Sitting of 1 April 1982

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

  PRIVATE BUSINESS
  PORT OF LONDON BILL
  Read the Third time and passed.
  SEVERN-TRENT WATER AUTHORITY BILL (By Order)
  TEES AND HARTLEPOOL PORT AUTHORITY BILL (By Order)
  FELTHAM STATION AREA REDEVELOPMENT (LONGFORD RIVER) BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Wednesday 7 April.
  BRITISH TRANSPORT DOCKS BILL (By Order)
  Order for Second Reading read.
  To be Read a Second time upon Wednesday 7 April at seven o'clock.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Common Fisheries Policy
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food what stage has been reached in negotiations for a European common fisheries policy; and if he will make a statement.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Mick Buchanan-Smith): Before answering the question, I apologise to the House for the absence of my right hon. Friend the Minister. Hon. Members will realise that he is at the Council of Agriculture Ministers' meeting which is continuing in Brussels.
    To answer the question, progress has been made on marketing, conservation and the Community's reciprocal fishing arrangements with third countries. I reaffirm that the Government intend to continue to seek a satisfactory agreement on the outstanding issues as soon as possible.
    Mr. Mills: I thank my right hon. Friend for that reply. In spite of the urgency, does he agree that it is crucial to achieve an agreement that is absolutely right in the interests of fishermen, consumers and the nation? Will he bear in mind that that decision must stand on its own
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    merits? Does he agree that that is equally true for fishing and the price review? Does he hope for a fairly early decision on both those matters, even though other problems in the Community may arise?
    Mr. Buchanan-Smith: I agree with my hon. Friend that fishing is such an important industry in Britain that the issue must be decided on its merits. We have made considerable progress on many issues. The fact that some are still outstanding demonstrates the strong line that the Government are taking on these extremely important matters.
    Mr. Donald Stewart: In view of the advantageous position that will exist for our Common Market partners if no agreement is reached by the end of the year, may I ask what incentive they have for agreeing to anything less in the meantime? If that situation arises, what arrangements has the right hon. Gentleman made for the protection of our fleets?
    Mr. Buchanan-Smith: The right hon. Gentleman should examine article 103 of the Treaty of Accession, which lays down that there should be new arrangements about the limitation of access. It is precisely on the matter of limitation of access that we are negotiating.
    Mr. McNamara: Will the right hon. Gentleman give an undertaking that there will be no sell-out of fishing interests to obtain a satisfactory arrangement on the budget or prices, or something of that type? When will the Council of Fisheries Ministers next meet? Will he give an unequivocal undertaking that there will be nothing less than exclusive access for Britain up to a 50-mile limit?
    Mr. Buchanan-Smith: The hon. Gentleman might acknoledge what I said earlier. We have already made considerable progress in several areas—progress that was not made under the Labour Government.
    The Government had hoped that there would be a meeting towards the end of April, but that is not certain. There may be a delay. Nevertheless, we shall negotiate as strongly as we can in the interests of our industry.
    Sir Patrick Wall: I am aware that progress has been made, but is my right hon. Friend aware that most fishermen have given up hope of obtaining a satisfactory solution to the CFP before the end of the year? What actions do the Government propose to prevent foreigners from fishing right up to our beaches in the future?
    Mr. Buchanan-Smith: No one should give up hope of a satisfactory settlement. We shall conserve and manage fishing resources properly only if we do so internationally, applying to fishermen everywhere. It is important for Britain's industry that we reach a satisfactory arrangement. If it should happen that there is no arrangement by the end of this year, I cannot imagine any British Government tolerating fishing up to our beaches.
    Mr. Strang: Has the Minister seen the front page headlines in the Fishing News in the past two weeks, saying "Walker's got it wrong" and "Ministers are out of touch"? Has he no idea of the despair in the fishing industry? Does he recognise that the minor measures to which he refers are totally inadequate to meet the situation? When will the Government stop pussyfooting about in Brussels and bring forward a national programme to support our industry?
    Mr. Buchanan-Smith: I should have more respect for what the hon. Gentleman says if he acknowledged that the Labour Government made no progress on marketing, reciprocal fishing arrangements or the national conservation measures agreed on a Community-wide level. He is taking a sour grapes attitude because he achieved nothing. It is the hon. Member who has got it wrong yet again.
    Mr. Warren: Does my right hon. Friend accept that the allegation that there is no confidence among fishermen is certainly not true on the South Coast, where we have every confidence that my hon. Friend will achieve a good and satisfactory negotiation? Will he reaffirm that the 12-mile exclusive limit—an object that we applaud—is still the Government's aim?
    Mr. Buchanan-Smith: I am grateful to my hon. Friend. If the hon. Member for Edinburgh, East (Mr. Strang) were more in touch with the fishermen themselves, rather than merely with the organs of the media, he might get a truer picture of the situation.

    Wool Prices
    Mr. Parrisasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the level of support for the British Wool Marketing Board wool prices for the coming year.
    Mr. Buchanan-Smith: My right hon. Friend announced on 23 March that the guaranteed price for wool will remain at its present level of 115p per kilogram for the next marketing year.
    Mr. Parris: In view of the importance of the wool clip to certain farmers, will my right hon. Friend keep a close watch on the market with a view to increasing prices as soon as the stabilisation principle permits?
    Mr. Buchanan-Smith: As my hon. Friend acknowledges, there is the important question of stabilisation. That is the nature of the wool guarantee. The fact that the stabilisation fund is at present in considerable deficit is clearly a factor. My right hon. Friend and I met the chairman of the Wool Marketing Board this week. We discussed the situation very fully with him and shall continue to do so.
    Mr. Myles: As the Scotch blackface is the most numerous breed of sheep in Britain, will my right hon. Friend use his good offices in every possible way to promote the wool of this hardy hill breed, especially in the Italian mattress trade?
    Mr. Buchanan-Smith: I am sure that the Wool Marketing Board will note what has been said and will ensure that the interests of the Scotch blackface breed are fully and properly taken into account.

    Meat Products Regulations
    Sir William van Straubenzeeasked the Minister of Agriculture, Fisheries and Food if he will take into account the representations from the National Consumer Council as to the addition of water into meat products such as bacon, ham and tenderised steak when deciding on the new meat products regulations.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): Yes, Sir. All representations on the proposed regulations are being very carefully considered.
    Sir William van Straubenzee: In so doing, will my hon. Friend take account of the surprise felt by many people that the regulations currently allow such a high proportion of water additive to some of the meats mentioned in my question? If she wants an example of first-rate waterless meat put into sausages, may I take her out one evening and present her with a first-rate example of a sausage as it ought to be, manufactured in my constituency?
    Mrs. Fenner: I should, of course, be delighted to join my hon. Friend, especially eating sausages, to which I am somewhat addicted.
    It would perhaps be premature for me to speculate on the final contents of the regulations, but I confirm that the proposed 5 per cent. tolerance for water added to cuts and joints of meat is to be removed and all added water will have to be declared. The original proposals about burgers and sausages are being reconsidered in the light of representations.
    Mr. Torney: Is the Minister aware that cooked meats are being sold, after steam cooking and flash roasting, with 25 per cent. water content? Is she further aware that bacon is being sold with a high water content and that housewives are compelled to pay bacon prices for water? Will she investigate this and take action to stop it?
    Mrs. Fenner: I think that some of the hon. Gentleman's concern is a little exaggerated, but I assure him that proposed controls over the addition of water to cured meats are being reconsidered in consultation with enforcement authorities and manufacturers.

    Wash Fisheries.
    Mr. Brocklebank-Fowlerasked the Minister of Agriculture, Fisheries and Food if he will establish a commission to carry out an independent inquiry into the potential for the Wash fisheries and to report to him on the means for exploiting that potential.
    Mr. Buchanan-Smith: No, Sir. My fisheries scientists have only recently surveyed and reported on the mussel stocks in the Wash. Accordingly, any further general inquiry would not be justified.
    Mr. Brocklebank-Fowler: Does the Minister agree that as the Wash is the largest natural shell fishery in Western Europe it is appalling that the constant reduction in catches and in the number of people employed, coupled with increasing imports from the European Community, should offer such a bleak future for the industry? Will he ask the Sea Fish Industry Authority to look again at the problem with a view to developing a programme of partnership between the Government and local industry to enable local fishermen to compete with others in the Community?
    Mr. Buchanan-Smith: I agree that the Wash is a very important shellfish area. The hon. Gentleman must have missed my reply, as I said that we had carried out a survey of the area and scientists had examined it, which is evidence of the importance that we attach to it. The report will now be discussed with representatives of the local fishing industry and with the Eastern Sea Fisheries Committee. I hope that as a result of that we shall see further improvements for this important fishery.

    Forest Lands
    Mr. Canavanasked the Minister of Agriculture, Fisheries and Food what is the total value of the forest lands which have been or are in the process of being sold under the Forestry Act 1981.
    Mrs. Fenner: The total value of plantations and plantable land that have been sold or were in the process of being sold at the end of February 1982 under the powers contained in the Forestry Act 1981 was £12,925,000.
    Mr. Canavan: Is it not a blatant example of doctrinaire asset-stripping for the Government to sell off more than 6,000 hectares of good forest land, including more than 3,500 hectares in Scotland? As the Government refuse to disclose to me and to Parliament the purchase price and the name of the purchaser of each individual property, and in the light of the recent Amersham International scandal, is there not a case for calling in the Comptroller and Auditor General to see whether Tory Ministers are selling off some of the nation's best assets to their rich friends?
    Mrs. Fenner: I totally repudiate the hon. Gentleman's allegation. I remind him that, as my right hon. Friend explained in his reply to the hon. Gentleman on 11 February, it would be a breach of confidence to disclose the names of individual purchasers and prices. The objective is to reduce the call on the Exchequer for the management of the Commission's forestry enterprise—no more and no less.
    Sir Hector Monro: Is my hon. Friend aware of the success of her policy in my constituency, where 2,700 acres have been sold for more than £2 million—producing not only a substantial sum of money for the Treasury but the prospect of new jobs from the development of peat resources?
    Mrs. Fenner: I am grateful to my hon. Friend. I realise that the hon. Member for West Stirlingshire (Mr. Canavan) is unlikely to be in favour of anything that reduces total State control.
    Mr. Canavan: I am not in favour of secrecy.
    Mr. Beith: Is the Minister aware of the concern among hill farmers that, whereas the Forestry Commission used to maintain fences around the plantations, that obligation will not necessarily pass to those who purchase plantations?
    Mrs. Fenner: I assure the hon. Gentleman that the purchasers enter into the contract prepared to maintain the land as forestry. If there is concern about fencing, I shall certainly make inquiries.
    Mr. Mark Hughes: Does the hon. Lady accept that her predecessor said expressly in Committee that the maintenance of the fencing was excluded from the conditions of sale under the Forestry Act? Will she also tell the House what proportion of the £12·9 million has been leased back to the Forestry Commission on a management basis? How many sites of special scientific interest have been sold from public to private domain?
    Mrs. Fenner: I ought to give the hon. Gentleman a comprehensive reply to the two latter points, so I shall write to him.
    Mr. Cockeram: Is it not the case that the British taxpayer has been pumping money into the Forestry
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    Commission for the past 60 years? Is it not about time that the taxpayer had a break by getting something back? Will my hon. Friend note that the taxpayer applauds the new policy?
    Mrs. Fenner: I agree with my hon. Friend. The original purpose of the Act was to reduce the call on the Exchequer, which is what is happening. We are not in the business of dismantling the Forestry Commission.

    Planning Legislation and Development Control
    Mr. Chapmanasked the Minister of Agriculture, Fisheries and Food if he is satisfied that the interests of the agriculture industry are adequately served by the current planning legislation and development control procedure.
    Mrs. Fenner: Yes, Sir.
    Mr. Chapman: As far too many acres of good agricultural land are still being lost to various developments each year, at a time when thousands of acres of land are lying unused or under-used in our urban areas, will my hon. Friend assure the House that the Ministry of Agriculture, Fisheries and Food is in close liaison with the Department of the Environment about such important land use matters, especially about good agricultural land on the fringes of our towns and cities?
    Mrs. Fenner: I certainly give my hon. Friend the assurance for which he asks—that my Ministry and the Department of the Environment work closely together on such matters. My Ministry is consulted at all stages in the preparation of structure and local plans and on all planning applications affecting more than 10 acres of agricultural land that do not conform to an agreed development plan. I agree that grade 3 agricultural land is of good quality and of great importance to British agriculture.

    Agricultural Marketing
    Mr. Spellerasked the Minister of Agriculture, Fisheries and Food whether he is yet in a position to announce proposals to encourage the improvement of agricultural marketing.
    Mr. Buchanan-Smith: Improvements in agricultural marketing can be brought about by co-ordinating and strengthening existing efforts within a new central marketing organisation. My right hon. Friend has been discussing plans for this with leaders of the agriculture and food industries, and hopes to see them come to fruition before long.
    Mr. Speller: I hope that my right hon. Friend is aware of the great concern felt by all the agricultural producers and food processors in Britain. Although we know that the spirit is willing, it seems that progress is slow. May we have a rather firmer date than "as soon as possible", as it is now 12 months since the original declaration of intent?
    Mr. Buchanan-Smith: I agree that it is important that all interests in the food industry—producers, processors, distributers and retailers—should be brought into any initiative. However, it is better to wait a little longer and make sure that all those interests are working together before we come to final conclusions. I take what my hon. Friend says to heart.
    Mr. Peter Mills: Will my right hon. Friend also bear in mind the enormous power of some retailers, which has

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    a difficult and adverse effect on producers and processors? Will he consider the matter, because serious problems are developing?
    Mr. Buchanan-Smith: This again emphasises the need for all interests in the food chain to work closely together. I am sure that my hon. Friend would acknowledge that, already, with many foods, such as apples and meat, the Central Council for Agricultural and Horticultural Cooperation is doing an enormous amount of work, which we should not minimise.

    Warble Fly
    Sir Russell Fairgrieveasked the Minister of Agriculture, Fisheries and Food how effective the Government's scheme to eradicate warble fly has been up to date; and what further measures are being introduced.
    Mrs. Fenner: Since the current campaign to eradicate warble fly began in the autumn of 1978, surveys show that the prevalence of infection in the national herd in Great Britain has been reduced from 38 per cent. to less than 1 per cent. Under arrangements recently announced, infestation of cattle with warble fly has been made notifiable from 15 March and additional requirements for treatment of infected herds have been introduced. We hope that the farming community will continue to co-operate in these arrangements so that the eradication programme can be completed.
    Sir Russell Fairgrieve: I welcome that reply. Will my hon. Friend assure the House that continued vigilance will be maintained until this pest is totally eradicated from our cattle, with the consequent improvement in quality and the comfort of the animals?
    Mrs. Fenner: Agricultural Departments can now order the treatment of all cattle on premises where infestation has occurred and restrict the movement of cattle from those premises. They can also order treatment of premises where infestation is suspected because of their proximity to infected herds or because they have received cattle from such herds. I am satisfied that those measures, together with great co-operation from the farming community, will help us to eliminate the last 1 per cent.
    Mr. Robert Hughes: Can the Minister tell us the incidence of warble fly in the House of Commons?
    Mr. Myles: Can my hon. Friend assure the House that there will be no move by the conservation lobby to try to protect the last warble fly?
    Mrs. Fenner: I am not sure whether my hon Friend wishes to have a serious answer to that, but I know of no conservation measures. We are keen only to eradicate the warble fly.
    Mr. Mark Hughes: Although I do not wish to get under my hon. namesake's skin, may I ask the hon. Lady whether she is aware that Opposition Members welcome the fact that the warble fly has been made notifiable? Will she also put her mind to the problem, mentioned in her publication on the increase in the incidence of notifiable disease, of enzootic bovine leukosis and reconsider the Ministry's position on that dangerous disease?
    Mrs. Fenner: I shall examine the comments on the disease to which the hon. Gentleman refers, but I know that he will appreciate that it does not concern warble fly.

    Ware Potatoes
    Mr. Bill Walkerasked the Minister of Agriculture, Fisheries and Food if he will make a statement on support measures for ware potatoes for the 1982 harvest?
    Mr. Buchanan-Smith: I refer my hon. Friend to the reply given to my hon. Friend the Member for Lincoln (Mr. Carlisle) on 23 March.
    Mr. Walker: Can my right hon. Friend explain why there has been no increase in the price of potatoes for the 1982 crop? Is he aware of the problems that that will cause in restricting the income of the Potato Marketing Board?
    Mr. Buchanan-Smith: We have discussed the matter fully, not only with the Potato Marketing Board, but with representatives of the farming organisations. In Britain we have a free market in potatoes. The help that we give on the contract buying programme and the fact that recently the price has been consistently more than the guarantee means that we now have a very different position from that of a few years ago. We should welcome that.

    Port Discipline and Marketing Rules
    Mr. Beithasked the Minister of Agriculture, Fisheries and Food what recent representations he has received from fish producers' organisations about the extension of port discipline and marketing rules.
    Mr. Buchanan-Smith: One producers' organisation has written seeking authority to apply its marketing rules to non-members landing fish within its economic area.
    Mr. Beith: Does the Minister realise how important the work of the producers' organisations is in the fishing industry? Does he further realise how impossible it is for that work to be carried out if non-members of those organisations are not bound by the marketing rules, which provide the stability from which they profit? Will he take the representations seriously and make use of the provisions that are now available to him?
    Mr. Buchanan-Smith: I acknowledge the important role played by the fish producers' organisations and I wish them every success in their efforts. However, it raises some further issues, which I ask the hon. Gentleman to consider. Membership of the organisations is at present on a voluntary basis. If we introduce a complusory element it will raise some problems. We are prepared to discuss the matter with the organisations and hope to do so in the months ahead.

    Dairy Industry
    Mr. Geraint Howellsasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the state of the dairy industry; and if he will make a statement.
    Mr. Buchanan-Smith: I believe that both sides of the industry can look to the future with confidence. In particular, the decision that my right hon. Friend was able to take last week on the spring review of liquid milk prices demonstrates our intention to provide them with as firm a basis as possible for planning their commercial operations following the Binder Hamlyn review.
    Mr. Howells: Can the Minister assure the dairy industry that there will be no further increase in the co-responsibility levy in the next few years and that, in the long term, he will abolish it?
    Mr. Buchanan-Smith: It would be a brave Minister who gave an undertaking for the next few years. However, as the hon. Gentleman knows, and as my right hon. Friend made clear at the Dispatch Box in last week's debate, we are strongly opposed to the principle of co-responsibility as proposed by the Commission. It is one matter on which we are negotiating in Brussels and I am glad to know that we have the support of the House.
    Mr. Hicks: Is my right hon. Friend aware of the growing concern about the imbalance between the livestock sector, including dairying, and arable areas in the United Kingdom? Will he take account of that fact when negotiating the current EEC farm price proposals?
    Mr. Buchanan-Smith: I wholly agree with my hon. Friend. One unfortunate feature of recent years has been that there has been no relative advantage for livestock producers in proposals from the Commission in Brussels. I am glad to say that in the proposals that we are considering this year we see a difference, with lower price increases for arable products.
    Mr. Strang: Although I welcome the Minister's statement that the Government are opposed in principle to a co-responsibility levy, will he make it clear that in practice there is no way that they will continue to accept levies that discriminate against British dairy producers?
    Mr. Buchanan-Smith: The worst aspect of the co-responsibility levy, as proposed, is that it discriminates against the more efficient and larger producers. We are opposing that in the negotiations, and we have the strong support of the Danish and Dutch Governments. I hope that we shall see improvements in the course of the negotiations.

    Fishing Industry
    Mr. Teddy Taylorasked the Minister of Agriculture, Fisheries and Food if he will make a further statement on the future of the fishing industry.
    Mr. Buchanan-Smith: I am continuing to seek a settlement on a revised common fisheries policy.
    Mr. Taylor: What legal rights does the United Kingdom have to exclude foreign vessels from our inshore waters in the event of the CFP not being revised by the end of the year?
    Mr. Buchanan-Smith: I answered the point earlier. I can see no way in which any British Government would allow fishing up to the beaches. As I said to the right hon. Member for Western Isles (Mr. Stewart), there is provision in the Treaty of Accession that there should be arrangements before the end of 1982.
    Mr. Robert Hughes: Is the Minister aware of the disquiet in the industry, following statements by the Earl of Mansfield and the right hon. Gentleman's replies, about the future aid package to the industry? May we have a categorical assurance that there will be an aid package, and will the right hon. Gentleman tell us when it will be produced?
    Mr. Buchanan-Smith: I know of the industry's concern and have spoken to its representatives. The case put to us by the industry contains a wide variety of evidence. We wish carefully to assess it all before we come to a decision, and we are doing that.
    Mr. John Townend: Is my right hon. Friend aware of the considerable concern of the inshore fishing industry at Bridlington about the possibility of restrictions on fishing for cod in the North Sea in the autumn? Is he aware that if cod fishing is restricted, no other fishing is available and the fleet will have to tie up?
    Mr. Buchanan-Smith: I am very much aware of that. In the past five days, the fishermen in my constituency have made the same representations to me. I know of the anxiety fishermen feel when fishing for a particular species is closed for whatever reason. Inshore fisherman particularly do not have the same variety of opportunities as others. It is a serious matter, which I shall consider carefully.
    Mr. McNamara: Is the Minister of State aware that the owner of the last two deep-sea fishing trawlers out of Hull sold them to New Zealand because, he said, of the Government's failure to arrive at an agreement on the CFP? Are we to assume that the Government have said farewell to a deep-sea fishing industry for Humberside? If so, what steps will the right hon. Gentleman take in the Community or in the Cabinet to direct investment and jobs to Hull for the people who have depended on the fishing industry?
    Mr. Buchanan-Smith: That is a selective view of the source of the problems of the deep-sea fleet. The main source is the extension of fishing limits out to 200 miles, giving rise to the loss of Icelandic and other water. I should have much more respect for such claims if they took into account all the interests.
    Of the last two years' aid of £42 million to the industry, more than £7½ million has gone to the sector of the fleet broadly represented by deep-sea vessels. That does riot exactly show a lack of concern by the Government. I hope that the hon. Gentleman will acknowledge that.

    Poultry (Newcastle Disease)
    Mr. John Wellsasked the Minister of Agriculture, Fisheries and Food when the last case was notified to him of Newcastle disease in poultry in the United Kingdom.
    Mrs. Fenner: The last notified outbreak of Newcastle disease occurred on a very small scale in Buckinghamshire in April 1978.
    Mr. Wells: What steps is my hon. Friend taking to ensure that we remain comparatively disease free?
    Mrs. Fenner: The policies that we have adopted have been designed to achieve the highest possible animal health status. Under the new policy applied from September 1981, the use of vaccine is banned. A slaughter policy would be followed, with the cost of compensation met by the industry, in the event of an outbreak. Complementary import controls were introduced to minimise the risk of importing the disease.
    Mr. Colin Shepherd: Is there not a substantial incidence of disease in poultry in France? Does that not underline the necessity of maintaining the present policy?
    Mrs. Fenner: Yes. That is why we firmly stand by our right to maintain the policy.

    Agricultural Production
    Mr. Iain Millsasked the Minister of Agriculture, Fisheries and Food what was the gross value of agricultural production in the United Kingdom in the last year; and at what cost to the Exchequer.
    Mr. Buchanan-Smith: In the "Annual Review of Agriculture 1982" White Paper, Crnnd. 8491, the gross output of agriculture in 1981 was estimated at £9,733 million, while public expenditure under the common agricultural policy and on national grants and subsidies amounted to £1,038·9 million, of which £769·7 million came from FEOGA receipts.
    Mr. Mills: Does not the difference demonstrate clearly the ability of agriculture to show the nationalised industries just how productivity can be achieved by hard work and lack of restrictive practices? Will my right hon. Friend take every opportunity to encourage his colleagues to press the same approach on nationalised industries?
    Mr. Buchanan-Smith: There are two particular records in agriculture. The first is the one to which my hon. Friend refers. The rate of increase in productivity per man is probably greater than in any of our other industries. The second is that in recent years our agriculture industry has increased our self-sufficiency in food, which is not only in the national interest but, most particularly, in the interests of consumers.
    Mr. Ashton: Is not much of the success of agriculture due to planning agreements whereby the Egg Marketing Board, the Milk Marketing Board and the Potato Marketing Board were set up? If planning agreements are so successful in agriculture, why is the Conservative Party against them in other industries?
    Mr. Buchanan-Smith: The hon. Gentleman might also acknowledge the fact that agriculture probably has the greatest number of small businesses and self-employed people. That demonstrates that the industry's strength comes from that structure and enterprise.
    Mr. Spence: How much has increased production and productivity benefited our balance of payments over the past 12 months.
    Mr. Buchanan-Smith: I am delighted to say that, because of the increase in self-sufficiency over the past 12 months, through savings on imports and through exports, the saving on our balance of payments is about £1,000 million, which is very much to our benefit.
    Mr. Cryer: If the productivity increase has been so marked, why cannot farming give just rewards to its workers who are responsible for the increase and who are among the lowest paid in the country? Has not massive Government intervention, through grants, subsidies, other aids and training schemes developed in the post-war period, produced the success?
    Mr. Buchanan-Smith: As the hon. Gentleman knows, the industry has an independent wages board. I hope that he will also acknowledge that in recent years we have seen a marked improvement in agricultural earnings as a percentage of industrial earnings. That is a movement wholly in the right direction.
    Mr. Hawkins: My right hon. Friend says that farming is made up of small businesses, but does he not agree that the increase in the number of huge farms has been injurious to village life? Will he make sure that small farmers and new entrants to farming are encouraged?
    Mr. Buchanan-Smith: My hon. Friend knows that that matter is examined from time to time. It must be put into perspective. There is concern in particular areas at particular times. I agree that the proportion of large farms in the total amount of land held by agriculture, and the changes that take place, must be watched. I do not believe that one should exaggerate that matter too much.

    Farm Prices
    Mr. Strangasked the Minister of Agriculture, Fisheries and Food when he expects agreement of the level of European Economic Community common farm prices for 1982–83.
    Mr. McQuarrieasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the negotiations of the farm price review with the other member nations of the European Community.
    Mr. Buchanan-Smith: The Council of Agriculture Ministers is currently considering prices for 1982–83. My right hon. Friend will make a statement to the House in due course.
    Mr. Strang: May I remind the Minister that the Opposition stand four-square behind the Prime Minister's determination to achieve a satisfactory solution to Britain's budget problem? Will the Minister assure the House that his right hon. Friend the Minister of Agriculture, Fisheries and Food will not undermine any such settlement, if it were to be achieved, by agreeing to price increases above those proposed by the Commission, which would lead to bigger surpluses and a bigger burden on the taxpayer?
    Mr. Buchanan-Smith: My right hon. Friend the Prime Minister has made it clear that the three elements concerned, which are regional and other policies, agriculture prices and the budget, must be dealt with in parallel. That view is taken not only by the Government but by other Governments in the Community. It is on that basis that the proposals are being discussed.
    Mr. Nicholas Winterton: Does my right hon. Friend accept that if we agree to what is likely to result from the European price review, the splendid achievement of British farmers in productivity improvement over the years may not be maintained because farming incomes will continue to drop, as they have in recent years? As the National Farmers Union has stated, there has been a 50 per cent. drop since 1976. Can productivity improvements continue, with such a drop in incomes?
    Mr. Buchanan-Smith: I assure my hon. Friend that in the negotiations in Brussels we shall bear closely in mind the record and present position of British farmers, as well as of processors in the food industry and consumers.

    Agricultural Holdings
    Mr. Heddleasked the Minister of Agriculture, Fisheries and Food whether he has received any recent

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    representations from the National Farmers Union and the Country Landowners Association concerning the interests of landlords and tenants of agricultural holdings.
    Mr. Buchanan-Smith: We have had no recent representations from the presidents of the National Farmers Union and the Country Landowners Association. We have, however, received a number of letters from hon. Members passing on the views of local branches of those organisations.
    Mr. Heddle: Does my right hon. Friend agree that his endeavours to create agricultural tenancies, and so to give our young farmers the opportunity to branch out on their own, are frustrated by the blind opposition of the Labour Party? Will my right hon. Friend urge leaders of the NFU and of the CLA, in the interests of agriculture's future, to obtain from the Labour Party an agreement to those sensible proposals?
    Mr. Buchanan-Smith: There is no doubt that the objectives that the CLA and the NFU have sought to achieve are broadly supported in the House. Good progress has been made so far. As the House knows, there are some differences of opinion. We have received a number of other representations, which we are considering. I hope that Opposition Members will have listened to what my hon. Friend has said.
    Mr. Maclennan: If the Government favour the proposals of the CLA and NFU, why do they try to pass the responsibility for not acting on those proposals to the Opposition and not bring forward their own proposals? Is the Minister aware that the NFU now views the Government's delay as a ducking of responsibility?
    Mr. Buchanan-Smith: The hon. Gentleman is completely incorrect in his final remark. If he were more in touch with what was happening in agriculture he would know that many different views are expressed. In the long-term interests of agriculture, whatever changes are made should be effective and long lasting. It is worth while taking a little longer to reach the right solutions.
    Mr. Maxwell-Hyslop: Is my right hon. Friend not aware that the NFU must be accepted as speaking for the farmers? It is in agreement with the CLA. There is no other sphere in which the concurrence of the official Opposition is required, so why on earth should it be required in this sphere?
    Mr. Buchanan-Smith: My hon. Friend should be aware that a number of other representations have been made. We are discussing this matter with the various interests concerned. I hope that, once the discussions are completed we can come to conclusions. There is no doubt that there is room for improvement. We wish to see sensible improvements in future.

  PRIME MINISTER

    Engagements
    Ql. Mr. Meacherasked the Prime Minister if she will list her official engagements for 1 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In
    436
    addition to my duties in the House I shall have further meetings later today. This evening I hope to dine with Her Majesty the Queen at Windsor.
    Mr. Meacher: Is the Prime Minister aware that she misled the House a week ago when she said that living standards were now higher than at any time under t he Labour Government? Is she aware that the Government's figures published yesterday show that real personal disposable income, which is the right hon. Lady's definition of living standards, is lower than when the Labour Government left office? Is she further aware that the truth is that living standards under the Labour Government rose continually by 13 per cent., whereas under the Tory Government they have fallen continually by 5 per cent?
    The Prime Minister: I have been looking at the figures. For the first quarter of 1979 real personal disposable income was 109·8 on the index. In the last quarter of 1981 it was 111·5.
    Mr. John Browne: Is my right hon. Friend aware that the sudden imposition of VAT on the sale of gold coins has, in the absence of foreign exchange controls, exported that business, and that British residents will now buy gold abroad? Will she consider abolishing VAT for all gold purchases in order to bring employment in that important, profitable and influential business back to Great Britain?
    The Prime Minister: As my hon. Friend knows, that announcement was made yesterday. It will take some time for the markets to settle down. We shall have to see what happens then.
    Mrs. Shirley Williams: Will the Prime Minister tell the Department of Education and Science to end the absurd anomaly under which any unemployed young person who studies for more than 21 hours a week is immediately refused supplementary benefit, which is directly contrary to what the Prime Minister has repeatedly said about the need for people to work harder?
    The Prime Minister: I thought that the right hon. Lady would know that on the whole supplementary benefit is not meant for students. Therefore, there has to be a certain limit at which it ceases to be paid to students. That has been the rule under all Governments. The question is precisely when that limit is applied. A number of questions have been put to my right hon. Friends the Secretaries of State for Education and Science and Social Services on that matter. There have been some recent modifications to the 21-hour rule. I must stress again that supplementary benefit is not for those who are more or less full-time students.
    Mr. Jessel: As the Liberal Party is opposed to the possession by the United Kingdom of an independent nuclear deterrent, and as the Social Democratic Party thinks that we should have one, is there not a deep split between the two parties on a matter that is of fundamental importance to the country? If by any chance those parties were to hold the balance in Parliament after the next general election, the British public would have not the faintest idea whether this country would have a nuclear deterrent.
    The Prime Minister: That is but one of the things over which the Liberal Party and the Social Democratic Party do not agree. There is not the slightest shadow of doubt

    437
    that the Government, realising that an independent nuclear deterrent has served this country well for three decades, believe that we should continue it as the best way of keeping peace.
    Mr. Beith: Will the Prime Minister define the circumstances in which the country ought to launch an independent nuclear retaliation when its allies did not think it right to do so?
    The Prime Minister: We have been alone before. I trust that we shall never be alone again, but I think it reasonable and prudent to make proper provision for the defence of this country should that happen. Only then could we stand up to any potential aggressor. I note the hon. Gentleman's fundamental weakness.
    Later—
    Mr. Meacher: On a point of order, Mr. Speaker. May I seek your support and advice? For the second time the Prime Minister has misled the House by quoting the wrong figures—
    Mr. Speaker: Order. No one should try to use a point of order to correct arguments—[Horn. MEMBERS: "Why not?".] Because it is wrong and is not in order.
    Mr. Bob Dunnasked the Prime Minister if she will list her official engagements for Thursday 1 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Dunn: Does my right hon. Friend agree that, however sincere some of the people in the peace movement might be, the peace movement by its activities can be construed by the enemies of this country as a sign of national weakness?
    The Prime Minister: My hon. Friend is right that those who make the loudest public demonstrations for peace are often those whose policies would make war more likely or would induce the feeling in any potential agressor that this country lacked resolve. My generation does not forget what happened in the 1930s. I agree with my hon. Friend.
    Mr. Norman Atkinson: With regard to the answer that the Prime Minister has just given about national incomes, is she aware that over the same period the top 25 per cent. of income earners in this country have come to share over 50 per cent. of total national income, yet the bottom 25 per cent. of income earners share less than 10 per cent? There is no doubt, using the same figures, that the rich are getting richer and the poor are getting poorer. Is that in keeping with the philosophy of the Tory party?
    The Prime Minister: Many statistical analyses are published, and all of them have different methods of calculating their results. There is bound to be a considerable spread of and difference in national income.
    Mr. Lyell: Will my right hon. Friend find time today to reflect on the great benefits that would flow to this country from the institution of a scheme of national community service? Will she also consider that while such a scheme would require a great deal of political will it would find huge underlying support in the country, and that no one is better placed to provide that will than she is?
    The Prime Minister: As my hon. Friend knows, there are many opportunities available for community service
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    under the several programmes operated through the Manpower Services Commission and the Department of Employment. My right hon. and learned Friend the Chancellor of the Exchequer has proposed to allocate about £150 million in the last Budget, if we can get such a scheme going. He is prepared to increase it if larger numbers of people are prepared to undertake that kind of service.
    Mr. Skinner: What about real jobs?
    The Prime Minister: It is better to go slowly than to bring in a massive scheme that would be difficult to organise.
    Mr. John Silkin: Will the Prime Minister find time today to reflect on the fact that when there is a Tory Government and high unemployment crime always increases, as it is now doing, and as it did in the 1930s.
    The Prime Minister: If the right hon. Gentleman looks, he will find no clear connection between the level of crime and that of unemployment. Even in the most prosperous countries, without high unemployment, the level of crime has increased.
    Mr. Ashton: There is a connection.
    Mr. Silkin: If the right hon. Lady checks her facts she will find that unemployment under the Conservatives in the 1930s doubled. In the first two years of her Aministration crime figures have gone up 20 per cent., and the Home Secretary said earlier this week that there was a relationship between unemployment and the crime figures.
    The Prime Minister: My right hon. Friend the Home Secretary said that it was one of many factors. If the right hon. Gentleman examines the figures he will find that crime went up during the years when unemployment was low.
    Mr. Silkin: If that is what the Prime Minister is saying, why did she promise in the general election campaign that her party would reduce crime?
    The Prime Minister: We promised that we would put much greater emphasis on the forces of law and order. There are now 8,000 more police in England and Wales than there were. They are better paid and better equipped, and for once they have the Government wholly behind them in their work.
    Mr. Nicholas Wintertonasked the Prime Minister if she will list her official engagements for Thursday 1 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Winterton: No doubt my right hon. Friend has today given considerable thought to the prospect of an excellent summer and an England test team that comprises the best possible cricketers available for England. Has she also found time to consider the recent MORI poll, which shows an increasing optimism about the British economy and also increasing support for the Government and for my right hon. Friend in particular? Therefore, will my right hon. Friend give an assurance to the House that, with her usual vigour and determination, she will continue to fight for the best interests of the United Kingdom at home and abroad?
    The Prime Minister: I am grateful to my hon. Friend. Long may the polls continue to go in that direction, and may the situation improve. We shall continue to bring down inflation, and I hope that my right hon. Friend the Lord President will allow us enough time to watch some cricket.
    Mr. William Ross: In view of the murder of five soldiers and one policeman in Northern Ireland in the past week, will the Prime Minister increase the capacity of the security forces to deal with the violence, stimulated now, as it was last November, by ill-advised political initiatives?
    The Prime Minister: I think that every hon. Member is aware of the sacrifices made on our behalf by the Royal Ulster Constabulary and by the armed forces who serve in Ulster. I pay tribute to them and extend sympathy to their families who have suffered tragedy of this kind.
    With regard to any future initiatives in Northern Ireland, I hope that there will be a White Paper and a statement next week.
    Mr. Michael Morris: As the Prime Minister will be aware, today we hope to hive the Third Reading of the Oil mberand Gas (Enterprise) Bill, the biggest piece of denationalisation, for 30 years. Will my right hon. Friend, at an early opportunity today, or certainly within the next few weeks, have meetings with her colleagues to produce for the next Session of Parliament an even greater measure of denationalisation?
    The Prime Minister: I thank my hon. Friend. As he knows, it is our policy to press ahead with further denationalisation because we believe that that is in the best interests of the people and it is a genuine way of extending private ownership in this country.
    Mr. James Lamond: Will the Prime Minister find time today to start polishing up her speech for the United Nations special session on disarmament? If she does, will she give serious consideration to trying to break the logjam in the peace talks, and even to break the mould by saying that she refuses to go ahead with Trident and refuses to have cruise missiles in this country, and that she will pursue a policy of unilateral nuclear disarmament?
    The Prime Minister: The answer to the hon. Gentleman is "No, Sir".
    Mr. Nicholas Winterton: Quite right.
    Mr. Neubertasked the Prime Minister whether she will list her official engagements for 1 April
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Neubert: Further to the question asked by my hon. Friend for Northampton, South (Mr. Morris), is it not encouraging that, as a result of denationalisation measures since my right hon. Friend came into office, about 75,000 employees in public industries have become worker-shareholders in their enterprises? Is this not a giant stride towards a nationwide capital-owning democracy?
    The Prime Minister: Yes, it is a considerable stride towards a capital-owning democracy. I am happy to report to my hon. Friend that not 75,000 but 90,000 people have benefited in that way.
    Mr. Straw: Is the Prime Minister aware of the great anxiety among the employees of the Royal ordnance factories in my constituency and those of many of my hon. Friends about the Ministry of Defence leaks in today's press that the Government are to do an Amersham International at those factories and sell them to the private sector? As this anxiety comes on top of an unprecedented number of redundancies in the Royal ordnance factories, will the Prime Minister take this opportunity to tell us exactly what is the Government's policy?
    The Prime Minister: The Government are considering how best to give effect to their policy objective of changing the constitution of the Royal ordnance factories to allow them to operate in a more commercial environment. I must give the hon. Gentleman news which I am afraid will be welcome to him, although not so welcome to some of my hon. Friends. The prospects for fast progress in privatising the Royal ordnance factories are not bright.

Business of the House
3.32 pm
Mr. John Silkin: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): Yes, Sir. The business for next week will be as follows:
MONDAY 5 APRIL—Remaining stages of the Local Government Finance (No. 2) Bill and of the Reserve Forces Bill [Lords].
TUESDAY 6 APRIL—Second Reading of the Finance Bill.
WEDNESDAY 7 APRIL—Supply (17th Allotted Day). There will be a debate on the first to seventeenth reports from the Committee of Public Accounts in Session 1980–81 and the first to fifth reports in Session 1981l–82, and the relevant Government observations.
At Seven o'clock, the Chairman of Ways and Means has named Opposed Private Business for consideration.
THURSDAY 8 APRIL—It is proposed that the House will meet at 9.30 am, take Questions until 10.30 am, and adjourn at 3.30 pm until Monday 19 April.
Mr. Silkin: Will the Secretary of State for Northern Ireland be making a statement next week on the White Paper and will the Lord Privy Seal be prepared to make an oral statement next week on the observers' report on the E1 Salvador elections?
Last week during business questions my right hon. Friend the Leader of the Opposition asked about the public expenditure White Paper. We are grateful for the fact that the Government have separated the Second Reading of the Finance Bill from the debate on the public expenditure White Paper. However, as the right hon. Gentleman knows, we would have preferred a debate on the White Paper before the Second Reading. May we have the debate before the Bill is discussed in Committee?
The Leader of the House will be aware that yesterday a written answer was given by his right hon. Friend the Secretary of State for Transport to the hon. Member for Cardiff, North (Mr. Grist). The answer amounted to a major Government statement and was a departure from Government policy. In our view, it was a departure that put in jeopardy many of the services of British Rail. We must demand that an oral statement be made by the Secretary of State for Transport and that a debate should follow in due course.
Mr. Pym: My right hon. Friend the Secretary of State for Northern Ireland intends to make a statement next week, and in all probability it will be on Monday.
I shall consult my right hon. Friend the Lord Privy Seal on the observers' report on the E1 Salvador elections. I do not think that we had it in mind to make an oral statement, but I am prepared to consider that possibility without giving an undertaking.
It is my hope to arrange a debate on the public expenditure White Paper before the Finance Bill begins its Committee stage. At any rate, I shall seek to arrange it in that way.
The written answer to which the right hon. Gentleman referred was very much in accordance with precedent and practice on such a matter. It is true that on occasion it has been done in another way, including in this Parliament in
442
respect of one nationalised industry, but the procedure that was followed yesterday was in accordance with precedent. It seemed to us to be the appropriate way of proceeding. I appreciate that the right hon. Gentleman believes that it is an important matter. It is possible for the Opposition to arrange a debate upon it if they so wish. We acted in accordance with what is normally done on such occasions.
Mr. Silkin: Nevertheless, will the right hon. Gentleman kindly consider the matter again? It is one of great importance to the Opposition and, we feel, to the nation. Perhaps he will have another look at it.
Mr. Pym: Of course I am prepared to do that. I do not wish to make any promise or to give an undertaking, but I am prepared to consider the matter again.
Mr. Edward du Cann: Has my right hon. Friend had time to observe the report of the Select Committee on the Treasury and Civil Service which was published today? It is the fourth report from a Select Committee to recommend an extension of the remit of the Comptroller and Auditor General and the Exchequer and Audit Department. As we are approaching the third anniversary of the occasion when my right hon. Friend's predecessor stated that the issue would be dealt with by my right hon. and learned Friend the Chancellor of the Exchequer as a matter of urgency, can my right hon. Friend tell the House when he thinks that an announcement will be made?
Mr. Pym: I am grateful to my right hon. Friend. I am conscious of the keen interest in the House on this subject, which has been debated before. I am conscious also of the Government's commitment fully to respond to the proposals that have been made and to which my right hon. Friend referred. I know that my right hon. and learned Friend the Chancellor of the Exchequer is fully seized of the position. He is actively pursuing the matter and I hope very much that progress will be made soon.
Mr. Jack Dormand: Has the right hon. Gentleman seen Early-Day Motion 382, which calls for support for the Northern region?
[That this House welcomes the decision announced by the Secretary of State for Wales to increase the budget of the Welsh Development Corporation by 71 per cent. from April 1982; recognises that representatives of the Northern Region of England are currently negotiating with Secretary of State for Industry about the North of England Development Council budget for 1983–84;notes that the problems in the Northern Region are at least as severe as those faced by the people of Wales; and calls upon Her Majesty's Government to give equal support to the people of the Northern Region.]
Does the right hon. Gentleman realise the implications of the statement made by the Secretary of State for Wales that there should be a 71 per cent. increase in grant for the Welsh Development Corporation, which we in the Northern region welcome very much because of the needs of Wales? However, will the right hon. Gentleman ensure that the Secretary of State for Industry makes a statement next week to draw attention to the needs of other regions and not least the Northern region, which still has the highest rate of unemployment and which would need an increase in grant of at least 71 per cent. to increase job opportunities?
Mr. Pym: There is no doubt that a number of regions have strong claims for the reason that the hon. Gentleman has explained. I shall convey his representations to my right hon. Friend the Secretary of State for Industry and consult him on the issue.
Mr. John G. Blackburn: Is my right hon. Friend aware that this week saw the publication of the first annual report of Her Majesty's Inspector of Prisons? There are many Members on both sides of the House who would welcome an early debate on the role of the prison service. Will my right hon. Friend give an assurance that we shall have such a debate after the Easter recess?
Mr. Pym: Hon. Members could have raised this important topic in the House on a number of occasions. It is true that there is a great deal of interest in it. It is true also that my right hon. Friend the Secretary of State for the Home Department has taken positive action and made a number of substantial decisions to improve the conditions in our prisons and to build new prisons. I cannot find Government time in the near future to debate the matter. I hope that there will be other opportunities for my hon. Friend to raise the subject for debate.
Mr. Robert Kilroy-Silk: Does the right hon. Gentleman accept that the first report of Her Majesty's Inspector of Prisons is extremely important? Is he aware that it speaks in fairly straightforward terms of the appallingly overcrowded conditions in our prisons and refers to the effect of imprisonment as being brutalising and dehumanising? Surely it is important that the House should have an early opportunity to debate the report?
Mr. Pym: Of course it is an important topic. Perhaps the decisions taken by my right hon. Friend are even more important. He has taken action to try to deal with some of the issues that have been raised I shall keep the hon. Gentleman's request in mind.
Sir John Biggs-Davison: Apart from the merits of the Northern Ireland initiative, which to a number of my right hon. and hon. Friends and myself are imperceptible, should not the statement thereon be made not next week but today or tomorrow, seeing that the whole arrangements have been published in the press? Should not we learn from Ministers of the Crown and not from newspapers and broadcasts what her Majesty's Government policy is?
Mr. Pym: I ask my hon. Friend to be patient until, I hope, Monday of next week. There were good reasons why it was not possible for the statement to be made today and why it was not practicable to make it tomorrow. It will be made at the first possible moment and thereafter we shall see what procedures may be necessary. I assure my hon. Friend that the statement will be made as soon as is practicable.
Mr. Donald Coleman: Is the right hon. Gentleman aware of the rising volume of protest in Wales about the level of water charges? Will he arrange for his right hon. Friend the Secretary of State for the Environment to make a statement next week on this difficult and vexing problem in Wales?
Mr. Pym: The Government have been reasonably generous in allocating time for debates on Welsh affairs, but I shall convey the hon. Gentleman's comments to my right hon. Friend the Secretary of State for Wales.
Mr. Richard Alexander: As the debate on the Middle East was cancelled owing to the Polish situation, as my right hon. and noble Friend the Foreign Secretary has been to Israel only this week and as there has been an escalation of the problems on the West Bank, may we have an early debate on this subject and not just a statement by a Foreign Office Minister?
Mr. Pym: The House would appreciate an opportunity for a debate on foreign affairs. I cannot arrange a debate before Easter, but I would hope to arrange one between Easter and Whitsun.
Mr. George Foulkes: Is the Leader of the House aware of the widespread concern in Scotland about the presence in the Firth of Clyde of a Soviet nuclear submarine? Does the right hon. Gentleman accept that the dangers consequent on such a presence will increase if the Government deploy Trident II at Coulport? Will he arrange for the Secretary of State for Defence to make an early statement on this matter?
Mr. Pym: That matter does not arise in the business for next week. However, I assure the hon. Gentleman that I shall convey the request for a statement, if that seems appropriate, to my right hon. Friend. Surveillance operations for the Soviet submarine and the large Soviet intelligence-gathering surface vessel in the area were mounted, using Royal Navy frigates, Sea-King helicopters and Royal Air Force Nimrod maritime patrol aircraft. I can assure the hon. Gentleman that at no time did the submarine or the other vessel enter territorial waters. Naturally, the matter is being kept under close review.
Mr. Richard Body: Will my right hon. Friend give an assurance that we shall have a full day's debate on the proposals for Northern Ireland before any legislation is published? In the meantime, will he be good enough to inquire why some members of the press are better informed on this subject than we are?
Mr. Pym: I cannot comment on my hon. Friend's latter point, although I shall try to inquire. Such inquiries do not normally yield much fruit. I must ask my hon. Friend to await the statement and we shall then see what the postition is.
Mr. Arthur Lewis: Given the deep desire of the Leader of the House and the Government to cut wasteful Government expenditure and quangos—a desire that I support—will the right hon. Gentleman arrange next week for the Secretary for State of the Environment to confirm or deny the statement in the press today that Jennifer Jenkins is to be appointed to a £25,000 a year job? The taxpayer does not like to hear of such things, and I am sure that hon. Members would like to know what is happening.
Mr. Pym: I dare say that the hon. Gentleman has made that inquiry direct to my right hon. Friend the Secretary of State. I have no knowledge of the matter, but I shall convey the hon. Gentleman's remarks to my right hon. Friend.
Mr. John Stokes: Will my right hon. Friend allow time next week for a debate on yesterday's VAT order on gold coins? While I have no objection whatever to foreign coins being taxed, is it not quite without precedent, and extraordinary, that the British gold sovereign should be subject to VAT?
Mr. Pym: I am not sure whether that matter falls within the scope of the Second Reading of the Finance Bill. That may provide an opportunity for debate, but I cannot find a special occasion to enable the Chancellor of the Exchequer to reassure my hon. Friend.
Mr. Tam Dalyell: I should like to return to the emollient answer that the right hon. Gentleman gave to the right hon. Member for Taunton (Mr. du Cann). He used such words as "actively pursuing", "conscious of the keen interest" and "the Chancellor of the Exchequer is fully seized". What exactly do they mean in terms of the debate on the Treasury and Civil Service Select Committee, which advocated access to information on Public money by the public Accounts Committee and the Comptroller and Auditor General? This is a matter of great concern in my constituency, where the tractor line at Leyland has so far not been cannibalised. Indeed, the Comptroller and Auditor General has been refused access to the books. Do the Government understand that this is more than an academic question—
Mr. Speaker: Order. Hon. Members must be fair to one another because there is a great deal of guillotined business to come later.
Mr. Pym: This is not the place to debate the merits of the issue. I was trying to assure the House, my right hon. Friend the Member for Taunton (Mr. du Cann) and now the hon. Member for West Lothian (Mr. Dalyell) that my right hon. and learned Friend the Chancellor of the Exchequer is, indeed, seized of the urgency and importance of the matter. Discussions are going on. I hope that we shall make progress with a matter that is very important and extremely difficult both for those hon. Members who are interested in it and for the Comptroller and Auditor General.
Mr. Ivor Stanbrook: Is my right hon. Friend aware that the decision made by the Cabinet this morning on Northern Ireland must have been communicated to the press immediately, because it was on the tapes, with all the details? There was even an item about it in the BBC "World at One" programme. Is it not wrong that a Cabinet decision on such an important matter should be issued first to the press and not announced to the House?
Mr. Pym: I entirely agree with my hon. Friend.
Mr. John Maxton: Will the Leader of the House give an assurance that the Secretary of State for Scotland will make a statement to the House next week about the rising crime figures in the Strathclyde region which were announced last week by the chief constable? As the Home Secretary has announced increased powers of search for the police as a cure for rising crime in London, and as we already have such powers in Scotland, we need to know what action the Secretary of State intends to take to cure rising crime in Scotland.
Mr. Pym: I shall convey those representations to my right hon. Friend the Secretary of State, but I think it most unlikely that a statement would prove appropriate.
Mr. Sidney Bidwell: Is the Leader of the House aware that there is a motion on the Order Paper concerning the ramp or luggage workers at
446
Heathrow airport, who include a number of my constituents? We are very worried. Will the right hon. Gentleman pass on that worry to the Secretary of State for Employment and ask him to use his influence to get talks going between the trade union officials and the management of British Airways, which seems to have acted in a high-handed manner on rosters? The dispute has been going on for weeks and threatens to spread because The Transport and General Workers Union is calling out other workers with a view to trying to close down the airport?
Mr. Pym: My right hon. Friend the Secretary of State for Employment and others are doing everything they can and are using their best endeavours to bring the dispute to an end.
Mr. Allen McKay: Will the right hon. Gentleman find time for the House to discuss the first report of the Social Security Advisory Committee 1981 which appears to show savings from the sick, injured and unemployed of £1·8 billion. The committee now states that we should return to the position of the 1979 valuation, which will cost £686 million. As the Secretary of State for Social Services said that he could not find any money to pay the 5 per cent. that has been taken from the unemployed, the House would like to know where the £1·8 billion is going.
Mr. Pym: I take note of those representations, and I shall convey them to my right hon. Friend the Secretary of State for Social Services.
Mr. Robert C. Brown: I should like to draw the attention of the Leader of the House to Early-Day Motion 387 dealing with the question of support for the Northern region.
[That this House welcomes the decision announced by the Secretary of State for Wales to increase the budget of the Welsh Development Corporation by 71 per cent. from April 1982; recognises that representatives of the Northern Region of England are currently negotiating with the Secretary of State for Industry about the North of England Development Council budget for 1983–84; notes that the problems in the Northern Region are at least as severe as those faced by the people of Wales; and calls upon Her Majesty's Government to give equal support to the people of the Northern Region.]
Notwithstanding what the Leader of the House said to my hon. Friend the Member for Easington (Mr. Dormand), and bearing in mind that unemployment in the Northern region is the highest for any region in Great Britain, does not the Leader of the House in all equity believe that Northern Members of Parliament are entitled to a statement next week from the Secretary of State for Industry?
Mr. Pym: The Government are still considering the level of financial support for the Northern region and three other regions. An announcement will be made as soon as a decision has been taken.
Mr. Michael Meacher: Will the Leader of the House find time for an early debate on changes in the distribution of income and wealth under this Government? Will he use such a debate to brief his right hon. Friend the Prime Minister that the official figures

447
from the Central Statistical Office show that the living standards index is now 111·4, although for the second quarter of 1979 it was 112·7?
Mr. Pym: That subject might be in order for debate during proceedings on the Finance Bill, but I doubt whether I can provide a special opportunity for a debate. The hon. Gentleman may be able to find other opportunities to raise the matter.
Mr. Bob Cryer: Given the article in the New Statesman which explains that MI5 is building and installing a massive computer with links to other Government Departments, will the Leader of the House, arrange for a statement to be made? The links between computer terminals have been confirmed in parliamentary answers to me. Does the right hon. Gentleman agree that Parliament, as a democratically elected assembly, should have some say about the safeguards for citizens which such computer storage and links threaten?
Mr. Pym: A White Paper on data protection will be published fairly soon, which will be relevant to that subject. In the fullness of time, that may provide an opportunity for the subject to be raised. However, I cannot provide time for a special debate on it in the immediate future.
Mr. Dennis Skinner: Will the right hon. Gentleman arrange for a statement to be made by the Secretary of State for Social Services on the scandalous treatment that the Government handed out this week to the nurses? The Government have refused to increase the offer to more than 6·3 per cent. and no hon. Member has had a chance to cross-examine the Secretary of State on having agreed to that scandalous offer. If the Common Market people have their way, there will be a farm price review increase of possibly 14 per cent. Why can some people get away with 14 per cent. while the Government keep nurses' pay down to 6·3 per cent?
Mr. Pym: An offer of 6·4 per cent. was made to the nurses and that is still under negotiation. It is a great mistake and extraordinarily unhelpful for any hon. Member to comment on a matter that is now under negotiation. That is how the position lies, and we must hope that a conclusion that is satisfactory to all sides will be achieved.

Lord Butler of Saffron Walden
Mr. Speaker: On Monday next the nation will be paying tribute in Westminster Abbey to the memory of "Rab" Butler, to whom the House paid tribute recently. Exceptionally, if not uniquely, this memorial service for an outstanding parliamentarian will be held at 2..30 pm, while the House sits.
I intend, on Monday, to ask the Deputy Speaker, the Chairman of Ways and Means, to take my place at Question Time while I attend the memorial service with the other two Deputy Speakers. I shall, of course, return to take my place in the Chair immediately after the Abbey service.

Adjournment (Easter)
Mr. Speaker: I remind hon. Members that on the motion for the Adjournment of the House on Thursday 8 April up to nine hon. Members may raise with Ministers subjects of their choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result will be made known as soon as possible thereafter.
Orders of the Day

  Oil and Gas (Enterprise) Bill
  [2ND ALLOTTED DAY]
  3.53 pm
  The Minister of State, Department of Energy (Mr. Hamish Gray): I beg to move, That the Bill be now read the Third time.
  This is a moment for which we have waited for more than 114 hours of serious and sometimes even tedious debate. We are now reaching the conclusion of this important part of the Government's legislative programme. We all know that it is an Opposition's privilege to be negative. Opposition Members are entitled to carp and criticise as much as they like and they can sometimes convince those—
  Mr. Merlyn Rees rose—
  Mr. Gray: Perhaps the right hon. Gentleman will allow me to develop my argument a little.
  Mr. Rees: On a point of order, Mr. Speaker. We have now reached the Third reading of a Bill that has detained us for many hours. We understand why the Secretary of State has not been with us on many occasions, but should he not be present now?
  Mr. Gray: Throughout our deliberations the right hon. Gentleman has been extremely understanding. My right hon. Friend the Secretary of State has many important duties to perform—[Interruption.]—and it is appropriate that he should seize the opportunity of having the last word on the Bill when he concludes the debate. Yesterday the Opposition could not even manage double figures. It is hardly appropriate for the Opposition to criticise my right hon. Friend when their Members have absented themselves from the Chamber for hour after hour. We do not blame the Opposition. We appreciate that they have their problems.
  Let us return to the much more important subject of the Bill's merits and contents and of the opportunities that it will provide. Throughout the Committee stage constructive contributions came only from Conservative Members. We heard little more than carping criticism from the Opposition and we never heard a constructive proposal from them. I am glad to see the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) in the Chamber. He made some useful contributions. At least he has been constructive, and that is something.
  Let us consider our achievements in relation to the British National Oil Corporation. Throughout our long debates there were far too many misconceptions about the Government's plans for BNOC. Some were genuine misunderstandings, others were no more than the Opposition trying to scaremonger and create apprehension in the minds of the public. However, we are not misled or deterred in any way by such things.
  I should like to put the record straight. We are not abolishing BNOC. From the outset we consistently stated that the corporation would remain in existence under State control. We said that its primary role would be to trade in participation oil. That represents an important contribution to the security of the nation's oil supplies. We are not
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  giving up our controls or regulatory powers over the North Sea. They will be unaffected by the creation Britoil. The independent BNOC will be completely separate from Britoil. BNOC will continue in being, ensuring that the national interest is properly safeguarded.
  We are not, in any way, engaged in asset-stripping. BNOC's oil-producing business will be transferred to Britoil as a going concern. There is no question of BNOC's assets being sold off individually. We are not leaving Britoil at the mercy of any creditors who may wish to take it over. The articles will contain effective safeguards for Britoil's independence.
  The Opposition's pathetic attempt yesterday—after so much song and dance during the weeks before—to criticise the articles serves only to show the care that we took to provide articles that adequately cover the situation. That was highlighted by the debate on new clause 1. The articles will contain effective safeguards for Britoil's independence and the safeguards will be triggered if there is an attempt to take over voting control of the company or to control the Britoil board or its composition.
  Our plans represent an imaginative approach to the problems of a public-sector oil corporation and they should command the support of all who wish to reverse the steady expansion of the State in our national life.
  Mr. Dick Douglas: The hon. Gentleman will recall that I asked yesterday whether the articles of association had been referred to the council of the Stock Exchange. The answer given was in the affirmative. May we have the council's comments on the articles? Are they available to the House?
  Mr. Gray: The hon. Gentleman has been in the House for as long as I have. He knows perfectly well that such correspondence and exchanges of views are confidential. Such information is not available to the House.
  I deal next with the Government's proposals for the British Gas Corporation. At this stage in the Bill's progress through the House it might be appropriate for me to suggest that the time is ripe for others to come to terms with the provisions that we are proposing. One can admire the putting up of a good fight, but not the bad loser—not that I would ever suggest that Labour Members would be bad losers. They cannot be looking forward to the next election with any enthusiasm—that is for sure.
  Mr. Edward Rowlands: Nor are the Tories.
  Mr. Gray: We are a philosophical party. We take things as they come. We do not get all uptight in the way that Labour Members do.
  No one should doubt the Government's resolve to implement their proposals for the gas industry. No one should doubt that in implementing the proposals the Government expect—they are entitled to expect—the full co-operation of those who are involved.
  We have described the gas measures to the House on a number of occasions. I should hesitate to do so again were it not for the misconceived criticisms still being put about in some quarters. There are general powers of disposal in respect of the British Gas Corporation's assets. We have made it clear that in the first instance we intend to use those to privatise the British Gas Corporation's interests in offshore oilfields.
  In Committee, my right hon. Friend the Secretary of State gave the assurance that he would not direct BGC,

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  under clause 11(1), to dispose of assets required for the performance of the corporation's statutory obligations to supply on request under schedule 4 to the Gas Act 1972. I want there to be no misunderstanding. At present the Government have no plans to require the corporation to dispose of its interests in gas fields or to dispose of its transmission and distribution pipelines.
  Competition will open up new opportunities for industrial and commercial concerns, on which success our economy depends. It is the larger industrial and commercial consumers who expect to be the purchasers of the majority of private gas supplies. However, the Bill also permits private supplies to smaller consumers, with my right hon. Friend's consent. We have made it clear that the purpose of that consent requirement is to permit a check to be made on the adequacy of the proposed safety and emergency arrangements.
  The Government also said in Committee that they accept the need for private gas in the British Gas Corporation's pipelines to fall within specifications which do not prevent the corporation from complying with its obligations. Those are proposals which are workable and have full regard to safety.
  Mr. Tam Dalyell: After yesterday, may we take it that the concept of non-premium gas has gone the way of the dodo?
  Mr. Gray: I do not think that the hon. Gentleman can make that assumption at all. That was made perfectly clear when my hon. Friend the Under-Secretary spoke on the gas clauses yesterday.
  Part 4 deals with the important subject of offshore safety. It is probably the only part of the Bill that is wholly non-political. For that reason, it probably provided us with the best debates throughout our progress in Committee. The Committee spent a considerable amount of time talking about offshore safety and the proposals that had been laid before me by Labour Members, in conjunction with the unions. The general approach was constructive and we made a lot of progress in our thinking along those lines.
  I recognise that the industry has invested considerable resources in safety. However, no matter how high the standard of self-regulation by the industry, no Government can abrogate their responsibility for the safety of workers offshore. For example, it would be completely unacceptable if workers housed on accommodation units did not have the same degree of protection as they receive when on drilling and production platforms. It is that thinking that underpins the proposals in clause 23. My Department is discussing with the United Kingdom Offshore Operators Association the application to Hotels of the various regulations made under the 1971 Act and the time scale for their implementation.
  The majority of the Burgoyne committee's recommendations concerned points of technical detail on a wide range of offshore operations. Nothing proposed in the Bill will prevent the recommendations from being put into effect. It may be helpful if I review briefly the position regarding the implementation of the Burgoyne recommendations which concern the House and which we have debated and exchanged views upon.
  Particular interest has been expressed for the safety of those who work offshore, and that is proper and understandable. Frequent reference has been made to the
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  proposals contained in the North Sea oil charter prepared by the joint parliamentary union offshore group. I discussed the proposals with the group in a constructive meeting on 27 January and subsequently sent the group a written commentary on the proposals contained in the charter. I stand ready to have further discussions with the group when its proposals assume definitive form. As I made clear to the hon. Member for Kingston upon Hull, East (Mr. Prestcott) last night, I look forward to discussing the progress that has been made after the group has had consultations with other Departments.
  The question has been raised of the effectiveness of the sanctions available to Ministers to deal with companies with unsatisfactory safety records. Some Labour Members have advocated having the power to ban such companies outright from operating on the United Kingdom continental shelf. Clearly, we would all seek to circumscribe the activities of cowboy companies with a proven record of failure to implement safety regulations. I am persuaded that the combined impact of the powers currently available and the major incentive to the companies themselves implicit in the existence and exercises of those powers, constitute a powerful deterrent against any such rogue companies. I am not persuaded that a total ban is necessary.
  As I explained to the House last night, legislation alone cannot ensure safety in the North Sea. A considerable number of factors influence that, not least the training of personnel before they go offshore and the attitude of the companies that are operating in the North Sea. Probably the most important factor of all is the general attitude of the workers offshore—the constant awareness of he necessity for safety and the application of the guidelines that are given in every case.
  Finally, hon. Members have underlined the need for the safety regime to keep abreast of technological developments. The entire saga of the North Sea has been characterised by the opening up of new technological frontiers. The application of advancing technology to safety is no exception. Indeed, successive Governments have striven to develop an effective safety regime, flexible enough to take account of new technologies and new situations. The proposals contained in the Bill are entirely consistent with that approach.
  The Bill reflects the Government's total commitment. in common with that of their predecessors, to ensure that every necessary step is taken to minimise the risks attendant upon activities in the hostile offshore environment. Clearly we should not delude ourselves into thinking that activities in such an environment can be rendered entirely risk free with legislation or without legislation—certainly not merely by regulation and administration.
  We have an obligation to the offshore work force to establish and maintain the best possible safety framework within which offshore oil and gas operations may be carried out, and the Bill reflects the Government's unqualified acceptance of that obligation.
  I believe that the measure that we have piloted through the House will be of great benefit not only to the nation but to everyone who is prepared to participate in the resultant Britoil company.
  After many hours of serious debate, perhaps I shall be permitted a moment of levity—
  Mr. Dalyell rose—
  Mr. Gray: I shall not give way just now. It may well be that what I am about to say is not within the knowledge of the hon. Member for West Lothian (Mr. Dalyell)—
  Mr. Dalyell: Before the Minister indulges in his moment of levity, perhaps he will comment on the speech made yesterday by the hon. Member for Derbyshire, South-East (Mr. Rost), who pointed out that the underwriting fees for Amersham, British Telecom, British Aerospace and Cable and Wireless came to £21·3 million. That was not denied. Before we come to the jokes, will the Minister say whether the £21·3 million is the Government's figure?
  Mr. Gray: The hon. Member has a happy knack of pouring cold water on anything. That has nothing whatever to do with the legislation that we are discussing.
  I was about to comment on the Welshmen who led for the Opposition. It is unusual to have two Welshmen leading for the Opposition. It will not be lost on my Scottish Friends that those two hon. Members made no reference whatever to clause 34. That is not a particularly important clause, but is has been indelibly imprinted on the minds of Welshmen since a week last Saturday. It is a good job that the clause does not contain a subsection (18), otherwise we might well have discussed such a subsection for a long time.
  I pay tribute to the right hon. Member for Leeds, South (Mr. Rees) and his hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), who have co-operated to the full throughout our deliberations. We now look to see whether Labour Members, in their vigorous opposition to the Bill will be able to keep this Third Reading debate going on until 7 o'clock. I commend the Bill to the House.
  4.13 pm
  Mr. Merlyn Rees: The Bill has been with us since the Queen's Speech. We have had a pre-statement, a debate in reply to the Loyal Address, a Second Reading debate and a guillotine motion. It is an important piece of legislation affecting BNOC, gas and safety in the North Sea. It would have been better if on Third Reading the Secretary of State had opened the debate, but I believe that the right hon. Gentleman will reply. I simply make the point that it would have been better had he opened the debate—
  Mr. Rowlands: The tradition is that the Secretary of State opens.
  Mr. Rees: Certain standards are involved in this, and what I have just said relates to that and nothing more.
  It would have been better had the Bill been handled differently at the beginning. We suggested a Select Committee-type approach. Despite what the Minister of State has said today, it was a good Committee. We made the most of it and the Bill was treated in a sensible fashion. Apart from one occasion upstairs and one today, the Minister of State provided us with much valuable information.
  On Second Reading, eight promises were made about what would happen on Report. This is not the appropriate time to deal with them, but it seems that four have not been dealt with. Perhaps we can have a letter about that.
  We put forward ideas arising from the charter on safety. That was debated last night, and everyone was self-congratulatory about it. We received certain assurances and we shall return to those in the future. Above all, we
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  shall seek to put overall responsibility for safety into the hands of the Health and Safety Commission. We shall also return to the need to control the entry of foreign workers to our rigs. I explained why last night.
  We are still convinced that the Bill is misconceived in respect of BNOC. It is wrong to split the corporation into production and trading arms. An integrated company is necessary, and that view is supported by many people in the industry. Although I do not want it done at all, it would have been better to have retained an integrated industry and privatised generally rather than to have split it up in the way proposed—[HON. MEMBERS: "Oh".] I am not advocating that; I am merely saying that splitting it in this way is a fundamental error.
  On the production side, there is no monopoly. BNOC produces about 7 per cent. of output from the North Sea and does so successfully. We shall seek to return to an integrated company. There is need for a national company that can talk to foreign companies, and BNOC could talk from strength with such companies.
  We shall also return to the role of Government directors, which we discussed yesterday, because I do not believe that any Government have got the role right.
  Just as nationalisation in the 1940s was not the end of that story, neither is privatisation in the 1980s the end of this story. One reason is that the alternative economic strategy that the Opposition are developing—[Laughter.] This is a serious point. The ability of the hon. Member for Enfield, North (Mr. Eggar) is such that he would make a good director of a Government company. What is done in respect of a national investment bank or even under the 1972 Act, where Government funds go into companies, is the opposite of privatisation. It is privatisation in reverse. In my view, we must be clearer about the terms of reference of these companies and the role of Government directors.
  We are intrigued with the Secretary of State's method of acting through the single share concept. I think that my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) called it the "golden share". Some people are concerned about its propriety. In any event, what a system for the future! All we shall need is an Articles of Association (Enterprise) Bill. We need only include one share that is owned by the Government, and the Government may do that whenever they wish. If that happens, I hope that the Conservative Party will not grumble, because the one-share concept is capable of being developed in other ways. Apparently the Stock Exchange did not grumble. Therefore, it would not be able to grumble if we were to do what I have suggested.
  In the 1940s and 1950s, we had Morrisonian nationalisation. Who knows, perhaps we shall have Lawsonite public ownership as a result of the single share concept.
  I hope that the lawyers in the other place will look at this matter carefully. The view has been expressed that there is something fundamentally wrong with the single share, given the concept of a joint stock limited liability company and the responsibilities of the firm.
  For the future, although there may be some sense in the Government having shares in firms as a general principle, nothing that has been done invalidates our opposition to the breakup of BNOC. There remains a large private sector, consisting mainly of multinational oil companies,

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  and a State company, like Statoil in Norway, is needed to play a role in the North Sea and in the other seas around our coasts.
  Despite the brave words of the Secretary of State, there is concern about the methods that are to be used for the sale of BNOC. Last night we learnt that the first that we shall hear about the sale of BNOC will be outside, not in the House. There is to be no report to the House of Commons about the method. So much for parliamentary accountability. If there is to be a repeat of Amersham International, it will be an affront to the country. New methods of selling the company should be found. Last night, the Minister called in aid the sensible words of the hon. Member for Derbyshire, South-East (Mr. Rost), and said that the hon. Member's suggestions would be looked at. So perhaps the method of sale will be different from that of Amersham International. In any event, the House of Commons is not to be told about the method that is to be used. There are other aspects of the Bill, such as the sale of subsidiaries, on which again there is to be no reporting back to the House of Commons. If the Government use the same methods as they used with Amersham International, they will not be able this time to say that it was a good method, particularly as the amount of money involved in BNOC is much larger.
  On gas, we oppose the blanket powers given by the Government to sell off the whole of the gas corporation. We are told that the sale will involve the oil operations and the sale of gas showrooms. We shall allow the gas corporation to produce and sell oil, and we shall stop the sale of the showrooms. It does not mean that, in its accounting procedures, the gas corporation should not identify the costs and revenues of the showrooms, as was recommended in the Monopolies and Mergers Commission report. In any case, nothing will happen to the gas showrooms until the next Parliament.
  The part of the Bill which forces the gas corporation to carry the gas of private concerns is unclear and ill thought out. Despite the mythical Leicestershire village which was to be supplied with private gas, at least at the beginning, obviously the gas will be supplied mainly to industry. Even here, the oil companies are not jumping for joy. They have warned the Secretary of State—one has to read the papers to discover what is happening in this respect—that the new legislation could be a dead letter, and that potential customers have responded in a muted way. In private it is said that many industrialists doubt whether the Bill will have much of an effect, at least in the next 10 years. There are great problems of logistics, and those industrialists do not believe that it will mean lower gas prices.
  I was disturbed to hear what the Minister said last night about the premium use of gas and depletion. It is the Government who decide that the British Gas Corporation should confine its sales to gas for premium uses. To change the policy would be wasteful. To judge from the tone of voice of the Minister last night, I feel that there has been a change of policy about the premium use of gas. The oil companies are interested only as long as they can move into the non-premium market.
  Price is at the heart of the matter. Higher prices are needed to justify the development of the gasfields privately. I have heard nothing to change my mind since Second Reading that if the fields are developed the price must go up—a price which would have to take into account the tax regime. It is that, together with the effect that BGC
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  has on the home market, which leads me to deduce that the Government will allow the export of gas, so that a market price of some sort will develop.
  In that connection, I note a speech that was made by the Permanent Under-Secretary of State in which he supported Government policy—a most unusual development. If that had happened in the time of a Labour Government, there would have been hell to pay. It is unusual for a Permanent Under-Secretary to make a speech saying that the balance between the public and private sectors in production should encourage innovation, enterprise and efficiency. That is the sort of speech that should be made in the House of Commons.
  The Secretary of State for Energy (Mr. Nigel Lawson): The Permanent Under-Secretary made a speech in which he set out clearly and factually Government policy on this issue. Not only is he perfectly entitled to do that—and there are many precedents for it—but Sir Donald Maitland is a distinguished public servant who has given distinguished service to this country over a considerable number of years. It ill behoves the right hon. Gentleman to cast aspersions on a man of that stature.
  Mr. Rees: Sir Donald Maitland is a distinguished man, but I do not believe that to make a speech that could have been distributed by the Tory Central Office is the function of a Permanent Under-Secretary. That would not have happened in the older Departments of State—just as in an older Department of State, the Secretary of State would have opened the debate.
  The Permanent Under-Secretary talked about gas exports. He said:
  "If, however, the fresh impetus given to exploration were to result in large volumes of new gas being discovered, this could provide a reserve base large enough to accommodate some exports"—
  I note the qualification—
  "as well as meeting the needs of consumers in the United Kingdom".
  We have been trying to find out in the House whether there are to be gas exports, yet we have to read a speech by the Permanent Under-Secretary made to the Institute of Directors to find out.
  Mr. Tim Eggar rose—
  Mr. Rees: If the hon. Member for Enfield, North (Mr. Eggar) wants to say something, I shall respond to what he says.
  Mr. Eggar: I am most grateful to the right hon. Gentleman. Will he explain why the statements made by the Permanent Under-Secretary were so unacceptable to him, given the qualifications that the Permanent Under-Secretary made? Why would that not be in Britain's national interest?
  Mr. Rees: It would have been an appropriate matter for a Minister to announce. If we were to be told that we were to have gas exports, which would have a profound effect on depletion policy, it would be better to be told about the matter during the course of the Bill. We are against it in the interests of depletion policy.
  Perhaps the Secretary of State will tell us whether, as a result of the Bill, there is to be a change. I said on Second Reading:
  "I accept what the right hon. Gentleman says—that the Government will have the same depletion policy as before".
  The Secretary of State intervened and said:

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  "I did not say that."—[Official Report, 19 January 1982; Vol. 16, c. 183]
  Therefore, we have not got the same depletion policy. It would be interesting to know what depletion policy will result from the Bill.
  Overall, the Government have pressed this legislation under a rosy umbrella of market pricing and competition, in a field where it is inappropriate. That does not mean we are not concerned with efficiency and prices, which will help industry, while giving a return of the investment capital. Speaking on behalf of the Opposition, as I did on Second Reading, we do not worship at the feet of State monopolies. Many changes must be made. Such monopolies were set up a long time ago. We do not sit at the feet of or wors6.ip multinational corporations either. There is a problem in both those respects and it must be considered.
  We have been well served on gas production by a modern and integrated gas concern—the British Gas Corporation. This Bill is misconceived. It will not work in the way that the Government believe it will. The whole argument will go on for a long time. Many things in the Bill—parliamentary procedures and single shares—if done by a Labour Government, would have meant the media causing a continuous row. Our actions would have been called "East European". I am disturbed about the parliamentary accountability in the Bill. We have not had an open answer to the implications of the Bill, given our obligations under articles 85 and 86 of the EEC legislation. We shall seek to change this Bill one day. When we do, we shall seek to get much greater parliamentary accountability.
  This Bill is only the beginning of the story. We shall vote against it tonight as an earnest of our long-term intention on other aspects of industry. I hope that my hon. Friends will vote against the Bill.
  4.24 pm
  Mr. Michael Morris: It is worth reminding Opposition Members—my hon. Friends need no reminding—what the Bill contains and what are its main tenets.
  We are talking about the setting up of a new private enterprise company named Britoil to take over the oil-producing business of BNOC. It is not just good fortune that the company has been so named. It is a reflection of the earnest endeavour of my right hon. Friend the Secretary of State and all Government Members that this company is being set up with the aim of achieving a new, thriving British oil company which, when launched, will have a wide spread of ownership among the public. Part I is the key and dominant factor. The public should take that point on board.
  The Bill effectively states that the BGC, whose abilities, sincerity and performance are acknowledged on both sides of the House, should concentrate on what it does best—gas exploration, marketing and all aspects of the provision of gas supplies.
  The BGC should not be tempted into undertaking oil exploration. It does not have a high degree of expertise in that area. Public assets should not be deployed in that area through a corporation that is supposed to carry out a different function. My right hon. Friend the Secretary of State was right to be firm and the assertions, suggestions
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  and pressures put on him by the board of the British Gas Corporation in that the corporation should retain its interest in oil.
  I hope when my right hon. Friend replies to the debate he will be able to reassure British Gas. There is worry among its management, particularly the middle management—who are perhaps the heirs apparent to the board of British Gas—that it will be viewed as a second-class explorer in the North Sea. There is no reason why British Gas, in its efforts to explore for gas, should be viewed by anybody as a second-class entity. Its expertise in this area is second to none and all hon. Members have a duty to make that known outside the House. We all have a duty to tell the world that we know of no organisation with the expertise of British Gas when it comes to exploring for and marketing gas. We must certainly not do anything to depreciate that dimension.
  There is no reason why British Gas should be regarded as a second-class explorer. Some will immediately ask why, in that case, they should allow major industrial customers to buy their gas direct from private companies. Over a period the evidence has shown that when resources are limited—as they must be for any organisation, however large—a degree of competition is no bad thing. Certainly the rate of exploration in the North Sea was not as rapid as certain parties believed it should have been. Therefore, it is right that some competition should be introduced. That can only benefit the performance of British Gas in its North Sea activities.
  The Bill was explored in considerable depth in Committee. We owe a "Thank you" to the hon. Member for Merthyr Tydfil (Mr. Rowlands). Of all Opposition Members, he showed the most assiduity. He went into matters in great depth and asked some penetrating questions. I do not want to chastise the right hon. Member for Leeds, South (Mr. Rees). I know that he is a sincere man, but he has been a reluctant reformer. He said from the Dispatch Box yesterday evening that he was not entirely at home with this subject, and we accept that. We realise that he is genuinely concerned about the implications of the Bill.
  Mr. Merlyn Rees: I did not say that I was not at home with this subject, and today's proceedings show that I am. However, there are aspects of it that I just do not like.
  Mr. Morris: I make it clear that I meant no personal offence to the right hon. Gentleman. He performed better today than he did on other occasions.
  My hon. Friend the Minister of State was right to say yesterday evening, particularly when we were discussing part IV, that we had covered the safety dimensions in considerable depth, but the hon. Member for Kingston upon Hull, East (Mr. Prescott) raised some issues that we did not discuss in depth in Committee. I hope that those matters that were unanswered in Committee will be dealt with in another place.
  I am still concerned about the immigration laws not applying to those working on oil rigs. Although this is not a matter for the Department of Energy, I put my hon. Friend the Minister on the spot yesterday evening. I hope that urgent representations are being made to the Home Office to correct, in the next parliamentary session, what is clearly an anomaly.
  I shall conclude now, because I had no intention of making a long speech. By his direct approach my right

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  hon. Friend the Secretary of State has made clear communications. Some may not like such clarity in communication, but there is no doubt what the Bill is all about. My right hon. Friend deserves great credit, because he has faced the issue of privatisation. Many previous Secretaries of State have not wished to do that. How does one deal with the denationalisation of major facets of the British economy?
  Nobody since the war has faced that requirement. There were tinkerings with the Carlisle brewery and other bits and pieces. One can denationalise major assets in Britain. My right hon. Friend has done that—or is at least three-quarters of the way towards doing it. It may hurt the Labour Party to hear that. It may confuse the Liberal Party and the SDP, but the British public want it. The House should express its thanks to my right hon. Friend for getting it done.
  4.40 pm
  Mr. J. Grimond: The hon. Member for Northampton, South (Mr. Morris) mentioned wider ownership. That is one of the matters with which I wish to deal. I should like, first, however, to ask the Government about gas gathering. An amendment on this matter was selected yesterday but was not reached.
  I must confess that my Presbyterian soul is still deeply shocked to see the flaring that takes place at Sullom Voe and Flotta and on the platforms that I visit. Has the position over the pipeline reached an impasse? Will no progress be made either by the private sector or the public sector? I should like the Government to reaffirm their determination to find some useful purpose for this gas and to see flaring diminished if not stopped.
  What are the companies doing? The first responsibility lies with them. It might be made a condition of their licences that they dispose of gas—or more of it than is now the case—for some good purpose. I do not accept that it is impossible to lay the gas gathering pipeline. If, however, that is the argument, what steps are being taken to see whether the gas can be used locally at Flotta or Sullom? If that is not possible, I should like to know what steps are being taken over shipments. A large amount of gas all over the world is now shipped from point to point. I should like more information about gas gathering and the cessation of flaring.
  I should like also to ask about the method of setting up Britoil. I have always considered it a great pity that the Government took no notice of the suggestion made by Mr. Samuel Brittan for a wide dispersal of shares to households in Britain so that all would share in North Sea oil. I intend, in due course, to bring together the Chief Secretary to the Treasury and Mr. Samuel Brittan so that they can discuss this matter. It is perhaps too late to do anything where this Bill is concerned, but it is highly desirable that the widest range of ownership should be involved in Britoil. This is also apparently the Government's view.
  To describe someone as a small shareholder can be misleading. A man who has a small shareholding in one company may be a multi-millionaire holding innumerable shareholdings in other companies. There is no means of knowing those who are the small shareholders of this country. All that is known is that in. Britain, certainly in Scotland, fewer people hold industrial shares than in any other Western European country except one.
  A great deal more needs to be done. I support the suggestions made yesterday by the hon. Member for
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  Derbyshire, South-East (Mr. Rost). I trust that the Government were serious in saying that they would consider them with care. All the suggestions were good. I wish to stress one or two of them. Small applications should be met in full. The scaling down that took place over certain recent issues has meant that people put in for far more shares than they want and get a smaller amount. I believe that small applications should be met in full. There is something to be said for a two-stage operation whereby only small applications in the first instance are received.
  The hon. Member for Derbyshire, South-East made the important point that cheques should be cashed. He suggested that cheques should be held for only a week. In my view, they should at least be held for some time, so that those who put in for large amounts of shares that they cannot meet suffer some penalty. The hon. Gentleman mentioned that stags could be identified. If that is possible, it would be a great step forward. I am not certain how it can be achieved. If it can be done, it should be done.
  Unlike the hon. Member for Northampton, South, I find that the more I listen to the right hon. Member for Leeds, South (Mr. Rees) the better he becomes. The right hon. Gentleman said that the Labour Party would look at alternative methods of ownership. I welcome that. I think that the right hon. Gentleman agreed that there were faults in State ownership. One alternative to State ownership is wider ownership, particularly ownership by people working in the company. It is extremely important that this should be pressed forward in the operation of Britoil.
  The National Freight Company was a great success when taken over by the people who worked in it. I think I am right in saying that 9,000 of its employees applied for shares and put up an average of £700 each. I think I am also right in saying that 83 per cent. of the equity of the company in reserve shares is confined to those who work in it or their pension funds. That is in startling contrast to Amersham International where, according to the Minister of State yesterday, the amount owned by workers is not 30 per cent. but 3 per cent. I do not protest about the method but Amersham was a mistake. I do not know why the Government cannot admit it was a mistake. Instead they go on saying that it was the greatest success of all time. That is not so. It was not a success from the point of view of the amount of money that was received. Not did it spread the ownership in the manner that the Government want, especially in respect of the involvement of employees in their company.
  What can be done now? First, one can have a special category of shares confined to employees. Secondly, one can give employees some rights—for instance, the right to appoint a director. I raised yesterday the issue of Government-appointed directors, particularly in BP. I thought that I received an evasive answer from the Secretary of State who, I suspect, privately agrees with me. It is not clear what advantage BP has gained from having Government-appointed directors. Nor is it clear what they have actually done. Have they protected the public interest? Do we know of occasions when they have intervened to prevent fellow directors of BP acting against the British interest? I doubt it. There is something to be said, I suppose, for having ex-ambassadors as directors when companies operate abroad. This company does not operate abroad. I pray in aid again the support of the right hon. Member for Leeds, South, who said:

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  "I have always been sceptical about what a Government director does."—[Official Report, 31 March 1982; Vol. 21, c. 325.]
  Perhaps we can be told what they do.
  In this case, we have the golden share. There is no need to have Government directors on the board. The Secretary of State can intervene to protect the public interest. When the Secretary of State asked me, in reply to my intervention, whether I was saying that Government directors were unnecessary and should be abolished, I can only say that I have heard no convincing reason for having them in this case. It is for the Government to show why ex-ambassadors and civil servants or even trade union officials, accountants and women are essential on the board.
  I believe that there is a much stronger case for directors being appointed by the workers. This might be an interesting experiment. It would spread not only the wealth but the responsibility. It would be interesting to see whether industrial relations could be improved by encouraging workers not only to take shares but also to accept some responsibility for running the company. This happens, as the Secretary of State knows, in many countries. I suspect again that the Secretary of State, in private, is rather responsive to the idea. The right hon. Gentleman is looking particularly sphinx-like at this moment. He has learnt from experience that it is unwise to expose his soul too openly in the House of Commons. I ask him to think about the idea in the quietness of his chamber to examine whether this is a possible direction in which we may move.
  It may be possible to establish a unit trust and allocate a certain amount of shares for it to the workers. The workers would control it themselves. There are various ways in which employee ownership can be widely extended. I hope that the Government are giving a great deal of consideration to how this can be achieved. I accept that Britoil is a much bigger company and a different sort of company from Cable and Wireless or the National Freight Company. I hope, nevertheless, that the Government will not be content to see only 3 per cent. of the equity go into the hands of employees. I hope that the Government will push on this occasion not only for wider ownership but for the real involvement of those who work in the company in its management and ownership. If they do not do that, the Bill is largely a waste of time.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): It may help the House if I make two comments. First, this is a Third Reading debate. Therefore, hon. Members must talk only about what is in the Bill and not about amendments that were not carried. Secondly, at least 10 right hon. and hon. Gentlemen wish to catch my eye. We have approximately 100 minutes before the Front Bench spokesmen want to speak. Hon. Gentlemen can do the arithmetic.
  4.51 pm
  Mr. Peter Rost: I am pleased to follow the right hon. Member for Orkney and Shetland (Mr. Grimond), because I, too, have striven to achieve wider ownership. This is one of the main reasons why I support the legislation. I congratulate my hon. Friend and
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  his team on the way in which they have pressed the legislation through with great urgency but not without adequate discussion. It is important legislation.
  I support what the right hon. Member for Orkney and Shetland said. It is a pity that the legislation will not give the same opportunities to employees of British Gas that the employees of the British National Oil Corporation will have to become employee shareholders. I should have preferred the Government to consider privatisation of the British Gas Corporation by selling off some of those shares as well. I agree that there are difficulties in privatising a monopoly, so to speak, but the legislation will ensure that it is no longer a monopoly.
  Safeguards could have been provided which would have allowed the sale of a minority of the shares in British Gas and given the employees a much-needed morale booster after all the changes that are visualised for the industry. It would have given them a genuine incentive, which is desirable. This has happened in industries which the Government have already denationalised, such as British Aerospace. We expect that others are in the pipeline.
  A point which has not been properly debated relates to the gas consumers council which has made representations to me. I understand that they have not been properly investigated yet. It is a little concerned that under the legislation it may not be fully responsible for representing the interests of all gas consumers in future because of the outside gas interests that will develop. I do not regard this as a major obstacle, but I hope that my right hon. Friend will consider it and have discussions with the gas consumers council, if he has not already done so, to see whether its anxieties can be allayed.
  The right hon. Member for Leeds, South (Mr. Rees) was constructive in his support of much of the principle of the legislation. I am sorry that the right hon. Gentleman is no longer in the House. His contribution was in strong contrast to the deliberately misleading propaganda that has been put out against the legislation. I am not accusing any specific Labour Member because many of the misleading scare stories about the legislation have originated not from the Opposition Benches but from outside.
  It is important that when my right hon. Friend replies he should emphasise that these are maliciously misleading scare stories. It is nonsense for the trade unions involved in British Gas to suggest that 20,000 or 30,000 employees will be thrown on the scrap heap if the showrooms are sold. That by implication suggests that in future no one will install a gas appliance, so that there will not be any work for maintenance workers on repairs or installation, or that the industry is overmanned, by 30,000 people. That is nonsense. It is malicious because all of us, as Members of Parliament, have been inundated by communications from constituents who are not fully appraised of the details of the legislation but are worried by the scare stories.
  The legislation will be of tremendous benefit to the consumer. That is what it is all about. There can be no question but that where a monopoly had been established by Parliament and has been encouraged to develop, as British Gas has, it has in its own way done an excellent job. Nobody disputes that. But a monopoly can get too powerful and its justification may no longer be as strong as it was in the early stages of its evolution. This applies to British Gas.
  No one can challenge the fact that, because British Gas has had the exclusive right to buy gas, the exploration of

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  gas has been inhibited. Because British Gas has had control over the price it has been prepared to pay, it has discouraged the development and exploration of our potential North Sea reserves. I do not think that I am alone in suggesting that the reserves of gas in the British Continental Shelf are substantial. They will probably last longer than our oil reserves.
  We know that a great deal has been discovered already and is unexploited and that much more will be discovered. Meanwhile, because British Gas has had complete control over buying and pricing, the market has been developed rapidly because of under-pricing to the domestic consumer in recent years to the point at which we have to import nearly one-third of our gas from Norway.
  Those who argue, as the Opposition have done, that this legislation, by increasing the availability of gas and increasing competition, will increase prices as well should think again. The increase in the price of British Gas has been largely due to the fact that supplies in the southern North Sea basin were no longer adequate to meet the demand and we have had to buy from Norway at European prices. The Norwegians have not been prepared to sell us the gas at prices lower than European prices. It is extraordinary that in our southern basin fields we are getting the gas at a very low price and at the other end of the pricing scale we are paying a high price, the market price, for Norwegian imports.
  I hope that my right hon. Friend will agree that between those two extremes is the reality; we could have developed British gasfields at a price between what British Gas has been prepared to pay for the southern North Sea basin and what we have to pay the Norwegians. If that exploration had been encouraged, those resources would have come forward and British Gas would have had an alternative source of supply from the British sector of the North Sea. This would have increased competition and held down prices, or at least evened out the inevitable rise in the price of gas. Those who dispute that must consider what has happened in the North Sea oil industry and in the oil market.
  It is evident that today's surplus of oil has come about solely as a result of competition. When competition was eliminated and OPEC had a complete stranglehold on world markets and competition, there was a sudden price increase. Since the free market has to some extent been reestablished in the world oil market, we have witnessed the benefits of competition. I believe that the same will happen to gas as the incentive is provided for gas exploration and development.
  British Gas will still be the dominant factor in the market as it will continue to have most of the retail market. It will therefore be dominant as the purchaser of gas. But at least it will have alternative sources of supply. That will benefit the consumer if those buying powers are used skilfully.
  I return to the importance of selling Britoil shares. I hope that in due course British Gas equity will also be sold to its employees and to a wide range of the British public. That is important, not merely to provide motivation and incentives for management and employees, but for the wider national interest. More citizens should be seen to be involved in the economy as owners of the wealth-creating process.
  It is lamentable in a mixed economy which practises the free enterprise system that still too few citizens are owners as well as earners. As Conservatives we are doing all that
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  we can to promote home ownership, for example, rather than State home ownership, and we are denationalising and encouraging personal ownership of assets rather than State ownership of assets, but it is equally important that we devise a system for further sales of State assets. Britoil will be in the pipeline before long. It is important that we should devise a system that is seen to be fair and encourages small investors to take a stake.
  The British National Oil Corporation is also concerned that that should happen. It is seriously considering methods of encouraging the small saver to subscribe to the share sale. There is a possible way of overcoming one of the difficulties of the Britoil share sale. If really small applications are encouraged and nearly all the shares are allocated to the small investor, Britoil may be landed with 500,000 shareholders, each owning £100 worth of shares. The administrative costs of that would be a problem.
  All companies like to have many shareholders, but they do not like all shareholders to be small ones because that adds to the costs of keeping the register and sending out annual reports and distributing dividends. A solution that I hope my right hon. Friend will discuss is the establishment of a unit trust which will hold the shares of Britoil for the small saver on a group basis rather than the individul shareholder being registered in his own name. That would overcome a number of the administrative problems of coping with really small savers such as those who cannot even subscribe for £100 of shares, but could buy them by instalments of £10 per month, which would be possible through a unit trust.
  Perhaps Britoil could establish trusteeship for a unit trust, holding only its own shares on behalf of many thousands of small savers and investors who want a stake in Britoil. That might be an interesting solution, and I hope that my right hon. Friend will consider it.
  I congratulate the Government on introducing this important legislation. It will without doubt be of major benefit to the consumer. I hope that the Opposition, even if they are not prepared to admit it now, will have the grace to admit that the Bill will be of great benefit in due course.
  5.5 pm
  Mr. Ron Lewis: In moving the "Chird Reading of the Bill the Minister emphasised—rightly, and I congratulate him on it—the need for safety, especially in the North Sea. I was not a member of the Committee, but I have read the debates on the subject. I gather from the Committee proceedings and from what has been said in the House that the safety aspect has rightly been stressed.
  My hon. Friends the Members for Newcastle upon Tyne, West (Mr. Brown) and for Wallsend (Mr. Garrett) often referred in Committee to the unfortunate fatalities in the North of England, and the Secretary of State undertook to send his officers to inquire into the matter. On 9 March, in reply to my hon. Friend the Member for Newcastle upon Tyne, West, the Secretary of State said that he had sent his specialist advisers to the North of England but that they had not at that stage reported.
  Not enough is being done about safety in the gas industry and of gas installations. A few years ago I had electricity installed in my home at my own expense Before the electricity board would connect my house to the system it carried out a thorough inspection to make sure that all the apparatus had been correctly installed. I understand that that is not the case with gas installations.

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  It appears that it is possible for gas appliances to be installed without the gas board being under an obligation to inspect what has been done.
  While the Bill has been going through its various stages, and in recent weeks, I have been disturbed by facts that have come to light in my constituency on a new housing site that was built by Barratt. I am not condemning or criticising that firm in any way. The gist of the story is that in many of the properties built by that company, gas appliances have been wrongly installed. When the gas board has been called in, it has immediately cut off the supply of gas.
  Who will pay for the faults to be put right? In many cases the cost of doing that will be between £100 and £200. No one will accept responsibility. I have tried to get the builders to a meeting, but they say that they are waiting for the gas board. I have discussed the matter with the gas board, and it has been extremely helpful. It has even gone to the extent of offering those involved a cut-price inspection. It has offered my constituents—and, I gather, others in the North of England—an inspection of gas appliances for £5, and I have advised them to accept the offer. For the sake of £5 they can and should ensure their safety. The gas board is being magnanimous about the matter.
  In many cases the gas supply has been cut off. Who is to pay? Many of those involved are ordinary working people. The lady that brought the matter to my attention was a Conservative candidate at the last council elections. She is an ardent supporter of the Conservative Party, but she, like others, is extremely worried, because the gas board has cut off her gas supply.
  I therefore hope that, if not now, when the Bill reaches another place, the Minister will ensure that there is a better safety net, so that my constituents will not face bills of between £100 and £200. They bought houses from a private company in good faith, and they thought that everything was in order. That is why I plug this plea for my people today. I hope that the Minister will re-examine this issue, to save that expense. I hope that there will be joint meetings with the builders and the gas board, which has been most co-operative. If it is a bad installation, my simple opinion is that responsibility must rest with the developers. I hope that the Government will consider what I have said.
  5.10 pm
  Sir Russell Fairgrieve: The Bill epitomises something that has been with us since the end of the Second World War—the argument between the Labour Party and the Conservative Party about clause four, the nationalisation of the means of production, distribution and exchange. The Conservative Party makes no excuse for continuing to fight that concept despite arguments from other countries about the continual ping-pong effect in British politics. Although one would not consider trying to run the Army or the police force on a private basis, nationalisation is not the most efficient vehicle for running productive competitive industry.
  I was the Conservative Whip for the first leg of the legislation—the Petroleum and Submarine Pipe-lines Bill of 1975. I well remember the right hon. Member for
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  Bristol, South-East (Mr. Benn) telling us that his legislation would not be like the old-style nationalisation of 1945 for the coal, electricity, and steel industries.
  The new legislation came in the wake of the white heat of the technological revolution and BNOC would be a properly competitive company in the market. Yet what were the right hon. Gentleman's first three decisions?
  First, for political reasons, the headquarters was set up in Glasgow, although the oil was in the North Sea. Secondly, for political reasons, BNOC was exempted from petroleum revenue tax, which all its competitors had to pay. Thirdly, for political reasons, it was headed up by a retired Socialist sympathiser from the textile industry. In other words, the new competitive company was yet another example of old-style nationalisation.
  As British Gas has been in business longer than BNOC there has been more difficulty in dealing with the clauses relative to it because it has become more entrenched. As a general principle, however, I have always believed that in a nationalised industry—be it gas, electricity, water, oil or even telephones—the job of the company is to produce the goods and take them to a point of distribution. I have never understood why British Gas should be involved in the retailing of appliances any more than the electricity or water authorities. We do not insist on buying baths and taps from water boards. Why should not the same competitive principle apply to gas?
  Mr. Dalyell: As the hon. Gentleman was a Whip on the 1975 Bill, he is in a better position than most to confirm that that legislation, which was not concerned with onshore gas installations, is absolutely no basis for saying that we have a depletion policy. We argued that yesterday, but received no answer whatever.
  Sir Russell Fairgrieve: The hon. Member has made an intervention on a completely different point from the one that I was making.
  As I have said, we do not regard nationalisation as a suitable vehicle for industrial efficiency. During the passage of the Bill, we have been able to see the shortcomings of BNOC. We have not been able to examine the shortcomings of British Gas because, regrettably, monopoly confirms the old adage that all power corrupts and absolute power corrupts absolutely. So long as there is total monopoly—it has been going on for 25 years—it is difficult to tell whether there could be a more efficient way of dealing with the industry. That is what the Bill seeks to achieve.
  BNOC was formed by the Labour Government after the oil had been discovered and brought ashore in the only way in which it would ever be brought ashore—by private industry. Those of us who represent constituencies in the north-east of Scotland realise the vital importance of private industry, be it British, Scottish or multinational, because we must use the exploitation of North Sea oil to learn for the future, so that in the next century when there is drilling for oil off the China coast or off South America and people ask "Where are the best underwater engineers in the world?" The answer will unquestionably be "In Scotland". That is what we must achieve now.
  This is a necessary and vital Bill. I welcome it because it is in the interests of all the British people.
  5.15 pm
  Mr. Robert C. Brown: This is probably the most important Third Reading debate

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  we have had for a long time. This is a major denationalisation measure which should have received detailed and complete scrutiny by Parliament. Unfortunately, due to the guillotine, it has received anything but complete scrutiny. The scrutiny has been extremely cursory. As this is probably the greatest asset-stripping exercise ever to take place, it is very sad that we have not had the time to scrutinise it fully.
  The Government have totally mishandled the conduct of the Bill. They failed to give the necessary information on the first part of the Bill dealing with oil, with the result that the all-important articles of association for Britoil remain largely undebated. In the middle of this period, there was the scandal of Amersham International, on which we have still had no satisfactory answers—only excuses. Yet the Government now intend to sell off valuable national assets according to some vague formula which, according to them, reflects the market value at the time. The time, of course, will be of the Government's choosing. Will they sell at a time of glut? Their own expressed intention is to complete the sale as soon as possible to produce significant effects on the public sector borrowing requirement. When will the sale take place? Will it be a forced sale? That, with the current low price of oil, would mean that the nation's North Sea assets will be literally given away.
  We still do not know exactly how much of BNOC's production is to be sold. Will it be 51 per cent., 49 per cent. or what? Because we did not have the articles of association, we still do not know how the Secretary of State will prevent foreign control. He made some suggestions yesterday, but I hope that he will enlarge on them.
  We certainly do not know how he intends to deal with the gas assets. The Opposition's anxiety arises not from xenophobia but from a genuine concern that we as a nation should retain control of our energy supplies. A time of crisis, when we really need that control, will be far too late to discover that we do not have it. It is all very well for the Government to commit £7 billion or £8 billion to the development of Trident as a form of defence, but they above all others should realise that the economic weapon is an equally potent defence—they urge its use often enough. Yet here the Government are proposing to give away a vital strategic tool in the control of -our energy supplies.
  Many important questions remain to be answered because of the Government's mishandling of the Bill. How will the gas assets be valued? That question is especially pertinent when we talk about the hiving off of Beryl A and B, which the British Gas Corporation has already spent a mint to develop. That is also the case with the Hutton NW field. Will the Government compensate the BGC for its investment? It would appear not, but the Government are saying that the BGC's exploration role will continue unaltered except for one important difference. If the BGC finds oil, the area will be privatised. Who will pay for that? The poor, long-suffering taxpayer will foot the bill while the oil companies, which are not short of a bob or two, will have a relatively cheap asset, as did the speculators who bought shares in Amersham International.
  The Government say that only fields that are predominantly oil fields will be privatised; but God did not arrange nature in that way. In many cases oil and gas are found together. What proportion of a field makes it predominantly gas or predominantly oil? Is it 10 per cent,
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  30 per cent. or 50 per cent? I suspect that the answer will lie more with the need to massage the PSBR than with the Government's stated intention of keeping the BGC a gas-only operation. Of course, that option does not make sense.
  However, more serious issues arise. The Government profess, as an article of faith, that the Bill will automatically produce more gas. In Committee, the Secretary of State mentioned a figure of 5 trillion cubic feet of uncommitted gas. He knows that that is not strictly accurate, because the British Gas Corporation has been planning to take that gas for some time. Perhaps the Government mean that the untapped, so-called possible reserves will be developed. One would expect them to be. We accept that higher prices to producers will make that viable, but so would the anticipated gas rundown in the 1990s. We cannot produce more gas just because the price is right. We cannot get what is not there. The BGC is already exploring for new sources, irrespective of price. The Government propose to leave the incentive for exploration to the commercial dictates of oil companies rather than the energy needs of Britain. As they have failed to define a gas field, they are turning the issue into a massive lottery, with the consumer as the loser every time.
  As well as the Bill relying on a magic formula whereby gas will be discovered, the Government have come up with an extraordinary proposal for guaranteeing gas supplies. Currently the corporation's industrial sales policy, which is approved by the Government, is a mix of firm and interruptible supplies. The latter are at a much lower price. In order to make their point that there was a shortage of gas, the Government made great play of the fact that Brush Electrical had its gas cut off for 23 days. Now the Government allege that the company spent an additional £100,000 to cover its excess fuel needs, but the Secretary of State did not tell us that it chose costly gasoil as a substitute. He also omitted to mention that it paid less for that fuel.
  Significantly, the Government would not answer the question about the future of interruptible supplies. About 45 per cent. of industrial sales are in that category, but as storage builds up so that part of the market will decline. The interruptible sales are large, because the British Gas Corporation interrupts only in case of emergency. However, the Government seem to be promising that in no circumstances will supplies be interruptted. That means that if we have a strike outside our control, such as the Norwegian Statoil dispute, the loss of a sea-line, or a bad winter such as we have just experienced, all pledged gas will go to industrial consumers irrespective of national emergency demands. So far the Government have not spelt out the terms on which the gas will be available.
  The lack of clarity goes much further. The Government have frequently said that the BGC will retain its so-called monopoly in domestic supply, but all sorts of hints were given in Committee about whether in future even that undertaking will be worthless. The Secretary of State said that, although in practice industry would probably be the main market for gas, he did not rule out private supplies to new housing estates, presumably to look after offtakes of private gas that cannot be absorbed by nearby industry.
  Even more serious has been the notion of the depletion policy envisaged by the Government. The House will be astounded to realise that the recently acquired conventional wisdom that premium fuel should not be used for non-premium enterprises is not accepted by the

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  Government. The Under-Secretary of State went so far in Committee as to question whether bulk steam-raising by gas was a bad thing. If his statement and the Government's philosophy were to be accepted, the Venice declaration on coal, the Coal Industry Act 1980, as well as many other aspects of the as yet thin rag that is called energy policy, would cease to exist. The Bill envisages that gas will always be available for any use, irrespective of whether it is in the national interest.
  The Government's guarantees on safety are rather meaningless. We have had vague assurances that, for private supplies, the right of entry to quell leaks would be part of the contract. That is wholly inadequate, because almost at the same time the Government said that this so-called safety provision will be open to sub-contract. That means all things to all people. For example, what happens if a sub-contractor disappears? They have been known to go bankrupt. It would appear that the Government are concerned only to enforce safety by post-mortem. We have perhaps the safest, but unfortunately, in the eyes of the Government, nationalised, gas industry in the world.
  There are further serious questions about the transmission of gas. It would appear from the Committee stage that not only will the BGC be forced to pay for constructing pipelines with no guarantee of return, but where the Secretary of State, in his wisdom, wishes to modify a pipeline to take on board private gas, the BGC still remains liable for the safety of the pipeline. That would be rational if the BGC had a final say about the modification, but it will not. The Government gave the game away when they said that that would be tantamount to charging private suppliers an unspecified price.
  All that the British Gas Corporation can do is take the Government to court, presumably in order to insist that a particular modification would be unsafe. What sort of writ could be applied for? Nothing in this measure or in any other measure guides us. Presumably it would be an injunction, but the matter has not been clarified by the Government. It is enlivening to see Lord Denning transformed into a top flight gas safety engineer, but we live in the real world and judges are not the best people to decide technicalities. We have a vast store of knowledge in British Gas Corporation which can make that determination. To suggest that this knowledge would be used to destroy the purpose of the Bill would be on a par with suggesting that the Secretary of State would act solely in accordance with mere whimsical doctrine. I do not believe that the right hon. Gentleman would do that.
  I am extremely anxious about the prospects of future sell-offs in the industry. I have in mind the research and development station at Killingworth, on the outskirts of Newcastle upon Tyne in the constituency of my hon. Friend the Member for Wallsend (Mr. Garrett). Killingworth is probably the only high level research and development facility in the northern region. Only recently the research station developed a new pig for clearing pipes. That gives us a world-wide opportunity for sales in the gas and oil industries. It would be a scandal to seal off the Killingworth engineering research station.
  On Tuesday about 1,000 gas workers lobbied the House. They were primarily concerned not with jobs, but with the public interest. I hope that hon. Members on the Government Benches listened to them, and I hope that they are listening to the Opposition this afternoon. The Bill
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  is misconceived, ill-arranged, mishandled and should be rejected. Unfortunately, because of the Government's huge majority, we know that the Bill willl not be defeated in the House. We must hope that there will be enough noble Gentlemen in another place who are prepared to speak for Britain, to force the Government to see sense and to amend some of the more obnoxious clauses in this bad Bill.
  5.33 pm
  Viscount Cranborne: We have heard from the hon. Member for Newcastle upon Tyne, West (Mr. Brown) a very good example of the expertise that we were fortunate enough to have paraded before us in Committee.
  The Bill illustrates, about as clearly as can be illustrated, the inherent weakness of the legislative procedures of the House. Passing legislation is, after all, one of its principal functions. The Opposition Front Bench distinguished itself on this point, as on so many others, in Committee. The right hon. Member for Leeds, South (Mr. Rees) and the hon. Member for Merthyr Tydfil (Mr. Rowlands)—with his animadversions on the eccentricities of the Merthyr Express—drew the Committee's attention, and I hope that of the House, to the absurdities of the way in which Standing Committees are conducted.
  Every hon. Member in the Chamber who has taken part in the debates on Report and Third Reading has said that this is a most important Bill, perhaps the most important Bill to come before this Parliament. I am delighted to see that a minority of hon. Members agree with that. However, I am disappointed that the unanimity among that minority is evidently not shared by other hon. Members whose enthusiasm is such that they have found better things to do this afternoon.
  The expertise that was paraded before ignoramuses such as myself in Committee was deeply impressive. The assiduity and hard work of the hon. Member for Merthy Tydfil must have impressed the Committee. We were, of course, impressed by my right hon. Friend the Secretary of State for Energy and my hon. Friends on the Government Front Bench.
  We had the experience of the hon. Member for Newcastle upon Tyne, West, whose knowledge of the gas industry was of such use to the Committee, and a further example of which we have heard today. We heard from my hon. Friend the Member for Bedford (Mr. Skeet). I am sure he will be making a speech today. His knowledge and skill in matters appertaining to energy is well known and acknowledged throughout the House. I should also mention my hon. Friend the Member for Derbyshire, South-East (Mr. Rost).
  However, I am sure that hon. Members on both sides of the House will not object if I say that the fount of knowledge among Back Bench members of the Committee—I am conscious of the presence of the hon. Member for Dunfermline (Mr. Douglas)—on matters relating to oil and gas, was relatively slight. It is wrong for the primary legislative Chamber of Parliament to rely on second-hand regurgitations of experts when examining the Bill, clause by clause and line by line, where modern legislative procedures are concerned.
  I support the aims and intentions of the Bill 100 per cent. but if any good comes of it I hope that, above all else,

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  my protests and that of the Opposition will be heard loud and clear by the powers that be and by those who arrange and reform the procedures of this place.
  The Bill contains many good proposals—whatever the Opposition may say. However, it would have been far better to have taken evidence in a Select Committee, as the right hon. Member for Leeds, South suggested many times. People such as myself, who are not experts but who were nominated to serve on the Committee, could have formed a judgment and asked questions of those who have the experience.
  I enjoyed the speeches of the hon. Member for West Stirlingshire (Mr. Canavan)—I have had the good fortune to serve on two Committees with him—but the great pleasure I derived from his ravings about the House of Lords and from the parading of his prejudices is a poor substitute for the serious business of considering a Bill in Committee.
  Mr. Dennis Canavan (West Stirlinghshire): Say something about the Bill for a change.
  Viscount Cranborne: The hon. Gentleman asks me to say something about the Bill. I give two examples in support of my theme. The first relates to the question raised in a predictably distinguished speech by my hon. Friend the Member for Bedford. He rightly questioned the wisdom of splitting BNOC and Britoil. Had I been expert enough at the time I would have supported my hon. Friend. I was diffident about doing so because I had neither the time nor the opportunity to brief myself properly. My hon. Friend put down a series of amendments yesterday, which, sadly, because of the guillotine, were not dealt with. They once again attempted to raise that very question.
  Had we been able properly to listen to the evidence of experts, more members of the Committee could have formed a proper judgment about the wisdom of my hon. Friend's thesis and voted accordingly. Instead, we had to rely on the advice of our Front Bench which, I hasten to add, we generally support in principle. But that is not how a Committee should function.
  The same applies to the argument about participation oil. Opposition Members use the question of splitting BNOC from Britoil to prop up their argument against denationalisation. I refuse to use the awful new word "privatisation" The argument to justify the existence of a Government-owned trading arm was never properly aired.
  Third Reading is not the time to go into the whys and wherefores. But I have tried to educate myself a little on the subject.
  Mr. Canavan: Hear, hear.
  Viscount Cranborne: As always, the hon. Gentleman provides a counterpoint to my observations.
  There is no justification for keeping the trading arm in public ownership. The arguments for selling the lot are overwhelming. We were presented with a fait accompli. It appeared that the justice of keeping the trading arm was implicit in the proposal. We were unable to question it. The inter-related issues of separation and whether we should have participation crude were never properly aired, in spite of the elegant and enthusiastic speeches of so many Committee members.
  I say this with diffidence, as I am a relatively new hon. Member. The House is in danger of becoming no more
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  than an Augustan assembly, separate and distanced from the aims and aspirations of the people whom we are deemed to represent. Unless the House begins to reform its procedures, we shall deservedly sink into oblivion.
  For all its imperfections—there are two clear ones in the oil section—the Bill attempts to do something which, as my hon. Friend the Member for Aberdeenshire, West (Sir R. Fairgrieve) rightly concluded, will prove of immense benefit to the British people. I hope that the Bill will be used as an example to all hon. Members of the way in which good intentions can be brought about only in part.
  5.44 pm
  Mr. Gordon Wilson: If I have a message for the hon. Member for Dorset, South (Viscount Cranborne) it is that he will find it difficult to persuade the House authorities to change their procedures. While the hon. Gentleman occupies the Government Back Benches, his role is to remain silent. His sole purpose is to put into effect the legislation that the Government, in their wisdom, or lack of it, put before him. The one thing that would send a shiver of horror through the Front Benches of both parties is the idea that Back Benchers should be released from the discipline exerted by the Whips and take an independent stand.
  The experiment launched a year ago to combine the Select and Standing Committee procedures has not been followed through with great vigour. I do not like to blunt the hon. Gentleman's idealism, but, after watching the procedures of the House, I believe that we are unlikely to see any change of consequence. I do not say that to undermine the strong argument for change.
  Our function on Third Reading is to discuss not the antiquated procedures of the House, but what is in the Bill. My view from the beginning has been that the Bill is misjudged and misguided. As has been said, our proceedings have resolved into a debate on the merits and demerits of denationalisation or privatisation. So far we have not dealt with the benefits that countries throughout the world derive from having a State oil company, not necessarily as a monopoly, but one which may be flanked by private oil companies, and which is there to represent the interests of the State.
  Wherever oil has been discovered, one is sure to find a State oil company. There are good and useful reasons for that.
  First, it ensures that the national or State interest is looked after by a company that has the opportunity to engage in exploration, development and production. That is a useful instrument. Even though the participation arrangements are still to be enforced, I regret the dismantling of the oil equity side of BNOC.
  The second reason is procurement. The issue greatly affects Scotland. Many jobs are involved, both onshore and offshore. Particularly in the areas further away from the oil industry, there is a great need to ensure, through Government agencies, the highest degree of purchase from national suppliers. The international oil market is full of multinational companies with only a passing interest in developing the North Sea oil province. They are inclined to order, as they did when they first came into the United Kingdom market, from existing suppliers.
  I regret that the actions that the Government are taking through dogma will lead to BNOC, which has only a small minority of North Sea oil production, being relegated from

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  a vigourous State corporation, with a growing influence on North Sea oil development, to a tiny private oil company, with minimal influence.
  I do not wish to exaggerate the importance of the sale of the assets. The Bill has been described as one of the most important to come before the House. If one considers the sum involved that is probably right, but only about £1 billion will be obtained for the assets of BNOC, while the oil revenues this year and next will be about £6 billion. That puts the matter into perspective.
  I do not agree that the Government's strategy is correct. They have not dealt adequately with the problem of preventing control by foreign shareholders. The special shareholder procedure may be sufficient to keep out foreign domination, but, having heard the Secretary of State's slim answer last night, I cannot accept that EEC interests can legally be prevented from asserting a claim over the assets. The Secretary of State perfunctorily said that that could be prevented, but those of us who have studied the articles of association take a different view. The matter might be tested in the courts.
  My third point about the disposal of BNOC's assets is the price. I return to the remarks that I made on Second Reading. The price of oil shares, like the price of oil, has collapsed. Over the next six or nine months, or a year, it is not likely that the Government will be able to put those assets on to the market and receive a worthwhile return on them. Whereas the Government could have a case for arguing that that could be done over a longer term, they will not be able to do that within the time scale that has been fixed.
  I warn the Government that by going for a policy of allowing the price of oil to be reduced and in doing their best to kick the feet from under OPEC, they are in danger of ruining thousands of jobs in Scotland. There is a high cost to be paid for the development of oil in the North Sea. If the price of oil comes down, it is unlikely that that development will go through. Jobs will be scarce if no contracts are given to oil platform yards and other yards. I want to reinforce that argument.
  I could say many other things about the Bill. It stems from blinkered dogma and flies in the face of reality. With my right hon. Friend the Member for Western Isles (Mr. Stewart), I shall vote against the Third Reading of the Bill.
  5.52 pm
  Mr. T. H. H. Skeet: The hon. Member for Dundee, East (Mr. Wilson) mentioned the value of State oil companies. I should like to spend one or two moments dispersing that theory.
  It is interesting to mention the Sarir field in Libya. The company there was BP which is half owned by the State. It was dispossessed by the Libyan Government. Its association with Bunker Hunt was broken. It eventually led to a court case. In Nigeria, British Petroleum was dispossessed because the Government sought to take over its assets. BP has not been able to get concessions in Venezuela or Turkey. There are two other cases. Pertamina, the State oil company in Indonesia became virtually bankrupt. In Italy there have been allegations of corruption against ENI over certain Saudi arrangements. Those examples are not advertisements for State oil companies.
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  I support the argument in the Bill to privatise BNOC. Of course, I make no allegations against it. I defended it in Committee. I have sought to keep it intact as a unified operation. What is notorious is that the initial chairman of the company was prepared to say that the company should be privatised so that it could advance further.
  It is interesting how in the Third Reading debate most hon. Members have not addressed themselves to the major points and crucial issues in the Bill. There is the disposition of the assets of BNOC so that it can establish itself as a unit in private enterprise. There will be true ownership by the people, with private shareholders—as many as there can be—and not that mysterious mystique of being held by the State over which no one exercises control.
  Another point which has been entirely overlooked is the supply of gas by persons other than the British Gas Corporation. Since section 29 of the Gas Act 1972 and section 8 of the Energy Act 1976, there has been only one distributor and one buyer of natural gas. That will be altered by the Bill. That is a crucial point. There will be other distributors, not simply the BGC. Therefore, its monopoly of supply will be altered. I should have thought that many Opposition Members would recognise that. They are surely not in favour of complete monopolies. Changes are brought about by the Bill. There are also two crucial clauses that concern the safety regulations.
  Clauses 9, 10 and 11 of the Bill concern the powers of disposal of the assets of the British Gas Corporation. There can be disposals of Wytch Farm under the section 7 of the Gas Act 1972, but that is being amended and extended by the Bill. The BCG should confine itself to gas exploration, gas transmission and distribution. It should have nothing to do with oil in the North Sea. Those assets could be liquedated and the cash handed over to the State.
  Clauses 15, 16 and 17 concern the use of pipelines belonging to the BGC. That is where there is a weakness. In future there could be a possibility of the role of BGC being confined to that of a transmission company only undertaking distribution. There is a possibility that it will go on on its present course. I have written to the Secretary of State and have suggested in Committee that there should be a natural gas transmission company. It would have all the advantages that are not apparent in the three clauses that I have mentioned. In those three clauses the ownership of the piplelines rests with the BGC. It can set the rates. There is an elaborate procedure under which appeals can be made to the Secretary of State.
  But the BGC has a great ability to delay. If the Secretary of State could consider that matter seriously when the Bill goes to the House of Lords or at a later stage he may be able to change the arrangement so that impartiality and independence could be granted to the applicant companies concerned.
  After all, what is the Secretary of State seeking? He is seeking to provide incentives, for example for more gas to be discovered. That can be done if the oil companies have the right to supply. Those companies will be able to compete if they can persuade BGC, under the Secretary of State's guidance, to enable the companies, perhaps in a consortium, to use the piplelines owned by BGC. However, there may come the day when the Secretary of State ceases to be in office and when, by accident or fortune, the Labour Party comes into Government. Does

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  my right hon. Friend think for a moment that a Socialist Secretary of State would allow the transmission lines to be used by private enterprise? I doubt that he would.
  One or two other matters are of importance. One is the retention of paragraph 28 in schedule 5 of the Petroleum (Production) Regulations 1976. I refer to the export of natural gas. I suggested in Committee that if a surplus of natural gas was required it would be essential to establish an export price to encourage exploration and development. Sheikh Yamani was here yesterday. I put one point to him: what will be the future price of natural gas? If the price is linked to crude oil, the price of gas will rise whether or not the right hon. Member for Leeds, South (Mr. Rees) wants it. We may wish to moderate that, but there has been a trend of rising prices. BGC started by paying the companies 2·87 old pence per therm. Now prices are rising and it is 16p or 16½p per therm. It could rise further to 20p or 30p per therm. Therefore, a linkage with Europe by joining the two grids would be the best thing that could happen to the United Kingdom.
  We are in an impossible position. We have the right to import gas from Europe and a company can export and reticulate it wherever it likes in the United Kingdom. However, without the consent of the Secretary of State, we cannot export gas to Europe. Surely that is contradictory to articles 30 and 34 of the Treaty of Rome.
  I sincerely thank the Government for introducing a definition of gas, which is being implanted in the Gas Act of 1972. Another matter, which has not been noticed by many hon. Members, involves the liquefaction of offshore natural gas. Before that can be done the Secretary of State's consent must be obtained. That was provided for in the 1976 Act. Why is it now retained? None of the gas has been exported. None of it has been liquefied, none of the ethane has been extracted and been sent abroad. Why, therefore, must the Secretary of State's consent be obtained? Perhaps the most conspicuous provision is removal of the duty to tender advice to the Secretary of State. What is more, the Burgoyne committee's recommendations have been to some extent implemented.
  The Bill is on its way to the House of Lords. Parts of it are not too good, parts of it are remarkably sound, but it contains the prime point of privatising industry and it extends a policy that we have been advocating elsewhere. Let us not think for one moment that the British Gas Corporation, which has been doing extensive lobbying of the House during the course of the Bill, is right in all that it does. It talks about the premium use of fuel. Of its total industrial sales, 46 per cent. at least goes on interruptible supplies. Much of this gas has been used for under-boiler heating where the more suitable fuel is oil or coal. The BGC should take a more correct view of premium fuels.
  It has been said that flaring is wrong. Surely some policy has been adopted? I am sorry that the North Sea gas-gathering pipeline was not successful. That was largely because of the attitude of British Gas, which was not prepared to nominate a price for methane, which meant that the banks were not prepared to give credit for development of the project. It was difficult to settle the amount of contribution being made from both sides. Having said all that, we are aware that the FLAGS pipeline, which is shortly to be completed, will link a number of other fields, North-West Hutton, Ninian North, Cormorant and Brent. This is the beginning of an embryo pipeline that will bring gas ashore into St. Fergus and other sites. The Government have controls and regulations and
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  they can specify that the companies must not flare gas. They have to find ways of using it either by re-injecting it or by bringing it ashore.
  I support the Bill, although it has weaknesses that have been pointed out to the Secretary of State in Committee. It must be drastically amended before it is finally successful, but I support it for its privatisation provisions. Privatisation in one form or another is what we want. I should have liked to keep BNOC intact, but the Secretary of State, for reasons that I do not understand, has not been prepared to do that. Nevertheless, he is privatising an integral part of it.
  6.3 pm
  Mr. Dick Douglas: We have had an interesting debate and some interesting strictures from the hon. Members for Bedford (Mr. Skeet) and for Dorset, South (Viscount Cranborne) about the procedures of the House.
  In his opening remarks the Minister illustrated some of the deficiencies. He spent a good part of his speech dealing with the clauses relating to safety. Last night my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) demonstrated his expertise, which was denied to the Committee. We should have accepted the view expressed by my right hon. Friend the Member for Leeds, South (Mr. Rees), and taken the path of the new Select Committees. Politics is not involved. We are all agreed on that. Under the new Select Committee procedure we would have had the expertise not only of my hon. Friend the Member for Kingston upon Hull, East, but of others.
  I cannot remember all of the Committee proceedings but I think that today, in the Minister's speech was the first time that we heard the word "Hotel". We are now on Third Reading, and I am not sure that the Bill covers the problems of flotels. Perhaps the Minister will say whether clause 23(2)(d) covers flotels. We have talked about them but have never had an opportunity to discuss the health problems involved. If there are flotels that accommodate hundreds of workers in congested conditions, we shall have to examine not only safety, but health. There is the minor aspect of the ventilation system that might be used in such vessels. This is something that is not part of an exchange across the Floor of the House. It should have been discussed under the new Select Committee procedure, and that is what we are asking for.
  On three or four occasions the Minister used the word "misconceived". He seemed to be suggesting that we had misunderstood the Bill. That is not the case. We shall stop telling the truth about the Bill if the Government and their supporters will stop telling lies about our policies. The Bill is a doctrinaire measure. This is no basis for the economic well-being of the country. It is a doctrinaire measure and will not—[Interruption]—add one barrel of oil or one cubic metre of gas from the North sea. [Interruption.] It will not be to the benefit of the nation.
  I do not say that it will not benefit the oil companies. That is a different matter. It may benefit the multinationals. Conservative Members have taken the remarkable view that, somehow or other, the price of gas can be reduced, but we must have an international price by exporting gas. How does that relate to a depletion policy? The Secretary of State will throw the existing depletion policy out of the window and ask for a depletion policy based on the market and price measurement. That is his view.

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  I take the view that monopolies can be wrong, but BNOC is not a monopoly. How can it possibly be a monopoly in the North Sea? The Secretary of State should do his Back Benchers the justice of listening to them, because on many occasions they were attacking BNOC. I am thinking particularly of the hon. Member for Aberdeenshire, West (Sir R. Fairgrieve). Unhappily, he is not in his place and I do not like talking about people who are not here. Perhaps I was unfair to the hon. Gentleman, but he distinctly said that he was against this type of monopoly. He suggested that a doctrinaire person—Lord Kearton—was being put in charge and that in some way he supported the Government's policy.
  Mr. Lawson indicated assent.
  Mr. Douglas: The Secretary of State nods, but he cannot find any member of the present board or of a past one who supports the disintegration of BNOC. If the Secretary of State has something to say, I shall give way. Those on the board—Mr. Sheldon, Mr. Utiger or Lord Kearton—do not support disintegration, because they know that the logic of the industry is to have integration. I do not want to go into the history of Standard Oil, but the logic of the industry is to have an integrated operation.
  The hon. Member for Dundee, East (Mr. Wilson) referred to the implications for Scotland. The hon. Member for Aberdeenshire, West said it was a political decision to put the head office in Glasgow. Of course it was. It was a correct political decision as a countervailing power. Did not the hon. Member for Ross and Cromarty (Mr. Gray) support that? Where else would it have been put? The Minister may have suggested Aberdeen, but is there any guarantee that even though, as a sop, Britoil will be registered in Scotland, the unemployment position will be improved?
  The oil trading side is likely to be in London. Will the employees be able to participate in the shareholding? They have participated in building up the corporation, but the Government have ensured that they will be denied the opportunity of entering into share ownership.
  I have questioned the Secretary of State about referring matters to the council of the Stock Exchange. The Secretary of State was a member of the Public Accounts Committee and he will know that papers can be called for by the PAC. Therefore, it is as well now to know the views of the Stock Exchange on the articles of association. Does it support the concept of a golden shareholding that can outweigh all others? I invite the right hon. Gentleman to come clean with the House on that issue. I invite him to do likewise on the presentation of the prospectus. When will we get the prospectus?
  I understand that the right hon. Gentleman desires to sell the company, when he has it in order, by the end of the year. Is that still his intention, bearing in mind the world oil market? I do not believe all that Sheikh Yamani says but I will take his view of the oil market before the right hon. Gentleman's. Sheikh Yamani has power because he can control his national oil assets, but all that the Secretary of State can do is attempt to talk down the market.
  The Secretary of State seems to think that there is perfect competition within a market mechanism. He should know that that is not so. If anyone should have told him, it was Sir Donald Maitland, for whom I have a great
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  deal of respect. I was surprised by the speech that Sir Donald made to the Institute of Directors in Scotland. He could have done so only under the instructions of the Secretary of State.
  Oil is an international political commodity and instead of enhancing it, holding it and garnering it for the benefit of the British people, the right hon. Gentleman, for doctrinaire reasons, is saying "Let the market decide". The right hon. Gentleman is abrogating his supreme responsibility to securing energy supplies for Britain. He should be rejected and the Bill should be rejected by the House.
  6.13 pm
  Mr. Tim Eggar: I hope that the hon. Member for Dunfermline (Mr. Douglas) will forgive me if I do not take up his remarks.
  I wish to raise two issues. I was extremely interested in the observations of my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) about the sale of BNOC. He suggested that one way of ensuring wider share ownership was to proceed through the sale of unit trust holdings in the corporation. I am certain that the traditional City methods of ensuring wide ownerhip are inadequate. We shall not get the degree of wide ownership that we need if we use the traditional City systems.
  I have a distinct preference for making shares available through the Post Office network, by employing the system that has been developed most effectively for the dissemination of national savings certificates. I believe that it would be possible to sell convertible stock in BNOC through the Post Office savings network, which could after a period—I suggest between 12 and 18 months—be converted into shares of BNOC. I hope that my right hon. Friend will consider that suggestion carefully.
  Secondly, I have never made a secret of the fact that I think that the Bill should contain provisions for the privatisation—I object to that word—of the British Gas Corporation. I maintain that position, which I have held ever since the Bill was published. I recognise that the Bill is to be welcomed as a first step in the right direction.
  My belief in the ultimate privatisation of BGC and its division into constituent parts was much strengthened by some documented information which I received recently. In January the corporation requested participants in the Frigg field, which is largely in the Norwegian sector of the North Sea, that it be permitted to pay early for gas due to be delivered to it in March. The corporation will have paid for 13 months of gas supplies during 12 months. The significance of this may not be immediately obvious to all hon. Members.
  One major way in which the Government control the corporation is through external financing limits. This year the corporation's EFL is minus £317 million—in other words, it should pay the Government £317 million. Had it not paid for the Frigg gas, which amounted to £100 million in this financial year, the chances are that it would have exceeded its financial limit by a significant amount. If it was trying to hit the limit exactly, it would have hit minus £317 million, but the real figure would have been minus £417 million.
  There is some significance in this, because the Government have based their public expenditure plans on the money that they expect to receive from nationalised industries and on what they expect to invest in them. A sum of £100 million is quite significant. The corporation

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  knows very well that if it has done much better than the Government expected and has generated more cash than expected, the Government will return to it in the next financial year and in subsequent years and tighten its cash limits.
  Some might consider the financial changes that the corporation has brought about as cooking the books or financial fiddling, but it is certainly significant window dressing.
  Before raising this issue in the House I took it up with the chairman of the corporation. He was extremely courteous. He saw me as soon as I asked to see him and he has written to me. I shall not bore the House with the detailed arguments, but I shall describe them roughly.
  The chairman said that it was a commercial decision and he gave two reasons. First, he said that there was pressure from the oil companies to change the way in which they were paid by the corporation. I have been assured by the Norwegian members of the Frigg consortium that while they have historically been engaging in discussions with the corporation about payments through bills of exchange, the request for early payment for the gas that is to be delivered in March was not made by them and that the initiative was taken by BGC.
  Mr. Rowlands: Many hon. Members do not appreciate the point. I understand that the arrangement between BGC and the oil companies was mutually beneficial and had been in practice for a long time. There is nothing new about it.
  Mr. Eggar: It is extremely interesting to note that the hon. Gentleman has been briefed by BGC and knew that I might bring up this subject. He would not have been able to make that point if he has not been so briefed.
  I have raised a matter that is not widely known. However, the hon. Gentleman's point about the commercial negotiations does not stand up to scrutiny. In the circumstances, the arrangement cannot be regarded as mutually beneficial. There was only a long-term agreement with the United Kingdom partners in the Frigg field. As the hon. Gentleman knows, the United Kingdom partners have only a small share of that field. The Norwegian partners in that field declined to do anything more than accept early payment for the March gas in this financial year. That is significant.
  The other commercial reason that Sir Denis Rooke gave was that there was a need to smooth out BGC's cash flow. He said that the weather conditions are so difficult that BGC must have some flexibility in its cash flow. However, BGC has had that problem for a long time, and it is not new this year. Why on earth should BGC ask for such flexibility this year?
  I then asked whether the way in which the early payment had been sought represented an attempt to avoid the cash limits and the external financing limit system. It is worth quoting the letter that Sir Denis Rooke wrote to me. I shall cite extracts, and if any hon. Member wishes to see the full details I shall make them available. He wrote:
  "I was certain it would have been quite properly and commercially negotiated"—
  that is the arrangement for early payment—
  "and that in those circumstances I certainly saw nothing wrong in making adjustments either way to meet the EFL target. … There is absolutely no point in making adherence to EFL targets even more difficult by building in aberrations stemming purely from the coincidence of weather factors."
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  We all recognise BGC's difficulties with cash limits. However, if the Government have set clear cash limits, it is up to BGC to stick to them. It is unreasonable for it to try to avoid them. I hope that the Government will carefully examine the whole issue and the way in which the accounts have been altered and changed.
  I wish to make one further point—[Interruption.] I shall develop the point quickly, if Opposition Members will allow me to do so. All hon. Members believe that Parliament should control the purse strings. Together with many other hon. Members, I strongly feel that the Comptroller and Auditor General should have powers to examine, if necessary—and if Select Committees consider it appropriate—the audited accounts of nationalised industries. [Interruption.] That argument should be adopted by hon. Members on both sides of the House, including the hon. Member for West Stirlingshire (Mr. Canavan).
  If anything substantiates that argument it is the story of how BGC has apparently got round the external financing limit.
  Mr. Deputy Speaker: Order. Other hon. Members wish to catch my eye, and the hon. Gentleman is straying from the subject-matter of the Bill.
  Mr. Eggar: I apologise, Mr. Deputy Speaker. You rose just as I was about to sit down.
  6.25 pm
  Mr. W. E. Garrett: As he gains experience of the House, I hope that the hon. Member for Enfield, North (Mr. Eggar) will acquire some understanding of the sensitivities involved in certain debates, particularly when only a limited amount of time is available.
  I turn to the Secretary of State's prompt decision on a gassing tragedy in my constituency. He dealt with the matter promptly and sent an official to the region. That was greatly appreciated. On behalf of thousands of householders with equipment with this type of gas supply, I should tell him that he has helped considerably to allay their worst fears. I hope that a report will be issued and widely distributed, perhaps after the inquest on victims.
  I have also had reservations about the Committee's progress. There should have been two Bills—one on oil and one on gas. However, experience tells me that, regardless of their political colours, Governments will always try to get three Bills into one. On this occasion, they have tried to put two Bills into one and have failed miserably. Many of the issues that still concern Committee Members have not been fully debated. I wish that the Minister had spent more time on the implications of two distribution systems. When Parliament has given the Minister the necessary powers, I urge him to proceed carefully and cautiously when phasing in, in some cases. a double pipeline and operational system. I hope that he will always ensure that the standards of the two sectors are compatible.
  As so often happens, an amending Bill will probably have to be introduced within the next two or three years to alter some of the actions taken in this Bill.
  6.27 pm
  Mr. David Myles: Although time is brief, I welcome the opportunity to say a word or two and to release some of the gasps that I had to pent up in Committee.
  I come from North-East Scotland and am well aware of the stupendous achievement involved in extracting oil and gas from beneath the North Sea. Those resources were laid down before the day of the dodo, as the hon. Member for West Lothian (Mr. Dalyell) said. They have lain under the North Sea for many years and have been released so that this generation, and perhaps the next—but possibly no more—can use that pent-up energy for their benefit. There is no doubt that those resources are available because of enterprise. I use that word advisedly, and, indeed, I am pleased that the word "enterprise" is in the title of the Bill. Private enterprise brought that energy to the surface and has made it available to us.
  I welcome the fact that the British Gas Corporation will have to break up its operations to a certain extent and that there will be an opportunity for small companies to get in on the gas act.
  For the sake of future generations we should look at methane digesters which could come into being on a small scale as a result of gas production, perhaps only on a farm scale. The breaking up of the gas monopoly may make that possible.
  6.30 pm
  Mr. Edward Rowlands: It is a matter of personal regret that, as we come to the end of our discussions on the Bill, I have to introduce two sour notes.
  First, I must tell the Secretary of State that good convention and tradition should have led him to open the debate on the Third Reading of the Bill. We have excused him for, and co-operated with, his periodic absenteeism. We made special efforts on Report in that regard. We think that he, like any Secretary of State, should have moved the Third Reading of this major and important Bill.
  The second sour note that I have to introduce relates to the speech made by Sir Donald Maitland. We do not believe that that speech was in order. It crossed the bounds of propriety and decency. Had Sir Donald's predecessor, Sir Michael Palliser, or Sir Robert Armstrong, the Permanent Under-Secretary of State, Home Office, made such a speech under a Labour Government, Conservative Members would have been the first to be on their feet on points of order about the role of permanent officials. His speech about this Bill carried "Yes, Minister" to extremes. It is not just a matter of a factual statement. The speech was a series of political views and opinions which we have debated constantly over 130 hours.
  Whatever the permanent secretary's role, it is not to make public speeches in favour of the Bill. That is what the press release was all about. I deeply regret what has happened. The Secretary of State does not need to lecture me about Sir Donald Maitland; I think I know him as well as he does. It is sad and regrettable that for some curious reason he has broken what we consider to be the bounds of normal propriety and convention of permanent secretaries and their relationships with Ministers.
  The Bill was no good when we began our proceedings, and it is no better now. It has not been changed at all. I have never come across a Bill to which fewer changes have been made. Labour Members who have served on many
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  more Standing Committees than I have said that this Bill is remarkable for its lack of change. The reason is that the Bill derives from blatant obstinacy. As my hon. Friend the Member for Dunfermline (Mr. Douglas) said, it derives from sheer dogma and doctrine. Even the practical and pragmatic arguments that we put on the gas provisions of the Bill have been ignored.
  In the time that is available under the guillotine, let me catalogue the fundamental failings of the Bill and the reasons why we shall oppose it both on Third Reading and in the country. First, as the hon. Member for Bedford (Mr. Skeet) and others have spotted, the Bill breaks up—smashes up—a successful national oil corporation. Even Conservative Members accept that it disintegrates BNOC. We take different views on what we should do about it, but it smashes a successful national oil corporation.
  BNOC was profitable and vibrantly successful. It has gained grudging respect, even from the oil industry. The Bill breaks it up in the worst possible way. That point has been made by the hon. Member for Bedford and others both in Committee and in the debate today. The Bill will leave behind a State corporation trading in oil which is weak, vulnerable and with extreme financial difficulties. Indeed, the Government introduced a clause to give grants and subsidies to the State oil company. It takes genius to create a lame duck out of a national oil corporation, yet the Government are on the verge of doing so if the Bill goes through in its present form.
  Secondly, by breaking up BNOC, it breaks up the one organisation concerned with the North Sea that was answerable to the Government and the nation alone. It had no allegiance other than to the Government and the nation. We know about the great success story of the North Sea and about the important role of the multinationals in developing the North Sea in the 1970s. That is all very well and good, but in fact and in practice they do not owe allegiance to this nation. They owe allegiance to the shareholders of Houston, Louisiana and elsewhere, and there is no reason to believe that they will invest on the size and scale required in the 1980s.
  Coincidentally, the North Sea was helpful to those companies because they were pushed out of the Middle East in the 1970s. However, they may spend more time looking at, and investing in, China in the 1980s. Therefore, the breaking up of the one organisation that is the eyes and ears of the British Government and British nation, answerable to no one else, is in our view a disaster, given the problems that we shall face in the 1980s.
  We believe that the Bill will destroy and undermine the control of our oil supplies. We have driven the Government hard and believed that we might obtain some concessions on the participation agreements between Britoil and BNOC. We still have not seen them, and that is another secret and veiled part of the Bill. Nevertheless, we believe that we shall lose control over our oil supplies.
  As hon. Members on both sides have pointed out, the Government are absolutely friendless in their belief that they should break up BNOC. They could not even get Mr. Shelbourne to agree to the proposal. Indeed, Mr. Utiger and most of the other members of the board, some of whom believe in privatisation, feel that the Government have done it in the wrong way.
  The gas provisions in the Bill are a betrayal of national and consumer interests. The measure will destroy the rights of British Gas to buy gas from the North Sea. It

  483
  destroys the rights of British Gas to purchase gas from the North Sea on behalf of 15 million consumers. It will destroy the purchasing rights of British Gas. At present it has the right to first purchase, and the Bill will stop that.
  As we said on Second reading, the end gain of the Bill is not to supply the Leicestershire villagers with gas that they do not have at present, nor is it to supply gas to Brush Electric. It will eventually allow the oil companies to export their gas to Europe. It paves the way for the export of gas, and Sir Donald Maitland told us so in his speech.
  The Bill will also undermine the negotiating power of British Gas with the oil companies. The hon. Members for Derbyshire, South-East (Mr. Rost) and Bedford, as well as the Government, know that British Gas will have to negotiate important contracts to cover consumer gas supplies for the mid and late 1980s. The Bill tilts the whole balance of those negotiations in favour of the oil companies.
  Conservative Members have said that they support the idea that the oil companies should get a higher price for their gas. They have been the spokesman for a particular group of companies. They have not spoken on behalf of the nation's consumers. They have spoken on behalf of the interests of a particular sector, as has been apparent in speech after speech. They are willing to undermine the power of British Gas to negotiate on behalf of 151½ million consumers of gas in the mid and late 1980s. That is what the Bill is about. It will benefit private interests at the expense of the nation and of the consumer. That is why we shall oppose it.
  There is worse. In clauses 15, 16 and 17 the Bill does something that no Government have done before. It will break up and meddle with the national gas transmission system.
  Mr. Matthew Parris: Hear, hear.
  Mr. Rowlands: I hope that that "Hear, hear", together with those of other Conservative Members, will go on the record. When the first problems arise as a result of the interference and meddling of a Secretary of State in a national gas transmission system and when the Secretary of State through his powers of direction overrides the professional and technical judgment of gas engineers and trouble arises, we shall remember who supported the proposal.
  There is an even more incredible proposition in the Bill. The Secretary of State says "I take powers of direction to override British Gas and interfere with its national gas transmission system, but I do not accept responsibility for the actions that I shall take". That is what the Government said. When they repeatedly say that if the Secretary of State uses his powers of direction to override the professional judgment of British Gas officials and engineers, one assumes that the Secretary of State will bear responsibility for that—but no. He says "Although we shall override British Gas and have power to do so, we shall not accept responsibility for any decisions that we take". I do not know where hon. Members stand on that. Whatever they think about privatisation, can they possibly support the proposition that when a Minister's decision overrides the responsibility and judgment of an organisation, he is not responsible for the decision that he has imposed? That is a travesty, and it is what is written in the Bill.
  Finally, I come to the most fundamental reason why we oppose the Bill. It offends every normal parliamentary
  484
  convention. It is a crude enabling Bill which gives the Secretary of State enormous power to do what he likes, when he likes, and how he likes, with large assets which at the moment belong to the nation. The amount of parliamentary control once the Bill becomes law will be miserable and paltry. It will consist of a couple of negative orders debated late at night in respect of gas, and not a single one for the disposal of more than £1 billion worth of oil assets.
  No matter where we stand on privatisation, we should stand on the side of parliamentary accountability and scrutiny. We have already seen an example of what happens when Parliament loses control or supervision of an issue. It happened with Amersham International, when none of the decisions made ever came back to this House. That is why the Government got into such a mess with that example of privatisation. This Bill is privatisation writ large. We oppose it on the grounds of principle, party philosophy and, more important, because it is a fundamental affront to every sense of decent parliamentary democracy.
  6.44 pm
  The Secretary of State for Energy (Mr. Nigel Lawson): I shall start by dealing with two matters of a personal nature which were raised by the hon. Member for Merthyr Tydfil (Mr. Rowlands). If, by replying to this debate, winding it up rather than opening it, I have been guilty of a discourtesy to the House, I apologise unreservedly. However, I assure the House that no such discourtesy was intended.
  The second matter that the hon. Member for Merthyr Tydfil raised was Sir Donald Maitland's speech. In that respect I make no apology whatsoever. Sir Donald's speech was his own speech. Of course, he showed it to me before he delivered it, and I approved it. It is a factual statement of Government policy, and he was perfectly entitled to make it. There are many precedents for it. I recall last year, when I was a Treasury Minister, that Sir Douglas Wass, the Permanent Secretary to the Treasury, made a public speech at an important meeting, when he explained Government economic policy. Economic policy is another issue which is not uncontroversial—something on which there is more than one view. The slur that we have heard today on a very distinguished public servant is uncalled for, and I hope that at some stage the hon. Gentleman will see fit to withdraw it.
  The Bill was scrutinised in Committee for more than 100 hours, quite apart from the scrutiny that it was given on Report yesterday. When the hon. Member for Newcastle upon Tyne, West (Mr. Brown) complained that the guillotine had prevented a proper scrutiny, that was totally absurd. It is important to get that on the record. The only thing that the guillotine prevented was an indefinite filibuster. The timetable motion that was moved and approved by the House was of such generosity that the Opposition were totally unable to fill the time that was allocated to them. Of the time that was available for debate under the allocation of time motion, the Opposition chose not to use twelve hours.
  Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. Before you were in the Chair, your predecessor rightly pointed out that Third Reading is a very strict debate, in which one can discuss only what is in the Bill. Where in the Bill is there anything

  485
  about the guillotine, how long the guillotine operated, and whether or not the guillotine was sufficient? I have not examined the Bill fully, but I can see nothing in it about the guillotine.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): The hon. Gentleman is right, but it is not unknown for hon. Members and Ministers to have a preamble to their speeches. It should not be too long in a short debate.
  Mr. Lawson: So much for that. Perhaps I may now say something else that is not in the Bill, Mr. Deputy Speaker. I am most grateful for the informed support—not always uncritical—which I and my Front Bench team have had from our hon. Friends on the Back Benches during the course of the Bill. If I do not have time to reply to all the points that they have raised, I hope that they appreciate that I take their points very much on board, and I will consider all of them most carefully.
  I turn to the various arguments that were raised today.
  On the first part of the Bill—Britoil and BNOC—one of the Opposition's main points was an attempt to maintain that the nation's security of oil supply would be undermined by the sale of shares in Britoil. That is complete nonsense. We have made it clear that, as with any other oil company operating in the North Sea, there will be a participation agreement between Britoil and BNOC. Participation, of course, is merely one of many aspects which ensure security of supply. In addition, there are assurances given by refiners, which recognise the special obligations to the United Kingdom in times of limited shortage, and BNOC's ability to repatriate oil to the United Kingdom market. That facility remains. These assurances, together with the Government's controls over depletion, licensing and flaring—I will come to the point about flaring raised by the right hon. Member for Orkney and Shetland (Mr. Grimond) in a moment—and the tax and royalty regime, remain wholly unaffected by the Britoil sale.
  I hope that during the Bill's proceedings we have dispelled any apprehensions that existed at the beginning, about BNOC's future role. As I made clear throughout, BNOC will remain 100 per cent. in the public sector, trading primarily in participation oil, for which it will retain all the rights that it needs. It would not be in the national interest—as some of my hon. Friends urged—to take the further step of privatising the corporation's trading, as well as its upstream business. That trading is an essential function of the participation agreements. Therefore, the participation agreements have a strategic rather than commercial function. That is why they exist. It simply would not make sense to privatise them. This answers the point made, among others, by the right hon. Member for Leeds, South (Mr. Rees). The right hon. Gentleman said that Britoil should be an integrated company. There is nothing to stop it being an integrated company. It is up to Britoil to decide whether it wants to move downstream; the articles of association state that it may do so. It can have refineries if it wishes, although at present it may not wish to. It can certainly trade and have distribution outlets. It can be fully integrated, but BNOC's role in the participation agreements is something that no integrated oil company can undertake, for the simple reason that such agreements are not basically commercial operations. They exist for strategic reasons.
  486
  One of my hon. Friends asked why we should not scrap the participation agreements. In those circumstances, the trading operation would be much smaller than its present large size. The reason we decided—most hon. Members on both sides of the House agreed that this was right—to retain participation agreements was fully explained by my hon. Friend the Minister of State in the fifth sitting of the Committee on 11 February.
  On Britoil, the BNOC board formally accepted the Government's policy of privatisation as long ago as January this year. The chairman made no secret of his welcome to the benefits that this will bring to the company and its employees.
  Viscount Cranborne: I am grateful to my right hon. Friend for giving way because I know that time is short. My right hon. Friend said that he retains the participation crude for strategic reasons. Surely, there are other strategic raw materials apart from oil. Why do we not have participation agreements for them?
  Mr. Lawson: Oil is a commodity of a very special nature, as the events of 1973–74 reminded us all. On gas—
  Mr. Merlyn Rees: On the sale of BNOC, will the Secretary of State undertake, although it is not in the Bill, to report to the House what method of sale he intends to use?
  Mr. Lawson: The House will, of course, be informed of the method of sale before the sale takes place. That goes without saying. There are, however, certainly no parliamentary precedents for formal procedures to do that.
  On gas, we have made a number of amendments as a result of discussion in Committee. That proves, to some extent, the benefit of the Committee. There can certainly be no contention that the Government have been unwilling to consider constructive suggestions on the gas provisions. Nor did the timetable motion prevent any such suggestions. Indeed, all the changes that occurred took place during the operation of the guillotine.
  Another point raised concerned gas exports. The Bill changes the present position in no way. I make no apology for that. There is tremendous scope for additional sales of gas to British industry. However, supplies from existing fields, which will soon decline, will be inadequate to meet all those demands. Our proposals will give the exploration efforts of the oil companies the fillip they need. UKOOA has assured me of its unreserved support for the Bill. On exports, the position is simple. If large new reserves of gas are discovered, we will consider exports.
  The right hon. Member for Orkney and Shetland asked about gas gathering and what progress had been made. The BGC expects to take receipt this month at St. Fergus of the first gas transported via the FLAGS line. When the western and northern legs are completed next year, it will be taking gas from a total of eight fields. I am confident that oil companies will come forward in due course with gas gathering schemes for other fields.
  The complete cessation of flaring would mean virtually the cessation of oil production. Flaring is now running at only half the rate that it was when this Government took office, even though the rate of production has risen considerably.
  Mr. Canavan rose—
  Mr. Lawson: I have no time to give way.

  487
  On gas provisions, the objections raised may sound very bland and impressive. However, they were raised by people who did not want to see the gas monopoly broken in any way. They did not want competition in any shape or form. The Government are confident that private industry, both suppliers and customers, will be able to make the most of the opportunities the Bill will give them. The newspapers have already reported that an important company, with undeveloped gas reserves, is seriously examining the direct sale of gas to industrial consumers once the Bill becomes law.
  I shall do all in my power to ensure that the market is open to such initiatives as speedily and effectively as possible. These powers are important and I commend them to the House. The safety provisions are of equal importance. I am glad that they were widely welcomed on both sides of the House.
  The Bill is passing through its last stage in the House of Commons and I reaffirm its importance. Britain's energy sector has been the object of stale thought and received wisdom for too long. Debate has been kept within unspoken limits, which utterly failed to touch on the fundamental issues. There has been a measure of private despair, common to all Governments, about nationalised industries.
  The Bill proposes a fresh approach, based on enterprise and change. I fully recognise, in the measures it proposes, that it is not a soft option, either for the industries concerned or the Government. Many would prefer us to leave things alone and let the industries stay as they are. That is not good enough. Of course change is never popular until it has succeeded. In the nation's interest, we must tackle problems and not pretend that they do not exist. We cannot afford to take the easy way out. Of course, it is easy for the Opposition to be negative, as they have been throughout the Bill. They carp and criticise, complain and are satisfied with nothing they are told. We know about that and a good example of it concerned the articles of association. They spent goodness knows how long at the start of the Committee stage complaining that they did not have the articles of association. When they got them, there was nothing they could think of to say or do. They did not criticise the Government directives. They did not criticise the provision to maintain independence. They had nothing to criticise. The whole thing was phoney.
  There has not been heard from the Opposition any intellectual or coherent case for clothing their basic prejudices. I look forward to the passage of the Bill. I look forward still more to its implementation. I invite the House to give it a Third Reading. It is a Bill of the first importance. It will create more change and more progress in our energy industries than any previous legislation that has passed through the House.
  It being Seven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to Order [8 March] and Resolution [31 March], to put forthwith the Question already proposed from the Chair.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 280, Noes 214.

  Division No. 116]

  [7pm

  AYES

  Adley, Robert

  Alison, Rt Hon Michael

  Aitken, Jonathan

  Amery, Rt Hon Julian

  Alexander, Richard

  Ancram, Michael

  488

  Arnold, Tom

  Fry, Peter

  Aspinwall, Jack

  Gardiner, George (Reigate)

  Atkins, Robert (PrestonN)

  Gardner, Edward (S Fylde)

  Baker, Kenneth(St.M'bone)

  Garel-Jones, Tristan

  Baker, Nicholas (N Dorset)

  Gilmour, Rt Hon Sir Ian

  Banks, Robert

  Glyn, Dr Alan

  Bendall, Vivian

  Goodhart, SirPhilip

  Benyon, W.(Buckingham)

  Goodhew, SirVictor

  Best, Keith

  Goodlad, Alastair

  Bevan, David Gilroy

  Gorst, John

  Biffen, Rt Hon John

  Gow, Ian

  Biggs-Davison, SirJohn

  Grant, Anthony (HarrowC)

  Blackburn, John

  Gray, Hamish

  Blaker, Peter

  Griffiths, E.(B'ySt.Edm'ds)

  Body, Richard

  Griffiths, Peter(Portsm'thN)

  Bonsor, SirNicholas

  Grist, Ian

  Bottomley, Peter(W'wichW)

  Grylls, Michael

  Bowden, Andrew

  Gummer, JohnSelwyn

  Boyson, DrRhodes

  Hamilton, HonA.

  Braine, SirBernard

  Hamilton, Michael(Salisbury)

  Bright, Graham

  Hampson, DrKeith

  Brittan, Rt. Hon. Leon

  Hannam, John

  Brooke, Hon Peter

  Havers, Rt Hon Sir Michael

  Brotherton, Michael

  Hawksley, Warren

  Brown, Michael(Brigg&Sc'n)

  Hayhoe, Barney

  Browne, John(Winchester)

  Heddle, John

  Bruce-Gardyne, John

  Henderson, Barry

  Bryan, SirPaul

  Heseltine, Rt Hon Michael

  Buck, Antony

  Hicks, Robert

  Budgen, Nick

  Higgins, Rt Hon Terence L.

  Bulmer, Esmond

  Hogg, Hon Douglas(Gr'th'm)

  Burden, SirFrederick

  Holland, Philip(Carlton)

  Butcher, John

  Hooson, Tom

  Cadbury, Jocelyn

  Hordern, Peter

  Carlisle, John (Luton West)

  Howe, Rt Hon Sir Geoffrey

  Carlisle, Kenneth(Lincoln)

  Howell, Rt Hon D. (G'ldf'd)

  Carlisle, Rt Hon M. (R'c'n)

  Howell, Ralph (N Norfolk)

  Chalker, Mrs.Lynda

  Hunt, David (Wirral)

  Channon, Rt. Hon. Paul

  Hunt, John(Ravensbourne)

  Chapman, Sydney

  Irving, Charles(Cheltenham)

  Churchill, W.S.

  Jessel, Toby

  Clark, Hon A. (Plym'th, S'n)

  JohnsonSmith, Geoffrey

  Clark, SirW. (CroydonS)

  Jopling, Rt Hon Michael

  Clarke, Kenneth(Rushcliffe)

  Joseph, Rt Hon Sir Keith

  Cockeram, Eric

  Kaberry, SirDonald

  Colvin, Michael

  Kellett-Bowman, MrsElaine

  Cope, John

  Kershaw, Sir Anthony

  Costain, Sir Albert

  King, Rt Hon Tom

  Cranborne, Viscount

  Lamont, Norman

  Crouch, David

  Lang, Ian

  Dean, Paul (North Somerset)

  Latham, Michael

  Dickens, Geoffrey

  Lawrence, Ivan

  Dorrell, Stephen

  Lawson, Rt Hon Nigel

  Douglas-Hamilton, LordJ.

  Lee, John

  Dover, Denshore

  LeMarchant, Spencer

  du Cann, Rt Hon Edward

  Lennox-Boyd, HonMark

  Dunn, Robert(Dartford)

  Lester, Jim (Beeston)

  Durant, Tony

  Lewis, Kenneth(Rutland)

  Dykes, Hugh

  Lloyd, Ian (Havant & W'loo)

  Eden, Rt Hon Sir John

  Lloyd, Peter (Fareham)

  Edwards, Rt Hon N. (P'broke)

  Loveridge, John

  Eggar, Tim

  Lyell, Nicholas

  Elliott, SirWilliam

  McCrindle, Robert

  Eyre, Reginald

  Macfarlane, Neil

  Fairbairn, Nicholas

  MacGregor, John

  Fairgrieve, SirRussell

  MacKay, John (Argyll)

  Faith, Mrs Sheila

  Macmillan, Rt Hon M.

  Farr, John

  McNair-Wilson, M. (N'bury)

  Fell, Sir Anthony

  McNair-Wilson, P. (NewF'st)

  Fenner, MrsPeggy

  Marland, Paul

  Finsberg, Geoffrey

  Marshall, Michael(Arundel)

  Fisher, SirNigel

  Marten, RtHonNeil

  Fletcher, A. (Ed'nb'ghN)

  Mates, Michael

  Fletcher-Cooke, SirCharles

  Maude, Rt Hon Sir Angus

  Fookes, Miss Janet

  Mawby, Ray

  Forman, Nigel

  Mawhinney, DrBrian

  Fowler, Rt Hon Norman

  Maxwell-Hyslop, Robin

  Fox, Marcus

  Mayhew, Patrick

  Fraser, Rt Hon Sir Hugh

  Mellor, David

  Fraser, Peter(South Angus,)

  Meyer, Sir Anthony

  489

  Miller, Hal(B'grove.)

  Skeet, T. H. H.

  Mills, Iain(Meriden)

  Speed, Keith

  Mills, Peter (West Devon)

  Speller, Tony

  Miscampbell, Norman

  Spence, John

  Moate, Roger

  Spicer, Jim (West Dorset)

  Monro, SirHector

  Spicer, Michael (S Worcs)

  Montgomery, Fergus

  Sproat, Iain

  Moore, John

  Squire, Robin

  Morris, M. (N'hampton S)

  Stainton, Keith

  Morrison, Hon C. (Devizes)

  Stanbrook, Ivor

  Morrison, Hon P. (Chester)

  Stanley, John

  Mudd, David

  Steen, Anthony

  Murphy, Christopher

  Stevens, Martin

  Myles, David

  Stewart, A. (E Renfrewshire)

  Neale, Gerrard

  Stewart, Ian (Hitchin)

  Neubert, Michael

  Stokes, John

  Newton, Tony

  Stradling Thomas, J.

  Normanton, Tom

  Tapsell, Peter

  Onslow, Cranley

  Taylor, Teddy (S'end E)

  Oppenheim, Rt Hon Mrs S.

  Tebbit, Rt Hon Norman

  Page, John (Harrow, West)

  Temple-Morris, Peter

  Page, Richard (SW Herts)

  Thomas, Rt Hon Peter

  Parkinson, Rt Hon Cecil

  Thompson, Donald

  Parris, Matthew

  Thorne, Neil(IlfordSouth.)

  Patten, Christopher(Bath)

  Thornton, Malcolm

  Patten, John (Oxford)

  Townend, John(Bridlington)

  Pattie, Geoffrey

  Townsend, CyrilD, (B'heath)

  Pawsey, James

  Trippier, David

  Percival, SirIan

  Trotter, Neville

  Peyton, Rt Hon John

  van Straubenzee, Sir W.

  Pollock, Alexander

  Vaughan, Dr Gerard

  Porter, Barry

  Viggers, Peter

  Prentice, Rt Hon Reg

  Waddington, David

  Prior, Rt Hon James

  Wakeham, John

  Proctor, K. Harvey

  Waldegrave, HonWilliam

  Pym, Rt Hon Francis

  Walker, B. (Perth)

  Raison, Rt Hon Timothy

  Walker-Smith, Rt Hon Sir D.

  Rathbone, Tim

  Wall, Sir Patrick

  Rees-Davies, W. R.

  Waller, Gary

  Renton, Tim

  Walters, Dennis

  Rhodes James, Robert

  Ward, John

  Rhys Williams, Sir Brandon

  Warren, Kenneth

  Ridley, Hon Nicholas

  Watson, John

  Rippon, Rt Hon Geoffrey

  Wells, Bowen

  Roberts, M. (Cardiff NW)

  Wells, John(Maidstone)

  Roberts, Wyn (Conway)

  Wheeler, John

  Rossi, Hugh

  Whitelaw, Rt Hon William

  Rost, Peter

  Whitney, Raymond

  Royle, Sir Anthony

  Wickenden, Keith

  Sainsbury, Hon Timothy

  Wigley, Dafydd

  St. John-Stevas, Rt Hon N.

  Wilkinson, John

  Scott, Nicholas

  Winterton, Nicholas

  Shaw, Giles (Pudsey)

  Wolfson, Mark

  Shaw, Michael (Scarborough)

  Young, Sir George (Acton.)

  Shelton, William (Streatham)

  Younger, Rt Hon George

  Shepherd, Colin (Hereford)

  Shepherd, Richard

  Tellers for the Ayes:

  Silvester, Fred

  Mr. Anthony Berry

  Sims, Roger

  and Mr. Carol Mather

  NOES

  Abse, Leo

  Brown, R. C. (N'castle W)

  Anderson, Donald

  Brown, Ronald W. (H'ckn'yS)

  Archer, Rt Hon Peter

  Brown, Ron (E'burgh, Leith)

  Ashley, Rt Hon Jack

  Callaghan, Rt Hon J.

  Ashton, Joe

  Callaghan, Jim (Midd't'n&P)

  Atkinson, N. (H'gey,)

  Campbell, Ian

  Bagier, GordonA.T.

  Canavan, Dennis

  Barnett, Guy (Greenwich)

  Carmichael, Neil

  Barnett, Rt Hon Joel (H'wd)

  Cartwright, John

  Benn, Rt Hon Tony

  Cocks, Rt Hon M. (B 'stol S)

  Bennett, Andrew(St'kp'tn)

  Cohen, Stanley

  Bidwell, Sydney

  Coleman, Donald

  Booth, Rt Hon Albert

  Concannon, Rt Hon J. D.

  Boothroyd, MissBetty

  Cook, Robin F.

  Bottomley, RtHonA. (M'b'ro)

  Cowans, Harry

  Bradley, Tom

  Cox, T. (W'dsw'th, Toot'g)

  Bray, DrJeremy

  Craigen, J. M. (G'gow, M'hill)

  Brocklebank-Fowler, C.

  Crawshaw, Richard

  Brown, Hugh D. (Provan)

  Cryer, Bob

  490

  Cunliffe, Lawrence

  McDonald, DrOonagh

  Cunningham, G. (IslingtonS.)

  McElhone, Frank

  Cunningham, DrJ. (W'h'n,)

  McKay, Allen(Penistone)

  Dalyell, Tam

  McKelvey, William

  Davidson, Arthur

  Maclennan, Robert

  Davies, Rt Hon Denzil (L'lli)

  McNamara, Kevin

  Davies, Ifor (Gower)

  Magee, Bryan

  Davis, Clinton (HackneyC)

  Marks, Kenneth

  Davis Terry (B'ham, Stechf'd)

  Marshall, D(G'gowS'ton)

  Deakins, Eric

  Marshall, DrEdmund (Goole)

  Dean, Joseph (Leeds West)

  Marshall, Jim(Leicestser)

  Dewar, Donald

  Martin, M(G'gowS'burn)

  Dixon, Donald

  Mason, Rt Hon Roy

  Dobson, Frank

  Maxton, John

  Dormand, Jack

  Maynard, Miss Joan

  Douglas, Dick

  Meacher, Michael

  Douglas-Mann, Bruce

  Mellish, Rt Hon Robert

  Dubs, Alfred

  Millan, Rt Hon Bruce

  Duffy, A. E. P.

  Miller, Dr M.S(E Kilbride)

  Dunnett, Jack

  Mitchell, Austin(Grimsby)

  Dunwoody, Hon Mrs G.

  Mitchell, R. C. (Soton Itchen)

  Eadie, Alex

  Morris, Rt Hon A. (W'shawe)

  Eastham, Ken

  Morris, Rt Hon C. (O'shaw)

  Ellis, R. (NED'bysh're)

  Morris, Rt Hon J. (Aberavon)

  Ellis Tom (Wrexham)

  Morton, George

  English, Michael

  Moyle, Rt Hon Roland

  Ennals, Rt Hon David

  Newens, Stanley

  Evans, loan (Aberdare)

  Oakes, Rt Hon Gordon

  Evans, John (Newton)

  Ogden, Eric

  Faulds, Andrew

  O'Halloran, Michael

  Field, Frank

  O'Neill, Martin

  Fitch, Alan

  Orme, Rt Hon Stanley

  Fitt, Gerard

  Park, George

  Fletcher, Ted(Darlington)

  Parker, John

  Ford, Ben

  Parry, Robert

  Forrester, John

  Pendry, Tom

  Foster, Derek

  Penhaligon, David

  Foulkes, George

  Powell, Raymond(Ogmore)

  Fraser, J. (Lamb'th, N'w'd)

  Prescott, John

  Garrett, John (Norwich S)

  Radice, Giles

  Garrett, W. E. (Wallsend)

  Rees, Rt Hon M (Leeds S)

  George, Bruce

  Roberts, Albert(Normanton)

  Golding, John

  Roberts, Allan(Bootle)

  Graham, Ted

  Roberts, Ernest (Hackney N)

  Grant, John (IslingtonC)

  Roberts, Gwilym(Cannock)

  Hamilton, James(Bothwell)

  Robertson, George

  Harrison, Rt Hon Walter

  Robinson, G. (Coventry NW)

  Heffer, EricS.

  Rodgers, Rt Hon William

  Hogg, N. (E Dunb't'nshire)

  Rooker, J. W.

  Holland, S.(L'b'th, Vauxh'll)

  Roper, John

  HomeRobertson, John

  Ross, Ernest (Dundee West)

  Homewood, William

  Rowlands, Ted

  Hooley, Frank

  Sandelson, Neville

  Horam, John

  Sever, John

  Howell, Rt Hon D.

  Sheerman, Barry

  Howells, Geraint

  Sheldon, Rt Hon R.

  Huckfield, Les

  Shore, Rt Hon Peter

  Hughes, Mark(Durham)

  Short, Mrs Renée

  Hughes, Robert (Aberdeen N)

  Silkin, Rt Hon J. (Deptford)

  Janner, Hon Greville

  Silverman, Julius

  Jay, Rt Hon Douglas

  Skinner, Dennis

  Jenkins, Rt Hon Roy(Hillhead)

  Smith, Rt Hon J. (N Lanark)

  Johnson, Walter (Derby S)

  Soley, Clive

  Johnston, Russell (Inverness)

  Spearing, Nigel

  Jones, Rt Hon Alec (Rh'dda)

  Spriggs, Leslie

  Jones, Barry (East Flint)

  Stallard, A.W.

  Kilfedder, JamesA.

  Stewart, Rt Hon D. (W Isles)

  Kilroy-Silk, Robert

  Stoddart, David

  Kinnock, Neil

  Stott, Roger

  Lambie, David

  Strang, Gavin

  Lamborn, Harry

  Straw, Jack

  Lamond, James

  Summerskill, HonDrShirley

  Leadbitter, Ted

  Taylor, Mrs Ann (Bolton W)

  Leighton, Ronald

  Thomas, Jeffrey (Abertillery)

  Lestor, Miss Joan

  Thomas, Mike (Newcastle E)

  Lewis, Arthur (N'hamNW)

  Thomas, DrR. (Carmarthen)

  Lewis, Ron(Carlisle)

  Thorne, Stan (PrestonSouth)

  Lofthouse, Geoffrey

  Tilley, John

  Lyons, Edward (Bradf'd W)

  Tinn, James

  Mabon, Rt Hon Dr J. Dickson

  Torney, Tom

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  Varley, Rt Hon Eric G.

  Wilson, Gordon (DundeeE)

  Walker, Rt Hon H. (D'caster)

  Wilson, Rt Hon Sir H. (H'ton)

  Welsh, Michael

  Wilson, William (C'try SE)

  White, Frank R.

  Winnick, David

  White, J. (G'gowPollok)

  Woolmer, Kenneth

  Whitehead, Phillip

  Wright, Sheila

  Whitlock, William

  Willey.Rt Hon Frederick

  Tellers for the Noes:

  Williams, Rt Hon A. (S'seaW)

  Mr. Allen McKay

  Williams, Rt Hon Mrs (Crosby)

  and Mr. Frank Haynes

  Question accordingly agreed to.
  Bill read the Third time and passed.

  SITTINGS OF THE HOUSE
  Resolved,
  That this House do meet on Thursday 8th April at half-past Nine o'clock, that no Questions be taken after half-past Ten o'clock, and that at half-past Three o'clock Mr. Speaker do adjourn the House without putting any Question.—[Mr. Garel-Jones.]

  Adjournment (Easter and May Day)
  Motion made, and Question proposed,
  That this House at its rising on Thursday 8th April do adjourn till Monday 19th April and at its rising on Friday 30th April do adjourn till Tuesday 4th May and that this House shall not adjourn on Thursday 8th April until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.—[Mr. Garel-Jones.
  7.13 pm
  Mr. David Winnick: There has been some complacency by Ministers recently over the slight reduction in unemployment. They have dwelt on the decrease in unemployment during the last month. In the travel-to-work area which I partly represent, Walsall, registered unemployment is 17 per cent., which amounts to 28,738 on the jobless register. In the West Midlands registered unemployment is more than 15 per cent. with 344,400 registered as jobless. Unemployment in the West Midlands is now higher than the national average. That is unique and has understandably caused great hardship and suffering.
  I am raising this matter as well because of the numbers who have been unemployed for a long time. In the area covered by West Midlands county council, 61 per cent. of those registered have been unemployed for more than six months and of these 36 per cent. have been unemployed for more than a year. It is also appropriate to point out that 29 per cent. of all the unemployed in the county area of the West Midlands are over 45 years of age. In the Walsall travel-to-work area the number registered jobless for over a year exceeds 10,000. That figure was given in reply to a parliamentary question recently.
  What about the figure when the Government took office? In April 1979 the figure was just under 2,500, so there has been a threefold increase in the number registered as jobless for longer than 12 months in my travel-to-work area. Therefore, it is not surprising that, whereas in May 1979, 6,300 non-pensioners were drawing supplementary benefit from the two Department of Health and Social Security offices in Walsall, the figure now is 14,300. These are people of working age who are forced to draw supplementary benefit because in most cases they are unable to find employment.
  We should not overlook what this means for the standard of living of those people and their families who have to live on the minumum prescribed by the State. They are unable to earn their living. If they are over 45 or 50 there is the nightmare fear that perhaps they will not be able to get jobs again.
  When the Government went to the hustings in May 1979 they did not promise such a future for the people in the West Midlands. The figures which I have quoted show only too well what has been happening in the region during the past two or three years. What is required is action by the Government to reverse some of their economic policies and to reverse the tide of mass unemployment.
  Previous Governments have accepted the objective of full employment. The accusation against this Government is that they do not accept that objective. In the Budget this year it was more or less accepted that unemployment would rise substantially during the next financial year. Are Conservative Members proud to belong to a party which in office has caused such misery, which has caused the living standards of so many people to fall and which makes those in the age group to which many of us belong feel that

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  they will probably not be able to get jobs again? As I have said, that was hardly promised in the election manifesto of Conservative right hon. and hon. Members when they last went to the country. It has been a disgraceful performance in Government. Undoubtedly people up and down the country understand that they have been betrayed.
  Yesterday the Secretary of State for Employment made a speech in which he said that young people had been priced out of jobs by other people's greed. That was a silly remark, even from the right hon. Gentleman. He seems to overlook the policies of his own Government, the recession, the slump, high interest rates and the rest, and simply talks about greed. Does he really believe that young people who go from school to the dole queue accept that as a reason why they cannot get jobs? Do their parents believe it? It is understandable that the right hon. Gentleman made those remarks, because he is so full of anti-trade union prejudice that he cannot think straight when it comes to any matter relating to unions.
  On the first of the two topics that I wish to raise, when he replies to the debate the Leader of the House should tell us what the Government intend to do about unemployment in the West Midlands. In some places it is far worse than it was in the 1930s.
  My second topic concerns an overseas matter—the recent elections, if they can be described as such, in E1 Salvador. Some ask why we should bother about E1 Salvador—what concern is it of ours? By sending observers, Britain has accepted some responsibility for those elections. It is extremely difficult to understand why we as a country have been associated with some others. Chile, for example, sent observers to those elections. That is a fine Government with which to be associated. Honduras, Haiti and Taiwan also sent observers. One can hardly describe such countries as outstanding examples of parliamentary democracy. The list of countries that sent observers to the so-called elections in E1 Salvador does not include one other European country.
  We have been isolated by the attitude of the Prime Minister, who wishes to associate Britain with the regime in E1 Salvador. As my right hon. Friend the Leader of the Opposition said yesterday, Britain's reputation has been harmed by being involved in and sending observers to those farcical elections. We all know how impossible it is to have genuine and meaningful elections in the middle of a civil war. The Opposition made that point recently in a debate but the Government refused to listen.
  The person who has emerged as most likely to be asked to form a Government in E1 Salvador is the leader of an ultra-Right-wing group, who was described by a recent United States ambassador there as a pathological killer. That is the man who, in the next few days, may be asked to form a Government in E1 Salvador. It is he who has been behind the death squads—he has never denied it—that have been responsible for killing about 30,000 people in the past two or three years.
  There have been many other occasions when the Opposition have protested against injustice abroad. There are many tyrannies. E1 Salvador is by no means the only one. Labour Members cannot understand why we as a parliamentary democracy should allow ourselves to be involved with such a regime. Surely it would do far more good if the British Government took a more detached view.
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  There is growing opposition in the United States to the American Government's policies towards Central America. The British Government may not want to associate themselves with such internal protests in the United States, but I am complaining that in many ways the British Government seem to be no more than an echo of the American State Department and Secretary of State Haig. We seem to be playing the same role as we played during the Vietnam war, and I doubt whether we helped the United States at the time by agreeing with their policies in South-East Asia.
  There is a growing crisis in Central America, and in E1 Salvador in particular. If we are to intervene at all, we should ensure that negotiations take place between those who are fighting the civil war. We should try to bring peace, stability and genuine reform to that country, which has been poverty-stricken and oppressed for so many years.
  It seems that the Government are once again making a grave mistake on an important foreign policy matter. That problem has preoccupied the United States a great deal. As my right hon. Friend the Leader of the Opposition said yesterday, we hope that the Government will change their line and recognise that what is happening in E1 Salvador is civil war and that if the Government have any role to play, they should try their utmost to bring the parties together, for the reasons that I have stated.
  Those, then, are the two points that I wanted to raise before the Easter Recess,
  7.24 pm
  Mr. W. R. Rees-Davies: Before the House rises for the recess, I wish to make a few brief points relating to essential requirements for the tourist industry. I have been asked by a number of my colleagues to do so.
  The few hon. Members with a peculiar and close interest in tourism must be intensely critical of all previous Governments and, I am sorry to say, of the present Government.
  In Hotel Catering and Institutional Management, Anne Voss-Bark, regional chairman of an area to which these matters relate, wrote as follows:
  "It is clear that the Government does not give a damn about the hotel industry at the present time. All that Westminster is doing at the moment is making it more difficult for us to live, to give good service and to attract more customers, many of whom are from abroad and who could help to put our balance of payments right. You would think that the Government realises this, but they act as if they don't. The Government have done nothing to help the hotel industry—nothing—only the reverse."
  Owing directly to Government policy, a number of hotels which are well liked and efficiently run have closed for lack of customers. One can go to coastal towns and count the "For Sale" notices as one walks along the front. Those signs are there not necessarily because the hotels are bad but because the owners have been forced to pay wages that they cannot afford and too much tax.
  One hears of people coming back from France and saying how cheap it is over there, but French hotel owners pay 7 per cent. in VAT whereas English hotel owners pay 15 per cent. The Dutch pay 4 per cent. in VAT and—imagine it—even in Italy VAT is a mere 9 per cent.
  I am not advocating that we change our structure of VAT, but I do advocate the urgent application of one or two matters. There is a serious malaise throughout the tourist industry. Whether it be the British Tourist Board,

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  the regions, Devon, the South-East regional tourist board, the hoteliers or the caterers, all are deeply concerned at the lack of an effective tourist policy for many years past, particularly under the present Government from whom they expected a lead.
  I shall give three examples. First is the abolition of the fatuous rule that Government grants—I am talking only of Government grants—provided under section 4 of the Development of Tourism Act 1969, are permitted in only five areas of the country, all of which are manufacturing areas. None of them could conceivably be designated for tourism. There are one or two towns, to which I shall refer, in those areas.
  None of the other tourist areas in the country is entitled to a tourist grant. No one in the tourist industry can understand it and no one in the country can believe it. The tourist industry is the most labour-intensive of all. It costs only £4,000 to create a job in the tourist industry. It has been proved that 80,000 to 100,000 such jobs could be created, at less cost than keeping people unemployed.
  It is therefore essential—we await an early answer—that the Cabinet should consider redesignating such areas so that they may receive for tourists what tourism really needs. I refer not to the opening of the Manchester canal or something of that sort, but to direct needs of tourism. The Government have been considering the problem for more than two years now and no answer has been forthcoming.
  It is the universal view of the industry that the grants, meagre though they are, should be on a nationwide basis specifically to assist black spots and the essential requirements of tourism. A satisfactory answer on that would make a very nice Easter egg for the tourist industry, which has waited a long time.
  Secondly, I was asked to see the Chancellor of the Exchequer, and I did so, to back up representations from the industry generally about industrial allowances. The present situation is intolerable. Tourism has been defined and accepted by the Treasury as an industry. Industrial allowances are 75 per cent. for industry, but only 25 per cent. for the hotel sector and the amusement centres, by which I mean caravan centres and so on. To restore the balance at least to the position of two years ago would mean raising the grant from 25 per cent. to 37½ per cent—still only half of the allowance to industry. That has been proposed as the first priority of the tourist industry.
  The hotel trade took a tremendous pummelling when it had to make substantial and perfectly proper improvements to meet fire regulations. As a result, hoteliers found themselves without the resources or the borrowing ability to carry out necessary modernisation to a standard comparable with that of our overseas competitors. Nevertheless, in some areas this was achieved by means of industrial and other allowances, and particularly through section 4 allowances. The example of Scarborough shines out like a beacon. Because it is in an industrial manufacturing area, Scarborough received £1¼ million in section 4 grant. It was thus able to modernise its hotels. As the chief executive has pointed out, the value of that is now up to £7 million. The town has completely picked up through the expenditure of such a small amount.
  Having considered the matter carefully, the subcommittee of the Conservative Party tourist committee has pressed this as a matter of the greatest importance. I beg the Chancellor to make the necessary amendment to the Finance Bill to bring the industrial allowances fairly into
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  line for this great industry, especially at the present time when so many more jobs could be created but when so many jobs could also be lost if hotels and guest houses continue to close all over the country. That is no exaggeration. If this were done, they could modernise at very little expense.
  Thirdly, the structure of the industry requires urgent consideration by the Cabinet, for this would be a Cabinet decision. To be quite blunt, the only good Minister concerned with tourism in the past few years was my right hon. Friend the Member for Gloucester (Mrs. Oppenheim), who recently gave up that responsibility. She was first-class.
  Mr. Winnick rose—
  Mr. Rees-Davies: I give way to the hon. Gentleman, but I do not wish to give way more than once.
  Mr. Winnick: In dealing with the tourist industry and related matters, has the hon. and learned Gentleman any interest of his own to declare?
  Mr. Rees-Davies: None at all. I am chairman of the Conservative Party committee on tourism, but l have absolutely no interests of any kind in this country.
  Mr. Winnick: What about Spain?
  Mr. Rees-Davies: I have none in Spain, either. I do not intend to argue any further about that. If I had any interest, I should certainly declare it.
  In the judgment of many of us and of most of the trade there should at least be a Minister of State for tourism who would be concerned solely with the multitudinous problems of what is probably the most successful industry. It can certainly provide the greatest number of jobs for the unemployed, due to its labour-intensive nature. I believe that the present structure is wrong. Many of those who serve the industry believe that it would be better with the Department of Industry than with the Department of Trade. Whether or not that change is made, the industry certainly needs a voice that can be more comprehensively heard than is now the case.
  If a mere £20 million instead of the present £4 million could be found, many of the problems would be solved, leading to a great expansion of the industry. If we had a Minister to correlate tourist issues with our European colleagues, we could ensure that the present EEC aid criteria were met and the European Investment Bank and the European social fund could provide the necessary tourist grants for hotels and for the infrastructure and the centres that this country requires but which, without assistance, will fail and will thus lose rather than create.
  In France, substantial funds have been injected into the Camargue in the south. Those funds have come in part from Europe. If the criteria of the European social fund and regional fund were looked into, assistance could be provided for black spots in this country. The hon. Member for Walsall, North (Mr. Winnick) referred to unemployment rates of 16 and 17 per cent. The rate in Margate is higher than that and is consistently one of the highest in the country. In all of the tourist resorts to which I refer, unemployment rates are 15 per cent. or more and generally higher than elsewhere. Let us give them the chance to assist this country. Let us support a successful industry and assist those who can make it more successful. That is certainly a better policy than following the path of trying to help those who have been less successful.

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  I hope that these considerations will be passed on to those who have to make the decision and that the Cabinet will pay due regard to them. I assure the House that there is a feeling throughout the hotel and catering industry that it is the Cinderella and has been left out although it has contributed much to the success story of the development of tourism in this country.
  7.30 pm
  Mr. William Ross: At Prime Minister's Question Time today, I raised the problem of the murders in Northern Ireland in the past week. It is particularly important that I raise this matter before the House adjourns for the Easter Recess, because in my city of Londonderry two soldiers were butchered in cold blood today, and a policeman was shot dead as he left church on Sunday and a week ago today three soldiers were murdered in Belfast. All those murders were the work of the IRA. That is six lives in seven days. Moreover, there have been other attempts, one of which, on Tuesday, left a member of the Royal Ulster Constabulary grievously wounded. It would therefore be wrong indeed for the House to shut up shop for 10 days without giving attention to this very serious matter.
  I asked the Prime Minister today for a stronger security force presence on the ground. That means more Army personnel on the ground. In the past we have found that when the manpower is present the ability of the IRA to strike diminishes, and that when the shield is lowered or removed the ability of the IRA to strike through the weakened defences quickly becomes apparent.
  The opportunity is not the only thing that matters in a situation such as this. There are wider ramifications. There are always other matters embodied in IRA strategy that are not immediately apparent to those who live in Ulster, and less so to those who live on this side of the Irish sea. Those who sit in the House, unless they are in positions of authority, and those in the streets of London and other British cities, do not have the feel and touch of grass root opinion in the Province and cannot be expected to reach the same conclusions as those of us who live there.
  It is reasonable to ask for a stronger security and Army presence during the coming weeks in the light of our experience during the past decade. There is always some trouble at Easter. Above all, there is trouble every time we have another so-called initiative. We are now in the throes of a further initiative, which is nothing more than a rehash of what has gone before. A similar upsurge occurs when there are conversations between the Prime Minister of the Irish Republic and the right hon. Lady. It happened under her predecessors, and possibly it will happen under her successors if we are so foolish as to continue such contact. On the last such occasion, in November, seven people were killed in about a week, one of whom was the late Mr. Robert Bradford who so often addressed the House from this Bench.
  My feeling is that we are seeing the same sort of upsurge, because today's murders were set up in such a way that they could have trapped anyone leaving the police station at which the soldiers were working and caught them on their way back to the city centre. Today the IRA displayed a willingness to kill any member of the security forces, whether local or national, who came within its reach. It was a carefully planned operation and part of an
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  emergent pattern during the past few days, which demonstrates to me that there is a definite build-up in IRA activity. I should be surprised if many more days passed without further victims of the IRA's murderous activities.
  Before the recess we must have a reassurance about the security force level in Northern Ireland. I must ask that the assurance given here in words is seen in uniform on the ground and that proper precautions are taken. Despite the warnings that should have been evident to any politician and to the security forces in Northern Ireland, no precautions appear to have been taken during the past few weeks. The security forces should have known that they had to take the necessary measures to prevent the six murders and attempted murders.
  There is no point in turning round and saying that the chief constable or the commanding officer did not ask for men. That is as much a matter of political judgment as of military and security force judgment on the ground. We have had long experience about what happens at this time of the year and whenever such alleged political movements are attempted.
  Mr. Gerard Fitt: Although I accept and completely agree with the condemnation of the hon. Member for Londonderry (Mr. Ross) of the atrocious murders in his city and throughout Northern Ireland in the past few days and weeks, is he saying that there should be no political initiative and that no one should try to erase the terrible divisions of the past and try to bring people together in the belief that the IRA or the Loyalist paramilitary organisations will not succeed? Is he saying that we should do nothing? If so, the IRA or the Protestant military organisations have won the war.
  Mr. Ross: The hon. Member for Belfast, West (Mr. Fitt) is too hasty. He should perhaps have waited and all would have been made clear as I expanded my arguments. The hon. Gentleman knows the policy of my party towards devolution in Northern Ireland. I object to the fact that the murders and criminal activity of the IRA are basically the direct result of the speculation, confusion and turmoil caused by the proposed initiative. The hon. Gentleman will recall that I said earlier that this was a rehash of what had gone before. We who have sat through many conversations with Ministers in the Northern Ireland Office are well aware that what has been offered to us is that which was cast out—the Sunningdale agreement. All the people in Northern Ireland know that that sort of system did not work then and will not work now.
  The Secretary of State, as well as rehashing that proposal, is guilty of gross negligence in not understanding the effect on the people of Northern Ireland of putting forward proposals such as these in the way that he has put them forward. It is a question of what effect his words, actions, and speculations in the press, and other news media, have on the people and the paramilitary organisations in Northern Ireland.
  I was present at some of the meetings with the Secretary of State and, like my hon. Friends, I put questions to him, which he kindly answered. However, throughout all these meetings there have been different understandings in the minds of every group, every party and, in many cases, every individual. That differing understanding has not only been among the Members of the parties who visited him, but in the minds of the people and of the media. At

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  best, that is a sign of poor communication by someone. As the communication all comes from the same source, the House will gather in whose lap I lay the blame.
  Let us consider the 70 per cent. majority proposal that the Secretary of State will lay before the House next week, and let us examine the attitude that has been taken towards it and the understandings and misunderstandings in the minds of those involved. For instance, last Thursday during Northern Ireland Question Time, the hon. Member for Antrim, North (Rev. Ian Paisley) asked whether the Secretary of State could assure the House that in his proposals
  "there are no suggestions of an institutionalised Irish dimension or enforced power sharing? Does he know that if he goes along that path he is bound to fail?"
  We would agree with that statement, but the Secretary of State replied:
  "We are now presuming on what may happen in the future. I should rather wait for these points to be discussed when and if the Government proceed with the proposals."—[Official Report, 25 March 1982; Vol. 20, c. 1073.]
  In other words, it was a put-off, flannel answer, which we can all recognize
  Mr. John Wilkinson: On a point of order, Mr. Deputy Speaker. I do not wish to be cantankerous, and I have listened with great respect to the remarks of the hon. Member for Londonderry (Mr. Ross), especially about the appalling butchery of his constituents and the security forces in Northern Ireland, about which we are all concerned, but surely we are debating a motion that we should not adjourn for the Easter Recess or the May Day Recess until we have had time to debate certain matters. We shall have a statement on Monday on the constitutional future of Northern Ireland, so I wonder whether the hon. Gentleman's remarks are in order.
  Mr. Deputy Speaker(Mr. Bernard Weatherill): I am listening carefully to the hon. Member for Londonderry (Mr. Ross). I judged that the hon. Gentleman was arguing that we should not adjourn until this matter had been resolved.
  Mr. Ross: Yes, Mr. Deputy Speaker, you have given the hon. Gentleman the answer that I should have given. This is a serious matter, which cannot be lightly glossed over. If I tend to go wide, I hope that the House will realise that I am seeking to avoid bloodshed and death by warning those whom I believe should be warned.
  In an effort to clear up the confusion, on 29 March I tabled a question to the Secretary of State for Northern Ireland. I asked him
  "whether, in his meetings with party representatives concerned with his initiative on devolution, he made clear to each delegation (a) the requirement for a 70 per cent. majority embodying cross-community support for any devolution of powers to a Northern Ireland elected assembly and (b) the method of involvement of Northern Ireland parties in the proposed assembly as a cross-border body of elected representatives; and by what means."—[Official Report, 29 March 1982; Vol. 21, c. 44.]
  The right hon. Gentleman replied that he would answer as soon as possible. He did so the next day, having given the matter careful consideration for a further 24 hours:
  "In my talks on constitutional development with the political parties in Northern Ireland I have made it clear that any proposals for devolution must be acceptable to both sides of the community. I have also discussed with the parties the case for a weighted majority in the assembly for any devolution proposals.
  No cross-border body of elected representatives is contemplated, but as for participation of members of the
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  Northern Ireland assembly in an Anglo-Irish inter parliamentary body, the first step is for the Parliaments in London and. Dublin to decide whether to establish such a body."—[Official Report, 30 March 1982; Vol. 21, c. 72.]
  Again, there was some concealment in some of the things that were said to me and to other members of my delegation when we visited the right hon. Gentleman. The right hon. Gentleman is saying, although not clearly, that there must be cross-community support, even up to the 70 per cent. level. I shall return to that in more detail shortly.
  In the eyes of the ordinary individual in Northern Ireland who reads these questions and answers, there is but one reaction—that there is not a straight answer among them. There must be straight talking and straight answers, so that people have clearly in their minds what is happening. It is an important subject on the streets of Northern Ireland.
  When there are no straight answers, there is speculation. Speculation is dangerous and leads to confusion. Confusion leads to destabilisation. The result is turmoil and incitement for the killers to capitalise on the position. Inevitably, that happens.
  Some weeks ago one of my hon. Friends overheard a senior civil servant in the Northern Ireland Office saying that the tactic was to keep the situation fluid. That objective has been achieved beyond the wildest dreams of those who proposed it. The people of Northern Ireland are already bewildered by what is happening and bewildered by the speculation, the leaks and the differing reports. The position is causing me great anxiety.
  In our meetings with the Secretary of State, Members of my party put forward simple, straightforward views, but we had the impression that we were talking to the deaf and that we were talking to people who had long since made up their minds to go down the Sunningdale road again. That road led to disaster, and it will do so again.
  I must tell the hon. Member for Belfast, West that only by having sensible proposals for workable institutions will people in Northern Ireland feel secure. Although the terrorists may attempt murders, they will fail to cause confusion, because people will know where they are going. At present they do not.
  Mr. Fitt: I take to heart what the hon. Gentleman says. The Leader of the House was Secretary of State for Northern Ireland during a fortuitous five months from January to May 1974. Is the hon. Gentleman saying that the Official Unionists, the Democratic Unionists, the Vanguard movement and all the other extreme organisations, including those on the other side of the fence—the Official and Provisional IRA—will coalesce again to prevent any political move in the forthcoming White Paper if it is not acceptable to the Official' Unionists?
  Mr. Deputy Speaker: Order. If the hon. Gentleman were to answer the question he would go wide of the debate. As the hon. Member for Ruislip-Northwood (Mr. Wilkinson) said, the debate is about whether the House should adjourn.
  Mr. Ross: Until now I was not aware that even in the mind of the hon. Member for Belfast, West my party was considered an extremist organisation. I resent the implication. The hon. Gentleman will understand that I cannot accept it. He was rather hasty again.
  When we met the Minister in early March, one of the first things that we asked was what he was reading to us.

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  I say this to illustrate the confusion and the different understandings that can arise. We listened with care to what the right hon. Gentleman read and said. He told us that he was reading the draft White Paper. He was asked three times whether he had read it to all the other parties. He said that he had. Will the Leader of the House ask his right hon. Friend to tell the House on which dates he read the draft to each of the other parties? Did he tell them what he was reading? He did not tell us until we asked him. Straightforward answers to those questions may help to clear up the confusion. We were astonished by the import of the right hon. Gentleman's words. We could not understand why other dogs did not bark. Did they realise what was being read to them and what it meant?
  Three of the major parties in Northern Ireland came to the conclusion that they were being told that 70 per cent., even if it was all Protestants, would be sufficient to bring a recommendation to the House for a transfer of powers to the proposed Assembly. That is not what we and one other minor party understood. Our understanding is that even if we have 70 per cent., that would not be sufficient unless it includes members of the Roman Catholic faith. If there are Roman Catholic members in it, much less than 70 per cent. would suffice. I do not know what is the understanding of the hon. Member for Belfast, West. Perhaps he can tell us.
  With that confusion, how on earth can we expect the people of Northern Ireland to understand what has been said? The people who sat down with the Secretary of State and listened to the same things have come out with different understandings of what was said and what was meant.
  Mr. Deputy Speaker: Order. The hon. Gentleman is abusing my tolerance. The Leader of the House can answer only for his responsibilities. He cannot say what was meant in conversations to which he was not a party.
  Mr. Ross: I thank you for your guidance, Mr. Deputy Speaker. No doubt the Leader of the House will bring my remarks to his right hon. Friend's attention before the end of next week, when the House rises.
  We in the Official Unionist Party want the Secretary of State to be clear in his mind, and the House to be clear, about what the Ulster Unionist Party wants. [Interruption.] The hon. Member for Belfast, West is interrupting from a sedentary position. Perhaps he will speak later.
  We do not want a rehash of the Sunningdale agreement. We want a Stormont-type devolution. We make no apology to anyone for saying that, least of all to the hon. Member for Belfast, West. We do not want a talking shop. We do not want jobs for the boys, as was set forth in the committee structure. The House will be surprised to hear that when the committee structure was discussed, we were told that a committee consisting of a chairman, a vice-chairman and rapporteurs would be set up. We took that to mean jobs for the boys. The press was not told of that term, which is not one that is commonly used in British politics.
  We believe that if there is to be any progression in Ulster, we shall have to be given the plain truth and the full truth next week. There must be no more fluid situations and no more smoke-screens.
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  It is essential that in the coming week or two effective steps are taken to increase the Army and the number of people on full-time alert until the turmoil that has been created by this initiative has died away.
  When all that is done, and when the White Paper is published, we want the Secretary of State to be assured that when the election is called, we intend to fight it and win it, and we will win it. We will use the moral right that that majority gives us to demand the right to control that territory and to govern, because that is what that election will be about. There is no shilly shallying or whitewash that will cover that up. We want the Secretary of State to know that we are determined to get what we demand.
  8.3 pm
  Mr. Peter Mills: I shall not take up the remarks of the hon. Member for Londonderry (Mr. Ross), although I sympathise with him because of what has happened in Northern Ireland. As an ex-Northern Ireland Minister, I know of the anguish, the problems and the difficulties.
  I am unhappy, in view of the problems in my constituency and in other rural areas, that the House is to adjourn next week. One problem is petrol supplies to rural garages. I wish to address my remarks to my right hon. Friend the Secretary of State for Energy via my right hon. Friend the Leader of the House. Obviously, I shall not expct a reply from him tonight, but I hope that he will make a statement in the near future on this important matter.
  The problem is that the big suppliers are charging rural garages much more for their petrol than garages in urban areas. The difference is great. We need some help with that problem. I am talking not about subsidies, but about discussions with the petrol companies so that the problem is sorted out.
  I have some criticism of the Government in this matter. They need to show more concern about the effect of high petrol prices in the rural areas and on the people who live there. My constituency is full of small villages, all with their own petrol stations. Regrettably, many of them have closed down because they cannot compete with the lower price at which petrol is selling in the cities and the towns.
  The village petrol and repair station is of immense importance to the area and to village life. It does not just have to sell petrol. Perhaps such sales are the bread and butter, but those stations carry out repairs on cars, minor repairs in homes, and repairs on agricultural implements. The two things go together. If the station ceases to sell petrol because it is uneconomic for it to continue to do so, the rest follows. The petrol and repair station may pack up altogether. Such stations are slowly being squeezed out. That is sad. That started with the withdrawal of supplies from the major companies. Therefore, the garages have to look around for alternative supplies from smaller companies. They have to supply at higher prices, sometimes at up to 10p a gallon more than the price charged by large companies.
  The Government have accepted that assistance must be given to counter that problem. They have given assistance to sub-post offices. I congratulate the Government on what they have done. There is no doubt that they have helped to channel more money to the sub-post offices in various ways. Good progress has been made. The petrol station and repair garage is equally important to the life of the village and the rural community. Good progress has also

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  been made in the maintenance of village schools, which is another area in which the Government have given assistance so that the village and village life can keep going in rural areas.
  I have five p's that I have mentioned before in the House—the pub, the parson, the primary school, the petrol station and the phone box, which are all essential to our remote areas and rural life. The demise of our small garages and petrol stations would have a devastating effect on rural life. It would cause further depopulation, which we do not want.
  Therefore, I should like the Government to give me some more information on that subject before the House rises. Perhaps a statement could be made. At least a letter should be written because we need to have further discussion with the major petrol companies. That is urgent. There is the problem of price of petrol supplied to the small garages. There is also the delivery size—that is, the number of gallons that can be delivered. Many of those garages have smaller tanks, which makes it difficult for them to take a full load. In the past, they would have part loads. There is also the problem of subsidisation of urban garages, which the big petrol companies are doing, to the detriment of the rural areas.
  Therefore, the effect is serious. I cannot emphasise too strongly that, while I am not asking for a reply tonight, I am asking the Secretary of State for Energy to consider those matters urgently before the Easter Recess because if the trend continues, rural life will be seriously affected.
  8.10 pm
  Mr. Thomas Cox: There are two matters that I should like to bring to the attention of the House, both of which the Government have responsibilities for, and which I believe should be discussed before the Easter Recess.
  First, I shall refer to a local matter, about which I am deeply concerned, and which affects many of my constituents who live in the Bedford ward of my constituency. It is the problem of prostitution in that part of my constituency. The problem is not new. It has existed in the area for many years. However, in recent years it has grown a great deal for local residents because of the activities of motorists—the kerb crawlers who drive round and round that part of my constituency day after day from early afternoon until the early hours of the morning seeking to pick up women. That problem exists not solely in my area. On the Order Paper is early-day motion No. 338, which was sponsored by my hon. Friend the Member for Leicester, South (Mr. Marshall), and which has been signed by 41 hon. Members. That motion states that that problem exists in many other parts of the country.
  Over the years I have sought on many occasions to bring this matter to the attention of the House. I have sought a change in the law. Unfortunately, nothing has been done, yet it could have been done long before now.
  My constituents are fed up with the abuse, the noise and the effect of this problem on the area in which they live. Can the Leader of the House fully understand what it is like to be repeatedly accosted, as local women are, by these individuals who drive around for hours on end in my constituency? I know of cases where respectable women, out in the front of their houses cleaning their windows or brushing the front steps have had motorists stopping, getting our of their cars, going up to them and asking "Are you out for business?" When comments have been made
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  to these individuals the ladies in question are forced to listen to a storm of abuse from these people who have been insinuating that these respectable women are prostitutes.
  What an insult, and my constituents have had to put up with it year after year. It is not only women but sadly it is also young girls leaving local schools and going home—and sometimes going to school—who are repeatedly accosted by motorists. I could give a list to the House of the ways that women are accosted by these kerb crawlers, that I am sure would both amaze and appal many hon. Members.
  The local women are thus affected by the kerb crawlers, but in addition the whole area suffers. These men drive around and turn the area into a race track for hours on end, day or night. Something has to be done. I reject the oft-made comments to me by Ministers. I have had Adjournment debates and have asked questions only to be told by Ministers that, although they are sorry for me and my constituents, there is nothing that they can do about the problem.
  I reject that point of view. We believe that very quickly these problems could be reduced, if not stopped. What we are seeking and what we have sought for many years, but on which we have had no help, is for the police to be given powers whereby they could stop motorists whom they see driving around the area and from time to time stopping and talking to women. Can there be any doubt in anyone's mind what these individuals are doing in my constituency ? If the police were given these powers the publicity that would follow from court appearances would quickly see an end to the problem, and an end not only in my constituency but to the problem that exists in other areas of this country.
  I ask the Leader of the House, when will the Government consider the Brennan report, which was published as long ago as 1976 and made recommendations as to possible action against kerb crawlers? When will the Government start to examine that report and present to the House the suggestions in it, suggestions that we believe would go a long way, if not all the way, to stopping this continuous problem that, sadly, my constituents have to face?
  The other issue that I wish to raise is the question of Cyprus. I do so because this is also an issue that the Government have firm responsibilities for. It is now nearly eight years since the invasion of Cyprus by the Turkish Army. After those eight years it is still a divided island. Over those years there have been many tragic happenings. Many people have been forced out of their homes in the northern part of Cyprus and those homes have been taken over by turkish settlers taken to the island by the Turkish Administration. Hundreds of people have been missing since the invasion. All the evidence and the information about them, such as their names and their villages, has been documented, but despite repeated efforts nothing has been done by the Turkish Administration to try to explain where these people are.
  We have, over the years, had a series of intercommunal talks between the Greek and Turkish Cypriots but, sadly, little progress has been made. It is worth recalling to the House that Cyprus is a Commonwealth country. It is deplorable that a Commonwealth country should be occupied by troops of a foreign army, as Cyprus is. The Government often tend to forget that with Greece and Turkey we are one of the three guarantor powers for Cyprus.

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  Along with other hon. Members I was able to go to Cyprus at the end of last year, and I met both Greek and Turkish Cypriots. There is a willingness by the Greek Cypriots to work for a united Cyprus. They see a Cyprus where both Greek and Turkish Cypriots can live together. What are we, as one of the guarantor powers, doing to see that the present round of intercommunal talks will be successful and not, as in the past, a failure because of the lack of willingness on the part of the Turkish Administration?
  What discussions are we having with the Turkish Government? No one can be in any doubt that, although Mr. Denktash is the leader of the Turkish community in Cyprus, the real authority rests in Ankara with the Turkish military junta. What discussions are we having with the Turkish Government specifically on the issue of withdrawal of the many thousands of Turkish troops now based in Cyprus? If the Turkish authorities would withdraw some of those troops it would be seen as a token of good will on their part, and a show of willingness, so that talks could progress to an acceptable and honourable settlement.
  Furthermore, what guarantee will the British Government give the Greek Cypriots? Many of them feel that at some stage and under whatever guise, the Turkish authority might seek to take control of the whole island. These are crucial issues for Cyprus, a Commonwealth country. Time is not on our side. Eight years have gone by and I remind the Leader of the House—although I know that because of a previous appointment of his in the Government he will undoubtedly be aware of this point—that we have military bases in Cyprus. There could be, at some future stage, and if there is not a satisfactory and honourable conclusion to the tragedy of Cyprus, action against the British bases there. I do not think that the Greek Cypriots want to do this. They may be forced to do it if they do not see, after the long years of torment that they have had to endure, some action that will bring an honourable settlement to the issue.
  I realise that I have put to the Leader of the House points that he may not be able fully to answer this evening. I ask him, because of the importance of the issue, with his usual courtesy, to make sure that his right hon. Friend the Lord Privy Seal is made aware of these points. If the Leader of the House is not in a position this evening to answer my points I hope that in the near future his right hon. Friend will do so.
  8.20 pm
  Mr. Robert Hicks: Before the House rises for the Easter Recess it is important that a statement is made, and preferably some action taken, on an issue that is a source of increasing concern and irritation for the people of Devon and Cornwall, which is the designation of the boundary of the existing South-West region.
  The standard administrative and economic regions within the United Kingdom are determined by Whitehall, by the Department of the Environment. Ministers do not have to obtain the prior approval of the House. Consequently, some of our designated standard regions take little or no account of the regions' characteristics or needs. That is especially so for the South-West region. Under existing arrangements the regional unit is important in our administrative structure. It is used as the basis of
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  functions such as regional economic planning and the collection and dissemination of a range of statistics such as housing, employment and income levels.
  In many parts of the United Kingdom there exists a distinct expression of regional consciousness. Nowhere is that more keenly felt than in the far South-West of England, especially in Devon and Cornwall. Where this desire exists it should be encouraged by the Government, but at present Devon and Cornwall are lumped together in a so-called South-West region that extends eastwards to include Bristol and Avon, Gloucestershire and Wiltshire.
  The two far south-western counties have little in common with the areas with which they are linked. The basis of their economies differs significantly. Cornwall and Devon are far more dependent upon agriculture, fishing, tourism and the service sector. Apart from Plymouth there are no major concentrations of economic activity and poulation. Furthermore, under the existing arrangements Bristol, the so-called regional capital of the South-West, is nearer to London than to Bodmin.
  The problem goes deeper than that because the artificial South-West region that we now have is dominated by Bristol and Severnside, Gloucester, Swindon and the like. In consequence regional statistics such as income levels and unemployment levels often make a nonsense of the true position that exists in the far South-West. As a result, distortions abound, much to the detriment of Devon and Cornwall.
  The situation was recently highlighted by the European Economic Community's proposal to modify the parameters of the Community regional development fund. It is being suggested that in future the South-West assisted area, which comprises the whole of Cornwall and much of Devon, should no longer be eligible for assistance under the quota section of the Community regional fund. This sector represents 90 per cent. of Community regional aid, of which the United Kingdom received £153 million last year. The South-West assisted area has benefited by receipts of £20 million over the past three years.
  It is understandable that the Commission's proposal created widespread concern in the far South-West. A number of my hon. Friends and myself raised the issue on appropriate occasions. It was raised also by our Euro Members in the European Parliament. As a result of our examination it became abundantly clear that the principal reason for the Commission proposing the deletion of the area was that it had used statistics that were based on the standard United Kingdom regional classification. In other words, the officials in Brussels had considered the figures for the standard South-West region. Consequently a completely misleading picture was given for Devon and Cornwall.
  I shall briefly illustrate the result by referring to unemployment and average earning figures in the official South-West region. In April 1981 average earnings were 94·4 per cent. of the average figure for the United Kingdom. Average earnings in Cornwall were 84 per cent. of the United Kingdom figure. In other words, they were 16 per cent. below the national average and significantly below those for the South-West region.
  Secondly, I shall quote the November 1981 unemployment figures, seasonally adjusted, for all employees but excluding school leavers. United Kingdom unemployment was 11·3 per cent. The figure for the South-West standard region was 10 per cent., which was less than the United Kingdom figure. However, when

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  Cornwall and the parts of Devon that are within the South-West assisted area are considered, the figure rises to almost 17 per cent., which is well above the national figure and 68 per cent. above that of the South-West region.
  I hope that the two sets of figures illustrate clearly the predicament of the far South-West. I hope also that I have been able to make it clear to my right hon. Friend the Leader of the House, and through him to Ministers in the Department of the Environment, that the present regional boundaries are totally unsatisfactory for the far South-West and that there is an urgent need to recognise the case for the creation of a genuine South-West region comprising Devon and Cornwall. This could easily be done without the fabric of a vast and costly new bureaucracy. There is a strong case on the ground of regional identity and regional consciousness. There is a strong case also in respect of the collection and dissemination of statistics on which policies emanating from Whitehall and Brussels are based.
  Until a genuine South-West is created, the real and urgent problems facing the far South-West will not be tackled with the vigour and determination that they merit. Therefore, I ask my right hon. Friend to relay to my right hon. Friend the Secretary of State for the Environment the need for urgent consideration of this matter.
  8.28 pm
  Mr. Ronald W. Brown: I raise what is for me the hardy annual of the problems of Hackney. I do so again today because the Easter Recess will mean that I shall have to spend time in my constituency listening to my constituents' problems. I know that I shall face considerable complaint about housing conditions.
  The complaint arises principally because today—opportunely April Fools' Day—the Secretary of State for the Environment decided that he would force Hackney borough council to receive 17,000 properties from the Greater London Council. Those properties, the majority of which are in my constituency, are in an appalling condition and have been so for years. Every week my surgery is full of tenants who complain bitterly about the condition of those GLC properties. I know that those tenants will be round to see me tomorrow and every Friday thereafter demanding that Hackney borough council do something about the condition of the properties.
  There is an argument that the local authority—the primary unit of local government—should manage the properties in its area. That is true only if the local authority is taking over properties in a fit and proper state. However, as I have pointed out to the Secretary of State for the Environment many times over the past months—since his proposal to transfer the properties—the GLC does not know whether it is responsible for the property. The GLC does not even know the tenants. It is also totally unaware of the conditions.
  The House will recall that I raised this matter a year ago, when the Secretary of State proposed to transfer the properties. I pointed out to him that the GLC had no detailed knowledge of its property. The Secretary of State was so impressed by the argument that he insisted on having a sample taken by his officials to test whether I was right.
  That first sample of about 2,000 properties proved without a shadow of a doubt that I was correct. The Secretary of State then decided—I believe rightly—to
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  extend the sample from 2,000 properties to 5,000. When he received the 5,000 the survey he found that what I had been telling him was correct—that the properties were in an appalling state. We then had a long argument about how he would reflect that, because he was content to transfer the properties. He said that he would try to reflect the condition of the properties in the money available to do something about them. Together with officials, the Secretary of State finally determined that, over 10 years £1,250 might be spent on each of the properties to bring them up to a reasonable standard. That point must be stressed—the properties were not to be brought up to an extraordinary standard, but up to a reasonable standard.
  I argued that it was nonsense to suggest that. I produced evidence to show that to put the GLC properties in my constituency into good repair would require a fortune I sent him typical examples. But today, 1 April, Hackney is responsible for all those properties. However, it is unable to provide money for repairs. The House will recall that Hackney is one of London's local authorities that has continually been kicked into touch by the Secretary of State. Hackney has lost millions of pounds and is therefore in no position to take up the slack to provide the resources to take care of these GLC properties.
  Some of the properties are in an appalling condition. One can go in and see a bucket on a table. On asking what it is doing there, one is told that it is to catch water from a hole in the ceiling. On inquiring how the hole in the ceiling came to be there, one is told that workmen came and knocked a hole in the ceiling. If one asks "Why did they do that?", one is told that water came through the roof and caused a bulge in the ceiling and that the workmen told the tenant to use a bucket to catch the water and to empty it when it had filled up. When one asks "How long ago was that?", one is told "Two months ago."
  The tragedy is that when one tries to get the housing department to do something about the problem, the department tells the director of technical services, who then gives the order, but as he does not have the necessary workmen or the money, the problem stays like that for months. That is the sort of problem that faces Hackney borough council.
  It would not be so bad if Hackney borough council had the resources, but it has its own properties to look after, which are also in a bad state. I am continually pressing Hackney borough council to carry out proper maintenance and repairs, but it cannot do those either. In Hackney, or e sees damp walls and ceilings, leaky roofs and rotten frameworks. The problem in my constituency is that about 90 per cent. of it is municipalised. It was owned either by Hackney borough council or by the GLC. Now, it is all owned by Hackney borough council.
  In preparation for the changeover the GLC unilaterally decided that it would cancel all movements of tenants. That has greatly aggravated tenants who want to move from their bad flats into something a little better. They have been prevented from doing so and Hackney borough council now has the responsibility for trying to do something about that.
  Hackney is in such a state with its property that it has had to stop transfers. The council will transfer tenants only if they are in a high medical category or if it is in its interests to transfer them. That would apply, for example, to those in under-occupied premises who can be moved to more suitably sized flats. From today, it will take months before Hackney borough council is geared up to manage

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  the properties properly. Therefore, I hope that the Leader of the House will draw the situation to the Secretary of State's attention. I have desperately tried to do so. The property is in a bad condition and my people wish to transfer. They all live in flats and high rise blocks and want to move into houses. However, the Secretary of State has permitted all the GLC houses in the outer areas of London to be handed back to the borough councils and, as a result, my constituents do not have an opportunity to transfer.
  There is a continuing argument between the Secretary of State and myself. The right hon. Gentleman says that there is a national mobility scheme. I try to point out that it is not working. It has never worked, and it is not working now. He then says that I must try. I tell him that I do try. I send him cases. He began by not understanding them and now sends them back to me saying that I will understand that it is the local authority's responsibility. I point out that he said that there was a mobility scheme. He then replies that he will get in touch with Basildon, for example, but writes back saying that he is terribly sorry but Basildon cannot help and adds that I will have to turn to the mobility scheme. Thus, we return to square one. We just go round and round.
  Mr. Fitt: That is mobility.
  Mr. Brown: That is right. I do not know whether the Secretary of State does that deliberately, whether his officials do not tell him or whether he does not read my letters. However, some of my constituents are virtually in a housing Colditz. People cannot get out of my area, but they can come in. There are so many awful properties that cannot be let that desperate people from other parts of the country will accept them. However, after six weeks they come to my constituency advice centre and demand to be taken out of the properties because of the appalling conditions. The roofs leak. I am talking about council properties, not privately-owned properties and landlords. Therefore, I seek some help.
  When the Secretary of State decided to make Hackney take those properties, he did not give sufficiently serious consideration to the resources needed. He allowed himself to be misled into thinking that anyone can move from an inner city area, such as Hackney, to any other area, through the national mobility scheme that he set up. Today, I received a booklet from him describing how a council tenant can move. I have never heard such rubbish in my life. In theory it is marvellous. However, I have many cases to show him which prove that the scheme does not work. He has handed out the booklet as if it were useful advice. My constituents know from experience that things do not work like that. Therefore, I hope that the Secretary of State will have another look at the mobility issue. Perhaps something should be done in the outer areas, where they have such desirable properties, to ensure that allowances will be made for areas such as mine so that my constituents can go to those areas.
  I deal now with the problem of funds for Hackney. There must be a special relationship between the Government and an area such as mine. We have had the partnership scheme. There has been a political issue and a row between the Government and Hackney borough council. I do not quite understand what Hackney borough council is doing.
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  On Friday 19 March I tabled an amendment to a motion, pointing out that the domestic rate in Hackney went up in 1980–81 by 48·9 per cent., and in 1981–82 by 55·1 per cent. This year it has gone up only about 10 per cent. That interested me, especially as the Secretary of State had withdrawn millions of pounds over those years from Hackney. In fact, he was responsible for increasing the rate from 69p to 196p in that time.
  I did a little homework. I wondered whether that was the lowest rate that Hackney had ever had. It was not. The last year that it had a low rate was four years ago, in 1978. I thought to myself that that was rather odd, and then the penny dropped. It was election year in 1978 and it is election year in 1982. They are playing their party politics in doing that.
  That would be all right if Hackney had no other problem; if it was able to manipulate its own affairs and get away with it. However, as from today, Hackney has another 17,000 properties from the GLC in bad condition to put in good repair. If it does not now raise sufficient rates—and under the new Government scheme an incoming council will not be able to raise a supplementary rate—my constituents will have to live in appalling conditions for a long time. Those people who now come under Hackney borough council, living in GLC properties, will live in misery for a long time. I suspect that no repairs will be carried out within the next year.
  I shall have to advise my constituents to take legal action against the council in order to have the repairs carried out. Litigation under those circumstances is expensive. The majority of my constituents are at the lower end of the earnings group. They will have to go to the law centres, and in order to get legal aid the law centres will have to get approval from the Law Society before they can undertake any litigation. That will take weeks and the problems will be mounting up all the time.
  I hope that I have been able to draw attention, first, to the foolishness of the Secretary of State in transferring these properties and, secondly, to his failure to carry out his responsibilities to ensure, in enforcing this transfer, that there were sufficient funds and resources available to carry out the work. Thirdly, the right hon. Gentleman has failed to comprehend the fact that, far from being able to manage these properties, Hackney borough council is unable to manage its own. Therefore, the problem in the area is only being compounded.
  It will be my constituents in Hackney, South and Shoreditch who will have to suffer more and more from the failure of both the Government and the council to do what they are statutorily bound to do, which is to carry out full repairs and maintenance to these properties to ensure that my constituents live to the standard which other people in Britain accept as a normal standard.
  8.43 pm
  Mr. John Stokes: I do not think that we should adjourn for the Easter Recess until we have debated the subject of immigration. As hon. Members know, this topic is rarely discussed in the House, despite its prime importance to the nation.
  The time has now come, after about 25 years of mass immigration, when the Home Office and the Government should look at the whole matter afresh. Of all the countries within the United Kingdom it affects only England,

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  because the number of immigrants who have settled in Scotland, Wales and Northern Ireland is tiny compared with those who have come to England.
  England has absorbed small numbers of foreigners over the last 1,000 years, but it was only in the 1950s that enormous numbers started to come here, mainly from the Indian Sub-Continent and from the West Indies.
  Mr. Wilkinson rose—
  Mr. Stokes: Perhaps I can continue. Many other hon. Members wish to speak, and, like my hon. Friend, I have been waiting to be called. However, I am aware of my hon. Friend's interest stemming from the constituency which he formerly represented.
  These people were not Europeans and were quite different in character, religion, habits and customs from our own people. It is a tribute to the kindness and tolerance of English people that so vast a number of strange newcomers should have come and settled in our midst with so little turmoil and confusion. As we know, the immigrants settled in London and in the large provincial cities and, naturally, tended to live together. As I know all too well, in many places the native English were gradually eased out of the houses, streets and neighbourhoods that they had known all their lives.
  The so-called intellectuals and progressives who heralded this new invasion seldom lived in these immigrant areas, but the burden and upset fell on ordinary English working people, many of them elderly. The lives of some of them were turned upside down and their appeals for help were not generally heard, here by politicians, by social workers or even by Lord Scarman, who in his report on last year's disturbances studiously avoided seeing any of them.
  A most interesting report was issued earlier this month on the old people of Lambeth after the rioting. It repays reading. The people struck the writer as being modest and gentle, even with a sense of humour. They remembered their history and were proud of the achievements of the English people. They sometimes wondered whether the West Indians really wanted to adopt our culture. The newcomers believed in the saying "When in Rome, do as the Romans do". There was little anger—no hatred at all—but there was sorrow and fear that rioting might become justified. An old man said simply "It is our country and our Queen. Why should we be afraid to go out?"
  We must ask ourselves how this dreadfully tragic state of affairs has come about. How is it that we in this House have so neglected elderly English people in the immigrant areas, many of whom fought in the last war, some in both wars, and why have we allowed it to happen? I believe that there are two reasons. First, there is what I call the race relations industry and all its hangers-on, together with the effect that the anti-discrimination laws have had on the media, making many English people in high places—indeed, even some people here—frightened of speaking out on this subject.
  Secondly, the immigrants who came here, mainly for economic reasons, have sometimes been slow to adapt to our patriotism and our ways. Indeed, many of them still have dual nationality. The merits of the case for immigration or otherwise are never discussed. Instead, abuse is heaped on those who try to raise the subject, and they are straight away accused of being unkind or unfair
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  to the immigrants. This induces a feeling of guilt, particularly in the media and in the bosoms of some progressive people, but not, I believe, in the vast bulk of the people of this country who were never consulted about immigration and never really wanted it in the first place.
  The fault lies not with the English, who are an amazingly kind and tolerant nation, but with those who would force changes upon us and invent a new crime called discrimination. Some years ago one used to speak with respect of a person "with taste and discrimination", but now the word "discrimination" is equated with "racialism", as a term of abuse.
  I believe that immigrants themselves, or at least those who make a success of their lives here, prefer in the main to do without the host of anti-discrimination laws. Many of those who have come from the Indian Sub-Continent have become rich and successful as landowners, traders and capitalists. On the other hand, many West Indians—perhaps because of our climate—are returning in increasingly large numbers to their homeland. In my view, there would be a better and healthier social climate if all the discrimination laws were abolished, and I hope that the Home Office, which already has much to think about, including law and order, will not forget this important issue.
  The exaggerations and absurdities of discrimination grow worse daily. An extraordinary case in Lambeth was mentioned by Ronald Butt in The Times today. The complaints of English people who objected to a noisy West Indian party in public premises which went on until 4 am were considered racialist. Last week there was the case, to which I referred the Prime Minister, of the doctor who advertised for a partner who was a Christian like himself. Some Christians are immigrants anyway, and one would hope that more would become so in this Christian country. In this respect, I welcome the Archbishop of Canterbury's firm stand on the primacy of Christianity above other religions here in the teaching in our schools.
  If we can only quieten down the pro-immigrant lobby—I distinguish those people from immigrants—the other improvements must surely lie with immigrants themselves. They should be proud to be in England, proud to have joined one of the oldest and most civilised nations in the world. They should respect our ways and habits. In the end, to prove themselves true patriots, they should be prepared, as we all are, to fight and die for their new adopted country. We have had too much carping from some immigrant quarters. Let them get on with becoming as near to ordinary people as they can. That is the only way that they will ever be accepted here.
  8.53 pm
  Mr. A. W. Stallard: I welcome this opportunity to mention an issue that has affected many of us during the past few weeks. The opportunity that is afforded by these recess Adjournment debates is something that Back Benchers greatly cherish. I should be grateful if someone could tell me if the announcement in today's Order Paper that the House rises on 8 April till Monday 19 April, and then rises on Friday 30 April till Tuesday 4 May, means that we shall not have a recess Adjournment debate for the second short recess? [Interruption.] I gather that today's debate covers both. So we are done out of another Back-Bench opportunity to raise issues on the recess Adjournment.

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  We have an opportunity to move away from the weightier issues with which we have rightly been concerned during the past weeks and months, and concentrate on some of the issues, perhaps not as big, but just as important to many millions of our constituents. Therefore, the House should not adjourn until we have given further consideration to the statement made last week by the Minister for Social Security on the death grant. We ought to be asking a few questions about that statement. The Minister was not as open, when making that statement, as we have come to expect. There were many gaps in the statement and they ought to be filled because the consultative process has already started and will certainly continue during the recess.
  The reaction from pensioners, pensioners' organisations and childrens' organisations throughout the country was immediate. The effect on them was dramatic. Incidentally, the consultative document was so popular and there was such demand for it, that it is no longer available in the House. It is unusual that supplies of a document, of any description, do not last more than a couple of days in the Vote Office before all available copies are taken. That shows the amount of interest in the matter.
  The Dignity in Death Alliance has campaigned for many years on this issue and reacted to the statement immediately. The Guardian quoted its reaction on 31 March:
  "The figures have been pitched so low that they will not help people who have real hardship in meeting bills."
  That gives the lie to some of the introductory remarks in the statement. On the same day, The Daily Telegraph stated in a leader:
  "We wanted the grant to be for everyone and are shocked that the Government is proposing to restrict it to a maximum of 125,000 people."
  We know that about 660,000 people would qualify now for such a death grant. To restrict the number to 125,000 will deny 505,000, and probably more, the opportunity of it. That article continues:
  "The proposals are very disappointing because the average cost of a funeral is about £400 and a grant restricted to such a small number is going to leave thousands worried about how they will pay the cost."
  From constituency experience—I have a bill in my pocket sent to me by a constituent—I know that the most up to date cost of a funeral, with only one extra car, totals £644. The present death grant is £30. The new arrangement means that over 500,000 people will not even be eligible for any grant, let alone for the £30. Many people find themselves in difficulty when the bill is £644.When my constituent visited his local social security office and asked for a special payment for assistance with that £644, he was told, when his bank account had been investigated and so on, that, because he had over £300 in savings, he would not be entitled to any assistance. He told them that he had saved that £300 towards the funeral, but was told it was too bad and that nothing could be done because of the regulations. That is an awful situation and we must consider it more closely, following the Minister's statement.
  The Dignity in Death Alliance made its views known, not just to this but to previous Governments. This problem has existed for many years. I told the Minister that there was no need for further consultation or for the consultative
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  document because the position was clear. The position is certainly clear to all those organisations who have been in almost constant consultation with their constituents, previous Governments and the Government. We could have had an immediate start towards solving the problem.
  We must consider the basis of the options, as they are set out in the consultative document. As I understand it, they were drawn up purely on a fiscal basis, and not, as we or the country were led to believe from the glamorous reports, on the basis of real need. It is no such thing. The Government are saying that they have only so much money and that they will therefore fit the need into that amount. The proposal has not been drawn up on the basis of need. It has been done on a fiscal basis. It is an arbitrary position to adopt. The document points out that not all people on low incomes will necessarily be entitled to one of the qualifying passport benefits. There is mention only of supplementary benefit and family income supplement as falling within the criteria under which people will qualify for the grant. The document also says that there may be other cases of hardship that cannot be met. The situation will become worse rather than better.
  I learnt for the first time from the Minister that the portion of the national insurance contribution that goes towards the £30 funeral grant amounts to 2p. I would have thought, like many of my constituents, that if 2p qualified one for a £30 grant, it would be reasonable to argue that multiples of 2p qualified one for a grant in multiples of £30. Should this not have been another option? If the 2p were multiplied by five or 10, and the £30 by a similar factor, the scheme would be self-financing. Is that not another option that should have been put to the people? There has been an omission. It was not honest to leave out this self-financing option.
  There are many thousands—probably millions—who, like me, have always believed that the death grant is a national insurance benefit—a contributory benefit. The Minister, by saying that 2p is the portion that goes towards it, is saying that it is a contributory benefit. The Government will be made aware in coming weeks of the belief of people that they have paid towards the benefit and that they are entitled to it. It will be an awful job to persuade them otherwise especially in view of what the Minister has confessed.
  I was horrified to hear spokesmen for the Liberal Party and the Social Democratic Party welcome the approach that has been adopted. These are the same people who have claimed credit over many years for the Beveridge report. Beveridge would not have denied the contributory aspect of the benefit. Paragraph 350, on page 135 of the 1942 edition, of the report, dealing with social insurance and allied services, laid down the principle:
  "Persons retired on pension will always be on full benefit for a funeral grant."
  It is therefore strange that fellows who have recently taken up the positions that they now occupy in the House should deny what Beveridge seems to have been saying in his total approach.
  Another aspect that bothers me about the new procedure is the complicated post-payment vetting system. There is no means, I hope, of refusing the payment for a funeral. The approach is to pay and check later. The claimant will sign a declaration not to violate the conditions laid down by the Government in their favoured options. This raises

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  a number of questions. There must be greater administrative costs than are involved in the present scheme.
  The administrative cost of the £30 grant amounts to £8 million. We ought to have been told by how much that cost will be increased and how many more staff will be involved in the new vetting system. Is it the Government's intention to increase the fraud squad who will check on how many people have fraudently signed the declaration to claim the death benefit and then perhaps sold the deceased's house? One of the conditions is that the property must not be sold within 12 months. Are the Government going to keep tabs on this? If so, it will be an expensive and staff—consuming exercise.
  The report in The Guardian of 31 March makes it clear that inspectors will check on families—not just the one claimant but other members of the deceased's family—after the grant has been awarded. It is alleged that that information came from the DHSS. That must mean the employment of more staff and therefore more expense. We were not told about that when the statement was introduced. We will not be able to discuss that in the consultative process because we do not know about it. We ought to be informed about that.
  The estate limit has been fixed at £1,500. If the estate is less than that and the claimant satisfies other conditions he will qualify for the grant. The qualification limit for supplementary benefit is £2,500. The Government have not even gone as far as that cut-off. The estate must be £1,000 below that before the claimant can qualify for the funeral grant, even if all the other conditions are satisfied.
  The rates outlined in the option will not be sufficient to pay for a full funeral. Those in real hardship will get some assistance but not the full payment, and thousands will get nothing. The Government cannot claim that they are improving the situation. Between 3,000 and 4,000 people apply for special help from the supplementary benefits department to pay high funeral bills. Since so many benefits remain unclaimed, that figure will probable get higher and the position will be much worse.
  The Minister who introduced the consultative document made no proposals to solve the problems which will still exist. According to the document, grants will be paid in respect of elderly people who were previously excluded on the ground of age. No one appears to have noted that because we are talking of men aged 98 and women aged 93—not a huge number—their next of kin will themselves be retirement pensioners and probably will not qualify for any grant because of their circumstances. None of us would like to go away before Easter without illumination on that point.
  The elderly pensioners who have spent many years caring for their aged parents, and who may have made sacrifices to do so, will benefit only if they are in receipt of family income supplement. It is doubtful whether pensioners receive family income supplement, or even, in many cases, supplementary benefit. So they will not qualify for the new grant. No doubt thousands will fall into that category.
  It is worth repeating that the consultative document, which is not necessary—there has been enough consultation—has not been fully explained by the Minister. Many questions that could have been answered have been left unanswered. They are not questions for
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  which replies had to be awaited. Such answers should have been included in the document if the consultative process is to be considered adequate.
  Since 1979, the Government have promised a statement on the future of the death grant. The first promise was in reply to a parliamentary question on 20 July 1979, when we were told that there would be a statement as soon as possible. In May 1981, the Secretary of State said that a statement would be made shortly. In July of the same year, in a debate on uprating, the Minister said that a statement would be made in the first few weeks of the new session—in November. No statement materialised. Nothing was done. We were then told that the Government intended to make a statement before the Summer Recess last year. More recently, we were told that a statement would be made after the Christmas Recess, but it never materialised. Only a few weeks ago, I asked the Secretary of State in the Budget debate and he said that the consultative document would arrive the next week, but it did not arrive until a week later.
  The statement should have been perfect after so much consultation and so many promises, but it turned out to be fairly inadequate. It has shocked all the pensioners and their organisations. The House is entitled to a further statement and to answers to the questions that I have raised before we adjourn for the Easter Recess.
  9.14 pm
  Mr. Christopher Murphy: Before the House rises for the Easter Recess, it should examine the value for money that many of our citizens receive in consequence of the activities of local government. At a time when rate demands are being received, it is appropriate to ask whether the finance raised is necessarily being spent satisfactorily or, indeed, whether it should be spent at all. It is essential that we consider privatisation. That is a dreadful sounding word, but it conveys accurately the essence of its meaning.
  Privatisation can be examined in terms of Government activity through various Departments, as well as denationalisation, but I shall concentrate on the local government aspect.
  The absence of competition in the provision of local services and therefore the absence of the advantages of private enterprise and the entrepreneurial spirit, creates exactly the same weaknesses and failings as are found in State-owned monopolies. When there is no overt need to consider profit, there is no clear requirement adequately to reflect the wishes of the customer. Bureaucracy and restrictive practices easily become the order of the day.
  People look to the county or district council to provide essential services. They should also be able to look for efficiency and good housekeeping. To involve the private sector, if it can undertake the services economically, must surely be only common sense, as long as sufficient public accountability is present in tandem.
  Parliament should give the right to compete to firms wishing to tender for local authority contracts. The Local Government, Planning and Land Act 1980 introduced for the first time such statutory competition into construction contracts of more than a prescribed value. That right to compete should be extended to all services.
  Privatisation has established itself slowly, due to the attitude of local authorities. Apart from a few well-trumpeted and excellent examples, relatively little has so far been achieved. Yet those same local authorities are

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  entrusted by the inhabitants of their district or county with the responsibility to early out statutory obligations while at the same time they are charged with the task of raising rates responsibly.
  The establishment of the right to compete would give fresh impetus to the concept of privatisation and would ensure that there was a duty upon local authorities to investigate possible savings and to implement them where appropriate. Such a system could be carried out by allowing potential contractors to serve notice on the district auditor obliging him to investigate their case for providing a particular service by contract.
  It is wrong to think in limited terms about what areas might be appropriate for privatisation. The publicity given to refuse collection and street cleaning masks an enormous range of possibilities. Pest control, catering, architects' departments, office maintenance, security and grass cutting are just a few examples of privatisation already in practice among forward-looking Conservative-controlled authorities.
  A further aspect of the need for value for money is much closer attention being paid to the role of voluntary effort. Our nation has long benefited from the dedication of volunteers giving assistance to the community in many different ways. The necessity of further reducing the public sector may provide additional opportunities for such good will to be given greater and freer range.
  The proof of the success of privatisation has already been twofold—money saved and service improved. The Government have given a historic benefit by introducing the right to buy for council tenants. Let them now give another to all families by instigating the right to compete for council services.
  9.16 pm
  Mr. Peter Snape: I wish to draw the attention of the House, and particularly the attention of the Leader of the House, to a written answer given to question 99 in yesterday's Hansard. The hon. Member for Cardiff, North (Mr. Grist) asked the Secretary of State for Transport
  "if he will make a statement on the requirement for Government support to British Railways passenger services for the current year."
  The reply was, of necessity, fairly lengthy and controversial.
  Before dealing with the reply, however, I wish to protest to the House and particularly to the Leader of the House about the increasing practice these days for Ministers to slip controversial matters through in written answers rather than coming to the Dispatch Box and being questioned by the House about the attitude and thinking behind Government decisions. I do not accuse only the present Government. The Labour Government, of which I was a very junior member, were equally guilty in some ways. More and more frequently matters have tended to be slipped through in written answers, thus depriving Members on both sides of the House of the opportunity to question the thinking and reasoning behind the decisions.
  Having registered that protest, I turn to the details of the lengthy reply given yesterday. In the second paragraph, the Secretary of State said:
  "The board originally submitted to me a claim for grant for 1982 of £885·2 million, which, allowing for inflation, would
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  have been some £60 million above the total grant provided in 1981. Most of this results from increases in cost rather than a fall in revenue."—[Official Report, 31 March 1982; Vol. 21, c. 139–40. ]
  The last sentence illustrates the mistakes made within the Department and the fatal flaw in the Government's thinking on subsidies to public transport in general and to British Rail in particular.
  Costs are likely to increase year by year. The costs of operating certain railway services tend to increase every year, not as a result of enormous wage increases or, as the Conservatives continually suggest, as a result of restrictive practices, but due to the necessity of operating what is, by and large, a clapped-out railway system. In rural areas and on branch lines especially, costs are rising year by year because British Rail does not have the money to modernise and upgrade the lines.
  Recently the British Railways Board published a proposal to re-signal a branch line in East Anglia. It proposed the abolition of the existing manned signal boxes and wished to modernise about six level crossings on the line. The total outlay for those improvements, which were fully supported by my union, the National Union of Railwaymen, was about £2 million. The British Railways Board could not proceed because of financial problems. It could not find £2 million out of its investment allowances.
  That branch line is still operating with signals constructed at the turn of the century and with level crossings that cost on average about £15,000 a year to run in staffing costs alone. That £15,000 a year could readily be saved by the operation of modern Continental lifting barriers. However, because of the recent reduction in available investment money the board could not carry out those improvements. Money is still being wasted and costs are as high as ever. Yet the Conservative Party believes—the Secretary of State for Transport has said it publicly—that the increase in railway operating costs is due either to increased wages or to restrictive practices inherited, as it likes to say, from our Victorian predecessors.
  In the same written reply, the Government announced the appointment of a firm of City accountants to consider the financing of British Rail. The Secretary of State said before Christmas that he would be interested to appoint a commission. That is nothing new and neither the railway management not the unions objected. We have been investigated, reorganised and sorted out generally by commissions appointed by successive Governments. When the Government last conducted a similar examination they appointed the Monopolies Commission to consider the operation of railway services in London and the South-East—a part of Britain which, for some reason, normally returns Conservative Members of Parliament. I understand that there is a possibility that that will change at the next general election. However, the Monopolies Commission report cleared British Rail of the wild accusations made against it, and gave Southern Region almost a clean bill of health.
  It remains to be seen whether Mr. P. J. Butler, a senior partner of Peat Marwick Mitchell and Company, proposes something that might blacken the character of the railway management or whether he produces a diatribe, much loved by the Conservative Party, about inefficiency, incompetence and restrictive practices, which it says—although no one has found it—bedevil railway operations in the 1980s. Mr. Butler's appointment has not been greeted with universal approval. In The Standard, not

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  a newspaper that normally supports the trade union movement or the Labour Party, under the heading "Wrong target" the editorial this evening waxes strongly about the Secretary of State's decision. It states:
  "Mr. David Howell, the Transport Secretary, ought to know full well by now that BR already gets less subsidy mile for mile and train for train than almost any other railway in Europe."
  I can confidently tell the House that there is only one word wrong in that editorial—"almost". Mile for mile and train for train, British Rail receives less subsidy per mile than any other railway in Europe. The editorial goes on to say:
  "If Mr. Howell meant yesterday's announcement as a warning shot, it was both badly timed and badly aimed: warning shots are supposed to cross the bows, not hit the target amidships."
  The leader continues:
  "The damage—"
  the damage caused by this reduction in real terms in PSO support—
  "will be, at worst, more cuts in services on top of the 10 per cent. already planned for June, more fare rises on top of those threatened this Autumn; at best it will mean more cheeseparing (dirtier trains with fewer carriages) of the kind that only adds to passenger misery."
  The article concludes:
  "And that will be the clearest evidence of a decision doubtful in principle and in practice plainly wrong."
  That is an emphatic condemnation of the Government's attitude towards railway investment and of their decision to set in motion this gentleman's inquiries into the future of the railway business.
  The key to the Government's intentions and attitude lies in the last sentence of the last paragraph in the written reply. It states:
  "The board's commitment to accelerated disposals of assets will make an important contribution to achieving the 1982–83 external financing limit."—[Official Report, 31 March 1982; Vol. 21, c. 140.]
  The hon. Member for Welwyn and Hatfield (Mr. Murphy) expressed the desire to see privatisation in various aspects of council services. I do not know what experience the hon. Gentleman has in these matters—whether he has been a member of a local authority or had experience in the private provision of services generally. If he has, no doubt he and some of his hon. Friends who are enthusiastic in their desire for privatisation will be making bids if the British Railways Board is forced to flog its assets because of the reduction in PSO grant.
  In the recent debate on a Ten-Minute Bill I listed for the hon. Member for Harborough (Mr. Farr) some of the assets of British Rail which some people in the City would no doubt find attractive, even given the depressed state of the British economy. I am pleased to say that, thanks to the diligence and attention of my hon. Friends, we succeeded in defeating that Bill. However, the written reply shows that the Government are far from giving up and intend to pursue this matter. The available assets for privatisation are fairly well known and it will do no harm if I mention a few of them in passing.
  The British Rail property board would be regarded by many Government Members, and by various people in the City, as a prime target for privatisation. It regularly contributes millions of pounds to the British Railway Board's coffers through the sale of assets—hundreds of millions of pounds over the past decade. Some sites were railway stations and goods yards in city centres, now, alas, no longer needed. Some sites were in the country.
  If further sites are sold over a period with the proper business acumen that the Conservative Party always
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  demands but rarely allows nationalised industries, a satisfactory source of income will be provided for the British Railways Board. In the past that income has been used to subsidise unprofitable services, which presumably we all wish to see continued. If the Government carry out their intentions, all that will be lost, because the British Rail property board will be sold lock, stock and barrel at a cut price to the City friends of the Conservative Party, thereby providing a profit for someone else instead of the British Railways Board and, through it, the nation. That is Conservative patriotism in the 1980s. Conservative Members are always quick to sing "Land of Hope and Glory" and wave a Union Jack. Their patriotism will give profits to their City friends instead of to nationalised industries and the country. I do not wish to be associated with such patriotism.
  It often seems that the Government, and particularly their Back Benchers, would flog our publicly owned assets for the price of a good dinner or a trip to the United States. The railway unions are not prepared to stand by and watch such piracy. I refer not only to the British Rail property board. The Department of Transport and the Secretary of State say that railwaymen have no business running the other subsidiaries and that the public sector has no business owning them. Hotels have been sold. We expect to see others sold in the near future. So far they have all been cut-price sales, partly because of the depressed state of the economy and partly because everyone knows that the board is being forced by the Government to sell. It is being starved of funds to bring about the sales. That is not a businesslike approach. It is not patriotic to flog our assets in that way.
  The PSO grant for 1982 represents a £15 million cut in real terms from last year. I could give a long list of branch lines that may be in danger because of the drastic reduction in finance. I mention two in my region. I forecast that within about 18 months proposals will be advanced to withdraw the Stourbridge junction-Stourbridge town service and Leamington-Stratford service as a direct result of the cuts. Both are seen as big loss makers in the West Midlands region.
  In the past couple of years time-keeping on the main line between Birmingham and Euston has suffered because of the slow-down in track maintenance due to previous reductions in funds. I forecast that the Government will bring about something that has not happened for over 100 years. The journey between Birmingham and London will take longer, so the two cities will effectively be moved further apart, again as a direct result of the cuts.
  The Government and the Secretary of State talk of the need to cut manpower and services. British Rail's original grant submission for 1982 took into account the manpower cuts that had taken place. By agreement with the unions, over the past two years 12,000 jobs have been lost. We saw no newspaper headlines or pious editorials about that. Since last June there has been a 6 per cent. reduction in loaded train miles on inter-city services as a direct result of the reduced grants for British Rail's investment to run existing services. A further 4 per cent. cut was scheduled up to October.
  Yesterday's announcement will accelerate and worsen the cuts. Numerous late night services have been cut, particularly in London and the South-East, over the past few months. Conservative Members are always ready to attack railwaymen, allegedly for lack of productivity. They should have the honesty to tell their constituents that

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  the reduction in services and the fall in standards are a direct result of the Government's attitude to the nationalised industries, particularly the railways.
  Fares are bound to be forced up further because of what is said in the written reply. British Rail's fares increased last November by an average of 9½ per cent., which was considerably below the rate of inflation at that time. Fares since January 1980 have increased by 42·8 per cent.
  The Secretary of State's answer should have been verbal and made at the Despatch Box. His written answer makes explicit his determination that there should be an accelerated disposal of assets in order to bring down the losses of British Rail in the next year. That is a short-term and short-sighted measure.
  None of us is under any illusions about the Secretary of State's attitude towards his job. We all know, without reading newspaper editorials, that his appointment as Secretary of State for Transport was a demotion. He was fired from his position as Secretary of State for Energy because he showed precious little of that commodity. I have never made a practice of attacking any Minister or any hon. Member in his absence, but I must say on behalf of Britain's railwaymen that the Secretary of State has been little short of an unmitigated disaster.
  Not only have British Rail's inter-city services suffered because of the Secretary of State's indifference, incompetence and desire to avoid probing questions at the Dispatch Box, but public transport in every major city has deteriorated drastically since the Secretary of State was appointed.
  London's case is well known and needs to be rehearsed no further. In the West Midlands county area, the controlling Labour group was elected on a pledge of reducing public transport fares. The Secretary of State has stood by with his customary indifference and the majority Labour group has been forced to raise fares higher than they were before the group was elected in May last year.
  Public transport is declining throughout the country. That applies not only to rural services and branch lines, which in many instances are the sole lifeline for many people who during the day have no access to a private car, but to the services in our major cities. Public transport and the railway industry have been strangled because of the mixture of malice and indifference on the part of the Secretary of State.
  I trust that the Leader of the House, when he brings my remarks to the attention of the Secretary of State for Transport, will remember, in his guise as protector of the rights of all hon. Members, my strictures, which are justified. I could tell that the Leader of the House did not agree with me when I began my speech. It is the duty of Ministers, regardless of political party or the popularity of the measures and policies that they wish to introduce to the House, to reply from the Dispatch Box and not to hide behind the device of the written reply. Opposition Members intend to return on each and every possible occasion to the subject of transport until we convince the Government of the error and magnitude—
  Mr. Ivan Lawrence: Come on—the hon. Gentleman has been speaking for nearly 25 minutes.
  Mr. Snape: The hon. and learned Gentleman appears to be cross at my strictures. If he thinks that the time of my speech should be limited or that my remarks are out
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  of order, no doubt he will make a direct appeal to you, Mr. Deputy Speaker. At least I confine my remarks to matters about which I have a little knowledge, unlike the hon. and learned Gentleman, who is never off his feet, normally propounding the most preposterous Right-wing views on each and every subject that comes before the House. I have no need for lectures from him about restricting or restraining my remarks. I am here to defend the future of British Rail and British railwaymen, and I make no apology to a jumped-up lawyer like the hon. and learned Gentleman for doing so.
  Public transport is suffering grievously under the Government. We intend to fight, and fight very hard, to reverse the policies that have proved to be such a disaster over the past three years.
  9.45 pm
  Mr. John Wilkinson (Ruislip-Northwood): I believe that the House should not rise for the recess until a statement has been made by the Home Secretary on what I believe to be an aspect of the administrative rules approved by the House which explicitly contravenes the rights of women, which in all respects in this country should be equal to those of men.
  I am referring to the immigration rules laid before Parliament on 20 February 1980 under section 3(2) of the Immigration Act 1971 which came into force on 1 March 1980. There is on the order paper early-day motion 370 on the immigration rules and the European Convention on Human Rights. It is signed by 12 hon. Members. The first six signatories were all supporters of Her Majesty's Government, including myself. It is worth reading the early-day motion. It says:
  "That this House, recalling that the immigration rules were amended on 1st March 1980, noting that since that date there have been two categories of women in the United Kingdom, namely, those entitled to marry men from other countries and live with them in the United Kingdom and those to whom this basic right is denied; and believing that the present immigration rules are in breach of the European Convention on Human Rights, welcomes the Secretary of State for the Home Department's review of these rules following the passing of the British Nationality Act and calls for an early statement on the Government's intentions."
  As I said at the outset, I believe that the Government's statement should be made before the recess. I shall rehearse to the House the very good reason why this should be so. The British Nationality Act 1981, whereby for the first time British nationality can be transmitted either through the male or the female line, makes necessary a review of the immigration rules. These are, in a number of aspects, directly consequent upon citizenship provisions.
  If, on matters of citizenship, we are agreed that there should be equality of rights for the transfer of citizenship between men and women, surely for immigration rules the sexes should not be accorded different treatment over the immigration of spouses for settlement in the United Kingdom. There is one particular reason why a statement from the Home Office is urgent and necessary. The lawfulness of the Government's action is about to be tested.
  The Joint Council for the Welfare of Immigrants and the National Council for Civil Liberties have launched complaints to the European Commission of Human Rights. These will be the subject of a hearing as to the admissability of the case presented by the JCWI and the NCCL before May 1982. If the commission rules that there

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  is a prima facie case the European Court of Human Rights will have to decide upon it. Therefore, it is urgent that before the matter goes to the commission in Strasbourg the Home Office should make its position clear.
  My hon. Friends and I put down the early-day motion that was tabled at the instigation of my hon. Friend the Member for Bexleyheath (Mr. Townsend), to whom I pay tribute. The Home Office ought to make its position clear, or, as a signatory of the European Convention on Human Rights, Her Majesty's Government might find themselves in some embarrassment.
  At this stage we should remind ourselves of what the immigration rules provide and the issue that is in question. The wife of any man, regardless of citizenship, who is settled in the United Kingdom and who has the right of abode, is entitled to enter the United Kingdom and to remain here with him. A woman does not enjoy similar rights.
  Under the immigration rules—I refer to paragraphs 50 and 52, but especially 50—a husband who wishes to enter the United Kingdom with his wife must satisfy a number of preconditions. Three are listed, but the most important one and the material one is:
  "an entry clearance will be issued provided that the wife is a citizen of the United Kingdom and Colonies who was born in the United Kingdom or one of whose parents was born there."
  In other words, the wife must be either a British citizen born here or have a parent born in the United Kingdom. Entry clearance is stipulated for the entry of her husband to join her here and it is significant that entry clearance is not stipulated for the wife of a man, regardless of whether he is British, to join him for settlement in Britain. This is a prima facie injustice, and it is on that basis that I bring the matter before the House.
  There are anomalies. For example, a woman who is an EEC national who is admitted to the United Kingdom to take employment has a right under EEC law to have her husband admitted to join her in the United Kingdom for settlement, but other women from non-EEC countries have no such right. The relevant articles of the European Convention on Human Rights are as follows: article 8, the right of respect for private and family life; article 12, the right to marry and found a family; and article 14, enjoyment of rights and freedoms set forth in the convention without discrimination on any ground such as sex, race, colour and national origins.
  In his evidence to the Select Committee on Home Affairs, Mr. Anthony Lestor, QC, said that he believed that the immigration rules prima facie contravened the European Convention on Human Rights. He said:
  "The first question which would arise is whether a difference of treatment has been made, in an area covered by the Convention, between persons in similar circumstances. The answer is plainly in the affirmative."
  In March 1981 the European Parliament adopted a resolution, formulated by the Legal Affairs Committee which declared that it was
  "of the opinion that the United Kingdom Government's new immigration rules may contravene the European Convention on Human Rights—is further of the opinion that they may also contravene the principle of non-discrimination enshrined in community law."
  Women who were not born here, even if they are British, may have to choose between their husbands and their home countries. This is an intolerable decision for a woman to have to make.
  The immigration rules have the ludicrous consequence that women of EEC nationality have more rights in the
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  United Kingdom than some British citizens. Surely that cannot be right. For example, a woman who is a United Kingdom citizen but who was not born here and is without a parent who was born here can go to Ireland or to any other EEC country to take employment under the freedom of movement of labour provisions of the Treaty of Rome. Under EEC law, her husband then qualifies as her spouse and can join her in that country. Yet the same woman cannot have her husband join her in her home country, which is also an EEC member State.
  I am pleased that the Home Office is reviewing this matter. I brought it to the attention of the Minister of State, Home Office, my right hon. Friend the Member for Aylesbury (Mr. Raison), on 24 March 1981, during the Committee stage of the British Nationality Bill. Although I do not like to quote what I have said before, it is worth quoting:
  "If the Bill is enacted"—
  it is now an Act. —
  "the husbands of women resident in this country will, if they are to acquire British citizenship by naturalisation, have to reside here for three years. Would that not be sufficient control—"
  to ensure, for example, that there are no bogus marriages; that is an important point—
  "to make it reasonable and proper for us to re-examine the current discrimination in our immigration rules between the rights of women resident in Britain who were born here and those of women resident in Britain but not born here?"—[Official Report, Standing Committee F, 24 March 1981; c. 735.]
  A year has passed, and it is high time that a Home Office Minister came to the Dispatch Box to explain what has happened. That should be done before the May Day Recess. If it is not, we may find ourselves facing a case in the European Commission of Human Rights which could possibly lead to a case in the European Court of Human Rights.
  9.51 pm
  Mr. Gerard Fitt: It is on rare occasions such as this that right hon. and hon. Members have an opportunity to bring their cases before the House. I was delighted to be able to remain in the House this evening to hear some of the important issues that have been brought before the House, particularly that raised by the hon. Member for Ruislip-Northwood (Mr. Wilkinson). The issues raised by the hon. Gentleman are of primary importance and should be given every consideration by the Government.
  I am always mindful of the fact that hon. Members on both sides of the House can advance a case, use all their political intelligence to try to have a problem resolved, and, at the end of the day go home to their constituencies and to their beds and not be afraid that they might be killed before the next morning. Those who represent Northern Ireland constituencies are in a special category. Whatever the many differences that I may have with Unionist Members on the Opposition side of the House and with Democratic Unionist Members on the Government side, I would accord to them the same feelings as I have. We all live under a great cloud of terrorism in Northern Ireland.
  I should like to comment on the speech of the hon. Member for Londonderry (Mr. Ross). Even the mention of that constituency and its political designation is enough to cause disarray and trouble in Northern Ireland, and many people would not wish to refer to that city as Londonderry. They would refer to it as Derry, and that is

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  an indication of the great divide that exists in Northern Ireland, and has existed for many years. Indeed, it existed in the island of Ireland long before the State of Northern Ireland was created in 1920.
  The hon. Member for Londonderry tried to tell the House that we should not adjourn because of what was happening in Northern Ireland. I intervened and said that it was fortunate that the Leader of the House was on the Front Bench, because he has great experience of Northern Ireland. We can now look back to 1974 and to the five tumultuous months from January to May 1974 and see that the things that happened then were disastrous.
  From the press and the media we know that there is to be a statement in the House on Monday by the Secretary of State for Northern Ireland, on the proposals that he may have for setting up a Government or Assembly in Northern Ireland. Some people thought that the Government might try to pull a fast one and make the announcement tomorrow morning. However, I am glad that they did not choose to do so. Northern Ireland is one of the most dangerous and compelling issues facing the British Government—far more compelling than the Trident problem. That is why the Government were right to decide not to make the statement tomorrow.
  However, it is probably not right to make the announcement on Monday either. The Government should make it on Tuesday, Wednesday or Thursday, when most hon. Members will be in the House and be able to express an opinion on the proposals. There will not be many hon. Members in the Chamber on Monday and there will be even fewer here tomorrow. However, if the choice is between Friday and Monday, Monday is the best day.
  Without pre-empting the statement on Monday—again, it will be only a statement—the hon. Member for Londonderry tried to tell the Leader of the House what the Government should say and do about the political situation in Northern Ireland. His whole approach was, to say the least, rather negative. However, one could not do anything but sympathise with the hon. Gentleman when he drew the attention of the House to the terrible atrocity that took place this afternoon in his constituency.
  I refer to the brutal and senseless slaying and murder this afternoon in Deny. Similarly, three young British soldiers were killed last Friday in my constituency. Such killings are senseless and will not in any way lead to a resolution of the terrible problems in Ireland. I do not need to tell the Leader of the House, but that is why I have taken my stand without fear of contradiction. The murders, atrocities and killings by the IRA, the Ulster Volunteer Force, the Ulster Defence Association and all the other paramilitary associations in Northern Ireland will not lead to a resolution of the conflict.
  What the hon. Member for Londonderry was saying tonight—if I might try to interpret it—was that the Government should pour in whatever military aid is necessary to defeat the IRA. After they have done that, they should accede to the demands of the majority—he mentioned the majority two or three times in his speech—for a restoration of Stormont as we knew it before it was abolished in 1972.
  That would be a total and absolute disaster. I lived in that State from 1926 until 1972, and I well remember that the one-party State that we then had in Northern Ireland—
  It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Motion relating to Adjournment (Easter and May Day) may be proceeded with, though opposed, until any hour. —[Mr. Lang.]
  Question again proposed.
  Mr. Fitt: The one-party State that we then had led to the conflict which ensued and which led to the abolition of the Stormont Government.
  Having said that, having been the leader of the SDLP for nine years, and having left that party because I believed that it had become a totally nationalist party and had forsaken all the beliefs of the SDLP, I do not believe that there is anyone in Dublin, Washington or London who can bring about the cessation of the conflict in Northern Ireland and the island of Ireland.
  There are people in Dublin—particularly the leader of the present Government, Mr. Charles Haughey—who believe that by wielding a big stick or by adopting a threatening attitude to the British Government they will be able to intimidate and frighten the Unionist-cum-Protestant majority in Northern Ireland. That is not possible.
  By the same token, the Right wing of the British Conservative Party will not be able to intimidate the Catholic minority in Northern Ireland. Whether it be the Right wing of the Conservative Party in Dublin, or the Ted Kennedys of the Democratic Party in America—wherever they may muster their support—any attempt to back one community against the other is doomed to failure. The only place that the conflict will be resolved is in Northern Ireland, and particularly on the streets of Belfast. Any attempt by one community—either the majority or the minority—to impose victory or defeat on its opponents is doomed to failure.
  I am telling the former Secretary of State for Northern Ireland that we still have tomorrow, Saturday and Sunday before the statement is made in the House. I believe that he—with his experince of that particularly turbulent five months—should impress upon his colleagues in office that any proposals that are brought forward must contain provisions for the protection of the Catholic minority and the Protestant majority. The impression must not be given that this is a victory of one community in Northern Ireland over the other.
  We all recognise that whatever proposals are brought forward will be met by cries of "traitor". When I returned from Sunningdale, leaving the SDLP, I well remember that we were met by cries of "traitor". The right hon. Gentleman was at Sunningdale as well. We were told that we had sold out and were members of the Unionist Party.
  Similar charges were levelled against the late Brian Faulkner, who was told that he had sold out and become a Republican. After the years that have elapsed, I can say that both of us were trying desperately to bring some sort of sanity to that terribly difficult situation, which had been brought about because of 400 or 500 years of Irish history. Brian Faulkner is no longer with us. I only wish that there was a man of his calibre still within the ranks of the Unionist Party—someone who could live with the realities of 1982.
  What is required is not simply a military solution, as advocated by the hon. Member for Londonderry. It is

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  simply not possible to use all the military hardware at our disposal in an attempt to capture all the IRA men. We must find a formula that will win the hearts and minds of the Catholic and Protestant communities in Northern Ireland.
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  I am not sure what the Government's proposals will be. The Secretary of State may belong to a party to which I would give little if any allegiance, but I believe that he is trying to do what he can. One can only wish him success, and I shall have something further to say next week.
  10.6 pm
  Mr. Ivan Lawrence: It is a pleasure to follow the hon. Member for Belfast, West (Mr. Fitt), whose courage is greatly admired in all quarters of the House.
  I am wearing a black tie because today I attended the funeral of Lord Gretton, who for two years served the constituency of Burton in this House and was much loved and admired by all who knew him.
  I rise to advance my plea that the House should not adjourn before it has got clear in its precisely what is happening on the West Bank and in the State of Israel. Although many hon. Members on both sides of the House are friends of Israel, and many are friends of the Arab countries, the Israeli case often seems to go by default, partly because the Israelis seem long since to have given up the belief that they need to justify their case in the councils of the world.
  Very often one gets the feeling that the Israelis do not care too much what the rest of the world says about them, but that does not mean that their case is not good. It is just, because they want peace while their enemies want the annihilation of the State of Israel, if necessary through war.
  For the past months the Israelis have pursued the Camp David agreement with great courage and in a most generous and praiseworthy way. They are giving up the Sinai in accordance with the agreement. They are handing over the aircraft bases, which means that they can be attacked in 10 minutes instead of 28 minutes. They are giving up all the oil that would have made them self-sufficient in two or three years. They are also handing over their outlet to the Red Sea and Sharm el Sheikh. They have experienced great opposition from their own settlers in Yamit. Yet Israel has been quietly trying to work out the basis for autonomy with the Palestinian Arabs on the West Bank.
  The Israelis have introduced a civil administration, the purpose of which is to begin to get the Arab citizens of the West Bank accustomed to being governed in a nonmilitary way, and to come together with Israel to discuss autonomy so that they can take over the governance of that part of the world themselves. That is what the autonomy pledge which Israel entered into in the Camp David agreement is all about.
  The other matter that has pre-occupied the Israelis is that none of that will happen unless it is done with the cooperation and support of Arab leaders among the Palestinians on the West Bank. So they have been carefully nurturing the village leagues—a body of Arab leaders who do not wish to be told what to do, or to be threatened or intimidated by the PLO, but who themselves wish to take control and govern the West Bank, their areas, in peace.
  However, as the PLO is pledged by 26 of its 32 articles of the covenant to annihilate the State of Israel, civil administrations which bring together the Arabs and the Jews, Arab village leagues which bring together the Israeli Government and the Arab village governments, are anathema to the terrorists and the warmongers in the PLO. So there has been a systematic and determined campaign of intimidation, which has involved the assassination of 17 moderate Arab Palestinian leaders in the past year and the deliberate disruption of the civil administration. That is why the Israeli Government had to sack the mayors of
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  Nablus, Ramallah and Albirah, because they were obeying the orders of the PLO and not doing what mayors should do—administer their towns for their people. If mayors do not do that, all the social services and municipal activities break down in their towns.
  The bitterness with which the PLO and its followers have pursued this campaign can be seen by two statements. One was from the "Voice of Palestine", which plays a leading role in the incitement of the Arab Palestinians. On 22 March it said:
  "Advance in the direction of the forces! Draw close to the storm! Scatter the flocks of enemies! Change the map! Cast down the lamps of treason and surrender! Break, as you know how, the glass of bottles in the face of the soldiers".
  That is the trash that comes over the radio and incites the Palestinian Arabs to violence.
  Then there was the order issued by the Jordanian Prime Minister, Mr. Mudar Badran, on 10 March condemning to death any individual who continued his membership of the village league. There is the intimidation. That is the cause of what is happening on the West Bank now, and must also be the cause of great embarrassment to the Foreign Secretary, who has, by chance, chosen this time to be there. I believe that the Israelis are much encouraged by the Foreign Secretary's visit. The Conservative Government have been showing a much friendlier face towards the State of Israel. They have declared that they stand by their determination that the State of Israel shall remain safe and secure within its proper boundaries. The Government said that they would do nothing to diminish the autonomy talks and would support the Sinai settlement to the ultimate degree. They are doing what they can to encourage moderate Palestinians to talk to the Israeli Government, without which there can be no possible settlement.
  Therefore, I ask my right hon. Friend the Leader of the House to bear in mind the one matter to which objection can be taken. I ask the Government to stop repeating that the Israeli occupation of the West Bank is in some way unlawful. I shall not use the time of the House by explaining why, by international law, that is simply not so. Suffice it to say that the League of Nations mandate gave a much larger area than the existing State of Israel to provide a Jewish home.
  When the mandate territory was split, trans-Jordan was given what amounted to three quarters of what was originally intended to be the Jewish home. The West Bank territory was not included and therefore was invaded by Jordan illegally in 1948. Therefore, Jordan was a belligerent. It is said that the Israelis are also belligerent because they repossessed the West Bank. As between the belligerents there is no superior right vested in Jordan. The only other element in that area is the PLO. That is not a State and it has no entitlement to ownership of the West Bank.
  Whatever might be decided by an international court of law, it would be wrong to continue talking about the Israeli occupation of the West Bank as though it were in some way a breach of international law and illegal. Of course there must be a settlement of peace. That peace will occur only when the moderate Palestinian Arabs talk and agree with a moderate Israeli Government. The only uncompromising stand that the Israeli Government take is that they will not be told that they can no longer exist, by

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  Palestinian Arabs, dictated to from Beirut. They must talk and negotiate with Palestinian Arabs on the West Bank not subject to the PLO to achieve peace.
  If the Government bear those matters in mind, I am sure that they will continue to be helpful in bringing peace to that troubled and torn part of the world.
  10.18 pm
  Mr. Michael Meacher: Before the House adjourns, I shall draw attention to important matters which have still not been dealt with, although we have been waiting for four years—the regulation of data banks, control over the misuse of personal information and protection of personal privacy.
  The Lindop Committee reported on these urgent matters in 1978. However, the Government have still not issued a statement about them. They have been promising a White Paper for some time. Perhaps that is now in the offing. I want, even at this stage, to raise several critical questions about the Government's thinking on this matter. That was revealed in the speech of the Minister of State, Home Office on 11 February, to the INFO conference.
  The first and crucial point is that the Home Secretary has already made it clear that he will not implement the central recommendation of the Lindop report—that a data protection authority be established. Instead, he proposes to set up an independent registrar, assisted by about 20 civil servants. Frankly, one distinguished person who, no doubt, will be chosen from the list of the good and the great, plus 20 officials, all of them internally recruited, are simply not up to the task of supervising and regulating the vast array of personal information that exists, the sheer magnitude of which the Government seem unwilling to take on board. Even at the time of the 1975 White Paper, there were no fewer than 220 functions of central Government involving computerised personal information with data banks containing anything from 10,000 to 1 million names each. The complacency of the Government's thinking is only too well revealed by the Minister of State's speech when he declared:
  "Breaches of personal privacy are likely to be rare."
  The fact is that breaches of personal privacy are likely to be anything but rare. The threats to personal privacy are considerable. I believe that they are growing and that they are growing from many sources—from the storing and distribution of information which may be inaccurate or out of date, from the collection of data that may be done illegally or without the consent of the person concerned, as I know from my experience recently with regard to The Sun, from the transfer of information for a different purpose to that originally intended when it was collected and from allowing—or at least not preventing—others having access to private and confidential data to which they should not have access.
  Secondly, the Government seem to be proposing that the independent registrar and his tiny staff would be limited to responding to complaints. They would not be undertaking regular and systematic supervision over the whole range of existing and new data banks to ensure that they complied with the appropriate codes of practice. This is surely a major defect when the great majority of people are probably wholly unaware of the vast range of data that is held on them, of the possibility of its misuse, of the right questions to ask to check on this situation and of whom to ask them. Trained and experienced inspectors are required to act on the public's behalf. The only way in which there
  532
  can be an assurance that information has been properly collected and stored and not abused is through random checks from time to time across the whole range with inspectors regularly and anonymously probing particular data bank systems to ensure that standards and safeguards are properly adhered to.
  Thirdly, it is surely crucial that the codes of practice should be mandatory. The Government, according to what their spokesmen have said, seem to have made it clear that they will be simply voluntary or discretionary. Lindop recommended that there should be 50 or more codes of practice to be made by the data protection authority which should have the force of law as regulations. In the absence of statutory force behind the codes, I believe that there is a real risk that serious abuses will continue to occur. Bodies like the BMA have rightly made clear their strong opposition to anything short of statutory regulations in sensitive areas, for example, in the whole area of clinical records. I hope that the Government, even at this stage, will think again about this important matter.
  Fourthly, the Government are making a serious mistake through their apparent intention to restrict this whole exercise to computerised information. There is every bit as much a threat to personal privacy from the wrongful or inaccurate collection, storage and use of manually collected or stored data. I ask the Government again to reconsider what I think will be a fundamental omission from their White Paper is they do not include this element.
  Fifthly and lastly, there is the whole question of the derogations and exemptions from the application of the independent registrar's supervision. Nobody doubts that genuine matters of criminal intelligence and national security should be exempt. Of course, that would he right. But it is vital that the exemptions should not be any more than are absolutely necessary. Certainly they should not be used as an excuse for blanket exemptions going far wider. It is on that point that there are serious grounds for concern that I should like the Government to consider.
  It has been revealed that MI5 from its MOD-X computer centre at Mayfair taps freely into the files of other Government Departments according to a charter under licence from the Prime Minister. This charter and other links between Government-held personal files have enabled officials to begin building up what could ultimately become a comprehensive national filing system on every individual. In view of the immense significance of that and of its 1984-type potential, there is an urgent case that those responsible for such operations should be accountable to a special parliamentary Select Committee. Will the Government consider that point in making provision in their White Paper which will no doubt soon be published?
  There is more than a suspicion that the Government will exclude the police from controls over how they use computers. This again is disturbing, because already we are into the era of mass surveillance of the population by the authorities. Indeed, 1984 is going to come well on time. The regulation of this in the public interest is essential.
  We are seeing the development of a comprehensive range of police computing and the evolution of a comprehensive command and control computer system by the police. No fewer than 39 of the 51 constabularies have now got local police computers. In many areas there is the development of a capability for collation of local intelligence data which, despite all the strenuous denials

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  by Home Office spokesmen, is clearly intended to link up with the police national computer for a countrywide intelligence network when the political climate is judged to be right.
  Lest my remarks are misinterpreted, I should say that like every law-abiding citizen I am completely in favour of an efficient criminal detection system. But what is emerging is something distinctly different. Ease of access to information is gradually but steadily changing the pattern of policing from checking after a crime has been committed to random checks without reasonable grounds for suspicion. That is a worrying development.
  For these reasons, certain safeguards are necessary. In addition to a special Select Committee we should adopt the Swedish system whereby even police and security files can be checked out by a duly appointed security-cleared officer. That is another point that the Government should consider before they produce the White Paper.
  We should also consider outlawing the technique called free text retrieval for personal data applications. Lindop in its report thought that the use of this brought, in its words:
  "a new dimension of unease"
  to police computing, it all depending on how exactly the information was to be used as to whether there was an abuse of the information. For that reason, it is worrying that the Lothian and Borders police, without waiting for the conclusion of the public debate on data protection, have gone ahead and implemented an operational free text retrieval based system. Even more worrying is the question of where all this is likely to lead. The West Germans have an integrated security service and police computer network. Without adequate control, the British police and MI5 could do the same. Is that what the Government intend for this country?
  I accept that there is unlikely to be any direct response from the Government to my comments before the White Paper is issued, as I believe that publication is probably imminent. Nevertheless, this is a vital subject which will have a close impact on the lives of citizens of this country and which touches on profound issues of freedom and civil liberties. I hope, therefore, that even at this stage the Government will reconsider the structure of their proposals on data protection and personal privacy. From all that we have seen so far, the signs are that at the moment their proposals are sadly defective.
  10.31 pm
  Mr. Eric Ogden: The Leader of the House may welcome my rising to speak now, if for no other reason than that it signals the end of his long, patient vigil from 7 o'clock until 10.30, listening to speeches on a wide range of subjects. I believe that mine is the penultimate speech from the Opposition, and I propose to take a much shorter time than others have done.
  I shall resist the temptation to follow earlier speeches, except for a brief comment on that of the hon. Member for Halesowen and Stourbridge (Mr.Stokes). I do not wish to be patronising in any way when I say that the hon. Gentleman is a unique character. He combines the ability to say the most outrageous things and to come to the most erroneous conclusions with retaining the respect and good will of most Members of the House. I hope that it will be a long time before the hon. Gentleman, or anyone else on
  534
  his behalf, draws his death grant. When the time comes, however, I am reasonably certain that he will go to the Christian Heaven of which he spoke in passing and will find there good friends from all parties. He may then have the shock of his life, or rather his death, when he bows before the throne of Jesus and looks up to see, smiling down at him, a brown, Semitic face. He may then realise that some of the people whom he has criticised are his brothers no more and no less than anybody else.
  It is proposed that the House should go into recess from 8 April to 19 April and from 30 April to 4 May. In normal times, those breaks from our duties here would be welcomed by everyone. I have always welcomed them, and in 17 years I have not sought to take part in a debate of this kind. Such breaks give us the opportunity to go to our constituencies, to do things that we cannot do when engaged in the everyday duties of the House and to spend a little time with our families. For the first time in 17 years, I now suggest that at this time of this year changes may have to be made in those dates even in the course of the next week.
  Briefly, we are all aware of the dangers and difficulties that have developed, have increased over the past 10 days and are still increasing for British citizens and British interests in and around the British Falkland Islands and the Falkland Island dependencies. Those dangers are likely to become greater before, one hopes, they become less. In a situation in which not only British interests but British lives are at risk, I am wholly in favour, as I believe the whole House is, of a considerable degree of restraint in the questions that we ask, the comments that we make and the answers that we might expect. We shall have the right to inquire about any possible Government failings later, but not tonight. Our aim should be to do nothing that could make the position worse.
  However, some things must be said before the House goes into recess—things that will do no harm, but may do some good. I hope that the Government will have such matters in mind during the next days and weeks whether we are in recess or in session. First, I ask the Leader of the House to accept that the first duty of the House and any British Government is to ensure the safety, security and defence of British citizens in British territories here or beyond the seas. The Falkland Island dependencies are British, the people of the islands are British and intend to remain British. We must give them every possible support.
  No less important is the fact that the people of the Falkland Islands are good neighbours to one another, and wish to be good neighbours to the people of Chile, Argentina, Uruguay and all other countries on the South American mainland. Britain, the Falkland Islands and South American countries have much to gain from cooperation, trade and better understanding. The present difficulties are not of the Government's making nor of the making of the people of the Falkland Islands. It is in everyone's interests in the South Atlantic that there should be co-operation, not confrontation.
  I hope that the Government will continue to make every diplomatic effort to obtain a speedy resolution to the problems, and I hope that they are taking the advice of two people with special knowledge of the difficulties and opportunities in the area. The first, who I believe is known to the Leader of the House, is His Excellency Mr. Rex Hunt, the Governor and Commander-in-Chief of the British Falkland Islands. The second is Captain Barker of HMS "Endurance".

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  Will the Government bear in mind that the chances of a speedy and peaceful settlement are enhanced and not diminished if Britain is clearly shown to be supporting her citizens and protecting her territories with the considerable naval, air and military capability available? If that is done, the negotiations that must continue to take place will be conducted from a position of strength, not weakness.
  Although I ask no questions and expect no answers about the capability available to the Government some people, both inside the House and outside, might be under a misapprehension about the total support available. At Question Time earlier this week the right hon. Member for Leeds, East (Mr. Healey) completely underestimated the capability of HMS "Endurance". She is not the clapped-out ice-breaker that he apparently believes her to be, and the fact that a former Secretary of State for Defence can make such a statement should be taken up with him direct. She is a much more powerful vessel. However, I shall not go into questions of which country possesses the biggest clout. All that I say is that people outside the House, especially in Argentina, would be under a great misapprehension if they were to assume that British capability in that area or anywhere else is less than it should be. We are talking about negotiations from strength and equality.
  The Davidoff affair will probably go down in history. We must inquire as we go along whether it was a miscalculation or whether it was premeditated. I ask the Leader of the House to note that, if it is possible to have a statement before the recess, it will be welcome. There will be caution on both sides about what is said, but our interest will continue. We expect the British Government to continue to look after British citizens and interests whether the House is in session or in recess.
  10.39 pm
  Mr. Charles R. Morris: The debate has taken its predictable course. A number of major and crucially important issues have been raised by hon. Members on both sides of the House. Some hon. Members have adduced seemingly compelling reasons why the House should not adjourn. Then, as you can observe, Mr. Deputy Speaker, they have disappeared from the Chamber, presumably lest they were taken at their word.
  I wish to pursue a number of the points raised. I was impressed by the contribution of my hon. Friend the Member for Walsall, North (Mr. Winnick). He raised the two important issues of unemployment and of the need for an early parliamentary statement on the report from the observers at the elections that have just been completed in El Salvador. The decision to despatch British observers involves the status and standing of this country. The House is not being unreasonable in demanding an early statement.
  My hon. Friend said that 61 per cent. of the people unemployed in the West Midlands have been unemployed for six months or more. The same argument applies to the North-West, the Northern region, South Yorkshire, Scotland and Wales. Economists talk of the contraction of manufacturing industry. Most of our manufacturing is in the regions. We have seen the virtual collapse of manufacturing in the regions. Men over 40 who are declared redundant may never work again. Parents see their children still searching for their first job. That is the
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  real cause of concern. The Government treat unemployment as inevitable. Our constituents do not accept as inevitable. They demand Government action to deal with the problem.
  I was impressed by the sincere contribution of my hon. Friend the Member for Tooting (Mr. Cox), who highlighted two problems. The first was soliciting. He drew attention to a legal contradiction. Legal action is taken against women found guilty of soliciting, yet men guilty of kerb crawling do not attract legal action except in isolated cases.
  My hon. Friend also drew attention to the continuing crisis in Cyprus. The Government joined in sanctions against the Soviet Union because it invaded Afghanistan. It is a contradiction for them not to take action as a guarantor power over the Turkish invasion of Cyprus. The Government are anxious to get Soviet troops out of Afghanistan. They should be even handed and try to persuade the Turks to get their troops out of Cyprus.
  Mr. Robert Rhodes James: The right hon. Gentleman will recall that the Turkish invasion of Cyprus occurred under the Administration of whom he was a member.
  Mr. Morris: It did. With a number of my hon. Friends, I urged lines of action on the Government, but at the same time it was not a Labour Government who took the stand on sanctions against the Soviet Union for the invasion of Afghanistan. It is that issue of action of principle that I believe, if the Government are to be even-handed, should be applied to Cyprus.
  I share the view of the hon. Member for Halesowen and Stourbridge (Mr. Stokes) that British people are amazingly kind and tolerant. The British people will need to be amazingly kind and tolerant when they hear on the air and read in the national newspapers and in Hansard his singularly offensive comments on the coloured population and communities in this country. Rarely have I heard such a singularly offensive speech from any hon. Member. The hon. Gentleman talked about the need for coloured people to have a community commitment. He lectured them on patriotism and on the fact that they should be willing to die for their country. I served in the Army in the last war. It was not exclusively white soldiers who died for their country.
  If we look around the communities in which we live, go in the hospitals and ride on the buses and on the trains, we find the coloured community making a real contribution, yet the hon. Gentleman lectured them on patriotism. With the greatest respect, I hope that he will think again about the speech that he made this evening.
  The comments of my hon. Friend the Member for St. Pancras, North (Mr. Stallard) about the death grant were absolutely right. I hope that the consultative document will be the subject of early debate. There are many features in it. Most people believe that when they contribute to the National Health Service scheme their contributions gives them benefits as of right. The consultative document shows that the Government's policy will be that benefits as of right will be transferred and interpreted as benefits by poverty standards. That is not good enough.
  At business questions today, my right hon. Friend the Member for Deptford (Mr. Silkin) and, during the debate, my hon. Friend the Member for West Bromwich, East (Mr. Snape), referred to the action taken by the Secretary

  537
  of State for Transport in announcing a major departure from Government policy in a written answer reported at columns 139 and 140 of Hansard for 31 March 1982. My hon. Friend the Member for West Bromwich, East said that it was a long answer. It covered one and a half columns of Hansard. It has all the characteristics of a planted question. The cut of £15 million represents a major departure from present Government policy.
  The annual grant to British Rail has been rising in real terms during the period of office of the Government and of their predecessors. The cut will increase significantly the possibility of forced sales by British Rail of its assets in property, hotels and shipping in order to survive financially.
  For those reasons, we are entitled to a parliamentary statement. I know that the Leader of the House will honour the undertaking that he gave in reply to my right hon. Friend the Member for Deptford when he said this afternoon that he would look into the matter. I hope that he does so seriously.
  Mr. Snape: Will my right hon. Friend reiterate the point that I made about the Government's common practice of slipping through controversial matters by means of a written reply? Does he agree with me that it is deplorable that this major change in policy should be so treated?
  Mr. Morris: I agree with my hon. Friend.
  I move on to the speech made by the hon. Member for Belfast, West (Mr. Ritt). He has the unique gift of conveying graphically the reality of the continuing tragedy in Northern Ireland. I am always impressed by the balanced views with which he conveys his thoughts on the subject. He talks with great experience, and over the years he has demonstrated a remarkable courage and moderation in the comments that he has made.
  My hon. Friend the Member for Oldham, West (Mr. Meacher) is right to demand an early White Paper and a debate on the findings of the Lindop committee report. In the last Administration I had some ministerial responsibility for the Government's central computer agency. The Lindop committee, even at that time, was looking forward to an early White Paper. Not only did the previous Government end without bringing forward a White Paper but this Government have now been in office for two years and we still have not had a White Paper dealing with data processing and computer privacy.
  All these issues demand the attention of the Government; and I am confident that the Leader of the House will bring the attention of his right hon. and hon. Friends to the points that have been raised.
  10.52 pm
  The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): For the last three and three quarter hours we have had an unusually wide-ranging debate in which hon. Members on both sides of the House have raised a number of issues, including many substantial ones. No particular theme has emerged from the debate, and if I were to deal substantially with each issue I should turn this into an all-night sitting, which, I suspect, is not what the hon. Members who have taken part wish. All the constructive ideas that have been
  538
  put forward tonight will be passed on to my right hon. and hon. Friends, and I am sure that they will wish to consider them.
  The hon. Members for Londonderry (Mr. Ross) and Belfast, West (Mr. Fitt) spoke on the subject of Northern Ireland. As the hon. Member for Belfast, West said, it is an exceptionally compelling issue as well as a dangerous one. It is one about which I have thought, and continue to think, a great deal. I echo what the hon. Member for Londonderry said about the casualties that his constituency unhappily suffered today. I am sure that the House will join me in expressing our revulsion at these murders and in extending our sympathy to the families of the soldiers killed today. I assure the House that the security forces will relentlessly pursue those responsible and will do everything possible to bring them to justice.
  Both hon. Members referred to the security forces. The hon. Member for Londonderry in particular referrred to the level of the forces. I assure him that this is always under review. It goes up and down according to circumstances and can be adjusted at short notice if necessary. However, it would be wrong of me to make any reference to a statement, and the proposals in it, that my right hon. Friend the Secretary of State for Northern Ireland will make on Monday. To that extent, the hon. Member for Londonderry expressed a view without knowing exactly what was to be proposed.
  Any initiative in Northern Ireland is extremely important. The Cabinet and my right hon. Friends, especially the Secretary of State for Northern Ireland, and I have spent much time considering what would be the best way of making progress and whether it would be better to make a move or to wait. As is known, we have come to a conclusion and the proposals will be presented to the House on Monday. Thereafter there will be various opportunities to debate them. I do not think that it would be right for me to comment in detail about the new proposals.
  The first foreign affairs issue to be raised was E1 Salvador. It was referred to by the hon. Member for Walsall, North (Mr. Winnick), who opened the debate. The fact that we have sent observers does not mean that there is any question of our accepting any responsibility. The hon. Gentleman continued rather accusatorialy to say that the Government should be bringing the parties together. We cannot do that if we are not there. From that point of view, the hon. Gentleman should concede that there was a certain amount of common sense in sending observers. In any event, we sent them because we felt that there was a need to make an independent assessment of an important event in a country that is of increasing concern here and in other countries. Our observers are completely free to report whatever they have found. I can assure the hon. Gentleman that we shall publish the report when it is produced.
  My hon. and learned Friend the Member for Burton (Mr. Lawrence) referred to the West Bank and the encouragement that has been given by the visit of my right hon. and noble Friend the Foreign Secretary. The West Bank is important and relevant to a foreign affairs debate, which I hope might be arranged before Whitsun.
  The hon. Member for Liverpool, West Derby (Mr. Ogden) spoke about the Falkland Islands. I have arranged for the House to be kept informed of the developments so far, and I shall continue to do that. I am sure that the entire House shares the hon. Gentleman's anxiety and will wish

  539
  to echo his call for co-operation. We shall do everything that we can to look after British interests, and we are taking all diplomatic measures at our disposal to achieve a satisfactory and peaceful resolution of the dispute. I am grateful to the hon. Gentleman for calling attention to the issue.
  The hon. Member for Walsall, North began by talking about unemployment in his constituency. It was the only reference to unemployment save for that of the right hon. Member for Manchester, Openshaw (Mr. Morris). I agree that it remains perhaps the most important domestic issue. The Government are tackling it fundamentally. Much of it arises from the economic weaknesses from which, as the entire House knows, we have suffered for many years--low productivity, lack of competitiveness and paying ourselves more than the value of what we produce. That is part of it. The world recession is also a contributory factor.
  There is no point in dressing up unemployment by producing false jobs. We must make ourselves competitive so that we can create real orders and real jobs, and that is what we are trying to do.
  Mr. Winnick: When the right hon. Gentleman's predecessor, the right hon. Member for Chelmsford (Mr. St. John-Stevas), made his last ministerial speech in replying to a similar motion prior to the Christmas recess 1980, when he went out of his way to defend the Government's employment policy, it did not do him much good.
  Mr. Pym: I do not know the relevance of that intervention.
  My hon. Friends the Members for Halesowen and Stourbridge (Mr. Stokes) and Ruislip-Northwood (Mr. Wilkinson) referred to immigration. My hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) asked for a debate on the subject. There was a debate on the Scarman report, which is only one aspect of the immigration problem. However, last Session the British Nationality Bill was passing through the House, and there were many opportunities when the subject could have been debated.
  My hon. Friend complained that the merits of immigration had not been discussed for some time. Throughout the 1960s, when it mattered, immigration was continually debated. I attended the debates. More than one Bill was enacted and there was considerable discussion and controversy. However, the merits of debating immigration now seem weaker than before. Last time we debated such matters, my late hon. and learned Friend who was the Member for Beaconsfield, Sir Ronald Bell, made the same request. I was unable to give him a very encouraging reply and it would be wrong to say that I foresee an opportunity in the near future for a substantial debate on that matter.
  My hon. Friend the Member for Ruislip-Northwood referred to the immigration rules. As he probably knows, the Government expect the British Nationality Act to come into force on 1 January 1983. My right hon. Friend the Home Secretary is considering the changes that will be required in the immigration rules and will announce his decision nearer that time. However, I do not know whether he will do so before the May day bank holiday. We believe that we have a strong argument for resisting the challenges made under the European Convention on Human Rights, and such matters are very much in the mind of my right hon. Friend the Home Secretary.
  540
  My hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) referred to local government and to value for money—fundamental issue in the minds of many hon. Members. He referred to privatisation and to reducing the size of the public sector. That is very much part of the Government's strategy and purpose. However, such matters can perhaps best be dealt with, to some extent, in the context of the rating review, which is all about local government finance. I am sure that my right hon. Friend the Secretary of State for the Environment will take account of the useful ideas put forward by my hon. Friend.
  The hon. Member for Tooting (Mr. Cox) mentioned prostitution in his constituency. No doubt the problem affects other constituencies. My right hon. Friend the Home Secretary does not think it right to make any decision on the need for legislation or on the form of legislation before the Criminal Law Revision Committee and the Policy Advisory Committee on Sexual Offences complete their review of the present law. I understand that the Criminal Law Revision Committee hopes to publish a working paper within the first half of the year, inviting comment on its provisional proposals. Prostitution is a continuing problem and it is difficult to deal with it. The hon. Gentleman proposed that the police should be given certain additional powers. I shall bring that point to the attention of the Home Secretary so that it can be considered. A review by the Law Commission is the right way to proceed and that will be forthcoming within the reasonably near future. That is the next stage.
  The hon. Member for Tooting also referred to Cyprus. He is right to say that it is taking a very long time to resolve the issue. Of course, several parties are involved. However strong our desire and however hard we work at achieving it, that in itself is not enough to resolve the problem. However, the intercommunal talks under the auspices of the Secretary General of the United Nations are continuing in Nicosia and the Government are giving their fullest support to that work. We cannot necessarily be optimistic about the outcome in the immediate future, but we shall make efforts and take every step possible to resolve the issue. That is the best answer that I can give.
  The hon. Member for St. Pancras, North referred to the death grant and the consultative document that has just been published. In preferring the course outlined in the document, the Government's objective is to devise a new system that helps those most in need and at the same time makes the best use of available resources. It is a consultative document. The hon. Gentleman thinks that we should have decided something and done something, but we think that the subject is more controversial than that. The idea is to allow a period of three months or a little more for consultation.
  The Government will welcome not only comments on what is in the document, but constructive alternatives. If there is a better alternative, it is open to the hon. Gentleman—or, indeed, to anyone—to put proposals forward. However, what the hon. Gentleman has said, and the constructive comments that he has made, show what a complicated issue it is and how sensible it is for us to proceed in this way. In the end, whatever is decided will be to some extent controversial. It seems to the Government that on such an issue we should have the broadest support possible.
  Mr. Charles R. Morris: Is the Leader of the House saying that the Government are prepared to reconsider the

  541
  preferred option within that consultative document? Are the Government saying that at this stage they have a competely open mind on the question of the death grant?
  Mr. Pym: I am saying that the Government are open to suggestions and are ready to discuss alternatives to the White Paper. We have thought about it a great deal. It has taken a long time. That criticism is completely fair. It is not only we who have taken a long time; the Labour Government were no less guilty than we are. That in itself is perhaps evidence, if anybody wants it, of just how complicated this matter is.
  The hon. Member for West Bromwich, East raised the issue of the railways and the grant to be made to British Rail. I said this afternoon that I would look again into the question of the written answer, and that I will certainly do. However, when I looked into it before it seemed to me to be a perfectly normal and proper way in which to inform the House. I assure the hon. Gentleman that I do not wish to avoid an oral statement being made or a discussion in the House. However, we must limit the number of oral statements. Today we were debating under the guillotine and it seemed to me that adequate time would have to be given to the completion of the remaining stages of the Oil and Gas (Enterprise) Bill.
  The hon. Gentleman rightly referred to the steeply rising costs on the railways the effect that they might have on some of the branch lines and the shortage of resources. That is absolutely true. However, he made no suggestion about where any extra money should come from. Our resources are limited nationally and all Governments have the job of deciding their priorities. Our purpose is not to provide more money from the taxpayer, but to try to help the railways operate on as commercial a basis as possible. There is no way that some fare rises can be avoided in the future. The taxpayer, the ratepayer, and all who contribute public money would say that we do not want any more burdens in order to pay more out to the railways.
  I say again what I said this afternoon. This seems to me to be a wholly suitable subject for the Opposition to suggest for debate on a Supply day. The general topic of public transport is of wide interest and of great importance and it causes much anxiety. However, the Government will do everything that they can to help British Rail and other public utilities operate to the maximum extent on a commercial basis and with the greatest possible efficiency.
  Data protection is another particularly complicated subject. It is quite true that the Government have said for some time that a White Paper will be published soon. The hon. Member for Oldham, West (Mr. Meacher) made it clear that it is a highly complicated subject. He expressed a number of rather strongly held personal opinions. I think that when the White Paper is published, and when the House comes to grips with the complexities of this subject, it will be found to be difficult.
  Perhaps it will give the hon. Gentleman some encouragement to know that the intention is to publish the White Paper next week. That will be the beginning of a substantial series of debates, certainly in public, and, no
  542
  doubt, at some point in the House, on what is a vital, intensely interesting and highly complicated matter. I think that the news about the publication of the White Paper next week is the best answer that I can give to the hon. Gentleman.
  My hon. Friend the Member for Bodmin (Mr. Hicks) referred to the South-West regional boundaries. He gave an excellent description of the distinctive and exceptional character of the far South-West within the South-West region. I am not sure whether it is simple to change the definition of a region for statistical purposes. In fact, that might be administratively quite difficult. However, I shall draw the matter to the attention of my right hon. Friend.
  My hon. Friend also referred to discussions in Brussels about Commission proposals. Those discussions are still at an early stage. We would not wish to see the introduction of any new scheme that would put Devon and Cornwall at a disadvantage. The discussions will continue and will take some time, but my right hon. Friend will keep my hon. Friend's point very much in mind.
  The hon. Member for Hackney, South and Shoreditch (Mr. Brown) referred to property in London and made a strong case about the condition of housing that is now the responsibility of Hackney. He said that that authority has very little money available to repair those properties and that not enough resources are available. The hon. Gentleman expressed the problem graphically. I do not think that my right hon. Friend will be able to conjure up additional resources. Indeed, his principal struggle at present—the Government give him their full support—is to restrain the ever-rising temptation of all authorities to spend too much money. That does not alter the importance of what the hon. Gentleman said about the standard of the housing to which he referred and the need to do something about it. I shall certainly draw the attention of my right hon. Friend to that matter.
  My hon. Friend the Member for Devon, West (Mr. Mills) referred to the price of petrol in rural areas. I know that he has returned to his constituency. I shall certainly take that matter on board.
  My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) spoke about the tourist industry and the need to help it. That is perhaps the sort of note on which we should end a debate such as this. I know that some hon. Members will spend the Easter Recess fairly modestly by staying at home and minding their own business, which I always regard as the soundest advice anyone can give a Member of Parliament.
  I hope that the House will feel that the proposal in the motion is entirely right and that, come the end of next week, the recess will be welcome. All the important matters that have been raised will receive the thought that I am sure they deserve.
  Question put and agreed to.
  Resolved,
  That this House at its rising on Thursday 8th April do adjourn till Monday 19th April and at its rising on Friday 30th April do adjourn till Tuesday 4th May and that this House shall not adjourn on Thursday 8th April until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.

  Northern Ireland (Higher Education)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]
  11.12 pm
  Mr. James Kilfedder: I am glad to have the opportunity of bringing forward a matter of vital importance to higher education in Northern Ireland and, indeed, to the rest of the United Kingdom. I am convinced that the extraordinary response of the Minister responsible for education in Ulster to the Chilver report on higher education in Northern Ireland embraces a number of concepts that are dangerous and must be exposed immediately.
  The Government's response is dangerous both because of what it says and because of the underlying implications to be found in many of their comments. I accuse the Government of having arrived at a decision on the merger between the new University of Ulster and the Ulster polytechnic without proper consultation, despite the fact that the decision must have a fundamental effect on higher education in Northern Ireland and, perhaps, throughout the United Kingdom.
  Of course, the proposals have been dressed up by the Northern Ireland press office in such a way as to suggest that the Ulster people ought to thank the Government for saving the new university and for creating some sort of new institution, but in truth the Government have put a gun to the head of the new university, in effect saying "Either you agree to a merger with the poly or you close down". It is an ultimatum, not a choice. The new University of Ulster has no alternative now, despite its misgivings, but to take part in the discussions, which will take place under the chairmanship of an independent chairman to discuss the proposed merger with the Ulster polytechnic.
  It means, I fear, that this mean manoeuvre by the Government—for that is what it is—could have wider implications. It might be a forerunner to similar forced amalgamations in Great Britain. Already six or seven universities are seriously under-provided with funds during the next few years. I warn those universities that what is proposed in Northern Ireland may be a softening-up process to make the precarious mainland universities more amenable to subsisting on a reduced income, knowing that the alternative may be a shotgun marriage with a polytechnic, as proposed in Northern Ireland.
  Why change the nature of the Ulster polytechnic? It already has an assured future in its present form, being one of the most successful of the 31 polytechnics in the United Kingdom. It is directly funded by the Department of Education, and it has achieved pre-eminence in many aspects of practical and technical education. However, its present size, the number of students and courses, and the amount of money that it receives may be significantly reduced in an amalgamation with the new University of Ulster. I fear that the proposed creation of a new institution is a device to enable the Government to place financial and other restrictions on the Ulster polytechnic. The Ulster polytechnic at present may be basking in a glow of the prospect of becoming part of a university, but it will be rudely awakened by reality, if the proposed amalgamation goes ahead.
  First the Minister seems to recognise that the Government made a tactical error in encouraging the Chilver committee to produce an interim report on teacher
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  training. The interim report gave the impression that teacher training and education are somehow outside higher education, and that it is only the lucky few potential teachers who get to a university. Worse than that, the interim report encouraged the backward-looking bigots of the Irish hierarchy to creep out from behind their false facade of non-sectarian benevolence to demand that Roman Catholic student teachers should be kept in religious servitude to guarantee the continuation of the religious apartheid in education in Northern Ireland. The hierarchy, in a hysterical campaign in which allegations were made of discrimination by the Government against the Roman Catholic Church, told everyone who would listen that the Government's prime duty was the education and training of potential teachers in a strict denominational mould, at the expense of the British taxpayer.
  The clear answer to this sectarian rubbish—for rubbish it is—is that the Government of a democratic State have no such responsibility. The clear responsibility of the Government is to provide non-sectarian education institutions, and I regret that the Government have capitulated to those who wish to maintain the sectarian divide in education in Northern Ireland.
  Secondly, I felt that the Minister, in reading the statement, was despairing over the two greatest and most valuable characteristics of British universities—their independence and academic autonomy. Of course, a university is not a financially independent institution. It must operate within the financial restraints imposed by Government. In Britain, the University Grants Committee has the essential role of standing between the Government, as paymaster, and the university, as beneficiary of the funds. That Committee stands in the middle and tries to ensure that the Government do not abuse their financial power and the universities do not abuse their privileges. Unfortunately, the statutory remit of that Committee does not include Northern Ireland. I have complained about that in the past.
  Funds are provided directly in Northern Ireland by the Department of Education and the Department of Agriculture. The advice of the University Grants Committee is taken up by the Northern Ireland Office only if it can afford it. Of course, the system is wide open to political manipulation. A wise vice-chancellor in Ulster no doubt cultivates the friendship of the political head of the Department of Education, as well as that of the chairman of the UGC.
  Therefore, universities in Northern Ireland are not as politically independent of Government as they are elsewhere in the United Kingdom. However, Northern Ireland universities are as academically autonomous as their counterparts in Great Britain. Their functions, privileges and responsibilities are defined by Royal charter. The senate and faculties are free to decide the syllabus for every course that the university decides to provide. There is no Council for National Academic Awards, Business Education Council or Technical Education Council able to become involved in these decisions, as happens with polytechnics. No outside body has the right to tell a university how it should design its courses, although some professional bodies are occasionally and naturally invited by the University Senate to consult them.
  Every member of academic staff is free to teach his subject in whatever manner he considers best, provided that it is within the syllabus and curriculum. Every

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  member of the academic staff is expected to carry out personal research. That is important and, of course, does not apply to a polytechnic.
  These matters are important because the Government are proposing an amalgamation between a polytechnic, which is 40 miles from the university. It is not possible to achieve that amalgamation. The third problem I thought the Minister was contending against was the practical difficulty of a merger. British universities—and the two universities in Ulster are no different—possess the unparalleled responsibility and privilege of being able to accept or reject students at their own discretion. That makes it possible to keep the number of students and facilities in a reasonable balance. Polytechnics do not have that privilege and power. If the proposed new institution is to be a university, there will be no automatic right of qualified students to enter it. The automatic right of entry into a polytechnic is correct and proper for the senior technician student doing a business or technical education level course or a Council for National Academic Award degree or diploma course.
  Whatever one may think about a student's reason for choice, the academically qualified students will go to a university in preference to a polytechnic. The existence of the Council for National Academic Awards has diminished the difference between universities and other institutions, but some important and valuable distinctions still remain. The status of a university degree, which a university can award, gives the university an academic reputation which the polytechnic can emulate but cannot surpass.
  The distinctive features of the two sorts of institutions are paramount in the minds of students, staff, employers or potential employers. Any merger between them could only be to the grave disadvantage of the university and curtail the innovatory spirit of the polytechnic. A university must be basically a centre for learning and culture. It should not be expected to respond to short-term social and economic needs. That is the function of a polytechnic that deals with the here and now whereas a university should concern itself with the forever.
  I should like now to turn to the comments made by the Minister in the statement that he issued at the time of the publication of the Chilver report. Paragraph 4.1(B) says that the deep-rooted traditions and attitudes of Queen's University could not lend themselves to its developing into a split-site institution. One wonders if the Minister has ever heard of the collegiate system or of the American system of university integration. The campuses at Berkeley and Sacramento are both parts of the University of California. I hope that the Minister is treating the matter seriously. I intend, like others, to return to it.
  This is very different from a split-site campus. The new University of Ulster has struggled for years with the problem of Magee College. With the best will in the world, no solution was found. The additional cost to the new University of Ulster was, I think, about £500,000 each year to maintain Magee College but with no additional financial assistance from the Government to meet that responsibility. As a separate institution integrated with the Londonderry College of Technology, Magee College would have a better prospect. It should be remembered that the technical college has always trained a number of teachers of commercial subjects. Like many
  546
  technical colleges in Great Britain, there is always the prospect of developing CNAA degree and diploma courses in a combined Magee and technical college institution.
  On the one hand, the Minister seems to deplore the fact that 60 per cent. of students at the Ulster Polytechnic are doing degree-level work. On the other, he uses this fact as an argument for merger with the new university. He cannot deploy his arguments in both directions. The question that seems to have concerned the Government is whether it is educationally sound sense for the Ulster Polytechnic to have degree level work that attracts 60 per cent. of its students.
  This state of affairs happened for two reasons. First, the existence of the Council for National Academic Awards encouraged the polytechnics to devise degree courses. Secondly, the Ulster College Act that created the Ulster Polytechnic provided no means by which the Department of Education could curtail the development of degree courses. We had the situation that within 10 miles of Queen's University a new institution was created which could develop the same range of degree courses. There is a heavy concentration of higher education institutions in the Belfast area to the detriment of the west of Ulster. That is why the new University of Ulster is so essential for the west of Ulster. Sadly, the Government propose to demean it by making it an instrument through which they seem to intend to control the Ulster Polytechnic.
  The new university is criticised in the Chilver report because its range of courses lacks vocational and professional studies. What hope had the university, tied as it was to the University Grants Committee critria, against the generously financed polytechnic close to Belfast which took over existing higher national certificate and diploma courses from the Belfast College of Technology? The House can well imagine the outcry that would have come from the polytechnic governors and others had the new university encroached on what they regard as their preserve—that is, the vocational technician type course that is just below degree level.
  At paragraph 3.12 we are told that the chairman of the University Grants Committee shares the Government's view that
  "more radical measures are necessary in order to give a worthwhile and cost effective role for a major education provision outside the Belfast area."
  The implication of that sentence is that the University Grants Committee chairman has approved the proposal to merge the university with the polytechnic. I see no evidence in the Government's statement that the University Grants Committee was involved in discussions about the future of the New University after the publication of the Chilver report, if indeed it was involved before its publication.
  I see no evidence that the Association of Commonwealth Universities was involved at any stage. Of course, that association has seen the amalgamation of several groups of universities and could have been of great assistance in providing information on this subject.
  For over 60 years the Committee of Vice-Chancellors and Principals has represented the collective views of the universities to the Government and to Parliament. Perhaps the Minister can tell the House why that committee was not consulted before publication of the Government paper. I should have thought that such consultation was

  547
  particularly important when a Government are contemplating a proposal either to close a university or to force its amalgamation with a non-university institution.
  I urge the Minister to withdraw his proposal which will hurt the West of Ulster. There is a great deal at stake here which is more important than public expenditure cuts. There is a grave danger that the reputation of the New University of Ulster will suffer and that its degrees will be devalued as a result of a merger. This will not only have an effect on future recruitment but it will adversely affect the students already there. To all intents and purposes it will have ceased to be a traditional university.
  The new University has had to contend with tremendous difficulties since its creation. The exodus of 18-year-old boys and girls from Northern Ireland, prompted by 13 years of terrorism and rising unemployment, was the main cause of the slow development of the New University. That exodus is a drain which could change the social and political face of Northern Ireland in less than a generation. If the Government are truly concerned, they ought to provide a special additional grant to encourage young people to stay in Ulster and attend the two local universities.
  The New University is financially and academically viable in UGC terms. There are almost 2,000 full-time students there. The Stormont White Paper issued in 1976 envisaged a target between 2,000 and 3,000 students. There are part-time students at the New University as well. If more students are required, the three sectarian teacher training colleges should have been closed, as I have demanded for years, especially as the cost of running them is exorbitantly high for the number of students involved, and the students placed in an enlarged teacher training unit at the New University.
  What about the 407 students from Eire who are at higher education colleges in Great Britain at the cost of £1 million per year to the British taxpayer? They could be directed to the New University which provides university education for 2,000 students at a cost of approximately £7 million. Thus the Government would effect a considerable saving.
  The Government's proposed merger of the New University with the Ulster Polytechnic is a polite way of scourging the university—no matter what the Government may say—of controlling the cost of the polytechnic and of letting the Minister off the hook with regard to the future of the sectarian teacher training colleges. To achieve a framework which will satisfy the Roman Catholic hierarchy, the Minister proposes to downgrade the New University of Ulster which has in most difficult times earned a reputation which does honour to Ulster and its people.
  It is a sad day for Ulster when liberal institutions of learning are being sacrificed to appease the bigots and those who seek further public expenditure cuts in an area which has suffered considerably from economic paralysis. I urge the Minister to drop these proposals or at least to reconsider them. A new Stormont assembly is about to be created. The Government seem to have great faith in it. I would have thought that this was a matter about which the Government should make no decision but leave it to that assembly.
  11.34 pm
  The Under-Secretary of State for Northern Ireland (Mr. Nicholas Scott): I welcome the opportunity to speak
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  on the future of higher education in Northern Ireland and I congratulate the hon. Member for Down, North (Mr. Kilfedder) on his good fortune in being able to raise the subject on the Adjournment. There will be other opportunities to debate the matter in the Northern Ireland Committee later in the year. I hope that those discussions will take place on a basis of greater reality than we have been treated to by the hon. Gentleman for the past 20 minutes.
  Talk of dangerous policies, guns to the head and so on is very far removed from the broad, if guarded, welcome that the Government's proposals have received in educational circles in Northern Ireland. Indeed, I welcome the constructive approach that those involved in education in Northern Ireland have taken to a difficult situation which, I believe, can be turned to the substantial advantage of all those involved in higher education in the Province in the future.
  The suggestion that the decision has been rushed, when the Chilver committee was set up three and a half years ago, took a great deal of evidence and engaged in all kinds of discussions before producing its proposals, is also very wide of the mark.
  As I have said, there will be opportunities for the Northern Ireland Committee to discuss the implementation of the Government's decision, but informal discussions with those involved in implementing the decision will begin immediately.
  I reject wholeheartedly the pessimistic approach of the hon. Member for Down, North. There is no question of damaging education in the west of the Province or demeaning the status of the new institution.
  Having said that, I shall go on to deal with some of the detailed issues involved.
  Mr. William Ross rose—
  Mr. Scott: I shall give way, but as I have been left only about seven minutes in which to reply to the debate. I hope that the hon. Gentleman's intervention will be brief.
  Mr. Ross: The Minister speaks of the implementation of the Government's view. Is he therefore saying that the Government have made up their mind and that what we have already heard is now firm Government policy for the new New University and the polytechnic?
  Mr. Scott: That is precisely the position. The Government have made up their mind on the fundamental principle, but we shall of course consult all those involved about the implementation of it.
  On teacher training, I am bound to say that I resented the hysterical attack by the hon. Member for Down, Noll h on the attitude of the hierarchy in Northern Ireland. We have a problem which the partners in education and teacher training in Northern Ireland will have to solve, in that there is room for twice as many teachers in training as are needed or likely to be needed in the foreseeable future. There is a great need for closer co-operation between the providers. The suggestions of Sir Henry Chilver's interim group, which I still believe would be a sensible way forward, were nevertheless not an end, but a means to an end, in achieving that co-operation and to achieve a continuing high standard of teacher training in Northern Ireland.
  We cannot go on with a staff-student ratio in Northern Ireland roughly twice as favourable as that which pertains

  549
  on the mainland. The economies of the situation will certainly not allow us to sustain that position much longer and the discussions that I have been having with all the suppliers of teacher training in Northern Ireland must soon be brought to a close. In that context, I certainly believe that here, as in the wider sphere of higher education, prolonged uncertainty would be highly damaging.
  I think that the background to the Chilver report is widely understood by those hon. Members present. When Sir Henry Chilver's group presented its report to me in January, I was very conscious of the fact that, since I was given responsibility for education some six months ago, all the institutions of higher education in Northern Ireland had been pressing me to realise how damaging it would be for continued uncertainty to prevail. Therefore, particularly as we are approaching the second half of the academic year and institutions are making plans for the future, I am sure that it was important and right that we should move to an early decision.
  In Great Britain, each university has been given detailed guidelines by the University Grants Committee as to its future role and development. While we were awaiting the publication of the Chilver report it was not possible for Northern Ireland universities to be given such guidelines, although the same financial constraints and the same demographic trends were apparent in Northern Ireland as elsewhere. Simply to have allowed uncertainty to continue for a longer period would have been very damaging.
  After examining Sir Henry Chilver's proposals, I did not believe that to have allowed the New University of Ulster to go on as suggested in that report, with a total enrolment of 1,000 to 1,500 students, as a totally new type of university, would have given it the guaranteed viability for the future that is necessary if we are to have a strong second university in Northern Ireland. That university would have been about half the size of the smallest universities in Great Britain and it would have been vulnerable to every sort of academic or economic storm that blew up. Now we have a chance to have a second university in Northern Ireland that can give security and stability for the future.
  The new institution will be a university. I believe that it can combine the strengths of the NUU, which are substantial. In making this proposal we are not criticising
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  the NUU, which has developed some strong aspects to its work. It had the grave misfortune of trying to develop its work at a time when there were troubles in the Province, and when nothing like the number of students from Great Britain or elsewhere were being attracted to higher education in Northern Ireland, for reasons that had nothing to do with academic standards, but everything to do with the political and security climate. Those who have been working at the NUU since its foundation deserve our tributes and our compliments.
  The new institution can combine those strengths as well as the innovative strengths that the polytechnic has brought. One matter that occurred to us as soon as we examined the Chilver report was why, in a small province the size of Northern Ireland, with 1·5 million inhabitants, we needed to duplicate the binary system that exists here, as all the institutions of higher education in Northern Ireland are directly financed by the Department of Education.
  One matter with which I am anxious to deal before the debate ends is the provision of academic continuity and the right of progression for students embarking on courses at the two institutions that are to be merged. The Government's statement made it clear that steps must be taken to ensure that students who have embarked on courses will not be at a disadvantage because of the changes. No matter what arrangements are made and what consultations take place, it is essential that there is a commitment to the students who are or will be in the system before the merger becomes effective. There can be no question of any students being left high and dry. I am glad to give that undertaking this evening.
  There is also the separate but related matter of staff redundancies. It is difficult at this stage to estimate the staffing implications until the details of courses and the structure of new institutions are resolved, but, bearing in mind the financial constraints to which higher education is subject and the demographic trends of the 18 and 19-year age group with which we are confronted, any additional constraints on staffing as a result of the merger are likely to be very undramatic.
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at seventeen minutes to Twelve o'clock.

TRADE
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Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Rochester): The LORD CHANCELLOR on the Woolsack.

Public Corporations: Sale of Shares
Lord Beswick: 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 is the total sum of commissions, fees and other expenses paid by them and by the public corporations concerned in connection with the sale of shares in Cable and Wireless, British Aerospace, National Freight Corporation and Amersham International.
The Minister of State, Treasury (Lord Cockfield): My Lords, excluding VAT and stamp duty, the amount payable by the Government was about £12·2 million. The appointment of advisers and payment of fees by the companies themselves are matters for the companies concerned.
Lord Beswick: My Lords, I am obliged to the noble Lord for that figure. He will probably recall that when I last asked for payments made, they were around £3 million. Now they are £12 million. Do not the Government have some misgivings—even slight misgivings—about these payments made for services which have not contributed one pennyworth of new wealth to the nation?
Lord Cockfield: My Lords, we are now dealing with four companies and not one. It is not surprising, therefore, that the figures for four companies should amount to more than the figures for one taken alone. Individually, the net figure in the case of British Aerospace was £5 million; in the case of Cable and Wireless, it was £5·4 million; in the case of Amersham it was £1·7 million and in the case of National Freight, which, of course, was a sale to the management and staff, the figure was £125,000.
As regards the noble Lord's other question, the position is that these four companies have successfully been transferred to the private sector. We wish them every success in their new role. Among other things, of course, it removes them from the constraints of the PSBR, a subject which no doubt will greatly appeal to the noble Lord.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the amount he has mentioned payable to these various concerns is a very large sum? Is he prepared to subject these sums and their payment to the same rigorous audit requirement of value for money as the Government are seeking to impose on local authorities?
Lord Cockfield: My Lords, we always look at any payments we make very much from the point of view of value for money and, indeed, in these cases competitive tenders are sought to ensure that that happens. The gross amount realised on these four sales amounted to £500 million, and costs of £12·2 million in relation thereto represent only a little over 2½ per cent.
Lord Beswick: My Lords, the noble Lord is, of course, absolutely right, that the amount realised was something like £500 million, but the value of the assets that were sold were probably in the region of £6·5 billion. For the loss of this £1½ billion, they are actually paying £12 million to the finance houses concerned. Does the noble Lord really think that this is a great achievement or a stimulation to industry?
Lord Cockfield: No, my Lords, I do not accept either the noble Lord's allegations or his arithmetic.
Lord Leatherland: My Lords, would the noble Lord the Minister agree that in the case of Amersham International the price at which it was floated was probably lower than that which it deserved, inasmuch as when dealings opened an immediate premium of 50p was quoted?
Lord Cockfield: My Lords, hindsight is one of the most widespread and valuable of all human attributes. What matters in the present case, of course, is what circumstances were like at the time the price was fixed. The views expressed at that time were as follows. The Investors' Chronicle on 12th February, the day after the price was announced, said that it was "a shade ambitiously priced". The Daily Telegraph on 15th February took the view that the price of the share "is ambitious". The Times, in its usual dispassionate and judicial manner, on 15th February said:
"The merchant bankers seem to have weighed up the interests of the future shareholders and the Government pretty well.".
Lord Leatherland: My Lords, will the Minister agree that that probably indicates that you should not believe everything that you read in the papers?
Lord Cockfield: My Lords, the noble Lord expresses a view of great wisdom. That is why I quoted to him a selection of newspapers rather than taking one only.
Lord O'Brien of Lothbury: My Lords, is the noble Lord the Minister aware that I have had considerable experience over many years in fixing prices for issues on the stock market of various kinds, and that it is notoriously extremely difficult to fix a price which is absolutely right on the day? It is just as likely that on the day the price will be wildly wrong one way as the other and, of course, one gets criticised whichever way it is. I am quite sure in this particular instance that those concerned acted in good faith and did their best.
Lord Cockfield: My Lords, I am most grateful to the noble Lord for his intervention. Perhaps I may illustrate his point and say that only last week British Aerospace shares changed hands at 170p, while

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yesterday they were up to 195p, which illustrates the extent to which shares can fluctuate in price over a very short period of time.
Lord Beswick: My Lords, I am not quite sure what lessons the noble Lord draws from that, but while he and I would deprecate hindsight, is it not also to be deprecated if we fail to learn lessons from the past? Are there not some lessons to be learned from the way in which these assets have been disposed of under market value?
Lord Cockfield: My Lords, there is one point which the noble Lord makes with which I entirely agree; it is that one must always learn from past experience. What has happened in these three cases is the subject of very careful consideration.

Aviation Security: Organisation and Finance
3.8 p.m.
Baroness Burton of Coventry: 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, separately from the review being undertaken by the Parliamentary Under-Secretary of State for Trade of the way aviation security is organised and financed in the United Kingdom and the subsequent report, they are now able to make a statement on the methods used by other countries to finance security charges.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, the Government do not propose to make a statement on the methods used by other countries to finance security charges before the review being undertaken by my honourable friend the Parliamentary Under-Secretary of State for Trade is complete. But in the course of that review he will have regard both to the financing of security charges and to the organisation of airport security in other countries.
Baroness Burton of Coventry: My Lords, in my Question I did say:
"separately from the review being undertaken by the Parliamentary Under-Secretary of State for Trade",
and I am wondering whether the Minister is able to look at that again, because as usual he has not answered my Question. Anticipating that this might be the case, is he aware that I have found out the facts for myself? Does he know that in the EEC, in Australia, in the United States of America and in Canada standards are set by the Governments through the national security agencies of their countries, and that airlines are expected to maintain these standards?
Furthermore, is the Minister aware that the United Kingdom is the only country in the world which has a Government levy to finance security charges? No other country has an Aviation Security Fund. Finally, can the Minister tell me whether he is maintaining
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that these facts are not available on the files of the department, or whether the department is determined that an answer shall not be given to the Question that I have asked?
Lord Trefgarne: My Lords, the noble Baroness is most mistaken in the last assertion which she put to your Lordships. I am aware of course that in general the arrangements that we have in this country for financing our aviation security are not those which are followed in other countries. Not all countries, however, choose to make this a charge upon the taxpayer, which I think the noble Baroness has in mind. In the United States, for example, the charge falls upon the airlines themselves. As for the statement which the noble Baroness is asking for, we have no intention, as I said, of making a statement in the way that the noble Baroness asks, but these matters will certainly be taken into account by my honourable friend in the review of which she is aware.
Baroness Burton of Coventry: My Lords, obviously I accept what the noble Lord says, but it seems most extraordinary. Obviously the files of the department are quite inadequate. May I ask him whether he is aware that, in our Companion to the Standing Orders of the House, it is stated:
"The essential purpose of Starred Questions and supplementaries is to elicit information from the Government"?
Does he really consider that I have been treated fairly by the department over the past two years and again today in the questions that I have put, which I would submit are reasonable questions and which have obviously been researched? Is it not right that it is the duty of a Minister to provide answers to such questions?
Lord Trefgarne: I must say, my Lords, that I somewhat resent the suggestion that the answers I give to the noble Baroness do not comply with the Companion to the Standing Orders. Not only do I reply to the noble Baroness often once, twice, or even three times a week, but I, and my successor at the Department of Trade, correspond with the noble Baroness almost equally frequently, and I am surprised that she is still in ignorance of the position.
Baroness Burton of Coventry: My Lords, but I never get anywhere from any of the answers, either written or spoken.
Lord Trefgarne: My Lords, in that case perhaps I may refer the noble Baroness to the answer I gave to her in correspondence on 23rd March.

House Property: Transfer of Loans
3.13 p.m.
Lord Jacques: 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 introduce legislation to enable loans on house

1469
property to be transferred along with the property itself so as to minimise costs of transfer and facilitate the mobility of labour.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, there is no impediment in the existing law to prevent loans on house property being transferred with the property either if the mortgage deed so provides or if the parties so agree. I am advised that it is doubtful whether there is any significant saving in cost.
Lord Jacques: My Lords, I thank the noble and learned Lord for his reply. May I assume that he is aware that this is a common practice in North America, where it is not only convenient but saves a great deal of money in costs?
The Lord Chancellor: My Lords, it is enough for me to know a very little, and all too little, about English mortgage practice, and I am afraid I do not know the practices in North America. Their methods of conveyancing, I think, are far more complicated than ours, but I may be doing them an injustice. The fact is that if this is preferable in England it would be done in England if the parties wanted it, but I do not think we could force it on them by legislation.
Lord Elwyn-Jones: My Lords, could the Law Society, the building societies and the others concerned be encouraged to look at this? There would be a saving of money and it would be valuable in this kind of transaction.
The Lord Chancellor: My Lords, I speak subject to correction, but I understand that there is at the moment a scheme being put forward by the Abbey National—with which I believe I have some personal connection, and I should declare this—and the Law Society, but that is a matter for them on the whole rather than for the Government.

Defence R and D: Availability to Industry
3.15 p.m.
Lord Gridley: 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 to what extent research carried out in the Ministry of Defence is made known to British industry.
Viscount Long: My Lords, defence research and technology is made widely available to British industry, subject to security constraints. We make research reports available; our scientists publish their results, attend symposia and join learned societies; we run joint consultative committees with industry covering particular research areas; we join with industry in developing technologies of mutual interest; and, most importantly, firms undertaking defence work are in general free to use the results for non-defence applications.
Lord Gridley: My Lords, while I thank my noble friend for that Answer and appreciate what the Government are doing at the present time in the various schemes to help industry, I wonder whether I may put to my noble friend that news of this character might be more speedily disseminated if someone were made responsible, or if arrangements were made within the Ministry of Defence to pass to industry discoveries of an unclassified nature which might have a competitive edge. Would my noble friend give me an answer as to whether the Government are aware that this type of procedure is in operation in the United States and Japan?
Viscount Long: My Lords, in addition to the publication of results in learned journals and participation of our scientists in symposia, we contribute to the Department of Industry's Tech Alert Scheme for circulating information to industry. We also make unclassified reports available through the Department of Industry's Technical Reports Centre, now transferring to the British Library. However, we recognise that firms are not always aware of what information may be available and we are currently looking into possible ways of extending the dissemination. The Ministry of Defence welcome the fact that the National Enterprise Development Organisation have asked Sir Ieuan Maddock to look into the exploitation of defence R and D in the electronics industry, and we intend to co-operate fully with this inquiry. I hope that that helps my noble friend.
Lord Peart: My Lords, I am grateful for that answer. It is a good answer. The Ministry of Defence has great possibilities for development in the development areas. Are there any plans to make sure that the development areas also get their fair share? This would help to cure unemployment and would be a great contribution.
Viscount Long: My Lords, my reply to the noble Lord is that really we come to the spin-off from Ministry of Defence R and D through industry and I think through the construction world, as such, for development. I think you will find that is where it comes in.
Lord Avebury: My Lords, in warmly welcoming the initiative the Government have taken in inviting Sir Ieuan Maddock to undertake this study, may I ask the noble Viscount whether the exact terms of reference given to Sir Ieuan will be published either in the form of an addendum to the Official Report or otherwise?
Viscount Long: My Lords, of course this has come from the House of Lords' scientific body, and I should think that they in turn will have the report, and I am sure your Lordships will receive it in due course when it is ready in the Library.
The Earl of Halsbury: My Lords, would the noble Viscount accept that the only certain way of ensuring that the results of defence research end in industry is to have the research done in industry under contract, as they do it in America, thereby ensuring that not only the knowledge but the associated knowhow vests where it starts?
Viscount Long: I note, my Lords, that the noble Earl has referred again to the question of the American way of dealing with knowhow. I well remember the way in which they dealt with the spacecraft secrets; once NASA had finished with them, the secrets were given to the Library so that everybody could see them. That is what I think the Ministry of Defence will try to do, anyway.
Lord Mayhew: My Lords, would the Minister agree that there are really two processes involved, dissemination and declassification? What arrangements are there in the Ministry for the regular declassification of secret research, just as there are for the declassification of secret papers?
Viscount Long: I am unable to answer that question, my Lords, and I will write to the noble Lord.
Lord Shinwell: My Lords, is it possible to estimate in financial terms the value of the transfer of defence research to industry?
Viscount Long: My Lords, it was stated in the report on R and D that, out of a total estimated procurement expenditure of some £5,800 million for the defence estimates for 1981–82, there was provision for nearly £1,700 million to be spent on research and development—about £260 million for research and £1,420 million for development—and I think that gives the noble Lord the information he requires.
Lord Wynne-Jones: Is the noble Viscount aware, my Lords, that in certain fields of scientific research some of the best work is done in Government establishments, including the Ministry of Defence? Is he aware, for example, that, in the sphere of batteries and electro-chemical work, some exceptionally good work has been done? Does he appreciate that that work is not normally published simply because the people engaged in it are not doing work which is regarded as fundamental, although it is extremely important industrially? Would he agree that it is very important that a method should be found of transmitting those results to industry? Are the Government representatives of the Department of Industry in various parts of the country able to convey to firms in their regions the results of that work? I am not referring to large firms—I do not worry about them; they have their own methods of getting the results—but the small firms.
Viscount Long: First, my Lords, I am grateful to the noble Lord for his tribute to the work that goes on on the scientific side at the Ministry of Defence and the work that is pushed on to the civil side. There is the problem of trying to make firms aware of the existence of defence research results which they could exploit. We recognise that the Tech Alert Scheme and the Department of Industry's Technical Reports Centre may, by themselves, not be totally adequate and we are currently looking into how the process of dissemination might be improved.
A particular problem is caused by the intellectual property rights limitation on the dissemination of information from extramural research contracts.
1472
It is difficult to ensure that that information reaches all those in industry. We could make use of it, particularly through non-defence manufacturers, and that is why I announced to your Lordships that Sir Ieuan Maddock would be heading an investigation to see if more information can get through to the smaller industries.
Lord Brockway: My Lords, while I appreciate what the Minister said about help to industry, may I ask the Government to consider whether more direct research might be made through the Government for industry? Am I right in thinking that four-fifths of Government aided research is for military equipment?
Viscount Long: Although that is not quite right, my Lords, I do not have the correct figure to which the noble Lord referred. It is vitally important that the two sectors, the Ministry of Defence and private industry, work together. Thereby one gets a better job done, more competitiveness and better prices.

Coal Industry Bill
3.25 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(The Earl of Mansfield.)
On Question, Motion agreed to.

Lloyd's Bill
3.26 p.m.
Lord Windlesham: My Lords, I beg to move that this Bill be now read a second time. I should explain at the outset that this is a Private Bill, not to be confused with the more usual Private Members' Bills. Unlike Private Members' Bills, which are public Bills although introduced by private Members and not by the Government, Private Bills are promoted by individuals—outside Parliament, by statutory or private corporate bodies or local authorities—with the purpose of obtaining particular powers or benefits beyond those provided by the general law of the land. Thus, a Private Bill affects only a particular category of people—in this case the members of what is described as the Community of Lloyd's—or sometimes they may affect a particular place, but never the public as a whole. It is an important distinction, and I make it at the start of our proceedings so we may have it in mind throughout what promises to be a lengthy debate.
I would also say at the outset that I have no financial interest in Lloyd's, nor have I had any previous connection in any capacity, save as a policyholder. At this stage I should point out that the interests of policyholders—people who hold Lloyd's policies, members of the public—are not in any way affected by the Bill.

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I accepted an invitation from the chairman and Committee of Lloyd's, who are the promoters of this Private Bill, to act as its sponsor, and I did so for two reasons. The first is because I believe Lloyd's is a unique and important national institution of high standing and great value to the British economy. The second is because I admire the vision and courage shown by the elected members who serve on the Committee of Lloyd's, supported by a very large majority of the membership, in bringing forward proposals to modernise and update the constitution and certain working practices of Lloyd's.
I think we can all agree from our experience in different fields that internal reform is never easy to accomplish, especially in a community as large, now numbered in several thousands, and as individualistic as is the case with Lloyd's. The office-holders and committee have persisted with determination in the task of self-reform for three years or more. It is two years since the publication of the important report on which the Bill is based; that of the working party chaired by a former High Court judge, Sir Henry Fisher. There were also some outsiders unconnected with Lloyd's, who served on Sir Henry's working party.
Let me say a word or two now about Lloyd's as background to the Bill. Although Lloyd's is often thought of as an entity, and particularly so overseas, it is in practice a market, an insurance market, sharing certain common services—a common building, for example, and supporting services—and accepting certain common rules. Therefore Lloyd's is very different from a company. It has no shareholders; nor does it accept any corporate liability for the risks that are insured at Lloyd's. It is a society of underwriters, all of whom accept insurance risks for their personal profit or loss and are liable to the full extent of their private fortunes to meet their insurance commitments.
The basic principle of Lloyd's, going back to the origins of marine insurance in a City of London coffee house nearly three centuries ago, remains unchanged. It is this: that private underwriters, in accepting a risk, bind themselves, in the hallowed phrase used by Lloyd's,
"each for his own part, not one for another".
This principle of individual and unlimited liability lay at the heart of the Lloyd's Act 1871, which is the basis of Lloyd's operations from that date until now. That Act, again a private Act, promoted by Lloyd's and brought before Parliament, created a corporation. The Corporation of Lloyd's has provided premises and centralised services, and also, through an elected committee, laid down regulations governing the financial requirements for Lloyd's membership. Since 1904 there has also been a requirement for the audit of underwriting accounts. This is an important matter to which I shall return later.
The Act of 1871 was amended by four further Acts of Parliament between that year and 1951; all private Acts of Parliament promoted by Lloyd's. It is hardly surprising that the constitution, based as it is in the 1871 Act, should be found wanting in certain respects today. The conditions in which Lloyd's operates have been transformed, and consequently it was the unani-
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mous conclusion of the Fisher working party, to which I referred earlier, that—and I quote their words:
"…the constitution is no longer appropriate and the Committee's powers are inadequate for self-regulation in modern conditions. We have, therefore, recommended that the Committee of Lloyd's should promote a new private Act of Parliament so that the constitution of Lloyd's can be brought up to date and the powers of self-regulation enlarged".
That, in brief, is the case for the Bill.
I turn now to the contents. It is not a long Bill. It contains 18 clauses and 4 schedules. It is not, in my judgment, compared with some other legislation that we have seen, a difficult Bill to read. It is clearly expressed, and much of its contents are generally accepted. It would be in the interests of time if I did not go through the Bill clause by clause, but instead concentrated on those matters—there are three—which have attracted particular interest and attention.
These aspects of the Bill are opposed by six petitioners to the House of Lords; that is, interested parties who have lodged petitions which will be considered in the quasi-judicial proceedings, which apply in the case of opposed private Bills, before a Select Committee made up of five of your Lordships. The subject of two of these objections raised by petitioners is raised again, it must be said exceptionally, in the Instructions which are on the Order Paper today and which will be moved by the two noble Lords on the Liberal Benches.
I should now like to examine these three aspects of the Bill in the order in which they occur. First, there is the matter of the composition of the new council which will be set up by the Bill. This is contained in Clause 3. It was inherent in the Fisher Report that the transfer of the power to make by-laws for the management and regulation of Lloyd's away from the cumbrous procedure of a general meeting of all the members (several thousands of people) should be to a new and an expanded council which represented not just the working members of Lloyd's, as is the case at present, but also the outside names who provide Lloyd's with so much of its underwriting capital. The composition proposed in the Bill embraces three categories of member. There will be 16 working members of Lloyd's. They will form the Committee, an executive body, to manage the affairs of the Lloyd's market. They will be supplemented by eight external members, and three nominated members, unconnected with Lloyd's, whose nomination will require the confirmation of the Governor of the Bank of England.
The Bill provides for the representatives of the external members on the council to be elected by all the other external members and for the working members of the market to elect their own council representatives from among their own number. Schedule 1 to the Bill classifies the members of the society into two categories for this purpose. The aim of the separate electorates—working members and the external members—is to strike a balance, as Fisher recommended should be struck, between the interests of the two categories of member, and to ensure that some of the external members are in fact elected to serve on the policy-making body of Lloyd's and are not over-shadowed by the professionals, as has happened with the elections to the presently constituted committee on the basis of a single electorate.
The next part of the Bill to which I should like to draw your Lordships' attention—this is the second of

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the provisions of the Bill that have attracted a good deal of attention and comment—is to be found in Clauses 10, 11 and 12. These contain the so-called divestment proposals. Clauses 10 and 11 set out the restrictions affecting Lloyd's brokers and managing agents, and it is this matter which is the subject of the Instruction in the name of the noble Lord, Lord Wigoder. The clauses prohibit any Lloyd's broker, or any group comprising a Lloyd's broker, from having any interest in, or any connection with, a Lloyd's managing agency, or vice versa, and they require the disposal of any such interests within a period of five years following Royal Assent. These clauses were not originally included in the Bill, although there was a power conferred on the council to provide for divestment.
This method of resolving what the Fisher Committee found to be a conflict of interest between brokers and managing agents was the one recommended by Fisher, but it did not find favour when the Bill was debated and considered in another place. An Opposed Bill Committee in the House of Commons concluded that the matter was of such significance that it should be specifically incorporated in the body of the Bill itself. Consequently, the divestment clauses were added to the Bill in the course of the Committee stage in the House of Commons by means of a petition for additional provision. This petition followed a ballot (with postal votes) conducted by Lloyd's in order to obtain the views of the members. On this ballot, 76 per cent. of the members voted and the results were as follows: 13,511 were in favour of the proposed additional provision, and 1,013 voted against.
If I may continue with the sequence of events, the next development was that a petition was lodged against the additional provision by a Lloyd's broker. The House of Commons Select Committee then reconvened and sat for a further six days, during which the merits and demerits of divestment were argued at length. Its conclusion was as follows—and I quote their actual words so that there should be no misunderstanding. This is what the chairman of the Committee said on 22nd December last:
"We are fully aware that considerable consequences would follow from divestment, both for Lloyd's as a whole, and for individuals and companies. Nevertheless, on balance, our view is that it is in the public interest that the additional provision should form part of the Bill".
The matter was then raised again on the Floor of the House of Commons, this time by a Member of Parliament who was a director of the broking firm which had petitioned against these additional provisions. Nevertheless, the Bill was approved in the form in which it is now before your Lordships. A further petition from the same broking firm, and others similarly affected, will be considered by your Lordships' Opposed Private Bill Committee, and it is reinforced in the Instruction before the House today in the name of Lord Wigoder. So no one can accuse those who believe that their business interests are threatened by these provisions of any lack of persistence.
The third matter to which I should like to draw your Lordships' attention is more appropriately, in my view, a subject for parliamentary debate by the House as a whole, and it concerns the provisions for exempting the society from liability for damages in
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certain circumstances as set out in Clause 14 of the Bill. The exemption conferred on Lloyd's by this clause is the subject of the first of the two Instructions on the Order Paper, that in the name of the appropriately-named Lord Lloyd, although in this case of Kilgerran rather than of Lime Street. I confess to being better disposed towards the purpose of the first Instruction than I am towards the second. This limited immunity from suit for damages is a provision of the Bill, it must be recognised, which has been the subject of a great deal of comment inside and outside Parliament; and in my view it is entirely proper that our Select Committee should be asked, as the Instruction suggests, to give "special consideration" to this clause and to report to the House.
It needs to be said, however, on behalf of Lloyd's, that the proposal is not one that was lightly included in the Bill. It originates, as do so many of the provisions of the Bill, from the Fisher Report. I should like to quote to your Lordships what Fisher said on this contentious matter. I quote his words—or more accurately, I quote the words of the report of the working party of which Sir Henry Fisher was chairman:
"It is in the public interest that Lloyd's should be efficiently regulated. … It would be contrary to the public interest and inconsistent with the patterns of control established by the Insurance Companies Act, if the Corporation of Lloyds was to be inhibited in the task of self-regulation by the fear of legal proceedings against it. In particular, if the Council and Committee of Lloyd's were to decide that, for fear of possibly legal liability they could not undertake functions designed for the protection of Members, the whole body of Members would suffer".
I should also like to repeat a point I made earlier on in my speech; that is that this provision affects the members of the Lloyd's community only. It does not affect the public and it does not affect policyholders, whose rights are unchanged.
There is one further practical matter in connection with immunities which I should like to put before your Lordships because I consider it to be one that is worth keeping in mind as we debate the merits of this proposal. Recent events have shown that acute problems can be faced by Lloyd's in obtaining the all-important audit certificates while legal proceedings are pending at the suit of members who have suffered underwriting losses. Without these audit certificates, which have to be produced annually in respect of each underwriting member of Lloyd's—it is a statutory requirement of the Insurance Companies Act 1974—Lloyd's cannot obtain a global certificate of solvency. It is on this certificate that Lloyd's ability depends to satisfy nearly 100 separate public authorities throughout the world who are responsible for regulating insurance business.
Let me now bring together what I have to say with two final comments. The first relates to the standards and wellbeing of what we can all agree is a major financial institution. The second relates to how we should handle the debate on Second Reading, including the two Instructions, this afternoon. Lloyd's is the City of London's largest earner of overseas currency from invisible exports. It has a worldwide business and a reputation overseas that is of immense value to this country. In 1980 (the last year for which figures are available) the community of Lloyd's contributed

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no less than £579 million in invisible exports. Moreover, it provides employment for some 72,000 people. Its future and wellbeing, I submit, are matters of national and not simply of any sectional importance.
After lengthy and careful consideration, and on the basis of the recommendations of a working party chaired by a former High Court judge, to which I have already referred, Lloyd's came to the conclusion that it needs, and needs urgently, structural changes and powers included in the Bill.
The membership has been consulted systematically and regularly by the Committee of Lloyd's. It is significant that at a general meeting of the membership, the Wharncliffe meeting, as it is known, which was held at the Albert Hall on 4th November 1980, 3,772 members attended in person. The result of the poll which included proxy votes was overwhelmingly in support of the Bill: 13,219 members voting in favour of the Bill to 57 against. The vote in favour was thus 99·57 per cent. of all those voting or 71·99 per cent. of the entire membership of Lloyd's. There is no doubt that the powers in the Bill will be used and that the new constitution will be implemented without any delay once the parliamentary processes are complete. Already no less than 21 task groups have been set up to study and make recommendations on the detailed implementation of the various changes. Well over 100 working members of the society and officials employed by the Corporation of Lloyd's are engaged in this work.
That is all I have to say on the Bill. I apologise that it has taken me some time to describe the background to the Bill, the controversial points in it, and why it is that the measure is brought before the House today. Let me, in conclusion, turn to how we should conduct the debate in this House this afternoon. We have before us the Motion that the Bill be read a second time, and there are also two Instructions on the Order Paper, the first in the name of the noble Lord, Lord Lloyd of Kilgerran, and the second in that of the noble Lord, Lord Wigoder. It has been suggested after discussion through the usual channels it would be for the convenience of the House to have one general debate rather than three separate debates. Accordingly, the movers of the Instructions are intending to make their speeches at the start of the debate and then formally to move the Motions standing in their names at the end, provided that the Bill receives its Second Reading, as I hope will prove to be the case.
It is most unusual to have two Instructions to a Select Committee on a Private Bill. I have looked up the precedents and find that there have been only 13 Instructions in all over the last six Sessions of Parliament, including those relating to several wide-ranging local authority general powers Bills. The noble Lord, Lord Wigoder, is aware that I regret the fact he did not feel able to accept arguments against tabling the Instruction in his name. Nevertheless, it is his right to do so and I appreciate his courtesy in discussing and agreeing the wording of his Instruction with the promoters of the Bill.
Lord Davies of Leek: My Lords, may I get this clear from this side of the House? Those who are laymen try to follow intelligently this debate and I find this important. I do not want to divide the House. I agree with the scholarship and legal knowledge of both
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noble Lords; but we shall vote for the Second Reading, I gather, and then the noble Lords will move their Instructions. Here comes the rub. Are we under this rule and procedure, which has not happened many times, then forced to a vote whether we go into the Lobby to instruct the committee? Is an Instruction enough to that committee without dividing the House? Do I make myself clear?
Lord Windlesham: My Lords, the noble Lord has made himself clear and his question may help to clarify any doubts that may be in the minds of other noble Lords. My advice to those who support the measure is not to divide the House. I do not believe it would be in the interest of the House to have a Division on either of the two Instructions. I have had some exchanges with the noble Lord, Lord Wigoder, and he knows my view. Nevertheless I counsel against calling a Division against either of the Instructions.
What was in my mind in particular when I reached that conclusion was the guidance given last week to the House by the Leader. I believe that there are some 194 Members of this House who are also members of Lloyd's. It may be recalled by those noble Lords who were present on Wednesday last week that the noble Baroness the Leader of the House strongly advised such Peers to refrain from voting on the Bill during its passage through this House, and I fully endorse that guidance. I am sure it is wise and in the best interests of the House. Therefore, I recommend to supporters of the Bill, and any other noble Lord, that if the Bill receives a Second Reading without Division (which I hope will be the case, since there is much general agreement about its desirability) both Instructions should be agreed without Division when the Question is put formally. I beg to move.
Moved, That the Bill be read a second time.—(Lord Windlesham.)
3.57 p.m.
Lord Lloyd of Kilgerran: My Lords, the noble Lord, Lord Windlesham, has explained the scope of this Bill fairly and comprehensively with his accustomed care and clarity. It is a Bill dealing with a society of great financial distinction. It is very difficult to compare this society with other bodies or institutions, regulatory or otherwise. What the noble Lord, Lord Windlesham, has emphasised, and I am sure noble Lords will concur, is that one of the main characteristics of the society which is the subject of this Bill is its truly international nature in terms of its business and liabilities. The purpose of the Bill is a difficult one. As the noble Lord, Lord Windlesham, has described, its main purpose is to bring up to date the scope of the society's laws and functions.
The part which I have to play so early in this debate is solely to explain to your Lordships certain procedural matters relating to the consideration of part of this Bill; namely, the scope of Clause 14 of the Bill. I have to assure your Lordships at this early stage in the debate, mainly in order to save parliamentary time, that in the event of your Lordships giving this Bill a Second Reading (as I hope will be the case) the Motion standing in my name will be moved immediately afterwards. That Motion, if I may remind your Lordships, is:

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"That it he an Instruction to the Committee to whom the Bill is committed that they should give special consideration"—
and I emphasise the words "special consideration"—
"to the exemption conferred on the Society by Clause 14 of the Bill".
As the noble Lord, Lord Windlesham, has indicated, he has considerable sympathy with the terms of my proposed Motion and would not oppose such a Motion when it is formally introduced. Therefore, I repeat that the sole purpose of my intervention at this stage is, in accordance with your Lordships' rules of procedure, to satisfy your Lordships that a full consideration of Clause 14 can be postponed, perhaps to the hearing by the Select Committee, and that the matter can then be further considered by your Lordships when this Select Committee report is received in this House.
I feel I must say that Clause 14 is a long and intricate one. It is to be found at page 18 of the Bill, and is entitled as follows:
"Liability of the Society, et cetera".
Clause 14(1) is in these terms:
"This section shall only exempt the Society from liability in damages at the suit of a member of the Lloyd's community".
The subject matter of this clause has caused considerable discussion inside and outside Parliament as to what is the precise scope of the exemption referred to in subsection (1). It is clearly a contentious matter. Your Lordships should know that there are several petitions lodged for and against the Bill, and objections raised by the petitioners will be presented and argued by several eminent Queen's Counsel, and particularly in relation to the scope of Clause 14.
Unhappily, a phrase which is not in the Bill has been much used in connection with this clause. It is a phrase along the following terms:
"The granting of immunity from legal proceedings".
In these days, naturally, to suggest that any institution or person is seeking immunity from the due process of law is clearly to raise basic questions of public policy which must be considered by Parliament.
I repeat that if your Lordships, after acceding to a Second Reading, also accede to the Motion in my name, as suggested by the noble Lord, Lord Windlesham, the Select Committee will give full consideration to the anxieties expressed and which no doubt will be also expressed in your Lordships' House this afternoon.
I do not propose to enter into any general discussion on questions of immunity from the law. I have been concerned at the Patent Bar with questions of immunity which have been asked for and demanded by Government departments, for instance, when they used Government patented inventions which belonged to firms and persons. But the liability in relation to Clause 14 is totally different from any matter that I have had any experience of having to deal with relating to liability. I hope therefore that this brief explanation of the reason why I am participating so early in this debate—to shorten the proceedings, if that is possible, in the public interest—has been of some assistance to your Lordships.
4.3 p.m.
Lord Wigoder: My Lords, may I join in the tribute which was paid by my noble friend to the noble Lord, Lord Windlesham, for the very clear, helpful and
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fairminded way in which he has introduced this important Bill to your Lordships' House this afternoon. My only task is to speak for a few moments on Clauses 10, 11 and 12 in order that the Instruction which stands in my name might become incorporated in the general debate and we might avoid the appalling consequences of my having to speak a second time at a subsequent stage later in the day.
May I make four preliminary points. First, I, like the noble Lord, Lord Windlesham, have no pecuniary interest of any sort in the matters under discussion this afternoon. I sometimes rather think that I would wish that I had. But I have not. Secondly, this is in no way a matter of party politics; it is pure chance that my noble friend and I happen to sit on this Bench, and it is not in any way a party issue. That goes without saying.
Thirdly, perhaps I may indicate that I happen to have come into this matter only because I am acquainted with some of the members of one of the companies which are concerned in the Bill; and many, many months ago I indicated to them that if I thought it was proper for me to do so, I would be perfectly prepared at an appropriate stage to speak in the course of these proceedings. Finally—and I make it clear, as my noble friend Lord Lloyd of Kilgerran has done—I do not propose to talk on the merits of the three clauses or their demerits, about which my Instruction is concerned. Noble Lords may wish to do so in the course of the Second Reading debate. For reasons which will become clear in a moment, it is not for me, when I come to put forward this Instruction to the committee as to how they should deal with the matter, to attempt to embark upon any discussion of the merits or demerits.
Clauses 10, 11 and 12 are generally known as the compulsory divestment clauses. That is a somewhat ugly phrase which rather suggests that we have gone back to the subject of sex shops which has been occupying your Lordships' House for so many weeks recently. What those three clauses, in a very few words, do—and noble Lords who are familiar with the Bill will of course know this—is to prohibit any Lloyd's broker or group comprising a Lloyd's broker from having an interest in or connection with a Lloyd's managing agency or vice versa.
The side note to the first two clauses (the third is the interpretation clause) somewhat euphemistically refers to the two clauses as containing restrictions. Restrictions they certainly are, because of course their effect—and this is not in dispute—if they become law, would be that a number of individuals and public companies would be compelled to submit to the forced sale of very valuable assets within a fixed time limit. It may be that that is necessary. I do not seek to argue that; I seek only to indicate that the consequences are of very, very great concern to a particular number of people, both individuals and public companies.
In those circumstances, it is not surprising that there are petitions awaiting to go to the Select Committee if and when—as I assume—this Bill receives its Second Reading today. There is one petition by a group of four large public companies, and another petition by some six independent underwriters. Those petitions will in the ordinary way in due course be heard by the Select Committee, with the petitioners arguing, as

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is their right to argue, that these compulsory divestment clauses are against their interests and property, and that their interests and property will be materially affected by these proposals.
I can leave it, I have no doubt, to the petitioners through their representatives to argue that case in due course as forcefully as they wish. As I have already made clear, that case is no concern of mine. What the petitioners will not be able to argue is anything at all outside the scope of the effect of these three clauses on their own particular interests and properties. It may very well be that the committee—which will be free to do so if it wishes—will wish to go a little outside that issue and will want to consider the effect of these clauses on the Lloyd's community as a whole and on the insuring public. I would have thought that the Select Committee very, very probably, would wish to embark upon that limited inquiry.
The only effect of the Instruction which is tabled in my name today is to ensure that what is in any event very likely will in fact happen—in other words, that the Select Committee will take account not simply of the effect on the interests of the petitioners but, on the slightly wider field, of the effect on the Lloyd's community and the insuring public. That means that so far as the effect on the Lloyd's community is concerned, the Select Committee will want to consider a series of issues of some consequence.
They will, for example, want to consider what will happen to the assets that are disposed of as a result of these clauses when they come into operation: will they pass into the hands of people who will be altogether outside the control of Lloyd's and, if so, what will be the consequences and will they he desirable or otherwise? Secondly, they will want to consider whether overseas business will be affected. The noble Lord, Lord Windlesham, has already given the figures—and very substantial they are—of over £550 million a year being brought in by way of invisible earnings as a result of the activities of insurance brokers. They will want to consider, for example, what will be the significance, if any, of the fact that three exchanges have recently been established in the United States, which has specifically encouraged the interrelationship of interests that this Bill seeks to prohibit so far as interests in this country are concerned. Is that going to lead to a degree of competition which perhaps may not be in the interests of the Lloyd's community? Those are the sorts of matters—and no doubt there are many more—upon which the Select Committee will have the task of embarking.
As to what will be the effect on the insuring public, again the issues are perhaps clear and I do not want to make any comment, one way or the other. Is there evidence of abuse in the present position? If so, is it infrequent and limited to the smaller organisations where management has not been separated? Is it the position that in the larger concerns where there is a separation of management there has not been abuse? Might it not be that what is sought to be achieved by these clauses could be achieved perfectly well by the compulsory separation of management? As I say, there are all sorts of matters which the committee will want to consider.
I would only add that these clauses I have spoken of are not, of course, the crux of the Bill. Indeed, as the
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noble Lord, Lord Windlesham, made clear, the Bill started out in another place without them and they were added subsequently. It is clear that the committee which considered these clauses in another place took the view that they would have considerable consequences, and they came to the conclusion that on balance the clauses should be accepted. Again, I make no comment about that. I know that Lloyd's are anxious, and perfectly properly so, to see this Bill on the statute book. I know that Lloyd's, being the great organisation that it is, will want to make quite sure that the Bill has gone fully through all the processes of our parliamentary democracy and has been analysed with care in every respect where it is likely to be controversial and where serious consequences might ensue.
I may say that the only object of the Instruction which I propose to move formally at a later stage is to ensure that that will happen and, if I may say so, it is an indication of the extremely responsible attitude taken by Lloyd's and by the noble Lord, Lord Windlesham, that he has been able to indicate at an early stage of this discussion that he does not propose to suggest that the House should be advised to divide against this Instruction.
4.14 p.m.
Lord Mishcon: My Lords, may I make it clear at the very outset, on behalf of the Opposition, that we certainly support the Second Reading of this Bill. I should also like, if I may, to add to the tributes already paid—and no doubt they will continue to be paid with your Lordships' usual courtesy—to the noble Lord, Lord Windlesham, for the very clear manner in which he introduced the Bill's provisions to us. He was modest on behalf of Lloyd's, whom he obviously admires. He referred to Lloyd's as "a major financial institution". I would call it a great national institution and one which has carried British integrity throughout the world and enhanced the name of Britain in many parts of the world.
Reference has already been made to what Lloyd's have been able to do for the economic well-being of this country. It makes very interesting reading. I shall not quote the figures already mentioned by the noble Lord, Lord Windlesham, about the record profits that were made in 1980. Indeed, during that year the figure I have for the net overseas earnings of Lloyd's is £860 million. It compares rather interestingly with another figure for the overseas earnings of the whole of the United Kingdom banking institutions of £314 million. As the noble Lord said, when you consider the employment of 72,000 people, and bear in mind that whereas this great traditional institution had some 675 members in the year 1871 (which we were talking about earlier) and now has some 20,000 members, your Lordships will appreciate that we are dealing with something very fundamental, responsible and sizeable in deeming ourselves worthy of assisting in the creation of an institution for Lloyd's which is worthy of itself, worthy of this century and of modern trading.
I mention the question of responsibility because I feel that this debate should be conducted in a thoroughly responsible manner. I am not suggesting that so far anyone has been unworthy enough to be irresponsible, but I am sure the noble Lord, Lord Wigoder, will forgive me for a moment if I wonder whether

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it is really a sensible procedure for us to follow in future, to assume that when we have a Second Reading debate on a Private Bill the Second Reading speeches made, where that Bill is opposed, are not going to be read by the Unopposed Bill Committee. I would have assumed that any contribution the noble Lord made would always be regarded with the greatest respect in this House and in any committee of this House. Why, therefore, is it necessary for us—and I am thinking of the future—to put down Instructions instead of making points in speeches? That seems to me a matter which ought to be raised and thought about rather seriously.
I make the point only for this reason—and I will come on to deal very briefly with the three controversial matters to which the noble Lord, Lord Windlesham, fairly and justly referred. I hope it will not be thought that when we nod our heads, or if we do not murmur the words, "Not Content" it means that the committee who will be considering this Bill should feel that your Lordships were not so terribly worried about Clauses 10, 11 and 12 (the divestment clauses), that we were saying to them that we were not very worried about the divestment clauses and the effect they may have on the general Lloyd's community and on the public at large.
I make that point so that it may be clearly seen from my personal point of view—and I am speaking only for myself—that I would not want the committee to have that impression. I hope they will have the impression that this is a matter which the noble Lord, Lord Wigoder, raised with his usual eloquence and which may be raised also by other Members of this House in the course of debate, and that we take it for granted that in any event it is something to which the committee will want to give consideration, and we have expressed no opinion at all that we are so specially concerned with it that we want the committee to give it attention at the request of this House.
Having said that—as I said, I am merely expressing a personal point of view—I want very briefly to refer to the three matters which the noble Lord, Lord Windlesham, mentioned. I do so against the background that I am sure that it would be the wish of the House—and I do not say this disrespectfully—that Lloyd's are allowed to put their house in order after 110 years in a way that they should do. Indeed, I noted the plea that was made in the Financial Times quite recently, in an editorial which put it in the following terms:
"The Lloyd's Bill is of vital importance to London's insurance community. The market needs a modern disciplinary framework and this will he provided by the Bill. This vital legislation is unlikely to be implemented until much later this year and protracted delay can only weaken confidence in the Lloyd's market in the world's insurance community. The Lloyd's Bill has rightly received close examination and wide debate, but the legislation must be enacted as soon as possible".
I agree with that.
There were 65 hours of scrutiny in another place, and examination of the very issue to which the noble Lord, Lord Wigoder, referred, and which is referred to in the Instruction. It took the committee six days, after objection had been raised in regard to Clauses 10, 11 and 12, before they came out with their own findings in this matter. It is against that background
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of wanting to assist in the speedy passage of this Bill, and realising the responsibility of Parliament to see that its wisdom and experience is at the benefit of those who are promoting this Bill, that I refer briefly to the three points which the noble Lord made.
The first point he made was on the question of the constitution of the council. I think that that is very much a matter for the membership of Lloyd's and a certain view has been taken in regard to it. If it be a fact that the wisdom is that there should be 16 working members and eight external members—again, I have no financial or other interest in this matter—then I do not feel competent to give any opinion at all and, therefore, I shall not weary the House with any comments upon it.
On the second matter, which is Clauses 10, 11 and 12, the divestment clauses, I repeat what the noble Lord said. Fisher, in his report, said that there was a conflict of interest unless divestment took place. That was the view of a committee chaired by a very much esteemed former High Court judge. The committee in another place, after examination, also took the view that there was a conflict of interest. If I remember correctly, the official evidence on behalf of Lloyd's was that there was a conflict of interest.
The only difference arose as to whether one followed the working party's recommendations, by incorporating this in some by-law procedure in order to get the divestment, or by leaving it internally to Lloyd's, or whether it should be written into the statute. Parliament, in its wisdom, has so far decided that this is so necessary for the protection of many interests—including, I imagine, those to which the noble Lord, Lord Wigoder, referred—that this would be in the statute itself, so that there is no doubt at all that Parliament has considered the matter and enacted it, and a conflict of interest should not ensue.
Therefore, I come finally to the point that concerns every one of us and which the noble Lord, Lord Lloyd of Kilgerran, in his usual way, put extremely fairly. One must admit that, on one side, it seems to be a very innovatory, and, possibly, a wrongly innovatory, provision to have written into a statute an immunity from suit for anyone or any institution. I am treading on very dangerous ground, speaking from the place where I do; and I can see noble Lords realising what I am saying. But it is very innovatory to write into a statute a complete civil immunity in regard to all torts, be it libel, slander or whatever.
I at once appreciate that it is for the protection of the members of Lloyd's itself, and that policyholders are free from this immunity clause and have their rights in the civil courts. I appreciate that the remedy of a judicial review is still available, in spite of this immunity clause, if the rules of natural justice have not been observed. It may very well be, too, that in certain circumstances injunctions could still be obtained. Nevertheless, what is spelled out here is an immunity from civil action, with the exception of clerical and administrative matters which were added at a later stage of the Bill, for those who are directing Lloyd's, the members of the council and the employees of Lloyd's. So one has to go very carefully—which I am sure the committee of this House will do—into whether or not this clause is too widely worded.
There has been a suggestion that the immunity

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granted under the Companies Act might be a more suitable one for those in Lloyd's, such as directors and other employees who have been shown to have acted in good faith. I think that that begs the issue, only because the court will have to be seized of all the facts before it can possibly decide whether the directors, the members of the council and the employees of Lloyd's are entitled to that protection. Therefore, the ensuing litigation would not answer the case of Lloyd's, who are saying that they are in special circumstances.
But, in all fairness, I must admit on the other side that this is an exceptional case. It is not like the other institutions, such as the Law Society, to which I have the privilege of belonging, the General Medical Council and so on, which deal with disciplinary matters. Those bodies deal with professional matters. They do not hold up trading. Nobody will be very much prejudiced if a disciplinary hearing is wrongly conducted by the Law Society, as a result of which some solicitor goes to court and tries to get the matter set aside, quite apart from the appellate procedure which already exists in that connection.
This is a question of trading. This is a question of trading throughout the world. This is a question of having to make immediate decisions in critical circumstances. This is a question of not wanting to give too much advantage to the competitors of Lloyd's throughout the world, who would be only too anxious to take advantage of publicity about litigation which was taking place. Indeed, I believe that in certain recent litigation, in the rather unfortunate Sasse case, there were American banks which, for a time, were refusing to accept Lloyd's contracts as security, because they wanted to know the limits of this extraordinary litigation.
So I accept that it could do Lloyd's a tremendous amount of harm if they happened to be joined together with others engaged in litigation, purely because Lloyd's—and I am using blunt language—might give in to blackmail, and might give in to the fact that so much might be lost if the litigation, which could be protracted, eventually came before the courts, and if one did not know when "eventually" was. So Lloyd's have to capitulate, or the council has to capitulate, and say, "We had better settle this litigation".
It is a question of balance. It is a very difficult question indeed—I am sure the noble Lord, Lord Lloyd of Killgerran, would agree with me—as to how one decides this matter. It is with the confidence that I personally would have in a committee of your Lordships' House and that the speeches which will be made this afternoon, and my own small contribution, will be considered, that I am sure the judgment they will finally give regarding Clause 14 will be of use to us and to Lloyd's, to whom this afternoon my noble friends and I wish to give every support in putting their house in order by the Bill.
Lord De Freyne: My Lords, if noble Lords will listen to me for just a minute, may I ask the noble Lord, Lord Mishcon, what he means by "a basic balance"?
Lord Mishcon: My Lords, as I see it, the balance is between, on the one side, the desire in principle to give civil remedies to those who feel that they ought to have them and to give them a hearing before our courts.
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The balance on the other side is not interfering, most unfairly, to their prejudice with a very great national institution which trades throughout the world for our advantage.
Lord De Freyne: My Lords—
Several Noble Lords: Order!
4.32 p.m.
Lord Strathalmond: My Lords, I ask for your Lordships' indulgence in taking up a few minutes of your time with perhaps more nervousness than many other maiden speakers. Neither my father nor my grandfather before him had the opportunity to speak in this place. This is the first time therefore that anyone from my family has attempted to contribute to a debate here.
In attempting to make a contribution to your Lordships' understanding of the workings of Lloyd's I must first of all say that I am not an underwriting member of Lloyd's but do work for an underwriting agency at Lloyd's. Having said that, I should add that the views which I am about to express are entirely my own and have not been put upon me in any way.
Lloyd's has existed for over 300 years. It has grown from a small group of merchants in a coffee house into a community of over 20,000 members. I am now going to give a third set of figures to add to those about which we have already heard. The premium income of this community at the last count was in excess of £2,000 million, with earnings for the United Kingdom at the last count in excess of £600 million.
Your Lordships might assume that these figures would be from 1980 or 1981. They relate in fact to 1978 for, as I am sure most of your Lordships know, one of the ancient customs of Lloyd's is that a year lasts for 36 months in order that underwriters may assess the amount of the outstanding claims as accurately as possible before declaring their syndicates' results. The accurate assessment of these outstanding claims is of prime importance to underwriting members of Lloyd's for, as we have already heard, they have unlimited liability in respect of their underwriting activities.
This unlimited liability is, to my knowledge, unique in its role in business affairs. The noble Lord, Lord Windlesham, has already explained that it is several. Perhaps I could put in it my own words by saying that, unlike a partnership where unlimited liability is joint and several, which binds each partner for the excess losses of the others, in Lloyd's it is several only. No member is responsible for losses incurred by another member's underwriting activities.
I believe that this type of structure may he a major reason for the length of time that this Bill has taken to reach this place. Over 20,000 individuals have been attempting to accept the first new self-regulation for over 110 years. None of them is liable for the losses of the others, each has unlimited liability, and it does not surprise me therefore that a great number of differing opinions should have been expressed.
After much debate in another place we have heard that a number of points have come to the fore. The

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three main ones would seem to be Clause 3, which deals with the composition of the new council; Clause 14, which concerns restraint upon suit; and Clauses 10, 11 and 12, which concern the potential conflicts of interest over the ownership of managing agents.
My personal view is that if the community of Lloyd's is to continue to act in its members' best interests, and therefore in the country's best interests, the first two of these clauses should be enacted in their present form as quickly as possible. They are measures designed to enable the new council to recognise the differing emphasis of interests of underwriting members by admission of non-vocational members to the council, and also to allow that council to act speedily in disciplinary action without fear that the principle of unlimited liability, which is several only, will be overturned.
I now turn to the third point, which is, to my mind, perhaps most central to the effectiveness of this legislation. Clauses 10, 11 and 12 deal with the potential conflict of interest in the ownership of a certain type of Lloyd's agent. There is no doubt that this point will be debated in your Lordships' House with far greater expertise than I am able to give, and I ask again for your Lordships' indulgence in explaining the role of the two different types of Lloyd's underwriting agents.
The first, dealt with in Clauses 10, 11 and 12, is the managing agent whose principal task is to allow the underwriter as much time as possible to underwrite insurance, rather than spend valuable time in administering the myriad of other items which this increasingly complex world requires. Clauses 10, 11 and 12 do not mention the second type of agent. This is the member's agent who introduces potential underwriting members in order to provide a wider capital base from which Lloyd's may increase its business.
My personal view of these clauses is that if they are enacted in their present form they will not go far enough. It appears to me that if a broker, by owning a managing agent, creates a potential conflict of interest, that same conflict is also there if he owns a member's agent. Both agents represent and act for the underwriter and underwriting members who are commercially opposed to the broker. However, I must say that in my work for both types of underwriting agent I have yet to experience a situation in which a major conflict of interest between the agent and the broker who owns him could not be satisfactorily resolved. And this without the help of legislation. I therefore wonder whether these clauses are necessary at all, especially as they deal only with one of the two types of underwriting agent.
I bow to those with far greater experience than I for the necessity of these clauses, but would ask that, whatever refinements may be felt necessary to the Bill, they should be made by the new council at a later time. Indeed, as we have heard, a working party has already been set up by the present Committee of Lloyd's to review all the aspects of the underwriting agency system which I have mentioned.
If this Bill should go to a vote, I would not feel able to vote because of my personal involvement with Lloyd's. However, I hope that my support for the Bill in its present form is quite clear. If it is enacted in its present form, the community of Lloyd's may
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concentrate once again on its business of providing a valuable and profitable service to its members and the country, by serving its policyholders with utmost good faith.
4.39 p.m.
Lord Saint Oswald: My Lords, as the House will recognise, I am singularly privileged to follow the noble Lord, Lord Strathalmond, after his highly informed maiden speech. So modest is the noble Lord's self-description in works of reference that I have been hard put to it even to discover that he is a chartered accountant under the Scottish rules, which the Scots will tell me are far stricter than those of their Sassenach colleagues. I had also discovered, before he told us so, that neither his father nor his grandfather had been able to speak in this House. Therefore he is the first in three generations who has addressed us. Up to that point I had attempted to interpret his title, which I had picturesquely taken to signify "the valley of the almond trees", but I found it difficult to imagine such a scene in Scotland where the "straths" are. I was also mindful of the Arabic expression which I picked up while serving in the Middle East: "Bukra fil mish mish". This means, "Tomorrow, when the almond blossoms", which is the same as saying in Spanish "Mañana, mañana", or "Tomorrow never comes." We must be grateful that today the almond tree has blossomed among us; we all hope that it will blossom continuously and that we shall receive many more informed contributions on a variety of subjects from the noble Lord who has just spoken.
A matter of years ago, it would have been necessary for me to declare an interest in the points I am about to raise for your Lordships' consideration within the scope of this Bill. This has not been so since I withdrew as a "Name" at Lloyd's in a mood of some disenchantment that has no bearing whatever today.
Among the six petitions which have been deposited for presentation to the Select Committee, there are two concerned with "Classification", which is the issue I am raising this afternoon. It is my view that this issue would have made a fair subject for an Instruction to the Select Committee and I have therefore received and pensively considered requests to present it as such. I have been persuaded—fully persuaded—that such a course would be out of line with the normal and proper practice of your Lordships' House in a case where two Instructions are already due to be moved or have been moved in a Private Bill. I am therefore restricting myself to putting the argument in a normal Second Reading speech, although keeping to a single issue in the cause of brevity. I hope that this abstinence from more direct action will in turn persuade the Select Committee to give due, serious and even particular attention to these individual petitioners when they come to present their case. I hope also that other noble Lords, when speaking later in the debate, may feel drawn to take up the same matter.
As I hope will be seen, I have no personal interest to declare but I do see a semi-public interest in seeking the fair treatment of those members who are now in danger of being classified as "external members"—a term which creates, in effect, a new under-privileged class within Lloyd's; making the non-working members subject, with minimal redress, to the decisions of the

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governing council and committee of the society. These non-working members represent 80 per cent. of the membership of Lloyd's, and without them Lloyd's could not operate, I dare to affirm, as the powerful institution and service it has been for so long a time. This premise has always existed. It will continue to exist, but the voice and influence of the non-working members would be diminished under Clause 3 as it stands. In this clause they would lose a large element of the defence and right of scrutiny, the right of advice or amendment over rules and appointments, which up to now is a right which has been preserved and available.
There is no argument that I have heard against the need for a new Bill to replace the Act of 1871. It will be cogently argued in the two petitions which I have studied that some of the methods of updating, chosen by the promoters, are not progressive but retrograde and inequitable. Clause 3 provides that the new governing council shall consist of 16 working members, 8 external members and 3 nominated members (that is, from outside the organisation altogether). This signifies in material terms that 80 per cent. of the members would be left with their influence depleted in a way which has never been visualised before. Clause 3 does not propose any representation whatever for nonworking members on the committee.
The origin and inspiration of these proposals is contained in two passages of the Fisher Report, in paragraphs 4.10 and 4.15 of Chapter IV. For precision I will quote the significant sentences:
"We see nothing controversial in our proposal that membership of the Committee of Lloyd's should consist solely of working members of Lloyd's: the members elected to the committee for as far back as anyone remembers have always been working members, and there are good practical reasons why this should be so".
Those words appear in paragraph 4.10, but the "good and practical reasons" are not there described.
In paragraph 4.15 the working party said:
"We consider that the value to non-working Names of the right to vote in committee elections is more apparent than real, and that their interests will be adequately protected by the presence of non-working members and outside nominees on the council".
Conversely, in one of the two petitions for presentation to the Select Committee, there stands the passage:
"Your petitioner most strongly objects to the proposal to classify the members of the society and alleges that any such classification is unnecessary and, furthermore, would be contrary to the interests of those members who are not working members of the society and, consequently, not in the interests of the society as a whole".
The Select Committee will be able, therefore, to establish that the proposal, whatever its merits, cannot be seen as being non-controversial at this stage and will need supporting arguments to obtain the blessing of the Select Committee.
The pattern put forward would, it is true, gives eight places on the council to non-working members but none on the committee. It is not yet clear to me whence the outside nominees would come but the argument adduced in the Fisher Report for their inclusion is convincing and widely accepted. The assumption that their presence would "give assurance to the nonworking Names" must depend to some degree on the personalities and the method of nomination.
It would be unsuitable and undesirable to spell out in the Second Reading debate the merits of any one or
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two petitions. They will be studied in depth and detail by the Select Committee itself. The provision would set up an unevenly composed council and an unrepresentative committee with almost unchallengeable rights of decision in the making of by-laws, the making of regulations, and in the appointment of the chairman and deputy chairman of the committee and other members of the committee—overriding or ignoring the views of 80 per cent. of the membership. The membership as a whole has a recourse, post facto, in the case of a by-law, to revoke that by-law by organising (as described in Clause 6 of the Bill) at least one-third of the whole membership of the society to obtain a majority within that one-third.
One of the valid justifications for the Bill is that in 1871 there were something like 700 members but that now there are more than 20,000 members, many of whom live abroad. I suggest that over so large and varied a field, the calling and collection of such a vote would entail costly and complicated logistics beyond the organising capacity of private objectors. The recourse visualised seems to me a weak and impractical provision which can hardly satisfy the legitimate needs of non-working members.
There is no general attack on this Bill—nor should there be—yet it has certain aspects which alarm some of those closely concerned. As has been said, it is based on the careful inquiry and recommendations of the Fisher Committee. By normal and respectable practice, the evidence given to the working party has not been made available to anyone outside, including the promoters, and it will not be made available to the committee. It is clearly a wish on the part of at least some of the 16,000 non-working members (and, in logic, probably on the part of most of them) to express reservations as to some of the fruits of the Fisher Report, while respecting all members of the working party.
I sincerely hope that the Select Committee will consider it proper, and even essential, to require the presence in person at some point of Sir Henry Fisher, since neither the promoters nor the petitioners have the right to require his attendance. It seems to me certain that a strong measure of confidence at present withheld (possibly due to an unclear picture of the reasoning behind parts of the Bill) would in this way be established, and is crucially desirable.
4.49 p.m.
Lord O'Brien of Lothbury: My Lords, first, may I apologise to the noble Lord, Lord Saint Oswald, and to the House for attempting to precede him by rising in my place? I was quite out of order. I did so, I think, because of my enthusiastic desire to congratulate the noble Lord, Lord Strathalmond, on his notable maiden speech. His father was a friend and colleague of mine for some years and I am delighted that his son has acquitted himself so well in your Lordships' House. Now that he has broken the family duck, I hope he will come to the wicket many times in the future.
I should also like to congratulate the noble Lord, Lord Windlesham, on a notably balanced and lucid exposition of the facts surrounding this Private Bill, which I am sure will help the House in the debate to follow. I must again apologise for not being able to remain in the House until the end of the debate, to

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my great regret, owing to prior commitments; I hope I may be forgiven.
My Lords, I am not a member of Lloyd's. If I have any interest to declare it is a continuing concern that the great financial institutions of the City shall be enabled to continue their work as efficiently and as much to the benefit of the community as I believe they have done in the past. The noble Lord, Lord Mishcon, has said that Lloyd's is a great national institution, and there can be no doubt that this is the case. I first made contact with them as a junior employee of the Bank of England over 40 years ago, when it fell to me, among others, to hold their hands through the vagaries of exchange control, a sufficiently complex subject made doubly so when applied to a great international business. The efficiency and integrity, the co-operation and the loyalty to the authorities of the people I then dealt with was a great lesson to me. In subsequent years, of course, I made closer contact with the Committee of Lloyd's and with successive chairmen, many of them, and those first impressions were never in any way impaired. This is a great institution which must be enabled, in the very difficult and different circumstances which prevail today in the turbulent world in which we live, to do the job which it has been doing so successfully over hundreds of years. I believe this Bill gives it the basis for this further lease of useful and indeed distinguished life.
So, my Lords, I come to you as a supporter of the Bill. It is a Bill which results from the work of the Fisher Committee. I think Lloyd's were extremely enlightened to decide that the whole of their affairs must be reviewed in this way and very wise to choose such a man as Sir Henry Fisher. As a result, we got a report which I think noble Lords who have read it will agree is unmistakably a great document—trenchant, lucid, indeed beautiful to read. It is not surprising that the Society of Lloyd's decided that it formed a good basis for the reforms which they now wish to make. The Bill which has resulted from these deliberations so far has had a long passage through the other place, where it has been most carefully examined and amended. I believe it now comes to your Lordships in a form which by and large we can accept, though I know that, as has been said, there are still matters in it which are the subject of controversy.
As to the two Instructions which are now before us, on the question of divestment, I have come to the opinion that on the whole it is something which should take place. It is perfectly true that in the City of London the ability to run under one umbrella two activities which should be kept separate has been successfully shown for many years. For example, in the banking system merchant banks can be general bankers and investment bankers, and keep, as they should, those two activities entirely separate one from the other. Unlike the USA, where the Glass Steagall Act many years ago decided that those two activities should by law be physically separated, we can do it here without that, I think quite satisfactorily. Nevertheless, I think Lloyd's is a different case and I believe that divestment would be for its benefit.
Then there is this very important question about immunity. The noble Lord, Lord Mishcon, has talked very learnedly about this, and I realise that many
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splendid lawyers could make an almost unanswerable case for not including such a provision in the Act: equally, of course, many other splendid lawyers could do the reverse; that is what lawyers do frightfully well. If I may presume to call it a common-sense practical point of view, I believe it is right that this immunity should be granted. It is a limited immunity, not a general immunity. The people who have been appointed by this great society to act for them and to see that their activities are properly controlled and regulated are given very responsible jobs.
They represent the members, and, as against the members, I think it is right that they should be safe from prosecution in respect of acts which they in good faith perform on behalf of the whole society. The noble Lord, Lord Mishcon, says the definition of "good faith" is very difficult, but I hope that that difficulty can be overcome, because I do think that this immunity is very important in securing the proper people to take on these extremely onerous jobs and in making sure that when they have taken them on they perform the tasks with courage and forthrightness, so as to give Lloyd's the kind of leadership it will need in the future.
I realise that these things are going to a Select Committee and will be further debated, but I should like to say at this point that, in my view, immunity should be granted and divestment should take place. I hope in general that the House will feel able to pass the Bill in very much the form in which it has come to us.
Lord Mishcon: My Lords, before the noble Lord sits down, I wonder whether he will allow me to take advantage of the quotation that he very properly made of something I said and to correct myself. I did use the words "in good faith". I should have quoted the words of the section of the Companies Act and said, "reasonably and honestly"; those are the words that do create difficulty, only because you have to hear the case before you can decide whether people have acted reasonably and honestly. I know the noble Lord will forgive me for taking advantage of this to put myself right.
4.57 p.m.
Lord Strathcona and Mount Royal: My Lords, it is heartening indeed to hear such an authoritative figure as the noble Lord, Lord O'Brien, adding his voice to all those who have spoken this afternoon in recognising the importance of the institution we are discussing and the competence with which it has been run throughout its long history. May I, as an underwriting name and indeed I think probably the first underwriting name to address your Lordships this afternoon, first thank the noble Lord, Lord Windlesham, on behalf of the underwriting names, for taking on the onerous task and discharging it in such a distinguished manner that he makes a rather complicated issue sound relatively simple. He reminds one of the famous solicitor who said he was sorry he had not had time to write a short letter. The noble Lord succeeded very well in summarising all the issues.
I find it interesting, in view of the debates we had last week, that this institution, or the laws governing this institution, are almost as old as the constitution of Canada, which turned out to be in need of a little modernisation. I find that the last time the law was

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changed was the year 1911, which your Lordships may recall was not a wholly auspicious year as far as the laws concerning this particular House are concerned. As has been properly said, it is scarcely surprising that an institution of that age, which has expanded in the way that it has, should need a little overhauling.
It is perhaps a fair criticism, one that I believe the committee themselves would accept, that possibly they were a little slow off the mark in deciding to seek modernisation of their legal constitution. It was my noble friend Lord Trenchard who last night quoted his father, who very often used to say, "Why change?". One can understand this, because it is a successful institution; but they have recognised, to their credit, the need to move from the atmosphere of a cosy gentlemen's club in order to adapt to the harsh world of contemporary commercial pressures, and all credit to them for appointing Fisher who produced the noble report upon which this legislation is based.
This Bill, as has already been said, has been discussed at great length and with great authority in another place. I am bound to say that I go along with those noble Lords who feel that probably the Instructions were really unnecessary for the committee in view of the fact that these issues were bound to be raised during the course of this debate and that there was no way in which a committee of this House was not going to tackle those problems. Nevertheless, at least it can be said that they do not do any harm.
It seems to me that to resist divestment in the light of the admitted possible conflicts, flies in the face of the explicit condemnation of insider trading which has permeated a number of recent comments and changes in the law in this country. I think that one must accept that the penalties of forgoing the possible benefits of informal ties are more than outweighed by the need to be seen not to show special favours. What I find curious about some of the criticisms of the Bill is that the criticism of that particular area—Clauses 10, 11 and 12—is precisely opposite to the criticism which has been levelled against Clause 14, which has suggested that there is a danger that the council (as it is now going to be called) might act unconstitutionally and beyond reasonably accepted powers. Indeed, I confess that when I first heard of the immunity I reacted with a certain degree of outrage and I wondered whether we were once again seeing some kind of self-perpetuating oligarchy seeking to protect itself against any kind of criticism or claims for damage. I certainly would believe that the proof of the need for immunity of this kind must lie with the Council of Lloyds. But I would like to suggest that they have given ample proof of the need for this admittedly very special provision.
It has been said several times already that Lloyd's is a very special institution. Indeed, I believe that this is one of the rare occasions on which the word "unique" is the proper word. It is a typically British institution which has been allowed to evolve over 300 years and I doubt very much whether it could be recreated from scratch even in this country. I believe that there have been attempts in other countries to create insititutions of a similar kind and they have not been successful. We must accept that Lloyd's competitors are not going to forgo any opportunity that they have to attack a competitor and, of course, the more effective the
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competitor, the more likely it is that those who are competing will seek to attack it.
I believe that the institution is a difficult one to understand and we need to give it every opportunity to protect its unique—again I use the word—reputation throughout the world. I am not a lawyer and there will be other lawyers who will point out that the so-called restraint on suit is, indeed, a very limited one. It is limited to members of the organisation; it does not affect the public. It is limited to damages, suits for damages brought by members of the organisation against their council. My understanding is that they will still be able to go for a quick judicial review and to seek a quick injunction if they feel that they are being wronged. Speed is of some importance in an institution of this kind.
The positive reason for immunity is not hard so see. It is essential to protect not only the good name of the institution itself but also the interests of the underwriting names. This activity is encapsulated in the expression, "regulate the market". It has already been said that Lloyd's has to satisfy over 100 institutions throughout the world of the correctness, the honesty, the accuracy, the validity and the financial soundness of affairs.
Comparisons with the Stock Exchange are not valid. The Stock Exchange is essentially an institution for home consumption; Lloyd's is essentially an international affair. I think that it was the noble Lord, Lord Mishcon, who mentioned the Law Society, and we have also sought analogy with the General Medical Council. As far as internal discipline is concerned, I dare say that that is a slightly closer analogy than the Stock Exchange. The noble Lord, Lord Mishcon, referred to the professional standing of those who belong to the institution as being of very great importance. But the medical council and the Law Society are not running a market and they are certainly not—and I am sure that they would be very concerned if somebody suggested that they were—dealing in the business of risk. That is what Lloyd's exists to do.
I think that we can usefully have a look at the example of the Sasse affair which had something to do with the promotion of this legislation. Here I find myself somewhat surprised by some of those who suffered as a result of the Sasse affair. Should we not ask ourselves: Would the names who have suffered have been more or less likely to be protected if this legislation had been in existence at that time? I find no difficulty in concluding that they would have had a vastly better chance of being protected by the council—as we are going to call it—than was the case under the committee. One cannot guarantee that everybody would have been protected, but I am sure that they would have had a very much better chance. The committee would have attempted to stop a member of this institution from embarking upon a suicidal course of self-destruction. My understanding is that the Committee of Lloyd's were mortified to discover that they really had no powers to act in that case, when things started to go wrong as far back as 1976. It was a case of the club rules. If a gentleman chooses to flout the club rules it is extremely difficult to bring any pressures on him. In some clubs it is not even possible to force him to resign. I said earlier that we were now moving out of the era where we could regard this as a comfortable

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club. It may be sad, but I believe that that is the reality.
However, there is another aspect of the Sasse affair which produced rather surprising and, to me, regrettable results, again relevant to what we are discussing. It has already been said—not least in the notable maiden speech by the noble Lord, Lord Strathalmond—that it is fundamental to the concept of Lloyd's that the underwriting name writes business on his own account or gets his agent to do it for him, and neither the risks nor the rewards are spread among fellow underwriters.
If I may digress further from the specific issue, I believe that in considering this legislation we must be careful not to try to over-regulate. The great merit of the Lloyd's system is that underwriters can act for themselves in an infinite variety of ways. This is their great strength. Some want to go for high rewards and high risks; some may choose a slightly more conservative policy of lower risks with relatively lower rewards. That is their privilege: and this is one of the great strengths of Lloyd's. So, clearly, what is needed is the maximum flexibility for the individual underwriters within an enforceable set of clearly understood rules, which, of course, are necessary for the international operation of the Lloyd's market.
In that context perhaps I may return to the Sasse affair. What eventually happened was that the names whose resources had been put at risk by irresponsible underwriting were able—by a brilliant combination of legal manoeuvring and a measure of realistic high-pressure horse trading, which havery properly been called blackmail by litigation—to spread some of their losses across the other names in the community of Lloyd's. The question of the certificates of solvency has already been discussed. If one part of the institution cannot produce that certificate, then the certificate cannot be produced for the institution as a whole. The possibilities for pressure of this kind are obvious. I suggest that this kind of spreading of the risk is totally contrary to the spirit of Lloyd's. I can assure the House that at least one underwriting member resents being saddled with the misjudgments and misfortunes of his fellow members.
I think it is just worth mentioning that there is, of course, in existence a fund which protects the public against the bankruptcy of any individual name, and I understand that, in fact, that fund was called into operation in respect of three or four individual names who were concerned in the Sasse affair.
Lord Davies of Leek: My Lords, will the noble Lord give way? I am glad that the noble Lord has mentioned that fact. Am I right in saying that, despite whatever may have happened inside Lloyd's in its history no one who has been insured has ever suffered as a result of some error inside the concern?
Lord Strathcona and Mount Royal: My Lords, I am but a humble underwriting name. I hope no one will contradict me when I say that what the noble Lord says is true, and it is precisely that of which we are very proud. I am sure that that is the case.
I have been trying to say that recent events have
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demonstrated that the great institution of Lloyd's needs a revision in its constitution; that the proposals have been very carefully considered, and that they are all needed. I believe that the Bill in its present form, as it comes before this House, is the best that we are likely to get. I hope that your Lordships' House will give it a Second Reading with enthusiasm.
5.15 p.m.
The Earl of Onslow: My Lords, I also am an underwriting member of Lloyd's and I used to work very happily for a Lloyd's insurance broker. I should like to congratulate the noble Lord, Lord Strathalmond, who, judging by what my noble friend Lord Saint Oswald said, will now be known as "Blossom" to the rest of your Lordships' House. Perhaps we ought also to introduce the Motion that "Peers may only speak once every three generations"! It might speed up the proceedings of your Lordships' House.
On the Sasse position, I should just like to correct my noble friend Lord Strathcona on one instance. The Committee of Lloyd's will intend to claim under its errors and omissions policy for the fact that it had to pay out on the Sasse syndicate. So that stops the risk being spread to other underwriters, because those other underwriters have had the premium for the risk which they underwrote when they underwrote the errors and omissions policy of Lloyd's.
I welcome this Bill. As has been said frequently, the noble Lord, Lord Windlesham, has moved it with skill and made a very complicated situation extremely clear. I welcome the fact that the Lloyd's Committee is to be given great powers of discipline and control. I welcome them especially as an interested underwriting member. Your Lordships will hear from my noble friend Lord Fortescue and from the noble Lord, Lord Napier and Ettrick, how the Lloyd's Committee paid up because of their possible negligence over the Sasse affair. You will hear, because of their experience, how it may not be so appropriate that the indemnity clauses are included in the Bill; and that is why it is so important that the noble Lord, Lord Lloyd of Kilgerran, should move his Instruction. It allows the public interest factor of the indemnity clause to be considered by the committee.
It has already been said that Lloyd's is a powerful, unique and go-ahead concern. It earns enormous sums of foreign exchange; it is a real leader in the insurance industry. It pioneered the insurance of oil rigs and actresses' legs. It has earned some of its names large sums of money. I would also add, of course, that some of them have lost large sums of money; happily, very many fewer than those who have gained. It has grown up from a few hundred people to several thousand now, and it needs this Bill.
The two most important clauses of this Bill are Clauses 7 and 14. Clause 7 makes the council establish a disciplinary committee and an appeal tribunal. It endows them both with enormous powers. They will have the right to subpoena documents and witnesses. Subsection (4) sets all this out and details these powers. They are the same powers as are given to the High Court. Clause 14, as is already known, gives the committee immunities from suit for negligence or tort when carrying out the powers given it by Clause 7. Clause 14 (3) reads:

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"Subject to subsection (1) above, the Society shall not be liable for damages whether for negligence or other tort, breach of duty or otherwise…".
Those are very wide words indeed. One of the excuses that has been advanced for the fact that it needs this immunity—and I have seen it in the documents set out on the opinion by Lloyd's counsel—and that it takes up too much of the time of its servants and that it will deter people from sitting on the committees and council is not a very good excuse; it has not up to now. The noble Lord, Lord O'Brien of Lothbury, has said that he has met men of great distinction and great integrity. The Committee of Lloyd's are men of great distinction and they are of great integrity, and they would have continued without the immunities that they are now claiming. It is said that the legal disputes will damage the community. Surely insidious gossip of negligence, unsettled by the courts of law, will do far more damage than the fact that it is proved either to be the case in the very minor incidents—the few numbers—which could arise, or the fact that it was disproved beyond peradventure.
Mr. Christopher Moran tried to get an interlocutory decree to stop the Lloyd's present committee from activating its disciplinary procedures. He failed. Lord Denning said that the alleged bias was "mere tittle-tattle, and nowhere near enough to show bias". Proper use of the regulatory powers will have considerable effect on some people's pockets. If this is the case, surely it is wrong that Clause 14 can allow the Lloyd's Committee to remove a Lloyd's name's entire fortune through negligence with impunity.
Of course, I am not saying that this is going to happen. I am merely suggesting that it is just possible that it might. That is totally unsatisfactory. The danger, my Lords, surely is that the committee members will not be spurred on with immunity. This immunity gives them the right to do perhaps not as much as they ought to do. To say, as they do, that lack of this immunity will stop them disciplining a member is surely baseless. The only grounds on which they could do that would be bad faith. Bad faith is specially excluded from Clause 14 anyway.
The present chairman of Lloyd's is an extremely tough and dedicated servant of Lloyd's. He has not hesitated to act with the powers he now has. I do not insult him by thinking that he would fail to act in the same way as The Stock Exchange Council did recently over Halliday and Simpson. They were suspended following an investigation into their affairs. The Stock Exchange Council has no Act to govern it, just an agreement drawn up in the mid-19th century. It has no immunity, but no writs followed. Furthermore, it pursues at the moment a fairly active interventionist policy. I am conviced that Peter Green would act in the same way, and with the same sense of duty, if he did not have his immunity powers that he seeks.
My Lords, Mr. Robert Cryer voted for immunity. I wonder why? Could it be that when discussing the trades union immunities which Her Majesty's Government are at present keen on trying to limit, he will be able to say, "It's all right for your friends in the city in the Committee of Lloyd's, but it is not all right for the working man"? It may be said that this is a difference of substance. It may be a difference of substance, but it will not stop people making that accusation. No one else will have these immunities laid out in Clause 14:
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not the Crown; not the Law Society nor the Bar Council; nor the Stock Exchange Council, which now trades worldwide since the abolition of exchange controls; nor the estate agents' governing body, all of whom have the right to deprive members of their livelihood.
My Lords, Peter Green is, as I have said earlier, a courageous and good chairman of Lloyd's, but he does not deserve—and even if he did, he should not have—these immunities. He stated at the Wharncliffe meeting at the Albert Hall:
"The working party concluded that the existing protection [from suit] would he wholly inadequate were Lloyd's to take on the responsibility of regulating the market in the manner proposed in the report".
Mr. Mann, QC, and Mr. Stephen Ruttle, in their report to the petitioners, say:
"We are unable to find any such conclusion in the Fisher Report".
My noble friend Lord Nugent of Guildford will chair the committee upstairs with skill and discretion, and I happily leave to him and his co-Peers the decision; but I hope they will bear in mind that immunities are wider than Lloyd's, and as my noble friend Lord Windlesham said, they are something of great concern to us all. The noble Lord, Lord Mishcon, was right over his question of balance. I hope that the balance will come down to modifying and restricting these immunities just a little, but I am still sure that the Bill needs an urgent and speedy passage through your Lordships' House.
5.24 p.m.
Lord Reigate: My Lords, may I begin by congratulating the noble Lord, Lord Strathalmond, on his able and remarkable speech? May I also take the opportunity of saying to my noble friend Lord Windlesham that, listening to his cogent exposition, I began to get a far clearer idea of what the Bill was about than I have had in my mind for the last two years? Three in a row: I also declare my interest, as being what used to be called a "name" at Lloyd's but what is now, I am afraid, going to be referred to by the rather ugly phrase "external member", which rather puts one outside the pale in a horrible way.
I also want to say to my noble friend Lord Onslow, with whose views in his speech I mostly disagreed, that I have been a member of Lloyd's since before he was born. A little research in Who's Who has enabled me to say that. When I joined Lloyd's in 1936, there were only 1,674 members, and there are now 20,000. It is this increase which has enabled Lloyd's to cope with the volume of new business and make this outstanding contribution to our not very stable economy in the last two or three decades.
There is a difference, too, in this: when I joined Lloyd's, I had dinned into me not only by my agent but by everybody I knew in Lloyd's the immense risk that I ran in becoming a name; that I placed at risk my entire fortune even down, as the phrase then went, to my cufflinks. Your Lordships may note with pleasure that I still have my cufflinks.
I find, however, that there is nowadays a slight change in some of the expressions I hear from newer members of Lloyd's. They read of vast profits, they read how wonderful it is and what a large income you derive

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from Lloyd's, but they forget the risk that hangs over you the whole time you are there as a name. It is most important that that should always be borne in mind. You also have to remember in discussing this Bill that no one has to be a member of Lloyd's.
The need for the new Act is obvious. I hope that the whole House will be agreed that self-regulation is the only possible answer for Lloyd's, and surely the only acceptable one either to Lloyd's or to Parliament. The alternative of state regulation would be possible, but pretty unsatisfactory. I am reminded that in 1975 your Lordships were considering the Policyholders Protection Bill which, by a slight subterfuge, in my view, sought to bring Lloyd's within the ambit of the Bill by statutory instrument. I disapproved of this and I moved an amendment at the Report stage to delete the reference to Lloyd's.
At that stage, I had no encouragement from the chairman of Lloyd's at all. In fact, he wished to dissociate himself entirely from my action. But, to my astonishment, the noble Lord, Lord Beswick, who was Minister in charge of the Bill, gave way. I was delighted. The only snag was that I had prepared a long and rather critical tirade against his action in refusing to accept my amendment, so I had to climb down rather quickly. However, I then got my thanks from Lloyd's for what I had done.
Now we have this new Bill, and at long last. The Fisher Report appeared two years ago. The draft Bill was approved by the Wharncliffe meeting in November 1980 with the stupendous majority of over 13,000 to 57. I should think the 57 were responsible for the 57 varieties of petition and objection that have been levied. It was an outstanding majority. It means that the bulk of the members of Lloyd's are wholeheartedly behind the committee.
The Bill received its Second Reading in March, 1981. It has taken a year to reach here. I really trust your Lordships will make swifter progress. Delay is not in Lloyd's interests and, in my view, it is not in the country's interests either. I do, with great respect to the noble Lords who are to move the two Instructions—and I think it is quite right that they should do so—say that I regret that exactly the same issues are going to be raised here as in the House of Commons.
I cannot believe, as one who has read all the documents and proceedings, that there are any new arguments which can be raised. I am not in any way questioning the Motions or the sincerity of the petitioners, but I ask myself, do they wish to defeat the Bill? It might happen. If the Bill is amended and goes back to the House of Commons, the House of Commons will, I am sure, insist again on divestment that was enforced by its own Select Committee. They have accepted immunity, and it is possible that if the Bill is changed again it will be impossible to get it through in this Parliament. If that happened, Lloyd's could not continue much longer under its constitution and it might be necessary to ask, disastrously in my view, for state regulation and a Government Bill.
As for the contents of the Bill, there are some valuable changes and I am wholeheartedly in support of the whole Bill. I have only one quibble or cavil, which is that I do not think there is much value in the external members proposed for the council. I view with some
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horror the paraphernalia of elections and canvassing and election addresses which would be involved. Personally, I have always looked to my agent, whom I trust implicitly, to represent my views where necessary to the council. But it is proposed in the Bill and we might as well see what happens.
On the other hand, I strongly support the three independent members, and that is a most welcome addition to the Bill. I am sure the Council of Lloyd's would appreciate having on their governing body three people who could bring in from the outside world a totally new and different point of view. To make a modest suggestion for consideration at a later stage, when the Bill becomes law, it might be wise and politic to have one member of very high legal standing, seniority and experience who could watch the operation of Clause 14 if, by then, it is, as I hope, part of the law. That might be worth considering; he at least could keep a check on any misuse of the clause.
The main bone of contention, as we all realise by now, is Clause 14. I shall not comment on divestment. I have read the facts and I think the arguments on balance are very much in favour of divestment, but obviously I understand the objections of those who are opposing it. On immunity, I find the clause wholly acceptable. As a member of Lloyd's, I have no compunction in surrendering my right to sue the council. You do not have to be a member of Lloyd's and, as I have said before, if you do not like the rules of the club it is up to you to resign. That is what I feel about it.
My noble friend Lord Onslow paid a warm tribute to Mr. Peter Green and said he would act courageously without the immunity. Why in that case should he be asking for it? I am sure he needs it as much as anybody else, and some of the scandals that have arisen would not have done so if they had had these very powers. That is the important point to remember. Anyway, having read the debates in another place, some of the arguments contain elements of hyperbole and even hysteria; the argument seems to run that the trade unions have immunity, which is bad, so Lloyd's cannot have it, and they do not need immunity anyway because the Stock Exchange does not need it. That, as others have said, forgets the disparity of the institutions and the totally different scope of immunity which is sought. As to the argument that it could form a precedent for other institutions to claim immunity—the Bar Council, the General Medical Council and so on—the other extreme was taken and it was said that the Average Adjusters' Association might ask for immunity. My comment is that if the Average Adjusters' Association felt they needed legal immunity, they would, no doubt, promote a Bill in due course, and I do not imagine your Lordships would give it much support.
I hope the fears about immunity will die down from now on. When the point first arose I looked up "immunity" in the dictionary and discovered to my astonishment that one of the definitions was "privilege", so I looked up "privilege" and discovered that one of the definitions was "immunity"—two sides of the same coin. I could not help thinking: who are we to criticise other people seeking immunities when one considers the immunities which we in your Lordships' House have? It forced me to study the Companion to

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the Standing Orders, and I discovered that we have both Privilege of Parliament and Privilege of Peerage. Although I would not want to be examined on it in too much detail, I understand that under Privilege of Peerage we have the right not to be arrested for a civil action, and so do our wives; they too enjoy our immunity. And so do our widows, though I am delighted to tell your Lordships that the Companion adds that widows lose their privilege if they marry commoners. If that is a slightly flippant interlude, I hope it does something to put the argument into perspective. This is a good and important Bill and the sooner it is on the statute book the better for everybody.
Lord Campbell of Alloway: My Lords, may I ask my noble friend a question for clarification? With his vast experience of these matters, may I ask if it is his view that without Clause 14 the same sort of pressures—I prefer to use a more neutral term—which were exercised in the Sasse situation could be exercised again to the detriment of the society?
Lord Reigate: I must make it clear, my Lords, that I am not a lawyer or a working member of Lloyd's and I disown any expert knowledge of Lloyd's. I have heard from Lloyd's only as one who from time to time has drawn a nice cheque from Lloyd's. I would not want to answer my noble friend's question off the cuff. Frankly, from my exeprience and from what I have heard discussed, I should have thought that the Sasse situation could have been nipped in the bud much earlier if they had had the immunity clause.
5.37 p.m.
Lord Napier and Ettrick: My Lords, I wish at the outset to add my warm congratulations to the noble Lord, Lord Strathalmond, on his wholly admirable maiden speech. It is some years since I last addresesd your Lordships' House. I declare an interest: I am an underwriting member of Lloyd's and, as some of your Lordships may recall, thanks to the horrendous publicity that my name attracted at the time, I was a member of Syndicate 762, more commonly known as the Sasse Syndicate. It was a situation in which just over 100 individuals, or names, were faced with losses over a two-year period in excess of £21 million and where we had strong grounds to suspect not only gross negligence but fraud. That is the point, and it helps to concentrate the mind.
Since the only other member of the syndicate here today is the noble Earl, Lord Fortescue, both he and I felt we could perhaps contribute a little to this debate. And for the avoidance of doubt, I wish to place on record that I am speaking solely for myself and in no way whatever on behalf of the Princess of the Royal House for whom I work.
Lloyd's require a Bill to enable them better to regulate their own affairs, and I suspect they should have promoted one years ago. I have no quarrel with any of the proposals in the Bill, except for the immunity clause, Clause 14, and I shall take a totally different view from that of the noble Lord, Lord Reigate. I find that clause wholly objectionable, and my remarks will be confined in the main to it alone.
The aim and effect of Clause 14 would appear to be an
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attempt to place the society, its officers and employees above the law in their dealings with the entire Lloyd's community; that is, the underwriters, underwriting agents and brokers operating at Lloyd's. I understand that in English constitutional law only the Sovereign can do no wrong in the eyes of the law and is immune from all suits and actions at law. A limited protection from suit exists in respect of judges, magistrates and justices of the peace acting in their official capacities. All other citizens are equal before the law. No man is above the law and every man is subject to the ordinary law of the land. This is the very essence of the rule of law and applies to everyone, including Her Majesty's Government, servants of the Crown, local authorities, and similar bodies.
Now, I know that it might be argued that the immunity from liability now being sought by Lloyd's applies only to members of its own "family" and should therefore be acceptable. But the "family" now has about 20,000 members, and it is therefore rather large But even if one accepts that the Lloyd's community is in the nature of a club, it would I think be hard to find a similar institution enjoying immunities of this kind—and this has been said earlier today. The Stock Exchange is established by deed of settlement, not Act of Parliament, and its council and officers certainly do not enjoy immunity from suit. Bodies such as the Law Society and other professional organisations mostly exist by Royal Charter. Many of them have statutory duties, but none is immune from suit. The General Medical Council and the General Dental Council are statutory corporations (like Lloyd's) but they have no immunity from liability.
Perhaps the best reason why the proposed immunity is undesirable is to be found in the recent Sasse case because it provides a practical example of the circumstances under which the question of liability has arisen. In his address to members at Lloyd's annual general meeting on 19th November 1980, the chairman of Lloyd's informed members that it was the advice of Lloyd's three leading counsel that the members of the Sasse Syndicate had—and I quote:
"justifiable grounds for complaint",
and that,
"whilst the Plaintiff Names were unlikely to succeed on the main issue relating to the conduct of business under binding authorities, similar assurance could not be given in regard to certain other issues".
Here perhaps I may also mention one other matter, since it was referred to by the noble Lord, Lord Windlesham, when he moved the Second Reading of the Bill, with, if I may say so, his customary charm and skill. He mentioned the question of the annual Lloyd's audit as required by the Department of Trade, and I would not wish there to be any shadow of doubt in the minds of noble Lords regarding the position of the litigants in the Sasse case.
In the case of myself and my colleagues, Lloyd's issued writs in the High Court against us, alleging that we had indicated a reluctance to comply with the Lloyd's audit requirement. Far worse, in my case not only was the writ never actually served upon me, but before it was even issued Lloyd's had the effrontery to issue a press release. In addition to my immediately issuing a counter-writ—
Lord Mishcon: My Lords, it is with the greatest reluctance that I rise, and I look for guidance to the Front Bench opposite, but if this House is to be used for the purpose of airing grievances in regard to litigation already completed—and I suppose that it would be even worse if it were litigation already in existence—there would be set a precedent which I should have thought would be most unfortunate. But from where I sit I can merely look at the Front Bench opposite and ask for guidance.
Lord Lyell: My Lords, I should not dare to intervene in this debate, nor indeed in this particular aspect, since I understand that we have, if I may say so, legal privilege in this House, but no doubt the comments of the noble Lord will be noted. I think that it might be the wish of the House that the noble Lord, Lord Napier, might take the greatest care as to what has been indicated by the noble Lord, Lord Mishcon, although I think that your Lordships will agree that there is nothing laid down with great clarity in the Standing Orders on this particular matter. But I am sure that we are grateful for the will of the House that might have been suggested by the noble Lord, Lord Mishcon.
Lord Renton: My Lords, surely the noble Lord, Lord Napier, at the moment that he was interrupted was quoting something said publicly by the chairman of Lloyd's, at a meeting of Lloyd's members, and something which had received a great deal of publicity. That is as I heard it.
Lord Mishcon: My Lords, I am afraid that the noble Lord, Lord Renton, most unusually, must not have been paying attention for the past few minutes. That particular point had passed and there was no objection to it. The noble Lord, Lord Napier, was going on to talk of the way in which a writ had been served, the manner in which it was done, and his general objections in regard to certain litigation. Of course, I would never in any way have objected to a part of a speech which dealt with a publicly-quoted statement. As I said, I was merely trying to find what was the will of the House because from my point of view this seemed an unwelcome precedent.
Lord Napier and Ettrick: My Lords, if I have acted incorrectly, I am appalled, and I would withdraw, but I should like to think that what I was doing was in fact repeating what is now history.
Several noble Lords: Hear, hear!
Lord Napier and Ettrick: I think that I have the feel of the House. Thank you, my Lords.
I found it necessary to seek an apology—and this is public knowledge—from the chairman of Lloyd's. Perhaps I may read a small comment, written in the Financial Times at that time—and I quote an apology to myself:
"Mr. Green, chairman of Lloyd's, has apologised to Lord Napier, a member of the troubled Sasse underwriting syndicate for embarrassment which may have been caused by the issue of a public statement on the Sasse affair last September"—
Your Lordships will see what I am coming to in a minute.
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"Last September Lloyd's had instituted legal proceedings against a number of members of a syndicate to complete the annual audit which all members of Lloyd's have to satisfy. Disputes surrounding the Sasse syndicate had held up the completion of the whole market's audit. Lloyd's alleged that some members of the syndicate had indicated a reluctance to comply with the Lloyd's audit requirements'. Lord Napier said through his lawyers that he had not indicated a reluctance to comply with the audit requirements; rather he was reserving his rights to say that those payments are obligations which he cannot legally be called upon to make. He has honoured, and will honour, all legal obligations upon him".
A great deal of responsible and informed comment on this subject has been published in the press in the past two years. I should like, if I may, to give your Lordships just one example. In July last year the Economist had this to say, under the heading "Charter for Chumps"—and I quote:
"Lloyd's hopes that if it knuckles under to Parliament on one important issue, Parliament will nod through the rest of the Bill intact, including the outrageous Clause 11 [now 14], which gives Lloyd's immunity from legal action by members for damages for negligence and breach of duty".
The article went on to say:
"All the brouhaha about divestment has succeeded in obscuring the more contentious issue of immunity. Lloyd's says that without this safeguard it will not be able to discipline members, or expel rogues, because it will then live in fear of litigation. Balderdash: other clauses of the Bill give Lloyd's adequate powers to exercise discipline. Clause 14, which confers immunities not even enjoyed by the Department of Trade, is an indemnity simply against incompetence. It should not be allowed".
I wrote a letter to The Times, which was published just over a year ago, on 3rd March—I am coming to the end of my speech—and with the indulgence of the House I should like to read it, since it really sums up my views in a nutshell:
"Sir, The chairman of Lloyd's, Mr. Peter Green, has recently written to all the underwriting members of Lloyd's seeking, inter alia, to justify the inclusion of Clause 11"—
now Clause 14—
"(the illegal immunity clause), in the Private Bill shortly to be considered by Parliament.
"I was a member of the Sasse Syndicate … at Lloyd's. Mr. Green has publicly admitted that grave irregularities had occurred in the affairs of this syndicate', and hence the settlement made by Lloyd's. It has been put about in certain sections of the press that this settlement was some kind of rescue operation. It was, of course, nothing of the sort. It was a settlement, offered at the instigation of Lloyd's, out of court. It was accepted by the names concerned, thus saving Lloyd's from the appalling embarrassment of the whole fiasco coming out in open court—which it would have done, no doubt causing irreparable damage to the good name of Lloyd's throughout the world.
"As part of the settlement over £6 million was left as had underwriting', and this was readily accepted by the one hundred odd names on this particular syndicate. None of us denied the principle of unlimited liability; what the litigants, in the Sasse case, were questioning was how much of a loss in excess of £21 million was their legal liability? …
"I do not believe that any future disgruntled name could ever sue the committee simply for bad underwriting. Lloyd's could only be sued if they had been in breach of their duties, either statutory or contractual, owed to the name. If Lloyd's have behaved properly they have nothing to fear in the courts. On the contrary, they would be vindicated. Of course the position would be different if in fact they have behaved improperly.
"It seems to many of us that Lloyd's are now seeking to place themselves above the law".
This was written a year ago, my Lords.
"Should this come to pass, then I believe it would be prudent for every name to reconsider his or her own position most carefully with a view to deciding whether they wish to continue as underwriting members of Lloyd's—and it is, after all, a fact that without the financial backing of the external names, Lloyd's would cease to function".

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I do not wish it to be thought that the Sasse names were not left with considerable losses after the out-of-court settlement. I do not mind it being known that I myself sustained a loss in excess of £80,000. That is quite a grown-up figure.
As I said in my letter that I have just read, no one is going to issue writs against Lloyd's unless they are very sure of their ground and know that they have a very strong case. The risks are far too great. I well remember myself when a most distinguished lawyer, not unknown to your Lordships, said to me: "I see you are involved in litigation against Lloyd's. I hope you are right, for it can be a very expensive thing to do". In our case we were right to take the action that we did, as has been subsequently proved by events.
To a large extent the action that I and my colleagues took has resulted in this Bill before the House today. But I maintain that Lloyd's are seeking blanket immunity against negligence and breach of duty, and if Clause 14 is accepted it will mean that they are in effect placed above the law. I would go further and ask all noble Lords whether they have considered the political implications of granting such an immunity as has been mentioned. It will not just stop at Lloyd's; the ripples will spread wide. I submit that there can be no genuine justification for it at all. I say to Lloyd's: "Have you no faith in the courts? If you have done your job properly, what have you to fear?"
I support the Instruction in the name of the noble Lord, Lord Lloyd of Kilgerran, wholeheartedly, and I hope it will not be necessary to divide the House.
5.53 p.m.
Lord Hacking: My Lords, as a lawyer in private practice I desire to say a few words concerning Clause 14. It is perhaps appropriate that I should do so at this stage, after the very strong language that the noble Lord who sits beside me has just used in referring to this clause. He has said it is, "the outrageous clause". He adds that it gives Lloyd's "a blanket immunity" to a position in which Lloyd's may be seeking to act, as he suggests, "above the law".
Before I go any further I should like to congratulate the noble Lord who has made a maiden speech today, Lord Strathalmond. I share some of his ordeal. I have not spoken in your Lordships' House now for some time; my father never spoke in this House. But I warmly congratulate the noble Lord on the execution of his maiden speech.
I do not have an interest to declare—I have indicated that I am a lawyer in private practice—but I have received a number of representations from those who are in favour of the proposed revisions and those who are opposed to them. If I may thank persons outside this House, I am very grateful for those representations which have been given to me. Indeed, it was an interesting and educative experience which had its lighter moments. I was provided with written opinions from eminent and distinguished counsel on both sides, and I noticed on reading the second opinion, which was presented by the eminent and leading counsel for the opponents of this provision in the Bill, that it began by castigating Lloyd's counsel for basing their opinion not on legal judgments but on "political" and "policy" judgments. Therefore, it was of some enjoyment to read later in that opinion that these same judgments
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were being expressed although with different interpretations!
The starting point, I believe, and particularly so after the words that have just been presented by the noble Lord who sits beside me (even if it means repeating and covering ground that has already been covered by other speakers in this debate) is to establish precisely what Clause 14 is, for if indeed it is a clause as described by my noble friends it is a clause that your Lordships clearly would have to look at very closely and, indeed, perhaps send in some different direction to the Select Committee.
Perhaps I may paraphrase (subject to any correction from any other noble Lord) what this clause is seeking to do. First of all, it is seeking to exempt only the Society of Lloyd's (acting through its council, its committee or its officers) from civil suits from members of the Lloyd's community, and that is not simply members of the Society of Lloyd's but other persons who work in the Lloyd's community, such as the Lloyd's broker, the underwriting agent and those associated with those men.
There is nothing in this Bill, therefore, to prevent a member of the public from suing the society; and there is also in this Bill nothing—and this is of supreme importance, in my view—to prevent one member of the Lloyd's community from suing another in a situation where, for example, members of the syndicate have grounds for serious complaint—grounds, let us say, for a suit in negligence against an underwriting agent. Thus, nothing in this Bill prevents any member of the syndicate, by this example, from suing an underwriting agent for negligence.
The second feature of this clause is that it is limited to civil suits for damages for pecuniary loss, and there are even two qualifications to that. There is no exemption for damages suits for personal injury or death. It is a little difficult to imagine how the Society of Lloyd's could be involved in such suits, but I suppose a member of their staff could fall down a lift shaft. There is also no exemption from suits arising from exercise by the society or an officer of the society of clerical duties. For example, if there was a misprint describing a member of Lloyd's being suspended and that members of Lloyd's suffered pecuniary loss as a result of this wholly erroneous misprint, then that member of Lloyd's would be entitled to bring an action for damages to recover what he had suffered as a result of this erroneous information being published upon him.
The third feature of the clause is that it places no prohibition on taking injunctive or declaratory proceedings. Reference has already been made to that, but may I just enlarge upon it slightly? In detail, no prohibition lies against a member of the Lloyd's Society applying to the Divisional Court for a judicial review giving that Divisional Court authority to quash the society's action and to require the society to reconsider its position on the grounds, for example, that the society was acting beyond its powers or that the society's powers were being improperly used.
But more important concerning injunctive proceedings is that the remedy for an interim injunction also remains available to members of the Lloyd's community or any member of the Lloyd's community who feels that action is being wrongly taken by the

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council or committee to his financial or other disadvantage. Thus, that a member of the Lloyd's community can place himself on an ex parte application within 24 or 48 hours before the Divisional Court, and, most important of all, before any losses have been suffered by him—at least, of any serious consequence. Indeed, only recently this remedy was used in an attempt to restrain the society from continuing disciplinarian proceedings. This particular application was unsuccessful on its merits, but it illustrates that full access to the courts was given to this applicant. Finally, Clause 15 is only effective when the society is acting in good faith. If any acts are done or omitted to be done in bad faith, then this clause provides the Lloyd's Society no protection.
Within these parameters, what requirements lie on the promoters of a Private Bill to satisfy this House that the provisions should be accepted? I suggest that there are two basic requirements for the promoters. First, to satisfy the House that the provisions within the context of the Bill as a whole—and not simply the exemptions provisions—are in the public interest and are not against public policy. Second, they should satisfy this House that the provisions properly represent the views of the society on whose behalf the Private Bill is being promoted. As the noble Lord, Lord Windleham, has pointed out, the answer to the second question has already been given an emphatic, Yes. On the questionnaire of August 1980, I think the questionnaire was sent to 18,441 members of Lloyd's, and of these 13,587 replied, and among those 13,124 were in favour of the Bill. Incidentally, this was in favour of a Bill which contained an immunities clause as Clause 10 (and it has now gone down to Clause 14) of the Bill with wider application than the present one.
As the noble Lord, Lord Windlesham, has said, the overwhelming majority of the Wharncliffe meeting on 26th November 1980 gave a resounding vote in favour of 99·5 per cent., representing 71·99 per cent. of Lloyd's membership. But that is not the whole answer. This Bill affects more persons than simply members of the Lloyd's Society, who now number some 20,000; and it now affects more who are outside the membership, but illustrates the position of the Society on whose behalf the Bill is promoted.
What is the position on the issue of public interest? As I understand it, Lloyd's put their position simply. They say, "It is in the public interest that we are now given greater powers which are long overdue. We must have effective powers to make by-laws and to regulate the business of those who trade to their benefit under the Lloyd's name". Thus, the public will be better served. Secondly, they say it is in the public interest that there should be more efficient and expeditious means to exercise disciplinary and other executive powers. I draw those two to the attention of your Lordships because it is within the context of those powers—that is, powers to make by-laws and to exercise disciplinary and other powers under the by-laws—that the sought exemption provisions should be judged.
Therefore, Lloyd's go forward and say, "It is in the public interest in making by-laws and in exercising
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executive powers that we are freed from certain civil suits from members of our own community".
Some would say that Lloyd's could stop there. This is a matter concerning a community and it cannot be shown to be against the public interest and certainly not against public policy. But Lloyd's produce further arguments, some stronger than others. One of them is the argument which has been criticised by some noble Lords that suits and the threat of civil suit would deter men of honour and integrity from serving on the council or be an administrative burden on Lloyd's. However, I believe that the central argument, whether this was strongly advanced by Lloyd's or not, is correct. That is that in the interest of Lloyd's business as a whole it should remain, on the one hand, innovative, daring and profitable, but, on the other hand, the size of the community has now grown to be so large that it should be subject to some control. Therefore, the choice in making regulations and by-laws is a delicate balance between under-regulation and over-regulation; and the threat of suits carries the danger of upsetting that delicate and important balance by which the whole Lloyd's community will gain.
The decision—and this is where I concur with the argument presented by the leading counsel—rests in a field not so much of law, so long as the position of the law is understood, as of policy judgment. Noble Lords have referred to other institutions: The Law Society, the General Medical Council, and The Stock Exchange. I have seen reference to immunity granted to local authorities under the Highways Acts, but I believe that this issue can be judged only on its merits as it applies to Lloyd's, Lloyd's as a worldwide business of high risk. Applying the test to Lloyd's, I have no hesitation in saying that this provision is needed.
The Earl of Lindsey and Abingdon: My Lords, before the noble Lord sits down, may I say that I think he slightly misrepresented the case regarding this clause. He said that Clause 14—or Clause 11, as it was at the time of the Wharncliffe meeting—was put to the membership of Lloyd's. At that meeting, the Bill was submitted—
Lord Skelmersdale: My Lords, is the noble Earl asking a question—he is to speak shortly—or is he pre-empting himself?
The Earl of Lindsey and Abingdon: My Lords, I am asking for clarification. That issue was put to the membership of Lloyd's as a general acceptance of the Bill and not as an acceptance of the immunities clause.
Lord Hacking: My Lords, I hope that I did not mislead your Lordships. I thought I made it plain that at the Wharncliffe meeting the Bill, as it stood in its entirety, was put to the meeting and the voting was on the Bill as a whole; but it was a Bill which contained Clause 10—or Clause 11 as the noble Earl has suggested—with wide application and wider immunities than the present clause contains.
6.8 p.m.
Lord Airedale: My Lords, I have to declare an interest. I, too, am a non-working member of Lloyd's—

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an expression which I regard as nicer than the expression "external member", to which the noble Lord, Lord Reigate, rightly objects. I am also, I am sorry to say, solely concerned with Clause 14, the immunities clause. If I may begin by intervening in the exchange that has just taken place, I think that the noble Earl who intervened—and I hope I have him aright—was saying that when the members, the 13,000, voted on that occasion, they were voting for a package deal. Many of them may have said: "A Bill with an immunities clause in it is better than no Bill at all. Therefore, although we do not much like the immunities clause, we think we ought to have a Bill". I think that the noble Lord, Lord Hacking, took that on board and we have to accept that what was being voted for was a package deal. Incidentally, I am glad that the noble Lord, Lord Windlesham, welcomed the Instruction about the immunities clause that is to be moved by my noble friend Lord Lloyd—not of Lime Street but of Kilgerran.
I think that the easiest way to explain what the immunities clause, Clause 14, does is to say this. We all have common law rights. One of those rights is that, when we suffer damage as the result of anybody else's negligence, we can go to the court and sue for damages to compensate us for what has been done to us and, if we prove our case, we are entitled to damages. But what Clause 14 says is that if you are a member of the Lloyd's community and you have a complaint owing to the negligence of members of the Council of Lloyd's, you shall be debarred from attempting to obtain compensation as a result of the damage that you have suffered. The question that the Select Committee are going to have to consider very carefully is whether that is right and just.
It has been said that Lloyd's are different from all these other bodies which manage to "rub along" without this immunity from suit. Lloyd's are unique, and so of course they are different, However, I think that this point can be made: when you consider the enormous field of human endeavour covered by all these other bodies that do not have the immunity—and I do not want to list them all again—such as the doctors, dentists, the Jockey Club and Stock Exchange, if they all manage without an immunity for their regulatory body, is it really so sure that Lloyd's alone can no longer function efficiently and properly without immunity for their regulatory council?
Until fairly recently, it was not uncommon for people to be deprived of their common law rights. People entering into contracts with suppliers found terms in the contract which said that the supplier was not to be responsible or liable even for his negligence. Under the old Post Office Acts the protection given to the Post Office was so enormous that Mr. Bernard Levin was moved to write in The Times that the Post Office could throw all your letters into the sea if they chose, and still you would have no redress. But the tide turned against that extraordinary situation and we had the Unfair Contract Terms Act of 1977. It is very interesting to read what the Fisher working party had to say about that Act of 1977. At paragraph 6.07 (b) they say that one of the ways that the Council of Lloyd's could have achieved their immunity might have been by getting the members of the Lloyd's community to agree to it. But, said the Fisher working party,
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if they attempted to do that by agreement, they might find themselves in trouble under the provisions of the Unfair Contract Terms Act. So the situation we now have is that the promoters of the Bill are saying: "Something which we could not achieve by agreement among ourselves, because Parliament regarded it as being against public policy, we nevertheless seek to achieve by a clause in a private Bill to which we are asking Parliament to give its blessing."
This is a great deal to be asking. We have heard so much about the terrible fears that members of the new Lloyd's Council are going to have about the prospect of being sued for negligence, that they are going to be looking over their shoulders. When one sees the picture painted by the noble Lord, Lord O'Brien, of the type of people who are presumably going to become the elected members of the new Council of Lloyd's, they are not the kind of timorous souls who are going to be looking over their shoulders in this way. Furthermore, I think it a much healthier situation to achieve, if one can, to have a Council of Lloyd's saying, "We take the very greatest care to have proper procedures for conducting all our investigations. We have had innumerable advice from the old Committee of Lloyd's about this. There are all kinds of tribunals who have all kinds of rules about the proper conduct of inquiries and we have access to advice about this, and we are quite satisfied that we have adopted a practice of conducting investigations which we would be willing at any time to place before a High Court judge, in the confidence that we should not be found to have been guilty of any negligence in carrying out those procedures". It is not easy to get a High Court judge to pronounce somebody guilty of negligence. It is not something that any judge is lightly going to do. The plaintiff has to prove his case very strictly indeed.
It is said that Lloyd's may be the subject of vexatious and frivolous claims. Again, the courts know all about this. One of the great interests that the courts have is to see that their time is not wasted by frivolous and vexatious claims. Furthermore, it is a very expensive business indeed to start pursuing a frivolous, groundless claim just because one is trying to injure somebody else in their business. It is said that the Council of Lloyd's are going to have to act with great speed. All sorts of people in highly responsible positions have to act with great speed. The police have to act with tremendous speed, but they do not get immunity from what may happen if they tread on the toes of innocent people just because they are acting with tremendous speed in order to catch a criminal.
One way in which the immunities clause has been referred to is that it is an agreement by the members not to sue one another. That sounds very civilised and good-natured. But turn it round the other way: an agreement not to club together to compensate one of your number who has been injured in his business as a result of the negligence of members of the committee who have been elected in that position in the expectation that they were going to conduct their affairs without negligence. It does not look quite so cosy when you turn it round in that way.
The noble Lord, Lord Hacking, referred to these alternative remedies which the promoters tell us about, the injunction and the declaration. It is at that

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point that I would have thought that the promoters are giving their case away entirely. If the declaration and the injunction are as effective as a claim for damages, why worry about immunity from the claim for damages? If the injunction and the declaration are not as effective, does not the person who has been damaged need to fill the gap with the other remedy normally available to him, which is the action for damages? I would have thought that really is the point at which the case for Clause 14 is given away. I very much hope that the Select Committee will pay very strict attention to the Instruction that my noble friend is about to move.
6.20 p.m.
The Earl of Selkirk: My Lords, I, too, should like to add my warm congratulations to the noble Lord, Lord Strathalmond, for his speech today. He in his person represents the rich variety which we have the honour and privilege of knowing in this House. I do hope he will speak to us again, speaking with the authority that he has.
I must declare an interest as an external member of the society, but my first task must be to congratulate Mr. Peter Green and his predecessor Mr. Ian Findlay for promoting this Bill. There are many people in this country who find themselves in high positions but they do not necessarily have the initiative and the courage to go through with a big reform which they know, and all of us know, is absolutely necessary. For that reason, I congratulate them very strongly and I also congratulate them on the care and trouble they have taken, the examination and attention to detail they have carried through and the consultations they have held—consulting with their own members and with others not once but several times. This was not an easy thing on which to get the degree of agreement among the members of Lloyd's which has already been received.
I would add only one thing to the stories of the strength of Lloyd's. It is that it has been astonishingly resistant to the recession which has affected practically all aspects of our economy. I believe that year by year the annual contribution to overseas payments, the numbers of persons employed and the important contribution made to the Chancellor of the Exchequer, which is no doubt much appreciated, have steadily increased. I think that is a very remarkable tribute to the people who are engaged in this work.
We have heard a lot about Lloyd's having been founded in a coffee house, and it is quite fascinating to speculate on the immense potency of that drink, when we consider that it was only introduced into this country about 40 years before the coffee house got working. It was said to have been introduced through the agency of Archbishop Laud, who took some poor Christian who was being maltreated by a member of another faith to Balliol College, Oxford. It was there that the first brew of coffee was established, and it spread widely from there.
I think the approach to Lloyd's must be that it is a living creature. Here I should like, if I may, to give a translation of Goethe which will be well known to your Lordships. It is this:
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"All theory, my friend, is grey,
But the tree of life is green".
This is essentially a tree which is growing. We are perhaps pruning it a little bit so that it will grow even more healthily, but it is an actual living organism that we are dealing with here, and it is on that basis that I think we should proceed.
The key to the problem is this: for some very odd reason, Lloyd's has existed for some 300 years with no effective disciplinary power. That is really at the centre of the whole Bill. It is based on a self-regulatory system of personal responsibility with no real power of enforcing agreements. Indeed it is very much like a cricket match—when the umpire says that you are out, you go out: we do not wait for a policeman to arrest the batsman and carry him off the pitch. You are expected to obey the rules. That has been good enough until the beginning of this century, but, with 20,000 members spreading all over the world and, as my noble friend Lord Napier said, with some members perhaps being less honest than others, a regulatory power is now essential. It is an essential and integral part and, to repeat what the noble Lord, Lord Windlesham, said, it is a question of the responsibility of each underwriting member for his own part and not one for another. That is the essence of it.
Two noble Lords have put down Instructions and, of course, strictly speaking neither of them is necessary. I agree with the noble Lord, Lord Mishcon, that in fact it is a slight misuse of the process, in one sense. The noble Lord, Lord Wigoder, has explained his views and explained them quite clearly. I would say, if I may, to the noble Lord, Lord Wigoder, that everybody recognises that there is a conflict of interest between the broker and the underwriting agent. The broker wants the cheapest price he can get and the underwriting agent wants the biggest price he can get. It is as simple as that: you cannot get away from it. As the noble Lord, Lord O'Brien, said, there are many cases in business where people have diversities of interest and you try, according to conscience or absence of it, to reconcile the two points of view. But here in insurance alone you have the principle of uberrima fides. That, to my mind, sets the whole of Lloyd's business on a totally different footing. If on this business, and indeed on a wider scale, there should be an element of what is not correct at the very centre, we should be in a weak position. I very much hope that that will not be carried any further, because I think this is absolutely essential. I know that there are people who have built up a business in which this does not matter. I am terribly sorry, but I feel that individual businesses must be subordinate to the strength and honour of Lloyd's itself. That is the basis on which I think we should proceed.
Lord Wigoder: My Lords, if I may intervene for one moment I should like merely to say that I never suggested for one moment that there was any dispute that there was a potential conflict of interest. What I was asking the Committee to consider when they came to the clauses in question was the most effective way of dealing with that conflict of interest or whether there is perhaps any more effective way than the one which is in the Bill at the moment.
The Earl of Selkirk: My Lords, of course I accept absolutely what the noble Lord has said. I was merely putting my own point of view on this matter. We come to the point of immunity, and here one has to remember two things. First, this only applies to members of the community. These arguments about the police and the Post Office having immunity are different because that would be immunity against the public; so this is quite different. I feel we are greatly indebted to the noble Lord, Lord Hacking, for his extremely able exposition of the very real problem. It is a question of decision. I think that every one of the syndicates in Lloyd's is subordinate to the quality and image of Lloyd's itself. That is the approach we have to make, because, after all, the syndicates themselves benefit by the high integrity of Lloyd's as it stands. Therefore you have to have pretty powerful discipline.
May I also say that, supposing you did sue the committee of Lloyd's, who would pay for it?—Why, all the underwriters, of course, because Lloyd's committee would not pay for it. So you are breaking the rule here and that is that you shall not be liable for what other people undertake. Of course the Committee will look at it and of course I accept that the wording might be changed, but I believe that there should be no reduction of the power for action—you see, you talk about negligence but anyone can raise an action for negligence and it might go on for years. It is very wide and could go on and might be holding up something on which it is essential to come to an immediate decision. I would say to my noble friend: if this had been the rule when his unfortunate affair took place, possibly it might never have taken place. Of course I do not know and I am not familiar with the details, but certainly that sort of thing should never happen again under these proposals. I believe that these powers are necessary for that purpose.
6.28 p.m.
Lord Davies of Leek: My Lords, from this side of the House I am the only speaker and let me say that I have no interest at all to declare; but, like any moderately intelligent citizen, since my college days I have followed with interest what happens in the financial world, not only here but in Hong Kong and other places. One of the regrets about Lloyd's is that the image of it for many, many years has been kept hidden. It is always a delight to follow the noble Earl who has just spoken, because he is well acquainted with the ramifications of The Stock Exchange, of Lloyd's and of the building societies. The building societies are getting roughly the same problem, with the growth of money. The kind of people who put money into Lloyd's are not those whose money is young. They are people who know and understand how to use that money. That has always been part of the strength of Lloyd's: it has been pivoted on millions of money in the hands of people whose money is not young. I do not want to expand that sentence but in itself it is historically true.
I shall not detain the House for long or repeat things that have been said, because the story has been told pretty well and I want to spike down one or two points. We have the statement on behalf of the promoters, which I welcome. They say:
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"It is respectfully submitted that the proposals contained in the Bill are needed to enable the Society to regulate its affairs and are needed urgently".
I need not say why. There have been so many speeches today, explaining the growth up to 20,000 members from a few hundred. That is the whole story. Anything more that I say will only be repetitious and tautological.
The promoters continue:
"The Society, therefore, respectfully requests that the Bill be read a Second Time so that it may be considered on its merits by a Select Committee of your Right Honourable House in the usual way".
That does not mean that we must rush the Bill through. One of the strengths of the British constitution is that this place can steady up the bandwagon a little, and take time to think. Today, I took the trouble to interrupt about the procedure, when we had that excellent opening speech on Lloyd's itself. I wanted it to be clarified. I think that it would be wrong to divide the House on this issue, and we would not do it. The voice of the House has been heard and the Select Committee will be intelligent enough to listen to that voice, and cannot avoid doing so, and to approach the Bill with the kind of understanding that those people will have.
Mr. Justice Foster, the senior Chancery judge, said a while ago that he was baffled by the complexity of the organisation of Lloyd's. He is not the only one. I took the trouble to read everything, including the report of the Second Reading debate and the minutes. Some of the speakers did not know what they were putting forward. I also looked at the Bill, and I have come to the conclusion that more account should be taken of Schedule 2, Regulations 21, 22, 23, 24 and 25. I am not a lawyer, but I know something about semantics. Those give tremendous power, beyond that which is necessary for the working of Lloyd's. What are the issues in this Bill? I was going to expand on them, but if I did so I would merely be repeating what has already been said and I want to finish within eight to 10 minutes.
The issues are now clear from the debate that we are having today, but that does not mean that we should finish there. The motto of Lloyd's is Fidentia, which means confidence, and confidence means that you cannot put any financial or other organisation above the rule of Parliament. I think—and here I take the ruling of learned Lords who have already spoken on the law—that to concede Clause 14, as it is roughly drafted now, would put Lloyd's above the rule of Parliament. I do not think that that should be. However, I do not say that dogmatically. Let us take the 72,000 people who are working for Lloyd's. Any one of those 72,000 people could, in one way or another, come under Clause 14. Therefore, too much power is being put there.
I have had letters from the other place and one is from Sir Nicholas Bonsor, who wrote:
"Lloyd's is a great financial institution. It has come to Parliament with a request for support in giving it statutory powers of self-regulation and no one is keener that it should obtain the support than I am. But there is a fundamental issue arising from the Bill which causes me great concern, both as a member of Lloyd's and as a barrister. If the Bill were to be passed in its present form, the council and committee of Lloyd's would be given immunity from suits of negligence and tort, including libel and slander, by any member of the Lloyd's community. This

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community includes not only working and external members of Lloyd's, but also a proportion of the 72,000 employees within the organisation".
There is no need to read the whole of the letter. But I want the Select Committee to know that on both sides of the House there is a feeling that Clause 14 should be looked into. I wanted to make a flourishing speech, but I regret that I must discipline myself.
On page 42 of the minutes for May, 1982, Mr. Peter James Frederick Green said:
"There never has been a case of a Lloyd's policyholder suffering".
Whatever misdemeanour there may have been by various members, or by those inside of Lloyd's, it has been a great world asset that never has an insured person suffered, and it is important for the record, nationally and internationally, that that was said by such an eminent person as the chairman.
Lastly—and there is a bit of a bite in this—I want to speak about the Common Market. I should have liked the television to show Lloyd's as they have shown the House of Lords. There is no need to be ashamed of our financial institutions, expecially one whose invisible earnings are in the region of £860 million. That is something which is of paramount importance, because it is helping investment and helping to keep employment. On 28th November, 1981, The Economist wrote:
"Insurers at Lloyd's of London could be forgiven if they wrote the EEC off as a dead loss".—
even I, who voted against the Common Market, have not said that—
"Though 24 years have passed since the Treaty of Rome was signed, there is still no real common market in insurance".
I shall paraphrase the rest, because I do not want to bore your Lordships. I am speaking now with the authority of The Economist. It said that, in France, VAT is charged on insurance, and that we are failing to get agreement with the Dutch and the Germans. Insurance is of paramount importance and it will take five or six years of discussion within the Common Market to get that agreement. Consequently, that increases the urgent need for this House to get this private Bill of Lloyd's settled as quickly as possible. I have been exactly 10 minutes.
Lord Hacking: My Lords, I had just got to my feet before the noble Lord sat down. During his speech to the House, the noble Lord referred with concern to Regulations 21 and 22. I wonder whether the noble Lord could enlarge upon his point. Those regulations concern the supply of information and the conduct of internal inquiries within the Lloyd's community.
Lord Davies of Leek: I know, my Lords. But suppose that the information was wrong and that, as a result of that wrong information, loss was incurred or the reputation of an organisation went adrift. This is so wide that you could wheel a horse and cart through it, never mind a Ford car.
Lord Hacking: My Lords, there is the provision of confidentiality, if the noble Lord will look at that regulation.
Lord Davies of Leek: My Lords, I give way to the legal argument, but what I have said is more or less right. Let me put it, so that we can agree, that it needs careful consideration.
6.40 p.m.
The Earl of Lindsey and Abingdon: My Lords, may I begin by congratulating the noble Lord, Lord Strathalmond, on his excellent and informative maiden speech. It is always a pleasure to hear noble Lords with inside knowledge of a subject such as we are discussing this afternoon. I hope that we shall see him again in this House, contributing as he did this afternoon. May I add that when I made my maiden speech I, too, suffered from an interruption just as I was getting to my feet, so I sympathise with the noble Lord. I know what the feeling is like. But I hope that it will not deter the noble Lord from coming again to this House. May I also add my congratulations to the noble Lord, Lord Windlesham, for the excellent way in which he has put forward the case for the promoters of the Bill.
I have been associated with and worked at Lloyd's for 28 years of my life, 17 of which were spent as a broker on the Floor of the Room, the past 11 as an underwriting agent. I have therefore not only to declare an interest as an underwriting member of Lloyd's but also as a director of an underwriting agency. In addition, I have an interest in a small non-Lloyd's reinsurance brokers who place a substantial proportion of their business with Lloyd's underwriters.
The views which I wish to put to your Lordships this afternoon in respect of the Bill now being considered are purely my own interpretation of the needs of the Lloyd's insurance market, now and for the future. I have purposely avoided seeking the opinions and advice of both the promoters and the petitioners to the Bill, other than in general conversation with individuals inside and outside the market. Having said that, I think it can be said that the great majority of those connected with Lloyd's, both working and external members of the society, wish there to be a new Lloyd's Bill to replace the Act of 1871. It must, however, be an Act which, like its predecessor, can survive well into the next century without undue criticism and strain. The new Council of Lloyd's must be provided with the means to regulate and discipline the workings of the market, which has changed out of all recognition within the last 10 years. Membership has increased during that period from around 7,000 to 8,000 to over 20,000. The increase in working capital which that has brought in has only enabled Lloyd's to hold its own relatively small percentage of the world's total insurance business. However, as has already been mentioned, this premium income forms a very important part of this country's invisible earnings. Lloyd's provides, through its services, employment for over 70,000 people. This, I feel, should be uppermost in our minds when considering the detailed aspects of the Bill.
As noble Lords will by now have gathered, I am broadly in favour of the Bill. I therefore intend to limit my remarks to those clauses of the Bill which have been petitioned against. If I may, I will deal first with Clause 3, upon which there is no Instruction. Clause 3 deals with the composition of the new council. I have a certain amount of sympathy with the petitioners

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in so far as the present constitution of Lloyd's provides for a committee consisting of 16 members. The new provisions will provide for a council consisting of 27 members, 16 of whom will be elected by the one-fifth working members of Lloyd's—approximately 4,000 members—with eight members of the council being voted for by four-fifths of the membership, consisting of external names.
Under the present provisions—this point has not so far been mentioned—all members of Lloyd's are entitled to vote for the existing 16 members of the committee. In the past it has only been the working members of Lloyd's who have taken any interest in the election to the committee, but the right has been there for external members to vote for the governing body. There could be resentment among the external names if they feel that something is being taken away from them. However, there is the danger that if the external names had the vote for the total council they could be lobbied by interested parties who are putting forward candidates. This is a point which your Lordships' Select Committee should bear in mind when considering the petition.
The only other point I should like to make about the composition of the new council relates to Clause 6(4)(a)—the powers of the council and of its committee. This is what is known as the long-stop provision. The new council—on any new by-law which they may introduce which is objected to, so long as 500 members of Lloyd's petition against the new by-law—would have to comply with the majority wish of the members of Lloyd's.
May I turn to Clauses 10, 11 and 12, which are known as the divestment clauses, and quote from the statement:
"The Bill was subjected to the most careful scrutiny by the other House, the three main topics argued being the electorate for the Council, the restraint on suit clause and divestment. The divestment clauses were added to the Bill during the Committee Stage by means of a petition for additional provision, following a postal ballot conducted by the Society in order to obtain the views of its Members. On this ballot, 76 per cent. of the Members voted; 13,511 were in favour of the proposed additional provision and 1,013 against".
At that time I do not think that the great majority of the members of Lloyd's really understood what divestment was about.
I make no apology for saying now that I was one of the 1,013 who voted against this provision, partly because I felt that there had been inadequate debate. However, I have changed my views and now accept—and I feel that this House should accept—not only the recommendations of the Fisher Report but also the recommendations contained in the Cromer Report, since when the issue has been debated extensively on the Floor of the other place. Evidence was given to a Select Committee of another place and after further consideration the committee upheld that divestment must take place. This, I feel, we in this House should accept.
Having said that, I think the duty of the Select Committee of this House is to consider the further implications of divestment. Very little has been said about what is going to happen to these managing agents when they have to divest. At the moment, the brokers control the shareholding. If these shares are put on the market, who will buy them? Will it
1518
be to the advantage of Lloyd's and the Lloyd's community if the ABC merchant bank or the XYZ investment trust company control these managing agents? Will they have the interests of the members of Lloyd's at heart any more than the broking houses did? Lloyd's is a community. My experience of working in the market is that I have never found any animosity or conflict of interest in dealing, as a broker, with an underwriter, and vice-versa.
There is here a very important aspect that ought to he considered in Committee. What I should like to see is an opportunity by which members of Lloyd's would have the prior right to purchase shares in these managing agents, giving them additional interest within the market. It does not add to their unlimited liability because most of these agents are limited liability companies. I do not want to elaborate any more on that, but those are just some ideas that I wanted to submit to your Lordships' House.
Finally, I come to the most controversial issue before us, which is Clause 14. An awful lot has been said this afternoon on this particular issue. I am not a lawyer and do not wish to get into a legal tangle; I would rather leave it to those of your Lordships with experience in these matters. I am only going to say that, basically, I am against immunities of any type. I do not like any immunities, from whatever quarter they come. I have yet to be convinced that Lloyd's require this particular aspect of immunity from people connected with the society—whether they be brokers, underwriters, members, agents or whoever.
It has never entered my mind to sue the Committee of Lloyd's. When I became a member of Lloyd's, if I was going to enter any dispute at all, I would go for my agent and him alone. Not even the underwriter should be sued, in my opinion. The underwriter is there to accept a risk on behalf of the names who underwrite on his syndicate and they should accept that. He is not there as a sort of target, to be got at. The same applies to the Committee of Lloyd's. The agent is there to advise the name about his underwriting affairs and whether he is on the right syndicate or not. The provisions required at the present moment by the Committee of Lloyd's is that all agents take out a professional indemnity errors and omissions policy amounting to a minimum of 5 per cent. of their annual premium income. I personally do not think that is enough, but I gather that consideration is being given to increasing this minimum requirement; so the agents have a required protection there.
It is very difficult for me to go any further at this stage. There are alternatives, and in fact Fisher did recommend in Chapter VI of his report alternative protection for the Committee of Lloyd's other than by the required immunity which I have mentioned. With that I shall conclude, and I feel that the sooner this Bill goes to a Select Committee of this House, comes back to the Floor of this House, and then goes on to the statute book, the happier I shall be.
6.54 p.m.
Lord Mowbray and Stourton: My Lords, I will start by confessing that I am an underwriting name at Lloyd's and have been for some 30 years. It has been a happy marriage, although as in all good marriages there has been the occasional hiccup. But I

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must pay tribute to my syndicate, the chairman of which has for all these years also acted as my agent, because most of my underwriting syndicates are in that company. I for one have always found them to be most helpful and I have no complaints whatsover about the composition of the committee and council as advised by my people.
That brings me to the usual but nevertheless very pleasant task of congratulating the noble Lord, Lord Strathalmond. I suspect that, like him, I am also "the third bite at the cherry". My father, certainly, never spoke in this House although he was a member here for many years. And, so far as I have been able to find out, my grandfather, who was a Member from 1890 until 1936, also never spoke in your Lordships' House. Perhaps I have more than made up for their lack of speech-making.
The promoters of this Bill have not only done themselves and this House a good turn by producing such an excellent explanatory statement, but they have done themselves an even better turn by getting such a distinguished sponsor as my noble friend Lord Windlesham who, as we might all have expected, put the case so simply, lucidly and persuasively. I had notes on a number of things to say, but there is nothing which has not already been said. All I will do is run my dirty finger very briefly over some of the things which have been said already. First, I should like to say that, like the noble Lord, Lord Mishcon, I too hope that the Select Committee which has these Instructions will listen to what this House has been saying in this Second Reading debate. I would not like to think that our words have been wasted.
My noble friends Lord Strathcona and Mount Royal, Lord Reigate and Lord Selkirk have exactly expressed my feelings on this Bill. They have all pointed out the necessity which Lloyd's feel for taking action where Lloyd's have a suspicion that there is a dirty smell. As my noble friend Lord Selkirk asked in regard to the speech of my other noble friend Lord Napier and Ettrick: Had the committee had these powers? Let us be honest; the council that is going to be in existence in the future will be a very much more powerful and interesting animal than the animal we had before. This council, being given some teeth, will, let us, hope, smell out the dirty smells, put in their little investigative fingers and, if necessary, apply a sharp bite of the tooth. That might stop the calamities which might occur and have occurred.
The noble Lord, Lord Airedale, quite rightly questioned earlier whether these powers were really necessary, and were they not dangerous. But, of course, one cannot compare this situation with that of the Jockey Club, which is one of the bodies he mentioned. The Jockey Club has only to decide whether a horse was wrongly passed or whether a jockey did something he ought not to have done. That is a simple question of yes or no. With Lloyd's, one has an ongoing situation with world-wide financial implications. If the bud is not nipped pretty quickly, it is not only Lloyd's that will suffer but, as we have heard, also this country's finances. I therefore believe that Lloyd's do have a special case for being considered.
Lord Airedale: My Lords, I did not seek to equate Lloyd's with the Jockey Club. The point I was making was that if all these other self-regulatory bodies over such a wide field do not need immunity from suit, why should Lloyd's be picked out?
Lord Mowbray and Stourton: My Lords, I take the noble Lord's point but I was just using an absurdity to make a point. If they can find the smell and kill the bad bud, that is really the main point. My noble friend Lord Strathcona and Mount Royal said that he did not like paying out his profits on the losses of other members and, as my very clued-up friend Sir Philip de Zulueta wrote in The Times, the other point to this Bill would be to stop seeking protection for individual members of Lloyd's seeking to mitigate their own commercial losses by transferring the cost of these on to all members. I say "Hear, hear" to that. I hope that this will not happen in future.
The divestment point has been dealt with very well by my noble friend Lord Lindsey and Abingdon. I think the fact that the Meacher Committee, the House of Commons and the Fisher Committee gave it their overwhelming support goes to show that there is, anyhow in their eyes, a prima facie case for that. My noble friend Lord Lindsey and Abingdon put forward some very interesting suggestions as to what might happen to these shares.
My Lords, I have said already more than I was intending to say. I would just like to add that I wholeheartedly support this Bill and wish it every success. I hope that the committee which is to look at these points will have full returns of all the points which have been made in this debate, and that they will come to a speedy conclusion, so to enable us to get the Bill into law.
7 p.m.
Earl Fortescue: My Lords, I must declare an interest in that I am an external member of Lloyd's, and in 1976 I was what my noble friend Lord Strathcona called one of the blackmailers in the Sasse syndicate. However, I will try to show later that he is wrong in that description.
My Lords, I entirely agree that Lloyd's needs a new Act to meet modern conditions and the present size of the organisation. Mr. Green, the present chairman of the committee, is most energetic and he has taken a lot of trouble to put over his case fairly and efficiently. My only complaint is that he is very wrong about Clause 14; that is, the immunity clause. The noble Lord, Lord Napier, has fully and fairly covered the Sasse saga. I will only stress what I consider the important points and hope to persuade your Lordships that we, as members of that syndicate, acted properly and reasonably.
In 1976, the Sasse-Turnbull syndicate got involved with some very dubious business in America, business which was contrary to the rules of the Committee of Lloyd's, and the Committee of Lloyd's also failed to observe its own rules in tribunalising agents. The committee knew of this contravention in mid-1976 but did nothing about it until they suspended the syndicate in December 1977, some 18 months later. The syndicate lost £15 million in 1976 and a further £61½ million in 1977. Several members of the syndicate

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resisted settling this loss, on the grounds that much of the business was more than dubious and that the Committee of Lloyd's was negligent and in breach of duty in not policing its own rules properly and promptly.
Writs were issued against Sasse-Turnbull, the names' agents and the Committee of Lloyd's. Sasse and the agents had nothing approaching £21½ million to meet the damages which might have been awarded. In the event, Lloyd's settled a large part of the claim out of court, paying the entire 1977 loss and about two-thirds of the 1976 loss. I would stress that if Clause 14 had already been enacted the names would not have been able to commence litigation against Lloyd's.
I do not in any way deny that I agreed that my liability should be unlimited against normal underwriting risks. However, I never agreed, nor do I now feel like agreeing, that I should accept unlimited liability if the underwriter or his agents act fraudulently or outside Lloyd's rules, or if in particular the loss is due to negligence or breach of duty on the part of the Lloyd's Committee or the future council. In a country governed by the rule of law an aggrieved party is surely entitled to go to court for redress. I therefore support the Motion in the name of the noble Lord, Lord Lloyd of Kilgerran.
7.5 p.m.
Lord Glenkinglas: My Lords, at this rather late hour it is extremely difficult to think of anything new or original with which to entertain your Lordships, if that is the right phrase. I have to declare an interest. I, like my father and grandfather before me, have been an underwriting name at Lloyd's. I was brought up in the tradition of respect to what Lloyd's was doing for the nation and the country, and in a sort of small way felt rather proud of being able to contribute at least my name and a little cash from time to time towards it. My respect for Lloyd's, I may say, was often increased in the years when it made losses, because it seemed to me it was the sort of operation which was able to meet overseas competition and overseas disasters quickly, efficiently, and, as far as I could see, with the minimum of loss passed on to the names, and get back quickly on to profits soon afterwards.
But then—and I think, my Lords, this is the only point I want to make today—it fell to my lot to be President of the Board of Trade, and as such I was responsible for the whole of the insurance industry. This was the time immediately following the V & G crash. I am glad to say it happened before my day, so that I was not responsible in any way for it at that time, but that may surely have been good luck. The result of this was that for most of two years we at the Board of Trade were very deeply interested in what was going on in the insurance world, trying to make sure that where there were loopholes they were filled in and where there were weaknesses they were watched, and trying to make certain that the insurance world as a whole was run as your Lordships' House would have wanted it to be run.
I would like to say that during the whole of that period there was not one single moment when we had the slightest worry about what was happening at Lloyd's. I am speaking now of the Board of Trade. I had very considerable personal worries because they
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were making very large profits and I was in suspension and was not allowed to underwrite; but that was neither here nor there.
The point I think I should like to stress to your Lordships is that these were the days before North Sea oil began to flow, and from the point of view of any Minister for Trade—as the poor chap is now rather miserably designated—the success of Lloyd's was every bit as important to our balance of payments as North Sea oil is today. It is very likely that North Sea oil may run out in the next 40 or 50 years. If we do the right thing by this Bill, it is very likely that Lloyd's will continue to function for at least another 100 years, by which time perhaps another Bill will be brought before your Lordships.
I would simply like to ask for this advice to be taken by those who want to bring more petitions. Lloyd's is famous for three things: for its international success, for its integrity, both of which have been stressed already today; but there is one other that is often forgotten, and that is for its power of innovation. In the whole of this very complex, changing world more new types of policy have been produced at Lloyd's than in any other part of the world. This intense competition, and this ability to innovate, essentially means that Lloyd's must be able to deal quickly and responsibly with its problems. We have already been nearly three years on this function and I hope that those who intend to petition this House again, in almost exactly the same terms as they did the other place, will please bear in mind that there are major interests at stake for this country.
7.10 p.m.
Viscount Caldecote: My Lords, I should like to apologise for not having been in the House earlier today, particularly to hear the speech of the noble Lord, Lord Windlesham, but I was involved in giving evidence to a Select Committee. I must also disclose an interest, for a company of which I am chairman has investments in a broker and in a managing agents.
I wish to raise one point. I think that it would be agreed that it is desirable, indeed helpful, to the development of the insurance business for financial institutions to be able to make investments in the businesses of brokers or managing agents. But if a financial institution has an investment of more than one-third of the equity in, for instance, a broker—and this works the other way round too—and more than 5 per cent. in any managing agent, it would be deemed to control the broker under Clause 12(2)(c)(ii) and the managing agent, being a related company with the financial institution, will, as I understand it, be deemed to be associated with the broker. Since this is not permitted, divestment of one or the other would have to take place.
I submit that it was not the intention of the Bill to prevent a financial institution having investments in brokers and managing agents. It is not clear to me why one-third of the voting power is specified in Clause 12(2), but maybe that is due to some ignorance on my part of the detailed point. If the proportion were raised to, say, 49 per cent. of the voting power, very few investments by financial institutions would be affected. I suggest that an alteration to 49 per cent. from one-third in this subsection would improve the Bill. So far as I can see, it would in no way affect the

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main principle of the Bill, and nor would it widen the scope of the Bill. So I would like to draw the attention of the promoters of the Bill to this point in the hope that they might consider it favourably. I should like also to give notice that I may put down at a later date an Instruction suggesting that the Committee should consider amending the Bill accordingly, which, I believe, is within the rules of your Lordships' House.
7.13 p.m.
Lord Orr-Ewing: My Lords, I do not think that I can follow my noble kinsman, who has just sat down, too far on the point that he has made, but I have no doubt that the Select Committee, as well as the promoters of the Bill, will look at the matter. It seems to me that, if one is a financial institution, one has to choose an interest between backing a broker or backing the underwriting agents. But perhaps some compromise can be reached, because certainly one would not wish to forgo the development of Lloyd's through lack of money, through an inhibition accidentally built into this Bill.
I would like to declare an interest. For many, many years—several decades—I have been an underwriting name. I have always trusted my broker and trusted my underwriters for the syndicates on which I am a name. I must say that my trust has never been undermined in any way. They are people of great honour, great dedication and great reputation.
I want to refer to a number of clauses which have been criticised during this debate. Before I do so, I should like to congratulate three sections of people. First, we all owe a debt to Lloyd's themselves. It would have been so much easier to do nothing after 110 years. The chairman, Peter Green, and his staff and advisers have been very patient whenever I have been uncertain. Indeed, I think that we have all had uncertainties and anxieties on certain clauses. We have rung up and received the best advice. They have always offered to come and see us. I believe that Peter Green himself has come to talk to the Cross-Benchers. He has come to talk to other groups with whom I have been concerned, to explain to us in simple language why they wanted this or that included in the Bill. I am sure that it has been wholly helpful and I think that we owe them a debt.
Secondly, I think that we owe a debt to the noble Lord, Lord Windlesham, who has, in his usual painstaking manner, introduced this Bill so effectively. Thirdly, I think that we should all like to congratulate the noble Lord, Lord Strathalmond, on his maiden speech. It was one of the best that I have heard for many a year.
My noble friend Lord Saint Oswald was worried about Clause 3. I also had some anxieties about that provision. Is it all right that 16 working members should he matched by eight external members and three nominated members? Are they going to be first-and second-class citizens? As a non-executive director one is in a very difficult position being an outsider when there is a group of people working on the inside, as it were, tackling the day-to-day problems to finance cash flow, the market, research and development and all the other operations one needs in an effective and progressive industrial company. But
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when I began to look at the situation, I came to the conclusion that the Bill had taken care of this point, because it lays down that the Act requires that certain decisions, such as by-law making and delegation of powers, can only be made if there are separate majorities within the working members and separate majorities within the external and nominated members. So the working members can never out-vote with their 16 the sum of 11 of the external and nominated members. I think that that, to some extent, relieves the point.
Secondly, I should like to underline the point made by many others that the eight external members, and perhaps particularly the three nominated members from the Bank of England, are not going to be people of straw. If that were so they would not get there or be given this responsibility. They will not be rubber stamps and they will not be pushed around. If they want to know the facts, then I am sure that the council will make sure that they know the facts. So, to some extent, I think that my noble friend may not have to be too worried.
The other clause that I was disturbed about and which I think many others chewed over and discussed, was the one which dealt with immunity. Personally, having blown this way and that way as I have argued the point in my own mind and with people who have been kind enough and patient enough to advise me, I have come down, as the Fisher Report did, to the view that Lloyd's needs this immunity. My noble friends Lord Napier and Ettrick and Lord Fortescue made the point that they somehow felt that this was totally wrong. In fact, I think that my noble friend Lord Napier and Ettrick overstated the case to some extent when he said that this place is all members entirely above the law. That just is not true. They are not above the law. When they began to get worried about the losses building up, the members of the Sasse syndicate were free at any stage to sue the underwriting agents or to sue the brokers. Of course, they were men of not great substance, so I do not think that their litigation would have been very effective.
Understandably they then turned to whether they could claim on Lloyds—much more powerful with much more in the way of resources behind it. Of course, with the holding up of the audit certificate there was, not purposely—I am not suggesting that my noble friends would do that—but in effect, blackmail by litigation, because here was Lloyd's unable to get these certificates, unable to proceed with their business with competitors overseas saying, "Lloyd's, are tied up and cannot act. Come to us and we shall give you good terms", in danger of losing the business, in danger of disintegrating in places overseas where they were particularly making progress, and so they took it on. But under this new Act they will still be free to sue the underwriting agent or their broker. It is up to the Council of Lloyd's from now on to make sure that they are not men of straw: that they are men of substance, whom you can sue and take to court and from whom you can claim some of your losses.
I hope that my noble friends will take a chance. It is a desperate position when you suddenly discover that your underwriting syndicate has lost, I think it was, £15 million in 1976 and then £6½ million. These are enormous sums and when they are divided down to the people who have trusted their brokers and trusted

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their agents, it is a devastating thing to happen to any family. I well understand it. But, if they think that too great an immunity is being given, I hope that they will take the opportunity to give evidence.
This is the whole point of the Select Committee. I very much agree with my noble friend who introduced the Bill. I do not think that we, who are not experts, are the right people to persuade and to argue the case, I think that the right people are Lloyd's themselves because they have years of knowledge behind them. They are the people to put the case for immunity—either stronger immunity or perhaps less strong immunity—to the Select Committee.
It is unusual to congratulate the Opposition, but the noble Lord, Lord Mishcon, made as good a speech as I have heard from those Benches. It was in moderate terms and foresaw exactly how right this Bill is. Therefore, in all parts of the House—from the Cross-Benches, the Liberal Benches (with personal reservations), the Labour Benches to these Benches, this Bill has our blessing, and I hope that it will have a speedy passage, because immunity is wanted and time is a factor—you cannot wait for lengthy stretched-out litigation when you are in a competitive and world market.
7.21 p.m.
Lord Grimston of Westbury: My Lords, I should like to say a few words in support of the Bill, and especially to congratulate the noble Lord, Lord Strathalmond, on his maiden speech. I join him as a person who works at Lloyd's and I must declare three interests: as an underwriting member, as chairman of an independent underwriting agency and as a non-executive director of a broking company, with minority shareholdings in both companies.
I also wonder what, in days gone by, would have been said about one of the earlier references before Parliament to insurance when Sir Nicholas Bacon asked this question in Queen Elizabeth's first Parliament in 1559:
"Is there any think you, so mad that, having a range of houses in peril of fire, would not gladly pluck down part to have the rest preserved and saved?"
How life has moved on! Self-regulation is very much the foundation on which the Lloyd's market is built, as has been said on several occasions.
I should like to add just a few words on divestment, where it is only fair to say that any conflict of interest has been more apparent than real, except in a few isolated cases. In theory, conflicts of interest frequently exist in all forms of commercial life, perhaps not only between a managing agent and a broker. However, I support the provision, because we live in an era when it is essential to be seen to be pure. No one, whatever his opinions, can be sure what the ultimate effect will he when the sales take place within the five years which have been designated under the Bill.
It also needs emphasising that Lloyd's brokers will be retaining a very considerable commercial interest with the Lloyd's market through the ownership of members' agencies. Here I cannot actually agree with my noble friend in his maiden speech, when I think he advocated that members' agencies should be treated in the same manner as managing agencies. This is not the time to go into the whys and
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wherefores of that. In the other place, when divestment was debated, this particular point did not actually receive the emphasis it deserved. I think that there has been quite a lot of confusion in speeches that I have heard, both on Second Reading and in Committee in another place, about the different terms that we use in Lloyd's. I am not sure that your Lordships' House fully understands some of the terms which are used as common place everyday terms. I think that it is essential that the Select Committee takes particular care in ensuring that it understands our terminology.
Turning briefly to immunities, it is well known that Lloyd's is seeking from Parliament a legal immunity which would protect the new ruling council. I recognise that it requires considerable political courage to withdraw immunities in one instance and grant them in another, however different the circumstances are. But, as has been said before, Lloyd's is a unique institution, and I think that some of the criticisms have treated the society as if it were an entirely separate body. I think that I detected one or two remarks today which suggested that. However, in fact, the society and its members are in reality the same.
The purpose of the restraint upon the suit or immunity clause was very well described in a letter to The Times. It is to protect the society from individual members seeking to mitigate their own commercial losses by transferring the cost of these to all members. This would be inconsistent with the spirit of the market, where we each take risks for our part and not one for another. However, there is no restriction of suit for damages from clerical error attributable to the Society of Lloyd's, for instance, where there is a prima facie case of the market systems being at fault and where the duties do not involve the exercise of discretion. Increasingly, in the world in which we live, where an individual sustains serious loss, there is a growing tendency to look for someone else to sue. What has not been sufficiently emphasised is that the commercial relationship between a member of Lloyd's and Lloyd's is not with the committee but with his underwriting agent or possibly a Lloyd's broker, who are the obvious defendants in these cases.
Therefore, it has been provided or insisted upon by the Committee of Lloyd's that underwriting agents and Lloyd's brokers are compelled to carry a realistic level of professional negligence insurance. It is a matter of opinion what is a reasonable level, but can assure your Lordships that it has been very substantially increased in recent years. Therefore, it can be deduced that an instance is very unlikely to arise where a suit against Lloyd's represented an individual's only chance to obtain redress for loss occasioned by breach of duty.
The Lloyd's Bill is of vital importance to the London insurance market, and so is its contribution to our invisible export earnings, which has already been emphasised. Lastly, I should like to thank my noble friend Lord Windlesham for the clear way that he expounded an intricate Bill when he had no previous knowledge of the subject.
7.30 p.m.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, I should like to join with many of your Lord-

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ships who have gone before me in congratulating the chairman and committee of Lloyd's on their courage and on the amount of work they have put in in bringing this provision to this length. I should also like on behalf of the Department of Trade to thank them for the way in which they have helped that department to appreciate their proposals. I should also like to join those of your Lordships who have thanked my noble friend Lord Windlesham for the clear way in which he has introduced this Bill and guided us in our deliberations on it. Finally, I should also like to join with those of your Lordships who have congratulated the noble Lord, Lord Strathalmond, on his maiden speech. I am sure we are all very glad that he has not followed the reticent example of his father and his grandfather.
The Bill before us is a Private Bill, as has been pointed out. There can however have been few Private Bills of such general importance and interest. Lloyd's is a private institution, but it is no contradiction to say that it is also a national institution. By the length of its historical tradition, its worldwide reputation as a byword for reliability, and its continuing contribution to the national economy, Lloyd's is a most important part of our national heritage.
I shall not speak at length on the unique historic record of Lloyd's and its contribution to the economy. These have been ably described already by my noble friend Lord Windlesham, and others of your Lordships. I should just like to join my noble friend Lord Glenkinglas in drawing attention to one aspect of Lloyd's that strikes me most strongly: its ability to combine tradition—a continuity of experience and regulation over some 300 years—with innovation. We can still proudly claim that the London insurance market leads the world, and this is in large part due to the continuing vigour and adaptability of Lloyd's.
Lloyd's contribution to the national economy is not confined to the immediate employment it provides and the foreign currency it earns, important though these are. We should not forget the integral and essential part played by Lloyd's in the London insurance market and the British insurance industry as a whole. Viewed in this light, it is even clearer that there must be a considerable national interest in the continued health and success of Lloyd's.
Any threat to the viability and reputation of Lloyd's must therefore be of concern to us all. The greatest danger perhaps would be complacency. How tempting it would be for Lloyd's to rest on its laurels. Lloyd's after all continues to meet its obligations, it continues to show an overall profit, and to attract new business and new members. Why, then, attempt to make radical changes in a system that has worked so well?
I am convinced that it would be a mistake, perhaps a disastrous mistake, to yield to the temptation of complacency. The world does not stand still. The character of Lloyd's itself has inevitably changed, and many noble Lords have drawn attention to this. The size of the membership has enormously increased in the hundred years or so since the existing constitution of Lloyd's was devised—and particularly so in the last decade. So has the complexity of international insurance business. It is remarkable that Lloyd's has managed to continue for so long without major changes in its institutional framework. But this has
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only been possible through the widespread acceptance of informal methods of regulation within the market.
In recent years there have been clear signs of strain in the system. It has not broken down, but it has shown signs of weakness. I do not want to make too much of particular incidents, but they cannot be ignored. Lloyd's was quick to accept this. The Working Party under Sir Henry Fisher, and the Bill that is before us now, represent Lloyd's response to that challenge. The authorities at Lloyd's, and the overwhelming majority of the members, accept the need for change. I should like here to join the tributes that have been paid to the distinguished work done by the working party under Sir Henry Fisher.
I have said that Lloyd's is a national as well as a private institution. There is therefore a public interest in this Bill. It is therefore proper that on behalf of the Government I should state a view on the public interest as we presently see it. It is recognised by Governments and legislators throughout the world, whatever their political complexion, that the public interest requires the business of insurance to be carefully supervised. In the United Kingdom, insurance companies are subject to supervision by the Department of Trade; supervision going considerably beyond the general provisions of company law. The Secretary of State has wide powers to require information and to intervene when necessary in insurance company affairs. Indeed, it is not possible for a company to enter the industry without the authorisation of the Secretary of State, who has to be satisfied that those in charge are fit to be so.
Lloyd's has traditionally been exempted from many of the regulatory provisions applicable to the insurance industry in general, and my noble friend referred to that during his experience at the Board of Trade. Such exemption can be justified only if the institutions of Lloyd's continue, and are seen to continue, to regulate the conduct of the Lloyd's market effectively. The basic principle of this Bill is the preservation of effective self-regulation of Lloyd's. The Government support that objective. Provided the institutions of Lloyd's show the will and the ability to regulate their own affairs by making and enforcing their own rules it is preferable that they should do so. The business of Lloyd's is very complex. The market is a close-knit community depending on mutual trust and understanding based on personal experience.
This makes possible a remarkable degree of flexibility and informality. That flexibility is one of the secrets of Lloyd's success. But it means that the task of regulating such a market is difficult, and calls for intimate knowledge, firmness and consistency of purpose and sound practical judgment on the part of the regulators. The Bill provides, in our view, the right framework for such a system. The council and committee must adopt the necessary by-laws and provide for their enforcement promptly and fairly. The Government support the Bill in the confidence that this will be done. My noble friend Lord Windlesham has laid before your Lordships ample basis for this confidence. The present authorities and membership of Lloyd's have given evidence of their determination by promoting this Bill with vigour and persistence. We are sure that the new institutions will be no less committed to these objectives.

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One of the functions of the authorities will be to maintain standards of conduct and integrity in the market. This task would be more difficult if fundamental conflicts of interest and duty were ever-present in the background. Such a conflict may arise where the agent for the purchaser of insurance—in this case, a Lloyd's broker—has a financial connection with the underwriter. There has been an increasing trend for Lloyd's brokers and the managing agents of syndicates at Lloyd's to come under common ownership. The conflict of interest which thus arises—and this is not disputed—presents a potential detriment both to the policyholder and to the members of syndicates.
The Bill as it stands removes this danger by requiring that, after a period of five years, a broker may not trade at Lloyd's if it, or any parent company, has a major interest in a managing agency. Similarly, a managing agency may not operate at Lloyd's if it has an interest in a broker. It is likely that in order to comply with this rule many brokers will divest themselves of shares or assets in managing agencies; hence the shorthand term of "divestment" for these provisions. I would mention in passing that there may be some cases where a capital reorganisation would suffice—a so-called "demerger"—of the kind this Government facilitated in the 1980 Finance Act. In other cases this may not produce the result required by the divestment clauses.
These provisions of the Bill—the "divestment" provisions—have attracted controversy. Petitions have been laid before this House relating to them. We should consider the matter in this light. This Bill will not meet its objectives if it fails to reassure the Lloyd's community and the world at large that the Lloyd's market is under proper control. There would, I believe, be serious doubt that that had been achieved if fundamental conflicts of interest or duty were untouched by the Bill. It is argued that common ownership of brokers and managing agencies constitutes such a fundaments conflict. The majority of the Fisher working party, including those with close practical experience of Lloyd's, concluded that a separation of ownership was the only satisfactory solution. A committee in another place, after hearing extensive evidence, confirmed that conclusion, and required, moreover, that the relevant provisions should be contained in the body of the Bill and not in by-laws, thus indicating their consideration of the importance of the matter.
I do not want to prejudice the evidence that may yet be heard. But on the evidence that has so far been presented, I am convinced that divestment is an essential component of the Bill. The promoters of the Bill themselves, backed by a large majority of their membership, have accepted the strong views expressed in another place. I do not think we can lightly envisage reversing or indeed modifying the clear-cut and clearly right decision that has been taken, and in that matter we, for our own part, share the sentiments so discreetly expressed by my noble friend Lord Windlesham in relation to the Instruction which was spoken to by the noble Lord, Lord Wigoder.
Petitions have also been presented dealing with other matters. I will mention only one. Clause 14 of the Bill restrains members and senior managers within the
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Lloyd's community from bringing actions for damages against Lloyd's and its officers where, in good faith, they have exercised their functions under the Bill. I have emphasised that Lloyd's is a self-governing community. I am sure it would wish to remain so, and that would certainly be the wish of the Government. Traditionally, the community has been prepared to accept the authority and judgment of the Lloyd's Committee and in particular, that of the chairman. The Bill may to some extent be regarded as formalising that which has hitherto been accepted on an informal basis.
Authority is given to the elected council and committee, subject in the case of disciplinary proceedings to review by an appeal tribunal under independent chairmanship. I do not think it is in principle unreasonable that those who voluntarily engage in business at Lloyd's as members or senior managers should accept that in matters requiring judgment and discretion over the operation of the Lloyd's market, the decisions of the Lloyd's authorities should be final. The very basis of self-regulation—which is accepted by all in the community—is that Lloyd's own institutions are best equipped to reach such decisions.
It has been pointed out that that is a very different matter from preventing other people, not members of the Lloyd's community as defined in the Bill, from taking court action; for example, policyholders are in no way affected by Clause 14. At the same time, it is right that the authorities' interpretation of their statutory functions should be open to scrutiny by the courts. Judicial review will be available as a remedy for oppressive or unfair acts, and nothing in the Bill affects that. Compliance with all the requirements of natural justice will be necessary. In our view of the matter, it is quite wrong to suggest that the Bill would put Lloyd's above the law. As we see it, Lloyd's will not be placed above the law.
I therefore do not think it unreasonable that the finality of Lloyd's decisions should have the limited degree of protection provided in the Bill, and your Lordships will notice—this perhaps in relation to the way in which the point was put by the noble Lord, Lord Airedale—that the protection of Clause 14 relates to the exercise of powers conferred by the statutory constitution. In other words, if one looks at the package as a whole, the duties as well as the protection are imposed as part of a single package.
Moreover, I see important practical benefits in that protection. Lloyd's will have a difficult path to tread in exercising their powers of disciplinary control. If they take action, they may be resisted by those affected by the action. If they do not take action, they may be attacked by others, perhaps external members, whose interests may be affected. It is not easy to take the right regulatory decision every time, and even less easy to take it precisely at the right moment. A judgment has to be made between excessive intervention in commercial decisions and the maintenance of proper standards. If the principle of self-regulation is to be maintained, the regulators may reasonably expect a degree of protection in taking these judgments. They are likely to make better decisions if they are free from the risk of an action for damages.
It is also likely that the exclusion of such actions will be in the interest of Lloyd's as a whole. Lloyd's

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operates worldwide, as has been pointed out, and its cover may remain in force for years. At the same time, its constitution is not always fully understood, particularly overseas. It is not in the interest of the whole institution that there should be litigation for damages between the society and its members on regulatory matters. The benefits to individuals are much outweighed by the interests of the community. It is reasonable that all should be protected from unfair regulatory decisions, but it is also reasonable that those who profit from their membership of Lloyd's or the Lloyd's community should forego certain rights to maintain litigation which may greatly affect the public reputation of the institution. Few things would be more deleterious to the world reputation of Lloyd's than a stream of such actions.
I think, therefore, that there is a strong case for a measure of exemption. It is entirely proper that any proposal for a statutory limitation of normal legal rights should be carefully scrutinised. The scope of any such limitation should be no greater than is strictly necessary. I believe that the scope of the exemption in the Bill as it stands has already been carefully circumscribed, but it is open to further examination. Accordingly, it is entirely right that this matter should be specially examined, as it will be, by the committee of your Lordships' House to whom opposed Private Bills are committed.
My Lords, the Bill is important. It affects the livelihood of many thousands of people and the future of one of this country's most remarkable and successful institutions. The need for reform is recognised. The Bill, whatever its controversial aspects, has been firmly endorsed by the membership of Lloyd's and by honourable Members in another place. I believe that in its present form we should now give it our strong support. In closing, I should like also to echo the thought from the editorial of the Financial Times, to which the noble Lord, Lord Mishcon, referred.
7.48 p.m.
The Earl of Listowel: My Lords, it might be for the convenience of the House, even at this late hour, if—acting on behalf of my noble friend the Chairman of Committees—I were to comment on the procedural aspects of the two Instructions which will be moved if your Lordships think fit to give the Bill a Second Reading.
I see no procedural objection to the acceptance by the House of either of those Instructions, as in both cases they do no more than reinforce points which are made by petitioners in the petitions they have deposited against the Bill. Three petitions object to the exemptions—or immunity, as most of your Lordships have referred to it during the debate—conferred on the society by Clause 14, which is the subject of the Instruction proposed to be moved by the noble Lord, Lord Lloyd of Kilgerran; and two petitions object to the compulsory divestment provided for in Clauses 10, 11 and 12, the subject of the Instruction of the noble Lord, Lord Wigoder.
Instructions, which are an accepted part of Private Bill procedure, though they cover matters already raised in petitions against a Bill, serve a useful purpose because
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they draw the attention of the House to the effect of specific provisions in a Bill, and the Hansard report of any debate, such as the report of all the speeches which your Lordships have made in today's debate, will be before the Select Committee for its perusal and consideration.
Moreover, Select Committees on Private Bills in this House do not normally set out in their report to the House the considerations and reasons which have led them to their decisions. But in cases where an Instruction to the Select Committee has been passed by the House, it is the practice for the committee to make and publish a special report dealing with the points raised in the Instruction. I have every reason to suppose that this procedure would be followed by the Select Committee on this Bill.
7.50 p.m.
Lord Windlesham: My Lords, I am sure it would be the wish of the whole House that I should thank the noble Earl who is acting as Chairman of Committees for the advice he has given on the procedure to be followed should the Bill receive a Second Reading. I made rather a long speech in introducing the Bill and I ought to make up for it by being extremely brief now. But I do not want to deprive myself of the opportunity to add my congratulations to the noble Lord, Lord Strathalmond, on his eloquent and well-informed maiden speech.
The three controversial proposals in the Bill have been fully debated, the issues are now clear, and there is no point in repeating the arguments. However, there is one fact relevant to the debate on the exemption of the Society of Lloyd's which has not been mentioned, but which I should like to put on record, since it refers to the exchange between my noble friends Lord Hacking and Lord Lindsey and Abingdon. This concerned the acceptance by the membership of Lloyd's as a whole of the immunity provisions at the Wharncliffe meeting. The noble Lord, Lord Airedale, who spoke after this exchange, said that, in voting so overwhelmingly in favour of the Bill, the members of Lloyd's were voting for a package, and that some of them may have had reservations about the immunity provisions which were then wider than those which are contained in Clause 14 of the Bill.
It is important to note the fact that, before the Wharncliffe meeting, the chairman of Lloyd's sent a questionnaire to the membership concerning the Bill and the meeting. In the circular he specifically asked for further comments beyond the proposal to form a council and the transfer of powers to it. A large number of replies were received. Some 600 were in favour of a long-stop measure; 180 comments were in favour of divestment, 136 comments were against divestment, but no comments at all were recorded on the immunity issue. Further, when Lloyd's brokers were consulted at three meetings, again held in advance of the Wharncliffe meeting in the autumn of 1980, no comments were raised on the matter of immunity. These are relevant facts to have on record.
I want to say to the noble Viscount, Lord Caldecote, that the point he has raised is a new one to me. It is, as I hope he will accept, a detailed matter which calls for consideraton by the promoters of the Bill.

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I can give him an assurance that consideration will take place without delay and that Lloyd's, as the promoters, will be in touch with him direct in the first instance.
Viscount Caldecote: My Lords, I am very grateful to the noble Lord.
Lord Windlesham: Finally, my Lords, I should record my thanks to both Front Benches for their support for the Bill—robust support, that is not too strong a word. The Department of Trade, for which the Lord Advocate has been speaking, has kept in close touch with the proceedings on the Bill. The Minister has stressed the importance that both the Government and the Department of Trade officials attach to effective self-regulation by Lloyd's. As the noble and learned Lord, Lord Mackay of Clashfern, said, in the view of the Government, which is shared by many noble Lords on this side of the House, it is preferable that this form of control should continue, rather than to proceed by way of general legislation, which would be the only alternative.
The noble Lord, Lord Mishcon, made a remarkable intervention from the Opposition Front Bench. should like to thank him warmly, and to say that all those who heard him were greatly impressed by what he had to say, and by the manner in which he said it.
I commend the Bill to the House. There has been a broad measure of agreement that the Bill should receive a Second Reading and that it should now go to a Select Committee, which will give thorough and careful consideration to its content. As I said in moving the Second Reading at the start of the debate, if the Instructions which appear on the Order Paper are now moved formally, I recommend the House not to oppose them.
On Question, Bill read a second time and committed to a Select Committee.

Lloyd's Bill: Instructions to Committee
7.55 p.m.
Lord Lloyd of Kilgerran: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the committee to whom the Bill is committed that they should give special consideration to the exemption conferred on the society by Clause 14 of the Bill.—(Lord Lloyd o Kilgerran.)
On Question, Motion agreed to.
Lord Wigoder: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the committee to whom the Bill is committed that they should carefully consider the effect which compulsory divestment provided for in Clauses 10, 11 and 12 of the Bill may have on the Lloyd's community and on the insuring public. —(Lord Wigoder.)
On Question, Motion agreed to.

Stock Transfer Bill
Brought from the Commons, read a first time and to be printed.

Deer (Amendment) (Scotland) Bill [H.L.]
7.56 p.m.
Report received.
Clause 1 [Alteration of general functions of the Red Deer Commission]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 1:
Page 1, line 12, leave out ("6(1),").
The noble Lord said: My Lords, Amendment No. 1, which removes the reference to Section 6(1) from Clause 1(2) of the Bill, merely paves the way for the next amendment, and perhaps it will he convenient if I speak to both together. At the Committee stage several noble Lords expressed dissatisfaction with the drafting of Clause 3(a) and I undertook to look at the various amendments that had been put down and to come back with a tidier version. This amendment is the result. It is still not particularly simple, but accuracy rather than simplicity was what we were trying to achieve. However, I think that it is at least clear. I beg to move.
Lord Northfield: My Lords, I should like very briefly to thank the noble Lord for the amendment, and to thank him most warmly for many further amendments that appear in his name on the Marshalled List. I also wish equally to thank the noble Earl, Lord Mansfield, for going such a long way in the amendments that are now before us to meet points that I made at the Committee stage. To save the time of the House I shall not get up on each occasion and thank noble Lords. I hope that both noble Lords to whom I have referred will accept this as an omnibus word of very warm appreciation for the steps that they have taken to meet me on so many amendments. If we can this evening reach similar agreement about the measures to tighten up against poaching, I think we shall have virtually a totally agreed Bill. I again thank the noble Lords and repeat that I shall not intervene each time to do so.
Lord Glenarthur: My Lords, I am most grateful to the noble Lord for his kind remarks.
Lord Burton: My Lords, I should like to associate myself with the remarks made by the noble Lord, Lord Northfield, since I have been one of the strong critics of the Bill in the past. I am grateful for the very agreeable way in which my noble friend Lord Glenarthur has progressed.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 2:
Page 2, line 17, leave out paragraph (a) and insert—
("(a) for subsection (1) there shall be substituted the following subsection—
"(1) Subject to the following provisions of this section, where the Commission are satisfied—

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(a) that red deer or sika deer are, on any agricultural land, woodland or garden ground—

(i) causing serious damage to forestry or to agricultural production, including any crops or foodstuffs; or

(ii) causing injury to farm animals (including serious overgrazing of pastures and competing with them for supplementary feeding); and

(b) that the killing of the deer is necessary to prevent further such damage or injury,

they shall authorise in writing, subject to such conditions as may be specified in the authorisation, any person who in their opinion is competent to do so to follow and kill on any land mentioned in the authorisation such red deer or sika deer as appear to that person to be causing the damage or injury.";").
The noble Lord said: My Lords, I spoke to this amendment in connection with Amendment No. 1. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 3:
Page 2, line 34, leave out ("or are likely to cause").
The noble Lord said: My Lords, when we discussed Clause 4 of the Bill in Committee I said that since the clause brings in a new Section 6A, which is intended to operate in parallel with the existing Section 6 of the Act, it should be made as similar as appropriate to Section 6. Section 6 is triggered only when serious damage is already occurring, and so it should be with Section 6A, too. This amendment is designed to have that effect. I beg to move.
On Question, amendment agreed to.
Lord Northfield Lord Northfield moved Amendment No. 4:
Page 2, line 38, after ("consent") insert ("in writing").
The noble Lord said: My Lords, we had similar amendments to this amendment in Committee. Its purpose is to ensure that in this case the consent of the occupier is not a casual, blanket consent or tacit acquiescence. It is to make sure on this point that I move the amendment. I beg to move.
Lord Glenarthur: My Lords, it might be helpful if I reminded the House of the general circumstances in which action under Section 6A will take place. The commission will have come in under the existing Section 6 to deal with a red deer problem. They then find that among the red deer—or sikas, as it will now be—there are also pockets of roe or some other deer which are also causing some damage. But they need the power which Section 6A will give them if they are lawfully to shoot deer of these other species.
The commission will certainly be on the land with the knowledge of the occupier, and in 99 cases out of a hundred they will in fact be there at his request. The commission's stalkers will have a written authority from the commission itself given under Section 6: and under the terms of Section 6A the Commission, in turn, will have had to have got the consent of the occupier before their stalkers could shoot the other species. Thus, the stalkers will already have full written authority from the commission, and the occupier will be fully in the picture.
To add to all this the requirement that the occupier must give his consent in writing seems to me to be unnecessary, and could indeed cause some delay in
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dealing with a problem which requires quick action. This being the case, which I hope explains the situation to the noble Lord, Lord Northfield, I trust he will see fit to withdraw his amendment.
Lord Northfield: My Lords, I am not entirely satisfied but I see the point that the occupier will already have invited the people on to his land. At this stage, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Northfield Lord Northfield moved Amendment No. 5:
Page 3, line 3, leave out ("Sections 21 and 23(1) and insert ("Section 21").
The noble Lord said: My Lords, subsection (3) of the new Section 6A confers automatic immunity on the servants of the Red Deer Commission for two of the most important and, indeed, the most necessary and sensitive constraints in the Bill, and that is shooting in the close season or shooting at night. I think it would be quite wrong if this immunity, so far as killing at night is concerned, were to be completely unfettered. I am therefore proposing that, in effect, the exemption should not be automatic but that the Red Deer Commission's stalkers should be subject to the same disciplines as any other person who may shoot at night. They would therefore seek permission under the authorisations given in Clause 9 (4), like anybody else, if they wanted to shoot at night. This gives a much more direct control over shooting at night. I beg to move.
Lord Glenarthur: My Lords, the Red Deer Commission stalkers already have a dispensation under Section 33(2) of the 1959 Act, which was amended by the 1967 Act, to shoot at night when they are operating under Section 6 of the Act or under a control scheme. Section 6, however, and the control scheme provisions, which are found in Section 7 and following, apply only to red deer or, as it will be under this Bill, red and sika. Thus, Section 33(2) confers no exemption in respect of other species, and the special exemption for night shooting under Section 6A, which is Clause 4 of my Bill, is therefore required if it is intended that Section 6A should operate in parallel with Section 6.
This is fairly tortuous, but I hope the noble Lord, Lord Northfield, will feel that he is satisfied by it and that we should not make the further amendment that he proposes, but that he will withdraw it. Perhaps I may also say that it makes it perfectly clear, I think, that the individual stalkers will in fact be individually authorised.
Viscount Thurso: My Lords, it would seem rather a charade to ask the deer commission stalkers to seek authoristation when they are already on the spot dealing with a case, because in fact the people from whom they would be seeking the authorisation would be administrators not familiar with what is happening on the ground. The normal procedure is that, if the Deer Commission wants advice on whether to authorise something to happen, they send their stalkers to look at the situation and the stalkers are the people who report back. If they have then to report back and have their report okayed, it seems to me to be rather a charade. I think that in this case it would be helpful if the

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noble Lord, Lord Northfield, were to withdraw his amendment.
Lord Northfield: My Lords, as the noble Lord, Lord Glenarthur, said, his explanation is very tortuous. Frankly, I have not followed it, and I shall have to read it in Hansard to see whether it is worth pursuing the point any further. Meanwhile, I have to withdraw the amendment.
Amendment, by leave, withdrawn.
8.5 p.m.
Lord Northfield Lord Northfield moved Amendment No. 6:
Before Clause 6, insert the following new clause:
("Prohibition of poaching
For section 22 of the said Act of 1959 there shall be substituted the following new section—

"Prohibition of Poaching.

22.—(1) Subject to section 33 of this Act, if any person enters any land without legal right or without permission from a person having such right in search or pursuit of any deer with the intention of taking, killing or injuring it, he shall be guilty of an offence.

(2) Subject to section 23 of this Act, if any person while on any land—

(a) intentionally takes, kills or injures any deer;

(b) searches for or pursues any deer with the intention of taking, killing or injuring it; or

(c) removes the carcase of any deer,

without legal right or without permission from a person having such right, he shall be guilty of an offence.

(3) If any authorised person or any constable suspects with reasonable cause that any person is committing or has committed an offence under subsection (1) or (2) above on any land, he may require that person—

(a) to give his full name and address; and

(b) to quit that land forthwith;

and any person who fails to comply with a requirement under this subsection shall be guilty of an offence.

(4) Subject to subsection (5) below, a person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding £500 or to imprisonment for a term not exceeding three months or to both.

(5) Where an offence under this section was committed in respect of more than one deer the maximum fine which may be imposed under subsection (4) above shall he determined as if the person convicted had been convicted of a separate offence in respect of each deer.

(6) In this section "authorised person", in relation to any land, means the owner or occupier or any person authorised by the owner or occupier of the land, and includes any person having the right to take or kill deer on the land.".").

The noble Lord said: My Lords, this is a very important amendment, and perhaps needs slightly more time than we have been giving to the previous amendments. We are now dealing with poaching. At the moment, poaching is really governed by Section 22 of the 1959 Act. All that Section 22 does is to say that anyone who takes or wilfully kills without legal right commits an offence. Frankly, I do not think—and I made this very clear at previous stages—that this is sufficient, and I will explain the extent to which my amendments now strengthen the powers against the poacher.
I might say in passing that there is considerable disappointment and surprise in many quarters that the Bill has not taken more vigorous and far-reaching steps towards curbing deer poachers. In fact, the Bill seems almost timid in its approach to this very
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serious matter; and I am astonished, frankly, that the Bill as originally drafted did not go for poaching as one of the main matters to be dealt with.
Here, I may say in parenthesis that it is not that I necessarily want to stop people from getting a bit of free meat; that is not the point. The point about poaching is the immense cruelty that is involved. I cannot over-stress this. The Deer Society and many others can bring the most terrible examples of mutilation and barbaric activity committed by poachers that leave people aghast. They are the sort of things that make middle-page spreads in the Daily Mirror and in the Scottish papers, too, and they occur on a scale which is absolutely horrifying in modern-day society. So let us get clear why we are anti-poaching: it is because of this cruelty.
I want to emphasise that I remember very well, too, that the noble Lord, Lord Glenarthur, in introducing this Bill at Second Reading himself referred to the objectionable practices of poaching, and made clear that he was against them as much as anybody else. The increase in poaching is well known—I am not going over it again—and the deterioration in the observance of law and order in Scotland is also recognised. It has been in The Scotsman in recent days. It is increasing in the Highlands, too. I am not saying that it is all about poaching—not for one minute. All I am saying is that we are not dealing with a static situation in this matter; we know that this sort of thing is increasing, and that in some parts poaching—I have given figures at previous stages—really is a very active form of earning a living. I therefore do not understand why additional provisions were not in the Bill, and I believe that this sort of weakness cannot be left.
I want to make it clear, too, that the sort of provisions that are in here to strengthen the hands against the poacher already exist in similar legislation dealing with game. I am not here introducing anything novel or new. Much of subsections (1) and (2) in my amendment are to be found in the Night Poaching Act 1828 and in the Game (Scotland) Act 1832, both of those measures being introduced during a similar period of increased poaching over a century ago.
So far as subsection (3) is concerned, very similar provisions already exist in relation to game in the Game (Scotland) Act 1832. So in fact I restate the point: this is not a series of revolutionary proposals that I am putting forward; I am merely making use of existing provisions as aids to curb deer poaching. I therefore hope that my proposals will not be objected to if there is real determination to tackle poaching.
In the light of what I have said, I will not go into all the details, but it is worth saying that, instead of the very simple power that is in the 1959 Act, the amendment is trying to make it clear that a person can be apprehended on entry into land without legal right if he is proved to be in search or in pursuit of deer with the intention of killing it; and that it covers not just taking and killing but wilfully injuring, intentionally injuring. It enables him to be apprehended if he is searching or pursuing with the intention of taking or if caught removing the carcase from the land. Then it goes on to give the police power to demand his name and address and that he quit the land. This

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is a simple and well-documented attempt to strengthen the 1959 Act. I beg to move.
The Earl of Mansfield: My Lords, perhaps I may respond to the noble Lord because this is a matter which goes rather further than the actual subject of this Bill. I say by way of preface that I am at one with the noble Lord when he expresses his detestation of poaching and the cruelty which frequently accompanies it. I appreciate the fact that what he is seeking to do by this amendment is to stiffen Section 52 of the 1959 Act. But I would hope to show him that, in at least one instance, what he seeks to do is unnecessary; in another it may be desirable but is something to be decided at a later stage of this Bill; and that, in the third instance, what he seeks to do is otiose according to Scottish law and the way in which we in Scotland comport ourselves. I shall come to all those.
What the noble Lord seeks to do in effect in subsection (1) is to make it an offence to be on land with the intention of poaching. I am using baby language but I hope that the House will forgive me. Secondly, he makes it an offence to remove the carcase of a deer without authority and, thirdly, he, as it were, makes it an offence (in subsection (3)) to decline to meet a challenge by virtue of his presence when he is challenged by a constable or any authorised person. So far as subsection (1) is concerned, it has little or nothing that is new. A person who is acting as described in subsection (1)—that is to say, being on land with intent to take, kill, or injure deer, to have what used to be called a felonious intent towards deer—is already covered by Section 26 of the 1959 Act where it refers to acts preparatory to an offence which are punishable as if they were the offence itself.
Furthermore, I would draw the attention of the noble Lord to Section 20 of the Firearms Act 1968 which applies to Scotland and which makes it an offence to enter or be on any land with a firearm as a trespasser without reasonable excuse—and the proof of that latter phrase lies on the accused. Conviction of an offence under Section 20 allows the court to order forfeiture or disposal of firearms and ammunition found in the offender's possession and to cancel his firearm or shotgun certificate. The maximum penalties on summary convition are a £200 fine and/or three months' imprisonment. So far as subsection (1) is concerned, nothing is achieved that is not already contained in the law as it stands.
Lord Northfield: My Lords, does not the 1959 Act refer only to killing? This amendment would extend it under subsection (1) to taking, killing or injuring, so is it not to some extent the case that these provisions are not covered by existing legislation?
The Earl of Mansfield: My Lords, I disagree with the noble Lord. If injuring a deer is not an act preparatory to taking it, I do not know what is. Coming now to subsection (2), that does very little but re-enact what we have already in the existing Section 22. I agree that the noble Lord has a point here. There is one particular difference which, in effect, is the offence of removal of
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the carcass of a deer without authority. The noble Lord will be conversant with the case of Miln v. Maher, with which I will not weary the House. I agree that the noble Lord has a point here. I should like to look at it further. I would hope, if I dare to suggest it, that we need not return to it at Third Reading; but this is a matter which the Government would like to look at. I think this is something which might be considered by another place. The legal position is that the interpretation of taking a deer is not clear. It should be the subject of research, and I am grateful to the noble Lord for bringing up this part of the Bill.
Now I come to subsection (3). That would require a trespasser on land to give his name and address to a constable or an authorised person and to remove himself from the land forthwith, and if he did not he would be committing a criminal offence and would be liable to a penalty. Under the Criminal Justice (Scotland) Act which the House discussed in 1980, a constable already has the power to demand the name and address of a suspect and to detain him where necessary while it is verified. This is part of the general law of Scotland and relates to any offence and not merely to those which have to do with deer or poaching. So we have that. That applies to a constable.
Now we come to what I regard as the difficult part of the noble Lord's amendment—and I am trying to be fair—the business of the authorised person. Such persons, according to this amendment, would be receiving a power, if not to arrest a poacher, to challenge him in circumstances which could and might be extremely tense. I would not want to take it upon myself to import such a power into the law of Scotland. It may be that we have in Scotland rather different ways of going about things than in England but in general people tend to walk about in Scotland on other people's land and, although there are certain rather shaming exceptions to the rule, basically landowners accept the position nowadays and we do not have more friction than we need. I think that to have presumably gamekeepers or owners or their agents challenging people in this way, which means that if, for instance, the accused person or the challenged person refuses to comply, he is guilty of a criminal offence, is entirely wrong.
The other matter is that I have had a lot to do with the law in Scotland and in England, although, I hasten to say, always at a fairly humble level. But I deprecate the making of law which if not complied with makes the law look an ass. In those circumstances, if the challenged person says that he will not give his name and address to the authorised person nor intends to quit the land, what happens? That is a recipe for violence or, at least, a breach of the peace. I am grateful to the noble Lord for his second suggestion, subsection (2), which I undertake to look at with sympathy; but, for the reasons that I gave, I cannot accept the first two heads of his new clause.
Lord Northfield: My Lords, again the noble Earl has been helpful. I am glad to be put right about the matters and powers which exist in other Acts and in connection with subsection (1). I beg to withdraw the amendment on the understanding that the noble Earl will look at subsection (2).
Amendment, by leave, withdrawn.
8.20 p.m.
Lord Northfield Lord Northfield moved Amendment No. 7:
Before Clause 6, insert the following new clause:
("Unlawful injury of deer
The said Act of 1959 shall be amended as follows

(a) in sections 21(1) and 23(2) after the word "kill" there shall be inserted the words "or injure"; and

(b) in section 23(1) after the word "kills" there shall be inserted the words "or injures".").

The noble Lord said: My Lords, in asking your Lordships to consider this amendment, I should like to refer to an important speech made at Committee stage by the noble Lord, Lord Glenkinglas. He said that those in areas where almost everyone had a shotgun, knew perfectly well that they were not going to kill the deer in 99 cases out of a 100 but it gave them some satisfaction if there was a deer in a field to go out and fire a gun at it. This was purely a "get off my ground" attitude which they could take and get away with. It was entirely cruel; it was entirely ineffective and it should be stopped.
The noble Lord, Lord Glenkinglas, knows a good deal more about these things than I do and he was there perfectly blunt about this practice of simply going out, not necessarily with the intention of killing, but with the clear intention of injuring in order to get the animals off the land. This is where, particularly in using a shotgun, a great deal of the cruelty occurs. There are so many examples of animals found with shot in them, and so on, eyes blown out, living out a miserable life until perhaps some stalker catches them eventually or until they die of their wounds.
This is talking therefore not about unintentional injury but wilful injury. My proposals have a good pedigree in the number of previous statutes. The provision I want to make is already in the Protection of Birds Act 1954, the Conservation of Seals Act 1970, the Badgers Act 1973, the Conservation of Wild Creatures and Wild Plants Act 1975, the Deer Act of 1963, the Deer Act of 1980 and the deer provisions of the Wildlife and Countryside Act 1981. That is a substantial pedigree indicating that wilful injury is something which in other respects we have been trying to curb. I therefore beg to move.
Lord Glenarthur: My Lords, as my noble friend Lord Mansfield said earlier, a court would probably be able to deal with a case of wilful injury in an attempt to kill, as Section 26 of the 1959 Act makes clear. However, I accept—to put the matter beyond doubt—that to deal with any cases that might arise this amendment should be made. Accordingly, I accept it.
On Question, amendment agreed to.
Lord Northfield Lord Northfield moved Amendment No. 8:
Before Clause 6, insert the following new clause:
("Control of vehicles
.—(1) After subsection (2) of section 23 of the said Act of 1959 there shall be inserted the following new subsections—
"(2A) Subject to subsection (2B) below and section 33(1) of this Act, if any person—

(a) uses any mechanically propelled vehicle for the purpose of driving deer on any unenclosed land or unenclosed woodland;

(b) discharge any firearm, or discharges or projects any missile, from any aircraft at any deer; or

(c) uses any aircraft for the purpose of transporting any live deer other than in the interior of the aircraft,

he shall be guilty of an offence.
(2B) Nothing in subsection (2A)(c) above shall make unlawful anything done by, or under the supervision of, a veterinary surgeon or practitioner.
(2C) In subsection (2B) above "veterinary practitioner" means a person who is for the time being registered in the supplementary register, and "veterinary surgeon" means a person who is for the time being registered in the register of veterinary surgeons.").
The noble Lord said: My Lords, at the Committee stage we tried a version of an amendment to control the use of vehicles. A number of objections were made to the drafting at that point. Since then, and following a number of useful discussions with a number of interested people, I have recast the proposals, as noble Lords will see, and they are now three-fold. Paragraph (a) will make it an offence to drive deer, to herd them, on unenclosed land. There is a misprint in the paragraph. The word "was" should be "uses". That is a simple misprint which I am sure the printer will put right at the next stage.
This is very important because it concerns the use of vehicles to drive animals in this way. That is one of the favoured methods of the poacher. It might be asked: what is a definition of "vehicle"? That is in the 1959 Act, if noble Lords care to look it up. If there is any problem about what is "mechanically propelled", I am sure that we can put in a definition at a later stage.
It will be noted that in paragraph (a) I have omitted the provision that was objected to in Committee, where it said that firing from a vehicle is often very useful in controlling deer. I have not put back the provision to prohibit the firing of firearms from a vehicle, only the use of the vehicle for driving.
Paragraphs (b) and (c) are to prohibit the use of all types of aircraft for shooting deer and the use particularly of helicopters for carrying deer when slung underneath the helicopter. I have not seen the film which many noble Lords have talked to me about showing the use of helicopters in New Zealand for pursuing, shooting and tranquillising deer and for transporting live deer. I am told that it caused widespread concern in this country, lest similar practices—and "barbaric" is often the description of them—should be adopted.
It was obvious from the film that during pursuit the deer were subjected to extremes of stress and, so far as transport was concerned, the deer were often suspended from a helicopter by their hocks fully conscious. One could see them struggling upside down in mid-air. More recently, deer have been netted and have been fully conscious when the net was slung from the helicopter. Is this really a practice that we want in this country? I hope that we can agree right now that we should prevent it before it becomes widespread.
I can tell your Lordships that there has already been one such case in Wales. While it was claimed that the deer were tranquillised, one would need a great deal of further expert information as to the degree of tranquillisation, and so on, before one could accept it. This has alerted us to a possible development that could start in Scotland now that it has been started in Wales. If I may put it this way, just as Governments rightly made it an offence to remove velvet from the antlers of live deer before the practice became widespread—and I have raised this matter in the House before and luckily we have managed to get provisions to stop velveting before it has become widespread—

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similarly in this case we should do something to outlaw this practice before a court is left to decide that it is cruel.
I maintain particularly that the use of aircraft—helicopters—should be prohibited and that we should take a stand on that matter right now. On the other hand, it may well be acceptable for a live deer to be transported slung from a helicopter so long as the deer is fully and properly tranquillised. One has then to ask: how can we assure ourselves of this? Has the deer had the right drug, the right dose, and so on? This is why the latter part of the proposed new clause deals with using these practices—and I am sorry that they are rather cumbersome—in the presence of veterinarians. The final subsection merely makes the practices subject to the penalties in other provisions of the Bill.
I have had a lot of discussion about this amendment between the stages of the Bill. I hope that we are now getting to a point where it is in a form that is acceptable. I beg to move.
Lord Glenarthur: My Lords, first of all, may I say that I am very grateful to the noble Lord, Lord Northfield, for removing the detail to do with shooting from vehicles which was in his original amendment? Referring to this amendment, it certainly has points of interest and some merit in certain places. I start with paragraph (b): the noble Lord probably has a very good case for saying that it can be cruel to shoot at deer from helicopters. I saw part of the film to which the noble Lord referred.
I have little doubt that at the very least a deer could be exhausted and therefore the practice could be considered exceedingly cruel. I am not entirely satisfied with what he feels about paragraph (c), about it being cruel to "undersling"—as we call it in the trade—a deer in a net beneath an aircraft. I entirely agree with what he says about suspending an animal by its hocks. He might like to know that it would be very difficult in many respects to carry a deer inside an aircraft. The animal would have to be suitably and correctly "anaesthetised"—for want of a better word—and strapped down to prevent any damage should it start to move around in the aircraft. I think with nets it is an acceptable procedure and one used for the rescue of animals which have been stuck in bogs. I know that the Army in Northern Ireland has done this on several occasions and it has not been too terrifying provided the animal is suitably drugged.
I think that what I have to say on the first point really covers all three: there is a great deal here which is not really suitable to put in an amendment to be made to primary legislation and it might be better left to another method. Perhaps I might refer particularly to Amendment No. 9. The equipment detailed there is the sort of equipment which could be affected by this amendment. I should like to make one other point. In paragraph (a) when the noble Lord attempts to prevent—
"… any mechanically propelled vehicle for the purpose of driving deer on any unenclosed land or unenclosed woodland",
I accept the point that the noble Lord is trying to make, but I must point out to him that, as he may recall, there was a great deal of discussion at Committee
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stage on the question of an occupier being allowed to shoot a deer he found on his land. It seems to me that what the noble Lord is achieving, probably accidentally, here is, first, saying that he does not like the idea of having to shoot it and, secondly, if he sees a deer about to come off unenclosed land on to enclosed land he may not even go out with a Land-Rover to frighten it off, because effectively he would be driving deer. So I hope that I may have satisfied the noble Lord to some extent, particuarly on the point of detail which we would be going into in primary legislation. I hope that, having heard those remarks, he will see fit to withdraw his amendment.
Lord Northfield: Before the noble Lord sits down and before the noble Lord, Lord Burton, speaks, do I understand him to say that if we withdraw this amendment the words "other equipment" in Amendment No. 9 will be specifically used to bring in some provision about the use of motorised vehicles?
Lord Glenarthur: My Lords, I will come on to Amendment No. 9 in a moment, but the point about "other equipment" which is mentioned there is that it is a very wide device indeed and, in my view and in the view of others who have given advice, it could accommodate the use of helicopters, which the noble Lord has in mind.
Lord Burton: Although appreciating the situation on Amendment No. 9, I am a little worried that paragraph (a) could not be covered by this. There are now modern vehicles such as Argocats and other things which you can run about in on the hills, and there have been at least two cases where they have even been used to drive deer: probably, there are more cases. I wonder perhaps whether this paragraph might not be improved by adding words similar to—
"for the purpose of killing or taking deer".
Clearly it would be beneficial to use those vehicles to chase the deer out if they are coming in and doing damage on the ground, so I think it would be useful to have something along these lines. Perhaps my noble friend would look at this again and bring it back on Third Reading.
Lord Ross of Marnock: My Lords, I think that the noble Lord, Lord Northfield, has got something here in respect of his desire to try to stop this cruelty in relation to transportation. Personally, I do not see how it is going to fit in just with the question of equipment. It is really a method of dealing with it in circumstances in which I think most people would agree, with an aircraft or helicopter being used. How are you going to limit that just by "equipment"? If the Government are satisfied that they can in some way cover this, certainly I would be reasonably well pleased with it; but at the moment I cannot see that Amendment No. 9 is adequate to cover the point, and I think that most of your Lordships would want this to be covered.
The Earl of Mansfield: My Lords, perhaps I could satisfy the House on this point. "Other equipment"—though I do not want to trespass on Amendment

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No. 9 more than I have to—is a very wide phrase and has been specifically used to take account of developments which perhaps we do not foresee at the moment. As I have said, it gives very wide powers. The one matter which I do not think it would satisfy is paragraph (a), but I hope that my noble friend has convinced the noble Lord, Lord Northfield, that that part of his amendment, although I entirely sympathise with its objects, is so drafted that it would have the opposite effect to the one he hoped to achieve: in other words, somebody would have to wait until the deer came on to enclosed land before anything could be done about it—unless they got out of the vehicle and advanced to the deer waving their arms!
Lord Northfield: My Lords, this has been an interesting discussion and I think we shall have to consider putting down on Third Reading an amendment which limits the provisions to an improved version of paragraph (a), namely:
"using any mechanically propelled vehicle for the purposes of killing a deer",
or something on those lines. That would meet the point about using a vehicle simply to frighten deer when they are attempting to come on to your land. That is the poachers' real use of vehicles and that is the one I am trying to prevent by this provision. I see the point about aircraft, and I am grateful to my noble friend for taking issue as to whether "equipment" covers aircraft. But as the noble Earl is so clear in his mind—and he has better legal advice than we have—that the word "equipment" could cover aircraft and other things not yet thought of, I suppose the proper course at this stage would be to accept the criticism of the amendment and return to paragraph (a) on Third Reading, which I shall do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Firearms and ammunition]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 9:
Page 3, line 41, leave out from ("firearms") to end of line 44 and insert (", ammunition, sights and other equipment which may lawfully be used in connection with killing or taking deer, and the circumstances in which any class of firearms, ammunition, sights or other equipment may be so used.").
The noble Lord said: My Lords, we discussed this just now in relation to Amendment No. 8. It is an amendment which is identical to one put down by my noble friend Lord Burton in Committee. He then graciously withdrew it so that we could consider it further. Having done so, I am fully persuaded that his idea is a valuable one and have therefore adopted it. It provides a very wide and flexible power to regulate by order not merely the type of firearm and ammunition, as was originally envisaged, and not merely the extra bits you might bolt on, such as a special type of sight, but the whole range of ancillary equipment—I suppose that helicopters would come in that range—and the circumstances in which they could all be used. How this power will be used in practice remains to be seen, but the beauty of the
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device is that it is flexible and could accommodate developments which cannot be foreseen. I beg to move.
On Question, amendment agreed to.
The Deputy Speaker (Lord Aberdare): I understand there is also a misprint in Amendment No. 10. It should refer to page 4, line 8.
Lord Northfield Lord Northfield moved Amendment No. 10:
Page 4, line 8, leave out ("killed or taken or attempted to be killed or taken") and insert ("taken or killed").
The noble Lord said: My Lords, this is virtually a drafting amendment and the words I omit are not really needed because they already appear in the 1959 Act. Therefore, there is no need to repeat them in the clause here. I beg to move.
Lord Glenarthur: My Lords, I accept the amendment.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 11:
Page 4, line 11, at end insert—
("(4) No order shall be made under this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House of Parliament.").
The noble Lord said: My Lords, this amendment provides that an order made under Section 23A, unlike other orders under the 1959 Act, should be subject to affirmative resolution. My Lords, I beg to move.
The Earl of Mansfield: My Lords, I think I should point out that this amendment was prompted by my noble friend Lord Burton. I undertook to consider the matter of affirmative resolutions. Governments, of whatever complexion, do not like affirmative resolutions very much, because they take up parliamentary time. It is much easier, from the point of view of the Executive, if somebody wanting to challenge subordinate legislation has to move a prayer. But, in the circumstances, it was thought that your Lordships might well want to debate an order made under this section, without the necessity of having to pray against it, and I felt, all things considered, that the affirmative procedure would be appropriate.
Lord Burton: My Lords, I thank my noble friend.
On Question, amendment agreed to.
8.41 p.m.
Lord Northfield Lord Northfield moved Amendment No. 12:
Page 4, line 11, at end insert—
("(5) Without prejudice to the provisions of this section and subject to section 33(1) of this Act, if any person uses for the purpose of taking, killing or injuring any deer any smooth-bore gun or any ammunition for use in a smooth-bore gun, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £500 in relation to each deer taken, killed or injured or to imprisonment for a term not exceeding three months, or to both.
(6) A person shall not be guilty of an offence under subsection (5) above by reason of the use, for the purpose of taking or killing any deer during the hours of daylight, of any smoothbore gun or any ammunition for use in a smooth-bore gun on any arable land, garden grounds or land laid down in permanent pasture (other than moorland or unenclosed land)

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forming part of that land or on enclosed woodland, as the case may be, if—

(a) he has reasonable grounds for believing that deer of the same species are causing, or have caused, damage to crops, pasture, vegetables, fruit, trees or human or animal foodstuffs on that land; and

(b) it is likely that further damage will be so caused and any such damage is likely to be serious; and

(c) his action is necessary for the purpose of preventing any such damage;

and in this subsection "the hours of daylight" means the period between the commencement of the last hour before sunrise and the expiration of the first hour after sunset.").
The noble Lord said: My Lords, this is one of the sticky points of the Bill, and it could be a kind of reef on which the Bill will break its back one day, unless we can get some agreement about it in one or other of the two Houses. The use of shotguns is well established as being to the shame of this country when used against deer and, as I said at previous stages, we are now almost alone in Europe in allowing them to be used against deer at all. I really must say that it does little credit to some members of the agricultural profession and its associations, who are still resisting us in making progress on this issue.
So much of the Bill seems to have been angled towards red deer, but, of course, this is not a Red Deer (Amendment) (Scotland) Bill; it is a Bill about all deer, and what we must sometimes consider here is the effect on roe deer, as was mentioned at previous stages. It is they who are so often the victims of farmers and, indeed, of some foresters who drive around at night in Land-Rovers with lights full on, pumping shot into half-seen animals. That is the kind of thing which we are very anxious indeed to stop.
The arguments are well-known and I shall not labour them. But what my amendment is seeking to do is three things. It is saying that we really must now come to grips with the issue of the shotgun. We must prohibit its use, except in genuine cases of crop damage, which is covered in the latter part of the amendment. It should be made an offence intentionally to injure deer with a shotgun—and I have partly covered that. Thirdly, the amendment prohibits absolutely the use of a shotgun at night. That is what the amendment does. I hope that I shall not have to say very much more about it. If we can reach agreement on the contents of this amendment—and I choose my words very carefully—I shall be very happy indeed, and I think that it will help progress in another place when, as I hope, the Bill goes there. I beg to move.
Lord Houghton of Sowerby: My Lords, I should like to support my noble friend Lord Northfield in this amendment. This is really one of the troublesome parts of the Bill. Of course, I listened to the debates on this subject at the earlier stages of the Bill. We have to make up our minds that public opinion on cruelty, on the treatment of animals—domestic pets and wildlife—is changing. If one looks back 100 years, one realises that things were done then which would not be tolerated today. For example, in the slaughter of animals for food, there was a time when the most disgraceful conditions obtained in our slaughterhouses. If you look back over the debates on the slaughterhouses legislation of different kinds since 1928, you see that the most horrible descriptions of conditions and
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methods used in slaughterhouses came before the House at different times. That was part of the business at that time, but now it is not. We now have humane slaughter, humane treatment and humane societies, all in relation to animals throughout the world.
Even though a forward date might have to be thought of in this connection, those who want to kill animals must, to do so, acquire the equipment which is regarded as acceptable today. It is no good saying, "All I have got is an old-fashioned pole-axe in my cupboard and I propose to use that to slaughter animals". There is better equipment available today than a shotgun for shooting mammals of this size and temperament, and position in the sentimental and emotional life of the country. These are animals which people regard with affection.
I know that a marauding deer is a most tiresome animal to have around the place. We have heard a good deal about marauding deer, and I have dealt with the philosophical aspects of putting a label of guilt upon an animal before you shoot it. That gives some kind of moral justification for what you are about to do. But it may not be marauding; it may be just eating, like any deer might do. So I feel very strongly about this amendment and I am sticking here at the moment to deal with it and to support it. I will stay all night to do it and will keep your Lordships here all night to do it. Some accommodation has to be reached on this, if we are to give this Bill final approval.
Lord Burton: My Lords, if we proceed with this Bill, as it appears we might, and we are to have a code of what is required for night shooting, that will require suitable equipment. Therefore, if there has to be suitable equipment I do not see why this amendment cannot be accepted, because, clearly, a shotgun is not a suitable part of the equipment.
Lady Saltoun: My Lords, may I just say one or two words about roe deer, which have been mentioned in connection with this amendment? Roe deer are very widespread throughout the lowlands of Scotland, both in the north and in the south. They are much more widespread than red deer and, for preference, they live in young woodlands. They are far more prolific breeders than red deer, and they have increased so dramatically in the past 20 years that they now occupy very much the same position as a forest and agricultural pest that the rabbit had before myxomatosis. No one ever suggested that the rabbit should not be shot at all times, without the inconvenience of the person shooting requiring authority from the Deer Commission. We all hope that people shooting roe deer will have suitable firearms for doing that, and I think that the schedules which are proposed to be introduced by the Secretary of State should help to cover this.
But I want to emphasise the importance of being able to control roe deer without a great deal of trouble and difficulty and, preferably, without the person shooting needing authority from the Deer Commission, because sometimes we are approaching the point where we have to choose between having roe deer unlimited and having trees or crops. Matters are getting to that point. If any noble Lord is in any doubt as to the truth of this, perhaps he would care to read an article entitled "Too many deer for the trees", which was

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published by the New Scientist on 18th March. I believe that the Forestry Commission have sent a copy to those who took part in the Committee stage debate and it is very interesting.
The Earl of Mansfield: My Lords, the House will recollect that we had quite a full debate on this matter in Committee. I sympathised then with the noble Lord, Lord Northfield, in his desire to curtail the use of the shotgun. I still do not think there is anything—or if anything, nothing very much—between us. No responsible body of opinion maintains that a shotgun is a suitable weapon for sporting use against deer. That is for sure. But I think I can claim, from the way he has put down and tabled his amendment and the phraseology which he has used, that the noble Lord reluctantly concedes, as I do—as we all have to—that it continues to be a disagreeable necessity, for the purposes of crop protection.
If we start from that base line, where do we get to? I am slightly disappointed that after the debate which we had the noble Lord has come back to this matter. I have read what I said in Hansard and, may I say, approved it. I had thought that what I undertook to do was this: that if the noble Lord conceded the principle that regulation of firearms should be relegated to subordinate instruments—and he did concede that—then I would take the very greatest trouble to be quite sure, first, that we should have consultation. I gave various undertakings about who would be consulted, and the various interested parties. Secondly, that we would press ahead with it as soon as this particular piece of legislation reached the statute book. Third, that we should go into those consultations with a strong presumption that the use of the shotgun is to be restricted to certain bores and to certain types of shot. And, fourth, that its use should be restricted to certain circumstances which would be well defined and which would be in connection with crop protection.
Having given all those undertakings, I then look at my list of amendments, as they come from the printer, and back comes the noble Lord to the same old subject. He drafts an amendment which in fact is designed, I know, with the very best motivation but which in fact is looser than the original one in Committee, and for this reason: that if the noble Lord will look at subsection (6) it has the curious effect, which I am sure the noble Lord would not want, or certainly would not intend, of making it impossible subsequently to prohibit the use of smaller bores and smaller shot. That, I am sure, is not in the noble Lord's mind. It would be the Government's intention that guns and shot below a certain size would be absolutely banned. That is one avenue in which the amendment is deficient: to the extent that it would, by being primary legislation, stop the Secretary of State from doing what we all want him to do as soon as he has had the consultations. That, I suggest, would be a very foolish procedure.
The same provisions as to damage appear in this amendment as we debated at length in Committee. We are going to deal with other damage provisions later on in our proceedings, but I think the House knows very well my views about damage. I myself and also, I think, my noble friend Lord Dulverton—who I regret to see is not with us—and the House
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agreed reluctantly that some night shooting is necessary for crop protection and that the shotgun should be permitted for that purpose. Therefore, there is logic in permitting their use in those circumstances. But the nuts and bolts of the regulations will be pursued during the consultations before the regulations are laid, and as we have now adopted the affirmative procedure they will be subject to debate in your Lordships' House when they come forward for approval under the affirmative procedure.
For all those reasons, if the noble Lord thinks that in some way the Government are going to be "got at", if I may use the phrase, so that they will renege on the undertakings and the, I hope, really fulsome promises which I have now given to the House on two occasions, I can assure him that we shall not. I think we agreed on the last occasion in Committee that we had got the right way of going about this. We had a little debate in which the noble Lord, Lord Ross of Marnock, took part as to the essentially Scottish nature of this legislation and the way in which we leave it to the Secretary of State to lay orders as he may be advised—and properly advised. In those circumstances, I can only hope that the noble Lord, Lord Northfield, and, indeed, the noble Lord, Lord Houghton of Sowerby, whose concern I share so far as the cruelty aspect is concerned, and the House, will see the wisdom of what it is that the Government have been consistently suggesting is the right course to be pursued.
Lord Northfield: My Lords, I am very grateful to the noble Earl the Minister, but I would say three things to him. I am not sure about his interpretation of subsection (6) because it refers back to subsection (5). Subsection (5) is carefully prefaced by the words, "Without prejudice to the provisions of this section". I would chance my arm in saying that if the Secretary of State wished to vary subsection (6) he could do so under the earlier powers in the Bill because subsections (5) and (6) are without prejudice to the powers of variation which he has, anyway. Until the noble Earl can convince me of it, I am not really penitent on that point.
My second point, if the noble Earl will accept it from me—I hope he will, and then he will not be so discomfited that I have come back to it a second time—is that it is important that we should get clear what the minimum is that we shall be looking for in the orders which the noble Earl will eventually be bringing to the House. The purpose of this amendment, as I said in introducing it, is to get clear the understanding that we have, and what I have not yet had from the noble Earl—which is important to me and, I guess, to my noble friend Lord Houghton of Sowerby—are any remarks about restrictng the use of the shotgun to daylight hours. That is of great importance in outlawing the shotgun. With great respect, I have to say to the noble Earl that I do not think he said anything about this at Committee, and he has not said anything about it tonight. So he cannot really blame me for coming back to state what our minimum is.
The third point I want to make is this. I hope the noble Earl will give us credit for trying to help this Bill through another place. As I have made clear on previous occasions, there are two kinds of people who might stop this Bill: first, the pro-farming lobby and,

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secondly, the animal welfare lobby. If we are getting the noble Earl to state and restate for the benefit of the animal welfare lobby the energetic use which he is prepared to make of his powers to issue orders about weapons, it is some way of assuring the animal welfare lobby that they should not need to object to this Bill at four o'clock on a Friday when it goes to the House of Commons.
I hope that the noble Earl's discomfiture—his displeasure, almost—at this amendment being brought again will be withdrawn when he realises that we, too, are trying to be helpful. The animal welfare lobby is already in touch with people like me, saying, "Are you satisfied? Is this Bill making enough progress? Is there enough protection against cruelty in the Bill? Or should we arrange with our supporter Members of Parliament to block it?" Therefore, I am trying to get the noble Earl to state as often as he can the reasons why they might not need to block it on one of the issues about which they feel most strongly.
I have given three reasons why I have come back to the issue. I am disappointed that I still have not had an answer as to whether in fact there will be some assurance on the point that the restriction of the shotgun to daylight use will be included in the affirmative order. If the noble Earl could help me on that point I should be very grateful. I am sure that he would have the permission of the House to make another short intervention.
The Earl of Mansfield: My Lords, with the leave of the House, perhaps I should just say something for the benefit of those members of the animal welfare lobby who do not read Hansard.
Lord Northfield: I will make sure that they do, my Lords.
The Earl of Mansfield: Well, if they do block this in the other place at four o'clock on a Friday afternoon, we shall just go back to the 1959 Act, and the very real concessions which are being made by the farming lobby will be lost. I say no more.
With regard to the undertakings I have given, have really gone as far as I can before the Secretary of State undertakes due consideration. I believe it is generally agreed that some shooting at night is necessary for crop protection. I believe it is also agreed, reluctantly, that for the purposes of crop protection shotguns sometimes have to be used. I am not going to say whether the two marry up for these purposes because I do not believe that such a matter should be decided—or rather, that I should pronounce on such a matter—before the necessary consultations are undertaken. It would be quite wrong of me to say "Yea" or "Nay" on what I know the noble Lord would like me to deal with.
I have now said on two occasions that the Government are entirely with the view expressed and that we are all concerned to ban so far as we possible can, where necessary invoking criminal law so to do, any cruelty in the control of deer. It is therefore of the utmost importance that this Bill proceeds along its way to another place. One hopes, as I said on Second Reading, that the consensus which I feel is emerging
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so far as this Bill is concerned is allowed to flower and that we get a really worthwhile measure.
Lord Northfield: My Lords, I have probably pushed the noble Earl as far as he should go. I greatly respect his assurances. As long as we have an understanding that the issue of daylight use is at least considered, then I must be "happy"—although obviously I am slightly unhappy at the same time. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.2 p.m.
Lord Northfield Lord Northfield moved Amendment No. 13:
After Clause 6, insert the following new clause:
("Extension of application of s. 25(4) of Act of 1959
. In subsection (4) of section 25 of the said Act of 1959 for the word "section" there shall be substituted the words Part of this Act".").
The noble Lord said: My Lords, this is a simple point, and again I hope that I have learned from what was said at Committee stage. This amendment is about the use of one witness. The noble Earl suggested that I pressed the extension of the conviction on the evidence of one witness too far in my Committee stage amendment. Therefore, I have now restricted this amendment to Part III of the 1959 Act, so introducing one witness in connection with poaching, killing at night, and killing by illegal means.
I believe it is well known that most of the offences we are dealing with in this part of the Bill take place in remote areas where we are lucky to have one witness, let alone two. Clearly, there is a lot of evidence that catching poachers is very difficult. If I may say so, the noble Earl was very doctrinaire in his approach to this issue at the previous stage. I would point out to him that similar examples exist in Scottish legislation; there is nothing new about all this. It appears in the Game (Scotland) Act 1832 and in the Salmon Fisheries (Scotland) Acts 1862 and 1868, which all dealt with poaching at that time. It is time that we tried to get agreement on what I might call the minimum proposition that I can make in this case which is necessary in order to deter poaching. This amendment would simply extend conviction on the evidence of one witness to poaching, killing at night and killing by illegal means. I have taken out what the noble Earl said at Committee stage were the more objectionable provisions.
The Earl of Mansfield: My Lords, as the noble Lord, Lord Northfield, has said, this amendment is very similar to that which he moved in Committee. He now has an ambition to extend the relaxation to offences under Part III of the 1959 Act—that is to say, covering the poaching, killing at night and unlawful killing of deer. I vigorously opposed the noble Lord at Committee stage—and I had the support of the noble Lord, Lord Ross of Marnock—and I vigorously oppose him now. I do so even more vigorously because I have looked up what occurred at Committee stage when the 1959 Act was going through. There was one and a half hours of heated debate in another place. I hope that I am not being too rude when I say that sometimes they conduct their debates like the Mad Hatter's tea party. At one moment, rather like the dormouse,

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somebody accused the honourable Member for Kilmarnock of being asleep; an allegation which, I may say, he rapidly refuted. However, when they finished with the points of order and actually got down to the debate, there was a consensus on all sides, led by the Lord Advocate, an ex-Lord Advocate and all the Front Bench speakers on both sides—and I may say that in those days the Opposition was united against subsection (4)—that only in very rare circumstances indeed could the law of Scotland permit an exception such as this. The matter was debated for one and a half hours. It went to a vote and the Government of the day won.
It is a fact that, under Scottish criminal law, the facts which establish guilt must be proved by the direct evidence of two witnesses or two or more evidential facts spoken to by separate witnesses from which the facts can be inferred, or a combination of direct evidence of one witness and of one or more evidential facts spoken to by other witnesses which support it, unless the crime is covered by a statutory exception to this rule. That is a fundamental principle of Scottish law. The noble Lord, Lord Northfield, said, quite rightly, that they have passed statutory exceptions, but there are very few. The view has been taken consistently that the fundamental principle should be departed from only in exceptional cases and for the most compelling of reasons.
The debate in 1959 involved a protracted argument over the unlawful possession of deer and firearms in circumstances which afford reasonable grounds for suspecting that an offence has been committed under Part III of the 1959 Act. This relaxation was quite wide enough to secure the effective enforcement of the provisions of the Act, and I really do not think it is necessary or desirable that we should extend the relaxation to the other offences in Part III. I can go into the details of the arguments in the other place in 1959, but I really do not think it is desirable that I should. I have to say to the noble Lord that the Government are totally opposed to him on this occasion.
Lord Northfield: My Lords, I am very sorry about this, because I think the noble Earl will regret it. I think poaching will go on increasing in Scotland. All the signs are in that direction. It will be increasingly difficult to convict. The noble Earl will regret that he did not think the situation was as urgent as it was in the 1832, 1862 and 1868 days of increasing poaching. I think he will find he will be back with that situation before this decade is out and will regret that he has not got this piece of ammunition against the poacher.
Perhaps the best thing to do would be to try it in the other place when the Bill goes there, and see if this time we can have it sent back from the other place as a legitimate provision and see whether the noble Earl will then accept it once the House of Commons has changed its mind. Meanwhile, I see no point in pursuing it, as the noble Earl is so adamant. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Licensing of dealing in venison]:
The Deputy Speaker: My Lords, if Amendment No. 14 is agreed to, I cannot call Amendment No. 15.
Lord Glenarthur Lord Glenarthur moved Amendment No. 14:
Page 5, leave out lines 10 to 12.
The noble Lord said: My Lords, I was at some pains at Committee stage, in replying to amendments in the name of the noble Lord, Lord Northfield, to argue that we should not encumber the Bill with the kind of detail which can be left to subordinate legislation. My noble friend on the Front Bench also argued this in particular reference to the form of venison dealers' records, and the noble Lord opposite eventually accepted my noble friend's point gracefully.
I think it only consistent, therefore, that I should invite the House to take out the words which this amendment details, which do exactly what we have decided should not be done, namely, circumscribe what may go into subordinate legislation. I do not mean that I am at all against having the sex and species of the deer recorded—on the contrary, it seems to me a fundamental piece of information—nor that I want to see the price recorded; I think that is probably irrelevant anyway. My motive is purely one of consistency, to leave the whole matter of the form of records to be settled, after consultation, by statutory instrument. I beg to move.
Lord Northfield: My Lords, as this is in substitution for my following amendment, perhaps I may say a word about what the noble Lord has just said. Here again, we are quite obviously looking for assurances. If we take out the directions to the Secretary of State as to what shall be included in the form, we are clearly looking for undertakings about how he will use the power he will have to set up the form. Here I am pointing at three issues which I think must be included: first, the place where the deer was killed. I cannot see any possible argument against that, because this is one of the crucial things in determining poaching. Secondly, the registration number of the vehicle delivering the venison. How can there possibly be any disagreement about the need for this? One of the most important ways of frightening off poachers turning up with one animal in an odd vehicle is that they may be traced through their vehicle registration. They can, of course, give a false name themselves, but they cannot get away with giving a false registration number to the vehicle when the venison dealer can look out of the window and see what it is. Thirdly, it is helpful if we can have an assurance that there will be some record of the manner of killing, where that is possible, and the type of firearm, especially if certain firearms are going to be outlawed under the Bill. I should have thought I was justified in asking the noble Earl to give us a few indications of how far he is prepared to go in using the powers under this part of the Bill if we leave it entirely to his discretion.
The requirement to include the means of killing is also a very good deterrent if the poachers have set a snare or killed by lurchers. Not that a crooked dealer would always put it down; nevertheless, all this adds to the pressure on the poacher. I should be grateful if the noble Earl could give us some guidance as to whether he thinks the points that are in my amendment will be considered for the form.
Lord Burton: My Lords, I should like to support the noble Lord, Lord Northfield, on this amendment. One of the reasons why we would like it written into the Bill is that, if I remember rightly, in Committee my noble friend on the Front Bench strongly resisted having put in the schedule the question of how the deer was killed. It is quite easy to see when an animal is hanging up in a game dealer's premises whether it has had a snare around its neck. If he has put it in his records as having been shot, then clearly he is committing an offence. I think that this must be written into the Bill. Indeed, although I agree with my noble friend Lord Glenarthur that we do not want more in than is necessary, in view of the resistance that there was in Committee, I think that the noble Lord, Lord Northfield, is quite correct in asking for an assurance at this stage.
The Earl of Mansfield: My Lords, I apologise for hesitation on my part because I really had thought that on the last occasion that your Lordships debated this matter in Committee, I had given a good and useful undertaking of what the Government were prepared to do. I do not want to say anything which is at variance with what I said on that occasion, which was carefully considered and which I had hoped and, indeed, from the reaction of the Committee I had concluded, was going to be satisfactory.
The only matter that I was rather doubtful about was the registration number of the vehicle delivering the venison. I am still doubtful about that. We have not had the time for consultation between stages of the Bill. For reasons which the noble Lord, Lord Northfield, knows better than anybody else, the stages of this Bill have not exactly dragged and I simply have not been able to have consultations. But certainly I think that the police were doubtful as to whether this should be included in a register in the form in which the noble Lord wants it.
I can only repeat what I said previously, that we shall pay close attention to the noble Lord's draft form in Committee, that we shall have consultation with all the interested parties after this Bill becomes an Act and, subject to the reservations of the police—I think it was the police who were worried—I have no doubt that a form of register will be produced which will commend itself to the noble Lord.
I am sorry not to be able to dot the i's and cross the t's in primary legislation which I know the noble Lord, with his tidy mind, dearly wishes me to do. I am simply not in a position to do it.
Lord Northfield: My Lords, before the noble Earl sits down may I say that the point which was worrying me concerned the vehicle. I have not yet understood from the noble Earl the problem about recording the registration number of the vehicle.
The Earl of Mansfield: My Lords, I do not know either. What I assume it to be is that the vehicle which eventually turns up at the dealers premises may not necessarily bear any relation to the vehicle which was actually used either in connection with the killing of the deer, or in its transporation. Therefore, the details in such form might well be misleading and certainly not very helpful.
On Question, amendment agreed to.
9.16 p.m.
Lord Glenarthur Lord Glenarthur moved Amendment No. 16.
Page 6, line 5, leave out ("and").
The noble Lord said: My Lords, I beg to move Amendment No. 16, and I should like also to speak to Amendment No. 17. We are here concerned with the form of record to be required in transactions between dealers. Your Lordships may recall that when we were dealing with this matter in Committee the noble Lord, Lord Northfield, suggested that the Red Deer Commission should be informed of the species of the carcases, to which the noble Duke, the Duke of Atholl, responded that, while the Committee would very much like that information, it would not always be feasible to get it. We looked at the matter, discussed the question with the Red Deer Commission and this amendment is the result. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 17:
Page 6, line 7, at end insert—
("; and
(e) the species of deer, provided that it is possible to identify it.").
The noble Lord said: My Lords, I beg to move Amendment No. 17. I spoke to this amendment with Amendment No. 16.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 18:
Page 6, line 14, at end insert ("or he has purchased the venison from a licensed venison dealer.").
The noble Lord said: My Lords, I beg to move Amendment No. 18. With this amendment I should like to speak also to Amendment No. 21 at page 7, line 28, because they are designed to work together. It was, I think, agreed in Committee that, while we want a tight control of the venison trade, it need not be so tight as to oblige every single retail outlet necessarily to go through all the hoops of the licensing, record-keeping procedure which the Bill describes. With that in view, I seek to define the term "venison" loosely so that we can exclude the later stages in the marketing chain, yet not so loosely as to leave the way open to easy abuse.
The noble Lord, Lord Northfield, made some constructive proposals, for which I was very grateful. But even so, I was not satisfied that we had it quite right and I undertook to give the question further thought. On looking at it again and considering the matter, it seems to me that the essence of what we were trying to achieve was that the venison should pass through the hands of at least one licensed dealer. There might be more than one licensed dealer in the chain, but there need not be. One is enough. On the assumption that there are typically four links in the chain—a stalker who shoots the animal, a wholesaler, a retailer and a consumer who eats the venison—one can get the requisite degree of control if one provides that it is lawful, first, to sell to a licensed dealer; secondly, to sell if one is a licensed dealer; and, thirdly, to sell if one has bought from a licensed dealer.
We have the first and the second in the Bill at present. My amendment provides the third of those that I have just mentioned; that is to say, the man who has bought from a licensed dealer. In effect, it means that once the venison has passed through the hands of a wholesaler who is licensed, the retailer will be free to sell to the consumer without further ado. If this is accepted, it becomes less critical how one actually defines "venison". In particular there is no longer the need for the exemptions which were giving us trouble; that is to say, canned, processed, for sale and so on.
That is the point of my other amendment, Amendment No. 21, at page 7, line 8. It cuts short the definition of "venison" before one gets to the exemptions. Indeed, I am not sure whether any definition of "venison" is any longer needed; but at any rate, the shorter definition of "venison", with which we would be left, does no harm. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 19:
Page 6, line 43, leave out ("£50") and insert ("£200").
The noble Lord said: My Lords, this amendment increases the maximum penalty for obstruction under Clause 7 from £50 to £200. I am advised that it is Government policy that the penalty for an offence of obstruction, which is a pretty standard kind of provision found in many statutes, should be £200. A more immediate reason is that in the Bill we are increasing the penalty for the offence of obstruction in Section 17 of the 1959 Act to £200. Therefore, for consistency, this penalty should go up by the same amount. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 20:
Page 6, line 45, leave out ("this section") and insert ("Part III or IIIA of this Act").
The noble Lord said: My Lords, this amendment provides that the penalty of disqualification from holding a venison dealer's licence should be available on conviction not only for an offence against the Part of the Act that concerns the trade in venison, but also an offence against Part III of the 1959 Act, which is to say an offence of poaching, unlawful night shooting or killing by some prohibited means, such as snaring. I think the House will recall that we debated a similar amendment in the name of the noble Lord, Lord Northfield, in Committee, which, however, extended the penalty further back still to include Part II of the Act; that is to say, unlawful shooting in the close season.
I accepted the extension to Part III but not to Part II, and undertook to provide an amendment to that effect. For his part, the noble Lord threatened to resurrect the argument at this stage. As I have discharged my undertaking with this amendment, no doubt he will now carry out his threat. Therefore, I should like to say a little more about—
Lord Northfield: My Lords, no, I do not intend to.
Lord Glenarthur: My Lords, in that case, I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 21:
Page 7, line 28, leave out from ("deer") to end of line 31.
On Question, amendment agreed to.
The Deputy Speaker: My Lords, if Amendment No. 22 is agreed to, I cannot call Amendments Nos. 23 or 24.
Lord Glenarthur Lord Glenarthur moved Amendment No. 22:
Page 7, line 32, leave out subsection (2)
The noble Lord said: My Lords, this is a technical amendment. What was Schedule 1 to the Bill, which concerned the procedure for handling applications for dealers' licences, was deleted in Committee. At the same time we should have taken out Clause 7(2), which brought Schedule 1 into the Bill. Hence the blank space at line 33 in the current print. This amendment simply takes out a provision which no longer serves a purpose. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 23 and 24 not moved.]
9.25 p.m.
Lord Northfield Lord Northfield moved Amendment No. 25:
Before Clause 8, insert the following new clause:
("Powers of search and seizure.
.—(1) For subsection (1) of section 27 of the said Act of 1959 there shall be substituted the following new subsections—
"(1) Without prejudice to the provisions of subsections (2) to (4) below, if a constable suspects with reasonable cause that a person is committing or has committed an offence under Part III or this Part of this Act, the constable may without warrant—

(a) stop and search that person if the constable suspects with reasonable cause that evidence of the commission of an offence is to be found on that person;

(b) search or examine any vehicle, animal, weapon or other thing which that person may then be using if the constable suspects with reasonable cause that evidence of the commission of an offence is to be found on that vehicle, animal, weapon or other thing;

(c) arrest that person;

(d) seize and detain for the purposes of proceedings under this Act any thing which may be evidence of the commission of the offence and any deer, firearm or ammunition, vehicle or boat, animal or other thing which may be liable to be forfeited on conviction of an offence under this Act.

(1A) For the purpose of exercising the powers conferred by subsection (1) above a constable may enter any land, and in this subsection "land" includes land covered by water but does not include any dwelling-house."
(2) Section 28 of the said Act of 1959 is repealed.
(3) In section 32 of the said Act of 1959 the definition of "land" shall be amended by inserting after the word "land" "the words", except in section 27(1A),".").
The noble Lord said: My Lords, we can be brief about this amendment. I understand that there may be some sympathy for its intent. This is to strengthen the powers of the police to stop and search in connection with poaching. I think enough has been said about that during different stages of the Bill. I hope that the sort of thing I am proposing here commends itself to the noble Earl. I move it as briefly as that, and ask for his comments on it. I beg to move.
The Earl of Mansfield: My Lords, there is considerable sympathy for what the noble Lord is trying to achieve. There is inconsistency in the face of the statute. Therefore, it follows that the powers under Section 27 should be extended to cover all offences of poaching and unlawful killing under Part III of the 1959 Act. The drafting of the noble Lord's amendment is not altogether happy, and I do not think he intends to press it tonight. Therefore, I am not going to weary him with all the details.
We should take advantage of the opportunity to include a subsection making an offence of obstructing a police constable in the exercise of his powers. I think that would be helpful. If the noble Lord is agreeable, I intend to look carefully at Section 27 and at the noble Lord's amendment and what he seeks to do. I think when this Bill gets to another place the Government will bring forward a revised Section 27 for consideration in Committee in another place, and when the Bill returns to your Lordships' House—always assuming that it does—then it will be for your Lordships to consider what has been done.
Lord Northfield: My Lords, that is helpful and I am grateful for what the noble Earl has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Exemptions for certain acts]:
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 26 and 27:
Page 8, line 5, leave out ("or agents") and insert ("in his ordinary service").
line 9, leave out ("normally employed") and insert ("in his ordinary service").
The noble Lord said: My Lords, with Amendment No. 26 I shall take No. 27. They are drafting amendments made for consistency. Lower down in line 27 we have the expression "in the occupier's ordinary service", and to use a different form of words at lines 5 and 9 where we intended the same meaning would be a nonsense and could lead to confusion and misinterpretation. It is important that we have the same wording in both cases. I beg to move.
On Question, amendments agreed to.
Lord Northfield Lord Northfield moved Amendment No. 28:
Page 8, line 13, after ("approved") insert ("in writing").
The noble Lord said: My Lords, I understand that this is probably acceptable. It is on all fours with previous similar amendments, and I beg to move.
Lord Glenarthur: My Lords, I am quite happy to accept this amendment.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 29:
Page 8, line 21, at end insert—
("Provided that the occupier has reason to believe that serious damage will be caused to crops, pasture, trees or human or animal foodstuffs on that land if the deer are not killed.").
The noble Lord said: My Lords, the House will recall that we had a long and somewhat fairly heated discussion on this point in Committee over two
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amendments in the name of the noble Lord, Lord Northfield, concerning the extent to which an occupier of agricultural land or woodland ought to be required to show that damage would ensure if he did not shoot deer found on his land. I undertook, with the noble Lord's agreement, to discuss with him and with others whether a generally acceptable formula could be found. This amendment and the similar one at page 8, line 43, are the result of that discussion.
I have not had an opportunity of discussing it with the noble Lord in person, but he was given some notice that I was putting down an amendment on these lines, and I hope he will find that it is acceptable. I hope he will recognise that it goes some way towards meeting his point of view. At the same time, I have reason to believe that it is acceptable not only to the farmers' union but also to the landowners, who of course represent both farming and sporting interests.
The amendment can be briefly described. First, the occupier must have reason to believe that damage will follow. He is not put under the burden of objective proof, nor does he have to wait for damage to begin for, as was argued at length in Committee, these would be unreasonable constraints. On the other hand, he may not irresponsibly shoot deer merely because they are there, which does, as the noble Lord observed, rather run counter to the idea of close seasons, or whatever one takes to be the purpose of close seasons. Secondly, as your Lordships will have observed, the damage anticipated has to be serious. That goes without saying after all our deliberations in the past on that point.
Finally, it will be observed that the formula avoids suggesting that other methods have been tried and found wanting before shooting as the last resort. That is realistic; in many cases shooting is the first and only resort, and we must recognise that. I believe this formula is the best compromise to be found among the conflicting interests, and I commend it to the House.
Lord Northfield Lord Northfield moved Amendment No. 30 as an amendment to the Amendment No. 29:
Line 1, leave out ("reason to believe") and insert ("reasonable grounds for believing").
The noble Lord said: My Lords, although I said at the beginning that I would not do so, I simply wish to say "Thank you" to the noble Lord, Lord Glenarthur, for what is a most important amendment, plus No. 34, which goes with it, which I hope we shall not now need to discuss when it is called. It is probably one of the most important amendments to have been made since Committee, and I am very grateful.
I hope that my amendment to the amendment is acceptable. "Reason to believe" is a subjective state. "Reasonable grounds for believing" is, I suggest, a much better phrase because it means that other people can give their opinion as to whether that person is or is not being reasonable. It may sound complicated, but I believe it is well understood in draftsmanship terms and that "reasonable grounds for believing" is the right phrase to use.
Lord Glenarthur: My Lords, a philosopher could probably tell us whether there was any difference between a reason to believe and a reasonable ground

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for belief. I suspect that in this case one would get as good an answer by tossing a coin. The noble Lord, Lord Northfield, seems to have reason to believe that his is the better formula, and as I have no reasonable grounds for resisting, I accept his amendment.
On Question, amendment to the amendment agreed to.
Lord Northfield Lord Northfield moved Amendment No. 31 as an amendment to Amendment No. 29:
Line 2, after ("caused") insert ("by deer of the same species").
The noble Lord said: My Lords, this matter was discussed at an early stage in Committee. If people are to have carte blanche to go out shooting because serious damage has been caused, I suggest that they should be slightly checked by someone saying, "You do it every time as if they were always the same deer causing the damage, when we know perfectly well that may not necessarily be the case". The amendment should cover cases where deer of the same species are continuing to cause bother. I beg to move.
Lord Glenarthur: I am not really convinced that this amendment to the amendment is necessary, my Lords. An occupier cannot lawfully act unless he has good reason to believe that damage will follow in some form or other. I would go so far as to say that a good reason is a good reason and that should be sufficient. In any case, there seems to be some repetition in what the amendment would achieve. The deer found, so to speak, will in fact be the same species, as the noble Lord will see if he looks at the provision to which it refers.
Lord Northfield: My Lords, as this is concerned with a small point, I am happy to withdraw it on the basis that I shall consider the matter between now and Third Reading.
Amendment to the amendment, by leave, withdrawn.
On Question, Amendment No. 29, as amended, agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 32:
Page 8, line 42, leave out ("deer") and insert ("red deer or sika deer or any hybrid of those species").
The noble Lord said: My Lords, this effectively removes roe deer from the deer which can be shot at night by occupiers. When we were debating an amendment to Clause 4 in Committee I gave a firm undertaking that provided some facility for night shooting of roe was left in subsection (4)(a), I would bring forward an amendment to take roe out of Clause 4 so that an occupier could not shoot roe at night without reference to somebody. My understanding from the debate we had on subsection (4A) was that noble Lords were prepared to see roe left within its scope, though with reluctance and heavy qualification. I hope that was the position reached and that there was no misunderstanding. At any rate I have in good faith put in this amendment to subsection (4), and equally I have not put forward a parallel amendment to subsection (4A), though I hope that your Lordships will see that I have other amendments there.
I do not think that I need say any more on the amendment. As I have said, it means that occupiers
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no longer have the rights which have been theirs hitherto to shoot deer of any species—say, roe, red and sika—on their land at night. They are to be restricted, and they will have to go through the whole panoply of applying to the Red Deer Commission if they wish to shoot roe. Roe do occasion damage; we know that. It is, I think—and I hope that the noble Lord will agree—quite a significant amendment in that it imposes a substantial restriction on occupiers of the rights which have been enshrined in law for some considerable time. I beg to move.
Lord Northfield Lord Northfield moved Amendment No. 33 as an amendment to Amendment No. 32:
Line 2, leave out ("or any hybrid of those species").
The noble Lord said: My Lords, I hope that we can dispose of this quickly. I think that the sponsor of the Bill knows that we need a definition in this part of the Bill, and I seek to provide that by Amendment No. 39, which we should discuss with this amendment. If my Amendment No. 39 is accepted, there is needed my small amendment to the noble Lord's Amendment No. 32. I think that, if that is agreed, this boils down to drafting. I beg to move.
Lord Glenarthur: My Lords, I accept that we should have a separate interpretation clause which would give the Latin names of these species, as is done elsewhere for another part of the Bill, and that the place for hybrids is in such a clause. The noble Lord has down a later amendment on this point, for which this is a paving amendment. I am quite content to accept this amendment.
Lord Burton: My Lords, with regard to Amendment No. 32, it is not only roe that will be exempted, but also fallow deer. I rather wondered why the poor sika—there are thought to be only 4,000 of them in Scotland—should be the ones left in. I do not want a reply on this tonight, but I hope that the noble Lord will consider it. I see that there is a case for red deer, and if one accepts the hybrid point, hybrids would be covered by red deer. I do not see any reason why the sika should be harried by the occupier at night.
On Question, amendment to the amendment agreed to.
On Question, Amendment No. 32, as amended, agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 34:
Page 8, line 43, leave out from ("occupier") to end of line 2 on page 9 and insert ("has reason to believe that serious damage will be caused to crops, pasture, trees or human or animal foodstuffs on that land if the deer are not killed.").
The noble Lord said: My Lords, this amendment qualifies the occupier's right to shoot at night by precisely the same formula which we have already considered in relation to out-of-season shooting. I submit that it is equally appropriate here. I beg to move.
Lord Northfield Lord Northfield moved as an amendment to the amendment, Amendment No. 35:
Line 2, leave out ("reason to believe") and insert ("reasonable grounds for believing").
The noble Lord said: My Lords, we have already discussed this point. I beg to move.
On Question, amendment to the amendment agreed to.
On Question, Amendment No. 34, as amended, agreed to.
9.39 p.m.
Lord Glenarthur Lord Glenarthur moved Amendment No. 36:
Page 9, line 12, at end insert—
("( ) that no other method of control which might reasonably be adopted in the circumstances would be adequate; and").
The noble Lord said: My Lords, as I said when speaking to an earlier amendment, the impression that I took away from the Committee stage was that your Lordships were prepared reluctantly to tolerate night shooting of roe under authorisation from the Red Deer Commission on the understanding that authorisation would be granted by no means as a regular thing, but only in exceptional circumstances and, as it were, as a matter of last resort. That is what this amendment seeks to express. It might not be a particularly elegant amendment, but I hope that it will be accepted as accurate. It leaves the commission a measure of discretion to determine what is reasonable, while at the same time guiding it firmly away from any thought that night shooting of any species of deer should be considered run-of-the-mill, or normal, or a regular method of control. I beg to move.
The Earl of Mansfield: My Lords, I think that it would be for the convenience of the House, and more especially for those who hearken to our debates, if I say something about what has troubled the House and indeed me. I have throughout the Second Reading and Committee stages taken note of the very widespread concern which has been expressed about the standards and methods of control exercised over deer in forests, especially those owned by the Forestry Commission. My noble friend Lord Dulverton wrote to me at length, and indeed most helpfully, on the subject, and of course I shall reply to his letter in due course; but I think it is right that I should say what I am going to say at this juncture.
I do not want to go into detail. I think it is sufficient to say that the Government are always concerned about the standards achieved by their departments, and in the light of comments made by noble Lords forestry Ministers will want to maintain some surveillance over the practice of the Forestry Commission, looking broadly at the design of forests, the instructions and training given to forest rangers, and the increasing body of knowledge that exists about the life style and habits of deer.
I do not wish to suggest that the commission themselves are not alive to these issues, and they have a

Enactment

Amendment

Present penalty

New penalty

1

2

3

4

("Section 26 (attempts to commit offences).

At the end of the section, add the words "; except that in the case of preparatory acts, the penalty shall be a fine not exceeding £500 or imprisonment for a term not exceeding three months or both.".

As for offence.

As for offence, except for preparatory acts, where it is £500 or 3 months or both.").

1564
wealth of professional expertise in the practice of deer management. Many of the problems that are being met are new and unforeseen problems, especially those which arise from the behaviour of roe deer in new and even-age plantations. So I have no doubt that the Forestry Commission, while faced with an urgent problem, will not adopt a blinkered approach to its solution. But I, too, undertake that I will keep closely in touch with what is going on and with the developments in deer management which the Forestry Commission will undoubtedly be introducing over the next few years.
On Question, amendment agreed to.
[Amendment No. 37 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendment No. 38:
Page 9, line 23, at end insert—
("(4D) The Commission shall prepare and publish (with power to prepare and publish a revised version from time to time) a code of practice for night shooting to which they shall have regard when exercising their powers under subsection (4A) above and it shall be a condition of any authorisation under the said subsection that the person concerned complies with the relevant provisions of the code.").
The noble Lord said: My Lords, in Committee both the noble Lord, Lord Northfield, and I put down amendments to the effect that the Red Deer Commission should publish a code of practice. Lord North-field's amendment, as I read it, was more for a code of self-discipline for the commission, outlining the type of circumstances in which they would sanction night shooting: mine was rather more a code by which those authorised to shoot would be bound in technical detail. At any rate, there seemed no dissent from the view that both types of code were desirable, and this amendment seeks to achieve that. I beg to move.
On Question, amendment agreed to.
Lord Northfield Lord Northfield moved Amendment No. 39:
Page 9, line 23, at end insert—
("(4E) In this section—
"red deer" means deer of the species cervus elaphus and "sika deer" means deer of the species cervus nippon;
and any reference to "red deer" or "sika deer" includes any deer which is a hybrid of those species.").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
Lord Glenarthur: My Lords, the noble Lord is quite right in what he said earlier, as well, that we ought to define the species by their Latin names. I accept the amendment.
On Question, amendment agreed to.
[Amendment No. 40 not moved.]
Schedule 1 [Penalties]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 41:
Page 12 line 17, at end insert—
The noble Lord said: My Lords, this is a technical amendment but an important one. The revised penalties in Schedule 1 each embody the concept, borrowed from the Deer Act 1980, that where one commits an offence in respect of more than one deer the court may treat each deer as a separate offence when it comes to determining a fine. Section 26 of the 1959 Act makes a general provision in respect of all the offences involving deer, to the effect that an attempt may be punished on the same basis as the offence itself. So far as the new penalties are concerned, that works quite well. One can attempt to kill three deer just as much as one can kill three deer.
But Section 26 goes further. It says that an act preparatory to an offence can also be treated as the offence itself. But, of course, an "act preparatory", such as going on to a hill with a loaded rifle, does not itself concern any defined number of deer, and it is therefore necessary to establish as it were the base line; namely, that in the case of a preparatory act, even though no individual deer was involved, the court may punish the offender as if he had taken one deer. This amendment has that effect. I beg to move.
On Question, amendment agreed to.
Schedule 2 [Minor and Consequential Amendments]:
Lord Northfield Lord Northfield moved Amendment No. 42:
Page 13, line 9, leave out ("licence") and insert "(certificate").
The noble Lord said: My Lords, this is drafting. I beg to move.
On Question amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 43:
Page 13, line 20, at end insert—
(". In section 27(1) of the said Act of 1959, for the words "in pursuance of" there shall be substituted the words "on conviction of an offence under".
. In section 35(1) of the said Act of 1959, at the beginning there shall be inserted the words "Subject to section 23A(4) of this Act,".").
The noble Lord said: My Lords, Section 21(1) of the 1959 Act provides that a constable may seize any deer, fire-arm or ammunition, vehicle or boat liable to be forfeited in pursuance of this Act. We are, however, removing most of the forfeiture provisions from the Act, since everything that one would want to make subject to forfeit is covered by a more general provision in the Criminal Procedure (Scotland) Act 1975. Only deer are covered specifically by the 1959 Act. It would follow therefore that the list of things which the police might sieze would be correspondingly curtailed, quite accidentally and quite unnecessarily. The first part of this amendment is designed to restore the position.
The second part of the amendment is purely consequential on an earlier amendment to Clause 6, which provided that orders made under that clause should, unlike orders generally under the 1959 Act, be subject to the affirmative procedure. I beg to move.
On Question, amendment agreed to.
Schedule 3 [Repeals]:
Lord Northfield Lord Northfield moved Amendment No. 44:
Page 13, line 30, column 3, after ("Deer") insert ("(Amendment)").
The noble Lord said: My Lords, this is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 45:
Page 13, leave out lines 37 to 40.
The noble Lord said: My Lords, this is a consequential amendment to Amendment No. 2, which rewrote the whole of Section 6(1) of the 1959 Act, making the scheduled repeal redundant.
On Question, amendment agreed to.

Port of London Bill
Brought from the Commons, read a first time and referred to the Examiners.
Fire Service College Board (Abolition) Bill [H.L.]
Returned from the Commons agreed to.
  DRUGS: FORENSIC ANALYSIS
  DRUGS: FORENSIC ANALYSIS
  GARTREE PRISON: REPORT ON CONDITIONS
  GARTREE PRISON: REPORT ON CONDITIONS
  ISLE OF WIGHT PRISONS: LIBRARIES
  ISLE OF WIGHT PRISONS: LIBRARIES
  NORTHERN IRELAND: CHILD DAY CARE FACILITIES
  NORTHERN IRELAND: CHILD DAY CARE FACILITIES
  CRUMLIN ROAD PRISON: DISTURBANCES
  CRUMLIN ROAD PRISON: DISTURBANCES
  UK INCOME PER HEAD: OECD CONCLUSION
  UK INCOME PER HEAD: OECD CONCLUSION
  SOVIET DEPOSITS AND INDEBTEDNESS IN BRITAIN
  SOVIET DEPOSITS AND INDEBTEDNESS IN BRITAIN
  ROYAL COMMISSION REPORTS
  ROYAL COMMISSION REPORTS
  BRITISH ATLANTIC COMMITTEE: CHARITABLE STATUS
  BRITISH ATLANTIC COMMITTEE: CHARITABLE STATUS
  HYDRO-ELECTRIC SCHEMES: INVERGORDON SMELTER
  HYDRO-ELECTRIC SCHEMES: INVERGORDON SMELTER
  COAL MINING DEVELOPMENT AND THE VALE OF BELVOIR
  COAL MINING DEVELOPMENT AND THE VALE OF BELVOIR
  THE HOOVER BUILDING, PERIVALE
  THE HOOVER BUILDING, PERIVALE
  ELECTRICITY GENERATING STATIONS
  ELECTRICITY GENERATING STATIONS
  ELECTRICITY PRODUCERS: WASTE HEAT UTILISATION
  ELECTRICITY PRODUCERS: WASTE HEAT UTILISATION
  POWs: PAYMENT DURING CAPTIVITY
  POWs: PAYMENT DURING CAPTIVITY
  OVERSEAS STUDENTS: FEES
  OVERSEAS STUDENTS: FEES