley

Eadie, Alex

Ashley, Rt Hon Jack

Coleman, Donald

Eastham, Ken

Ashton, Joe

Conlan, Bernard

Edwards, Robert (Wolv SE)

Atkinson, Norman (H'gey, Tott'ham)

Cook, Robin F.

Eggar, Timothy

Bagier, Gordon A. T.

Cowans, Harry

Ellis, Raymond (NE Derbyshire)

Barnett, Guy (Greenwich)

Cox, Tom (Wandsworth, Tooting)

Ellis, Tom (Wrexham)

Barnett, Rt Hon Joel (Heywood)

Craigen, J. M. (Glasgow, Maryhill)

English, Michael

Beith, A. J.

Crowther, J. S.

Evans, loan (Aberdare)

Benn, Rt Hon Anthony Wedgwood

Cryer, Bob

Evans, John (Newton)

Bennett, Andrew (Stockport N)

Cunliffe, Lawrence

Ewing, Harry

Bidwell, Sydney

Cunningham, George (Islington S)

Faulds, Andrew

Booth, Rt Hon Albert

Cunningham, Dr John (Whitehaven)

Field, Frank

Boothroyd, Miss Betty

Dalyell, Tarn

Fitch, Alan

Bottomley, Rt Hon Arthur (M'brough)

Davidson, Arthur

Flannery, Martin

Bradley, Tom

Davies, Rt Hon Denzil (Llanelli)

Fletcher, L. R. (Ilkeston)

Bray, Dr Jeremy

Davies, ifor (Gower)

Fletcher, Ted (Darlington)

Brown, Hugh D. (Provan)

Davis, Clinton (Hackney Central)

Foot, Rt Hon Michael

Brown, Robert C. (Newcastle W)

Davis, Terry (B'rm'ham, Stechford)

Forrester, John

Brown, Ronald W. (Hackney S)

Deakins, Eric

Foster, Derek

Brown, Ron (Edinburgh, Leith)

Dean, Joseph (Leeds West)

Fraser, John (Lambeth, Norwood)

Buchan, Norman

Dempsey, James

Freeson, Rt Hon Reginald

Callaghan, Rt Hon J. (Cardiff SE)

Dewar, Donald

Freud, Clement

Callaghan, Jim (Middleton & P)

Dixon, Donald

Garrett, John (Norwich S)

Campbell, Ian

Dobson, Frank

Garrett, W. E. (Wallsend)

Campbell-Savours, Dale

Dormand, Jack

George, Bruce

Canavan, Dennis

Douglas, Dick

Ginsburg, David

Golding, John

McNally, Thomas

Sandelson, Neville

Gourlay, Harry

McNamara, Kevin

Sever, John

Grant, George (Morpeth)

McWilliam, John

Sheerman, Barry

Grant, John (Islington C)

Magee, Bryan

Sheldon, Rt Hon Robert (A'ton-u-L)

Grimond, Rt Hon J.

Marks, Kenneth

Shore, Rt Hon Peter (Step and Pop)

Hamilton, James (Bothwell)

Marshall, David (Gl'sgow, Shettles'n)

Short, Mrs Renée

Hamilton, W. W. (Central Fife)

Marshall, Dr Edmund (Goole)

Silkin, Rt Hon John (Deptford)

Hardy, Peter

Marshall, Jim (Leicester South)

Silkin, Rt Hon S. C. (Dulwich)

Harrison, Rt Hon Walter

Martin, Michael (Gl'gow, Springb'rn)

Silverman, Julius

Hart, Rt Hon Dame Judith

Mason, Rt Hon Roy

Smith, Cyril (Rochdale)

Hattersley, Rt Hon Roy

Maxton, John

Smith, Rt Hon J. (North Lanarkshire)

Haynes, Frank

Maynard, Miss Joan

Snape, Peter

Healey, Rt Hon Denis

Meacher, Michael

Soley, Clive

Heffer, Eric S.

Mellish, Rt Hon Robert

Spearing, Nigel

Hogg, Norman (E Dunbartonshire)

Mikardo, Ian

Spriggs, Leslle

Holland, Stuart (L'beth, Vauxhall)

Millan, Rt Hon Bruce

Stallard, A. W.

Home Robertson, John

Miller, Dr M. S. (East Kilbride)

Steel, Rt Hon David

Homewood, William

Mitchell, Austin (Grimsby)

Stewart, Rt Hon Donald (W Isles)

Hooley, Frank

Mitchell, R. C. (Soton, Itchen)

Stoddart, David

Horam, John

Morgan, Geraint

Stott, Roger

Howell, Rt Hon Denis (B'ham, Sm H)

Morris, Rt Hon Alfred (Wythenshawe)

Strang, Gavin

Howells, Geraint

Morris, Rt Hon Charles (Openshaw)

Straw, Jack

Huckfield, Les

Morris, Rt Hon John (Aberavon)

Summerskill, Hon Dr Shirley

Hudson Davies, Gwilym Ednyfed

Morton, George

Taylor, Mrs Ann (Bolton West)

Hughes, Robert (Aberdeen North)

Moyle, Rt Hon Roland

Thomas, Dafydd (Merioneth)

Hughes, Roy (Newport)

Mulley, Rt Hon Frederick

Thomas, Jeffrey (Abertillery)

Janner, Hon Greville

Newens, Stanley

Thomas, Mike (Newcastle East)

Jay, Rt Hon Douglas

Oakes, Rt Hon Gordon

Thomas, Dr Roger (Carmarthen)

John, Brynmor

Ogden, Eric

Thorne, Stan (Preston South)

Johnson, James (Hull West)

O'Halloran, Michael

Tllley, John

Johnson, Walter (Derby South)

O'Neill, Martin

Torney, Tom

Jones, Rt Hon Alec (Rhondda)

Orme, Rt Hon Stanley

Urwin, Rt Hon Tom

Jones, Barry (East Flint)

Owen, Rt Hon Dr David

Varley, Rt Hon Eric G.

Jones, Dan (Burnley)

Palmer, Arthur

Wainwright, Edwin (Dearne Valley)

Kaufman, Rt Hon Gerald

Park, George

Wainwrlght, Richard (Colne Valley)

Kerr, Russell

Parker, John

Walker, Rt Hon Harold (Doncaster)

Kilfedder, James A.

Parry, Robert

Watkins, David

Kilroy-Silk, Robert

Pavitt, Laurie

Weetch, Ken

Kinnock, Neil

Pendry, Tom

Wellbeloved, James

Lambie, David

Penhallgon, David

Welsh, Michael

Lamborn, Harry

Powell, Raymond (Ogmore)

White, Frank R. (Bury a Radcliffe)

Leadbitter, Ted

Prescott, John

White, James (Glasgow, Pollok)

Leighton, Ronald

Price, Christopher (Lewisham West)

Whitehead, Phillip

Lewis, Arthur (Newham North West)

Race, Reg

Whitlock, William

Lewis, Ron (Carlisle)

Radice, Giles

Wigley, Dafydd

Litherland, Robert

Rees, Rt Hon Merlyn (Leeds South)

Willey, Rt Hon Frederick

Lofthouse, Geoffrey

Richardson, Jo

Williams, Rt Hon Alan (Swansea W)

Lyon, Alexander (York)

Roberts, Albert (Normanton)

Williams, Sir Thomas (Warrington)

Lyons, Edward (Bradford West)

Roberts, Allan (Bootle)

Wilson, Rt Hon Sir Harold (Huyton)

McCartney, Hugh

Roberts, Ernest (Hackney North)

Winnick, David

McDonald, Dr Oonagh

Roberts, Gwllym (Cannock)

Woodall, Alec

McElhone, Frank

Robertson, George

Woolmer, Kenneth

McGuire, Michael (Ince)

Robinson, Geoffrey (Coventry NW)

Wrigglesworth, Ian

McKay, Allen (Penistone)

Rodgers, Rt Hon William

Wright, Sheila

McKelvey, William

Rooker, J. W.

Young, David (Bolton East)

MacKenzie, Rt Hon Gregor

Roper, John

Maclennan, Robert

Ross, Ernest (Dundee West)

TELLERS FOR THE AYES:

McMahon, Andrew

Ross, Stephen (Isle of Wight)

Mr. Ted Graham and

McMillan, Tom (Glasgow, Central)

Ryman, John

Mr. James Tinn.

NOES

Adley, Robert

Blaker, Peter

Butcher, John

Aitken, Jonathan

Body, Richard

Butler, Hon Adam

Alexander, Richard

Bonsor, Sir Nicholas

Cadbury, Jocelyn

Alison, Michael

Boscawen, Hon Robert

Carlisle, John (Luton West)

Amery, Rt Hon Julian

Bottomley, Peter (Woolwich West)

Carlisle, Kenneth (Lincoln)

Ancram, Michael

Bowden, Andrew

Carlisle, Rt Hon Mark (Runcorn)

Arnold, Tom

Boyson, Dr Rhodes

Chalker, Mrs Lynda

Aspinwall, Jack

Braine, Sir Bernard

Channon, Paul

Atkins, Robert (Preston North)

Bright, Graham

Chapman, Sydney

Atkinson, David (B'mouth, East)

Brinton, Tim

Churchill, W. S.

Baker, Kenneth (St. Marylebone)

Brittan, Leon

Clark, Hon Alan (Plymouth, Sutton)

Baker, Nicholas (North Dorset)

Brocklebank-Fowler, Christopher

Clark, Sir William (Croydon South)

Banks, Robert

Brooke, Hon Peter

Clarke, Kenneth (Rushcliffe)

Beaumont-Dark, Anthony

Brotherton, Michael

Clegg, Sir Walter

Bell, Sir Ronald

Brown, Michael (Brigg & Sc'thorpe)

Cockeram, Eric

Bendall, Vivian

Browne, John (Winchester)

Colvin, Michael

Bennett, Sir Frederic (Torbay)

Bruce-Gardyne, John

Cope, John

Benyon, Thomas (Abingdon)

Bryan, Sir Paul

Cormack, Patrick

Benyon, W. (Buckingham)

Buchanan-Smith, Hon Alick

Corrie, John

Best, Keith

Buck, Antony

Costain, A. P.

Bevan, David Gilroy

Budgen, Nick

Cranborne, Viscount

Biffen, Rt Hon John

Bulmer, Esmond

Critchley, Julian

Blackburn, John

Burden, F. A.

Crouch, David

Dean, Paul (North Somerset)

Kellett-Bowman, Mrs Elaine

Pym, Rt Hon Francis

Dickens, Geoffrey

Kershaw, Anthony

Raison, Timothy

Dorrell, Stephen

Kimball, Marcus

Rathbone, Tim

Douglas-Hamilton, Lord James

King, Rt Hon Tom

Rees, Peter (Dover and Deal)

Dover, Denshore

Kitson, Sir Timothy

Rees-Davies, W. R.

du Cann, Rt Hon Edward

Knight, Mrs Jill

Renton, Tim

Dunn, Robert (Dartford)

Knox, David

Rhodes James, Robert

Durant, Tony

Lamont, Norman

Rhys Williams, Sir Brandon

Dykes, Hugh

Lang, Ian

Ridley, Hon Nicholas

Eden, Rt Hon Sir John

Langford-Holt, Sir John

Ridsdale, Julian

Edwards, Rt Hon N. (Pembroke)

Latham, Michael

Rifkind, Malcolm

Elliott, Sir William

Lawrence, Ivan

Roberts, Wyn (Conway)

Eyre, Reginald

Lawson, Nigel

Rossi, Hugh

Fairbairn, Nicholas

Lee, John

Rost, Peter

Fairgrieve, Russell

Lennox-Boyd, Hon Mark

Royle, Sir Anthony

Faith, Mrs Sheila

Lester, Jim (Beeston)

Sainsbury, Hon Timothy

Farr, John

Lewis, Kenneth (Rutland)

St. John-Stevas, Rt Hon Norman

Fell, Anthony

Lloyd, Ian (Havant & Waterloo)

Scott, Nicholas

Fenner, Mrs Peggy

Lloyd, Peter (Fareham)

Shaw, Giles (Pudsey)

Finsberg, Geoffrey

Loveridge, John

Shaw, Michael (Scarborough)

Fisher, Sir Nigel

Luce, Richard

Shelton, William (Streatham)

Fletcher, Alexander (Edinburgh N)

Lyell, Nicholas

Shepherd, Colin (Hereford)

Fletcher-Cooke, Charles

Macfarlane, Neil

Shepherd, Richard (Aldridge-Br'hills)

Fookes, Miss Janet

MacGregor, John

Shersby, Michael

Forman, Nigel

MacKay, John (Argyll)

Silvester, Fred

Fowler, Rt Hon Norman

McNair-Wilson, Michael (Newbury)

Sims, Roger

Fox, Marcus

McNair-Wilson, Patrick (New Fotest)

Skeet, T. H. H.

Fraser, Rt Hon H. (Stafford & St)

McQuarrie, Albert

Smith, Dudley (War. and Leam'ton)

Fraser, Peter (South Angus)

Madel, David

Speller, Tony

Galbraith, Hon T. G. D.

Major, John

Spence, John

Gardiner, George (Reigate)

Marland, Paul

Spicer, Jim (West Dorset)

Gardner, Edward (South Fylde)

Marlow, Tony

Spicer, Michael (S Worcestershire)

Garel-Jones, Tristan

Marshall, Michael (Arundel)

Sproat, lain

Gilmour, Rt Hon Sir Ian

Marten, Nell (Banbury)

Squire, Robin

Glyn, Dr Alan

Mates, Michael

Stainton, Keith

Goodhart, Philip

Mather, Carol

Stanley, John

Goodhew, Victor

Maude, Rt Hon Angus

Steen, Anthony

Goodlad, Alastair

Mawby, Ray

Stevens, Martin

Gorst, John

Mawhinney, Dr Brian

Stewart, Ian (Hitchin)

Gow, Ian

Mayhew, Patrick

Stewart, John (East Renfrewshire)

Gower, Sir Raymond

Mellor, David

Stokes, John

Grant, Anthony (Harrow C)

Meyer, Sir Anthony

Stradling Thomas, J.

Gray, Hamish

Miller, Hal (Bromsgrove & Redditch)

Tapsell, Peter

Greenway, Harry

Mills, lain (Meriden)

Taylor, Robert (Croydon NW)

Grieve, Percy

Mills, Peter (West Devon)

Tebbit, Norman

Griffiths, Eldon (Bury St Edmunds)

Miscampbell, Norman

Temple-Morris, Peter

Griffiths, Peter (Portsmouth N)

Mitchell, David (Basingstoke)

Thomas, Rt Hon Peter (Hendon S)

Grist, Ian

Moate, Roger

Thompson, Donald

Grylls, Michael

Montgomery, Fergus

Thorne, Neil (llford South)

Gummer, John Selwyn

Moore, John

Thornton, Malcolm

Hamilton, Hon Archie (Eps'm&Ew'll)

Morris, Michael (Northampton, Sth)

Townend, John (Bridlington)

Hamilton, Michael (Salisbury)

Morrison, Hon Charles (Devizes)

Townsend, Cyril D. (Bexleyheath)

Hampson, Dr Keith

Morrison, Hon Peter (City of Chester)

Trippier, David

Hannam, John

Mudd, David

Trotter, Neville

Haselhurst, Alan

Murphy, Christopher

van Straubenzee, W. R.

Hastings, Stephen

Myles, David

Vaughan, Dr Gerard

Havers, Rt Hon Sir Michael

Neale, Gerrard

Viggers, peter

Hawkins, Paul

Needham, Richard

Waddington, David

Hawksley, Warren

Nelson, Anthony

Wakeham, John

Hayhoe, Barney

Neubert, Michael

Waldegrave, Hon William

Heath, Rt Hon Edward

Newton, Tony

Walker, Rt Hon Peter (Worcester)

Heddle, John

Normanton, Tom

Walker, Bill (Perth & E Perthshire)

Henderson, Barry

Nott, Rt Hon John

Walker-Smith, Rt Hon Sir Derek

Heseltine, Rt Hon Michael

Onslow, Cranley

Waller, Gary

Hicks, Robert

Oppenheim, Rt Hon Mrs Sally

Walters, Dennis

Higgins, Rt Hon Terence L.

Osborn, John

Ward, John

Hill, James

Page, John (Harrow, West)

Warren, Kenneth

Hogg, Hon Douglas (Grantham)

Page, Rt Hon Sir R. Graham

Watson, John

Holland, Philip (Carlton)

Page, Richard (SW Hertfordshire)

Wells, John (Maidstone)

Hooson, Tom

Parkinson, Cecil

Wells, Bowen (Hert'rd & Stev'nage)

Hordern, Peter

Parris, Matthew

Whitelaw, Rt Hon William

Howe, Rt Hon Sir Geoffrey

Patten, Christopher (Bath)

Whitney, Raymond

Howell, Rt Hon David (Guildford)

Patten, John (Oxford)

Wickenden, Keith

Howell, Ralph (North Norfolk)

Pattie, Geoffrey

Wiggin, Jerry

Hunt, David (Wirral)

Pawsey, James

Wilkinson, John

Hunt, John (Ravensbourne)

Percival, Sir Ian

Williams, Deiwyn (Montgomery)

Hurd, Hon Douglas

Peyton, Rt Hon John

Winterton, Nicholas

Irving, Charles (Cheltenham)

Pink, R. Bonner

Wolfson, Mark

Jenkin, Rt Hon Patrick

Pollock, Alexander

Young, Sir George (Acton)

Jessel, Toby

Porter, George

Younger, Rt Hon George

Johnson Smith, Geoffrey

Prentice, Rt Hon Reg

Jopling, Rt Hon Michael

Price, David (Eastleigh)

TELLERS FOR THE NOES:

Joseph, Rt Hon Sir Keith

Prior, Rt Hon James

Mr. Spencer Le Marchant and

Kaberry, Sir Donald

Proctor, K. Harvey

Mr. Anthony Berry.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House, recognising the importance of the sub-post office network in the life of urban and rural communities, insists that the Government, in making any changes in the system of paying pensions and benefits intended to give recipients wider choice as to the method of payment and to save administrative costs, ensures the continuance of that network, welcoming the Government's commitment to explore ways of bringing new business to sub-post offices, for instance through the National Girobank and wider opportunities for the payment of bills.

WEST MIDLANDS COUNTY COUNCIL BILL [Lords] (By Order)
Order for consideration of Lords reason for disagreeing to a Commons amendment read.
WEST MIDLANDS COUNTY COUNCIL BILL [Lords] (By Order)
  Clause 25

    ACUPUNCTURE
    [The Lords have disagreed to the amendment made by the Commons in page 21, line 1, after '1957' insert "or a registered member of the British Acupuncture Association and Register Limited", for the following reason: Because it is desirable to give the House of Commons an opportunity to reconsider the Amendment.]
    7.12 pm
    Mr. David Atkinson: I beg to move
    That this House doth insist on its amendment to which the Lords have disagreed.
    The House might have been forgiven for believing that it had seen the end of the West Midlands County Council Bill and for expressing surprise that it is the subject of further debate this evening. The matter at issue is clause 24 of the Bill. The West Midlands County Council proposed that persons who practise as acupuncturists should no longer carry on doing so unless they and their premises are registered with the district council. Failure to register would render acupuncturists liable to a fine of up to £200. Following registration they would then be subjected to district council byelaws which would aim to ensure standards of cleanliness of premises, equipment and persons employed.
    Without having to petition, doctors and dentists, whether or not they practised acupuncture, were granted an amendment by the county council exempting them from having to register or be subject to the byelaws. The British Acupuncture Association petitioned against the clause and sought the same exemption as doctors and dentists who practised acupuncture. Because the association was still in negotiation with the county council for that exemption when the Bill first went to the other place, it reserved its position until the Bill came before the

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    Commons Private Bill Committee, as it had every right to do.
    My interest in this matter is that I am the sole surviving member of that Private Bill Committee that met prior to the election and received the petition of the Association. For two days we heard evidence from the Association and the promoters of the Bill—the county council. We cross-examined both parties at length, received Government reports and submissions and unanimously concluded in favour of removing the exemption clause for the Association.
    When the Bill arrived at its consideration stage in the House last month, my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) proposed to amend clause 24 by removing this exemption of the Association, but his amendment was not selected by Mr. Speaker for debate. Thus the Bill, retaining the exemption for the Association, went back to the other place for consideration of Commons amendments two weeks ago. There, even though there had been a Commons amendment to clause 24, Lord Derwent moved a motion to remove the exemption which we, in Committee, had granted to the Association. It is for that reason that we are having the debate tonight.
    In my view, the motion from the other place has serious constitutional implications. The other place is asking this House to overturn a decision arrived at by a Private Bill Committee of this House. The other place has not had the benefit of the experience of our Committee in arriving at our decision. It should he remembered that we sat for two days cross-examining the petitioners and the promoters of the Bill and receiving evidence. The other place, after only 15 minutes, decided to reject our decision.
    Mr. Dan Jones: Do I interpret the hon. Member for Bournemouth, East (Mr. Atkinson) correctly? Is it a fact that the other place has interfered with a Committee of this House? Is it the principle of acupuncture or is it both?
    Mr. Atkinson: As I hope to make plain during the course of my speech, it is a little of each.
    The detailed examination in Committee, afforded by the Private Bill pro-
    324
    cedure, is the way in which Parliament provides petitioners with a right to seek redress of grievance and protection. It is a procedure which is judicial in character. It is an ancient right that this House has proudly defended through the centuries. In seeking to amend the Bill the other place now challenges the strong tradition and to remove the principle of comity here in our Bill that where a Private Bill Committee of one House has reached a positive decision—as in this case—the other place will not seek to overturn it. This is a challenge that is not without precedent.
    Lord Derwent, in the debate in the other place, said that the last occasion on which the other place agreed to disagree with an amendment approved by this House was in 1903. I need not remind the House of the events of a constitutional nature that followed in 1911. The Lord Chairman of Committees himself said in that debate in the other place, when referring to the decision that had just been made not to accept the amendment of this House that he had:
    "very considerable misgivings about the proposal … and its possible effect on future private legislation."
    Quite what lie meant by that I shall refer to later on.
    I should like the House to understand the reason for clause 24. It is the first acupuncture clause to come before Parliament. I should also like the House to understand the reason for the petition of the British Acupuncture Association and the attitude that we adopted in Committee. Clause 24 was promoted to safeguard the public from infection, following an outbreak of viral hepatitis which was apparently caused by the use of a dirty hypodermic syringe needle by someone who had applied years before to join the association and who had been turned down by it. The clause requires all acupuncturists to register, irrespective of skills, qualifications and standards. It puts them in the same category as ear piercers and tattooists.
    In our approach in Committee to the association's petition it is fair to say that all four members of the Committee had no specific knowledge or experience of the practice of acupuncture. Indeed, I suspect that we shared the same human prejudices against a practice of which we knew little, which was of ancient and foreign

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    origin and which, by its nature, was slightly discomforting—although we were assured by those with experience that that was not the case. We also shared a healthy suspicion of any attempt by a public body to impose unnecessary regulations and controls, with the accompanying bureaucracy of officials armed with powers of entry and inspection on those who practise reasonable and accepted activities. That applies particularly to qualified acupuncturists, osteopaths and chiropractors, to whose services a growing number of people are turning as an aid to healing.
    It is interesting to note that in the debate on the National Health Service on 21 November 1979 in the other place Lord Cullen, replying on behalf of the Government said:
    "I hope that in due course arrangements may be made by which qualified chiropractors, osteopaths and acupuncturists could if they so wished, make their skills available to National Health Service patients."—[Official Report, House of Lords, 21 November 1979; Vol. 403, c. 272.]
    The British Acupuncture Association claims to be regarded as the pre-eminent acupuncture body in the country. It refers to a letter that the chairman of the Association received from the British Medical Association, which said:
    "We would have no hesitation in stating that your Association is pre-eminent among the organisations with which we have come into contact."
    The British Acupuncture Association demands of its members adherence to a code of ethics that is strictly applied under penalty of suspension or expulsion. Its training and qualifications and the methods of hygiene and sterilisation that its members apply, were cited in evidence to justify the exemption it sought.
    The association argued that the clause which the county council sought to impose ignored their skills and standards and put them in the same category as tattooists, ear piercers and unqualified persons who practise acupuncture. It found that derogatory and offensive and believed that it would diminish the trust of its patients. It pointed out that it was the only body of acupuncturists to petition for exemption in the Bill. No evidence concerning the transmission of disease or malpractice was given against the association in the West Midlands. The instance of the outbreak of hepatitis which provoked clause 24 was fully considered by the Committee and it was
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    made clear that no member of the association was involved.
    The Committee also considered a report from the Department of Health and Social Security. In recommending us to accept the county council's exemption for doctors and dentists who practise acupuncture, the Secretary of State said that it would appear to be inappropriate to extend exemption to members of a body for which the requirement for membership did not include provision for statutory registration. Statutory registration does not in itself guarantee standards or prevent infections. It does not imply qualifications or confidence. That was made clear in 1977 in a letter to the British Acupuncture Association from the right hon. Member for Lewisham, East (Mr. Moyle) when he was Minister of State, Department of Health and Social Security. In that letter he said that the Health and Safety at Work etc. Act 1974 exists already to control those practitioners who are a menace to public health because of the constant lack of hygiene in their premises.
    If the Department requires statutory registration of all who practise acupuncture, surely it should bring forward general legislation instead of attempting to take advantage of local authority Bills in this way. The association emphasised to us in Committee that it would welcome a national Act of Parliament providing for the registration of all qualified acupuncturists with proper standards, and that it would not welcome piecemeal legislation of this nature which would be bound to produce erratic results.
    If my motion is not passed tonight it will be the first time that a positive decision by a Commons Committee has been subsequently rejected by the other place and a decision by a Private Bill Committee has been overturned by the Floor of this House. I believe that such a decision would reduce the confidence that the citizens of this country have in being able to exercise their right to petition this House for redress of grievance and protection. If it is seen that a successful petition to a Private Bill Committee of this House, requiring effort and money on the part of the petitioners, is overturned by the other place and that the House does not support its Committee's own decision, future petitioners will say to themselves "What is it worth? Why should I bother to

    327
    spend the time and money to defend what I believe to be right in order to protect myself?"
    Clearly, that was also the fear of the Chairman of the Lords Committee. I believe that if my motion is not passed, that will represent a further erosion of the rights of the individual to defend himself against large bodies, elected or otherwise, by appealing to Parliament. In effect, it will represent an undermining of the role of Parliament itself. It is not just a constitutional issue but a fundamental one for our parliamentary democracy. I hope that the House will give the motion serious consideration and support it tonight.
    Mr. Andrew Faulds: The hon. Member for Bournemouth, East (Mr. Atkinson) has a very good case against the constitutional impropriety that the other place is trying to force on the House tonight. It is unacceptable that by an amendment slipped in on the bureaucratic insistence of the Department of Health and Social Security—by grace and favour of Lord Derwent—the clearly decided will of the Committee which spent days in its deliberations on this matter should be subverted by a Lords amendment in this somewhat sneaky fashion. It is carried out in a way that has not been attempted or accepted by the other place since 1903, and this was the case of the hon. Gentleman.
    In the debate in the other place, Lord Aberdare expressed considerable misgivings about the underhand procedure. I shall quote what he said about this manoeuvre:
    "The principle of comity between the two Houses in Private Bill procedure is of very great importance for the smooth working of the system. It is for this reason that our Companion to the Standing Orders, on page 176, reads: If there is any disagreement between the Houses on amendments to Private Bills, the same procedure of sending reasons for disagreement is followed as for Public Bills. In modern times the policy on Private Bill legislation is so co-ordinated between the two Houses that the need for this procedure seldom, if ever, arises. Another factor is the unwritten principle, scrupulously observed, that in a Private Bill neither House re-inserts a provision which has been struck out by the other House unless by agreement between the two Houses'."— [Official Report, House of Lords, 31 January 1980; Vol 404, c.1001.]
    7.30 pm
    Mr. Deputy Speaker (Mr. Bernard Weatherill): I hesitated to interrupt the
    328
    hon. Gentleman earlier. It is not normal to quote from the proceedings of the other House which have taken place during the current Session.
    Mr. Faulds: You have placed me in some difficulty, Mr. Deputy Speaker, because the case was so well put by Lord Aberdare, who is Chairman of Committee up there, that I am at a loss as to how I can make my argument unless I may quote him in extenso.
    Mr. Deputy Speaker: The hon. Member might use a free paraphrase. However, he has already done it.
    Mr. Faulds: I am delighted that you have considered it to be a free paraphrase, Mr. Deputy Speaker. I am very relieved about that. Lord Aberdare made other comments, but I do not have time to make a free paraphrase. However, I think I have made the point that this is an unacceptable and most unusual manoeuvre to override the will of a Committee of this House.
    The House may wonder why I should seek to intervene in what is primarily a procedural matter between the two Houses. Thank God, I am not one of our procedural experts. However, I have a personal interest in the Bill in two respects. It is called the West Midlands County Council Bill [Lords] and I am fortunate enough to represent an interesting constituency in that part of the world. More importantly, I am probably one of the few hon. Members who regularly seek acupuncture treatment. If anyone wishes to stand up to say that he also suffers or enjoys such treatment, I hope he will do so. I am proud to make this claim, and I will tell you why.
    For 20 years now, my wife and I have carefully—indeed, scrupulously—avoided the attentions of allopathic doctors. Occasionally one lands in a place where one has to seek allopathic treatment. It usually takes a long time to recover from such treatment. But my wife and I for those 20 years have sought homeopathic treatment because the sort of treatment that allopathic doctors, I find, are competent at is dealing with simple things such as syringing the ears or applying sticky plasters to the thumbs of little boys. For 20 years we have managed to avoid that excellence of attention from standard professionals in this country by seeking homeopathic treatment. I think you will

    329
    see from my excellent physical and mental condition—mens sana in corpore sano—that the treatment usually pays off and provides a good return.
    During a trip to China some years ago, my parliamentary colleagues and I saw deaf children being treated by acupuncture. They were apparently restored to hearing according to the figures that we were shown. We witnessed also an operation for the removal of an enormous cyst—the size of a small football—from the inside of a woman while she was fully conscious but anaesthetised by acupuncture. I began to think that I should look into the benefits of this form of treatment. Therefore, three years ago, when I took a few days' rest from the exhaustions and toil of the House, I went to a health clinic and there I sought and received acupuncture treatment, which I found highly beneficial. Since then I have sought such treatment for a variety of reasons. I shall not go into detail, because I would hate the House to know of my many afflictions. However, acupuncture or homeopathic treatment has worked the trick for each of those afflictions in a way that in my previous experience before allopathic treatment had failed to do.
    These treatments were always given by members of the British Acupuncture Association. I am strengthened in my belief in the efficacy of acupuncture treatment by the appreciation of and support of acupuncture as an effectual means of medical treatment of a distinguished gentleman named Dr. Bannerman, of the World Health Organisation. He is a most distinguished medical authority, whose writings in such magazines as "World Health" make clear his acceptance of acupuncture. Perhaps, Mr. Deputy Speaker, I may quote his words instead of paraphrasing. It is a long article. If any of my colleagues wish to read it, I shall be happy to lend them the copy on condition that I get this valuable document back. I know the habits of some of my colleagues and I shall therefore vet their applications very carefully.
    In the article, Dr. Bannerman says,
    "The sheer weight of evidence demands that acupuncture must be taken seriously as a clinical procedure of considerable value."
    He goes on in another passage to say:
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    "It has long been practised in the United States, but widespread interest in this and other aspects of Chinese traditional medicine awaited the reopening of significant communications between China and the United States."
    Perhaps the one good thing of Nixon's Administration was that it restored that unhappy breach of relations.
    Dr. Bannerman continues:
    "Considerable controversy has surrounded acupuncture; on the one hand, extravagant claims have been made for its efficacy while, on the other, it has been criticised for its lack of scientific standing. It has now been introduced into several developing countries and since 1976, WHO has organised training courses in China. Quite a number of Western trained doctors practise it, and there is official interest and enthusiasm, particularly from the point of view of its potential usefulness as a tool in primary health care delivery. However, there is some resistance to its acceptance by physicians. So far, it has been used with considerable success for the treatment of"—
    Dr. Bannerman then deals with a number of various afflictions that have been treated by acupuncture. He continues:
    "With adequate logistic support, training and research facilities, acupuncture will be fully accepted in these terrorities in the foreseeable future."
    I should hope that we in this country, when we have more open minds to the value of alternative medicine, will accept this practice against the resistance of the BMA, which hardly needs explaining. I hope that we in this country shall be able to benefit from alternative medicine.
    In the other place, Lord Winstanley made a cheap quip while discussing the Bill. He said—
    Mr. Deputy Speaker: Order.
    Mr. Faulds: Again, I shall paraphrase, Mr. Deputy Speaker. Lord Winstanley said that acupuncture might do very well for Chinamen but that it did not help other people very much. That is a load of unadulterated nonsense. All over the world, people have discovered the advantage of acupuncture. Why do ordinary doctors—and Lord Winstanley was an ordinary doctor before he moved down into the upper place—make such comments? Ordinary allopathic doctors have something to protect. Their practice is of intervention on a massive scale with the workings of the body either with scalpels or with drugs. That type of intervention frequently does more harm than good. All of us, if we examine our consciences, know from personal experience in our constituencies

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    such cases of damage that have been caused by allopathic treatment. Such doctors have reason to be concerned about the efficacy of alternative medical practices, because those practices show up the limitations of allopathic practice.
    My experience of the BAA is such that I am more than satisfied that members of the BAA pursue a course of practice with their own ethical code, which is highly satisfactory. I am delighted that the hon. Member for Bournemouth, East (Mr. Atkinson) made the constitutional element the main point of his speech. However, I deeply resent the implication that the work of those who practise in the British Acupuncture Association should require this statutory registration as if they were all chaps with dirty fingernails who use needles in a way that other needle practitioners, such as tattooists and ear piercers, do. That is a slander against the practitioners of the BAA.
    I hope that we shall resist this manoeuvre by the House of Lords to get through an underhand piece of legislation. I hope that it will be resisted both for constitutional reasons and in order to defend the rights of members of the BAA to practise their properly trained skills.
    Mr. Jocelyn Cadbury: I shall oppose the motion in the name of my hon. Friend the Member for Bournemouth, East (Mr. Atkinson). However, I congratulate the hon. Member for Warley, East (Mr. Faulds) on his excellent state of health. I am sure that that state of health is due to acupuncture. I am not against the practise of acupuncture; quite the contrary.
    My hon. Friend the Member for Bournemouth, East explained why the amendment was made. I believe that the other House was right to disagree with it, and I urge this House to uphold that judgment.
    There are two separate arguments. One is whether the British Acupuncture Association register should be exempted from the clause. That is an argument about public health. The second is a constitutional agrument about whether the other House can disagree with an amendment to a Private Bill that has been passed by a Committee of this House.
    My hon. Friend believes that the other
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    House should not disagree and should not return such a Bill to this House. It is perfectly true that in normal circumstances the other House would not disagree with such a Bill and return it to this House, but the circumstances were not normal.
    The clause was debated in Committee but not on the Floor of the House. The motions referring to the clause were never called. I was here on one occasion when the Bill was debated. The part of the Bill dealing with processions was debated for such a length of time that the clause dealing with acupuncture was never reached. We have not previously had the opportunity to discuss the subject.
    My hon. Friend is the only hon. Member in this new Parliament who had the opportunity to discuss whether the BAA register should be exempted from the clause. He is the sole surviving member of the Committee that considered the Bill.
    Mr. David Atkinson: We worked very hard.
    Mr. Cadbury: I am sure that that is so.
    To say that the other House has overreached itself is to ignore the fact that this House did not have an opportunity to express its collective view, one way or the other. By sending the Bill back to us, the other House has given us that opportunity. I believe that the other House has behaved properly and that the constitutional points raised by my hon. Friend are not valid.
    The debate is about public health. It would therefore be helpful to trace the origins of the Bill and its progress. Reference has been made to the incident that gave rise to the Bill. In 1977 there was an outbreak of hepatitis, when 34 cases of hepatitis B were discovered in Birmingham. They were traced to an acupuncturist who was treating up to 80 patients a day without sterilising his needles.
    Mr. Faulds: Does the hon. Gentleman claim that the fellow who applied the acupuncture on that occasion was a member of the BAA?
    Mr. Cadbury: I believe that the hon. Gentleman is right and that he was not a member of the BAA. I shall deal with that point later.

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    The fact that that acupuncturist was not sterilising his needles was a serious threat to public health. It is elementary that acupuncturists should sterilise their needles. It is horrifying that one of them did not.
    That unpleasant incident prompted the West Midlands county council to include a clause in the Bill to make acupuncturists register with district councils and to make provision for regular inspection of premises. That provision would ensure that their premises had a high standard of hygiene. My hon. Friend made the point that that would not guarantee that they would sterilise their needles. However, if they knew that there would be a check to see that they were not operating out of unsatisfactory premises it would instil some degree of control over their practice.
    When the Bill was first introduced in the other House late in 1978, an amendment was moved to exclude registered doctors and dentists, who were already subject to strict statutory controls by the General Medical Council and the General Dental Council. In March 1979, the Bill came before the Committee, and the BAA petitioned for an exemption similar to that granted to doctors and dentists. The association wished its members to be exempted from registering their premises and being subject to inspection by district councils.
    7.45 pm
    The then Secretary of State for Social Services, the right hon. Member for Norwich, North (Mr. Enna1s) made a report in which he said:
    "The Secretary of State recommends that there is no need for district councils to be empowered to register medical and dental practitioners who are already subject to statutory registration, although it would appear to be inappropriate to extend exemption from the provisions of the clause to members of a body of which the requirements for membership do not include provision for statutory registration".
    It was the clear recommendation of the previous Secretary of State that the BAA should not be exempted from registration.
    Surprisingly, the Committee did not seek the Secretary of State's views through his representatives who were present in Committee. The Committee did not have to do so, although it would have been normal to consult the Secretary of State on a matter of public health.
    Mr. David Atkinson: Does my hon. Friend accept that we had the Department's submissions in writing and that they were perfectly clear? We took them into account in our decision. We did not need to call on the Department's representatives to outline further what we had in writing. We were not obliged to call on the Department's representatives.
    Mr. Cadbury: I agree that there was no obligation, but it is rather strange that the Committee did not appear to take note of what the Secretary of State said on a matter of public health.
    Secondly, the BAA is only one of a number of acupuncturist asssociations in the country. There is the Traditional Acupuncture Society, the International Register of Oriental Medicine and other smaller bodies. The Committee did not hear evidence from these associations and therefore had no opportunity of judging whether only one association should be singled out for special treatment. It is hardly logical or fair that one group should be exempted from registration while other groups that have advanced similar claims to high standards should receive no such exemption.
    Mr. David Atkinson: My hon. Friend suggests that other acupuncture bodies sought exemption. Why did they not petition the House for an exemption clause in the way that the British Acupuncture Association did? They did not. We had only one petition for exemption. That was from the BAA.
    Mr. Cadbury: That is a valid point, and I cannot explain why, However, I insist that it is unfair and illogical to discriminate between groups. It is not logical that some groups should have to register and others not. If they were all exempted, the public would have no safeguard against the sort of outbreak of hepatitis that occurred in Birmingham in 1977. The whole object of the Bill would be defeated.
    My third point concerns the balance of evidence heard by the Committee. I have read the minutes of the evidence. I have also listened in Committee in the other House to the proceedings on the South Yorkshire Bill, which was similar. The contrast is remarkable. The Committee on which my hon. Friend sat heard evidence that was almost entirely

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    one-sided and favourable to the BAA. The evidence at the hearing of the South Yorkshire Bill gives an entirely different impression. Some of the witnesses called at the latter hearing were doctors who practised acupuncture. They were not necessarily biased against acupuncture. Almost all of the doctors, who were themselves acupuncturists, were emphatic that there should be no exemption from registration for any single group of acupuncturists. I do not feel that the Committee heard both sides of the argument.
    None of the acupuncture associations has anything to fear or anything to lose from the requirement that members should be registered, provided that they are anxious that their members should practise the profession hygienically. The Bill in no way intends to discriminate against the practice of acupuncture. On the contrary, the new regulations are likely to inspire greater public confidence in the profession, and, therefore, will accelerate the full acceptance of acupuncture as an integral part of Western medical practice. That is an outcome that I, and I am sure all hon. Members, will welcome.
    If the House accepts the motion, a dangerous precedent will have been created. It will have been conceded that it is proper that bodies over whose membership there is no statutory control may be exempted from the application of the law. However worthy such a body may be at the time at which the exemption is conferred upon it, there can be no guarantee that it will remain so, and that the privileges that it has won will not be abused in the future.
    I should like to draw a simple parallel. If a Committee were considering a Bill for the control of environmental health in food stores, how would hon. Members feel if the Committee, having decided that Fortnum & Mason was a highly worthy and respectable establishment, proceeded to amend a clause in the Bill to exclude Fortnums, but to make Tesco, Sainsbury's and other stores comply? I am sure that the House would never agree to such an amendment.
    Mr. Faulds: Does the hon. Gentleman agree that there is more security for the public in accepting the ethical standards
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    incumbent on members of the BAA than simply requiring a statutory registration of many possibly unqualified acupuncturists.
    Mr. Cadbury: It is elementary, if there is some form of control over all acupuncturists, that the public should be given some safeguard. That is no reflection of the degree of excellence of one group of acupuncturists over another. They should be treated in the same manner.
    Why should the House agree to confer exemption from the law on one group of acupuncturists, over which there is no statutory control and which can change its conditions of membership at will? Conferring such exemptions would be illogical.
    I believe that the House would be failing in its duty to protect the public health if it upheld this unfortunate amendment. I therefore urge the House to vote against it.
    Mr. Dan Jones: I am pleased that the hon. Gentleman spoke before me, and not after me. His interpretation of the law changed my mind. I can see his point of view that there was no arrogance in the dismissal of the claim, but that it was simply being referred back to the House. We must all agree that that is a common practice which we rarely can ignore. I have changed my mind in that direction.
    Mr. Faulds: It is not a common practice at this stage of a Private Member's Bill. It has been unheard of since 1903. That is borne out by the declaration of Lord Aberdare.
    Mr. Jones: I agree with that. I said that it is common practice in the House for measures to be returned from the Lords to this Chamber for further consideration. In any case, whether it is a Private Member's Bill or a Government Bill, the procedure that has been accepted by successive Governments over the years can hardly be wrong.
    The hon. Member for Birmingham, Northfield (Mr. Cadbury) put forward a reasonable argument about acupuncturists. Some who wish to practise acupuncture are hardly qualified in terms of honour and healing ethics. I know about acupuncture in Hong Kong. I have had sessions with the Chinese who practise acupuncture there. Those people are

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    highly reputable, and I have read about many cures that they have effected. In that respect I am happy to support the hon. Member for Bournemouth, East (Mr. Atkinson) in bringing the matter to the attention of the House so that it can be properly discussed. At the same time I ask him, not only with respect, but with a sense of fraternity, to pursue the matter. If the regulations on hygiene, cleanliness and so on are adhered to, I believe—from the people to whom I have spoken in Hong Kong—that it can make a valuable contribution to the health of the nation. I do not find it necessary to denigrate the orthodox medical profession. One does not have to denigrate the one to extol the other. One has only to consider the thousands of people who are cured in hospitals to realise the vast contribution of the orthodox medical profession to society.
    I recommend that the hon. Member for Bournemouth, East should re-examine the matter. My first impression was different. I intended to go into the Lobby with him. I now ask him to reconsider the matter and to bring the matter before the House again, on the principle of the value of acupuncture to society.
    8 pm
    Mr. Julian Ridsdale: I simply wish to enter a short caveat, possibly because I was in China with the hon. Member for Burnley (Mr. Jones) who spoke so vividly about acupuncture. My object in doing so is that I am considering not simply acupuncturists, but osteopaths also. There should be a recognised standard of the BAA, and if other bodies wish to register they can do so. But to seek to legislate to give local councils powers to search and examine is a constricting attitude. It takes away the freedom of the individual to choose the acupuncturist or the osteopath that he wishes to treat him.
    I am intervening because of the strong feeling of some very distinguished osteopaths in my constituency. I should like the Minister's assurance that there will not be a closed shop for the medical profession. I hope that we will be able to give freedom to osteopaths and acupuncturists, and give the individual the freedom to choose the acupuncturist that he would like to treat him. I should have thought that it could have been done by allowing a proper register of acu-
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    puncturists and osteopaths. Some difficulty is caused when people walk in and make inquiries, and this could be very harmful to the practice of this branch of medicine. I would like an assurance from the Minister that he will give the freedom to acupuncturists and osteopaths to practise in freedom without restriction.
    The Under-Secretary of State for Health and Social Security (Sir George Young): Perhaps it would be helpful if I said at the beginning that the Government have nothing against acupuncture or osteopathy. I shall write to my hon. Friend the Member for Harwich (Mr. Ridsdale) on the question that he raised about osteopaths. I hope to be able to give him the assurances which he sought.
    I noted what the hon. Member for Warley, East (Mr. Faulds) said about acupuncture. I was impressed by his experiences. However, he has slightly more flesh to pierce than I have, and that fact might deter me a little from seeking the cure that obviously worked so well for him.
    There have been two objections to what my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) seeks to do. At this stage I must say that my Department supports my hon. Friend in seeking to resist this amendment. The two objections have been first on constitutional ground, and secondly, on the merits of the case. On the constitutional ground I should end the conspiracy theory about the House of Lords by making it clear that my right hon. Friend the Secretary of State for Social Services and the right hon. Member for Salford, West (Mr. Orme) wrote a letter to the House of Lords asking whether the House of Commons might have an opportunity to reconsider this matter. The House of Lords acceded to that request. Therefore, I do not believe that any allegation can be made in this case that the House of Lords is seeking to frustrate the will of the House of Commons.
    Mr. Faulds: That does not lessen the impropriety of what has happened. The House of Lords has adopted a procedure which has not been followed for years since the reform of the other place. The Minister is making use of that improper manoeuvre to get the will of the Committee changed when that Committee deliberated on this matter for many days.
    Sir G. Young: In a few moments I shall submit that this case warrants the procedure in that the House of Lords had come to one decision in dealing with the South Yorkshire Bill, and had refused to grant the exception, and at the same time the House of Commons had come to a totally different decision in respect of the West Midlands Bill. This gives no guidance at all for future petitioners. Therefore, it seemed right that this House should have the opportunity to consider the case on its merits and see whether we could rationalise the position and come to a coherent decision which would guide future petitioners.
    I hope that my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) and those who have supported him will seek to win their case on merit, rather than try to get it through without proper debate and perhaps without a vote in this House.
    I turn to the merits of the case and express the concern that the Government would feel if the Bill went through as it stands. I digress a little to give the history of the matter. The Bill was introduced in the House of Lords and it completed its Commons Committee stage before the dissolution. It was the subject of a carry-over motion to enable it to continue in the new Parliament.
    Following an outbreak of hepatitis in Birmingham in mid-1977, caused by the use of unsterilised needles by a single acupuncturist, the West Midlands county council included in the Bill a clause whose effect was that no one should practise acupuncture unless he and his premises were registered by the appropriate district council. The clause empowered district councils to make byelaws for the purpose of securing the cleanliness of the premises, equipment and persons.
    My Department, which was then in different hands, offered no objection to this initiative by the West Midlands county council in seeking powers to regulate acupuncturists and their premises. This initiative was designed to protect the public from the risk of unhygienic acupuncture.
    In a report to the Lords Committee on the Bill, the Secretary of State recommended exclusion of registered medical and dental practitioners, some of whom practise acupuncture, from application of
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    the relevant clause. This was because doctors and dentists are already subject to statutory regulation, whereas most acupuncturists are not medically qualified or subject to statutory regulation, and may have no formal training of any kind. The recommendation was accepted by the Lords Committee.
    The British Acupuncture Association and Register Limited petitioned the House of Commons saying that, if registered medical practitioners and dentists were to be excluded from the operation of the clause, its own members should equally be exempted on the ground of their alleged reputation, international recognition and qualifications. In his report to the House of Commons which took account of the petition, the former Secretary of State said:
    "The Secretary of State recommends that there is no need for district councils to be empowered to register medical and dental practitioners who are already subject to statutory registration, although it would appear to be inappropriate to extend exemption from the provisions of the clause to members of a body of which the requirements for membership do not include provision for statutory registration".
    As has been said in the debate, the BAAR is merely one of several non-medical and non-statutory acupuncture bodies.
    The Opposed Private Bill Committee of the House of Commons heard the evidence of the petitioners and the representations of their counsel on 13 and 14 March last year. Officials of my Department were present throughout the proceedings but were not invited, as Standing Orders would have permitted, to explain why in the Secretary of State's view the petition should not be granted. After deliberation, the Committee announced that the petition had been allowed.
    However, Committees are required by Standing Orders to notice ministerial recommendations in their reports to the House, and, if they do not accept them, to state their reasons. In this case the report states that the recommendation of the Secretary of State was adopted, but, in view of what I have said, I submit that that is not the case. I regard it as a matter of principle that exemptions from the law should not be granted in privately-promoted legislation, as much as in any other, to organisations or

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    members of organisations which have not themselves been statutorily created and for the membership and conduct of which there is no statutory control. I think that this view must commend itself to any hon. Member who has considered the implications of not adopting that principle.
    We are not here to consider the merits of the BAAR or even whether those who are members of it are likely always to practise their profession hygienically and so present no risk to their patients or the public at large. We are here to consider whether—as both Houses have determined—it is desirable that acupuncturists practising in the West Midlands should be required to be registered, have their premises registered and be subject to bye-laws ensuring that their premises are clean.
    It would be desirable that some acupuncturists who are not otherwise statutorily registered or subject to statutory controls should be exempted from this registration and that others should not. If we accept the principle as I have enunciated it, we cannot stand by the amendment of the House of Commons which provided that the members of the BAAR should be exempted from the provisions of the clause.
    Mr. Dan Jones: Many of us believe that there can be a healthy compromise. Could not the Minister give his hon. Friend the Member for Bournemouth, East (Mr. Atkinson) an undertaking that if he is prepared to withdraw his amendment the DHSS will take over the measure and see it safely to the statute book under the conditions that the Minister himself has prescribed?
    Sir G. Young: I am not sure that I can give that assurance in quite those terms. I think that my hon. Friend sought exemption for acupuncturists, but I have made it clear that we are not minded at this stage to exempt them when doctors and dental practitioners, who are statutorily registered, have to conform to stringent requirements. We have nothing against acupuncturists, but I cannot say that we will exempt them from statutory controls at a time when other medical practitioners have to submit to them.
    Another Committee in another place recently considered a petition of the same association against a similar clause in the South Yorkshire Bill. It heard the argu-
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    ments of the petitioners at length and the counter arguments of the promoters. Unlike the Committee of which my hon. Friend the Member for Bournemouth, East was a member—a singularly accident-prone Committee—it heard the representatives of my right hon. Friend express his views on why the petition should not be allowed.
    Mr. David Atkinson: Would my hon. Friend care to enlarge on that description of my Committee?
    Sir G. Young: Yes, indeed. Nothing offensive was meant. It seems that none of them survived the last election, apart from my hon. Friend. That Committee disallowed the petition. So we now have two Committees that have reached contrary conclusions on the same issue. Whatever may be our pride, I urge hon. Members to accept that the decision of the Committee of the other place on this point of principle was correct and that the decision taken by the Committee of the last House of Commons was wrong.
    The other place took an unusual step, as I readily concede, by seeking to discuss with this House the exceptional implications of this amendment. But, as was said in another place, such a step has a precedent, although one has to go back to 1903 for it. I am sure that what was done in another place was right. There can be no doubt that we require the opportunity that we have tonight to consider what is an important issue of principle. Now that we have the opportunity, I hope that we shall use it to reverse the amendment of the last House of Commons. If this is done, promoters of other Bills containing parallel clauses will know what is the will of Parliament and will not be under any obligation imposed by the unfortunate precedent created by this amendment to emulate. I ask my hon. Friend, in the light of the debate, to consider withdrawing his proposition.
    8.15 pm
    Mr. Clement Freud: I have listened to the debate with care. I wished particularly to hear the explanation by the Minister.
    One had grave misgivings on two points. The first is the constitutional point. There is no validity in denigrating the identities of the members of the Committee simply because three of them

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    either lost their seats at the last election or did not stand again. What seems to me important is that the Committee was set up by the House of Commons to investigate an issue. It investigated at great length. I have read the minutes of evidence taken before the Opposed Private Bill Committee, as has the Minister. I believe that the Committee satisfied itself that the British Acupuncture Association was a proper and reputable association.
    One is obviously apprehensive about doing something that has not been done since 1903. I believe it is wrong to accept advice from the other place. I read the debate in the other place as well. Like the hon. and afflicted Member for Warley, East (Mr. Faulds), I have little sympathy with the statement by my noble Friend Lord Winstanley and his lighthearted remark that acupuncture was something that the Chinese did and that it did not work anywhere else.
    The real issue of this debate is whether the British Acupuncture Association takes sufficient care for it to be above the inspection of a local authority. Perhaps, at this moment, one may even consider whether a local authority is sufficiently expert to look at an acupuncturist and come to a realistic decision. Looking at the evidence given, it seems clear that acupuncturists from this country take great care. No one is allowed to practise acupuncture without supervision unless he has been doing it for two years. This is a proper provision. I accept it.
    I am a little less happy about the accommodation that is given acupuncturists from other countries. I have listened with care to what the Minister says. I shall give way if he cares to intervene.
    Sir George Young: I had intended to intervene on the constitutional point. Is the hon. Gentleman aware that the Liberal spokesman in the House of Lords supported the course of action on which we are embarked this evening?
    Mr. Freud: I think that the Minister read his brief beautifully. I wish he had listened to me. That is what I said. [HON. MEMBERS: "Cheap".] It is cheap to insult the political party of a man simply because a Minister is sufficiently deaf not to hear what has been said. [HON. MEMBERS: "Oh".] That is exactly what happened.
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    I was interested to hear the report of the hon. Member for Warley, East about acupuncture and deafness. I also went to China on a parliamentary delegation. It is important to state, before a great deal of hope is given to deaf children, that research shows that, while there was a temporary relief of deafness in children, what usually occurred was that, as a result of a subsequent cold or influenza, or worse, the deafness returned and, in some cases, was worse than before. I mention this simply because I have a number of deaf constituents who were fascinated by the findings of the home to which I went and made inquiries.
    Mr. Faulds: I do not wish to question the bedtime reading of the hon. Gentleman. That was not the report that we had on our visit to China. Perhaps next time we can go together.
    Mr. Freud: I am grateful for that intervention.
    Mr. Faulds: Invitation.
    Mr. Freud: I believe that the issue is bound up, not with the competence or otherwise of acupuncture, but with the care of the British Acupuncture Association. That is what the House must concentrate upon when voting.
    Mr. Peter Bottomley: I intervene briefly to pick up the remarks of the hon. Member for Isle of Ely (Mr. Freud). My hearing of the Minister's speech—he read it well and I agree with it—was not that anything dangerous or anything more dangerous, is likely to be done by acupuncturists than by other people in the medical professions that they should be relieved of the responsibility on people in other medical professions to being supervised and inspected. Nothing that he said is an aspersion on British acupuncturists.
    There is no insult in referring to one hon. Member as afflicted and others as accident prone. The idea that two years supervised practice in any profession is sufficient could presumably be extended to doctors, dentists and the rest. I do not think that the hon. Member's speech takes us much further on the issue.
    Question, That this House doth insist on its amendment to which the Lords have disagreed, put and negatived.

COUNTY OF MERSEYSIDE BILL [LORDS]
Order for Third Reading read.
[Queen's Consent, on behalf of the Duchy of Lancaster, signified.]
Mr. Eric Ogden: Now, Sir.
Motion made, and Question proposed, That the Bill be now read the Third time.
Mr. David Alton rose—
Mr. Ogden: The Question was put from the Chair.
Mr. Alton: I was on my feet.
Mr. Deputy Speaker (Mr. Bernard Weatherill): Mr. Alton.
Mr. Ogden: On a point of order, Mr. Deputy Speaker. If the Question was put from the Chair and put to the vote and two of us called, we should make a decision. If it was not, perhaps you will allow one hon. Member to move it before you agree to one hon. Member opposing it. [Interruption.] The hon. Member for Rochdale (Mr. Smith) should not tell me what goes on in Merseyside. He should look after Rochdale.
Mr. Deputy Speaker: Not having heard what the hon. Gentleman proposes to say, I can hardly rule on what he is saying.
8.19 pm
Mr. Alton: I should like to draw the attention of the House to part II, lines 7 to 31, of schedule 3 to the County of Merseyside Bill. I attempted to move an amendment deleting the sections that deal with the Corporation of Liverpool Act 1966 that is now being enacted through this Bill. That amendment, unfortunately, was not accepted. I feel so strongly about these clauses and their implications that I must take the opportunity of opposing this section of the Bill even though I agree with many points in the Bill.
I have been opposed to the concept of a Liverpool inner ring road since it was introduced in place of the former Liverpool inner motorway scheme. I opposed the Bill when I was a member of the Merseyside county council. I
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opposed the Bill on the Liverpool city council, of which I am still a member. I petitioned the Bill when it went to another place 18 months ago. I applied successfully for an Adjournment debate, and was grateful for the opportunity to air the matter.
We have progressed no further because, at this last-ditch attempt, we are about to enact a Bill that will deprive citizens of the opportunity of a public inquiry to air their grievances against the construction of the road. It is better to have a city without byelaws than a city that has a Berlin wall through its centre.
The Bill removes the right of public inquiry for hundreds and hundreds of citizens whose businesses and homes will be demolished to make way for a scheme that will cost £40 million. That staggering cost is to be embarked upon at a time when ratepayers are being asked to find a 65 per cent. increase if they live in the city of Liverpool.
It is about time that the Merseyside county council came out of its dream world into the real world. It is about time that the Government ended the longest running farce in local government by scrapping the scheme once and for all. The scheme was conceived in the 1960s by politicians and planners with delusions of grandeur. At that time it was to have been called an inner motorway. It, and schemes like it, accounted for the loss of 100,000 people from the centre of Liverpool. They were shanghaid to towns and suburbs outside the city. The scheme was opposed by my colleagues on the Liverpool city council. The campaign was led by Councillor Trevor Jones and his wife Doreen, who is the Lord Mayor of Liverpool.
Those thrown out of the city found themselves left in wildernesses where they were unhappy. The scheme was a dream which turned into a nightmare. The scheme was dropped ultimately by the county council, but not for long. It revamped it in different clothing and it returned as the Liverpool inner ring road.
Among its chief promoters was the then chairman of the highways and tunnels committee, Councillor Hubert Harriman, whose firm was involved in its design. It was paid a fee of £50,000. The

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county council was denied access to documents which discredited the scheme. The documents were drawn up by staff of the county planning officer and the county engineer. They were not given to county councillors, on the ground that they would find them too complicated to understand.
I have with me a copy of technical document No. 25, which was not made available to county councillors when they considered the scheme. I have referred to the document before. I am sorry to have to bore the Minister with the same argument, but I hope that he will be more convinced on this occasion than he was on the previous occasion. I wish to allude to sections of the document to substantiate my case. My opinions are those of a layman and politician who has consistently opposed the scheme. It is far better to give the opinions of those who have some professional knowledge.
The report states:
"Chapter 27 presents the results of an identification survey of all existing private sector businesses (excluding public houses) which will be displaced by the development of the Inner Ring Road, together with the results of an interview survey with approximately one-third of them. The scheme examined will displace 52 firms employing 400–450 persons."
That, in a city where about 12 per cent. of the population is without work. The report continues:
"An additional displacement of 12 firms (approximately 100 jobs) is possible if identified options are implemented. Job losses are heaviest among manufacturing, building and joinery, and other service firms and are concentrated in the Berry Street and Jamaica Street areas. We estimate that of the 400–450 jobs probably displaced, 55 per cent. might be retained in the central or inner areas. Fifteen per cent. might be retained in Liverpool and 30 per cent. lost to the local economy."
The firms affected were interviewed by the county council and they said that they would face 100–200 per cent. increases in rents if they were relocated.
It might be said in favour of the road that it could provide job opportunities in Liverpool, as people might be needed for the construction of the road. It might be argued also that it would improve accessibility to factories, firms and sites in the city. However, the report disproved those theories.
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The report continues:
"the loss of any further jobs must be regarded as a serious disbenefit in the context of inner Liverpool … accessibility is not a major problem for the firms interviewed and any improvements could only have limited benefits for them. A company's level of activity and operating costs are determined by a number of factors, among which access and transport costs are not particularly significant. The savings in costs and time associated with a road of this type are minimal at the level of individual firms, and there is no evidence that the activities of the firms would be affected in any substantial way. … The industrial image of inner Liverpool, as seen by firms operating there, is almost entirely negative and the Ring Road could have an impact on this in two ways."
The report discusses the significance that the road might have on the city's image. It states:
"There is little evidence to support the view that this form of public sector investment would create confidence in the area and stimulate private investment. … The most effective assistance from the public sector to firms operating in the area would seem to be the provision of sites, the creation of an atmosphere of security, financial assistance, and motorway links."
Mr. Anthony Steen: I am following the hon. Gentleman's arguments with great care. It is obviously a matter about which he feels strongly. He and other hon. Members are concerned about all that is happening in Liverpool and Merseyside. However, does he not agree that the question of the inner ring road, important though it is, is not really a subject with which it is correct to occupy the House at this time on this particular day? The Bill is virtually a co-ordinatory and consolidatory Bill of byelaws going back many years.
Perhaps the hon. Gentleman will explain how the arguments about the inner ring road, to which we have listened with great interest—we know his interest in espousing the cause at every opportunity—fit into the debate. Will he move on to his objection to the Bill?
Mr. Alton: No, certainly not. If the hon. Member for Liverpool, Wavertree (Mr. Steen) had been present at the beginning of my remarks, he would have heard me say why I am expressing my opposition in this way and why I am having to use this opportunity yet again to raise these arguments about the inner ring road.

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If the hon. Gentleman were really concerned about those living in his constituency, he would wish to try to save them from the 65 per cent. rate increase that they will probably be inflicted with this year. He would be trying to save the further displacement of jobs. This is it not my argument but that of the Merseyside county council's planning department. The argument is contained in its private technical report. If the hon. Gentleman were really concerned about the state of inner Liverpool—he has frequently talked about empty sites and the need to clear up derelict land—he would be trying to do something to bring firms back on to the sites. He would be arguing against the building of a road that nobody wants.
Liverpool may have problems, but traffic congestion is not one of them. If Liverpool were given £40 million to spend in other ways, life and vitality could be brought back into the city. The hon. Gentleman is suggesting the worst form of municipalisation. He and others who support the road will steal the businesses and the homes of those living in the inner city. They will be displaced as 100,000 others were displaced before them. That is an almost criminal act.
Mr. Ogden: On a point of order, Mr. Deputy Speaker. Is it entirely in order, according to the rules and conventions of the House, that an hon. Member should accuse another hon. Member of stealing the livelihood and the business of anyone else? I think we know what the hon. Member for Liverpool, Edge Hill (Mr. Alton) means, but perhaps he can frame his point in slightly different language.
Mr. Deputy Speaker: I hope that the hon. Gentleman was not casting any aspersions upon the honour of the hon. Member for Liverpool, Wavertree (Mr. Steen). I think that the hon. Gentleman was making a debating point.
Mr. Alton: Thank you Mr. Deputy Speaker. I would never cast any aspersion on the honour of the hon. Member for Wavertree. I am sometimes concerned about his sanity but not about his honour. In the context of the discussion of the Liverpool inner ring road I cannot understand why the hon. Gentleman has consistently supported the project when most of his constituents, the Liverpool
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city council and local newspapers have courageously advocated their opposition to it all the way along the line. I do not believe that in that sense he represents local opinion.
Mr. Robert Parry: Will the hon. Member for Liverpool, Edge Hill (Mr. Alton) also point out that alongside the opposition to the ring road from the Liberal Party in Liverpool the Labour Party there also opposes it as does the Communist Party? The only party that supports it is the Tory Party.
Mr. Alton: I do not have the links that I know Liverpool Labour Party often has with the Communists, so I do not know what the Communist view is. The hon. Member for Scotland Exchange has been a consistent opponent of this road and I congratulate him on that. It is true that the Liverpool borough Labour Party, having supported the concept of the Liverpool motorway scheme under the leadership at that time of Councillor, now Lord Sefton, later took a different view. It is quite right that it did come round to our way of thinking and opposed this scheme and I congratulate it.
It was pointed out in the report of the technical officers that the most effective assistance from the public sector to the firms operating in the area would be the provision of sites, the creation of an atmosphere of security, financial assistance and motorway links. The primary requirements of firms coming to inner Liverpool are sites and a suitable supply of labour. The report points out that if the road goes ahead 4 per cent. less land will be available for new development and that a 22 per cent. greater loss of existing development land will be sustained. Both options contained in the inner ring road scheme result in more than—
Mr. Deputy Speaker: Order. I am sorry to interupt the hon. Gentleman but will he please let the Chair know to which part of the Bill he is referring? I cannot find anything in it about ring roads.
Mr. Alton: I am referring, Mr. Deputy Speaker, to schedule 3, part II, consequential amendments in the Liverpool Corporation Act 1966 and schedule 4, lines 35 to 37 of that Act. The powers

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in the Bill are those required to continue the implementation of the 1966 Act in acquiring properties for the construction of the Liverpool inner ring road.
Mr. Steen: On a point of order, Mr. Deputy Speaker. The argument used by the hon. Member for Edge, Hill deals with the powers provided by the Bill. Those powers could be powers to provide anything from power stations to small firms. The hon. Member is talking about powers and trying to use that as an opportunity to debate anything he wishes. What the hon. Member is talking about has nothing to do with the Bill. He is using time that this Bill could command to exploit a particular point. The point may concern him and many other people, but he is discussing it at the wrong time and in the wrong place.
Mr. Deputy Speaker: It is perfectly in order for the hon. Gentleman to draw attention to the use of the powers. I take it that that is what he is doing. I have not had an opportunity of checking the Liverpool Corporation Act 1966, to which the hon. Member has drawn my attention, but I am sure that he is correct in what he has said.
Mr. Alton: I assure you, Mr. Deputy Speaker, that that is the appropriate legislation which was enacted 14 years ago with the express purpose of constructing the inner motorway. It is to that point that I shall come in a short time. However, I should like to go back to what I said before. Both options result in more than 240,000 sq. metres of currently vacant land and 100,000 sq. metres of temporarily used land coming into use for a road, and not for small businesses or homes or to improve the quality of the environment. It is simply for a road that will go nowhere and which no one will ever use.
Mr. Steen: Does the hon. Gentleman realise that there are 1,800 acres of vacant, dormant and derelict land in the Liverpool boundaries and that about 900 acres are in the hands of nationalised industries, such as British Rail and the gas authority, as well as the local authority? It is right to say that the ring road will use some of that land, but surely it is better to use some of the vacant land for
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some purpose than to use none of it for any purpose.
Mr. Alton: That is a crazy argument. It is rather like saying that we should build igloos throughout the city of Liverpool because it would be a way of spending money. The attitude that money grows on trees, and that one should just throw money away without worrying about the quality of the work one does, is the sort of atitude which has got Liverpool in the mess which it is in because of successive Conservative and Labour administrations there.
I again quote from the technical report, which states:
"The valuation and job opportunity analyses confirm the above. Marginal improvements in land value as a result of easier assembly of sites, the availability of services and some improved access if the road is built is not likely to be sufficient to offset real value losses as a result of demolition".
Those are the views of the county council's own planning department, which were ignored by the Merseyside county council itself. In its conclusion the report states:
"In sum, consideration of these four areas of major economic impact suggest that it will be difficult to quantify, or ever identify, substantial economic development benefits that will lead to increases in industrial and commercial activity and levels of employment either among indigenous firms or as a result of attracting new firms to inner Liverpool. The main areas of benefit are likely to be confined to the construction sector and on the few remaining development sites which can be assembled and released".
In other words, the benefits would be very superficial indeed, but the long term damage to the city would be considerable.
I now turn to the arguments that were put forward in favour of the road by the county engineer.
Mr. Steen: On a point of order, Mr. Deputy Speaker. The hon. Gentleman has a duty to confine himself to the clauses in the Bill. He has cited the schedule, which sets out the powers which the county council may have to do any number of things. He is now reading an article dealing with the inner ring road, which he says is one of the powers which the county council could use to build an inner ring road. It could build anything it liked. But this has nothing to do with the Bill that is before us. The county council may or may not use a power in the

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schedule of the Bill to do something which the hon. Gentleman does not want to happen.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Perhaps the hon. Gentleman can instruct me as to what his position is in the matter.
Mr. Alton: Again, Mr. Deputy Speaker. I refer to part II of schedule 3—consequential amendments to the Bill—which appears on page 138. Those are the powers that are to be vested in the Merseyside county council to acquire properties in order to proceed with the construction of the Liverpool inner ring road.
I am trying to give the House some idea of the disadvantages to the city of Liverpool of constructing the road. I have referred to the arguments placed before the county council by its own staff. I now come to the views of the city planning officer. They are all arguments why we should not proceed with the construction of the road and, therefore, why we should not proceed with the acquisition of property in order to build it.
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): So far I have been reluctant to interrupt. I thought that it was better to let the hon. Gentleman make his speech. However, he moved immediately into arguments against building the road. I hope that he accepts that the decision to build the road is entirely a local authority matter. It is a matter for the Merseyside county council, as the responsible highway authority. This is not a trunk road for which the Government are responsible. It is not a project for which the Government are answerable to the House or are in any way directly involved. We give a grant for it, but no more. The last time we had an Adjournment debate on this matter, in July, the hon. Gentleman made exactly the same quotations from the same report, which he has been using for many years in Liverpool. I thought he conceded that this matter was to be decided in the chamber of the Merseyside county council. It has nothing to do with Westminster, or our role as Members of Parliament.
Mr. Alton: I totally disagree with this Pontius Pilate style of government, where people want to wash their hands of responsibility. As £40 million of ratepayers and taxpayers' money is being spent, we
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have a moral and legal obligation to ensure that that money is wisely spent. The Government could withdraw the grant to the county council if they did not think that this was a wise road scheme. This evening we have the opportunity, by opposing the Bill, to prevent the road going ahead. Therefore, Parliament is the arbiter. Parliament finally decides. That is why I petitioned the other place and why I tried to stop the road from proceeding.
The key argument was put by the county engineer in a report written by Ian Craig, the local government editor of the Liverpool Daily Post last year. He wrote:
"The key argument used by county engineer Mr. Ronald Williams to justify such a major ring road is the prediction that by 1998, despite dropping population and jobs, a 43 per cent. increase in city centre traffic would produce widespread congestion'.
In fact, according to statistics prepared by the ring road team itself, the growth in traffic may be as low as 11 per cent. and the most it could be would be 43 per cent.
The city planning officer, disputing the county's predictions, says a basic weakness is the use of the maximum possible increase.
'Growth estimates of between 11 per cent. and 43 per cent. by 1998 were produced, yet the figure of 43 per cent. growth is used without question in the report as a basis for justifying the need for the ring road,' says Mr. Evans.
And he says that such long-term forecasts are 'notoriously unreliable' anyway and points to remarks made by the county's own planning department, saying there is uncertainty about forecasting things like the number of cars.
Other points Mr. Evans makes are:
That the London Road shopping area would be seriously hit by the ring road with most of its shops removed.
That the road would mean unnecessary job losses, with at least 50 firms hit, and would harm the environment.
He also says that despite the ring road's planned size, it would not necessarily even speed up traffic movement.
Mr. Evans says he would be apprehensive if the city agreed to the present ring road plan which would be 'wasteful, representing a misuse of financial resources'.
He feels an honourable compromise to outright opposition, which could create more uncertainty, would be to scrap the grand plans and simply improve some of the present roads."
Those are the views of the city planning officer.
The method employed in the Bill to deny people the right of basic appeal and

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public inquiry before their properties are stolen from them is tantamount to using totalitarian methods. The reports were suppressed. Neither the city councillors nor the county councillors had that information before them when they arrived at their decision. We should send the Bill back for further consideration, on the basis that people were misled and did not have that information.
Far more important, this is a monstrous denial of rights. It is a different scheme, affecting different properties. When Parliament granted these powers 14 years ago it certainly did not intend them to be used in this high-handed way. It is an iniquitous Bill, which threatens the basic rights of British citizens. It allows homes and businesses to be stolen and bulldozed without the right to public inquiry. For that reason I oppose the Bill, despite the fact that there are many clauses in it with which I obviously agree. I would rather have the city in its present condition, dealing with its present byelaws, than see the Bill implemented with this iniquitous clause in it. It creates a disgraceful situation in the city of Liverpool.
Mr. David Hunt: On a point of order. Does the hon. Member not think that it is rather irresponsible to raise this matter at such a late stage, and could he perhaps explain to the House why, when making a petition to the House of Lords, he did not appear to his petition? In the Minutes of that Committee there is a call for him to appear and when he did not do so the Chairman reluctantly had to strike out his petition. Was that not the stage at which he should have made the objections that he is now making?
Mr. Alton: I think that it would be rather more irresponsible for the hon. Member for Wirral (Mr. Hunt) to intervene at this late moment in this debate, not having listened to the arguments.
Mr. Hunt: I was there.
Mr. Alton: I apologise to the hon. Member. It seemed to me that he had taken his seat just at that moment. It seemed to me that to come here and suggest in this way that I have not consistently opposed this scheme is ludicrous, when I pointed out at the beginning of
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my speech my consistent record in opposing it. I did indeed write to the other place and place before it—the hon. Member has my letter in his hand—an outline of my objections. I have constantly given my reasons for opposition to this scheme.
It would be far better for us tonight to agree to the removal of these clauses and to allow the Bill to go through. This would be a responsible move on our part. I did attempt to amend the Bill, as the hon. Member for Wirral well knows.
He knows that I moved an amendment that was not selected, for reasons that Mr. Speaker can give himself and that I fully understand. Nevertheless, the amendment was moved and I attempted to have a special debate on this specific subject. That being so, I had no choice this evening but to state my opposition in this way.
I do feel strongly about £40 million being squandered when, in my constituency, we have 30 per cent. Unemployment—12 per cent. in the city—when home helps and meals on wheels services are being closed down, teachers are being sacked, and many local government services are to be cut.
Mr. Deputy Speaker: Order. I cannot recognise many of those items in the Bill.
Mr. Alton: I take your point, Mr. Deputy Speaker. I was perhaps provoked.
I am opposed to this frivolous scheme for these reasons. Conservative Members talk so often about spending people's money wisely. I wish that on this occasion they would think in terms of making one expenditure cut which would be welcomed by the people of Liverpool.
Mr. Cyril Smith: Hear, hear.
8.48 pm
Mr. Eric Ogden: I thank the hon. Member for Rochdale (Mr. Smith) for that warm expression of feeling. I do not know whether it was directed at me or at the passing of his hon. Friends.
Mr. Cyril Smith: It is not that I am grateful; it is simply that I believe in hon. Members having the right to speak.
Mr. Ogden: The purpose of this debate, as I understand it after having served some time in this House, is to provide an opportunity for the House to debate the Third Reading of this Bill and to decide whether to give it a Third Reading. It is not in our power to decide to delete any part of the Bill. The hon. Member for Liverpool, Edge Hill (Mr. Alton) is perfectly entitled to do whatever he likes, within parliamentary procedure, to withhold or to give his support. I suggest that he is fighting what is perhaps the right battle—about the inner ring road—but on the wrong battlefield. I will explain that in a little while.
The question is whether we should give the Bill—this modest tome of 16 parts, 146 sections, five schedules, and 149 pages—which has been around the corridors of the Palace of Westminster since 1978, a Third Reading. If anyone in Merseyside asks a Merseyside Member what he did in the Parliaments of 1977, 1978, 1979 and 1980, he can say that he considered the County of Merseyside Bill, and that should be more than sufficient explanation.
The Bill has been considered and debated. It has been dissected and put together again. It has had more consideration than has any other piece of legislation in the past 15 years. If Government legislation were given half the scrutiny that the Bill has received, it would be much better. During the parliamentary progress of the Bill the past chairman of the county council, now Lord Sefton, the present chairman of the county council, Sir Kenneth Thompson, a former Member of the House, the parliamentary agents, the Officers of the House and the officers of the county council have been readily available to Merseyside Members of Parliament and to Members of Parliament from all parts of the country, to discuss difficulties with them, agree alterations and improvements and to allay understandable and perhaps ill-founded worries and fears about the Bill's finer points.
The Bill renews the powers of the county council which lapsed because of an Act of Parliament. It is no empire-building exercise by the county council. The hon. Member for Edge Hill seems to have overlooked the fact that the Bill provides for a considerable degree of discretion on how the powers that remain
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in the hands of the county council are used. That is a key point. From now on, how the Bill is used by the Merseyside county council for the people of Merseyside on Merseyside must be decided in Merseyside and not in the House.
During the past 15 years no one has accused me or my hon. Friends of being careless about the spending of public money. There are times when decisions have to be taken locally and times when they have to be taken here. How the Bill is used should be decided on Merseyside, not in the House of Commons. My electors did not send me to Westminster, 200 miles away, so that I should run from Westminster the Merseyside district council or county council elections. Merseyside Members of Parliament will continue to take an interest in the Bill and in what happens to it outside, just as we have taken a keen interest in it from inside the House. The sooner it is realised that county councils are supposed to be run by county councillors and district councils by district councillors, and that we in Westminster cannot significantly affect or decide the day-to-day running of the councils, the better it will be for local government and Members of Parliament.
Mr. Alton: We are considering a Bill that takes away a right of public inquiry. It takes away the right of members of the public to appeal against the acquisition of their homes and businesses. Should not that be a concern of Merseyside Members of Parliament? Does the hon Member for Liverpool, West Derby (Mr. Ogden) support those clauses?
Mr. Ogden: Yes, because I believe that if the people of Merseyside allow a certain county council to be elected, that is their responsibility, right and duty. If they decide that a certain district council should be elected, that is their decision which I would try to influence, but surely we do not have local councils so that Members of Parliament can tell them what to do. It might be part of the philosophy of the hon. Member for Edge Hill to tell his electors that he will sort out their roads, their grids and so on. We have an interest in it, but it is not the duty of a Member of Parliament to decide the day-to-day administration of local government. If we do that, why bother to have a county council? Why

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bother to have a district council? Let it all be run from Merseyside. I could be appointed commissioner for Merseyside tomorrow and I should be delighted, but I do not know what others would think. We should not be told that we have the duty of influencing decisions without power to carry them through.
Mr. Parry: I inform my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) that the Merseyside group of Labour Members of Parliament have it on record that they are totally opposed to the construction of the ring road.
Mr. Ogden: I happen to be the secretary of the Merseyside group of Labour Members of Parliament. I wrote that decision down and do not need to be reminded of it.
Mr. Parry: I moved it.
Mr. Ogden: My hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) moved it and I wrote it down. But it is not the person who makes the decisions who decides what happens but the person who writes down the decisions a month or so later. Of course we are agreed on this. All I am saying is that I have grave doubts. This matter has to be dealt with on Merseyside and not across the Floor of the House.
The county council offices are just as bad. There were rumours—we know that this is a place of rumour and great mystery—that the hon. Member for Edge Hill was supposed to have tabled a blocking motion and that the whole Bill would go because he did not like one part of it. The reaction of the county council was to panic—it has a thing about the hon. Member for Edge Hill. My good lady thinks that he is lovely. I could suggest that she needs another pair of spectacles, but that is something else. But the county council offices start sending in screeds of detail about the inner ring road, and of course it will be useful but not in the House of Commons unless we decide, as well we might, to abolish the county councils and the district councils and sort everything out here. That is the choice.
I was not elected to run the offices of the district, city or county council, but I shall have my say back on Merseyside
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later. I do not usually swear and would not be allowed to do if I wanted to, but I consider that one-third of the time of any Member of Parliament from Merseyside is spent on local government or county council matters that officially have nothing to do with a Member of Parliament. Houses, gates, roads and the rest are very important—
Mr. Alton: Education.
Mr. Ogden: Yes. We have an influence there to some extent. But others, better paid and with more time than ourselves—
Mr. Deputy Speaker: Order. I imagine that those people are not mentioned in the Bill.
Mr. Ogden: They form part of the schedule to the third section of the fifth part—and so on.
If we spend our time doing the work of others, there will be much less time to spend on our real job. Our duty is supposed to be to support or oppose a Government and to scrutinise legislation. Our duty is supposed to be to act as the parliamentary voice for our constituents. If we spend time doing the job of city or county councillors, there is less time to attend to our primary job.
The hon. Member for Edge Hill has doubtless filled the front, middle and back pages of the Liverpool Daily Post and the Liverpool Echo. He has confirmed his reputation in some areas. There are times when he and I agree and work closely together. But, though he is involved in the right battle, he is in the wrong place tonight. This Bill has had more time, more detailed attention, more changes and alterations than any piece of legislation I know. In the previous debate I called it the Eliza Doolittle of legislation; we have grown accustomed to her face.
There are other battles that have to be fought but not here. That is the only difference between myself and the hon. Member for Edge Hill tonight. The Bill and its use must be decided by Merseyside people in Merseyside for Merseyside. We have our part to play in that, not here in Westminster but back home. I hope that the House will give the Bill a deserved and unopposed Third Reading.
8.59 pm
Mr. Anthony Steen: I am aware that the hon. Member for Liverpool, Edge Hill (Mr. Alton) does not like to seek any limelight, wish to receive any publicity or be heard on the radio. He merely wishes to use this debate to further a point that he fervently believes is relevant to the Bill and on which he feels that the House should hear his arguments on Third Reading. It is quite clear that he is exploiting the situation, and you, Mr. Deputy Speaker, have been extremely tolerant of the approaches in his speech which have been out of order and made at the wrong time. I wish to put on record that the hon. Gentleman is trying to advance an argument, interesting though it may be, which has nothing to do with the Bill. It may be interesting in his county council's chamber or on the streets of his constituency, but it is not appropriate in this place.
I hope that the House will reject his suggestion that the whole of the Merseyside Bill, which has been fighting to get on the statute book for one and a half years, should be delayed still further. The hon. Gentleman—perhaps understandably—has a penchant for objection to the inner ring road. The hon. Gentleman is not alone in his condemnation of the ring road. However, from discussions in my constituency, I can tell the House that au equal number of people are for the inner ring road. His analysis of the situation in Merseyside is totally wrong.
The hon. Gentleman talks about the waste of public land by the use and the building of a ring road. He does not seem to realise that the cities of Europe and North America are dependent on good infrastructure and that the purpose of the ring road is to provide, as the underground system now provides, a basic infrastructure. We hope that that infrastructure will start to attract small firms and some of the larger firms back into the inner area.
Mr. Alton: Will the hon. Gentleman explain how small firms on Merseyside will survive the calamity of a possible 65 per cent. increase in rates this year? In view of that increase how does he justify spending £40 million on a road scheme?
Mr. Steen: The hon. Gentleman does not understand how the rates have in-
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creased over the last decade because of Governments who have driven people out of the inner city by demolishing private homes and small firms. That means that there is less rateable land and that less rates are paid to the city treasurer's department to create prosperity and provide the services that are needed to sustain the inner area.
Mr. Parry: Does not the hon. Gentleman agree that the building and construction of the inner ring road will drive thousands more from the inner areas?
Mr. Steen: No, I do not. That argument is completely misguided. The building of the road will create a termendous amount of employment, and it will offer a lifeline for Liverpool to create the necessary infrastructure. It will allow the derelict land of about 1,800 acres—900 acres of which is in the hands of nationalised industries and local authorities—to be built upon. It will encourage the building of homes and factories. Opposition Members who pursue that argument should remember that small firms were driven from the inner areas to the green field sites and 100,000 jobs were moved from the inner to the outer areas over the last 10 years by the programmes of successive Governments. The inner ring road is an attempt to reverse that drift.
The hon. Member for Liverpool, Edge-hill, may not agree that it would cause people to come back to live in the inner city, but that is the purpose of the scheme. We could debate that matter at another time and in another place. However, I must put on record that the analysis of the hon. Gentleman is mistaken. He believes that using a little of the derelict land will drive out the remaining firms. The reason why firms are being driven out is that the buildings that remain in Liverpool have an artificially high rent that is caused by scarcity. Firms are being driven out because the rate base is so diminished that rates have to be artificially high.
Taking a bit of land for the inner ring road will not make the situation worse for small firms. It will create the essential infrastructure to encourage a return of wealth and job creation to an ailing inner area.

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The hon. Gentleman would like to see the continual slide of the inner area. His is a recipe for disaster. Although he has the best possible intentions, his assessment of the problem is misguided.
Mr. Alton: It is unfair of the hon. Gentleman to accuse any hon. Member of deliberately trying to create a slide towards decay in an area that he represents—and lives in. I have been a councillor in the area for about eight years. I like to think that I am concerned to try to help its vitality.
I do not expect the hon. Gentleman to be convinced only by my arguments. He should, however, accept the arguments of the county council's technical team, whose report I read earlier, and the city planning officer, who could be regarded as some kind of authority, and the views of the elected representatives of the Liverpool city council. They do not come from the lush green pastures of Formby or the Wirral but are on the local authority dealing with the area. The hon. Gentleman disagrees with the view of the elected representative for the major area affected—the hon. Member for Liverpool, Scotland Exchange (Mr. Parry)—and many others who feel strongly about the issue. He treats such views as if they were totally irrelevant.
Mr. Steen: We are debating a side issue that the hon. Gentleman raised. I rose merely to show that his was one of a number of views. His assessment and analysis of the problems of a city that we both represent may not be those of all hon. Members or widely held in a city of nearly half a million people. Although it has been an interesting exchange, it is wrong to use the Floor of the House to debate an issue that has nothing to do with the Bill.
I firmly believe in the ring road. It is the last chance for Liverpool to reverse a declining economic situation. There are 1,800 acres of dormant, vacant land. In the Committee corridor, the urban affairs and new towns group of the Conservative Party has mounted an excellent exhibition. It demonstrates that the inner area has been destroyed. People and small firms have moved out. The agricultural belt and green fields have been eaten away.
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It is a complex macro-economic and planning problem. The hon. Gentleman approaches it in terms of just an inner ring road. That shows that he does not comprehend urban problems. The inner ring road cannot be viewed in isolation.
I know how dedicated and concerned the hon. Gentleman is. It is unfortunate that he has it wrong tonight.
9.8 pm
Mr. Robert Parry: I make no apology for supporting the hon. Member for Liverpool, Edge Hill (Mr. Alton).
About seven-eighths of the inner ring road will pass through my constituency. That massive road will completely divide communities and isolate hundreds of people. It will cause council houses to be demolished. When the second Mersey tunnel was built, hundreds of houses were demolished and people had to move from the inner area.
It will be responsible for the demolition of small firms and businesses in the inner area and that will add to unemployment. Unemployment in some parts of my constituency is at nearly 40 per cent. That is an even higher percentage than in Edge Hill. It is tragic. More firms may be moved out of inner areas.
Construction of this road has met with the strongest and most hostile objections that I have known during many years in politics. Political parties are opposed, with the exception of the Conservative Party, to the road. Practically every tenants' association, community council, neighbourhood council, local trades council, trade union, local church—Catholic and Anglican—is opposed to the road. They oppose the destruction of their parishes. People have been born and raised in those areas.
Perhaps I have a vested interest. I was born and raised in the inner area. I still live there. This massive road is to be built in spite of strong opposition from those born and raised there—my neighbours, friends and relatives. Mass rallies have been held all over Liverpool. I assure the House that if the Minister, leader of the county council or anyone else were to attend the meetings and meet the people, they would realise that there is strong opposition right along the line.

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The inner ring road is in part the responsibility of planners who live in ivory towers. They live in the nice parts of Merseyside—in the Wirral or West Derby. None of them lives in the inner areas. The road will be a nightmare. I completely disagree with the views put forward by the hon. Member for Liverpool, Wavertree (Mr. Steen). The road will not return the heart to our city. It will have the opposite effect. There is no real need for a road where it has been planned. The county council should seriously look again at this issue.
Many years ago prime land in the city centre was used for small houses—of the two up and two down type. That land could be used for rebuilding the heart of our city. Houses and small factories will help to bring back jobs. During the next few years the local city council will attempt to demolish 7,000 pre-war tenement blocks. I support that action. Thousands of people will have to be rehoused. Most of them have lived in the inner area all their lives. They still wish to remain in that area. If this land is used in order to build a motorway, it will be impossible to rebuild houses and flats in the inner city area. Where will the people be rehoused?
Mr. Steen: Is the lion. Gentleman aware that as many of the older houses have already been demolished, the population has been transferred to vast soulless council estates? The hon. Gentleman must have seen them. Those tenants all wish to return to small houses in the inner area. Whenever the council destroys, it makes a worse mess. Is the hon. Gentleman saying that that should happen again?
Mr. Parry: Many years ago, local councillors for the central ward had meetings with Bill Sefton, now a noble Lord, when he was leader of Liverpool city council, before the county council was formed. We got a definite understanding that land that is now to be used for the inner ring road would, in fact, be used for building houses. Now the land has been taken away. Now there is no possibility of making some of the smaller parishes and some of the local schools viable. Some of the schools do not have enough youngsters attending them to make them viable. In spite of all the opposition the county council insists on
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pressing on like a mad bull, pushing aside all objections of the people.
At a recent meeting of the county council a small group of objectors attended. Because members of that group demonstrated, they were ejected from the Liverpool town hall. I was ejected with them, and so were two local priests who were supporting them. I know that recently Sir Ken Thompson has done a U-turn on the question of the developing council and I hope that he will be big enough to consider another U-turn and recommend to the county council that it should scrap this road that nobody wants—[HON. MEMBERS: "That is not true."] I say that the road is not wanted by anybody and I have talked to a cross-section of the community, local organisations and associations and I am sure that if a petition was presented at least 100,000 people would sign it.
Mr. Ogden: I agree with a great many things that my hon. Friend says, but surely the most effective way to change the policy of the county council is to change its elected membership. Too often local people sit at home during local elections and allow anybody to be elected—and we all know that the percentage turn-out for local elections is very small—and then they appeal to Members of Parliament to do the councillors' job for them. Local people take responsibility for electing their Members of Parliament and they should take the same responsibility for electing members of their district and county councils.
Mr. Parry: I shall not follow my hon. Friend down that road now. I feel very strongly about this issue and I led a deputation to the then Secretary of State last year. He listened to these people and we all watched a first-class film on the proposed inner ring road and the effect that it would have on people living there. I have asked that the present Parliamentary Secretary should meet those people again but he has refused. I seriously hope that he will change his mind and listen to their objections.
I do not know whether the Parliamentary Secretary has looked at the siting of the ring road, but I beg both him and the Secretary of State to have a look, just as the last Minister of Transport did.
Mr. Steen: He liked it.
Mr. Parry: I do not think so. I agree with the hon. Member for Liverpool, Edge Hill (Mr. Alton). It is not often that we agree on political matters but he has been consistent in his opposition, both inside and outside the House, and I fully support him.
9.18 pm
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I rise to intervene briefly and emphasise that my remarks are in no way meant to wind up this debate. The County of Merseyside Bill is a private measure, sponsored in this House by my hon. Friend the Member for Wirral (Mr. Hunt) I do not know how many sponsors this Bill has had during its long passage or how many Ministers have intervened at various stages, but it is not appropriate that I should wind up the Bill as a whole. I merely give the Government view on the Liverpool inner ring road.
The hon. Member for Liverpool, Edge Hill (Mr. Alton) has chosen the Third Reading debate to canvass his well-known views on this ring road and with some ingenuity he has commanded the Floor of the House of Commons for the best part of an hour about a totally Merseyside local government row. He raised this in an Adjournment debate on 10 July last year when he used much the same quotations and arguments. I will not rehearse them all again.
I find myself agreeing with the hon. Member for Liverpool, West Derby (Mr. Ogden). We have been debating a matter which should be debated by the elected representatives of the local authorities in Merseyside. It is preposterous to argue that every Member of Parliament who has a dispute with his county council or his district council—regardless of the political party that controls the local authorities—should breeze along to the House of Commons, and seek either to refute a Bill of this sort and reject it entirely, or to try to involve the Government in taking decisions in London which are best taken in Merseyside. The people whose opinions the hon. Member rejects are elected representatives from Merseyside. They are the highway authorities. The hon. Member uses emotive language in which to attack them. They have to answer to their electorate and to legality which is best exercised there.
Mr. Alton: I am grateful to the Minister. I do not want the Minister to go into long and detailed arguments about the ring road. We have debated that matter on previous occasions. It is obvious that he has not changed his mind. I should like him to concentrate his mind on the schedule before us. Parliament is being asked to decide whether we wish the Bill to be placed on the statute book. That is a matter for hon. Members, not for the county council. People's homes and properties can be taken away from them under the powers contained in the Bill, without the right of a public inquiry. Is that a matter of which the Minister and his Government approve?
Mr. Clarke: That is certainly the case. The Bill bears on the 1966 Act, which gives the powers on which the council tend to rely. They have a 14-year-old power. I am an outsider on the matter of the ring road, as is the hon. Member for Rochdale (Mr. Smith). I shall give him a similar reply if he talks about local roads in Rochdale, claiming that he wants a ministerial reply.
I do not regard myself as being in a position to decide on Merseyside local roads. I have been obliged to take an interest in the road, and I find that for 14 years people on Merseyside have talked themselves to a total standstill about a road on which no one seems able to take a decision. Parliamentary powers were given in 1966. The hon. Member for Liverpool, Edge Hill was elected in May 1979, and he now wants to open 13 years of debate, and thus cause further delay.
As an outsider—I hesitate in the fraught atmosphere of a Merseyside debate to give advice to Merseyside MPs—one of the things that I discovered when looking at the inner ring road is that the inner area of Liverpool is blighted to a considerable extent with empty derelict land, much of which is deteriorating because of continued indecision. Because the hon. Gentleman is late in the field so far as the House is concerned—although he is not late in his opposition to the road—he wishes to extend the uncertainty either by asking Ministers to intervene or by blocking a Private Member's Bill, or by any other means by which he can overrule the decisions of the democratically elected Merseyside county council.

369
I intervene because the hon. Gentleman is entitled to a reply as a Member of the House. I underline the fact that this is a local authority responsibility. The hon. Gentleman has obliged me to take a much closer look at the road. My attention was drawn to the matter by the hon. Member for Liverpool, Scotland Exchange (Mr. Parry). His constituency is affected, so I have some sympathy with him, but the hon. Member for Edge Hill insists on representing the constituencies of other Liverpool Members which are outside his boundaries.
The hon. Member for Scotland Exchange has the most direct interest. He wishes me to look at the ring road. I have taken an interest. I cannot conceivably meet deputations on behalf of the Government, and take steps on a matter which is not the proper responsibility of the Government. I have made the same decisions as the Ministers responsible in the previous Labour Government. The scheme is highly commendable, and it is accepted expenditure for the purpose of transport supplementary grant. So long as the Merseyside county council continues to persevere with it, the time has come for a decision.
Mr. Alton: I am grateful to the Minister for being so courteous. It would be highly irresponsible for me, a Merseyside Member, to ignore the fact that my constituents will have to pay vast amounts for the road to be built. Some of my constituents' properties will be affected by the construction of the road. I speak legitimately on their behalf. It would be irresponsible of me not to be a guardian of the public purse. The scheme is to cost £40 million at a time when the Government are talking about public expenditure cuts.
We are talking about the use of powers that are 14 years old.
Mr. Ogden: That is not a long time in this place.
Mr. Alton: We are talking about a different scheme from the one conceived by the Liverpool city council in 1966, the year that the Liverpool Corporation Bill was introduced. We are about to witness a misuse of powers. We are talking about a different road, a different scheme and different properties. Nevertheless, the House is asked to allow the
370
Bill to pass on to the statute book so that people's businesses and homes may be taken away from them.
Mr. Clarke: We are studying the transportation programmes and plans of local authorities and deciding what is acceptable expenditure We are giving the appropriate grant for that expenditure. That is being done against a background of financial restraint. We are not against all expensive road schemes. To claim that financial constraints mean that all road schemes should be stopped would lead to absurdity and great hardship in some areas.
It is for Merseyside to make its bid. The hon. Gentleman is a member of the Liverpool city council. Apparently he is able to command considerable attention in the local press and on radio and television in the Liverpool area. He should pursue his argument in the Liverpool area and not any longer in the House of Commons.
The Bill has had a long course in this place. I believe that the time has come for the House to make a decision on Third Reading. It is an odd suggestion that two years' work in the House should be rejected because the hon. Gentleman has decided yet again to advance his argument on the inner ring road. I understand that at some stage a petition was presented by the Liberal councillors on the Liverpool city council. All 41 of them petitioned against the inner ring road. They were entitled to do so. They petitioned against the Bill and the relevant powers. On 10 July 1978 the time came for the petition to be pursued and to be examined by the Committee. Unfortunately, not one of the 41 councillors appeared to pursue the petition. They were noticeable by their absence. They took no part in the proceedings at that stage.
It is unfortunate that on Third Reading—[Interruption.]
Mr. Cyril Smith: Disgraceful lies.
Mr. A. P. Costain: On a point of order, Mr. Deputy Speaker. Did you hear the hon. Member for Rochdale (Mr. Smith) say that my hon. Friend the Parliamentary Secretary told a lie? Is that parliamentary language?
Mr. Deputy Speaker: If I had heard anything of that sort, I should have asked the hon. Member for Rochdale (Mr. Smith) to reconsider the matter.
Mr. Alton: I ask the Minister to reconsider his statement. I composed the letter and sent it myself. I received an acknowledgement. I know that many written representations were made. I personally delivered to another place the 41 signatures. Representations were made by my colleagues and myself and none of us was invited to attend the other place.
Mr. Cyril Smith: Answer that.
Mr. Clarke: I am sorry if a procedural error was made. That may be the explanation. The 41 signatures were presented on the petition. However, the petition was not pursued. Not one of the signatories appeared to pursue it. If a procedural error was made, that was a
misfortune. However, that was the stage at which the matter should have been pursued. It is absurd to try to reject the entire Bill on Third Reading because of a dispute concerning the inner ring road.
I have discovered that there are strong feelings about the inner ring road in Liverpool. However, there are rather more substantial portions of the Bill on which Merseyside Members are anxious to reach a conclusion. The Government's views remain the same on the inner ring road. We consider it to be a local authority matter. We have accepted the expenditure for grant purposes. The scheme appears to us to have considerable merits. It is an issue that is not appropriate for the House or for the Government finally to determine. It is not a reason for rejecting the entire Bill.
Question put, That the Bill be now read the Third time:—
The House divided: Ayes 179, Noes 6.

Division No. 191]

AYES

[9.30 pm

Ancram, Michael

Duffy, A. E. P.

Kimball, Marcus

Arnold, Tom

Dunn, Robert (Dartford)

King, Rt Hon Tom

Aspinwall, Jack

Dunnett, Jack

Knox, David

Atkinson, Norman (H'gey, Tott'ham)

Edwards, Robert (Wolv SE)

Lambie, David

Banks, Robert

Ellis, Raymond (NE Derbyshire)

Lawrence, Ivan

Bell, Sir Ronald

Evans, John (Newton)

Lee, John

Bennett, Andrew (Stockport N)

Eyre, Reginald

Leighton, Ronald

Benyon, Thomas (Abingdon)

Fairgrieve, Russell

Lewis, Ron (Carlisle)

Berry, Hon Anthony

Faith, Mrs Sheila

Lloyd, Peter (Fareham)

Best, Keith

Fenner, Mrs Peggy

Lofthouse, Geoffrey

Bevan, David Gilroy

Field, Frank

McCartney, Hugh

Bidwell, Sydney

Flannery, Martin

Macfarlane, Neil

Blackburn, John

Fletcher, Ted (Darlington)

McKay, Allen (Penistone)

Booth, Rt Hon Albert

Fookes, Miss Janet

MacKay, John (Argyil)

Boscawen, Hon Robert

Fox, Marcus

McQuarrie, Albert

Bottomley, Peter (Woolwich West)

Fraser, Peter (South Angus)

Major, John

Bowden, Andrew

Freeson, Rt Hon Reginald

Marland, Paul

Bright, Graham

Garel-Jones, Tristan

Marlow, Tony

Brinton, Tim

George, Bruce

Marshall, Jim (Leicester South)

Brown, Michael (Brigg & Sc'thorpe)

Golding, John

Mather, Caro.

Buchanan-Smith, Hon Alick

Goodhart, Philip

Maxton, John

Budgen, Nick

Gorst, John

Maxwell-Hyslop, Robin

Butcher, John

Gow, Ian

Maynard, Miss Joan

Cadbury, Jocelyn

Gower, Sir Raymond

Meyer, Sir Anthony

Campbell-Savours, Dale

Grant, Anthony(Harrow C)

Miller, Hal (Bromsgrove & Pedditch)

Carlisle, John (Luton West)

Grant, George (Morpeth)

Mills, Peter (West Devon)

Carlisle, Kenneth (Lincoln)

Grieve, Percy

Moate, Roger

Chalker, Mrs Lynda

Grylls, Michael

Morris, Rt Hon Charles (Openshaw)

Clark, Dr David (South Shields)

Hamilton, Michael (Salisbury)

Morrison, Hon Peter (City of Chester)

Clark, Sir William (Croydon South)

Hamilton, W. W. (Central Fife)

Morton, George

Clarke, Kenneth (Rushcliffe)

Hampson, Dr Keith

Myles, David

Colvin, Michael

Hawkins, Paul

Nelson, Anthony

Cook, Robin F.

Hawksley, Warren

Neubert, Michael

Cope, John

Haynes, Frank

Newton, Tony

Corrie, John

Heddle, John

Normanton, Tom

Costain, A. P.

Henderson, Barry

Nolt, Rt Hon John

Craigen, J. M. (Glasgow, Maryhill)

Hicks, Robert

Ogden, Eric

Cryer, Bob

Hogg, Hon Douglas (Grantham)

O'Neill, Martin

Cunliffe, Lawrence

Hogg, Norman (E Dunbartonshire)

Orme, Rt Hon Stanley

Dalyell, Tam

Howell, Ralph (North Norfolk)

Page, John (Harrow, West)

Davis, Terry (B'rm'ham, Stechford)

Hunt, David (Wirral)

Page, Rt Hon Sir R. Graham

Dean, Joseph (Leeds West)

Hunt, John (Ravensbourne)

Palmer, Arthur

Dean, Paul (North Somerset)

Jenkin, Rt Hon Patrick

Pattie, Geoffrey

Dempsey, James

Jessel, Toby

Pavitt, Laurie

Dewar, Donald

Jones, Barry (East Flint)

Porter, George

Dixon, Donald

Jones, Dan (Burnley)

Proctor, K. Harvey

Douglas-Hamilton, Lord James

Jopling, Rt Hon Michael

Race, Reg

Rathbone, Tim

Spence, John

Waldegrave, Hon William

Rees, Peter (Dover and Deal)

Spicer, Jim (West Dorset)

Walker, Rt Hon Peter (Worcester)

Richardson, Jo

Spriggs, Leslie

Walker, Bill (Perth & E Perthshire)

Rifkind, Malcolm

Sproat, lain

Ward, John

Roberts, Albert (Normanton)

Stevens, Martin

Watson, John

Roberts, Allan (Bootle)

Stewart, John (East Renfrewshire)

Wells, Bowen (Hert'rd & Stev'nage)

Sainsbury, Hon Timothy

Stradllng Thomas, J.

Wheeler, John

Shaw, Giles (Pudsey)

Strang, Gavin

Wickenden, Keith

Shaw, Michael (Scarborough)

Tebbit, Norman

Winterton, Nicholas

Shepherd, Colin (Hereford)

Temple-Morris, peter

Young, Sir George (Acton)

Sims, Roger

Thatcher, Rt Hon Mrs Margaret

Skeet, T. H. H.

Thompson, Donald

TELLERS FOR THE AYES:

Spearing, Nigel

Waddington, David

Mr. Malcolm Thornton and

Speller, Tony

Wakeham, John

Mr. Anthony Steen.

NOES

Beith, A. J.

Ross, Stephen (Isle of Wight)

Homewood, William

Howells, Geraint

TELLERS FOR THE NOES:

Parry, Robert

Mr. Cyril Smith and

Penhaligon, David

Mr. David Alton.

Question accordingly agreed to.

Bill read the Third time and passed, with amendments.

EUROPEAN COMMUNITY (WATER POLLUTION)
9.40 pm
The Under-Secretary of State for the Environment (Mr. Marcus Fox): I beg to move,
That this House takes note of European Community documents 6995/79 and 7735/79 concerned with draft EEC Directives on water pollution by aldrin, dieldrin and endrin and by mercury, and the Department of the Environment's supplementary explanatory memorandum; and supports the Government's intention to seek satisfactory quality objectives according to the purpose for which the water is to be used.
The Government welcome this debate tonight and are grateful to the Select Committee for recommending it. The Select Committee was correct in its conclusion. These two sets of proposals from the EEC raise questions of political importance which it is right and proper for the House to consider and I look forward to hearing the views and comments of hon. Members.
I congratulate the Select Committee on these two reports. They are a model of brevity, accurately summarising the main features of these proposals and the issues to be considered. I should also like to pay tribute to the excellent work done on these subjects by sub-committee G of the House of Lords Select Committee on the European Communities. Its authoritative report on the drins proposals is well known and respected both here and in Brussels.
Apart from the Select Committee's two reports, hon. Members should also have seen the supplementary memorandum we have just tabled. This describes two important developments in Brussels since the original drafts were published last summer.
Let me first, Mr. Deputy Speaker, put these EEC proposals into context. They are not by any means the first water directives. The Community's environmental activity formally began in 1973 with the publication of the first environmental action programme. Directives on water quality were agreed to be a clear priority and the House will know that a number have now been agreed. We have debated those on groundwater, freshwater fish, drinking water and standards of measurement, to give the most recent examples.
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The United Kingdom has played its responsible role as a member State in actively supporting and assisting the preparation of directives on water quality. But one thing has become very clear. Our circumstances in the United Kingdom and as a result our policies and practice are very different from those in Europe. The principal reason for the priority given to water legislation was European concern for transfrontier pollution. We can understand that concern in the United Kingdom and indeed sympathise with it, but we do not share it. It is not a United Kingdom problem.
As I have said, our circumstances are very different from those of other member States. We are an island, with abundant water supplies, and a large number of fast flowing rivers. Our water pollution control procedures are well established and are based upon United Kingdom circumstances and conditions. They are, inevitably, different from those used on the Continent of Europe. These vital differences in circumstances and as a result in policies and procedures are a constant theme in negotiations on EEC water quality directives and they recur in the latest sets of proposals that we are debating tonight.
In sketching out this important background, I do not seek to imply that we regret at all the tremendous Community effort spent in establishing a regime of water quality directives. We do not—and here I might stress the bipartisan nature of the United Kingdom position which I hope will be continued tonight. But the accommodation of the different approaches to controlling water pollution in Community legislation has not been easy, and the difficulties remain in the current negotiations.
Let me now come to the proposals on the drins and mercury. They result from a major parent directive passed in 1976, the negotiations for which were, I understand, more than usually bedevilled by the difficulties that I have mentioned. As the Select Committee has said, the important point about these present proposals is that they are the first offspring of that parent directive. I refer to EEC document 76/464, passed by the Council on 4 May 1976, dealing with
"pollution caused by certain dangerous substances discharged into the aquatic environment of the Community."

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This provides a framework for measures to control water pollution caused by the discharge of harmful substances. These are grouped into a black list and a grey list on the basis of their polluting effects.
The parent directive does not in itself establish limits or standards for any of these dangerous substances. The idea always was that standards for the black list should be laid down in subsequent directives. The first two of these are before us now.
To take the drills first, these proposals are not in themselves of major significance. The drins should indeed be controlled, but they are not in wide use. In fact, the proposed directives will bear only on two member States, the Netherlands and the United Kingdom. In the United Kingdom, the EEC proposals would only affect discharges of dieldrin by our mothproofing industry, which is largely based in Yorkshire. Traces of drins can be found elsewhere, but these would not be covered by the present texts.
There is room for doubt as to whether such a limited proposal justifies a Community directive. In the early negotiations in Brussels we raised this question, but the Commission has been under pressure from a number of countries to make progress with proposals under the parent directive, and the drins obviously seemed a simple place to start.
Mr. Tam Dalyell: When the hon. Gentleman raised this question in Brussels, what was the reply from the Community? Some of us with experience of the Community are strongly with him and think that this sort of blanket approach in directives is sometimes daft.
Mr. Fox: The hon. Gentleman, as usual, speaks common sense. With regard to this directive, I think that we behaved sensibly in that here was a minor matter and there was no way in which we could stop its progress. It seemed fair that we should accept it as being one of the first proposals. If the hon. Gentleman will wait until I have finished my speech, I am sure that he will understand how we shall tackle these other things in the future, which are much more major.
Mercury was less simple in prospect because it is a widely-used substance
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which also occurs naturally. In the interests again of making an early impact on the problem of dangerous substances, the EEC Commission chose to concentrate upon the chlor-alkali electrolysis industry. It claimed this industry was a "principal source" of pollution caused by mercury discharges into water. As the Select Committee's ninth report has noted, the CBI rejects this charge. It argues that mercury discharges from this industry have not caused harmful pollution within the terms of the definition specified in the parent directive.
The United Kingdom Government have some sympathy for the industry's point of view. Companies such as ICI have spent considerable sums of money in recent years to reduce the amounts of mercury discharged to the waters concerned, which have in any case been carefully monitored by the relevant water authorities. The fact is, however, that in Community terms the chlor-alkali industry is the largest single discharger of mercury and was, therefore, the likeliest target for the legislators to pick off first.
Here is an immediate example of the difference in approach that I have mentioned. Controlling discharges of dangerous substances on the industry-by-industry basis proposed by the EEC Commission is not the United Kingdom approach. Our concern is with the quality of the water which may be affected by a number of different discharges and, in the case of mercury, by some natural levels. So we have proposed, as our supplementary memorandum makes clear, that for the United Kingdom system the eventual directives should apply generally and not just to the mothproofing industry, for the drins, or the chlor-alkali industry, for mercury. The House will agree that not only does this accord better with existing United Kingdom practice but it also makes for more comprehensive and effective environmental legislation. Instead of at least two mercury directives dealing with different industries and sources of discharge, the United Kingdom approach requires only one.
Mr. Dalyell: Before the Minister leaves that subject may I ask him a question, as he may wish to answer it from the Box? What will the Government do about the methyl-mercury problem in this country? Do they accept that it is a major issue?
Mr. Fox: The hon. Gentleman is correct. By leave of the House, and with permission, I hope to reply to him.
This brings me to a major issue in the negotiations on these proposals. It concerns what the Select Committee rightly calls "the parallel approach" embodied in the parent directive. A vital compromise was reached in that 1976 directive for which I would pay tribute to the efforts of the Ministers then concerned and especially the right hon. Member for Birmingham, Small Heath (Mr. Howell) whom I see opposite. This was that member States could control water pollution by black list substances either by environment quality objectives—the United Kingdom system—or by limit values—the European system. In other words, we agreed to achieve the same ends by our different means. This was—and in the Government's view, remains—an appropriate and respectable solution to the problems posed for Community legislators by the differences in circumstance and practice between the United Kingdom and other member States.
This compromise enshrined in the "parallel approach" remains vital to United Kingdom interests. As the evidence considered by the Select Committee makes clear, our industry and water authorities strongly support the Government's preference for the EQO system. It is an effective policy for controlling water pollution. It is a policy soundly based in both scientific and economic terms. It is well established in this country. And the proof of its effectiveness lies in the generally high quality of our rivers, which set a standard to which many European countries would like to aspire.
It is therefore of crucial importance, Mr. Deputy Speaker, to ensure that the parallel approach embodied in these offspring directives is a genuine one. As these drafts on drins and mercury are the first to be published, we must take particular care. Further directives covering other black list substances will follow and the precedents established in these first two directives will inevitably affect subsequent proposals.
So we must take a very hard look at these EEC proposals. What do we find? The Select Committee states in its ninth report that the evidence it received claims
380
"a basic misunderstanding by the Commission of the implications of the parallel approach".
For both the drins and mercury proposals the Select Committee also refers to claims of "unrealistic quality objectives" and "a lack of correspondence" between the standards set for the two different methods of control.
These are serious criticisms, if true. The Government think they are. Let me give the House two examples to support our conclusions. First, let us consider the imbalance in the timescale's proposals for the alternative methods. For mercury, it is proposed that the quality objectives should apply in full from 1983; but the most stringent limit values are not to be achieved until 1989. For drins, the quality objective—our system—must be achieved by January 1982. The most stringent limit values need not be met until January 1986. If this is a parallel approach it seems a strange one.
A second example concerns the most important criticism we have of these texts. The quality objectives proposed do not accord either with the EQO system used in this country or with the compromise contained in the parent directive.
The vital feature of EQO philosophy and practice in this country is that objectives and standards set for different stretches of water vary according to the use of that water. To give a simple example—a section of a river where water is abstracted for drinking will have different quality requirements to meet from one used as a coarse fishery. This principle is already embodied in EEC water directives. We expected to see it in these proposals. But in the drins text, only one quality standard is proposed which all waters in the United Kingdom, irrespective of use, apparently have to meet. For mercury, different standards are allowed for marine and freshwater but, again, there is no distinction by use. The implication is clear: we are expected to change our system and practice in this country, to meet the demands of these directives.
The objections are obvious. First, this was not the compromise agreed in 1976 and embodied in the parent directive. Secondly, the United Kingdom has long been controlling water pollution by dangerous substances like the drins and mercury and doing so, using our EQO

381
system, effectively and economically. Thirdly, the standards proposed in these draft directives would impose additional costs on industry and water authorities—possibly quite substantial ones—which certainly have not been justified.
The Government's conclusion is that there must be changes in the present proposals. We are seeking these in the negotiations. My officials have made counterproposals at the working level for what we regard as realistic quality objectives by use, for controlling water pollution by these two substances. I welcome the opportunity provided by this debate tonight to say to all concerned that this is a fundamental principle for the United Kingdom, which must be embodied in these directives, and the ones to follow. I hope the House will support that statement and thus the motion before us tonight.
9.56 pm
Mr. Denis Howell: I thank the Minister for his kindly reference to myself. When I was negotiating these matters in Brussels, it was a great comfort for me to be able to assure Ministers from other countries that I was speaking for the whole House. If this motion is carried tonight, as I hope it will be, the Minister has our authority, when he negotiates with our partners in the Nine, to say that he, too, negotiates for the whole House. I think that that is extremely important.
As the Minister has said, this debate is very important, first, because it deals with two list 1 substances; secondly, because it puts to the test for the first time the different, the parallel, approach, as we come to call it, of establishing emission standards which can be measured immediately upon a discharge into a water supply, as compared with our own procedures which have regard to the environmental quality objectives after the discharge has been made either into rivers or into estuaries, and because it raises the matter of the authority of Ministers within the EEC and the accountability of the Commission to Ministers who, in their turn, have to be accountable to their own sovereign Parliaments. This seems to me to be an issue of principle.
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Like the Minister, I have had the benefit of advice from the National Water Council and from the Confederation of British Industry and, like him, I fully accept their advice now as I did when I had to carry out his responsibilities. On the question of drins and mercury, it is interesting to note that there is, as the Minister has said, a total lack of consistency, as far as the Commission is concerned, on the relative effects of these directives in different circumstances. We must take account of this. Certainly as far as I understand it, nowhere in the United Kingdom, in the case of either drins or mercury, is any manufacturer exceeding the safety limits, nor is there any danger from these substances as far as drinking water is concerned.
In one instance this directive imposes a more stringent standard for the effect of a substance when it enters the sea than it proposes for drinking water in this country, which seems an extraordinary situation for the Commission to find itself in. In so far as any of our manufacturers had been discharging these substances into our aquatic environment, I am glad to agree with the Minister that British industry has already taken effective steps to deal with it. I pay tribute to the ICI Mond division which has made an investment of many millions of pounds in dealing with discharges into the Mersey, in particular in the Blackpool Bay area.
It being Ten o'clock the debate stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Reserve Forces Bill [Lords] and the Residential Homes Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr Waddington.]

EUROPEAN COMMUNITY (WATER POLLUTION)
Question again proposed.
Mr. Howell: It is, therefore, unnecessary for me to spend more time in dealing with the merits of controlling either drins or mercury. We all agree that these are dangerous substances that need to be controlled, although the danger in this country is extremely limited.

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My attention was first drawn to the question of the parallel approach by my guardian angels in the Department of the Environment when I had ministerial responsibility and by representations from the Confederation of British Industry as long ago as 1975. The CBI wrote to my late colleague Anthony Crosland, who was Secretary of State at that time, and later made representations to my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) when he was Secretary of State for the Environment.
The CBI's first letter referred to fixed emission standards and said that in 1975 that was the sole procedure on which the Commission relied. It was an untried and hypothetical system. It wasted resources, finance and material by requiring the installation and operation of artificial treatment plants in cases where it was not appropriate. It was also said that the procedure had no more relevance to the distortion of trading arrangements between member States than had other aspects of industrial production costs. I agree with those three points.
I would say one word about the question of the harmonisation of trade and competition. When we started out in 1975 we were in a minority and had to try to persuade our colleagues to agree with us. We were able to get a parallel approach only by saying that in no circumstances would we approve the directive unless a parallel approach was written into it. That attitude eventually gained general acceptance, and I hope that the Government will continue along those lines.
In those days I was constantly told that we must harmonise trading arrangements. I pointed out that the EEC was not trying to harmonise trading arrangements but trying to harmonise the facts of geography, and that is a very different matter. There are two seas in the Continent of Europe, the North Sea and the Mediterranean, which geographically behave differently. We used to explain to ministerial colleagues in the EEC that if titanium dioxide was put into the Mediterranean it accumulated and had a deleterious effect on the aquatic environment, whereas if it was put into the North Sea the action of the sea upon the titanium dioxide was such that immediately the problem was reduced.
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Therefore, in the name of harmonisation, of trade, it was ludicrous to expect British manufacturers to accept such standards and considerable financial investment to deal with a non-problem as it affected the North Sea. I readily agree that the problem as it affected the Mediterranean Sea had to be dealt with.
I used to argue that if we were to start harmonising all the terms of trade, we should consider that geographically we are a bit out on a limb compared with the the rest of Europe. For example, our transportation costs are more considerable than those in other European countries. If this is what is meant by harmonisation and fair competition, the Community ought to consider how it can provide an input for British industry to allow it to trade on fair terms when one considers the transportation difference. That is the sort of argument we used to have and I have no doubt that the two Ministers who are present have to meet similar arguments today. However, we managed to obtain this parallel approach and this agreement. It was a hard-won victory, but at least we all came away thinking that it actually meant something.
That takes me on to my second point: do the directives faithfully carry out the intention of Ministers as agreed in 1975–1976? The directive does no such thing because it totally departs from that agreement—certainly the agreement for which I was responsible when I was negotiating on behalf of the Labour Government.
Mr. Dalyell: From his experience of negotiations, does my right hon. Friend think that it is fair to say that much of this was geared to the rather special problems of the Rhine and its tributaries as opposed to fast-flowing rivers? The analogy my right hon. Friend used as between the North Sea and the Mediterranean could be applied as between the Rhine and British rivers.
Mr. Howell: There is some truth in what my hon. Friend says. I do not think that it necessarily applies to these two substances, but it is true of other substances that we considered. If a country is on the receiving end of the Rhine, as some of the member States are, one can have a lot of sympathy for it because it receives half the pollution of Europe as the river reaches the sea. One has considerable sympathy for such countries.

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At any rate, I did when I used to attend the meetings.
As the Minister has rightly told us, we are for the first time establishing the precedents that will govern the dual system. Therefore, it is essential that the House should get it right. I can pick out about four or five discrepancies, particularly those that were drawn to my attention by the National Water Council, about the disparate effect between sea water and drinking water in one instance and fish life in another. As I understand it, the Ministry of Agriculture, Fisheries and Food monitors regularly—I hope the Minister can assure us on this—the fish landed here that has been caught in such waters, and nothing has been found to suggest that there is cause for concern.
The time limit is an absolute giveaway. I know that the Commission did not like this parallel approach and fought it tooth and nail, month after month. We had to keep returning to Brussels to fight this battle. That the Commission never really accepted the result achieved by Ministers is to be found in the differential time limits. I will not repeat them because the Minister has already given them to us.
If we adopt these emission standards so that pollution is measured at the moment it is discharged, we can have until 1989 to put our house in order. But if we adopt our system of environmental standards the time limit is 1983. That seems an absolutely monstrous diversion of approach that none of us should support for one moment. I am sad to make these remarks because I am a strong supporter of the European Community.
That brings me to the third point that I want to make. Those of us who support the European ideal cannot believe that it is being advanced by the sort of chicanery that is going on in Brussels. The Commission is undermining its own credibility and that of the EEC by reaching a decision with one set of Ministers and, after an election and another set
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of Ministers, going back to square one and totally disregarding the previous decision. It is not credible.
The National Water Council wrote to me recently and asked whether it was appropriate for decisions of this sort to be made by the Commission behind closed doors and without adequate consultation or accountability. It raises a matter of considerable principle. I do not doubt that the Ministers knew what they were doing in 1976; they knew how the agreement would be put into effect and how it would be carried along by Ministers representing other countries. Therefore, how can the Commission totally depart from that agreement?
This is a matter of principle and I hope that our Ministers will follow it up within the EEC. It is a weakness of the Common Market system that the Commission can initiate directives and legislation of this sort but that the system of rotating chairmanship means that no chairman presides for a sufficient period. During my period in office, we held the chairmanship for a while and we were beginning to get to grips with the matter when the chairmanship passed to another nation. The matter raises important constitutional questions. The behaviour of the Commission causes questions to be asked at the Dispatch Box tonight.
We recognise the dangers of list 1 substances. We also recognise the facts of geography. This country more than any other must insist that the tests applied to these substances are related to the problems of British industry and the geography of the British Isles. That is of vital importance.
I take it from the Minister's remarks that he has given the assurance that the Government intend to stand firm and that they will use the veto if necessary—as we were prepared to use it. I fully support that stand on behalf of my right hon. and hon. Friends, and I assure the Minister that when he fights the battle in Brussels he will speak for the whole House.
10.13 pm
Mr. Hugh Dykes: The House has benefited from two excellent presentations of what my hon. Friend the Under-Secretary has called a bipartisan case on these directives.
We are grateful to the right hon. Member for Birmingham, Small Heath (Mr. Howell) for giving the immediate historical background to the documents. Yet again, that shows that the timetable of these documents both in Brussels and here—because of the slippage in our scrutiny procedure timetable and the local timetable of the House of Commons—has created a muddle on these papers. The House has benefited directly from the clear explanations of my hon. Friend the Under-Secretary and the right hon. Member for Small Heath.
We were also extremely impressed by the reiteration of the right hon. Gentleman's belief in the fundamentals of the European ideal. That is always the greater background to these documents. That point must be reiterated quite frequently these days as the atmosphere has become considerably soured in the United Kingdom as regards membership of the Community. I pay tribute to the right hon. Gentleman. Such an utterance demands a considerable amount of courage in the Labour Party. It is rare to hear that type of remark. It lent respectability to his later words concerning his anxieties and worries about the documents.
I agree with the remarks of my hon. Friend the Minister concerning the Government's misgivings about certain aspects of the directives. I shall intervene only briefly in order to add one or two slightly general but relevant points. The question of scrutiny procedure must be regularly and monotonously raised. These documents were available in their revised form last November. A debate could have been held at an earlier date. Perhaps I have misunderstood the timing of various meetings in Brussels, but it is a pity that we have been unable to consider the documents before mid-February. An earlier debate would have given the Government the authority to state that there are objections and misgivings about various aspects.
I particularly agree about the need for differential treatment. Pollution in the
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middle of Western Europe is severe and intense. It is very different from the pollution that we encounter. We have had higher standards of control, although that may change in the future as the technology of other member States improves as regards water pollution control.
I wish to express an anxiety that has already been implied regarding the procedures on framework directives. These documents do not emanate directly from a specific article in the treaty. They emanate from a Council decision to issue a directive. That decision was not taken under the action programme for the environment that was drawn up by the Commission four years ago. It was a separate decision concerning water pollution. The advantage of a framework directive is that the Commission can construct fairly wide terms, conditions and clauses in a particular document. That will allow a reasonably pragmatic type of harmonisation in difficult technical circumstances. That applies particularly in circumstances where one does not want rigid or centralised criteria being applied to member States that have different backgrounds and technologies.
However, it also gives the Commission too much temptation—as we have already seen—to deal elaborately with many areas. Perhaps it should not deal with those areas at all. However, that is a major question and constitutional changes might be considered in future. If the Commission deals with those issues, it should do so in the most limited and brief way. It should be done by domestic legislation and it should allow member States to get on with their work.
Perhaps the Minister will correct me, but I think that we can deal with these problems under our domestic legislation. Like the right hon. Member for Small Heath, I share an enthusiasm for the original ideas and fundamental arguments behind our membership of the Community. But we should advise the Commission not to attempt to do everything. It should resist that temptation. The Commission has a great amount of discretionary authority. It can choose whether to get involved in an issue. However, if that issue does not emanate from a specific written clause in the treaty or any of the addtions to the treaty, the Commission should resist the temptation.

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All too often the temptation is for highly paid Commission officials, with their discretionary authority, and with the enthusiasm automatically generated by the framework directive procedure, particularly in environmental matters, to sit down and draw up an elaborate document. They will then more or less harry the Council of, for instance, water Ministers until they produce to the Commission's satisfaction an agreed document that Ministers from different countries may object to or worry about later, perhaps when it is too late—I believe that there have also been objections from other member States.
The Community is beset with severe problems, mainly economic and social. It would be better if the Commission was more selective in the areas in which it need not be too ambitious or elaborate.
There is a third important reason, which the House should remember and constantly recall, as should other institutions in the Community. The members of the Scrutiny Committee are worried about the accumulation of items for debate. I believe that the Chairman would agree. In the past week or two the situation has been eased marginally by some items being set down for debate. The delay until that point was all too uncomfortable for the Committee and the House.
In Strasbourg, which may now be the single seat of the European Parliament, there is also a most disconcerting and overwhelming accumulation of separate items coming from the Commission, through the Council of Ministers, to the Parliament for consultation and opinion and a more powerful form of decision making in respect of certain financial documents now being re-presented for discussion. The list of items piling up is enormous. I believe that most representatives of member States will admit that the European Parliament is incapable of dealing with those documents without changing internal procedures. That is a terrible situation for that body unwittingly to find itself in for reasons beyond its control.
That is a wider perspective, but it also applies to these documents and the original thoughts in the Commission that produced them. There is value in what is laid down in the directives. It can be
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worked on and improved. However, it is a further example of where the Commission could possibly be more usefully employed on another matter. I believe that that was the prevailing inference in the remarks of my hon. Friend the Under-Secretary and the right hon. Member for Small Heath.
10.22 pm
Mr. Tam Dalyell: Like my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), I am an unreconstructed and unapologetic pro-Marketeer. Having said that, I should like to deal with the remarks of the hon. Member for Harrow, East (Mr. Dykes). He said that it was a pity that all these items were piling up in the Parliament in Strasbourg. Some of us think that that is the fault of that Parliament. From the accounts of the debates in the press, it appears that that Parliament is spending an inordinate amount of time on subjects that should not be its first concern.
The European Parliament should not take a view on everything from Afghanistan to Central America. One can see how it is tempted to become involved in many issues. We all have individual opinions. However, the amount of time spent in Strasbourg dealing with subjects which are of global significance but which, nevertheless, remain the business of national Parliaments is Strasbourg's own fault. That Parliament must take responsibility for gumming up and snarling up matters that it should be concerned with.
I strongly support my right hon. Friend's view that, as with previous directives that we have discussed, part of the problem is musical chairs. As a former member of that Parliament's budget committee, I recall that we had endlessly to nag Ministers who came before us on whether it was sensible to have a six-month period. Count Lambsdorff was extremely scathing about the system.
It is not the fault of the Commission but the responsibility of national Governments. For the one hundred and nineteenth time I ask the British Government, for goodness sake, to accept that, when it comes to these relatively technical Ministries, the game of musical chairs with chairmen is a ludicrous procedure. It takes three or four months to settle in.

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And what is he doing? Like every other Minister, he is handing over to the next occupant and the next incumbent. That is bad enough with nine members of the Community. If the Community is to be enlarged to 12 or 13 members, Community institutions must be examined.
We now come to the general pursuit of the directives. It is legitimate to ask Ministers to pass on to the Lord Privy Seal or to the Prime Minister, or whoever handles such matters, the fact that certain questions should be asked about the various candidates for the presidency of the Commission. Do the Presidents of the Commission believe that it is the business of the Community to be regurgitating all sorts of directives? I agree with the hon. Member for Harrow, East on that point. My experience is that two-thirds of the higher civil servants in the Berlaymont work extremely hard, and they are overworked. Another six, or possibly more, work averagely hard. There are comparatively few who have less to do. A small number are looking around for jobs that the Community might be doing, and it is they who inflict the number of superfluous directives upon us. This directive is perhaps one.
Mr. Dykes: Does the hon. Gentleman agree that it might be a good idea to consider that when a new President takes over he should present a sort of Queen's Speech programme, outlining measures that he would ask the Commission to submit over that period? In that way there would be greater control.
Mr. Dalyell: I agree. But I think that the various candidates Gaston Thorn, Commissioner Gundelach or whoever—should be asked at an early stage, before the British Government come to any decision, what is their philosophy on directives. What kind of directives should be issued? The number of directives issued is ridiculous.
The Minister has said that it is absurd to cater for the Mediterranean and the North Sea in the same directive, and for fast-flowing rivers such as the Spey and slow-moving rivers such as the Rhine and the Po. The conditions are completely different. What, therefore, is the purpose of a blanket directive?
There is a good deal of reference in documents to ground water. I gather that
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the ground water conditions are wholly different in the United Kingdom from those in Italy and Sicily. What is right for Sicily and southern Italy and parts of France in relation to ground water is completely inappropriate for my area or the area represented by the hon. Member for Aberdeenshire, West (Mr. Fairgrieve).
Mr. Tom Ellis: My hon. Friend talks about the absurdity of the same sort of legislation covering all types of river, whether fast flowing or slow flowing. Does he agree that our indigenous legislation suffers from precisely that? The standards for the fast-flowing Dee in my constituency are the same as those for the slow-flowing lower reaches of the Thames.
Mr. Dalyell: There is something in that.
What causes these directives? It is the sort of television programme such as that about Minamata Bay. This is a dramatic affair that has gone completely wrong. Now everyone says that a Minamata Bay must be stopped in Europe. There are only three or four places in Europe where this kind of situation has arisen. It is an instant reaction—I will not say panic reaction—to dramatic events somewhere in the world to draw blanket conclusions. These conclusions can often be exceedingly expensive.
In his opening speech, the Minister referred to the incurring of quite substantial costs. If we are to change the whole criteria of distinction by use, we have to face substantial costs. I wonder what figures the Government have in mind. One's guess is that enormous sums are involved if anything meaningful is to be done.
A raging row is taking place about the saving of small sums of money by closing down the effluent plant at Coldstream. I expect that the effluent plant at Coldstream is written on the heart of the Under-Secretary responsible for health matters in Scotland. This fairly new plant is to be closed down for the sake of some tens of thousands of pounds. According to argument, the Tweed will be polluted or will come near to being polluted.
The contrast between the trivial sums that may be saved by risking—I put it no higher—putting sewage into the Tweed

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and the enormous sums that would be involved in outlay if this kind of directive came into operation should be argued in Brussels.
10.32 pm
Mr. Michael Crylls: I should like to pursue the reference by the hon. Member for West Lothian (Mr. Dalyell) to the Minamata Bay drama and horror in Japan. As a result of that case, there was a panic about mercury in many parts of the world. I recall reading a learned paper in Canada. Samples of sea water were taken from around the Canadian shore to discover the mercury level. The level of mercury was compared with that revealed by tests on prehistoric bones in Canadian museums. It was a surprise, considering the level of industry in Canada, to discover that the level of mercury in the prehistoric bones was exactly that found in the sea.
The hon. Member for West Lothian is right to draw the attention of the House to the ease with which panic might occur. That is not to say, of course, that action should not be taken to prevent a similar horror occurring again.
I wish to support the approach that the Government—like the previous Government—have taken. It is a sensible and distinctive approach. As the right hon. Member for Birmingham, Small Heath (Mr. Howell) remarked, some people in Brussels might have a geography lesson. The geography of Britain is distinguished from the rest of Europe. We are surrounded, for most of the year, by raging seas.
The EEC approach is, perhaps, not so much a sledgehammer to crack a nut but the wrong tool for the job. I was struck that the right hon. Gentleman had been heartened, encouraged and reinforced by the bipartisan approach in the House of Commons over this practical matter. I am sure that it is helpful to the present Ministers, when they go to Brussels, to be able to speak with one voice. We cannot too often point out that our seas and our rivers are different from those of Europe. Our geography is different. It is, therefore, sensible to look at the matter in a different way.
One has only to gaze at the sluggish, dirty and polluted Rhine and compare
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it with the sea outside the city of Newcastle. A lot of effluent can be put in the sea and it will be washed away in a short time. That could not happen in the Rhine.
There is a danger that the directive applies only to a small sector of British industry. If we are not careful and firm as a Government and House it may prove to be the thin edge of the wedge. There may be other silly directives that could damage British interests. It cannot be said too often that the environmental quality directive is environmentally sound and, above all, a cost-effective approach, as was mentioned by the hon. Member for West Lothian. It is most important. It is pragmatic rather than theoretical.
As my hon. Friend the Member for Harrow, East (Mr. Dykes) said, it is sometimes apparent that those in Brussels run around thinking about theories rather than practices. Parliaments and assemblies of elected representatives should consider the practical approach, in terms of how it would effect our constituents, their jobs, and the manner in which they work. It is not sensible to follow the EEC on this matter.
The hon. Member for West Lothian was right to say that it will be a crazy time. We should say loud and clear that to impose extra and unnecessary costs on British industry at a time when we are finding it difficult to compete would be the wrong approach. Britain is in a difficult geographical position. We have to send our goods overseas to European markets. It would be intolerable to be forced to accept extra capital and revenue costs in industry at this time of all times.
We should consider each effluent discharge in the light of local circumstances and of the river into which the effluent will be discharged—I quoted earlier the case of the Rhine and the waters outside Newcastle—and decide what sort of effluent can be discharged into those rivers or waters.
We should remind our European friends that in Britain extensive use is made of scientific and technical knowledge, and the financial implications are carefully considered. Surely that is a better and more flexible approach than having a set limit, as has been proposed in Europe. The consultations that take place between the water authorities and

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the industries as to what effluent should be allowed into a river or into part of the British seas form a more sensible and flexible approach.
I arrived a few minutes late and did not hear the first part of my hon. Friend the Under-Secretary's speech. I do not think that he mentioned the European Parliament. The directive is to be sent to it, and I hope that hon. Members will influence those whom they know in the European Parliament to add a sensible and practical approach to the directive. The European Parliament could return the directive to Brussels and give it a flea in its ear, and say that it is not good enough for Britain. I hope that our European colleagues will take an active interest in the matter.
I commend my hon. Friend the Under-Secretary's speech, and the strength of the Government's stand. I am pleased that it is a bipartisan approach. A sensible and pragmatic approach from Britain should be the one that wins the day for British interests. I am an enthusiast for Europe—like other hon. Members who have spoken in the debate—and because of that I do not like seeing the EEC fall fiat on its face by putting forward a rather silly and inflexible directive.
I support the Government enthusiastically on the matter. I hope that it will be helpful to them, when they return to Brussels for further negotiations, to know that they have the House behind them. That knowledge will strengthen them in their resolve to pursue a practical and sensible approach to this potentially damaging problem.
10.40 pm
Mr. Tom Ellis: I agree with a great deal of what has been said by hon. Members on both sides of the Chamber. I shall not seek substantially to alter or to disagree with the contributions that have been made. However, I am rather concerned about what may be described as a euphoric celebration of British practicality and common sense. I shall express a brief note of caution. We are constantly saying how wise and sensible we are and how silly are the bureaucrats on the Continent. We claim that there is a great difference between us and them.
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I accept that there are differences know that our waters flow faster—that is something to do with gravity, or possibly the phases of the moon. Over the past 20 years there has been considerable controversy in my area about the discharge of raw effluent into the seas around North Wales. Even by British standards, that is fairly stormy water. The Irish Sea is quite stormy. We have periodically had to alter our arrangements. We are being slightly overenthusiastic in our praise for the British method.
We have the parallel arrangement, and I welcome it. We are different. The Mediterranean is a closed sea and the North Sea is not. We can get financial benefits from it. I am the last person to decry ally financial or commercial benefits that may accrue to British industry from our good fortune. It is only right that we should derive that benefit. However, we should consider the principles that are involved even if the practical politics behind the principles have not emerged clearly before us.
Mr. Denis Howell: When I was negotiating these matters in Brussels I was always struck by how far advanced we are in Britain in environmental legislation and practice compared with our European partners. That applies especially to the cleaning of our rivers. We have done so spectacularly well that in a misguided moment I once offered to catch a salmon from the Terrace of the House by 1980. I am glad that no one has called on me to do it. We have made spectacular progress with clean air legislation. The same applies to noise pollution. Our partners are far behind us in general environmental legislation. I think that, on reflection, my hon. Friend will accept that in this respect we have something to teach our European partners.
Mr. Ellis: I am grateful to my right hon. Friend for reminding me and the House of how far ahead we are. I am pleased to acknowledge that fact. I am anxious that we remain equally far ahead over the years to come and that we do not rest on our laurels. We should not allow those who are a long way behind to catch us up. That would be a great mistake. As I take that point of view, it is possible that I am more critical than my right hon. Friend.

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If we leave aside commerce and deal merely with what is called bio-accumulable pollution—that is a form of pollution different from organic pollution whereby an effluent that is toxic can over a period become increasingly more of an irritant and more strongly present in whatever body, whether a mollusc or a fish—it is surely better to limit the toxic content of the effluent to a certain level than to wait to see what happens when an effluent is affecting the whole environment in a large stretch of water. It seems that the Community approach is the right one in those circumstances.
I accept that often in politics what is right in theory and principle is not necessarily the best practical political course to take. I am happy that my right hon. Friend managed to arrive at the parallel approach. We must use it to our advantage as much as we can in future. At the same time, we must never forget that a poison such as mercury is cumulative in its effect. It may be that there are bones in Canada that go back to prehistoric times that have the same amount of mercury in them as bones in a river in Britain. However, in a highly industrialised country that has industries that consistently discharge into rivers toxic effluents that are bio-accumulable, the rivers will become polluted over a period. My right hon. Friend has admitted that he cannot catch a salmon from the terrace of the House of Commons. That is a fact and from that fact alone it seems that, no matter how far ahead we are of our friends on the Continent, we should not be complacent.
It has been said that the actions of the Commission are undermining the credibility of the Community. We do of course have enthusiastic bureaucrats just as we have enthusiastic politicians but it seems to me to be far-fetched to suggest that the Commission can use the 1976 framework directive for some malevolent and perverse purpose. am not a lawyer and I am not an authority on the 1976 framework directive, but a directive is a directive and one assumes that it has to be applied strictly in a legalistic sense to achieve its objectives, no more no less.
If the Commission is getting away with something it should not be allowed to do so. It is not necessarily a question of the Commission doing something behind closed doors. I am one of the first to criticise the legislative processes of the
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Community and I have said all along that the system in the Community for passing legislation produces legislation by ministerial fiat.
That is one of the reasons I have been so anxious to see the European Parliament develop in authority and influence. That is the one institution that can introduce democratic accountability into the legislative process in the Community. We cannot do it here. If we were to attempt to do it, eight other legislatures would have to try as well. The obvious place to do it is in the European Parliament. We should be bending our energies here to devising changes in the Community constitution so that the European Parliament really does increasingly gain in power and influence.
The point made about the vast volume of legislation facing the European Parliament is valid. The same would apply to our Parliament if we were to scrutinise each and every piece of legislation passed here. I do not think that in principle there is anything much wrong with the present position. In relation to much of the technical work we are discussing the place to introduce democratic scrutiny is the European Parliament.
10.48 pm
Mr. Fox: By leave of the House I shall quickly try to answer a few of the points that have been made.
It has been a useful debate and I assure the House that I have taken note of the various points made by hon. Members. I am particularly grateful to the right hon. Member for Birmingham, Small Heath (Mr. Howell). His clear recollection of the agreement that he made as a Minister in 1975 on the parent directive certainly accords with the position of the Government. I assure him that we welcome what he has said, that we can certainly continue to negotiate for the whole House and that we have every intention of standing firm on the matters on which we all so obviously agree.
I also reassure the right hon. Gentleman that the Ministry of Agriculture, Fisheries and Food regularly monitors the water he talked about. I am told that in Liverpool Bay there are fish with the highest content of mercury, Even so, there is no danger to anyone. But, though we accept that position, we are looking to improve it.

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The hon. Member for West Lothian (Mr. Dalyell) asked whether metal mercury was a big problem. The answer is that it is no real problem in the United Kingdom in so far as discharges are concerned. My information is that that is of no consequence. The danger, of course, is from mercury found in fish, which is probably what the hon. Gentleman is thinking about. That is why the United Kingdom is proposing standards that are adequate to protect the health of people who eat fish in considerable quantities.
The hon. Gentleman is probably being misled with regard to groundwater. That was mentioned in the parent directive, but the two directives that we are discussing tonight are not concerned with that subject, as the hon. Gentleman well knows. That is a separate and agreed directive, and tonight would not be the occasion to go into that any further.
I am sorry that the hon. Gentleman has had to remind the House on 119 occasions that many of these directives are too technical for words. I take note of many of the sensible things that he has said. It is hard to believe that a United Kingdom representative has been the president of an important committee for six months, but I had better be careful about what I say in that respect. We share the hon. Gentleman's concern, and we are very mindful of the financial implications of all these directives. It is true to say that this consideration is very high on our list when we look at any of them.
That brings me to my hon. Friend and Member for Harrow, East (Mr. Dykes).
Mr. Dalyell: It is not just a question of having a president for six months, because as we all know, Minsters may change. However, in Europe it is much more serious than that, because not only are there revolving Ministers, there are also revolving groups of civil servants around those Ministers. There is not the permanent Civil Service which makes things tolerable in a nation State.
Mr. Fox: The hon. Gentleman is right. We had an instance tonight whereby because of our system of continuity, the civil servants dealing with the matter have been able to keep a tight control of it,
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even though there has been a change of Government. It was suggested that there were instances of chicanery. That may be too strong a word, but we have the continuity to ensure that when negotiations start there are people to follow them through to the end. I accept what the hon. Gentleman says.
We well understand the close involvement in Europe of my hon. Friend the Member for Harrow, East, and his service in the European Parliament as well as on the Scrutiny Committee. He suggested that the Commission should not try to do everything, which would seem to be a fair summary. Despite what he has said, negotiations at this stage are only in draft form. That is why tonight's debate is so important. My hon. Friend asked whether domestic legislation already in existence would deal with certain matters. The answer is "Yes", and I can assure him that nothing extra will be needed.
I thank my hon. Friend the Member for Surrey, North-West (Mr. Grylls) for his support. He was right to point out that in these matters the extra costs on industry at present represent a most important factor which the Government will not lose sight of. I reassure him also that these directives are only in draft form. It is right that tonight we should make our views known as forcibly as possible.
To the hon. Member for Derbyshire, North-East—
Mr. Tom Ellis: Wrexham.
Mr. Fox: I beg the hon. Gentleman's pardon. I apologise. My copy of "Dod's" is obviously out of date. I was about to talk about effluent discharges from North Wales to the sea. It would be difficult to see that coming from north-east Derbyshire. I understand the concern of the hon. Member for Wrexham (Mr. Ellis). We are not complacent about the matter. However, although we may not yet be perfect, the point is that we think that our approach is the most pragmatic and cost-effective way of achieving the improvements that we all seek.
Mr. Dalyell: I asked specifically about any estimate of costs. That may be a difficult question, but all these things ought to have some kind of a rough price tag. No one in his right mind would try to tie down a Government Minister to an exact sum, because that would be absurd

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But we ought to have some vague idea of the sums involved.
Mr. Fox: The hon. Gentleman is right, in that I have no figures that I can give to him. However, if he will bear with me I shall write to him at the earliest possible opportunity.
I think that right hon. and hon. Members will be pleased to notice that alongside me for most of the debate has been my right hon. Friend the Minister for Local Government and Environmental Services, who is more involved than I am, in that he attends the Commission regularly. That fact that he has been present to listen to most of the debate shows that we consider this to be a most important matter. I ask the House to support me.
Question put and agreed to.
Resolved,
That this House takes note of European Community documents 6995/79 and 7735/79 concerned with draft EEC Directives on water pollution by aldrin, dieldrin and endrin and by mercury, and the Department of the Environment's supplementary explanatory memorandum; and supports the Government's intention to seek satisfactory quality objectives according to the purpose for which the water is to be used.

RESERVE FORCES BILL [LORDS]
Order for Second Reading read.
10.55 pm
The Solicitor-General (Sir Ian Percival): I beg to move, That the Bill be now read a Second time.
This is a Consolidation Bill which consolidates a number of enactments relating to the reserve and auxiliary forces, and lieutenancies, and which repeals certain obsolete enactments relating to these matters going back to a statute of 1662.
No fewer than 29 Acts will be removed from the statute book if we put this one on to it.
The Law Commission made a recommendation proposing a minor change in the law to facilitate the consolidation. This relates to the application of the measures consolidated to the Isle of Man. The Isle of Man authorities have been consulted and are in agreement with the recommendation which has been incorporated in the Bill.
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There is one matter of detail to which I would draw the attention of the House, and that relates to clause 144 of the Bill. As a result of an oversight, the penalty provisions in this clause do not take into account the statutory maximum fine that may be imposed in England and Wales under section 28 of the Criminal Law Act 1977, and the corresponding Scottish provision.
It is my intention to move at Committee stage an amendment to rectify that oversight.
The Bill has been considered by the Joint Committee on Consolidation Bills. In its fifth report to both Houses dated 28 November 1979 the Committee reported that it was of the opinion that, apart from those parts of the Bill which are the subject of a Law Commission recommendation—that is the one relating to the Isle of Man—the Bill is pure consolidation and represents the existing law. It was satisfied that the recommendation is for the purposes of producing a satisfactory consolidation of the law and that the amendments which the Bill proposes to make to the existing law give effect to that recommendation. The Committee further recommended that there was no point to which the attention of Parliament should be drawn.
I commend the Bill to the House.
10.57 pm
Mr. Tam Dalyell: Having read the speech made in the other place by Lord Wigg, some of us think that it is relevant to put forward a quotation that my noble Friend took from Captain Waterhouse, who said:
"The fact remains that when this crisis came we had no plan, no ships, no aeroplanes and no men available in sufficient quantities to hit quickly."
This is not the time for a long debate on the merits or otherwise of the reserves. However, I wanted to put on record that some of us rather take the view of Lord Wigg.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Cope.]
Committee tomorrow.

RESIDENTIAL HOMES BILL [LORDS]
Considered in Committee.
[Mr. BERNARD WEATHERILL in the Chair.]
Clauses 1 to 10 ordered to stand part of the Bill.

RESIDENTIAL HOMES BILL [LORDS]
  Clause 11

    TRANSITIONAL PROVISIONS, CONSEQUENTIAL AMENDMENTS AND REPEALS
    11 pm
    The Solicitor-General (Sir Ian Percival): I beg to move amendment No. 1, in clause 11, page 9, line 11, after 'effect', insert 'subject'.
    Members of the Committee will have observed that in line 11 of the clause the word "subject" has been omitted. The purpose of the amendment is to restore it, and I hope that it will commend itself to the Committee.
    Amendment agreed to.
    Clause 11, as amended, ordered to stand part of the Bill.
    Clause 12 ordered to stand part of the Bill.

  Schedule 1

    CONSEQUENTIAL AMENDMENTS
    The Solicitor-General: I beg to move amendment No. 2, in page 10, line 13, at end insert—
    '(2) In section 128(1) of that Act (sexual intercourse with patients) for the words "Part III of this Act" there shall be substituted the words "the Residential Homes Act 1980".'.
    Again, the Committee no doubt will have noted the point here. It is a consequential amendment.
    Section 128 of the Mental Health Act 1959 makes it an offence for a man to have sexual intercourse with a woman who is a mentally disordered patient and who is in his guardianship or otherwise in his custody or care as a resident in a residential home for mentally disordered
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    persons within the meaning of part III of the 1959 Act.
    The provisions of part III concerning residential homes are consolidated in this Bill. The reference to part III is therefore inappropriate, hence the consequential amendment.
    Amendment agreed to.
    The Solicitor-General: I beg to move amendment No. 3, in line 16, leave out from 'etc.)' to "Section' in line 18 and insert
    'for paragraph 31 there shall be substituted the following paragraph—
    "31'.
    This is another amendment that arises consequentially upon the enactment of this Bill. Part II of schedule 3 to the Local Government Act 1966 lists various statutory provisions that, under section 35 of the Act, may be amended by ministerial order. They include
    "31. Section 37(2) of the National Assistance Act 1948 (including subsection (2) as applied by section 19 of the Mental Health Act 1959)."
    These provisions will be so well known to the Committee that I need add only a very little. However, I should say that originally the present Bill was not intended to consolidate section 19 of the 1959 Act, and the reference to that Act was retained in paragraph 3 of schedule 1. Now the Bill consolidates section 19, as right hon. and hon. Members will have seen from the table of derivations, so the reference to section 19 is deleted from the 1966 Act by the device of replacing the whole of paragraph 31 in the 1968 Act by the reference to the appropriate clause of the Bill, which is clause 2(2).
    Amendment agreed to.
    Schedule 1, as amended, agreed to.
    Schedule 2 agreed to.
    Bill reported, with amendments; as amended, considered.
    Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
    Bill accordingly read the Third time and passed, with amendments.

DAY NURSERIES (BLACKBURN)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
11.5 pm
Mr. Jack Straw: I now realise that one of the many benefits of being successful in the ballot for Adjournment debates is to be a witness of such a fascinating and scintillating debate as the one that preceded this debate.
There are six day nurseries in the borough of Black burn, five within the town itself providing places for approximately 225 children and one in Darwen that caters for another 50 children. Last month, as part of its programme of cuts, the county council's social services committee had before it a proposal to close one of the Blackburn day nurseries, Holden House, which caters for 35 children, and two other nurseries in the county, one in the constituency of my hon. and learned Friend the Member for Accrington (Mr. Davidson), whom I am pleased to see here tonight, and one in Colne. The aim was to save £51,000 in 1980–81 and £154,000 in subsequent years.
The closures were partly justified by the county council on the ground that the level of provision in the areas served by these day nurseries was in excess of 20 places per thousand children under 5. In 1978 a circular was issued by the Departments of Health and Social Security and of Education and Science to local authorities about the provision of facilities for day care facilities for children under 5. Although that circular was issued under the previous Government, the Under-Secretary of State told me earlier this month in a written answer that he fully endorsed the contents of the circular and its predecessor issued in 1976.
The 1978 circular said that priority for places in day nurseries should be given to those in special need, including children of working lone parents, children with a mental or physical handicap or whose home environment is so impoverished or so strained that they need day care and those whose parents are, through illness or handicap, unable to look after them during the day. Those guidelines have been followed nationally, and also locally in Blackburn and in the Holden House day nursery, since all the parents having
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children at that day nursery fall within those priority categories.
So it was with the gravest concern and apprehension that the threatened closure of the day nursery was greeted in my constituency. It was also greeted by some astonishment, because even the Lancashire county council, though not known for its charity, had never been expected to consider such a callous and uncaring act as this.
The result was that the Blackburn One-Parent Families Association, ably led by Mrs. Doreen MacDonald, quickly organised a campaign of opposition to these cuts and, with opposition from Accrington and Colne as well, the social services committee agreed at its January meeting to defer its decision until 18 March.
I met a large group of the parents concerned on 25 January. Since then the campaign organisers have been able to collect 2,000 signatures on a petition calling for the day nursery to be kept open. By a coincidence that is so extraordinary that it is no coincidence at all, the chairman of the social services committee, Dr. David Murray, announced earlier today that in the light of further consideration of the issue and because of the pressure that has been applied, he would now be recommending to the social services committee when it meets on 18 March that, after all, the Holden House day nursery and the other two in Accrington and Colne should not now be closed.
That is a great victory for all those who have been associated with the campaign to keep these three nurseries open. But while the news of the Holden House reprieve is of course welcome, the timing and the content of the chairman's announcement says very little for the manner in which the committee first proposed this closure—a proposal which can best be described as cavalier and unthinking. The announcement does nothing to compensate parents and staff for the anxiety which this threat of closure caused to them. If the county council had bothered to study fully the important service provided by Holden House it would never have proposed closure in the first place. Nor would it have done so if it had shown any serious understanding of the needs of some of the more deprived children in an inner urban area such as Blackburn.

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Closure would have had a desperate effect on many of the families involved. It would have forced some of the parents to leave work and go on to supplementary benefit and would have placed some of the children at risk. Further, there would have been far lower savings to the public than the county council suggested, because any of the gross savings to Lancashire would have been offset by an increase in supplementary benefit payments to those parents who had to stop working.
One other lesson that we have learnt from this unhappy saga is just how insensitive to local needs and unwieldy are the remote county authorities—such as Lancashire county council—that now run social services. We have seen how Blackburn and Accrington, the urban heartland of Lancashire, have had to fight all the way against the complacent deadweight of the overwhelmingly Conservative Fylde that now dominates the politics of the county council and how loud one has to shout to drive home even the clearest points.
The facts should have been plain to the county council from the beginning. Of the 35 children in the day nursery over 80 per cent. come from one-parent families. All the remaining children were admitted on proof of the most serious social need, including the serious illness of parents or poor or unstable home conditions.
When I met the parents concerned at the end of last month, I asked a group of 11 of them what would happen to them if the day nursery closed. Some said that they would try to make alternative arrangements by way of child minders but all were pessimistic about the chances of finding a decent child minder and very apprenhensive about whether they could meet the cost.
Of the 10 parents who were out during the day—seven at work and three studying—six said that they thought that they would have to give up their work or studies altogether were the day nursery to close and go on supplementary benefit. Three of the parents feared for the future of their children because those children had entered the day nursery precisely as a result of behavioural problems or family and home difficulties.
The fact that all the children were and are in serious social need also shows how
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absurd and misplaced it was for the county council to rely on crude references to national guidelines about places per head of the population to justify the closure of this day nursery in what is unquestionably the borough with greatest social need in the whole county of Lancashire.
When the guideline figure was put into the Department of Health and Social Security circular 35/72 in 1972 it was made clear that it was a national guideline and was not intended to be used in narrow local circumstances such as those in Blackburn. The circular stated:
"even when that figure is achieved nationally it is likely that need will remain for greatly increased use of full and part-time day care."
It is true that Blackburn's provision of day nursery places is well above the guidelines; but so is need in the area. It is well above both national and county average. That is shown clearly by figures from "Community Indicators" published by the Chartered Institute for Public Finance and Accountancy. On almost every indicator Blackburn emerges as worse than Lancashire as a whole and also significantly worse than English counties. There are more single-parent families, more large families, more people from the New Commonwealth, more unskilled workers and, perhaps most significant of all, a much higher proportion of women at work with children under 5 than in Lancashire as a whole and in the country as a whole.
It was figures such as these and others relating to housing conditions that led the previous Government to designate Blackburn as the only inner urban area within the county of Lancashire, a designation that the present Government have not disturbed. I hope that when the Under-Secretary replies he will not make too much of the present level of provision because in comparison with need it is not over-generous.
Like my hon. and learned Friend the Member for Accrington I do not accept the economic policies of this Government. Even if I did, the county council has no need to contemplate cuts of this nature. The social services committee in Lancashire is already well within the targets set by the county council.
The meanness of the proposal can be well illustrated by looking at the figures involved. Closure would have meant a

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saving next year of £50,000 in respect of the three day nurseries or one-fiftieth of 1p on the county rates. Each family in Lancashire would have saved the princely sum of 9p per year. Against the savings to the county council have to be set the cost to the DHSS of parents who would have ben forced to give up their jobs and go on to supplementary benefit. If only 15 of the 35 parents at Holden House had been so forced on to supplementary benefit—that is in my view an under-estimate—the cost in supplementary benefit, and tax and national insurance forgone would have been over £30,000. That is more than the total saving from the closure of the day nurseries would have been in the first year—and would result in a saving of only £20,000 in subsequent years.
I hope that the Under-Secretary will indicate in his reply whether he has asked local authorities to take such wider calculations into account in seeking to make economies. Why, given the vital importance of these services, have local authorities not been given more effective advice to protect these nurseries? I should like to know the advice that has been given to the authorities when they have been asked to make cuts in such services.
It is a terrible indictment of the Government's social priorities that the poorest and most vulnerable groups such as those using day nurseries have been put at risk by a doctrinaire economic policy which, even by its own standards, is bound to fail and which seems to provide nothing but misery, hardship and anxiety to the wage earners in my constituency.
11.16 pm
Mr. Arthur Davidson: I congratulate my hon. Friend the Member for Blackburn (Mr. Straw) on managing to acquire this Adjournment debate at such a singularly convenient time. I do not believe that the convenient time was a complete coincidence. It may well be that those who came to this happy conclusion on the subject matter of the debate were content to regard it as such. I also congratulate my hon. Friend on this speech and the fight that he has put up generally to keep the nurseries going.
It is inconceivable that the county
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council could ever have contemplated closing the nurseries. Indeed, it would have been a disaster if it had succeeded in closing the Manchester Road nursery in my constituency. Of the 34 to 42 children normally at that nursery, only three come from two-parent families. The result of the closure would have been that the weakest and most vulnerable parents would have been forced either to give tip work and live on social security —that seems to be against the philosophy of this Government—or to try to find alternative places for their children. They would not have succeeded in doing so without great cost and inconvenience. It has been estimated that the nearest nursery would have added about two hours' travelling time for those unfortunate ladies plus the burden of three times more expensive bus fares.
My hon. Friend has outlined the folly and foolishness of the project, and I need not underline that. However, I should like to praise the Hyndbum Nursery Action Group for the fight that it has put up. It obtained about 4,000 signatures in one week—an indication of the hostility and resentment caused by the proposal throughout my constituency. A campaign cannot exist without publicity. I should also like to praise—as I am sure my hon. Friend would—the local press, the Lancashire Evening Telegraph and the Accrington Observer, for the help that they have given by highlighting an action that could have caused great disaster to many throughout north-east Lancashire.
11.19 pm
The Under-Secretary of State for Health and Social Security (Sir George Young): I am most grateful to the hon. Member for Blackburn (Mr. Straw) for raising the subject of day care for young children. The subject is of particular interest to me. Some three years ago, I raised an Adjournment debate on the broader subject of education for the under-fives. That is the definitive speech on the subject. It was made on 14 January 1977 and I commend it to the hon. Gentleman.
The hon. Gentleman has provided a welcome opportunity to outline briefly the Government's policy and to dispel the delusions voiced in some quarters—that we are not interested in the welfare of

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pre-school children and their families. As the hon. Gentleman has conceded, the reason for the Adjournment debate has now passed. However, I shall discuss our policy under four broad headings: prevention, regulation, support and last, but by no means least, optimising the use of resources.
First I shall deal with prevention, by which I mean measures to prevent family breakdown and to avert the need to take children into local authority care. Ideally the pre-school child should be cared for by a parent. There is no substitute for the love, care and attention which a committed parent can give. Where that is not possible, we feel that the first priority for the statutory authorities and all others involved in this field must be to seek to meet the needs of those families with a special social or health need for day care. Such families are often called the priority families. These include many of those about whom both hon. Gentlemen have tonight expressed such concern. Day nurseries undoutedly have an important role to play in meeting the needs of these families. However, we think that it is particularly important that their needs should be looked at also on a wider basis —for the facilities available in day nurseries to be complemented and supplemented by other forms of day care. Day nurseries are expensive and, even more important, there is a growing body of expert opinion that considers that the institutional type of care that they provide is not the best thing for many young children. One possible answer is to increase the involvement of parents in the day-to-day running of nurseries. This is now happening in a number of places, and I welcome all moves in that direction. Parental involvement benefits the children—by adding to the homely atmosphere in the nursery—and it can also be of great benefit to the parents, many of whom can learn much from the skill and expertise of the staff in looking after children, in playing with them and in coping with the problems, fads, tantrums and idiosyncracies that small children are so prone to display.
To have parents around all the time may make life more complicated and may disturb a well-established routine. I hope however, that staff will appreciate the
412
benefits to be gained and that they will recognise the value of such moves. However, for many young children, especially those under 3 and those with special problems, such as beset many of those in the priority groups, the sort of care such as that which a good childminder can provide is likely to be more in tune with the child's limited capacity for social contacts than the communal experience of a day nursery.
Good child minding also has many advantages for working mothers, as it can more readily be arranged to suit their hours of work and is often much nearer home than other forms of provision. Another great advantage is that it can readily be related to the particular needs of an individual child. It can encourage the development of relationships with individual adults that are often difficult to foster in a day nursery with the frequent changes of staff that most of them experience. I, therefore, welcome the moves that a number of local authorities are making to develop child-minding services in their areas. I am very interested in schemes that link childminders and day nurseries that operate in the same area. In this way it is much easier to choose the form of day care—and the individual best able to provide it—for a particular child.
I move on now to the second strand of our policy in this field—the regulation of services. We fully recognise that some parents will need to go out to work. It is not, however, for the State automatically to provide facilities for the children of working mothers. But the State has a very real interest in ensuring that the quality of the day care services for young children is satisfactory. We have, therefore, stressed to local authorities—which are responsible for regulating day care services in their area—the importance of doing all they can to foster the development and raise the standard of day care facilities in their area. While resource constraints will clearly limit what can be done in this field at present, we see the benefits to be gained from support and advice services for childminders, private day nurseries and other facilities as an excellent investment. I am, therefore, particularly pleased to hear of the plans, to which I shall be referring again later, of the Lancashire authorities to foster an increasing degree of professionalism

413
among childminders working in the county.
The legislation that governs the regulation of day care services is also often criticised as being out of date and unworkable. It dates back to 1948, and we are therefore looking at it to see whether it should be brought more into line with current needs.
The third strand of our policy—support —brings me on to a subject very close to our hearts. That is the need to counter the all too common attitude that mothers who stay at home to look after their children are doing a second-rate job. We must stop demoralising the country's mothers. The job that they do is frequently more demanding and skilled than any job done by their husbands. I feel that it is vital that the importance of the role of the mother who looks after her children at home should be fully acknowledged and that steps should be taken to improve the quality of her life.
For that reason, we particularly welcome the work being done by the preschool playgroup movement to enable mothers with young children to get out and about. That is of great benefit to mothers and their children. The development of playgroups can do much to develop a spirit of community in an area and help to relieve the loneliness and isolation that affects the lives of many mothers with young children.
The last strand of our policy that I want to mention tonight is the need to optimise the use of all available resources, not only of scarce finance and skilled manpower, but of all the good will and expertise available in the community. I have already mentioned the work of the preschool playgroups movement. There are many other examples of valuable and imaginative work being done by voluntary agencies and from community initiatives. We hope that authorities will foster these initiatives.
It was the policy of the previous Government to encourage co-ordination in the provision of services for under-fives, and we are happy to maintain that policy. We want to ensure that all those working in the field of the under-fives work together to ensure that developments in one area, or by one group, are planned in full knowledge of what is being done
414
by others. Only in that way can we ensure that we are making optimum use of all resources.
We need to involve all those who have an interest in the needs of under-fives—the statutory agencies and the voluntary organisations. I am fully aware of the difficulties that that presents. The voluntary agencies are jealous, and rightly jealous, of their independence. The statutory agencies have to be aware of their responsibilities to their authorities and elected members. Professional workers have very real differences in their perceptions and approach. We are asking them all to come together, forget their differences and work together in the interests of young children and their families.
Despite all the difficulties, it is most encouraging to see the extent to which co-ordination, collaboration and consultation are being achieved. At central Government level, we work very closely with the Department of Education and Science, and also have close ties with voluntary organisations active in that field. I am pleased to say that close co-operation is also widely practised between education and social services departments and local voluntary organisations in the field. The proposed amendment to the Education Act to enable teachers to be employed in nurseries should ensure that teaching skills are more widely available, and enable another barrier to be broken down. However, there is no room to be complacent, and I am sure that there is still room for further improvements in local co-ordination to secure the best use of resources in the interests of young children.
I have outlined the main strands of our policy, and I hope that I have made quite clear the importance that we attach to the needs of young children and their families. However, responsibility for the day-to-day provision of day care facilities rests with local authorities. They have to make the difficult decisions on priorities between services in the light of their assessment of local needs and conditions. Because of the planned reduction in local government spending as a whole, social service authorities cannot necessarily be expected to maintain expenditure on personal social services at previous levels. Services for young children cannot expect automatic exemption from reductions.

415
However, Ministers do not regard that lightly but realise that the country must live within its means.
As the Government said in their previous White Paper on public expenditure, we expect that savings will, as far as possible, be made by further increases in efficiency, by reducing or eliminating low priority provision, by developing policies to help people to help themselves and others and by promoting collaboration with the voluntary sector. Where reductions in standards of provision prove necessary, authorities are relied upon to implement those in ways which, as far as possible, protect the most vulnerable, amongst whom must be some of the young children in the priority groups mentioned by both hon. Members. To improve child minding services in place of expensive day nursery care can be seen to be compatible with these objectives. It remains, however, for individual authorities to decide the eventual distribution of the resources available to them.
I now turn to the proposal for the closure of day nurseries in their constituencies, to which the hon. Member for Blackburn and the hor, and learned Member for Accrington (Mr. Davidson) have drawn attention. First, I should like to stress one point. It remains a proposal, on which no final decision has yet been made. Many of the proposals for reductions in services up and down the country which have been widely publicised have not, in the event, been accepted or endorsed by the authority. Indeed, I understand that the chairman of Lancashire social services committee yesterday announced that no nurseries are to be closed at present. Although I fully appreciate the hon. Members' concern for those who might be affected, were this proposal in due course to be approved, I think that we need first to see the proposal in its wider context.
I understand that the proposal, which has now been abandoned, to close the
416
nurseries is part of a wider package of measures. There are at present five nurseries in Blackburn and four in Accrington which provide 223 and 184 places respectively. Were they to be closed, these numbers would be reduced by 31 and 34 places respectively. Even so, the number of places remaining would represent over 20 places per 1,000 children under 5. That compares with about 16 per 1,000 throughout Lancashire and 9 per 1,000 in the country as a whole. I fully appreciate that in a town like Blackburn, with a long tradition of women going out to work, there may be a greater call on day care services than in other areas. It is, therefore, particularly interesting to note the other complementary plans that I understand Lancashire social services department has for the development of day care services. These include, I am told, further support and development of child minding services. That would be in line with national policies, and could result in services much better tailored to the needs of many children and their families. Although I have not yet seen the full details of what is proposed, and, of course, decisions remain to be taken locally, I shall await with great interest news of developments in the field of day care for young children and support for their families in Blackburn and Accrington.
It has become clear that the original reason for the debate has been put behind us. It has been interesting to hear the particular problems that both hon. Members face in their constituencies, and I hope that they have found this exposition of the Government's policy useful.
Mr. Straw: I should like to thank the Minister for the fullness of his reply, and to apologise to him and to the House for keeping hon. Members up so long.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes to Twelve o'clock.

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    Scottish TUC
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    East Midlands
    East Midlands
    Training Schemes
    Training Schemes
    Northern Region
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    Pay Comparability
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    Preston
    Preston
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    Shipbuilding and Ship Repairing Industry (Merseyside)
    Special Employment Measures
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    Secondary Industrial Action
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    Unemployed Persons
    Unemployed Persons
    TUC
    TUC
    Disabled Persons
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    Jobcentres
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    CBI
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    Occupational Guidance Unit, Manchester
    Occupational Guidance Unit, Manchester
    Redundancies
    Redundancies
  DEFENCE
    Parachute Regiment
    Parachute Regiment
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    MR. JIMMY KELLY (INQUEST)
    MR. JIMMY KELLY (INQUEST)
  HOME DEPARTMENT
    Privacy (Younger Committee Report)
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    Prison Officers (Overtime)
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    Mr. Jimmy Kelly
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  TRADE
    European Community (Insurance Services)
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    Listed Aerodromes
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    Civil Aviation Act (Disclosure of Information)
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    White Goods (Imports)
    White Goods (Imports)
    American Textiles (Imports)
    American Textiles (Imports)
    Cars (Imports)
    Cars (Imports)
    Tankers (Sullum Voe)
    Tankers (Sullum Voe)
    Television Sets (Imports from Thailand)
    Television Sets (Imports from Thailand)
  SOCIAL SERVICES
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    Supplementary Benefit
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    Health Services (Disputes Procedure)
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    Retail Chemists
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    Maternity Grant
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    Sickness Benefit
    Sickness Benefit
    Deserted Families (Maintenance)
    Deserted Families (Maintenance)
    Research and Development
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    Multiple Sclerosis Sufferers (Naudicelle Capsules)
    Multiple Sclerosis Sufferers (Naudicelle Capsules)
    Family Allowances (Payment)
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    Departmental Manpower
    Departmental Manpower
    Abortion (Amendment) Bill (Proceedings)
    Abortion (Amendment) Bill (Proceedings)
    Welsh Language
    Welsh Language
    Children in Institutions
    Children in Institutions
    Child Benefit
    Child Benefit
    Heart and Kidney Donors
    Heart and Kidney Donors
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    Drug Licensing
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  FOREIGN AND COMMONWEALTH AFFAIRS
    Rhodesia
    Rhodesia
    BBC Overseas Broadcasts
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    Albania (Gold Reserves)
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    Immigration (Indian Sub-continent)
    Immigration (Indian Sub-continent)
    Sea Bed Resources
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    British Council
    British Council
    Commonwealth Secretariat
    Commonwealth Secretariat
  WALES
    St. Clears Bypass
    St. Clears Bypass
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    A40 and A48 (Dyfed)
    Health Education (Expenditure)
    Health Education (Expenditure)
    South-West Wales (Skills and Retraining Facilities)
    South-West Wales (Skills and Retraining Facilities)
    A487, Rhianfa, Groeslon
    A487, Rhianfa, Groeslon
    Local Authority Mortgages
    Local Authority Mortgages
    Health Centres
    Health Centres
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    Registered Disabled Teachers
    Further Education
    Further Education
    House Building Costs
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    Job Creation
  HOUSE OF COMMONS
    Underground Car Park
    Underground Car Park
  INDUSTRY
    Steel Industry
    Steel Industry
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    Inmos
    Inmos
    Research and Development
    Research and Development
    National Enterprise Board
    National Enterprise Board
  ENVIRONMENT
    Domestic Rates
    Domestic Rates
  TRANSPORT
    A1 (Improvements)
    A1 (Improvements)
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    Research and Development
    Nuclear Waste
    Nuclear Waste
    "School: Keep Clear" Signs
    "School: Keep Clear" Signs
    Tachographs
    Tachographs
    Children (Car Safety)
    Children (Car Safety)
  NATIONAL FINANCE
    Forecasting Techniques
    Forecasting Techniques
    Fish Imports
    Fish Imports
    Income Tax
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    Unit Labour Costs
    Unit Labour Costs
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    Wildows' Allowance
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    Coinage and Currency
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    Personal Incomes
    Personal Incomes
    Eurobands
    Eurobands
    £ Sterling
    £ Sterling
    Construction Industry (Tax Deduction Scheme)
    Construction Industry (Tax Deduction Scheme)
  NORTHERN IRELAND
    Job Creation and Industrial Development
    Job Creation and Industrial Development
    Public Debt
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    Companies (Registration)
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    Constitutional Conference
    Constitutional Conference
    De Lorean Motor Car Company
    De Lorean Motor Car Company

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
PrayersߞRead by the Lord Bishop of Rochester.

NAMIBIA: PROGRESS TO INDEPENDENCE
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made by the United Nations to realise the independence of Namibia.
Lord TREFGARNE: My Lords, a team of United Nations officials led by General Prem Chand, Commander Designate of the United Nations Force for Namibia, is at present in Southern Africa for discussions with the parties on arrangements for implementing the United Nations plan. The parties have already agreed to the concept of a demilitarised zone.
Lord BROCKWAY: My Lords, is there not danger for a settlement of independence because of the delay, for three reasons? Did not fighting begin again between the South African and SWAPO troops this week? Is not the South African Administrator-General urging the unrecognised national assembly to obtain self-governing powers? Finally, has he not given a very hostile reception to the United Nations commander, General Chand, saying that any negotiations with him must be treated with some suspicion?
Lord TREFGARNE: My Lords, the noble Lord, has indeed, accurately described a good number of the difficulties, but I should tell him that the shortcomings are not all on the one side, and we certainly hope that SWAPO will also be able to make some concessions and help the negotiations forward.
Lord GORONWY-ROBERTS: My Lords, will the noble Lord confirm that this country in the United Nations and, indeed, in Southern and Central Africa, is lending its fullest support to General Chand's very hopeful initiative under the aegis of the United Nations; that we place the utmost importance upon the creation, and thereafter the maintenance, of, I think, the 10-kilometre demilitarised zone on both sides of the northern border; and also that there is no question of any existing so-called assembly in Namibia usurping what properly will be the powers of a regularly elected and constituted assembly after stability has been achieved in that country?
Lord TREFGARNE: My Lords, as I think the noble Lord knows, the Government do not recognise the national assembly because it is based on the unilateral elections of December 1978, which were not consistent with the plan with which we were associated. As for the United Nations, we certainly support everything that they are doing, with one qualification: they have recognised SWAPO to be the sole representative of the Namibian people; we think that that is for the Namibian people to decide for themselves.
Lord BROCKWAY: My Lords, in addition to the welcome proposal of demilitarisation either side of the Angolan border, will the Government consider urging that both the South African and the SWAPO troops should be restricted to their barracks pending an election?
Lord TREFGARNE: My Lords, that is a useful suggestion which I think the noble Lord put to my noble friend the Foreign Secretary when he raised this matter some months ago. It is certainly something that could be considered. However, we think that the effective way forward for the moment is in line with the plan which we proposed, which includes the demilitarised zone, to which the noble Lord, Lord Goronwy-Roberts, referred. Perhaps I could say, in parenthesis, that that zone is to be 50 kilometres either side of the border, not the 10 kilometres that he mentioned.

THE IVEAGH BEQUEST
2.41 p.m.
Lord MOYNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they can contradict the rumour circulating in Hampstead that either they or the Greater London Council intend to seek powers to override the Iveagh Bequest (Kenwood) Act 1929 so as to introduce entrance charges for viewing the collection on days additional to the two authorised by the Act, or to reduce the minimum hours of opening laid down in it.
Lord MOWBRAY and STOURTON: My Lords, the Government do not intend to seek any powers in respect of the lveagh Bequest (Kenwood), but I cannot answer for the intentions of the Greater London Council.
Lord MOYNE: My Lords, in thanking the noble Lord for his most helpful reply, I should perhaps declare my keen personal interest as a grandson of the founder, a former trustee and even a signatory aged 22 or 23 of the schedule to the Act. Therefore, I am extremely grateful for what my noble friend has said, as will be all friends of Kenwood in Hampstead, Highgate or London generally.
On the attitude of the Greater London Council, is my noble friend aware that, despite a resolution advocating these changes passed by the GLC last November, their leader has written to me saying that he certainly regards any such changes as needing the support of central Government?—which makes the Government's attitude, as now expressed by my noble friend, extremely welcome.
Lord MOWBRAY and STOURTON: My Lords, I am glad that my noble friend has declared his interest, because we in this country all owe a great debt of gratitude to his grandfather, the first Earl of Iveagh, for his very generous bequest to the nation. On the question of the Greater London Council, some proposals were put to them, but a General Powers Bill for 1979–80 is shortly to be laid in this House and there is nothing
566
relevant to the subject in that. At this stage they cannot add anything to it. As regards the future, as my noble friend knows, it is the Government's policy—and in particular my right honourable friend the Chancellor of the Duchy of Lancaster feels strongly about this—that we do not want to see museum charges extended.
Lord STRABOLGI: My Lords, in view of the noble Lord's answer, may I ask him whether he will take his original Answer a little further and confirm that the Government have no intention of introducing museum charges into the national museums and galleries, in view of the almost universal hostility which their original proposal engendered?
Lord MOWBRAY and STOURTON: My Lords, I can assure the noble Lord that we have no intention at present of introducing any such museum charges.
Lord WYNNE-JONES: My Lords, will the noble Lord accept that it is, I think, the universal opinion of this House that such charges are undesirable, and that they are very grateful for the statement made by the noble Lord on behalf of the Government?

GOLD: SUGGESTED REMONETISATION
2.44 p.m.
Lord BOOTHBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now bring pressure upon the Government of the United States to remonetise gold.
The MINISTER of STATE, TREASURY (Lord Cockfield): No, my Lords.
Lord BOOTHBY: My Lords, arising out of that Answer, may I ask the noble Lord whether he is aware that cogent reasons for a return not to the old rigid gold standard, but to a gold exchange standard with gold at a realistic price, were given in a debate held last week in your Lordships' House by the noble Lord, Lord Boothby? May I further ask him

567
whether he is aware that unless and until gold is accepted internationally as the standard measuring rod of value, no so-called monetary policy can ever succeed, and there is no hope of avoiding further inflation and higher unemployment?
Lord COCKFIELD: My Lords, I had the great pleasure of listening to the noble Lord's contribution to the debate last week, and I am grateful to him for reminding me of it. I would, however, be misleading him if I were to suggest that his views were shared by Her Majesty's Government.
Lord BOOTHBY: My Lords, arising out of that answer, does not the noble Lord think that, as the Treasury has proved to have been wrong about this for 50 years, and I have proved to have been right, he might use his own powers to persuade his department to give me a last chance before it is too late?
Lord COCKFIELD: My Lords, the noble Lord presses his case with great charm and ability. Nevertheless, the simple position is, as his own Question indicates, that the only country which is in a position to do this, either from the point of view of economic strength or from the point of view of possession of the quantities of gold required, is the United States. There is no reason whatever to believe that the United States has changed its policy of wishing to see gold demonetised.
Lord WYNNE-JONES: My Lords, is it true that Her Majesty's Government are thinking of adopting bimetallism?
Lord COCKFIELD: No, my Lords.

LOCAL AUTHORITY EMPLOYMENT FIGURES
2.47 p.m.
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the numbers of industrial and non-industrial employees of local authorities have increased since the last general election.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, figures for local authority employment in England and Wales taken from the Joint Manpower Watch show that between 10th March 1979 (the last survey date before the general election) and 9th September (the latest survey date for which information has been published) the number of manual employees increased by 3,062 and of non-manual employees decreased by 4,705, a net decrease of 1,643. All these numbers are in terms of full-time equivalents.
Baroness VICKERS: My Lords, I thank the noble Lord for that reply. Is the noble Lord satisfied, in view of all the cuts proposed, that the numbers are diminishing, particularly in the non-industrials?
Lord BELLWIN: My Lords, the Government are by no means satisfied, although a start does seem to have been made in achieving a reduction in manpower levels. But I think it is necessary to keep in proper context the extent of the cuts to which my noble friend refers. They are, if I may remind the House, 1½ per cent. from the levels of current spending in the current year plus another 1 per cent. to be taking place next year.
Baroness BIRK: My Lords, as the Minister has answered in terms of numbers and then percentages of public expenditure, can he give any idea of how this equates with the cut in services to the community, which is what so many people are suffering?
Lord BELLWIN: My Lords, it is of course quite fallacious to assume that the quality of provision of services is in any way commensurate with the level of expenditure.
Baroness BIRK: My Lords, with great respect, that is not the question I asked the Minister. I was asking as a question whether he would explain the relationship between the numbers reduced, which he has produced, and the level of services to the people. I was not talking about expenditure. I was talking about the personnel and the services.
Lord BELLWIN: My Lords, the point I was trying to make was that there is not of necessity a relationship between the two points that the noble Baroness mentioned. In any case, the figures that I quoted would surely indicate that at the time they were taken—and they are the latest ones available—one really could not draw any conclusions at all from them except that there is a trend. When we have the next figures, which should be, I am told, early next month, we may have a much better indication of the direction in which they are going.
Lord BOYD-CARPENTER: My Lords, is it not a fact that a number of local authorities have been far more zealous in reducing the services they give to the community than in reducing the numbers of their employees?
Lord BELLWIN: Yes, indeed, my Lords, that certainly is the case; but then I think one would have to accept that the circumstances differ in different authorities, as indeed does the degree of zealousness with which the various authorities try to carry out the Government's requirements. The fact is that if we do not succeed in reducing the general level of public expenditure then the debate as to the level of services could in time become somewhat academic.
Baroness SEEAR: My Lords, if one figure is going up and the other is going down would the noble Lord tell us what the trend is?
Lord BELLWIN: As I said, my Lords, the figures I quoted really show nothing of a trend other than that there is in general a slight decrease. One might expect the figures next time round to show a greater decrease.
Lord DAVIES of LEEK: My Lords, may I ask the Minister to say, despite his coruscating reply, which was blinding in its flashing and making the matter befogged, whether workers at the old folks' homes which have now been closed were considered industrial or non-industrial: and how many old folks' homes have been closed as a result of this?
Lord BELLWIN: My Lords, the noble Lord will know that a statistic of that kind is not something I can readily trot out now;
570
but in any case this only emphasises the point made by my noble friend Lord Boyd-Carpenter—namely, that what an authority does as regards its services when trying to reduce is costs, first of all will vary very considerably as from one authority to another, and, secondly, there will be those authorities which will be more concerned to ensure that what they reduce are the costs of administration and of providing services rather than the cost of the services themselves.

PICKETING: STATE OF THE LAW
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble and learned friend the Lord Chancellor will repeat a statement being made in another place on criminal law relating to picketing.
NEW HEBRIDES BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

COMPETITION BILL
2.53 p.m.
The MINISTER OF STATE, DEPARTMENT OF INDUSTRY (Viscount Trenchard): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Viscount Trenchard.)
On Question, Motion agreed to. House in Committee accordingly.
[The LORD ABERDARE IN THE CHAIR.]
Clause I [Abolition of Price Commission]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord WALLACE of COSLANY: We strongly object to this clause. The clause itself is a formality to put into effect what has, in the main, already been carried out. No mention was made during the general election or in the gracious Speech of a Conservative decision to abolish the Price

571
Commission. During the election a review of the work of the Price Commission was promised and in the gracious Speech it was promised that the Government would publish proposals for more effective competition and fair pricing policies. However, during the debate on the Address, the Prime Minister in another place suddenly announced the abolition of the Price Commission.
"Competition" certainly comes into the title of the Bill, but how far it will be effective in operation is open to doubt. Fair pricing certainly takes a back seat in the Bill and Clause 1 rules out any effective measure of price protection for the consumer. There is no doubt that the work of the Price Commission played a significant part during the effective period of wage restraint under the Labour Government. In the winter before the election there was a demand for the return of free collective bargaining by some trade unions, actively and stridently supported by the present Prime Minister. That helped the Tories to win the election. But having sown the wind the Government and the country are reaping the whirlwind of escalating pay demands and rising prices. Eventually an incomes policy of some sort must emerge and to support it there must be price regulation or restraint. Those are the vital ingredients of a counter-inflation policy.
There is no doubt that the existence of the Price Commission had a deterrent effect on price increases. I see the noble Lord, Lord Trefgarne, shaking his head in dissent, but that is a fact. Indeed, one of the main complaints of manufacturers was that they did not want to fill in forms; they wanted to increase their prices without restraint. It also made consumers feel that they had a defendant. It made people conscious of the problem of inflation and people felt in some way that the Government cared about the problem of prices and pay. Today prices are a vital issue in the average household, as I am sure the noble Viscount, Lord Trenchard, realises as he wheels his shopping basket around the shopping centres trying to find bargain prices. Housewives look to the Government for action, but all the action they have is the Government forcing up prices by 15 per cent. VAT and ordering a gas price
572
increase against the Gas Board's wishes. To abolish the Price Commission in the way the Government are doing under this clause is not only an error of judgment but a serious psychological error as well.
Lord ROBBINS: Without entering into controversy at all on the noble Lord's main point, may I ask him whether he can quantify the effect which successive attempts to control prices have had on the retail price index?
Lord WALLACE of COSLANY: There has been an undoubted deterrent effect. In some cases prices were held without an increase being made and in some cases price increases were postponed. All of those added up to a position where until last winter—and I readily admit that position—there was recognised restraint on the part of trade unions. There were, of course, some awkward people involved, but in the main I think it is fair to claim that until last winter, when the dam broke, there was restraint, and that had some effect on the inflation issue.
Lord BOYD-CARPENTER: The abolition of the Price Commission, which I welcome, raises two issues. First, there is the issue which the noble Lord, Lord Robbins, raised, as to whether any system of price control—any instrument for seeking to regulate prices—is likely to be either effective or beneficial. I take the view—I will not weary your Lordships with it at any length—that, save in the most exceptional circumstances, such as a war-time situation, such a system on the whole is inefficient and does more harm than good, creates a black market and damages the profitability of industry.
The second point is whether, even if one concedes to the noble Lord, Lord Wallace of Coslany, the opposite view (that a system of price regulation is what the editors of 1066 and All That would call a good thing), the Price Commission was an effective instrument for doing that. I will detain your Lordships for a moment, and I have one justification for doing so because I have had very direct experience of the actual working of the Price Commission.
About this time last year a company of which I happen to be chairman was submitted to an examination by the Price Commission. The result was, in

573
fact, an acceptance that the price increase which we were contemplating was justified. So I have no grievance on that score. But if your Lordshios could have seen the waste of time, effort and public money involved in the examination of what was shown to be a perfectly efficient company, by an organisation which knew absolutely nothing about the industry concerned, then I think you would have been fully convinced that, whether or not one wants price control, the Price Commission was the clumsiest and most blunt instrument that anyone could have invented for the purpose.
They knew nothing about the industry concerned. They started with doctrinaire views. They sought to persuade us—your Lordships will hardly credit this—to adopt a pricing system based on cost-plus. Noble Lords who have served in the House of Commons know that the Public Accounts Committee in that place spent years getting Government departments off the system of cost-plus, which of course is a system which stimulates inefficiency, because on a cost-plus basis the less efficient you are, the higher your costs; the higher your costs, the bigger your percentage margin, and therefore the bigger your profits. Yet this was solemnly advocated to us by the Price Commission They knew nothing about the industry. They did not even understand that in the distribution of cement prompt and punctual delivery and service to the customer is what matters. Their chairman even went out of his way to say, "Oh, does it matter whether you deliver today, tomorrow, or in a few weeks' time?" This was the body who set themselves up to pronounce upon the efficiency of industry.
The experience which I have related to your Lordships is one of which I have direct knowledge. I am perfectly certain that other noble Lords who are in industry could add to this. Whatever may be said in theory for a system of price control, the elimination of the Price Commission has been greeted with a gasp of relief by British industry.
Baroness GAITSKELL: The noble Lord, Lord Robbins, asked my noble friend to quantify the rise in prices. What happened under the Price Commission? Is it not wonderful to hear noble Lords
574
—not the women, but the men—asking questions like that. Why do they not get together, go out into the streets, and ask the housewives whether prices have risen, or whether the Price Commission was any good? This is what they should do. They should not be talking in this theoretical, completely impractical, and ignorant way about price rises at this time. The extent of price rises really is staggering. Prices have practically doubled on all kinds of items. I bought a reel of cotton last week; I had to pay 30p for it. Do any of the noble Lords in this House know what was the price of a reel of cotton a year ago? Have they any idea of what they are talking about? They have no idea.
Lord ROBBINS: As usual, I am in complete agreement with the noble Baroness that prices have risen, but I submit that my question as to whether the Price Commission had exercised quantitative and significant restraint on the increase in prices—which, in my opinion has, since the beginning of the 'seventies, been due to both parties—was very down-to-earth. I think that the rise in prices, on which the noble Baroness and I are in complete agreement, is due to factors other than the existence or the non-existence of a Price Commission.
Baroness GAITSKELL: May I suggest, though, that the Price Commission had some effect—
Several noble Lords: No!
Baroness GAITSKELL:—on keeping prices lower? No one can deny that.
3.6 p.m.
Viscount TRENCHARD: May I at this stage get a word in edgeways. We are on opposite routes to the party opposite in terms of trying to control inflation. To rely on competition, and to make sure that competition works, is the object of the Bill and is thus the reason for the abolition of the Price Commission. There are put in its place some very extensive powers to ensure that competition really works. These are opposites. I, too, have spent some 30 years in industry with price control and without price control, and I know very well that when there is a Price Commission operating one talks more to competitors, and one gets in applications

575
early for the maximum amounts that could be justified. The Price Commission then claim that they have kept prices down by a certain amount. That route breaks down competition and is not effective. I should not dare to do what the noble Baroness, Lady Gaitskell, has just done; namely, to question the noble Lord, Lord Robbins, in terms of what have been the effects of price control so far as objective total measurements are concerned. Whether in the past there has been a Conservative Government or a Labour Administration in office, or whether one is talking of outside surveys, so far as I am aware no one has claimed, even at any one moment, that more than just on 1 per cent. of RPI has been affected; and at the time that 1 per cent. of RPI was affected very considerable damage was done to profit margins, cash flow and investment.
In those days I was an industrialist, and our excellent Civil Service under both Administrations were forced to use the word "cosmetic" over and over again, because the real purpose of the Price Commission, when difficulties were encountered under both Governments in trying to make a pay policy stick, was to try to encourage the trade unions to accept it. I have been asked to play the cosmetic game. The proof of this pudding is in the profit levels of industry, which have been reduced to very low levels, but which in time of extreme competition were never such that they could do more than fund the necessary investment; nor are they more in Germany, the USA, or other countries that have not followed this route.
I have no doubt that this subject will come up at a later stage, and I have little doubt that the noble Baroness, Lady Seear, who made many points on Second Reading, will want to raise it again when she moves her amendments, and I have perhaps a few extra points that I should like to make at that time.
Lord DAVIES of LEEK: A question was asked about quantifying—a horrible word, anyway—and when we are asking the trade union movement to modify its demands, it is important to ask ourselves how this can be expected if all the time we leave prices entirely to what is believed to be, wrongly, the logic of competition. When it comes to the shopping basket
576
both sides of the Committee plead that they want to keep prices low. There is no doubt whatever about the success of the Price Commission in regard to articles that matter to the housewife, her husband, and thereby the trade union movement. It is from the kitchen of the housewife consumer that demands of the trade unions emanate. Rents and the ordinary victuals of daily living are more than anything else the cause of the demands by the trade union movement.
As a matter of fact, since we strengthened the Price Commission in 1974, and again in 1977, there are on record hundreds of notified price increases which were modified. The Commission estimated that direct savings from their activities between August 1977 and July 1978 were around £120 million—and that is savings to the British housewife. That would therefore have a lessening effect on the demands of the trade union movement for increases in pay. This does not include unquantifiable artifacts. I know that the noble Lord opposite was one of the most capable Ministers in his day, and it would not be for me to denigrate his constructive speeches from time to time, but I should like to know in what article or artifact he was dealing. I do not doubt his words.
Lord BOYD-CARPENTER: I am very happy to tell the noble Lord, although it might perhaps almost rank as a commercial. I manufacture cement.
Lord DAVIES of LEEK: We do not eat cement, quite, but it does enter into the cost of buildings and therefore it enters into rents. We will accept that. I do not know whether the noble Viscount wants to intervene, but I have not finished.
Viscount TRENCHARD: I wonder whether I may intervene for one second. If I may say so, I think we are going over the same ground. I do not doubt the noble Lord on the £120 million. This is the difference between the applications put in and the price increases granted. I would just ask him: Can he account to me, please, for the reason why, since the announcement that the Price Commission was to be abolished, the overall profit margins, already abysmally low in industry, have in fact reduced, and reduced substantially, rather than gone up? This is quite separate from the question which the noble Baroness raises about prices rising.
Lord DAVIES of LEEK: Now I have the Minister on the hip, because —and he had an illustrious father in the military period—we used to have a phrase during the war to answer that question—"It's a piece of cake"! Obviously there has been a depression since the Tories won the election. Shops are closing all over the country, and people serving in shops are worried about their jobs. If you ask the Union of Shop, Distributive and Allied Workers you will find that there is a falling off in the number of shops. In fact, competition is forcing the average little shopkeeper on to the streets.
Baroness GAITSKELL: May I ask the Minister this? If prices are going to go up as well as profits, who wins? If they are both going up at the same time to the same extent, who is going to win?
Viscount TRENCHARD: That is a hypothetical question, and I do not fully understand it, if I may say so. At the moment, prices are going up for reasons of the inflation we inherited and the once-only moves that we have made—I repeat, for reasons of the inflation that we have inherited and the once-only moves that we have made—to lower tax. So we have added to it, but have added to it by a known amount. In the last year of office of the Government of noble Lords opposite inflation was accelerating. On a six-month basis it was over 13 per cent. We have added to it. The fact is that profits are going down. The noble Lord is quite right in saying that they are going down because conditions are difficult; but because, when conditions are difficult, competition exists, as it does all the time, very strongly, it makes it quite impossible, without a Price Commission, for industry to profiteer.
Lord JACQUES: The party opposite is being as contradictory in office as it was in opposition. First of all, we are told that the Price Commission was a waste of money; it was completely ineffective. Then, in the next breath, we are told that it had serious effects; it reduced the profits, and therefore reduced investment. You cannot have it both ways. The noble Viscount further said that their inflation, Government-induced, was once-and-for-all. I do not think that stands up to examination. I believe that the Government are going to find out, sooner or later, that
578
control of the public sector borrowing requirement and control of the minimum lending rate are by themselves insufficient to rid us of inflation, for the simple reason that in operating those controls over the demand for money the Government induce inflation in the first place. I will give them details to show that it is estimated that, from mid-1979 to mid-1980, 8½ per cent. of the inflation rate is Government induced. Three per cent. comes from the reductions of the PSBR, 1¾ per cent. comes from the high interest rates, and 3¾ per cent. comes from the increase in VAT. That makes up 8½ per cent.—approximately one—half of the inflation rate.
Now the Minister says that is once-and for-all. Not on your life! If you are at the same time operating a free bargaining policy, then it follows inevitably that trade unionists will expect their leaders to try to maintain their standard of living; and you do not need to belong to any party to take that view. Even the Conservative trade unions would take that view. Consequently, Government-induced inflation is perpetuated through wage claims into the succeeding years, and because of that I believe the Government are going to find that their present policies are completely inadequate to control inflation and that ultimately, like many of their predecessors, they will have to have some form of incomes policy, whether statutory or voluntary. They will never get that policy unless there is some effort made to control prices and profits; and I believe that ultimately, while you may not wish to have the Price Commission, you will certainly have to have profit control and a certain measure of price control. The sooner noble Lords opposite get that into their heads the better, because otherwise they are just burning their boats behind them.
Viscount TRENCHARD: I am hoping that in a moment we can perhaps get on with the amendments. I will try very hard not to respond in kind on this occasion, but merely in detail. The noble Lord, Lord Jacques, said I was contradicting myself. I do not believe I was. I said that the effect on the RPI had been very small even at the height of the strongest Price Commission applications—under 1 per cent. of the RPI. I said it did a lot of harm of other kinds in breaking down competition, and I would point out that

579
a fraction of a per cent. on a sales price can make a very big dent in profit margin and in investment—and that is what it did. It is the arithmetic of the situation, if I may say so, to which noble Lords opposite have not given adequate weight.
I shall not go back over the statements I made on the inflation that we inherited and added to, but they are correct and are in accordance with the figures. I would merely add once again that in many other countries where inflation rates are very low indeed they do not depend upon price control; they do depend upon competition, the principles of which are unaltered though the details need to be clearly understood. I hope that perhaps we shall have time to come back to them later where amendments have been moved to the appropriate clauses.
Lord PONSONBY of SHULBREDE: I want to add just one word. I was very surprised to hear the remarks of the noble Viscount opposite about inflation. I think it is largely unproductive to quote figures, because everybody quotes different figures on different bases. But what is absolutely undoubted is that inflation has shown a substantial increase since the Government came into office, and a lot of that increase was deliberately induced by increasing the rate of VAT from 8 to 15 per cent Now it would not be so objectionable that this clause should be included in the Bill, if, later on in the Bill, there were adequate powers to deal with prices. However, these powers are not there. A number of amendments have been put up to deal with them but, in the absence of any adequate substitute for a Price Commission, we feel that this clause should not stand part of the Bill.
Baroness HORNSBY-SMITH: On this occasion I support my noble friend. The noble Lord, Lord Jacques, referred to the necessity for the Price Commission May I say that trade, industry and the retail trade were delighted to see it go? It was a good propaganda exercise for the former Government, but it only scratched the surface and made a very small dent in inflation. It investigated only a tiny proportion of increases and it tended to
580
act as an arbitrary penalty on a very limited and selective number of companies. I believe that a Price Commission would be justified only if there was a lack of competition or where excessive profits are being made. There is no evidence today of lack of competition in the High Street, and Government policy is to encourage it.
We believe that, so far as the argument about profitability is concerned, that falls to the ground because profitability, in the old terms as understood, has been declining in industry for the past 10 or 15 years and is now at a level which positively discourages the investment that we all seek and need. I believe that the old Price Commission was likely further to have exacerbated the situation by holding down prices artificially. The major areas in which the Price Commission might have had an effect were in restricting price agreements. I understand that that will be covered in the increased powers given to the Director General of Fair Trading and a through strengthening of the Monopolies and Mergers Commission.
That commission should also perhaps be given power to investigate restrictive labour practices, which are a major source of industrial inefficiency and low production today and which therefore push up prices. The operation of the Price Commission as it was has, I believe, been wasteful of resources, and we are told that it cost £7 million a year. I shall not quibble about whether it was 1 per cent. or 5 per cent. of one point by which they were able to bring down retail prices; but no one can compare the £7 million which it cost the Government with the quite appalling loss in time and money for the companies which have been investigated. Therefore, I congratulate Her Majesty's Government on abolishing the Price Commission and, although I may disagree with him later, I support my noble friend in retaining this clause in the Bill.
3.24 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
Their Lordships divided: Contents, 121; Not-Contents, 61:

CONTENTS

Addison, V.

Enniskillen, E.

Middleton, L.

Adeane, L.

Exeter, M.

Morris, L.

Ailesbury, M.

Falkland, V.

Mottistone, L.

Airey of Abingdon, B.

Faithfull, B.

Mountgarret, V.

Alport, L.

Ferrier, L.

Mowbray and Stourton, L.

Amherst, E.

Fraser of Kilmorack, L.

Moyne, L.

Ampthill, L.

Gage, V.

Newall, L.

Amulree, L.

Glasgow, E.

Northchurch, B.

Auckland, L.

Gowrie, E.

Nugent of Guildford, L.

Banks, L.

Greenway, L.

O'Brien of Lothbury, L.

Barrington, V.

Grey, E.

Orkney, E.

Bellwin, L.

Grimthorpe, L.

Piercy, L.

Belstead, L.

Grimston of Westbury, L.

Reilly, L.

Berkeley, B.

Hailsham of Saint Marylebone, L.(L. Chancellor.)

Robbins, L.

Bessborough, E.

Roberthall, L.

Boyd-Carpenter, L.

Hampton, L.

Rochdale, V.

Brentford, V.

Hankey, L.

Romney, E.

Byers, L.

Harding of Petherton, L.

St. Aldwyn, E.

Caithness, E.

Henley, L.

St. Davids, V.

Campbell of Croy, L.

Hives, L.

St. Just, L.

Clancarty, E.

Home of the Hirsel, L.

Saint Oswald, L.

Clifford of Chudleigh, L.

Hornsby-Smith, B.

Sandys, L. [Teller.]

Clitheroe, L.

Hylton-Foster, B.

Seear, B.

Clwyd, L.

Ilchester, E.

Selkirk, E.

Cork and Orrery, E.

Inchyra, L.

Simon, V.

Cottesloe, L.

Inglewood, L.

Sligo, M.

Cromartie, E.

Kilmany, L.

Spens, L.

Cullen of Ashborne, L.

Kilmarnock, L.

Stamp, L.

Daventry, V.

Kimberley, E.

Stanley of Alderley, L.

De Freyne, L.

Kinloss, Ly.

Strathclyde, L.

De La Warr, E.

Kinnoull, E.

Suffield, L.

Denham, L. [Teller.]

Lauderdale, E.

Teviot, L.

Derwent, L.

Long, V.

Tranmire, L.

Drumalbyn, L.

Loudoun, C.

Trefgarne, L.

Duncan-Sandys, L.

Lovat, L.

Trenchard, V.

Dundonald, E.

Luke, L.

Vaux of Harrowden, L.

Ebbisham, L.

Macleod of Borve, B.

Vickers, B.

Effingham, E.

McNair, L.

Vivian, L.

Ellenborough, L.

Mancroft, L.

Wakefield of Kendal, L.

Elliot of Harwood, B.

Margadale, L.

Wigoder, L.

Emmet of Amberley, B.

Merrivale, L.

NOT-CONTENTS

Ardwick, L.

Goronwy-Roberts, L.

Plant, L.

Aylestone, L.

Gosford, E.

Ponsonby of Shulbrede, L.

Birk, B.

Greenwood of Rossendale, L.

Ross of Marnock, L.

Blease, L.

Hale, L.

Sefton of Garston, L.

Blyton, L.

Henderson, L.

Segal, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Brooks of Tremorfa, L.

Irving of Dartford, L.

Stedman, B.

Bruce of Donington, L.

Jacques, L.

Stewart of Alvechurch, B.

Burton of Coventry, B.

Janner, L.

Stewart of Fulham, L.

Cledwyn of Penrhos, L.

Kilbracken, L.

Stone, L.

Collison, L.

Leatherland, L.

Strabolgi, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Crook, L.

Leonard, L.

Taylor of Mansfield, L.

David, B.

Listowel, E.

Wallace of Coslany, L. [Teller.]

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Walston, L.

Davies of Penrhys, L.

Wells-Pestell, L.

Diamond, L.

Lloyd of Hampstead, L.

Whaddon, L.

Gaitskell, B.

Maybray-King, L.

Wilson of Radcliffe, L.

Galloway, E.

Paget of Northampton, L.

Wootton of Abinger, B.

Galpern, L.

Pargiter, L.

Wynne-Jones, L.

Resolved in the Affirmative and Clause 1 agreed to accordingly.

3.34 p.m.
Clause 2 [Anti-competitive practices]:
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 1:
Page 2, line 22, after ("of") insert ("constituting a monopoly or").
The noble Lord said: With the passion of the Division subsiding, I put the point to the opposite Benches that this is a simple and straightforward amendment. Monopoly is obviously an anti-competitive practice. Some would argue that a 100 per cent. monopoly is not anti-competitive as there is no competition; but that would be playing with words. Constituting a monopoly is an uncompetitive practice. There are some patterns of behaviour for monopolies—restrictive trading arrangements, and inefficiency. Large organisations often arouse a great deal of inefficiency, rigidity and bureaucracy. This is evident in the nationalised industries as well as private industry. An example is the gas board taking a long time to give estimates to people and not calling at the right time.
There is also monopoly pricing. I would not say that it could be argued that petrol companies constitute a monopoly. I suppose the large three companies have the market. I am not a motorist but I understand that in some areas it is very difficult to get petrol; in other areas petrol varies in price. It is the small man who is finding it difficult to keep up with the bigger garage proprietors who are getting supplies on a basis of preferential treatment and discount. This is happening quite a lot throughout the rural areas and, as a result, it is a difficult job to obtain supplies of petrol. I am quoting this as an example. I hope that the Government will accept this amendment; it is simple and straightforward. There is no malice aforethought in it. I beg to move.
Lord TREFGARNE: I understand that it would be convenient if we now took the Statement. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

PICKETING:STATE OF THE LAW
3.37 p.m.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, with your Lordships' permission, I will repeat a Statement now being made in another place by my right honourable and learned friend the Attorney General. It is about the criminal law on picketing. After the formal parts, the Statement is as follows:
"The recent events outside the private steel firms have renewed public anxiety about the law on picketing and intimidation.
"I must emphasise that the law on picketing does not, in any real way, change the criminal law and in no way diminishes the rules which govern public order.
"The criminal law of the land applies to pickets as it does to anybody else.
"Let there be no illusion that the immunity provided under the civil law enables pickets to break the criminal law.
"Peaceful picketing in contemplation or furtherance of a trade dispute is lawful so long as it is the honest belief of those involved that their action will advance the interests of those in dispute.
"This does not mean that the freedom to picket is a licence to obstruct or intimidate—the law permits picketing solely for the purpose of peacefully obtaining or communicating information or of peacefully persuading another person to work or not to work.
"The immunity from civil proceedings given by Section 15 of the Trade Union and Labour Relations Act 1974 does not extend to any wrongful act such as violence, threats of violence or similar intimidation—whether by excessive numbers of pickets or otherwise or molestation amounting to a civil wrong. In these circumstances it may be open to the employer on his own behalf or on that of his workforce to take action in the civil court. In addition the criminal law is perfectly clear. Each of us has the right to go about our daily work or pleasure free from interference by anybody else. Each one of

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us is free as an individual to come and go as we please to our home or to our place of work.
"The law specifically protects our enjoyment of those rights. If anyone tried to deter us from exercising those rights by the use of violence or intimidation or obstruction then he is breaking the law and may be punished.
"The freedom to picket does not confer or imply any right to stop vehicles—still less do pickets have the right to stop people going about their lawful business. Pickets have no right to link arms or otherwise prevent access to the place they are picketing. This is not a new situation; the present law was made clear by my predecessor"—that means, of course, my right honourable friend's predecessor—
"on 25th January last year and by my noble and learned friend Lord Rawlinson in 1972 when he was Attorney General.
"If pickets by sheer numbers seek to stop people going to work or delivering or collecting goods they are not protected by the law since their purpose is to obstruct rather than persuade.
"Are large numbers really necessary in the name of lawful peaceful persuasion? They are more likely to lead to unlawful assembly or even an affray.
"So far as excessive numbers are concerned the courts have recognised that the police may limit the number of pickets in any one place where they have reasonable cause to fear disorder. In my view, this includes, in the appropriate case, not only asking some of those present to leave but also preventing others from joining the pickets.
"The enforcement of the law is and must remain a matter for the police and the courts. I recognise the difficult task chief officers of the police have in deciding how order can best be maintained so as to ensure that ordinary people can exercise their own rights. It is the function of the law to protect the rights of people—employers and employees—to go about their daily business, to work or not to work, and to make their own decisions whether to exercise those rights. If we let go of that principle then we risk abandoning
586
the rule of law and risk surrender to the rule of violence.
"I hope that stating the main principles of the law, with which the Lord Advocate agrees, I have removed the doubts and encouraged all those concerned, whether pickets or others, to respect and uphold the law. I am sure that the great majority in this country will support this."
My Lords, that concludes the Statement.
3.44 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor for repeating this Statement, and your Lordships will be glad to have it at this time. The Statement itself does not indicate any change in the law. Perhaps the noble and learned Lord the Lord Chancellor would agree, as seems to be quite clear from the Statement itself, that it is a statement of what the law actually is and, if I may say so with respect, a clear one.
There are only two short points I should like to put to the noble and learned Lord the Lord Chancellor. I would ask him first of all whether he would agree that it is for chief constables to use their discretion to ensure that the criminal law is at all times enforced, bearing in mind, as I am sure they do, that in exercising this discretion of theirs, emotive situations are not always improved by introducing criminal sanctions into them, at least straight away.
I would ask the noble and learned Lord the Lord Chancellor whether he would confirm that this Statement itself does not in any way imply any change in the well-established tradition that Ministers of the Crown do not themselves attempt in any way to instruct chief constables upon how to carry out their duties or in the exercise of their discretion in handling any of the situations which are in mind in making this Statement, or indeed in any other.
I am sure we are all fully confident that chief constables will exercise their discretion in accordance with the fine and very best traditions of the Police Service. I am also sure that your Lordships on all sides of this House will be very conscious of the need to see that our Police Service

587
does indeed enforce the law in this situation.
3.46 p.m.
Lord WIGODER: My Lords, we on these Benches are also grateful to the noble and learned Lord on the Woolsack for repeating the Attorney General's Statement. I understand it really comes to this: that where there are threats to public order or to the Queen's peace that occur in the course of mass picketing, the criminal law in its present state is perfectly adequate in theory to deal with those dangers, and that the existing law of obstruction, of unlawful assembly, of riot and affray can be used properly against those misbehaving on those mass pickets.
I want to ask the noble and learned Lord on the Woolsack whether he would not agree that the real problem here is not whether the criminal law is adequate—because I would respectfully agree with the Attorney General that it clearly is so—but to what extent it can be enforced, which is a political question rather than a legal one, in a very difficult situation in which enforcing the criminal law is liable to lead to the creation of martyrs and is liable to lead to a situation in which, instead of hundreds of people defying the law, there way well be thousands of people defying the law.
I am the last person to suggest that in the face of such a threat the law should abdicate its responsibilities. What I would respectfully suggest to the noble and learned Lord is this: am I not right in thinking that among those on the mass pickets at the moment who are causing much of the trouble there are many people who are professional troublemakers and are not in the least bit interested in the industrial action which is sought to be pursued by the picket but are solely interested in sowing the seeds of civil disorder? If that is so, am I not right in thinking that these people are perfectly well known to the police force in the locality who have to deal with the situation?
Might I suggest to the noble and learned Lord that in that situation it is those people in the first place who should be dealt with with the utmost firmness of the law in order to cope with the breaches
588
of the Queen's peace that are taking place? If that were done, would it not be right to say that that would be with the full support not only of the community as a whole but of the great majority of ordinary decent, peace-loving trade unionists?
3.49 p.m.
The LORD CHANCELLOR: My Lords, I am extremely grateful to both noble Lords for their welcome of this Statement. I begin by confirming that it was designed to state what the law is and not to create any alteration in what it should be. That was my purpose over the weekend and that was my purpose on television yesterday; and it was the purpose of my right honourable and learned friend in the other place in making this Statement.
I absolutely concur in what the noble Lord, Lord Boston, said about the discretion of chief constables. Good policing or "policemanship", if there is such a word, is not a science but an art, and it involves a very great deal of tact as well as a very great deal of firmness. It is certainly not wise in what the noble Lord, Lord Boston, called "emotive situations" to react too violently. On the other hand, violence in itself is a crime, and the rights of ordinary people must be protected by the police Firmness is required as well as tact, and I know that chief constables can be trusted to give us the right blend of both.
I also confirm what the noble Lord, Lord Boston, said: that Ministers do not purport and will not attempt to instruct chief constables. This is not only a very wise and, I think, legal tradition, but it also reflects a fact which must be very familiar to your Lordships; namely, that in different situations and in different parts of the country the art of "policemanship" must necessarily differ. The mood of the locality must be taken into account, and all kinds of local feelings as well as national interests must also be taken into account. It is not the business of Ministers—I made that very clear myself on the television yesterday—even of the Home Secretary, still less of the Lord Chancellor or the Attorney-General, to instruct police constables in the exercise of their duties. Of course, they will consult with one another and, probably, with my right honourable friend, but

589
instructions are not the order of the day.
I was also grateful, as I have said, to the noble Lord, Lord Wigoder. Yes, I think that the criminal law is sufficient if it has the people behind it. The question is one of enforcement, but it is the business of Government and the business of the police to enforce the law, and enforceability very largely depends upon the extent to which the police and the criminal law have the support of the public. One of the purposes that I think my right honourable and learned friend had in making this Statement was to appeal to the public to give support in these matters.
I am not sure about the danger of martyrs. There are people who seek martyrdom in various causes of different degrees of attractiveness. But to be a martyr in favour of intimidation, to be a martyr in favour of unprovoked violence against innocent people, is a kind of church to which few of us, I think, would care to belong, even if the extent of it led to martyrdom.
Yes, I would agree with the noble Lord, Lord Wigoder, so far as I am informed, about the nature of some of the people who have been causing trouble. Of course, I am not as well informed about this as my right honourable friend the Home Secretary, but I am told that of those who have been arrested—and there have been, I think, more numerous arrests than is generally appreciated—a very high proportion had nothing at all to do with the steel dispute or with any organised trade union. They were there to make trouble and they received it, and I hope that they will continue to receive it.
At the same time, I should like perhaps —and I hope not improperly—to say that those who have nothing to do with a dispute do not necessarily help the police by joining the crowd. They themselves may be completely innocent of any offence, but they make it easier for the troublemakers. In any random crowd, of say, 2,000, it is almost inevitable that you get one or two hot-headed people who behave foolishly, and once violence breaks out in a crowd it is rather like a virus breaking out in the body—it spreads. So I do not want it to be thought that, even if the purpose of an individual or a group of individuals is innocent, it is necessarily to be encouraged that they
590
join groups who may themselves have a perfectly legitimate interest in a dispute.
3.54 p.m.
Lord SHINWELL: My Lords, may I ask the noble and learned Lord the Lord Chancellor whether he would be inclined to agree that what we appear to be discussing, because of some observations made by the noble Lord, Lord Wigoder, and also by himself in his final remarks, is not the question of whether the law is adequate, whether something is criminal or subject to civil action, but the whole question of picketing? Also, as I understand some of the observations to which we have just listened, although it is not within the prerogative of politicians, whoever they are, on any side of the political fence or even in Government or out of government, to seek to enforce the law or to suggest how the law should be enforced, that has not been the attitude of the noble and learned Lord who sits on the Woolsack, in his final observations, or of the noble Lord, Lord Wigoder. They have gone a little further. They disclaim the right of politicians to say to chief constables or to those in authority what they ought to do. They explain what the position is and almost appear to be telling them what to do. I think, if I have made myself clear about it, we want some clarification on that point.
Another point is this. I am not a lawyer, and therefore I understand nothing about these legal niceties. But if, as has been said by the noble and learned Lord the Lord Chancellor and by others, and as has appeared in Press articles—and there have been many in recent weeks—the criminal law is available and is quite adequate, what is the precise purpose of making the Statement today in another place and having it repeated in your Lordships' House? Is there not in contemplation the intention to make the law more adequate, to ensure that it is going to be enforceable? We ought to know.
I ask these questions because I myself had some experience of picketing a long time ago, just immediately after the First World War, when hundreds of thousands of men in the forces were disposed of without employment, with no hope, and living in despair. We were demanding a reduction in the hours of labour and we wanted to absorb many

591
of those who were unemployed. There was a great deal of picketing in which I joined, and which I even organised, not for the purpose of creating violence or disorder, but in order to provide employment for people who had rendered service to the United Kingdom during the First World War.
I want, further, to ask whether we ought to take account of the reason for this picketing, leaving aside the question of violence, which I deplore. I hate the sight of it when I see it on television, and I am sure that other Members of your Lordships' House feel the same. But do we ask ourselves: why this violence or attempted violence? Why these activities which we deplore? Are we considering what is the cause of it all, and are the workers entirely to blame? Are even the Scargills entirely to blame? What about the people on the other side? Recently, some of the managerial people associated with the BSC have come out and declared that they are dissatisfied with the administration of the BSC. There have also been suggestions, and even direct statements, to the effect that there is something almost in the nature of corruption operating, by way of cars, flats, perks and the rest of it, in the BSC.
Finally, I put this point. Do we take no account of the inescapable fact, which we must all deplore, that thousands of skilled workers who have rendered service to the steel industry, and others, are now to be unemployed with no hope of work in the future? Are we to take no account of that?
The LORD CHANCELLOR: My Lords, I think that the noble Lord, Lord Shinwell, if I may deal with his points in inverse order, has probably got the wrong end of the stick. I think that he does a very great disservice to the steelworkers to suggest that they have been on any substantial scale—although I would not speak for individuals —responsible for the violence about which we are talking in regard to this Statement. I do not think that is so at all. I think that the noble Lord, Lord Wigoder, was right in saying that those who have mainly been arrested, and presumably those who have caused offences, are not the workers themselves, nor even the rather uninvited guests led by Lord Scargill.
Several noble Lords: Lord?
The LORD CHANCELLOR: I am sorry, my Lords—King Scargill. I beg his pardon. I have underestimated his standing in the world! But it would be right to say that he had behaved perfectly lawfully, even if they were uninvited to the party.
Very largely, the violence is caused by people who want to commit violence, not by people with legitimate grievances. The English people, when they are deeply moved, are not a violent people. Whether their grievances are just or unjust is a very different matter from whether violence is used, and by whom. I do not claim to be quite so experienced of that period of history as the noble Lord, Lord Shinwell, but I do remember that in my boyhood there were a number of very legitimate grievances and very legitimate apprehensions, and very serious mistakes were made in the demobilisation period of 1919. I think that we have learned our lesson about that, and I think that that lesson has been learned in all walks of society. We very largely avoided it at the end of the last war because of our experiences of the kind to which the noble Lord, Lord Shinwell, referred.
Then he says: If the criminal law is adequate, why make the Statement? The fact is that the criminal law may be adequate but people do not know what it is, and that is why we made the Statement. It fell to my lot during the weekend to address a conference which was largely discussing the Employment Bill. We heard one informed speech after another by very intelligent young people who never realised that this criminal law existed. That is why I said what I said, and no doubt that is why my right honourable and learned friend said what he said.
The third point made by the noble Lord, Lord Shinwell, was about politicians. Why, he says, if you say that you are not going to instruct chief constables, should you express an opinion at all? My opinion is that one is entitled to express one's opinion, both in this House and elsewhere.
Lord FERRIER: My Lords, would my noble and learned friend agree that he asked for an expression of opinion from the people as a whole in support of the

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views which have been expressed on this Statement? If so, am I not right in suggesting that this Statement is an appeal to all of us to be outspoken in our disgust and revulsion at the scenes which we see now? And would it not be proper for this House to say that we feel utter revulsion at what has been going on and that we feel it should be stopped?
The LORD CHANCELLOR: My Lords, I wholeheartedly agree with my noble friend. This statement of the law serves two purposes: one is to tell people what the law is and the other is to solicit their support in keeping it constantly before people's minds.

COMPETITION BILL
4.3 p.m.
Committee stage resumed.
Lord TREFGARNE: If we can now cast back our minds to the amendment, No. 1, proposed by the noble Lord, Lord Wallace of Coslany, I am afraid that I cannot share the same high hopes for it that he expressed when he moved it. When a monopoly exists, it can already he investigated under the Fair Trading Act, providing that it falls within the statutory definitions. The Government will be reviewing the provisions of the Fair Trading Act dealing with monopolies, but as yet there is no basis for any particular modification.
Our predecessors' Green Paper recommended further study of some relevant matters, including the definition of a monopoly, but we have not yet reached a conclusion on this very important and, indeed, complex issue. If any further provisions on monopolies are desirable, they will certainly not be made in the form of the present amendment.
I fear that this amendment falls into considerable confusion between a person's course of conduct, on the one hand, and the existence of a monopoly situation, on the other. The latter is a question of the structure of a market rather than the conduct of a particular firm, and there is no way in which the existence of a monopoly situation can be brought within the framework of the provisions of this Bill, which is designed to deal with parti
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cular anti-competitive practices. If, of course, an anti-competitive practice is likely to give rise to or reinforce a monopoly situation, it will be open to investigation, but this is already the case under the Bill and there is no need for any special provision. I hope, therefore, that the noble Lord will not pursue his amendment.
Lord WALLACE of COSLANY: I am not surprised, of course. I did not expect generosity immediately to arise from the opposite Benches. If I understood him correctly, the noble Lord did say that the Government are reviewing the situation, with a view to amendment of the Fair Trading Act. That to some extent is satisfactory; but why it cannot be in this Bill, because it is in the Fair Trading Act, I fail to see. Again, if I remember correctly what the noble Lord said, it was that the Bill specifies a number of anti-competitive practices. But that is the trouble with the Bill. It does not.
Lord TREFGARNE: I did not say that it did.
Lord WALLACE of COSLANY: I am glad that the noble Lord agrees with me. It just shows how weak the Bill is. In the circumstances, I am not going to press the amendment at the moment. I give it for thought to the Government because I think that I have a fair point, but we must press on until the early hours of tomorrow, I suppose. I shall have to leave it there for the moment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn
4.7 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 2:
Page 2, line 26, at end insert ("(otherwise than by imposing of conditions relating to the export of such goods from the United Kingdom).").
The noble Lord said: The object of this amendment is the long-term retention of overseas markets. There is a need to safeguard contracts with overseas distributors and to cover the costs of promotion of a product and associated costs. This leads to a need for an overseas price which is higher than the equivalent in the United Kingdom for a particular product. A situation of this sort was highlighted within the last couple of years in Europe. The European Commission

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forbade the Distillers Company to charge more in Europe for a well known brand of whisky than they did in the United Kingdom.
Similar situations, which are not subject to the application of the principles of the Treaty of Rome, as was claimed by the Commission, apply world-wide. It is perhaps relevant that in the case of whisky manufacturers, only 15 per cent. of their sales are in the United Kingdom; a further 15 per cent. of their sales are in other EEC countries, and 70 per cent. are in the rest of the world. So it is of the rest of the world that we are particularly thinking. I am assured that the European Commission agree with us in that respect.
As a result of the practice of charging more in an overseas market, exporting companies are at the risk of their product being bought by a wholesaler on the home market and sold more cheaply in an overseas market than they do. An example of that might be a market where a manufacturer is well established, such as Japan. The trader or the wholesaler who does this underselling benefits, free, from the promotion of the product by the agent of the manufacturer of the product, and also undercuts the sales by that agent. The overall effect—and this is the important point—is to undermine the position of the product in the overseas market and to lose the services of the overseas agent. All in all, a short-term gain to the trader who bought cheap on the home market can serve to ruin a well established and highly profitable major exporting success, to the net disadvantage of the United Kingdom as a whole.
The concern is that Clause 2(1) as at present phrased does not give sufficient argument to preventing this sort of position from coming about. Companies seek to protect themselves by special terms of sale on the home market and on the whole they are successful, although not always so. But they have also been protected in part by legislation. Examples of this are—or were, after having passed Clause I—in Section 2(2)(h) of the Price Commission Act of 1977. I hate to have to quote that Act, but even it had some good points. Also, Section 10(1)(f) of the Restrictive Trade Practices Act of 1976 makes the same point. The purpose of my amendment is to provide similar
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underpinning of major British long-term exporting initiatives in this Bill. I beg to move.
Lord TREFGARNE: I must confess that while I was considering how to answer this amendment the sort of situation described by my noble friend was not one of the ones which occurred to me. However, the Bill is concerned only with competition in the United Kingdom market and the definition of "anticompetitive practices" in Clause 2 therefore confines the Director General's consideration to practices which affect competition in the United Kingdom. Practices whose only effect is to restrict competition in the supply of goods in overseas markets are therefore outside the scope of the Bill as it stands. We recognise, however, that there may well be practices related primarily to exports but which may have some immediate effect on competition in the supply or production of goods in the United Kingdom, and they are therefore within the scope of the Bill. But I do not think that was the sort of thing that was in the mind of my noble friend.
I believe that this amendment seeks to take such practices quite outside the scope of the Bill. We have to draw the line somewhere between the effects on competition in the United Kingdom and the effects overseas. We believe that the distinction already drawn in the Bill strikes a reasonable balance and we are not convinced that there is much to be gained by accepting this amendment. I hope my noble friend will be reassured by that.
There is one further point, however, in that there is a distinction between applying the scope of the Bill to the effects in the United Kingdom only and specifically exempting—and therefore by implication condoning—anti-competitive behaviour in relation to exports. I think a number of undesirable effects would flow from this amendment and I hope my noble friend will not pursue it.
Lord MOTTISTONE: I understand what my noble friend has said and it is significant perhaps that he did not think of the example I gave because it may be that we were working slightly at cross-purposes. I hope that what I have said (and I shall certainly study with great care

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what my noble friend has said) might be borne in mind if and when it came to the stage of the Secretary of State producing an order under subsection (3), because it is a very real situation. Competition within this country is one thing and competition abroad with overseas people is another, but the two can complicatedly interact in the way I have described, and I think it is quite important that we do not cut off our exporting nose in order to be very competitive at home in every single possible respect, much as I applaud the general thought that we should. So at this stage I will withdraw my amendment, but I reserve the right to reconsider it or something similar at a later stage of the Bill when I have had the opportunity carefully to study my noble friend's remarks.
Amendment, by leave, withdrawn.
4.15 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 3:
Page 2, line 26, at end insert ("or the use of land in the United Kingdom or any part of it for the purposes of carrying on a business.").
The noble Lord said: This amendment to the latter part of subsection (1) of Clause 2 is concerned with the ambit within which competition references can be made and come into the general ambit of anti-competitive practices. Indeed there are a number of subsequent amendments tabled to try to extend that ambit in one form or another. As the subsection stands at the moment the wording is concerning competition
"with the production, supply or acquisition of goods in the United Kingdom or any part of it or the supply or securing of services in the United Kingdom or any part of it".
This amendment concerns the use of land in the United Kingdom or any part of it for the purposes of carrying on a business. The point here is that it would seem that, as the wording now stands, a situation where, for example, a restriction was put on the use of land (shall we say?) for a certain type of retailer, a certain type of use, by the owner of that land or by a local authority would not come within the ambit of Clause 2(1) at the present time. One can well envisage—and indeed one knows—with the question of the grant of shop leases, for example, that a number of restrictions might well be put on what type of use a particular shop can be put to and that might indeed be a
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beneficial form of anti-competitive practice. One knows that there are local authorities who will try to secure a variety of different trades within an area. But as the Bill stands it would seem that this is not an anti-competitive practice which can in fact be investigated at the present time. I beg to move.
Lord TREFGARNE: I am obliged to the noble Lord for moving this amendment, although I hope I can explain that he need not press it. As the noble Lord will be aware, we shall shortly be discussing Government amendments the purpose of which is to bring within the scope of the anti-competitive practice provisions of the Bill certain practices relating to the supply of a site for a holiday caravan and for the provision of off-street parking facilities.
On the question of business leases, to which the noble Lord referred, this matter was discussed at considerable length in another place and the Government undertook to consult between departments in order to consider whether there might be scope for dealing with the problems more effectively, for example by amending the Landlord and Tenant Act 1927, and I am sorry to say that such consideration is not yet complete. But having aired the matter I hope the noble Lord will be content to pursue it further when we get to the subsequent amendments.
Lord ROSS of MARNOCK: Before my noble friend withdraws the amendment I should like to ask whether any thought has been given to the question of feudal restrictions in Scotland? I do not know whether the noble Lord appreciates it, but most of the land in Scotland is held on feudal tenure and the charters granted usually contain restrictive conditions. Not so long ago I could have taken the noble Lord to a village in Scotland where one person—and I shall not name the person concerned—owned the one hotel and all the rest of the land and would not allow any other hotel to be built in that village or any other place in that village to be used for that purpose. Surely, if anything, is that is anti-competitive. I thought perhaps the Government would have looked at this to see whether or not they are satisfied that conditions relating to the land code in Scotland are adequate. But could it not be brought within the

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scope of this Bill? Of course it might trouble the Secretary of State for Scotland because he owns a lot of land.
Lord TREFGARNE: I do not know about that. The noble Lord has certainly raised a very interesting point. I will certainly undertake to ensure that the consideration currently being given to the desirability, for example, of amending the Landlord and Tenant Act also includes the very interesting point raised by the noble Lord.
Lord PONSONBY of SHULBREDE: May I thank the noble Lord for his explanation and say, at this point, that I was pleased to see a number of the amendments which the Government have put down subsequently to this clause. In the circumstances, I am happy to beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
4.21 p.m.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 4:
Page 2, line 26, at end insert ("such course of conduct being one which the Secretary of State has prescribed by order.").
The noble Baroness said: I beg to move Amendment No. 4. In many ways the intention of this amendment—although it is perhaps stronger—is similar to that to be moved by the noble Lord, Lord Jacques—Amendment No. 10. I wonder whether my noble friend appreciates how many hours have already been spent by legal advisers to companies who have asked, "What will this new Bill do and how will Clause 2 operate? What can we do and what can we not do?" The answer is they do not know. The retailing and manufacturing companies overall desperately want to keep within the law, but under this clause no one knows what the interpretation is going to be. You ask a legal adviser and he says, "It could be anything; it depends what the Director General's interpretation is". I think it is only fair that industry should be allowed to know what the Director General is likely to hold to be restricting, distorting or preventing competition.
At times, of course, every business activity impinges to some extent on its competitors; everyone is competing for
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new business. Some advertise; others do not. It could be held that those who advertise have an unfair advantage over those who do not. Is Which's three months free issue to new members to be considered unfair competition? Is the free installation by gas and electricity boards, or the free set of saucepans if you buy one of their more expensive cookers, going to be held to be unfair competition? Campaigns for new promotions and new products take months to evolve and cost a very great deal of money. They may not know until they are well into their campaign—and it may be sales at home or for the export trade. I think it is really asking a great deal of industry to be forced to accept a clause which is so woolly that they will not know whether they are breaking the law or whether they are not. It is so much a matter of interpretation. If you close a shop in a village, there is no question that you are preventing competition, but will it be held as an offence for investigation?
I believe manufacturers and retailers are entitled to have a defined list, by order, of what will constitute an offence which will result in them being investigated by the Director General of Fair Trading under Clause 2. One rather wonders whether clearance sales are unfair competition. Shall we see the official receiver challenged on the selling up of bankrupt stock way below anything that can be bought in the High Street? One man and one man only is going to make these decisions, possibly when inquiries flood in—hundreds of thousands of inquiries by companies with different products and different methods of promotion. Poor man! I have the profoundest respect for the Director General of Fair Trading, but he really is being made into an inflated Solomon in order to be able to guide any and every type of industry, service, professional practice, to define, in his opinion alone, in industries with which he may never have been closely associated, what is and what is not preventing competition.
I ask the noble Lord perhaps to think again about the Green Paper Review of the Restrictive Trade Practices Policy, which quite firmly recommended that the abuses should be listed. The retail trade and manufacturing industry feel that they

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should be listed by order, so that industry can find the right path over the swamp and not be engulfed in it. I beg to move.
Lord MISHCON: I wonder whether I may add my humble voice to the delightful one of the noble Baroness and say that this absence of particularisation does worry many practitioners in the law who will be called upon to advise under this Act. It is absolutely true that the wide words used in this clause, by way of definition of what constitutes an anti-competitive act, leave one in great wonder as to whether a certain type of act is meant to come within this provision or not.
I wonder whether your Lordships will allow me to give a brief example, arising out of the discussion that took place on the amendment moved just before this one by my noble friend Lord Ponsonby. He talked in terms of an amendment which will deal with the restriction of land in regard to certain trades, and the noble Lord who replied to him dealt then with a question of looking at the Landlord and Tenant Act. All of us know people who are trying to organise tidy shopping estates, which will not admit of cut-throat competition which would otherwise cripple the little traders, who suddenly find that they have entered into a lease and then, lo and behold, although the lease commands a full economic rent, the same landlord has let the shop next door or one away from it for precisely the same trade. There they are, committed to a lease, committed to obligations, and all of a sudden their trade and their living have disappeared. Unless there is a proper definition who will know—if the noble Lord does bring back, as a result of further investigation, a clause dealing with the Landlord and Tenant Act—whether this sort of behaviour by a landlord would be correct or not?
There are other instances that all of us could think of. What is so worrying is this; that the Director General, if I understand the position aright, is given the power either to refer the matter after investigation to the Monopolies Commission or to require an undertaking from the citizen. I tell your Lordships very frankly that the average practitioner will find it extremely difficult, with the Act standing as vaguely as it does, to tell this poor citizen whether he would be well advised or not to avoid further complica
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tions, further costs, and further trouble by merely signing an undertaking which he may or may not be justly required to sign. I believe that the noble Baroness has done a great service to the Committee by tabling this amendment and by referring back to the Green Paper which seemed to favour the very cause which she so eloquently espoused.
Lord TREFGARNE: If your Lordships will allow me, I shall not repeat the arguments which I put forward in connection with the last amendment, except to say that the inquiries to which I referred were not specifically directed at the Landlord and Tenant Act; that was just one of the possibilities that we envisaged. The amendment, as it stands, would, I fear, have a very limiting effect. It would provide that the Secretary of State must specify in advance the types of conduct which might constitute anticompetitive practices.
We have already explained why we do not think it appropriate to specify in detail the varieties of anti-competitive practice. Not only is it very difficult to describe many commercial practices in precise legal terms—and if we attempted to do so in the Bill each case would turn not solely on the important question of whether the practice actually had anticompetitive effects but, on legalistic questions of whether the practice actually being pursued was the practice contained in the definition rather than on the much more important point of whether the results were the undesirable ones that we sought to control. However, as is the case with resale price maintenance under the Resale Prices Act 1976, questions of legal interpretation are essentially matters best handled by the courts.
We are concerned in this Bill with the economic effects of practices, and it would not readily be compatible with the procedures in this Bill for essentially legalistic definitional questions to be added to the procedures. Furthermore, we do not at present know of any practices which are regarded by definition as anti-competitive in all circumstances, and at this stage we think it best to continue to adopt a case by-case approach. There are many practices, such as exclusive dealing, which may often be beneficial to the public, but in some circumstances many have adverse effects. The philosophy of the Bill is that

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the Director General and the Commission should investigate the circumstances in each case. Therefore, I hope my noble friend will not press her amendment.
Lord MISHCON: I wonder whether your Lordships will forgive me if I address the Committee for just a moment in order to elaborate the point that I tried to make and which the noble Lord has just sought to answer? The fact of the matter is that the clause, as now worded, does not even include the words "unfairly" or "unreasonably" in order to give some guidance to the citizen and to those who are trying to interpret the Act. If one takes his reply literally—that it is extremely difficult for various reasons to give definitions beforehand—will he consider before the Report stage at least introducing into this clause words which colour or define the conduct in order that people may know better what it is that this clause hits at by way of definition of "uncompetitive practices"?
Lord TREFGARNE: I think—if the noble Lord will allow me to say so—that those words are already present in the Bill. I refer to him the sub-section under discussion. I am reading from lines 20 and 21, where it says:
"a course of conduct pursued by persons associated with him, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods".
I should have thought that that met the point made by the noble Lord.
Lord MISHCON: It does not say "unfairly" or "unreasonably".
Baroness HORNSBY-SMITH: My noble friend will know that I am very unhappy with his answer because, in view of all the burdens that trade and industry have to carry at present, they really do not want the uncertainty of this provision when they are trying to promote their sales and increase industry. I hope that my noble friend will consider the point made by the noble Lord, Lord Mishcon—namely, whether or not some phrase, such as he suggested, could not be introduced during the Report stage. As my noble friend knows, I feel very strongly about this issue. However, today I shall very reluctantly withdraw my amendment, but
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I hope that he will consider the issue again before we reach the Report stage, when I shall feel free to put down another amendment if necessary.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): Does the noble Baroness wish to withdraw the amendment?
Baroness HORNSBY-SMITH: Yes, my Lords.
Amendment, by leave, withdrawn.
Lord TEVIOT Lord TEVIOT moved Amendment No. 5:
Page 2, line 43, at end insert—
("( ) To the extent that a course of conduct is required or envisaged by an agreement or arrangement made under section 24 of the Transport Act 1968 or sections 1 and 3 of the Transport Act 1978 (which require certain bodies to enter into agreements for the reorganisation of bus services and require and authorise certain local authorities and other bodies to enter into arrangements for the coordination of transport) or by an agreement or arrangement made before the passing of one or both of those Acts which has been continued in force by the parties thereto as giving effect to the provisions of those Acts, that course of conduct shall not be regarded as constituting an anticompetitive practice for the purpose of this Act.").
The noble Lord said: I beg to move Amendment No. 5. This is the first amendment in the group of amendments I have tabled. At the outset I must firmly state that this amendment does not in any way try to alter the spirit of the Bill, for reasons that I shall explain, but hopefully it makes it more practicable concerning passenger road transport. Your Lordships will remember that at Second Reading I did dwell on the fact that the bus industry was already subject to much control. My noble friend Lord Trefgarne in his winding-up speech on that occasion referred to this subject and I shall briefly quote the Official Report of 4th February 1980, column 1141, where he said:
"the industry, as was intended, will not be exempt from investigation because there are a number of local areas where some firms have a monopoly, or near monopoly, and it is certainly our intention that those operations should be subject to scrutiny, if necessary. However, I can also say that we do not intend to use those powers particularly widely."
With respect, that statement gives the impression that there are many frustrated bus operators waiting for an opportunity

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to enter the market, and that the present licensing system creates monopolies which can be exploited by those holding road service licences. Indeed, there is a strong element of such thinking in much of the support which has been given to the current Transport Bill. But it would be sensible not to prejudge the effects which that Bill will have on the level of stage bus services.
The Committee will be well aware that the operation of deeply rural bus services is not commercial, and that the operators depend on their integration into a viable network of services providing mutual support. Independent bus operators, rather than entering the market, have, over recent years, been selling their businesses to the major network operators because only the latter can keep many of the services in being. The majority of private operators of public service vehicles are not interested in providing such bus services.
I quote from the report from the Government's Transport Road Research Laboratory published last July, namely The Organisation and Role of Private Bus and Coach Companies, by Messrs. Jackson and Martin, who said:
"Many private companies were unwilling to take more work of this nature (stage) because it involved extra administration but did not provide a guaranteed income, and because of a reluctance to become involved in on-vehicle fare collection."
In the light of that quotation it should not be thought that bus operation provides a wide market for competition. On the contrary, the rapid advance of personal transport, especially the private car, has led to a decline in the bus market and, in addition to the car, the train and plane provide the competition which ensure, across the board, that passenger road transport does not enjoy a monopoly. The industry may not achieve perfect efficiency but, in the current economic climate, and through staff shortages, no other industry does. The industry is, however, involved in public service and strives to maintain that service as economically and as efficiently as possible. The complexities of the problem are seldom understood from the outside and, mostly through circumstances beyond its control, particularly in metropolitan areas, the industry is criticised by those who should rather be helping it to move passengers more freely on congested roads.
With regard to what I have already said, and to the industry's present statutory duty to co-operate in the provision of services to the public, the purpose of this amendment is to avoid the creation of further complicated machinery which would put obstacles in the way of providing greater operational efficiency for buses. I shall explain briefly how matters stand now and what are the statutory requirements. By Section 1 of the Transport Act 1978 it is the duty of the non-metropolitan county councils, acting in consultation with public passenger transport service operators and district councils within the county:

"(ii) to develop policies which will promote the provision of a co-ordinated and efficient system of public passenger transport to meet the county's needs, and

(iii) for the purpose to take such steps as the Council thinks appropriate for promoting the co-ordination, amalgamation and reorganisation of road passenger transport undertakings in the county."

Therefore for the purpose of this co-operation, the bodies mentioned are given power to enter into:
"such arrangements with one another with respect to the exercise and performance of their respective functions on such terms as may appear to them to be expedient."
Section 3 of that Act provides specifically for agreements with operators.
Again, I must refresh your Lordships on the provisions of Section 24 of the 1968 Transport Act. It provides that the Passenger Transport Executive, the National Bus Company and the Scottish Transport Group have a duty to cooperate with one another in the reorganisation of bus services and to co-operate with each other, the London Transport Executive and the British Railways Board, either directly or indirectly through subsidiaries, for the purpose of coordinating passenger transport services.
In conclusion, I should like to state that in view of the clear duty imposed by Parliament to carry out all the functions that I have quoted, all arrangements or agreements made between the bodies covered by that legislation should be excluded from the provisions of the Competition Bill. I hope your Lordships will see this amendment in that light. I beg to move.
4.42 p.m.
Lord TREFGARNE: My noble friend's amendment seeks to exempt certain mat-

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ters relating to bus services from investigation under the Bill. I can assure my noble friend that where practices of a bus company flow directly from an agreement or arrangement which is endorsed by the Government's transport policy and legislation, there is no danger that it would be investigated under the Bill.
As we have made clear in other contexts, where an investigation would call into question a practice authorised by the Government's own policies, the Government would always be able to exercise their power of veto. Therefore, the amendment does not really seem to be necessary. I hope that with that short explanation my noble friend will not press his point.
Lord TEVIOT: I cannot say that I am very happy about this. I should like to ask my noble friend a question which I thought I had explained in my amendment, perhaps not very briefly but also not at great length. Controls already exist for this industry which do not apply to other industries. This amendment seeks to exclude this industry. The industry is most concerned about this Bill. Although an amendment was not pressed on behalf of the industry in the other place, with respect, I do not think that many people are aware what the Bill really means. This industry has taken the Bill seriously and is extremely worried about it. It believes very strongly that in view of the fact that there exist all these other provisions in the two Acts which I have mentioned, the Bill is not necessary. Does not my noble friend think that the provivisions contained in those two Acts, which I explained at some length, do the trick as regards competition?
Lord TREFGARNE: No, not necessarily. Perhaps I did not make myself as clear as I should have done. There may be some grounds for exemption in regard to some of the bus services and transport services to which my noble friend refers, but it might be more sensible and more appropriate for exemptions in this area to be made under subordinate legislation—that is to say, by order—so that it could be more easily varied with any subsequent changes in policy or in the other legislation to which he referred. I assure my noble friend that the Government will give care-
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ful consideration to what has been said, both here and in the other place, to see whether the sort of exemption which my noble friend proposes would be appropriate. If we come to that conclusion, we should make it in the form of an order under this Bill.
Lord TEVIOT: Having drawn my noble friend out a little further, I shall study what he has said and, if necessary, take the matter up at a later stage, bearing in mind that he says that this could be done by way of an order. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 6:
Page 3, line 29, at end insert—
("(7) In this section "the supply or securing of services" includes providing a place or securing that a place is provided other than on a highway, or in Scotland a public right of way, for the parking of a motor vehicle (within the meaning of the Road Traffic Act 1972).").
The noble Lord said: I beg to move Amendment No. 6. We have already considered the amendment to extend the coverage of the Bill to any restriction of competition in relation to the supply of land. I explained why the Government felt unable to accept that proposal. The Government did, however, in another place undertake to consider amendments which would cover two matters about which particular concern had been expressed: namely, holiday caravan sites and off-street car parking facilities. I am glad to say that we are now able to propose amendments which meet those concerns.
In the case of holiday caravan sites, we feel that it is desirable to go further. The new clause therefore proposes that the Director General's responsibilities, not only under this Bill but also under the Fair Trading Act 1973, should extend to the supply of holiday caravan sites in the same way as they already extend to the provision of services in general. One effect of the amendment will be that the Director General will be required to monitor the practices in the holiday caravan industry in the same way as he monitors other practices in the supply of consumer services. The information which he obtains in this way will provide the basis on which he can decide whether

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to take action and, if so, what action to take, in respect of holiday caravan sites either under the Fair Trading Act or under this Bill when it is enacted.
In particular, the Director General will be able to encourage the preparation of codes of practice in the industry, and will be able to continue the work which my right honourable friend the Secretary of State has initiated in this field. My right honourable friend will, of course, discuss the transitional arrangements with the Director General and ensure that his officials co-operate with the Director General's staff to achieve a smooth and efficient transfer. In the light of this short explanation, I hope your Lordships will agree this amendment.
Lord PONSONBY of SHULBREDE: We welcome the fact that the noble Lord has tabled this particular amendment as we believe that it is a very useful one.
Baroness SEEAR: We also very much welcome the reference to caravan sites, which is long overdue.
On Question, amendment agreed to.
4.48 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 7:
Page 3, line 29, at end insert—
("(8) For the purposes of this Act any question whether, by pursuing any course of conduct in connection with the acquisition of goods or the securing of services by it, a local authority is engaging in an anti-competitive practice shall be determined as if the words "in the course of business" were omitted from subsection (1) above; and in this subsection "local authority" means

(a) in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Scilly,

(b) in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973, and

(c) in Northern Ireland, a district council established under the Local Government Act (Northern Ireland) 1972.")

The noble Lord said: This Government amendment is brought forward to honour another commitment made in another place to extend the scope of the Bill to the acquisition of goods and the securing of services by local authorities, whether or not that activity is carried out in the course of business.
I should like to make it clear, however, that in extending the Bill to bring within the scope of the anti-competitive practice provisions all purchasing by local authorities, the Government have no intention of undermining the widely recognised practice of selective competitive tendering, because the reasonable application of such procedures by local authorities does offer very real benefits both to authorities and to their suppliers.
Under the basic approach of Clause 2 of the Bill, the definition of an anticompetitive practice is related to the effects on competition of a particular person's conduct. The particular circumstances of the case must always be taken into account. There can be no question that a general practice can be considered anti-competitive by definition. This applies as much to selective competitive tendering as to anything else.
The Government wish to go further than this, however, because they do not consider it appropriate for there to be investigations into tendering systems by local authorities when these are operated in accordance with principles accepted by the Government. Any such investigations by the Director General would call Government policy into question, and where the Director General proposes such an investigation the Government would have to consider the use of their power of veto. Any abuse of such procedures could, however, be caught and examined under the Bill. We are nevertheless not in favour of the Opposition amendment which goes further than extending the scope of the Bill to purchasing practices by local authorities, but we can deal with that when we come to it. I beg to move.
Lord PONSONBY of SHULBREDE: Unlike the noble Lord opposite, I thought it might be for the convenience of the Committee if, in welcoming his Amendment No. 7, I referred to my Amendment No. 9.
Lord TREFGARNE: I am quite content that we should discuss them together if the noble Lord wishes.
Lord PONSONBY of SHULBREDE: We welcome the fact that Amendment No. 7 has been put down, and indeed it meets a number of the points raised in my Amendment No. 9. Our feeling was

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that a local health authority at a hospital could also be involved in selective competitive tendering and therefore that a number of the considerations which applied to a local authority would also apply to a local health authority. I feel that the Bill would be further enhanced if in fact that could be included as well. The noble Lord has already stated that in fact he does not believe that it should be extended to this extent, but I would ask him, as he is in fact prepared to go as far as including a local authority within this, would it not surely be logical to extend it to a local health authority as well?
Lord TREFGARNE: We do not consider it necessary or desirable to bring in health authorities. In their case procurement is done in accordance with instructions issued by the relevant health department, and that department's Ministers are directly answerable to Parliament for any procurement practices. Equally, unless evidence is brought forward that purchasing practices of other non-trading bodies are a cause for concern, there is no call, we say, to extend the scope of the Bill to the other persons as the amendment seeks to do.
Baroness SEEAR: Surely the local health authorities have great spending powers and it is highly desirable that they, as well as the local authorities, should act in a competitive fashion. I recognise, as the noble Lord has said, that they are under the control of the department, but nevertheless it surely makes it easier, particularly at local level, when issues of this kind come up if these powers are already in the legislation. Surely there is no harm occasionally in reinforcing what you wish to do. The fact that it can already be done by a method which will not be clear to a great many people is no reason why it should not be also in the Bill.
Lord TREFGARNE: I am afraid that I do not agree with the noble Baroness. Parliamentary scrutiny is, or should be, the best of all.
On Question, amendment agreed to.
4.53 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 8:
Page 3, line 29, at end insert—
("(7) For the purpose of this section and sections 3 to 10 below the word "person" shall where the context so admits be deemed to include a particular class of person.").
The noble Lord said: The purpose of this simple amendment is to cover restrictions on price competition and anticompetitive practices by and for professional services. This practice has been condemned by the Monopolies Commission on several occasions, including recently in the case of surveyors, and earlier in the case of estate agents, architects, and solicitors. The amendment does not deal with individual firms as such. The intention is to cover professional bodies, associations, or groups imposing scales of fees or charges for their members to carry out leading to anticompetitive practices.
There has been investigation by the Monopolies Commission. This is a field which I know is a delicate field—particularly in the case of solicitors, so many being in this House—but, nevertheless, it is not clear in the clause as it stands that such associations, bodies or groups are covered. I put this amendment forward mainly for clarification, but I firmly believe that in point of fact this class of person, or persons, should be included in the clause. I beg to move.
Lord TREFGARNE: I think that the noble Lord is misinformed in this matter. The provisions that he seeks to write into this Bill are already contained in the Fair Trading Act. We believe therefore that there is no need for this provision. Where an anti-competitive practice is widespread in an industry it is open to investigation under the Act I have referred to. The provision of an alternative procedure under this Bill, therefore, would I think serve no particular purpose.
As to the adequacy of the provisions under the Fair Trading Act, we do not claim that those provisions are perfect, nor do we rule out any subsequent revision, but this is not the time or place to do it. The provisions on anti-competitive practices in this Bill are designed to allow quick investigation of specific practices by particular firms. I do not think it is practical to turn these provisions into a means of dealing with whole sectors of an industry.
Lord WALLACE of COSLANY: All I can say is that here we go again: so long as it is in the Fair Trading Act, nothing should be mentioned in this Bill. This is ridiculous. There is no reason at all why this provision should not be inserted in the Bill. I shall not press it now, but I am rather surprised at the Government's attitude to this. All I do in all charity is to ask the Government to think again. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE had given notice of his intention to move Amendment No. 9:
Page 3, line 29, at end insert—
("(8) In subsection (1) of this section the words "in the course of business" shall be taken to include the acquisition of goods or the securing of services by a local authority, health authority or other person notwithstanding that the person so acquiring or securing does not otherwise act in the course of business.").
The noble Lord said: I do not intend to move this amendment in view of the fact that we have passed Amendment No. 7. But, although I do not move it, I reserve my position with regard to moving a subsequent amendment on Report stage on the question of the local health authority.
4.57 p.m.
Lord JACQUES Lord JACQUES moved Amendment No. 10:
Page 3, line 29, at end insert—
("(7) The Director shall publish a code of practice in which he shall inter alia give an illustrative list of practices which in his opinion restrict distort or prevent competition."
The noble Lord said: I am in the happy position today that for this amendment I can call in support the Government's own experts. The chief officials of the department concerned in this area of legislation formed a working group, and they examined the legislation and the policies in this area and produced a report. The report is entitled A Review of Restrictive Trade Practices Policy. It is a consultative document, of March 1979, Cmnd. 7512.
Lord TREFGARNE: I think that the noble Lord's party was in office then.
Lord JACQUES: It was not the last Government that formed the working party. It was the officials, and the officials are still there.
Lord TREFGARNE: Before the noble Lord goes further, may I say that I think he is trespassing rather dangerously upon the unwritten rule—may be it is a written rule—that advice tendered to Ministers is kept private.
Lord JACQUES: I am not depending upon advice given to Ministers; I am depending on recommendations which were published. They are known to everybody, and I hope that noble Lords opposite will not argue with me about this because we shall only get into deeper water.
Lord BOYD-CARPENTER: Is the noble Lord saying that under the previous Administration officials published recommendations without any authority from the relevant Ministers so to publish?
Lord JACQUES: I am simply saying that the report was the result of the work of a working party; all the Minister did was to write the foreword.
Lord BOYD-CARPENTER: So it was with the authority of the Minister?
Lord JACQUES: Yes.
Lord BOYD-CARPENTER: Exactly.
Viscount TRENCHARD: The Minister appointed the working party and asked for it to report. The Civil Service, bless them, are entirely loyal to each Government in turn. I think it would be quite wrong if in your Lordships' House we were to apportion blame or use as evidence reports requested by an Administration.
Lord JACQUES: Surely it is quite in order—should like to know why the noble Lord, Lord Boyd-Carpenter, is shaking his head in dissent before even hearing what I am about to say—and perfectly proper to quote in support of this amendment opinions given by a working group and published to the world at large, which is all I am doing. I am not dealing with private advice and I do not know what the private advice was.
Lord TREFGARNE: That is perfectly fair, but the noble Lord must not suggest that those are the views of officials and not the views of Ministers. The views

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which he is about to quote were the views of the last Administration.
Lord JACQUES: As I understand it, they were the views of officials during the period of office of the last Administration.
Lord MOTTISTONE: I have a copy of the document and it says:
"Presented to Parliament by the Secretary of State for Prices and Consumer Protection by Command of Her Majesty".
Surely that unquestionably says that it was the Minister who presented it to Parliament.
Lord JACQUES: Yes; he presented the report of the working party and I am going to quote from that working party's report. I can see nothing wrong in that, and I shall take a lot of convincing that there is anything wrong in it.
Lord TREFGARNE: There is nothing wrong in that at all, but what the noble Lord must not do is ascribe the views contained in that document to civil servants and not to Ministers.
Lord JACQUES: I suggest it would be much more reasonable for the Committee and everybody concerned if noble Lords opposite waited until it was their turn to speak and then replied and did not try to reply to every other sentence uttered from this side.
This working party was considering this area of legislation and policy in relation to the legislation, and in paragraph 7.32 they said:
"We do not recommend across the board prohibition of anti-competitive practices so defined. This conclusion does not, however, conflict with the suggestion that certain carefully defined practices might be prohibited".
They went on in paragraph 7.33:
"This scope of the powers would need to be delimited in the legislation, and to avoid the problem of trying to define the numerous varieties of restriction, the definition could simply take the form of a reference to certain practices which have as their purpose or effect the restriction, distortion or prevention of competition followed by an illustrative list of such practices."
We have the definition in Clause 2(1), but we do not have the list of illustrative practices, and the only assumption one can make in reading this document is that the working party intended that an
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illustrative list should be part of the legislation; it should be either in the primary legislation or part of the secondary legislation. But I am not going that far. All I am asking is that it should go in a code of practice, not in the legislation.
In this matter there are two views There is the view of the trader. He does not want uncertainty; he wants to know where he is going and what he is being asked to do, and he cries out for the practices which are to be prohibited to be specified, as we heard in debating an earlier amendment. On the other hand there is the view of the administrator of the law. He wants general powers because he knows that things are constantly changing, and because things are constantly changing he wants to be in a position to deal with any new practice that comes along without the need for legislation. Both sides have a reasonable case and all I am trying to do is get a fair balance of their case. I am saying let the administrator of the law have the sweeping powers in Clause 2(1)—I am not trying to amend that in any way—but let us also try to meet the view of the trader; let us have a code of practice in which there is an illustrative list of the kind of things which would be regarded by the Director General as being anti-competitive. I would not expect that list to be definitive; in the words of the report:
"Such a list would not be exhaustive, nor would it imply that any practice included in it was always anti-competitive. The practices would come within the scope of the power only in cases where they had the purpose or effect of restricting competition".
Those words could go into the code of practice. While the administrator has the right to be in a powerful position to deal with any anti-competitive practice that comes along, the trader should have the right to know where he is going and, to be rid of uncertainty, he should have some indication from the Director General as to the code of conduct expected of him.
Lord AIREDALE: If I may pour a little oil on troubled waters, although the storm seems to have subsided somewhat, I have great sympathy with the object of the amendment, but I noticed that the Minister in Standing Committee in the other place did not favour an amendment of this kind. I think what went through her mind was that a code of practice was

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more appropriate to a list of things one should do than to a list of things one should not do. At any rate, it occurred to me that probably this amendment would not be agreed to today, and I am bound to say that nothing that has been said so far from the Government Front Bench has led me to change that view. I therefore took the opportunity of trying to achieve our joint purpose by another means, namely by my Amendment No. 63 to Clause 18. Speaking for myself, I am only too willing to support the noble Lord, Lord Jacques, in this amendment in the hope that when we come to my Amendment No. 63 he will support me, and then perhaps, in one way or another, we may succeed in achieving out joint objective.
Viscount TRENCHARD: Perhaps I may in general terms, before the noble Lord, Lord Jacques, decides whether or not to press the amendment, again remind the Committee that the purpose of what we are trying to do is to have a Director General of Fair Trading with a relatively small staff who will be publishing reports in all sorts of different industries where different things are anti-competitive or unfair. Having rules right across the board is extremely difficult; what is unfair and uncompetitive in one industry and one situation is not so in another. What we are trying to do here is to have a body headed by a man of great ability and responsibility who will be picking up all the transient wisdom on questions of competition, and there are many complicated and difficult arguments and different kinds of anti-competitive practice. There is predatory competition, and every sort and kind of effect of competition in different circumstances. Earlier, in another amendment, there was reference to the effect on overseas competition.
We are trying to have a small body, led by a man of wisdom, who will publish their decisions, who will take contemporary wisdom as it emerges from committees of inquiries being conducted currently, for instance, by the Monopolies Commission, and who will work on very simple broad terms. It would be quite impossible for such a body, equipped as it is, to set itself up as the authority on what should or should not be a competitive practice in every circumstance. It is not possible to have detailed regulations or descriptions,
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nor in my view does one get into clearer waters by having codes of practice to go halfway. One merely opens as many questions as one leaves unanswered. My plea to the Committee is to leave the terms simple, short and general, and to judge the performance of the Office of Fair Trading as it proceeds, as it uses contemporary wisdom; and if it takes a step in the wrong direction, there will be a howl. There are plenty of safety powers in this legislation to stop a proceeding at various stages, as we have discussed. So I ask the noble Lord, Lord Jacques, please to consider this before pressing the amendment.
5.12 p.m.
Lord HARMAR-NICHOLLS: I wonder whether my noble friend would pay the noble Lord, Lord Jacques, the compliment of saying that he will consider a little further the points that he has made. I think that the noble Lord, Lord Jacques, has certainly made a point. The Director General has all the powers to form his views on evidence as it comes in, as my noble friend has said. But I believe that the trader is entitled to have set up a boundary where he knows he is safe and so can make long-term arrangements accordingly. Let me give an example to illustrate the reason why I rise to my feet. Some time ago a business in which I was interested wished to build a cellulose store. We applied for permission for the store to be built, and we wanted it to comply with all the necessary safeguards. We were told that the authority required a certain thickness of concrete, that the roof had to have a concrete finish, and that the furniture and doors had to be made of steel in order, it was argued, to contain the effects of any explosion that might occur.
We then applied for permission to build a similar building in a town only seven miles away. We submitted plans which included the concrete finish, the steel doors and all the other requirements that in the other case we had been told were absolutely necessary, only to find that in this case the authority said that it wanted the building to be as flimsy as possible, with the roof to be made of lathes and the shelves to be made of wood. That authority argued that if an explosion was not contained in the rigid way suggested in the other case less damage would

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result. Both those cases were considered by experts, based within seven miles of one another; yet they were flatly contradictory one of the other. We, the poor traders, did not know where we were in terms of wanting to ensure the kind of safeguards we had in mind.
I admit that it is not easy to deal with such cases. I recall that when I had some ministerial responsibility the Metropolitan Police wanted it the other way; they wanted put on plaques in Trafalgar Square detailed descriptions showing when people were committing an offence by scratching a wall or plucking a flower. Then I argued that that ought not to be done; that the matter ought to be put in general terms. I believe that there is enough in the argument of the noble Lord, Lord Jacques—supported by the noble Lord, Lord Airedale—for my noble friend to say that he will have another look at it. It may be difficult, but I believe that if possible this boundary fence ought to be erected, so that traders know where they are, rather than have the proposal negatived without it receiving the further thought that I think could be given to it.
Baroness SEEAR: I hope that the noble Lord, Lord Jacques, will not press the amendment. It is my belief that anticompetitive practices are in fact very widespread and that we do not know the full extent of them. In any case a code of practice confuses because it does not have the force of law. Certainly it strengthens an argument, if the matter comes to an argument, but it does not have the force of law. It would be assumed by everybody that whatever was not in the code of practice was not an anti-competitive practice, though investigation could well prove that not to be true. Those of us who want to get rid of anti-competitive practices and who believe that this Bill is not strong enough—and that is very much the position that we on these Benches are taking—would not like to see the list prescribed at this stage.
Lord BOYD-CARPENTER: Although as the noble Lord, Lord Airedale, has rightly said, the atmosphere has now cooled, may I none the less put to the noble Lord, Lord Jacques—because I think it is only courteous to him that he
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should understand it—the reason why I and one or two of my noble friends ventured to interrupt him in the course of his very interesting speech. I certainly understood him to say that he was going to quote a document giving the views of my noble friend's civil servants and that therefore these views would naturally be acceptable to my noble friend. Having himself held public office, I am sure that the noble Lord, realises the very crucial importance in our Constitution of not disclosing the views of the Civil Service on public issues and of not appearing to rely upon them in public discussion. I do not want to weary the Committee at this time; it is obvious to all noble Lords that it is a basis of our Constitution that an incoming Government can rely upon the absolute loyalty of civil servants who a week earlier were serving another Administration.
Naturally, therefore, to quote as the views of my noble friend's civil servants, views which were I understand formerly contained in a document that was laid, perfectly properly, on the authority of the then Secretary of State for Prices and Consumer Affairs could seem, however inadvertently—and I at once acquit the noble Lord of any deliberate intent—to be trespassing on that rule. Those of us who, like the noble Lord and myself, have held public office and fully understand therefore the importance of this constitutional nicety, naturally feel sensitive on the point. I know that when one is interrupted in the course of a speech, when one's mind is on the merits of the matter in question, one is naturally a little impatient; I sometimes am myself. I am sure that, having had time for reflection, the noble Lord will appreciate that we were right to prevent even a nominal or marginal departure from what is really one of the basic principles of our Constitution.
Lord TAYLOR of GRYFE: I hope that the Committee will heed some of the advice offered by the noble Lord, Lord Jacques, who has had a long and distinguished record as the chief executive of a very large retailing organisation, and who has had the responsibility of interpreting law and applying it in his business. If there is one area that causes difficulty, it is this area of uncertainty, with inevitable delays in interpretation of law,

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and all of this is frustrating in the conducting of a lively retail or wholesale business. To that extent I believe that we ought to heed some of the advice that is given—that the illustrations provided in a code of practice might in fact lead to a more expeditious handling of the provisions of the Bill. I support the Bill. I think that all of us want to see competition, but we all want to see it clearly delineated for the trader in terms of where he stands, and the illustrations contained in a code of practice as suggested might be extremely helpful and so remove some of the uncertainty from business.
Lord GALPERN: May I say a few words? The purpose of the amendment is nothing really new, so far as I see it. In my opinion it is only an extension of what is present day practice so far as most trades are concerned. Quite a number of trades I know of have published their own codes of conduct, and retailers and traders and people who buy or sell their appliances or goods are expected to conform to certain conditions suggested by the trades' associations. I see no possible difficulty, if the Minister or the Director were called upon, in following the practice of these trade associations. It would be most helpful and most welcome to these trade associations. Some of the recommendations may be in conflict with the code of practice already utilised by the various traders, and in that respect we can avoid the conflict by getting to know exactly what the Director himself thinks of the matter.
Lord TREFGARNE: I think we are under a delusion if we imagine there is any halfway house in this matter. The choice before us, I suggest, is, on the one hand, the procedure that we have laid down in the Bill, where we do not define precisely the practices which are to be held to be anti-competitive, much less unlawful; or, on the other hand, if we do not choose to follow that course, then we must provide a comprehensive catalogue of practices which are to be outlawed under the Bill. That second route is a wholly different philosophy, and the one which I suppose the Americans have chosen to follow with their anti-trust laws but one which we have, I think very soundly and rightly, chosen to reject.
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If the Director General were required to publish a code of practice or a list of practices which he considered to be anti-competitive, this would put him under great pressure to implement a much more rigid approach, which would be quite at variance with the flexibility which is the very heart of this legislation.
However, as my noble friend Lord Trenchard said a while ago, the Director General will be required to publish an annual report on all his activities, and the Government made it clear when the Bill was discussed in another place that the Director General will wish to use these reports to provide some kind of "forward look" wherever that proves possible. This might be in the form of guidance on anti-competitive practices in general, the circumstances in which they arise and the manner in which they affect competition, based on the experience of investigations under the Bill; and he might indicate any particular practices which cause concern and which he might seek to investigate in the future. I believe that this is the most sensible way to proceed, and I hope that in view of these observations the noble Lord will not press his amendment.
Earl DE LA WARR: I, too, hope that the noble Lord, Lord Jacques, will not press his amendment, but I have to say that I have listened very carefully to all the arguments and am much impressed by those who think that traders will find themselves in some difficulties. The noble Baroness, Lady Hornsby-Smith, quoted the example of a promotion which contained free offers. This went fairly close to my heart, because until a few months ago I had spent 20 years trying to dispose to the public television sets, mainly for rental. Whether or not I was a success is beside the point, but I know well that the practice in times of fierce competition is of going further and further towards giving away larger and larger gifts. It may well be that that is anti-competitive. Nevertheless, I have taken the point of my noble friend Lord Trefgarne that you must decide one way or the other; but I hope the Government will take on board the points which have been made, because they will not go away and they will assuredly come up on Report.

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Could it not be that the Government could indicate that the Director General of Fair Trading would welcome approaches from companies before they sought to do certain things in order that they might get an informed opinion as to the view of the Director General of Fair Trading on these things? Is there not some way like that in which we could find a reconciliation between the difficulties of publishing a code of practice and the worries that traders will have if a code of practice is not published?
Lord TREFGARNE: I am certainly quite happy to agree that the Director General would consider informal approaches from companies considering adopting a particular line of practice, but I would emphasise the point that simply because a company is adopting a particular line of practice which the Director General might seek to investigate does not mean that they are breaking the law. They are not even breaking the law when they enter into an understanding or agreement with the Director General and subsequently depart from it. That is a matter we shall be referring to later. The ultimate test of whether or not a practice is to be regarded as anti-competitive will eventually come to be decided by the Monopolies and Mergers Commission when it finds the practice (if it does) to be against the public interest. But, as your Lordships will have noticed, there are many steps to be taken before it gets to that stage. With this explanation I hope, as I said earlier, that the noble Lord, Lord Jacques, will not press this amendment.
Lord JACQUES: May I say, first, that if I in any way transgressed convention I apologise, of course, but I did not feel that I did and I still do not feel that I did. I am quoting something which was published, and which is available to everybody. That is the difference I think. That is the important difference; and I think it is a difference which entitles me to quote it as I did.
However, be that as it may, I do not agree with the statement made by the noble Viscount, Lord Trenchard, that the list would have to be one of practices which were anti-competitive in all circumstances. I agree with him that that is impossible. That is not intended. It is
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quite clear that in giving a list of practices which could be in breach of the rules of competition the Director General would have to point out, first, that the list was not exhaustive, and, secondly, that the list was not of practices which would be anti-competitive in all circumstances, but was giving examples of where it was anti-competitive. I believe that the trader must have some guidance, and if the noble Lord thinks that a code of practice is going a bit too far, then, all right, make it guidance notes. Guidance notes are being printed in this sphere of legislation almost daily—explanations of orders, explanations of Bills and so on. Unless I can get some definite promise of that kind, I shall certainly insist upon dividing the Committee.
Viscount TRENCHARD: I do not think that from these Benches we can give any guarantee that the Director General will issue guidance notes. My noble friend has pointed out that his reports will in fact be published and that the cases on which he takes action will be published, so the case law that already exists in this country will continue to build up, but not with the full penalties of law. This is one of the advantages of the quick investigation without reaching a stage where a company is considered to have broken the law. This is the whole point of it, that it will push the accumulated wisdom forward. In addition to all that body of individual cases—some withdrawn, some practices with undertakings agreed—the Director General has the duty to publish the annual report that my noble friend mentioned. I cannot (and it would be quite wrong for any Administration to do so) tell the Director General what to write in that report, but it must be obvious that he is going to review the cases which have been through his hands in the year, and I would think that he is going to make observations of the kind that the noble Lord, Lord Jacques, has in mind. I cannot from these Benches give the noble Lord a guarantee, and it would be improper for me to do so.
Lord JACQUES: What the Minister is saying in effect is, that after 10 years when we have had 10 annual reports, if we take them altogether, there may be a code of practice. That is not something that I could accept.
Lord WALLACE of COSLANY: Surely the noble Viscount will be able to give some indication that the matter might be considered before Report. Representations have been made from all sides of the Committee. This is not at all a one-sided argument. If I may presume to be in the position of giving advice, surely it would be better to consider this at a later stage, at Report, rather than forcing a Division and ruling out something which is giving concern to a number of Members of the Committee.
Viscount TRENCHARD: I do not feel able to do that. These matters have been discussed—and noble Lords have no doubt read them fully—in another place. I do not believe that the halfway house suggestion, which I think is the term my noble friend used, is a starter. I think that it would be inhibiting the Director General if you started to declare what was fair or unfair, unless you were to write literally volumes. I do not believe that the proposition is a practical one, and I am afraid, therefore, that I cannot give the undertaking for which the noble Lord has asked.
Lord HARMAR-NICHOLS: Could not my noble friend give another thought to that? Those of us who are traders (or claim to be) are concerned about this. The Director General, I have no doubt, will be a man who will be fair-minded and who will do his best to operate in the spirit described by my noble friend. But he may not be so. Those of us who are dealing with officials of various sorts, whether in planning departments or in matters of this kind, know that a lot depends upon the personality of the people to whom we are giving these powers.
I believe that the noble Lord, Lord Jacques, has shown less rigidity than has my noble friend on the Front Bench. Parliamentary proceedings have their Committee stages and Report stages so as to allow time to elapse in order that other thoughts may be given to it. That is the object of the system. The noble Lord, Lord Jacques, first suggested that it should be written in; now, he is not pushing that. Then he suggested a code of conduct, which I agree would be a difficult thing and would go into volumes; but now he has suggested guidance notes, which we know are the general practice.
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It may be that at the end of the day my noble friend will have to come back and say that nothing can be done. But it would be more satisfying to people who come to Parliament to examine Bills in detail (which is the purpose of the Committee stage) to feel that there is not a rigidity of mind and that further thought can be given. I should have thought that this was an ideal opportunity for the Government at the Dispatch Box to say that they cannot offer a great deal of hope for reasons which have been explained; there have been one or two extra points made that are worthy of consideration; and at the Report stage they will see what can be done. If that is not working the parliamentary system with sympathy and good sense, I do not know what is. That is all I ask.
I shall have to vote against the noble Lord, Lord Jacques—I tell him that—if he pushes the issue, because, on balance, there is a great deal in terms of administrative problems in what my noble friend has said. But I should like to be given the opportunity to feel that these matters have been given more detailed thought than appears from a quick answer now.
Lord BOYD-CARPENTER: I should not like my noble friend, Lord Harmer-Nicholls, to think that the view he has expressed is unanimous on these Benches. It is one of the easiest things in the world for a Minister—and many of us have done it—to avoid a Division by saying, "We will think about it". It means another amendment at the Report stage. But, in truth, the ministerial mind is almost certainly made up. I differ from my noble friend in thinking that it is that which derogates from parliamentary procedure.
I have listened to every word of the discussion and the issue is clear-cut. I do not say that the view of the noble Lord, Lord Jacques, is not a respectable one. It always is—I must not go too far; it generally is. My noble friend the Minister has deployed what is clearly Government philosophy on this. As he says, it was argued at length in another place. I should have thought that the sensible thing is to say that the matter has been fully argued and should now be decided in the way which this House and the other place decides these matters, by vote.
Baroness PHILLIPS: I would hope that the Minister will not agree with that slightly immoral suggestion from the noble Lord opposite, that the Minister says that he will consult when he has no intention of doing so and already has his mind made up. Whatever we think about Ministers it would be unfortunate if it went on the record that they actually do what the noble Lord described.
Lord BOYD-CARPENTER: If the noble Baroness will allow me to say so, my memory had gone back a year to a number of Ministers—and I will not name them—in the previous Administration.
Lord MOTTISTONE: I wonder if the noble Lord, Lord Jacques, before finally reaching a conclusion, has given consideration to subsection (3). He has come a long way towards modification of his original point. The subsection seems to make provision for the negative aspect of what Lord Jacques is calling for positively. It may be that the negative aspect of this matter meets the point of my noble friend —it must; it is in the Bill—in the sense that it is not calling for a vast, comprehensive list but is going somewhere towards identifying those areas where specific acts are not treated as anticompetitive. That goes a long way towards meeting the basic principle asked for by the noble Lord, Lord Jacques.
Viscount TRENCHARD: Before the noble Lord, Lord Jacques, answers that request for consideration, I should love to appear a reasonable man (as my noble friend has said) always prepared to consult again. But I am quite sure that we are on a wrong course here—the Committee is, or noble Lords opposite are. What the noble Lord, Lord Jacques, is asking for when he asks: "Will the Director General give guidance?" is, in effect, to ask me to tell the Director General how to carry out this Bill. That, we specifically do not want to do. The Director General must make very public all his actions.
My noble friend Lord Harmar-Nicholls, asked what happens if we get an unreasonable man. Frankly, I believe that even if we were to get an unreasonable man, there are all the provisions that are upon him of what he has to declare and
628
the reports that he has to make. He has no legal power whatever. He cannot convict a company; he cannot even send a company to court. I really believe that if he publicly states things which clearly are unreasonable and not in accord with the general body and forward movement of thinking on this vexed and difficult question of competitive practices, he will not be there for very long. I believe that even in the unlikely event that either Administration would appoint an unreasonable man to that position, we are not taking in the point that he is not making the law.
Furthermore, if he is a reasonable man, which I believe he will be, then I am quite sure that he will be having discussions with all the trade associations in the country. I am quite sure that they already ask him to come to meet them—in fact, I know that they do—at regular intervals. I know that all the difficult and thorny questions of what is or is not a competitive policy are being discussed between the Director General and between certain officers who are interested in the Monopolies Commission and others, and the trade associations. This goes on all the time. I am pretty sure that when he does move there is not going to be any doubt in the minds of the traders concerned that this is a practice which is investigatable. Even then, it may be a moot point; and when he publishes his report there is the delay before a reference is made.
Surely we are overlooking this fact. This is a preliminary and fast investigation where we want to be able to do preliminary, fast investigations which do not have the force of law. Let us not complicate the issue by telling the Director General how he should behave.
Lord JACQUES: May I leave the Committee with this thought? Had my amendment been moved by a member of the party opposite from where I am standing, it would have been carried by a huge majority.
5.41 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 120.

CONTENTS

Airedale, L.

Gardiner, L.

Ponsonby of Shulbrede, L. [Teller.]

Ardwick, L.

Glenamara, L.

Aylestone, L.

Goronwy-Roberts, L.

Rhodes, L.

Balogh, L.

Granville of Eye, L.

Ritchie-Calder, L.

Birk, B.

Hale, L.

Ross of Marnock, L.

Blyton, L.

Henderson, L.

Sefton of Garston, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Brockway, L.

Jacques, L.

Stedman, B.

Brooks of Tremorfa, L.

Janner, L.

Stewart of Alvechurch, B.

Bruce of Donington, L.

Kaldor, L.

Stewart of Fulham, L.

Caradon, L.

Kennet, L.

Stone, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Strabolgi, L.

Collison, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Cooper of Stockton Heath, L.

Listowel, E.

Taylor of Gryfe, L.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

David, B.

Longford, E.

Wallace of Coslany, L.

Davies of Leek, L.

Lovell-Davis, L.

Walston, L.

Davies of Penrhys, L.

McGregor of Durris, L.

Wells-Pestell, L. [Teller.]

Diamond, L.

Maelor, L.

White, B.

Fulton, L.

Monson, L.

Willis, L.

Gaitskell, B.

Phillips, B.

Wilson of Radcliffe, L.

Galpern, L.

Wynne-Jones, L.

NOT-CONTENTS

Abinger, L.

Giladwyn, L.

Northchurch, B.

Aircy of Abingdon, B.

Glasgow, E.

Onslow, E.

Amory, V.

Greenway, L.

Orkney, E.

Ampthill, L.

Grey, E.

Pender, L.

Auckland, L.

Gridley, L.

Redesdale, L.

Avon, E.

Hailsham of Saint Marylebone, L. (L.Chancellor.)

Rochdale, V.

Banks, L.

Romney, E.

Barrington, V.

Halsbury, E.

St. Davids, V.

Beaumont of Whitley, L.

Hampton, L.

St. Germans, E.

Belhaven and Stenton, L.

Hanworth, V.

St. Just, L.

Bellwin, L.

Harmar-Nicholls, L.

Saint Oswald, L.

Bessborough, E.

Hemphill, L.

Sandford, L.

Boyd-Carpenter, L.

Henley, L.

Sandys, L. [Teller.]

Brookes, L.

Hereford, V.

Seear, B.

Caccia L.

Home of the Hirsel, L.

Selkirk, E.

Caithness, E.

Hooson, L.

Sempill, Ly.

Campbell of Croy, L.

Hylton-Foster, B.

Spens, L.

Cathcart, E.

Inglewood, L.

Stanley of Alderley, L.

Clifford of Chudleigh, L.

Killearn, L.

Strathclyde, L.

Clitheroe, L.

Kimberley, E.

Strathcona and Mount Royal, L.

Cork and Orrery, E.

Linlithgow, M.

Cottesloe, L.

Lloyd of Kilgerran, L.

Suffield, L.

Craigavon, V.

Long, V.

Swansea, L.

Cromartie, E.

Lucas of Chilworth, L.

Teviot, L.

Cullen of Ashbourne, L.

Mackay of Clashfern, L.

Tranmire, L.

Daventry, V.

Macleod of Borve, B.

Trefgarne, L.

de Clifford, L.

McNair, L.

Trenchard, V.

De La Warr, E.

Malmesbury, E.

Trevethin and Oaksey, L.

Denham, L. [Teller.]

Mansfield, E.

Tweedsmuir, L.

Drumalbyn, L.

Margadale, L.

Vaux of Harrowden, L.

Dundee, E.

Massereene and Ferrard, V.

Vernon, L.

Ellenborough, L.

Merrivale, L.

Vickers, B.

Emmet of Amberley, B.

Meston, L.

Vivian, L.

Exeter, M.

Middleton, L.

Wade, L.

Faithfull, B.

Morris, L.

Wakefield of Kendal, L.

Falkland, V.

Mottistone, L.

Westbury, L.

Ferrier, L.

Mountgarret, V.

Wigoder, L.

Gainford, L.

Mowbray and Stourton, L.

Winstanley, L.

Garner, L.

Moyne, L.

Wise, L.

Geddes, L.

Murton of Lindisfarne, L.

Young, B.

Geoffrey-Lloyd, L.

Newall, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.50 p.m.
Lord STANLEY of ALDERLEY Lord STANLEY of ALDERLEY moved Amendment No. 11:
Page 3, line 29, at end insert—
(" (7) For the purposes of this Act a course of conduct is not an anti-competitive practice if it constitutes an agreement which is excluded from the application of the Restrictive Trade Practices Act 1976 by virtue of section 33 of that Act (Agricultural and Forestry Associations, and Fisheries Associations).").
The noble Lord said: The purpose of this amendment at this stage is to try to discover how the Government interpret the effect of this Bill on agricultural cooperatives. I hope that I shall not be accused of quoting anything or anybody other than the Bill or myself—both are somewhat confused on this matter. I should declare that I am a member and director of various agricultural cooperatives. The trouble is that the principle behind the Bill is in particular to stop two or three co-operatives from gathering together, not in this case to pray, but in order to obtain a higher price by, in the words of the Bill, "restricting, distorting or preventing" the supply of their product. That of course is exactly what we do, or indeed try to do, when we belong to an agricultural co-operative.
If my simple summary of the Bill's objective is correct, it follows that we who are agricultural co-operators—and, I might say, encouraged to be so by many past Governments, and indeed the EEC —are frowned upon by this Bill, and would be subject to all the provisions and inspection by the Director General of Fair Trading, the Monopolies and Mergers Commission, not to mention the Secretary of State for Trade. In theory, at least, they could stop us from co-operating in order to obtain either a better price for our product or maybe better terms from our customers.
What is more confusing is that the agricultural co-operatives have been expressly excluded and protected in Section 33 of the Restrictive Trade Practices Act. In this Bill we are complicating the co-operatives' lives by including them. There is an urgent need for clarification here. I hope and trust that my noble friend can put my mind at rest, and maybe he can move an amendment so that the agricultural co-operatives will not have to spend their time answering long and detailed questions posed by the
632
Director General of Fair Trading, the Monopolies and Mergers Commission and/or the Secretary of State for Trade.
I noted the possible exemption mentioned by my noble friend Lord Trenchard in his Second Reading speech, that the Government may make exemptions for firms with a turnover of (I think he said) £5 million. I welcome such an action, but quite a few agricultural co-operatives now have a turnover very much in excess of that. So far as the grain trade is concerned, a turnover of say £30 million is really chickenfeed compared to those with whom we have to trade.
If my noble friend is confused—as I am —over the position of the agricultural co-operatives, I will fully understand if he does not wish to accept this amendment to straighten out what I believe to be a muddle. But I hope he will put his mind, and that of his department, to outlining very clearly how we, as agricultural co-operatives, stand and behave in regard to this Bill. I beg to move.
5.54 p.m.
Lord TREFGARNE: There is no muddle in our minds. The Government agree that agricultural co-operatives certainly have a valuable role to play and entirely accept that they can and do make significant contributions to increasing standards and increasing efficiency. We would not wish this Bill to discourage or undermine such desirable aims. On the other hand, co-operatives, like any other enterprise, may seek, where they have a strong market position, to abuse that position by anti-competitive behaviour. If they were to do so, I am sure we would all agree that such anti-competitive behaviour should be within the scope of this Bill.
The question is: Where to draw the dividing line? We believe that the Bill as it stands should not discourage farmers from entering into co-operation for beneficial purposes; and I can assure my noble friend that, as the Bill is drafted, the Director General of Fair Trading would not normally be concerned with the internal working and relationships of a co-operative; nor would membership of a co-operative by itself constitute an anticompetitive practice.
I should like to remind your Lordships of the Government's intention, to which

633
my noble friend referred, to introduce a cut-off to exempt small firms, or farmers or co-operatives, with a turnover of below £5,000,000 a year from investigation, unless they have more than a 25 per cent. share of a particular market. That alone should ensure that most co-operatives, although I accept not all of them, are outside the scope of the Bill. We are, however, looking closely at the question to see either whether we can give a clearer assurance of the context of the application of the Bill to co-operatives, or whether some further clarification is needed to remove any doubts that remain. I hope to be in a position to say something further about this on Report; and, with that assurance, I hope that my noble friend will not press his amendment.
The Earl of CAITHNESS: I, for one, am very pleased to hear those words from the Front Bench, because this is a problem. As my noble friend will be aware, in order to enable agricultural co-operatives to become feasible in their own right, the Agriculture and Forestry Associations Act was passed in 1962. That was absorbed into the Restrictive Practices Act. However, I welcome the assurance that he has given that he will look at this again, because it is getting in a muddle, in that the co-operatives are already governed by the Agricultural Marketing Act and the Fair Trading Act. The Director General of Fair Trading has pretty extensive powers now to look into any co-operative when it seems as though it might be abusing the purposes for which it was set up. We are governed by stringent rules under the Restrictive Practices Act and I am very glad that he realises that a further complication by inclusion in the provisions of the Competition Bill would make life very difficult indeed for the co-operatives.
Lord MOTTISTONE: I do hope that if the Government think further about this they will bear in mind that co-operative farmers are no different from other traders and that they need to be in competition with other processors and traders of whatever sort, and therefore need to be subject to anti-competitive legislation as much as anybody else. I hope that will be fully borne in mind by the Government.
Lord TREFGARNE: It certainly will be.
Lord STANLEY of ALDERLEY: I, too, very much welcome the remarks made by the noble friend on the Front Bench that he will look at this again. I am glad that, though he did not say so in so many words, he implied that he was slightly confused, just as I am totally confused, over the matter. I think that agricultural co-operatives are slightly different from other people. We have been encouraged for many years; we are terribly weak sellers. It is one of the things that is being permanently complained about: the Minister of Agriculture permanently says: "Get out and sell." Here we are, trying to get out and sell, as agricultural co-operatives; so I would to some extent disagree with my noble friend here, and I do not think it will be the last time that I shall do so during this Committee stage.
There are one or two other points I would like to ask my noble friend to consider when he goes back and thinks about this. I would ask him to remember that at the present time agricultural co-operatives can be investigated by the Director General of Fair Trading under the Restrictive Trade Practices Act if they do anything to break the rules under that Act. Now we are going to get the situation that if the Director General of Fair Trading, as I understand it, wakes up one morning and perhaps is a bit cross with us, he can just descend on us for no reason whatsoever. Before, he had to descend on us if we had broken a particular thing. I am not very keen on that. I do not think that would increase our efficiency, as my noble friend on the Front Bench said, if we are permanently to have to turn up and listen to the Director General of Fair Trading as he looks at our affairs. There is a slight problem there. Surely, if we are exempted under Section 33 of the Restrictive Trade Practices Act, that should be all right. That is where we should stay and we should be taken out of this Bill. However, certainly I have no intention of following this up after the very good assurance I have had from my noble friend, bearing in mind what was said in connection with the last amendment—that they had no intention of giving that sort of assurance unless they were actually going to do

635
something about it. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3 [Preliminary investigation by Director of possible anti-competitive practice]:
6 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 12:
Page 3, line 30, after ("Director") insert (" acting alone or acting upon representations made to him").
The noble Lord said: This is quite an important amendment, the purpose of which is to make provision for organisations which are recognised as representing consumers to raise with the Director practices which appear to be anti-competitive, either directly or through a parliamentary representative who could also raise issues on behalf of constituents. The amendment brings in a very important democratic right, and I would add that Amendment No. 41 to Clause 11, which is shortly to be moved by the noble Baroness, Lady Seear, also covers this point.
There are a number of organisation and State constituted bodies, such as the Consumer Council, Townswomen's Guilds, Women's Co-operative Guilds and many others which have, in the past, played a valuable and constructive part in the area of consumer protection. In the present situation, when trust and understanding on the part of the public are urgently required by the Government, the contribution made by the bodies I have mentioned, and others, could prove invaluable. Furthermore—and I am bothered about a situation which arises in another place—the amendment would ease the intolerable position of elected Members of Parliament, who, bearing in mind the statement of the Minister for Consumer Affairs at the end of the Third Reading in another place, cannot, it appears, make direct representations to the Secretary of State, but have to search to find the Minister responsible for a given situation.
If this amendment were accepted, the Director would have to reach a decision
636
about whether to act on the representations which have been made. It is true that the Director's duty to consider complaints is already provided for in Section 2(2) of the Fair Trading Act, but this is no reason for rejection of the amendment. On the contrary, it is all the more essential for a reference to be made in this Bill, in order to gain public support and confidence, which I am sure the Government would wish to see. As the Bill stands, there is no right of complaint by a member of the public to the Director. I feel that this is very wrong indeed, and I hope that the Government —who have so far been set as hard as the cement which the noble Lord, Lord Boyd-Carpenter, alleges he produces —will show a little more tolerance and understanding.
I understand that the Minister responsible for public relations has recently urged his colleague Ministers to put over the real face of the Government. I have my views on that, but, here at least, is something which they can put into the Bill to show that the public have a part to play. So I urge the Government to think very seriously about the amendment. I beg to move.
Baroness SEEAR: I very much hope that the Government will feel able to accept this amendment. There is great anxiety about price increases and it is highly desirable that elected representatives, consumer bodies and voluntary organisations, of one kind or another, should feel that they are able to play a part. I strongly support what the noble Lord, Lord Wallace, has just said, if only to relieve the anxieties that people are experiencing in the face of price increases, and the sense of impotence that they have in their inability to do anything about them. It surely cannot do any harm to allow this amendment to be included, and it would be evidence of the Government's understanding of how anxious people are in this area.
Lord TREFGARNE: I entirely accept what has been said by the noble Lord, Lord Wallace, and the noble Baroness, Lady Seear, that everybody ought to have the right to approach the Director General with their representations. Indeed they do. Under the Bill as drafted, the Director General is entirely free to take any representations into account when

637
selecting cases for investigation. An explicit provision is not necessary, and I do not think that we ought to write it into the Bill.
Lord WALLACE of COSLANY: I am astonished. My relations with the noble Lord outside this Chamber are quite friendly, but, really and truly, he is spitting in the face of the housewife and that is dangerous. Here am I, on the Opposition Benches, humbly trying for the sake of the nation to help the Government and all they are doing is just rejecting the amendment out of hand. The noble Lord has said that this is written into the Bill, but it should be more explicitly stated on the lines of my amendment. I ask the noble Lord not to be so difficult. Let us have a little hit of reason.
Baroness SEEAR: It cannot do any harm and may do some good. What is the objection?
Baroness GAITSKELL: May I add my opinion to that of the noble Baroness, Lady Seear, and my noble friend Lord Wallace. It is awful of the Government not to give way on such a small and valid point, and to make it a real case of principle. It is really not very nice.
Viscount TRENCHARD: With respect to the noble Lord, I think that my noble friend, in the hope of getting through the less important questions fairly quickly, has stated the Government's position fairly brusquely. But may I ask the noble Lord who moved this amendment what it is that he thinks his amendment will achieve which is not in any event bound to happen? The Director General of Fair Trading is not in some ivory tower somewhere, as I was saying to some of my noble friends on a previous amendment. He has a statutory job to do. He is bound to be accessible, and fully accessible, to all those with credentials to advise him on his task, particularly those concerned with consumer protection, which the noble Baroness mentioned, or with departments, elected representatives, local authorities, national Government and Quangos who may be involved. Why is it necessary to state the obvious? We are trying to keep Bills fairly short. Why does the noble Lord want to state what is bound to happen in any event? We cannot give these bodies statutory powers
638
to be consulted. Dozens of bodies would consider that they had to be consulted on each issue, if there were statutory powers. So what really is the purpose—and I say it as politely as I can—of the noble Lord's amendment? What is it going to achieve that is not already done?
Lord WALLACE of COSLANY: The noble Viscount and his colleague keep hiding behind the skirts of the Director-General if I may use that term. The noble Lord smiles—
Viscount TRENCHARD: I am smiling about the skirts of the Director General.
Lord WALLACE of COSLANY: Why should there not be a Director General with skirts?
Lord TREFGARNE: Is the noble Lord aware that the Director General is a Scotsman and probably wears a kilt?
Lord WALLACE of COSLANY: I will not comment on that, because I am supposed to have come from Scotland in the dim and distant past. But, really and truly, I do not understand the Front Bench here. Noble Lords may say that it is already in the Bill, but where is it? The Government have to give an outward appearance to the public that they can make representations. I will ask the noble Lord another question. What is his honest opinion of what was said at the very last stage of the Third Reading of the Bill in another place, when she said that the Secretary of State would have no responsibility for prices? It would leave the responsibility of Ministers and the responsibility of their Department, undefined.
This is a very important democratic point. The Government are smothering it with confusion. The organisations that I am speaking about have played a good part, and they continue to do so. We want the voice of the people—
Several noble Lords: Hear, hear!
Lord WALLACE of COSLANY:—so why not put it in the Bill? If noble Lords shout "Hear, hear! ", I invite them to come and join me in the Division Lobby.
6.11 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?

Resolved in the negative, and amendment disagreed to accordingly.

Their Lordships divided: Contents 74;Not-Contents, 92.

CONTENTS

Annan, L.

Gladwyn, L.

Sefton of Garston, L.

Ardwick, L.

Goronwy-Roberts, L.

Segal, L.

Aylestone, L.

Gregson, L.

Shepherd, L.

Balogh, L.

Grey, E.

Shinwell, L.

Banks, L.

Hale, L.

Simon, V.

Barrington, V.

Hampton, L.

Spens, L.

Beaumont of Whitley, L.

Hanworth, V.

Stedman, B.

Blease, L.

Henderson, L.

Stewart of Alvechurch, B.

Blyton, L.

Hood, V.

Stewart of Fulham, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Stone, L.

Brockway, L.

Jacques, L.

Strabolgi, L.

Brooks of Tremorfa, L.

Janner, L.

Taylor of Blackburn, L.

Caradon, L.

Kaldor, L.

Taylor of Gryfe, L.

Cledwyn of Penrhos, L.

Lee of Newton, L.

Taylor of Mansfield, L.

Collison, L.

Llewelyn-Davies of Hastoe, B.

Wade, L.

Cooper of Stockton Heath, L.

Longford, E.

Wallace of Coslany, L. [Teller.]

Crowther-Hunt, L.

McNair, L.

David, B.

Maelor, L.

Walston, L.

Davies of Leek, L.

Milner of Leeds, L.

Wells-Pestell, L.

Davies of Penrhys, L.

Ponsonby of Shulbrede, L. [Teller.]

Whaddon, L.

Diamond, L.

Wigoder, L.

Elwyn-Jones, L.

Rhodes, L.

Willis, L.

Fulton, L.

Ritchie-Calder, L.

Wilson of Radcliffe, L.

Gaitskell, B.

Ross of Marnock, L.

Winstanley, L.

Galpern, L.

Seear, B.

Wynne-Jones, L.

Gardiner, L.

NOT-CONTENTS

Abinger, L.

Ferrier, L.

Murton of Lindisfarne, L.

Airey of Abingdon, B.

Feversham, L.

Northchurch, B.

Amory, V.

Gainford, L.

O'Neill of the Maine, L.

Ampthill, L.

Galloway, E.

Onslow, E.

Auckland, L.

Garner, L.

Orkney, E.

Avon, E.

Glasgow, E.

Pender, L.

Bellwin, L.

Gray, L.

Redesdale, L.

Bessborough, E.

Greenway, L.

Rochdale, V.

Brookes, L.

Gridley, L.

Romney, E.

Brougham and Vaux, L.

Grimston of Westbury, L.

St. Davids, V.

Caithness, E.

Hailsham of Saint Marylebone, L. (L. Chancellor,)

St. Germans, E.

Campbell of Croy, L

St. Just, L.

Clifford of Chudleigh, L.

Halsbury, E.

Sandys, L.[Teller.]

Cork and Orrery, E.

Hereford, V.

Selkirk, E.

Craigavon, V.

Hives, L.

Sempill, Ly.

Craigmyle, L.

Home of the Hirsel, L.

Stanley of Alderley, L.

Cullen of Ashbourne, L.

Hornsby-Smith, B.

Strathclyde, L.

Daventry, V.

Hylton-Foster, B.

Strathcona and Mount Royal, L.

de Clifford, L.

Inglewood, L.

Stuart of Findhorn, V.

De Freyne, L.

Killearn, L.

Swansea, L.

De La Warr, E.

Kimberley, E.

Teviot, L.

Denham, L.

Kinnoull, E.

Tranmire, L.

Drumalbyn, L.

Lauderdale, E.

Trefgarne, L.[Teller.]

Duncan-Sandys, L.

Long, V.

Trenchard, V.

Dundee, E.

Lucas of Chilworth, L.

Tweedsmuir, L.

Ellenborough, L.

Lyell, L.

Vaux of Harrowden, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Vernon, L.

Emmet of Amberley, B.

Mansfield, E.

Vickers, B.

Exeter, M.

Massereene and Ferrard, V.

Vivian, L.

Faithfull, B.

Mottistone, L.

Wise, L.

Falkland, V.

Mowbray and Stourton, L.

Young, B.

6.19 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 13:
Page 3, line 43, leave out from (" relate ") to (" arrange") in line 1, page 4, and insert (";but
( )before arranging to be published the notice referred to in paragraph (b) below the Director shall afford to the person or persons whose conduct is to be investigated an opportunity to make representations within such a period as the Director considers reasonable in the circumstances; and
( ) subject to subsection (9) of this section").
The noble Baroness said: The last thing that I want to do is to build delays into the operation of this legislation. However, I think that there is a case for asking that before the fact that an investigation is taking place is made public the bodies or persons to be investigated should have the chance to take up the issue with the Director General. I recognise that in the vast majority of cases there will be no question of not proceeding with the investigation, but it could happen that there is some misunderstanding and raising issues with the Director General could mean that he would change his mind.
I think there is no doubt that organisations feel that the fact of being investigated is in itself a criticism and that the mere fact that it is known that they are being investigated can have an effect on their business. Therefore, I think that the right to have a hearing to explain their position is one that ought to be built into the legislation.
I am sure that the noble Lord will tell us that this of course will happen. I suspect that on everything that we are going to raise in this Bill we shall be told that of course it will happen; that it is implicit in the legislation. But once again before the noble Lord says this, may I make the point that there is a lot to be said for having things made clear in the Bill as well as having it implicit in the Bill. These things may be crystal clear to the noble Lord the Minister, but they are not always so clear to other people who are less familiar with ploughing their way through legislation. I beg to move.
Lord TREFGARNE: We have some sympathy with the underlying purpose of this amendment—that firms which are investigated should be given a fair hearing. But it should be remembered that the
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Director General's investigation is intended only to obtain a preliminary view of the facts. This preliminary investigation itself gives firms an ample opportunity to present their case to the Director General. Nevertheless, we recognise that even before an investigation formally begins it would normally be desirable for the Director General to seek the views of the company concerned. This is only common sense, and we understand that it would be the Director General's intention to do so wherever practical. A strict legal requirement to this effect would however be cumbersome, and could, we think, involve unnecessary delays and complications for example, where a number of subsidiary companies were involved.
The amendment as it stands seeks to introduce a further opportunity for the Director General to reconsider a decision to investigate. This could be likely to result in lengthy and frustrating delaying tactics. It is surely better that once the Director General has firmly decided on an investigation, it should be allowed to proceed without interruption. I hope the noble Baroness will be persuaded by my remarks and will not press this amendment.
Lord MOTTISTONE: There is one small point which worries me. The noble Baroness said that because the matter is going to be made public anyhow then there is purpose for her amendment because it gives a chance to the company to explain the situation beforehand. What I did not like was her point, nor did I like the fact that my noble friend on the Front Bench did not refute that point, because as I read Clause 3(2)(a) and more especially subsection (2)(b) it seems to me that paragraph (b) says that the fact that there is going to be an investigation will only be published in such a manner as the Director considers most suitable for bringing it to the attention of any other person who is concerned. To me, that is not making the matter widely public. I think it is crucial and it is the subject of an amendment which I have tabled, and I beg the indulgence of the Committee to make a little of the speech that I shall be making later, because it is an important point. If it is thought that it does not matter that the fact that a company is to be investigated is made

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public I hope the Government will give careful thought to any amendment on that line.
I believe that the fact that a company is being or has been investigated or is going to be investigated needs to be treated with as much confidentiality as can reasonably be applied, because it could well be that it will react against the company in the market, its general standing, its reputation, even if it is totally cleared or, under the circumstances of this Bill, every undertaking that is ever called for is given. The fact that it has happened reminds me of the terrible phrase that my noble father warned me against in politics, "There's no smoke without fire". People go about saying that and however much a person is cleared, they still say it.
With the greatest respect to the noble Baroness, I do not agree with this amendment and I think my amendment is much better, but the fact of the matter is that we really must have it confirmed to us that my reading of subsection (2)(b) is correct and that the publicity—because we are talking about publicity—given to an investigation or a potential investigation is as restricted as it possibly can be so as not to harm somebody's reputation when it is purely an investigation and the result is that nothing happens. I hope that my noble friend on the Front Bench will be able to give us an assurance.
Baroness SEEAR: If the noble Lord, Lord Mottistone, really thinks that in subsection (2)(b) the words,
" in such manner as the Director considers most suitable for bringing the proposed investigation to the attention of any other persons who, in the opinion of the Director, would be affected by or be likely to have an interest in the investigation ",
mean that the matter is going to remain secret and confidential for very long, his experience of rumour is very different from mine. Once all those people who might have an interest in it have been informed about it, it will be known to all the people who have any interest in the matter whatsoever. That is what I want to avoid, for precisely the same reason that the noble Lord, Lord Mottistone, has given—that this can be extremely damaging. Therefore, at least the company should have a chance to get in first and point out to the Director General that just this once he has made a mistake.
Lord PONSONBY of SHULBREDE: This amendment deals with a preliminary investigation by the Director General and the intention of the Bill, which seems right, is that this should be a speedy investigation. My feeling is that this amendment would have the effect of very much delaying and extending that initial investigation and therefore on the whole my view is that the Government view is probably the right one on this amendment.
Baroness SEEAR: I am afraid I do not agree with that and I think that some amendment of this kind should be included in the Bill.
On Question, amendment negatived.
6.29 p.m.
Lord JACQUES Lord JACQUES moved Amendment No. 14:
Page 4, line 9, at end insert (" but no such notice shall be published before the end of the period of two weeks beginning with the day on which the Secretary of State receives notice of the proposed investigation under paragraph (a) above ").
The noble Lord said: I think it would be for the convenience of the Committee if I were to speak to Amendment No. 16 at the same time. Subsection (1) of Clause 3 gives the Director General power to investigate. Subsection (2)(a) requires the Director General to give notice to the Secretary of State and the person whose conduct he is to investigate. Subsection (2)(b) requires the Director General to publish a notice of investigation indicating the matters to be investigated and the person whose conduct is to be investigated. Subsection (5) gives the Secretary of State power to veto the investigation within two weeks. Surely it is not in the interests of any party that there should be publication and then within the next two weeks there should be a veto by the Secretary of State. That seems to me to be absurd. It is not in the interests of the Government that it should happen, nor the Party concerned nor anybody else. It is in the interests of all that if there is to be a veto it should be before, and not after, publication. Therefore, the purpose of Amendment No. 14 is that publication should be after the two weeks during which there can be a veto. It therefore defers publication until the period for the veto has entirely elapsed,

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and there could not be the confusion which there would be if the Bill is left as it is.
Amendment No. 16 provides that the notice received by the person whose conduct is to be investigated shall state the date after which publication shall be made. If the person whose conduct is to be investigated knows the date after which there will be publication, then he has an opportunity of making any representations before publication. If he does not know the date, he cannot do that. I believe that these two amendments make no material alteration to the Bill but are fair and reasonable to the parties concerned. I beg to move Amendment No. 14.
Lord TREFGARNE: I am sorry to say I am not very happy with this one, either. There are three points which your Lordships might like to consider. The first difficulty would be that it would, of course, as with the previous amendment, delay the start of an investigation by the Director General, and that, as the noble Lord, Lord Ponsonby, said earlier, is not desirable in the context of this quick procedure. Secondly, I think that the arrangements, if we agreed to this amendment, would seem to be to those who were subject to an investigation a sort of court of appeal where the Secretary of State would be obliged to reconsider almost every decision made by the Director General to institute an investigation. That is not the intention. It is intended only that the Secretary of State should use his powers in a very narrow range of cases, principally where the Director General proposed to investigate matters which were properly a matter of Government policy.
I think the third and final objection is that an arrangement such as this would smack of a behind-the-scenes deal where the public at large might be persuaded to think that it was all a put-up job and that neither the Director General nor the Secretary of State was a particularly free agent in this matter. I hope, therefore, for these reasons the noble Lord will not press this amendment.
Lord JACQUES: I should like to reply to all three points which have been made.
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First of all, on the question of delay, surely there will be delay in any case. You are not going to start upon an investigation before the period during which it can be vetoed has come to an end. You do not want an investigation partly completed and then the Secretary of State vetoing it. If the Secretary of State wants to veto it he should veto it before it starts. Therefore, I do not accept that there will be any delay. In any case, if there is any delay the whole period is only two weeks. The Bill provides that within two weeks the Secretary of State shall have the power of veto. He may decide to veto it within three days. In that case, since it would be known that there was no veto, the investigation could then start. I do not believe there is any serious delay. Two weeks is not important, and it does avoid the confusion. Look at the confusion you would have if you got publication and then the Secretary of State said, "I veto that". That is obviously not in the interests of the Secretary of State or anybody else. It is quite wrong.
Coming to the question of a court of appeal, there is no question of a court of appeal. The person whose conduct is to be investigated will be advised in accordance with subsection (2)(a) that his conduct is going to be investigated. He would obviously wish to acknowledge it. He will not be asked if he has anything to say, but if he knows that there is going to be publication in two weeks and he wants to say anything before publication he had better get on and do it. So I do not accept that there is any question of a court of appeal.
The third objection is the appearance of a deal behind the scenes. There is nothing in the words of the Bill or in the words which I have used in the amendment which would smack of a deal behind the scenes. What is said almost throughout this Bill is that the Director General shall try and get agreement with the parties. It is quite obvious that if he gets agreement with the parties that a practice is going to be dropped he will not proceed with his investigation. Even if he has proceeded with his investigation he is authorised to try to get agreement. Consequently, I think all these three reasons are absolutely phoney.
Lord TREFGARNE: I suppose I had better reply to what the noble Lord has said, but I do not think it will have persuaded your Lordships. The fact is that an investigation could start within the two-week period allowed for the Secretary of State to exercise his veto, and in general cases it will, because most of the investigations decided upon by the Director General will under no stretch of the imagination be candidates for the Secretary of State's veto. Therefore, the Director General will of course proceed right away. Where the Director General apprehends that there is a possibility of the Secretary of State seeking to exercise his veto he will undoubtedly, as he is required to do under the Bill, have informed the Secretary of State in advance of his intention to carry out the investigation and the Secretary of State will no doubt have made up his mind whether or not to exercise the veto.
Lord JACQUES: Before he knows there is going to be an investigation?
Lord TREFGARNE: No. Once the Secretary of State has heard formally of the Director General's decision to institute an investigation he will be able to make up his mind right away, if he needs to, whether or not to exercise the veto.
As for the "behind the scenes" point, it will be the case, if the noble Lord's amendment is agreed to, that the announcement of the Director General that he proposes to carry out the investigation, and the announcement of the Secretary of State's veto, will be made at more or less the same time, which I should have thought would always cause people to think that the whole matter has been fixed up behind the scenes, which would not, of course, necessarily be the case. It would, I think, cause people some apprehensions and misgivings. I think the noble Lord's amendment detracts from the effect of the Bill in this clause, and I hope he will not press it.
Lord JACQUES: I think this is sheer obstinacy. This amendment clearly improves the Bill. It does not involve any serious delay. It avoids the confusion of publication followed by veto, which is in nobody's interest. But I am not going to press this to a vote. I think the Government are being damned obstinate.
Viscount TRENCHARD: I am glad the noble Lord will not press it, but we really are not being obstinate. You either have to get the Secretary of State's agreement to every move of the Director General of Fair Trading, or, if you do it the way this amendment suggests the Director, working on a wide-ranging brief, looking for areas he wants to look at, of his own initiative, publishes that he is going to investigate. If you have a delay before he starts, a period for consultation, you are bound to have every interested body in the country descending on the Secretary of State and the Director General to say, "Do not start". This would completely defeat the power of the Director General to do these quick, short, sharp investigations in many areas, and it would make life for the Secretary of State absolutely impossible. Everybody would be on him if there was a need not to go ahead with the investigation until the Secretary of State had decided whether to use the veto. It really is not practical given the objectives of this body and this Bill.
Lord JACQUES: The argument is exactly the opposite to what the Minister has said. He has confused the facts. He has transposed the two matters. I think that Hansard will show that he said: "if there is publication, and then delay". I am not asking for that. I am asking that there should be delay and then publication and that is quite the opposite to what the Minister has said.
On Question, amendment negatived.
6.41 p.m.
Lord TEVIOT Lord TEVIOT moved Amendment No. 15:
Page 4, line 9, at end insert—
(" (2A) Where the Secretary of State receives notice under subsection (2)(a) above, he shall consult any other Minister who, in his opinion, has functions directly relating to the persons specified in the notice.").
The noble Lord said: I beg to move Amendment No. 15 and with it discuss Amendment No. 17. This amendment is relevant to a large number of later amendments in Clauses 7, 9 and 11. I realise that I shall not get very far with this amendment because it is rather similar to that of the noble Lord, Lord Jacques. I am asking for the Minister to be brought in. I have listened to the arguments that have been put forward by my noble friends

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on the Front Bench. I cannot say that I am extremely happy, but before I withdraw the amendment I should like to hear from them whether the departments concerned, such as transport and energy, are quite happy that they will not be brought in until the end of the power to veto. Like the noble Lord, Lord Jacques, I thought that it would have been rather better—and it would not have been behind the scenes—if they had been brought in at the beginning and thereafter at every stage. Because, with great respect to the Secretary of State for Trade, he cannot know about the various inquiries and investigations that have been brought up—no one Minister can—whereas if the matter had been referred to the relevant Minister, he would have been able not necessarily to veto, but to advise and that would save a great deal of argument and even a great deal of bureaucracy. Having made those short remarks, I welcome the Government's reply.
Lord TREFGARNE: I have a great deal of sympathy with the amendment, or the series of amendments, proposed by my noble friend. However, I think that the formal consultation procedures which my noble friend seeks to introduce are rather cumbersome and, I hope your Lordships will agree, unnecessary. The Secretary of State will certainly wish to consult the relevant Minister, who might well be the Minister of Transport, about the sort of matters in which my noble friend takes such an interest, before using any of his powers under the Bill in respect of the matters for which that Minister had direct responsibilities. This would be in complete accordance with the normal principles of collective responsibility and that I think removes the need for a formal procedure. I hope that that explanation will persude my noble friend that the sort of procedures which he desires will, in fact, take place and that therefore he will not press his amendment.
Baroness SEEAR: We are still talking about the same problem; namely, that the Ministers think that informal understandings are good enough and that we do not need to have these matters written into the legislation. With the greatest respect, I do not believe that that is so. If the informal procedures work, and they want them to work, what harm is there in
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having them written into the legislation, as well?
Lord TREFGARNE: Collective responsibility is a very important matter. Every Minister in every Government is responsible equally with his colleagues, for every measure put forward by that Government and, therefore, of course, insists that he is consulted on proposals that affect his department. I hope that the noble Baroness will accept—and indeed my noble friend behind me will accept—that there is a good deal of formality in the consultations that take place between Ministers. I hope that the noble Baroness will accept what I have said on this occasion.
Lord TEVIOT: I accept what my noble friend has said. The Director General of Fair Trading will, as he said, informally discuss the matter with the various Ministers of the various departments. I do not take the view that my amendments are all that cumbersome; indeed, it would have been nice to have seen them written into the Bill. However, I shall not press this amendment. My noble friend's answer was kinder than I thought it would be. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. /6 and 17 not moved.]
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 18:
Page 4, line 42, leave out ("and relating to any matter relevant to the investigation").
The noble Lord said: My Lords, I beg to move Amendment No. 18. In Committee in another place—the Committee report of 30th November, column 430—it was made clear that anything that the Director does in a preliminary investigation must be with a view to establishing whether a person is or has been pursuing a course of conduct which is anti-competitive in its effect. If that is the case, then the words that I seek to delete for the purposes of clarity would seem to be superfluous. If, on the other hand, the Government feel that they are necessary to emphasise the point, I suggest that they should then, logically, also be included in Clause 3(7)(b) where they are, if anything, even more important. I beg to move.
Lord TREFGARNE: I can assure my noble friend that the effect of the paragraph, as presently drafted, is quite clear and reflects the Government's intentions in this matter. Although the Director General's powers will enable him to request documents from persons who are not the subject of an investigation, such documents must relate to matters relevant to the particular investigation. There is no question of these powers being used to obtain documents which have no bearing on the investigation. In the event of any dispute, the courts would have to determine the relevance of a particular document. I hope that my noble friend will agree that to give the type of powers that would be created if we were to agree to his amendment, would be undesirable. They would enable the Director General to ask for almost any document under the sun from people who were not connected with the investigation. I really do not think that that is the right way to proceed and I hope my noble friend will not press his amendment.
Lord MOTTISTONE: I quite take the point made by my noble friend that it is necessary to have this provision in paragraph (7)(a). However, I should have thought that the same sort of sense needs to be in paragraph (7)(b), indeed, even more so. What would the Government's reaction be if I were to put down an amendment to that effect at a later stage?
Lord TREFGARNE: I agree that the powers in paragraph (b), which enable the Director General to obtain information from any person carrying on any business, do not include a requirement that that information should relate to matters relevant to the investigation. However, the provisions in that subsection closely follow similar provisions in Section 85 of the Fair Trading Act, and I should perhaps point out that the subsection as a whole is prefaced by the words:
"For the purposes of an investigation".
I suggest that that makes it clear that the Director General is not empowered to seek information irrelevant to the investigation.
Lord MOTTISTONE: I thank my noble friend very much for that further answer which I shall study with great
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care. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.49 p.m.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 19:
Page 5, line 35, at end insert ("and why such a course of conduct might be contrary to the public interest").
The noble Baroness said: I beg to move Amendment No.19. We have heard from the noble Lords on the Front Bench today about the enormous variety of industries and, that a practice which may be perfectly acceptable in one industry may be inapplicable to another. However, there is no doubt that in this Bill the Director General of Fair Trading is given enormously increased and almost all-embracing, powers. Even if he has the keenest of brains, is indefatigable, as he will need to be and, indeed, has the wisdom of Solomon, we are creating a tremendously over-mighty servant of the public. I believe that the vast discretionary power which is given to the Director General should, within this Bill, be subject to judicial control and that where he proposes, in following up preliminary investigation, to make a competitive reference, he should be required to show reasonable grounds for believing that the anti-competitive practice in the instance which he is investigating and which is applicable to that firm or industry, is contrary to the public interest. I know that subsection (10)(b) says "with reasons", but that may be in respect of pricing advertising, which in itself may not be contrary to the public interest.
As the noble Lord said, as indeed my noble friend Lord Mottistone has pointed out and as did the noble Baroness, Lady Seear, a little while ago, the mere announcement of a competitive reference is in itself extremely damaging to the company. Therefore, it is imperative that before a company is sent for a competitive reference, it should be told why its practice—which no company goes into lightly—is to be referred. A company goes into a practice because it thinks that it is within the law, because it thinks that it is promoting some new product; in no way does it want any section of the law to stop it marketing or selling the product. Therefore, it does not blindly go into these

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unfortunate practices. I believe that it should be reasonable that those challenged should be told immediately why the particular practice is deemed to be contrary to the public interest at the time that they are sent forward for their competitive reference. I beg to move.
Lord MOTTISTONE: I should very much like to support my noble friend in her amendment. In any case, I had it in mind at some suitable stage to ask the Government why it is that there is no reference to public interest in relation to the sort of inquiry which is the subject of this clause. Clause 7(6) refers to Section 84 of the Fair Trading Act 1973, which is all about public interest. I find it odd that the public interest aspect of an investigation is not mentioned at all in this clause or, indeed, in the succeeding one. I have it in mind to put down an amendment at a later stage in order to invite the Government to comment on this more fully; it would be a very good opportunity for them to do so. In the meantime, may I suggest to the Government that it would be reasonable to accept my noble friend's amendment? If, on reflection, they do not much like it, they can always take it out at a later stage.
Lord TREFGARNE: I should prefer not to follow that course. Under the Bill as drafted, the Director General is required, where he has found an anticompetitive practice, to state with reasons whether he considers it is appropriate for him to make a reference to the corn-mission. The purpose of the Director General's preliminary and relatively informal investigation is to establish to his own satisfaction whether—and why—there is an anti-competitive practice. He is not equipped, nor is it his role, to assess the public interest. That is for the commission. Nevertheless, it will be helpful to consumers, to industry—both the investigated firm and those who may be affected by its practices—to know why the Director General thinks it appropriate or otherwise to make a reference to the commission.
It will be up to the Director General to take his own decisions, but I would expect that, where he has found a significant restriction on competition, this would be the principal reason why he thinks a
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reference appropriate. On the other hand, if he finds that the restrictions on competition are trivial, he may decide that they are not sufficiently serious to warrant further investigation. Equally, it could happen that he thinks a particular practice is similar and operating in similar circumstances to one which the commission has found to be anti-competitive but not against the public interest, and that he thinks it inappropriate to make a reference in those circumstances.
But, as I have said, his task is not to assess the public interest. This is why we cannot accept the amendment. It would lengthen the Director General's inquiry. It would force him to hold public interest hearings and it would considerably add to the burden on industry facing what is, after all, only a preliminary inquiry, which would have to be repeated before the Monopolies and Mergers Commission. For those reasons, I hope that the amendment will not be pressed.
Baroness HORNSBY-SMITH: I think that the noble Lord is rather turning the arguments upside down. The Director General is to have enormous power; it will be for him to decide in his wisdom and discretion. Surely the unfortunate firm has the right to know why, what it is doing is not in the public interest. It does not seem a very great request to make. However, we are now told that the Director General has nothing to do with the public interest and that it is not for him to decide whether it is in the public interest. I rather thought that that was what he was there for.
I hope that the noble Lord will look again at this before the Report stage, because companies are being kept in the dark the whole time—they are having to walk through a minefield. It is to be at the discretion of this one overriding man, who may cause terrible damage to a company by way of a reference. I should not have thought that it was unreasonable to ask Her Majesty's Government to think again and to let the unfortunate victim know why he is not acting in the public interest.
Lord TREFGARNE: I am sorry that I have not persuaded my noble friend in this matter. If I may, I should like to make one further point. There is no obligation upon a company to accept the

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findings of the Director General; there is no obligation upon a company to give an undertaking to the Director General. If the Director General finds that in his view the practice is anti-competitive he may then, if he wishes, refer it to the Monopolies and Mergers Commission. But the company is still under no obligation to cease the practice until it is found by the Monopolies and Mergers Commission to be against the public interest. Therefore, I do not think that the evil consequences which my noble friend foresees for this provision will, in fact, flow.
Baroness HORNSBY-SMITH: With great respect, I should like to raise one other point. If we have to wait for the public interest decision by the Monopolies and Mergers Commission, will the Minister give consideration to the enormous amount of time, money and effort that has to be put into preparing a case for the Monopolies Commission? Might it not be possible at an earlier stage to prove and point out that such and such a practice is detrimental to the public interest, without having to go through all that?
Lord TREFGARNE: I think that, for example, the question of costs of proceedings before the Monopolies and Mergers Commission is the subject of amendments which we shall be considering later on. Perhaps my noble friend would like to raise that matter then.
Baroness HORNSBY-SMITH: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 20:
Page 5, line 41, at end insert—
("(11) Where a report is published under subsection (10) above, it shall in the first instance be provided only to the Secretary of State and to the person or persons concerned. If an undertaking under the provisions of this section is agreed, the Director will discuss with the person or persons concerned in the report whether all or part of it, subject also to the provisions of section 16(1) below, shall be made generally public or be issued only to persons notified in accordance with section 3(2) above.").
The noble Lord said: With permission, I should like to speak also to Amendment
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No. 23, which is consequential on this one. This is a subject which was raised under Amendment No. 13 by the noble Baroness, Lady Seear. The purpose of these amendments is to safeguard firms against unreasonable publicity from a preliminary investigation by the Director where an undertaking is given to adjust practices to ensure their competitive nature.
It appears from Clause 3(2)(a) and (b)—and I mentioned this earlier—that the fact that an investigation is being conducted will be made known only to those persons considered to be affected by it. Whether that then gets leaked to the Press and others is unfortunately a risk difficult to avoid, because it is clear that they ought to know that the investigation is going on. I was slightly heartened by my noble friend saying in answer to the last amendment that this was an informal investigation. Let us hope it is kept so informal that the Press does not get interested in it. If, thereafter, the company being investigated complies with all that the Director asks of it—and most companies will—it is suggested that wide publicity of the report and the investigation would be unreasonable.
The purpose of the first amendment is to limit the publicity of the Director's report to those who already know about the investigation. We cannot do any better than that. It is as good as we can get, even if it is not perfect. This will keep to a minimum any adverse effects on the company's public standing that might result from the mere fact that an investigation was considered necessary. I suppose that is the best we can do. I think that the Government are probably not aware how badly some people can be affected by these things. The trouble is that we tend to legislate for the lunatic fringe, and we do this always. Both sides do it. The other Government did it even more than we do it. We therefore find that the sensible chaps, the ones who want to be law-abiding, get caught and get a bad name, with lots of time wasted and money spent all because we have to cover this so fully. The publicity angle in this modern day and age is something that must and should be taken seriously by the Government. That deals with the first amendment.
On the other hand, if the company does not give the undertakings required by the

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Director it would seem that there is no need for its interests to be so specially protected. Accordingly, I shall propose Amendment No. 23 to make that clear. Finally, if the Government do not feel that they can accept my Amendment No. 20—and I hope they will be persuaded by my arguments and those of other noble Lords—I should be grateful if, in endeavouring to explain why they cannot accept it, my noble friend would specifically tell the Committee to whom it is intended that the report specified in Clause 3(10)should normally be distributed. I beg to move Amendment No. 20.
Lord TREFGARNE: It is an important aspect of the Bill that a report should be published to explain the Director General's findings as to whether a practice is anticompetitive. I want to emphasise that point—anti-competitive; that does not necessarily mean for or against the public interest. Without the publication of reports on investigations people will not be aware of the reasons for the Director General's views, which may contain important clarification about the circumstances in which anti-competitive practices arise. If no report were published, quite unjustified inferences might be drawn from the bare fact that a practice had been discontinued, and those affected by the practice, or those who might be considering engaging in similar practices, would not have the opportunity of seeing for themselves the Director General's conclusions. It is also an important discipline on the Director General that his conclusions and arguments should be open to public scrutiny.
We therefore think there is an overwhelming case for reports to be published. I can however, assure the Committee and my noble friend that it would be the standard practice of the Director General to show the factual parts of any report in draft to the persons concerned in order to correct any factual errors or misunderstandings. Where an undertaking has been agreed, the Director General will also try wherever possible to clear his Press Notice with the firm or firms concerned. I hope that these observations will allay the fears of my noble friend and that he will not press his amendment.
Baroness GAITSKELL: I wonder whether the Minister would tell me
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what he means by "anti-competitive"? This is Alice in Wonderland language. I do not understand a word of it. It is something quite new. I am ignorant about this kind of Bill. It is hard to follow, and there does not seem to me to be a great deal that is very important in it. What does "anti-competitive" mean?
Lord TREFGARNE: Perhaps the noble Baroness was not in her place when we had our discussion on Clause 2 where we went into that particular point in great detail. "Anti-competitive" means discouraging to competition. I hope that is clearer to the noble Baroness.
Baroness GAITSKELL: That is not an explanation. That is just another set of words not telling me what it is.
Lord MOTTISTONE: It seems that I am not getting any further support on this particular point. I am heartened by various things that my noble friend said. I was rather distracted by the noble Baroness and she has rather upset my thoughts, which were carefully assembled for the task. I think that the reassurances are as satisfactory as one can hope for. Would the Government—and this is a practice which has been adopted in other circumstances—give consideration to making it possible for these reports (the noble Lord talked about "reports", so presumably there might be several of them) to be generalised so as to get the point across, and made anonymous so that the specific company which had been investigated is not mentioned by name? I think that would help. Therefore, every six months one would get a report from the Director which would say, "During the past six months I have investigated x cases. They fall into the following categories, and these are the points I investigated, what I found, and what action was taken. All these chaps are splendid, and they all undertook to do what we asked them to do", and that would be it. It is quite unimportant for the purposes of that exercise that the firm in question happens to be a particular firm with a particular name, and, if I understood my noble friend aright, that is what he wanted. Would be prepared to say that he will look at that sort of way of translating it?
Lord TREFGARNE: I shall consider that point. I think it is quite a reasonable one. The only danger I see is that a bowdlerised report is always the subject of intense detective work by those who receive it to see if, by reading between the lines, they can discover to whom it actually refers. If there were no clear indication in the report as to who it referred to, one might have it wrongly ascribed to some company which was in no way involved. I shall consider the point and see whether the difficulties can be overcome.
Lord MOTT1STONE: I thank my noble friend for that concession and look forward to hearing from him, in order to perhaps free us from further consideration at the Report stage. If there are enough of these reports, of course there will be so many that it will not be worthwhile trying to identify them. But you will always get these detective creatures, who are dangerous characters anyhow.I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.10 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 21:
Page 5, line 41, at end insert—
("(11) Nothing in the European Communities Act 1972 shall be construed to curtail the operations of sections 3 to 10 of this Act.").
The noble Lord said: This amendment raises the question of conflict with European Community legislation. Those of your Lordships who have served on sub-committees of the European Subcommittee will well recall that this question of conflict arises, particularly in the field of consumer protection; the question is whether the superiority of European laws can have the effect of forcing a subsequent alteration in a measure such as the one we are discussing today. This amendment is designed to make clear the superiority of our legislation in this field so that there can be no doubt that this is superior legislation to legislation passed in Brussels.
Lord TREFGARNE: The noble Lord, Lord Ponsonby of Shulbrede, is expressing an oft-expressed fear, if I may put it that way, from the Benches opposite. In certain areas it would conflict with Community obligations for the Government to exercise unilateral control; this is a
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consequence of our membership of the Community. Your Lordships have discussed on many occasions the general principle of membership of the Community and I do not suppose the Committee wants to hear from me on that again, nor even from Lord Ponsonby. The amendment would create a potential conflict between action under the Bill and our obligations under treaties. I very much hope that the responsible authorities under the Bill would never turn a potential conflict into a real one, but it is best not even to allow such a possibility to arise and I therefore hope the noble Lord will not press the amendment.
Lord PONSONBY of SHULBREDE: I thank the Minister for his remarks. It was not my intention to press the amendment to a Division.
On Question, amendment negatived.
Clause 3 agreed to.
Clause 4 agreed to.
7.13 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 22:
After Clause 4, insert the following new clause:
Breaches of undertakings
".—(1) If it appears to the Director that a person has given such an undertaking as is mentioned in the preceding section and has failed to carry it out, the Director may bring proceedings against that person before the Restrictive Practices Court at any time after the notice referred to in paragraph (c) if subsection (4) of the preceding section has been given to that person.
(2) Where in any proceedings before the Restrictive Practices Court under this section, the Court finds that the person against whom the proceedings are brought (in this section referred to as "the Respondent") has failed to carry out an undertaking which has been accepted by the Director in accordance with the provisions of subsection (3) of the preceding section, the Court may make an order against the Respondent under this section.
(3) An order of the Court uner this section shall require the Respondent co carry out his undertaking.
(4) Notwithstanding anything in any other enactment, an appeal on a question of law shall lie from any order of the Court under this section—

(a) in the case of proceedings in England and Wales, to the Court of Appeal by way of case stated;

(b) in the case of proceedings in Scotland, to the Court of Session by way of stated case;

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(c) in the case of proceedings in Northern Ireland, to the Court of Appeal in Northern Ireland by way of case stated.

(5) In proceedings under this section the Court's decision on questions of fact is final.".
The noble Baroness said: This and the subsequent amendments standing in my name are governed by our overall approach to this legislation. At this late hour I will not make a long speech on the subject, but I wish to stress a few points that have determined the amendments we have tabled. It is our view that the objectives behind the Bill are desirable—those of strengthening competitive policy—but at the same time, as I tried to make clear on Second Reading, we have considerable doubts whether the Bill as it stands is sufficiently strong to do the job it is intended to do. Therefore these amendments are intended to make the alleged purposes of the Bill more likely, in our view, to be fulfilled than they are at the present time.
There is, after all, a reduction in the overall resources being devoted to this task; the work of the Director General is considerably enlarged but the resources he is being given are not being considerably enlarged. There is the further point that there is great public anxiety about rising prices. The Government have told us repeatedly that this Bill, plus their economic policies, will have the effect of reducing inflation and controlling prices because this is how their legislation in this field will work. If it does work in this way, it is going to take time, but we have a problem of rising prices here and now which is causing a great deal of anxiety, and therefore we want the public to be assured that this legislation has teeth on the one hand and, secondly, that the elected representatives of the people in Parliament and those other consumer bodies of one kind and another—this point will come out more strongly when we debate a subsequent amendment—will really he able to get into the act and see that the intentions of this legislation are carried out, because that is what we doubt.
When we on these Benches voted against the continuation of the Price Commission we did so not because we did not want to see prices properly controlled, with real control over prices, but because we wanted to see the Monopolies Commission, the Director General of Fair Trading and the
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Restrictive Practices Court acting more strongly than they have done in the past, because we believe these can be very effective instruments for price control, but that they need to be strengthened. It is with that in mind that I have tabled this and subsequent amendments, and the subsequent amendments I shall move much more briefly because they are all governed by these considerations.
When he has carried out his investigation, the Director General can get an undertaking from the investigated body that they will desist from certain anticompetitive practices. If they fail to give that undertaking, the Director General, if he considers the matter sufficiently serious—and I take it he would not ask for an undertaking unless he did—can proceed with an competitive reference. Plainly, it will be in the interest of the investigated party to give an undertaking. As the noble Baroness, Lady Hornsby-Smith, pointed out, references to the Monopolies Commission are expensive and are a long-drawn-out business which everybody who can will want to avoid, and therefore they have every interest in giving an undertaking.
However, we want to make sure that those undertakings are adequately fulfilled, that they are properly monitored and that if there is any side-stepping of an undertaking, it will be quickly picked up and dealt with. As the Bill is drafted, the only way in which that can be done is by the Director General then deciding that the concern which has been investigated and given an undertaking but which is not adequately carrying out its obligations should be referred to the Monopolies Commission. That is a very long-drawn-out business. By the time the Monopolies Commission has given a finding on it, we shall be many months from the date at which the Director General originally discovered that there was, in his view, an anti-competitive practice.
I fear that some of the more wily organisations which have been found to be indulging in anti-competitive practices may work out good delaying tactics, during which time of course they will be finding various ways to continue the practices which are contrary to the interest of the consuming public. I want to speed up this process, and that is why I want to

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give a second route for the Director General to follow, which is to take the breach of the undertaking to the Restrictive Practices Court and not necessarily to have to go through the lengthy procedures involved in a competitive reference to the Monopolies Commission.
Lord TREFGARNE: This amendment raises an issue which was exhaustively and extensively discussed in the other place. The central question is whether there should be a stronger deterrent against failure to comply with an undertaking given to the Director General following a preliminary investigation. The Government believe, and it has been accepted by the other place, that the Bill as it stands strikes the right balance in this respect. If an undertaking is broken, the case can quickly be referred to the Monopolies and Mergers Commission for a full investigation, and I do not think any firm will wish to bring an investigation upon itself in a light or casual manner. We believe that to go even further than that and to introduce specific penalties for the breach of an undertaking would act as a positive disincentive to the offering of the undertaking in the first place. Apart from the general principle involved, the particular amendment proposed raises some objections—
Baroness SEEAR: I apologise for interrupting, but I wonder whether the noble Minister will agree that, if firms refuse to give an undertaking, they will know that they are going to be referred to the Monopolies Commission. I should have thought that they would not be likely to refuse to offer an undertaking, because as the Bill stands the only option then would be for the Director General to go straight to the Monopolies Commission, which is precisely what they would wish to avoid.
Lord TREFGARNE: I suppose that in the short term they would wish to avoid it, but the noble Baroness will recall that earlier we discussed the question of public interest, and a firm, while agreeing that a practice is anti-competitive, may well believe that it is in the public interest and that it will be found to be so by the Monopolies and Mergers Commission in due course. For that reason I do not think
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that a firm would necessarily want to give an undertaking simply to avoid a reference to the Monopolies and Mergers Commission. The noble Baroness is really thinking of a situation in which a rogue firm (if I may call it such) has given an undertaking simply to avoid a reference. I think that that is taking an unduly pessimistic view of the ethics of our companies, although I am not saying that there is no firm that would do that. In general a firm which has given an undertaking accepts that the practice in which it was indulging was anti-competitive and therefore has undertaken not to continue it. It is not likely that the view of the firm and of the Director General would be overturned by the Monopolies and Mergers Commission.
Apart from the general principle involved, the particular amendment proposed raises a number of objections. The most fundamental is that it would involve the permanent prohibition of a practice without there being any finding by the Commission about the public interest, to which I referred. It cannot be right that the practice should be condemned—which is the effect of the amendment—without the implications for the public interest being considered; and when I say "condemned", I mean permanently condemned. I hope that in the light of these difficulties the noble Baroness will not press her amendment.
Baroness SEEAR: I am sorry, but I am afraid that I am not satisfied with that explanation. I quite agree, as the noble Minister has said, that the great majority of firms will play it straight and will not try to get round the intention of the legislation, and that if they have been found to have indulged in an anti-competitive practice and have entered into an undertaking, they will honour it. I am sure that this goes for the great majority, but in every pack—or is "herd" the right term?—there are rogue elephants. We know that in this country we have suffered very considerably from anticompetitive practices. We want this to cease in the interests of consumers, in the interests of competition, in the interests of anti-inflation and control of prices—all the things we stand for—and I believe that these stronger measures need to be there in reserve to deal with the rogue elephants.
Lord TREFGARNE: Before the noble Baroness decides what to do with her amendment, may I say that I think her objection is a Second Reading objection; she objects to the very philosophy of the policy that we have advanced to contain anti-competitive practices. The right logical progression from what she is suggesting is the kind of legislation that exists elsewhere, in which a large number of practices are specifically prohibited and there are penalties laid down for those who undertake those practices. That is not the course that we have chosen to follow. We have chosen a course described in the Bill, whereby the Director General can consider these matters, reach his conclusions, and accept undertakings; but at that stage the firm has not broken the law. I hope the noble Baroness will
agree that our more restrained approach to these matters is the right one.
Baroness SEEAR: I am very sorry not to be able to satisfy the noble Minister on this point. At Second Reading I indicated that I believe that the Bill is too weak and that it needs to be strengthened. That has been the theme of the comments that have been made from these Benches on this legislation, and I am afraid that I am not prepared to withdraw my amendment.
7.25 p.m.
On Question, Whether the said amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 89.

CONTENTS

Ardwick, L.

Hampton, L. [Teller.];

Ritchie-Calder, L.

Balogh, L.

Hanworth, V.

Ross of Marnock, L.

Barrington, V.

Houghton of Sowerby, L.

Seear, B. [Teller.]

Beaumont of Whitley, L.

Howie of Troon, L.

Simon, V.

Blease, L.

Jacques, L.

Stewart of Alvechurch, B.

Boston of Faversham, L.

Janner, L.

Stewart of Fulham, L.

Brockway, L.

Kaldor, L.

Stone, L.

Brooks of Tremorfa, L.

Kilmarnock, L.

Strabolgi, L.

David, B.

Lee of Newton, L.

Taylor of Blackburn, L.

Davies of Leek, L.

Llewelyn-Davies, L.

Taylor of Mansfield, L.

Davies of Penrhys, L.

Llewelyn-Davies of Hastoe, B.

Wade, L.

Elwyn-Jones, L.

Lovell-Davis, L.

Wallace of Coslany, L.

Gaitskell, B.

McNair, L.

Wells-Pestell, L.

Galpern, L.

Maelor, L.

White, B.

Glenamara, L.

Mishcon, L.

Wigoder, L.

Goronwy-Roberts, L.

Monson, L.

Wilson of Radcliffe, L.

Gregson, L.

Pitt of Hampstead, L.

Winstanley, L.

Grey, E.

Ponsonby of Shulbrede, L.

Winterbottom, L.

NOT-CONTENTS

Abinger, L.

Gainford, L.

Morris, L.

Airey of Abingdon, B.

Galloway, E.

Mottistone, L.

Auckland, L.

Glasgow, E.

Mountgarret, V.

Bellwin, L.

Greenway, L.

Mowbray and Stourton, L.

Bessborough, E.

Gridley, L.

Moyne, L.

Caithness, E.

Grimston of Westbury, L.

Murton of Lindisfarne, L.

Campbell of Croy, L.

Grimthorpe, L.

Newall, L.

Colwyn, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

O'Neill of the Maine, L.

Cork and Orrery, E.

Hereford, V.

Onslow, E.

Cottesloe, L.

Hives, L.

Orkney, E.

Craigavon, V

Holderness, L.

Pender, L.

Craigmyle, L.

Home of the Hirsel, L.

Rochdale, V.

Craigton, L.

Hood, V.

Romney, E.

Cullen of Ashbourne, L.

Hornsby-Smith, B.

St. Aldwyn, E.

de Clifford, L.

Hunt of Fawley, L.

St. Davids, V.

De Freyne, L.

Inglewood, L.

St. Germans, E.

De La Warr, E.

Kilmany, L.

St. Just, L.

Denham, L.

Long, V. [Teller]

Sandys, L. [Teller.]

Drumalbyn, L.

Lucas of Chilworth, L.

Selkirk, E.

Ellenborough, L.

Lyell, L.

Sempill, Ly.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Skelmersdale, L.

Fairfax of Cameron, L.

Macleod of Borve, B.

Stanley of Alderley, L.

Faithfull, B.

Malmesbury, E.

Strathclyde, L.

Falmouth, V.

Mansfield, E.

Stuart of Findhorn, V.

Falkland, V.

Mansfield, E.

Swansea, L.

Ferrers, E.

Mansfield, E.

Teviot, L.

Ferrier, L.

Massereene and Ferrard, V.

Tranmire, L.

Trefgarne, L.

Vaux of Harrowden, L.

Westbury, L.

Trenchard, V.

Vernon, L.

Wise, L.

Tweedsmuir, L.

Vickers, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 23 not moved.]
Clauses 5 and 6 agreed to.
[Amendments Nos. 24 and 25 not moved.]
Clause 7 agreed to.
7.34 p.m.
Clause 8 [Conclusions and reports of the Commission]:
Lord JACQUES Lord JACQUES moved Amendment No. 26:
Page 12, line 26, at end insert—
(" (6) When in the opinion of the Commission a person has been put to unnecessary and unreasonable expense because the reference should never have been made to the Commission, the Secretary of State shall refund those expenses.")
The noble Lord said: In support of this amendment I have only two things to say, and I invite the Minister to reply to both points before he throws the amendment out. First, this amendment is based upon the Report of the Council on Tribunals on the Award of Costs at Statutory Inquiries. The date is 1964, and it is Command Paper 2471. So I think I am on safe ground. Secondly, I direct the attention of the Committee to the fact that the question is not whether a party has won his case, but whether the reference should ever have been made.
A person may have acted unreasonably, vexatiously or frivolously and have only himself to blame for the position in which he finds himself, and therefore be not entitled to costs, even though he has won his case. But it is unreasonable that a person should have to bear his costs in all circumstances. This amendment seeks to get a fair balance. I hope that on those grounds it will be accepted by the Minister. I beg to move.
Lord TREFGARNE: I do not have in front of me the report to which the noble Lord has referred, but I believe that the procedures and safeguards already incorporated into the Bill make this amendment unnecessary. No case will go before the commission unless the
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Director General has himself carried out his own preliminary investigation and has concluded, setting out his reasons in a published report, that there is an anticompetitive practice to be investigated and whether it is appropriate for him to make a reference to the commission. This procedure will ensure that no trivial or unnecessary cases are sent before the commission. If the amendment is accepted, firms might be tempted to divert the commission from their main task of deciding whether a practice was anticompetitive and, if so, whether it was against the public interest into considering quite separate arguments about costs—which, incidentally, would themselves increase the costs of the investigation. This, I believe, would be undesirable, especially since the safeguards and procedures in the Bill make it inconceivable that unnecessary cases would come before the commission. I hope the noble Lord will not press his amendment.
Lord MISHCON: Does the Minister really put that to the Committee as being an appropriate answer to the very lucid way in which my noble friend Lord Jacques put this matter? First of all, are we to have a new doctrine of the infallibility of Directors General, whoever they may be; and can it not be conceived that a Director wrongly has a reference before the Commission? Is it really seriously suggested by the Minister, for whom we have a profound respect and whose utterances are usually very serious, to those of us who know the court procedures and commission procedures, that proceedings are prolonged by an argument over costs? One knows perfectly well that such matters are dealt with only at the end of the commission's proceedings, and then a short submission is made as to the unreasonableness of the proceedings having been brought before the commission. I am sure that within a matter of a few seconds the commission could make up their minds.
The point about this is that the citizen can be put to expense. It is not a question, as my noble friend Lord Jacques put it so reasonably, of the citizen being put to expense when there is a slight balance

669
as to whether or not the case ought to have been brought. In order to get his expenses he would have to show that it was quite unreasonable for him to have been brought there. Would the Minister not think again about this matter?
Lord TREFGARNE: The amendment on the Marshalled List is not concerned simply with the question of costs. The noble Lord, Lord Mishcon, briefly referred to this in his closing sentences: it says—and I am reading now from the Marshalled List:
"When m the opinion of the Commission a person has been put to unnecessary and unreasonable expense because the reference should never have been made to the Commission, the Secretary of State shall refund those expenses".
Does the noble Lord, Lord Mishcon, or the noble Lord, Lord Jacques, not think that that would lead to endless arguments before the Commission as to whether or not the reference to the Commission was unnecessary or unreasonable? I should have thought that almost half the references, at least, might well, in the minds of those companies which have been referred, fall into that category—and in most cases, I should have thought, wrongly. I can see endless representations made to the Commission on this point by counsel learned in these matters.
However, I do not want to appear inflexible or unreasonable in these matters. I will consider this again and perhaps, if the noble Lord, Lord Jacques, would wish, we could refer it to the next stage of the Bill. But I want to say clearly that I am not in a position to give any firm undertaking of what the outcome of that consideration may be.
Lord MISHCON: Perhaps I may intervene again because the Minister was good enough to say that he would consider the matter again and because, too, he directed a question to me which I ought to answer. Surely the Minister is being rather pessimistic about the result of matters referred by the Director to the commission when he says that he thinks that possibly in half of the cases there would be an argument about their being unreasonably brought before the commission That implies that at least one-half of the cases before the commission would be unsuccessful.
Lord TREFGARNE: I said that they would be unreasonable in the minds of those referred.
Lord MISHCON: Quite obviously, this application for expenses cannot be made unless the commission has found that the case has been wrongly brought. That is why I said that one imagines, if the Minister is correct in his forecasts of the care that the Director will be taking, that there will be only a small percentage of cases where the Commission finds that it was wrong for the matter to have been brought before them. I do not want to delay the Committee, but I feel that where a citizen is brought before a tribunal—whoever be the party who does it; and we live in a democracy—in the event of it being found that that citizen was unnecessarily brought there, wrongly brought there, there ought to be the right of recovery of, at least, expenses so that the citizen, who in certain cases may be in very poor cirumstances, has the right to recovery if the Commission think it appropriate.
Lord TREFGARNE: Before the noble Lord, Lord Ponsonby of Shulbrede, addresses us or the noble Lord, Lord Jacques, decides what to do with his amendment, may I remind your Lordships that the Price Commision Act, as it now is, in which Lord Jacques and Lord Wallace of Coslany took notable part when it went through this House, did not provide for costs incurred by firms of inquiries by that Commission to be recovered by the Commission or by anyone else. We shall bear that in mind when considering this matter.
Baroness HORNSBY-SMITH: I am sure it would be with the agreement of the Committee in view of the fact that this amendment has almost exactly the same aim as my Amendment No. 27, that I should say a few words on this and not move Amendment No. 27. To say that there would be endless argument is no answer to somebody who has had to go to enormous expense and who has been proved guiltless of the representation made against him. We are not asking for something new and unreasonable but for something already enshrined. If an objector is successful in a town planning inquiry, he can get reimbursement of costs.

671
In other areas, under the Local Government Act, again costs can be made available.
Many of these arrangements stem from the report of the Council on Tribunals on the Award of Costs of Statutory Inquiries. Surely, this is equivalent to a statutory inquiry. If it goes to the Monopolies Commission, it will be a statutory inquiry. It seems to me to be grossly unfair. It is the old idea that industry can stand and pay anything; no matter, they can find the money. I take a little gleam of hope from the Minister's assurance that he will look into this before Report stage. It has been said time and again in this House how enormously expensive are some of these inquiries. If people are found to have offended, let them pay. But if they are completely cleared it is a different matter. They have to suffer already the damage that they have had from being sent to the Monopolies Commission on that product; they have already suffered the loss of (I do not know how many) man-hours of people on their staff preparing their evidence within the firm—which will not be counted for expenses. I hope sincerely that in justice, following the precedent of other cases, the Minister will look again at this before we come to Report stage.
Lord TREFGARNE: I have undertaken to look at this matter again. I must say that I do so with an open mind but without too much hope. I think that the arguments which I deployed in respect of the amendment of the noble Lord, Lord Jacques, are broadly the same as those I would deploy in respect of the amendment proposed by my noble friend, Lady Hornsby-Smith. I believe that this amendment was also discussed in another place and, if I have my information correct I think the amendment was withdrawn in the light of the assurances that were given. I am happy to think that my noble friend Lady Hornsby-Smith will feel able to do the same, as will the noble Lord, Lord Jacques, on his amendment now before the Committee.
Lord MOTTISTONE: I was going to speak in support of my noble friend Lady Hornsby-Smith on her amendment, but I understand that she has embodied it within this one. I support her amend
672
ment, but not that of noble Lords opposite. I might say two things. First, it is extraordinarily expensive. A company which is investigated by the Price Commission (which takes a shorter time than a monopolies reference normally will take) has been known to spend £1 million in goods and services in the shape of the services of their directors. I hope that somehow the Government will give attention to this very large sum of money which must be produced. With a Monopolies Commission inquiry it can be that a firm has to detach special staff for nine months. I am sure that my noble friend on the Front Bench is aware of these things even if other Government Ministers are not. I think it is something which needs to be taken seriously. I would make another point. My noble friend said that we had this difficulty in raising the matter with the previous Government over the Price Commission Act. I raised it and was sharply shot down by the noble Lord, Lord Jacques.
Lord PONSONBY of SHULBREDE: The point I wished to make earlier was, first, to thank the noble Lord, Lord Trefgarne, for saying he will look at this again, without holding out any great hope that he will be able to come back with a favourable answer. I would point out that the amendment moved by my noble friend Lord Jacques refers to unnecessary and unreasonable expense. It does not refer to the fact that the reference was unnecessary or unreasonable. What it states is that the reference should never have been made—an absolute situation. Therefore, I hope, when the noble Lord comes to look at this, that he will be able to take that into account.
Viscount MASSEREENE and FERRARD: May I make one or two short comments in support of both these amendments. I think it is unjust that these heavy costs would have to be borne by the innocent party. In industry today, employers have a hard enough time with VAT and all the other things that they have to deal with, without having to pay out a great expense after they are found to be innocent under this Bill. My noble friend on the Front Bench says that he will look at this matter with an open mind. I hope that his mind and that of his right honourable friend are 100 per cent. open when they look at this again.
Lord JACQUES: I think that I should first reply to the noble Lord, Lord Mottistone. I have no recollection of rejecting an amendment of this kind on the Bill during our term of office. I invite the noble Lord to produce the Hansard which supports the point he made.
The Minister made four points. I want to reply to them one by one, very briefly. First of all, he says in effect that this situation is never likely to arise. If this is never likely to arise, there is no harm in putting it in the Bill. Secondly, he said that the time of the commission would be wasted in the discussion of unreasonable expenses and costs. The Minister knows that a commission or a court first of all decide on the main issue, and the question of costs only arises after that. This is generally dealt with very briefly. Thirdly, he seemed to take objection to the words "unnecessary and unreasonable expense". But as my noble friend has pointed out to him, this applies only to the expenses. It does not apply to the reference; it is a reference which should never have been made. Those are the words used.
That wording is based upon the Council of Tribunal's report of which I have given the number. I invite the Minister to look up that report before he comes to the Report stage. The final point that he made was that he was quite happy to consider this before the Report stage. I thank him for that and I am very happy to accept it. But I give notice now that I shall put the amendment down again at the Report stage. If I find the matter has been dealt with in response to what has been said tonight, I shall withdraw it. At this stage, I withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
[Amendment No. 27 not moved.]
Clause 9 [Undertakings following report on competition reference]:
[Amendment No. 28 not moved.]
Clause 9 agreed to.
Clause 10 [Orders following report on competition reference]:
7.54 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 29:
Page 14, line 32, leave out ("substantially to the same effect as that practice") and insert ("similar in form and effect to the one so specified").
The noble Lord said: In the Committee stage in another place (on 29th November, at cols. 505 and 506 of Hansard of the other place) the Government accepted an amendment to Clause 6(5)(a) to improve the wording to read as it currently does in line 40 on page 9 of the Bill:
"similar in form and effect to the one so specified".
It would seem logical for a similar amendment to be made, as suggested in Amendment No. 29, to Clause 10(2)(a). I beg to move.
Lord TREFGARNE: I hope that the members of the Committee are sitting comfortably because we agree in principle to this amendment. I understand my noble friend's concern that art order made following a report on a competition reference should not extend to a course of conduct which was different in form from that specified in the report and we are therefore prepared to accept his amendment in principle. I am advised that the amendment, as drafted, is however slightly defective. But if my noble friend is prepared to withdraw his amendment now, I will give him an undertaking that a Government amendment will be tabled at Report stage to achieve the desired effect.
Lord WALLACE of COSLANY: I should like to congratulate the Minister on emerging as a human being once more. I am staggered! I want to go and celebrate, but I had better not do so.
Lord MOTTISTONE: I am grateful to my noble friend. I happily withdraw this amendment and look forward to seeing the Government amendment at Report stage.
Amendment, by leave, withdrawn.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 30:
Page 14, line 37, after (" Part 1") insert (" (excluding paragraphs 8, 9, 10 and 11) ").
The noble Baroness said: It may be for the convenience of the Committee if I speak to this amendment and the next. We took great pride in the fact that we have abolished the Price Commission. But it does appear that we have brought back by a somewhat circuitous route the reintroduction of a price control under this clause. Subsection (2) gives the Secretary of State the power to make an order following an adverse finding in the Monopolies and Mergers Commission prohibiting the practice concerned or for remedying adverse effects. It also gives him the power, by virtue of paragraphs 8 and 11 of Schedule 8 of the Fair Trading Act 1973, Appendix 2, to control prices.
If it is the intention of this Government to abolish price control, it seems rather absurd halfway through the Bill that we should negate the effect of abolishing the Price Commission and, having assured ourselves through the Monopolies Commission that the abuse has been removed, say we believe that prices should then find their own level. If this Government believe in the free market economy, then we think they should aim to remove distortions. This seems to us bringing back a price control through the back door. We believe that prices will be perfectly well regulated if the abuse in the practice is removed—which we fully agree with—and we do not think that the price control should be reinstated in this way. I beg to move.
Viscount TRENCHARD: If I have understood her correctly, I think my noble friend is under a misunderstanding. She is suggesting that under Clause 10(2) price control powers can be brought back. But we are deliberately excluding the route via the Fair Trading Act 1973, which is the subject of amendments to be moved by other people. In Clause 13 the Secretary of State can ask the Director General to cause an investigation. This would only be done in very rare cases. Clause 10(2) deals with prohibiting the anti-competitive practices. When it refers to the Fair Trading Act 1973 it excludes the part of it which could refer to prices. I may have got this wrong—I asked my noble friend to check it—but I think I have it right.
Lord TREFGARNE: Perhaps I might be allowed to deal with the general points
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referred to by my noble friend. Under Clause 10, order-making powers are available either to prohibit a practice or to remedy its adverse effects. Normally it will be sufficient to prohibit the practice, but, exceptionally, it may be necessary or desirable to take steps to remedy the adverse effects of the practice which had been specified by the commission either instead of or as well as prohibiting the practice. The former could arise where the practice is so deeply built into the fabric of the firm that it would be unrealistic to demand that it should cease, and the Secretary of State judges it sufficient to remedy the adverse effects by means of the order-making powers of the Fair Trading Act.
Another example could arise where a firm has successfully been employing an exclusionary practice and, as a result, there are few or no competitors. Even if the' firm is ordered to cease operating the practice, the adverse effects specified by the commission could continue at least for a transitional period until new firms have been able to enter the market. In these circumstances, too, it may be necessary or desirable to remedy the continuing adverse effects by means of an order. The order-making powers available are those listed in Part 1 of Schedule 8 of the Fair Trading Act 1973. The powers in paragraphs 8 to 11 of Part 1 of Schedule 8, which this amendment seeks to remove, apply to the regulation of prices and to such things as a requirement for firms to publish price lists and to adhere to them or to notify prices. These powers are, of course, already available to remedy adverse effects following a monopoly report by the commission and, since they are limited to the remedying of adverse effects specified by the commission in their report, it is in no way inconsistent with our general approach towards price control to retain these powers.
Baroness HORNSBY-SMITH: My noble friend will not expect me to welcome his reply, but in view of the explanation he has given, although I do not find it wholly satisfactory, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
On Question, Whether Clause 10 shall stand part of the Bill?
8.3 p.m.
Lord AIREDALE: As we have now reached the last clause under the heading of" Control of anti-competitive practices", I should like briefly to mention to your Lordships an example of what I believe to be a practice which this Bill is about. The electricity boards send out quarterly bills to their customers and between them they have access to just about every household in the United Kingdom. I have no doubt they assess their bills at a figure which passes on the cost of postage to the consumer. Some boards take the opportunity to enclose with their bills leaflets advertising the electrical appliances which they have for sale. They go further. I have in my hand a typical electricity bill, and at the foot of it is written in capital letters:
"For safe, guaranteed electrical repairs, call 'the experts'. Ring the number above for repairs or wiring by appointment".
For the private enterprise sector of the electrical industry to penetrate to this degree by direct mail advertising would cost them a fortune. Therefore, I should have thought that this practice which is being indulged in by some electricity boards amounts to an anti-competitive practice within the meaning of this Part of the Bill, and I think it might well be the subject of an investigation by the Director. I should be very interested in any comments the Government might have.
Lord TREFGARNE: That was a most interesting thought. At first sight, although I shall have to think about it, I would not have thought that it involves any restriction of competition, and indeed I am not sure that many of us will be in the most receptive mood towards advertising when we have just had our electricity bill. As one who has night storage heaters, I can say that is certainly the case, so far as I am concerned. However, it is for the Director General of Fair Trading to consider whether any restriction of competition is involved, and I will draw the noble Lord's remarks to his attention.
Lord MISHCON: Does the Minister realise, in these last observations, the
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whole doubt that comes in interpreting the very clause that he looked to; namely, Clause 2? I do not want to repeat previous speeches made by the noble Baroness, Lady Hornsby-Smith, and the ones that I ventured to make when we dealt with that interpretation; but does the Minister now see the difficulty one gets into without a proper interpretation or clarification of that clause?
Lord TREFGARNE: No, I am afraid not. I remain content with what I said about Clause 2.
Clause 10 agreed to.
Clause 11 [References of public bodies and certain other bodies corporate to the Commission]:
8.7 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 32:
Page 15, line 22, leave out (" or ").
The noble Lord said: I think it would be for the convenience of your Lordships if I were to take Amendments Nos. 32 and 34 together: they do run together. The purpose of Amendment No. 32 is quite simple. It is to enable the Secretary of State to make reference to the Commission concerned with prices being charged by nationalised industries or similar public bodies. If all other aspects of nationalised industries, as indicated in (a), (b) and (c), can be referred, surely one of the most important questions concerning consumer interest—namely, price—should be included?
I can understand the Government being a little sensitive over the price of gas, but prices charged to the consumer by nationalised industries are very much a question of public as well as governmental concern. In fact, I cannot understand why the reference to prices has been left out. It may be that the Government are "touchy" about the general question of price, and they have every reason to be so; but apart from that, this is quite a sensible and reasonable amendment and I am sure the Government are going to accept it. They seem to be changing their minds. I beg to move.
Viscount TRENCHARD: I take it that we are also dealing with Amendment

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No. 34. There is no question that the Government do not think that the prices charged by nationalised industries are an important matter. It is a question of how they shall be dealt with; and it is the view of the Government that we have, on the one hand, the objectives and the financial limits set by the sponsoring Minister of the nationalised body or other body referred to in this context in the Act and, on the other hand, the new powers to inquire into questions of cost and efficiency. We believe that those two between them deal with the question of prices in the nationalised or public body sector.
Therefore, we also believe that it would be unnecessary and would possibly lead to considerable conflict, if there were to be further powers for investigation into prices per se. Prices will stem from the costs and efficiency of the public body on the one hand and the objectives of that body on the other. Ministers, Secretaries of State, are responsible to Parliament for the objectives and financial limits and we have cases clearly in front of us at the present time. If we now look after the costs and efficiency area, I believe there is no need to pursue prices per se.
Lord WALLACE of COSLANY: That is quite a surprise. Am I to understand from the noble Viscount's remarks that, in future, the nationalised industries will deal with their own prices and that there will be no Government intervention whatever?—that Ministers may be responsible for the financial contributions of the Government towards such industries but they will have nothing to do with prices, which are a very important matter?—that it is for an industry itself to set its prices, so long as it makes a reasonable profit, et cetera? Is that the position?
Viscount TRENCHARD: The objectives set for different public bodies by their sponsoring Ministers vary to quite a high degree, but, as I have already stated, it is not a disregard for prices which the Government are suggesting. It is that the prices will be at the most reasonable level possible if costs and efficiency are right and if financial objectives are secured. There is also a danger, if you do not leave it to the sponsoring Minister with his objectives for the public body, that if
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there is further pressure on public bodies in regard to prices the result will be not only a conflict, but a shifting of the necessary cost from the consumer to the taxpayer, which, as I have said before, would be a clash between directions and objectives.
It is not impossible for the Secretary of State to have the Director General look into the question of nationalised or public body prices under Clause 13. though it is not anticipated that he would find it necessary to use those powers, because our stance is very definitely that through financial limits and general objectives, together with the securing of greater efficiency through this Bill, prices charged by public bodies as a whole will be as moderate in total as they can be, and that to interfere in the detailed pricing as between one product and another is to interfere with management, which we are trying very hard not to do.
Lord WALLACE of COSLANY: I am still a little baffled, because I think the Minister has said that if the efficiency and the costs of an industry are right, then the price is bound to be right. If it is not—
Viscount TRENCHARD: Together with the financial limits.
Lord WALLACE of COSLANY: The financial limits of Government interference. I cannot understand how the Government instructed the Gas Board to put up the price of gas, on the basis of what the Minister has said. We are assuming in this argument that prices must he right, but what will happen if, even in the judgment of the Secretary of State or the Minister concerned with the industry, they are not? Will the Minister tell them that they are naughty boys and then let them get away with it, or what will happen?
Viscount TRENCHARD: I think that I have answered that point. It is the financial limits and the objectives of the sponsoring Minister—and the noble Lord mentioned the question of gas—which will bear on prices. The other factors which will bear on prices are the costs and efficiency of the organisation. On prices as a whole, there is really no room between those two forces of the general objectives and financial limits on the one hand, and

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efficiency on the other. A lot has to be done to make sure that that efficiency is up to scratch in all areas.
Lord WALLACE of COSLANY: I am still not satisfied. It seems to me that we are now reaching the stage where the Government do not want to have anything to do with prices. I am not happy about the reply of the Minister, and we may give further consideration to this issue at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.16 p.m.
Lord AIREDALE Lord AIREDALE moved Amendment No. 33:
Page 15, line 23, leave out (" situation ") and insert (" enjoyed ").
The noble Lord said: On 21st November last year, the noble Lord, Lord Kings Norton, introduced an interesting short debate on the deterioration in the use of the English language. In the course of his speech, the noble Lord said this at columns 127 and 128 of the Official Report:
"In another place recently a Member referred to 'the crisis situation'. The word 'situation' was unnecessary. Rather worse, in a broadcast report of the Pope's visit to Mexico, I learned that in Mexico City there was 'an ongoing chaos situation', which meant, I suppose, 'continuing chaos'.".
What is sauce for the goose is sauce for the gander. A monopoly is a monopoly is a monopoly. The word "situation" adds nothing to "monopoly". I beg to move.
Lord MONSON: I warmly support this amendment. The noble Lord, Lord Airedale, is well-known for his zeal in upholding the correct use of the English language. What a pity it is that more noble Lords do not appear to share his concern. It is curious that this phrase ever crept into the Bill in the first place, but I suppose that in an era when even Ministers of the Crown can refer to "crisis situations" when their predecessors for generations past were content with the word "crises" perhaps it is only to be expected. At any rate, I hope that the noble Lord will stand firm on his amendment if the Government refuse to give way and, if he decides not to do so tonight for tactical reasons, then I hope that he will stand firm at a later stage.
Viscount BARRINGTON: May I in a very few words also support this amendment on the grounds that although the phrase "monopoly situation" could mean something, I do not believe it means anything in this Bill? If I were to say that the noble Lords on the Front Bench opposite had a monopoly of wisdom, or that the Liberal Party had a monopoly of virtue, I might be challenged on both points but one would know what was meant. The only sense of a monopoly situation then would be that the Front Bench was a monopoly situation, or that the Liberal Benches were a monopoly situation. Otherwise, I find it very difficult to understand that the word adds anything at all. I hope that the Minister will support this.
Viscount TRENCHARD: I should love to agree with this amendment. Unfortunately, I cannot be retroactive. The reason why I use that term, which is equally ghastly but in common use, is that, unfortunately, the term "monopoly situation" is one that is used in the Fair Trading Act, and it cannot be avoided. I sympathise with the noble Lord's desire to avoid what seems to be a very slipshod use of language. In the present case, however, I have to point out that "a monopoly situation" has a precise meaning which is defined in the Fair Trading Act and that to refer simply to "a monopoly" would not have the same effect. I therefore hope that, however reluctantly, the noble Lord will be able to withdraw his amendment rather than press me to act retroactively in relation to the 1973 Act.
Lord AIREDALE: I am always deeply depressed by being told that something which we all agree is nonsense must be perpetuated—because this mistake was made in the past, therefore it must go on being perpetuated forever. Perhaps the answer to the Minister's problem is to be found in his Amendment No. 69, which we have not yet dealt with:
"After Clause 21 Insert the following new Clause—(' . In Section 137(3) of the Fair Trading Act 1973…' there shall be inserted"
an amendment to that Act. Here is the opportunity. Let us amend "a monopoly situation" in the 1973 Act to "a monopoly" and then we shall get it right retroactively as well as now.
Viscount TRENCHARD: I will undertake to look into this before the Report stage, but the point is that there is a definition in that Act. I am not familiar with all its details, but the definition in the 1973 Act says, as I understand it, that "a monopoly situation" means X, Y and Z. As a result, I feel we shall find that it is impossible to change this. Perhaps, however, the noble Lord will accept my undertaking that, with a full wish to achieve his aim, I shall look into it and come back at Report stage to say whether we can get round this obstacle. However, I fear that I may have to confirm that we really cannot do so without quite a major amendment of the 1973 Act.
Viscount BARRINGTON: Before the noble Lord answers, may I make only one suggestion? If there is a difference between "a monopoly" and "a monopoly situation", the wording might be altered to "monopolistic situation", on the grounds of monopoly restrictive practices and so on. That would make an adjective instead of what I think the noble Viscount has at the back of his mind—this very confusing use of two long nouns which nobody quite understands. What the difference is we shall learn later on.
Lord AIREDALE: Of course I will respond to that generous offer by the Minister. I feel sure that he will be able to accommodate me, seeing that his Amendment No. 69 is an amendment to a definition in the 1973 Act. But for the present, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 34, 35 and 36 not moved].
8.24 p.m.
Lord TEVIOT Lord TEVIOT moved Amendment No. 37:
Page 16, line 2, leave out ("and").
The noble Lord said: I beg to move Amendment No. 37 and with it to take Amendments Nos. 38 and 39. These amendments are rather different to those I proposed on earlier clauses though I did refer to their implications loosely on Amendment No. 5 in Clause 2. I mentioned in the Second Reading debate that the operators of bus services are
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already subject to a considerable degree of control. The purpose of these amendments is to remove further controls which, in the light of what control already exists, are deemed unnecessary by the road passenger transport industry. Your Lordships will forgive MC if I spell out the present position.
Except for the London Transport Executive, all road transport undertakings are already subject to investigation of the service provided to consumers, and into efficiency and costs, through the Traffic Commissioners' powers in the interests of the public under Sections 135 and 136 of the Road Traffic Act 1960; and they will continue to be subject to similar powers in the case of local services if the 1979 Transport Bill, in its present form, becomes law.
The Passenger Transport Executives are subject to control by the Passenger Transport Authorities by virtue of the Transport Act 1968. I must say the verbiage is very dry! The metropolitan county councils act as Passenger Transport Authorities. District council bus undertakings are controlled by their respective councils in terms of the legislation by which they were established, and they are also subject to a measure of control by virtue of Section 1 of the Transport Act 1978, to which I now refer.
The Transport Act 1978 requires non-metropolitan county councils to prepare annual five-year rolling public transport plans, which must be published, and it specifically requires county councils and operators to co-operate and provide information to one another for the purpose of preparing and implementing these plans. Many operators also receive grants from county councils under that Act and are thus subject to policies determined by county councils.
Overall, there is the "control of the market place", in that bus operators are subject to competition from other forms of public and private transport. For instance, the car owner is so wedded to using his own car that he will use it disregarding its true cost.
The apparent original intention of subsection (3)(b) in this clause was to include publicly-owned undertakings such as "National Bus" but, as the wording is now, it includes all corporate bodies which

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provide a bus service. The only organisations that are not subject to this legislation are the small sole owners and partnerships, whereas limited companies are. The industry feels that this is unfair, and I would like to present an example. For instance, if one of these corporate bodies—we can call it John Bloggs and Co.—provides a one-day-a-week bus service from a village to a nearby town, it will, as the clause is worded, be subject to authorisation of a full investigation into the whole of its business. A company might also be involved in car sales, travel agency, haulage and, to the extent permitted by subsection (1), these could all be included in a reference to the commission. That may not be the intention, but it is what Clause 11 unquestionably authorises. It is all patently unfair, patently contrary to the spirit of the Bill, patently an inconsistency which should be removed.
Finally, I can see no good reason for making bus operators subject to further investigation when adequate controls already exist in other legislation, as I have said. It is accepted that there are special circumstances in respect of the London Transport Executive, because it is not subject to the controls that I have mentioned, but I do feel the Government should spare all other operators. Therefore I do urge my noble friend to look at this again and, if he does not like the wording, agree with the principle and come up with something more suitable at a later stage. I beg to move.
Viscount TRENCHARD: I should like to start where my noble friend Lord Teviot ended, on the question of the words "adequate control"—adequate control in terms of the purposes of this Bill. Of course, in almost every area of investigation under this Bill account is bound to have to be taken of laws and of policies and of other Acts—and the 1960 Act and the 1978 Act have been mentioned specifically. But, in relation to the 1960 Act, it should also be mentioned that the providers of bus services generally are often effectively protected from competition by the licensing provisions of the Road Traffic Act 1960. It is not the intention to cut across transport policies laid down or to question their detailed foundations, but it is thought that independent scrutiny should
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apply to these organisations as to any other.
In the case of the very small organisation noble Lords will remember the statement that I made on Second Reading on the £5 million turnover exclusion. My noble friend has already mentioned the inconsistency that this amendment would produce in relation to London Transport, but the justification for including in the clause bus undertakings from the point of view of the Bill we are considering, other than public corporations answerable to Ministers, is that the providers of bus services are protected from competition and that independent scrutiny should be allowed to operate. It is true that bus services will operate in a more competitive environment when the Transport Bill becomes law. The Traffic Commissioners will still be able to grant monopolies to the operators of local stage services and it is right to retain the power to examine them.
I want to end by saying that we are looking for the possibility (I do not think that it is likely to be used in many cases in this area) of scrutiny by a body right outside the transport world—I understand that I have made yet another mistake. The turnover cut-off for small businesses does not apply to references under Clause 11. I am sorry.
However, those are our general views and we hope very much that my noble friend will allow this independent body, looking at competition and the effects of lack of competition, to have a look at the public transport world and the private transport world.
Lord TEVIOT: I thank my noble friend very much for his considerate reply. He mentioned that there may be scrutiny outside the transport world and perhaps he is referring to a consumer association or the like who are looking into a particular bus service and who might make a complaint to the Director General of Fair Trading. If that happened, they could do it perfectly well now through the Passenger Transport Executive, which does not include London Transport. I purposely omitted London Transport from this amendment because that is responsible to the GLC only. They have plenty of scrutiny and this consumer organisation could well go to the Passenger Transport

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Executive, and I suggest that to do that with the Director General of Fair Trading could be counter-productive and create a lot of unnecessary red tape because they are perfectly adequately safeguarded now. However, I shall read what the noble Viscount has said and I am certainly not going to press this amendment now. I feel that either this or something similar would have been suitable, but in the light of what I have said I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 38 and 39 not moved.]
8.35 p.m.
Lord STANLEY of ALDERLEY Lord STANLEY of ALDERLEY moved Amendment No. 40:
Page 16, leave out lines 14 to 16.
The noble Lord said: The purpose of this amendment is to remove the agricultural marketing boards from being referred by the Secretary of State for Trade to the Monopolies and Mergers Commission in matters relating to (a) their efficiency and costs, (b) their services, and (c) a possible abuse of their monopoly position. I hope that the Government will find my amendment helpful, because I truly believe that they have not appreciated the difference between the agricultural marketing boards and other bodies affected by this Clause 11, who are such organisations as the nationalised industries and the water authorities. I hasten to add that the difference is not just because I happen to believe that the agricultural marketing boards have done a remarkably good job for both the farmer and the consumer, as opposed to the water boards in general, and Thames in particular, with whom I have to admit to having a personal vendetta.
I hope to convince the Committee of the true difference by looking at the three items referred to in the Bill in Clause 11(1) paragraphs (a), (b) and (c), and prove to your Lordships that in each case the present position of the agricultural marketing boards under the Minister of Agriculture, Fisheries and Food and the Agricultural Marketing Act 1958 is far more satisfactory not only to the farmer but particularly to the consumer than that proposed in this Bill under Clause 11. Clause 11(1)(a) allows the Secretary of State for Trade to refer the agricultural
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marketing boards to the Monopolies and Mergers Commission if he suspects inefficiency or high costs. This is totally unnecessary because these points are already covered by the Fair Trading Act which allows the Minister of Agriculture Fisheries and Food and the Secretary of State for Trade to refer the board to the Commission, as in this Bill, but also under the Agricultural Marketing Act the Minister of Agriculture can set up a reorganisation commission; and also the Minister can direct the board and also, if he thinks fit, the Minister can amend the scheme.
Apart from these extra statutory powers because the members of the agricultural marketing boards are responsible to their farmer members, great pressure is always put on them by their grass root farmers, on their economy and their efficiency. Farmers are not particularly well known for giving their money away for no return and, as an example, may I remind the Committee of the demise of the Tomato and Cucumber marketing boards and indeed the demise of the Egg Marketing Board, who failed to measure up to the efficiency and cost strictures put on them by their farmer members. It was the farmer members who acted in one case and the consumer committee in the other. In fact, I cannot see how I, as a ratepayer, could do the same thing to, say, the Thames Water Authority, which I hope reinforces my case that the agricultural marketing boards are totally different beasts from those which are referred to in Clause 11.
Clause 11(1)(b) says that the Secretary of State for Trade is allowed to refer matters relating to the service provided by the board to the Monopolies and Mergers Commission. Once again, under the Fair Trading Act this can be done by the Minister of Agriculture and the Secretary of State for Trade; but much more important is the fact that under the marketing Acts there is a consumers committee who watch the effects of that particular board, and they are no toothless wonders. I hope the Committee will believe this, rather than force me to read out the number of complaints and the ways in which these consumer committees have dealt with them over the past 30 years. However, if the Committee wishes it I shall be happy to delay the Committee for a considerable period of time, quoting them all.
Lastly, under Clause 11(1)(c) the Secretary of State for Trade may refer matters relating to possible abuse of the boards' monopoly position to the Monopolies and Mergers Commission. Once again under the Fair Trading Act the Minister of Agriculture and the Secretary of State for Trade can do this; also, so can the Minister of Agriculture under the Agriculture Marketing Act refer such an action to a committee of investigation under that Act. However, quite honestly I cannot envisage a situation where the Secretary of State for Trade would have to use his powers under this clause, because he already has these powers under Clauses 2 to 10 of this Bill, and I have not asked for the agricultural marketing boards to be taken out of those clauses, though quite privately I admit that I would have liked so to do, and if the Government would like to put down an amendment to do this I would be delighted to support it.
I hope I have proved that Clause 11 should not apply to the agricultural marketing boards. It is useless, it is redundant and it is bureaucratic nonsense. And although I admit that I cannot see it ever being used, it could make the unfortunate board appear all over again, by order of the Secretary of State for Trade, before the Monopolies and Mergers Commission, which, in the words of my noble friend Lord Trenchard, in his Second Reading speech, would have exactly the same effect as previously, and I quote:
"…having to beat off … the Price Commission … with its 500 staff and consultants to support it, was capable of asking enough questions to keep the minds of tens of thousands of managers away from wealth creating in the sector that used to so create ". [Official Report, 4/2/80, col. 1111.]
In this case, it would be the agricultural marketing boards which would have their minds taken off the marketing of, say, milk, which I understand is in surplus and at the moment badly needs selling.
As I understand it, one of the reasons why this Government were elected was to cut down on bureaucracy. I believe that, unbeknown to them, including the agricultural marketing boards in Clause 11 is doing just the opposite. I am reinforced in that view because when this clause was debated in another place my right honourable friend Sally Oppenheim on 22nd November in Committee B said:
"For the first time under this Bill the agricultural marketing boards and their practices will be capable of investigation ".
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Perhaps I should just say, "No comment", but I hope I have convinced the Committee that that just is not so, and that the present arrangements are very much more foolproof and embracing, both for the consumer and the farmer member of that particular board, than what is proposed under this Bill. I, therefore, very much hope that the Government will accept my amendments. I beg to move.
Baroness ELLIOT of HARWOOD: I rise to support my noble friend Lord Stanley. I stand here tonight rather in the position of being the mother of all marketing boards since it was my husband who in 1933 started the Milk Marketing Board and a great many others. Although some of them have not survived or have outlived their usefulness, I think it is perfectly true to say this. Last year, or it may have been the year before, when the EEC challenged whether our farmers should be able to continue with marketing hoards, they said we could if the dairy industry, the milk producers, would vote up to 80 per cent. in favour of the Milk Marketing Board. They voted 99·2 per cent. or 99·3 per cent. in favour. So it shows in any case that this has the wholehearted 100 per cent. support of the dairy industry.
I agree with all that my noble friend Lord Stanley has said. There are quite distinctive points about this which seem to me to put the marketing boards in a different category from the other boards we have been talking about. To begin with, the agricultural marketing boards are elected by producers. The members of the various boards are working in the different agricultural industries. They do not supply goods or services directly to the public. They are elected and watched over very carefully by the producers, and they are not directly responsible to the public. They are subject to investigation if anything they do or recommend is contrary to public interest. That is already in the Act. If the Minister receives a complaint under the Act of 1958 about the working of the Milk Marketing Board or any other board, the Minister can order an investigation to get the complaint dealt with. Under the Fair Trading Act 1973, the activities of any board can be referred to the Monopolies Commission. All these things are there; they do not require to

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be added to any Act of Parliament at all. Also, the consumer committees appointed under the agricultural Acts can periodically investigate any marketing board, and in case of recommendations in regard to any of their practices they can receive those criticisms and be guided by such criticisms, and in many cases will alter the practices.
Clause 11, if passed as it stands, simply duplicates existing powers. It would cause confusion and additional costs and complicate matters quite unnecessarily. I think it would be greatly important to this Bill, apart from its importance to the agricultural industry, if the Government could see their way to accepting the amendment which Lord Stanley and I—and I may say, Lord Cledwyn of Penrhos, who I am sorry is not here—support.
Viscount TRENCHARD: I think I may be able to help, at least to a degree. I do not want in any way to fail to support the views that my noble friends have expressed on the excellent job, in many ways, that the marketing boards have done and are doing, and the extensive machinery under which they operate. But there is extensive machinery in other areas, too. There are consumer councils, and indeed the noble Baroness, Lady Seear, will be speaking to an amendment in a moment in relation to consumer councils and consumer committees in nationalised industries.
If I may remind your Lordships once again, what this Bill is dealing with is anti-competitive practices. It is possible for these marketing boards—which, as my noble friend has just said, are elected by the producers and organised by the producers—to be engaged in anti-competitive practices in particular terms that they may give to particular customers for particular products. They are large and very powerful boards, and in some cases have near monopolies. In that situation, it is possible for anti-competitive practices to arise and to affect other and smaller organisations and companies to a major extent. So they have been included in Clause 11 because of their monopoly position under statute, in which respect they have some similarities with other bodies. They are not, of course, entirely similar for the reasons my noble friends have mentioned.
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As has been made clear in other contexts, the Fair Trading Act 1973 is not an ideal vehicle for examining the efficiency of public bodies, and Clause 11 is designed to remedy this deficiency. The fact that these boards are already subject to the Act of 1973, albeit at the initiative of Ministers rather than the Director General, is not an argument against including them in Clause 11. The Government, however, recognise that special provision for these boards was made under the Fair Trading Act and that similar procedures should be adopted in the Bill.
Consequently, amendments have already been accepted in another place which have the effect of extending the order-making powers of the Minister of Agriculture so that he can take appropriate action in respect of these boards following a report of the commission in exactly the same way as he can under the Fair Trading Act. At the same time, these amendments remove the Secretary of State's powers to make orders in respect of these boards. However, in view of the special position of the Ministers for agriculture in relation to agricultural marketing boards under the Act of 1958, the Government consider that it would be right to make some further amendments to this part of the Bill. Therefore, an amendment will be tabled on Report which will require the Secretary of State formally to consult the relevant agricultural Minister before a board is referred to the commission under Clause 11. An amendment will be tabled requiring similar consultation about the use of the Secretary of State's power of veto under Clauses 3 and 7 of the Bill. Therefore, I hope that my noble friends will be satisfied with that statement. We shall see whether we can give it positive form at the Report stage.
The Earl of CAITHNESS: I am very grateful for what my noble friend has said on this matter. However, he made one remark which I should like him to clarify. He said again that the Fair Trading Act was not the complete answer. However, there is the Agricultural Marketing Act, which covers the agricultural marketing boards and that, I have been informed, covers every situation raised by the Bill. Therefore, it is sheer duplication rather than covering any new ground. Perhaps he could confirm whether that is a correct interpretation?
Viscount TRENCHARD: I do not think that the Agricultural Marketing Acts, which indeed set these boards up in many cases as monopolies—although they contain many safeguards, many checks and balances, if that is the correct expression—bear on all the purposes of the Bill and on how these boards may act in relation to other traders. Therefore, I hope very much that a form of words along the lines that I have described will satisfy my noble friends and allow the ligitimate purposes of the Bill to apply to agricultural marketing boards with the minimum of duplication.
The Earl of CAITHNESS: Without wishing to press the point, but in order to satisfy the people who have given me help in this matter, can the Minister suggest one or two areas which would prove his point? Specific examples would be most useful.
Viscount TRENCHARD: I do not think that I can give specific examples other than the type that I have already given. This is the first time that we have had legislation on the statute book which bears on such matters as distortion of competition, for instance—I am thinking aloud to answer the question—in relation to how particular customers might be treated. Again, in each individual case, people interested in particular bodies or particular types of companies are visualising that the Director General of Fair Trading will be investigating them fully all the time and only them. That gives me the opportunity of saying to my noble friend, who quoted me my words in the Second Reading debate, that this organisation is set up with a small staff —much smaller than that of the Price Commission—and it is set up with the object of making competition work. My remarks on Second Reading were in relation to the Price Commission, which, in many respects, did the opposite.
Lord STANLEY of ALDERLEY: Of course I thank my noble friend for what he has said and I look forward to seeing the form of the amendment that he will bring forward at the next stage. I should like to mention one or two matters that I would like him to consider as regards this issue. First, I must point out again that Clause 11, as I see it, deals only with the internal arrangements of the board, and not the external arrangements.
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I know that I shall be picked up on Clause 11(1)(c) in a few minutes, but I have already said that I cannot ever see that happening unless the monopoly position that they occupy is dealt with in Clauses 3 to 10. I cannot see why that is there and I would be most grateful if my noble friend, when he refers it back to the department and thinks about it, would try to consider whether there would ever be a case when Clause 11(1)(c) would actually be used rather than another part of the Bill—Clauses 2 to 10—which, as I say, I have not taken out, although I would like to do so.
If there is any anti-competitive action or practice going on, I am sure my noble friend will find that he will catch us in Clauses 2 to 10. In any event, I am afraid that my noble friend has not convinced me that the new arrangements are any better than the old arrangements.
I should like to take your Lordships through one other point in this respect. I see a great duplication. Under the present system the Minister of Agriculture is in charge of his boards, we may say, through the Agricultural Marketing Act 1958. Under that Act we could get a position whereby the Secretary of State for Trade wakes up one morning and sees something happening in one of the agricultural marketing boards. He writes a letter to the Monopolies and Mergers Commission and says, "Off you go, we shall take you to them ". At the same time, at the other end of the corridor in Horseferry Road, the Minister of Agriculture, under the Agricultural Marketing Act, is doing exactly the same thing. I do not think that that will lead to a happy relationship.
On the other hand, the Minister of Agriculture may decide to take a different view and refer the matter to one of his committees of inquiry under the Agricultural Marketing Act. I do not know whether I have made myself clear to my noble friend, but I would like him to look at the duplication arising from both being in charge and neither being in charge and perhaps both doing separate things in their own particular way and not knowing what the other side is doing. If they both know what they are going to do by consultation with each other, why not leave things as they are at present? Apart from that, unless my noble friend

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has anything else to say at this moment —which I do not think he has—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.58 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 41:
Page 16, line 23, at end insert—
(" ( ) Any body established under any enactment to represent the interests of consumers of goods or services supplied or provided by any body falling within subsection (3) above may, in relation to that body, make representations to the Secretary of State at any time with regard to the matters specified in subsection (1) above and it shall be the duty of the Secretary of State to consider such representations with a view to making a reference to the Commission under this section and in the event of the Secretary of State not making such reference he shall report his decision to Parliament with reasons.").
The noble Baroness said: I am sure that by this time the noble Viscount, Lord Trenchard, is pining for an opportunity to agree to an amendment. I really believe that on this occasion I have given him the chance that he has been looking for. Amendment No. 41, which seeks to strengthen the position of the consumer councils in the nationalised industries, is surely an amendment which must appeal to the heart of the noble Viscount, Lord Trenchard. The amendment proposed illustrates the two major points that I made when speaking to a previous amendment. There can be no question—can there?—that the public is deeply concerned about prices in the nationalised industries. That has been demonstrated in the last few weeks. The public are concerned about the prices in the nationalised industries because the nationalised industries deal with commodities of the very first importance to the general public, as well as, indeed, to manufacturing industry. They are also, almost by definition, industries which are monopolistic. Therefore, they are industries of quite peculiar importance to people everywhere and to those of us who are concerned to see that prices are kept as low as is compatible with efficiency.
It is also well understood and well agreed that, despite efforts to make consumer councils effective, we have never really found a way in this country to protect the consumer in relation to the nationalised industry. I do not believe
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that anybody, however strong a supporter of nationalisation—and I am not a strong supporter of nationalisation—believes that the consumer councils have been a satisfactory answer to the problems of the consumer vis-à-vis the nationalised industries.
In this legislation we have an opportunity to strengthen the position of the consumer councils in an area of the very greatest possible importance. In this legislation the Government have recognised that action is needed in relation to the nationalised industries. But surely they must also recognise that the consumers want representation; they want to be able to take action through those bodies which are set up for their peculiar benefit.
As I said earlier, we want to ensure that consumer representatives are able to have a more effective say in what happens. We also want to ensure that Members of Parliament are able to have a more effective say in prices in these peculiarly sensitive areas. Therefore, in this amendment I propose, first, that the consumer councils should have the right to bring a case to the attention of the Secretary of State which, in their view, needs investigation and, secondly, that if the Secretary of State does not act on the suggestion from the consumer councils, he has to explain to Parliament why he is not so acting, which gives Members of Parliament an opportunity to challenge and press the Secretary of State on reasons for not taking up a matter which has been raised by the consumer councils.
I really believe that, if this amendment could be accepted, it would make Clause 11 far more effective; it would give real teeth to the consumer councils, which they have lacked in the past; and it would give a real opportunity for Members of Parliament to play an effective part in the control of prices in the nationalised industries. I beg to move.
Viscount TRENCHARD: That was a heart-moving appeal to accept an amendment—how I wish I could respond to it, and respond adequately. However, if I read the amendment correctly, it would impose an obligation on the Secretary of State to consider such representations specially. The future of the nationalised industries' consumer councils is under

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review. I do not want that statement to be taken as being a critical one. New Governments review many things and they may well want to strengthen rather than weaken. I do not want that statement to be regarded as being anything other than entirely neutral.
We recognise the good work carried out by a number of dedicated people in these areas. We do not think that the present legislation is the appropriate vehicle for setting out their rights of representation to the Government. The Government would, of course, very carefully consider any representations which they received from nationalised industries and their consumer councils about an industry's costs and efficiency, service provided or possible abuse of a monopoly situation. However, I think that that makes it unnecessary to impose a requirement on the Secretary of State to consider such representations. For the same reason, I do not consider that he should be obliged to give his reasons to Parliament should he, in the event, decide against making a reference. In any case, Ministers are accountable to Parliament for their decisions. Therefore, for those reasons I must resist this amendment. I have the slight feeling from the noble
Baroness that she wanted to have a look at the good work that the nationalised industries' consumer councils do, and thus put them on a stronger footing. I suggest once more that the present legislation is not the appropriate vehicle for setting out their rights of representation to the Government generally, and that in the context of this Bill, therefore, there is no need for the amendment.
Lord PONSONBY of SHULBREDE: I am sorry that the noble Viscount takes that attitude to this amendment, for it seems to us that this is a very worthwhile amendment and I had hoped that, in fact, we would have a constructive response to it from the noble Viscount.
Baroness SPEAR: I am very sorry indeed that the noble Viscount is unable to accept the amendment. In the circumstances, I fear that I must test the opinion of the Committee.
9.6 p.m.
On Question, Whether the said Amendment (No. 41) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 77.

CONTENTS

Airedale, L.

Grey, E. [Teller.]

Ross of Marnock, L.

Barrington, V.

Hanworth, V.

Seear, B. [Teller.]

Beaumont of Whitley, L.

Houghton of Sowerby, L.

Segal, L.

Blease, L.

Kaldor, L.

Simon, V.

Brooks of Tremorfa, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

David, B.

Llewelyn-Davies of Hastoe, B.

Stewart of Fulham, L.

Davies of Leek, L.

McNair, L.

Stone, L.

Davies of Penrhys, L.

Maelor, L.

Strabolgi, L.

Elwyn-Jones, L.

Mishcon, L.

Taylor of Blackburn, L.

Evans of Claughton, L.

Oram, L.

Taylor of Gryfe, L.

Galpern, L.

Pitt of Hampstead, L.

Wallace of Coslany, L.

Gladwyn, L.

Ponsonby of Shulbrede, L.

White, B.

Glenamara, L.

Ritchie-Calder, L.

Winstanley, L.

Gregson, L.

NOT-CONTENTS

Airey of Abingdon, B.

Exeter, M.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Bellwin, L.

Fairfax of Cameron, L.

Harvey of Tasburgh, L.

Bessborough, E.

Faithfull, B.

Hereford, V.

Caithness, E.

Falkland, V.

Hives, L.

Cockfield, L.

Falmouth, V.

Holderness, L.

Cork and Orrery, E.

Ferrers, E.

Home of the Hirsel, L.

Craigavon, V.

Gainford, L.

Hornsby-Smith, B.

Crathorne, L.

Galloway, E.

Hunt of Fawley, L.

Cullen of Ashbourne, L.

Glasgow, E.

Inglewood, L.

de Clifford, L.

Gray, L.

Kilmany, L.

De La Warr, E.

Greenway, L.

Long, V.

Denham, L. [Teller.]

Gridley, L.

Lucas of Chilworth, L.

Denman, L.

Grimston of Westbury, L.

Lyell, L.

Drumalbyn, L.

Hacking, L.

Mackay of Clashfern, L.

Elliot of Harwood, B.

Macleod of Borve, B.

St. Aldwyn, E.

Strathcona and Mount Royal, L.

Mancroft, L.

St. Davids, V.

Stuart of Findhorn, V.

Mansfield, E.

St. Germans, E.

Swansea, L.

Margadale, L.

St. Just, L.

Swinfen, L.

Massereene and Ferrard, V.

Sandys, L. [Teller.]

Trefgarne, L.

Mottistone, L.

Selkirk, E.

Trenchard, V.

Mountgarret, V.

Sempill, Ly.

Vaux of Harrowden, L.

Mowbray and Stourton, L.

Skelmersdale, L.

Vernon, L.

Murton of Lindisfarne, L.

Spens, L.

Westbury, L.

Newall, L.

Stanley of Alderley, L.

Wise, L.

Orkney, E.

Strathclyde, L.

Young, B.

Rochdale, V.

On Question, amendments agreed to.

Clause 11 agreed to.
Clause 12 [Orders following report under section 11]:
9.14 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 42:
Page 18, line 33, leave out ("excluding paragraph 10").
The noble Lord said: This and the following two amendments are concerned with the same subject, and I would say in parenthesis that we are now starting a series of amendments all dealing with the question of prices and all trying to put back into the Bill some guts, so that we have an adequate mechanism for dealing with prices. This amendment and Nos. 43 and 44 are aimed at retaining for the Minister the ability to regulate prices as described in Section 10 of the Fair Trading Act 1973. Our feeling is that the Bill as drafted is inadequate in this field and, as I say, these amendments would go some way to put some guts into the Bill.
Viscount TRENCHARD: I will try in my answer to emulate the brevity with which the noble Lord, Lord Ponsonby of Shulbrede, moved the amendment. My comments on this are in line with those I made earlier; namely, that for public body investigations or references, we believe a combination of the financial limits and general objectives set by sponsoring Ministers to nationalised industries, and investigations into the efficiency of the organisation under Clause 12, are more than adequate to cope with any possible problems and that to bring back—which I think is what the amendment seeks to do—part of the price-regulating powers is the opposite of the Government's objective.
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These amendments have already been considered in another place at considerable length and the Government advised against their acceptance, and the reasons are still valid. The order-making powers in Clause 12 relate only to investigations into nationalised industries and the other bodies described in Clause 11(3). These investigations will be concerned primarily with efficiency and the commission's reports will be available to sponsoring Ministers, who will be able to take account of the findings when they come to determine the financial targets of the bodies concerned. If one were to go further, one would cause a conflict between financial targets and pricing, and if efficiency is properly investigated and improved and financial targets are set by sponsoring Ministers, there will be no need to act on prices.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remarks. I persist with my amendment, but will not press it to a Division.
On Question, Amendment negatived.
[Amendments Nos. 43 and 44 not moved.]
Clause 12 agreed to.
Clause 13 [Investigations of prices directed by Secretary of State]:
9.20 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 45:
Page 19, line 1, leave out from beginning to ("under") in line 5 and insert—
(" (1) The Director may carry out an investigation into any price which appears to him to be of public concern with a view to providing the Secretary of State with information, recommendations and observations relating to that price; but an investigtion").
The noble Baroness said: The purpose of the amendment is to strengthen the powers of the Director General so that in a matter of public concern he does not have to wait

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for the direction of the Secretary of State, but can in fact take the initiative. This amendment should be considered in conjunction with Amendments Nos. 46 and 47, all of which together constitute the total amendment that I propose. I beg to move.
Lord AIREDALE: I should like to support the amendment. It seems to me to be fairly clear that people making complaints about prices will complain to the Director, because the Director will be the person who holds the investigation, if there is to be one. So in practice, the Director will receive the complaint, look at it, and decide whether an investigation is desirable. He will then write to the Secretary of State and say, I think this investigation is desirable. Would you care to direct me to make one, because I cannot make one under the Act as it now stands unless you direct me to do so. "The Secretary of State, having faith in his Director General of Fair Trading, will almost automatically say, "Yes, if you, having looked at it, think an investigation should be made, you go ahead and make one—and I formally direct you to do so ".
This is rather a waste of time, shuffling between the Director and the Secretary of State and back again. Surely the Director will always be a person worth his or her salt who is capable of reaching a sensible conclusion on whether an investigation should take place; and that is the situation which the amendment would achieve. I hope that the Government will think it a sensible and excellent amendment. Of course, if the Secretary of State differs from the Director and wants an investigation which the Director is not particularly keen to conduct, under, I think, subsection (2), the Secretary of State can still direct the Director to investigate. So nothing would be lost on that score.
Viscount TRENCHARD: The Government's view is that Clause 13 will be needed only in very exceptional cases. If indeed we concentrate both on making competition work—I have said this several times already today—and on anti-competitive practices, the market will take care of prices. At the beginning of today's Committee stage, we had a long interchange which I do not propose to repeat on the question of the degree to which
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Price Commissions or their equivalents in this or other countries had in fact affected the level of prices.
We agree that there are some areas where, due to an anti-competitive situation, there is the risk not only of results relating to prices but of other unfortunate results, and the Bill is designed to go to the root of the causes, rather than to the symptoms. We do not believe that the suppression of the symptoms has been successful. We do not believe that Clause 13 will need to be used, except in very exceptional circumstances. Therefore all the amendments of the noble Baroness—she may wish to speak to each of them; she mentioned two other amendments—are based on the presumption that a great deal of price reference work will be necessary. We do not think that it will be. The noble Baroness thinks that the market place has changed, but we do not believe that it has changed in principle. It has changed in many details, but before the days of "motorbility" of customers—probably in Adam Smith's day—there were just as many opportunities for people to corner a particular section of a local market as is the case today when competition relates not only to price but to many other factors, and is very often international as well as national.
Again, we believe the proof lies in the profit margins of industry, both at times when we have had price control and at times when we have not, and we believe that independent surveys bear that out. So I very much hope that noble Lords opposite will not press these amendments.
The noble Lord, Lord Airedale, I think suggested that the Director of Fair Trading would be the main person to receive complaints about prices. We do not see it that way. We believe the Director of Fair Trading will be principally engaged, so far as this Bill is concerned, on the anti-competitive practices, and that if he gets to the root causes the prices question will not arise. We quite specifically do not want him to be a Price Commission, and we quite specifically, therefore, regard Clause 13 as the exceptional safety valve, where someone can go to the Secretary of State to make a complaint. It may be that in some instances the Director General may himself make a complaint, but we believe that the very exceptional case will have to

703
be considered by the Secretary of State before the Office of Fair Trading moves into prices under this clause.
Baroness SEEAR: This, of course, is the heart of the disagreement between us. We on this side of the Committee do not share the Minister's optimism as to the extent to which the measures proposed are in fact going to deal quickly enough (though maybe in the very long run) with the prices situation which is causing the very greatest concern at the present time, both in general and in particular localities. We therefore believe that it is necessary for the Director General to have a function in relation to prices which will be something more than the very exceptional occasion when he has to intervene. However, at this late hour, with the plain unbalance between the two sides of your Lordships' Committee, I do not propose to press this to a Division at the present time, but I reserve the right to bring the matter up again at the Report stage.
Lord ROSS of MARNOCK: I sincerely hope this question is brought up again at the Report stage, for the simple reason that it is of very considerable importance. Here we seek to give some real power to the organisation that will replace the Price Commission and which will do a better job, although they are going to have very few people with which to do it. I have looked at the number of people who are going to be employed. For all these things that we have been talking about all day, I think the number to be employed is about 80. I heard one Minister today talking about the Price Commission being cosmetic. This is not even pale whitewash. Here we have a chance to give power to the Director himself to carry out an investigation; hut, no, he must get the permission or the direction from the Secretary of State also.
What price is causing us most trouble at the present time? It is gas—gas prices. Do you think the Secretary of State is going to tell the Director to start an investigation into that? After all, it was a Minister who came to that Dispatch Box and told us that gas prices were going up, and that they were going up at a rate and to a degree which was not agreed with the Gas Council itself. It was the
704
Minister who was putting it up. Can we expect the Minister, then, to order an investigation into himself? This is the weakness. Some residual power must therefore be given, I think, to the Director to carry out an investigation into these special things. The special things are important, but at the present moment the special things are tied up, and the people responsible are not the nationalised industries in two particular cases, but the Ministers themselves. Who is going to investigate the Ministers? It is an interesting question. Unless we get an answer to it, I do not think there is any satisfaction in this piece of whitewash.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 and 47 not moved.]
9.30 p.m.
Lord WALLACE OF COSLANY Lord WALLACE OF COSLANY moved Amendment No. 48:
Page 19, line 12, leave out ("major").
The noble Lord said: My amendment strikes at the heart of the differences between the two sides of this Chamber. If there was ever a bunch of artful dodgers, the Government are certainly that so far as this particular clause is concerned. The clause as drafted is heavily weighted against reference to the Secretary of State by providing too many excuses. For the Secretary of State to be satisfied of "public concern" is quite sufficient. What more do they want? The clause is so widely drawn that it is almost impossible to make any reference out of it. First, the Secretary of State has not only to be satisfied on public concern but on "major public concern". What constitutes "major public concern"? Do we have to have marches on No. 10 or riots in Whitehall? What do they mean by that? Then we have to have "general economic importance". Not just "economic" but "general". What precisely does "general economic importance" mean? How vague can you get? And that is not the end. The Secretary of State has to decide that the consumers are affected by "the price"—not the charge. But they have to be "significantly affected ". If there was ever a clear example of dodging responsibility, this is it.
Let us face it. Having got rid of the Price Commission, every attempt is being

705
made to avoid responsibility on prices. The noble Viscount, Lord Trenchard, has admitted this. They do not want to have anything to do with prices. The Secretary of State has no responsibility for prices. Some Minister or some junior Minister in some remote corner will have responsibility; but who does what, nobody knows. I think this is a disgraceful piece of legislation so far as this clause is concerned. Public concern, certainly! What more do they want? I state definitely that, in dodging this issue, this is an act of clear political cowardice. I do not expect to get any satisfaction from the Minister. Neither does the housewife, nor the country. The Government do not intend to do anything about prices, except perhaps to put them up where they have some responsibility. This is absolutely disgraceful. I do not expect to get any undertaking, and in view of the lateness of the hour, there will be no vote. But I warn the Minister now that when we come to the Report stage we shall have another battle on this question because this is a vital issue in the country and not only in the House of Commons and the House of Lords. I beg to move.
Viscount TRENCHARD: On a point of detail, first I think that the noble Lord, Lord Wallace of Coslany, has implied that the Bill means that the Secretary of State must be satisfied under Clause 13(2)(a) and (b). This is not true. There is an "or" between (a) and (b). That is a detail. In general, I have to return Lord Wallace's compliments. I believe that the noble Lord himself is the artful dodger. I believe that he suggested that we were a bunch of artful dodgers. If he did not, it may be my hearing—
Lord WALLACE of COSLANY: I did.
Viscount TRENCHARD: Then I return the compliment. The form of artful dodging that the noble Lord indulges in is in paying not one bit of attention to the substantial evidence which we discussed earlier this afternoon that, in fact, the Price Commission had little, almost negligible, effect on prices and damaged business to a major degree. I explained why that was not a contradiction. I am afraid that noble Lords opposite have never understood business and that is
706
why they have nearly ruined it. How can it be explained, as I said earlier, that there are no huge profit margins in big companies or small companies in any situation? Nor will there be as a result of our already fait accompli since we announced the abolition of the Price Commission. I will not go over all the international evidence again, but the artful dodgers are opposite. They do not listen and nor do they pay any attention to the facts.
Lord WALLACE of COSLANY: Tempers are getting a little bit frayed, are they not?
Viscount TRENCHARD: Yes.
Lord WALLACE of COSLANY: I am very surprised. The noble Viscount says, "noble Lords on the opposite side" know nothing about business. I happen to have been in my career an office manager, getting staff working and consoling my typists when the management came in, after extremely heavy lunches, late in the afternoon and intended to dictate their letters. We are the people who kept the businesses going. The people out wining and dining for business reasons on business expenses were not those actually keeping the business going. I resent any reference that has been made. This amendment is nothing whatever to do with the Price Commission. This amendment is just giving the Secretary of State responsibility to deal with public concern. That is what he is there for. With all the other provisions, the Government are really dodging the issue. As for artful dodgers, I would not be in competition with that bunch. They have the know-how; I have not. Under the circumstances—I have enjoyed myself—
Viscount TRENCHARD: Steady. I was resisting replying.
Lord WALLACE of COSLANY: That is all right. Under the circumstances —the hour is late and my bedtime is nigh—I will withdraw the amendment now but I give warning that further shots will be fired on the Report stage. I shall bring it in again.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
9.38 p.m.
Lord MOTTISTONE Lord MOTTISTONE: moved Amendment No. 50:
Page 19, line 17, at end insert—
(" ( ) The Secretary of State shall not give a direction under this section until—

(a) he has given to the person or persons whose price is to be investigated notice of the proposed investigation together with an indication of the goods or services to which the investigation is to relate; and

(b) at least fourteen days have elapsed since such notice was given ").

The noble Lord said: The purpose of this amendment is to allow time for representations to be made by a company whose prices might be investigated. The procedure might prevent unnecessary investigations arising from misunderstandings and would provide companies with an opportunity to draw attention to any factors which they believe are relevant in weighing up the potential advantages and benefits of such an inquiry. I beg to move Amendment No. 50.
Lord TREFGARNE: I am afraid it would be impracticable for the Secretary of State to give the notice required by my noble friend's amendment. An investigation might well involve a whole multitude of manufacturers, suppliers of services or distributors and it would not be realistic to expect all these parties to receive notice of the proposed investigation. If, having announced his intention to launch an investigation under Clause 13, the Secretary of State became convinced through representations received that his original decision needed to be modified, it would be open to him to revoke or vary the investigation under Clause 13(3). In any case, it is important to remember that the powers under Clause 13 are to be used only exceptionally. There is, therefore, no question of investigations under this provision imposing major burdens on industry or commerce. In the light of that last point, particularly, I hope that my noble friend will see fit not to press his amendment.
Lord MOTTISTONE: I thank my noble friend for his very clear reply, which has clarified the situation well. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord AIREDALE Lord AIREDALE moved Amendment No. 51:
Page 19, line 19, leave out from ("not") to ("having") in line 22 and insert ("vary a direction unless he issatisfied that he can give the direction as varied ").
The noble Lord said: This is a purely drafting amendment. This subsection is not the only one in the Bill which seems to me to say what it has to say in more words than it needs in which to say it. I have ventured to preserve the meaning of the subsection intact but to convey the message in rather fewer words. I beg to move.
Lord TREFGARNE: The noble Lord—I am almost inclined to call him my noble friend after all these exchanges—has made an appeal for simplified drafting in legislation which we have heard many times in this Chamber. His appeal will be welcomed by everyone and particularly, I am sure, by parliamentary counsel who will take careful note of what the noble Lord has said. The present text of Clause 13(3), however, we think makes absolutely clear the Government's intention, and for that reason I believe the amendment is unnecessary and I hope the noble Lord will not press it.
Lorc AIREDALE: I shall not press it, but it is not unnecessary if it makes the meaning as clear in fewer words, because we want to save people having to read more words in Acts of Parliament if we can. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The CHAIRMAN of COMMITTEES (Lord Aberdare): The next amendment I have to call is No. 52. I understand there is a misprint here. This amendment is in the name of the noble Baroness, Lady Seear.
9.43 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 52:
Page 19, line 30, leave out subsection (5) and insert—
(" (5) As soon as practicable after the completion of an investigation made under this section, the Director shall prepare a report—

(a) stating the findings of fact made by him in the course of that investigation;

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(b) recommending whether, in his opinion, the price in question should be wholly or partly restricted and as to the duration of any recommended restriction;

(c) making such additional recommendations or observations (if any) as the Director considers should be made to the Secretary of State as a result of the investigation; and

(d) stating the Director's reasons for making his recommendations.

( ) A report referred to in subsection (5) above, shall be submitted by the Director to the Secretary of State, and where a direction has been made under subsection (2) above shall be so submitted before the expiry of a period which shall be specified for this purpose in such direction (whether as originally given or as varied under subsection (3) above).
( ) On the date that a report is submitted to the Secretary of State in accordance with preceding subsection (hereafter in this Act referred to, in relation to that report, as "the publication date").

(a) the Director shall give a copy of the report to the person by whom the price or charge which is the subject of the investigation is made (hereafter in this Act referred to, in relation to that price or charge, as "the relevant person") and shall publish the report in such manner as he considers appropriate; and

(b) the Secretary of State shall lay a copy of the report before each House of Parliament.

( ) If such a report is presented by command of Her Majesty to either House of Parliament otherwise than at or during the time of a sitting of that House, the presentation of the report shall for the purposes of this section be treated as the laying of a copy of it before that House by the Secretary of State.").
The noble Baroness said: This amendment is once again an attempt to give greater publicity to the reports of the Director General and to give greater parliamentary control over the results of those reports. I fully expect the same response that we have had to all the previous amendments from the Government Bench. It is quite clear they are not interested in bringing more control by the representatives of the people, elected or in consumer councils, to bear on the whole question of monopolies and prices. This amendment is intended to give the public fuller information about what is happening and to allow Parliament to have more influence on the outcome of those reports. I beg to move.
Lord TREFGARNE: I think that my noble friend Lord Trenchard really deployed the major arguments against this amendment and, frankly, I have precious little to add to what he has said. May I just say this: that because all investiga-
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tions under Clause 13 will be exceptional and limited to prices of major public concern, the Director General will not retain a large staff for this purpose. On the rare occasions when investigations do take place, he will probably have to engage consultants to assist him. If, as a result of price investigations, there is evidence that a price is unjustified, the appropriate follow-up action could be through the use of the competition legislation; for example, the earlier provisions of this Bill dealing with anti-competitive practices or action under the Fair Trading Act. I do not really think there is much more I can say beyond that.
Baroness SEEAR: Once again, I shall withdraw this amendment at this stage, but with the prospect of bringing it forward again later at Report stage.
Amendment, by leave, withdrawn.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 53:
Page 19, line 41, at end insert (";and
(c) containing such recommendation for the restraint or reduction in the price specified as the Director considers justified.").
The noble Lord said: Amendments Nos. 53 and 55 are, again, concerned with reinforcing the prices aspects of Clause 13. We have discussed this matter at some length and I do not intend to detain the Committee at this late-ish hour with a further long speech. Therefore, I beg to move.
Lord TREFGARNE: I shall try to follow the fine example of the noble Lord and speak very briefly. The purpose of these amendments is, we think, totally at variance with the underlying intention of Clause 13. The aim of investigations made under the clause is to explore the circumstances behind a particular price issue of major public concern, and to produce a public report 'on the facts. It is not the purpose of a price investigation to replace the mechanism of competition. If there is effective competition, then there should be no need to restrict prices; and that is a point which I think my noble friend Lord Trenchard has made a number of times already this evening. If a price investigation reveals evidence that a price is unjustified, the appropriate follow-up action is through the use of competition legislation; for example, under

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the Fair Trading Act or the earlier provisions of this Bill dealing with anti-competitive prices. So I hope that the noble Lord will not feel inclined to press this amendment or No. 55.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remark. I shall not press the amendment to a Division.
On Question, amendment negatived.
[Amendments Nos. 54 and 55 not moved.]
Clause 13 agreed to.
[Amendments Nos. 56 and 57 not moved.]
Clauses 14 and 15 agreed to.
Clause 16 [General Provisions as to reports]:
9.48 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 58:
Page 21, line 36, at end insert—
(" ( ) Before reports are made under sections 3(10), 8(1), 11(8) and 13(5) above, the Director or the Commission shall make available to the person or persons who are the main subject of the report a final draft of it. The person or persons concerned may within 72 hours make representations to the Director or to the Commission with regard to accuracy both of the detail and of the general sense of the report. In the event that agreement cannot be reached on any corrections to the report that may appear necessary a note to this effect shall be appended to the report.")'
The noble Lord said: One of the most serious difficulties that companies had with Price Commission inquiries was that they were conducted quickly by staff with limited experience of business and no knowledge of the company concerned. Your Lordships who were here when we were discussing Clause 1 will have heard very expert advice on that point by my noble friend Lord Boyd-Carpenter. There can also be difficulty over conflicting needs. There is the need for speed in inquiries, so as to cut to a minimum the massive diversion of effort by company management, with its resultant cost, which can quite readily run to millions of pounds. On the other hand, there is an equally pressing need for the inquiry to be done sufficiently thoroughly and expertly to give all concerned a truly fair picture of the relevant state of affairs.
This is a genuine problem which applies whenever you have a public body which is required to so something quickly, and whose staffing is limited, by whatever means. To that extent, it is not a political issue, though the Price Commission, which was perhaps wrongly conceived by noble Lords opposite, pointed this out particularly clearly. Because the Price Commission was required to give emphasis to speed, experience showed that some of its reports tended not to make a fair and accurate comment, which was very unfair on the companies that were investigated. The purpose of my amendment, therefore, is to give companies being investigated a final
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say about the overall accuracy of the various types of report which may be made under this Bill. The amendment does not seek to prolong any argument unduly and, in the last resort, merely seeks to make provision for the recording of such an argument where one takes place. I hope that that point was taken up by the Government and noted by them when they read my amendment, for I suggest that that makes it more tolerable for them to accept. Otherwise, it could well be very difficult for them. I therefore hope very much that the Government will be disposed to give favourable consideration to Amendment No. 58, which I beg to move,
9.51 p.m.
Lord TREFGARNE: I am conscious of the fact that we have accepted only one amendment this evening. Although I will not reveal what is in my brief for the rest of the evening, I am afraid that I cannot add to that small tally with this one. I can, however, assure the Committee that where matters of fact are concerned the regular practice of the commission is to check all factual material concerning companies with the companies themselves. This procedure will be followed also in investigations under the Bill. The Director General will follow a similar procedure in relation to his preliminary investigations and report.
So far as the conclusions of the commission are concerned, it is of course right that firms should have a full opportunity to make their case to the commission. I understand that the procedure of the commission is to advise the firms concerned in writing of the issues which they consider relevant and of any complaints against them. Firms are given every opportunity to comment. The Director General's own investigations into anti-competitive practices are intended to be quick, preliminary and informal. Nevertheless, firms under investigation will have ample opportunity to make their views known. But under the legislation the commission and the Director General must ultimately be responsible for their own conclusions.
The procedure suggested in the amendment is akin, I suggest, to permitting the

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parties to a case in a court of law to be given the right to hear the judgment three days in advance and to have the opportunity to overturn it before it has been delivered. I hope your Lordships will agree that that is not appropriate.
Earl DE LA WARR: I understood that the purpose of the amendment was to enable the facts to be ascertained and not the judgment. I suggest—and I do so from very considerable experience of no fewer than two Price Commission investigations—that an investigation like this can, with the best will in the world, very easily fall into the trap of failing, in the short time that it has available to it, to pick up all the facts. I believe therefore that it is enormously for the benefit of the Director to have the opportunity to discuss with the firm concerned whether all the facts are right before he publishes them. I have known cases, admittedly with the Price Commission, where the Price Commission rather made fools of themselves because they had not bothered to check their findings with the company concerned.
I feel therefore that it would be to the advantage of both sides if this amendment, or the purpose behind it, were to be agreed to. It may be that the Government will wish to deal with it in some other way, but I hope that they will respect and accept what my noble friend Lord Mottistone has suggested.
Lord TREFGARNE: I am sorry to disappoint my noble friend, but I am afraid that I cannot do so. As I said earlier, the sort of procedure proposed by my noble friend is akin to getting a sneak preview of the judgment in a court of law. That is not, I think, the sort of proposal that ought to commend itself to your Lordships. To pick up a point made by my noble friend Lord De La Warr, may I read from the amendment tabled by my noble friend Lord Mottistone? He says in the second sentence:
"The person or persons concerned may within 72 hours make representations to the Director or to the Commission with regard to accuracy both of the detail and of the general sense of the report."
In other words I think my noble friend's amendment provides almost for a veto of
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the report, at least with the provisions that he provides for.
Lord ROSS of MARNOCK: I am sure the noble Lord appreciates that in Scotland at least in a public inquiry a reporter is appointed by the Secretary of State for Scotland and the first thing he does, before he delivers his finding, is to send out to the parties concerned a statement of fact. If that is all that is required there is something to be said for it, but by what the Minister said latterly it may well be that he is going a bit beyond that in respect of this amendment. However, there is precedent for a statement of fact.
Earl DE LA WARR: The noble Lord, Lord Trefgarne, again spoke about a judgment in a court of law. I think there is no suggestion of that: it is simply giving both sides the opportunity to make sure that the facts are right, not the judgment. That is why I said that if the Government will accept the spirit behind this amendment they may see their way to being able to do something about it at Report stage without in fact accepting the wording of this amendment. May I have any hopes of that?
Lord TREFGARNE: I said right at the outset of my remarks that the Director General—and indeed the commission—will take every opportunity during the course of their investigations to make sure that the facts which they are relying upon are accurate. I am afraid I cannot give my noble friend any undertaking to consider this matter further before the next stage.
Lord MOTTISTONE: I regret the note on which my noble friend Lord Trefgarne ended both his first reply to me and also to my noble friend, with all this business about judgments and vetoes and so on. The earlier part of his statement was most acceptable and understanding and I hope that it actually happens. One is always slightly worried—and this applies to both sides of the House—about allowing things not to be put into an Act of Parliament and relying on the goodwill of public bodies, which in

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the event do not always reveal that goodwill. I hope the Director General and the people running the commission will be made aware for all time of the remarks of my noble friend in the earlier part of his statement.
As to the judgment aspect of it, if I may say so I think that was a bad simile, rather beneath the normal standard of the noble Lord, Lord Trefgarne. It is not like a judgment. As my noble friend has said, it is just a question of making sure that the facts are right because, as he has had experience, as the noble Lord, Lord Boyd-Carpenter, has had experience and as companies with which I am associated have had experience, when that confounded Price Commission reported, the facts were not always right. This was not because the Price Commission was wicked; it may have been stupid but it was not wicked. It was because it did not have time to get them right. If one puts in a lot of young men who are inexperienced in business to have a quick look at a business which has been running for centuries and to try to pick up in a short time how it works, it is really an impossible task.
That is the sort of thing I am afraid will happen, not so much with the Monopolies and Mergers Commission, because it takes a relatively long time to do its investigations anyhow and it has more experience in this area. I know that it will be informal: the trouble with informality, splendid though it is in theory, is that it can get too informal and the result is that one does not get an accurate picture.
The object of this amendment is to give an opportunity for an accurate picture to be produced. This is not a question of fiddling with the judgment: it is making sure that the facts are right. As to the question of the veto, which the noble Lord, Lord Trefgarne, suggested, the whole point of the last sentence of my amendment is to take away any suggestion that there should be a veto. There is no question of the accused person in the dock having a veto: it is just a question of trying to get the facts right. If they cannot agree, for very good reasons, it seems only reasonable if there has been a cause for this to arise, for it to be recorded so that the Secretary of State, when he eventually comes to read it, will say "Ah, there is something
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that is not quite right". It can make a tremendous difference to the interpretation of what a public body or company is doing, whether it really is being anti-competitive, if the facts are not quite right. As my noble friend Lord Trenchard knows, the difference between a competitive situation and an anti-competitive situation can be a very narrow one, so facts are going to be very important.
As my noble friend Lord De La Warr says, will it be possible for the Government, quite understandably not accepting my wording, to take this away, and to say they will have a look at it with a possible view to having something like it, which gives this strength? —because one is trying to strengthen these reports so that they may mean something. They are going to be used, we are told by noble Lords on the Front Bench, as the basis of guidance; these reports will be published so that people can learn a sort of case law; so it is particularly important that they should be accurate and based on facts. At the same time, they have got the problem as I said in my opening remarks on this subject, of trying to produce firm facts when they have not got very much time to put the facts together. So I do hope that perhaps noble Lords could have another think and say that they will have a look to see what they can do. If they cannot do anything perhaps they will have a good explanation for it at the nest stage, and I will have another "bash". I do hope they can do something for me before I finally take a decision.
Lord TREFGARNE: I am reluctant to mislead my noble friend. The fact is that his amendment goes further than asking for a discussion of the mere facts. His amendment says "both of the detail and of the general sense of the report", and that really goes a good deal wider than the effect of the arguments my noble friend has deployed. I said earlier, and I repeat, that where matters of fact are concerned the regular practice of the commission is to check all factual material concerning companies with the companies themselves, and this procedure will be followed by the Director in his investigations under this Bill. If my noble friend insists that I think about it again I will do so, with little hope that I shall reach any different conclusion.
Earl DE LA WARR: I am sorry to press this point. The noble Lord said that the facts would be checked. What we are asking for is that the company concerned see the draft of the report in which the facts are stated and they check that.
Lord TREFGARNE: I am aware that is what my noble friend has asked for, and I am afraid I cannot agree to it.
Lord MOTTISTONE: I am not quite clear if the noble Lord said he would, if I pressed him, look at it again but is not going to agree. That seems rather pointless. Is he going to look at it again or not?
Lord TREFGARNE: I will look at it again but I am not prepared to agree to it on the terms defined in the amendment.
Lord MOTTISTONE: I am very sorry to keep this going. I have said that I quite accept, as one always does when one produces amendments, that the wording is not quite right. It is the general overall sense of this amendment that one wishes to have reconsidered, at the highest level perhaps I might ask.
Lord TREFGARNE: I really do not think I can go any further. The noble Lord keeps on pressing me, but I think I have made the point quite clearly. I will think about what I have said and maybe I will change my mind, but I am very unlikely, I think, to do that. I am prepared to think about it, but without any commitment at all that I will reach any different conclusion.
Lord MOTTISTONE: I thank my noble friend very much for being so concessionary in the end, and with that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Laying before Parliatnent and publication of reports]:
[Amendment No. 59 not moved.]
10.5 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 60:
Page 22, line 8, leave out ("such a report") and insert ("a report made to him under section 8(1), 11(8) or 13(5) above").
The noble Lord said: I beg to move Amendment No. 60. This is merely a technical amendment which makes clear that the procedures in Clause 17(3) of the laying of reports when Parliament is not sitting apply equally to the reports made under Clauses 8, 11 and 13. I beg to move.
[Amendments Nos. 61 and 62 not moved.]
Clause 17, as amended, agreed to.
Clause 18 [Information and advice about operation of Act]:
Lord AIREDALE Lord AIREDALE moved Amendment No. 63:
Page 22, line 41, leave out ("such") and insert ("information as to those courses of conduct which in his opinion constitute anti-competitive practices and such other").
The noble Lord said: This is the amendment to which I referred briefly during the debate on the amendment of the noble Lord, Lord Jacques, when the noble Lord sought to advocate a code of practice. The reason I put down this amendment was that I had observed that, in the Standing Committee in another place, the Minister had shown no enthusiasm for a code of practice and it occurred to me that, by this amendment, the same objective could be attained by a different route; the objective being to give the Director an opportunity to address himself to the general public in a case where it had come to his attention that a practice was being conducted which he had decided was an anti-competitive practice within the meaning of the Act, but he was aware that the general public did not realise that it was an anti-competitive practice and he therefore wished to address himself to the public, to explain the matter in the hope that the people who were minded to adopt this practice or to continue it would stop doing so.
I listened very carefully to the Government's arguments against the code of practice put forward by the noble Lord Lord Jacques. It seemed to me that there were two limbs to the Government's argument and I shall take them one at a time. The first was that the difficulty about a code of practice was to make it comprehensive. This amendment does not seek to make anything comprehensive

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at all. It is an amendment to Clause 18 which is intended to provide the Director with an opportunity to make a series of ad hoc pronouncements and address them to the general public. After all, that is what it says:
"Such…advice as it may appear to him [the Director] expedient to give the public in the United Kingdom about the operation of this Act".
Nobody would suppose that any one of these announcements made to the public by the Director under this clause would, by itself, be comprehensive: it would be only one of a series of pronouncements.
The second limb of the Government's argument was that the appropriate vehicle for the Director to convey this information to the public was by means of his annual report. I do not know precisely the distribution of the average annual report made to Parliament, but I very much doubt whether very many copies of annual reports get into the hands of the general public. I should have thought that Clause 18, directing itself directly to the general public, was the perfect vehicle to enable the Director to make this very wise announcement that, in a given case, a practice has been found to be anticompetitive, but is not generally realised to be so and he wishes the general public to know about it. I should have thought that there could be no argument against an amendment of this kind and that it was exactly what was required as an alternative to the code of practice. I beg to move.
Lord TREFGARNE: I do not think it would be helpful to require—and that is the operative word—the Director General to provide information about courses of conduct which he considers anti-competitive. This would starkly conflict with the flexibility which is at the heart of the legislation.
However, as we have already indicated in another place and, indeed, here this evening, the Director General does anticipate using his annual report to provide some guidance on anti-competitive practices in general, the circumstances in which they arise and the manner in which they affect competition, based on the experience of investigations under the Bill and indicating any particular practices which caused concern and which it might be appropriate to investigate in the future.
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With regard to the point made by the noble Lord about the distribution of the annual report, I think that it will be distributed among those people most anxious to know about the thoughts of the Director General in this matter; that is, industry, commerce, trade associations and the like, We really explored this matter very fully when we were considering the amendments put forward by the noble Lord, Lord Jacques, and others. I believe that the reports to which I have referred will be helpful, both to industry and indeed to the consumer. In view of what I have said, I hope that the noble Lord will not wish to press his amendment.
Lord AIREDALEM: Having heard that reply, I am very much more inclined to press the amendment than I was before. The Government must make up their minds. I understood the noble Lord to say just now that it is not desirable that the Director should make pronouncements about anti-competitive practices, but that the annual report would be the occasion on which he would make pronouncements about such practices. I do not understand this. What is the mystery about this? Surely the point of all this is to let people know what are the anti-competitive practices, because in that way they can be discouraged from pursuing or initiating them. Therefore, if we have a clause which says that the Director shall address himself to the general public about certain matters, why not include in that a "non-comprehensive" pronouncement from time to time about some practice against which people ought to be warned?
Lord TREFGARNE: I do not think that there is such a thing as a "non-comprehensive" announcement in this context. Anything that the Director General says will be taken as written on tablets of stone, and I think that that is wholly undesirable. We developed this point very fully indeed when the noble Lord, Lord Jacques, moved his amendment. I hope that the noble Lord will now be content.
Baroness SEEAR: I must support my noble friend. It is quite different from the problem of the code of practice. I was very much on the side of the noble Lord, Lord Trefgarne, over the question

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of the code of practice, because that creates an idea that one has now been told what are the anti-competitive practices and people will believe that that is a comprehensive list. But my noble friend is saying that as the experience of the Director General develops in carrying out anti-competitive practices, from time to time he clarifies issues as they arise in order to give people an illustration. No one is going to be so stupid as to think that if he has one illustration of a particular case which has been established as a competitive practice in a given context, that is a comprehensive list. It is the comprehensive list that was the objection to the code of practice put forward in the previous amendment.
Lord TREFGARNE: The noble Lord, Lord Jacques, did not persist with his proposal for a comprehensive list. Some guidelines were all he was asking for. What we said was that the Director General will record in his annual report the outcome of investigations that he has made during the year. I think that that will be sufficient guidance for those who are seeking guidance in this matter. May I say again that this is the third debate at least this evening we have had on this subject. Your Lordships may think that we have now gone round and round this topic and ought to leave it for another one.
Lord AIREDALE: I have the greatest respect for the Minister, but I am really sorry to hear him speak as he has just been speaking. We had a debate on codes of practice. I mentioned for the benefit of noble Lords that it so happened that I had an amendment down to a much later clause which was an alternative solution to the problem facing the noble Lord, Lord Jacques, but I carefully did not use that occasion to develop any argument at all regarding this amendment we are now discussing. Neither Government spokesman answering the noble Lord, Lord Jacques, referred at all to this amendment. Not one word do I remember being addressed to this amendment on that occasion. It is not good enough to say that this matter has been fully discussed. It has not.
Lord TREFGARNE: The noble Lord disclaims all parentage as far as the noble Lord, Lord Jacques, is concerned with
724
respect to this amendment, but noble Lords may like to read the amendment which the noble Lord, Lord Airedale, is now asking us to consider. I quote:
"…and insert ('information as to those courses of conduct which in his opinion—
that is, the Director's opinion—
"constitutes anti-competitive practice and such other')".
I am at a loss to distinguish between what the noble Lord is now proposing and what the noble Lord, Lord Jacques, was proposing when he spoke earlier.
Lord AIREDALE: Then we shall have to take time with me explaining to the noble Lord what he did not gather from the speech of my noble friend Lady Seear who just now was at great pains to point out that a code of practice was something which was probably comprehensive, but an ad hoc pronouncement about one particular—
Lord TREFGARNE: Will the noble Lord give way again?
Lord AIREDALE: In a moment, but I am going to finish the sentence. An ad hoc pronouncement about one particular practice which the Director General wished people to know was considered anti-competitive could not by any stretch of imagination be regarded as a comprehensive list in the sense that Lord Jacques' code of practice might be regarded as a comprehensive list.
Lord TREFGARNE: I am obliged to the noble Lord for giving way. The noble Lord, Lord Airedale, is asking for the Director General to give information as to those courses—not in the singular but the plural. In any event, the noble Lord, Lord Jacques, ended up asking for guidelines, which is a different thing from a code of conduct or a code of practice. May I say again that I think that what the noble Lord is now proposing is very much in line with what the noble Lord, Lord Jacques, was finally proposing.
Lord AIREDALE: Very well, I do not think we have seen the last of this one. We shall be coming back to this on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 [Restriction on disclosure of information]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 64:
Page 23, line 28, leave out from ("enabling") to ("the") in line 31 and insert ("information obtained under certain other enactments to be used for facilitating the performance of functions under this Act").
The noble Lord said: There are presently provisions in the Fair Trading Act 1973, the Consumer Credit Act 1974, the Restrictive Trade Practices Act 1976 and the Estate Agents Act 1979 restricting the disclosure of information obtained under those enactments except for proper and relevant purposes. Clauses 19(4) amend those enactments to enable information obtained under them to be used for the exercise of functions under the Bill.
The purpose of this amendment is to make it clear that the effect of the amendments to the enactments listed will be to enable any amendments obtained under their provisions to be used for the purpose of facilitating any of the functions under the Bill and not merely, as the opening words presently suggest, to enable the Director to use such information. This amendment is therefore purely clarificatory and not substantive. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 65:
Page 23, line 32, at end insert—
(" ( ) at the end of paragraph (aa) of the proviso to section 47(2) of the Agricultural Marketing Act 1958 there shall be added the words "or the Competition Act 1980";
( ) at the end of paragraph (aaa) of section 23(2) of the Agricultural Marketing Act (Northern Ireland) 1964 there shall be added the words "or the Competition Act 1980 ";").
The noble Lord said: This amendment will enable information obtained under the Agricultural Marketing Act 1958 and the Agricultural Marketing Act (Northern Ireland) 1964 to be disclosed for the purposes of the Bill. It will be useful for this information to be available to the Director General or the commission if an investigation is being conducted into the practice relating to an agricultural marketing board. This will bring the Bill into line with the Fair Trading Act, where a similar provision already exists in relation
726
to monopolies investigations. I beg to move.
Clause 19, as amended, agreed to.
Clause 20 agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 66:
After Clause 20 insert the following new clause:
Monopoly references by the Secretary of State alone
" . It is hereby declared that where it appears to the Secretary of State that—

(a) a monopoly situation exists or may exist as mentioned in subsection (1) of section 51 of the Fair Trading Act 1973 (monopoly references by Ministers), and

(b) the goods or services in question are of a description mentioned in subsection (2) of that section, and

(c) none of the Ministers mentioned in subsection (3) of that section has such functions as are mentioned in subsection (2) of that section in relation to goods or services of that description,

the Secretary of State may make a monopoly reference with respect to the existence or possible existence of that situation acting alone; and accordingly any reference which has been made in such circumstances by the Secretary of State acting alone has been made in compliance with that section."
The noble Lord said: Section 51 of the Fair Trading Act makes provision for monopoly references to be made by Ministers. References must be made by Ministers and not by the Director General in respect of those industries which are wholly or in certain circumstances the subject of statutory monopolies—that is monopolies arising from Government measures or which are controlled by a statutory body. These include the nationalised industries and certain agricultural products. Section 51(2) precludes the Secretary of State from making such a reference other than jointly with one or more of the Ministers listed in Section 51(3) who have functions relating to the particular industry.
There are, however, certain Government Ministers, notably the Secretaries of State for Trade, Energy and Industry, who are not listed in Section 51(3) as their functions were held by the old Secretary of State for Trade and Industry when the legislation was passed. While we believe that a reference can be made by the Secretary of State alone when there is no appropriate Minister with whom it

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could be made jointly, it is possible that this could be open to challenge. The purpose of this new clause is to make it clear that the Secretary of State can and always could make a reference alone under this section if there is no appropriate Minister with whom he could make it jointly. I beg to move.
[Amendments Nos. 67 and 68 not moved.]
Clause 21 agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 69:
After Clause 21, insert the following new clause:
Amendment of s. 137(3) of Fair Trading Act 1973.
" . In section 137(3) of the Fair Trading Act 1973 (definition of "the supply of services") there shall be inserted after paragraph (b) the following words:—
"and
(c) includes the making of arrangements for a person to put or keep on land a caravan (within the meaning of Part 1 of the Caravan Sites and Control of Development Act 1960) other than arrangements by virtue of which the person may occupy the caravan as his only or main residence"."
Clause 22 agreed to.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 70:
After Clause 22 insert the following new clause:
Exclusive Copyright Licences.
" . It is hereby enacted that:—
(1) The Restrictive Trade Practices Act 1976 shall have effect and be deemed always to have had effect as if it had been made with the addition, in Schedule 3 thereto, of the paragraph set out in Part 1 of Schedule 1A to this Act.
(2) The Restrictive Trade Practices Act 1956 shall be deemed always to have had effect as if it had been made with the addition of the section set out in Part II of Schedule 1A to this Act.
(3) The Fair Trading Act 1973 shall be deemed always to have had effect as if it had been made with the addition of the section set out in Part III of Schedule 1A to this Act."
The noble Lord said: I am afraid I cannot be quite so brief as the noble Lord, Lord Trefgarne, was in moving No. 69. This amendment—and associated with it is Amendment No. 75—concerns exclusive copyright licences. Until about two years ago it was generally accepted that exclu-
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sive copyright licences did not fall within the ambit of the Restrictive Trade Practices Act 1976 and the Fair Trading Act 1973, as they did not constitute the supply of goods or services. However, it has recently been the bone of a contention that the grant of such licences falls within the ambit of those Acts, on the supposition that an author who grants a copyright licence to a publisher is factually depriving himself of the right to publish, and that that therefore is an anti-competitive practice. I could go on at some considerable length on this question. I understand that it is a matter which the Government might well feel minded to look at with favour, and therefore I will not speak at length on the amendment. I beg to move.
Lord TREFGARNE: We have considerable sympathy with the object behind the noble Lord's new clause and new schedule. There appears to have been a fairly general assumption until relatively recently that agreements relating solely to copyright were completely outside the restrictive trade practices legislation. However, as the noble Lord has said, some doubt has been cast on this assumption, specifically in the case of exclusive copyright licences. It is unlikely that all such licences are liable to registration, but it appears that they may be registrable where two or more parties carrying on business accept relevant restrictions within the definitions of the 1976 Act.
I agree that this matter requires urgent consideration. I am afraid that I am not yet in a position to accept the noble Lord's amendments, as the implications of their proposals need to be explored further, and indeed the drafting may also need some attention. But I can undertake that the question of copyright in relation to the restrictive trade practices legislation will be looked at very carefully before the Report stage and that, if at all possible, the Government will introduce their own amendments when we then consider the Bill.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remarks. I understand that there are a number of legal problems involving the amendment, particularly in regard to the retrospective nature of it. In view of the undertaking

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given by the noble Lord, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clause 24 agreed to.
10.28 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 71:
After Clause 24, insert the following new clause:
Recommendations by services supply associations.
" .—(1) An order under section 11 of the Restrictive Trade Practices Act 1976 (restrictive agreements as to services) may provide that section 16(3) of that Act (recommendations by services supply associations to members about services) shall not apply to recommendations of such descriptions as may be specified in the order and an order under section 12 of that Act (information agreements as to services) may make similar provision in relation to section 16(5) of that Act (recommendations by services supply associations to members about furnishing information).
(2) Where—

(a) section 16 of that Act would (apart from this subsection) apply in relation to a recommendation by a services supply association within the meaning of that section, and

(b) if the sole term of the agreement for the constitution of the association were a term by which each member of it agreed to comply with that recommendation, the agreement would be excluded by the terms of the order from the operation of an order made, or having effect as if made, under section 11 of that Act which came into force after 21st March 1976 and before the coming into force of this section

subsection (3) of the said section 16 shall not apply and shall be deemed never to have applied in relation to that recommendation during the continuance in force of the order.
(3) Subsection (2) above shall have effect in relation to a recommendation made before the repeal of section 112(3) of the Fair Trading Act 1973 as if each reference to section 16(3) of the 1976 Act included a reference to that section.
(4) In the Table in paragraph 5 of Schedule 2 to the said Act of 1976 (time within which particulars of agreements and variations to be furnished under that Act)—

(a) there shall be added at the end of the first column of paragraph (f) the words "not being a variation which becomes subject to registration by virtue of an order under section 11 or 12 above"; and

(b) there shall be added at the end of the first column of paragraph (i) the words other than a variation to which (ii) below applies"; and

(c) after paragraph (i) there shall be added the following paragraph:—

"(ii) Variation of an agreement being a variation which extends or

Within 1 month from the day on which the

The noble Lord said: The purpose of this new clause is to correct a technical defect which had been identified in the exemption of recommendations by certain services supply associations from the Restrictive Trade Practices Act 1976. It was hitherto thought that where the Restrictive Trade Practices (Services) Order 1976 exempted categories of agreement made by these bodies, the exemption extended to their recommendations which fell in the same categories. However, there is now doubt as to whether the order did exempt these recommendations, or indeed whether the Act effectively conferred power on the Secretary of State to exempt recommendations in the first place. This defect was unfortunate. If it is possible to exempt categories of specific agreements made by services supply associations from the Act, it is only logical that there should be a power to exempt recommendations of the same category made by the body to their members.
Furthermore, associations which thought that recommendations that they made in good faith were exempt from registration under the Act may have been operating unregistered and therefore void agreements, thereby exposing themselves to civil actions from third parties. It is important that this defect should be corrected, and with retrospective effective.
The new clause is inevitably complex and I shall therefore say only a few words about it. It will ensure that the exclusions listed in the 1976 order in relation to recommendations shall have the effect originally intended. It will also ensure that for the future the Secretary of State may exempt categories of recommendations from the Act, as well as categories of agreement. I can assure your Lordships that the new clause does not restrict the Secretary of State under Section 11 in any way and would not prevent him, if he thought it desirable, from withdrawing any exemptions for agreements listed in the order, subject of course to parliamentary approval.
This is, as I have said, a technical amendment, but it is of considerable importance to members of services supply associations. It would be inequitable to them if the defect which has been detected in the law were not removed, and I therefore commend the new clause to your Lordships. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 72:
After Clause 24, insert the following new clause:
Amendments to s. 19 of Restrictive Trade Practices Act 1976.
" .—(1) In section 19(1) of the Restrictive Trade Practices Act 1976 (which provides amongst other things that there is a presumption that a restriction or information provision is against the public interest unless the court is satisfied the removal of it would deny benefits to the public as purchasers, consumers or users of any goods)—

(a) the word "vendors" shall be inserted before the word "purchasers" in both places where it occurs, and

(b) the words "or other property" shall be inserted—

(i) after the words "users of any goods" in paragraph (b) and

(ii) after the words "users of goods" in the words following paragraph (h).

(2) In subsection (2) of that section ("purchasers", "consumers" and "users" to include persons purchasing, consuming and using for trade, business and public purposes) the word "'vendors'" shall be inserted before the word "purchasers'" and the word "selling" shall be inserted before the word "purchasing"."
The noble Lord said: Section 19 provides that the restrictions in an agreement shall be deemed to be contrary to the public interest unless they pass through one of the so-called "gateways" in paragraphs (a) to (h) and also satisfy the tailpiece to Section 19(1). Paragraph (b) provides that a restriction will pass through that gateway if its removal would deny certain benefits to
"the public as users of any services, or as purchasers, consumers or users of any goods in relation to which any services are supplied".
This amendment will make it clear that parties to an agreement before the Restrictive Practices Court may, in defending their agreement, plead benefits to the public arising from the purchase, consumption or use of property other than goods in relation to which any services are provided. It also provides that bene-
732
fits arising from the sale of property, including goods, may be pleaded. The amendment recognises a fact of life in the commercial world—that the providers of services do not perform their functions in relation to goods alone but also in relation to intangibles, such as securities, copyright and leases, all of which do not fall within the legal definition of "goods" but are included in the term "property". If such people are caught by the legislation, it is only fair to allow them to defend themselves as widely as can those providing services in relation to goods alone. It also recognises that the public may receive such benefits as sellers as well as buyers or users of property, including goods. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 73:
After Clause 24, insert the following new clause:
Exemption of certain undertakings from Restrictive Trade Practices Acts.
.—(1) The Restrictive Trade Practices Act 1976 shall not apply in relation to any agreement by virtue only of restrictions being accepted or information provisions being made under it which are comprised in undertakings which have been—

(a) given pursuant to section 88 of the Fair Trading Act 1973, or

(b) certified by the Secretary of State under paragraph 9 of Schedule 11 to the said Act of 1973, or

(c) accepted under section 4 or 9 above.

(2) The said Act of 1976 and Part 1 of the Restrictive Trade Practices Act 1956 shall be deemed never to have applied in relation to any agreement by virtue only of restrictions being accepted or information provisions being made under it which are comprised in undertakings falling within paragraph (a) or (b) of subsection (1) above.
(3) In this section "agreement" has the same meaning as in the said Act of 1976.".
The noble Lord said: The Restrictive Trade Practices Act 1976 (which consolidated earlier legislation, including the Restrictive Trade Practices Act 1956) provides for the registration and subsequent investigation by the Restrictive Practices Court of agreements between persons in business in the supply of goods or services under which certain restrictions are accepted. "Agreement" is defined in the Act to include
"any agreement or arrangement whether or not it is intended to be enforceable…by legal proceedings • •"

733
In the light of this definition it is possible that, where undertakings are obtained following investigations by either the Director General into anti-competitive practices or by the Monopolies and Mergers Commission upon a monopoly reference, and where the undertakings are obtained at the same time from more than one person in relation to the same practices, if these undertakings restrict the supply of goods or services they may be liable to registration under the Restrictive Trade Practices Act 1976.
Since it is clearly inappropriate that such undertakings given in the public interest should be liable to registration and proceedings, the new clause exempts from the Restrictive Trade Practices Act 1976 any future undertaking given under the Competition Bill as enacted and under the Fair Trading Act 1973; and to avoid any doubt about their standing will exempt retrospectively undertakings already entered into under the Fair Trading Act 1973 or its predecessors. I beg to move.
Clause 25 [Orders and regulations]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 74:
Page 27, line 29, leave out ("(1)") and insert ("(3) or (5)").
The noble Lord said: Under the Bill as drafted, Clause 25(3) provides for orders made under Clause 12(1) to be subject to negative resolution. Clause 12 orders are in fact made under subsections (3) and (5), not subsection (1), and the amendment corrects this small error. I beg to move.
Clause 25, as amended, agreed to.
Remaining clauses agreed to.
Schedule 1 agreed to.
After Schedule 1:
[Amendment No. 75 not moved.]
Schedule 2 agreed to.
In the Title:
Lord TREFGARNE Lord TREFGARNE moved Amendments Nos. 76 to 79:
Line 10, leave out from ("of") to ("the") in line 11.
Line 13, after ("1(3)") insert ("to exclude certain recommendations from section 16").
Line 13, after ("1(3)") insert ("and to amend section 19").
Line 14, after ("1976") insert ("and to exempt certain undertakings from the provisions of that Act and Part 1 of the Restrictive Trades Practices Act 1956").
The noble Lord said: Amendments Nos. 76, 77, 78 and 79 are all very minor, consequential amendments on the amendments that I have moved earlier. I beg to move them en bloc.
Title, as amended, agreed to.
House resumed: Bill reported with the amendments.

BRITISH OLIVETTI LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committed to an Unopposed Bill Committee.
EAGLE & GLOBE STEEL LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committeed to an Unopposed Bill Committee.
PROCEDURE OF THE HOUSE
Third Report from the Select Committee made and to be printed.
  CANCER AND MORTALITY STATISTICS
  CANCER AND MORTALITY STATISTICS
  ALCOHOL CONSUMPTION: INFLUENCE OF ADVERTISING
  ALCOHOL CONSUMPTION: INFLUENCE OF ADVERTISING
  THE 1979–80 DEFENCE BUDGET:PROVISION FOR VAT
  THE 1979–80 DEFENCE BUDGET:PROVISION FOR VAT
  PARLIAMENTARIANS' PERSONAL ACCIDENT INSURANCE
  PARLIAMENTARIANS' PERSONAL ACCIDENT INSURANCE