Sitting of 28 July 1982

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

  Hunter Report
  Resolved,
  That an humble Address be presented to Her Majesty, that she will be graciously pleased to give directions that there be laid before this Housed a Return of a report of an Inquiry by the honourable Lord Hunter, VRD, into the whole circumstances of the murder of Mrs. Rachel Ross at Ayr in July 1969, and the action taken by the police, the Crown Office and the Scottish Home and Health Department relating to that case both before and after the trial of Mr. Patrick Meehan.—[Mr. Younger.]

Oral Answers to Questions
  SCOTLAND

    Invergordon Smelter
    Mr. Douglasasked the Secretary of State for Scotland if he will make a statement on current progress toward a power cost and price agreement with companies interested in acquiring an interest in the aluminium smelter at Invergordon.
    Dr. J. Dickson Mabonasked the Secretary of State for Scotland if he will make a further statement on the future of the aluminium smelter at Invergordon.
    The Secretary of State for Scotland (Mr. George Younger): I propose to make a statement about Invergordon to the House after Question Time.
    Mr. Douglas rose—
    Mr. Speaker: Does the hon. Gentleman prefer to wait until the statement?
    Mr. Douglas: Normally I would delay a supplementary question in the hope of catching your eye later, Mr. Speaker.
    Mr. Speaker: I shall do my best. Whenever an hon. Member says that I try to call him early among the hon. Members who are called to put supplementary questions on the statement.
    Dr. Mabon: May I not—
    Mr. Speaker: Does the right hon. Gentleman wish to give up his chance of asking a question on the statement?
    Dr. Mabon: No, Mr. Speaker, but I wish to ask the Secretary of State whether he is aware that during Monday's Question Time when Energy Ministers were cross-examined about the future of Dounreay, a large question mark was raised about the future of the
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    experimental fast-breeder reactor? If the statement is to be anything other than hopeful about the future of Invergordon, the question mark over Dounreay, the shutting down of the Fort William pulp mill at Corpach and the cancellation of the gas-gathering pipeline will all add up to very bad news for the Highlands.
    Mr. Younger: I note what the right hon. Gentleman says. I do not think that he has read correctly the answer given by my hon. Friend the Under-Secretary of State for Energy.

    Public Works Contracts (European Social Fund)
    Mr. Carmichaelasked the Secretary of State for Scotland how many public works contracts were started in Scotland in the last convenient 12-month period with the help of the European regional fund; and what percentum of the cost of each scheme this represented.
    The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): One hundred and twenty-four public works contracts for which grants have been approved from the European regional development fund started in Scotland in the 12 months ending 30 June 1982. In 117 of those the grant is 30 per cent. of project costs; for the six projects in support of the Western Isles integrated development programme the grant is 40 per cent.; for one project the grant is 20 per cent.
    Mr. Carmichael: Does the fact that those grants are being given affect in any way the priorities given to particular schemes by the hon. Gentleman's Department? If so, does the Minister not think that that is wrong, as the Prime Minister has said, that it is our own money that we are getting back?
    Mr. Fletcher: The priorities for grants from the EEC are related to the nature of the project. These are all infrastructure projects by local authorities and other public bodies. We are anxious to ensure that Scotland continues to receive a full share of the money coming to the United Kingdom. So far, 25 per cent. of the grants have been related to projects in Scotland.

    Scottish Development Agency
    Mr. Knoxasked the Secretary of State for Scotland how many new factory units and how many square feet of factory space have been built by the Scottish Development Agency since its inception.
    Mr. Alexander Fletcher: Since its inception the Scottish Development Agency has built 546 factory units providing over 4 million sq ft of factory space.
    Mr. Knox: How many of those factory units are occupied, and is my hon. Friend satisfied that their provision is sufficient to meet demand?
    Mr. Fletcher: I am satisfied that the provision is sufficient to meet demand in Scotland. Although the occupancy rates vary, at present fewer than 10 per cent. of the agency's factories are vacant.
    Mr. Foulkes: Does the Minister accept that one of the SDA factories that is likely to become unoccupied is the Falmers factory at Patna? Following the meeting that I had with the Minister and the Prime Minister, is there any hope of keeping the factory occupied, preferably by Falmers but, failing that, by some alternative manufacturer?
    Mr. Fletcher: I met the chairman of the company this morning. It is clear that the decision on the closure of Patna is firm. We undertook to do what we could to find a new tenant for the vacant factory.
    Sir Hector Monro: Does my hon. Friend agree that it is the letting rather than the building of the factories that is important? Is the SDA following up every conceivable opportunity with the full determination that is required, particularly in relation to small business men?
    Mr. Fletcher: I believe that to be the case. If my hon. Friend knows of any case to the contrary that he would like to draw to my attention I should be delighted to look into it.
    Mr. Harry Ewing: In view of the Chancellor's statement yesterday about the proposed new enterprise zones for Scotland, has the Minister discussed its factory building programme with the SDA? If so, what was the outcome of those discussions against the background of the Chancellor's statement? Will the Government's decision on the allocation of those enterprise zones be based on the need for employment in the area rather than on the availability of factory space?
    Mr. Fletcher: I entirely agree with the right hon. Gentleman on the last point. My right hon. Friend's main criterion in deciding where to locate the new enterprise zones will be the need to create jobs in an area, and the SDA will be involved in the consultations.

    TUC and CBI
    Mr. Craigenasked the Secretary of State for Scotland on what dates since coming to office he has met representatives of the Confederation of British Industry in Scotland and the Scottish Trades Union Congress at official meetings; and what plans he has in mind for future discussions.
    Mr. Younger: I have met representatives of the Confederation of British Industry in Scotland four times and of the Scottish Trades Union Congress nine times at official meetings since May 1979. In addition, my hon. Friends and I have frequent informal contact with representatives of both bodies. We have made it clear that we are willing to meet representatives of both bodies whenever that would be useful.
    Mr. Craigen: How seriously does the Secretary of State treat the Scottish CBI's latest economic findings on export orders and manufacturing capacity? Will he consider setting up a Scottish NEDC to involve the STUC and the Scottish CBI?
    Mr. Younger: I take seriously forecasts produced by the CBI, the chambers of commerce or anyone else. The survey published in May was the third in succession to show a more optimistic trend, but I understand from more recent statements by the Scottish CBI that at present it sees less favourable trends. I am watching the trends carefully and will of course be glad to discuss them with the CBI.
    Mr. Ancram: Will my right hon. Friend confirm that in the CBI regionalised statement last week a lack of improvement rather than a deterioration was reported for Scotland, in sharp contrast to other areas of the United Kingdom? Although that is gloomy, does he agree that, taken with the fact that unemployment is rising less fast in Scotland, it is a reason for optimism?
    Mr. Younger: I am grateful to my hon. Friend for what he said. Compared with the same period a year earlier, industrial production in Scotland from March to May 1982 was up 2 per cent., and manufacturing production was up 1·7 per cent. Manufacturing output in Scotland has fallen since 1979 by 8·3 per cent., but that compares with an overall United Kingdom fall of 14·5 per cent. Scotland has weathered the recession remarkably well.
    Dr. M. S. Miller: Does the right hon. Gentleman accept that meeting the Scottish CBI and the STUC will not produce the necessary increase in employment while the Scottish Development Agency continues extortionately to increase rents? Is he aware that a factory in my constituency has had its rent increased by almost 100 per cent. in the past year, and that such increases are driving factories to the wall?
    Mr. Younger: I shall look into any complaint by the hon. Gentleman. However, like the rent for other factories, those for SDA factories should be on a proper commercial basis. Whether an increase is fair depends on the previous rent and how long it had appertained.
    Mr. Bill Walker: Have the Scottish CBI and the STUC welcomed the new training initiative?
    Mr. Younger: The CBI has warmly welcomed it and pledged all possible support to make it a success.
    Mr. Millan: Is not the CBI in Scotland, as elsewhere, expressing anxiety about the economy almost as strongly as the trade unions have done over the past two or three years? Is the Secretary of State aware that, even though he may be satisfied with the 8·3 per cent. reduction in industrial production in Scotland, the rest of us, including the CBI, certainly are not? Will he comment on the disturbing reports today from Russian sources that the John Brown contract may be irretrievably lost?
    Mr. Younger: I have no reason to believe that the contract is lost. We have kept in close touch through my right hon. Friends and directly with John Brown, and pleged every support, right up to the level of the Prime Minister, and the firm has expressed its appreciation. But I shall look into what the right hon. Gentleman says.
    What the CBI is saying comes after three successive surveys showing a more optimistic trend. The CBI suggests an element of reflation paid for by increased public spending cuts. I do not know whether the right hon. Gentleman would fully support that.

    Civil Aviation Expenditure
    Mr. Robert Atkinsasked the Secretary of State for Scotland what expenditure on services associated with civil aviation has fallen on his Department's Vote in the last three years for which figures are available.
    The Under-Secretary of State for Scotland (Mr. Allan Stewart): In the financial years 1979–80 to 1981–82 inclusive, my Department's expenditure on services associated with civil aviation totalled £6·9 million. I shall publish detailed figures in the Official Report.
    Mr. Atkins: Is my hon. Friend aware of the great achievements of the Highland division of British Airways, which has managed to turn substantial losses into profits for the forthcoming year as a result of the efforts of management and unions to increase productivity and to

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    give a better service for the money? Could not the same be done in other parts of British Airways throughout the country and in other companies?
    Mr. Stewart: The division has been in operation for only two months. My hon. Friend's detailed knowledge and expertise are well-known, and I am glad of his comments.
    Mr. Foulkes: What are the Government doing to bring together all interests in Scotland to increase direct flights to Europe and North America out of Glasgow, Edinburgh and Prestwick to counter the pull of the South-East of England?
    Mr. Stewart: When my right hon. Friend gave evidence to the Select Committee on Scottish Affairs on 19 July he emphasised the Government's commitment to the long-term potential for Prestwick and our wish to encourage all involved, including the British Airports Authority, to support the airport. Considerable effort is being devoted to that end in North America by the Scottish Tourist Board.
    Lord James Douglas-Hamilton: Will my hon. Friend confirm the great importance of Edinburgh airport and pass the information on to those responsible that there is widespread demand for intercontinental services out of Edinburgh?
    Mr. Stewart: No doubt my right hon. and hon. Friends in the Department of Trade will note what my hon. Friend says. We have recently reiterated our policy on the Scottish Lowland airports, which is that the three airports should complement each other to achieve the best use of resources.
    Following is the information:

    1979–80

    1980–81

    1981–82

    Highlands and Islands Aerodromes

    —

    2,700,000

    3,830,000

    Loganair Limited

    102,700

    92,589

    171,050

    Exports (European Community)
    Sir Russell Fairgrieveasked the Secretary of State for Scotland if he is able to estimate the quantity of Scottish produced goods and services that are exported to the European Community; and how many jobs are dependent on these industries.
    Mr. Younger: Exports of Scottish produced goods are not recorded separately, and it is therefore not possible to give an estimate of the number of jobs connected with exports to the Community. We know, however, that United Kingdom trade with the Community is now 43 per cent. of our exports, and it can be assumed from that that a large number of jobs are involved in such activities.
    Sir Russell Fairgrieve: Of all its stupidities, is not the Labour Party's most asinine policy to withdraw from the Common Market, which could put at risk 200,000 jobs in Scotland and which, added to our present problems of high unemployment, could make the Labour Party responsible for 500,000 unemployed?
    Mr. Younger: I, too, find it almost impossible to believe that the Labour Party really intends to take us out of the Common Market, with the catastrophic effect on jobs that that would have.
    Mr. Douglas: Is not one factor affecting jobs anti job creation additional transport charges? Will the right hon. Gentleman take urgent steps to abolish tolls on the Forth road bridge, even though he has just increased them?
    Mr. Younger: We should see the issue in proportion. The Forth bridge was built on the understanding that tolls would be paid. It is an extremely good bargain, since it is much more expensive to drive the long way round. The tolls have not been increased since 1969 and the present levels are moderate.
    Mr. Myles: Does my right hon. Friend agree that many jobs in Scotland depend on other aspects of the EEC, such as the less favoured areas directive and the integrated development programme for the Western Isles? Will he take note of the report on the subject of the Select Committee on Agriculture, published yesterday?
    Mr. Younger: I am grateful to my hon. Friend for reminding me of that report, which I shall study with great care. He is right in saying that a good example of the benefits that we receive from membership of the Community is the IDP for the Western Isles, which is warmly welcomed by everybody there.
    Mr. McKelvey: Has the Secretary of State kept a record of the jobs that we have exported to the EEC, among which would be the 1,800 jobs that have disappeared from the Massey-Ferguson plant in Kilmarnock to be: exported to Marquette, in France? How many jobs have we exported in this fashion?
    Mr. Younger: I do not have that figure, but many more jobs than that have been created by firms coming to Scotland to serve the European market. Virtually all of those firms make it crystal clear that if Scotland were not in the Common Market they would have had no intention of setting up in business in Scotland.

    Levenmouth (Job Prospects)
    Mr. Hendersonasked the Secretary of State for Scotland what action he is taking to improve job prospects in Levenmouth.
    Mr. Alexander Fletcher: The Levenmouth and Methil employment office area remains a development area eligible for all forms of Government and European regional assistance.
    Mr. Henderson: I thank my hon. Friend for the personal interest that he has taken in the complex problems of Sybron-Balfour. If Henry Balfour is to be left out of the deal between Sybron and Sohio, are the Government satisfied that no one else will be prevented from taking over and operating the glass lining operations at Leven? In the wider context of Levenmouth, will my hon. Friend urge the SDA to respond positively to the proposals made by the local authorities for an integrated project in the Levenmouth area?
    Mr. Fletcher: We shall examine carefully the local authorities proposals. I know that the SDA will do likewise. As to the agreement that is being negotiated between Sybron and Sohio in the United States, which is still not completed, we are closely involved with the parties concerned. We are doing our best to ensure that the business at Henry Balfour is retained.
    Mr. Gourlay rose—
    Mr. Harry Ewing: On a point of order, Mr. Speaker. If some of my hon. Friends on the Back Benches wish to catch your eye, perhaps—
    Mr. Speaker: Order. I shall call those hon. Members who rise, but the House must bear with me, as I thought that this was a constituency matter for the hon. Member for Fife, East (Mr. Henderson).
    Mr. Gourlay: Levenmouth covers my constituency as well, Mr. Speaker. Is the Minister aware that Henry Balfour Ltd. has about 75 per cent. of the glass lined vessel market in the United Kingdom? If that business were to go to West Germany, as is anticipated, it would be a major loss to Scotland generally and the Levenmouth area in particular. Therefore, what do the Government propose to do to try to prevent this tragedy?
    Mr. Fletcher: I agree that it would be a tragedy if the glass lining business were to be lost, not just for Levenmouth but for the United Kingdom. That is why we are doing everything possible to persuade the parties making the contract to agree that the business should be allowed to remain at Levenmouth. At this point, however, I cannot predict the outcome.
    Mr. William Hamilton: A number of my constituents are deeply worried about this matter, as they are employed in Sybron-Balfour. Does the Minister realise that there is already 28 per cent. male unemployment in that area and that if these jobs are lost—about 500 of them—it will be a disaster?
    Mr. Fletcher: I have already said that this is a serious matter, but the Government are not in a position to interfere in the negotiations. We are doing our best to influence the parties by pointing out to them the serious position that would arise if the proposed deal were to go through.
    Mr. Ewing: The Minister's answers are abysmally complacent. The Minister must understand that Sohio American is a subsidiary of BP. Has he made any direct approach to seek to influence BP to stop it taking those viable jobs away from Balfour at Leven? Does the Minister realise that we are talking about a company that has been successful in attracting orders and has a full order book? Contrary to what the Secretary of State has said, all 600 jobs are to be exported to Germany and the EEC. Does the Minister understand that he must make much greater efforts to help Levenmouth?
    Mr. Fletcher: I refute the charge of complacency. I have been in direct contact with BP, which owns 53 per cent. of Sohio and we are in direct contact with Sohio and Sybron. Talks are taking place at the moment, but there is no complacency in the Scottish Office about Henry Balfour or any other project in Scotland.

    Emigration
    Mr. Tom Clarkeasked the Secretary of State for Scotland what information is available to him as to the number of people who have left Scotland for other parts of the United Kingdom in each of the last three years.
    Mr. Alexander Fletcher: The estimated net migration from Scotland to the rest of the United Kingdom in the year to 31 December 1981 was 1,500. This corresponds with 5,000 for the year to 30 June 1981, 9,900 for the year to 30 June 1980 and 7,100 for the year to 30 June 1979.
    Mr. Clarke: Is the hon. Gentleman aware that this represents an appalling picture? Is he further aware that Governments have a responsibility for the movement of jobs as well as people? Is his right hon. Friend using the influence available to him as a member of the Cabinet to speed the process of Civil Service dispersal so that we may have jobs in Glasgow serving the rest of Scotland?
    Mr. Fletcher: I appreciate that it is difficult to pick up figures in an oral answer of this kind. I am sure that when the hon. Gentleman has time to see the written answer he will realise that, far from what he has said, the figures show an improving picture. With regard to the transfer of Civil Service jobs to Glasgow, he will have seen the announcement by my right hon. Friend the other week that the plans are going ahead, and some are even being brought forward.
    Mr. Gordon Wilson: Surely the Minister is aware that the real trend in emigration is to outside the United Kingdom. Internal migration has stopped only because he has ruined the English economy as well. As emigration has been the bane of Scotland for the past 25 years, what is the Minister doing to stimulate the Scottish economy so that there are opportunities of jobs for Scots people at home so that they will stay in Scotland?
    Mr. Fletcher: We are already taking action to stimulate the Scottish economy, and my right hon. and learned Friend the Chancellor of the Exchequer announced additional moves for jobs yesterday, including two enterprise zones in Scotland. I should make it clear to the hon. Gentleman, if only for the sake of my colleagues, that I have no responsibility for the English economy.
    Mr. Corrie: Will my hon. Friend accept that, thanks to higher education standards in Scotland, one of our best exports is qualified people, and that England has benefited from people going south and taking over banking, industrial and factory jobs and trade unions?
    Mr. Fletcher: I do not know whether my hon. Friend intended to, but, while I agree with his remarks, he is perhaps suggesting that the rest of Scotland is responsible for the English economy.

    National Health Service (Dispute)
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a further statement on the industrial dispute in the National Health Service in Scotland.
    The Under-Secretary of State for Scotland (Mr. John MacKay): I regret that disruptive action by some groups of health service workers continues to affect the care of patients in Scotland. Many patients suffer discomfort and inconvenience, and the treatment of many sick people is being delayed.
    The Government's offer is a reasonable one in all the circumstances, and I urge the unions to call off their strike action and resume negotiations.
    Mr. Hamilton: Is the Minister aware that many hon. Members such as myself continue to support action being taken by the nurses and ancillary staff in the health services? Is he surprised about that, since large numbers of nurses will be worse off, net, after their pay increase of 7·5 per cent? How can he, or anybody in the Government, defend the 10·3 per cent. increase to the

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    police and the 7·5 per cent. increase to nurses? Is it because the Government think that nurses are less important than policemen?
    Mr. MacKay: My right hon. Friend is meeting the negotiating body on police pay today and it is not for me to join in speculation on that. I remind the hon. Gentleman of the last four years of the Government in which he served, when increases in pay for nurses lagged well behind the RPI, whereas since the last general election the increase to nurses has been in advance of the RPI.
    Mr. Grimond: Although some of us do not support the industrial action, we are puzzled by the Government's policy. What is the logic of giving senior civil servants, judges and now the police a much larger increase than the nurses? What is the logic of saying that the people who work in the Health Service, who do a good job and are badly paid, should have a much lower increase?
    Mr. MacKay: The right hon. Gentleman ought to compare like with like. The groups most comparable with the Health Service, such as those in local government and the Civil Service, have received wage increases averaging 6 per cent. Indeed, the Armed Forces received 6·1 per cent. and teachers 6 per cent. Therefore, our offer to the Health Service workers is well in line with what the vast majority of other workers have received.
    Mr. McQuarrie: Is my hon. Friend aware that a considerable sum of money is spent by health boards on property and administrative staff? Were the Government to carry out an investigation into that sort of wastage, they could well have more money to pay the nurses and the ancilliary workers.
    Mr. MacKay: That is certainly an area where the health boards could look for savings, and I hope that they will do so. We have encouraged the health boards to look over the next two or three years for an average percentage reduction in administrative costs so that as much taxpayers' money as possible goes direct to patient care.
    Mr. Donald Stewart: Is the Minister aware that many people are beginning to question the way in which higher salaries are being treated by the Government and believe the Government's philosophy to be "To him that hath shall be given"? As many people regard as unfair the way in which defenceless people on low incomes are being treated, is it not about time that the Government took action to give a reasonable wage increase to the NHS workers?
    Mr. MacKay: As I have already said, since the general election the Government have given considerable extra money to the NHS and to its employees. We feel that the 7½ per cent., 6½ per cent. and 6 per cent. offers currently on the table are consistent with the other offers that have been accepted in other walks of life, both in the private and public sectors. We know that neither the taxpayer nor the Health Service can afford to pay the 12 per cent. claim for which the NHS workers have asked.
    Mr. Harry Ewing: If the taxpayer cannot pay the 12 per cent. to the nurses and the ancillary workers, how does the hon. Gentleman justify the taxpayer paying 18 per cent. to judges, 14·6 per cent. to higher civil servants and 10 per cent. to the police? He cannot have it both ways. What does he mean by "negotiations", especially when he has gone out of his way to say that there is no room for
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    further negotiation? What about the dispute in his Department? We understand that some of his civil servants have withdrawn co-operation as a result of the way in which he has handled the Health Service dispute.
    Mr. MacKay: Perhaps I can convince the hon. Gentleman of the realism of this situation. I noticed that this morning the national executive of the Labour Party was picketed by its employees who are unhappy about the fact that their wages will not be increased.
    Mr. Ewing: Answer the question.
    Mr. MacKay: If the hon. Gentleman reads my previous answers, he will see that I have answered all his questions. We have moved from our original offer of 4 per cent. The unions have made no move and I urge them now to do so.
    Mr. Ewing: What about the dispute in the hon. Gentleman's Department?
    Mr. MacKay: Part of my Department is involved in a dispute, which means that some of the questions tabled by hon. Members cannot be answered because we do not have the detailed statistics. I hope that those involved will take the same advice as I am giving to the rest of the Health Service and return to normal working and negotiations.

    Unemployed Persons
    Mr. Gregor MacKenzieasked the Secretary of State for Scotland what further measures he proposes to introduce as a means of reducing the number of people unemployed in Scotland; and if he will make a statement.
    Mr. Younger: Details were announced yesterday of a new job-splitting scheme to provide more part-time jobs and of the community programme for the long-term unemployed. We have also announced a further two enterprise zones for Scotland, in addition to the measures to assist industry announced earlier in the Budget.
    Mr. MacKenzie: Is the right hon. Gentleman aware that the majority of Scottish Members believe that the measures announced by the Chancellor yesterday do little more than tinker with a real and serious problem in Scotland? They will not create any real new jobs. About 350,000 Scottish people are unemployed, and they will have little hope of employment unless there is a radical change in Government policy. If the right hon. Gentleman is not willing to listen to Labour Members, will he at least listen to his friends in the CBI and the Scottish chambers of commerce, who have advocated a change in direction? There will be nothing shameful in admitting that such a change—
    Mr. Speaker: Order. That question is long enough.
    Mr. Younger: I understand that the CBI is proposing a measure of reflation to be paid for by public expenditure cuts. If the right hon. Gentleman is in favour of such a measure, I shall be glad of his support for the appropriate cuts. It is not fair to suggest that a change in Government policy could improve the position, unless it takes great care not to endanger the progress of reducing inflation, which is the only long-term security for Scottish jobs.
    Mr. Henderson: Will my right hon. Friend confirm that there is still a possibilility of commencing the Fife

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    regional road this year, which will provide both direct employment and employment prospects for Fife as a whole?
    Mr. Younger: We do everything that we can to bring forward such projects to help employment prospects. If my hon. Friend will table a question on the starting date for that road, I shall do my best to answer it.
    Mr. James Hamilton: Does the right hon. Gentleman accept that we are happy that some progress has at least been made in attempting to bring new jobs to Scotland? However, the measures announced yesterday are an absolute sham and an insult to the intelligence of the Scottish people. In view of the number of factories that are now derelict through liquidation and the number of people unemployed, will the right hon. Gentleman embark on a public expenditure programme to provide real jobs that will bring people off the dole?
    Mr. Younger: I am grateful for what the hon. Gentleman said at the beginning of his supplementary question. Yesterday's measures were not intended to be a huge change in policy. They will be useful in themselves. I am sure that people who get places in an enterprise zone will be glad of them. The hon. Gentleman should appreciate that, were the Government to spend taxpayers' money on extra inflationary policies, the long-term position for jobs in his constituency and elsewhere would be very much worse. That has happened on every occasion since the war when such a policy has been tried, and the Government are determined not to do it.
    Mr. Ancram: Does my right hon. Friend agree that the key to reducing unemployment is to attract new industry and jobs and that the two things that will make that least likely are industrial distruption in Scotland and the kind of talking down that we have heard today from the moaning minnies on the Labour Benches?
    Mr. Younger: I agree with my hon. Friend that the attraction of new industry is vital to replace jobs that are lost in older industries. In addition to the examples given by my hon. Friend, any threat to leave the EEC would make it almost impossible to attract any new industries to Britain.

    Highland and Islands (Employment)
    Mr. Maclennanasked the Secretary of State for Scotland if he will introduce further measures to increase employment in the Highlands and Islands.
    Mr. Alexander Fletcher: The Government attach high priority to encouraging employment opportunities in the Highlands and Islands and will continue to support the efforts of the Highlands and Islands Development Board as the principal development agency in the area. In addition, the whole Highlands and Islands area benefits, as an assisted area, from a wide range of aid from the Government and the European Community.
    Mr. Maclennan: In view of the collapse of the pulp mill at Invergordon, the non-progress on the gas-gathering pipeline, the failure of the aluminium smelter at Invergordon and the Government's refusal to implement the National Farmers Union's recommendations on an agriculture development programme for the Highlands, why should the House and the people of Scotland have any confidence that the future of the major employer left in the Highlands at Dounreay is in good hands?
    Mr. Fletcher: The hon. Gentleman will be aware that successive Governments have made great efforts to attract investment to the Highlands, and much public financial support has been given to such projects. Projects have failed simply because, over a number of years, they have not been viable, despite the large amounts of public funds that have been made available. The hon. Gentleman will know that the Dounreay firm has a full work programme in support of the United Kingdom fast reactor project. It is, of course, premature to consider the future of any commercial fast reactor. However, Dounreay has a well-established site and a supportive community, and those are two important factors for the Government in deciding about the future.
    Mr. Bill Walker: My hon. Friend will be aware that a large part of the highlands of Perthshire is not covered by the Highlands and Islands Development Board or by the Highlands region. In considering proposals to help the Highlands, will he bear in mind the highlands of Perthshire?
    Mr. Fletcher: Yes, Sir; and we frequently do so, thanks to the urging of my hon. Friend.
    Mr. Grimond: The Minister is not viewed in my constituency with the total disfavour with which he is viewed in the South—perhaps because he has given us assisted area status. Has he considered creating free ports or free enterprise zones in the Highlands?
    Mr. Fletcher: We are now in a position to consider that matter, as we have two additional enterprise zones. In due course my right hon. Friend will make a statement about them.

    Surgical Operations
    Mr. Ancramasked the Secretary of State for Scotland what are the numbers of patients awaiting major surgical operations in Scotland at the present time; and what they were six months before.
    Mr. John MacKay: This information could be ascertained only by a special inquiry of health boards. During the current industrial disruption it would not be fair to add to the work load of the boards in this way.
    Mr. Ancram: Nevertheless, will my hon. Friend confirm that, since the Government came to office, waiting lists for serious surgical operations have reduced considerably as a result of the 6 per cent. increase in real terms in expenditure in the National Health Service? Does he agree that the current industrial dispute is severly endangering the well-being of the patients who need these operations, and that we cannot stand for that?
    Mr. MacKay: My hon. Friend is right. Since the Government came to power in 1979, waiting lists in the Health Service in Scotland have been reduced. Part of the reason for that reduction is that we have considerably increased the financing of the National Health Service in Scotland and in the rest of the United Kingdom. My hon. Friend is also right when he says that the dispute, as the Labour Government found in 1978–79, will result in waiting lists increasing and patients having to wait for operations which, frankly, they could have had but for the dispute.
    Mr Home Robertson: Health Service staff in Scotland have become accustomed to slurs from the hon. Member

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    for Edinburgh, South (Mr. Ancram) and the Minister. Is the Minister aware that my personal experience during the day of action five weeks ago confirmed that NHS staff are providing full cover for emergency cases while pursuing their justified wage claims? If anyone is guilty of putting patients in danger, surely it must be the Minister and his right hon. Friend?
    Mr. MacKay: I am not sure whether I should congratulate the hon. Member on his return to good health, although I do so. I join him in congratulating those in the Health Service who declined to go on strike and have continued to work, often well beyond their normal duties, to maintain the high standard of patient care to which we are accustomed in the National Health Service.

    Meehan Case (Report)
    Mr. McElhoneasked the Secretary of State for Scotland if he is now in a position to announce the date of the publication of the report by Lord Hunter on the Meehan case.
    Mr. Younger: Lord Hunter's report into the whole circumstances of the murder of Mrs. Rachel Ross at Ayr in July 1969 will be published on Thursday 5 August.
    Mr. McElhone: Will the Secretary of State take it from me that that answer is totally unacceptable and a gross insult to Patrick Meehan, myself and many hon. Members who have taken a keen interest in this case? Does he accept that he has had this report on his desk since last August? It is a gross insult to the House to publish the report in a dummy form. Does the right hon. Gentleman also accept that he demeaned himself yesterday by involving himself in a shabby manoeuvre with the former Scottish Tory Whip in tabling a late priority written question in an effort to dodge proper qestioning on the matter? Finally, does he accept that what he has done has brought the Scottish Office into disrepute and, indeed, the good name of justice in Scotland as a whole?
    Mr. Younger: I do not understand what the hon. Gentleman is saying about a question. I hope that, on reflection, he will think that his questions were inappropriate. This is a long report about important matters, which occurred a long time ago. It is vital to get this report presented in some form to Parliament before the recess so that it can be studied—that will take a very long time—by the many people who are affected by it. I hope that the hon. Gentleman will feel that there is no discourtesy to anyone in taking great care to do that.
    Mr. Fairbairn: Does my right hon. Friend appreciate that, whatever explanations are given, the effect of this report being published when Parliament is in recess—missing a year's delay by only three days—will be that Members may not comment on it under privilege, at least until we reassemble, which will be too late? Secondly, will he advise us on the mechanics of getting this vast report, so that those who are entitled to immediate comment, and the media, may have copies in their hands at the earliest possible moment, and not be delayed by the time that it takes to get from the Vote Office to our constituencies next week?
    Mr. Younger: My hon. and learned Friend knows that he can apply to the Vote Office for a copy and that it will
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    be sent to him as quickly as possible. Alternatively, he can pick it up in person—or, of course, if he has a secretary, no doubt he or she can pick it up.
    My hon. and learned Friend is in as good a position as anyone to know that any comment on the report—which owes much to the hard and effective work of Lord Hunter over a long period—will need a great deal of detailed study, because it is a huge document. Therefore, it is appropriate that everyone concerned should have time to study it before making off-the-cuff comments.
    Mr. Millan: Is the Secretary of State aware that it is wholly unsatisfactory for this report to be published a week after Parliament rises for the Summer Recess? It has been in his hands since August 1981. When was it sent to the printers? Will he comment on the statement by the managing director of the printers this morning that he delivered the report to the Scottish Office on a timetable that was agreed four or five weeks ago? If that is correct, it sheds a rather different light on some of the things that have come out of the Scottish Office in recent days.
    On the merits of the matter, it is not just a question of the convenience of Members of Parliament. What will the Secretary of State do with this report? Will there be deletions, as has been suggested in the press? We want to question the Secretary of State on these matters. It is particularly important that Members of Parliament should be able, if appropriate, to question the Secretary of State in the House under the cloak of parliamentary privilege, in view of the many sensitive matters that are covered in the report.
    Finally, will the Secretary of State retrieve the position, at least a little, by agreeing now to make a definitive statement on the report in the first week that the House comes back from the recess?
    Mr. Younger: I note what the right hon. Gentleman says. Perhaps I should say, first, that my Department, the printers and I have done all that we possibly can to produce the report as quickly as possible. The printers have done a good job. They have had to take on extra staff and to work overtime. However, it has not been possible for them to produce it any earlier. They received the report in its initial form at the end of last year. They had complete proofs, and corrected galley proofs were returned on 24 May. The final detail was in their hands by 28 June, and since then they have been working very hard. When hon. Members see the report and appreciate its size and weight, they will understand why it has taken so long.
    The right hon. Gentleman would be well advised to look at the report before he jumps too far into the matter. It will take a long time to read. As many individuals are mentioned, it is important that any comments made on it should be made with the greatest of care, because reputations will be involved. The right hon. Gentleman's criticisms are wholly inappropriate.
    Mr. Millan: Is it not extraordinary that the galley proofs were available at the end of May but that we still do not have the report at the end of July? As the report is important and raises sensitive issues, it is all the more important that there should be an early opportunity to comment upon and ask questions about it inside rather than outside the House. The real mischief in mishandling the printing of the report is that hon. Members will not have the opportunity to do that until they return in October.
    Mr. Younger: I can only disagree with the right hon. Gentleman. He says that it is extraordinary, but he will find that it is not extraordinary when he sees the size and weight of the report and exactly what is involved. If he wishes, he can consult the printers.
    No one should make instant comment on the report. I very much hope that no one will.
    Mr. Gordon Wilson: Does the Secretary of State realise that he has given the House a choice between Government incompetence in taking so long to produce the report and scabby and cynical manipulation of the House of Commons and parliamentary procedure to avoid hon. Members having the opportunity to question the contents of the report in the public interest?
    Mr. Younger: I wholly disagree with the hon. Gentleman. I am one of the few Members who have no axe to grind, having had no responsibility at any time for any part of these events. Therefore, the hon. Gentleman should clear me of that.
    If I must take some blame for taking time to ensure that no individual will be needlessly harmed or traduced by what is said in the report and for the care that I have taken over it, I am happy to do so in order to protect reputations and feelings.
    Mr. Speaker: I shall allow an extra two minutes at 3.30 pm.
    Mr. Buchan: On a point of order, Mr. Speaker. May I give notice that I should like to raise a point of order at the end of Question Time in relation to that question?
    Mr. McElhone: May I also give similar notice?
    Mr. Speaker: Certainly.

  SOLICITOR-GENERAL FOR SCOTLAND

    Trials (Crown Witnesses)
    Mr. Foulkesasked the Solicitor-General for Scotland what proportion of trials in Scotland, for the most recent 12-month period, have had to be postponed because of the non-appearance of Crown witnesses.
    The Solicitor-General for Scotland (Mr. Peter Fraser): Statistics are not kept for this purpose, but it is thought that the proportion of trials which have had to be postponed because of the non-appearance of Crown witnesses is small.
    Mr. Foulkes: Is the Solicitor-General aware of a constituent of mine who lost his job and suffered severe health problems as a result of two prolonged delays for that reason after being charged with a minor offence? Will the Solicitor-General assure the House that he will look into that case with a view to awarding my constituent some compensation? Will he discuss with the Lord Advocate the possibility of taking some action to minimise such delays in other cases?
    The Solicitor-General for Scotland: I know about the case to which the hon. Gentleman referred. It was an exceptional case. I accept that it was most unfortunate that, for reasons beyond the Crown's control, adjournments were necessary on three occasions. I cannot give the hon. Gentleman any undertaking on compensation, but I recognise that in such cases individuals do suffer as a consequence of adjournments.
    Mr. Dewar: I know that the Solicitor-General is sensitive about delays in this area. Will he undertake to look at the situation again? He said that no figures were available for delays caused by the Crown, but I should have thought that there are often considerable delays. At the same time, will he take an early opportunity to report to the House on the working of the provisions of the Criminal Justice (Scotland) Act 1980, with its intermediate diets, which are meant to stop delays caused by people who plead guilty and change their plea at the last minute?
    The Solicitor-General for Scotland: I shall certainly report to the House on that latter point. It is important that we know how the Criminal Justice (Scotland) Act is working.
    The original question related to the non-appearance of Crown witnesses. It can be extremely difficult for the Crown to discover that a witness will not appear. It may be that everything is arranged and the witness simply does not turn up at court.

    Criminal Prosecutions (Crown Office)
    Mr. David Marshallasked the Solicitor-General for Scotland if he is satisfied with the procedures in the Crown Office before decisions not to prosecute are taken in cases of serious crime.
    The Solicitor-General for Scotland: In general, I am satisfied with procedures in the Crown Office. However, my noble and learned Friend the Lord Advocate and I do instruct changes in procedures from time to time.
    Mr. Marshall: The Solicitor-General may be satisfied, but does he accept that several cases recently have caused public concern? Some of those cases have involved an individual accused, but others have involved the increasing practice of indicting large groups of accused persons. Will he reconsider those procedures carefully and report more fully at a later date?
    The Solicitor-General for Scotland: Regrettably, that is the result of the pattern of crime in Scotland. Several incidents recently have resulted in the indictment of many accused. It certainly presents problems for the Crown, the defence, the police and members of the public. I shall certainly look at the problem.
    Mr. Ancram: Does my hon. and learned Friend agree that, however good the procedures, there will always be borderline cases where the public interest has to be weighed against the chances of a successful prosecution and the use of public funds? Ultimately, it must be a matter for the discretion and experience of highly qualified advocates depute. Decisions can never be made by a hard and fast rule.
    The Solicitor-General for Scotland: There are great difficulties, where a large number of people are intitially accused of a crime, in determining whether some or all of them should be indicted in court. As my hon. Friend said, it is a matter for discretion, and there may be occasions upon which it is difficult to determine immediately just where that discretion should lie.
    Mr. Maclennan: Have there been any further changes since the statement about the rape case in the categories of offence that now require the personal consideration of the Lord Advocate before a decision not to prosecute is taken?
    The Solicitor-General for Scotland: No. The last occasion on which any change in procedure with regard to decisions to be taken personally by the Law Officers was made was the statement to which the hon. Gentleman referred. There are several types of crime where, if the recommendation is not to prosecute, the Law Officers must personally be involved.
    Mr. Hugh D. Brown: Does the Crown Office take any special part in decisions not to prosecute when the only witnesses involved are police or prison officers and the person who makes the complaint? Will the hon. and learned Gentleman pay attention to that matter of public concern?
    The Solicitor-General for Scotland: I am not aware of any particular statistics on that aspect of the matter, but I understand the hon. Gentleman's concern. If there are any figures that might be of assistance, I shall certainly provide them to him.
    Mr.Millan: The Solicitor-General will be aware that, at the time of the original statement about the Glasgow rape case, considerable concern was expressed about procedures in the Crown Office. I understand the difficulties and do not wish to go into the merits of that case until it is finally disposed of, but we would like to have a more considered statement about the procedures after that event. We have not been able to pursue the matter since then. I should be grateful if the Solicitor-General would consider it and make a statement later, when it is appropriate.
    The Solicitor-General for Scotland: As the right hon. Gentleman clearly recognises, it would be inopportune and inappropriate at this time to make a full statement. One change in Crown Office procedure was immediately announced. If other changes are to be introduced, I shall certainly undertake to make them known to the House.

    Perth (Illegally Parked Caravans)
    Mr. Bill Walkerasked the Solicitor-General for Scotland what instructions his Office has issued to the procurator fiscal of Perth in the matter of the illegal parking on public property of caravans.
    The Solicitor-General for Scotland: No special instructions on this matter have been issued to the procurator fiscal at Perth. As my hon. Friend will know, all procurators fiscal have been directed by my noble and learned Friend the Lord Advocate to report to the Crown Office for the instructions of Crown counsel any case reported to them involving unauthorised camping by travelling people.
    Mr. Walker: I thank my hon. and learned Friend for that reply. He will be aware that around the city of Perth considerable encampments have caused trouble and aggravation. Will he assure the House that that situation will not be allowed to continue and that he will encourage his colleagues in the Scottish Office to give the go-ahead for the two permanent sites for travelling people, which are urgently awaited in the city of Perth?
    The Solicitor-General for Scotland: As my hon. Friend recognises, the provision of funds for such sites is a matter for my right hon. Friend the Secretary of State. However, it is correct to say that proceedings may not be taken if there are no alternative sites available in the area. Once sites have been provided, the Crown Office's instruction—which my hon. Friend finds objectionable—has a good chance of being reversed.

    Vandalism
    Mr. Ancramasked the Solicitor-General for Scotland how many charges of vandalism have been brought by the Crown Office over the past 12 months.
    The Solicitor-General for Scotland: The statistics on court proceedings for the past 12 months have not yet been processed, However, I can inform my hon. Friend that in 1981 41,959 contraventions of section 78 of the 1980 Act were made known to the police. Of those, 8,610 were cleared up in that one or more persons were apprehended, warned, cited or traced for the offence.
    Mr. Ancram: Is my hon. and learned Friend satisfied that the charge of vandalism is now acting, as intended, as a deterrent?
    The Solicitor-General for Scotland: There was some initial apprenhension that what was being introduced was little more than cosmetic, but it is interesting to note that groups such as the Scottish Legal Action Group have now recognised the importance of demonstrating to offenders exactly what they have done. It is well worth having the crime of vandalism on the statute book.
    Mr. Dewar: The Solicitor-General is laughing at his own reply. Does he really maintain that position? Surely the change is cosmetic. All the offences would have been recorded as breaches of the peace and would have been prosecuted in exactly the same way. It is brass-necked to suggest that the provision represents some contribution to better government and law enforcement in Scotland.
    The Solicitor-General for Scotland: It is no laughing matter that there should be 47,000 incidences of vandalism in Scotland. People should be charged with that offence so that they, the courts and the public know exactly what they have been engaging in. In addition, it makes it easier for the courts to take advantage of compensation orders and allows offenders to contribute properly towards rectifying the damage that they have caused.
    Mr. Henderson: Is there any way in which my hon. and learned Friend can point out to the courts that although a particular offence, such as vandalism, may not in itself be of major, world-shattering importance it can have a serious impact on a local community if it is carried out on a large scale?
    The Solicitor-General for Scotland: I recognise the great damage that can be done to individual communities and the concern that it can cause to people. That is why it is important not only to have the offence of vandalism, but to couple it with compensation orders. Contrary to what the Opposition may say, it makes a valuable contribution to law and order in Scotland.

Questions to Ministers
Mr. Norman Buchan: On a point of order, Mr. Speaker. I would not normally raise a point of order in relation to Question Time, particularly when there are other important matters to debate. However, the Secretary of State's answers require us to ask you questions—
Mr. Speaker: Order. The hon. Gentleman knows that I cannot allow a point of order on further questions to the Secretary of State.
Mr. Buchan: If you had borne with me another second or so, Mr. Speaker, you would have heard me say that the matter that arises affects both the House and you. It involves privilege. We are entitled to know whether the form used—which was new to me and, I believe, to many—has been used before in such a situation. Has an address for a return of a report ever enabled a report, which should be dealt with under privilege, to be published at a time when it cannot be dealt with in that way? You will recall, Mr. Speaker, that the issue has been described as large and important. Indeed, it is large and important.
The Secretary of State said that he was not involved, but several people are involved. The former Solicitor-General for Scotland, for one, is involved, and I am also involved. The matters arising from the report require such discussion. Is there any way in which you, Mr. Speaker, or the Leader of the House, could take steps to ensure that the Scottish Grand Committee is recalled when the report is published—[Interruption.]—so that it can be discussed under the proper circumstances of privilege?
Mr. Speaker: I am grateful to the hon. Gentleman for the way in which he presented his point of order. However, he will be aware that it is not for me to decide whether a Committee should be recalled.
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In response to the hon. Gentleman's first point, what has happened is not without precedent. It has happened before, and there is nothing out of order on which I can rule.
Mr. Frank McElhone: On a point of order, Mr. Speaker. In view of the Secretary of State's totally unsatisfactory answer to my question, I give notice that I intend to raise the matter on the Adjournment of the House. Although I have every faith in Adjournment debates, I have no faith that the Secretary of State will give me an adequate answer. Therefore, I give him notice that I intend to seek an action of declarator in the Court of Session in Edinburgh because of his incompetence.
Mr. George Foulkes: Further to the point of order raised by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan), Mr. Speaker. Would it be in order for the Leader of the House to be called to inform the House whether it is possible for a resolution to be passed by the House prior to the Summer Recess so that the Scottish Grand Committee can meet during the recess to discuss the matter?
Mr. Nicholas Fairbairn: Further to that point of order, Mr. Speaker. My right hon. Friend the Secretary of State said that if we wanted a copy of the report, we could ask our secretaries to obtain one, or ask the Vote Office to send one. He also said that we should take time to consider the report before commenting on it. However, the time taken will be infinitely increased by the inevitable delay in receiving copies of the report if they have to be sent from the Vote Office. Could you protect the rights of Back Benchers by asking the Secretary of State to ensure that copies of the report, upon its issue, are delivered to Back Benchers in their constituencies instead of allowing a further delay of perhaps three days?
Mr. Speaker: That request will have been heard. I shall lend my support to it if it is in the interests of hon. Members to have a copy. That should not be too difficult.

Local Government Expenditure (Wales)
3.37 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): The Government are determined that local authority current expenditure should be reduced. In Wales local authorities generally have made efforts to meet the Government's expenditure targets, and I pay tribute to them for the efforts that they have made. Unfortunately, however, there still remained an overspend of some £13 million on their 1981–82 target, which was expressed in volume terms. In 1982–83 revised budgets suggest an overspend of some £25 million on total expenditure, £36 million on current.
Against that background I have decided that there should be a grant penalty of £2·5 million in respect of 1981–82 and grant holdback of £5 million in respect of 1982–83. I have previously made it clear that the holdback in respect of 1982–83 will be applied differentially, with exemption for those authorities spending at or below their targets. Supplementary reports to give effect to these decisions will be presented to Parliament in due course.
That background has also influenced the proposals that I have decided to make in respect of 1983–84. First, I have reviewed the plans for Welsh local authority current expenditure set out in the last public expenditure White Paper. I propose that the plans should be adjusted to £1,205 million. That will be an increase of £19 million. It will allow local authorities to spend nearly 4 per cent. more than the total of this year's revised budgets. Since authorities collectively may spend, if past trends are repeated, in the region of 1 per cent. less than their budgets, it will be equivalent to about a 5 per cent. increase. In addition, I intend to increase the amount planned for local authority capital spending by £17 million.
In support of the increased level of current spending I propose a total aggregate Exchequer grant in Wales of £975 million in 1983–84. The amount actually distributed will depend on whether Welsh local authorities spend in accordance with the target that I am proposing. If they do, it should mean that many authorities will find that they need no rate increases at all to finance their current expenditure. In those circumstances our present estimate is that aggregate Exchequer grant would amount to about 70 per cent. of relevant expenditure.
I shall be discussing these proposals with the local authority associations within the framework of the Welsh consultative council on local government finance. I shall also be discussing with them the part that individual authority spending targets might play in securing our target for next year.
Mr. Alec Jones: Is the Secretary of State aware that this statement will be greeted with dismay by local authorities in Wales, which are already finding it increasingly difficult to maintain their services, and also with a feeling of bitterness? The first paragraph of the statement refers to the efforts that the local authorities have made. The Secretary of State paid tribute to them for their attempts to co-operate. Does not the Secretary of State believe that it is a shabby reward for their efforts to be penalised to the extent of £2·5 million for 1981–82? Does he not think that such treatment is hardly conducive to
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good co-operation between himself and local authorities in future? For 1982–83, the right hon. Gentleman talks about an overspend of £25 million. Will he confirm that that overspend contains some payments that may be made to the advanced further education pool? Therefore, is there a possibility that the overspend figure will be less?
For 1983–84, does the Secretary of State agree that he is painting too rosy a picture when he says that if local authorities spend in accordance with his demands there will be no need for any rate increases? The Secretary of State talked about a 4 per cent. increase in public expenditure. Is not that really a cut in public expenditure? That 4 per cent. is surely insufficient to meet the Government's assumptions of pay increases of 4 per cent. and price increases of 7½ per cent? If those assumptions are wrong, the cut will be greater. That unreasonable assessment of local authority needs, plus the 2½ per cent. reduction in grant, represents a cut in cash terms of about £60 million. That £60 million can be met only by increased rates or by cuts in services.
Will the Secretary of State confirm that this is the third consecutive year in which he has proposed cuts in the percentage of grants when the domestic ratepayers in Wales have already suffered a loss of 18½p of domestic relief? Does the Secretary of State agree that that settlement must mean rate increases, job losses or reduced services in the local government sector or a combination of all three?
Mr. Edwards: The reason why I am imposing penalties for 1981–82 and 1982–83 is that expenditure exceeds provision. I have always made it clear to the authorities that if they could not reduce their expenditure I should have to consider taking this course. The local authorities have reduced their expenditure. That means that the withholding that I have had to apply is less and at a later stage than it would otherwise have been. Penalties on the scale of those in England, where overspending has been greater, have not been incurred.
The right hon. Gentleman referred to the way in which local authorities have responded over a period. I pay tribute to them for that. However, the steady progress that they have made has meant that we have been able to give them an easier target at each stage than in England. They have not had to start from such a difficult position. For example, in England the provision shows a 2 per cent. increase over current plans compared with a 4½ per cent. increase in Wales. This year, as last year, I have been able to make extra capital provision available to local authorities. That shows the direct relationship between cutting current expenditure and getting extra money for capital spending.
The right hon. Gentleman made a specific point about education. Today I have given the local authorities the figures for holdback in 1982–83, but we shall have to lay measures in Parliament in the autumn and I shall consider any general representations that are made on the detail before we do so.
As to rate increases and the assumptions made, it should be clearly understood that the assumptions are realistic. The authorities must understand that they have a choice. If they can hold their wage increases and the total level of their wage costs in low single figures and reach the targets that I have set, there is no reason why there should be more than minimal rate increases. They have a direct choice whether they put an extra burden on their

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ratepayers or whether they make a real effort to cut expenditure as they can. There is no doubt that the numbers employed in local government in Wales, which were reduced by only 2 per cent. last year and by nothing at all in the last quarter, leave room for further improvement.
Mr. Ian Grist: Is my right hon. Friend aware of the welcome that Conservative Members give his efforts to control local government expenditure and the resulting increase in rates, which affects jobs and the livelihood of the people of Wales? Are South Glamorgan council and Cardiff city council among the councils that have overspent and are any penalties to be borne by them as a result?
Mr. Edwards: I think that I am right in saying that Cardiff is one of the councils that have overspent. My hon. Friend is absolutely right that additional rates are a direct disincentive to job creation and a direct penalty on productive companies. It must be the prime objective of local authorities to seek to hold down rate bills. That is why I made the switch in the domestic rate last year, to which the right hon. Member for Rhondda (Mr. Jones) referred.
Mr. Edward Rowlands: Has not the Secretary of State been unable to deny what my right hon. Friend the Member for Rhondda (Mr. Jones) said, which is that there will be a burden of £60 million on ratepayers as a result of the cuts and changes that he is proposing to make? Is he aware that if he continues to turn the screw on some aspects of local authority expenditure, for example in Mid-Glamorgan, education for the under-fives in the county which we have had for over 60 years could be destroyed? Does the right hon. Gentleman want to go down in history as the Secretary of State who reduced educational opportunities for young people?
Mr. Edwards: It is not a cut but an increase in provision. It is money that has to be found. If the local authorities can control their expenditure, they can maintain services. Which services they provide is a choice for them. Many local authorities have shown by their policies that they can maintain services and make cuts. For example, Dyfed county council has just issued a statement saying that it will not be penalised because it is the only county in Wales that has fully met the target. It is fully maintaining services. However, I have to say even to that council that I wish that it had made further cuts in current expenditure rather than making them out of capital and by altering the excessive assumptions that it made previously about wage increases and the level of inflation.
Mr. Roy Hughes: Does the Secretary of State believe that he is adequately considering local
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authorities' problems, bearing in mind the tremendous social problems that they are experiencing as a result of mass redundancies, especially, in areas such as mine, in the steel industry? Far from threatening them as he is doing and putting ever more stringent tax limits on them, does he agree that he should be treating them far more generously?
Mr. Edwards: I have tried, by working closely with local authorities, to achieve their co-operation to avoid many of the complexities and difficulties that have arisen in England. At each stage, Welsh local authorities have had reasonable targets and have come fairly close to reaching them in the past. I hope that they will continue to do that and remember that the greatest single contribution that they can make to reducing unemployment is to keep rates down.
Mr. Tom Ellis: Is the Secretary of State aware that in some Welsh counties, parents are being asked to spend up to one-seventh of their weekly incomes to transport their children two and a half miles or more along busy main roads to school? When he makes his rate support grant allocation, will he bear in mind that what is happening is the ending of 100 years of universal free education?
Mr. Edwards: The choice of how to spend resources remains with local authorities. As the hon. Gentleman knows, there is a substantial reduction in pupil numbers that has not yet been reflected in reduced local authority spending. I hope that he will note that Wrexham Maelor is one of the largest over-spenders and will incur severe penalties. That will encourage it to take the action that other Welsh local authorities with similar problems have succeeded in taking without making reductions in services.
Mr. Ioan Evans: Is the Secretary of State aware that Welsh local authorities' services have been cut to the bone and that his statement will entail not the worsening of services but the possibility of their ending? As unemployment has doubled since the Government took office, does the Secretary of State agree that, as in the 1930s, public works schemes should be set up to get unemployed building workers, for example, involved in local authority works rather than having to take the dole, as they must do now?
Mr. Edwards: It is absurd to talk about the ending of local authority services when the level of provision in real terms is still roughly what it was in the mid-1970s. No one talked in those terms then. I repeat that, because of the cuts that Welsh authorities have achieved in current expenditure, I have been able in two consecutive years to make additional capital allocations for them to spend. That is just what the hon. Gentleman urges me to do.

Aluminium Smelter (Invergordon)
3.52 pm
The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I wish to make a statement about the Invergordon smelter. The House will recall that the British Aluminium Company closed its Invergordon smelter last December. The smelter employed some 900 people. The closure took place after intensive negotiations between the company and the Government. During the negotiations, the Government had been prepared to offer the company a package of assistance which included writing off some £47 million of disputed power charges and an annual subsidy towards its power costs of £16 million for three years.
In my statement to the House on 18 January, I said that the company had undertaken to maintain the smelter in a usable condition for six months and that the Scottish Office, in conjunction with Locate in Scotland and the Highlands and Islands Development Board would make every effort to find a new operator. I also said that the Government had agreed, in the event that no new operator came forward, to provide a special extra allocation of funds for the HIDB, amounting up to £10 million during the next three years.
I am sorry to tell the House that, despite the extensive efforts that have been put into the search and the company's agreement to maintain the plant for a further month, no new operator is prepared to take over the smelter. The details of the Government's discussions with the parties who have expressed an interest in acquiring the plant must obviously remain matters of commercial confidentiality. The House will, however, wish to know what level of assistance the Government were prepared to offer to prospective operators. As hon. Members know, the level of power costs is crucial to the economics of aluminium smelting. We therefore offered prospective operators an annual subsidy for each of five years up to £20 million, amounting to £100 million in total.
The Scottish Office has searched far and wide for possible operators and has been in contact with a total of 16 companies. My hon. Friend and I have personally met several of the companies which have expressed an interest. Some companies have visited the plant and held discussions with the Scottish electricity boards. Despite this wholly exceptional offer of assistance, which we were prepared to make because of the unique importance of the smelter for the local economy and the rest of the Highlands, no company was prepared to acquire and operate the smelter. Even if we were to take steps to maintain the plant in usable condition for a further period, I see no prospect of a purchaser coming forward.
I very much regret that the great efforts which have been made to find a purchaser have not been successful. The deciding factor has been the depressed state of the aluminium industry throughout the world. The price of aluminium is at very low levels—in real terms, well below what it was 14 years ago when the smelter project was announced. Many major companies are making substantial losses. Last week Alcoa announced the deferment of a huge new smelter project in Australia. That is only the most recent in a long series of such announcements. In these circumstances, it is understandable, although deeply disappointing, that no company is prepared to make the
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necessary investment at Invergordon. The Government will, of course, now make available to the HIDB the additional funds promised in January.
The board and the Scottish Office have completed a joint report on the impact of the closure and the action that might be taken to offset the effects on employment. The board has already appointed a local development officer and opened a new local office to deal with development inquiries. It will also provide additional small factory space. Locate in Scotland has already joined the board in drawing the area to the attention of potential investors. The Scottish Office will do everything possible to bring new developments to the area. In addition to these efforts, I have decided that one of the two new Scottish enterprise zones that my right hon. and learned Friend the Chancellor of the Exchequer announced yesterday shall be located in the Invergordon area.
I will shortly be meeting the local authorities in the Invergordon area and representatives of the smelter work force to discuss these initiatives.
Mr. Bruce Milan: The Secretary of State has made a tragic statement. The tragedy goes well beyond Invergordon and the surrounding area. The whole of Scotland is affected by its serious implications. What he said confirmed our criticisms at the time of the initial crisis—that the Government's dereliction of duty was to allow the smelter to close in the first place. That error having been made, it is extremely difficult to retrieve the situation.
Not only was the error made, despite a bonus of more than £20 million that was paid to British Aluminium, but the works was not taken over. It is still in private ownership. What is more, the assurances about Falkirk look a little sad when one bears in mind that plant's present difficulties.
Is the Secretary of State aware that the designation of an enterprise zone is a poor substitute, indeed no substitute, for what has happened? Despite what the Secretary of State has just said, we know little about the negotiations with the companies that he mentioned. Is he aware that it has been suggested—I should like the suggestions to be confirmed or contradicted—that no specific offer was made to those 16 companies in the negotiations? It has been suggested that what might be available was discussed but that no specific offers were made. Perhaps the Secretary of State will deal with that point.
Can the Secretary of State make it absolutely clear that what was on offer to the new operator at Invergordon was at least as favourable as what is now being provided at the other two smelters at Anglesey and Lynemouth—a matter to which the Secretary of State said earlier that he attached importance? May we have an absolute assurance about that?
As to what will now happen, has the Secretary of State seen the action group's proposals that a public company might take over the smelter? What does he think about that? At least that would leave the opportunity open for perhaps two or three years to see whether a new operator could come forward, by which time the aluminium market may have improved.
Many people in Scotland, not just hon. Members, felt that the way in which the Secretary of State dealt with the matter was the real test of his credibility as the Minister

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who looked after Scottish economic and industrial interests. If that is the test, the Secretary of State has failed lamentably.
Mr. Younger: I entirely agree with the right hon. Gentleman that it is an extremely serious situation and I regret it every bit as much as he does. I shall try to cover all his questions.
First, the right hon. Gentleman said that it was a gross error to have allowed the smelter to close in the first place. I made it perfectly clear to him and to others at the time that the only option to try to prevent it from closing would probably have brought down virtually all the other British Aluminium Company plants. He will recall that it was a case of trying to save them. In any case, the British Aluminium Company had not the slightest intention of continuing to run the smelter at that time. The right hon. Gentleman's criticism is therefore totally misplaced.
I agree that the enterprise zone is a poor substitute for keeping the smelter open, but I should have thought that the right hon. Gentleman would at least have had the grace to welcome it as a useful contribution to help people in the area who will now be extremely worried about their future.
I am not sure what the right hon. Gentleman's point was about no specific offer being made, but the discussions with the many companies that we contacted went into all the details of how much support each company felt that it would need to take on the running of the smelter. In spite of many serious negotiations with companies that were clearly interested, however, not one came remotely near £20 million—itself a truly staggering amount to offer in annual subsidy.
As I think the right hon. Gentleman knows, neither of the other smelters receives Government subsidy. Their power contracts are confidential between the smelters and the fuel suppliers. I received the action group's proposals only yesterday afternoon, but I studied them with great care to see whether they contained anything new. I have replied that, although I greatly welcome the interest and trouble taken by the group, the proposals contain nothing that we have not considered many times in the past few months, so I am afraid that they provide no basis for any continuation.
As for my credibility, I think that on reflection the right hon. Gentleman will agree that to have found, with the full approval of Government colleagues, a scheme to commit no less than £100 million over five years to help the Highlands is about the biggest commitment to the Highlands that any Minister could have made.
Several Hon. Members rose—
Mr. Speaker: Order. I promised on Question No. 1 that if the hon. Member for Dunfermline (Mr. Douglas) would wait he would be called first now.
Mr. Dick Douglas: Thank you, Mr. Speaker. Does the Secretary of State agree that the whole history of this matter is a governmental botch-up and that the great tragedy is that the company in default of its long-term obligations still owns the assets?
Mr. Albert McQuarrie: It was the Labour Government in 1967.
Mr. Douglas: Does the Secretary of State agree that the assets must be put into public sector hands at break-up value?
Will the Secretary of State also deal with the knock-on effects for the Scottish economy, particularly in the mining industry, as I believe that they will be extremely severe?
Lastly, will the Secretary of State tell us how many companies actually visited the plant? Will he also assure the House that the £100 million over five years is still in his grasp and will be ploughed into the Scottish economy and not vanish back into the Exchequer?
Mr. Younger: I am not sure how far back the hon. Gentleman was going in his comments about a Governmental botch-up. Certainly, no one who has been concerned in the whole sad history of the smelter over 15 years or more can regard it as a great success. When I took responsibility for the matter, the smelter contract was clearly in great trouble and in danger of causing the company itself to go under. As the hon. Gentleman will recall, law suits were involved. Speaking for the Conservative Government, I can say that we have done all that we conceivably could to retrieve a desperately difficult situation. I think that history will be clear on that.
There are, of course, serious knock-on effects. For instance, a considerable quantity of coal will now have no outlet. That is a very serious matter.
Mr. Douglas: We are having no pit closures.
Mr. Younger: I presume that the National Coal Board will now seek ways of using that coal or exporting it to some profit if possible.
On the number of companies, we approached every company that we could find that might be interested, as quite a number of them were. In all, we approached 16 companies. I cannot say offhand how many actually visited the plant, but many of them had many discussions both here and on the ground about what might be done, and a surprising amount of interest was shown. The real difficulty was that the gap between the operational costs of the plant and the falling price of aluminium was so large that even the huge sum that the Government were prepared to contribute seems to have been nothing like enough to persuade any company to take on the operation.
Sir Hector Monro: Does my right hon. Friend agree that to obtain £100 million for a prospective purchaser was a tremendous achievement and that only the over-capacity of the smelting industry brought failure? Does he further agree that my right hon. Friend the Member for Ross and Cromarty (Mr. Gray), the Minister of State, Department of Energy, did everything possible to help his constituents, as did the community of Invergordon itself and that we are all desperately disappointed at the failure?
Mr. Younger: I am grateful to my hon. Friend. My right hon. Friend the Member for Ross and Cromarty (Mr. Gray) has been totally involved at all stages. Without his help, we should not have achieved nearly such a good prospect as we did. I entirely agree that this is a tragedy, but I hope that no one will say that we have not pulled out every possible stop to try to rescue the company.
Mr. Roy Jenkins: The right hon. Gentleman has no doubt made strenuous efforts in recent weeks, but how does he explain the contradiction between his dismaying statement today and the fully confident

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promise that he gave during the Hillhead by-election campaign that Invergordon would reopen? As the depressed state of the world aluminium market was fully known to him then, was it his judgment or his frankness that was at fault?
Mr. Younger: I note the right hon. Gentleman's interest in this matter. I have made it clear at all times that my effort was to find a company that would reopen the smelter. In that, I include everything that I said during the famous Hillhead by-election campaign. At that time, a number of companies were still showing very lively interest. It was literally in the last day or two that the questions of all the interested companies were finally solved. Therefore, I hope that the right hon. Gentleman will acquit me of any suspicion that I have not been absolutely frank about this throughout. I was at all times doing my utmost to find an operator for the smelter. In trying to persuade people to go there, I was certainly not going to go around saying that it was a hopeless task, because it was not.
Mr. George Foulkes: How does the Secretary of State reconcile his statement that he has done everything possible with reports in the trade press that people in the industry regard his efforts as having been half-hearted and more of a public relations exercise than a genuine attempt to save the plant? Furthermore, how can his hon. Friend the Member for Ross and Cromarty (Mr. Gray) continue as a member of the Government at the Department of Energy after the fiasco at Invergordon?
Mr. Younger: I always enjoy the highly intellectual contributions of the hon. Member for South Ayrshire (Mr. Foulkes) on these matters. With regard to his readings in the trade press—
Mr. Foulkes: You should read it.
Mr. Younger: I am not sure to which section of the trade press the hon. Gentleman refers, but I assure him that the companies with which we have been negotiating were in no doubt whatever that this was a real concrete exercise in seeking an operator to take over the plant. If the hon. Gentleman needs any further evidence of that, I should have thought that persuading the Government—no doubt he would say, this Government in particular—to earmark no less than £20 million per year for five years made nonsense of his claims.
Mr. Barry Henderson: Does my right hon. Friend accept that, contrary to the view of the Opposition Front Bench, a great many people will share the view of my hon. Friend the Member for Dumfries (Sir H. Monro) that no one could have expected any Government to do more than has been done? Did not the implications of the public statements of the British Aluminium Company at the time of the closure imply that on the basis on which it was operating it could never possibly have made a profit even if the electricity had been free?
Mr. Younger: I am grateful to my hon. Friend. The British Aluminium Company managed to make a profit on operating the plant in some years, but it had difficulty in other years. I think that there is probably agreement between both sides of the House—in more normal times, there would certainly be agreement—that the old power contract, although started with the best of intentions, had become completely inoperable by the time it finished. The
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power contract had been rendered out of date by events and had to be superseded by a new one. The Government have certainly been extremely generous in the contribution that they were prepared to make. Tragically, however, due to the falling price of aluminium, the gap was so wide that even that sum was nowhere near enough to persuade any company that it could viably operate the plant.
Mr. Gavin Strang: Is the Secretary of State aware of just how black a day this is, not only for the Highlands but for the whole of the Scottish economy, not least the electricity and coal industries? Is it not monstrous that in his statement he should make no reference to the future of the plant while at the same time he pointed out that the deciding factor was the depressed state of the aluminium industry? Will he use some of that £100 million to acquire and maintain the plant so that this Government or another Government can bring it back into production when conditions improve in the aluminium industry?
Mr. Younger: Perhaps the hon. Gentleman will agree that I am in a better position than most people to consider that this is a black day. It is not for nothing that I have spent seven months trying to save the plant. With regard to the latter part of the hon. Gentleman's question, I have shown by what I have said today that the Government have no intention of turning their back on the Invergordon area and leaving it to get on with it. I am meeting its representatives tomorrow. We have already said that we are prepared to commit money. I have said today that we will create an enterprise zone there and that I shall enter into discussion with them. That is surely a clear commitment from the Government to try to help the area with its serious problems.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising.
Mr. J. Grimond: Will the Secretary of State tell the House, first, how much public money has been lost at Invergordon; secondly, to whom the plant now belongs; thirdly, what his intention is about the future of the plant—whether it is to be mothballed or demolished; and fourthly, whether if enterprise areas are so good, he will extend them throughout the Highlands?
Mr. Younger: I shall write to the right hon. Gentleman to give him a total of how much public money has been spent on the plant and I shall try to make a balance sheet to answer the first part of his question. Secondly, the plant is and always has been owned by the British Aluminium Company. Thirdly, the future of the plant is a matter for its owner and no doubt BACO will consider that.
Mr. McQuarrie: My right hon. Friend has referred to the telex that he received from the Invergordon smelter action group. I am sure the House will welcome the action that the group has taken in an endeavour to maintain the plant. I should like to draw my right hon. Friend's attention to the reference in paragraph 6 of the telex.
"income from goods imported and exported over the Invergordon jetty, from existing leases of land currently in ownership of BACO at Invergordon".
Are those leases to be retained by BACO or are they to be made available for sale? If they are to be sold, will he give serious consideration to the recommendations that have been made by the Invergordon smelter action group that

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there should be a public/private sector company formed with part of the £20 million that is available for the next five years? Will he examine the telex even more carefully as a last-minute endeavour to save the smelter? As has been rightly said, he and my right hon. Friend the Secretary of State for Industry and my right hon. Friend the Minister of State, Department of Energy, are justified in making every effort they can to ensure that the smelter is retained, if at all possible.
Mr. Younger: I should like to join in the tribute my hon. Friend paid to the way in which the Invergordon smelter action group has conducted itself over the past seven months. In an extremely nasty position, it has been thoroughly helpful and constructive. I pay tribute to the group for that.
My hon. Friend refers to the scheme that was sent to me by telex yesterday. We have studied it carefully and I look forward to discussing it with the group later. He referred to the suggestion in the telex that BACO might be prepared to use some of the facilities remaining at the smelter at commercial rates. It is too early to say whether there are such facilities that BACO would want to use and, if so, whether BACO would be prepared to pay commercial rates and what those rates would be. Those matters would have to be gone into. I can assure my hon. Friend that I am looking forward to meeting all concerned on the ground in the area and discussing the problems with them.
Mr. Gordon Wilson: Does the Secretary of State realise that he has created an industrial cemetery in the area and that we are seeing the second Highland clearances? In those circumstances, bearing in mind that he had offered about £20 million a year to keep the smelter going, would he not consider it to be a worthwhile investment to pay £300,000 a year for continuing maintenance of the smelter so as to have it available as an asset as and when the world market in aluminium picks up?
Mr. Younger: While the phrase "industrial cemetery" may be good for a headline, it is not helpful to the people in Invergordon, who will now need every help they can get to attract some other employment to the area. With regard to the £300,000 a year to keep the plant going, I would stress to the hon. Gentleman—perhaps he will think about this—that we have looked all over the world to find firms that are skilled and versed in the running of smelters. Not only has none of them been able and willing to come forward to run the smelter now but none of them has been able to contemplate running it at anything remotely approaching even the huge amount of subsidy that I have mentioned today. Therefore, we must realise that it is not likely to be a viable proposition in the future.
Mr. Robert MacLennan: It is only 18 weeks since the Secretary of State was quoted as saying in the Scottish Sunday Express:
"I am confident that the smelter will reopen."
Was he not aware at that time that there was a vast gap, which he has described, between the money that the Government were prepared to make available and what was necessary to put the smelter back into operation? Does
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the Secretary of State realise that his amiability is wearing a little thin and that his competence is now deeply in question?
Mr. Younger: I said that at that time because several weighty and worthwhile companies were showing interest in that matter. If that was the case, it was not likely that I would get far by rushing round the country saying, "It is a dead duck; there is no chance of getting it to work". That is why I said it, and I stand by it.
Mr. Ian Lloyd: The Secretary of State will be aware that the Select Committee on Energy carefully examined energy costs with regard to Invergordon. Is he aware that we reached very cautious conclusions about that matter and that many of us admire the effort he has made to reach a solution to an immensely complex problem but that some of us would have been dismayed had he announced this afternoon that yet another vast outpouring of the taxpayers' money, virtually in perpetuity, was to be organised to maintain the smelter in existence? Indeed, if the industrial future of Scotland is his main concern, should not sums of this magnitude, if they are to be paid anywhere, be paid to reinforce the enormous success of his Department in reinforcing information technology in Scotland rather than to industries which have no hope of long-term survival?
Mr. Younger: I appreciate what my hon. Friend has said and his proper anxiety not to see excessive amounts of public moneys, which are badly needed for all sorts of things, spent unwisely. I was very much prepared to find these huge sums of money to get the plant started again because it seemed to me to be the best and cheapest way of making use of an existing asset. That is why I felt it was worth doing. No one has suggested—I doubt if anyone will—that it would be sensible for any Government to have provided the still larger sums that it is clear would be needed to have any chance to get the plant operated by a new operator.
Mr. Alex Eadie: While making his announcement, the right hon. Gentleman informed the House that it had serious consequences for the coal industry and that he presumed that the National Coal Board would have to go into the export market. Since the right hon. Gentleman is the custodian of the Scottish economy, surely he is not informing the House today that that is all he intends to do to save jobs for the people of Scotland.
Mr. D. N. Campbell-Savours: Resign.
Mr. Younger: I am not certain how far the hon. Gentleman wishes to take his last few words. I am deeply concerned that a part of the Scottish coal industry has lost a market. However, the hon. Gentleman knows that the coal industry is dependent, like all other industries, on finding good markets for its products. It is most important that it should produce its goods at the cheapest possible price so that it can find more markets. I am certain that the National Coal Board, which is charged with running the coal industry, will be looking for other markets for its coal, and I hope that it finds them.
Mr. John Home Robertson: The Secretary of State has calmly announced that he has exported 900 jobs from Easter Ross. I am not surprised that the right hon. Member for Ross and Cromarty (Mr. Gray), the Minister of State, Department

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of Energy, has left the Chamber. The right hon. Gentleman told my hon. Friend the Member for Dunfermline (Mr. Douglas) that jobs in the energy industry elsewhere in Scotland would also be under threat. If he is proposing to do away with jobs in the coal mining industry or the electricity generating industry elsewhere in Scotland, is he aware that he will stand condemned for the destruction of Scotland's industrial future and that he will have a real fight on his hands?
Mr. Younger: I congratulate the hon. Gentleman on fitting about nine headlines into those few, but rather difficult to understand, questions. In framing them, he forgot that we are discussing the end of seven months of dedicated effort by many people in my Department to find a new operator anywhere in the world to take over the smelter. The search was backed by money found by the Government. The hon. Gentleman should know enough about these matters at least to recognise the good effort that has been made.
Mr. Millan: Does the right hon. Gentleman recollect that he was optimistic only a few days before the Glasgow, Hillhead by-election and that he happened, by coincidence, to be optimistic a few days before the regional elections? As for the future of the plant, he seems to have given the impression that he turned down the action group's proposals out of hand. Is he aware that if he does not reconsider his response to the group's proposals, the plant will be sold off for scrap? We should try to prevent that.
Mr. Younger: I expect to be able to discuss the ideas of the action group and those of others when I meet local authorities and other representatives. It would do no service to anyone in the area—everyone must be extremely worried—to try to conceal the fact that I see nothing in the action group's suggestions that we have not considered already. I cannot accept that it would be sensible to spend a great deal of money to keep the plant in a state of readiness for an operator which we shall not be able to find, wherever we look. I suppose that I could have spent seven months going around Scotland saying, "There is no hope of reopening the smelter." That would not have been very helpful to anyone.

Local Government Expenditure (Scotland)
4.23 pm
The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I shall make an announcement about the rate support grant settlement for Scotland for 1983–84. I shall also refer briefly to 1982–83.
Local authorities' budget estimates for 1982–83 are more than £200 million higher than was proposed in the rate support grant settlement, and I have already indicated to the Convention of Scottish Local Authorities that authorities will have to restrict their expenditure to something nearer to what the country and their ratepayers can afford.
I have initiated selective action against Lothian regional council and Stirling district council. Lothian has proposed an expenditure reduction of £30·7 million commensurate with the very welcome cut of 16p in the rate poundage already implemented by it. In the light of this proposal, I do not propose to proceed with selective reduction in grant payable to Lothian. On 22 July the House approved my proposal to reduce grant payable to Stirling district council by £1·2 million.
As I do not propose to set in hand further selective action, this still leaves about £170 million of excessive spending which cannot simply be ignored and I therefore have no option but to make a general abatement to cover at least a part of this overspending. I have, however, decided to limit this to £27 million, which amounts to only about 16 per cent. of the total overspend, and is no greater than the general abatement that I had to impose last year.
I shall bring an order before the House about Christmas with proposals for the rate support grant settlement for 1983–84. The proposals will take into account the need for reductions in the present level of current expenditure by local authorities. To enable authorities to plan expenditure accordingly in good time I am making this statement now. The Minister with responsibility for home affairs and the environment will be meeting the Convention of Scottish Local Authorities on 29 July.
The figure which I propose provisionally as the public expenditure provision for local authority current expenditure in 1983–84 is £2,635 million. That is £120 million more than provision in the public expenditure White Paper (Cmnd. 8494). After considering the views of the convention as expressed to me in preliminary consultations, I have concluded that this increase should be made. It will not be fully allocated to provision for individual services: £100 million will be treated as an undifferentiated addition made solely because authorities need more time to bring spending into line with the Government's plans, and I shall take this into account before deciding the basis of current expenditure guidelines for 1983–84.
The total of relevant expenditure for the rate support grant settlement will be derived from the figure of £2,635 million in the normal way by the addition of non-current expenditure, including loan charges and capital financed from revenue.
I propose aggregate Exchequer grant of £1,925 million, giving a rate of grant of some 61½ per cent. But I must make it clear that this will be liable to reduction if authorities budget for expenditure significantly above the

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Government's planning figure. This figure of £1,925 million represents a cash increase of 3·5 per cent. over the 1982–83 grant figure. If authorities budget for expenditure in line with the Government's planning figure, it should be possible to keep rate increases next year very low. I shall be consulting the convention on these proposals in more detail before presenting the rate support grant order to Parliament in the usual way.
Mr. Bruce Millian: Is the right hon. Gentleman aware that this is another sad and depressing statement about local government, and that it is not inappropriate that it should be made on the same day that another extremely depressing statement has been presented to the House? For 1982–83 we have reached the absurd position that the Government's so-called guidelines have been offended by 56 of the 65 local authorities in Scotland. Action, however, is being taken only against Stirling while a general penalty is being imposed on the other authorities.
It is even more absurd that Lothian region's expenditure, which has been reduced by £30 million, will still be more than 12 per cent. above the Government's guidelines, although we have been told by Lothian Tories and the Secretary of State that the guidelines are perfectly easy for any local authority with good will to meet. I repeat that Lothian will still be 12 per cent. above the guidelines while the Scottish average is about 8 per cent. above them. The business of guidelines is an utter farce and the sooner the right hon. Gentleman abandons attempts to dragoon local authorities in Scotland the better.
Consultations have been non-existent. It is farcical to meet the local authorities tomorrow at extremely short notice. I inquired of COSLA yesterday and apparently it was only yesterday that the meeting was arranged. All the major decisions about expenditure and grant have been taken. What is the purpose of the negotiations tomorrow? Is it intended merely to convey the bad news to local authorities and not to enter into any genuine discussions with them?
Is the right hon. Gentleman aware that the usual presentation for 1983–84, with cash figures confused with real figures, does not obscure the fact that the new figure of relevant expenditure for 1983–84 of £2,635 million is only about £15 million more than the adjusted budgets for the current year 1982–83? As the 1983–84 figure is in cash terms, there will have to be a reduction in real expenditure by Scottish local authorities of between 6 and 7 per cent. in 1983–84 to reach the relevant expenditure figures. The Secretary of State knows that he has no hope of getting that sort of reduction, and that even if it took place it would be at the expense of a drastic curtailment of basic local authority services.
Is the Secretary of State also aware that he has added insult to injury by a further 2·7 per cent. reduction in the rate of Exchequer grant, so that during the past three years the rate of grant will have fallen from 68½ per cent.—the figure that he inherited—to only 61½ per cent? The burden of that falls on the ratepayers, for whom the Secretary of State always expresses such deep and artificial concern. The net result of the settlement—that is what it is, because there are no real negotiations—will be to add to the difficulties and burdens of local authorities and ratepayers
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in Scotland and to add to the already appallingly high unemployment as local authorities are forced to reduce staff.
Mr. Younger: There is some misunderstanding, because the meeting to be held tomorrow is only a preliminary and courtesy meeting to tell the president of COSLA what was said to the House today. The right hon. Gentleman should have known that this is a genuine negotiation and consultation. None of the figures are firm and final until they are announced, I hope in November. If the right hon. Gentleman believes that it is not genuine consultation, I hope that he will disabuse himself and others of that belief. I have taken note of what COSLA has said to me many times during the past few years and made changes as a result.
The right hon. Gentleman said that he was depressed about the statement. It is depressing that, after three years, we are still trying to attain a reduction in local government spending. Each year more has been spent than the year before.
The right hon. Gentleman's comments about Lothian were most revealing. He supported the previous administration in that region lock, stock and barrel in its deliberate policy of overspending beyond even what he could have stomached had he been Secretary of State. He is now criticising the new administration, which does not even have a majority, for not having reduced the region's spending to the Government's guidelines in about four months. The right hon. Gentleman is becoming difficult to believe.
Mr. David Steel: The Secretary of State talks about his expectation of low rate increases next year. What target does he have in mind, given that his expectation for this year was wildly inaccurate? Does he accept that the sledgehammer that he is now using will hit the local authorities that have been prudent in their spending just as badly as those that have been extravagant? When will he implement the Government's election promise about reforming the rating system?
Mr. Younger: I do not agree with the right hon. Gentleman's first point. The person who was completely inaccurate in predictions of rate increases this year was the right hon. Member for Glasgow, Craigton (Mr. Millan), who was wildly wrong. I appreciate the right hon. Gentleman's point about prudent authorities, and I hope that when we discuss the details of the general abatement we can ensure that no authority that has spent under the guidelines will suffer a penalty as a result. The Government are considering the alternatives for the reform of the rating system. They liked the Green Paper and hope to produce policy decisions before long.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have already risen and then to move on.
Mr. Barry Henderson: Will my right hon. Friend tell us something about the impact of party control on local authorities and their expenditure? Can he not do more to protect from the rapacious demands of high-spending local authorities the authorities that have been consistently careful? Is local authority staffing still higher than it was in 1979?
Mr. Younger: I do not have the detailed figures, but, as I recall it, two or three months ago it was apparent that anyone who lived in a Labour-controlled authority in Scotland could expect to spend 10p in the pound more in rates than someone who lived in a non-Labour-controlled authority. I shall check to ensure that my statement is correct.
I agree with what my hon. Friend said about high spenders. It is a misfortune that the general abatement procedure must be distributed between authorities according to the formula. It means that some authorities that have not been major contributors to overspending must pay penalties, but I hope to ensure that no authority needs to pay a penalty that is larger than its overspending.
Mr. James Hamilton: Will the right hon. Gentleman resist stating that the rate poundage is a contributory factor to unemployment in Scotland? Is he aware that Strathclyde regional council and my district council of Motherwell made it clear that if the further guidelines are imposed it will mean cuts in services? Old folk will suffer, education will suffer drastically, and many children who now go to school barefoot will continue to do so. [HON. MEMBERS: "Oh."] And that is a fact of life, whether hon. Members like it or not.
Mr. Younger: If the hon. Gentleman really believes that the rate poundage has no effect on unemployment, he will find few people who run small businesses in Scotland to agree with him. As to children going to school without shoes, which I greatly regret—I presume that the hon. Gentleman is talking about Strathclyde—I noticed on Scottish television last week that Strathclyde has just bought a £70,000 yacht on the rates. It might have spent some of that on shoes for children.
Mr. Robert Maclennan: Why did not the Secretary of State follow the example of the Secretary of State for Wales, who made an earlier statement, by sugaring the pill and announcing an increase in much-needed capital expenditure by local authorities? He must be aware of the decline in the condition of our sewers and housing stock, and his statement would have been more complete had he referred to that.
The aggregate Exchequer grant for 1983–84 is clearly an increase well below any projected reduction in inflation. The consequence of that must be a further financial squeeze in Scotland. What is the Secretary of State's justification for that?
Mr. Younger: I do not normally try to sugar pills. I try to be realistic and straightforward with everyone if I possibly can. I appreciate the hon. Gentleman's point about capital spending, and the Scottish Office will do all that it can to obtain as much money as possible for capital spending, because we wish to protect it. The hon. Gentleman is right about inflation. If the amounts allowed are not sufficient to compensate for inflation, it means that difficult decisions must be taken. But local authorities in that position will be similar to almost everyone else in Britain, especially those who run businesses. Perhaps businessmen believe that it is about time that local authorities were in a similar position.
Sir Hector Monro: Will my right hon. Friend re-examine the distribution formula? Does he agree that at present it is weighted against rural areas, where
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local authorities are having great difficulty in providing schools, buses and other community services that are desperately important in the countryside?
Mr. Younger: I appreciate my hon. Friend's points. It is always difficult to compensate fully for the extra costs of rural areas. Together with COSLA, I shall examine the formula to see whether it is fair.
Mr. Norman Hogg: If the Government's ludicrous guidelines were to be met by the local authorities, what would be the reduction in manpower in Scottish local government, and which services would the Secretary of State expect to carry the burden of manpower reductions?
Mr. Younger: There are two answers to that. The first is that a reduction in manpower is extremely desirable because the cost of the staff employed in local government falls either on the ratepayers or on the taxpayers, for both of whom it is difficult to find the money. As to what would happen if the guidelines were met, the hon. Gentleman might wish to examine what happens in the authorities that keep within the guidelines. There are some and they seem to manage. Why cannot the rest?
Mr. David Myles: Does my right hon. Friend believe it significant that the cost per head of providing services in rural areas such as Banff, Buchan or Moray districts is about £65, but that in more concentrated areas, where one would expect the cost of providing the services to be much less—areas such as Dumbarton or Stirling—the figure is more than £130 per head?
Mr. Younger: I agree with my hon. Friend, although it has to be recognised that inner city areas especially have difficult problems of their own. It never ceased to amaze me that costs per head of the old Lothian regional council before the last election were vastly greater in respect of practically every item than anywhere else, even country areas with their greater distances and problems.
Mr. John Home Robertson: Is the Secretary of State aware that many hon. Members are becoming heartily sick of his efforts to pose as the ratepayers' friend? In the interests of accuracy, will he explain what has been the impact in real, net terms of his cuts in rate support grant on rate levels throughout Scotland? I am not interested in playing off one area against another. Hon. Members do not want to hear about phoney guidelines. They want real figures.
Mr. Younger: The hon. Gentleman can see for himself if he compares the rate levels in various authorities with the political control in those areas. It should prove an interesting exercise for him. I would have thought that the hon. Gentleman, to a greater extent than other hon. Members, would have received more correspondence to prove that the ratepayers in many parts of Scotland, and especially the part that he represents, are desperately concerned about local government overspending and wish it to stop.
Mr. Albert McQuarrie: My right hon. Friend will be aware that there was some criticism last year of the timing of the guidelines to local authorties such as Grampian, Banff, Buchan and Gordon with which I am connected. Will my right hon. Friend make a special effort to ensure that the guidelines are

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issued earlier to assist committees in areas such as I have mentioned, which invariably meet the guidelines and, in fact, underspend?
Mr. Younger: I am glad to give my hon. Friend that assurance. I am trying hard to get decisions made as early as possible. I hope that they can be taken much earlier than last year when they were reached much later than they should have been. I join in his tribute to the local authorities that he has mentioned. If all local authorities operated in the same manner there would be no problem and I would not have had to make this statement.
Mr. Jim Craigen: As the Secretary of State has now put all Scottish local authorities on his hit list, will he say what he expects will be the reduced figure in order to comply with his proposals? Is a 6 per cent. reduction in local authority spending in real terms to be expected next year?
Mr. Younger: I hope very much that we shall see, at last, this year, a reduction in spending by local authorities. We have not yet seen any reduction in aggregate. Every year, more has been spent than the previous year. I doubt if that has happened in many businesses. There is a long way to go before we have local authority spending under control.
Mr. Tom Clarke: Is the Secretary of State aware that local authorities have a far better record than central Government in containing expenditure and adhering to their budgets over the last decade? Is he aware that genuine concern will be expressed at his meeting with COSLA tomorrow that he should, for the first time, engage in discussions on the guidelines to reflect the real problems that local authorities have to face? Is he aware that the local authorities have never accepted the guidelines as being reasonable and that, until they are fully involved in discussions, they never will do so? Does the right hon. Gentleman really feel that the allowance of 3·5 per cent. contained in his figures bears any relation to the real anticipated level of inflation or wage settlements with which local councils, whatever their political complexion, inevitably have to deal?
Mr. Younger: I am grateful to the hon. Gentleman, who has specialist knowledge on these matters. The hon. Gentleman referred to discussions on the guidelines. I agree that it is desirable for the maximum possible discussion to take place on the guidelines to try at least to get agreement on what the guidelines should be, irrespective of whether they are reached. There was a time, which the hon. Gentleman, I think, will remember, when there was a refusal to discuss. I am glad to say that this attitude is now in the past. I am only too willing to discuss any complaints or problems of local authorities or differences that they would like to see in the guidelines.
On the 3·5 per cent., we have taken into account everything possible, including future trends and medium-term financial strategy. The total figure represents the maximum that the Government believe the country and the ratepayers can afford to provide for local government services. It is not unfair that local authorities should have to work on the same basis that applies to every business. The hon. Gentleman claimed that local authorities have a
1080
better record than the Government in saving money over the last few years. With great respect, I do not think that that represents a fair picture.
Among their items of expenditure, local authorities have education. The number of pupils is falling sharply. It would be extraordinary, against that background, if they did not manage to achieve reductions in expenditure. In spite of all exhortations, there has yet to be an actual reduction in aggregate local government spending for one year against the previous year. It is time that this was achieved to try to compensate for the fall in national income.
Mr. Gavin Strang: Is the right hon. Gentleman aware that we can bandy about as many figures as we like but the reality in Lothian is that savage cuts are being made in the level of services? More important, these local government cuts, both regional and district, the university cuts, the Scottish Office cuts and the removal of Edinburgh's eligibility for industrial development assistance, have combined to create a remarkable situation in that unemployment in the Edinburgh area in the last year has increased twice as fast as in Scotland as a whole?
When will the Secretary of State do something about the plight of Edinburgh? Is he determined that unemployment there should be forced up to the deplorable level that exists in Glasgow and Dundee?
Mr. Younger: I sympathise with the hon. Gentleman in his concern about unemployment in the Edinburgh area. One of the major factors, openly stated by people in Edinburgh, frequently in the press and elsewhere, has been the excessive rates imposed by the old regime in Lothian region. As the hon. Gentleman will remember, the Edinburgh chamber of commerce produced chapter and verse showing what had happened. It is time that the hon. Gentleman recognised it.
Mr. Millan: Will the right hon. Gentleman now answer a specific question which he has been asked twice but which he has failed to answer? What reduction in real terms would local authorities have to make in 1983–84 compared with their 1982–83 budgets to attain his figures for 1983–84? Is the amount, as I have calculated, between 6 and 7 per cent. in real terms, or is it something different? The right hon. Gentleman must know the figure. What is it?
Mr. Younger: I could probably make a calculation that would help the right hon. Gentleman. I shall try to send him such a calculation. The right hon. Gentleman will know from my statement what are the main figures on which local authorities can operate.
Mr. Millan: The Secretary of State has made an extraordinary statement. Does he not know what sacrifices he is asking local authorities to make next year? Is it 6 to 7 per cent. in real terms or something else? Does he not know? Will he not tell us?
Mr. Norman Hogg: He cannot understand the figures.
Mr. Younger: The right hon. Gentleman has cooked up one particular comparison, as he is entitled to do. I have given him a mass of figures. All he has done is to make out that none of those will do and that he wants his private set of figures. If he wants a private set of figures, he can put down a question and I shall answer it.

Textile Maintenance (Takeover)
4.48 pm
Mr. Allan Roberts: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the attempt now being made by the Sunlight Services Group to take over Johnson Brothers Cleaners Ltd"
which has its headquarters in my constituency. If allowed to continue, this would result in a totally unacceptable monopoly group dominance of the textile maintenance industry, leading to major redundancies not only in Bootle but throughout the country. At this moment, major boardroom battles are taking place as the board, management and employees of Johnson's fight to resist this takeover.
The matter is urgent because the takeover is likely to succeed unless the Secretary of State for Trade intervenes and makes a reference to the Monopolies and Mergers Commission. It is also urgent as almost 1,000 jobs are at risk including 177 in Bootle and Merseyside, 222 in London and 150 in Yorkshire which would disappear, adding significantly to the already horrifically high levels of unemployment in those areas.
This merger, if allowed, would remove from Merseyside one of its few remaining national company headquarters. Opportunities for expansion would be lost as all available resources would be needed to service the debt created by the takeover.
I ask for the emergency debate to save 1,000 jobs, to help stop the decline of Merseyside, to prevent an unacceptable monopoly in the linen rental and retail dry cleaning market, and, in the public interest, to highlight cut-throat boardroom activities that are taking place against the interests of the employees, management and customers of Johnson Brothers, who seem powerless, without the authority of the House, to prevent the operation of uncontrolled and uncaring free market forces.
Mr. Speaker: The hon. Gentleman gave me notice before 12 o'clock this morning that he would seek leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing
"the attempt now being made by the Sunlight Services Group to take over Johnson Brothers Cleaners Ltd".
As the House knows, under Standing Order No. 9, I am directed to take into account the several factors set out in the Order, but to give no reasons for my decision. I have given careful consideration to the representations that the hon. Member has made, but I have to rule that his submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

Competition Act 1980 (Amendment)
4.51 pm
Mr. D. N. Campbell-Savours: I beg to move,
That leave be given to bring in a Bill to amend section 3 of the Competition Act 1980 to compel the Director General of Fair Trading to carry out an investigation with a view to establishing whether an anti-competitive practice is taking place.
When the Competition Act 1980 was introduced, its explanatory memorandum clearly defined the Bill's intentions. It said that it
"Provides for the selective investigation and control of practices which restrict competition. Thus it empowers the Director General of Fair Trading … to carry out preliminary investigations into courses of conduct which may have this effect … Where he indentifies an anti-competitive practice, he is empowered to request the Monopolies and Mergers Commission to investigate further and report whether in their view the practice is against the public interest or, as an alternative, he may accept an undertaking from the enterprise concerned relating to the practice. Following an adverse finding by the Commission, the Secretary of State may ask the Director to seek an undertaking from the enterprise or he may make an order prohibiting the practice concerned or for remedying its adverse effects."
The problem with the law as it stands is that it allows the Director General of Fair Trading a discretion. I believe that that discretion should be removed and compulsion placed upon him to investigate a complaint. My Bill removes that discretion, and to do so it amends section 3 of the Competition Act 1980 so that where it says:
"The Director may … carry out an investigation"
I would replace the word "may" by the word "shall".
I introduce my Bill because the Director General of Fair Trading refuses to investigate some complaints. This year's annual report, under the heading "Action on complaints and allegations", says:
"During the year the Office received a total of 982 complaints and allegations about uncompetitive behaviour and practices covering a wide range of goods and services. All complaints are carefully scrutinised, and where necessary additional information is sought from the complainants; the subjects of the complaints and other interested parties may be asked to comment."
I know of complaints that have been made where additional comment has not been sought. I should like to draw the attention of the House to a complaint that reinforces the need for the Bill. On 15 February the Lancashire Footwear Manufacturers Association wrote to the Director General of Fair Trading seeking an investigation under section 3 into the distribution of Polish shoes by A. Nicholson and Company Ltd. of Liverpool at a price that was little more than the material cost of United Kingdom manufacturers. The complaint was not about the importation but about the distribution of those products on the British market. I emphasise that because I understand that importation complaints would be made not to the Director General of Fair Trading, but under the antidumping code of the Commission of the European Community.
The Director General replied to the Director-Secretary of LFMA:
"I feel bound to say that in the absence of any evidence to suggest that Nicholsons are selling below their costs an investigation by the Director General in these circumstances would be unjustified since it is usually the case that the availability of competitively priced goods acts as a spur to competition and is to be welcomed."
I understand the Director General to be saying that dumped goods, or goods that are unfairly priced for whatever reason, distributed on the British market are to he regarded as a spur to competition.

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The LFMA issued a press release on 23 March which said:
"The Director-Secretary of the LFMA said that an application for an investigation into Polish shoes had been turned down by the Director General on the grounds that 'dumped' goods provided the UK consumer with more effective competition."
The distribution of those goods constitutes an anticompetitive practice that should have been the subject of an investigation by the Director General of Fair Trading.
After its first application the LFMA wrote to the Director General on 23 March seeking an investigation into the distribution by Messrs Beehive Rubber Company of Chinese slippers at 51p a pair when the United Kingdom manufacturers' basket of prices, based on average manufacturing costs, was £2.36 for a similar pair of slippers.
Mr. Speaker: Order. The hon. Gentleman is going a long way from introducing a Ten Minutes Rule motion. He must say what his Bill contains and why he thinks we should allow it. The speech he is making is more like an adjournment debate than a Ten Minutes Rule motion.
Mr. Campbell-Savours: I understand that, Mr. Speaker. I was well aware, when I considered making the application to introduce my Bill to the House, that I must prove that current legislation is wrong. What more can I do than relate correspondence that shows that the law is deficient?
Mr. Speaker: Order. The hon. Gentleman should not go into long detail about one particular case.
Mr. Campbell-Savours: Following that last letter, Mr. Speaker, the response from the Leader of the House, then the Secretary of State for Trade, the right hon. Member for Oswestry (Mr. Biffen), was the same as the reply to the first application from the LFMA. The Government repeated that existing anti-dumping code arrangements within the European Community and the Commission were sufficient to deal with the problem.
I do not believe that that is the case. The powers that the Director General of Fair Trading has can be used if he is compelled to exercise them and his discretion is
1084
removed. The arrangements that exist within the Community are slow and cumbersome and invariably lead to further damage to British industry and trade.
My Bill restores powers which were removed when we entered the European Community. I am not opposed to the Community and I have reservations about withdrawal, but that does not mean that we should not make every effort to restore power to our domestic Parliament, the Department of Trade and the Secretary of State, when those powers are in the public interest and current arrangements in Europe are not.
If the Bill was introduced there would be a spate of applications from British manufacturers and other people complaining of anti-competitive practices. An investigation might lead to a major change in the pattern of trade and distribution in the country. The Bill also fulfils the spirit of Labour policy, as it provides for fair and responsible trade practices and calls on the Director General of Fair Trading to institute them.
Question put and agreed to.
Bill ordered to be brought in by Mr. D. N. Campbell-Savours, Mr. Robert C. Brown, Mr. George Foulkes, Mr. Barry Sheerman, Mr. Alfred Dubs, Mr. David Stoddart, Mr. Joan Evans, Mr. Derek Foster and Mr. Stuart Holland.

Competition Act 1980 (Amendment)
  COMPETITION ACT 1980 (AMENDMENT)
  Mr. Campbell-Savours accordingly presented a Bill to amend section 3 of the Competition Act 1980 to compel the Director General of Fair Trading to carry out an investigation with a view to establishing whether an anti-competitive practice is taking place: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 172.]

CIVIC GOVERNMENT (SCOTLAND) BILL [LORDS]
Ordered,
That it be an Instruction to any Committee to which the Civic Government (Scotland) Bill [Lords] may be re-committed that they have power to make in the Bill provision as respects England and Wales in relation to taxis or private hire cars the operation and driving of which are licensed under the law of Scotland.—[Mr. Allan Stewart.]

Orders of the Day

  Civic Government (Scotland) Bill [Lords]
  Order for consideration, as amended in the Standing Committee, read.
  Ordered,
  That the Bill be re-committed to a Committee of the whole House in respect of the new Clause (Journeys in England and Wales by vehicles and drivers licensed under this Act); and the Amendment to Clause 138, page 92, line 25, standing on the Notice Paper in the name of Mr. Secretary Younger.—[Mr. Allan Stewart.]
  Bill immediately considered in Committee.
  [MR. BERNARD WEATHERILL in the Chair]

  Civic Government (Scotland) Bill [Lords]
    Clause 138

      CITATION, COMMENCEMENT, REPEALS AND EXTENT
      5.1 pm
      The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move amendment No. 1, in page 92, line 25, after 'Act', insert
      `(except section [Journeys in England and Wales by vehicles and drivers licensed under this Act] which applies to England and Wales)'.
      The Chairman of Ways and Means: With this it will be convenient to take new clause 1—Journeys in England and Wales by vehicles and drivers licensed under this Act.
      Mr. Stewart: The amendment and the new clause provide that licensed Scottish taxis and hire cars may pick up passengers in England. Amendment No. 55, which we shall come to on Report, provides for reciprocity for English taxis.
      The changes arise from undertakings that we gave in the Scottish Grand Committee about two problems that had been drawn to our attention by, in particular, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel)—I am glad that he has added his name to the amendment and the new clause—and the hon. Members for Berwick and East Lothian (Mr. Home Robertson) and for Berwick-upon-Tweed (Mr. Beith).
      The problems have arisen in relation to Berwick railway station in particular. The provisions will enable licensed Scottish vehicles to pick up passengers in response to a telephone call which they receive in their licensed area. I commend the proposals to the House. They meet a problem that has caused the right hon. and hon. Members whom I mentioned particular anxiety.
      Mr. David Steel: I thank the Government, albeit late in the day, for meeting a difficult problem across the border, although mainly affecting Berwick. The English legislation was defective, as it took no account of the position in Scotland, and we are having to amend a recent English Act.
      The Under-Secretary is right in his description of the reciprocal arrangements proposed, except in one respect. He said that it would be lawful for a Scottish taxi to pick up a passenger in England provided that it was in response to a telephone call to the Scottish taxi's headquarters, but I do not believe that he meant literally that it had to be a
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      telephone call. It is normal practice for someone going on holiday or on a visit to the South to take a taxi to the station—that has always been legal—and to arrange there and then that the same taxi will pick him up at the end of his journey. The amendment will make that legal.
      My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) wishes to ask how reciprocal the reciprocal arrangements will be, but I am happy that the change brings to an end the feud between him and me and that no longer will the police force in Berwick-upon-Tweed arrest my constituents for going about their lawful business.
      Mr. John Page: This is the first time that I have ventured into a Scottish debate since I spent a happy year on the Scottish Grand Committee 22 years ago.
      I congratulate my hon. Friend the Under-Secretary on this cross-border and cross-Bench new clause, which emphasises the ecumenical attitude which we have grown to expect from my hon. Friend and my right hon. Friend the Secretary of State.
      I give my hon. Friend a further bouquet. All the clauses dealing with the licensing and regulation of taxis and private hire cars are sensible, comprehensible and fair to the trade and to the travelling public, who are so often forgotten. The change puts the private car hire business on a new footing; it will know where it is and will be properly recognised.
      The new clause allows vehicles under the Scottish regulations to operate in a limited way in England, even as far as Harrow, where we shall welcome them, without contravening the Local Government (Miscellaneous Provisions) Act 1976. The private car hire industry, particularly in London, welcomes the change and hopes that the visitations from Scotland and the rash of new legislation will be infectious. For many years London has longed for such regulations.
      I hope that it is not tactless of me to suggest that the Secretary of State might draw the Home Secretary's attention to the new legislation; he has been busy with other things in the past few days and may not have had time to do his homework on it.
      Finally, I add a word of warning. I wonder whether my hon. Friend has fallen into a pitfall with the new legislation involving seat belts. I shall not pursue that, Mr. Weatherill, as I noticed that you raised your eyebrows an almost imperceptible fraction of an inch, and I do not want to incur your disapproval.
      Mr. A. J. Beith: It must be unusual for a Bill to be recommitted to a Committee of the whole House after having been through a Scottish Standing Committee, especially so that it can be made to apply to my constituency and almost entirely to my constituency. But the Government have sought to deal with a difficult anomaly.
      The House appears to be in a frivolous mood, but it should be remembered that we are dealing with the livelihoods of people on both sides of the border in a difficult and competitive business. They are people on whom the general public depend for a taxi at the station or to get from many parts of the Borders region to extremely distant railheads. Particularly in the constituency of my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) people may live 50 miles from the nearest railway station. We should

      1087
      all try to secure responsible and well regulated taxi facilities and make sure that responsible taxi drivers are supported and that proper provision is made for them.
      I wish to ensure that in pursuing these changes to the complicated provisions of the Scottish and English legislation the Minister achieves his object. If he does so, he will satisfy all the parties, including the Berwick borough council, which made proposals at an early stage in the discussion and sought to be as constructive as it could be. The borough council was the enforcing authority, to whom fell the uncomfortable duty of enforcing the law against taxi drivers from Scotland who were at the time acting outside the law.
      It is important to establish what will happen if these provisions and those that the Minister intends to move later in the Bill come into effect. My understanding is that they will confer complete reciprocity in that all the rights available to Scottish taxis will be similarly available to English taxis in Scotland. I wish to be clear about where reciprocity stands in relation to the decision whether to have a licensing system in an area.
      The Berwick borough operates a system for the licensing of taxis by virtue of the discretionary powers in English legislation. What will happen if the appropriate local authority on the Scottish side of the border decides not to exercise such powers? Would the effect be that the law was, for all practical purposes, as it is now, or would there be a one-sided arrangement in which the reciprocal benefit to English taxi drivers of this proposal does not materialise?
      If the law remains as it is, and is only brought into practical effect by licensing, there can be no complaint from either side and there will be a strong incentive on the Scottish local authority to introduce a licensing system. I know that there is an amendment later on the Amendment Paper for Report stage to make licensing compulsory. We must cater for what might arise if the Scottish authorities decided not to proceed in the matter. Therefore, I seek the Minister's guidance as to whether reciprocity depends on the Scottish side introducing a licensing scheme, and what happens if it fails to do so. That guidance is what I seek before being ready to give my support to what seems to be, on the face of it, an appropriate tidying up of an anomalous and difficult piece of law.
      Mr. John Home Robertson: I am not sure that the local authority and police in Berwick-upon-Tweed seem as benign to people on my side of the border as the hon. Member for Berwick-upon-Tweed (Mr. Beith) suggested. I welcome the new clause and thank the Secretary of State for introducing it. I also wish to thank my hon. Friend the Member for South Shields (Dr. Clark) who raised this point in the Committee examining the Local Government (Miscellaneous Provisions) Bill and who did his bit to draw attention to this rather localised problem.
      I am not sure what interest the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) has in this subject because I cannot imagine that many taxis travel all the way from his constituency to Berwick, but perhaps he has been paying attention to the activities of the Boundaries Commission and is trying to curry favour with people in my part of the world.
      Mr. David Steel: I am sorry that the hon. Member is unaware that some of my constituents from Roxburghshire have been stopped and charged in the courts of Berwick-upon-Tweed because they had picked up passengers by pre-arrangement and taken them back to Selkirk. That is quite within my constituency and has nothing to do with the changes proposed by the Boundaries Commission.
      Mr. Home Robertson: Perhaps that was retaliation against the famous incident when a former mayor of Berwick-upon-Tweed was charged with an offence in Roxburghshire, but we had better not go into that.
      The existing taxi licensing legislation contains a serious anomaly which perhaps only came to light when the English borough of Berwick introduced a licensing scheme covering the area that it controls, which includes Berwick railway station. The Borders region of Scotland is the only major administrative area in the United Kingdom that does not have a railway station. Therefore, it is necessary for people in the Borders region to take advantage of the facilities of Berwick railway station.
      Traditionally, taxi and hire car operators in my constituency and, apparently, in the constituency of the right hon. Member for Roxburgh, Selkirk and Peebles have set down and collected passengers by appointment at Berwick station. However, on 2 July 1981 the rather inappropriately named Mr. M. H. Chicken, the borough secretary of Berwick-upon-Tweed, wrote to taxi operators in my constituency saying:
      "I should be pleased to have your co-operation in either licensing with this authority (application forms are available on request) or ensuring that your staff are instructed not to arrange to pick up passengers within the controlled district."
      He listed the costs involved, which would mean a Scottish taxi operator paying £60.
      5.15 pm
      The Berwickshire district council, like the Roxburgh district council, does not operate taxi licensing schemes. Therefore, Berwick borough council was entitled to impose these restrictions. However, what worried me and other hon. Members was the fact that even if the taxi were fully licensed and appropriately inspected, tested and the rest of it in Scotland, it could not pick up passengers, even by appointment, at Berwick station. That seemed to many of us to be pointless discrimination and an unjustifiable financial imposition on taxi and hire car operators in Scotland.
      The new clause will eliminate that anomaly. I have been advised today by the chairman of Berwickshire district council that it now intends to introduce an appropriate licensing scheme to enable local taxis to take advantage of the new provisions. Those licences are likely to be considerably cheaper than those offered by Berwick-upon-Tweed council on the English side.
      It is appropriate that all parties and all nations approve this useful reform, which also refers to Wales. Since the intervention of the hon. Member for Harrow, West (Mr. Page), we are a little alarmed by the possibility of fleets of English and Welsh taxis appearing on the Scottish side of the border to pick up passengers. All my hon. Friends are keen to encourage commerce and travel between the various nations of the United Kingdom, and the new clause is welcome.
      Mr. Donald Dewar: It was suggested at the beginning of the debate that we were looking at Government new clause 1 and Government

      1089
      amendment No. 1. That is what appears on the top of the selection list. Government amendment No. 1 is an interesting amendment because it refers to amendment No. 3, which appears down the list, and I assume that we shall be coming to that later. It fits ill with this particular—
      The Chairman: Order. The hon. Gentleman may be under a misapprehension. We are dealing with Government amendment No. 1 in Committee, not on Report.
      Mr. Dewar: In other words, new clause 1 becomes Government amendment No. 1?
      The Chairman: Order. Government amendment No. 1 might be said to be a paving amendment for new clause 1. We are debating amendment No. 1 and, with it, new clause 1.
      Mr. Dewar: I hope that I am clear in saying that we are talking merely about the cross-border taxi trade and nothing else. That is the easiest way of dealing with this matter.
      My right hon. Friends and I welcome the amendment. The subject that it deals with was dealt with during Committee and I am glad that the Minister has seen his way to making an appropriate concession.
      This is not merely the Berwick Railway Station (Emancipation) Bill. Presumably, the same rule will apply to any cross-border traffic, wherever it takes place, although Berwick is well represented and one would say that some hon. Members seem to have a special interest in it. However, the case has a wider application.
      This protection will be afforded only to Scottish taxis that come from an area that is licensed and where a licensing system operates. That is important to the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) who is worried about his constituents being charged. If he cannot persuade his local authority to opt into the licensing provisions in the Bill when it becomes an Act—the provisions are optional—the taxi drivers will still be in breach of the law, as I understand it, if they go to pick up at Berwick railway station, or anywhere else south of the border, by pre-arrangement.
      I should have thought that the reciprocal arrangement might be the same. If an English taxi came to an unlicensed area in Scotland it might be in breach of the regulations, but it would be all right if it were coming to a licensed area. Perhaps the Minister will clear that up, as I am not as sure about reciprocal arrangements as I am about the trade from Scotland to England for the purposes of picking up fares.
      With that one proviso, and with the observation that this would seem to be another reason for thinking that we ought to amend clause 9 to make sure that all local authorities have a licensing system, I extend a warm welcome to the new clause.
      Mr. Allan Stewart: I am grateful to those hon. Members who have spoken in support of both the amendment and the new clause. We have had a brief but well-informed debate.
      I assure my hon. Friend the Member for Harrow, West (Mr. Page) that my colleagues in the Home Office have closely followed the general provisions on taxis and hire cars.
      The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) referred to telephones. I used that as
      1090
      an example of the kind of circumstances in which the new clause will apply. I confirm that these provisions apply only to licensed vehicles.
      I was interested to hear from the hon. Member for Berwick and East Lothian (Mr. Home Robertson) that Berwickshire intends to introduce a system to license vehicles that cart be licensed either in their own areas or, conceivably, south of the border—for example, in Berwick—as private hire cars.
      Although we have concentrated on Berwick, the hon. Member for Glasgow, Garscadden (Mr. Dewar) was correct to point out that the provisions apply right across the border.
      Amendment agreed to.
      Clause 138, as amended, ordered to stand part of the Bill.

    New Clause 1

      JOURNEYS IN ENGLAND AND WALES BY VEHICLES AND DRIVERS LICENSED UNDER THIS ACT
      `In section 75 of the Local Government (Miscellaneous Provisions) Act 1976 (saving for certain vehicles from requirements of Part II of that Act as to private hire vehicles), after subsection (2) there shall be inserted—
      "(2A) Where a vehicle is being used as a taxi or private hire car, paragraphs (a), (b) and (c) of section 46(1) of this Act shall not apply to the use or driving of the vehicle or the employment of a person to drive it if—

      (a) a licence issued under section 10 of the Civic Government (Scotland) Act 1982 for its use as a taxi or, as the case may be, private hire car is then in force, and

      (b) the driver holds a licence issued under section 13 of that Act for the driving of taxis or, as the case may be, private hire cars.

      In this subsection, 'private hire car' and 'taxi' have the same meaning as in sections 10 to 21 of the Civic Government (Scotland) Act 1982.".'.—[Mr. Allan Stewart.]
      Brought up, read the First and Second time, and added to the Bill.
      Bill reported, with amendments; as amended (in the Standing Committee and on Recommittal) considered.
      Mr. George Foulkes: On a point of order, Mr. Deputy Speaker. Would it be a completely lost cause for me to petition Mr. Speaker, through you, to reconsider his decision on new clause 12 and starred amendments Nos. 201 to 206? Is there any possibility of their being accepted for consideration?
      I know that they were tabled rather late, and I apologise to you, to Mr. Speaker, and to the House for that fact. It was due entirely to something beyond my control. Although the Minister will not have had sufficient notice of them, I am sure that with his usual skill, speed of thought and perception he will be able to deal with them. Perhaps the Clerk could ask Mr. Speaker to give further consideration to the inclusion of the new clause and the amendments as we proceed with the Bill, as we shall probably do for some hours yet.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): Perhaps the hon. Gentleman will rely on me to consider the matter before making a decision.
      Mr. Foulkes indicated assent.
      Ordered,
      That the Civic Government (Scotland) Bill [Lords] as amended, be considered in the following order: New Clauses, New Schedules, Amendments relating to Clauses 1 to 4, Schedule 1, Clauses 5 to 15, Clause (Journeys in England and

      1091
      Wales by vehicles and drivers licensed under this Act), Clauses 16 to 45, Schedule 2, Clauses 46 to 138, Schedules 3 and 4.—[Mr. Thompson.]

    New Clause 1

      INTERPRETATION AND CROWN APPLICATION OF THIS PART
      `(1) In this Part of this Act, "chief constable" means the chief constable for the police area in which the person taken into custody, within the meaning of section 82 of this Act, is so taken and includes a constable acting under the direction of the chief constable for the purposes of this Part of this Act.
      (2) This Part of this Act binds the Crown.'.—[Mr. John MacKay.]
      Brought up, and read the First time.
      The Under-Secretary of State for Scotland (Mr. John MacKay): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take the following: Government new clause 2—Application to Crown.
      Government new clause 3—Powers to execute works on seashore.
      Government amendments Nos. 137, 147 to 155 and 170.
      Mr. MacKay: It may be for the convenience of the House if I summarise the effect of these amendments and new clauses which affect the clauses dealing with the seashore and make technical adjustments to the way in which the Bill affects the Crown.
      They respond to points raised by a number of hon. Members in Committee. Although Government amendments Nos. 157 and 159 have not been included in this group, I should like to include them in my explanation as that may be for the benefit of the House.
      Mr. Norman Hogg: Will the hon. Gentleman give an assurance that the subjects now under discussion fall within his ministerial responsibility?
      Mr. Deputy Speaker: Order. I am reluctant to interrupt the Minister so early in his speech, but I hope that he did not say that he would discuss amendments that have not been selected.
      Mr. MacKay: They have been selected, Mr. Deputy Speaker, and will arise later.
      Mr. Deputy Speaker: In that case, the hon. Gentleman should deal with them at the appropriate time.
      Mr. MacKay: I accept your advice, Mr. Weatherill.
      Mr. Hogg: On a point of order, Mr. Deputy Speaker. I asked the Minister to clarify whether the subjects on which he is about to comment fell within his ministerial responsibility. I would be grateful if you could ask him to answer that point.
      Mr. Deputy Speaker: First, that is not a point of order; secondly, the Minister has hardly started his speech.
      Mr. MacKay: I assure the hon. Gentleman that I have great knowledge of the seashore. Frankly, given the weather in Scotland today, it would be nicer to be there than here.
      New clause 1 and amendment No. 137 clarify a number of aspects that could lead to uncertainty were no reference
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      to be made to them. The new clause defines "chief constable" for the purposes of part VII in the same way as clause 81 does for part VI by reference to the police area in which the person is taken into custody. It also makes it clear that the chief constable is not expected to undertake his responsibilities under part VII personally, but may delegate them to other officers in his force. It expressly provides that part VII binds the Crown. This is clearly implicit in clause 84(4), but in view of the terms of Government new clause 2 it was considered desirable to provide for this expressly.
      Government amendments Nos. 155 and 157 clarify the Crown applications of the Bill by making it clear that nothing in the legislation binds the Crown, with the exceptions of parts VI and VII and the seashore clauses.
      Government new clause 2 and amendment No. 159 are technical in that their main effect is to substitute references to the Bill "not binding the Crown" for references to the Bill not "affecting prejudicially" the interests of the Crown. The new clause defines the appropriate authority to give or withhold consent when local authorities propose to make byelaws affecting Crown land under clause 122 or to carry out works on the seashore under clause 123.
      Government amendments Nos. 147 and 153 deal with the separate but related question of the protection of public rights when local authorities intend to make byelaws or undertake works. This matter was raised in Committee by the hon. Member for Glasgow, Provan (Mr. Brown) and my hon. Friend the Member for Dumfries (Sir H. Monro). We have clarified this by providing in Government amendment No. 153 that in making byelaws relating to the seashore, adjacent waters and inland waters a council must have regard to the need to protect and maintain any public rights. A similar provision in relation to works that councils propose to carry out is contained in subsection (3) of new clause 3, which replaces clause 123.
      The Secretary of State as confirming authority will, of course, take the necessity for any effects on public rights into account when deciding whether byelaws should be confirmed after the usual period for objections and public inquiry if necessary.
      Mr. Foulkes: Will the Minister explain how that will alter the responsibility for providing groins on the seashore? Does it alter that responsibility?
      5.30 pm
      Mr. MacKay: It does not alter it at all. If the hon. Gentleman reads new clause 3, which replaces clause 123, he will see that it merely clarifies the procedures which the local authority has to follow before it can build groins on the seashore—that is, of course, if it wishes to build the groins on the seashore.
      Amendments No. 148 to 152, taken with amendment No. 170 to the interpretation clause 124, redraft the byelaw-making powers in the present clause 122 to meet the concern that was expressed in Committee by my hon. Friends the Members for Dumfries and for Bute and North Ayrshire (Mr. Corrie).
      There are four main effects. First, byelaws can be made only if they are shown to be necessary. Secondly, the provisions narrowly define the scope of byelaws to the regulation or prohibition of trade or business activities, the regulation of the use of vehicles, and the regulation of sporting and recreational activities. In other words, the list is exhaustive rather than illustrative. Thirdly, as suggested

      1093
      by my hon. Friend the Member for Bute and North Ayrshire, they provide that different parts of the seashore may be set aside by the byelaws for different activities. Fourthly, they make more rigorous the requirement for the prior consent of owners and lessees before byelaws are made, for advertisement if they cannot be traced, and for prior consultation with sporting and recreational interests.
      Finally, as I mentioned earlier in response to a question from the hon. Member for South Ayrshire (Mr. Foulkes), new clause 3 redrafts clause 123 to make provisions similar to what was provided in clause 122 for amenity works—of the type, for instance, that the hon. Gentleman asked about, and on which if he listens for a moment he will get the answer— which a council proposes to carry out on the seashore
      "or in or on adjacent waters".
      The changes include new requirements for regard to be had to public rights and for the prior consent of owners and lessees.
      I hope that my hon. Friends and the House will agree that the amendments fully meet the spirit of what was said in Committee, and I commend them to the House.
      Mr. Dewar: The Under-Secretary of State for Scotland, the hon. Member for Argyll (Mr. MacKay), said that the list was "exhaustive rather than illustrative". I can only say that I found his remarks exhausting and that they did not illustrate much to me. They were positively impenetrable. We have not got off to what might be called a flying start in the jungle into which we have now plunged.
      We cannot go into the matter in great detail. If we were in Committee we could spend many happy hours going through the dots and commas, and examining the nuances of the Government's proposals. However, as I understand the general drift, the Government are seeking to meet a number of criticisms that were levelled at them, largely by Conservative Back Benchers.
      This was one of the few issues on which Conservative Members were more active in Committee than Opposition Members. The Government were criticised for leaning over too far in favour of conservation groups and for erecting a potentially bureaucratic structure which could not be defended and which could lead to a serious infringement of public rights and of the freedom of individuals to enjoy themselves on the seashore. Indeed, the hon. Member for Dumfries (Sir H. Monro) accused the Minister of being the champion of bureaucracy. That was the unkindest cut of all. The changes that we are now contemplating are the result of what was said in Committee.
      I have sympathy with some of the remarks that were made by Conservative Members. The hon. Member for Bute and North Ayrshire (Mr. Corrie) perhaps overstated the case, but I understand the basis of his anxiety. He was worried about preservation groups that had what he described as a paranoid hatred of anything that had a motor in it. He said that such groups seemed to want to conserve every square inch of the countryside and seashore. I am in favour of conservation, but I agree that some of the powers originally proposed were very sweeping and would perhaps be rather difficult to control, because of a lack of definition.
      The Minister has kept the limitations, in that the byelaw can only be
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      "for the purpose of preventing nuisance or danger at, or preserving or improving the amenity of, or conserving the natural beauty of, the seashore".
      Thus, conditioning factors still have to be met, but, compared with the old clause which we are replacing, in amendment No. 148, we have a much narrower group of objectives for byelaws. The Government are proposing to delete the provisions about
      "regulating or prohibiting the erection, replacement or use … of any booth, tent, shed, hut, stand … the playing of games on the seashore and … the activities of … water skiers, sand yachtsmen and persons engaged in similar recreational activity".
      Is this a cosmetic change, or is it a real change? Have the Government taken out illustrations of what the byelaws can do, or have they in some way restricted the scope of byelaws by redrafting the clause? If it is merely cosmetic, if the Government have not specifically provided for the regulation of recreation of the kind which so alarmed the hon. Member for Bute and North Ayrshire, if the scope of the byelaws is restricted, and if the powers are still there but are clouded by less specific examples, Conservative Members will not feel that there has been much improvement or that we have made much progress. How real is the change? Is it merely a matter of presentation, whereby the draftsmen have produced a form of words which does not change the reality but perhaps makes it more acceptable to the doubters on the Government Back Benches?
      There is another change. In the old form, we had arguments about the consent of the owners of any salmon fishing rights. The hon. Member for Dumfries proclaimed his devotion to wild-fowling and stated his interest in that respect. He said that if the owners of salmon fishing rights were to be consulted, we should consult also wild-fowling and the many other recreational and sporting interests that might be affected. The reference to salmon fishing no longer stands on its own. Under amendment No. 150 a duty is laid on a district or islands council to consult proprietorial interests of various kinds which might be affected or which might abut on the seashore. I take it that there will still be no duty to consult, for example, recreational interests, as Tory Back Benchers sought to provide in Committee, unless those recreational interests happen, by coincidence, to be proprietors of the land concerned or the adjoining land. Perhaps the Minister will comment on that matter.
      Lastly, there is the whole matter of the Crown. Will the Minister tell us whether there has been any real change in the new form? He will remember that in Committee he was particularly keen to point out the benefits of the then clause 122 (a), which referred to
      "the public rights therein under the general guardianship of the Crown."
      He tried to reassure Conservative Members by saying that that was an important buttress against an arbitrary use of the byelaw power. It seems that that form of words has gone. Perhaps the Minister will tell us whether there has been any real change in that respect.
      I do not welcome these provisions, because, as I say, I am not sure to what extent they are real changes or steps to move the Minister's Back Benchers. Certainly the Minister's brief did not provide the answers to those or related questions.
      Mr. Albert McQuarrie: New clause 3(1) states:

      1095
      "A district or islands council may, in accordance with this section, on any part of the seashore or in or on adjacent waters or the bed thereof, execute any works for the purpose of preserving, improving or restoring amenity."
      I do not know whether the clause places an obligation upon the district or islands council to restore an amenity which has fallen into a state of disrepair. The Cairnbull boathaven in my constituency has existed for many hundreds of years but has fallen into a state of disrepair. Will the new clause place an obligation upon the local authority to make funds available for the restoration of that amenity? It is surely right that a local authority with a local amenity that has existed for a considerable period should take upon itself the obligation of returning it to its original state, particularly in a fishing village such as Cairnbull which has grown up over the centuries with the fishing industry.
      I hope that the Minister will say what liability will be placed upon a local authority if the new clause is accepted by the House.
      Mr. John MacKay: May I answer some of the points that have been raised? I must say that, having suggested that I had not been clear, the hon. Member for Glasgow, Garscadden (Mr. Dewar) showed, as usual, that he at least had managed to see through the points raised by the new clauses and amendments before us.
      Mr. Foulkes: That is more than the Under-Secretary did.
      Mr. MacKay: The difference between amendment No. 148 and what was before us in Committee, where we had a long list of activities, is that the illustrations are no longer there, nor is the word "prohibiting". The use of vehicles and the exercise of sporting and recreational activities are regulated, not prohibited. It was said in Committee that that would remove fears that a local authority might decide tp prohibit them. There is a considerable difference, to which my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) drew attention. Regulation implies that a local authority could provide, for example, that a part of a beach could be kept specifically for certain water sports while another part of the beach could be kept for swimming. That implication is built into the amendments that were made in another place. Therefore, one of the main changes is that, whereas originally we had prohibition in some places, here we have regulation.
      Mr. Dewar: We must not turn this into a Committee stage, but the Minister seems to be digging a slight hole for himself. Clause 122 states that the byelaws may regulate or prohibit any trade or business on the seashore and the erection, the placement or use on the seashore of any booth, tent, shed, hut, stand, platform or stall, but when it comes to horses, ponies or sports they are merely regulated. Therefore, the power to prohibit was not there. He is offering a non-existent concession if he says that we have taken out prohibition as regards sports because it was never in clause 122 anyway.
      Mr. MacKay: That is true, but if the hon. Gentleman looks at clause 122(b) he will see that prohibition was included too and that that could have been applied to various sporting activities which we are talking about, which do occasionally require various erections on the
      1096
      beach. Subparagraph (a) includes regulation and prohibition and the rights of any owner or lessee are protected by the need for the local authority to have their consent before they move to the byelaws.
      The hon. Gentleman asked me about sporting interests. In amendment No. 150, subparagraph (c) explicitly says that the district or islands council should consult representatives of persons who engage in each sporting or recreational activity which may be affected by the byelaws.
      My hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) asked me if new clause 3 placed an obligation upon local authorities to do certain things and he mentioned a particular example in his constituency. It does not place an obligation on a local authority, but it gives a local authority powers to undertake the kind of work that he was talking about.
      The hon. Member for Garscadden raised the question of public rights. If he looks at amendment No. 153 he will see that it expressly states:
      "A district or islands council, when exercising their powers under this section, shall have regard to the need to protect and maintain any public rights under the guardianship of the Crown to use the foreshore, adjacent waters or, as the case may be, inland waters."
      I hope that that answers his question about the protection of public rights on the waters and shores with which we are concerned in this series of amendments.
      5.45 pm
      We had considerable debate in Committee about how to get this part of the Bill right. We have taken it away and come back with these new clauses and amendments which I feel sure meet the valid points that were put by my hon. Friends and by Labour Members. I hope that the House will accept them.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New clause 2

      APPLICATION TO CROWN
      `The provisions of Parts VI and VII and sections 121 to 124 of this Act apply to the Crown as provided in those provisions but otherwise this Act shall not bind the Crown.'.—[Mr. John MacKay.]
      Brought up, read the First and Second time, and added to the Bill.

    New clause 3

      POWERS TO EXECUTE WORKS ON SEASHORE
      '(1) A district or islands council may, in accordance with this section, on any part of the seashore or in or on adjacent waters or the bed thereof, execute any works for the purpose of preserving, improving or restoring amenity.
      (2) Works may be carried out under this section only if—

      (a) the council have complied with subsection (4) below and made such other inquiries as may be reasonably necessary to ascertain the existence and identity of each person having, in the seashore or in relation to the adjacent waters or in the bed thereof or in any salmon fishings, a proprietorial interest which may be affected by the works; and

      (b) subject to subsection (5) below—

      (i) every such person has consented to their being carried out;

      (ii) in the case of works by the district council, they have obtained the consent of the river purification board within whose area the works are to be carried out; and

      1097

      (iii) in the case of works by the district council, they have, if not obliged to give notice to the coast protection authority under section 17 of the Coast Protection Act 1949, obtained the consent of the regional council within whose area the works are to be carried out.

      (3) A district or islands council, when exercising their powers under this section, shall have regard to the need to protect and maintain any public rights under the guardianship of the Crown to use the foreshore and adjacent waters or the bed thereof.
      (4) The district or islands council shall—

      (a) give public notice of their proposal to carry out works under this section and of the effect of subsection (2)(b)(i) above in relation to that proposal in a newspaper circulating in the area where the works are proposed to be carried out; and

      (b) notify the Crown Estate Commissioners of that proposal.

      (5) If a district or islands council have complied with subsections (2)(a) and (4) above but the consent of a person whose consent to the carrying out of the works is required under subsection (2)(b)(i) above cannot be obtained because his existence or identity is unknown or he cannot be found or if the consent of a person whose consent is required under subsection (2)(b) above cannot be obtained because he fails to respond in any way to a request for his consent, the council may nevertheless proceed to carry out the works but shall not so proceed earlier than one month after the date of the advertisement under subsection (4) above or, if there were more than one advertisement, the later or last of these dates.'.—[Mr. John MacKay.]
      Brought up, read the First and Second time, and added to the Bill.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): The hon. Member for South Ayrshire (Mr. Foulkes) raised a point of order at the beginning of the proceedings about his starred new clauses. I have now had an opportunity to look into the matter. I understand that they were carefully considered by Mr. Speaker at his selection conference this morning. I regret that it is not possible to select them now.
      Mr. Foulkes: May I thank you, Mr. Deputy Speaker, for that further consideration. I fully accept the decision.

    New clause 4

      LICENSING OF DOGS
      '(1) Notwithstanding the terms of subsection (3) of section 43 of the Local Government (Scotland) Act 1966—

      (a) the duty payable for a licence under the Dog Licence Act 1959 shall be £5 or such other sum as may be fixed from time to time by the Secretary of State by order, and

      (b) subsection (1) of section 2 of the said Act of 1959 shall be amended by the addition of the following "except on change of ownership of the dog, at which time duty shall be payable".

      (2) Subsection (1) of section 12 of the said Act of 1959 shall be amended by the substitution of the words "25 pounds or five times the duty determined under section 2(1)(a) hereof, whichever is the greater" for the words "ten pounds".
      (3)(a) The District or Islands Council responsible for the issuing of licences in terms of section 7 of the said Act of 1959 shall provide each licence-holder at the time of issuing the annual licence with a tag or identification mark which shall be valid for the currency of the licence with which it is issued.
      (b) The said tag or identification mark shall be displayed or worn by the dog by means of a collar at all times when the dog is in a public place; any person in charge of a dog in a public place not displaying or wearing a valid tag or identification mark shall be guilty of an offence and liable on summary conviction to a fine not exceeding £50.
      (c) The District or Islands Council shall make available on demand replacement tags or identification marks at a charge determined by the Council.'.—[Mr. Dewar.]
      Brought up, and read the First time.
      Mr. Dewar: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take the following: New clause 6—Registration of dogs—
      'All dogs will require to be registered and a licence obtained 12 weeks after birth. The dog will also have an identification number indelibly marked on the inside thigh as this area is lacking in pigmentation and would be suitable without causing pain to the dog. This code marker would be applied by a veterinary surgeon and would be recorded on the licence.'.
      New clause 7—Stray dogs—
      `Each island or district council shall have powers to pass byelaws for the specific purpose of appointing persons or firms with acceptable qualifications who will undertake the duties of catching and removing to a compound, stray dogs, or dogs causing a nuisance or annoyance to the ratepayers and their families, and subject to section 32(2) of the Local Government (Scotland) Act of 1962, the costs of such services shall be met, notwithstanding the terms of subsection (3) of section 43 of the Local Government (Scotland) Act, by increasing the duty payable for a Dog licence fee under the Dog Licence Act 1959 to a sum of five pounds per annum.
      No increase shall be made on the licences for guide dogs, work dogs, and dogs owned by persons over 60 years of age.'.
      Mr. Dewar: I now approach somewhat diffidently the problem of dogs and dog licences. This issue invariably gives rise to a great deal of ribald comment and it is somewhat easy to slip into grotesque arguments.
      It was common ground in Committee that the control of dogs is a matter of genuine concern in our constituencies, and I certainly receive many representations about that. The clauses that are already in the Bill, which greatly strengthen the position of the local authorities in terms of the Dogs Licence Act 1959, will be welcome. We will come to other amendments which I shall be able warmly to welcome and which will further help with the general problem of control.
      I have tabled new clause 4 as an invitation to the Minister to give us a report on the aftermath of the extensive debates in Committee. I do not intend to rehearse exhaustively arguments that were deployed fully in our earlier debates. However, as a courtesy to the House and so that those who wish to read of our proceedings will know the argument, I shall briefly describe the contents of new clause 4. It represents a distillation. I have taken several items from the much more comprehensive reform that was urged on the Minister, largely unsuccessfully, in Committee. The first and most basic suggestion in the new clause is that the dog licence fee should be increased from 37½p to£5.
      The House will appreciate that the matter is somewhat controversial and, no doubt, strong views are held. However, it is an indefensible anomaly that a licence fee that was set in 1878 should remain at that level. Would that many more of our costs had done the same. If the 1878 licence fee of 7s. 6d.—37½p—which even predates the office of Secretary of State for Scotland, were brought up to date it would constitute a substantial sum.
      Put in the simplest terms, if the fee is left at 37½p it will hardly be worth collecting. Given the inflation that has taken place since the original fee was set, our suggested increase is modest. We propose a licence fee of £5. Some hon. Members may recall that a working party on dogs resulted in a Department of the Environment report being issued in 1976. The Scottish Office was well represented,

      1099
      as were Scottish local authorities. That report suggested a fee of £5 largely on the basis that it would allow for the employment of one dog warden per 50,000 of the population. I do not necessarily suggest that that is the proper basis for the calculation, but the fee of £5 is not unreasonable. Indeed, I am told that if was appropriate in 1976, the figure should probably be more than £9 now. The Minister will recall that the Convention of Scottish Local Authorities suggested that the licence fee should be £9. However, £5 is a sensible sum.
      It is anomalous that the licence fee should have remained at a purely notional level. I do not wish to suggest that I am generally embracing a Conservative approach to this problem, but Ministers have long urged us to accept that all local authority licensing and planning systems should be self-financing. They have introduced extensive legislation to enforce that view for planning. Therefore, it is ridiculous to leave the fee at such an unrealisic level. I am told that a fee of £5 is being discussed in Northern Ireland. Therefore, there is a precedent and we should consider it.
      An increased licence fee would at least allow the bureaucracy—to use that word in a neutral sense—of local government to be self-financing. More important, it might bring home the fact that dog ownership involves certain responsibilities which should be taken seriously. If the dog licence fee remains at its 1878 level, we may well encourage those who adopt a somewhat cavalier approach to the responsibilities of dog ownership.
      The second, smaller proposal is that we should update the Dog Licence Act 1959 which states that a dog licence must be obtained when the puppy is six monhs old. We suggest that if the dog is sold, or passes to a new owner before that period is up, the first licence should be obtained then. There is also a penalty if someone does not bother to obtain a dog licence. It is suggested that it should be £25 or five times the current fee, whichever is the greater. That suggestion came from the working party, although the figures have been varied.
      The final proposal is that the law should state that dogs should have identification tags on their collars. That is self-evidently sensible. I accept that it may be difficult to enforce, but the present law is extremely unsatisfactory. The report of the working party on dogs states:
      "A dog other than a working dog or hound is required under the present law to have its owner's name and address permanently attached to its collar when it is in a public place."
      That provision is now honoured almost entirely in the breach. The new clause will, I hope, draw the Minister's attention to the clear need either for restating that provision and trying to enforce it, or for taking it from the statute book altogether. If there is to be some control, it might be better to make some effort towards making the law a reality.
      These provisions were extensively debated in Committee. At that time, the Minister did, as always, an extremely pleasant and fairly agile job of stonewalling. He invented some interesting arguments such as that there was no unanimity in the Committee. However, there was almost complete agreement. I believe that the hon. Member for Dumfries (Sir H. Monro) was the only hon. Member to believe that we should abolish licences and have no nonsense with them. I find myself in an unlikely, if not unholy, alliance with the hon. Members for Perth
      1100
      and East Perthshire (Mr. Walker), Aberdeenshire, East (Mr. McQuarrie), Bute and North Ayrshire (Mr. Corrie) and Aberdeenshire, West (Sir R. Fairgrieve). They all believed that the Government should take some action to bring the present dog licence fee into the land of the living, or at least into the currency of contemporary society. To suggest that there is no unanimity is ingenious, but it hardly bears the most cursory examination.
      On 29 June the Minister said:
      "Certainly, I give the hon. Gentleman my assurance that I will clearly express to my right hon. Friend the Secretary of State the points made in Committee, but it would be unreasonable for me to suggest, in the light of the debate, that I can go any further now."—[Official Report, First Scottish Standing Committee, 29 June 1982; c. 850.]
      Fair enough. However, it was worth tabling the new clause because it has merit in itself and because I know that we can rely on the Minister's word and that he means what he says. Therefore, he will have consulted the Secretary of State and will be in a position to give us a much more definitive and positive statement one way or the other on the Government's intentions.
      In that expectation, I commend the new clause to the House, at least for discussion.
      Mr. McQuarrie: I listened with considerable interest to the comments of the hon. Member for Glasgow, Garscadden (Mr. Dewar) on new clause 4. However, new clauses 6 and 7, which stand in my name, seek to rectify a serious problem for all local authorities, which is of the greatest concern to many electors in Scotland. Not only do many thousands of stray dogs roam and foul the streets and play areas, but it is estimated that there are at least 6 million dogs in the United Kingdom, many of which have never been licensed.
      It might be of interest to the House to know that in 1980 the total revenue gained from the purchase of dog licences was £800,000, while it cost the Government £1 million to collect it. As the hon. Member for Garscadden pointed out, the main reason for that is that the dog licence fee has not been increased since 1878 and stands at 37½p. In terms of today's purchasing power it is equivalent to £8·50 to £9·50 per annum. It could be left to the Secretary of State to decide what new fee should be charged, while giving exemptions for guide dogs for the blind, work dogs and dogs owned by those aged over 60.
      New clause 7 would give an island or district authority the power to pass byelaws
      "for the specific purpose of appointing persons or firms with acceptable qualifications who will undertake the duties of catching and removing to a compound, stray dogs, or dogs causing a nuisance or annoyance to the ratepayers".
      That would remove a burden from the police, because they usually collect stray dogs at present. The clauses will give island or district authorities the power to create firms that would collect the stray dogs. Small businesses would be created. People could be suitably trained, purchase vans and dog handling equipment and collect the dogs, thus saving the ratepayer money. The cost could be met from the increased fee which was mentioned by the hon. Member for Garscadden.
      6 pm
      As the hon. Gentleman said, in 1974 the Labour Party set up an inter-departmental working party on dog control. Its report was published in 1976, but has never been implemented. That report covered licence fees, fouling and nuisance, road safety, livestock worrying and controls

      1101
      over breeding. It dealt with all the aspects of dog control that affect the public. We know that the Bill that we are discussing has taken cognisance of parts of that report.
      The clauses that I have tabled are supported by the Royal Society for the Prevention of Cruelty to Animals. It has stated that hundreds of thousands of unwanted dogs are destroyed every year because the homes do not exist for the number of animals that are born. One of the main problems is the number of illegal breeders. I ask the Minister to take cognisance of that factor.
      I can give the House the example of an elderly lady who keeps 44 dogs, which include four stud dogs and eight breeding bitches. How many of those dogs are ultimately thrown on to the streets and become strays is unknown, but that is an example of the dog control problems that we must grasp.
      Organisations such as the British Small Animal Veterinary Association, the National Canine Defence League, the Petfood Manufacturers Association, the Association of Metropolitan Authorities, the National Dog Rescue Co-ordinating Committee, the British Veterinary Association, the Kennel Club, the People's Dispensary for Sick Animals and the RSPCA have produced comprehensive reports that cover every aspect of the dog control problem in the United Kingdom. They all ask that the Government should grasp the nettle, which all Governments have failed to do.
      It is accepted that any question of dog control is a highly sensitive political issue, but we should not run away from it when it has reached chaotic proportions. The health dangers that are apparent to human beings resulting from diseases transmitted from dogs cannot be underrated. Some form of control must be implemented. A child can give his love to a dog. An adult, particularly one of the 9 million pensioners, can keep a dog as a companion and a watchdog. The guide dog is indispensable to the blind. The handicapped have every reason to be grateful for the affection that a dog can show during a period of loneliness.
      On the other hand, having tired of a dog as a pet, many families put their dogs on to the street to wander and gather in packs, which become a danger to the public, roaming wild, injuring people and fouling streets and public areas. The public are entitled to be protected from that. My new clauses would go some way towards giving that protection.
      Subsection (3)(b) of the new clause tabled by the hon. Member for Garscadden refers to a dog tag, or identification mark. In new clause 6 I have asked that the House should consider that the identification mark should be
      "indelibly marked on the inside thigh as this area is lacking in pigmentation and would be suitable without causing pain to the dog."
      —[Interruption.] This is no joking matter, as the hon. Member for Berwick and East Lothian (Mr. Home Robertson) seems to think. The clause states further:
      "This code marker would be applied by a veterinary surgeon and would be recorded on the licence."
      That suggestion was one of the results of the report that was brought out in 1976, which was not implemented. No pain would be caused to the dog. The important factor is that that identifiable mark indelibly placed on the body of the dog would be better than the use of a tag, when someone could undo the dog's collar and take away the dog, causing a problem of identification, when the dog might be considered a stray.
      Mr. Norman Hogg: If the dog was kept for breeding purposes and was valuable, would it not be possible for someone to add another letter or numeral to the indelibly printed mark on the thigh, thereby rendering it useless from the point of view of identification of the dog? The hon. Gentleman's suggestion does not seem to provide for proper identification.
      Mr. McQuarrie: The mark would be put on by a veterinary surgeon under strict supervision of the district council. Therefore, it would not be possible to superimpose other letters on the identification mark.
      Mr. Neil Carmichael: The hon. Gentleman mentioned a £5 licence fee. How much does he think that it would cost a pensioner to have his dog taken to the vet and tattooed? Would not the fees be high?
      Mr. McQuarrie: No, Sir. I said that the expenses would be met from the licence fee. I did not say that the fee would be £5. I said that the fee had not increased since 1878 and stands at 37½p. Based on the value of that sum of money in 1878, the fee today should be £8·50 to £9·50. The amount could be set by the Secretary of State in accordance with the powers granted to him under section 43 of the Local Government (Scotland) Act 1966.
      The three new clauses justify the House giving serious consideration to them. The hon. Member for Garscadden was right. The Minister cannot say that there was a difference of opinion in Committee. With the one exception that was mentioned by the hon. Member for Garscadden, there was unanimity that something should be done about the problem. We do not have to be required to wait until the Chancellor of the Exchequer has decided what he wants to do because the Secretary of State for Scotland has the power to increase the cost of the licence.
      I ask the House to accept my new clauses. They will mean that at long last the Government will be seen to have had the courage to bring in legislation to control dog problems. The Angus report in 1978, which was brought out by the Scottish Canine Consultative Council, pledged its support to the need for new legislation. The report suggested that the council had the support of all responsible dog owners in Scotland as well as the majority of district councils. The failure of successive Governments fully to grasp the problem justifies my new clauses.
      The Minister should take cognisance of this most important factor. When I introduced my Dogs (Miscellanous Provisions) Bill 18 months ago, I received 300 or 400 letters from local authorities and individuals which all supported the Bill. Everyone complained bitterly about the problem of dog control in the United Kingdom, particularly in Scotland. I ask the Minister to give us an assurance that he will take this matter under his wing and accept the new clauses.
      Mr. Home Robertson: The hon. Member fur Aberdeenshire, East (Mr. McQuarrie) implied that I was taking his suggestion less than seriously. I make it clear that I—and I am sure other hon. Members on both sides of the House—take this matter seriously. However, I was a little concerned about the practical aspects of the means of identification that he suggested. In my constituency, which includes both urban and rural areas, I am aware of the problems created by stray dogs and dogs, which have owners, but which act as if they were strays. Stray dogs present a danger to traffic, a danger to the health of

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      children in the playground and, as is well known, a major danger to sheep in rural areas. An alarming number of sheep are killed by stray dogs every year. We all hope that rabies will never come to Britain, but in that unhappy event the large number of stray dogs wandering about the countryside and towns could accentuate the problem.
      East Lothian district council has taken the matter seriously. It has introduced new byelaws and sought powers to control dogs there. Nevertheless, we always return to the same problem—how will local authorities finance the provision of dog wardens and the administrative services connected with controlling stray dogs in their areas? We return to the Secretary of State for Scotland's statement of a cut of rate support grant in real terms. There is no way that local authorities can be expected to carry out those responsibilities unless they get the funds. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has presented the House with a serious proposal that would make sufficient funds available to local authorities to administer that type of scheme. I hope that the Minister will respond to it positively.
      Mr. Allan Stewart: I accept what has been said about the importance and seriousness of the topic. We debated it fully in Committee. Unfortunately, my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) was indisposed then.
      I can tell the hon. Member for Berwick and East Lothian (Mr. Home Robertson) that clause 130, which was originally proposed by my hon. Friend the Member for Banff (Mr. Myles) and which relates to the rural problem, has been widely welcomed.
      I shall deal first with dog licensing. I emphasise the point that was rightly made by my hon. Friend the Member for Aberdeenshire, East. The new clauses are not required in order to increase the dog licence fee. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) and my hon. Friend the Member for Aberdeenshire, East have said, the Secretary of State has powers to amend the provisions of the Dog Licence Act 1959 with respect to the time for payment of duty, the age of a dog and the period for which a licence is to be enforced, in addition to having the power under section 43 of the 1966 Act to increase the licence fee by order.
      It has been suggested that funds that are raised by increases in the licence fee could be devoted to the operation of the type of identification system that was advanced by the hon. Member for Garscadden and the operation of the dog warden scheme suggested by the hon. Member for Berwick and East Lothian. There could be no guarantee that such funds would be used for dog control. The House knows the difficulties, both in principle and in practice, about hypothecation of revenue.
      As with our debate in Committee, today's debate has confirmed that there are genuine differences of opinion on procedure. The hon. Member for Garscadden suggested a system of identification tags. That would involve administrative cost. My hon. Friend the Member for Aberdeenshire, East suggested a system of tattooing. Opposition Members' response to that system showed that it also involves difficulties.
      Mr. Robert MacLennan: The Minister recognises the difficulty of hypothecation,
      1104
      but will he admit that a licence fee that does not cover its own administrative costs—I understand that this is the case with dog licences—is scarcely justifiable and that Goverment action on the matter is necessary?
      Mr. Stewart: I confirm that the hon. Gentleman's understanding of the financial position is correct. I had not finished what I intended to say about dog licences.
      My hon. Friend the Member for Aberdeenshire, East has tabled amendments dealing with the rounding up of strays. He will recognise that clause 129 goes a long way to provide local authorities with powers of the type that he regards as desirable. Moreover, clause 130 deals with the problem of dangerous or annoying creatures, including dogs.
      6.15 pm
      My hon. Friend the Member for Aberdeenshire, East referred to employment and the possibility of private firms assisting with the catching of stray dogs. That is a matter for the councils concerned. I understand that there is a firm that offers such contract services in England.
      My right hon. Friend the Secretary of State has fully considered the points that were made in Committee. That was an extremely well informed debate. I hope that the House will recognise the improvements in the control of dogs that the Bill implements, both in urban and in rural areas. New clause 4 is unnecessary, as my right hon. Friend the Secretary of State already has the power to increase the licence fee.
      Mr. McQuarrie: If the Secretary of State has those powers—we know that he has—is there any possibility of his implementing them in accordance with the terms of the Bill?
      Mr. Stewart: I was just coming to my hon. Friend's point. The hon. Member for Caithness and Sutherland (Mr. Maclennan) also made that point. I assure the House that because, as the hon. Member for Caithness and Sutherland said, the system of dog licensing seems increasingly to be going into deficit in Scotland, we will keep the level of licence fee under review. The new clauses are not necessary in order to increase the fee. There is a wide divergence of view on the issue. I cannot, therefore, go any further than that now.
      Mr. Dewar: The Opposition do not wish to push the matter to a Division. That would not be helpful. The Minister has made great play of the fact that new clause 4, or at least that part of it which refers to the amount of licence fees, is unnecessary. That is only so if something will be done about the matter.
      The Minister made some cautious comments that were not exactly commitments—that would be over-optimistic—but at least he has assayed the view that the matter will be kept under review and consideration. Perhaps the matter has been under review since 1878. I concede that previous Governments have done nothing about it either. I hope that the Minister will take the review as a positive matter and will conclude it in the foreseeable future.
      The hon. Member for Caithness and Sutherland (Mr. Maclennan) was right to say that the problem becomes increasingly farcical as years pass by. Pargraph 16 of schedule 1 is common place enough. It sets out the provisions for the fees for all the other licensing that is being introduced by the Bill. It says:

      1105
      "the licensing authority shall seek to ensure that from time to time the total amount of fees receivable by the authority is sufficient to meet the expenses of the authority in exercising their functions".
      That is now almost standard with almost all the licensing or planning permission systems that the Government regulate or are introducing. It is a startling anomaly that nothing has been done about dog licences.
      The problem lies not solely with the level of the fee. Once again the law has fallen into disrepute. The law states that every dog must have the name and address of its owner attached thereto. I do not know how many prosecutions there are in a year for not doing that. I suspect that it is nil. I have never come across such a prosecution.
      Without wanting to be too much of a purist, I believe that if the law has laid down an offence with a sanction attached thereto, we should either take it off the statute book or make an effort to update and enforce it. We should not leave it there as lumber, as a standing reproach to anyone who has the energy or interest to refer back to the statute book.
      I am prepared to withdraw the new clause. However, everyone will have noted that a review is under way and the Minister may rest assured that his attention will be drawn to it and questions will be asked about its progress as the months go by. The best way for the Minister to dispose of that irritation is to do something about the cause of the complaint. He should bring the review to a reasonably speedy conclusion and introduce the reforms which everyone who has taken part in the debate thinks are long overdue and clearly necessary.
      It is not a question of being anti-dog. There are probably more than 6 million dogs in this country. The figure has doubled since the mid-1950s. I accept that dogs are essential and valuable companions to many people. I have been part-owner of a dog—
      Mr. Nicholas Fairbairn: Which part?
      Mr. Dewar: I believe in co-operation and the co-operative movement. I assure the hon. and learned Gentleman that it was a co-operative dog. I do not take the view that the ownership of dogs should be discouraged. Nevertheless, reform is overdue and I hope that the Minister will not allow the matter to drop from sight.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 5

      TAXIMETERS
      'For the purposes of this Act a taximeter may be fitted only to a vehicle which is licensed as a taxi.'.—[Mr. Bill Walker.]
      Brought up, and read the First time.
      Mr. Bill Walker: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take the following amendments:
      No. 162, in clause 9, page 7, leave out lines 12 to 17.
      No. 161, in clause 10, page 9, line 19, at end insert—
      '(6) A licensing authority shall refuse an application to transfer a taxi or hire car licence if:

      (a) The person to whom it is proposed that the licence be transferred is not in their opinion a fit and proper person to be the holder of such a licence;

      1106

      (b) Where the licence relates to an activity consisting of or including the use of premises, the person to whom it is proposed that the licence be transferred in their opinion neither is in possession of the premises nor has a right to possession conditional only upon the transfer to him of the licence;

      (c) The holder of the licence is capable of giving his consent to the transfer but has not done so; or

      (d) Where the licence-holder has, in the opinion of the licencing authority, not been the de facto operator for a sufficient time since the first granting of the licence, which sufficient time shall be not greater than five years,

      and otherwise shall grant the application.'.
      No. 163, in clause 13, page 10, line 38, at end insert—
      '(7) A taxi driver's licence or a private hire care driver's licence may only be issued to applicants who will operate on a full time basis.'.
      Mr. Walker: Those hon. Members who were on the Standing Committee will have heard most of the arguments on this issue as we spent some time discussing the thorny problem of taxis. Nevertheless, I do not believe that we finally resolved the fundamental problems of the differences between the various groups within the hire trade—that is, taxi drivers and private hire operators, and the third, unsavoury element that is not licensed and does not not fall into either of those categories. The latter are known in the trade as bandits and they are the main problem.
      The new clause and the amendments cover a wide range of aspects of the problem. New clause 5 provides that a taximeter can be fitted only to a vehicle licensed as a taxi. In Committee, the Government seemed happy that meters should be fitted to private hire vehicles, but if the meter is referred to as a taximeter its presence immediately suggests that the vehicle is a taxi. That opens the first area of doubt in the minds of the travelling public.
      I believe that private hire operators who wish to use meters will do so in part with the intention of misleading the public into thinking that the vehicle is a taxi. It may be argued that private hire operators would not wish to do that. The Committee spent some time debating, for example, whether the advertisements in newspapers, particularly in the Glasgow area, were misleading and it was generally agreed that they would certainly give a person who did not know anything about the trade the impression that the private operators were offering a taxi service.
      Having debated the matter at some length in the presence of private hire operators who had had meetings with us and had declared clearly that they had no wish to mislead, I was disappointed to read the following in a Glasgow newspaper on 28 May:
      "After only a year in business, we realised that a lot of our traffic was going into the city and our customers regularly phoned up looking for cars to bring them back to the district. For the convenience of our customers, we decided to acquire a city rank."
      The use of the word "rank" was one of the very problems to which we drew attention in Committee because, coupled with the matter of meters, it was clear that the public would again be misled and we should not encourage that in legislation.
      In the light of the discussions in Committee, I believe that the main purpose of a meter being put in a private vehicle would be primarily to regulate on behalf of the owner what the vehicle was doing. There is no need for a taximeter for that. It can be done in other ways if it is simply a means of auditing or controlling the operation of the vehicle or the driver or both.

      1107
      If meters are put into private cars, the cars must be controlled on the same basis as taxis. Otherwise, the public are in danger of getting the wrong idea of the type of vehicle in which they are travelling. Local authorities must be given power to regulate such traffic.
      Very properly, there are tight regulations about the testing of meters in taxis cabs. In relation to private hire meters, however, clause 11(2) allows for the removal of the meters at any time. As no lists would be available of the vehicles and the meters and how they were married up, it would not be known which private hire cars had meters and which had not. That, again, shows clearly that we have not got that aspect quite right. Either we must regulate the matter fully so that private hire vehicles and taxis are treated in an equal fashion or, as I have suggested, we must ensure that all cars carrying meters are registered as taxis.
      Amendment No. 162 proposes the deletion of subsection (4) of clause 9. Having studied the provision carefully, I wondered how best to tackle this matter. However, as amendment No. 42 deals with the mandatory aspect of licensing, I shall not say much about this now, other than that I think that that amendment will have my support as it seems to achieve my purpose exactly. We must be sure that by the time we finish our proceedings we have tied up all the ends.
      As I said in Committee, I believe that once a fare structure is laid down and is mandatory for those who are licensed, there can no longer be a free market because the price to be charged is controlled. The exercise of that degree of control must bring accountability and the responsibility to ensure that the controls apply equally to all who ply for hire. I draw the Minister's attention again to the question of unlicensed vehicles operating into a licensed area. We spent a considerable time on this in Committee and I understood that the Minister had got the message, but I now wonder whether we have got this right. I believe that unlicensed operators who go into licensed areas do so at an advantage. In Committee, I drew attention to the problems of Carnoustie and Invergarry near Dundee. Clearly, that problem must be dealt with.
      6.30 pm
      I turn now to private hire cars. Although we will be debating again the regulation of all vehicles, my hon. Friend will know that I have a constituency interest in what goes on in Dundee. He will also know that the private hire taxi trade in Dundee has written to him and has stated that it would prefer a licensing system operated by the local authority. The private hire trade in Dundee is disclaiming any connection with the West of Scotland Private Hire Association because it is not in step with the association. Nevertheless, we have a duty and a responsibility to listen to those people and, as some of them are constituents of mine, I ask my hon. Friend to take careful note of that.
      Amendment No. 161 deals with the transfer of a taxi or hire car licence. It constitutes a recognition that what is being transferred is not just a licence—a piece of paper—but a business, and that that business has a worth on the open market which must be transferable. In other words, if someone is selling his business, he expects the goodwill of that business and all that goes with it to have a value. In Committee, my hon. Friend made it clear that the Government accept transferability. It was suggested that as this was happening at the moment and did not require legislation it was therefore an accepted pattern. I
      1108
      should like confirmation from my hon. Friend that the transfer of a business is permitted by the legislation as it stands, even by omission, and that he will be taking cognisance of the strong feeling of the Scottish Grand Committee and others on this matter.
      I turn now to amendment No. 163 in which I draw attention to the problems that affect the full-time operators. Again, this is a matter that was first brought to my attention almost two years ago. I dealt with my hon. Friend's predecessor on the question of who drives taxis or private hire vehicles. It is interesting that we have legislation that lays down the number of hours that a train driver, a lorry driver and a bus driver may drive. Yet a chap can drive a bus all day long, complete his eight hours, and then in the evening, if he is available, he can climb into a taxi and drive it for another working day if he so wishes. The regulations governing this matter should be examined carefully.
      I have no wish to exclude a petrol pump attendent or a mechanic in a small garage from driving a taxi part time as part of the business of the garage. What worries me is that there is substantial evidence that individuals are driving vehicles on a part-time basis after they have done a full day's work elsewhere.
      Mr. McQuarrie: Does my hon. Friend accept that taxi and private hire car operators invariably employ part-time people at peak times, holiday seasons, Christmas and other times, and that such people, prior to their driving a taxi or a private hire car, have not necessarily done a full day's work? They may be unemployed people who wish to earn a few extra pounds and hope that it may lead ultimately to a full-time job.
      Mr. Walker: I accept that there is obviously such scope, particularly in the rural areas. I hope that nothing I have said would exclude that. I would not wish to do anything to damage the rural areas. I drew attention to the fact that in many rural areas the garages supply the taxis, and that those who drive the taxis or private hire cars do other jobs in the garage. I do not have those people in mind. They could be classified as full-time employees of the holder of the licence. There would be no difficulty there. I am worried about the taxi drivers whose livings are at stake because they are faced with competition from individuals who are not employed full-time in that job. The taxi driver is often self-employed. He is probably the best example of free enterprise that one could give. He is the fellow who will work 12 hours, usually unsocial hours, to provide a service so that he can make a living. If he is in competition with part timers, that would present a risk to his job.
      Mr. Maclennan: I have been following the hon. Gentleman's argument with great interest. Have not his last few sentences shot down the first part of his speech? He was endeavouring to suggest that the consumer interest was being protected by not allowing part-time licences to be issued. He now says that he is willing to contemplate licensed taxi drivers driving for up to 12 hours, or more presumably, if they see fit.
      Mr. Walker: I have never set myself up as a judge of the number of hours that it would be wise for a taxi driver to be on duty. It is common practice, in plying for hire, for a vehicle to be operated on a 24-hour basis, with 12-hour shifts. I am not commenting on whether I think

      1109
      that is wise. I am worried about the chap who has already driven a bus or another vehicle for the normal eight hours, who has a meal, and then returns to do another shift. That is not the same, and anyone who suggests that it is is doing a disservice to the public and to the trade.
      I hope that the hon. Member for Caithness and Sutherland (Mr. Maclennan) is not suggesting that I am not worried about the safety of the public. I am concerned that the public not only get a good deal but a safe, good deal in terms of the number of hours a chap has driven and whether the vehicle that he is driving is up to the job.
      It is common practice to have two drivers for a maximum of 12 hours which includes meals, sitting stationary on the ranks, and other such matters. I am told that by the trade. I have no knowledge of the taxi trade, so I must take the advice and the guidance of those who tell me that they represent the trade. Over the past two years, the representatives of the taxi trade in my constituency and in the adjacent constituency where I have an interest have been worried about a number of matters. That is why I have taken this opportunity to suggest that there is considerable merit in my case.
      I hope that hon. Members, who were not in Committee and did not listen to our long detailed discussions and who have not grasped my argument, will understand that I am speaking briefly to save the House sitting long hours unnecessarily. If hon. Members wish me to go into great detail, I have the ammunition to do so. However, I do not think that that would be the wish of the House. I am being as brief as I can because I know that the House wishes to deal with the Bill as quickly as possible.
      Mr. Gavin Strang: I am glad to take up the remarks of the hon. Member for Perth and East Perthshire (Mr. Walker). It is not often that I agree with him, but there are some elements of common ground on this occasion. The Minister may recall that on Second Reading I said that my primary interest was that the Government should not do anything to damage the valuable service provided in Edinburgh by the taxi trade. I welcome the Government's decision to leave local authorities, especially Edinburgh district council, with the power to restrict the number of taxi cabs operating within their areas.
      The compelling reason for retaining that restriction is the need to protect the investment of those who have acquired taxis. I appreciate that many arguments have been advanced for moving eventually from that system, provided that we can protect those who have bought their own taxis, some of whom have been made redundant and have borrowed money to acquire their vehicles. I do not say that the situation that prevails in Edinburgh is ideal, but, in the light of the Government's initial intention, there is an overriding need to protect the investment of many owner-drivers.
      I was not a member of the Committee that considered the Bill, but I have read—in some instances rather cursorily—most of its proceedings. I am still in some doubt—I suspect that this applies to the private car hire business and the taxi trade—about the Government's intentions in respect of the regulations that they will introduce under clause 19. I recognise that they have scope to prescribe criteria in one licensing area and other criteria in other areas. I understand that one important function of
      1110
      the regulations is to prevent a licensing authority from laying down a certain condition, or what the Minister would call a restriction.
      It is important that the Minister should give us some idea of what the Government will have in mind when they introduce the regulations. I have sympathy with the argument that has been advanced on behalf of full-time drivers, but I do not think that it is practical to try to lay down regulations for the whole of Scotland. I should like to see the Edinburgh licensing authority free to encourage full-time drivers. I say that partly because of the unemployment background. It is natural that those who have a full-time job in the taxi trade in Edinburgh, for example, want their jobs protected. They see scope for additional full-time drivers in the taxi trade in Edinburgh.
      There are various ways in which a licensing authority can encourage full-time drivers. It can be done by means of the allocation of licences and transferability provisions. It would be possible to protect the investment of someone who is giving up his licence and, at the same time, introduce a scheme of giving priority to someone who, for example, has been earning his living by working full lime by driving someone else's taxi. There are many such drivers in Edinburgh and Glasgow and in some other parts of Scotland. We should encourage the idea of enabling these drivers to acquire their own licence, or plate, as it is known more colloquially in Edinburgh, and to go about their own business. The likelihood is that they would continue to operate as full-time drivers with their own taxi cabs.
      6.45 pm
      I agree with the argument of the hon. Member for Perth and East Perthshire about the installation of taximeters in private hire cars. It would be my inclination to rule that out. If the Minister is intent on laying down regulations that will restrict the freedom of a local authority, there is a case for preventing the installation of meters in private hire cars.
      There was a considerable discussion in Committee on the operation of radios in private hire cars. I gather from the Minister's statements in Committee that he is much opposed to the idea that a licensing authority should allocate private hire car licences on the basis that a radio will not be installed in the vehicle. I do not share that view. There is a case for seeking to protect the traditional taxi trade in Edinburgh from what could be the development of cowboy part-time operators using their vehicles and creaming off the important weekend taxi trade. With the present depression, the bulk of the earnings of taxi drivers and those involved in the taxi business in Edinburgh comes at the weekend.
      Mr. McQuarrie: Does the hon. Gentleman accept that one of the advantages of having radios in private hire cars is that in sparsely populated parts of rural areas, if someone urgently wanted to use a private hire car he would be able to contact one that had a radio? If that car were not available, the driver would be able to contact someone else who could offer his vehicle for hire. It would be similar to the idea of citizens band radio and would be of great advantage to rural areas, especially the sparsely populated parts of them.
      Mr. Strang: The hon. Gentleman makes a legitimate and fair point. The position is different in urban areas. I am sure that that view is shared by the majority of Glasgow

      1111
      Members. Much of what they were saying in Committee was equally relevant to Edinburgh, although there are certain differences. The situation in remote areas, especially the area that the hon. Member for Aberdeenshire, East (Mr. McQuarrie) represents and other areas further north in the Highlands, is completely different.
      When the Minister introduces the regulations—they will have to come before the House—I hope that he will seek to avoid ruling out conditions which a local authority might wish to make, unless there is good reason for doing so. I want local authorities such as Edinburgh and Glasgow to be free in dealing with the important taxi business. I hope that the House will remember that we are not talking only of taxi drivers. There is a great deal of work associated with maintaining and servicing the black cabs. That will be especially relevant to the new type of vehicle, which presumably will take over from the traditional black cab. We must also consider the manufacturers of the black cabs. We are discussing an important indigenous service industry with an important manufacturing element.
      I accept all that has been said about rural areas. The Minister should refrain from making regulations that will specifically prevent a local authority from continuing to protect—I use the word "protect" unashamedly—the taxi industry. It is an important industry, which provides a great deal of work and a valuable service to the public.
      Mr. Harry Ewing: First, may I mention new clause 5 together with the three amendments that refer to three different clauses in the Bill and that in many ways are three unconnected issues? The hon. Member for Perth and East Perthshire (Mr. Walker) is suggesting that taximeters should be allowed to be installed only in taxi cabs and that, by implication, they should not be installed in private hire vehicles. The hon. Gentleman will remember the debate that we had in Committee.
      It is discretionary whether those owning private hire vehicles wish to instal taximeters in their vehicles. If they decide to instal them, in an area that is licensed, they are bound by the conditions that apply to taxi cabs and their meters. Taxi cab owners have one advantage over private hire cars in that when the fare structure has been decided by the licensing authority only they have the right of appeal or objection. Private hire car owners should not have any such right, so there are swings and roundabouts.
      Mr. Bill Walker: I accept the hon. Gentleman's point. Does he consider that a meter in a taxi cab relates to fares that are agreed or appealed against, but that in a private hire cab there will be no such fare structure available to the public?
      Mr. Ewing: That is precisely the point that I was making. There will be a fare structure in the private hire vehicle. The hon. Gentleman obviously misunderstands me. Any private hire vehicle owner who decides to instal a taximeter will be subjected to the fare structure which has been decided by the licensing authority but against which he has no appeal. Only taxi cab owners have the right of appeal. Therefore, I prefer to leave the matter as it is in the Bill.
      Amendment No. 162 relates to clause 9. It is interesting to note that the effect of the amendment—I am not being
      1112
      unfair to the hon. Gentleman, who did not say much about it—is to remove subsection (4) from clause 9. I presume that the hon. Gentleman is saying that local authorities can then make regulations on one group of subjects. Under the Bill as at present drafted, they would be obliged to take all the groups of subjects into account before they made a regulation. I am not happy about that either.
      Amendment No. 161 relates to clause 10. I was interested in what the hon. Gentleman said about the conditions under which applications for a transfer shall be refused. The hon. Gentleman's amendment deals not with the conditions under which the transfer shall be made but with the conditions under which the transfer shall be refused. My hon. Friends and I will listen with interest to what the Minister has to say on the subject.
      Amendment No. 163, relating to clause 13, suggests that taxi drivers' licences should be granted to those who earn a full-time living from driving. I accept that that is highly desirable, but I have the gravest doubts, which I am sure are shared by the hon. Gentleman, about the enforceability of such a measure. It does us no credit to introduce legislation that, once introduced, becomes unenforceable. For those reasons, my hon. Friends and I are not happy about the proposals that the hon. Gentleman has very fairly made.
      Mr. Allan Stewart: My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) made a series of suggestions with great clarity and brevity. The Government are at one with the hon. Member for Edinburgh, East (Mr. Strang) in emphasising the importance of the taxi trade and its service to consumers in Edinburgh and elsewhere. As the hon. Gentleman fairly recognised, because of our anxiety we have made the major concession that we shall discuss later.
      Although radios are not strictly the subject of the amendment, the Committee accepted—partly for reasons advanced by my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie)—that it would be unreasonable to deprive private hire cars of the right to have radios. With the spread of citizens band radio, one could have the anomaly whereby private hire cars would be the only vehicles on the road without radio communication.
      We have no preconceived ideas about regulations and we hope that they will not be necessary. However, it seemed right that the Secretary of State should have reserve powers to make recommendations against any unreasonable provisions imposed by a local authority. As the hon. Member for Edinburgh, East recognised, the regulations must be considered by the House.
      Mr. Strang: Is the Minister saying that it may be possible to avoid bringing forward regulations in this area?
      Mr. Stewart: Yes. We hope that there will be discussions with the Convention of Scottish Local Authorities and the trade, that we shall achieve general agreement and that there will be no need for regulations.
      On the general issues, I am in the slightly unusual position of agreeing more with the hon. Member for Stirling, Falkirk and Grangemeouth than with my hon. Friend the Member for Perth and East Perthshire. New clause 5 deals with taximeters. The Committee felt—at the prompting of the Opposition—that it was reasonable for a private hire car to have a taximeter as a legitimate aid to the driver or operator in keeping track of mileage and

      1113
      as a protection for the public. The hon. Member for Stirling, Falkirk and Grangemouth rightly said that a meter in a private hire car is entirely discretionary. I emphasise to my hon. Friend that it will be an offence for the driver or operator of a private hire car fixed with a taximeter to charge higher fares than those fixed by the local authority. Meters must be inspected and tested in hire cars as well as in taxis.
      As to amendment No. 161, we are aware of the anxiety about the position of a licence holder's widow whose livelihood is cut off suddenly when her husband dies. The Government have produced amendments to deal with the problem and we shall discuss them later. That will be in primary legislation. I would seek to reassure my hon. Friend about the general point of transferability. The Government are not against transferabiliy, whether as a result of death or another position, but we feel that, as at present, the matter can be handled by local authorities under administrative arrangements rather than by primary legislation.
      As to amendment No. 163, my hon. Friend mentioned excessive hours for drivers. The hon. Member for Stirling, Falkirk and Grangemouth was right to say that a full-time taxi driver who works for 12 hours is unlikely to be more safe than someone who has worked for seven or eight hours in another job and who drives a taxi for a few hours in the evening. The key argument against my hon. Friend's amendment is that of workability. The proposal would be enormously difficult to enforce even if it were desirable in principle.
      The final argument that I must put in the balance against my hon. Friend's arguments is the point that was made by my hon. Friend the Member for Aberdeenshire, East and conceded by my hon. Friend the Member for Perth and East Perthshire. It is customary, especially in rural areas, for taxi drivers or hire car drivers to work part-time. The nature of the trade is such that it is insufficient to provide a full-time livelihood.
      7 pm
      I cannot accept new clause 5. There are also strong arguments against amendment No. 163, expressed by the Opposition as well as by myself. I hope, however, that my hon. Friend is reassured about what I have been able to tell him about transferability under amendment No. 161.
      Mr. Walker: I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 3

      DISCHARGE OF FUNCTIONS OF LICENSING AUTHORITIES
      Mr. Allan Stewart: I beg to move amendment No. 1, in page 2, line 22 leave out from 'and' to end of line 26 and insert—
      `, subject to the following provisions of this section, reach a final decision on it within 6 months.
      (2) On summary application by the licensing authority within the 6 month period referred to in subsection (1) above, the sheriff may, if it appears to him that there is good reason to do so, extend that period as he thinks fit.
      (3) The applicant shall be entitled to be a party to a summary application under subsection (2) above.
      (4) Where the licensing authority have failed to reach a final decision on the application before the expiry of—

      (a) the 6 month period referred to in subsection (1) above, or

      1114

      (b) such further period as the sheriff may have specified on application under subsection (2) above,

      the licence applied for shall be deemed to have been granted or, as the case may be, renewed unconditionally on the date of such expiry and shall remain in force for one year, but this subsection is without prejudice to the powers of revocation under section 7(8)(a) of this Act, of variation under paragraph 11 of Schedule 1 to this Act and of suspension under paragraphs 12 and 13 of that Schedule and to the provisions of paragraph 9(3A) of that Schedule.
      (5) The licensing authority shall make out and deliver the licence to the applicant to whom it has been deemed to have been granted under subsection (4) above.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 15 to 19 and Government amendment No. 95.
      Mr. Stewart: This set of amendments implements concessions or agreements to reconsider made by the Government in Committee. Amendment No. 1 provides that a decision on an application for a licence must be reached within six months, subject to extension of that time limit by the sheriff on application by the authority. Where a decision is not reached within six months, the licence will be deemed to be granted unconditionally for one year and issued by the licensing authority. Amendment No. 18 is a drafting, consequential amendment and meets concern expressed by hon. Members in Committee that there should be safeguards against unreasonable delays.
      Amendments Nos. 15, 17 and 19 arise from suggestions made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). A discussion took place about whether the provision for temporary licences and for the extension of joint licences in the name of one holder where the other has ceased to be such were sufficiently flexible to cover all hardship cases. These amendments seek to improve the position by providing that, where a temporary licence or an extension of a joint licence is in force and the holders apply for a full licence, the temporary licence or the extension shall continue until a final decision, whether or not for an appeal, is reached on that further application.
      Amendment No. 16 deals with the question of the widow of a licence holder. It provides that there should be automatic transfer for three months of an operator's licence to the executor.
      I commend the amendments to the House.
      Mr. Dewar: I give a brief but genuine welcome to one of a large number of groups of amendments that represent the Government's efforts to meet points made by hon. Members in Committee. I am grateful to the Minister, who has taken the Committee stage seriously and who has shown willingness to respond to what are not controversial but still important points. I am particularly glad to see amendment No. 1. It is useful to replace the not unusual arrangement in which a final decision must be made without unreasonable delay. The proposal that a decision must be made within six months unless there is recourse to a sheriff for an extension represents considerable tightening up of the arrangements.
      These are useful amendments. I should like to mention amendment No. 16 described by the Minister as the death-in-harness amendment. This is not just a matter of the widow: it could apply to another relative. It ensures that the executor could continue to operate the taxi business for three months while the application for transfer of the licence is processed.
      Amendment agreed to.

    Schedule 1

      LICENSING—FURTHER PROVISIONS AS TO THE GENERAL SYSTEM
      Mr. Allan Stewart: I beg to move amendment No. 2, in page 93, line 5, after `1', insert '(1)'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 3, 4, 6, 8, 10 and 23.
      Mr. Stewart: Amendment No. 3 is the main amendment in the group. It provides that where an application for a licence is made by or on behalf of a person other than a natural person the application must specify not only the name and address of any employee who is to manage the business but also give full details of the legal person, including the names and private addresses of its directors, partners or other persons responsible for management. This amendment, together with amendments Nos. 8 and 23, which are also concerned with the legal persona problem, are the result of concern expressed by hon. Members in Committee that licensing authorities should be able to find out full legal details of persons who apply for licences.
      Mr. Dewar: I welcome the amendments, which improve the Bill. The Minister is right in saying that amendment No. 3 is the key amendment. It is largely a matter of redrafting. One minor matter arouses my curiosity. Paragraph 2(c) of schedule 1, if amendment No. 3 is adopted, will provide that,
      "where the application is made by or on behalf of a person other than a natural person",
      the application shall specify the full name of the person—this presumably means, if it is not a natural person, the name of the company or partnership—and
      "the full name and address of any employee or agent who is to carry on the day-to-day management of the activity in relation to which the application is made."
      I wonder whether the phrase "any employee or agent" should not have been "the employee or agent". There will always be someone who is in day-to-day charge. The use of the word "any" almost gives the impression that the question does not need to be answered, because there may not be an employee or agent. There will presumably have to be such a person. I hope that the Minister can confirm that.
      Mr. Stewart: I am grateful to the hon. Gentleman for his general welcome for the amendments. In the interests of consistency, it was right to expand the information to be required to include the full name and address of any employee or agent who will be managing the business on the applicant's behalf.
      Mr. Carmichael: I should like to ask what may appear a naive question. Will the public be able to see the licences? I am thinking of licences for sex shops which can cause concern among local people. Will there be a register where people can discover who holds the licence?
      Mr. Stewart: The public can go the local licensing authority to obtain the information to which the hon. Gentleman refers. I accept that this might be a matter of considerable interest, especially where sex shops are concerned.
      Amendment agreed to.
      Amendments made: No. 3, in page 93, leave out lines 12 to 34 and insert—
      '(2) An application under sub-paragraph (1) above shall specify—

      (a) the kind of licence in respect of which the application is made;

      (b) where the applicant is a natural person, his full name and address and, where the applicant himself is not to be carrying on the day-to-day management of the activity in relation to which the application is made, the full name and address of any employee or agent who is;

      (c) where the application is made by or on behalf of a person other than a natural person,

      (i) the full name of the person;

      (ii) the address of its registered or principal office;

      (iii) the names and private addresses of its directors, partners or other persons responsible for its management; and

      (iv) the full name and address of any employee or agent who is to carry on the day-to-day management of the activity in relation to which the application is made;

      (d) the address of the premises, if any, in or from which and the area in which the activity is to be carried on; and

      (e) such other information as the authority may reasonably require.

      (3) Where the application relates to a licence for an activity which is wholly or mainly to be carried on in premises, it shall contain one or other of the following declarations by the applicant, that is to say, a declaration that he is complying with paragraph 2(2) below or a declaration by him that he is unable to do so because he has not such rights of access or other rights in respect of the premises as would enable him to do so, but that he has taken such reasonable steps as are open to him (specifying them) to acquire those rights and has been unable to acquire them.'.
      No. 4, in page 94, line 5, leave out '(i) to (v)' and insert `(2)'.—[Mr. Allan Stewart.]
      Mr. Allan Stewart: I beg to move amendment No. 5, in page 94, line 43, at end insert—
      '(aa) shall, in accordance with sub-paragraph (8) below, cause public notice to be given of an application made to them for the grant or renewal of a licence in relation to an activity wholly or mainly to be carried on in premises if the application contains a declaration that the applicant has been unable to comply with the requirements of sub-paragraph (2) above;'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 174 and 175.
      Mr. Stewart: The amendment provides that where an application is made in respect of an activity involving premises but it has been impossible to display a site notice advertising the application on such premises, the licensing authority must give public notice of the application in a newspaper. This was a point made by hon. Members in Committee. The other amendments are consequential.
      Amendment agreed to.
      Amendments made: No. 174, in page 94, leave out line 47 and insert
      `and notice of which they are not obliged to give under this sub-paragraph'.
      No. 6, in page 95, line 4, leave out '(i) to (v)' and insert '(2)'.
      No. 175, in page 95, line 13 at end insert 'above'.— [Mr. Allan Stewart.]
      Mr. Stewart: I beg to move amendment No. 7, in page 97, leave out from beginning of line 1 to 'and' in line 2.
      Mr. Deputy Speaker: With this it is convenient to take Government amendments Nos. 11 and 14.
      Mr. Stewart: Amendment No. 7 deletes the Secretary of State's power to make model licence conditions by statutory instrument. The change was strongly represented to the Government as necessary in Committee.
      Amendment agreed to
      Amendment made: No. 8, in page 97, leave out lines 12 to 14 and insert—

      '(a) the applicant or, where the applicant is not a natural person, any director of it or partner in it or any other person responsible for its management, is either—

      (i) for the time being disqualified under section 7(8) of this Act, or

      (ii) not a fit and proper person to be the holder of the licence;

      (b) the activity to which it relates would be managed by or carried on for the benefit of a person, other than the applicant, who would be refused the grant or renewal of such a licence if he made the application himself.'.—[Mr. Allan Stewart.]

      Mr. Allan Stewart: I beg to move amendment No. 9, in page 98, line 2, leave out from 'decision' to end of line 6.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 12, 20, 21, 22, 25, 26, 28, 29, 93, 94, 96, 97, 98, 103, 106, 128 and 146.
      Mr. Stewart: Amendment No. 9 and the associated amendments have two simple aims. They reduce the total length of the Bill and simplify the time limits for the provision of reasons for decisions. Amendment No. 93 is a drafting amendment. Amendment No. 97 requires a local authority to inform the licence holder, the chief constable and the fire authority of any material change of circumstances as to schedule 2. The hon. Member for Glasgow, Garscadden (Mr. Dewar) will doubtless be glad to see amendment No. 146, which takes out of the Bill certain lines that he described as a slab of dismaying type.
      Mr. Dewar: I am glad. I cannot remember that period of dismay, but there were many in Committee. I am grateful to the Minister for removing one cause of irritation. There is a great deal of sensible rearranging in Government amendments Nos. 128 and 103. Amendment No. 28 rewrites the notification of decisions and the giving of reasons. It provides:
      "A licensing authority shall, within 10 days of being required to do so under sub-paragraph (2) below, give reasons in writing for arriving at any decision of theirs. … Reasons for a decision referred to in sub-paragraph (1) above shall be given by the licensing authority on a request being made to the authority by a relevant person within 28 days of the date of the decision."
      They seem to be different time scales from those that were originally in the Bill. Most of the references in the Bill, as presently drafted, refer to the supply of written reasons within seven days and application having to be made within 48 hours of the decision. Paragraph 6 of schedule 1 is excised by Government amendment No. 12 and is replaced by the new form to which I have referred. They are not minor variations—48 hours to 28 days is a startling difference and even seven to 10 days is important. I accept that these are matters of judgment and that there are no absolutes. One has to decide on something that seems suitable. As the variation is so substantial, will the Minister say something about the rationale behind it?
      Mr. Stewart: The hon. Member will remember that in Committee it was argued that the period of 48 hours for requesting reasons was too short and an extension to one week was sought. There was a general complaint about the
      1118
      complexity of the time limits. Those were the two main points made in Committee. The provisions in the Bill now simplify the interlocking time limits by providing for a notification of decisions within seven days as at present: the request for reasons within 28 days of the decision, and the provision of reasons within 10 calendar days of the request being received. That eliminates two bones of contention—the 48-hour period for requesting reasons and the complex calculations for deciding precisely which seven days the local authority has at its disposal for the provision of reasons.
      Persons entitled to request reasons will still be able to receive them within the 28-day appeal period, provided that they request them speedily.
      Amendment agreed to.
      Amendments made: No. 10, in page 98, line 17, leave out `1(iii)' and insert '1(2)(b) or (c)(iv)'.
      No. 11, in page 98, line 23, leave out sub-paragraph (9).
      No. 12, in page 98, line 27, leave out paragraph 6.
      No. 13, in page 99, line 19, leave out
      `2 to 4, 5(1) to (4) and 6'
      and insert
      `1(3), 2 to 4, and 5(1), (2), (4) to (6)'.
      No. 14, in page 99, line 26, leave out lines 26 and 27.
      No. 15, in page 99, line 34, at end insert
      `but, where the holder of or the applicant for a temporary licence has also made an application for a licence under paragraph 1 above in respect of the same activity, the temporary licence, if granted, shall continue to have effect until—

      (a) the licence applied for under paragraph 1 has been granted, whether as a result of an appeal under paragraph 17 below or not, or has been deemed to have been granted; or

      (b) where the licensing authority have refused that application, the time within which an appeal under paragraph 17 below against that decision may be made has elapsed; or

      (c) when such an appeal has been lodged, it has been abandoned or determined.'.

      No. 16, in page 99, line 46, at end insert—
      `(2A) In the event of the death of a holder of a licence (except in the case of a licence referred to in section 13 of this Act) that licence shall be deemed to have been gramted to his executor and shall, unless previously revoked, suspended or surrendered, remain in force until the end of the period of 3 months beginning with the death and shall then expire; but the licensing authority may from time to time, on the application of the executor, extend or further extend that period if they are satisfied that the extension is necessary for the purpose of winding up the deceased's estate and that no other circumstances make it undesirable.'.
      No. 17, in page 100, line 3, at end insert—
      `but, where the remaining holder has made an application under paragraph 1 above for a licence in respect of the same activity within that period of six weeks, that period shall be extended until the time specified in subsection (3B) below.
      (3A) If an application for the renewal of a licence is made before its expiry, the existing licence shall continue to have effect until the time specified in subsection (3B) below.
      (3B) The time referred to in subsection (3) and (3A) above is—

      (a) the time when the licence applied for under paragraph 1 above is granted or renewed, whether as a result of an appeal under paragraph 17 below or not, or has been deemed to have been granted or renewed; or

      (b) where the licensing authority have refused that application, the time within which an appeal under paragraph 17 below against that decision may be made has elapsed; or

      (c) where such an appeal has been lodged, the time when it has been abandoned or determined.'.

      No. 18, in page 100, line 6, after 'not', insert—
      ',unless it has been deemed to have been granted under section 3(4) of this Act.'.
      No. 19, in page 100, leave out lines 13 to 22.
      No. 20, in page 101, line 9, leave out from 'authority' to end of line 32.
      No. 21, in page 102, line 14, leave out from 'authority' to end of line 18.
      No. 22, in page 102, line 24, leave out sub-paragraphs (6) to (9).
      No. 23, in page 103, leave out lines 3 and 4 and insert—

      (a) the holder of the licence or, where the holder is not a natural person, any director of it or partner in it or any other person responsible for its management, is not or is no longer a fit and proper person to hold the licence;

      (b) the activity to which the licence relates is being managed by or carried on for the benefit of a person, other than the licence holder, who would have been refused the grant or renewal of the licence under paragraph 5(3) above;'.—[Mr. Allan Stewart.]

      7.15 pm
      Mr. Allan Stewart: I beg to move amendment No. 24, in page 103, line 35, at end insert—
      '(5A) A licensing authority may, whether upon an application made to them or not, recall an order made under this paragraph.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 27 and 99.
      Mr. Stewart: Amendment No. 24 provides that the suspension imposed under paragraph 12 may be recalled either at the licensing authority's instance or on application being made to it by the licence holder. That was a point made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). Amendments Nos. 27 and 99 are purely technical.
      Amendment agreed to.
      Amendments made: No. 25, in page 104, line 29, leave out from 'decision' to end of line 7 on page 105.
      No. 26, in page 105, line 37, leave out from 'authority' to end of line 12 on page 106.
      No. 27, in page 106, line 28, at end insert—
      '(4) Where a licence has been surrendered under this paragraph on its revocation under section 7(8)(a) of this Act or its suspension under this Schedule and the revocation or suspension is quashed or recalled the licensing authority shall re-issue the licence.'.
      No. 28, in page 107, line 33, at end insert—

      LICENSING—FURTHER PROVISIONS AS TO THE GENERAL SYSTEM
        'Sending of notice by post
        16A. When a licensing authority sends by post, for the purposes of paragraphs 5(6), 10(7), 11(4), 12(11), or 13(7), written notice of its decision, it shall be treated as having been sent within the time required if it was posted so that in the normal course of post it might be expected to be delivered to the person concerned within that time.

        Notification of decisions and giving of reasons
        16B.—(1) A licensing authority shall, within 10 days of being required to do so under sub-paragraph (2) below, give reasons in writing for arriving at any decision of theirs under this Schedule—

        (a) to grant to renew a licence or to refuse to do so;

        (b) to consent or to refuse to consent to a material change in any premises, vehicle or vessel;

        (c) to vary or refuse to vary the terms of a licence;

        (d) in relation to paragraph 12 above—

        (i) to suspend a licence or to refuse to do so;

        (ii) as to the period of suspension;

        (iii) ordering immediate suspension:

        (e) to suspend a licence under paragraph 13 above or to refuse to do so.

        (2) Reasons for a decision referred to in sub-paragraph (1) above shall be given by the licensing authority on a request being made to the authority by a relevant person within 28 days of the date of the decision.
        (3) Nothing in this paragraph affects the power of the sheriff under paragraph 17 below to require a licensing authority to give reasons for a decision of the authority—

        (a) which is being appealed to the sheriff under that paragraph; and

        (b) for which reasons have not been given under this paragraph.

        (4) In this paragraph, "relevant person" means—

        (a) in respect of a decision specified in sub-paragraph (1)(a) above, the applicant or any person who made a relevant objection or representation (within the meaning of paragraph 18 below) in relation to the application to which the decision relates;

        (b) in respect of a decision specified in sub-paragraphs (1)(b) to (e) above, the holder of the licence or the chief constable;

        (c) in respect of a decision specified in sub-paragraphs (1)(b) to (e) above which relates to an activity wholly or mainly carried on in premises, the fire authority;

        (d) in respect of a decision to consent or to refuse to consent to a material change in premises, the fire authority; and

        (e) in respect of a decision specified in sub-paragraph (1)(d) above, any person who, in pursuance of paragraph 12(6)(b) above, was heard by the licensing authority.'.

        No. 29, in page 108, line 6, leave out
        `6, 11, 12 or 13'
        and insert `16B'.

    Clause 5

      RIGHTS OF ENTRY AND INSPECTION
      Mr. Allan Stewart: I beg to move amendment No. 30, in page 3, line 18, at end insert—
      '(2A) Any person who—

      (a) being a person for the time being in charge of any premises, vehicle or vessel, fails without reasonable excuse to permit a constable or an authorised officer of a licensing authority or a fire authority who, in pursuance of subsection (1) above, demands to do so to enter or inspect the premises, vehicle or vessel or obstructs the entry thereto of a constable or such an officer, in pursuance of that subsection;

      (b) being a person in respect of whom powers are exercised under subsection (1) above on being required under that subsection to do so by a constable or an authorised officer of the licensing authority or the fire authority, fails without reasonable excuse to produce any equipment, plant apparatus or stock-in-trade or to permit a constable or such an officer, in pursuance of that subsection to inspect any equipment, plant, apparatus or stock-in-trade;

      (c) being a holder of a licence, on being required by a constable or an authorised officer of the licensing authority or the fire authority, in pursuance of subsection (1) above to produce any records or other document required by or under this Part of Part II of this Act to be kept by the holder of a licence, fails without reasonable excuse to produce them;

      shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £200.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 31 to 39 and No. 100.
      Mr. Stewart: These are primarily drafting amendments which re-order the offence provisions in the Bill in a way that was helpfully suggested by the hon. Member for Glasgow Garscadden (Mr. Dewar).
      Mr. Dewar: We are now making satisfactory progress. I am grateful for Government amendment No. 31, which regulates the time within which documents and licences have to be produced. In the Bill as drafted, the phrase was "a reasonable time". I made the point in Committee that it would be a good thing to bring it into line with the

      1121
      provisions of the Road Traffic Act for producing driving licences and insurance documents. The Government have tabled amendment No. 31 and inserted five days. I welcome that as it brings certainty to the procedures.
      Amendment agreed to.
      Amendments made: No. 31, in page 3, line 22, leave out 'a reasonable time' and insert '5 days'.
      No. 32, in page 3, line 23, at end insert—
      '(3A) Any person who, having been required under subsection (3) above to produce a licence, fails without reasonable excuse to do so within the period of 5 days specified in that subsection shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £25'.—[Mr. Allan Stewart.]

    Clause 6

      POWERS OF ENTRY TO AND SEARCH OF UNLICENSED PREMISES
      Amendment made: No. 33, in page 4, line 14, at end insert—
      '(4) Any person who fails without reasonable excuse to permit a constable in pursuance of a warrant granted under this section to enter and search any premises, vehicle or vessel or who obstructs the entry thereto or search thereof by a constable shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £200.'.—[Mr. Allan Stewart.]

    Clause 7

      OFFENCES, ETC.
      Amendments made: No. 34, in page 4, line 18, leave out '200' and insert '500'.
      No. 35, in page 4, line 27, leave out 'wilfully'.
      No. 36, in page 4, line 31, leave out '200' and insert `500'.
      No. 37, in page 5, line 4, leave out subsection (6).
      No. 38, in page 5, line 36, leave out subsection (7).
      No. 39, in page 5, line 42, after 'under', insert—
      section 5 (other than subsection (3A) thereof) 6 or'.—[Mr. Allan Stewart.]
      Mr. Allan Stewart: I beg to move amendment No. 40, in page 5, line 45, leave out
      `that is to say an order'.
      Mr. Deputy Speaker: With this it will convenient to take Government amendment No. 101.
      Mr. Stewart: These are purely drafting amendments which remove unnecessary words.
      Amendment agreed to.
      Amendment made: No. 172, in page 6, line 1, leave out `for' and insert 'from'.—[Mr. Allan Stewart.]
      Mr. Allan Stewart: I beg to move amendment No. 41, in page 6, line 7, at end insert—
      (9A) A person may appeal against an order under subsection (8) above in the same manner as against sentence and the court which made the order may, pending the appeal, suspend the effect of the order.
      (9B) A person may, at any time after the expiry of the first year of his disqualification under subsection (8) above, apply to the court which ordered the disqualification to remove it, and, on such application, the court may by order remove the disqualification as from such date as may be specified in the order or refuse the application, and, in either case, may order the applicant to pay the whole or any part of the expenses of such application.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 102.
      Mr. Stewart: The first part of the amendment makes provision for an appeal against an order revoking a licence or disqualifying the licence holder. The second part meets a commitment given in Committee to enable a disqualified person to apply to the court for removal of a disqualification. Government amendment No. 102 effects for schedule 2 what we are effecting for clause 7.
      Mr. Dewar: The Minister has been doing so well that I feel a heel to rise with a small although serious point.
      I welome amendment No. 41. I pushed for it, but I did not have to push hard. The Minister speedily conceded that it was right to introduce a provision similar to that in the Road Traffic Act. If under the Road Traffic Act a person is disqualified from driving for a lengthy period, after a certain period has passed he can return to court to ask for the disqualification to be lifted, normally on grounds of hardship and if there has been good conduct in the interim.
      Under clause 7(8), apart from fining for a number of offences, the courts can disqualify a person from holding a licence for a period not exceeding five years. Often a driving licence is a basic requirement to earn a livelihood in the way to which a person has been accustomed and it is right to make provision for the courts to review the situation on application.
      The provision in subsection (9)(b) is more generous than that in the Road Traffic Act 1972. Application can be made on the expiry of the first year of disqualification. Even if it is only a two-year disqualification, presumably application can be made after the first year. Will the Minister confirm that my understanding is right?
      The point that is of some moment is that at the end of new subsection (9B) appear the following words:
      "and, in either case, may order the applicant to pay the whole or any part of the expenses of such application."
      That is an interesting inhibition.
      Some hon. Members may think that I exhaustively refer to the Road Traffic Act parallel. If I appear for a client in Glasgow sheriff court and succeed in persuading the court that his driving licence should be restored because he has served three and a half years of a five-year ban, that is splendid. But I am not aware that the court can tell the applicant to pay a proportion of the prosecution costs, for instance, for getting the police to see whether there have been convictions or any other problems in the intervening period. An important innovation appears to be proposed almost surreptitiously.
      We are dealing with a disqualification that is not a civil procedure in the normal sense. It is a disqualification based on a criminal conviction. Having fined the person £100 or £150, the sheriff may ban him for five years from holding a licence of the sort involved in the offence. It is against the background of that criminal process that the appeal for the removal of the ban would be made. Is it right that there should be an award of costs, and what would they consist of?
      Mr. Allan Stewart: The provision for claiming the expenses of the application is in precisely the same terms as that in the Road Traffic Act. Subsection (9B) ensures that a person who has been disqualified by an order of the court can make an application to the court to have the disqualification removed. That meets the undertaking that we gave in Committee.
      When we considered the proposed provision, we had regard to the provisions for lifting disqualifications under the Road Traffic Act which narrate the circumstances that

      1123
      the court may take into account, specify a minimum period of one year or one half of the period of disqualification, whichever is the longer, before the application can be made and prohibit repeated applications within a specified period if the first application is unsuccessful. But we felt that in this instance such elaborate provisions were not required.
      The court may take any relevant considerations into account. The period of one year's disqualification before the application can be made seems sufficient. Common prudence would normally discourage an applicant from repeating early applications if the first is refused, as the court would be unlikely to reverse its earlier decision until a reasonable time had elapsed and the cost of a repeated unsuccessful application would fall on the applicant.
      Mr. Dewar: If there is a similar provision in the Road Traffic Act for costs it is seldom used. I am curious which costs they would be. Would they be the procurator fiscal's costs or the costs of the police in searching to see whether there were convictions during the period of the ban or in making a character search? I am totally unaware of such machinery having been used.
      Mr. Stewart: I confirm that the provisions are in the same terms as those in the Road Traffic Act. Court costs would be covered. If the hon. Gentleman wishes to write to me for particular definitions, I shall happily respond.
      Amendment agreed to.

    Clause 9

      APPLICATION OF SECTIONS 10 TO 27, 38 TO 40 AND 42 TO 44
      Mr. Harry Ewing: I beg to move amendment No. 42, in page 6, line 29, leave out '10' and insert '23'.
      Mr. Deputy Speaker: With this we shall take the following: Amendment No. 43, in page 6, line 29, leave out from '27' to first 'and' in line 30.
      Government amendments Nos. 44, 166 and 167.
      Mr. Ewing: Amendments Nos. 42 and 43 would make mandatory a licensing system for taxis and private hire vehicles throughout Scotland. I say at once that if what I say does not persuade the Minister to accept the amendments, we shall divide the House.
      There was a strong view in Committee that a mandatory licensing system throughout Scotland would be preferable to the discretionary system proposed in part II of the Bill. I hope that the Minister will not say that it is strange for us to argue for mandatory licensing when at other times we argue for greater discretion for local authorities. There is no inconsistency in arguing in some instances for greater discretion and in others for mandatory provision.
      The main argument that the Minister used against the mandatory licensing system when the matter was discussed in Committee was the geographical differences between various areas in Scotland. He drew heavily on the point that there are a whole host of rural areas, and he named a number of district councils that had no licensing system, as opposed to others that did. However, nowhere in the Bill are there any provisions that say that the geographical spread of the various local authorities in Scotland should be taken into account.
      1124
      7.30 pm
      The licensing conditions are fairly clearly defined, and the basis of licensing is not whether a local authority is rural or urban, but is laid out in a series of conditions in schedule 1 of the Bill, the two important conditions being that the person is fit and proper to hold a taxi licence, and that the vehicle is a safe one in which to carry fare-paying passengers. Nowhere in the conditions laid out in schedule 1 or clause 9 or 10 or any other is there any reference to the geographical location of any of the local authorities.
      Having discussed this matter with both sides of the trade, both private hire vehicles and taxi owners—if we have discussed anything in the Bill with interested parties, we have discussed this—we found that they were in favour of mandatory licensing. If the drafting of an amendment that unites both sides of the trade is not an attraction for the Minister to accept the amendments, I shall have to take the matter a little further.
      I am sure that the Minister became tired of hearing about the problems of the non-licensed area of Milngavie vis-a-vis Glasgow, and those that the hon. Member for Perth and East Perthshire (Mr. Walker) experienced in Dundee as a result of the non-licensed area in Angus district council. If the amendments were to be accepted, that problem would disappear. Non-licensed areas would not cause difficulties for licensed areas.
      Uniformity would also benefit the police, because, as we know, it will be the district councils which will be the licensing authorities. The chief constables' police areas in Scotland are made up of a number of district councils. I am not sure whether the Association of Chief Police Officers in Scotland has made representations to the Secretary of State on this matter—I suspect that it has not. However, the police force must have difficulty in remembering which districts have licences in the chief constable's area and which do not. We should be removing one more obstacle placed in the way of uniformity.
      The transferring of police officers from one district council area to another while in the same police authority area would be easier in the sense that the officer would not have to apply his mind to a new set of conditions in that area when dealing with this problem of the licensing of taxis.
      Furthermore, at the beginning of this debate, the Government introduced an amendment and a new clause allowing for the cross-border provisions referred to by my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) and other hon. Members. The Government went on to make it clear that even the new clause and the amendment would be operative only if the vehicles were operating from a licensed area. It seems strange that the Government should go to the trouble of dealing with what was recognised as a cross-border problem, yet at the same time leave this discretion that could negate the measures that they took in the new clause and amendment.
      There is a strong case for mandatory licensing. We need a uniform licensing system throughout Scotland so that we can avoid all the doubts and misunderstandings and get rid of the uncertainties. With clarity of legislation, all these points could be achieved. Nowhere do the arguments in favour of rural authorities deciding not to license outweigh any of the arguments for a mandatory, uniform licence system.
      My hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Glasgow, Kelvingrove

      1125
      (Mr. Carmichael) said that we should not be returning to this subject before a fair number of years had passed. Thus, it is important to do everything possible to get the matter right. We have the opportunity tonight to deal with the thorny question of licensing of private hire vehicles and taxis, and to put it on a uniform mandatory basis throughout Scotland.
      If the amendments are accepted, local authorities will be happy, both sides of the trade will be happy and, as the hon. Member for Perth and East Perthshire said, this will be an attractive proposition to him. There is nothing political about the amendments; it is a question of getting the matter right. I hope that I have persuaded the Minister that our approach to the matter is correct and that he will accept our amendments.
      Mr. Allan Stewart: With amendments Nos. 42 and 43 we are taking Government amendments Nos. 44, 166 and 167. The Government amendments will make public entertainment licence provisions subject to the optional rather than mandatory requirements as presently drafted in the Bill. This is the result of the concern expressed by hon. Members on both sides of the Committee about the consequences of mandatory licensing for public entertainment. The discretion now provided meets the concern expressed by hon. Members, and I commend the Government amendments on that basis.
      The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) made a serious and well-considered case, and I shall not make the too obvious point. As I think he recognises, it is rather unusual for the Opposition to seek to impose obligations on local authorities, which would be the result of his amendment. The main point between us is whether taxis and hire cars should be licensed in any particular area at the discretion of the local authority.
      I accept what hon. Members and the trade have said about the problems in the big conurbations, where local authorities did not have the necessary powers under the Burgh Police Act. I said in Committee that, in consultation with the convention and the police, we would make it very clear that in our view there was everything to be said for avoiding the creation of small areas of local authorities that can operate as havens for unlicensed pirates in the conurbations. However, that is very different from the amendment, which seeks to provide a blanket application of taxi and hire car licensing throughout Scotland, irrespective of local conditions.
      The anxiety of the trade, referred to by the hon. Member for Stirling, Falkirk and Grangemouth, reflects the concern in the urban areas rather than the position under rural authorities. At present, 26 authorities in Scotland do not license taxis or hire cars, the majority of which are concentrated in the rural areas. Many of those authorities have not said that difficulties have arisen as a result.
      The position south of the border under the Local Government (Miscellaneous Provisions) Act 1976 is similar, in that an authority may or may not adopt a licensing system. There is no evidence of abuses in England and Wales from the way in which councils operate their discretion.
      The Opposition view does not, perhaps, put sufficient weight on the legislation that already exists on the safety
      1126
      of vehicles, which is contained in the construction and use regulations, or she requirements for regular inspection of vehicles under the normal testing arrangements.
      Frankly, there is a genuine difference of view between us on what is appropriate. I accept that the hon. Gentleman put forward a serious case, but where there is pressure from the trade to have a licensing system, all the evidence suggests that local authorities respond positively to such pressure.
      The position in many rural areas is different. Ultimately, our view remains that it is sensible to continue to give local authorities discretion in this matter. After all, the local authorities best know the circumstances and needs of their areas, and I would expect any Scottish local authority that is under legitimate pressure to have a licensing system to adopt one.
      I do not think that the hon. Gentleman has made a persuasive argument for imposing on local authorities a mandatory system for which there is no need. If the hon. Gentleman seeks to divide the House, I must advise my right hon. and hon. Friends to vote against the amendment.
      Dr. J. Dickson Mabon: I was willing to be convinced that it was unnecessary to have a mandatory licensing system, but I do not think that the Minister has made much of a case. After all, most Scottish people live in the urban areas. I concede that the system operating in the urban areas need not necessarily be reflected in the rural areas. Indeed, many hon. Members representing rural areas see no logic in introducing a mandatory system that would be a burden on the local authorities which apparently have an existing system that is satisfactory.
      On the other hand, the argument is that the situation is unsatisfactory in urban areas where the local authorities see no reason for contracting into the system. In those cases, no attention is given to the problem of being contiguous to an area that has a mandatory system. I have no doubt that the anomalies referred to by the hon. Member for Perth and East Perthshire (Mr. Walker) also apply to other areas.
      If the argument is the greatest good for the greatest number, is it the case—
      Mr. Allan Stewart: Does the right hon. Gentleman not agree that their difficulty has been that some urban areas have not had the power to introduce a licensing system? The main example given in Committee was that of Eastwood district, which under the Burgh Police Act does not have the power, yet that district has made it very clear that it would introduce a licensing system once it was given the option.
      7.45 pm
      Dr. Mabon: I have no doubt that the Minister, who represents the Eastwood district, will do all that he can to persuade it. People who live in the Glasgow environs know that Eastwood is an important part of the area and know what a great lacuna it would be if it did not opt into the system. There could then be the abuse about which both sections of the trade and the local authorities are concerned.
      The Minister has not said that the local authorities are against a mandatory system. As he is not able to say so, I presume that the local authorities would not be upset if the amendments were to be carried.

      1127
      The hon. Gentleman has been a good Minister, in as much as he listened to all the arguments in Committee. Given his predecessor's commitments, he obviously had to argue this point with his colleagues and make a major change in the Bill. It is now his Bill. It is not one that he inherited from a pigeon hole in the Scottish Office and is seeking to carry it through as it stands. Having taken this major step forward by accepting—
      Mr. Home Robertson: Flattery.
      Dr. Mabon: It is not entirely flattery. The point is that the Minister accepted the argument and improved the Bill substantially as a result.
      Is the Bill now complete in this regard? On balance, I do not think so. The inconvenience caused to authorities that would be obliged to adopt a mandatory system would be much less than the inconvenience to the travelling public who live in the urban areas and who might find the contiguity argument treacherous in as much as they would not get the service they would expect. The trade also feels disturbed about the possibility of different provisions.
      In effect, the Minister concedes that argument by saying that he will go to the police and to local authorities such as Eastwood to persuade them to opt into the system. Perhaps in his own heart he believes in mandatory provisions but is unable to carry his colleagues that far. In that case, we should help him by voting for the amendments.
      Mr. Harry Ewing: Obviously, the Minister's reply is not acceptable to the Opposition and we now intend to push the matter to a vote.
      I am sure the Minister wants placed on the record the fact that Eastwood district council does not have these powers because it is made up of areas which at the time of local government reorganisation had no local authorities within them. Therefore, Eastwood did not take over an area that operated the Burgh Police Act.
      The Minister emphasised the inconvenience for rural authorities if they were subjected to a mandatory system. In fact, the inconvenience is caused to authorities that opt into the system. As the hon. Member for Perth and East Perthshire (Mr. Walker) and others have said, the difficulty has occurred because of areas with no licensing provision operating in areas that are licensed. That is where the inconvenience arises. To test the will of the House on this matter, I invite my right hon. and hon. Friends—and any Conservative Members who care to do so—to join me in the Division Lobby.
      Question put, That the amendment be made:—
      The House divided: Ayes 79, Noes 113.

      Division No. 296]

      [7.50 pm

      AYES

      Allaun, Frank

      Clarke, Thomas C'b'dge,

      Alton, David

      A'drie

      Beith, A. J.

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

      Booth, Rt Hon Albert

      Cook, Robin F.

      Bray, Dr Jeremy

      Cryer, Bob

      Brown, Hugh D. (Provan)

      Deakins, Eric

      Brown, Ron (E'burgh, Leith)

      Dean, Joseph (Leeds West)

      Buchan, Norman

      Dewar, Donald

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

      Dixon, Donald

      Campbell-Savours, Dale

      Dormand, Jack

      Carmichael, Neil

      Dubs, Alfred

      Cartwright, John

      Eadie, Alex

      Clark, Dr David (S Shields)

      Eastham, Ken

      1128

      Edwards, R. (W'hampt'n S E)

      Millan, Rt Hon Bruce

      English, Michael

      Miller, Dr M. S. (E Kilbride)

      Evans, Ioan (Aberdare)

      Morton, George

      Ewing, Harry

      O'Neill, Martin

      Faulds, Andrew

      Palmer, Arthur

      Foster, Derek

      Pavitt, Laurie

      Foulkes, George

      Penhaligon, David

      Freud, Clement

      Pitt, William Henry

      George, Bruce

      Powell, Raymond (Ogmore)

      Hamilton, James (Bothwell)

      Roberts, Ernest (Hackney N)

      Hamilton, W. W. (C'tral Fife)

      Ross, Ernest (Dundee West)

      Hardy, Peter

      Ross, Stephen (Isle of Wight)

      Harrison, Rt Hon Walter

      Shore, Rt Hon Peter

      Heffer, Eric S.

      Silkin, Rt Hon J. (Deptford)

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

      Skinner, Dennis

      Home Robertson, John

      Snape, Peter

      Hooley, Frank

      Spriggs, Leslie

      Hughes, Robert (Aberdeen N)

      Steel, Rt Hon David

      Lamond, James

      Stewart, Rt Hon D. (W Isles)

      Lewis, Ron (Carlisle)

      Strang, Gavin

      Lyons, Edward (Bradf'd W)

      Wainwright, E,(Dearne V)

      Mabon, Rt Hon Dr J. Dickson

      Wilson, Gordon (Dundee E)

      McCartney, Hugh

      Winnick, David

      McElhone, Frank

      Woolmer, Kenneth

      McKay, Allen (Penistone)

      Young, David (Bolton E)

      McKelvey, William

      MacKenzie, Rt Hon Gregor

      Tellers for the Ayes:

      Marshall, D(G'gow S'ton)

      Mr. Frank Haynes and

      Martin, M(G'gow S'burn)

      Mr. Lawrence Cunliffe.

      NOES

      Alexander, Richard

      King, Rt Hon Tom

      Ancram, Michael

      Knight, Mrs Jill

      Aspinwall, Jack

      Lawson, Rt Hon Nigel

      Atkins, Robert(Preston N)

      Lennox-Boyd, Hon Mark

      Beaumont-Dark, Anthony

      Lester, Jim (Beeston)

      Bendall, Vivian

      Lloyd, Peter (Fareham)

      Benyon, Thomas (A'don)

      Lyell, Nicholas

      Benyon, W. (Buckingham)

      McCrindle, Robert

      Berry, Hon Anthony

      Macfarlane, Neil

      Biggs-Davison, Sir John

      MacGregor, John

      Blackburn, John

      MacKay, John (Argyll)

      Body, Richard

      Major, John

      Bonsor, Sir Nicholas

      Marlow, Antony

      Boscawen, Hon Robert

      Marshall, Michael (Arundel)

      Brinton, Tim

      Mates, Michael

      Brooke, Hon Peter

      Mather, Carol

      Bruce-Gardyne, John

      Mawhinney, Dr Brian

      Bryan, Sir Paul

      Maxwell-Hyslop, Robin

      Cadbury, Jocelyn

      Mayhew, Patrick

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

      Mills, Iain (Meriden)

      Chapman, Sydney

      Mills, Sir Peter (West Devon)

      Cope, John

      Moate, Roger

      Cranborne, Viscount

      Morrison, Hon C. (Devizes)

      Crouch, David

      Murphy, Christopher

      Douglas-Hamilton, Lord J.

      Myles, David

      Dover, Denshore

      Neale, Gerrard

      Dunn, Robert (Dartford)

      Neubert, Michael

      Durant, Tony

      Newton, Tony

      Fairbairn, Nicholas

      Normanton, Tom

      Faith, Mrs Sheila

      Parris, Matthew

      Fenner, Mrs Peggy

      Prentice, Rt Hon Reg

      Fletcher, A. (Ed'nb'gh N)

      Price, Sir David (Eastleigh)

      Fletcher-Cooke, Sir Charles

      Prior, Rt Hon James

      Fowler, Rt Hon Norman

      Rathbone, Tim

      Fraser, Peter (South Angus)

      Renton, Tim

      Garel-Jones, Tristan

      Rhodes James, Robert

      Goodhart, Sir Philip

      Roberts, Wyn (Conway)

      Goodlad, Alastair

      Rossi, Hugh

      Gorst, John

      Rumbold, Mrs A. C. R.

      Gray, Hamish

      Sainsbury, Hon Timothy

      Griffiths, Peter Portsm'th N)

      Shaw, Giles (Pudsey)

      Hampson, Dr Keith

      Sims, Roger

      Hawkins, Sir Paul

      Speller, Tony

      Hawksley, Warren

      Sproat, Iain

      Hayhoe, Barney

      Stainton, Keith

      Heddle, John

      Stanbrook, Ivor

      Hooson, Tom

      Stevens, Martin

      Hurd, Rt Hon Douglas

      Stewart, A.(E Renfrewshire)

      Irvine, Bryant Godman

      Stradling Thomas, J.

      1129

      Taylor, Teddy (S'end E)

      Wells, Bowen

      Thomas, Rt Hon Peter

      Wheeler, John

      Thompson, Donald

      Wickenden, Keith

      Townsend, Cyril D, (B'heath)

      Wolfson, Mark

      Trippier, David

      Younger, Rt Hon George

      Waddington, David

      Waldegrave, Hon William

      Tellers for the Noes:

      Waller, Gary

      Mr. Ian Lang and

      Ward, John

      Mr. Archie Hamilton.

      Watson, John

      Question accordingly negatived.
      Amendments made: No. 44, in page 6, line 30, leave out '40, 42 and'.
      No. 166, in page 7, line 19, after `to', insert '(a)'.
      No. 167, in page 7, line 23 [Clause], at end insert';
      (b) the activity provision for the licensing of which is made in section 41 of this Act (that is to say the use of premises as a place of public entertainment) shall specify the place or places, or class or classes thereof, which shall thereby fall to be licensed.'.
      No. 47, in page 8, line 18 [Clause 9], leave out 'in this section'.— [Mr. Allan Stewart.]

    Clause 10

      TAXI AND PRIVATE HIRE CAR LICENCES
      8 pm
      Mr. Allan Stewart: I beg to move amendment No. 48, in page 8, line 38, at end insert—
      '(2A) Without prejudice to paragraph 5 of Schedule 1 to this Act, a licensing authority shall refuse an application to grant a taxi licence if, in their opinion, granting it would have an adverse effect on the general availability to the public in their area of the services of taxis or the cost of providing these services.'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
      No. 49, in page 8, line 38, at end insert—
      '(2A) Without prejudice to paragraph 5 of Schedule 1 to this Act, a licensing authority shall refuse an application to grant a taxi licence or private hire car licence if, in their opinion, granting it would have an adverse effect on the general availability and costs of taxi services or private hire car services in their area'.
      No. 189, in page 8, line 38, at end insert—
      `(2A) Without prejudice to paragraph 5 of Schedule 1 to this Act a licensing authority shall refuse an application to grant a taxi licence or private hire car licence if, in their opinion, the number of licences already granted in their area is sufficient to provide an adequate service to the public'.
      No. 190, in page 8, line 38, at end insert—
      '(2A) Without prejudice to paragraph 5 of Schedule 1 to this Act a licensing authority shall refuse an application to grant a taxi licence if, in their opinion, the number of licences already granted in their area is sufficient to provide an adequate service to the public'.
      Mr. Stewart: This amendment is of fair importance and it has already been referred to by several hon. Members during our debates. Concern was expressed on Second Reading in the Scottish Grand Committee and in Committee that there was no provision in the Bill to allow local authorities to limit the number of taxi licences.
      During extensive debates it was argued that the taxi trade was in a unique position, for three reasons: first, that its fares were controlled by a local authority; secondly, that under the present system of limitation operators who had bought their way in could suffer a capital loss if such limitation were removed—that point was made by the hon.
      1130
      Member for Edinburgh, East (Mr. Strang)—and, thirdly, that the trade itself was strongly in favour of the continuation of such a provision.
      It was argued that the absence of limitation powers could mean a reduction in the availability of services on a seven-days-a-week, 24-hours-a-day basis throughout a licensing authority's area because full-time operators would be driven out of business and would have to concentrate on city centres at weekends, when the demand is highest. That could mean a reduction in the availability of services in the peripheral areas and at unsocial hours.
      I do not need to detain the House by speaking at greater length on this amendment. It was fully discussed on Second Reading and in Committee and I believe that it will be warmly welcomed by all hon. Members. I hope to catch your eye, Mr. Deputy Speaker, to respond to any points that are raised by hon. Members on the other amendments that are being taken with amendment No. 48.
      Mr. Harry Ewing: The principle of the Minister's proposal is acceptable, but the wording of amendment No. 48 leaves a little to be desired. From my point of view and that of my hon. Friends, the wording is strange, to say the least. However, amendment No. 49, to which I speak now, was drafted before the Government amendment appeared, and it was not only for that reason that we tabled amendment No. 49. In our view, it has the same effect but is much clearer in its definition of the conditions under which licensing authorities can refuse to grant licences.
      It is important to remember that under this part of the Bill any applicant who is refused a licence by a licensing authority has the right to appeal to a sheriff. Under amendment No. 48, where an applicant is refused a licence and appeals to a sheriff, it will be difficult for the local authority to prove its case before the sheriff, if only because of the words
      "in their opinion, granting it would have an adverse effect on the general availability to the public in their area of the services of taxis or the cost of providing these services."
      Amendment No. 49 is much clearer in its intention and would make life easier for the local authorities, which are the licensing authorities, and would certainly make life easier against the background of any appeal to the sheriff. Therefore, I hope that the Minister will consider what I have said and possibly not press amendment No. 48, but, in its place, accept amendment No. 49. If he is not minded to do that, I implore him to give the House a fuller explanation of why amendment No. 48 is worded in the way that it is. There can be no doubt that amendment No. 48 is loosely worded and will create difficulties for licensing authorities, particularly on an appeal to the sheriff.
      Amendments Nos. 189 and 190 are designed to permit limitation, not only for taxis, but for private hire vehicles. Again, I am perfectly well aware that there is a division of opinion on this matter. We have come along the road of allowing the private hire vehicles, if they so desire, to introduce taxi meters. There has been some relaxation—we shall come to that later—about illuminated signs on private hire vehicles, allowing them to display a sign under certain conditions laid down in the legislation. If we have come along that road and that of limitation in relation to black cabs, which we all accept, surely the logic of our actions in the past few months would lead us to limitation in private hire.
      I know that private hire people are not particularly enamoured with the proposal that they should not be

      1131
      limited, whereas the black cabs should be. These amendments say that a licensing authority which decides to operate a licensing system—the House has decided that it should be discretionary—should also have the power to introduce limitation for private hire vehicles in the same way as the legislation gives it the power to limit the black cabs.
      I know all about the return—on—investment arguments. It is futile to repeat those at this late stage. However, all the logic of our actions has led us to the position that the Government should seriously accept the proposition that it makes sense to limit the private hire vehicles in the same way as the Government have accepted there should be limitation on the black cabs.
      If there is no limitation, I am bound to forecast that a trade war—I put it no higher than that—will break out. In their heart of hearts, I am sure that both sides of the trade will accept that that is unavoidable. There are bound to be casualties in such a trade war. The private hire people should understand that they will be as much the victims as the black cab people. Therefore, it is in the interests of both sections of the trade that the Government should accept amendments Nos. 189 and 190.
      In case it has slipped the Under-Secretary's mind, I remind him that we are not at all happy with the loose wording of Government amendment No. 48. We would much prefer the Minister to accept amendment No. 49, which is more tightly worded. I shall be interested to hear what the Minister says, particularly if he prefers amendment No. 48 to amendment No. 49. I hope that he will explain the reason for the wording in amendment No. 48. I am glad that the Solicitor-General for Scotland is in the Chamber, because that loose wording will give rise to no end of difficulties in an appeal to the sheriff. I look forward to hearing the Minister's response.
      Mr. Bill Walker: This evening is most odd, because I constantly find myself in agreement with the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). As he and I know, that is most unusual.
      I too must draw the Under-Secretary of State's attention to the wording of amendment No. 48. We debated the matter at length in Committee, and we understood that the Minister would make over-provision a ground for refusal. If I made a case on that basis, it would not stand up in the light of amendment No. 48. If my hon. Friend believes that it will, he should say so. He should say that the amendment will meet the question of over-provision. After all, we spent some time in Committee on that point. My hon. Friend will note that I have put my name to amendment No. 49. At the time I thought it a useful amendment that met much of my concern. However, if I had to choose among all the amendments, I would now greatly prefer amendment No. 189. It goes much nearer to the nub of the problem.
      There are two parts to that problem. We have already dealt with over-provision. However, the more fundamental point is that the trade consists of two sections. We must be careful that we do not end up with a situation that is neither fish nor fowl and that will result, as has been said, in a trade war. Let us be sure that we know what we are doing. There are times when I wish that we had not become involved in this legislation, but since the beginning we have put in many hours of work and we wish
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      to ensure that what we are doing is best for the customers and for both parts of the trade. That is particularly important when it comes to coping with unlawful operators.
      It is interesting to note that even this evening it has been said that the private hire side of the trade does not want the limitation. However, that is not strictly true. Every one of the Dundee licensed private hire operators wants the same provisions as the taxi cabs. All the private hire operators in Dundee wrote a letter to the Minister saying:
      "Dear Sir,
      We the undersigned represent the entire licensed private-hire taxi trade in Dundee. We would like it to be known that we are in favour of having the numbers of both Hackney and Private-hire taxis controlled by District Council.
      That could not be clearer.
      Mr. Ewing: If the private hire operators in Dundee had wanted more people to know of that, they perhaps should have sent a copy of the letter to those of us who have been involved in the Bill. However, I put it on record that those whom we have met are not in favour. I am encouraged by the fact that the Dundee private hire operators, who are, I suspect, fairly representative of north, north-east and central Scotland, are in favour of limitation. The Minister should take that into account.
      8.15 pm
      Mr. Walker: I apologise for not having given a copy of the letter to those who have taken an interest in the matter. The fault is mine. However, in my defence I should say that I only got the letter in my hands today. From experience, I have learnt that before pushing material around one must ensure that it is authentic and that it is the original. I managed to get my hands on it today and that is why I am quoting from it. I plead guilty, because I should have done something about it earlier today, but I had other things on my mind.
      The letter continues:
      "As both sections are competing for the same business it is futile to control Hackneys and allow unlimited private-hire operation. We would also like it known that we have no connection whatsoever with the West of Scotland Private-Hire Association."
      I do not know why they say that, but presumably they feel that that association does not represent their views. From Committee and elsewhere, we know that the West of Scotland Private-Hire Association is fairly new and was formed because its members recognised the problems that they may face as the result of the legislation.
      When we saw members of the association, they admitted that it was a new association. It is just unfortunate that the private hire section of the trade has not, in the past, been as well organised as the taxi side. That is a pity, because if it had been well organised it would have found, as Dundee found, that it is in the same line of business, that its problems are similar and that the real difficulty is that of unlicensed operators, or pirates as they are called in the trade. In Dundee, the two sides of the trade appear to want to work together. That is encouraging, because there has been a long, sad history of difficulties in Dundee for both the private hire and taxi sections.
      I stress that the wording of Government amendment No. 48 is not quite what I would wish for. I hope that my hon. Friend will give us an assurance that it meets the over-provision requirements. If not, perhaps he will explain his views. In Committee, he said that he would

      1133
      take the opportunity offered by the Report stage and as we have reached that point I look forward to hearing his assurances.
      Mr. Allan Stewart: With respect to the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), I am not sure why he thinks that amendment No. 48 is so different from amendment No. 49, which stands in the name of the Opposition. Amendment No. 49 includes the private hire car issue, which is a point of principle. However, apart front that important point, the Opposition's amendment is drafted in more or less identical terms to the Government's amendment. The hon. Gentleman asked me whether the trade thought Government amendment No. 48 acceptable. My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) also made that point.
      I confirm to the House that the Convention of Scottish Local Authorities and the Federation of Taxicab Associations are content with amendment No. 48. It meets the commitment that I gave to the Committee. We consulted the federation specifically. We modified the original draft of the amendment in the light of the comments that we received from taxi cab owners.
      Amendment No. 190, in the name of the Opposition, would be unduly restrictive because it would require licences to be refused as soon as there was a sufficiently adequate service to the public. That would prevent the service from becoming better for the public, even in circumstances where there would be no adverse effect on the trade. It would restrict taxi services to a minimum level of adequacy. The way in which Government amendment No. 48 proceeds is preferable. It is the way in principle in which Opposition amendment No. 49 proceeds, except for the important point on the control of numbers of private hire car operators.
      I do not believe that any of the arguments by hon. Members in favour of limitation of the numbers of taxi cabs applies to private hire car operators. The first argument for limitation was fare control. It was stated that taxi cab owners do not operate in a free market. However, the fares of private hire car operators are not controlled, so that argument does not apply.
      Secondly, hon. Members argued about the capital value of plates. On Second Reading, the hon. Member for Edinburgh, East (Mr. Strang) stressed that argument. However, it does not apply. The third argument represents the view of the trade. I accept what my hon. Friend the Member for Perth and East Perthshire says about private hire car operators in Dundee, but I am advised that his letter represents the views of six such operators. I accept that that is a genuine point of view, but I do not think that it should be weighed too heavily in the balance against the general view that has been put to us strongly that the private hire car operators are not in favour of local authorities having the power to impose quantitative limitations on their numbers. Entry to the hire car trade should be free to suitable drivers with suitable vehicles. There would be competition.
      Mr. Bill Walker: Did I hear my hon. Friend right when he suggested that the views of six operators were represented? I should like to correct that. There are 14 signatures on the letter.
      Mr. Stewart: I entirely accept what my hon. Friend has said. It is right that there are 14 signatures. However,
      1134
      they may be signatures of 14 individuals representing six firms. There are only six or seven hire car licences in Dundee compared with more than 250 taxis.
      The general argument put forward by the trade is therefore different. Moreover, in England, under the 1976 Act, limitation such as that proposed by my hon. Friend is specifically prohibited. There has been an expansion of the hire car trade in England to meet public need and demand. Taxis and hire cars are not identical. They should not be treated as if they were identical.
      I have listened carefully to the arguments that have been made but I do not believe that the persuasive arguments about taxis apply to private hire car operators. The drafting of amendment No. 48 is acceptable and sensible, and has been fully considered by both the convention and the operators.
      Amendment agreed to.

    Clause 14

      SIGNS ON VEHICLES OTHER THAN TAXIS
      Mr. Allan Stewart: I beg to move amendment No. 50, in page 10, leave out from line 41 to line 2 on page 11 and insert
      'any word, sign, notice, mark, illumination or other feature which may suggest that the vehicle is available for hire as a taxi.'.
      This amendment is self-explanatory. It follows considerable discussion in Committee. The original drafting of the clause was criticised in Committee. I commend the redraft, which I hope will be acceptable to the House.
      Mr. Harry Ewing: Am I right in saying that the effect of the amendment would be to allow private hire vehicles to display a sign stating that they were for hire privately? The original proposal in clause 14 would have prohibited the use of the word "hire" under any circumstances. Am I right in believing that amendment No. 50 will allow private hire vehicles to use the word "hire" provided that attached to that word is "private"? It is important that that point should be cleared up.
      Mr. Stewart: The hon. Gentleman's understanding of the effect of the clause is correct.
      Amendment agreed to.

    Clause 20

      OFFENCES
      Mr. Allan Stewart: I beg to move amendment No. 51, in page 15, line 6, leave out
      'subject to subsection (2) below'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 53 to 55.
      Mr. Stewart: I have spent some time disagreeing with my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) on these important matters. However, amendment No. 51 meets an undertaking that I gave in Committee. I undertook to consider making it clear that the request for hiring has to be received by the driver in the area for which he is licensed to make it less easy for radio-controlled vehicles to congregate in an area for which they are not licensed while taking instructions by

      1135
      means of radios and so on from an area for which they are licensed. Government amendment No. 55 is the cross-border reciprocity amendment that we discussed earlier.
      Amendment agreed to.
      Mr. Allan Stewart: I beg to move amendment No. 52, in page 15, line 12, leave out '200' and insert '500'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 56, 57 and 62.
      Mr. Stewart: These are consequential amendments. They make a change in penalties similar to the change that was made in Government amendment No. 34. That matter was discussed in Committee.
      Amendment agreed to.
      Amendments made: No. 53, in page 15, line 16, after `received', insert
      'by its driver whilst—
      (a)'.
      No. 54, in page 15, line 17, at end insert—
      '(b) engaged on hire on a journey which began in that area or part or will end there; or
      (c) is returning to that area or part immediately following completion of a journey on hire.'.
      No. 55, in page 15, line 17, at end insert—
      '(2A) Subsection (1)(b) above does not apply to the operation of a vehicle within an area in respect of which its operation or its driver is not licensed if there are in force—

      (i) in respect of the vehicle, a licence under section 37 of the Town Police Clauses Act 1847 (licensing of hackney carriages) or section 48 of the Local Government (Miscellaneous Provisions) Act 1976 (licensing of private hire vehicles); and

      (ii) in respect of its driver, a licence under section 46 of the said Act of 1847 (licensing of hackney carriage drivers) or, as the case may be, section 51 of the said Act of 1976 (licensing of drivers of private hire vehicles)'.

      No. 56, in page 15, line 24, leave out '200' and insert `500'.
      No. 57, in page 15, line 30, leave out '200' and insert `500'.—[Mr. Allan Stewart.]
      8.30 pm
      Mr. Allan Stewart: I beg to move amendment No. 58, in page 15, line 32, leave out `(a)'.
      Mr. Deputy Speaker (Mr. Paul Dean): With this it will be convenient to take Government amendments Nos. 59 to 61.
      Mr. Stewart: The amendment deletes from clause 20(5) references to a taximeter registering incorrectly. The hon. Member for Glasgow, Garscadden (Mr. Dewar) made the suggestion to the Committee.
      Mr. Bill Walker: My hon. Friend the Minister will remember that I also spoke on this amendment in Committee. I should like an assurance from him about the point that I raised then—that when a replacement meter is installed during a holiday period or at a weekend, the chap operating the cab will not find himself in contravention of the law. The meters cannot be properly checked at those times. My hon. Friend will remember that I pointed out to the Committee that this could occur on a holiday weekend when the bulk of the business may be for that month.
      Mr. Stewart: My hon. Friend is right. I apologise for not referring to that point when I introduced the
      1136
      amendment. I assure him that any such offence under this provision will now rest on the common law of fraud. I hope that gives my hon. Friend the detailed reassurance that he wishes.
      Mr. Harry Ewing: How will the amendments leave this part of the Bill? Amendment No. 58 leaves out paragraph (a). I assume that that does not include the leaving out of the words that follow (a):
      "without good cause breaks the seal on a taximeter;"
      Amendment No. 59 is fairly clear. Amendment No. 60 leaves out paragraph (c). Once again, I assume that that does not include the leaving out of the words following it. Amendment No. 61 leaves out from "broken" to the end of line 37 and amendment No. 62 is quite clear.
      It is important for the sake of clarity that the Minister says how the amendments leave this part of the Bill. There appears to be some confusion. When I discussed it with some people, there was some misunderstanding about what the amendments are intended to achieve and what they mean.
      Mr. Stewart: The amendments take out subsection (5) of the clause. I am happy to explain their purposes at greater length. They arise from the discussion about the meaning of "incorrectly", which was prompted, by the hon. Member for Glasgow, Garscadden (Mr. Dewar).
      At present, subsection (5), as well as providing offences for the breaking of a seal of a taximeter or operating or driving a taxi knowing that the seal is broken, provides offences for altering a taximeter so as to make it register incorrectly. Disquiet arose in Committee about the precise meaning of "incorrectly" as used in this clause. We undertook, therefore, to consider whether a precise definition could be produced. We have been unable to produce such a definition which did not appear to risk confusion between calibration, on the one hand, and the approved fare scale, on the other. Hon. Members will recall the technically sophisticated discussion in Committee on that point.
      The reference to the meter registering incorrectly is intended to prevent fraud. That matter is already covered by common law. Because of the difficulties surrounding the reference to a meter registering "incorrectly", the amendment deletes reference to it. The offence will therefore rest simply on the common law of fraud. We have re-examined the underlying purpose of the clause—it is to prevent fraud. The English legislation of 1976 contains the concept of altering a meter with intent to mislead. We have concluded, therefore, that the offence can be dealt with under the common law of fraud and have decided to avoid the problem of defining "incorrectly" by dropping the phrases altogether. I hope that is clear. I shall continue, however, as the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) wants clarification as well as an explanation of how clause 20(5) will now read. It will be as follows:
      "If any person without good cause breaks the seal on a taximeter or operates or drives a taxi or private hire car knowing that the seal on its meter has been broken he shall be guilty of an offence".
      I hope that that description meets the hon. Gentleman's request.
      Amendment agreed to.
      Amendments made: No. 59, in page 15, line 33, leave out line 33.
      No. 60, in page 15, line 35, leave out `(c)'.
      No. 61, in page 15, line 36, leave out from 'broken' to end of line 37.
      No. 62, in page 15, line 39, leave out '200' and insert `500'.—[Mr. Allan Stewart.]
      Mr. Allan Stewart: I beg to move amendment No. 63, in page 16, line 6, leave out subsection (8).
      The hon. Member for Glasgow, Garscadden (Mr. Dewar) thought that we could leave out subsection (8) of clause 20 and we have concluded that we can.
      Mr. Harry Ewing: I am sure that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) would wish me to thank the Minister for agreeing to remove subsection (8). It is with pleasure that I place on record our thanks to the Minister.
      Amendment agreed to.
      Mr. Allan Stewart: I beg to move amendment No. 64, in page 16, line 11, leave out subsection (9).
      The hon. Member for Glasgow, Garscadden (Mr. Dewar) raised a similar point about this amendment and we have concluded that it would be right to remove subsection (9).
      Amendment agreed to.

    Clause 23

      SECOND-HAND DEALERS' LICENCES
      Mr. John MacKay: I beg to move amendment No. 65, in page 17, line 7, at beginning insert
      `Subject to subsection (2A) below,'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 66 to 73 and No. 75.
      Mr. MacKay: As drafted, clause 23 does not make it clear that a pawnbroker, who also acts as a secondhand dealer, requires a secondhand dealer's licence. The purpose of the amendments is to identify the activities which are exempt from the second hand dealing provisions rather than, as at present, the person engaged in the activities.
      Amendment No. 65 is a paving amendment for amendments Nos. 66 to 69 and 72 which identify the businesses exempt from secondhand dealing requirements. Amendment No. 70 seeks to improve the drafting of subsection (2)(d), which was criticised in Committee, and amendment No. 71 is consequential. The amendments meet the Government's undertaking in Committee to reconsider the drafting of the clause. I also gave undertakings in Committee about considering the substance of Government amendments Nos. 73 and 75. The hon. Member for Glasgow, Garscadden (Mr. Dewar) criticised some of the provisions in subsection (3) and he successfully moved amendments to remove two subparagraphs. I undertook to consider whether subsections (3) and (4), as amended, were necessary and concluded that they were not. Therefore, amendment No. 73 deletes those subsections, which I am sure will delight the hon. Member for Garscadden.
      Amendment No. 75 is consequential and deletes—this will again bring joy to the hon. Gentleman—the definition of pawnbroker, which is now incorporated in the body of clause 23(2), and of pawn receipt and pawn ticket.
      I commend the amendments to the House.
      Amendment agreed to.
      Amendments made: No. 66, in page 17, leave out lines 13 and 14, and insert—
      `(2A) A second-hand dealer' s licence shall not be required for carrying on—
      (a) the business of a pawnbroker (that is to say, a person who, under a regulated agreement under the Consumer Credit Act 1974, takes an article in pawn);'.
      No. 67, in page 17, line 15, leave out 'person carrying on'.
      No. 68, in page 17, line 18, leave out 'person whose business' and insert 'business which'.
      No. 69, in page 17, line 20, leave out 'person whose'.
      No. 70, in page 17, line 21, leave out 'is incidental' and insert 'incidentally'.
      No. 71, in page 17, line 21, leave out 'of his'.
      No. 72, in page 17, line 24, leave out 'person engaged in the'.
      No. 73, in page 17, leave out lines 30 to 36.
      No. 75, in page 18, leave out lines 4 to 11.—[Mr. John MacKay.]
      Mr. John MacKay: I beg to move amendment No. 74, in page 18, line 3, at end insert—

      '(5A) A second-hand dealer acquiring a second-hand motor vehicle for the purpose of its re-sale in the course of his business shall keep a record of the mileage reading on the vehicle's odometer when he acquired it.

      (5B) Any person who contravenes subsection (5A) above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £200.

      (5C) It shall be a defence for a person charged with an offence under subsection (5B) above to prove that he used all due diligence to prevent the commission of the offence'.

      This matter was the subject of an interesting debate in Committee and I indicated that the Government had not closed their mind to including in the Bill a requirement on secondhand dealers of motor cars to record the mileage of secondhand cars when they acquire them for resale. I also pointed out that any amendment would be better made to clause 23 rather than to clause 25. The amendment requires secondhand car dealers to keep records of mileage readings on any secondhand car which they acquire for resale. It further provides for it to be an offence to fail to keep a record, and for a defence of due diligence.
      I am sure that the amendments will commend themselves to the House. They were argued strongly on both sides of the Committee and I am glad to fulfil the understanding that I gave to consider them.
      Mr. Dewar: The Under-Secretary of State looked pleased with what he said at the end of his remarks. I shall try not to spoil the atmosphere. I am glad that he has been able to move on this matter. He was right to say that a good deal of anxiety was expressed in Committee. It is important that we try at least to include some safeguards. We cannot by any means include a fail-safe system that will eradicate the abuse, but we should at least include some bulwark against the widespread abuse of clocking, the turning back of odometers, in secondhand cars.
      I do not wish to repeat all the arguments from Committee. It would be an exaggeration to say that that would weary the House, but it would weary the Minister and his gallant lieutenants who have stayed to support him. I believe that that would be unfair. When I introduced the probing amendment which led to the present proposals, I drew attention to some startling facts and figures, most of them culled from the impeccably respectable source of the Office of Fair Trading. It published a consultative paper in July 1979 which dealt with odometers and the fraudulent faking of the mileage covered by secondhand cars.

      1139
      The first fact which surprised me was the importance of the secondhand car trade. Perhaps that suggests that I come from a sheltered and secure financial background. I was surprised to learn that of the 11 million privately owned cars in the United Kingdom at that time—I do not suppose that the figures have changed much—about 10 million had been purchased on the secondhand car market. Therefore, about 90 per cent. of private cars are bought not new but second hand. That opened my eyes to the scale of the potential problem. Indeed, it was pointed out to me that customers buy only 300,000 to 400,000 new cars each year, while they buy about 3 million secondhand cars from the motor trade.
      I do not wish to weary the House, but it is worth mentioning two other facts. First, the Office of Fair Trading has been alarmed by the enormous growth in the number of complaints about motor cars. I am not referring specifically to odometers but to the number of complaints about cars in general, particularly about used cars. There are now more than 50,000 complaints a year to local trading standards departments and citizens' advice bureaux. Of those complaints, a substantial number involve clocking back of one form or another.
      I was started on this chase specifically by a survey carried out by the Office of Fair Trading. In the latter part of 1978 it asked 10 local trading standards departments to make inquiries into the problem. The local trading standard departments asked a number of companies which were selling off fleet cars to record the mileage as they sold them. They then checked the mileage after they had been sold. Of a sample of 1,614 cars, it was discovered that 874—almost 54 per cent.—had been clocked. I stress that those were fleet cars where, no doubt, the temptation for that type of dishonesty is greater than it would be in a balanced sample across the secondhand car trade. However, it is still astonishing that 54 per cent. of such a large sample had been tampered with in this way.
      The Office of Fair Trading took a serious view of those results. Its report said:
      "It is generally accepted that, when accurate, mileage readings are often a useful and readily apparent indication of the likely condition of a vehicle. The prevalence of clocking, however, means that the mileage readings of many used cars are valueless or are positively misleading. Our consultative paper suggested that a high proportion of used cars were being clocked and that large illegal profits were being made with only a limited risk of prosecution. The response that we have received confirms that each year, as a result of this fraudulent practice, many consumers are deceived into buying high mileage cars."
      There is a substantial abuse. I am grateful to the Minister that he has at least moved some way towards trying to combat it.
      8.45 pm
      Having said that, and being suitably grateful for and appreciative of the Minister's efforts, I shall express some reservations and raise some queries about the specific form of amendment No. 74. The theory is that if one has an accurate record of the mileage at the time that the car is sold, it is possible to check to ascertain whether an offence has been committed. That in itself is a useful preventive measure. It is to be hoped that the fact that record has to be kept and the mileage has to be recorded by the dealer will be an inhibition, before the dealer sells the car on, to tampering with the odometer.
      1140
      The amendment consists of only three small subsections. Given the lack of definition and the lack of backing detail, I am suspicious about the working of the proposed machinery. I drew the attention of the Scottish consumer council and the Strathclyde regional council's consumer protection department to the Government's intentions and asked them for their comments. They provided me with a formidable list of questions which they thought were relevant and which are not answered by the amendment.
      I am not clear about the material and records that will have to be kept. When a secondhand dealer acquires a secondhand vehicle for the purpose of resale, he will be required to keep a record of the mileage recorded on the vehicle's odometer when he acquires it. It is self-evident, but presumably he must record the registered number of the car. Does he have to keep details of the person from whom he bought it? That would be valuable in tracing a potential offence. The Strathclyde regional council's consumer protection department thinks that the dealer should record also the registered engine number, the name and address of the seller and the date of sale.
      Perhaps that is all common sense but it is not spelt out in the amendment. It might be possible to include the requirement in the regulations that the person who is selling and handing over the car should sign the record of the mileage that is recorded. That would be a considerable safeguard because it would provide an independent check that when the record was made it was a correct record of the mileage at that time. That seems to be a simple and important further safeguard. Has it been considered? It has not been written into the amendment but I think that it is important.
      The Scottish consumer council has argued strongly that that procedure should be carried out. It is important that the mileage data should be countersigned by the seller of the vehicle, as clearly that would go a long way to ensure that someone did not under-record at that point and then at leisure bring back the odometer to correspond with the false record that had been entered in the books on acquisition.
      How long should the record be kept? This is another query that has been raised with me and on which the amendment is silent. It has been suggested that it should be kept for three years. The Minister might think that that is unreasonable but it has been suggested because it is the period that is set out in the Trade Descriptions Act 1968. It was thought peculiarly appropriate that that should remain in phase and that three years would be the right period for the preservation of the record.
      I could sophisticate and proliferate these questions considerably. There is a great paucity of detail on exactly what is expected and on how the safeguards will operate. For example, are auctioneers to be included as dealers? The Minister will recognise that, when secondhand cars move from their first private owner, they often go through the hands of auctioneers. I am informed that, sadly, that is a point at which much abuse can arise. An auctioneer may not be a secondhand car dealer for these purposes.
      In other parts of the Bill there are references to the status of auctioneers. The point that I am making is that, although there is a gesture in amendment No. 74, it is only a gesture—a skeleton of a good and useful safeguard that is being written into the Bill. I am not sure that we have sufficient flesh on that skeleton to make it an effective servant in the fight against abuse. Is it possible, for

      1141
      example, to make regulations adding to the proposals? There is no written provision for such regulations. Perhaps the Minister can help me on that point.
      When I took advice about improving the position, it was suggested that the House of Lords should be invited to disagree with the amendment and to substitute another, perhaps in the same form but with the important addition that the details of the Bill could be regulated by order of the Secretary of State or by regulations. Such a possibility is provided for in other parts of the Bill.
      My proposal is important. Those who are professionally involved in regulating secondhand car sales and the prevention of fraud have many unanswered questions that cannot be answered by the slim amendment that we are considering. I hope the Minister will respond later. I am not trying to be obstructive or in any sense ungrateful for what he has done. We both have the same aim. My anxiety is always for his reputation. If he has reached the point where he is prepared to make a concession, that concession should be an effective one and he should not be accused of making a token gesture, or of trying to get out of a difficulty when his hon. Friends in Committee were showing signs of restlessness about the Minister's lack of response and the fact that he could not implement the amendment that he has imported into the Bill. We have a common interest in ensuring that the amendment is effective. I am unconvinced that it is effective in its present form.
      Mr. John MacKay: I thought that the first part of the hon. Gentleman's remarks were too good to be true when he seemed to welcome the amendment and leave it at that. I do not wish to be unreasonable, but the amendment before the House closely mirrors the amendment that he tabled in Committee. I am gently reminding him of that fact.
      We are talking about the details of the records which, if authorities decide to license secondhand car dealers, will come within clause 23(5). The licensing authorities must make provision for the information to be included in the records. That answers some of the points. When they make decisions about licensing secondhand car dealers, they will decide what goes on the record, such as the car number. The ownership of a car and related matters can be traced back via the number and the log book. Clause 23(5) states that authorities' powers include the provision of information to be included in the records, such as the premises on which they are to be kept and the period for which they are to be kept. That point answers another query put to me by the hon. Gentleman about how long the record should be kept.
      There is no power under which the licensing authority could oblige the seller of the vehicle to sign on the dotted line for the mileage. If the buyer is in any doubt, he can examine the record and, if he is keen on the car, but wishes to make some checks, he can ask the previous owner whether the mileage on the record was the same as when the vehicle was sold.
      As we said in Committee, we cannot close all the possible loopholes. The amendment is an effort to make it more difficult for dishonest dealers to perpetrate that dishonesty and to make it easier for the bulk of the honest motor trade to conduct business openly with its clients. If the licensing authority holds the record, someone who buys a secondhand car can check the mileage. That is the
      1142
      protection that will be afforded to buyers of secondhand cars. I hope that I have answered the hon. Gentleman's points.
      Mr. Hugh D. Brown: Does that mean that those who sell their own cars at some self-appointed place are not obliged to produce a record and that the buyer of that car is not covered by the provisions of the clause or the amendment?
      Mr. MacKay: I know of no qualifications about the place where an individual may sell his motor car without involving a secondhand car dealer, but I am not a secondhand car dealer and if I sell my motor car to the lion. Gentleman no record must be signed. The clause deals entirely with secondhand car dealers in an area where the local authority decides to register them.
      It is an important step forward. I shall not outline the real problems that have arisen in the motor trade as a result of tampering with the mileage clock. The hon. Member for Garscadden reminded us of those problems. This is a useful amendment to the legislation and will be a considerable protection to consumers.
      Mr. Dewar: With the leave of the House, may I tell the Minister that he sometimes says things with great coolness. He is right in saying that amendment No. 74 is similar to the one that I moved in Committee. That is the burden of my complaint, because what I moved in Committee was a brief probing amendment to force some discussion. If it found favour with the Committee, I intended to withdraw it so that the Minister could draw up an adequate blueprint that would satisfy our needs. The first part of that strategy worked excellently with his co-operation, but the second part has been something of a frost and I am not satisfied with what the Minister said.
      There will be problems and I am not entirely satisfied that the powers of local authorities to regulate in the way that the Minister suggested will be adequate to meet the problem. The best thing that I can do is to withdraw from the field for the moment but to take further advice from those who are deeply involved in the problems and return to the Minister, if necessary. Whether I can do that before the House of Lords has considered the amendments, although it may be somewhat daunted by the number, do not know. However, I hope that the Minister will accept that the matter requires monitoring and that he will listen to representations in an effort to improve the position. It is an important matter and the Minister has done well in responding. I should be sorry if some inflexibility were to set in, given the substantial increase in complaints. I could weary the Committee with figures from the consumer protection department of Strathclyde regional council—I hope that the Minister will be prepared to consider the matter as it progresses. I see him nodding assent, as I expected that he would, so I shall leave the matter there.
      Amendment agreed to.
      Amendment made: No. 75, in page 18 leave out lines 4 to 11.—[Mr. John MacKay.]
      9 pm

    Clause 25

      GOODS BELIEVED TO BE STOLEN
      Mr. John MacKay: I beg to move amendment No. 168, in page 19, line 1, leave out clause 25.

      1143
      The amendment honours an undertaking that I gave in Committee when dealing with clause 36 to remove the clause now before the House.
      Amendment agreed to.

    Clause 27

      FUNCTIONS OF THE COURT IN RELATION TO SECOND HAND DEALERS CONVICTED OF OFFENCES
      Mr. John MacKay: I beg to move amendment No. 78, in page 20, line 6 leave out '(1) or '.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 88.
      Mr. MacKay: The amendment makes it clear that the offence of failing to comply with a court order relates only to an order made under this clause for the retention of secondhand goods and not to a breach of an order under section 7(8), which will be dealt with separately under other provisions of the Bill. Amendment No. 88 is a similar amendment in relation to clause 35.
      Amendment agreed to.
      Amendment made: No. 79 in page 20, line 8 leave out '200' and insert '500'.—[Mr. Allan Stewart.]

    Clause 28

      METAL DEALERS: LICENSING AND REGULATION
      Mr. John MacKay: I beg to move amendment No. 80, in page 20, line 15 at end insert '(1) or (3A)'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 81 to 85.
      Mr. MacKay: It has been represented to the Government by the trade that the provisions relating to the issue of exemption warrants based on an annual turnover exceeding £100,000 do not cater for new businesses where capital and potential turnover would, in normal circumstances, have enabled the dealer to apply for an exemption warrant. Amendment No. 83 enables the licensing authority to issue a temporary exemption warrant if satisfied that the person applying has not been carrying on business as a metal dealer. The duration of the temporary warrant is 18 months, which is sufficient for the dealer to establish that he meets the criteria in clause 29(1) and to make an application for an ordinary exemption warrant. It is, if one likes, 12 months trading and six months in which to get his accounts made up and to go to the authority and ask for a normal exemption warrant.
      A condition of a temporary exemption warrant is that a dealer can deal only with trade sources and not with the man in the street. Failure to meet this condition could result in the temporary exemption warrant being revoked by the licensing authority. Amendments Nos. 80, 81 and 82 are paving amendments for amendment No. 83, and amendments Nos. 84 and 85 are consequential.
      Mr. Dewar: I am grateful for the Minister's explanation. I approached amendment No. 83 in some puzzlement. I could not understand what the temporary exemption warrant was. I now understand. It seems a strange concept. The whole idea of an exemption warrant is that someone is one of the big boys with a proven track
      1144
      record, which means that he has a turnover in excess of £100,000. I should be interested to know of those who are likely to start from scratch in the manner suggested with no turnover, but able to establish that they will get into that situation.
      I should not have thought that there was any real difficulty. If the firm is not in business and not operating, I cannot see that it can establish that it will have a turnover of £100,000 immediately and therefore be exempt from all licence regulations. This seems to me a danger. I am not sure what the test will be. Does the Minister think that the firm will be respectable and plough in a large amount of capital? What is the criterion? It seems to fudge the edges of something that was neat and tidy, which was that one had a turnover above a certain amount in the previous financial year. Perhaps the Minister will say a word or two more, because it is not satisfactory to say that the trade wanted it.
      Mr. Hugh D. Brown: Has this matter been agreed with COSLA and the chief constables?
      Mr. John MacKay: I do not think that there will be many occasions on which somebody will apply for a temporary exemption warrant. The local authority has to be satisfied, by the evidence that the person brings, that he has the premises, capital and business know-how to achieve the £100,000 turnover that is required. If somebody comes to the business with that kind of background and is able to persuade the licensing authority that he has that potential, he will have the exemption, but he will not deal with the man in the street, which is an important part of the amendment.
      In those circumstances, it would be unfair to prevent that person achieving the exemption. If we leave the Bill as it is, we are dealing with the trade as it exists and we are not taking into consideration anybody who comes new to the trade. I accept the point made by the hon. Member for Glasgow, Garscadden (Mr. Dewar) that it will not happen very often. As the House knows, and as the Committee knew, because it heard me say it often enough, the purpose of the licensing provision is crime prevention. We have underlined that by not allowing trading with the man in the street.
      The temporary warrant with the provisions on it will be enough of a safeguard, and local authorities and licensing authorities will be able to judge sensibly whether a person is likely to come into this qualification.
      I cannot answer the question of the hon. Member for Glasgow, Provan (Mr. Brown), but I shall inquire and let him know.
      Amendment agreed to.
      Amendments made: No. 81, in page 20, line 17, leave out 'as an exemption warrant' and insert
      'respectively as "an exemption warrant" and "a temporary exemption warrant".'.
      No. 82, in page 20, line 19, after 'warrant', insert 'or temporary exemption warrant'.—[Mr. John MacKay.]

    Clause 29

      METAL DEALERS' EXEMPTION WARRANTS
      Amendments made: No. 83, in page 20, line 37, at end insert—

      '(3A) A licensing authority may, on application by a metal dealer, issue a temporary exemption warrant in relation to him if they are satisfied that he has not been carrying on business as a metal dealer.

      1145

      (3B) A temporary exemption warrant in relation to a metal dealer shall remain in force from the date of its issue or such later date as the licensing authority may specify—

      (a) for a period of 18 months; or

      (b) until (if earlier than the expiry of that period) the date of the grant to that dealer of an exemption warrant; or

      (c) if a metal dealer's licence has been applied for by him within that period, until the date when it is granted or is deemed to have been granted or, if it is refused, until the expiry of the time within which he may lodge an appeal under paragraph 17 of Schedule 1 to this Act against that refusal or, where he has lodged such an appeal, until it has been abandoned or determined against him.

      (3C) It shall be a condition of a temporary exemption warrant that the dealer to whom it relates shall acquire metal only from persons selling or otherwise disposing of it in the course of trade or business.

      (3D) A licensing authority may revoke a temporary exemption warrant on the grounds that the metal dealer to whom it relates has contravened the condition specified in subsection (3C) above.'.

      No. 84, in page 20, line 42, after 'warrant', insert 'or temporary exemption warrant'.
      No. 85, in page 21, line 2, after 'warrant', insert 'or temporary exemption warrant'.—[Mr. John MacKay.]
      Mr. John MacKay: I beg to move amendment No. 86, in page 21, line 7, leave out '(1)' and insert '(4)'.
      This is a drafting amendment to correct an error and I commend it to the House.
      Amendment agreed to.

    Clause 34
      OFFENCES RELATING TO METAL DEALING
      Amendment made: No. 87, in page 24, line 35, leave out '200' and insert '500'.—[The Solicitor-General for Scotland.]
    Clause 35

      FUNCTIONS OF THE COURT IN RELATION TO METAL DEALERS CONVICTED OF OFFENCES
      Amendment made: No. 88, in page 25, line 21, leave out '(1)' or'.—[Mr. John MacKay.]
      Amendment made: No. 89, in page 25, line 23, leave out '200' and insert '500'.—[The Solicitor-General for Scotland.]

    Clause 37

      INTERPRETATION OF SECTIONS 29 TO 36
      Mr. John MacKay: I beg to move amendment No. 90, in page 26, line 18, leave out 'is altered' and insert
      'or of any article which is made of the metal is altered so as to make it substantially less identifiable than before the process,'.
      In Committee, hon. Members expressed concern about the definition of the word "processing". We had an interesting debate on the subject, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) remembers.
      The amendment provides that "processing" shall be widened to ensure that the metal remains in the form and shape in which it is acquired—that is, it will he in a recognisable state. As I recall from the debate in Committee, we discussed dismantling a car down to its piston rings at one stage. It is argued that processing would not cover that dismantling or the breaking up of a car, as this would not necessarily affect the composition or form
      1146
      of the metal. The amendment avoids that risk in response to doubts expressed in Committee about the foolproofness of the Bill.
      Amendment agreed to.

    Clause 38
      BOAT HIRE LICENCES
      Amendment made: No. 91, in page 28, line 31, leave out '200' and insert '500'.—[The Solicitor-General for Scotland.]
    Clause 45

      CONTROL OF SEX SHOPS
      Mr. Dewar: I beg to move amendment No. 191, in page 33, line 14, at end add—
      '(4) A district or islands council may resolve that while Schedule 2 to this Act shall apply in their area no licences shall be issued to any shop which falls within the definition of a sex shop in the said Schedule and the terms of Schedule 2 shall be modified accordingly.'.
      The spirit in which the House is approaching the Report stage does not encourage far-reaching and wide-ranging debate. If I attempted to enter into such a debate I should be a lonely figure. This amendment is tabled to provide a caveat against the way in which the Government have approached the problem of the licensing of sex shops in Scotland. The subject was reached late in Committee. There were lengthy discussions primarily between the hon. Member for Renfrewshire, East (Mr. Stewart) and myself. I do not apologise for that as this is a controversial and important matter.
      Clause 45 leads us to schedule 2 which can be made effective in any local authority area at the discretion of the local authority for that area. Schedule 2 sets out at great length over many paragraphs and pages an extremely sophisticated and complex system for the licensing of sex shops. I have never made any secret of the fact—I believe I have the support of almost everyone—that there is something wrong with a system which could allow a pitched battle to be fought over a take-away shop but did not allow local objections or opinion to be canvassed about the desirability of a sex shop in a particular locality. Anyone who has had experience of sex shops opening in their constituency knows how strongly feelings run, and sometimes perhaps they run too strongly. There is no way in which a local authority can consult and reflect on what it discovers by that consultation for the control of such shops.
      I do not wish to attack the concept of control which I think is necessary. The more my right hon. and hon. Friends and I look at schedule 2 the more we begin to worry about the way in which we are plunging into a labyrinth of control which will involve enormous difficulties of definition. Grey areas will emerge and there will be a great deal of tension and difficulty. We have a bad case of overkill. There is a problem, but we may have gone a little too far in our attempts to find the right way to deal with it.
      I do not want to repeat all the arguments that may have been relevant in Committee but are probably not relevant in the House. I referred to the difficulties of definition, some of which are extremely fundamental. When asked

      1147
      what is a sex shop, the Government replied that it is a shop that sells a sex article. When we define a sex article we finish with a general definition:
      "Anything intended for use in connection with or for the purpose of stimulating or encouraging—

      (i) sexual activity; or

      (ii) acts of force or restraint which are associated with sexual activity."

      There was a great deal of good natured banter, but it had a serious purpose. Hon. Members vied sometimes in private conversation and sometimes in Committee to think up objects that clearly fell within that definition, but which could not be seen as sex articles in the normally accepted sense of the word.
      The Minister will remember that one example that was mentioned was the shop that sold a double bed. There is nothing that more clearly falls within the definition of a sex article. Ingenious friends have talked about the dangers of lipstick and perfume. Shops that sell those objects are clearly selling something intended for use in connection with stimulating sexual activity. I can think of no other reason for perfume or a double bed, although I hope that I shall not be considered to have a devious mind when I put those points to the Minister.
      9.15 pm
      More seriously, there is the problem with newsagents that is widely canvassed. Nearly every newsagent on every railway station in Scotland sells a large number of magazines that are clearly sex articles. The previous Solicitor-General for Scotland even called some of them obscene articles. Prosecutions have resulted. Although it is not Parliament's intention that the newsagents should register as sex shops, they are caught in the definition if the letter of the law in the statute is strictly applied. I do not like to be in the situation where it is said that no one will strictly interpret the letter of the law. There is a great problem because of the complexity of the matter. The House has a duty to introduce a more simple and understandable system.
      Amendment No. 191 permits us in certain circumstances not to go through the enormously complicated and difficult safeguards of schedule 2 and to accept that a local authority that wishes to ban sex shops should be allowed to do so. But it would still require the definition in schedule 2 and schedule 2 would have to apply. If, having considered the matter, the local authority comes to the conclusion that there should be no sex shops in the area, is it not better to give it that power? The concept is not as revolutionary as it may first appear. In effect, schedule 2 will achieve what the amendment suggests but by the back door, and I do not like back-door legislation.
      In schedule 2 we have a complicated system of intimations, rules, regulations and appeals set out in 20 pages and in the middle has been inserted the concept of the nil quota. A person may apply for a licence, but if the local authority has decided on a nil quota in the locality, irrespective of the applicant's fitness to run a sex shop, the suitability of the premises and the experience of such shops in the area, the licence will be refused without the right of appeal. In paragraph 22 are set out complicated provisions for appeal, but if a nil quota has been decided there is no right of appeal. In Committee the Minister stated that each application must be carefully considered on its merits, but if a local authority has decided on a nil
      1148
      quota it can examine an application for as long and solemnly as one likes, but at the end of the day the answer will still be "No".
      The amendment cuts the cackle and simplifies the issue: if a local authority wants a nil quota across its area let it have it. I do not know whether I like that blanket approach by local authorities, but we are in any case slipping the power in with the nil quota in paragraph 9(6), which states:
      "Nil may be an appropriate number for the purposes of sub-paragraph (5)(c) above."
      If we include that sparkling sentence, a more honest way of approaching the matter, which would save much expense, time and heart searching—and may even prevent a local authority going through the empty charade of considering applications that it knows that it will refuse in the knowledge that its right to refuse cannot be challenged in any appeal procedures—would be to go for something like amendment No. 191. This is a simplifying proposition. It does not change the spirit of what the Government are about, but it recognises the realities buried in what is at times an over-complicated machinery.
      The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) hoped that we would be able to halve the size of the Bill. Our effort in Committee was not too bad. The Minister was a key figure. He had to accept the various excisions and junk the various unnecessary measures. However, at the end of the day, along came schedule 2 and sex shops, and rather than halving the Bill, we placed a substantial burden on its weight and size.
      I make no complaint about that. It was perhaps inevitable. However, at this last stage we should try to do something to simplify the procedures. We should recognise what will happen in reality. Amendment No. 191 may be technically imperfect, but we need something like it if the Government are to move in that direction.
      Mr. Hugh D. Brown: I missed the interesting discussions in Committee on this part of the Bill because of the Coatbridge and Airdrie by-election, but I see no reason why I should be denied the pleasure of making a few observations on this interesting subject.
      I do not altogether agree with the amendment. Edinburgh, Dundee and other cities may have different problems, but inevitably in Glasgow the respectable citizens of areas such as Eastwood find their way into the working class area where the sex shop is located. On the other hand, the greatest need for such shops seems to be in the trendier parts of the West End of Glasgow.
      The vast majority of my constituents are fairly normal. Therefore, there is not much demand for sex shops in the huge housing estates. We are wise to take a hard look at this matter, because it is regrettable that such shops are so profitable and to some extent cater for people who, frankly, are not strictly normal. Perhaps they require something other than a sex aid.
      It would be wrong to ask an authority to take a policy decision based on prejudice. That is not a particularly judicious approach. The Government have gone even further than I would have gone. I do not think that we should encourage the blanket rejection of an application merely on a local authority policy decision. Instead, we should leave it to the discretion of the licensing authority.
      Mr. Gordon Wilson: I am not sure whether the advice given by the hon. Member for Glasgow, Garscadden (Mr. Dewar) would be entirely

      1149
      suitable for parliamentary purposes. He advised us to cut the cackle, but if we did so we would be left with little else to do.
      This monstrous schedule has taken us far from the protests that emerged two years ago as a result of the growth of these shops in various parts of Scotland. I congratulate the Government on having responded to the pressure from all parts of the country about the need for regulation of these shops. There is no doubt that they have been found to be offensive both in concept and principle. There was much concern about their layout, and, as we all know, there was a series of prosecutions, with variable success, against some of the shops involved.
      I am rather impressed by the amendment tabled by the hon. Member for Garscadden. Honesty is sometimes appropriate. It is clear from the schedule, and particularly the nil quotas, that it would be possible for licensing authorities, in pursuit of their quasi-judicial role, to take decisions which were not essentially judicial or even quasi-judicial. They would operate on the basis that these shops were not acceptable in the locality controlled by the licensing board. It is a policy decision, and one might as well admit that from the start. If political objection is taken by councillors in a locality to the setting up of such shops in their area, and those councillors are responding to political pressure, there is nothing wrong with that. Equally, if it is right for councillors who are elected to respond to pressure put on them by their constituents, there should be an opportunity for a policy decision to be taken by the local authority concerned.
      I am attracted to the hon. Member for Garscadden's amendment, because he seeks to put the responsibility back on the shoulders of the district or islands council. The amendment would have other beneficial effects. It would prevent applicants for licences for these shops wasting their own time and that of the licensing board when there was no chance of getting a licence. They might as well know that there is a policy veto, and that they should avoid that area.
      I have looked at schedule 2, in all its length, but if amendment No. 191 is accepted I cannot see that it will shorten the Bill in any way. In fact, it adds to it marginally. It is an honest declaration. If decisions involving public policy are to be seen to be open, there is every reason to support the amendment. I see no reason why the Minister should seek to cloak objection to sex shops within the terms of schedule 2. It should be left open to the local authority to tell prospective applicants and the public where they stand in relation to these new manifestations on the Scottish scene. It is quite clear that they are not welcome or acceptable. In fact, many of them do not display offesive material, and seem to hide behind painted windows, for instance, to avoid drawing attention to their activities. However, their basic existence in some areas is objectionable to people who wonder whether youngsters will find their way into them.
      As we all know, these shops also attract people who do not react in normal ways, and parents object to that kind of attraction in their district. The hon. Member for Glasgow, Provan (Mr. Brown) said that one tends to get one or two shops in a city and that customers therefore concentrate in that area. That is why many people feel, quite openly, that shops of this kind should not be in their locality, and that there is no need for them.
      Therefore, I commend the amendment to the Minister. I hope that, if he is still in a basically friendly mood
      1150
      towards the Bill, as seems to have been the case, judging from the mutual back-slapping and back-scratching episodes that I lave noticed so far, he will accept the amendment tabled so wisely by the hon. Member for Garscadden.
      9.30 pm
      Mr. Allan Stewart: I thank the hon. Member for Dundee, East (Mr. Wilson) for what he said about the introduction of the provisions in the Bill. I recall, I think correctly, that the concern on the Floor of the House in relation to this matter was first raised by him, by the hon. Member for Dundee, West (Mr. Ross) and by my hon. and learned Friend the Member for South Angus (Mr. Fraser). That is a fairly considerable political cross-party alliance.
      What the hon. Member for Glasgow, Garscadden (Mr. Dewar) is proposing is fundamentally different from the licensing provisions in the Bill. As hon. Members have said, the amendment would enable local authorities to ban an activity as a matter of principle—an activity that may be quite legal—and without giving any consideration to individual cases. That is an inequitable approach.
      By contrast, the Government's approach will give local authorities effective control over sex shops. Problems arise not so much from the type of material that is sold in sex shops as from the fact that local authorities at present have no control over the opening or siting of such shops. Therefore, they are unable to prevent establishments that many people find offensive from opening in particularly unsuitable locations. The hon. Member for Glasgow, Cathcart (Mr. Maxton) has previously referred to a location next to a primary school, which is obviously undesirable.
      The licensing scheme will give local authorities control over both the number and location of sex shops in their area. They will have full power to decide that there should not be any sex shops in a particular locality. However, the local authority must reach such a decision only after giving proper consideration to an application for a licence to operate a sex shop in that locality. The local authority must consider every individual application.
      Mr. Dewar: In a sense, I can see the theoretical point, but why give due, weighty or thorough consideration to an application if there is already a decision that the quota for that area will be nil?
      Mr. Stewart: A local authority must consider each individual application on its merits. For example, a new application for an establishment could be different from a previous application that had been turned down. I would argue strongly that that is equitable in order to ensure that every individual application is seriously considered by the local authority.
      Mr. Dewar: I am intrigued by that. The Minister seems to be suggesting that there might be different categories of sex shop. He has not answered my question. If an area has a nil quota, what conceivable point is there in solemnly considering an application which must, by definition, be turned down?
      Mr. Stewart: A new application would not necessarily be in precisely the same location as a previous application. The local authority, rightly and properly, should consider the new application on its merits, regardless of what it had

      1151
      decided previously. Local authorities should consider each individual application that is made, because applications and circumstances will vary.
      The amendment proposes a total ban on an activity that is not in itself illegal, with no consideration of the merits of each individual case. That is not acceptable. There is a fundamental difference of principle between the approach adopted by the Government and that adopted by the Opposition in their amendment.
      Mr. Dewar: It might be helpful to withdraw the amendment. I have sympathy with some of the Minister's points. Indeed, one advantage of tabling the amendment is that I have drawn attention to the fact that, like the hon. Member for Dundee, East (Mr. Wilson), I believe that there is just a touch of dishonesty about the way in which the whole thing has been constructed. We have managed to slip in what may amount to a ban if the local authority wishes to operate the provision in that way. At the same time, the Minister has protested mightily that that would be wrong and contrary to the great traditions of Scottish justice. However, the Minister will discover that he has allowed an absolute ban. Like several other hon. Members, I should have preferred it if that fact had been recognised. In the hope that the Minister will make a concession during our next debate on sex shops, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 2

      CONTROL OF SEX SHOPS
      Amendments made: No. 92, in page 110, line 26, after 'objection', insert 'or representation'.
      No. 181, in page 114, line 41, leave out '(6)' and insert '(5)'.
      No. 182, in page 114, line 47, at end insert 'below'.
      No. 93, in page 116, line 20, leave out from 'decision' to end of line 24.
      No. 94, in page 116, line 34, leave out sub-paragraphs (4) to (7).
      No. 95, in page 118, line 6, at end insert
      `or, if determined in favour of the applicant, the time when the licence is renewed.'
      No. 183, in page 119, line, 3 at end insert 'the'.
      No. 96, in page 119, line 17, leave out from 'decision' to end of line 41.
      No. 176, in page 119, line 43, after 'obtaining', insert `such'.
      No. 184, in page 120, line 16, leave out '16' and insert '18'.
      No. 97, in page 120, line 30, at end insert—:
      `(6A) A district or islands council shall, within 7 days of their decision under sub-paragraph (2) above, send written notice of their decision to the holder of the licence, the chief constable and the fire authority.'.
      No. 98, in page 121, line 13, leave out from 'authority' to end of line 36.
      No. 99, in page 122, line 8, at end insert:
      `(4) Where a licence has been surrendered under this paragraph on its revocation under paragraph 13 or 19(5)(a) of this Schedule and the revocation is quashed or recalled, the district or islands council shall re-issue the licence.'.
      No. 100, in page 123, line 39, leave out 'wilfully'.
      No. 177, in page 124, line 4, leave out from `exceeding' to end of line 6 and insert '£1,000'.
      No. 101, in page 124, line 11, leave out
      `that is to say an order'.
      No. 102, in page 124, line 15, at end insert—

      '(5A) A person may appeal against an order under subparagraph (5) above in the same manner as against sentence and the court which made the order may, pending the appeal, suspend the effect of the order.

      (5B) A person may, at any time after the expiry of the first year of his disqualification under subsection (5) above, apply to the court which ordered the disqualification to remove it, and, on such application, the court may by order remove the disqualification as from such date as may be specified in the order or refuse the application, and, in either case, may order the applicant to pay the whole or any part of the expenses of such application.'.

      No. 185, in page 124, line 17, leave out '21 or 22' and insert '20 or 21'.
      No. 103, in page 125, line 39, at end insert—

      CONTROL OF SEX SHOPS

        'Sending of notice by post
        21A. When a district or islands council sends by post for the purposes of paragraph 10(2), 13(9), 14(6A) or 15(5), written notice of its decision, it shall be treated as having been sent within the time required if it was posted so that in the normal course of post it might be expected to be delivered to the person concerned within that time.—[Mr. Allan Stewart.]
        Mr. Dewar: I beg to move amendment No. 104, in page 126, line 6, leave out 'either'.
        Mr. Deputy Speaker: With this it will be convenient to take amendment No. 105, in page 126, line 7, leave out 'or (d)'.
        Mr. Dewar: This is our second little debate on sex shops. The amendment is serious and I hope that the Minister will consider it sympathetically. To some extent, the Report stage has been conditioned by a long and constructive Committee stage. I hope that that remark does not come into the back-scratching activities that attracted the censure of the hon. Member for Dundee, East (Mr. Wilson), because it is a fair reflection of what happened. As a result of that Committee stage, many of the amendments on Report have been agreed to. Some of those that have not been accepted have seen light skirmishing between hon. Members. At this late stage I do not believe that the Minister will accept many amendments. If he has resisted them in Committee, it will be difficult to change his mind now.
        However, I have some genuine hopes for amendments Nos. 104 and 105, because they raise important matters. I do not want to exaggerate the number of times that the sex shop machinery is likely to be used in Scotland. I understood that there are only two sex shops in my city of Glasgow, and only about six in Scotland. Therefore, there is something less than an epidemic of sex shops in Scotland. However, a proposal to open such an establishment generates considerable heat and very strong feelings.
        As I withdrew my previous amendment on the subject, it is now common ground that each application must be considered on its merits. If we are in that situation, it is important that we make the safeguards in the schedule adequate. In many ways, on first reading, they appear to be so. If one reads through the schedule, one sees that not only are there careful rules and regulations about intimation, time limits, applications and so on, but important provisions about appeals to the sheriff in circumstances in which a local authority has rejected an application for a licence to operate a sex shop.
        Paragraph 22 of schedule 2 says that there is that right of appeal to the sheriff. The sheriff will apply criteria that

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        are listed if he is satisfied that there has been an error in law, that the local authority has relied on an incorrect material fact, has acted contrary to natural justice and has exercised its discretion in an unreasonable manner. If any of those circumstances applies, the sheriff can either remit the matter to the local authority or alter its decision.
        On first reading that looks fine, but if one looks at the small print one finds that, while there is a right of appeal in general, that right of appeal is qualified. If the location has been refused on the ground specified in paragraphs 9(5)(c) or 9(5)(d), there is no right of appeal to the sheriff.
        I suspect that almost all the refusals will be in those two categories. I think that I shall have to live with one of them, as I have accepted that the nil quota is part of the grand strategy. Although I did not succeed in restructuring it, I did not attack the fundamental concept that a local authority should be able to say "No, we shall not have a sex shop in a certain area." If one accepts that, it seems fair that there is no point in appealing to the sheriff or appealing to him if one is told that one cannot have one's sex shop as it has been decided that there will be no sex shops in that area.
        The amendment does not attempt to reinstate the right of appeal if the refusal is under paragraph 9(5)(c). However, it attempts to reinstate the right of appeal if the refusal of a licence to operate a sex shop is under paragraph 9(5)(d), which states
        "that the grant or renewal of the licence would be inappropriate, having regard—

        (i) to the character of the relevant locality; or

        (ii) to the use to which any premises in the vicinity are put; or

        (iii) to the layout character or condition of the premises, vehicle, vessel or stall in respect of which the application is made."

        If we assume that there is a no diktat from the local authority, that is the end of the matter, but there cannot be much of a case for saying that all the splendid criteria of natural justice, material facts and discretion of a reasonable manner should not apply to circumstances in which the refusal has been made because of the location—not only because the area is unsuitable, but because the location in the area is unsuitable, or the layout, character or conditions of the premises are unsuitable. It seems that we are making a mockery of the appeal procedures. We are driving an enormous horse and cart through the appeal procedures. We are making them no more than cosmetic window dressing.
        I am not attacking the important nil quota proviso, but I am saying that it is only right that we should preserve the general right to go to the sheriff and say that the criteria of paragraph 22(7) have not been met and he should interfere on behalf of the applicant and instruct the district council to reconsider the matter.
        I accept that the Minister is rightly proud of the fact that the Government have been reasonably careful. They have put in some new rights of appeal particularly with regard to taxi licences and appeals to traffic commissioners about taxi fares and so on. The Bill is spattered with useful and important additional safeguards. I am sure that the Minister will agree with me that the point about schedule 2 is that while allowing that there must be adaptations for the specific problem that has been dealt with—sex shops—wherever possible it should duplicate or follow the general lines of schedule 1, which applies to all the other licences that are included in the Bill.
        1154
        Schedule 1 makes adequate, comprehensive and proper provision for appeal to the sheriff. I ask the Minister to consider including that provision also in schedule 2, with the one very important difference that there should be no appeal if the refusal is due to the nil quota proviso enshrined in another part of the schedule. I believe that with that one exception the general right to go to the sheriff should stand. That would be achieved if the amendments were accepted.
        9.45 pm
        This is a serious matter. The amendments would strengthen the Bill and the safeguards. If the Minister believes in the rhetoric of the last few minutes about careful consideration and scrutiny and the importance and due place of the processes and safeguards of law, the case for the amendments is very strong indeed. I hope that he will not harden his heart and reject them out of hand. The amendments would in no way endanger the Minister's grand design for sex shops, but the system would be made a little fairer. To quote one of the most valid sayings in the book, the amendments would ensure that justice was seen to be done. The loophole in appeal coverage would then be limited to the one special circumstance of the nil proviso.
        I commend the amendments to the House, and I hope that the Minister will take a flexible view.
        Mr. Allan Stewart: As always, I listened with great care to the hon. Member for Glasgow, Garscadden (Mr. Dewar). As he said, the whole Committee stage was most constructive. That is why there are so many agreed amendments today.
        The effect of the amendment would be to provide a statutory right of appeal against refusal of an application for the grant or renewal of a licence when refusal is based on the grounds set out in paragraph 9(5)(d):
        "that the grant or renewal of the licence would be inappropriate, having regard—

        (i) to the character of the relevant locality; or

        (ii) to the use to which any premises in the vicinity are put; or

        (iii) to the layout character or condition of the premises".

        I accept that an applicant would still have a common law right to seek to have the local authority's decision reduced in the Court of Session on the ground that it was ultra vires. As I made clear in Committee—I have considered carefully what the hon. Gentleman said on that occasion and today—we believe that in view of their essentially local character, which is the aspect that I emphasise, these matters should be determined by the local authority which is familiar with all the local circumstances. In other words, I stress that the local authority is in the best position to judge the character of the locality and the effect of a sex shop on premises in the vicinity.
        I believe that a valid distinction can be drawn between those grounds and questions such as whether the applicant is unsuitable to hold a licence, which would be subject to the full statutory appeal under paragraph 22. I believe that local authorities should have a substantial say in whether there should be sex establishments in their areas. I believe that the distinction that I have drawn is valid. Therefore, with personal regret, I have to tell the hon. Member for Garscadden that on this occasion we shall not reach agreement.
        Amendment negatived.
        Amendments made: No. 106, in page 126, line 19, leave our '10, 13 or 15' and insert '21B'.
        No. 178, in page 127, line 8, leave out 'other enactment' and insert
        `enactment other than this Schedule'.
        No. 107, in page 127, line 16, after 'premises', insert `vehicle'.
        No. 179, in page 127, line 24, leave out 'came' and insert `comes'.—[Mr. Allan Stewart.]

    Clause 48

      DOGS: FOULING OF PAVEMENTS
      The Solicitor-General for Scotland (Mr. Peter Fraser): I beg to move amendment No. 169, in page 33, line 42, at end insert—
      `(bb) a pedestrian precinct maintained by a local authority;
      During the Committee debates on clause 48, doubt was expressed about whether the term "footpath or footway" in subsection (1)(a) included a pedestrian precinct. We have decided that the term as defined in subsection (4) does not in fact include pedestrian precincts. Therefore, to ensure that the dog fouling offence of this clause extends to such places, the amendment extends the provision to pedestrian precincts maintained by a local authority.
      Amendment agreed to.

    Clause 50

      DRUNKENNESS
      Mr. Bill Walker: I beg to move amendment No. 110, in page 35, line 28 after 'including' insert 'a crossbow'.
      Clause 50 deals with drunkenness. The part of the clause to which the amendment relates deals with offensive weapons including airguns, air rifles and air pistols. It seems right to include in the clause a weapon that could become a dangerous weapon—the crossbow. For those who are not aware of it, the crossbow has again come into fashion. It is being sold in numbers that one would never have thought possible. It is well known that the crossbow is an effective weapon when used against vermin such as rabbits. That is why my hon. friend the Member for Bute and North Ayrshire (Mr. Corrie) and I deemed it wise to include the crossbow with these other dangerous weapons.
      The Solicitor-General for Scotland: This matter was raised in Committee and I accept that there is considerable force in the arguments advanced by my hon. Friend. For that reason, I am happy to accept the amendment.
      Amendment agreed to.

    Clause 51

      OBSCENE MATERIAL
      The Solicitor-General for Scotland: I beg to move amendment No. 111, in page 35, line 38 at beginning insert 'Subject to subsection (4) below,'.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 113.
      The Solicitor-General for Scotland: In Committee, the hon. Member for Glasgow, Garscadden (Mr. Dewar)
      1156
      pointed out that there was an inconsistency between subsections (1) and (2) of clause 51. Under subsection (1) it is an offence wilfully to display obscene material but subsection (2) makes it an absolute offence to publish, sell or distribute obscene material, subject to a due diligence defence in subsection (4).
      In Committee the hon. Gentleman suggested that both offences should be governed by the word "wilfully". While we accepted the point that there should be some consistency within the clause, contrary to what the hon. Gentleman suggested, we propose to move in the opposite direction—that is to say, to make both parts of the clause absolute and subject to the due diligence defence.
      As I pointed out in Committee, if the hon. Gentleman's suggestion were to be adopted, the Crown would have to establish that the accused deliberately published, sold or distributed the obscene material. We consider that that is too severe an onus to impose on the Crown. Clause 51 concentrates on the more serious obscene material rather than merely indecent material. Therefore, we believe the correct approach is to make display, sale and distribution absolute offences, subject to the defence that the accused has used all due diligence to avoid committing the offence. Such a defence will provide a proper and appropriate safeguard for an accused person. I consider that that is a valuable and important part of the clause.
      These amendments bring subsection (1) into line with subsection (2) by making both absolute offences subject to a due diligence defence.
      Mr. Dewar: The Solicitor-General for Scotland has taken in Government amendment No. 112 as part of the package deal. Amendment No. 112 removes the word "wilfully" from clause 51 and therefore makes some sense of the first two amendments. We have done some telescoping there.
      I have listened to what the Minister has had to say and he may be surprised to hear me say that I recognise that there is some virtue in what he proposes. It is clear that the Bill as drafted was wrong. No doubt as a constitutional theorist he will bear some personal responsibility for that. We could move in either way to achieve consistency. The hon. and learned Gentleman has moved in a slightly liberal way, and who am I to criticise that? He has chosen to remove "wilfully" and to insert "due diligence" as a defence. In that way he has strengthened the position of the potential offender. I am satisfied with the changes and I shall be happy to see them enshrined in legislation.
      Amendment agreed to.
      Amendments made: No. 112, in page 35, line 38, leave out 'wilfully'.
      No. 113, in page 36, line 11, leave out 'subsection (2) above' and insert 'this section'.—[The Solicitor General for Scotland.]
      The Solicitor-General for Scotland: I beg to move amendment No. 114, in page 36, line 35, at end insert
      "'photograph" includes the negative as well as the positive version;'.
      The amendment is designed to make it clear that in relation to obscene material a photograph includes a negative as well as a positive copy. Such a definition is already included in clause 52(8)(c) in respect of indecent photographs of children.
      Amendment agreed to.

    Clause 53

      OBSTRUCTION BY PEDESTRIANS
      The Solicitor-General for Scotland: I beg to move amendment No. 115, in page 38, line 18, leave out `refuses' and insert 'fails'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 116 to 119.
      The Solicitor-General for Scotland: Hon. Members will recall that in Committee I said that clause 54 as drafted was not satisfactory, because, while it was designed primarily to catch noise emanating from or passing into a public place, it would cover also noise made between private households and gardens, to the extent, for example, that a front room was adjacent to any public place. Other noise passing between households—for example, from back rooms—might not be caught, given the definition of public place. That was clearly inconsistent and we sought the Committee's views on whether the clause should be restricted to public place noise or extended to cover all inter-household noise. The Committee clearly favoured the latter course and the amendment is designed to achieve that end.
      There is no doubt that noise between households, especially late at night, creates considerable annoyance. There may be difficulties in dealing with such noise and it may have been dealt with in the past as a breach of the peace. The use of civil interdicts could be a course but that is not really a solution for most people. We believe that the creation of this minor offence and a fairly modest fine will enable the police to deal effectively with such troublesome conduct. I do not believe that the enforcement of this provision will place an undue burden on the police. In most instances a request from a constable to desist from making the noise will suffice.
      Under clauses 54, 53—the latter dealing with obstruction by pedestrians—and 55 the offences are contingent upon the person refusing to desist and being required to do so by a constable in uniform. There may be instances where a person does not actually refuse to desist but fails to do so. Amendments Nos. 116, 115 and 119 alter "refuse" to "fails" in all three cases to catch the actual actions or lack of them.
      Mr. Dewar: This is an interesting little amendment. The hon. and learned Gentleman was right to say that it caused some interest in Committee. Of course, he expressed some doubt about the wisdom of moving in this direction. He was anxious about the burden that this might place upon the police. I am glad that he has had advice, or has convinced himself, that there will be no problems for the police. Anyone who represents a large urban constituency—perhaps this applies to any constituency—will recognise at once the problems caused by noisy neighbours. Undoubtedly one of the greatest attacks upon the quality of life is that of having a noisy neighbour who plays records, for example, into the small hours of the night, or even into the large hours of the morning. The fact that the police now have something that is short of breach of peace but that will allow them to bring a report before the procurator fiscal which may result in a charge, presumably in the district court, seems sensible. I accept that the provision may be abused and that the police have
      1158
      a natural reluctance to become involved in stairhead rammies and the problems of noisy neighbours, but this is a useful weapon and I welcome it.
      Could the Minister speak briefly about amendment No. 118, which is an addition to clause 54? The amendment says that the new offence of noise should not apply—
      It being Ten o' clock, the debate stood adjourned.

    Business of the House
    Ordered,
    That, at this day's sitting, the Civic Government (Scotland) Bill [Lords], the consideration of Lords Amendments to the Local Government and Planning (Scotland) Bill and the Duchy of Cornwall Management Bill may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]

  Civic Government (Scotland) Bill [Lords]
  Question again proposed, That the amendment be made.
  Mr. Dewar: Amendment No. 118 states that there shall be certain occasions when the operation of a loudspeaker shall not be caught, or potentially caught, by the new offence that we have just created. I suppose that I am displaying a nasty, narrow, vested interest, but the obvious comment is that political loudspeakers are riot included. Perhaps the Minister will reply to that point. Perhaps political loudspeakers are controlled in other ways. There was some discussion in Committee, but the Minister should cover the ground again.
  The Solicitor-General should also deal with the exemption from possible prosecution under the new offence in clause 54 for travelling showmen on land where the loudspeaker is being used to advertise a pleasure fair. That seems an extraordinary exemption. I am not sure in what category a travelling showman on water would be. It is a curiously drafted phrase. Possibly travelling showmen on land are covered by other legislation, but I should like a comment from the Minister on that.
  The Solicitor-General for Scotland: I apologise for the fact that in trying to proceed quickly I did not clarify amendment No. 118, which is linked to amendment No. 117. They are designed to clarify the relationship between clause 54 and section 62 of the Control of Pollution Act 1974. The hon. Gentleman may recall that we strayed into that statute in Committee. Amendment No. 117 makes it clear that clause 54 does not affect the offences of operating a loudspeaker in the streets at certain times, as laid down in section 62 of the Act and, conversely, that even where the use of the loudspeaker is not an offence under section 62, it will be caught under clause 54 if it gives reasonable cause for annoyance and the person refuses to desist.
  Amendment No. 118 is identical to section 62(2) of the 1974 Act, which exempts from clause 54 the operation of loudspeakers for various public service purposes, such as fire, police or ambulance.
  The hon. Gentleman asked for my views on subsection (2)(f), which relates to travelling showmen on land. In the interest of brevity I refer him to section 62(2)(f), where he will find that a similar exemption is provided in identical terms.
  Mr. Gordon Wilson: Is there to be an exemption for the use of loudspeakers for political purposes during elections, or will that category be caught under the Bill and a restriction created that did not exist hitherto?
  The Solicitor-General for Scotland: There is no specific exemption relating to the use of a loudspeaker during a political campaign. The absolute use of a loudspeaker is not being limited. The provision is intended to cover occasions when its use has reached such a stage and the manner is such that it causes annoyance. Although emotions run higher during election campaigns than normally, the decision to prosecute for misuse of a louspeaker is left to the good judgment of the police.
  Amendment agreed to.

  Civic Government (Scotland) Bill [Lords]
    Clause 54

      PLAYING INSTRUMENTS, SINGING, PLAYING RADIOS, ETC. IN PUBLIC PLACES
      Amendments made:
      No. 116, in page 38, leave out from beginning of line 25 to first `to' in line 32 and insert—

      '(a) sounds or plays any musical instrument;

      (b) sings or performs; or

      (c) operates any radio or television receiver, record player, tape-recorder or other sound producing device

      so as to give any other person reasonable cause for annoyance and fails'.
      No. 117, in page 38, line 36, after (to), insert 'any offence under'.
      No. 118, in page 38, line 37, at end insert—
      '(3) Subsection (1) above shall not apply to the operation of a loudspeaker—

      (a) for police, fire brigade or ambulance purposes by a water authority in the exercise of any of its functions, or by a local authority within its area;

      (b) for communicating with persons on a vessel for the purpose of directing the movement of that or any other vessel.

      (c) if the loudspeaker forms part of a public telephone system;

      (d) if the loudspeaker—

      (i) is in or fixed to a vehicle, and

      (ii) is operated solely for the entertainment of or for communicating with the driver or a passenger of the vehicle or, where the loudspeaker is or forms part of the horn or similar warning instrument of the vehicle, solely for giving warning to other traffic, and

      (iii) is so operated as not to give reasonable cause for annoyance to persons in the vicinity;

      (e) otherwise than on a highway, by persons employed in connection with a transport undertaking used by the public in a case where the loudspeaker is operated solely for making announcements to passengers or prospective passengers or to other persons so employed;

      (f) by a travelling showman on land which is being used for the purposes of a pleasure fair;

      (g) in case of emergency.

      In this subsection, "water authority" has the meaning assigned by section 3 of the Water (Scotland) Act 1980.'.—[The Solicitor-General for Scotland.]

    Clause 55

      TOUTING
      Amendment made:
      No. 119, in page 39, line 1, leave out 'refuses' and insert `fails'.—[The Solicitor-General for Scotland.]

    Clause 57

      MOBILE ADVERTISEMENTS
      The Solicitor-General for Scotland: I beg to move amendment No. 120, in page 39, line 10, leave out Clause 57.
      The effect of the amendment is to delete clause 57. My hon. Friend the Under-Secretary of State has gained credit this evening for slashing away at the Bill and I wish to get in on the act with this amendment.
      Clause 57 provides that it shall be an offence to use any vehicle, moveable board or structure to display advertisements without the consent of the district or islands council. It carries a maximum penalty of £50 for contravention. At the end of our debate in Committee, during which several hon. Members made wide-ranging criticisms of the provisions, I undertook to reconsider the principle of the clause. The clause was criticised on two main grounds—that it would require consent to be given for such small items as newspaper boards displayed outside shops, and that the use of vehicles as display advertisements should not be a criminal offence.
      Since the Committee stage the Government have consulted COSLA and, as a result, we have concluded that there is no need for formal control over moveable boards or placards. The problem with vehicles used to display advertisements goes rather wider, since advertisers may sometimes use stationary vehicles to display advertisements where they have been refused permission to display them or have not made an application under the Town and Country Planning (Control of Advertising) Regulations 1961. In Committee I said that the regulations would not normally apply to advertisements displayed on vehicles and that their application should be restricted to fixed advertisements. However, we are considering whether it would be appropriate to make stationary vehicles used primarily to display advertisements subject to the regulations. We shall consult interested parties about the proposal as part of a revision of the advertisement regulations during the next few months.
      In those circumstances, given the review that we shall undertake, and after careful consideration of the cogent arguments advanced in Committee by hon. Members on both sides, we propose that the clause should be omitted from the Bill.
      Mr. Dewar: Perhaps I might allow myself the luxury of saying how much pleasure that announcement has given me, because, of all the clauses in the Bill, I found clause 57 peculiarly irritating. I do not know whether in a few years the Solicitor-General will have a reputation as a great reforming Minister, but I shall always have a soft spot for him as the man who came away with the great truth that formal control over moveable boards and placards is not strictly necessary. Anything that is based upon that great precept should be welcomed by the House. The clause was nonsense, and I am glad to see the back of it.
      Amendment agreed to.

    Clause 59

      CONVICTED THIEF IN POSSESSION
      Mr. Dewar: I beg to move amendment No. 121, in page 39, line 39, leave out clause 59.

      1161
      In different circumstances, this amendment would be the foundation of a wide-ranging debate, but I recognise that now it might strain the patience of hon. Members. I have grave doubts—they are shared by many of my right hon. and hon. Friends—about clause 59. I do not believe for a moment that we shall be fortunate enough to persuade the Solicitor-General to do with clause 59 what he has just done with clause 57, although it would be simple for him to say that he is prepared to accept the amendment.
      The basis of our disquiet is that this is a preventive offence—of being a convicted thief in possession of tools with which it may be reasonably inferred that one intended to commit theft or had committed theft. It is debris left on the statute book by the repeal of the Vagrancy Act 1824 and the general agreement that we can do without the sus law. It is a case of lack of courage. The Government have agreed that sus should go and have taken section 4 of the Vagrancy Act 1824 off the statute book in Scotland. However, they have left causes 58 and 59 which, at least in spirit, are very much like the sus law.
      I dislike especially the fact that clause 59 creates an offence which is an offence only if the person concerned has previous convictions. It will not be possible to charge a man with no previous convictions who is walking along the street with tools in his possession. If, however, he has been in trouble before, it will be possible to charge him under the clause. Once charged, he is in the unenviable position of having to discharge the onus of proving his innocence against the presumption, which seems to me dangerous, that he is guilty—a guilt assumed because of his previous record. I do not think that this is a good offence. It should not be retained on the statute book.
      It is perhaps overstating the case, but it gives a flavour to the argument to say that the Solicitor-General would have been horrified if a new clause had been proposed that it should be possible to pray in aid at a trial the previous convictions of the accused in order to help the jury or the sheriff to reach a decision on his credibility. People would say that it was an abhorrent principle which struck at the whole basis of the assumption of innocence until proved guilty. Yet we are getting into the same area by creating an offence that is chargeable only if the person concerned has two previous convictions.
      There are many other attacks that I could make upon the clause. Many are common to clause 58. They will be familiar to anyone who has read the Home Affairs Select Committee report of 1978–79 which led to the abolition of the sus laws. It is not right to put upon the statute book contrived offences based upon situations and actings that fall far short even of the Scottish law of attempt. We are in the position of saying, "We think you did it. Perhaps you have not got round to it or even got round to something that could be described as an attempt, but we still believe that the intent, as distinct from the attempt, was present, and we will do you under these surviving preventive offences". This seems to me a flawed and dangerous position. That is why the amendment has been moved.
      I have presented what I believe to be an almost insultingly brief and telescoped résumé of the argument. It is, however, important to have that argument on the record. People occasionally read Hansard when they do not read reports of Standing Committees. I am perhaps according the Solicitor-General too much credit in believing that he may have some sympathy with the
      1162
      argument. The preventive offences in the Bill will be defended presumably on the grounds that crime prevention is important.
      The real principle and working practice should be that the law punishes men, severely, if necessary, for offences that they have committed and offences that can be proved according to the normal standard of criminal law of Scotland. If that is not possible, we should not try to erect contrived and artificial situations that do no credit to the law. At the end of the day, they infringe the reputation of justice in the criminal courts. Clause 59 falls into that category. I would like to think, even at the eleventh hour and fifty-fifth minute, that the Solicitor-General might be prepared to abandon the clause.
      10.15 pm
      Mr. Gordon Wilson: I support the hon. Member for Glasgow, Garscadden (Mr. Dewar). We have always enjoyed the principle in the courts, with one or two exceptions, that a person is innocent until proved guilty, and the onus for so doing is on the Crown. It would amount to lazy prosecution to produce previous convictions to a court to secure a conviction which might not otherwise be obtained. I believe that it has been agreed that the sus offences are to be eliminated. It is a pity that that principle has not been accepted by the Solicitor-General and the Government. I have no doubt that within a year or two a criminal justice Bill will be brought before the House which will strike clause 59 if not 58 out of the Civil Government (Scotland) Bill. Legal opinion is that that offence can no longer be justified, and that civil rights cannot be invaded by such a law.
      I am sure that the Solicitor-General accepts that the onus is on the Crown to prove guilt, and it should be done by the means that apply in most cases. All citizens are presumed to be innocent until they are found guilty. Many people who will be prosecuted under clause 59 may well be guilty of the offence with which they are charged. That assumption might apply to many other offences, but Parliament has ensured that the rules of natural justice should apply. Our judicial system is established on the principle that innocence is assumed.
      These offences are a flaw in our legal system, which should be removed. The Solicitor-General and the Government have an opportunity to do so by accepting this amendment, which removes those objectionable offences and relies upon the normal rules of evidence to secure conviction. Many people prosecuted under clauses 58 and 59 may be guilty, but many others will be convicted who are not guilty of the offence with which they are charged. They will be convicted because at some time in the past they had committed some other criminal offence. Under our system, once one has committed a crime, been convicted and served a sentence, that is the end of the matter. It is wrong that a conviction should be used to buttress what might be an uncertain prosecution where conviction could not be secured under the normal rules of evidence.
      The Solicitor-General for Scotland: In Committee we had a fairly detailed discussion about this group of offences. We considered in detail the law of attempt in Scotland. One of the points that has to be made at the outset is, that there are, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) would recognise, more extensive powers under the Burgh Police (Scotland) Act 1892.

      1163
      Clause 59 is a considerably curtailed replacement for the existing powers. The aim of clause 59 is to help crime prevention, but important safeguards are included.
      We are seeking to catch those people with previous convictions for theft who are in possession of burglary tools. From such possession it may reasonably be inferred that such a person intends to commit theft. Section 409 of the Burgh Police (Scotland) Act 1892, covers both known and reputed thieves. We believe that it is justified to penalise those people with previous convictions who are in possession of burglary tools. We do not believe that it is so in the case of an individual who has no previous criminal record.
      I was surprised by the hon. Gentleman's argument. I recognise in totality that he does not like the idea of these preventive offences, but I should have thought that he would welcome the restriction of their application to those instances where the persons who could be charged with them have a record of previous convictions not across the board but only for convictions of theft. That is why we have dropped the reference to "associates" and replaced the pejorative term "known or reputed thief" with the provision in subsection (4) applying the offence to those who have two or more extant convictions for theft. I am sure that the hon. Gentleman has noticed the later amendment proposed.
      I understand why there is unease about clause 59 applying to convicted thieves, but for the provisions to apply to any person would be unacceptably wide. They should be restricted to people with a record of crimes of theft, given the crime prevention aims of the clause. Amendment No. 123 will further restrict the clause to people with convictions for theft. It should also be remembered that the person has to have two or more previous convictions and that the clause will not apply to a first-time offender.
      I also stress the important safeguards. The mere possession of tools is not sufficient. The circumstances of the possession must be such that it may reasonably be inferred by the constable in the first instance and ultimately by the court that the person intended to commit theft or had committed theft.
      Because the provision applies only to a person with previous convictions for theft, the hon. Gentleman suggests that it is to be inferred that the possession by him of the tools is sufficient to indicate that he intends to commit a theft. If he looks at the clause he will see that that is not right. The circumstances must be considered to see whether it can reasonably be inferred that the person charged intended to commit a theft.
      Mr. Gordon Wilson: The Solicitor-General is right to point out the conditions in the clause that weaken the offences in the Burgh Police (Scotland) Act 1892. But in itemising each of the relaxations that the Government have put forward he has given no reason why an objectionable offence is to be continued on the statute book. I hope that he will say why the Government seek to keep one of the sus laws on the statute book.
      The Solicitor-General for Scotland: We see this as an important crime prevention measure. The issue was carefully considered by the working party. It agreed with the views of a large number of hon. Members that other
      1164
      offences should properly be deleted, but the working party and the police considered that this offence should be retained.
      The aim is crime prevention, but the provision is nothing like as wide as it was originally. I am pointing out how it is circumscribed, in contradistinction to the provisions in the 1892 Act.
      The person charged will have every opportunity to demonstrate that the possession was not for the purposes of committing theft. It is only if he is not able to do so to the satisfaction of the court that he will be guilty of an offence. I therefore make it clear that I do not see this as a draconian provision. A convicted thief is not liable to an offence under the clause simply because he is in possession of burglar tools. It has to be clear that he intends to commit theft, and has no satisfactory explanation.
      I am sorry that the earlier agreement by me to delete a clause from the Bill should have excited the hon. Member's hopes that I would follow on with a deletion in this clause. Possibly his hopes were not particularly high, and in that case he accurately assessed my position.
      Amendment negatived.
      The Solicitor-General for Scotland: I beg to move amendment No. 123, in page 40, line 24, leave out from 'convictions' to end of line 26.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 124, in page 40, line 26, at end insert—
      '(4A) Without prejudice to subsection (4) above no appearance before a children's panel shall be taken into account in deciding that this section applies to any person'.
      The Solicitor-General for Scotland: As I have said, in terms of clause 59, it is an offence for a person with two or more convictions for theft to have in his possession burglar tools, from the possession of which it may reasonably be inferred that he intends to commit, or has committed, theft, provided that that person is unable to give satisfactory explanation of his possession. Under subsection (4) convictions are defined in terms of section 1(4) and section 3 of the Rehabilitation of Offenders Act 1974.
      In Committee my hon. Friend the Member for Dumfries (Sir H. Monro) and the hon. Member for Glasgow, Garscadden (Mr. Dewar) expressed some concern over this definition, particularly with regard to children under 16 who have been referred to a children's hearing on the grounds that the child has committed an offence. That would fall within the ambit of clause 59.
      I accept that that would be inappropriate and contrary to the philosophy of the children's hearing system, and the amendment is designed to ensure that only those children over 16 with a conviction proper for theft fall within the scope of clause 59. It does this by removing the reference to the extended definition of conviction in the 1974 Act and leaving "conviction" to be read in its normal sense. The Government amendment therefore achieves what the hon. Gentleman's amendment seeks to do.
      The amendment means that only those who have two or more convictions for theft are liable to be subject to clause 59. I imagine that the amendment will be welcome on both sides.
      Mr. Dewar: The Solicitor-General is right in thinking that the amendment will be welcome. It is an interesting example of what happens when one asks naive questions

      1165
      in Committee. I did not imagine that a children's panel appearance, the acceptance of grounds of referral before a children's panel, or the establishment by the sheriff as a result of a denial of grounds for the children's panel would count as a conviction or a qualifying mark that might lead to prosecution under clause 59. I asked that question in Committee, not maliciously but because it occurred to me, and when such questions occur one pops them out.
      It is well worth doing that because the Minister made it clear that appearance before the panel was a conviction in terms of clause 59. I am pleased that, as a result of the pressure that was put on the Minister from both sides of the Committee, the Minister has come up with his version, which overcomes the problem.
      It is a matter of some importance because this is a sensitive question. A large number of us take the view that the whole relationship of the children's panel system to the Rehabilitation of Offenders Act 1974 is in need of re-assessment. I had a quite lengthy correspondence with the hon. Member for Renfrewshire, East (Mr. Stewart) in his short interregnum when he was in charge of social work. He flashed through the social work world leaving hardly a trace behind him, except for a few letters in my files. Some of those letters deal with the importance of whether a children's panel appearance and the acceptance of grounds of referral should be a conviction in terms of the Rehabilitation of Offenders Act 1974 and whether it should be covered by section 3 of the 1974 Act.
      10.30 pm
      In a number of lengthy letters—I make no complaint about that because the matter is worthy of proper consideration—the Minister took the view that it would be an anomaly if we treated a juvenile offender in Scotland on a different basis from a juvenile offender in England. If a 15-year-old child in England is involved in a theft, he goes to the juvenile court, whereas in Scotland he would go to the children's panel. The Minister seemed to think that common justice should ensure that both should be treated in the same way, as they were both convictions under the Rehabilitation of Offenders Act.
      The logic of that argument is flawed, because there is every reason why a distinction should be made. That is the point of the reform introduced after the Kilbrandon report. Scotland has taken the child in trouble out of the criminal system. The children's panel is a means of mobilising help. It is a disposal agency. It is not part of the criminal courts. There should be no question of an appearance before the children's penal being counted as a criminal offence and a previous conviction.
      That wide-ranging point gives piquancy to this debate. I am glad that the Minister has at least accepted the logic of our arguments. I hope that he will try to persuade his colleagues that we should look again at the whole problem of the Rehabilitation of Offenders Act. As that Act covers children's panel disposals, there are a number of important areas of employment where it is necessary to disclose such an appearance as though it were a previous conviction.
      That is offensive to the spirit of the panel system, and has caused much anxiety to many of those who work hard to keep the system going. I am sure that all hon. Members agree that those people are doing valuable work.
      I was pleased to discover in Committee that many Conservative Members were appreciative of the children's panel system and the way in which it had developed. I
      1166
      referred to the fact that the Tory candidate in Coatbridge and Airdrie had made a campaign point of the success of the panels and said that Scotland was fortunate to have them. That is an important sea change in Conservative opinion, which I welcome because at best Conservative Members have been extremely grudging in the past.
      I hope that this good will will be translated into action and that the Minister will continue in the spirit of amendment No. 123 by looking at the wider issues to which I have referred.
      Mr. Robin F. Cook: I also welcome the amendment and warmly support the remarks of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about the Rehabilitation of Offenders Act.
      I am privileged to have in my constituency the headquarters of the Lothian children's panel, and I have regularly met the reporter and some of its members. I am well aware from my discussions with them that they are deeply concerned that the children's hearing system should have become entrammelled with the Rehabilitation of Offenders Act.
      It was never intended that an appearance before the children's hearing should constitute a conviction, and for the first three years of the system there was no question of such an appearance constituting a conviction. The question of a conviction arising became possible only with the passage of the Rehabilitation of Offenders Act.
      It is worth recalling that the insertion of the passage relating to the children's hearing system in Scotland occurred on Report, without any consultation with the children's panels, and the debate was perfunctory and consisted of two columns in Hansard on a Friday morning.
      I believe that on that occasion the House committed a fundamental error. There is no prosecution before a children's hearing, and it therefore logically follows that there can be no conviction.
      I have also seen the correspondence from the former Minister who had responsibility for social work in Scotland. The Minister claimed in that correspondence that it is fair to treat such an appearance as a conviction because an appearance can occur only when there is an admitted offence. An appearance before a children's panel does not necessarily mean that the child has admitted an offence. All it means is that the child has accepted that there are grounds for referral.
      The matter is well set out in a letter that I have seen from the chairman of the chairmen's group of the children's panel. He said:
      "As a result of this change it is now the case that a child may incur a conviction without benefit of Scottish court procedure, rules of evidence, opportunity for defence and the decisions of a judge or a sheriff, but may incur that conviction merely by accepting the grounds of referral drawn up by a reporter, not necessarily a lawyer, who considered that child in need of compulsory measures of care, possibly because of deficiencies in his family".
      I find it offensive that such an acceptance of grounds of referral should constitute a conviction.
      There is a second reason why I believe that the confusion between the children's panel system and the Rehabilitation of offenders Act is inappropriate. That Act necessarily involves a tariff of gravity of offence. That tariff of gravity is wholly irrelevant to the children's hearing process. The primary reason why a child may be brought before a children's hearing is not the gravity of the offence but the nature of the home background, and

      1167
      whether the child needs a supervision order. It is perfectly possible in the case of a child who has committed a trivial offence for the reporter to decide that that child should have a referral to the children's hearing because of the nature of the child's home background, and that background dictates the care for a supervision order.
      Conversely, it is possible where a child has committed a serious offence for the reporter to believe that there are no grounds for a supervision order, and where the matter can be dealt with himself, without the formality of a referral to a children's hearing. The effect of the Rehabilitation of Offenders Act is that the former case, which stands on a trivial offence, becomes a conviction, but the latter case, which may turn on a more serious offence, does not become a conviction. I find that offensive, because the only difference between the two cases may well be the assessment of the home background from which the child came.
      In my view, the House has committed a profound mistake in that addition to the Rehabilitation of Offenders Act. We have confused a system of offence—which the Act necessarily recognises—with a system of welfare, on
      1168
      which the children's hearing system turns. It would have been better if, during our proceedings on this Bill, we had had the opportunity to remedy the basic problem by accepting new clause 9, to which my hon. Friend the Member for Garscadden and I have attached our names. That new clause has not been selected, for reasons that I well understand. Nevertheless, although we shall not have the opportunity on this occasion to remedy that error, I am glad that at least we shall not compound that error by widening the scope of conviction under the Rehabilitation of Offenders Act, with the effect that what is recognised as not a real conviction but a notional conviction in front of the children's hearing, may become the basis of future real convictions under this clause.
      I therefore welcome the amendment, but I hope that the Government will look at the basic problem from which the amendment stems on a future occasion.
      Amendment agreed to.

    Clause 61
      POWERS OF SEARCH AND SEIZURE
      Amendment made: No. 180, in page 42, line 14, at end insert 'or'.—[The Solicitor-General for Scotland]
    Clause 62

      POWERS TO ENTER PREMISES ETC.
      The Solicitor-General for Scotland: I beg to move amendment No. 173, in page 42, line 19, leave out clause 62.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we are to take amendment No. 160.
      The Solicitor-General for Scotland: If I, as a Northern Member, may adopt a cricketing analogy, in Committee my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), in asking me what the hon. Member for Glasgow, Garscadden (Mr. Dewar) would have said was a naive question, simply took out my middle stump. It has taken me some time to recognise the difficulty that I was in, but, on close examination of the clause, it appears that the whole of it should be omitted. The hon. Member for Garscadden also said that it would be appropriate to do that, and I am happy to agree with him.
      Amendment No. 160 is consequent on that.
      Mr. Dewar: I imagine that having one's middle stump removed by the hon. Member for Aberdeenshire, East (Mr. McQuarrie) would be a painful process. It certainly does not do much for the dignity of the high office occupied by the Solicitor-General for Scotland. However, it is no doubt all useful experience.
      The amendment caused some puzzlement on the Labour Benches, because until recently, presumably as a result of a misprint, it appeared as "leave out clause 63". However, as long as the Minister is confident that it is clause 62 that he wishes to leave out, I am content with that.
      Amendment agreed to.

    Clause 65

      FUNCTIONS OF REGIONAL AND ISLANDS COUNCILS IN RELATION TO PROCESSIONS
      Amendments made: No. 126, in page 45, line 12, leave out
      'under section 64(1) to (4)'
      and insert
      'or falls to be treated as having been given in accordance with section 64(1)'.
      No. 127, in page 45, line 25, leave out
      'to them under section 64(1) to (4)'
      and insert
      'or falls to be treated as having been given in accordance with section 64(1)'.—[The Solicitor-General for Scotland.]

    Clause 66
      APPEALS AGAINST ORDERS UNDER SECTION 65
      Amendment made: No. 128, in page 46, line 14, leave out from 'appellant' to end of line 20.—[The Solicitor-General for Scotland.]
    Clause 69

      DUTY OF FINDER
      Mr. John MacKay: I beg to move amendment No. 129, in page 49, line 26 leave out 'railway stations,'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments No. 130 and 132, and amendment No. 195, in page 49, line 30 leave out 'or by contract'.
      Mr. MacKay: We have come to the part of the Bill that deals with lost property. Amendments Nos. 129 and 130 are needed partly to reflect a later amendment concerning British Rail, and partly to substitute the word "vessel" for "ship" to cover the possibility of a hovercraft service being operated in Scotland.
      We have looked again at the terms of the exemptions from this part of the Bill as set out in clause 69(2). We remain convinced that the present arrangements for handling lost property on trains, buses and aircraft operate satisfactorily and should not be disturbed.
      However, as the clause is drafted, I concede that the words "or by contract" may allow a variety of transport operators, albeit mainly operating on a small scale, to make their own rules for handling lost property. The words "or by contract" were intended to cover the circumstances of British Rail, which handles lost property under its conditions of carriage. Those arrangements are well understood and work satisfactorily.
      Amendment No. 132 specifically exempts British Rail instead of resting on the more general reference "or by contract". The amendment thereby removes the possibility of the law being exploited by unscrupulous transport operators who ply their trade on a contractual basis and continues to allow British Rail to operate its lost property service in the way that it has always done.
      Mr. Dewar: The words "leave out railway stations" have a splendid ring.
      The Minister knows the views of the Labour Party, and I shall not labour the point. However, we find it disappointing that he has not been able to look more seriously at the Law Commission's suggestion that there should be a comprehensive approach to the problem of lost and found property. I still think that it will be confusing for people to follow one system if they lose property in a street and a wholly different system if they lose property on a bus or a train. However, I recognise that the Minister will not go back on that now and that we shall have to make the best of the split system.
      10.45 pm
      From the Minister's remarks—for which I am grateful—I take it that by removing the words "or by contract" we stop any private firm from contracting out and starting its own system by using the small print on the back of a ticket. I also take it that British Rail is the only exception. It is in a category of its own. As the Minister said, it is a fairly well understood entity that runs a system with which we are familiar.
      In that sense, the amendment is helpful. However, it is only improving a situation that remains basically unsatisfactory. The Government were not right to reject the advice offered to them by the Scottish Law Commission in its well thought out and comprehensive report. However, we shall have to let the matter rest there.
      Amendment agreed to.
      Amendments made: No. 130, in page 49, line 27, leave out 'train, ship' and insert 'vessel'.
      No. 132, in page 49, line 30 leave out 'or by contract' and insert—
      '(aa) property found on the premises of, or used by, the British Railways Board or on any vehicle, train, or vessel used by the Board'.—[Mr. Allan Stewart.]

    Clause 70

      FUNCTIONS OF CHIEF CONSTABLE
      Mr. John MacKay: I beg to move amendment No. 133, in page 50, line 30, leave out
      `sell or otherwise dispose of the property'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 134 to 136.
      Mr. MacKay: Amendments Nos. 133 and 134 clarify the decisions which are open to the chief constable in determining the fate of unclaimed property. We had a debate on the matter in Committee and the amendments clarify the position in the manner suggested.
      The amendments require the chief constable in normal circumstances to offer any lost property to the finder before proceeding to sell it. Where the chief constable does not believe that it is worth while trying to sell it, he may dispose of it in some other way. That ensures that the police have due regard to the position of the finder and it is hoped that the amendment will further encourage finders to hand in lost property.
      I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar), who suggested a similar refinement in Committee.
      Amendment No. 135 also arises out of a debate in Committee and I have gone some way towards meeting the points made by the hon. Member for Garscadden and by my hon. Friend the Member for Perth and East Perthshire (Mr. Walker). We have considered carefully the question of lowering the limit for the payment of compensation. We are convinced that a substantial figure is desirable to avoid imposing on the police a fresh administrative burden in processing claims for compensation.
      On the other hand, it is certainly not our wish to confine the advantages of compensation arrangements to the more affluent groups in our society. It is obviously a question of striking the right balance between fairness to the loser and administrative practicality. The amendment, which will replace the sum of £250 with £100, shifts the balance significantly towards the loser.
      Amendment No. 136 is my hat trick in terms of making at least some concessions to the points raised in Committee. The amendment arises from the misgivings about clause 76 expressed in Committee by some of my hon. Friends. On looking at the matter again, we concluded that there could be a disadvantage to farmers if animals on unfenced roads were regarded as strays and were thereby subject to the terms of clause 76. We decided that it would be desirable to exempt livestock altogether. That means that the chief constable would not normally consider allowing the finder of a stray sheep to take the beast home and care for it.
      The thrust of the Scottish Law Commissin's arguments for clause 76 was that other animals should be treated in
      1172
      a similar way to dogs. That analogy is probably all right for living creatures that can be regarded as pets. However, some of the Opposition Members who fancied going round the unfenced roads of Berwickshire—as I see that the hon. Member for Berwick and East Lothian (Mr. Home Robertson) is amused—and of Argyll seeing how many stray sheep they could find will be disappointed.
      Mr. Foulkes: There is one on the Government Front Bench.
      Mr. MacKay: The hon. Member for South Ayrshire (Mr. Foulkes) could spend many happy hours—happy for the rest of us too—looking round the highways and byways of Argyll for stray sheep on unfenced roads.
      Seriously, the exemption of livestock is sensible and does not represent a significant departure from the principles underlying the clause.
      Mr. Dewar: I thank the Minister for amendment No. 135, which is important. One of the innovations in the new lost and found property system is a compensation fund. It is a valuable innovation. The value was almost completely destroyed by the Government's decision that the only people entitled to compensation would be those who had lost property over a value of £250. Almost everyone in the Committee, and also an uncomfortable Minister, thought that that was a ludicrously high figure. I have seldom seen the Minister, except on one occasion, which was during the inquiry into the Gourock-Dunoon ferry, looking more discomfited. I am glad that he has managed to persuade his superiors that that ceiling should be reduced to £100. That makes the compensation seem more valuable. Although we are trying to hurry to a conclusion, I should express the Opposition's thanks for that change.
      Amendment agreed to.

    Clause 70

      FUNCTIONS OF CHIEF CONSTABLE
      Amendment made: No. 134, in page 50, line 33, leave out 'but shall not do so' and insert
      `having regard to the whole circumstances including the nature and value of the property and the actings of the finder, offer it to the finder under section 72(1)(b) of this Act or, if in his opinion so to offer it would be inappropriate, may sell it or, if in his opinion it would be both inappropriate so to offer it and impracticable to sell it, may dispose of it or make arrangements for its disposal otherwise as he thinks fit; but he shall not do any of these things'.—[Mr. John MacKay.]

    Clause 74
      RIGHTS TO COMPENSATION
      Amendment made: No. 135, in page 52, line 14, leave out '250' and insert '100'.—[Mr. John MacKay.]
    Clause 76

      LIVING CREATURES
      Amendment made: No. 136, in page 52, line 38, after `dog', insert
      `or livestock (which expression shall have in this section the same meaning as it has for the purposes of section 130 of this Act)'.—[Mr. John MacKay.]

    Clause 81

      INTERPRETATION OF PART VI
      Amendment made: No. 137, in page 54, line 23, at end insert
      'and includes a constable acting under his direction for the purpose of this Part of this Act'. — [Mr. John MacKay.]

    Clause 89

      INSTALLATION OF PIPES THROUGH NEIGHBOURING PROPERTY
      Amendment made: No. 138, in page 57, leave out line 46 and insert
      'pipes, or soil, waste or rainwater drains or drain ventilating pipes; or.'.—[Mr. Allan Stewart.]

    Clause 90

      SAFETY OF ROOFS, PLATFORMS ETC.
      Mr. Allan Stewart: I beg to move amendment No. 139, in page 58, line 38, leave out 'roof'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 140 to 142.
      Mr. Stewart: These amendments have the effect of confining applications of the clause to temporary structures only, following discussion on that point in Committee.
      Amendment agreed to.
      Amendments made: No. 140, in page 58, line 39, leave out 'balcony'.
      No. 141, in page 59, line 30, leave out from 'structure' to 'in' in line 31.
      No. 142, in page 59, line 33, leave out first such'.—[Mr. Allan Stewart.]

    Clause 120

      REGULATION OF CHARITABLE COLLECTIONS
      Amendment made: No. 146, in page 80, line 15, leave out from 'reasons' to end of line 21.—[Mr. Allan Stewart.]
      Mr. John MacKay: I beg to move amendment No. 143, in page 80, line 21, at end insert—
      '(9A) In upholding an appeal under subsection (9) above, the sheriff may—

      (a) remit the case with the reasons for his decision to the district or islands council for reconsideration of their decision; or

      (b) reverse or alter the decision of the district or islands council.'.

      In Committee the hon. Member for Glasgow, Garscadden (Mr. Dewar) asked why the appeals provision in clause 120 gave no guidance to the sheriff as to the method of disposal. The amendment honours my undertaking to reconsider that issue.
      Amendment agreed to.
      Mr. John MacKay: I beg to move amendment No. 144, in page 80, line 26, leave out 'subsections (1) to (9)' and insert 'subsection (1)'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 145.
      Mr. MacKay: This amendment deals with the provision for national charities and arises from arguments
      1174
      developed in Committee by the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Stirling, Falkirk and Grangemouth (Mr. Ewing).
      I have considered carefully the hon. Members' representations to the effect that the provision for exemption for national charities was too widely drawn. It had been our intention to rely on strengthened administrative directions to all exempt charities to give islands or district councils adequate notification of collection dates, but hon. Members argued persuasively that that was not sufficient and that a more immediate requirement to inform local authorities should be placed on exempt charities. At present, exempt charities are not statutorily required to notify unless such notification is one of the conditions attached to their exemption under the terms of subsection (10).
      Amendment No. 145 effectively reverses the onus of responsibility, providing that a charity must give at least three months' notice of its intention to collect in any district or islands council area unless the Secretary of State otherwise directs.
      Amendment No. 144 makes a consequential and technical change in the numbering in subsection (10). I am sure that the House will welcome the amendments.
      Amendment agreed to.
      Amendment made: No. 145, in page 80, line 28, at end insert—
      '(10A) Notwithstanding the provisions of subsection (10) above, any person who has been exempted from subsection (1) above by a direction of the Secretary of State under subsection (10) above shall, unless the Secretary of State otherwise directs, give to the district or islands council in whose area he intends to organise a public charitable collection 3 months notice of that intention.
      A direction under this subsection may be revoked or amended by a further direction so made.'.—[Mr. John MacKay.]

    Clause 121
      SAVINGS FOR CROWN AND OTHER RIGHTS
      Amendment made: No. 147, in page 81, line 14, leave out paragraphs (a) and (b).—[Mr. John MacKay.]
    Clause 122

      CONTROL OF THE SEASHORE, ADJACENT WATERS AND INLAND WATERS
      Amendment made: No. 148, in page 81, leave out from beginning of line 27 to end of line 5 on page 82 and insert—
      `122.—(1) Insofar as it is necessary to do so for the purpose of preventing nuisance or danger at, or preserving or improving the amenity of, or conserving the natural beauty of, the seashore, a district or islands council may, in accordance with this section, make byelaws—

      (a) regulating or prohibiting any activity by way of trade or business with, or in expectation of personal reward from, members of the public on the seashore;

      (b) regulating the use of vehicles on the seashore;

      (c) regulating the exercise of sporting and recreational activities on the seashore.

      (1A) Byelaws under subsection (1) above may confine the exercise of any activity (including the use of vehicles or kinds of vehicles) specified in the byelaws to a part of the seashore specified in the byelaws and prohibit the exercise in that part of the seashore of any other activity (including such use) so specified.'.
      No. 149, in page 82, line 6, leave out from "may" to end of line 7 and insert ", in accordance with this section,".
      No. 150, in page 82, line 19, at end insert:

      "(2A) A district or islands council may make, in relation to inland waters, byelaws for the same purposes as they may, under subsections (1) and (2) above, make byelaws in relation to the seashore and adjacent waters.

      (2B) Byelaws may be made under this section only if—

      (a) the district or islands council have complied with subsection (2C) below and made such other inquiries as may be reasonably necessary to ascertain the existence and identity of each person having—

      (i) in the case of byelaws under subsection (1) above, a proprietorial interest in the seashore;

      (ii) in the case of byelaws under subsection (2) above, a proprietorial interest in relation to the adjacent waters;

      (iii) in the case of byelaws under subsection (2A) above, a proprietorial interest in or in relation to the inland waters; and

      (iv) in any case, a proprietorial interest in any salmon fishings;

      being a proprietorial interest which may be affected by the byelaws;

      (b) subject to subsection (2D) below, every person whose consent is required under paragraph (a) above has consented to their being made; and

      (c) the district or islands council have, in connection with their proposal to make the byelaws, consulted such person or body, if any, as appears to them to be representative of persons who engage in each sporting or recreational activity which may be affected by the byelaws.

      (2C) The district or islands council shall give public notice of their proposal to make byelaws under this section and of the effect of subsection 2B(b) above in relation to that proposal in a newspaper circulating in the area where the byelaws are proposed to have effect.

      (2D) If a district or islands council have complied with subsections (2B)(a) and (2C) above, but the consent of a person whose consent is required under this section cannot be obtained because his existence or identity is unknown, or he cannot be found or fails to respond in any way to a request for his consent, the council may nevertheless proceed to make the byelaws but shall not proceed earlier than one month after the date of the advertisement under subsection (2C) above or, if there were more than one advertisement, the later or last of those dates.".

      No. 151, in page 82, line 20, leave out from "under" to "may" in line 21 and insert "this section".
      No. 152, in page 82, line 30, leave out subsection (4).
      No. 153, in page 83, line 1, leave out subsection (7) and insert—
      `( ) A district or islands council, when exercising their powers under this section, shall have regard to the need to protect and maintain any public rights under the guardianship of the Crown to use the foreshore, adjacent waters or, as the case may be, inland waters.'.
      No. 154, in page 83, line 9, leave out clause 123.—[Mr. John MacKay.]

    Clause 124

      INTERPRETATION OF SECTIONS 121 TO 123
      Amendments made: No. 155, in page 83, line 43, at beginning insert `(1)'.
      No. 170, in page 84, line 11, at end insert '"proprietorial interest" means the interest of a proprietor or lessee;'.—
      No. 157, in page 84, line 22, at end insert—
      `(2) Sections 121, 122 and [Power to execute works on seashore] of this Act and this section shall apply to Crown land, that is to say, land an interest in which belongs to Her Majesty in right of the Crown or belongs to a government department or is held in trust for Her Majesty for the purposes of a government department and, for the purposes of giving or withholding consent under these sections in relation to such land, the appropriate authority shall be—

      (a) in relation to land an interest in which belongs to Her Majesty in right of the Crown and is within the administration of the Crown Estate Commissioners, these Commissioners;

      (b) in relation to land an interest in which belongs to a government department or is held in trust for Her Majesty for the purposes of a government department, that department;

      and, if any question arises as to the authority which is the appropriate authority in relation to any Crown land the question shall be determined by the Treasury.'.—[Mr. John MacKay.]

    Clause 129

      CONTROL OF STRAY DOGS
      Mr. Allan Stewart: I beg to move amendment No. 158, in page 86, line 35, at end insert—
      '(1A) For the purpose of extending the powers under section 3 of the Dogs Act 1906 of seizure and detention of stray dogs to those found on land or premises other than highways or places of public resort, the said section 3 shall be amended as follows—

      (a) in subsection (1), after the word "resort", there shall be inserted the words "or on any other land or premises";

      (b) after the said subsection (1) there shall be inserted the following subsection—

      "(1A) The powers under subsection (1) above shall not be exercised in relation to any dog found on any land or premises other than a highway or place of public resort unless the owner of the land or premises or person having the right of possession thereof has consented to such exercise.".'.
      This amendment makes it clear that dog wardens can take possession of a stray on private ground provided that the owner of the ground consents.
      Mr. Dewar: I recognise here a fragment of the COSLA proposals. As everyone has been thanked by everyone else today, we should all unite in thanking COSLA for making the original suggestion and the Minister for adopting it.
      Amendment agreed to.

    Clause 132
      CROWN RIGHTS
      Amendment made: No. 159 in page 88, line 15 leave out Clause 132.—[Mr. Allan Stewart.]
    Schedule 3

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendment made: No. 186, in page 127, line 43, leave out '60' and insert '58'.—[Mr. Allan Stewart.]
      Mr. Allan Stewart: I beg to move amendment No. 187, in page 127, line 44, at end insert—

      MINOR AND CONSEQUENTIAL AMENDMENTS

        'The Breeding of Dogs Act 1973 (c. 60)
        In the Breeding of Dogs Act 1973—
        (a) after the word "breeding" in each place where it occurs, except in sections 5(2), 6 and 7, there shall be inserted the words "or rearing";
        (b) in section 5(2) (interpretation), for the definition of "breeding establishment" there shall be substituted the following definition—
        "'breeding or rearing establishment' means any premises (including a private dwelling) where more

        1177
        than two bitches are kept for the purposes of breeding for sale or where a business of rearing puppies for sale is carried on'; and
        (c) in section (6) (transitional), after the word "Act", where secondly occurring, there shall be inserted the words "or the date when it first applied to the rearing of puppies" and after the word "breeding" there shall be inserted the words "or, as the case may be, rearing.".'
        Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 188.
        Mr. Stewart: Amendment No. 187 extends the scope of the Breeding of Dogs Act 1973 in so far as it relates to Scotland to cover puppy farms—that is, establishments where puppies bred elsewhere and brought in are reared for commercial sale. The hon. Member for Glasgow, Garscadden (Mr. Dewar) raised this in Committee and I am glad to be able to respond so positively.
        Amendment No. 188 enables local authorities to provide financial assistance under the repairs grant scheme towards the cost of such proportion of repair work carried out in tenemental properties as is attributable to a commercial proprietor where the works are necessary to rectify defects specified in a notice issued by the authority under section 24(1) of the Housing (Scotland) Act 1969. This has been a long-standing anomaly and a source of concern to a number of hon. Members.
        I commend the amendments to the House.
        Mr. Dewar: This is a most remarkable grouping. I say that in no uncharitable spirit, Mr. Deputy Speaker. Indeed, perhaps there should be the odd surprise package in every selection. The connection between breeding bitches and suckling puppies and the problems of tenement properties in Glasgow is certainly not immediately obvious.
        On amendment No. 187, I intend, mercifully, to say nothing, except to welcome the proposals, which are culled from section 19 of the report of the working party on dogs to which reference was made earlier, although I am sure that my hon. Friend the Member for Glasgow, Provan (Mr. Brown) will be following me in.
        I shall, however, delay the House for a few minutes on the very last amendment—No. 188. As the Minister has said, it deals with a proposition of considerable importance. It is vital that we understand exactly what is being done and how far the Minister is prepared to go.
        My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) has been in correspondence with the Minister. A letter from the Minister dated 22 July sets out at least some of the matters covered by the amendment No. 188. In so far as I can understand it, the proposal is that repair grants will now be available to the proprietors of shops in tenement property. I agree that that is a matter of real importance..I wish to understand this fully. Am I right in saying that it does not extend to improvement grants?
        11 pm
        Like many other hon. Members, I have a housing association in my constituency. One of the banes of the housing association is that it has a housing action area with a improvement programme within it where it is taking old tenements and knocking them into shape—perhaps converting three flats into two and producing decent living units—but the costs of doing so are extremely heavy. They are largely financed by the Housing Corporation, or, if there are owner occupiers, among the flat occupiers, those owner occupiers are entitled to receive improvement grants which help a great deal with the burden of the costs.
        1178
        Those who own the shops may find that the have to bear a large percentage of the cost because it may be calculated on a rateable value basis. The rateable value, as commercial property, will be extremely high. Therefore, it can happen that a number of shopkeepers—perhaps not men of substance because not all shops are banks or multiple chain grocery shops, but small family businesses—cannot face the expense of contributing their share to the improvement programme. This is a problem on which many a scheme has foundered, as I know from personal experience and from talking to many people working in housing associatons.
        Am I correct in thinking—this is important—that that problem will not be dealt with by amendment No. 188? If not, why not? I do not say that in a hostile spirit. I appreciate that the Minister is giving a welcome and important concession but if he could go that little bit further or at least promise to consider dealing with the problem, he would be doing something of real value to the housing association movement, and, equally important, to a large number of small shopkeepers who are caught in the embarrassing position that I have described.
        The final paragraph of letter to which I referred stales:
        "What will not be possible under the provisions in the Bill will be for grant to be paid to non-residential proprietors at the usual rate of 75 per cent. which applies to housing improvement and repair works in the housing action area. The reason for this is quite simply that the payment of any grant in such cases is generally contingent on the houses reaching the standard specified in the housing action area resolution, a standard which, by definition, a non-residential property cannot attain."
        That seems to be a technical impediment. I should perhaps be relieved that the Minister did not say that the Government could not afford it. He has not said that; he has relied on the technicality that a shop cannot reach the proper standard because, by definition, it is a shop and therefore it is disqualified from reaching that standard. That is daft and an almost Alice-in-Wonderland position. I hope that the Minister will not think it ungracious if I press him hard on this issue and ask him to consider going beyond the present narrow concession which is merely for repair grants which can amount to 50 per cent. and which will help many shopkeepers. But if he can go a litle further to include improvement grants and get over the technicalities to which I have referred. Perhaps it would be thought too undiscriminating and that people who did not need that type of financial aid would benefit from it—banks, multiple shops and so on. If so, it should not be beyond the wit of man to include a screening process, or a discretionary element in the payment of the grant that would take care of that point.
        We have important schemes where crumbling tenements that can be saved and should be saved and where there is a willingness to save them, are being placed in continuing jeopardy because of the genuine and fundamental difficulties of the small shopkeeper situated in the block. This was a splendid chance to tackle that problem. It appears that the Minister has not taken it. I hope that he will be prepared to reconsider.
        Mr. Deputy Speaker: Before I call the next hon. Member, I note the comment of the hon. Member for Glasgow, Garscadden (Mr. Dewar). It is a rather strange grouping. Would it be for the convenience of the House if we took the amendments separately?
        Hon. Members: Aye.
        Mr. Deputy Speaker: Then let us dispose first of No. 187.
        Amendment agreed to.
        Amendment proposed: No. 188, in page 127, line 44, at end insert—

        'The Housing (Scotland) Act 1974 (c.45)
        In section 10A of the Housing (Scotland) Act 1974 (repairs grant), after subsection (5) there shall be added the following subsection—
        "(6) References in this section to a house shall, in relation to an application made under this section for a grant in respect of works which are to rectify defects specified in a notice under section 24(1) of the Housing (Scotland) Act 1969, be construed as including references to premises other than a house; but where such an application relates to such premises—

        (a) the local authority shall not, under subsection (2) above, approve the application unless they are satisfied that the premises form part of a building which contains a house or houses and that house or, as the case may be, all these houses will provide satisfactory housing accommodation as mentioned in that subsection;

        (b) subsection (4) above shall be construed as if the reference in it to each house were a reference to each of the premises other than a house; and

        (c) subsection (5) above shall be construed as if the enactments excepted by that subsection included sections 3(2) to (5), 9(1), (2), (6), (8) and (9) and 10 of this Act".'.—[Mr. Allan Stewart.]

        Mr. Hugh D. Brown: I did not really want to speak to amendment No. 187. The only justification for linking the amendments is their relationship to the end of schedule 3.
        The Minister has been rather cursory in proposing this important amendment. It is unfair that a matter of such importance should be dragged in at the tail end of the consideration of a Bill withwhich it has no connection. This has been done for convenience only, and it is a shame that the matter should have to be dealt with at this time of the night. It deserves much more study than we shall be prepared to give it tonight.
        Am I right in assuming that the amendment extends the provisions that apply to houses to commercial properties, including shops? If that is so, am I right in thinking that discretion lies with the local authority to use the powers that will be provided? What are the amounts of grant that can be paid, and will there be an income test? I want to protect my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), because when he is a Minister he might have to argue against some of the things for which he is arguing now. We should not rush to accept the theory of giving improvement grants to commercial properties without much more study of the matter.
        We are going along the road of giving repair grants to commercial interests without providing a definition. Will there be an income test, or will discretion lie entirely with the local authority? Will there be grounds for appeal if the local authority decides in certain circumstances that it will not provide a grant? What is the total cost likely to be for local authorities, bearing in mind the strictures that we have had today about containing public expenditure? Has any attempt been made to cost this scheme, and what will be the burden on the Government? I assume that this has been done with the blessing and consent of COSLA, the SSHA and housing associations.
        Am I right in assuming that this proposal has nothing to do with the funds of housing associations? If any expenditure is involved, will it be for the district authority and the Government to meet it? I have recollections of the
        1180
        hon. Member for Southend, East (Mr. Taylor)—when he had ministerial responsibilities he was the hon. Member for Glasgow, Cathcart—complaining bitterly about the thought of giving public money to commercial undertakings that had not proved need. As we are accepting a rather unusual principle from the Government, who believe in monetarist policies and who do not want to subsidise lame ducks, I think that we should have more information from the Minister than we have had so far.
        Mr. Allan Stewart: I am glad to have the opportunity to spell out the provisions in rather more detail. I accept what the hon. Member for Glasgow, Garscadden (Mr. Dewar) said about the importance of the general problem. This is a limited change, which I hope the House will welcome. It is limited to repair grants. A research study has been undertaken and we hope to publish its findings in September. I recognise what the hon. Gentleman said about improvement grants and commercial properties. That is something that has been raised with me by representatives of the housing association movement. As the hon. Member for Glasgow, Provan (Mr. Brown) rightly said, a range of issues will not be affected by the limited change that we have been able to bring forward.
        I can confirm to the hon. Member for Provan that these are discretionary grants, except in cases subject to a repairs notice, where the grant will be mandatory. I can also confirm that the grants are subject to a needs test.
        The hon. Gentleman also asked about consultation with COSLA. We have not had consultations on this matter, although I believe that they would be welcomed.
        Mr. Frank McElhone: I am interested to hear the Minister talk about a needs test. I was not aware of that in the context of the letter that he wrote concerning small shopkeepers in my area. How will the test work? Is the discretionary factor intended to ensure that banks, betting shops and others do not make use of public money when they do not need it? I shall be interested to hear how the Minister will assess need.
        Mr. Stewart: We are talking about an existing system which is being applied to particular owners who do not receive the benefit offered at present. We are talking in the context of tenement property. There is no fundamental change to the system. We are talking of a limited change. I hope that it will be welcomed.
        Mr. McElhone rose—
        The Deputy Speaker: I think that the Minister has sat down.
        Mr. McElhone: May I prevail upon the Minister?
        The Deputy Speaker: Order. I think that the Minister has sat down. I must, therefore, put the Question.
        Amendment agreed to.

    Schedule 4

      REPEALS
      Amendment made: No. 160, in page 129, leave out lines 2 to 5.—[Mr. Allan Stewart.]
      Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified]
      Motion made, and Question proposed, That the Bill be now read the Third time.
      11.13 pm
      Mr. Bruce Millan: The House will be glad that I do not intend to make a lengthy speech. I recall paying tribute on Second Reading to the work that had been done on the Bill in the other place particularly by Lord Ross of Marnock, who suggested a number of improvements. It would be remiss of hon. Members to allow the Bill through on Third Reading without mentioning the tremendous amount of work done by a number of hon. Members in Committee. Some of the results of that work have appeared in the Government amendments discussed today. In many respects, the Bill is hardly recognisable as the measure that originally entered the other place.
      I wish to pay tribute especially to my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Stirling, Falkirk and Grangemouth (Mr. Ewing). I do not believe that those hon. Members who served on the Committee will feel it invidious if I single out for special mention my hon. Friend the Member for Garscadden who, I understand, kept the Committee going more or less happily—I do not know how happily—for many meetings. My hon. Friend produced a large number of arguments and ideas. Many of them have been incorporated into the Bill.
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      My hon. Friend the Member for Stirling, Falkirk and Grangemouth also contributed to what I believe is a far better, but by no means perfect, Bill. I suspect that each piece of Scottish legislation from now on will have minor and consequential amendments to the Civic Government (Scotland) Act as part of its schedules.
      11.14 pm
      The Secretary of State for Scotland (Mr. George Younger): I appreciate what the right hon. Member for Glasgow, Craigton (Mr. Millan) said, and I hope that the House will give the Bill a. Third reading. It is highly appropriate that such a complicated measure should have been examined so thoroughly by the House and I pay tribute to those hon. Members on both sides of the House who have taken many hours to try to make it a better Bill. It is a better Bill than when it started. That is the right way for the House to approach such Bills. It will be of good service in the future and I agree with the right hon. Gentleman that it will probably be amended on other occasions.
      Question put and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

  Local Government and Planning (Scotland) Bill
  Lords amendments considered.
  Local Government and Planning (Scotland) Bill
    New Clause A

      VALUATION OF AND REDUCTION AND REMISSION OF RATES PAYABLE IN RESPECT OF COMMUNAL ACCOMMODATION FOR SINGLE PEOPLE
      Lords amendment: No. 1, after clause 4, insert—
      "A.—(1) In section 4 of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 (which provides for reduction and remission of rates payable by charitable and other organisations)—

      (a) in subsection (2)—

      (i) after paragraph (b) there shall be inserted the words—

      "; or

      (c) are within any such category as the Secretary of State may by order specify, being a category of lands and heritages which are not used for profit making purposes, which are wholly or mainly used as residential accommodation for person living separately from any family and in which certain facilities are shared by those persons,";

      (ii) after the words "described in" there shall be inserted the word "—(i)"; and

      (iii) after the words "one-half" there shall be inserted the following sub-paragraph—

      "(ii) paragraph (c) of this subsection shall not exceed such fraction (and different fractions may be specified for different cases) as the Secretary of State may by the said order specify,";

      (b) in subsection (5)(a), for the words "or (b)" there shall be substituted the words "(b) or (c)"; and

      (c) at the end there shall be added the following subsection—

      "(12) An order under subsection (2)(c) of this section shall have no effect until approved by resolution of each House of Parliament.".
      (2) Where the Secretary of State has power under paragraph (c) of section 4(2) of the said Act of 1962 (the which paragraph is inserted by subsection (1) above) to specify a category of lands and heritages he may instead or in addition prescribe a method whereby the values of, or of certain of, those lands and heritages are, for the purpose of making up any valuation roll, to be ascertained.
      (3) Prescription under subsection (2) above shall be by order made by statutory instrument; and such order shall have no effect until approved by resolution of each House of Parliament."
      11.15 pm
      The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move, That this House doth agree with the Lords in the said amendment.
      Hon. Members will recall our discussion in Committee about rating relief for communal accommodation for single persons. The hon. Member for Glasgow, Garscadden (Mr. Dewar) tabled an amendment which was withdrawn after ministerial assurances that the matter was being actively considered. We have been aware of the problem for some time and we have brought forward this enabling provision which I am sure will be welcomed, especially by the Scottish Council for the Single Homeless and the housing associations.
      Mr. Bruce Milan: We welcome the amendment. As the Minister said, there is a history to
      1184
      it and we tried in previous legislation to have something similar. The Scottish Council for the Single Homeless, and Mr. Naumann of that council, made representations two or three years ago. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pursued them, together with other hon. Members. This is a useful provision. It requires an order from the Secretary of State to implement the provision. Can the Minister tell us the Government's intentions?
      Mr. Allan Stewart: I am grateful to the right hon. Gentleman for his remarks. He is right to say that we need an order. We must have consultations first, and we have arranged a meeting in August. We must consult COSLA and the Scottish Valuation Advisory Council. I hope that we shall have an order for consideration by the House early in the next Session.
      Question put and agreed to.

    Clause 5

      EFFECT OF SPECIFIC POWER OR DUTY TO INCUR EXPENDITURE AT ONE TIER OF LOCAL GOVERNMENT ON EXERCISE OF GENERAL SUCH POWER AT DIFFERENT TIER
      Lords amendment: No. 2, in page 5, line 12, leave out "are" and insert "is"
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment is the result of a lesson in grammer delivered in another place by a noble Lord, whose talents as a schoolmaster are well known to many hon. Members in this House.
      Question put and agreed to.

    New Clause B

      POWER OF LOCAL AUTHORITY TO ENTER INTO ARRANGEMENTS UNDER EMPLOYMENT AND TRAINING ACT 1973
      Lords amendment: No. 3, after clause 6, insert—
      "B. Every local authority shall have power and shall be deemed always to have had power to enter into arrangements with the Manpower Services Commission or the Secretary of State under the provisions of the Employment and Training Act 1973."
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment has the effect of placing beyond doubt the fact that local authorities have the power, and have always had it, to enter into arrangements with the Manpower Services Commission or the Secretary of State, under the Employment and Training Act 1973, to run schemes providing temporary employment and training for the unemployed under the Government's special employment and training measures.
      Question put and agreed to.

    Clause 9

      ISLANDS OR DISTRICT COUNCIL'S FUNCTIONS IN RELATION TO TOURISM
      Lords amendment: No. 4, in page 9, line 13, after "After" insert "the said"
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.

      1185
      This is a technical drafting amendment.
      Question put and agreed to.

    New Clause C

      POWER OF LOCAL AUTHORITY TO MAKE AN ADVANCE FOR THE ACQUISITION OF LAND OR ERECTION OF BUILDINGS
      Lords amendment: No. 5, before Clause 47, insert the following new clause:
      "C. In section 7 of the Local Government (Development and Finance) (Scotland) Act 1964 (which empowers a local authority to make an advance for the erection of a building on land sold, feued or let by them)—

      (a) for subsection (1) there shall be substituted the following subsection—

      "(1) Where a local authority are satisfied that it would be for the benefit or improvement of their area they may, subject to the provisions of this section advance money to any person for the purpose of enabling him either—

      (a) to acquire any land; or

      (b) to erect any building or carry out any work on land."; and

      (b) for subsection (3) there shall be substituted the following subsection—

      "(3) The amount of the principal of an advance shall not exceed nine-tenths of—

      (a) where the advance is made under subsection (1)(a) above, the value of the land; or

      (b) where the advance is made under subsection (1)(b) above, the value which it is estimated will be the value of the land on the completion of the building, or as the case may be works,

      in respect of which the advance is made."."
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Lords amendment No. 6.
      Mr. Stewart: Lords amendment No. 5 is a straightforward amendment designed to bring the loan-making power of Scottish local authorities up to that recently agreed for their counterparts in England. Lords amendment No. 6 was introduced on Report in another place in response to requests from the Opposition and the Convention of Scottish Local Authorities. It will make it clear to local authorities that section 83 can be used to assist financially persons carrying on industrial and commercial undertakings. It will clarify the fact that the limit on total expenditure incurred under the provision in any financial year is the product of a rate of 2p in the pound calculated net of certain items specified in the amendment.
      Mr. Millan: I do not follow the grouping of the amendments. Amendments Nos. 5 and 6 seem to have nothing in common. I thought that the Minister had passed to amendment No. 7 at the end of his remarks.
      Amendment No. 5 is useful and we welcome it. We also welcome amendment No. 6 which deals with fire escapes. That is another matter that was drawn to the Government's attention by the Scottish Council for the Single Homeless. I understood that amendments Nos. 12 to 15 related to amendment No. 6 and not amendment No. 7. Amendment No. 12 mentions fire escapes and, presumably, is related to amendment No. 6.
      I do not mind whether the Minister explains amendment No. 13, which is incomprehensible, now or in the next
      1186
      group of amendments with which it has nothing in common. When I first read amendment No. 13 it appeared to be full of misprints. I have read it several times more and it still appears to be full of misprints. Perhaps the Minister will clarify it in due course.
      Mr. Deputy Speaker: A point of order was not raised, but it is a matter for the Government to group the amendments.
      Question put and agreed to.
      Lords amendment No. 6 agreed to.

    New Clause E

      GRANTS WHERE LOCAL AUTHORITIES REQUIRE PROVISION OF FIRE ESCAPES FOR HOUSES IN MULTIPLE OCCUPATION
      Lords amendment: No. 7, after clause 47, insert:
      "E.—(1) After section 10A of the Housing (Scotland) Act 1974 there shall be inserted the following section—
      'Grants for fire escapes for houses in multiple occupation.
      10B.—(1) Subject to the provisions of this section, where a local authority have served on any person, other than a public body, a notice under section 107 of the Housing (Scotland) Act 1966 (which empowers a local authority to require the provision of a means of escape from fire in a house in multiple occupation) they shall make a grant to that person in respect of—

      (a) the works specified in the notice; and

      (b) any other works required in connection with the works so specified,

      if an application for such grant is made by him in accordance with the provisions of this section and approved by the local authority.
      (2) A local authority shall not approve an application under this section unless they are satisfied that at the time of completion of the works to which the application relates the house will be in reasonable repair (disregarding the state of internal decorative repair) having regard to its age, character and location.
      (3) Where a local authority approve an application under this section they shall determine the maximum amount of expenses which they think proper to be incurred for the relevant works; but so much of such amount as relates to works referred to in—

      (a) paragraph (a) of subsection (1) above shall not exceed £6,750 or such other amount as may be prescribed;

      (b) paragraph (b) of that subsection shall not exceed £2,500 or such other amount as may be prescribed.

      (4) Subject to subsection (5) below, the amount of grant payable under subsection (1) above in relation to any application shall be 75 per cent. of the maximum amount determined under subsection (3) above in relation thereto or such other percentage of that maximum amount as may be prescribed.
      (5) If, in any case, it appears to the local authority by whom the application is approved that the applicant will not without undue hardship be able to finance the cost of so much of the work as is not met by the grant, they may, as regards that case, increase

      1187
      the percentage referred to in subsection (4) above to such percentage, not exceeding 90 per cent., as they think fit.
      (6) Sections 2 and 4 to 10 of this Act (other than section 4(3)(b), section 5(1), (1A), (3), (3A), (5) and (6) and section 7) shall apply to an application for a grant under subsection (1) above as they apply to an application for an improvement grant, except that for the purposes of such application the reference to "section 5(1) or, as the case may be, 7(4)"in section 6(1)(b) shall be construed as a reference to subsection (4) or, as the case may be, (5) of this section.
      (7) In subsection (1) above "public body" means a regional, islands or district council or such other body as the Secretary of State may by order specify.".
      (2) In subsection (1) of section 107 of the Housing (Scotland) Act 1966 at the end there shall be added the words"; and it shall serve a notice under the foregoing provisions of this subsection if such house is of such description or occupied in such manner as the Secretary of State may, with the consent of the Treasury, specify by order a draft of which has been approved by the Commons House of Parliament."."
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 12, 13, 14 and 15. I inform the House that privilege is involved in this amendment.
      Mr. Stewart: The right hon. Member for Glasgow, Craigton (Mr. Millan) may be working from a draft Order Paper which has subsequently been revised.
      This new clause and the associated schedule amendments were introduced in another place in response to the undertaking given at the Report stage on 17 May to make provision in the Bill for grant assistance to be given by local authorities towards the installation of means of escape from fire in houses which are classed in general terms as being in multiple occupation. The right hon. Member for Craigton will remember that this point was raised on Report on the Floor of the House. I gave a commitment that the measure would be introduced in the other place.
      Amendment No. 13 is a minor technical amendment intended to improve an inconsistency in the method by which the appropriate improvement grant provisions of the Housing (Scotland) Act 1974 were related to the repairs grants provisions introduced into that Act by the Housing (Financial Provisions) (Scotland) Act 1978. If the right hon. Member for Craigton would like me to write to him further spelling out the provisions in detail I shall be happy to do so.
      Mr. Deputy Speaker: It may be for the convenience of the House if we take Lords amendment No. 13 separately.
      Mr. Millan: I had been working from the wrong document, although there was no indication that it was not the right one. When the Minister previously mentioned local authorities having the power to assist local industry,
      1188
      I responded on the question of fire escapes. Now that he is dealing with fire escapes, I hope that I may respond on the question of assistance to local industry.
      The question of assistance to local industry up to the maximum of the 2p rate was raised originally with me by Councillor Stewart of Strathclyde region. Similar amendments had been moved to the English legislation. I arranged to have the matter raised in the other place at a late stage. The Government kindly consented to consider the matter, and I am glad that they moved the amendment. Large numbers of Scottish local authorities were extemely doubtful about what their powers to help industry were. It is useful to have the issue clarified.
      I should be grateful to the Minister, now that we are actually dealing with amendment No. 13, if he could explain it to me.
      Question put and agreed to. [Special Entry.]

    New Clause F

      RANKING OF STANDARD SECURITIES TO SECURE DISCOUNT
      Lords amendment: No. 8, after clause 48, insert:
      "F. In section 6(5) of the Tenants' Rights, Etc. (Scotland) Act 1980 (which provides for the ranking of a standard security to secure discount)—
      (a) in paragraph (a)—

      (i) for the word "a" where it first appears there shall be substituted the word "any";

      (ii) after the word "loan" there shall be inserted the words "either—(1)"; and

      (iii) for the word "and" where it first occurs there shall be substituted the words "; or

      (2) for the improvement of the dwelling-house, and"; and
      (b) in paragraph (b) for the word "further" there shall be substituted the word "other"."
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      The new clause is necessary to allow tenants who purchase their council houses under the right-to-buy provisions of the 1980 Act to take out additional security on their home for loans for house improvement without seeking their landlord's consent, as is the case in England and Wales.
      Question put and agreed to.

    Clause 63

      SHORT TITLE, COMMENCEMENT AND EXTENT
      Lords amendment: No. 9, in Page 39, line 10 leave out "subsection (3) below and to"
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, we may take Lords amendments Nos. 10, 11 and 16.
      Mr. Stewart: The object of the amendment is to retain the power of a local authority voluntarily to reduce its rate when faced with action by the Secretary of State under section 5 of the Local Government (Scotland) Act 1966.
      Mr. Millan: With respect, the amendments do more than that, and we are entitled to an explanation of their effect. They would retain section 108A of the Local Government (Scotland) Act 1973 but would amend subsection (1).

      1189
      I read the explanation of the amendments given by Lord Mansfield in another place and found it incomprehensible. He said that the new wording would allow a local authority to determine a new, and presumably lower, rate later in the procedure—we abhor, and voted against, the principle—but the amendment does the opposite.
      At present, under section 108A a local authority can decide to modify its rate at any time before the Secretary of State informs it that the reduction specified in the report that the Secretary of State makes to the House has been made. Up to the point at which the reductions provided for in the report and approved by the House have been made, the local authority can modify its rate.
      11.30 pm
      The new wording that has been put in says that that can only be done up to the point that the report is approved by the House. That seems to be an earlier part of the procedure and therefore, far from the amendment allowing the local authority more time to make changes, it allows it less time.
      I should like to know exactly what amendment No. 11, which the Minister did not mention, means. It changes section 108A of the 1973 Act, and I should like the Minister's explanation of what effect that change will have as it seems to be the opposite effect that the Minister in the other place said it would have. If that is so, it would seem to be rather undesirable even to the Government, and the Opposition find it abhorrent.
      Amendments Nos. 9 and 10 make changes in clause 63, and we are entitled to some explanation of these as well. It was clause 63 which, as we understood it, made it clear that the new procedures provided for in the earlier stages of the Bill further to tighten up the power of the Secretary of State over the local authority and, in effect, to determine their rates for them over the heads of the elected local authorities, should not come into operation earlier than 1983–84. The only specific reference to that is in subsection (3) of clause 63, where the year 1983–84 is mentioned.
      Amendments Nos. 9 and 10 remove subsection (3) of clause 63. I am not sure why they should do that and I am not sure that it follows from the rest of this group of amendments, but, if the Government are to do that, they must have on record the assurances, given on numerous occasions, that these powers will not be used in the current year, 1982–83. We have had specific pledges on that, but it is not yet clear that if we allow these amendments to go through, the Government will be able to use the new powers in 1982–83. That would be a major breach of faith and I am sure that that is not the Government's intention. We must have the Government's intentions on record.
      I want a fuller explanation of amendment No. 11, and of its effect. I should also like assurances on the latter point arising from amendments Nos. 9 and 10.
      Mr. Allan Stewart: On the last point made by the right hon. Member for Glasgow, Craigton (Mr. Millan), I can give him the assurance that he seeks. It has already been given by my right hon. Friend the Secretary of State, and I am happy to repeat it.
      Clause 63(3) was contingent on the repeal of section 108A(1), being intended to ensure that enactment of the Bill in the current financial year did not prevent the exercise by local authorities of the discretion of section 108A(1) in 1982–83. Clause 63(3) is no longer required now that section 108A(1) is no longer to be repealed.
      1190
      Removal of clause 63(3) is therefore provided in the amendment, together with a consequential amendment to clause 63(2).
      We had thought when drafting the Bill that a power for the Secretary of State to redetermine the rate of an authority was incompatible with the power of the local authority to voluntarily reduce its rate. Therefore, we had made provision for the repeal of this power at the start the 1983–84 financial year. It was proposed that the Secretary of State should be able to use his new power, provided in clause 1.
      However, this year's experience suggested that it would be useful for an authority to have the power to redetermine its own rate voluntarily, thus avoiding the time-consuming process of obtaining the approval of the House for a report to reduce the rate.
      I hope that that explanation makes clear a fairly complicated set of provisions.
      Mr. Millan: The Under-Secretary has explained why the Government are retaining section 108A(1) and has said that the amendments to clause 63 are connected with the retention of that section, as is the amendment to the schedule. I understand that and, as the hon. Gentleman has given assurances about the date, so that there is no misunderstanding, I am happy.
      However, as well as retaining section 108A(1), the Government have amended it apparently to allow a local authority to change its mind later in the procedure than is possible under existing legislation. That was my understanding, but it seems that the amendment has the opposite effect and will allow an authority to change its mind only up to an earlier date than is permitted under the existing procedure. Will the hon. Gentleman explain how the change from
      "the Secretary of State informs them that the reduction specified in such report has been made"
      to
      "such report is approved by the Commons House of Parliament"
      is an improvement for the local authorities or the Government? It seems to me that the change will make matters worse and will force authorities to make their choices earlier rather than later. That is the substantive point which I want the hon. Gentleman to answer.
      Mr. Stewart: This is a complicated matter and I am trying to follow the right hon. Gentleman's argument. It would be incompatible for a local authority to be able to redetermine its rate at the same time as the Secretary of State could enforce a rate reduction. Therefore, the voluntary power lapses on approval of the report. I hope that that makes the matter clear.
      Mr. Millan: I am asking a simple question. Is that earlier or later than the present procedure? It was stated in another place that it was later, but it seems to be earlier. Is it earlier or later? Does the amendment make the power of a local authority lapse earlier or later? That is my simple question.
      Mr. Stewart: I understand the point that the right hon. Gentleman is making. Clearly, the two events cannot coincide, which is why the amendment is drafted in the way that it is.
      Mr. Millan: Is it earlier or later? Has the message to the Minister arrived?
      Mr. Stewart: I have been trying to explain the matter to the right hon. Gentleman. He asked me a specific question and I can give him a specific, one-word answer. It is "earlier".
      Mr. Millan: Then why did the Minister in another place say that it was later?
      Mr. Deputy Speaker: I think that I had better put the amendment.
      Question put and agreed to.
      Lords amendments Nos. 10 to 12 agreed to.

    Schedule 3

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Lords amendment: No. 13, in page 65, line 43, leave out "following proviso—"" and insert
      "words" except that for the purposes of their so applying the reference to "section 5(1) or, as the case may be, 7(4)" in section 6(1)(b) shall be construed as a reference to subsection (4) of this section:"
      Mr. Allan Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Millan: Following the Under-Secretary's illuminating reply on the previous amendment, perhaps he will explain No. 13 with similar clarity.
      Mr. Stewart: The application of the appropriate improvement grant provisions of the Housing (Scotland) Act 1974 to the grants for provision of means of escape from fire in houses in multiple occupation brought to light an inconsistency in the method by which the same provisions were related to the repairs grant introduced by the Housing (Financial Provisions) (Scotland) Act 1978.
      The opportunity was taken to introduce this technical amendment to improve the position.
      I assure the right hon. Gentleman that this is a minor technical amendment intended to improve an inconsistency in the method by which the appropriate improvement grant provisions of the Housing (Scotland) Act 1974 were related to the repairs grant provisions introduced into that Act by the Housing (Financial Provisions) (Scotland) Act 1978.
      I hope that makes the position clear. If not, I assure the right hon. Gentleman that I shall write to him spelling out the technicalities in as much detail as possible.
      Lords amendment agreed to.
      Lords amendments Nos. 14 to 16 agreed to.

  Rating and Valuation (Scotland)
  11.41 pm
  The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move,
  That the Valuation (Postponement of Revaluation) (Scotland) Order 1982, a copy of which was laid before this House on 6th July, be approved.
  The House will be well aware of the history of the proposal to hold a partial revaluation next year, and I shall not dwell on that at too great a length at this late hour.
  My right hon. Friend announced on 8 January that the Government intended that the rating revaluation to be held in Scotland in 1983 should apply to non-domestic property only. The Valuation (Scotland) Order which gave effect to this decision was considered in detail by a Committee of the House on 31 March. At that time, a number of hon. Members drew attention to a variety of technical problems which they saw arising as a result of holding a partial revaluation.
  As I told the House on 17 May during consideration of an Opposition amendment to the Local Government and Planning (Scotland) Bill, when my right hon. Friend met representatives of the Convention of Scottish Local Authorities on 23 April, the convention made strong representations that it would be better to put revaluation back rather than hold a partial one. It felt strongly that however technically sound the conduct of a partial revaluation, its results might produce inequities in the rateable values of similar properties in different regions. Indeed, the hon. Member for Glasgow, Garscadden (Mr. Dewar) made similar points in our debate on 17 May.
  In the light of these representations, my right hon. Friend reconsidered his decison to hold a partial revaluation, and on 18 June he announced that the Government intended to defer the revaluation for two years until 1985–86 and to revoke the order which prescribed a partial revaluation in 1983–84.
  The Valuation (Postponement of Revaluation) (Scotland) Order 1982, which we are now considering, implements this decision. It is a very simple order, which does two things only: first, it prescribes 1985–86 as the next year of revaluation; and, secondly, it revokes the Valuation (Scotland) Order 1982.
  Given the disquiet that certain hon. Members felt about the proposal to hold a partial revaluation, I am sure that the revocation of the Valuation (Scotland) Order will be welcomed in all parts of the House. Hon. Members will, however, recall that the concept of the partial revaluation was introduced to enable valuation rolls to be kept up to date while the Government considered the future of the domestic rating system. It is still important that valuation rolls should be kept up to date for as long as the rating system is with us, and so my right hon. Friend decided that revaluation should be postponed for only two years, thus allowing the next revaluation to proceed seven years after the previous one—the same period as occured between the revaluations of 1971 and 1978. Assessors will have had sufficient notice of the intention to proceed with a revaluation in 1985.
  Our original intention was not to have a domestic revaluation while the future of the domestic rating system was being considered. Deferring revaluations achieves the same purpose in a different way. I hope—as my right hon. Friend said at Scottish Question Time this afternoon—that

  1193
  before long the Government will announce the results of their consideration of the responses to the Green Paper. We shall take them into account in planning the revaluation.
  I trust that hon. Members agree that we should proceed now by postponing the revaluation for two years and abandoning the 1983 partial revaluation because of the criticisms that have been made of it by COSLA and hon. Members. I commend the order to the House.
  11.46 pm
  Mr. Donald Dewar: I suspect that the Minister is glad that this order is being considered at a late hour, which gives a certain anonymity to the proceedings and provides a cloak for what is, despite all the special pleadings, a disordered retreat.
  The Minister said in his opening remarks that he did not intend to dwell on the history. That is extremely wise, because it is a long and sad history of confusion and indecision and—on occasions—not a little obstinacy. It started wth the Local Government (Miscellaneous Provisions) (Scotland) Bill a couple of years ago. At that time, the Minister—not the present Minister, but the hon. Member for Edinburgh, Pentlands (Mr. Rifkind)—took power to postpone, if he thought that appropriate, or introduce only a partial revaluation. That was to be the paving provision for rating reform. It was to be a great leap forward, if not for the Scottish electorate, at least for Tory electoral prospects, because it was to be the flag-waving exercise of abolishing domestic rates.
  After the Local Government (Miscellaneous Provisions) (Scotland) Bill was enacted, we had a long wait to see what would happen. I remember harrying the Minister's predecessor on numerous occasions about when he would decide whether the 1983 revaluation would go ahead. It was clear that time was running short. We were told originally that the decision would be taken in weeks rather than months. As the time ticked away, it became clear that the unfortunate assessors in Scotland would be left with an extremely difficult job, as the Minister was leaving his decision to such a late hour.
  On 29 June 1981 I asked a parliamentary question, and I was told that the decision would be announced in due course. I asked another parliamentary question on 29 October 1981, when I was told, rather pompously, that the announcement would come before long. However, there was no firm news, until we had the inevitable planted question, and the announcement that there would not be a full revaluation in 1983, only a partial revaluation.
  The Minister rightly referred to our doubts about the technical difficulties that such an exercise would involve. In the Sixth Standing Committee on Statutory Instruments, &c. on 31 March 1982, we debated the Valuation (Scotland) Order 1982, which we are now repealing and which has had such a sad and transitory life. I said on that occasion:
  "If I have a criticism of the way in which the order is being handled, and indeed, the way that the whole subject has been handled in recent months, it is that the Government have not faced up to the complexities and enormous difficulties behind the operation. It has been cobbled together".
  I went on to say that the Ministers
  "have not come to grips with the problems which they are causing for both the system and themselves".—[Official Report, Sixth Standing Committee on Statutory Instruments, &c., 31 March 1982; c. 6.]
  Although the Minister refers to that criticism now as justification and predicts that we shall welcome the order
  1194
  tonight, he gave it short shrift then, as did the hon. Member for Pentlands, now the Under-Secretary of State for Foreign and Commonwealth Affairs.
  We had those doubts and they were not entertained by Ministers. We were chided, the whole matter was shrugged off, and we were told that the technical difficulties could easily be overcome and that there was no need to panic. Now we find that we were right all along. Spurred on by COSLA's opposition, the Minister has had to come to the House and say that he is scuttling for cover, that it was all a mistake and that he never meant it anyway.
  It is a pretty sad position and there are serious implications. First, there will be a break of seven years between revaluations. It is common ground that it is useful and proper to have revaluations on a regular basis and we in Scotland were proud that we had been able to keep to our five-year pattern fairly regularly. That is a point that I have heard Ministers make.
  The Minister is entitled to say that there was a seven-year break between 1971 and 1978. However, that was because of a major local government reorganisation just at the point when the quinquennial review was due and it would have been impossible to have carried on in the normal way.
  There is no prospect of such an upheaval at the moment. We have had to sacrifice a quinquennial review and push it back a couple of years merely because of the indecision of Ministers and a dramatic change of course that was forced upon them by their own misjudgment and miscalculation.
  I shall not bother hon. Members with the large number of quotations from the Minister and his predecessors about the value of regular quinquennial reviews. However, if the Minister looks at the report of the local government and planning debate in the House on 17 May 1982, he will see that that is the point that he was making. He said:
  "I entirely accept his general point about the advantages and desirability of regular revaluation."—[Official Report, 17 May 1982; Vol. 23, c. 79.]
  That is a theme about which we have heard a great deal. There has been a break in that regularity and we are entitled to complain about it.
  To push the revaluation back by two years will considerably disadvantage the ordinary ratepayer in Scotland at the moment. The whole point of a revaluation is to provide the opportunity to adjust anomalies and distortions that have arisen during the four or five preceding years, possibly as a result of fluctuations in market prices and housing fashions.
  People will now find that they are paying too much because the initial rent of their house has dropped or because of other changing circumstances. How will they get that put right if there is no revaluation? They will experience great difficulties. The postponement means that inflexibilities will be built into the system on a semi-permanent basis.
  Mr. Allan Stewart: The hon. Gentleman will appreciate that his point applies only to industrial and commercial ratepayers, given that we are going back on a partial revaluation.
  Mr. Dewar: Exactly. That was the basis of one of our attacks on the partial revaluation. Our view was that that was always a fraud. It was not just a matter of the technical difficulties. There was an expectation and a hope amongst Ministers that many householders would think that it

  1195
  would be to their advantage not to be revalued. However, 36·7 per cent. of rates come from domestic ratepayers. The figure would have remained the same anyway. The Minister is right to say that we believe that the partial revaluation was wrong. There was no way that the proportion could be varied. It was a clear condition that the ratio between the various sectors would remain the same.
  The difficulties of individual ratepayers would have continued, because adjustments could not have been made within the domestic ratepayer section. In a way, the Minister is right to say that that will continue, but the situation is most unhappy. Things were not right the first time and the Government will leave the situation unsatisfactory by postponing the revaluation for a further two years. I hope that the Minister will tell us what will happen in 1985–86. Will he guarantee a full revaluation then, or will people still be waiting, if not with bated breath, with—on the part of those professionally involved—some irritation, for Ministers to decide again whether there is to be a partial revaluation in 1985–86. The Minister should make it clear now that there will be no more flirting with this halfway house and parboiled non-solution. He should tell us that there will be a proper revaluation in 1985–86. I have recently spoken to people in the assessors departments. They have already done an enormous amount of work in preparation for the partial revaluation next year. That work will now be wasted.
  The Government talk about the productive use of local authority manpower—a theme to which most Tories, particularly bigoted Tories such as the hon. Member for Edinburgh, South (Mr. Ancram) normally warm—but there will be great concern about the fact that large amounts of ratepayers' money have been wasted on preparing for the partial revaluation that is being so ignominiously aborted by the order.
  What are the implications for rating reform? The Minister may say that the order has little to do with rating reform. That would probably be a convenient posture for him to strike. However, whenever we made the complaints that have turned out to be so well justified about the technical difficulties or fundamental lack of logic in the Government's actions, we were told that they were essential and that they were all part of the package that would lead to domestic rating reform in the not too distant future.
  I have always thought that Ministers were far too optimistic. The Green Paper contains very few flashes of inspiration. It canvasses the options that were largely rejected by the Layfield report and comes to the same depressing conclusions. It is impossible to envisage any rating reform before the 1990s. Indeed, if I remember rightly, that is explicitly stated in the Government's Green Paper. What exactly does this all mean? Does it mean that interest in rating reform is cooling? Alternatively, have Ministers gained a more realistic appreciation of the difficulties and possibilities of fast progress?
  The former Under-Secretary of State for Scotland, now Under-Secretary of State for Foreign and Commonwealth Affairs, made a surprising comment in Committee. He said that there was no possibility of a domestic rating reform unless this partial revaluation was the paving process. He made that perfectly clear. He said that it would not be sensible to go ahead with the revaluation of
  1196
  domestic rates if the system was likely to be reformed in the near future. The hon. Gentleman then said that it was clear that we should have the revaluation. On 17 May the present Under-Secretary of State was very apologetic about the prospects for rating reform. In c. 79 of Hansard of 17 May the hon. Gentleman said that the election promise had been made before the 1974 election. He made it clear that there were other things, such as incentives and the reduction of direct taxation, that would take precedence over rating reform. He sounded so doubtful about the prospects for rating reform that the hon. Member for Edinburgh, South galloped to the rescue like a member of the light cavalry and asked whether his hon. Friend would give an assurance
  "that his remarks do not in any way diminish the intention of the Conservative Party and the Government to find a way of reforming rates."—[Official Report, 17 May 1982; Vol. 24, c. 80.]
  He had got the message that the Under-Secretary of State had got cold feet and that a considerable lack of enthusiasm was beginning to show on that subject. The Minister hastened to assure him that he was still committed.
  However, the commitment is technical. The decision to abandon partial revaluation, which has always been presented as an important part of the process, a staging post on the way to reform, underlines that point.
  I believe that what has happened is that we have started out with a breezy promise from Ministers. The scheme of partial revaluation was dreamt up on the prayer and the hope that the Minister would be able to deliver on rating reform in the near future. He discovered that he had got the time scale wrong by about a decade, so he had to rethink the partial revaluation wheeze that he had introduced so blithely only a few months before.
  The result is muddle, mismanagement, confusion and a considerable blow to the system. The Minister is safe. Of course, we did not like the partial revaluation. Therefore, it would be illogical to vote against the order that is killing it off. However, we are entitled to say that it has done nothing for our confidence in the Minister's competence or credibility. In the words that we use in my constituency, the whole sad story leads us to wonder whether the Conservative Front Bench could organise a menage.
  12.2 am
  Mr. Gordon Wilson: I was taken by the final words of the hon. Member for Glasgow, Garscadden (Mr. Dewar). I regret that I cannot summon up much enthusiasm for a long debate on the order at this time of night, particularly at this time of the parliamentary Session.
  As the hon. Member for Garscadden said, the reason for the order is that the Government have mismanaged the whole affair. There are three other reasons why the Government became involved in this affair. The first is control of local government. If one has revaluation, there is certain confusion. It makes it much more difficult for the Scottish Office to be able to put the same curbs and controls on local government. We all know how dedicated it is to cutting the amount of money available to local government.
  The second reason is that the election must be considered. When there is revaluation, there is the impact of what seems to be increases. Sometimes they are just

  1197
  inflationary. In some cases they are real; in other cases there is a decrease in the amount of money that individuals pay in rates. The third reason is that at the election the Government will still have on their manifesto the promise, infinitely delayed, of rating reform, which they will say will give more freedom to local government and at the same time reduce the amount of money that ratepayers will pay and allow more money to be available for services. They will be able to give the impression that the impossible will be done, depending on which of the three balls they can juggle and safely secure.
  As the hon. Member for Garscadden said, it would be wrong to oppose the order. Partial revaluation was a monstrosity. It is right that the Government have reconsidered that matter. There is nothing wrong with revaluation. In fact, there is much to be gained from it. However, in many cases in England revaluation was suspected to be the cause of problems that arose. Changes in the market place affecting houses and commercial properties could not make their way through the system. That led to some people having to pay more rates than they should have and others to pay less.
  I shall give one example. For commercial properties based on rental value, the list of rents is made known to the assessors. They take a mean figure from that and apply it to certain ranges of shops. If a new shopping centre opens in a district or city, as has occurred in Dundee, there may be a switch of shopping fashion from one part of the area to another. "To let" notices then begin to appear on the shops in the original area because trade has gone, but there is no change in the rating valuation, so the rating bill becomes heavier compared with the amount of trade.
  The same thing occurs, although less frequently and substantially, on housing estates. Over a period, some may increase in terms of amenity value and the amount of rent that they could theoretically command on the market, while others go down. In those circumstances, the object of devaluation is to achieve some equity in the system.
  Here I take issue with the Government in their proposal to postpone revaluation. They may well have stumbled into this for the reasons suggested by the hon. Member for Garscadden. In reality, a seven-year delay becomes a nine-year or 10-year delay, because the body of rental evidence built up by the assessors is based on two to three years of the quinquennium. In the last year or so before revaluation they take their base value and put it through the system and apply it to different properties, but the evidencial base is necessarily historic. If revaluation is postponed, a delay of none or 10 years will be built in and many disparities will arise.
  I very much regret that the Government have seen fit to postpone revaluation in Scotland. I believe that it is wrong in principle. We all know that valuation for rating is a regressive system. No doubt that is why all political parties are desperately looking for some reasonably fair substitute that will work and will not be too complex or too administratively expensive. A regressive system is made far more imperfect, however, if it is not updated to take account of the changes in property values that occur from time to time.
  If the justification for partial or complete suspension of revaluation was that it would lead to reform of the rating system, it might be bearable, but many of us suspect that the way is not so sweet or so smooth as the Government originally envisaged in the run-up to the last general election. Certainly their promises seem to have become
  1198
  progressively weaker. It is now three-and-a-half years since the last election, and we have so far reached the Green Paper stage. The Government now propose to take evidence on that.
  There will then have to be a White Paper, Government commitments, and so on, so if we are lucky we may see something before the next general election—or we may not. Successive Governments have tried to find a replacement for the rating system, but it seems to be far more difficult than they imagine. If a fair system were to be achieved, I should not cavil too much at the unfairness that is now to be imposed on ratepayers in the commercial, industrial and domestic sectors through suspension of revaluation.
  To sum up, it is clear that the Government have been driven to this. They have wandered entirely off course in their plans for reform of the rating system and have ended up with an inadequate situation in which certain injustices will be perpetuated and fresh injustices will be caused as a result of this breach of the quinquennial revaluation, on which Scotland has prided itself for so many years.
  Mr. Allan Stewart: First, I emphasise that postponement achieves the objective of not having a revaluation before decisions are taken on alternatives to domestic rates. My right hon. Friend and I have spelt out the Government's position.
  The hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Dundee, East (Mr. Wilson) referred to the effects of delay. The hon. Member for Dundee, East talked about the rating system in some detail. I accept the desirability of regular revaluation. I do not think that anyone disputes the desirability of that principle. However, the delay between the last revaluation and the next one will be seven years. There was precisely the same period between the last revaluation and the one before that, which was 1971 to 1978. It is not an unreasonable position.
  The order provides for a full revaluation in 1985–86. The hon. Member for Garscadden asked me to forecast exactly what will happen. We are talking about a period beyond the next general election, but I can confirm that it is our intention to go ahead with the full revaluation in 1985–86. That cannot be changed without a new order being passed by the House.
  There is no relationship between the Government's decision and their commitment to reform of the domestic rating system. Nor is there any relationship to expenditure control mechanisms, which are separate from revaluations. It would have been possible for the Govenment to go ahead with the partial revaluation that was proposed. There were technical problems, but they were not insuperable. However, in the light of the representations from the convention, it seemed that on balance it made more sense to delay matters and to have a general revaluation in 1985–86. The lesson to be learnt is that my right hon. Friend the Secretary of State pays careful attention to the representations of the convention. I attended the meeting of the convention with my right hon. Friend and there is no doubt about the strength of feeling of COSLA. We considered the representations and the order implements my right hon. Friend's decision to accept the recommendations of the convention on this issue.
  Mr. John Heddle: My hon. Friend will be aware that within the English dimension of

  1199
  rating reform certain aspects of compensation are based upon gross and rateable values. He will know also that well maintained allowances are based—when, for example, a house is declared unfit—upon rateable assessment. In the event of the order being passed by the House and the postponement of the revaluation, will he confirm that orders will be brought before the House to protect property owners and those with interests in land, tenants especially, and that any assessment for well maintained payments will be based on an updated assessment rather than on a historic assessment?
  Mr. Stewart: My hon. Friend's expertise in these matters is well known, but I must stress that there is no change for the domestic ratepayer in the decision that the House is being asked to take tonight. I am glad to be able to confirm also that I have no responsibility for the rating system south of the border.
  Question put and agreed to.
  Resolved,
  That the Valuation (Postponement of Revaluation) (Scotland) Order 1982, a copy of which was laid before this House on 6th July, be approved.

  Duchy of Cornwall Management Bill
  As amended (in the Standing Committee) considered.
  Duchy of Cornwall Management Bill
    New Clause 1

      APPORTIONMENT OF COSTS
      `Any costs incurred by the Treasury as a result of the operations of this Act shall be met jointly by the Treasury and the Duchy, these costs being shared between them in the same proportion as the excess of receipts over disbursements from the Duchy is shared between the Consolidated Fund and the Duke.'.—[Mr. Alan Williams.]
      Brought up, and read the First time.
      12.16 am
      Mr. Alan Williams: I beg to move, That the clause be read a Second time.
      We had a brief debate on this subject in Committee. I see no point in repeating at length the points that we discussed then. I told the Minister that we wished to give him time to consider his position, as he was not entirely unsympathetic to the idea of a sharing of costs. He suggested that it might be possible to think in terms of dividing the costs evenly. The point that I made to him at that stage was that any costs incurred are incurred at the request of the duchy, because it has initiated an application for consent. Therefore, it would seem appropriate, since the duchy, particularly at present, stands to derive three times as much benefit from any additional surplus as does the Contingency Fund, that any costs that arise should also be split in the same proportion. The Minister was kind enough to send me a letter stating how limited the costs have been so far, but I would make the point that if he examines clause 7, which will be debated next, and considers how potentially wide-ranging that clause is in its implications, he will realise that the costs that could be imposed are utterly unpredictable. In those circumstances, it seems to be a reasonable safegaurd to ensure that the costs are borne in the same proportion as the benefits are derived.
      The Minister of State, Treasury (Mr. Barney Hayhoe): As the right hon. Gentleman said, this point was raised in Committee. I said that I would give it consideration and take advice, particularly if it were thought that the costs were likely to be considerable. My inquiries have made it clear that in the past the demands upon the Treasury for carrying out its duties under the earlier legislation have been small. With regard to the Bill before us, it is not envisaged that there will be any substantial or considerable increase in that work. For example, no increase in complement within the Treasury is foreseen as a result of the Bill. It may be that if the provisions that the right hon. Gentleman is commending to the House were accepted, they would add considerably to the costs involved because of the exercise that would have to be carried out. In those circumstances, one does not envisage any significant extra expense as a result of the provisions, and the amendment could be time-consuming and costly in its own right. As I explained in my letter to the right hon. Gentleman, this would not exclude special arrangements being made by the Treasury if at some future time some heavy expense seemed to arise under the Bill. In these circumstances, I could not advise the House to give a Second Reading to the clause. I hope that it will be withdrawn or I shall recommend my right hon. and hon. Friends to resist it.
      Mr. Alan Williams: In view of the Minister's assurances that the Treasury could impose an apportionment of costs if they were seen to be considerable, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 7

      POWER OF TREASURY TO AUTHORISE TRANSACTIONS
      Mr. Alan Williams: I beg to move amendment No. 2, in page 3, line 32, leave out clause 7.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this, it will be convenient to take amendment No. 3, in page 4, line 5, after 'vicinity of', insert 'or working on'.
      Mr. Williams: When I was first asked to deal with this Bill on Second Reading, I little expected the excitement and attention that it would attract. I have been astonished this evening, as I have walked around the Corridors, to find the assiduous interest displayed by the servants of the House and even by the policemen on duty in the progress of the Bill and the amendments. I suspect that that is a tribute to my hon. Friend the Member for Fife, Central (Mr. Hamilton) for the lucidity with which he exposed the problems and paradoxes implicit in this legislation. I should have been slightly happier if the questions put to me had been addressed more to the potential quality of the debate than to the quantity. However, I have no intention of adding to the quantity because the import of both amendments is clear and was mentioned in Committee.
      I asked the Minister to consider amendment No. 3 in Committee. We were grateful for the fact that he accepted the suggestion that there should be an amendment to ensure that those who live on duchy land or in its vicinity would have their interests taken into account by the Treasury when consent was being considered. Equally, it seemed appropriate that those who worked for the duchy should have such consideration. However, it also occurred to us that to move an amendment with the words "working for" would exclude many people on the estate who work for tenants and who would have an equal interest in decisions. For that reason we have included the words "working on" the estate.
      Amendment No. 2, on which the House may have to divide, is important, because although we asked in Committee about the implications of subsection (1) of clause 7—the other subsections arise automatically from subsection (1)—we also asked the Minister to explain the implications of a transaction being permissible with Treasury consent although it would not otherwise be authorised. We asked about the limits on that power being given to the Treasury. The Executive is being given, in one subsection of an inconspicuous piece of legislation, power to set aside wide-ranging decisions of the Legislature. The Minister did not tell us in Committee about the limitations. In the notes on clauses that the Minister kindly circulated to Members of the Committee, it was made clear that the proposal was to cover contingencies that at this stage were not even envisaged.
      Unless the Minister can tell us now precisely what he wants, however small the vote may be, it is important that we register our strong objection to the Executive being given that wide-ranging power to set aside legislative decisions.
      Mr. Hayhoe: I should like to deal first with amendment No. 3, the less radical of the two amendments with which the right hon. Member for Swansea, West (Mr. Williams) is concerned. I have a great deal of sympathy with the intention behind the amendment. It is very much in tune with the proposal made in Committee that the Treasury must have regard to
      "the manifest advantage of the local populace".
      I explained to the Committee that this was a somewhat unworkable concept in the view of lawyers and advisers. I tabled an amendment that sought to make clear that there would be concern for
      "persons living on, or in the vicinity of, the land."
      This was acceptable to the Committee. It also goes a long way to cover the point made by the right hon. Gentleman that there should be concern, in the Treasury's exercise of power under clause 7, for those people who work in the area and who could be affected by the decisions being made. I am advised that the words that we have already put into the Bill go a long way to cover the concern of the right hon. Gentleman.
      I would also say to the hon. Member for Truro (Mr. Penhaligon), who has much duchy land in his constituency, that the duchy, by its nature, is permanently exposed to the glare of publicity in its dealings and must endeavour to conduct its affairs in an exemplary Manner. The general expectation is that transactions
      "conducive to the good management of the Duchy"
      will have full regard to those working on, as well as living on, or near, the land concerned. Full weight will be given by the Treasury to those considerations in deciding whether to give consent to proposals under the Bill.
      On the wider issue of the elimination of clause 7, the right hon. Gentleman referred to the fear expressed in Committee that "any transactions" would allow the procedures of the clause to be used to set aside even decisions of Parliament. I am advised that this is not so. The reference to
      "Any transaction affecting Duchy property which would not otherwise be authorised"
      is and would be interpreted as a transaction not authorised by the management Acts and not precluded by any other existing legislation. There would be no question of setting aside under clause 7 general provisions that this House had enacted. I hope that the clause will be allowed to go forward. It is a useful provision. Treasury approval is required for any particular item concerned. Accountability is written in as a result of an amendment moved by the right hon. Gentleman and accepted in Committee which means that a report of every authorisation under clause 7 will be made to the House. There has been consultation since the Committee stage with the officers of the House. It is now agreed that the duchy account in the new form prescribed by the legislation will, when it becomes law, be printed as a paper of the House and will then meet a number of the points raised by the hon. Member for Fife, Central (Mr. Hamilton) about the circulation of the accounts and their availability to the public. I am happy to give that assurance, and I hope that on that understanding the right hon. Member for Swansea, West will not press the amendments. If he wishes to go to a vote I must advise my right hon. and hon. Friends to vote against them.
      12.30 am
      Mr. William Hamilton: In Committee I made the point repeatedly that there was no reference in

      1203
      the Bill as originally drafted to the local people. The Bill dealt with tidying up the management to provide additional profits for the estate's sole beneficiary. However much the Minister dresses up the language he uses to put the Bill before the House, the fact is that, whatever else might be claimed for the Bill, it is not a modernisation measure. The estate remains, as it always has been, a feudal enclave being ruthlessly exploited for the benefit of one person, with little regard—despite what the hon. Member for Cornwall, North (Mr. Neale) said in Committee—for the tenants' welfare.
      I have received numerous letters containing evidence that the tenants are grossly dissatisfied and sometimes frightened of the duchy. I hope that my right hon. Friend the Member for Swansea, West (Mr. Williams) will force a Division on amendment No. 2, which provides for clause 7 to be left out. I am not satisfied that it gives the tenants the protection that they should have.
      I am not convinced by the Minister's arguments of the reasons for not accepting amendment No. 3. Why should those words not be inserted? How will a man working for a fanner be protected under the provisions of the Bill as drafted? It is thoroughly unsatisfactory and I hope that my right hon. Friend the Member for Swansea, West will force his amendment to a Division.
      Mr. David Penhaligon: Amendment No. 3 adds the words "working on" and I have no objection to their being added to the Bill. They cannot weaken the Bill, and I do not understand why the Minister cannot accept the amendment. It does not affect the major problem of farm amalgamations, which I tried to raise in Committee. I am not crazy enough to suggest that Treasury permission should be required before the Duke of Cornwall takes six acres off one farm and adds them to another, or carves up a smallholding if he thinks fit. That seems to be well within the province of sensible local management. I dread to think what would happen to farming if the House should ever give a Minister that much power.
      I expressed my anxiety in Committee, and I do so again. The major effect that duchy policies have had in my county in the past decade during which I have taken a close interest has not been on the selling or buying of property, but on farm amalgamations. One could make the speech in other circumstances, too, but I believe that the estate of the Duchy of Cornwall does the community a disservice by leading the trend towards farm amalgamations. Occasionally economic forces make amalgamation popular, and in some cases it is necessary.
      I ask the Minister to consider the amendment favourably. I cannot see what harm it can do. A significant proportion of my constituents and many other people in the South West rely on the duchy estate for their living. I see no reason why they should not be protected.
      Having listened to the Minister, I am not a great deal wiser about clause 7 or how the Bill is supposed to work. I ask him to think again about amendment No 3.
      Mr. Alan Williams: I am grateful to the Minister of State for what he said about amendment No. 3, and shall not press it further in view of his assurances.
      The hon. Gentleman has done his best to convince us about amendment No. 2, but he will not be surprised to learn that he has failed. We have won the argument. In
      1204
      view of the hour, it would be in everyone's interest if we allowed the matter to be decided by the brutal adjudication of the Division Lobbies.
      Mr. Hayhoe: The hon. Member for Fife, Central (Mr. Hamilton) referred to "ruthless exploitation". There is no evidence of that. Far from thinking that, I believe that the local populace would wish to join us in wishing the Duke of Cornwall a happy wedding anniversary.
      We are sympathetic to amendment No. 3, but the phrase "working on" is too vague. People working on duchy property in Kennington would include building surveyors, test match cricketers, lawyers, doctors, painters and so on. The concept behind the amendment was referred to by the hon. Member for Truro (Mr. Penhaligon). It will be taken into account.
      I hope that my hon. Friends will support me in seeking to maintain clause 7.
      Question put, That the amendment be made:—
      The House divided: Ayes 16, Noes 83.

      Division No. 297]

      [12.38 am

      AYES

      Campbell-Savours, Dale

      Martin, M(G'gow S'burn)

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

      Mawhinney, Dr Brian

      Cryer, Bob

      Powell, Raymond (Ogmore)

      Dean, Joseph (Leeds West)

      Shore, Rt Hon Peter

      Dixon, Donald

      Skinner, Dennis

      Dormand, Jack

      Williams, Rt Hon A.(S'sea W)

      George, Bruce

      Hamilton, W. W. (C'tral Fife)

      Tellers for the Ayes:

      Harrison, Rt Hon Walter

      Mr. Allen McKay and

      McCartney, Hugh

      Mr. George Morton.

      NOES

      Alexander, Richard

      Marlow, Antony

      Alison, Rt Hon Michael

      Marshall, Michael (Arundel)

      Ancram, Michael

      Mather, Carol

      Bendall, Vivian

      Mawhinney, Dr Brian

      Benyon, Thomas (A'don)

      Maxwell-Hyslop, Robin

      Berry, Hon Anthony

      Mayhew, Patrick

      Biggs-Davison, Sir John

      Mills, Iain (Meriden)

      Blackburn, John

      Moate, Roger

      Boscawen, Hon Robert

      Morrison, Hon C. (Devizes)

      Brinton, Tim

      Murphy, Christopher

      Brown, Michael(Brigg & Sc'n)

      Neale, Gerrard

      Bruce-Gardyne, John

      Neubert, Michael

      Cadbury, Jocelyn

      Newton, Tony

      Carlisle, John (Luton West)

      Normanton, Tom

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

      Osborn, John

      Cope, John

      Parris, Matthew

      Dorrell, Stephen

      Penhaligon, David

      Dover, Denshore

      Proctor, K. Harvey

      Dunn, Robert (Dartford)

      Rhodes James, Robert

      Faith, Mrs Sheila

      Roberts, Wyn (Conway)

      Fletcher-Cooke, Sir Charles

      Rossi, Hugh

      Fraser, Peter (South Angus)

      Rumbold, Mrs A. C. R.

      Good lad, Alastair

      Shaw, Giles (Pudsey)

      Griffiths, Peter Portsm'th N)

      Sims, Roger

      Gummer, John Selwyn

      Sproat, Iain

      Hamilton, Hon A.

      Stanbrook, Ivor

      Hawkins, Sir Paul

      Stevens, Martin

      Hawksley, Warren

      Stradling Thomas, J.

      Hayhoe, Barney

      Taylor, Teddy (S'end E)

      Heddle, John

      Thomas, Rt Hon Peter

      Hooson, Tom

      Thompson, Donald

      Hunt, David (Wirral)

      Townsend, Cyril D, (B'heath)

      Hurd, Rt Hon Douglas

      Trippier, David

      Jopling, Rt Hon Michael

      Waddington, David

      King, Rt Hon Tom

      Waldegrave, Hon William

      Lang, Ian

      Waller, Gary

      Lester, Jim (Beeston)

      Ward, John

      Lloyd, Peter (Fareham)

      Wells, Bowen

      Lyell, Nicholas

      Wheeler, John

      MacKay, John (Argyll)

      Wickenden, Keith

      Major, John

      Wolfson, Mark

      1205

      Younger, Rt Hon George

      Brooke and

      Mr. Tristan Garel-Jones

      Tellers for the Noes: Mr. Peter

      Question accordingly negatived.
      Motion made, That the Bill be now read the Third time.
      [Queen's Consent, on behalf of the Crown, and Prince of Wales' Consent, on behalf of the Duchy of Cornwall, signified.]
      Question put forthwith, pursuant to Standing Order No. 56 (Third Reading):—
      The House divided: Ayes 80, Noes 11.

      Division No. 298]

      [12.49 am

      AYES

      Alexander, Richard

      Marshall, Michael (Arundel)

      Alison, Rt Hon Michael

      Maxwell-Hyslop, Robin

      Ancram, Michael

      Mayhew, Patrick

      Bendall, Vivian

      Mills, Iain (Meriden)

      Benyon, Thomas (A'don)

      Moate, Roger

      Biggs-Davison, Sir John

      Morrison, Hon C. (Devizes)

      Blackburn, John

      Murphy, Christopher

      Boscawen, Hon Robert

      Neale, Gerrard

      Brinton, Tim

      Neubert, Michael

      Brooke, Hon Peter

      Newton, Tony

      Brown, Michael(Brigg & Sc'n)

      Normanton, Tom

      Bruce-Gardyne, John

      Osborn, John

      Cadbury, Jocelyn

      Parris, Matthew

      Carlisle, John (Luton West)

      Penhaligon, David

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

      Proctor, K. Harvey

      Cope, John

      Rhodes James, Robert

      Dorrell, Stephen

      Roberts, Wyn (Conway)

      Dover, Denshore

      Rossi, Hugh

      Dunn, Robert (Dartford)

      Rumbold, Mr C. R.

      Faith, Mrs Sheila

      Shaw, Giles (Pudsey)

      Fraser. Peter (South Angus)

      Sims, Roger

      Garel-Jones stan

      Sproat, Iain

      Goodlad, Alas air

      Stanbrook, Ivor

      Griffiths, Peter Ports'th N)

      Stevens, Martin

      Gummer, John Selwyn

      Stradling Thomas, J.

      Hamilton, Hon A.

      Taylor, Teddy (S'end E)

      Hawkins, Sir Paul

      Thomas, Rt Hon Peter

      Hawksley, Warren

      Thompson, Donald

      Hayhoe, Barney

      Townsend ril D, (B'heath)

      Heddle, John

      Trippier, David

      Hooson, Tom

      Waddington, David

      Hunt, David (Wirral)

      Waldegrave, Hon William

      Hurd, Rt Hon Douglas

      Waller, Gary

      Jopling, Rt Hon Michael

      Ward, John

      King, Rt Hon Tom

      Wells, Bowen

      Lang, Ian

      Wheeler, John

      Lester, Jim (Beeston)

      Wickenden, Keith

      Lloyd, Peter (Fareham)

      Wolfson, Mark

      Lyell, Nicholas

      MacKay, John (Argyll)

      Tellers for the Ayes:

      Major, John

      Mr. Anthony Berry and

      Marlow, Antony

      Mr. Carol Mather.

      NOES

      Campbell-Savours, Dale

      Powell, Raymond (Ogmore)

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

      Skinner, Dennis

      Cryer, Bob

      Williams, Rt Hon A.(S'sea W)

      Dean, Joseph (Leeds West)

      Dixon, Donald

      Tellers for the Noes:

      Hamilton, W. W. (C'tral Fife)

      Mr. George Morton and

      Harrison, Rt Hon Walter

      Mr. Allen McKay.

      McCartney, Hugh

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

  Museum of Childhood
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
  1 am
  Mr. Ian Mikardo: I am glad to have the opportunity to draw attention to the threatened closure of the Museum of Childhood in Bethnal Green. I shall seek to do so in a considerably shorter time than is usual for hon. Members introducing the Adjournment debate, principally because I know that one or two other hon. Members wish to speak.
  I believe that I can put my case shortly, because, in making it to the Under-Secretary of State for Education and Science, I believe that I am pushing at an open door. Had the Minister for the Arts been replying, that would have been equally true. I fully understand why he cannot be here and I am grateful to him for his note of explanation. I fancy that if the decision were left to those within the Department, those who care about education and the arts, there would be no question at all of closing the museum.
  The threatened closure of the museum arises from the recommendations at the end of a report on a group of museums which was recently presented by the unit that is led by Sir Derek Rayner. His scrutiny of the museums was so superficial that the recommendations simply cannot carry any authority at all.
  I do not want to anticipate the debate on the Theatre Museum which will take place in a few hours time, but the report of the Select Committee on Education, Science and Arts, which looked at the recommendations on the Theatre Museum, made one or two observations which apply a fortiori to the Museum of Childhood.
  Paragraph 13 of the Select Committee's report states, that
  "we were not impressed by the manner in which the investigation was carried out…on the basis of one ill-informed layman's brief investigation."
  Later, in paragraph 16, the Select Committee says:
  "We suspect that the recommendations of the Rayner Report regarding outstations and the Bethnal Green Museum"—
  that is the Museum of Childhood—
  "may well be as ill-considered as those concerning the Theatre Museum."
  Mr. Burrett's investigation of the Museum of Childhood was a great deal more superficial than his investigation of the theatre museum. The Museum of Childhood is open every day of the week except Friday. Mr. Burrett made only one visit, and he chose to make that for the three hours on a Friday—the only day of the week when it is closed. Brilliant, is it not?
  If I may strike a personal note, for many years I headed a management consultancy team. If in those days I had been asked to assess the viability or validity of, an institution, a company or a factory, and I had sent one chap down with an adviser for three hours, picking a day on which the place was not working, and then sought to make a client pay fees for my report, I should confidently have expected to be prosecuted for attempting to get money by false pretences. That is exactly what the Rayner unit has done.
  Mr. Burrett went to the museum for one three-hour visit on the only day of the week on which it was shut. Perhaps he went on that day because he did not want to see what goes on when the museum is open. Perhaps in making his

  1207
  cost-benefit analysis—that is what he was supposed to be doing—he did not want his lofty thoughts about money to be disturbed by any sordid considerations of the pleasure and knowledge gained by the 4,000 children and adults who visit the museum every week. Perhaps he did not want to be reminded, by their presence, that
  "Man does not live by bread alone."
  The museum is not just a set of show cases. It is also a notable centre of education and scholarship, with its well-attended lectures, workshops and art classes, and with its seminars, which are over-subscribed and which are attended by people from all over the country and, indeed, from other countries.
  Perhaps I should explain how the museum came to be in Bethnal Green. Shortly, the history is that in 1865 the South Kensington museum, which was the Victoria and Albert's precursor, found that it no longer needed the prefabricated iron building in which it had been housed since 1856, so it offered the building to various parts of London, to be re-erected as a museum building. The only takers were a group of people in the East End, who put some money together and bought the present site from private owners and presented it to the Government on the explicit condition that it should be used as a museum and for no other purpose. That undertaking is still extant and is as valid and binding as it was when the museum was first opened in 1872.
  The Rayner report does not explain why it accepts non-commercial criteria for the main Victoria and Albert museum in Kensington but demands the application of commercial criteria for the Victoria and Albert's outstations or branches, including the Museum of Childhood. The Museum of Childhood costs one-fortieth of the cost of the whole Victoria and Albert complex, including the outstations. It provides one-eighth of all attendances in the complex. Therefore, it is much more cost-effective than the main museum. Why has it been picked on for victimisation? Is it because it is all right to subsidise culture in SW7, but not in E2? Is it because it is all right to provide culture on the State to the well-heeled burghers of Kensington but not to the less well off in the East End?
  Perhaps I am doing the Minister an injustice, but I shall remind him—although I am sure he knows—that the Museum of Childhood is the only Government-funded cultural activity in the whole of east London. It is the only bit of the national heritage anywhere east of the Tower of London.
  Even if one were to accept—and I do not—that an institution such as the Museum of Childhood ought to be considered or judged purely on hard, commercial business grounds, Mr. Burrett's business analysis is grievously defective for two reasons. First, if he had done even a hap'orth of arithemetic, he would have realised that there was no sense in recommending even an examination of the possibility of recovering the running costs by means of admission charges. Those running costs are about £300,000 a year. The number of admissions is over 200,000 a year. So, calculates Mr. Burrett, all one has to do is to get £1·50 off every grown up and child who goes into the place. He would get his £300,000, always assuming that the law of supply and demand does not
  1208
  apply and that one will get as many people paying £1·;50 as one does with free admission. Of course, that is a piece of arrant nonsense.
  Many organised parties, including school parties, go to the museum. I have received lovely letters in the past few days from schoolchildren, including one from a darling boy—I should like to meet him—who lives in Hertfordshire, who said:
  "I love that museum. I would go more often if I did not have to go to school."
  That is rather sweet.
  A teacher taking his class to the museum would have pay £30. It is only on the basis that he will take his class that the arithmetic of the Rayner report can be substantiated. It is a piece of nonsense.
  There is a second piece of nonsense in business terms. I am looking at the matter for the moment in cold business terms. The report says that if the museum is shut the building will fetch about £½ million for storage purposes. There are one or two hurdles to be crossed before that can happen. Will the planning authority allow a listed building to be used for storage purposes? Secondly, if Mr. Burrett had had a good look at the site he would have seen that there is difficult access to it for large vehicles. Who on earth will buy a building for use as a store if lorries are not able to get to and from it?
  The building is prefabricated. It is light, with cladding on it. The floor loading is light. One cannot put weights on it. One could not have a hoist there. What sort of a store is that? The only thing that could be stored is hollow spheres made of a virtually weightless material such as expanded polystyrene. No one will pay £½ million just for that.
  The so-called Rayner scrutiny was not a scrutiny at all, but a casual glance. The investigation was perfunctory, unprofessional, unskilled and imperceptive. It does not make any case for ending the great work done by the museum and the great pleasure and instruction that it gives to hundreds of thousands of people, young and old alike.
  1.13 am
  Mr. Nigel Spearing: I join the debate as another east London Member of Parliament. The proposed closure is seen by the people of east London as a slap in the face for east London, for reasons that my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) has mentioned. I sympathise with the Minister's job tonight. On almost any ground, this proposal is destructive, narrow-minded, discriminatory, vindictive and nasty. One wonders where the political nous was of those who let it pass over their desks.
  My hon. Friend mentioned the requirement, in theory, for entrance fees. What headmaster will spend large sums of money to send whole classes a round such an establishment when his capitation is being cut because of reasons that we know about, with regard to local government expenditure? It just does not add up.
  Moreover, the economic superstitions behind all this are, to say the least, questionable. The Government may say that they have to cut something and ask what we would cut instead. I am not sure that anything is gained by considering such relative candle-ends in expenditure terms. I draw the Minister's attention, however, to a reply that, by happy coincidence, I received today to a written question in which I asked the Secretary of State for Education and Science what was the United Kingdom

  1209
  contribution in the latest financial year to the European university institute—an EEC affair in Florence. The answer was that we contributed some £550,000—nearly double the cost of the children's museum in Bethnal Green. What do we get for that money? On 13 July 1981, the then Minister, the hon. Member for Brent, North (Dr. Boyson), told us that there were 15 United Kingdom students at that institution. The cost was £30,000 per year or more. I recommend that Sir Derek Rayner take an air trip to Florence—tourist class, no doubt, to save money—and examine that institution, which I suggest has far greater capacity for providing savings than the institution that we are now discussing.
  My hon. Friend the Member for Bethnal Green and Bow mentioned that the prefabricated building dated back to 1856 and was removed from South Kensington. The South Kensington complex, which is an important part of our national heritage, came into being as a direct result of the Great Exhibition of 1851. The trusteeship which was extended into the east end was regarded as a duty by the people whom my hon. Friend described. It is part of our heritage and any Government who seek to destroy it are guilty of vandalism.
  1.17 am
  Mr. Nicholas Lyell: I am glad to have the opportunity briefly to support the hon. Members for Bethnal Green and Bow (Mr. Mikado) and Newham, South (Mr. Spearing) in urging the Government to change their minds and to keep open the Museum of Childhood at Bethnal Green. Not only are they absolutely right that the East End should have its museum, but the Bethnal Green museum has a special place in its community. That 200,000 people should go to it within the east end shows how popular it is in that area and further afield.
  My special reason for taking part in the debate is that that museum has gone to particular lengths to draw in not only the public but children. This was pioneered by Janet Gladstone who worked there until her tragic death some 12 years ago. She opened classes on Saturday mornings and after school, especially designed to bring in children from the local neighbourhood and involve them in the activities of the museum—in painting, drawing and making things and taking a deep interest in and learning profoundly from what was to be found in the museum.
  When Janet Gladstone was tragically killed just after her child was born, her friends set up a trust, of which I am proud to be a trustee, to keep that work going. It has been kept going to this very day by Imogen Stewart. It has expanded and pioneered. It has shown the way to other museums. It has shown the way for holiday projects. It has been of immense catalytic benefit far beyond the region in which the museum is situated but also within Bethnal Green itself. It would be a tragedy if that valuable work were brought to an end. Three hundred thousand pounds is important in some ways but it is also important that it should be spent there for that purpose. I urge the Government to think again on this, to recognise the huge value of the museum in that position and to keep it open.
  1.20 am
  The Under-Secretary of State for Education and Science (Mr. William Waldegrave): The House will be grateful to the hon. Member for Bethnal Green and Bow (Mr. Mikado) for giving us the chance, even briefly, to discuss this important subject. Unfortunately, my right
  1210
  hon. Friend the Minister for the Arts is in Mexico addressing at this very moment—given the time shifts—a UNESCO conference. The arguments were set out well by the hon. Gentleman and by the hon. Member for Newham, South (Mr. Spearing) and, if I may so, by my hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell), whose particular connection with the museum was of great interest. The Conservative Party Back-Bench heritage committee was represented silently, because of the pressure on time, by my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy).
  The status of the Burrett report should not be exaggerated. It is necessary to have sceptical looks at even the smoothest-running parts of the Government machine. I know that the hon. Member for Bethnal Green and Bow will agree with me when I say that it is sometimes necessary to have a sceptical look at those parts of the establishment that can muster great support in the newspapers and elsewhere. But that does not necessarily mean that such reports should be accepted immediately by Ministers. It is necessary to have reports, but it is also necessary for Ministers to exercise their responsibility when they come to examine the reports. It is no criticism of Mr. Burrett or of Sir Derek Rayner. They were doing their job in casting a sceptical eye over this area and many of the other recommendations—we are dealing with only one recommendation in a long report—are sensible. The Select Committee on Education, Science and Arts congratulated the Government on the speedy acceptance of the principal recommendation to give trustees to the two great museums. The principle of some charging for outstations, such as Osterley Park, of the great museums has been accepted by Governments of both parties. The hon. Gentleman made the fair point that in a museum dedicated particularly to children the opportunity for charging must be smaller. Most of the museums with charges also have exemptions for children. That argument must be put in the balance on the other side.
  The interest, for better or for worse, that has been aroused in the work of the museum by the Burrett report, whatever the future, will reap benefits. The Department has received 309 letters in the short time since tie report was published. There have been two petitions. There have been debates in another place about the Bethnal Green museum and the other museum whose future is under question, and there has been this short debate tonight. All of us are now better informed about the interesting history of the museum.
  Although my small child is too small yet to do other than add to the museum's problems by her arrival, now that I have learnt from my brief about the interesting collections that will be available for her to see, I shall in due course be taking her along. I am advised by my private secretary who, with the heirarchical systems that we organise in Government, has a child older than mine, that his child has been much amused by the collections, which he thought were of high quality.
  The museum makes a contribution to the life of the East End and its community. It reminds us once again of the foresight of the Victorians in their public policy. The explicit purpose of setting up a museum in the East End can be admired from the distance of more than 100 years. That argument must also go into the balance.
  In addition, there are the restrictions on resources. There is also the principle of limiting the necessary coercion which is implicit in the State asking people who

  1211
  do not use a facility to pay for those who do. It is a coercion which all Tories—I am sure that my hon. Friend the Member for Welwyn and Hatfield will concur—will accept as necessary. They will accept that some necessary use of the State's power to tax is in order for the arts and museums. Only the most unreformed and unregenerated Cobdenite Liberals, of whom there are one or two on both sides of the House, could possibly stand four-square against that principle. The use of the State's great power of taxation and coercion must be examined closely. It is a great power that must be used with discrimination. Therefore, it is not wrong to cast a sceptical eye over its use in different aspects from time to time.
  1212
  I shall report to my right hon. Friend the issues that have been raised tonight. I have no doubt that he will read them for himself in the report in Hansard. Undoubtedly he will be meeting some of those who want to pursue the matter with him. I think that he has met members of the staff and others concerned. The case will not go by default. This useful little debate has made extra-certain of that. I think that the House and the children of a wider constituency than the East End will be grateful to the hon. Member for Bethnal Green and Bow for raising the matter.
  Question put and agreed to.
  Adjourned accordingly at twenty-six minutes past One o'clock.

PRIME MINISTER
  Security Select Committee
  Security Select Committee
  COCOM List (China)
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AGRICULTURE, FISHERIES AND FOOD
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  Livestock (Exports)
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  "Coal and the Environment" (Flowers Report)
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  Rabies
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  Emergency Planning Initiatives
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  Management Information and Accounting System
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  European Community (Farm Workers)
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  Rural Areas (Aid)
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  Salmon Fishing
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  Cattle Breeding Centre, Reading
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HOUSE OF COMMONS
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WALES
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  Rhydlafar Hospital
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  NHS (Recruitment)
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  Land Authority
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  Industrial Expansion
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  Community Care (Consultative Document)
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TRADE
  European Air Transport
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  British Airports Authority (Investment Programme)
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  Management Information and Accounting System
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  British Midland Airways (Appeal)
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  Sequestrations (Dundee)
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  Tourist Boards (Expenditure)
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  Manchester International Airport
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  Monopolies and Mergers Commission (Public Transport)
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  Tourism
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  Aberdeen Airport
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  International Maritime Organisation
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SOLICITOR-GENERAL FOR SCOTLAND
  Offensive Weapons (Convictions)
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HOME DEPARTMENT
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  Vehicle Exhaust Emissions (Prosecutions)
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  Immigration Service Union
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  European Parliament
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  Law and Order (Brixton)
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INDUSTRY
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NATIONAL FINANCE
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ATTORNEY-GENERAL
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CIVIL SERVICE
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ENERGY
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  Wytch Farm
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NORTHERN IRELAND
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  Mr. Clive Abbott (Investigation)
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SOCIAL SERVICES
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  Sickle Cell Centres
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  Management Information and Accounting System
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  Mrs. C. M. Lacey
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  Dr. David Player
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  Yorkshire Regional Health Authority (Ministerial Meeting)
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EDUCATION AND SCIENCE
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  FOURTH REPORT FROM THE EDUCATION, SCIENCE AND ARTS COMMITTEE: INTERIM REPORT ON THE NITRATE PROBLEM AT THE NATIONAL FILM ARCHIVE
  FOURTH REPORT FROM THE EDUCATION, SCIENCE AND ARTS COMMITTEE: INTERIM REPORT ON THE NITRATE PROBLEM AT THE NATIONAL FILM ARCHIVE
  Secondary Education (Liverpool)
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FOREIGN AND COMMONWEALTH AFFAIRS
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  BASKET 1: Security in Europe: Principles guiding relations between participating states: confidence building measures and certain aspects of security and disarmament
  BASKET 1: Security in Europe: Principles guiding relations between participating states: confidence building measures and certain aspects of security and disarmament
  BASKET II: Co-operation in the field of economics, of science and technology, and of the environment
  BASKET II: Co-operation in the field of economics, of science and technology, and of the environment
  BASKET III: Co-operation in humanitarian and other fields
  BASKET III: Co-operation in humanitarian and other fields
  Iranian Nationals (Deportation)
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TRANSPORT
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SCOTLAND
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  United Glass Containers Ltd., Shettleston
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EMPLOYMENT
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  Redundancy Payments
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  Fair Wages Resolution
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  Enterprise Allowance Scheme
ENVIRONMENT
  Disabled Persons Act 1981
  Disabled Persons Act 1981
  Lead
  Lead
  Local Authorities (Defective Properties)
  Local Authorities (Defective Properties)
  Prefabricated Houses
  Prefabricated Houses
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  Severely Handicapped Persons (Rate Rebates)
  Welwyn and Hatfield
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  Fish and Chip Shops
  Fish and Chip Shops
  Gipsy Caravan Sites
  Gipsy Caravan Sites
  Sports Council
  Sports Council
  Asbestos
  Asbestos
  House Building
  House Building
  Toxic Waste
  Toxic Waste
  House Owners (Compensation)
  House Owners (Compensation)
  Confidential Correspondence
  Confidential Correspondence
  Victim Support Schemes
  Victim Support Schemes
  Homeless Persons
  Homeless Persons
  Housing Association Tenants
  Housing Association Tenants
  Building Control
  Building Control
  Ordnance Survey
  Ordnance Survey
  Departmental Circulars
  Departmental Circulars
  West Midlands (Employment)
  West Midlands (Employment)

Preamble
The House met at a quarter-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Bristol.

Baroness Carnegy of Lour
Elizabeth Patricia Carnegy, having been created Baroness Carnegy of Lour, of Lour in the District of Angus, for life—Was, in her robes, introduced between the Lord Mowbray and Stourton and the Baroness Young.
Lord Gormley
Joseph Gormley, Esquire, OBE, having been created Baron Gormley, of Ashton-in-Makerfield in Greater Manchester, for life—Was, in his robes, introduced between the Lord Blyton and the Lord Taylor of Mansfield.

Air Security Charges Review
2.44 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 they are in a position to announce the date on which they expect to make a Statement in both Houses of Parliament on the review of air security charges and related matters now being conducted by the Parliamentary Under-Secretary of State for Trade.
The Secretary of State for Trade (Lord Cockfield): My Lords, a Statement will be made tomorrow.
Baroness Burton of Coventry: My Lords, is the Minister aware in the first place that it is really refreshing to receive an affirmative reply? However, if I may pursue the matter a little further, presumably, in accordance with what has been said in the past, the Statement will be made in both Houses. Will it, as we expect in both Houses, be an oral Statement on which we shall have an opportunity of questioning the Government?
Lord Cockfield: My Lords, a Statement will be made in both Houses, but following the normal practice in matters of this kind the Statement will be made by way of reply to a Question for Written Answer.
Several noble Lords Several noble Lords: Oh!
Baroness Burton of Coventry: My Lords, not being able to argue with the Minister on the precedents—I expect that he has the details of what is done regarding this type of reply—may I ask whether he is aware that
228
a number of us in both Houses, and on all sides, have been following this matter for some months, that we disagree with what we think has been done, that we expected to have the opportunity of putting questions to the Minister, and that neither House welcomes a Written Answer on the day before the House rises?
Lord Cockfield: My Lords, I should have thought that the noble Baroness would have been pleased by the promptness with which I have dealt with the matter. Secondly, if the Statement is made by way of reply to a Question for Written Answer, the noble Baroness will have time to study it before she comes to a conclusion on what the Government say.
Lord Byers: My Lords, may I ask the noble Lord how it comes about that there is to be a Question for Written Answer in both Houses tomorrow? Is it not an odd procedure—two Questions, one in each House?
Lord Cockfield: My Lords, it is quite normal; it has been done on many occasions.
Baroness Burton of Coventry: My Lords, is the Minister suggesting that I put down for tomorrow a Question for Written Answer?—because as yet I have certainly not done so. Is he further aware that I had no idea that a matter which we have been pursuing for so long, and which the airlines have been pursuing, would be shuffled out of by means of a Written Answer to which people cannot reply?
Lord Cockfield: My Lords, there will be plenty of opportunity for the noble Baroness to make her views known when she has seen the terms of the Answer.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that a Written Answer on a matter of this importance is really not good enough? It is not satisfactory, and will he be good enough to consult his right honourable friend the Prime Minister and his other right honourable friends in order to ensure that there is made in both Houses a Statement instead of a Written Answer?
Lord Cockfield: My Lords, it is in fact standard practice for Statements of this kind to be made in reply to Questions for Written Answer. It would be difficult to say that this matter, which relates solely to the question of financing the costs of security, is of such overriding public interest that it demands an oral Statement in your Lordships' House, to the detriment of the other business on the Order Paper.
Lord Wigoder: My Lords, which Member of your Lordships' House has asked the Question to which the Written Answer is to be given tomorrow?
Lord Cockfield: My Lords, I imagine that such a Question will appear on the Order Paper when it is published.
Lord Wynne-Jones: My Lords, does not the noble Lord agree that a mere exercise in one-upmanship is not a substitute for a reasoned Answer?
Lord Cockfield: My Lords, this is not an exercise in one-upmanship; it is an exercise in trying to make the information available at the earliest possible date. I dealt with the matter finally only this morning. The terms of the Statement have not yet been settled. I should have thought that the noble Lord would appreciate my dealing with the matter with such speed, instead of following what no doubt he regards as the normal practice of taking more time.
Lord Glenamara: My Lords, will the noble Lord say how my noble friend can pursue this matter before the middle of October?
Lord Cockfield: My Lords, I was under the impression—and I thought that the noble Lord also knew—that your Lordships' House will be sitting next week.
Lord Beswick: My Lords, is it not a coincidence that we were asked to approve the order relating to air security charges last week, instead of after the outcome of the review is known?
Lord Cockfield: No, my Lords; the effect of the order last week was to reduce the security charge. I should be surprised if the noble Lord felt that the security charge should not have been reduced.
Lord Molloy: My Lords,—
The Lord Privy Seal (Baroness Young): My Lords, we have now had five minutes on this matter—
Several noble Lords: Oh!
Baroness Young: I appreciate that your Lordships very much want to know what is in the Statement which will be given by way of a Written Answer tomorrow. As has already been indicated, the House does not rise until Tuesday, and there will of course be other opportunities to pursue the matter. May I suggest that we take one more supplementary question, and then move on to the next Question.
The Earl of Cork and Orrery: My Lords, as the Question for Written Answer has apparently not yet been set down and the oral Question by the noble Baroness, Lady Burton of Coventry, has been on the Order Paper for some time, would my noble friend explain why it was not possible to give an answer to the noble Baroness in order that she should have the opportunity to ask a supplementary?
Lord Cockfield: My Lords, a full and comprehensive reply was given to the noble Baroness's Question, which read as follows:
"To ask Her Majesty's Government whether they are in a position to announce the date".
That I have answered.
The Earl of Cork and Orrery: There has been no opportunity for a supplementary.
Lord Cockfield: The answer to it is that a Statement will be made tomorrow. It would have been perfectly possible, I may say, if the noble Earl's object is to try
230
to meet the noble Baroness's interest in this matter, which has been evidenced over a long period of time, to have decided to make the Statement in a week's time; but I cannot see what advantage that would have compared with the decision that I in fact took, which was to make the Statement as soon as possible, which is tomorrow.
Baroness Burton of Coventry: My Lords, may I ask the noble Baroness the Leader of the House whether she can help—because perhaps I misheard what the noble Lord said, and we have got rather lost with all these exchanges. I thought I heard the noble Lord say that it would not be helpful to make a Statement tomorrow in this House because that would be to the detriment of the business in another place. I do not think that has anything to do with it, but that is certainly what I understood him to say. I do not know whether the Leader of the House could help us, in view of the contributions we have had from all sides of the House. It may be a most excellent Statement, but we have not seen it. Could she possibly use her influence to see whether we could have an oral Statement tomorrow?
Baroness Young: My Lords, as the House knows, it is quite common practice to have Statements by way of Written Answer. I have used this means myself already in the course of the last year, and I think all Ministers do at some stage or another. It is really a decision which would usually rest with the Minister responsible for the department. It is a matter, I recognise, about which the House feels very strongly indeed, and we all know of the noble Baroness's interest in this matter. I will, of course, reflect on what has been said in your Lordships' House today, but I hope that both the noble Baroness and the House will feel that my noble friend, in giving the reply that he did today, has actually followed what is quite normal practice. The House will have an opportunity, when the Statement is published tomorrow, to see what it is that the Government have in mind on this particular matter, and I hope noble Lords will feel that that is not in any sense an unusual procedure.

Anglo-French Economic Discussions
2.53 p.m.
Viscount Mersey: 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 discussions have taken place between them and the French Government about the latter's adoption of economic policies which show that the French Government recognise the need for firm control on Government borrowing and inflation.
Lord Cockfield: My Lords, the opportunity arises frequently for Governments to exchange views on economic affairs; for example, at meetings of the European Council and the Finance Council. The French Government indicated a change in emphasis in their

231
policies at the EMS realignment meeting on 12th June. The annual Anglo-French summit will take place in November, and will provide a further opportunity for an exchange of views.
Viscount Mersey: My Lords, I thank my noble friend for that full reply. May I ask him whether he would not agree that there now seems to be common ground among the parties in this country that we cannot buy our way out of recession, as M. Mitterrand tried to do initially? Indeed, my noble friend Lord Boardman made this very point last Monday. Was not M. Mitterrand's initial reflationary policy further proof of this?
Lord Cockfield: My Lords, I entirely agree with what my noble friend says. The French Government that came into power just over a year ago came in on the basis of a reflationary policy. They have since had to modify that policy in very material respects.
Lord Bruce of Donington: But, my Lords, is the noble Lord aware that there is hardly anything in the Government's record that justifies their being able to give any advice to anybody? Would it not be far better if the noble Lord decided to devote some interest to his own country and to its prosperity, as distinct from the disaster into which his own Government have put it?
Lord Cockfield: My Lords, I was not giving advice to anybody, although from time to time I am tempted to give advice to the noble Lord himself. He will find that after 12 months in office the French Government have had to devalue the franc twice, have had to introduce a freeze on wages and prices, have had to reduce Government expenditure and have now set a limit of 3 per cent. on the budget deficit—a figure somewhat comparable to our own.
Lord Molloy: My Lords, is the noble Lord aware that the almost jocular way in which he approaches these questions does not give much encouragement to the 3 million unemployed, two-thirds of whom were created by this Government; nor to the hundreds made bankrupt every day; and does he not think that a policy which deliberately creates inflation is a form of governmental masochism so that they may get credit for reducing it? Is this not a serious issue that ought to be treated by any Government spokesman in a most serious way?
Lord Cockfield: My Lords, the noble Lord will not be surprised to hear that I do not agree with a single word that he says. These matters were debated at length in your Lordships' House as recently as Monday; and, if I may suggest it with respect, the noble Lord having participated in that debate, it would pay him to read the record of the whole of the debate again.
Lord Harmar-Nicholls: My Lords, did I understand from my noble friend that we have contact with the French Government through the EMS? Does that mean that, although we are not members of the EMS, we do take part in any discussions arising within that organisation?
Lord Cockfield: My Lords, my noble friend raises what is in effect a very technical point. We are in fact members of the EMS, but we are not members of the exchange rate mechanism.
Lord Shinwell: My Lords, will the noble Lord not find it embarrassing to exchange views with a Socialist Government? Is there not a danger of him being converted?
Lord Cockfield: My Lords, the answer to both parts of that question is, "No".
Lord Underhill: My Lords, as the noble Lord referred, in answer to one supplementary, to whether another noble Lord had read the debate on unemployment held last Monday, may I ask him whether he has re-read that debate, and whether he recalls that from all sections of the House there was pressure for constructive capital expenditure, including from the CBI, and that he did not reply to those points?
Lord Cockfield: My Lords, I have in fact re-read the whole of the debate. I indicated at the time that I would be reading it, and I did in fact re-read it. I have nothing to add to the very full and comprehensive reply I gave to the debate or to the opening speech that I delivered on behalf of the Government.

Police Powers to Stop and Search
2.59 p.m.
Baroness Trumpington: 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 favour strengthening the power of the police by giving them the authority to stop and search for offensive weapons, as recommended by the Phillips Report.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): Yes, my Lords; and we hope to bring forward legislative proposals accordingly.
Baroness Trumpington: My Lords, in thanking my noble friend for that brief but satisfactory reply, may I ask him whether he agrees that prevention of crime is much better than punishment for crime which has taken place; and would he not agree that the example of Scotland, where this matter has already been tried out during the last eight months and where searches in 530 cases revealed offensive weapons in 206, proves that crime levels must have been reduced and that this power will therefore benefit the rest of the country?
Lord Elton: My Lords, my figures are a little more recent. I support my noble friend's statement that the Scottish experience is successful. In the first 10 months of operation of the new power, just over one-third of the 750 or so persons stopped and searched were found to have an offensive weapon on them.
Lord Inglewood: My Lords, may I ask my noble friend whether, when he says "accordingly", he intends to supersede the powers in various Private Acts giving to certain police forces in this country the power to stop, search and detain? In addition, will he ensure that whatever powers are included will be national rather than local and will go further than just searching for offensive weapons, following the lines of the Metropolitan Police Acts, which were primarily concerned with stolen property?
Lord Elton: My Lords, I can confirm that we want to have a uniform procedure throughout the country and that at present there is a patchwork of local enactments which ought to be superseded. As the noble Lord asked and as the Royal Commission recommended, it is also intended to rationalise existing powers of stop and search in relation to stolen goods by extending them throughout England and Wales, and to create a new power in relation to housebreaking implements.

Peace Studies in Schools
3.1 p.m.
Lord Hatch of Lusby: 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 their attitude to the teaching of peace studies in schools and institutions of higher education.
Lord Elton: My Lords, since the noble Lord's Question lacks any definition of the term "peace studies", I can only answer that the Government regard it as essential that what is offered in any institution should always be education and never indoctrination.
Lord Hatch of Lusby: My Lords, perhaps I should declare a non-pecuniary interest as a long-standing honorary member of the School of Peace Studies in Bradford, and professor in Zambia. May I ask the noble Lord whether he realises that the term "peace studies" has been used by members of his own Government, including the Parliamentary Under-Secretary of State at the Department of Education? Therefore I assumed that it was not necessary to define it. Would he say whether he and the Government stand by the attack made by the Under-Secretary of State in a public speech in which he described peace studies as a Trojan horse; and would he agree that peace studies themselves, in the teaching of mediation as an alternative to force, have a very valuable part to play, not only in this country but throughout the world?
Lord Elton: My Lords, I note the noble Lord's interest and I would point out that the Parliamentary Under-Secretary of State in any department is never a member of the Cabinet—I say with regret. As to Trojan horses, I have not read my honourable friend's precise words, but any subject can be a Trojan horse and it must be the case that the quality and content
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of what is taught in our schools depends above all else upon the qualities of those who teach it. The most innocent curriculum can become dangerous in irresponsible hands and the most dangerous curriculum doubtless can be put to some good use.
The Earl of Lauderdale: My Lords, would my noble friend agree that a valuable component in serious peace studies would be the history of the balance of power?
Lord Elton: Yes, my Lords, and I would go on to say that the sort of balanced analysis of human behaviour which the noble Lord, Lord Hatch of Lusby, quite rightly thinks should be pursued in our schools has for many generations been pursued in the subjects of history, geography and economics.
Lord Annan: My Lords, would the noble Lord agree that in the last 40 years in our universities and institutes of higher education, departments of history, politics, international law and international relations have been set up which exist to promote the study of why states come into conflict with each other? Does he not agree that there is no need of further proliferation? Is he aware that in universities there is some suspicion of some of those who promote peace studies, in that it is feared that they are interested in propagating a particular explanation of this subject rather than considering dispassionately the whole of the evidence relating to peace, as would be customary in any university which had a regard for scholarship?
Lord Elton: My Lords, in response to that, I should like to say that peace, like salvation, is very greatly to be desired, and our concern is that in their consideration of how to achieve it our young people should be given guidance which is realistic and balanced. Prejudice in pursuit of either aim is a fatal handicap.
Lord Beloff: My Lords, is my noble friend the Minister aware that the Institute of Peace Studies in the University of Bradford has been described some years ago in relation to both its content and the type of student who attended it as being a rest camp for urban guerrillas? Is the noble Lord further aware that since the proposed affiliation of the National Union of Teachers to the CND, parents are rightly disturbed about what "peace studies" might mean in the schools?
Lord Elton: My Lords, the first half of my noble friend's supplementary question I note with great interest in the context of Lord Hatch's declaration of interest. As to the second, I am well aware that there is a wide unease about this subject, but, as I said in my opening reply, it has not actually been defined and it does not, in the terms of secondary education as I understand it, yet lend itself to definition. What matters is the quality of the teachers and the way they put across what they are teaching. It is my experience that a good teacher will give good guidance, irrespective of his own personal convictions or prejudices in either direction, on matters in which children ought to be taught to make up their own minds—and that is what we want to pursue.
Lord Stewart of Fulham: My Lords, is it not important that the peace studies should contain an account of the important part played by the Atlantic Alliance in keeping the peace over the last 30 years?
Lord Elton: My Lords, I would entirely agree, and I am tempted to follow that theme wider into the area of the question of the validity of deterrence as a means of keeping the peace; but in order to keep the peace in your Lordship's House I thought I would not.
Lord Brockway: My Lords, arising from the original Answer of the Minister in which he deprecated documentation to schools—
Several noble Lords: "Indoctrination".
Lord Brockway: I am sorry my Lords; I misheard. I substitute the word. Is he aware that in a Written Answer to a Question by me this week the Government acknowledge that they send to schools their documents about disarmament? Seriously, may I ask him this: the United Nations has now decided to set up a world disarmament campaign to distribute information. Will that information be available in the schools?
Lord Elton: My Lords, Her Majesty's Government do not exercise censorship over what goes into schools unless it is obscene. The publications of Her Majesty's Government are available to all schools and so, indeed, are the publications of the Government of the Soviet Union. It is to make up their minds that our children must be taught.
Lord Hatch of Lusby: As a non-urban guerrilla, may I ask the noble Lord whether, in the light of his original Answer to me, he will take this opportunity of dissociating himself from the words used by the Under-Secretary when he described these studies as a Trojan horse? Is he further aware that there are five universities in this country with schools of peace studies, training teachers of peace studies, and therefore that the term "peace studies" is defined and is being taught under the aegis of our universities? Would he invite his honourable friend the Secretary of State and his noble friends behind him to visit these schools of peace studies and see what is being taught there and whether it is not helpful to the peace of the world that we are all seeking?
Lord Elton: My Lords, I would never dissociate myself from the words of my honourable friend on such an invitation as I have now been offered. But I would say, as I said at the beginning, that the term, as used, is not defined in our schools and I am not prepared to condemn out of hand something which the noble Lord has not specifically described. If the noble Lord's Question is addressed to matters other than the schools, I ought to apprise myself of that also. But I do not think that will be helped if all my noble friends and I were to tramp through the classrooms in the first instance.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that dinner will be
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available at the usual time this evening. The Report stage of the Employment Bill will be adjourned at approximately 7.0 p.m. for approximately one hour. During this adjournment the Northern Ireland Assembly (Day of Election) Order 1982 and the Valuation (Postponement of Revaluation) (Scotland) Order 1982 will be taken.

Woolworths (Aberdeen Development) Order Confirmation Bill
Read a third time, and passed.

Employment Bill
3.12 p.m.
Report received.
Lord Rochester Lord Rochester moved Amendment No. 1:
Before Clause 1, insert the following new clause:
("Employee participation.
.—(1) In this section—
references to "the Act" of any particular year are to the Companies Act of that year;
"directors' report" means a report by the directors of a company which by section 157(1) of the Act of 1948 is required to be attached to a balance sheet of the company prepared under section 1 of the Act of 1976 (or under that section taken with section 150 of the Act of 1948); and
"employment" means employment other than employment to work wholly or mainly outside the United Kingdom; and "employed" and "employee" shall be construed accordingly.
(2) This section applies to every directors' report of a company which relates to a financial year beginning on or after 1st January 1983 where the average number of persons employed by the company in each week during the financial year exceeded 200; and for the purposes of this subsection that number shall be the quotient derived by dividing by the number of weeks in the financial year the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company and adding up the numbers ascertained.
(3) In every directors' report of a company there shall be contained a statement describing the action that has been taken during the financial year to introduce or develop arrangements aimed at—

(a) providing employees systematically through their managers or supervisors with information on matters of concern to them as employees;

(b) consulting employees or their representatives on a regular basis so that the views of employees can be taken into account before decisions are made which are likely to affect their interests;

(c) encouraging the involvement of employees in the company's performance through means such as employee share ownership schemes;

(d) achieving a common awareness on the part of managers and employees of the problems involved in allocating resources for such purposes as pay and investment.").

The noble Lord said: My Lords, this amendment is a revised version of one that I introduced at Committee stage two weeks ago at four o'clock in the morning when it was not possible for a number of your Lordships to be present. I should therefore first briefly describe the purpose and content of the proposed new clause. Its aim is positively to improve this country's industrial relations and performance by increasing the extent to which employees participate in the activities of the company in which they work.
The amendment seeks to make it a statutory requirement that in every directors' report of a United Kingdom company which relates to a financial year beginning on or after 1st January 1983, and where the number of employees exceeds 200, a statement should be included describing the action that has been taken during the year to introduce or develop arrangements aimed at furthering employee participation in the ways that are set out in subsection (3)(a) to (d) which I hope will speak for themselves.
The content of the subsections has been altered slightly from the original version to take account of views which were expressed in Committee and helpful advice that I have received from all parts of the House. I should like to take this opportunity to acknowledge gratefully that help. Perhaps the best way to summarise the discussion which took place at the Committee stage is to say that when the noble Earl, Lord Ferrers, replied to the debate, he observed that every noble Lord who had spoken on the amendment seemed to have been mildly in favour of it.
I should add that in summarising the Government's own position he went on to express what might be described as mild opposition to the amendment in saying, at col. 321 of Hansard for 13th July:
"we like the idea but we have misgivings about it. We are sympathetic to the amendment, and we have not ruled out a legislative step of this kind in the future, if industry makes insufficient progress on a voluntary basis. But I think it would be risky to take this step without further and careful consideration".
I should like to return to that point now, if I may. From these Benches, we have given the Government broad support on many of the more contentious provisions of this Bill concerning such matters as unfair dismissal, closed shop ballots and trade union immunities. We have done this despite the practical difficulties to which they may give rise. If there are risks for industrial relations involved in this legislation, it is in those provisions that they reside, and compared with them any that are attendant on acceptance of this proposed new clause are surely insignificant.
I was once altogether a voluntarist on this question of more employee participation; but the trouble about voluntarism is that there have to be volunteers. In the past exhortation concerning the need for speedier progress in this matter has proved largely fruitless. The Liberal Party have for the past 50 years wished to go much further in the direction in which this amendment points.
For my part, I have reached the conclusion that the time has come to make it a statutory requirement that in every company employing more than a certain number of people there should be consultative bodies of some kind. But in the present instance we are asking only for the very limited legislation contained in this amendment. Everywhere people are now seeking to exercise more influence over the making of decisions that affect their lives. They cannot surely for much longer be denied that influence only while they are at work. Some legislative action is therefore called for in this field. I should like to see the initiative for that action coming from this House.
In Committee, the noble Earl, Lord Ferrers, said also that the Government were doubtful about imposing a rigid legal system on all employers irrespective
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of their particular needs and circumstances. So, my Lords, am I. But all that the new clause requires is that companies should expose to public view what progress, if any, they are making in this field. Within it they are not obliged to take any action at all. If they are altogether inactive in the matter there will simply be no progress to record.
We have also tried hard in subsection (3)(a) to (d) to strike the right balance between the needs, on the one hand, to be reasonably specific concerning some of the general areas in which employee participation has been proved by this country's most progressive companies to work, and, on the other hand, to avoid rigidity and encourage flexibility by leaving companies free to act or even not to act in those areas as they think best. Then it was argued that the directors' reports are costly to produce, and the longer the report the more the expense that is incurred. It was claimed also that paradoxically a requirement of the kind proposed in this amendment would impose the greatest burden on those employers who already have well developed employee involvement policies.
In response to those criticisms, I would say two things: first, the amendment is concerned with the activities of companies in relation to their most precious asset—people. What information in the report of a company could offer better value for money than a statement about the involvement in its activities of the people it employs? Secondly, in order to comply with the spirit of this new clause, companies with admirable employee participation arrangements might indeed wish to state in the first year of their operation what in general was being done in the area covered by subsection (3)(a) to (d). Thereafter there might be little for them to say, but their reputation for good industrial relations would not suffer on that account for it would continue to depend not on their words but on their actions; so they would have nothing to fear. On the other hand, this amendment sets out to activate the directors of other less well run companies, particularly those of medium size, to pay more attention than they now do to the need to develop employee participation.
In Committee, the noble Lord, Lord Mottistone, rightly probed more deeply. He said that we were in an area of attitude-changing and he had misgivings as to whether legislation at this time would produce real change. I respect his views, and indeed he and I both know from experience how difficult it is to effect changes of attitude by another means—industrial training. But what I know is possible, because I have seen it happen, is that marginal modifications in behaviour can be brought about which eventually lead to attitudinal change by building on what has already been shown to work in practice and thus to contribute to improvements in motivation, productivity and competitiveness.
This Bill is called the Employment Bill. As it stands, it aims to do nothing to further employee involvement; but the proposed new clause would remedy that omission, not least in being seen to occupy pride of place as the first in the Bill. I do not for a moment suggest that the wording of the clause cannot be improved, but the principle underlying it is clear enough. If the Government consider such a clause should not form part of this Bill I will gladly withdraw

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the amendment, provided that they will undertake to bring forward another Bill dealing with this question as soon as possible in the next Session of Parliament. Alternatively, if they are prepared to discuss the matter with me and others between now and the Third Reading of the Bill in October, with a view to improving the wording of the amendment or putting down an amendment of their own on similar lines, again I will happily withdraw this amendment.
What will not be acceptable is either an outright rejection of the new clause or to be told that there is need for the Government to consult further with employers, trade unions and others before any legislation of this kind can be introduced. We have had years and years of consultation. Nowhere in the field of industrial relations has there been more talk and less action than on the question of developing employee participation. The time has surely come for this first tiny statutory step to be taken towards that goal. I beg to move.
3.24 p.m.
Lord Kilmarnock: My Lords—
Lord Boyd-Carpenter: My Lords, I think that perhaps this side of the House has priority? I am much obliged—
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, with respect to my noble friend, I think that the noble Lord, Lord Kilmarnock, although his name is not on the amendment, may be speaking for his noble friend Lord Aylestone.
Lord Kilmarnock: My Lords, I thank the noble Earl for his intervention. In fact my name is not on the amendment but that of my noble friend Lord Aylestone is, so I hope I may be taken as an acceptable substitute. Briefly, throughout this Bill we have been discussing the righting of certain wrongs and the imposition of further restrictions on the closed shop, on immunities and on the definition of trade disputes. This is the first time we have been able to discuss properly something positive, something which is designed to avoid or to reduce such disputes in the first place. The forerunner of this amendment came up at something like 3.45 a.m. on the last day of the Committee stage when we had all rather run out of steam; so I am delighted that the noble Lord has brought it forward again at "prime time", when all our minds are fresh, or at least fresher.
Proposals to improve industrial relations through some measure of employee participation are not new. The trouble is that they have tended to be either so bland as to have little practical effect, or so rigid as to put companies in a straitjacket. The attraction of this new clause is that it avoids both defects. It is perfectly specific in that it requires directors to make a statement, which can be as long or as short as they like but which must be there in their report. At the same time it recognises that there are a number of possible routes to participation and that different companies may prefer to go different ways, and some further than others. It recognises the merits of a
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pluralist approach and it avoids the straitjacket.
Participation is not in itself a cure for our industrial ills, but it will be vital if the technological changes, which we cannot possibly resist, are to be introduced with the co-operation of the workforce in this country. It could be said that at no previous time in our industrial history have good communications between management and workers been more necessary. My party therefore proposes to make it obligatory on large firms to introduce participation in some form, but we do not propose to shackle companies by the imposition of statutory directors or single-channel balloting for elected posts. We believe it is vital to give as much freedom as possible to workers and employers to devise the form of participation that suits them best. It seems to me that this amendment—that is, the new clause proposed by the noble Lord, Lord Rochester—is drafted very much in that spirit.
It also has another attraction for me. If it is accepted, as I hope it will be, it will provide a rich source of information concerning the way different companies go about participation. It will make it possible for one company to learn from another. It may be that a standard or code of practice will emerge in a particular industry and we shall be halfway to where we want to get, without any further legislation. This requirement upon directors of companies may seem a modest thing at first sight, but we believe that it could play a very important part in the development of employee participation and industrial democracy in this country.
Finally, let us remind ourselves what this Bill does. It seeks to right certain injustices to individuals and to oblige the trade union movement to put its house in order. But we must recognise that in very poor market conditions it is not only the unions which have obligations to society. Employers must, as far as humanly possible, take the workforce into their confidence and seek to involve them in a creative way in the future of their companies in the difficult times that lie ahead. If that is the case—and I believe it is—how satisfying it would be if we sent this Bill back to the other place a little less lopsided by the addition of this new clause. That is a contribution to better industrial relations that this House can and ought to make.
Lord Boyd-Carpenter: My Lords, may I first apologise to the noble Lord, Lord Kilmarnock, for the misunderstanding a moment ago. As he says, and I think he deduced, it came about because his name did not appear on this amendment and I had no reason to suppose, therefore, that he was speaking on behalf of his noble friend.
I have a great deal of sympathy with the purpose and intention of this proposal. Indeed, to some extent I can come before your Lordships in the unaccustomed apparel of a white sheet on a good deal of its contents. I happen to be chairman of a company which, as I think the noble Lord, Lord Rochester, knows, has been in the forefront of developments under all four of the headings included in subsection (3) of his amendment. Indeed, on employees' shareholdings we go a long way beyond what he suggests in the third paragraph, inasmuch as already slightly over 90 per cent. of those who work for us in the United Kingdom are shareholders in the company. I say that in order

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to indicate that I am far from being hostile, either in practice or in theory, to what is the plain purpose that the noble Lord, Lord Rochester, has in mind in bringing this proposal forward.
Having said that, I must say that I am very doubtful about the means which he has sought to adopt for helping these excellent developments. I very much doubt whether mandatory inclusion in the annual report, and indeed in the directors' report section of the annual report of a company, is the right way to encourage this kind of development. I can see it only too easily passing into a kind of stylised formula used year after year and conveying remarkably little. And I honestly doubt whether the annual report and accounts, which are, of course, as he knows, required by the Companies Acts and for their purposes, are the proper vehicle for a company to draw attention to its developments in this direction.
Indeed, on a small point, in my own company's case such references as we make—and I think we make them every year—to our employee shareholding scheme almost always appear, not as this amendment would wish them to appear, would hind them to appear, in the report of the directors, but in that part of the document which is described somewhat misleadingly as the chairman's speech; because, may I say in parenthesis, I do not inflict on our shareholders the cruelty of having to listen to me at considerable length. I reserve that ill behaviour for your Lordships' House.
But I feel that this is the wrong way of doing it and, indeed, would be somewhat discouraging. Also, it would be, as T think was mentioned in the small hours, a little unfair to those companies, such as my own, which have already made such progress in this matter. One would be bound by these proposals to refer to the introduction of things of this kind. We introduced them years ago. We presumably, therefore, could not on a strict reading of the amendment refer to them. And if the noble Lord says that, of course, it is also the development that is covered, there again we have an effective scheme which is operating extremely well and which, for further development, depends on Her Majesty's Government, from the point of view of adjusting the quite severe taxation restrictions, which still tend to inhibit the development of employee shareholding schemes.
To compel companies, in a document that they are compelled to produce every year, to try to set out what they are doing on these sometimes delicate and sensitive issues, such as the consultation one, would not serve the purpose which the noble Lord wants. I think that it could produce even a little counter-reaction, even a little feeling that what a sensible company does, for good and sensible reasons of its own, does not need to be set out in a legal document under legal compulsions every year. It very soon, as the noble Lord knows, becomes known—becomes known, very often, by the performance of the company—when companies are progressive in this way, and it is a much better expedient to let a company's sensible handling of these matters speak for itself.
I do not know what my noble friend Lord Ferrers will say about it, but I am disposed, on balance, to object to the insertion of any further compulsory material in a company's annual report. We are bound by statute to include a great deal; we are bound by the
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rules of the Stock Exchange and of the auditor's profession to include a great deal and it is quite a laborious business. To include under statutory compulsion what we are doing as a matter of sensible policy for the fostering of co-operation would not only be counterproductive; it would tend to produce a little prejudice against developments of this kind. I very much hope that, after your Lordships have debated this amendment, we will not put it into this statute.
3.35 p.m.
Lord Houghton of Sowerby: My Lords, I added my name to this clause, because it represents a meeting of minds rather than any change in political alignment. But my noble friend Lord Rochester is the secretary of the House of Lords Industry Study Group, of which I have the honour to be chairman. If that is not a commercial, I do not know what is. I could also refer to the fact that the noble Lord, Lord Aylestone, was a colleague of mine in the Labour Government, so I think that the support for this new clause has a respectable background.
May I, for a moment or two, say why I think that this new clause should go into the Bill? I think that it would give it a balance which it does not have at the present time, because this Bill is mainly about the conditions under which workers and management may confront each other. To some extent, the provisions of this Bill supplement the Employment Act 1980, which began to draw afresh the lines of conflict.
Both of these measures represent a kind of new Geneva Convention on the rules of war. I do not think there is much hope for this country in all this, unless it is a sort of run-of-the-mill approach to fundamental upheaval, politically and industrially. What I am sad about is that the word "co-operation" is becoming obsolete in the vocabulary of industrial relations today. "Participation" is not the vogue word that it was. In our economics, Keynes is out, Friedman has been briefly in and now Karl Marx is stirring in his grave—stirred by travellers and fellow travellers who are keeping political leaders and trade union leaders awake at night. They surely are.
If noble Lords are wanting a suggestion for reading during the Recess, I would recommend Mass Unemployment and the Future of Britain by Bill Jordan. It is nice and gloomy. The author predicts that some time in the mid-1980s, and probably during the year after the next General Election, the country will become increasingly ungovernable.
"Strong forces of left and right will confront each other on the streets of Britain",
says the author. That sort of perception seems to reduce this Bill, and indeed this amendment, to a sort of tawdry irrelevance; at least, one might be forgiven for thinking so. Though I think, on second thoughts, it is the Bill that is the real irrelevance, because this new clause is relevant, quite apart from the Bill. But I think that it would add something to the Bill.
For myself, I am all for scrutinising the use of power. It is the most dangerous thing in the world in human affairs, whether it is the power of Government, of bureaucracy, of monopolies, of employers or of trade unions. Where power lies, there is the likelihood of abuse and abuse can become tyranny. That is one of the dangers confronting the world today.

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Taken to pieces and looked at bit by bit, some of this Bill may be needed to curb excesses, but taken as a whole it presents a sinister purpose in the eyes of a great many people. And it may indeed have that purpose. Call it a threat, or call it an attack, or call it anything you like. It has been called all those things, and worse. The trade unions would not take it from the Labour Government, and some appear now to be preparing to reflect on their defiance in the solitude of a prison cell. I hope that the Official Solicitor will be on hand to get them out. But in this amendment there is a faint shaft of light in the gloom of the English summer which has now settled on the countenance of Mr. Tebbit. It requires companies to extend their reports beyond the list of directors' fees, which are constantly rising. If one wants to know about pay increases, only have a look at directors' fees. We want to know a little more than that. One of the things we want to know is what they are doing about the workers.
What is in the new clause is all conventional stuff, really. We are asking companies to tell us a little more about how good they are at communications and consultation, if not positive participation. We are debating this new clause in the shade of Bullock, the fifth directive and all the other plans to change the face of capitalist enterprise. Against that background, this new clause is a mere flick of a feather. The noble Lord, Lord Boyd-Carpenter, criticised the proposal to add more to the statutory obligations of directors in their companies' reports. This ought not to trouble them in the least. It seems to me that it would probably add to the interest of company reports. It would enable them to include more—more that is relevant, perhaps, to the workers' interests—about their relations with their staff in the supplement which many companies admirably produce for the special interest of their employees.
Lord Boyd-Carpenter: My Lords, I wonder whether the noble Lord would give way?
Lord Houghton of Sowerby: Yes, certainly, my Lords.
Lord Boyd-Carpenter: My Lords, I am sure the noble Lord will agree that there is nothing whatever to prevent a company which wishes to set out its activities of this kind in some part or other of its annual report from so doing, and as I told the noble Lord we in fact do it from time to time.
Lord Houghton of Sowerby: My Lords, I agree entirely but there are times when just a gentle nudge helps, and this is what the new clause suggests. It does not tell companies what they must do. It merely asks them to tell us what they are doing. And that I think is of great interest, because it is one of the most important aspects of industrial relations today. My firm conviction is that our existing system cannot last unless there is a better understanding between management and workers under our existing system. I do not think that prosperity lies the way of this Bill; I do not think it puts us on the way at all. But if this new clause went into the Bill, it would be the one thing which indicated that there was some constructive proposal
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in the Bill to establish evidence of a better relationship between management and workers. So I sincerely hope that the amendment will not be brushed aside by minor objections.
The noble Lord's own company ought to be proud to include in its reports what it has done in this particular field and it might get some satisfaction from looking at the reports of other companies to see whether they have got anything to match it. Let us have rivalry in industrial relations as well as in profitability and in other aspects of industrial and commercial enterprise. I feel that there is great merit in this proposal. It would be highly diverting for the members of many companies to read what their directors are doing in this field, and it would not be without interest among the workers, who would be very glad indeed to read the directors' version of their relations with the staff.
Lord Mottistone: My Lords, when the noble Lord, Lord Rochester, moved this amendment, he made mention of my contribution to the debate in the early hours of the morning. He was kind enough to say that I had talked rather more deeply about the philosophy of it. I still think that it is a desirable attitude-changing thing. I said also at that time that to use the directors' report was an ingenious way of getting it into the system but that I wanted to reflect upon it. I think I said at that time, and I say it again, that what the noble Lord has put into subsection (3) is much too detailed. Subsection (3)(d) in particular has got an element of bias in it which does not make it encouraging. But what is important is whether it is in the right place.
Since the Committee stage I have taken advice from companies and from the CBI. Their main point has been very well put to us by my noble friend Lord Boyd-Carpenter. I shall not go into that point too far, but I was disappointed to hear from my noble friend that he deprives his shareholders of the most eloquent speeches which he gives to us. I think it would be only fair to them if he were to expand on his speeches. Perhaps he might take Lord Rochester's advice and in his directors' report or his chairman's report at least give them that part which relates to the subject of this amendment.
Having said that, the point is that it is not very suitable to put in a Bill of this nature something which is more suited to a Companies Bill. It is a bit of a trick to try to put legislation relating to annual reports and directors' reports into an Employment Bill. For that reason, although the idea is a good one, I should not have thought that it ought to go into this Bill. By that I mean that the idea of encouraging companies to do what is set out in subsection (3) is a good one. I am persuaded, however, that the directors' report is not the right place for it. My noble friend Lord Boyd-Carpenter has told us why, and I endorse what he said.
I support also very much the fact that it would become a rote for those companies which were not doing it properly. What one wants to do is to get the thinking there so that it develops. I do not think we shall get it there just by making people write something down every year. Many enthusiastic companies have been doing this kind of thing for 10 years or more. The ones who are not enthusiastic—I had experience of this in an earlier job—will shuffle through and give

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some kind of a cosmetic report which means nothing, while the ones who want to do it do not need to put it down. This is the conundrum. It would be nice if there were an element of compulsion, but even if you introduce an element of compulsion you cannot bring it about unless you send people to prison if they fail to do it. It can only be done by persuasion. The question therefore is how to introduce the persuasion. I should have thought that if you are to do it by persuasion it needs to go a little wider, but I suggest that you cannot do it by legislation. Therefore we are back again at trying constantly to get the message across, to make speeches, to get trade associations to tackle it for their industries, to get the CBI to encourage it, which indeed they do, and then gradually to get across the message that if one does not do these things then one's company is not going to be so profitable. That is one of the factors to which one returns. Unless one gets the message through that there should be a degree of communication which involves the people in one's employ, one will not get the extra profitability that one needs. That is the key message—but one does not do that by legislation; one does that by all sorts of other means. I am sorry, but for those various reasons I do not believe that this amendment should be supported, but I shall be most interested to hear what my noble friend on the Front Bench has to say.
3.51 p.m.
The Earl of Halsbury: My Lords, I am by no means disposed to brush aside the amendment in the manner suggested by the noble Lord, Lord Houghton of Sowerby. I have the utmost sympathy with what it proposes as an end, but, like the noble Lords, Lord Mottistone and Lord Boyd-Carpenter, I am doubtful about its inclusion in the statute as a means. I entered industry when I was 20 and retired when I was 70. I had 50 years in industry and during all that time I never worked for, was a director of or was associated as a consultant with any firm that did not bend over backwards to try to develop its relations with its employees.
One of the most careful and meticulous in this respect was Joseph Lucas, of which I was a director for many years. We took an enormous amount of trouble to publish a special balance sheet which explained to the laity, as it were, what the official balance sheet meant, and a special edition of the cash flow statement and profit and loss account in simplified terms which enabled everyone to understand it. I remember that at Schweppes, the chairman Sir Fredrick Hooper used to have a regular meeting of his shop stewards at which he explained his progress in the financing of the company. At Lucas, for example, if we included in the directors' report and accounts all that we were doing with our employees by way of employees' relations, we would have trebled or quadrupled the length of the directors' report and accounts. That is what the house magazine is for, and it is the development of house magazines over the last few years which has done so much.
Furthermore, in incorporating such a thing into the statute, one is rather taking it out of the discretion of the directors just how far various acts of judgment they have to make are to be regarded. All boards of directors operate under various Stock Exchange
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conventions and rules for security in relation to whatever might create an artificial value for the shares in the context of mergers, takeover bids and so on. It is a very difficult thing to know just how far one can go in taking this matter, which is of substantial interest to employees, into employees' confidence in this sort of way.
It must be a matter of judgment, and I do not believe that it should go into the statute. But, in saying that it is for this reason that I cannot vote for the amendment, I would not in any way like to withold my sympathy from what it aims for as an end, although I cannot agree with this as a means.
Lord Oram: My Lords, when the noble Lord, Lord Rochester, moved a similar new clause at Committee stage, I gave it my support, but was unable to express myself in any terms of enthusiasm. I noticed that the version which the noble Lord has now moved includes some changes which he has explained, but I must say that my enthusiasm is not greatly enhanced by the changes he has made.
I regard this proposition as a commendable tentative first step in what is a much more fundamental problem of industrial democracy than the noble Lord appears to appreciate, in the way in which he has drafted his amendment. It reminds me of a bather putting a tentative toe into the water, but being afraid to take the plunge into the sea. What is involved in the achievement of a worthwhile system of industrial democracy is, I believe, much more than the provision of information or even the establishment of consultative committees for employees. It goes much deeper than that. If workers really are to be involved in decision-making in industry, then it is my view that they should be much more involved in ownership and real control than is provided for by the orthodox schemes of share ownership, such as that which has been described by the noble Lord, Lord Boyd-Carpenter, and such as those advocated with enthusiasm by the Liberal Party.
I suggest that this is not the occasion on which to spell out the details of a more fundamental approach. I feel sure that if we did engage in such a debate, my views and those of the noble Lord, Lord Rochester, would fairly soon take divergent paths—not least on the question which his amendment ignores, of the degree to which trade union organisations should be involved in planning and the control of industrial enterprises. I reiterate what I said at Committee stage; that I gave his proposition mild support. I believe that he and I ought to rest content today with that very modest degree of agreement, rather than take things any further at this stage.
Lord Campbell of Alloway: My Lords, may I support the spirit of this amendment, which seeks to introduce this concept of worker participation; a peculiarly English concept of consultation before decision making and a measure of participation in profits. The distinction between this concept and other concepts is of importance because of the obligations arising by virtue of United Kingdom accession of the Common Market. I refer to worker participation in the sense of worker representation, which the noble Lord, Lord Houghton of Sowerby, has touched upon. There are two types, your Lordships will appreciate.

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The first type is the worker participation referred to as such in paragraph 999 of the Donovan Report where the concept of worker participation in management bodies below board level is discussed and adversely commented upon, The other type of worker participation is that at board level, which really is the subject matter of all the talk, talk, talk which has gone on. That stems from the 5th draft directive in 1972, Bullock in 1977, and the Vredeling draft—all within the Community context—in 1980. Very recently (this year in fact), there was the report of the Legal Affairs Committee. That is the concept which reflects the two-tier structure of the Netherlands and West German companies. This amendment has nothing whatever to do with those other concepts of worker participation which are in effect forms of worker representation.
Why do I support this so strongly? First, because in the technological age—the age of the microchip—and with the development of the new service industries, it is conducive to a better order of industrial relations, because these new developments are bringing about very substantial changes in the pattern of employment. Secondly, because these proposals are conducive to the national interest, because they provide a means, albeit a small means, of seeking to relate pay to profitability and beating the bogey of inflation.
Furthermore, they provide the employee with a sense of involvement, they provide him with a spur, an initiative. So far as the employer is concerned, they constitute what your Lordships may think is a timely and requisite exhortation, an exhortation without compulsion, because the employer is under no obligation to disclose any sensitive information, and in fact, as pointed out by others, the employer is not really under an obligation to do anything, to take any positive step other than to say in his report what he has done. Here I go along with the noble Lord, Lord Houghton of Sowerby; we do need a new initiative, we do need a new approach and we do need a new spirit within the framework of existing law.
This amendment, if it does nothing else, seeks to herald this new approach. It is a step, and in my submission an important step, in the right direction. Whether one regards it as the brainchild of the union of its sponsors or as some hybrid adoption, this is at least indigenous; it is related to our needs and is in accordance with our traditions.
But, surely, before this could be brought into law the views of all interested parties ought to be canvassed, and they ought to be known before any legislative proposals are made. The questions arising are not only as to the substance but as to the means, as the noble Lord, Lord Boyd-Carpenter, so rightly observed. Furthermore, surely the other place could hardly be expected to welcome this surprise bundle on its doorstep at this stage of the legislative process.
Finally, within the dimension of the European Community, to which of course we are bound, surely consideration has to be given to the deveolpments there which to some degree could overlap with the proposals here, and furthermore and in particular the degree to which the 1975, 1977 and 1978 directives are relevant. They affect consultation over redundancies, protection or workers, amalgamations, mergers, takeover situations,
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the question of guaranteed wages for insolvency when insolvency is used, and that will come into effect in October next year. All these aspects surely have to be considered in relation to this matter.
Finally, if only my noble friend the Minister were able to give some assurance that this subject of worker participation should find its way into the next Green Paper, with a view, if possible, to introducing legislation, after consultation, before the next general election, surely that would commend itself to many, if perhaps not most, of your Lordships. I most respectfully ask—while expressing gratitude to the sponsors for having brought forward this very important idea and this very useful constructive proposal, while acknowledging the rectitude of their approach and the sincerity of their purpose—would it not be premature to move towards legislation in this sphere, for the reasons I have given, without adequate consultation?
4.4 p.m.
Lord Aylestone: My Lords, may I take one or two brief points. We have already taken rather a long time on a rather long Report stage. I was delighted to hear from the noble Lord, Lord Boyd-Carpenter, that the company of which he is chairman—and one would expect it of a company of which he is chairman—already engage in this type of participation. What I cannot understand is his reluctance to put the fact in the annual report. It does not require, as has been suggested, paragraph after paragraph about detail as to whether the tea break shall be taken in half an hour and so on. What it does require is instruction in the annual report of major decisions that have been taken by the company in consultation with their employees. Nor does it require the employees always to agree. The fact that they have been consulted is the important thing.
My point is that this would be of great value to shareholders. Shareholders get a copy of the annual report; they do not all get a copy of the house magazine—in fact, few of them do. A shareholder reading the annual report will feel that any suspicion has been laid of possible trouble that could have arisen because of something that was happening within the company. A short paragraph would unquestionably help to diffuse the fear in the minds of shareholders that things are not being carried on as they should be. My final point is that those companies that are already doing this—there are many; I know of some and they are doing it extremely well—would have little or no objection to putting a short paragraph or two into the annual report. But if this amendment is approved and becomes legislation it will help to persuade those companies which are less helpful in this direction to move, and to move rather quickly.
The Earl of Halsbury: My Lords, before the noble Lord sits down, would he clarify his usage of one word? He spoke of the amendment requiring major decisions—
Earl Ferrers: My Lords, I wonder if I may interrupt the noble Earl. I realise he is asking for clarification, but it is Report stage and he has spoken once. I think we might be contravening custom if the noble Earl made a second speech.
Viscount Massereene and Ferrard: My Lords, may I speak for three minutes on this? I have often spoken on it before. I think it is a very nice idea and I have always supported it. But one has to be practical in these matters. I have had experience of being a small employer. Of course, the average small employer takes his employees into his confidence, but it is far more difficult in a big public company, and I think it would be almost impossible in a nationalised industry. I am all for giving bonus shares—I am talking now of public companies—but if you give bonus shares in public companies the employees will instantly sell them. You have to give a special sort of share that they cannot sell straight away. Otherwise, giving these shares would seem pointless. The object of giving employees shares is to encourage them to take an interest in the company.
One of the most important aspects is to try to explain a balance sheet to employees. It is extremely difficult. If an employee reads in the newspaper that such and such a company has made a profit of £1 million he thinks, "I should like some of that". If only it could be explained to him where that …1 million goes! A great deal goes in tax; a lot goes back to the reserves to keep the employee employed and for new machinery; the balance goes to the shareholders who have to pay their tax and who are the people who have taken all the risk. So the majority of the money goes to the state, to pay for the employees' children at school and all the social benefits. If only we could explain that to the employee! I have found it very difficult. In my experience the average employee is interested only in the size of his wage packet. He is rather inclined to live in the present.
However, I am all for some form of employee participation and sharing financially. I have in mind the speech of the noble Lord opposite who spoke on workers' ownership, and I wonder whether the workers would be prepared to see their savings go if the company fails. Any business is a gamble and not every business succeeds. In fact, hundreds go down every year. Is the employee prepared to take the risk, the gamble, that the employer is prepared to take? I have sometimes thought that an amendment like this should be in a Bill, but, with great respect to the mover of this amendment, I do not think that this is the right Bill. As my noble friend behind me said, it is really a matter for a Companies Bill, but it would be extremely difficult in big public companies to have such a statutory arrangement.
Lord Howie of Troon: My Lords, I should like to take up the points raised earlier this afternoon by the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Mottistone; to agree with what they said; to add—your Lordships will be happy to learn—very little to it; and to dissent ever so mildly from their conclusion. They were quite correct when they said that many firms already do these things—and the firm with which the noble Lord, Lord Boyd-Carpenter, is connected is a notable example of that—and do not need encouragement. They were also correct in saying that there were a number of firms that would do these things in a phantom or spurious way, giving lip service to the idea. However, there is a great group of firms in between
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those two groups, many of whom will respond to the kind of encouragement which the noble Lord, Lord Mottistone, quite rightly said was the best way to go about these things. However, I am sure that when he reflects he will agree that even encouragement sometimes needs help.
Ideas of this type have been around for quite a considerable time. I think that noble Lords will agree that progress has been slow, glacially slow. Anything which agitates the process, which makes progress quicker, ought to be encouraged. I think that noble Lords, on reflection, will agree with me that legislation has often been used for the purpose of education and for encouragement, as well as for the ordinary uses of legislation which we understand perfectly well. It seems to me that this is a situation in which the prod or goad of legislation, added to the kind of encouragement that the noble Lord, Lord Mottistone, argues is necessary, might increase the pace towards the aim which most noble Lords in all parts of the House seem to agree is required. I hope that your Lordships will agree with this amendment and that the noble Lord, Lord Rochester, will not withdraw it. In fact, I hope that he will pursue it and that, if he does so, noble Lords on all sides of the House will support him, as I certainly shall.
Lord McCarthy: My Lords, I do not want to keep the House long. According to my calculations we have had seven speeches in favour of this amendment and, I think, four against it. I want to support it in much the way in which we on these Benches supported it when it came up on Committee. I think that the arguments for it have been put very fully this afternoon, much more fully, of course, because we have discussed it at a much better time than when the arguments were put last time.
I want merely to point to a paradox, as I see it, in the arguments, to some extent in the source of the arguments, of those so far who are opposing the amendment. It is a paradox which I think would be particularly notable if it were to be reflected in the speech of the Minister when he replies. It is what one might call the recrudescence of voluntarism. We are told that people do this already, so why can we not leave them alone? We are told that even if they do not do it already, there is nothing to prevent them from doing it; and anyway we are told that it has been done for years. We are told: "These are good practices; they are excellent things; people ought to be like this, but you cannot force them. You have to allow for the voluntary system; you must trust the voluntary system". Indeed, that is very much what the noble Viscount, Lord Trenchard, said when the noble Lord, Lord Rochester, put forward this argument first of all in the 1980 Industry Bill. As I recollect it, he said that it was reasonable enough but he could not accept it because the voluntary method was the way, and anyway there were no powers in the Bill.
The noble Lord, Lord Rochester, has come back and has put it forward again. This time there are some powers, but when we discussed the matter in Committee we received from the noble Earl the same arguments: "There is nothing to prevent it; we have done it for years; you cannot force people to do it;

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trust the voluntary system". This is extremely paradoxical, when you compare it with the general drift of the debate which we had all through the Committee stage and which we shall be having later on tonight and again on Monday about legislating about the conditions of UMAs, picketing and responsibility in trade unions, and probably in the next Bill when we talk about elections and trade union government. When we have these things we have moved away from voluntarism in all those areas. But there is nothing to prevent it. We have told you—and am afraid it is Professor Gennard again—that the great majority of UMAs have all these things. In other words, they have done it for years. That argument does not do for the greater part of the Bill: it only does for this amendment in this particular clause. I suggest that it does not do there either.
4.19 p.m.
Earl Ferrers: My Lords, we have had an important debate on what is a very important matter. The noble Lord, Lord McCarthy, said that he wondered when I spoke whether I was going to use the argument that this was the recrudescence of voluntarism. I am bound to say that I do not know whether I am going to do so because I am not quite certain what the expression means. But I am quite certain that every other noble Lord knows what it means, and I shall listen to my speech with interest to see whether in fact I shall achieve what the noble Lord anticipates! We had a similar debate on an almost identical amendment during the previous proceedings in Committee, and I am bound to say that I admire Lord Rochester's parliamentary dexterity in ensuring that, by putting this amendment down for mention even before Clause I, his arguments and his amendment will be properly considered, as opposed to what happened when the matter was dealt with at 3.46 in the morning. He certainly has ensured—and quite rightly so—that it has had a good hearing.
I think that everyone agrees with what this amendment seeks to achieve in the overall sphere of industrial relations. This afternoon, as indeed in our previous debate, there has been no dissension from the general proposition that it would be for the benefit of the economy generally if greater advances were made in British industry towards employee involvement. I think the differences arise over what one considers to be the best methods by which the common objective of making progress would be achieved.
My noble friends Lord Mottistone and Lord Boyd-Carpenter and the noble Earl, Lord Halsbury, all thought that legislation was not the right way in which to achieve this. I should like to assure your Lordships that the Government are firmly committed to the principle of managements informing and consulting their employees about matters which affect them; but we are equally opposed—and I am bound to say this—to imposing rigid and possibly inflexible legal systems on employers which take no account of their particular needs or circumstances. I agree with my noble friend Lord Mottistone that in the end it is a question of persuasion and not of legislation.
I think that there has been much progress in what one might generally call employee involvement. A
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recent survey by the Confederation of British Industry some nine months ago showed this to be the case, but some understandably wished the progress to be greater. I think it was the noble Lord, Lord Howie of Troon, who used that graphic expression that it was "glacially slow". The amendment which the noble Lord, Lord Rochester, has tabled would require directors of companies over a certain size to include in the annual report, which is required of them under the companies legislation, a statement of the arrangements which have been introduced or developed by the company during the financial year concerned to promote employee participation and economic understanding. If this amendment is accepted, this they will have to do year after year, every year.
I agree with my noble friend Lord Boyd-Carpenter that there is the danger that these reports may become routine or anodyne. There is a similar reporting requirement which was introduced under the Companies Directors Reports (Employment of Disabled Persons) Regulations 1980. This requires directors to include in their report a statement describing the company's policy towards the employment of disabled people. No formal review has been conducted of the statements which are made under these regulations, but an initial analysis has revealed a considerable number of brief and rather bland statements, and it is by no means certain that the legislation is stimulating employers to adopt more progressive policies.
I think that it would be wrong to legislate in this way unless industry itself believes that the costs and the burdens, which would undoubtedly be imposed upon it, would be outweighed by the resultant benefits. I agree with my noble friend Lord Mottistone that the concept of employee involvement is one of the changing of attitudes. It must be done consonant with the fortunes of a company. Employee involvement, desirable though it is—and I think that we all desire it—does not of itself ensure success, and the worst way to encourage genuine progress towards employee involvement would be to create difficulties or opposition within companies by imposing a legal obligation to report annually on the steps which they have taken towards what is, after all, a social goal, and a commendable one, but one which may be considered by some in certain circumstances—but not all—to be distant from economic enhancement.
I would, therefore, urge your Lordships not to accept this amendment until such time as industry itself has indicated that it is convinced that the benefits would outweigh the costs. The noble Lord, Lord Rochester, prayed in aid that he and his colleagues had supported the Government over the Bill and he hoped, therefore, that the Government would, in return, be enabled to accept this amendment. I am bound to say that I appreciate the support of the noble Lord. I do not think that it emanates from any natural feeling of generosity that he may have, but merely, probably, because he thinks the Government are right in the Bill. I commend him and his party for their judgment.
The noble Lord said that he would be prepared to withdraw this amendment if the Government would consult with him. But then he made the quite extraordinary remark, if I may say so, that it was no good the Government saying that they would consult with employers, trade unions or others, provided that they

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consulted the noble Lord, Lord Rochester. It is certainly the case that there will shortly be placed before the Council of Ministers proposals from the European Community Commission for directives about employee involvement. Before we start serious discussions on these proposals there will have to be consultation and discussion about the best method of achieving employee involvement. I fancy that those consultations will display strong support for the Government's current policy. But it will provide an opportunity for interested parties to register further their views about how progress could best be made.
I do not think that the noble Lord, Lord Rochester, could genuinely say that it is all right to discuss this with him, but not with those who are intimately involved. I must stress that all this Bill—except Clausel, which is different and totally separate—has been the result of discussion and consultation; and I agree with my noble friend Lord Campbell of Alloway, who said that it would be unfortunate to include in legislation something which, however commendable the objective may be, has not been discussed with those who will be deeply affected and something over which many of your Lordships, while expressing sympathy, have nevertheless expressed a reservation.
The amendment is similar to a Private Member's Bill which was introduced in another place. By raising it now, the noble Lord, Lord Rochester, has made it quite certain that company reports will be considered in the forthcoming debate on the European Community directives on employee involvement. But I urge upon your Lordships the desire that we should not put into legislation in this Bill something which, however good it may be, has not had the fullness of consultation with others and which might not achieve the admirable intention which the amendment of the noble Lord, Lord Rochester, seeks to achieve.
Lord Somers: My Lords, before the noble Earl sits down, I should like to ask him one question. He said that these matters are best dealt with by persuasion, and I am inclined to agree with what he said about the undesirability of very rigid legislation. But can he tell me how this persuasion will be put across, who will do it, and what proportion of business magnates he thinks is likely to respond to it?
Earl Ferrers: My Lords, with the leave of the House, perhaps I may reply to that intervention by the noble Lord, Lord Somers. I would ask him to look back over the last 10 years and see the enormous progress which has been made by industry over employee participation, over the general understanding of the new ways in which people think. No one person is responsible for doing the persuading. It is a matter of fact and it is a fact of life that public opinion persuades people to change their attitudes.
Lord Rochester: My Lords, I am most grateful to all noble Lords who have taken part in this debate, which I think has been worthy of the subject matter. I do not want to detain your Lordships for very long and I think it would be fair to say that I endeavoured to anticipate in my opening remarks a number of the arguments which have been adduced against this amendment. But a number of points have been made
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to which I think I should offer some reply because they are new.
First, perhaps I may turn to what the noble Lord, Lord Mottistone, had to say. I was disappointed that he should feel that in subsection (3)(d) there was a certain bias. The wording in subsection (3) is specifically framed in order to avoid that bias. At the moment the trouble is that managers and employee representatives often have different ideas as to how resources should be allocated for the purposes of pay and investment, for example. That was why this subsection is framed to indicate that what we are after is the achievement of a common awareness on the part of great groups as to the problems that arise in that connection.
The noble Lord came very near to telling me that there was an element of trickery in my having sought, along with my noble friends and allies, to include, a clause of this kind in the Bill. I hope on reflection that he will absolve me from any such motive. The sole purpose of seeking to introduce this clause into the Bill is to give it a positive complexion as opposed to the necessarily negative attributes that it now has.
Lord Mottistone: My Lords, would the noble Lord allow me to reassure him that at no stage was I trying to indicate that there was any trickery on his part or that of his noble friends in any way?
Lord Rochester: My Lords, I am obliged to the noble Lord. We are good friends and I am grateful for that assurance. The noble Earl, Lord Halsbury, if he will forgive me for saying so, seemed to come very near to being complacent in this matter. I can only say that, if he has been engaged throughout the 50 years of his distinguished industrial connections with only those firms which have good employee involvement policies, he must have been very fortunate.
I wish that Sir Raymond Pennock had already taken his seat and had been able to take part in this discussion. I am not for a moment suggesting that he would necessarily have supported this amendment, but I am sure of one thing, and that is that, since he has made it perhaps the major theme in his two years' presidency of the CBI that there are still far too many firms with inadequate employee involvement policies, he would have been heartily behind the objective which this amendment seeks to achieve.
The noble Lord, Lord Oram, seemed to feel that it did not go far enough. That was a change. In particular, as I understood it, he thought that there was insufficient emphasis given to trade union representatives in the consultative exercise here proposed. I should like to reassure him that, in so far as employee representatives are trade unionists, as they are in the firm for which I used to work—where I think I am right in saying they are still all shop stewards—it is they who of course would be engaged as the employee representatives in the consultation exercise.
I am more grateful than I can say to the noble Lord, Lord Campbell of Alloway, for the support he offered at least to the principle underlying this amendment. I am sorry that the noble Earl, Lord Ferrers, when he replied did not even take up the suggestion made by the noble Lord, Lord Campbell, that at least this question of employee representation should feature in the

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consultations that the Secretary of State is to have with employers and trade unions on other matters in connection with ballots.
I was disappointed but not altogether surprised by the response of the noble Earl. He is certainly right to say that in so far as we have given the Government support on the main issues of this Bill it is because, in general, we have felt that, despite the practical difficulties to which I referred earlier, they deserve that support, but certainly there was no element of horse-trading involved in the suggestion that I made that, that support having been given, for some reason the Government should support this amendment. This amendment is left to be supported on its merits or not at all.
Similarly, I am sorry that he should have felt that it was inconsistent of me to say, as I understood it, that I was seeking consultation on the part of the Government with me but not with others. The point of the distinction was one of time. If there were consultations with me and others between now and Third Reading, that would place a maximum time on the process of 10 weeks. If there were to be further consultations with employers and trade unions, at the rate at which these consultations have taken place in recent years, I certainly would not see anything happening this side of the next general election, if then.
A clear division of opinion has arisen in the House today. Our views are strongly held, they are sincerely held, and I should like to take the advice, for which I was grateful, of the noble Lord, Lord Howie of Troon, that the distinction is great enough to mean that I should divide the House.
4.37 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 116; Not-Contents, 112.

DIVISION NO. 1

CONTENTS

Airedale, L.

Elwyn-Jones, L.

Amulree, L.

Esher, V.

Ardwick, L.

Evans of Claughton, L.

Auckland, L.

Ewart-Biggs, B.

Aylestone, L.

Fisher of Rednal, B.

Banks, L.

Gaitskell, B.

Barrington, V.

Gladwyn, L.

Beaumont of Whitley, L.

Glenamara, L.

Beswick, L.

Gosford, E.

Bishopston, L.

Grey, E.

Briginshaw, L.

Hampton, L.

Brockway, L.

Hatch of Lusby, L.

Brooks of Tremorfa, L.

Houghton of Sowerby, L.

Bruce of Donington, L.

Howie of Troon, L.

Burton of Coventry, B.

Hughes, L.

Byers, L.

Hunt, L.

Chitnis, L.

Hunter of Newington, L.

Cledwyn of Penrhos, L.

Hylton-Foster, B.

Clifford of Chudleigh, L.

Ilchester, E.

Collison, L.

Jacques, L.

Cooper of Stockton Heath, L.

Jeger, B.

Craigavon, V.

Jenkins of Putney, L.

Crook, L.

John-Mackie, L.

Cudlipp, L.

Kennet, L.

David, B.

Kilmamock, L. [Teller.]

Davies of Leek, L.

Kinloss, Ly.

Diamond, L.

Kitchener, E.

Donaldson of Kingsbridge, L.

Leatherland, L.

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Lee of Asheridge, B.

St. Davids, V.

Lee of Newton, L.

Seear, B.

Listowel, E.

Sefton of Garston, L.

Llewelyn-Davies of Hastoe, B.

Shinwell, L.

Lloyd of Hampstead, L.

Simon, V.

Lloyd of Kilgerran, L.

Stamp, L.

Longford, E.

Stedman, B.

Lovell-Davis, L.

Stewart of Alvechurch, B.

McCarthy, L.

Stewart of Fulham, L.

Mackie of Benshie, L.

Stone, L.

McNair, L.

Strabolgi, L.

Mais, L.

Strathcona and Mount Royal, L.

Mar, C.

Mayhew, L.

Strauss, L.

Molloy, L.

Tanlaw, L.

Ogmore, L.

Taylor of Gryfe, L.

Oram, L.

Tordoff, L.

Parry, L.

Underhill, L.

Peart, L.

Vernon, L.

Phillips, B.

Wade, L.

Plant, L.

Wallace of Coslany, L.

Ponsonby of Shulbrede, L.

Walston, L.

Porritt, L.

Wells-Pestell, L.

Raglan, L.

Whaddon, L.

Rathcreedan, L.

White, B.

Redcliffe-Maud, L.

Wigoder, L.

Ritchie of Dundee, L.

Willis, L.

Roberthall, L.

Wilson of Langside, L.

Robson of Kiddington, B.

Winstanley, L.

Rochester, L. [Teller.]

Wynne-Jones, L.

Ross of Marnock, L.

NOT-CONTENTS

Ailesbury, M.

Gray, L.

Airey of Abingdon, B.

Gridley, L.

Aldenham, L.

Hailsham of Saint Marylebone, L.

Alexander of Tunis, E.

Ampthill, L.

Halsbury, E.

Avon, E.

Hankey, L.

Balerno, L.

Hatherton, L.

Balfour of Inchrye, L.

Hawke, L.

Belhaven and Stenton, L.

Hayter, L.

Bellwin, L.

Henley, L.

Beloff, L.

Hives, L.

Belstead, L.

Holderness, L.

Bessborough, E.

Home of the Hirsel, L.

Boyd-Carpenter, L.

Keyes, L.

Caccia, L.

Killearn, L.

Campbell of Croy, L.

Kilmany, L.

Carnegy of Lour, B.

Kimberley, E.

Cathcart, E.

Lane-Fox, B.

Clitheroe, L.

Lauderdale, E.

Coleraine, L.

Long, V.

Constantine of Stanmore, L.

Lyell, L.

Cork and Orrery, E.

Mackay of Clashfern, L.

Cullen of Ashbourne, L.

Macleod of Borve, B.

Daventry, V.

Mancroft, L.

Davidson, V.

Mansfield, E.

De La Warr, E.

Margadale, L.

Denham, L. [Teller.]

Marley, L.

Dilhorne, V.

Massereene and Ferrard, V.

Drumalbyn, L.

Mersey, V.

Duncan-Sandys, L.

Milverton, L.

Ebbisham, L.

Minto, E.

Eccles, V.

Morris, L.

Elibank, L.

Mottistone, L.

Ellenborough. L.

Mountgarret, V.

Elles, B.

Moyne, L.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Elton, L.

Newall, L.

Faithfull, B.

Orkney, E.

Ferrers, E.

Pender, L.

Ferrier, L.

Penrhyn, L.

Fortescue, E.

Platt of Writtle, B.

Fraser of Kilmorack, L.

Rankeillour, L.

Gainford, L.

Reigate, L.

Gibson-Watt, L.

Renton L.

Glenarthur, L.

Rochdale, V.

Glenkinglas, L.

Romney, E.

Gowrie, E.

St. John of Bletso, L.

257

Sandys, L. [Teller.]

Thorneycroft, L.

Seebohm, L.

Trenchard, V.

Selkirk, E.

Trumpington, B.

Sharples, B.

Vaux of Harrowden, L.

Skelmersdale, L.

Vickers, B.

Soames, L.

Vivian, L.

Spens, L.

Wakefield of Kendal, L.

Swinfen, L.

Westbury, L.

Teynham, L.

Young, B.

Thomas of Swynnerton, L.

Resolved in the affirmative, and amendment agreed to accordingly.
4.46 p.m.
Schedule 1 [Compensation for certain dismissals.]:
Lord McCarthy Lord McCarthy moved Amendment No. 2:
Page 27, line 10, after ("applicant") insert ("and, so far as is practicable, the relevant employer and the relevant trade union specified in the union membership agreement,").
The noble Lord said: My Lords, I will, with permission, speak also to Amendments Nos. 3, 4 and 5. First, however, I would remark that I would give the noble Earl full marks for the recrudescence of voluntarism, in view of the last contribution he made. This series of amendments is concerned with the schedule which spells out what the objectives are in Clause 1, and we return to the issue we raised in Committee about the degree of discretion given to the Secretary of State under this procedure. In Committee we tried to insert a number of conditions on those wide areas of discretion. We wanted the grounds of the discretion specified, we wanted a role for industrial tribunals and we wanted to provide the same basis for the payment of compensation as other forms and so on; but in all those attempts we were unsuccessful. However, today may prove a precedent, so we can hope.
We were told two things by the Government on that occasion. It was said that all our attempts to introduce some modification of the discretion given to the Secretary of State were unnecessary either because they would happen anyway—because he would act in the ways we tried to prescribe he should act—or because (and in particular we were told this by the noble Earl, Lord Gowrie) it was really an administrative process and not a judicial one. We do not accept that. We consider that to pay out money for past circumstances in which it is alleged that people were unfairly dismissed—or would have been unfairly dismissed if the law had been otherwise—is just as much a judicial process as to pay out compensation in cases of unfair dismissal which happen today under the 1980 Act.
Therefore we have returned to the same issue and we have tried to do it in a very modest way, because in this series of amendments we are really only dealing with a situation where there may have been a mistake—that, in terms of paragraph (9) of the schedule, it has been thought that maybe there is a case for a reconsideration of the decision because it may have been,
"made in ignorance of, or was based on a mistake as to, some material fact."
We are saying that it should be possible for that kind of process to be started not only by the complainant, but by other interested parties, too; for example, the employer, or the trade union. They should be able to invoke the procedure whereby they claim that the decision,
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"was made in ignorance of, or was based on a mistake as to, some material fact".
The other interested parties should be able to invoke the procedure just as much as the complainant can invoke it.
The only argument that I see it might be possible to advance against our proposal was, in a slightly different form, advanced by the noble Earl, Lord Ferrers, at col. 689 of the Official Report of the Committee stage on 6th July. He said that so far as he could see, going back to the model of an administrative process, the facts, and ascertaining them, was a simple matter and in effect was no concern of the union or the employer. He said at col. 689:
"The Government accept that the dismissals of those who will be eligible to apply under these arrangements were not unlawful at the time. There is no question of seeking to establish whether these dismissals were right or wrong in some legal sense. The sole questions at issue now will be factual ones which—and again I must emphasise this—cannot lead to any liability on the part of a former employer or trade union. In view of this there can be no case for giving a former employer or trade union the right to state their views, as these amendments seek. In fact, the views of the employer or of a trade union are neither here nor there".
We would submit that the noble Earl went on somewhat to argue against himself when he subsequently admitted that there were cases where the facts might be in dispute, and it might not be all that apparent. If that were the case, then, going back to the first defence of the Government—that they would do all the things, anyway—the employer or the union almost certainly would be contacted. He stated:
"Then, of course, in other cases there will be more difficulty in establishing the facts. In these cases the appointed person will no doubt wish to ask the former employer and possibly the union concerned for details, and this the Bill permits him to do".
He then said:
"I need hardly say that if there is any doubt about the facts of a dismissal or about the loss which the applicant has suffered, then the appointed person will seek the facts from any individual or organisations who may be able to help".
The point that we are making is, how can we be certain that the appointed person, prompted, as he may well be, by the complainant, knows whether there has been ignorance of facts, so far as he is himself concerned? How does he know about his own ignorance? How does he know whether he has based his decision on a mistake as to some material fact? Of course, if he bases his decision on a mistake as to some material fact which affects the complainant, we can expect the complainant to set him aright. But it is not true, nor is it fair, to say that the union and the employer are not involved. They may well wish to argue that there was not an unfair dismissal in the terms of the legislation. They may wish to feel, and may very well feel, that to suggest that there was an unfair dismissal is a slight upon their own procedures. They may very well have had operating in the period their own domestic procedures, which allowed for conscientious objection, and allowed existing employees to opt out of union membership agreements. Therefore, they may feel that those facts are material, and that in one way or another the decision must have been based on a misstatement of fact, believing that the actual facts were in their favour.
So the aim of the amendment is simple and straightforward, and we look forward to hearing the Government's arguments. We believe that the parties

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are involved. We believe that in a minority of cases they could correct the facts upon which the decision of the appointed person is based, and the object of the amendments is to give them the right to do that. I beg to move.
Earl Ferrers: My Lords, I am greatful to the noble Lord, Lord McCarthy, for taking Amendments Nos. 2, 3, 4 and 5 together. This group of amendments reverts to a theme which, as he quite rightly said, we discussed at the Committee stage. At that stage your Lordships debated whether the opinion of an applicant's former employer and the relevant trade union should have to be sought before payments could be made under the provisions. Now, with Amendment No. 2, the noble Lord seeks to have all decisions notified to the former employer and trade union, and with Amendments Nos. 3, 4 and 5 he seeks to allow employers and trade unions to be able to request reconsideration of a decision on compensation, on the grounds that the decision was based on a mistake as to, or ignorance of, some material fact.
Perhaps I may be permitted to look at each amendment in turn. Amendment No. 2 would require the Secretary of State to inform not only each applicant of his decision on each case, but also so far as was practicable, the former employer and the trade union concerned. I ventured to make clear in Committee—the noble Lord, Lord McCarthy, this afternoon has reminded us of this—that it is wholly mistaken to view the former employer or trade union concerned as being in any sense parties to the applications. I think that the noble Lord quoted the words that I used—that it is nothing to do with them. In Committee I tried to make it plain that no blame or liability will attach to any employer or trade union as a result of an application under Clause 1 of and Schedule 1 to the Bill. They are not the ones who are being judged. They have nothing to gain and nothing to fear from the outcome of the applications. If that is so, in my view there can be no justification for requiring the Secretary of State to inform them of his decisions on individual applications.
Amendment No. 3 seeks to allow the former employer or trade union to apply for a reconsideration of the Secretary of State's decision. I must say that I find that unacceptable. As I have said, neither the employer nor the union will in any way at all be parties to the applications, and yet here it is being argued that nevertheless they should be able to come along and say, "Excuse me, I know that the outcome has nothing to do with me, but you must look at this again". With the greatest of respect to the noble Lord, Lord McCarthy, that simply does not make procedural sense, if it makes any other kind of sense—which I rather doubt.
In Amendment No. 4 the noble Lord seeks to require the Secretary of State to inform the employer and trade union concerned as well as the applicant if, off his own bat, he decides to reconsider an application. This is the same well-worn theme, and so I shall not repeat myself yet again, other than to say that the employer and the union would not have been parties to the original application, and therefore they would not be parties to the Secretary of State's reconsideration.
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Amendment No. 5 seeks to impose on the employer and the trade union concerned a time limit of three months in which to apply for a reconsideration. Well, perhaps we should be grateful for small mercies. If we were to allow employers and trade unions to apply for reconsideration of someone else's application, at least it would be nice to be able to limit the time in which they could do so. I have suggested that the Government do not see it right to tread down that cobbly, old path, and I would ask the House to reject this amendment, as well.
Lord McCarthy: My Lords, I would not say that the noble Earl has disappointed me, but there it is. He has gone through each amendment and, as he has said, he has repeated his well-worn track answer that it has nothing to do with anybody other than the Government and the complainant. What we are saying fundamentally is that it has something to do with other parties, and that they should have at least the very limited rights that we are suggesting. I do not feel disposed to withdraw the amendment.
On Question, amendment negatived.
[Amendments Nos. 3, 4 and 5 not moved.]
5 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 6:
Page 27, line 40, leave out sub-paragraph (2) and insert—
("(2) Where the Secretary of State, after reconsideration of a case under paragraph 9, is satisfied that a payment has been made by reason of a fundamental mistake as to some material fact, he may, within three months of the payment being made, cause the person to whom it has been made to repay such part of it as he considers just and equitable.").
The noble Lord said: My Lords, we are still on Schedule 1, and this is the final attempt on our part to inject a little equity and fairness into this procedure. We feel, as we have said, that it is biased against those who consider the fairness and justice of the original dismissal. What we are trying to do is to widen the basis on which, in this case, there might be repayment through some mistake, fraud or something of that kind.
At the moment, as I understand it, the schedule allows for liability for repayment in one extreme case and in one extreme case only, and that is in paragraph 10 on page 27:
"Where … any person misrepresents or fails to disclose any material fact, whether fraudulently or otherwise".
An example, I suppose, would be where he was warned five times for unsatisfactory work: that that is why he was dismissed and it was not anything to do with his union membership. Or it might be that he had refused to obey a lawful order, or something of that kind. If he suppressed or fraudulently misrepresented the facts of his dismissal in a circumstance like that, then, I take it, that would be covered by this part of the schedule. The most common case, I suppose, would be where he had already obtained an alternative job somewhere else and wished to leave anyway, and where the throwing in of his union card, or whatever, was simply a way of applying for the money. If it could be shown that these statements were made, or had failed to be made, and that therefore there was fraud, there would be a liability for repayment.
What we are suggesting in this amendment is that in some ways it is an exceptional circumstance that

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fraudulent misrepresentation exists. We do not suggest it is common. More common, I would suggest, given the administrative nature of this procedure—what we called at Committee stage this hugger-mugger procedure; that is, the privateness of this procedure and the distance from the event (because these are circumstances in which the decision by the appointed person is some two, three or four years from the event itself)—is the innocent mistake of fact. The most common one, I suppose, might be the date on which a UMA became operative. It may be that the individual was not in fact in employment at the time; or, rather, to put it the other way round, that the UMA did not come into operation when he was first engaged but came into operation subsequently or previously, or there was some mistake about the date on which the UMA became operative. That might affect whether or not he had a case for compensation under the Act, and some innocent mistake might be made in that respect.
A further example might be where there was an appeals machinery. If one tries to give this clause a little concreteness, one is reminded of the case of Miss Joanne Harris, who, we understand, failed to use the machinery for appeal which was available to her. That might be taken into account—I do not know—by the appointed person if he knew of it. I do not know about Miss Harris; perhaps she forgot that there was such machinery. It might quite innocently he forgotten that there was a form of redress and that the form of redress was not followed. These are facts which could quite innocently have been withheld from the tribunal; and they are mistakes of fact, not deliberate matters of misrepresentation. It is this kind of thing that we are trying to cover in this amendment, and we are saying that there should in effect be an additional reason why there could be a reconsideration of a liability for repayment, not simply when there is some misrepresentation but when there is some innocent misstatement of fact. I beg to move.
Earl Ferrers: My Lords, we have had our two old friends pop up from the Committee stage again—Professor Gennard, and now hugger-mugger. I wondered whether we were going to see them appear again. As Schedule 1 is presently drafted it will make an applicant liable to repay compensation which he has been awarded only where he has been at fault; for example, by failing knowingly to disclose some material fact. The amendment moved by the noble Lord, Lord McCarthy, could require him to repay compensation where he in fact has acted in perfectly good faith but where some mistake has nevertheless occurred.
I am bound to say at the outset that I think that the amendment is directed at an eventual which seems unlikely to occur very often, if ever, but I also accept the fact that it is proposed in perfectly good faith. But if the facts cannot be established, payments will not be made; and if the facts have been deliberately misrepresented or concealed with the consent or the connivance of the applicant, the Bill already provides for a liability on the applicant to repay. The noble Lord, Lord McCarthy, is entirely right in saying that that appears in paragraph 10(1) of the schedule. But this amendment seeks to go further by making the
262
applicant who has acted with total honesty nevertheless liable to repay compensation if a mistake occurs elsewhere.
My Lords, let us consider the case of a person who makes an application, in good faith, in which every particular is true to the best of his knowledge and belief. After the appointed person has considered his case and has made his recommendation, the Secretary of State makes a payment. The applicant might well use that money straightaway to pay off debts, to take a holiday or to do whatever else he likes to do with it. Then, two months later, the Secretary of State might write to him and say, "I am terribly sorry, I have made a mistake; my calculations were wrong"; or, indeed, he might say," I made a mistake; your former employer has now sent me some further facts which he did not send when my assessor first asked him about your application, and therefore you ought to repay the money which you received ". I do not really believe that it would be right or just that that person should repay the compensation because of a mistake for which he was not responsible.
In prescribing that it would be wrong for the applicant to have to repay in such circumstances, the Government have followed the precedent—and, indeed, virtually the same words—in two other similar Acts, both passed by the previous Government, which provide for payments of compensation. They are the Vaccine Damage Payments Act and the Pneumoconiosis Act. The same principle is also present in the Social Security Act 1975, where it provides that repayment of benefits will not be required so long as the beneficiary can show that he has used due care and diligence to avoid overpayment. So, while I sympathise with what the noble Lord, Lord McCarthy, is trying to achieve, I think he will agree that if his amendment were to be made to the Bill it would really be putting an imposition on the recipient of the money for reasons for which he was not responsible and in conditions in which it would be unfair for him to have to repay.
Lord McCarthy: My Lords, I accept what the noble Earl says and I thank him for it. Certainly he is perfectly correct to say that if our amendment were introduced as it appears on the Marshalled List—at least, I think he is right—we might be getting at people who had, in the terms of, I think he said, the pneumoconiosis legislation, used due care and diligence, and I would not want to do that. I would say that if somebody has done his best to present the truth—and I think "due care and diligence" is a very good phrase; it should have been in our amendment—then I should want to leave him outside.
But, as I indicated in my example, I was thinking of somebody who was not aware that when he came to the place of work there was indeed a UMA. People forget, and they may not always know. These things do not always work in the proper way; and so he believes that the UMA came after he arrived when in fact the UMA was there before. If the appointed person knew that, he would rule the case out, and then, to take the noble Earl's own case, subsequently the employer gets to know the true facts and writes to him. This is one of the arguments for having the employer play a role in this matter, but the Government have ruled that out. The employer gets to know the

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evidence on which the appointed person has taken his decision and says, "That is quite wrong; in fact we have had a UMA in this establishment for two years, or four years, and it is quite wrong. I do not suggest that the man was not using due care and diligence, but he just happened to be wrong That is the kind of circumstance I was trying to deal with and I still maintain that it is one which it would be fair to put in the Bill, but I must accept the point made by the noble Earl that it is not there in our amendment. Therefore, I am prepared to withdraw the amendment.
Amendment, by leave, withdrawn.
5.10 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby moved Amendment No. 7:
Page 2, line 47, leave out from ("agreement") to end of line 5 on page 3 and insert—
("(3A) Subsection (3) shall not apply where within six months of the delivery to the employer of a petition signed by not less than 20 per cent. of those employees of the employer who on the day of the delivery of the petition belonged to the class to which the union membership agreement relates and calling for a ballot on the question whether the agreement should apply in relation to them the union membership agreement has not been approved in relation to employees of that class in accordance with section 58A provided that no such petition for a ballot has been made within the preceding three years.").
The noble Lord said: My Lords, I beg to move Amendment No. 7 and in doing so I should first apologise to the House for the very convoluted wording of this amendment. In fact, the wording is not really my responsibility. I do not think that I could have composed it on my own. It is taken—with one addition—from an amendment that was moved in Standing Committee in another place by a member of the Social Democratic Party. I spoke to the principle contained in this amendment on Committee stage and pointed out at the time that it appeared that the so-called alliance between the Social Democratic Party and the Liberal Party had broken down in the Standing Committee and that it was only right that the country should know where they stood on this very important principle of how they intend to deal with the closed shop.
The noble Lord, Lord Rochester, in speaking about a similar amendment moved by my noble friend Lord Jacques, objected to the references I made at that time, by saying that the noble Baroness, Lady Seear, had faithfully reflected the ideas and words of their honourable friend Mr. Cyril Smith in the Standing Committee. That is perfectly true. But what I think we are entitled to know is just where this alliance stands on this issue. We know, broadly, where the Government stand. I had thought that the Government would support the amendment moved by my noble friend Lord Jacques at Committee stage, because I had always believed that the Government supported the principle of contracting-in rather than contracting-out. This amendment, and the amendment of my noble friend Lord Jacques, is based upon contracting-in as far as balloting is concerned.
We were left just as mystified—except in the vote on that amendment—as we had been before. In the vote, the members of the Social Democratic Party and the Liberal Party voted together, with the Government, against the amendment. This afternoon I should like
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to invite them both to clear up this matter. During my speech at Committee stage, the noble Lord, Lord Kilmarnock, pointed out that his objection to the amendment moved by my noble friend Lord Jacques was that the use of what is known as the trigger mechanism for balloting, rather than the automatic five-year balloting, was open to the abuse that it could be used too frequently; that there could be constant requests for ballots and that this would ruin the whole principle of the idea.
I have allowed for the objections of the noble Lord, Lord Kilmarnock, which have some point to them, by adding the words of his honourable friend in the Standing Committee in another place. The provision at the end of this amendment is:
"that no such petition for a ballot has been made within the preceding three years".
I am not fussy about whether it is two years or three years, but that is put in specifically in order to make sure that there is no covering over of the objections which he made during Committee stage.
My Lords, the other objection made was the difference between the amendment of my noble friend Lord Jacques and the amendment proposed in Standing Committee by the member of the SDP. Whereas my noble friend Lord Jacques had referred to 10 years, Mr. Bradley in the Standing Committee had referred to 20 years. The 20 years is now there. Therefore, it would seem to me that we are entitled to know where stands this alliance, which claims to be considered a future prospective Government.
In the Standing Committee it was clear that the Liberal representative was so passionately opposed to the whole concept of the closed shop that he would not accept the amendment that had been moved by the member of the Social Democratic Party, because he believed that it might weaken the attack on the closed shop which is represented in this Bill. At the same time, in the Committee stage in this House the members of the Social Democratic Party voted against the amendment that allowed for the trigger mechanism, as opposed to the automatic five-year balloting—so where do they stand?
Let me say one thing about the Social Democratic Party in this House. I make a distinction here between those members of the Social Democratic Party who were never members of the Labour Party and those who have defected from the Labour Party. The members of the SDP in this House, as distinct from those in another place, who have not defected were mostly splendid, delightful, independent Members of your Lordships' House who contributed very greatly, with their expertise and their experience, to the work of the House. We welcomed on many occasions the stands that they took. Then they apparently began to feel lonely—a quite normal, human emotion—and wanted to join a community. Well, they have moved one step. I think it is fair to say that moving into the Social Democratic Party from independence is one step towards the recognition of the Socialist message. So we welcome that.
That is very different from the case of those whose public life has been based largely on support of the Labour and trade union movement. Nevertheless, they claim to be one party and they also claim to be a part of a political alliance; and I should like to hear

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from the Front Benches of the Liberal Party and from the Back Bench of the Social Democratic Party whether they have a policy towards balloting in connection with Clause 2 relating to the closed shop. I invite them to clear up this matter so that we and the country may know where they stand.
Is it the case, as appeared to be exhibited in the Standing Committee, that the Liberal Party and the Social Democratic Party are engaged in battle over whether there should be an automatic five-year ballot or whether there should be a trigger mechanism for such a ballot? To what extent is the Social Democratic Party accepting the known obsessive dislike, indeed hatred, shown by some members of the Liberal Party towards the closed shop? Whether that is cleared up or not, I still submit to the Government that if they are genuinely concerned, as they claim to he, with industrial relations in this Bill, as distinct from antiunion ideology and hostility towards the closed shop, then they will recognise that there is at least a very strong case to be answered as to whether the automatic five-year ballot concerning the closed shop will not provoke industrial unrest, chaos in many industries and hostility within the trade unions inside those industries.
I pointed out at Committee that, if it is known that in 1987 there is going to be a ballot regarding the closed shop, then the preceding six months to a year will be taken up with lobbying, with pressures, leafleting, meetings and so on, which is not going to help industrial relations in this country. That automatic form of ballot, as contained in the clause as it presently stands is, as the Government will accept, opposed and disliked by both employers and trade unions. One can quote—as the noble Lord, Lord Jacques, quoted in a similar debate in Committee—the Engineering Employees' Federation, and I am sure that the Government Front Bench know of the opposition of the merchant shipping employers. It is also opposed totally by the trade union movement. So this is surely a prescription for industrial unrest.
With those two points, and a request to both the Social Democratic Party and the Liberal Party to let us know where they stand so that we know whether we may count on their votes in the Division Lobby, together with a request to the Government to take seriously the danger that their present proposals will lead to serious industrial unrest, I move Amendment No. 7.
Lord Rochester: My Lords, I suppose I should respond briefly to the bait put before me by the noble Lord, Lord Hatch. But it will be brief. I think that he is stirring the pot. I think that he is wasting the time of the House, in that we have better things to do than argue on this point. Briefly, on behalf of my party, I have made it plain that we oppose the closed shop in principle but we have some reservations on practical grounds concerning the operation of the ballots. It is for that reason, your Lordships will remember, that we put forward certain amendments which were designed to reduce the percentage of support required before an existing closed shop would retain protection. We made it plain that we prefer the Government way of approaching this method, however, by that kind of ballot rather than by the trigger
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mechanism. It may be that there has been some difference of emphasis on this matter between my party and our allies in the Social Democratic Party. That is for them to comment on as well as myself.
What irritates me, frankly, is the reaction to any minor difference of opinion on complex matters like this. It may not be a bad thing that in Committee and in your Lordships' House there are these differences. In the last vote, for example, certain members of the Conservative Party had the courage to vote with members of the Liberal and Social Democratic and indeed Labour Parties. I do not think that they deserve reproach for that for one moment. Any differences that there may be of this minor nature between my party and the Social Democrats as our allies are as nothing compared with the vast gulf which lies between right and left wings of the Labour Party.
5.26 p.m.
The Minister of State for Defence Procurement (Viscount Trenchard): My Lords, I do not know whether a Report stage on a trigger amendment should give rise to a general debate on the state of the Alliance. I note that the Members of the SDP present shake their heads, and that the noble Lord, Lord Rochester, has already spoken. I suggest we leave that for another occasion.
Lord Boyd-Carpenter: My Lords, would my noble friend allow me to speak? Would not such a debate be most appropriately conducted during the dinner adjournment?
Viscount Trenchard: My Lords, I think that is an excellent idea. This is another trigger amendment which, apart from the discussions in the other place to which the noble Lord has referred, has been very well discussed in this House at the Committee stage. The noble Lord who moved the amendment suggested that we ought to have been more attracted to it because of our views about contracting in and contracting out. Frankly, I think that analogy bears on an individual's right to contract in and out. In an authorised closed shop, subject to the provisions concerned, he has to contract in and cannot contract out, so I do not accept the analogy.
The difficulty with trigger ballots lies in the problems which employees would be likely to face in practice in achieving the required threshold level to "trigger" a ballot. We must remember that efforts by individual employees to canvass or simply inquire into possible support for a ballot among fellow employees could in many cases be strenuously resisted by the trade unions concerned. It must be realistically expected that in many cases people attempting to promote a ballot would suffer attempts to dissuade them from such a course. I do not think it can be right that 20 per cent. or any other percentage of employees should declare themselves in order to gain the right to vote in a secret ballot, particularly when those prepared to press publicly for a ballot could suffer actual or threatened disciplinary action from their union as a result Noble Lords will remember the quotations from rule books to which I referred previously.
This provision—indeed, any trigger provision—might result in ballots hardly ever being held even

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where employees would like them, as indeed the opinion polls tend to show that they would. We therefore do not consider that trigger ballots are an acceptable substitute for the automatic balloting in the provisions of this Bill. We believe—and we made this clear at Committee stage—that it is likely that there will be much less disruption on an automatic check with the alternative ways of doing that check which in closed shops which have the support of the vast majority allows the alternative of 85 per cent. of those voting.
I am puzzled that trigger ballots should continue to be recommended rather than what I would have thought would have been supported by many responsible trade unions—or ought to be supported—namely, the great authority they are bound to draw from an authorised closed shop position should they have the authority of a secret ballot every five years. That must give them much greater strength than an authorised closed shop which has not been checked, and which it would be difficult to check, which has existed for years and years and years. I therefore ask the House to resist this amendment.
Lord Oram: My Lords, I think it was right that my noble friend Lord Hatch should seek clarification from various quarters in the House of the attitude of different parties to the ballot. He has achieved two-thirds of his objective in that we have had statements from the noble Lord, Lord Rochester, and the Minister who has just spoken.
Viscount Trenchard: My Lords, I wonder if I may intervene to make the noble Lord, Lord Oram, aware that the representatives of the Social Democratic Party behind him nodded when I asked them whether they wanted to say anything further—that is to say, they nodded that they did not want to say anything further.
Lord Oram: My Lords, I am sorry that I cannot see the gesticulations of the Social Democratic Party behind me, but I should like briefly to remind the House of the purpose which my noble friend Lord Jacques and I sought to serve at the Committee stage when we moved a similar, though somewhat weaker, amendment than that which is before the House now. Our purpose was to ensure that where closed shop arrangements had been satisfactorily operated over the years, particularly in large and complex business organisations, then those arrangements should not be easily disturbed unless there was sufficient evidence that there was opinion within the workforce in favour of a change.
That is why in our amendment at the Committee stage we suggested that requisition by 10 per cent. of the workforce was reasonable. It was put to us during that debate by the noble Lord, Lord Kilmarnock, that 20 per cent. might be a more reasonable and certain figure; and my noble friend Lord Jacques indicated that he was not particularly sticking on the 10 per cent. figure. Moreover, the noble Lord, Lord Kilmarnock, quite validly made the point that there was nothing in our amendment to prevent a whole series of requisitions for ballots, even if those ballots did not lead to the turning down of the existing closed shop arrangements. We consider that both points put by the noble Lord,
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Lord Kilmarnock—whether he is shaking his head or nodding, I cannot be sure at the moment—were valid points, and I am glad my noble friend, Lord Hatch, has included in this amendment words which fully take into account those words spoken by the noble Lord during his intervention last time. Therefore I hope that we may hear briefly from the noble Lord on behalf of the Social Democratic Party, not in terms of how divided or how allied they are with this, that and the other party, but what he thinks about this particular "trigger" suggestion.
Lord McCarthy: My Lords, I did not want to intervene in this debate, but the noble Viscount the Minister has made a number of statements which I think must be corrected. We do not argue on this side of the House for trigger ballots. If someone comes along and introduces statutory ballots—and it is the Government who would introduce statutory ballots, automatic statutory ballots—in certain circumstances, by and large there is a balance of advantage in favour of trigger processes rather than automatic processes. It is as broad as it is long. The problem with this amendment is that although it gets rid of automaticity it introduces a trigger ballot over a rather shorter period, but we are not coming before the House arguing for trigger ballots. Unfortunately, the main objective, which was to get the Social Democratic Party to say what they would like to do, has not been fulfilled because they will not say anything.
The only other thing I would say is that once again, in arguing against trigger ballots, the noble Viscount has gone back to a statement he made in an earlier debate about rule books. He really must not make this statement about rule books in the way that he does. He quotes general expulsion rules. Every voluntary association has a general expulsion rule: that is, the equivalent of Section 40 of the Army Act. Judges have said in cases of expulsion that you cannot operate unions without general expulsion rules because those who sought to do so would require vast rule books which specified every conceivable thing that a member might do which might in some way lead him into trouble. Every organisation has general expulsion rules. It is quite a different thing how you impose those rules and how frequently you cause them to be used to expel people; and even if you do that you must really appreciate that there were first-class common law defences and protections against the abuse of general expulsion rules, long before the 1980 Act.
Lord Hatch of Lusby: My Lords, I am sorry I have been unable to elicit clarification of the position of the Social Democratic Party towards this important issue—I think the noble Lord, Lord Rochester, somewhat played this down—regarding the future of industrial relations. I still think we are entitled to know where the Social Democratic Party, as well as the Liberal Party, stand in their view on the future of industrial relations and how they would deal with this important matter if they achieved their aim as the Government. However, it may be that the position of the Social Democratic Party in politics has been aptly represented by the noble Viscount's comment that they nodded when they meant "No".
My noble friend Lord McCarthy has put his finger

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clearly on a very important issue that was raised at Committee Stage and which apparently has not yet sunk into the mind of the noble Viscount the Minister. I think he revealed the thinking of the Government when he said in his argument against the trigger mechanism that if there was a trigger mechanism perhaps ballots would not often be held. But do we want ballots to be held? We certainly do not, and nothing that is in this amendment is designed—I assure the noble Lord, Lord McCarthy, about this—to support the principle of balloting. It is only if ballots are going to be put into the Bill that we would then be trying to minimise the damage they will do. We think it is less dangerous to have the trigger mechanism than to have the automatic ballot. When the Minister says that one of his objections to the necessity for 20 per cent.—one in five—of the workforce to ask for a ballot concerning the closed shop, and that that provision would lead to ballots being held only infrequently—here I am paraphrasing his actual words—that reveals, to me at least, what the thinking of the Government is.
Why do the Government want to force these ballots against the wishes of the employees and the trade unions? What we have been trying to do is to minimise the insistence of the Government that ballots should be held, by saying that ballots will be held when the people concerned—only one in five of them—show that they want ballots. We are not going to force ballots on them. The point that has been made regarding the danger to members in collecting that 20per cent. has surely been exploded by now. What evidence has there ever been that there is any substantial appreciation, pressure or intimidation by members of trade unions regarding the decisions that they take? That was challenged in another place, it was challenged in Standing Committee and there has been no answer to it.
I do not believe that the noble Viscount has made out a case for saying that the kind of dislocation and hostility that would be created in the lead-up to these ballots would be less under his automatic system, than it would be if the trigger mechanism were to be adopted. All I am suggesting in this amendment is that the damage to industrial relations would be less—it will apply, anyway, from this clause—if it were a requirement that a ballot would be held at the will of 20 per cent. of the workforce, rather than an automatic ballot held every five years.
Viscount Trenchard: My Lords, just let me say to the noble Lord, Lord McCarthy, that I certainly do not today want to enter into the question of whether or not there is a case for changing or regulating rule books. I merely pointed out that the existence of the rule book and not just the expulsion clause, together with the closed shop, creates a very strong position. Many of us who have spent our working lives in factories know that the pressure can be considerable, and that it is not easy in a closed shop situation to put forward something that a union may feel is against their interest. We still feel that and I would say to the noble Lord, Lord Hatch, that there is less likely to be disturbance, even in extremely contentedly working closed shop areas, by an automatic ballot, which we believe even unions will come to welcome
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as being a good way of giving backing to their authority. I hope that they will and, anyway, I hope that the House will resist this amendment.
On Question, amendment negatived.
5.44 p.m.
Viscount Trenchard Viscount Trenchard moved Amendment No. 8:
Page 4, line 6, at end insert—
("(7A) In any case where neither subsection (4) nor subsection (7) has the effect of displacing subsection (3) and the employee—

(a) holds qualifications which are relevant to the employment in question;

(b) is subject to a written code which governs the conduct of those persons who hold those qualifications; and

(c) has—

(i) been expelled from a trade union for refusing to take part in a strike or other industrial action, or

(ii) refused to become, or remain, a member of a trade union,

subsection (3) shall not apply if the reason (or, if more than one, the principal reason) for his refusal was, in a case falling within paragraph (c)(i), that his taking the action in question would be in breach of the code or, in a case falling within paragraph (c)(ii), that if he became, or as the case may be remained, a member he would be required to take part in a strike, or other industrial action, which would be in breach of that code.").

The noble Viscount said: My Lords, in moving Amendment No. 8, 1 do not think I shall need to encourage the noble Earl, Lord Halsbury, or the noble Lord, Lord Howie of Troon, to speak, if they wish to do so, to Amendments Nos. 11 and 12 which are in their names. The House will remember that at the Committee stage the noble Earl and the noble Lord sought to protect the position of professionally qualified people, who might face a conflict of interest in an approved closed shop situation. I argued that we felt that the position was fully covered in the Bill and, to a degree, was supported by the 1980 Act and by a code of practice which had been issued following the 1980 Act.
In fact, the Government still believe that that is the case, but we cannot prove absolutely that that would specifically be the case on every occasion. As a result, and as a result of the noble Earl and the noble Lord pressing the point that they were not looking for a specific protection of people's opinions, consciences or firmly held convictions, but were looking for protection for people who found themselves with a conflict of interest, we have come forward with Amendment No. 8, which seeks to put in what could be called a subsection to deal with a conflict of interest, and in that way to avoid weakening the generality of subsection (4), which deals with conscience or deeply held personal convictions.
I hope that the noble Earl and the noble Lord will feel that we have met their points, and I should like to thank them both, and other Members from all quarters of the House who took part in the very interesting Committee stage discussion which we had on this subject. If accepted, this subsection will be a good demonstration of the value of the experience in which this Chamber abounds, and I couple that particularly on this occasion with the names of the noble Earl, Lord Halsbury, and the noble Lord, Lord Howie of Troon. My Lords, I beg to move.
The Earl of Halsbury: My Lords, I am extremely obliged to the noble Viscount for coming forward

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with this amendment in the name of the noble Earl, Lord Ferrers, on behalf of the Government, and I have no hesitation in supporting it in the form in which it now stands. It is similar to my Amendment No. 21 at the Committee stage, but, of course, I have always conceded that on a Government Bill the Government draftsmen must have the last word on the actual wording of the clause, and I accept that.
At the Committee stage, I withdrew the original amendment against a promise by the noble Viscount of sympathetic study in the interim, and I would entirely endorse what he has just said about the value of the Committee stages of these Bills as a dress rehearsal for the in-fighting which comes at Report stage, and the opportunity they give to study with good faith the various points involved. He promised to write to me and he kept his promise with commendable despatch. I have had plenty of time to study his arguments.
I came up with an alternative in response to points made by many in the Committee stage that prevention is better than cure, and that it would be better not to allow a situation to arise than have to rectify it by giving damages if it did. I succeeded in drafting an amendment which comes forward as Amendment No. 11 and which I shall not now move at this Report stage. But, of course, you have to pay a price for what you achieve, and the price I had to pay for Amendment No. 11 was that it invalidated all the closed shop agreements, unless they were amended and that gave opportunities for demanding renegotiation and so on, which might be thought a high price to pay for achieving that. Meanwhile, the noble Viscount's promise of sympathetic study was honourably kept and he has come forward with this amendment, which I have no hesitation in accepting as a fair alternative to my own. It gives me what I have been arguing for since 1971 and, if your Lordships see fit to support the Government amendment on this occasion, I shall go home this evening a very contented Member of your Lordships' House.
Lord Howie of Troon: My Lords, I want to say relatively little on this occasion, because we have discussed this matter on at least half a dozen occasions, in my experience, and many more in the experience, which goes back much longer, of the noble Earl, Lord Halsbury.
I want to begin by congratulating the noble Viscount, Lord Trenchard, and thanking him for two things. First, in the Committee stage debate he undertook to send out a letter giving the Government's attitude on this matter to the noble Earl, Lord Halsbury, and myself, and to other noble Lords who were interested, and to place a copy of it in the Library. That letter was the most clear and convincing statement of the Government's attitude on this matter which we have had in the course of the discussions over the last several years, and I thank him for it. I found it convincing. The noble Earl also found it convincing, because it gave him his points. It did not quite give me mine.
I found it convincing, but not convincing enough—only in the sense that the letter was based on the Government's strategy which leans on the concept
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of fair and unfair dismissal. I know that many of the concepts which we have discussed in these debates on employment legislation are hallowed by time, but this concept of unfair and fair dismissal is hallowed only as far back as 1971. I do not regard that as terribly hallowed. It is the kind of short hallowedness which could be unhallowed in due course, and I hope that in some future Bill it will be. I want not the concept of unfair or fair dismissal, but the dismissal not to happen at all, but I do not want to push my luck too far.
Therefore, I should like to go on and give my second congratulation and thanks for this amendment which the Government have put down. It does not quite meet the point I made in earlier discussions, but I am perfectly sure that it goes as far in my direction as the Government reasonably could be expected to go. Since I had been under the impression that this Government were virtually immobile in such matters, any movement of this sort I welcome with open arms, and I hope that the House will, too.
My own amendment, Amendment No. 12, which I do not intend to move when the time comes, was based on the letter which the Minister sent out to the noble Earl and to myself and to others. I took up the point made by the Minister that paragraph 54 of the code of practice on the closed shop was the key to the question, because it had to be considered by an industrial tribunal if a case came before it. I have argued all along that this particular matter should not be in the code but should be in the appropriate Bill. That is what I sought to do in my amendment. I took the provisions of paragraph 54 of the code and put them into the Bill, because that seemed to me to be the logical, clear and, above all, simple place for them to be. When they were in the code of practice, they seemed to me to be too far removed from the point of application and too tenuous in their connection with the problem.
Although the Government cannot meet me on that, they have gone a very long way towards meeting the principle. I shall certainly look at the application of the Bill, when it becomes an Act, assuming that this amendment is accepted by the House, and see how it affects the professional engineers and other professional people about whom I have been worried. If the Government's proposals work, I shall be delighted. If it turns out that the Government's proposals do not work, I fear that I shall be required to come back to the House at some later suitable stage in order to try to press the point which I have made on a number of occasions. In the meantime, I hope the House will accept the generous proposals made by the Government.
Baroness Seear: My Lords, like the noble Lord, Lord Howie of Troon, I am very glad that the Government have been able to go this far, but regret that the question is only one of unfair dismissal and not of retention of the job. It seems to me that where the professional code or the statutory duty conflicts, this should take priority. It remains to me monstrous that a man in that position is going to lose his job, albeit he is going to be compensated.
Lord Boyd-Carpenter: My Lords, I think that somebody from these Benches should say just two

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things. First, may I express appreciation to the Government for their response to what was, during the Committee stage, the general feeling of the Committee and for coming forward, therefore, with this amendment. It is good to see the parliamentary system working in this way and after a certain amount of pressure Ministers coming forward to that Box with something designed, at least in part, to meet the strong feelings expressed at the Committee stage. Secondly, may I congratulate the noble Earl, Lord Halsbury, on the climax of, as I think he told us, 11 years of struggle. It is an admirable example to us all of the value of persistence. If I may add a speculation, those who have the good fortune to live in the near neighbourhood of the noble Earl may well find their sleep later tonight disturbed by the popping of corks.
Lord McCarthy: My Lords, I feel like the guardsman who was out of step and the lady who was left waiting at the church. Firstly, may I say that we agreed with the Minister. When we saw—it came at an early stage, though no doubt the Minister had his reasons—for the first time this clause (and I do not claim now to have fully explored its ramifications because it is not exactly like the one put down by the noble Earl, for it goes beyond statutory professions, for example) we wondered what were the reasons for the Minister having changed his mind, because he was extremely persuasive. As he said again today, Section 4 of the 1980 Act protects, Section 7 of the 1980 Act protects, the code of practice protects, and in the only case that is cited the professional man won his case. Yet he comes to us today and does not say that he has changed his mind. He does not say that as a result of all the correspondence and listening to all the arguments he now finds that he was wrong.
I have not read his letter. He did not send one to me, though it is no doubt in the Library. But I am told by the noble Lord behind me that that letter restated his position with even greater clarity. So I am in a bit of a maze as to why in fact he has changed from the position which I thought we shared the other night. The only thing he has told me is that he could not be sure. He could not prove, he says, that if a professional man had come in front of an industrial tribunal, the decision would have gone that way. Well, no. That is what the judicial process is all about. You cannot prove it. Nevertheless, he wants to make it clear in the legislation. Well, all right.
Let me say that we are not here today—and we were not at the Committee stage—trying to support situations in which people used closed shops to get professional men the sack. That is not what it is about. We disagree with this Bill in all kinds of ways. We disagree with what is done with union membership agreements, mainly because we believe that the way those agreements are operated in practice takes into account these problems. In addition, the Government have legislated with Section 4 of the 1980 Act, Section 7 of the 1980 Act, and so on, and now want to go further. I am not here to stop them. All I am saying is that I wish that when we put down amendments which the Government say are declaratory and which we say cannot be proved, they would be equally generous to us.
Viscount Trenchard: My Lords, I did use certain words which I hope will be clear when the noble Lord, Lord McCarthy, reads the account. I mentioned that this conflict of interest was not specifically covered. We still felt, as we expressed both in the Committee stage and in the letter, that in all probability the Bill would have covered an unfair dismissal in this situation. But we believe that, due to the particular pressure of a conflict of interests, including areas where there was statutory backing to that conflict of interests, this issue should, on reflection, be specifically covered.
As far as the noble Baroness, Lady Seear, is concerned, I understand what she has in mind, but the Government view, I believe rightly, is that, as a Government, they can best protect people by working on the unfair dismissal and the consequences of it. A statement to say that someone must not be dismissed—or, as was suggested at Committee stage, should not be expelled—is a statement, but there is no absolute guarantee that it will be carried out. So the Government believe that, with the very strong deterrents for unfair dismissal in these cases, that is the strongest way for a Government to achieve what I believe the noble Baroness is after.
On Question, amendment agreed to.
6.1 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney moved Amendment No. 9:
Leave out Clause 2.
The noble Lord said: My Lords, I beg leave to move the amendment in my name. Since putting down Amendments Nos. 9 and 10, I have read the little red booklet which advises us what is proper and what is not proper. I find that Amendment No. 9 is proper because it is my intention to press this amendment, but that Amendment No. 10, as it was for the purpose of discussing the subject, is not proper at Report stage. Therefore, with the leave of your Lordships, I announce now my intention not to move Amendment No. 10, because I gather that it would be inappropriate to move an amendment that is only for debate.
I hope, however, to persuade your Lordships to accept the argument that I shall put forward in regard to Amendment No. 9. I have greater hope of doing so now than I had when I came in because the amendment which has just been not only moved but accepted by the Government indicates a degree of appreciation of the nature and complexity of the problem which has been absent hitherto. I rather hope that, during the course of this debate, that degree of appreciation will extend to the point where the Government will be able to say, "We will abandon Clause 2 altogether". I hope that when the reply comes from the Government Front Bench it will be more affirmative in character than I had expected at the beginning.
I am also encouraged in that thought by the fact that, in the course of the debate in the last session, the Government indicated that their minds were not closed. Another factor which may help the Government here is that by not moving Amendment No. 10, I am making it quite clear that it is my intention that the existing Sections 58 and 58A of the 1978 Act shall remain. Therefore, the removal of Clause 2 would simply leave in being the existing legislation; legislation which has worked and which I would have

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thought the Government might find reasonably satisfactory, without introducing this new business of complicated ballots which I hope to demonstrate will prove to be very difficult. I will go further than that—I believe that they are going to be quite impossible.
I rather suspect that, in drawing up these provisions in Clause 2, the model which the Government have had in mind has been the shop floor of the factory. I concede that it is just possible—although with some difficulty—that this clause could be made to apply and could work in a factory situation. But it is not the case that most people in this country work in factories. A large and important minority work in factories and I do not wish to indicate any lack of appreciation for their very great importance. But most people are not in a factory situation, and where we shall run into problems and chaos all over is in every situation which is not a factory situation. In fact, I do not know how it can be applied at all, and I wonder whether, in practice, the Government will ever bring in Clause 2 if they pause to examine the consequences of doing so. Let me illustrate one case that I know well.
To do so, I will quote, if I may, a letter from the general secretary of Equity which has been quoted already in the other place. What he wrote was this:
"Equity has been party to union membership agreements since the 'Thirties, and I believe that the employers and their associations have long shared our view that the maintenance of those agreements where they exist is in the interests of artists, employees and the entertainment industry in general. For example, in the theatre, this union and the managers' associations have long joined to form joint industrial Councils (the London and Provincial Theatre Councils, the first of which was established by a previous Minister of Labour). These Councils approve standard conditions of employment which provide, inter alia, that no manager may engage artists under those terms unless he is registered with the Council as an approved manager, and no artist may be so engaged unless he is similarly registered as an approved artist. Managers are approved if they belong to the appropriate trade association (or register with the Council and pay deposits to it to safeguard payment of salaries) and artists are approved if they are members of Equity. This ensures, to a great extent, not only that there are standard conditions which prevent unfair competition by undercutting, but also that those who are unlikely to be able to meet their obligations are unable to mount productions and employ artists. The Theatre Councils also require disputes to be referred to them for resolution "—
in other words they are stabilising forces for good industrial relations—
"and Equity undertakes to those Councils that it will use that procedure before taking industrial action. In addition, there are provisions ensconced in Theatre Council agreements whereby managers may apply to Equity to use non-members and have a right of appeal to the joint Councils if there request is rejected—and the quota system in the provincial theatre itself is the major area for entry to Equity and to the profession. The system has worked well without major industrial unrest in the theatre for nearly 50 years."
I will not quote the whole of the letter, but there is just one other piece that I would like to add, where the general secretary of Equity goes on to state:
"The proposed provisions concerning periodic review of union membership agreements cause my Council some concern. The vast majority of our members are employed or engaged on a casual basis. In films and television, employment can normally be measured in weeks if not days. In the theatre, although there are some artists engaged by the year, the vast majority are engaged for short periods or for the run of the play '. In those circumstances, it is difficult to see how any realistic ballot or periodic review could sensibly be held and how any benefit could be
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obtained thereby. Most of our agreements with employers are negotiated at regular intervals in any event."
If I may explain that a little further, the "agreement", which is the general agreement, is this document in my hand—the agreement for West End theatres. There are a number of others, but this is one of them. This agreement lays down the broad general conditions of employment and it applies to everyone who is employed in that area. There are similar documents in films, and similar agreements for the BBC and ITV covering television. There are also similar documents in the provincial theatre. These documents are regularly negotiated. They form the basic conditions. It is fair to say that over the years the conditions of employment have gradually been improved; it has, in other words, been a successful agreement between the two parties, without, as the letter says, any major industrial dispute. There have, of course, been minor disputes from time to time; it is natural that there should be. But I do not think any of your Lordships can remember any general stoppage in the theatre at all.
This document covers the general conditions. But there is subject to that—and this is probably the only document that the individual actually sees, though he may refer to that one from time to time—the standard contract. Here we have a contract which the individual enters into. These contracts are being signed at different places and at different times all over the place. The details filled in in the contract are different in every case. It is subject to a minimum salary and the holiday period is provided as a minimum period, but the actual conditions of employment can vary enormously, as your Lordships will readily imagine. For example, one actor may be on something rather less than £100 a week, even substantially less than that. Another one, a star, may be on 10 times that figure and possibly a share of the profits of the production as well. So that the range of remuneration is very large indeed. But the standard conditions apply. This complex operation is held together by the existence of a union shop which is interpreted and which is achieved in the manner described to your Lordships in the letter.
So we have this complex situation, that on the one hand the general terms of the agreement are negotiated periodically, perhaps once a year, perhaps rather more. This particular agreement I am holding in my hand was negotiated in 1981, in the early part of 1981, and I know is in course of discussion, with the idea that a new document, with somewhat improved conditions, one hopes, will be available later this year. This one is dated January 1981, but the whole of this condition is negotiable.
The complexity is this. What are we talking about when we are talking about ballots? Are we to say that there shall he a ballot related to the negotiation of this general document? If so, who does one ballot? Who does one know who is going to be employed under this contract? Nobody knows. At any one moment there will be a number of people, perhaps 300 or 400, engaged under this contract. But in a year's time there may be an entirely different 300 or 400 engaged under the contract. How can one select? Is one then to ballot the entire union membership? Why? Some people will never work under a West End contract. Some people work only in

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films or in television, and therefore under these circumstances would be voting in respect of a contract under which they are not currently engaged and under which they are probably unlikely ever to be engaged. Therefore, one has this terribly complex situation.
If one then says "No, one does not ballot all those on this. One ballots only the small group who are currently engaged in the particular theatre", is one then to have a continual series of ballots? Is one to say to the group employed in the theatre when they sign their contracts, "You six have got to ballot as to whether you will have this particular contract or whether you will not accept the union shop clause in it?" I do not see that that is a practical proposition, when contracts are being individually signed all over the place, not on the same day, when agents are negotiating and making agreements on behalf of other people of which those people may not be precisely aware at the time because they have given their power of attorney to the agent to conclude agreements on their behalf. It seems to me that what is being proposed here is totally impracticable; it simply will not work.
Not only will it not work in the area of theatre, but there are a number of other areas where it will not work. I do not see how it is going to apply in the area of shipping. There are other areas where I think the complexities I have illustrated would equally apply. I would seriously ask the Government to look again at this whole problem, and to say that they recognise, however good the intention may have been, that this is not a practical proposition. It is not capable of universal enforcement. In these circumstances I ask them, as the amendment suggests to leave out Clause 2, and I beg to move.
Lord Davies of Leek: My Lords, very briefly, as somebody with an interest in this, I do not think the Government have thought this out in depth, both so far as seamen are concerned and certainly in regard to theatricals. I know this from within my own family, somebody trying for a contract. Person A may have no knowledge whatsoever of what is going on anywhere else. They are particularly concerned through their agents in getting a job in pantomime and so on. They may never reach the echelons of the West End or the higher echelons, they may be in small repertory theatres throughout Britain. Without going into the argument any more in depth, because it has been well covered by somebody who knows much more about it than I do, I think this should be looked at again before all this verbiage—and look at the length of it—is left here. It is not clear, it is not precise and it does not spike down exactly what the Government anticipated it would spike down.
Lord Campbell of Alloway: My Lords, at Second Reading I mentioned this problem that is being raised by the noble Lord, Lord Jenkins of Putney, and as I remember I mentioned it in relation to Equity, being wholly ignorant of his vast experience and identity with Equity. Again, if I remember aright, my noble friend Lord Mottistone mentioned the question of shipping in this context. I am not going to take up your Lordships' time, but is it not right that there are certain situations where derogations might have to be granted in the interests of fairness and practica
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bility? If that is so, is it not right that there should be some form of machinery to provide the requisite elasticity to make this work? There is, of course, none. Although I fully support the broad intentions of my Front Bench in this matter, I would most respectfully ask that they give serious consideration to the matters that have been raised today by the noble Lords opposite.
Lord Mottistone: My Lords, if I may intervene to explain the position with regard to the General Council of British Shipping and the National Union of Seaman, the position is not quite the same as has been explained to us by the noble Lord, Lord Jenkins. The situation is that the General Council of British Shipping and the shipping companies are reorganising the method of the employment of seamen by agreement with the union; they have started that already. As they are organised at the moment they would have the same sort of problem. All they are asking is that the Government shall delay the introduction of these clauses sufficiently to give them time to complete their reorganisation. What they have been asking for is five years and what I have been seeking in various amendments is that period. The Government are aware of this and I understand that there have been very many meetings between the general council and the Government. I imagine that Equity would have done the same type of thing. So both sides are fully aware of the problem.
In the case of the seamen, it looks as though we may get two years from the date that this Bill is enacted, and what with the lead-up time that there has been from the beginning of the Bill being laid in another place, it will work out at something not far short of a total period of three years. That is marginally all right, but it does mean accelerating a reorganisation which was already in contemplation by the shipping companies. Therefore, the situation is not so serious and it is not one which I would seek to pursue any further than I have already, except to say to the Government that I trust, indeed, that they will stick to their idea of two years rather than one year, on which I gather they have not yet quite made up their mind.
Lord McCarthy: My Lords, I am very grateful to the noble Lord, Lord Jenkins of Putney, for putting down this amendment. I do not think that I am betraying any confidence in saying that we sought at first to find, if we could, a way in which we could put down an amendment at this stage in the proceedings to deal with the special narrow problem that he has discussed with such knowledge and such eloquence tonight, but in fact we could not find one. The fact is that there is no way.
The noble Lord, Lord Mottistone, quite rightly in an attempt to deal with the problem of the shipping industry, sought to deal with it by giving them time. Fortunately, because of the reorganisation of the shipping industry, he tells us—he knows more about it than I do—that three years will do and that at the end of a three year period, it may be possible for the shipping industry to deal with what is the single most difficult problem for them; namely, to have a ballot at which they could get the requisite figures. But there is no

279
way in the case of Equity. As the noble Lord, Lord Jenkins, has said, whether it be three years, 30 years or 300 years, they cannot have a ballot, because the people who would be balloted are constantly moving.
Therefore, there is no way and there was no way that we could find in Committee to deal with this situation. We put down a whole series of amendments. The noble Lord, Lord Jenkins, said quite reasonably afterwards that there was, in fact, no amendment which dealt with the Equity situation, because no amendment will deal with it. The only thing that will deal with it is the removal of the clause and that is why we have this amendment down today. The noble Lord, Lord Campbell, is quite right to take up this point, because this is virtually the basic reason why we have parallel organisations to union membership agreements, in professions. That is why we have them in the law; theirs is a client relationship and the only way in which we can protect a client relationship is by what in the trade union movement they would call a "union shop", but which in the professional associations they call a "register". That is the only way in which it can be done. While we have this Bill and while we have this clause, I regret to say that we have no alternative but to move against it.
Lord Glenarthur: My Lords, the noble Lord, Lord Jenkins of Putney, in moving this amendment, despite the fact that he has cloaked a lot of what he wants to say in relation to Equity, has certainly opened the opportunity for a debate on the principle that there should be ballots of existing closed shop arrangements, and perhaps on the principle that we should protect non-union members in a closed shop. I am very glad that he is not going to move Amendment No. 10, as that amendment, by repealing Section 58 of the 1978 Act, would also have removed the basic rights of employees to join trade unions and to take part in their activities. No doubt his own Front Bench would have had something to say about that.
But, leaving that matter aside, I am afraid that we do find ourselves on a fairly familiar treadmill. As your Lordships will know, Clause 2 of the Bill introduces new rights against unfair dismissal for non-membership in a closed shop. In particular, it provides that after a transitional period, dismissal for non-membership will be unfair where a closed shop has not been approved as required in a secret ballot.
I do not think that I need burden the House by responding to arguments which have been raised previously against the closed shop balloting provisions of the Bill. Most of them now look decidedly threadbare. We kept hearing, for example, that the closed shop balloting provisions were disliked by employers who feared the industrial relations consequences. It has not been raised today, but I think it is worth pointing out that there was an article in the Financial Times on Monday referring to a poll taken earlier this month among 500 senior directors in large companies. That poll showed that most regard the Employment Bill as presenting little threat to industrial relations in their companies. A fair majority—60 per cent.—thought that the Bill was "about right", compared with 20 per cent. who thought it went too far and 13 per cent. not far enough. Only 2 per cent.
280
thought that it would lead to a confrontation. So like so many of the other arguments which we have heard against the closed shop provisions of the Bill, the one about employers fearing the industrial relations consequences of the Bill's closed shop provisions just does not hold water.
All these provisions have received many hours of debate both in your Lordships' House and in another place. The noble Lord, Lord Jenkins, will hardly be surprised to learn that we simply cannot accept this amendment which is effectively a wrecking amendment. We firmly believe that where employees are required to work under a closed shop agreement or arrangement, they should have the opportunity peridiocally to make known their views in a secret ballot, as to whether or not they want to continue to work under a closed shop arrangement. I must emphasise that the Government—and I am sure all of us on this side of the House—find this principle wholly unexceptionable and entirely justifiable. It is saying no more than that people are entitled to say whether an arrangement which can quite clearly conflict with their individual liberty is, nevertheless, one under which they wish to work.
The noble Lord, Lord Jenkins strikes a fairly familiar note when he talks about Equity and what amounts to collectivism versus individual rights in a closed shop. He argues that the majority have rights in a closed shop and that we are wrong to seek to safeguard the individual non-member, as we do in this Bill. Of course, the majority have rights: they have the right to be union members; the right to take part in trade union activities; and the right to organise and seek recognition from their employer. But why should these rights extend to forcing the odd non-union member to join a union? By staying out of the union he is not preventing the majority from exercising their rights to be in a union, but they seek to prevent him from exercising his basic right to choose whether to join a union or not.
There is no doubt that as a Government we dislike the closed shop for precisely these reasons. We, of course, would prefer that it did not exist. If it were likely to be practical, we would seek to outlaw it, but because that it is not in our view a practical possibility, we are, instead, introducing the additional safeguard in this Bill, such as ballots, to ensure that the limitations on individual freedom, which the closed shop inevitably entails, should not be imposed on any individual unless it is quite clear that the overwhelming majority of his fellow employees are content for their freedoms to be restricted in this way.
Contrast this, my Lords, with the attitude of the trade union movement. The TUC's guide to the Bill, asks unions to tell their employers that the policy on the closed shop should be "business as usual", and in particular advises unions to tell employers that
"secret ballots should not be held on the continuation of union membership agreements ".
One is forced to ask, "What is it that the TUC is so afraid of?" Can it be that if, for once, union leaders actually asked their members what they thought, they might not get the answer they wanted? Can it be that union leaders, in fact, know that the closed shop is just as unpopular with their members as it is with the public at large? Perhaps it is much safer,

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from their point of view, not to risk finding out. We reject this philosophy entirely. We think that individual employees have every right to make known their own views as to whether or not they want a closed shop to continue. That is what Clause 2 provides and that is why I shall ask your Lordships to reject this amendment.
The noble Lord, Lord Jenkins, spoke particularly about Equity. I understand his concern about Equity. I have to say that I think that his fears are misplaced. There is nothing in these balloting provisions which need stop closed shop agreements in the entertainment industry from continuing to operate so long as they are genuinely wanted by the employees concerned. It will not be difficult—as the noble Lord suggests—in any way for employers in the entertainments industry to hold closed shop ballots. All they will need to do is to ballot all of their employees who are in their employment on a particular day. It will be up to them to choose a suitable day, and that is why the Bill's provisions are made deliberately flexible.
My noble friend Lord Campbell made a point in connection not only with Equity but with Shipbuilding. It seems to me that he is seeking some form of exemption from the closed shop provisions for particular groups, rather like the approved closed shop provision of the 1971 Act. But there is a difference. The 1971 Act outlawed the closed shop; this Bill does not. If ballots are held, closed shops in entertainment can continue as though they were perfectly lawful.
The Secretary of State is still considering whether to bring these balloting provisions for existing closed shops into effect one or two years after Royal Assent, but he will obviously have to take into account what has been said in your Lordships' House before reaching these decisions. In the light of what I have said and the particular comments that have been made in relation to the whole principle of Clause 2 of the Bill, which the noble Lord, Lord Jenkins, seeks to remove, I trust that your Lordships will reject this amendment.
Lord Jenkins of Putney: My Lords, I think that the noble Lord, Lord Glenarthur, has been answering some other debate which took place in some other place on some other day. No doubt he was given a brief to do that in the belief that perhaps I would raise the general principle of the closed shop. As your Lordships will be aware, on this occasion I uttered no word of general condemnation about what the Government's intentions were. I do condemn them, but I did not do so on this occasion. I simply sought to deal with the question of practicability. My entire remarks were directed to the question of whether or not the clause was workable, and the reason that I asked your Lordships to reject it was not because I think it is wrong in principle—although I do—but purely because it is not practicable. It will not work; it cannot work; it will create total chaos.
The noble Lord, in the one moment when he touched on the matters which I have raised, suggested that there might be a day selected on which the ballot would take place. How does one select this day and who ballots? Everybody on that particular contract will be on a contract which already contains a closed shop clause. Who will be balloted—everybody on that
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particular contract at the moment? What are to be the consequences of the ballot?
There is perhaps one area in which Equity differs from some other trade unions; it is that there has never been any case whatever of any breach of contract. The negotiations that take place at Equity take place on a general proposition which operates over the whole area. That general proposition, that general agreement, is negotiated about once a year. Subject to that, the individual actor is engaged on another document which is his personal contract, The general proposition is negotiated, and if one fails on that then no personal contracts are signed. But once a personal contract is signed between a manager and an actor, it is never broken by the actor or by the manager; it operates for the duration of that contract. In those circumstances, you cannot get an effective ballot operating, because the circumstances are not those which exist in the model in theminds of the Government, which is a factory floor situation. It is a situation in which—as I said in my introductory speech—people are signing contracts at different times all over the place, and sometimes are having contracts signed on their behalf.
We have only touched on the beginnings of the complexity of the situation. I have talked about the theatre. A similar situation exists in films and television, with different kinds of contracts and different councils. But all these agreements are on the same basic principle of a general agreement which operates between the union and the managerial association and which does not at the time of its agreement concern any particular group of people. It envisages that there will be a group of people, all of whom are members of the trade union, who will come into the position which is affected by the negotiation.
I want to make one more remark before I sit down. I went through this clause trying to discover some particular amendment to it which would create a special position to provide for the particular circumstances which I have described to your Lordships. I have not been able to find it. Nor has my noble friend on the Front Bench been able to find it; nor could the noble Lord, Lord Wedderburn, find it. We could not find any way of amending the contract which would provide for a workable exception to be made for the set of circumstances which I have described to your Lordships. In those circumstances I had no alternative but to move that Clause 2 be left out, because there is no practicable way of amending it. Therefore, I have no alternative but to ask your Lordships to divide and to support my amendment that Clause 2 be omitted.
6.38 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 44; Not-Contents, 128.

DIVISION NO. 2

CONTENTS

Ardwick, L.

Bishopston, L.

Bernstein, L.

Blease, L.

Beswick, L.

Blyton, L.

Birk, B.

Briginshaw, L.

283

Brockway, L.

McCarthy, L.

Brooks of Tremorfa, L.

Molloy, L.

Bruce of Donington, L.

Oram, L.

Cledwyn of Penrhos, L.

Parry, L.

Collison, L.

Peart, L.

David, B.

Ponsonby of Shulbrede, L. [Teller]

Davies of Leek, L.

Elwyn-Jones, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Stewart of Alvechurch, B.

Glenamara, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stone, L.

Houghton of Sowerby, L.

Strabolgi, L.

Jacques, L.

Taylor of Mansfield, L.

Jeger, B.

Underhill, L.

Jenkins of Putney, L.

Wallace of Coslany, L.

John-Mackie, L.

White, B.

Llewelyn-Davies of Hastoe, B. [Teller]

Willis, L.

Wynne-Jones, L.

Lovell-Davis, L.

NOT-CONTENTS

Airey of Abingdon, B.

Kinloss, Ly.

Alexander of Tunis, E.

Kinnoull, E.

Auckland, L.

Lane-Fox, B.

Avon, E.

Lauderdale, E.

Aylestone, L.

Lloyd of Kilgerran, L.

Balerno, L.

Long, V.

Bellwin, L.

Lyell, L.

Beloff, L.

Mackay of Clashfern, L.

Belstead, L.

McNair, L.

Bessborough, E.

Mais, L.

Burton of Coventry, B.

Mansfield, E.

Caccia, L.

Margadale, L.

Caithness, E.

Marley, L.

Campbell of Alloway, L.

Massereene and Ferrard, V.

Cathcart, E.

Mersey, V.

Clifford of Chudleigh, L.

Milverton, L.

Cockfield, L.

Mottistone, L.

Colwyn, L.

Mountevans, L.

Constantine of Stanmore, L.

Moyne, L.

Cork and Orrery, E.

Murton of Lindisfarne, L.

Craigavon, V.

Napier and Ettrick, L.

Craigmyle, L.

Newall, L.

Cullen of Ashbourne, L.

O'Neill of the Maine, L.

Davidson, V.

Orkney, E.

De La Warr, E.

Pender, L.

Denham, L. [Teller]

Penrhyn, L.

Diamond, L.

Platt of Writtie, B.

Eccles, V.

Rankeillour, L.

Ellenborough, L.

Renton, L.

Elles, B.

Rochdale, V.

Elliot of Harwood, B.

Rochester, L.

Elton, L.

Romney, E.

Evans of Claughton, L.

St. John of Bletso, L.

Ferrers, E.

Sandford, L.

Ferrier, L.

Sandys, L. [Teller]

Fortescue, E.

Seear, B.

Fraser of Kilmorack, L.

Selkirk, E.

Gainford, L.

Shannon, E.

Gardner of Parkes, B.

Sharples, B.

Glenarthur, L.

Skelmersdale, L.

Glenkinglas, L.

Spens, L.

Gowrie, E.

Stamp, L.

Gridley, L.

Stedman, B.

Halsbury, E.

Sudeley, L.

Hampton, L.

Swansea, L.

Harmar-Nicholls, L.

Swinfen, L.

Harris of Greenwich, L.

Tanlaw, L.

Hayter, L.

Taylor of Gryfe, L.

Henley, L.

Terrington, L.

Hives, L.

Teviot, L.

Holderness, L.

Thomas of Swynnerton, L.

Home of the Hirsel, L.

Tordoff, L.

Hornsby-Smith, B.

Tranmire, L.

Hylton-Foster, B.

Trefgarne, L.

Ironside, L.

Trenchard, V.

Kennet, L.

Trumpington, B.

Killearn, L.

Tryon, L.

Kilmany, L.

Tweedsmuir, L.

Kilmarnock, L.

Vaux of Harrowden, L.

Kimberley, E.

Vickers, B.

284

Vivian, L.

Whaddon, L.

Wade, L.

Windlesham, L.

Wakefield of Kendal, L.

Young, B.

Walston, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 10, 11 and 12 not moved.]
Clause 3 [Basic Award]:
6.46 p.m.
Lord McCarthy Lord McCarthy moved Amendment No.13:
Page 6, line 33, leave out ("by virtue of section 58 or 59(a)")
The noble Lord said: My Lords, I beg to move Amendment No. 13 and should like to bring in Amendment No. 15. We return now to the issues in the Committee concerning the basic award for unfair dismissal. We argued there that we did not accept the distinction between dismissals on grounds of the reason for dismissal. We were arguing that we thought that, for example, dismissal on grounds of discrimination for sex, or race discrimination, or for incapacity without due notice, or for so-called insubordination without taking into account the circumstances, all situations in which a tribunal might well decide that there was a case of unfair dismissal—either that the true reason was an unfair reason or because the employer had acted unreasonable according to the provisions of the unfair dismissal legislation—there was no basis on which to make a distinction so that all those cases would carry with them a lower level of award of compensation, a lower maximum of compensation, and to set them on one side and on the other side to set up, as it were, dismissal on grounds of union membership.
We never could see, and we cannot see today, the basis on which the Government make their three tier approach to unfair dismissals. It seems to us that in practice any unfair dismissal on any grounds could be, in principle or in practice, either less, or more, serious to the individual concerned than any other dismissal in any other grounds. Whether a dismissal is serious or not depends on the period out of work, whether you can immediately get another job and as good a job, the type of job you eventually obtain, and whether the dismissal itself—I suppose this is the argument that the Government used on Committee stage—was given on a ground which made it more difficult, if the cause and grounds were known, for the individual to get a job somewhere else.
Here again we thought that there could be just as many cases where people could be known to be unfairly dismissed on grounds of certain heart conditions, for example, or because they were thought to be unsuitable in various ways. Although it may be known that unfair dismissal on those grounds had been corrected in that compensation had been given, nevertheless the knowledge would follow people around from place to place and they could be hit just as hard—even more so—in certain circumstances as individuals dismissed because they would not join a union. We pointed in particular in Committee to the case of middle managers, say, who were earning substantial sums and who therefore could look forward to maximum compensation, perhaps of 50 per cent. of annual salary.
But the Government would have none of it and the noble Earl, Lord Gowrie, said—reported at cols. 12 and 13 of Hansard of 12th July—that none of it was appropriate because the Government were seeking to create an effective deterrent and were responding to deep public concern. Because of those two things—and he quoted very few examples of deep public concern or the possible effects of the deterrent—the Government were justified in what they were doing, he said. There was no answer to our point, yet unfair dismissals continue at much the same rate outside the area of union membership. If one wants to practise a deterrent, why not practise it there? If one wants to deter unfair dismissals, why not increase the value of the compensation all round and deter by that means? Why instead do what the Government have done and abolish the old basic award and remove more than one million people from the effective protection of unfair dismissal? That cannot be justified as the result of any fall in the number of unfair dismissals.
We have therefore tabled another amendment which does not attempt to spread the £2,000 on the basic award or the special compensation award to everyone. Instead, it seeks to return to the position as it was previously; that is, to go back to the old-fashioned basic award of two weeks—that is the effect of Amendments Nos. 13 and 15—and thereby to return to a universal situation in which compensation maxima are the same for all, so that all are equally having available to them the two weeks' minimum basic award.
6.53 p.m.
The Minister of State, Northern Ireland Office (The Earl of Gowrie): My Lords, a similar amendment was moved in Committee, and the noble Lord, Lord McCarthy, acknowledged that. Noble Lords opposite made the point then, as the noble Lord has now, that all unfair dismissals are to be equally condemned and that if limits for awards of compensation are to be raised at all, they should be raised for all cases. I agree that all unfair dismissals are to be regretted, and there is no difference between me and Lord McCarthy on that. As I pointed out in Committee, we believe that certain kinds of unfair dismissal merit the substantially enhanced levels of compensation which the Bill provides, and the reasons are simple. First, we are dealing not with dismissals which have been carried out because of some altercation between employer and employee or vice versa, but with dismissals which have been carried out in open defiance of rights specifically and recently passed by Parliament, and that is something we wish to deter very emphatically.
Secondly—this answers the substantive argument adduced by the noble Lord, Lord McCarthy—it is surely the case that those who find themselves unfairly dismissed in these circumstances (in the closed shop circumstances) are likely to suffer considerably more as a result of their unfair dismissals than is the case in the generality of other unfair dismissals. That is one of the evils of the closed shop; it can frighten people as to the possibility of their not being employed in the future at all.
I do not want to detain the House by repeating in detail the very black histories I outlined on earlier
286
occasions, which I even outlined in some detail on the passing of the 1980 Act—the Walsall and Sandwell dismissals. The point there was that the dismissals were made by employers in direct violation of recently enacted statutory rights and in the knowledge that the employers would be liable to pay compensation. So they were not cases where an employer was acting, as he thought, fairly but subsequently found that a dismissal was unfair. The employers knew perfectly well that they were acting unfairly, and they were acting unfairly as a deliberate political act in outright defiance of statutory rights provided by Parliament. It was particularly lamentable that those renegade employers were supposedly responsible members of public authorities.
I have made it quite clear that we want to deter such employers very fiercely, but the second reason is probably the reason which should commend itself more closely even to the noble Lord, Lord McCarthy. It is surely self-evident that persons dismissed for non-membership of a union in a closed shop may find it difficult, if not impossible, to get another job in the same industry or locality, particularly where pre-entry closed shop arrangements are widespread. We firmly believe there is an urgent need for the enhanced compensation which the Bill provides in the case of unfair closed shop dismissals. The amendment would defeat that intention. There is a clear difference of view between ourselves and the Opposition on this score and I must therefore ask that the amendment be rejected.
Lord McCarthy: I am not surprised at that reply, my Lords, and I wish to take up only one point the noble Earl made because he was right to say that we have been round this matter a number of times. We have given examples of cases where we believe people could—in fact do—suffer as badly, if not worse, outside closed shop areas. However, I wish to take up one point he made because it has been made repeatedly in these debates and this may be the last opportunity to answer it. It is the point that there was something uniquely reprehensible in the conduct of Walsall and Sandwell Councils in the sense that they defied the Act.
There is nothing unusual in an employer deciding to dismiss someone and pay the compensation. It is not a criminal offence; he has decided to pay the compensation, and I make no criticism. One of the first things solicitors say to employers when they are called in on unfair dismissal cases is, "Of course, you can always pay your way out. The average award is only £750", and it is perfectly fair for them to say that because that is the legal position. We have carefully not given people a right of reinstatement, and if people are not given such a right, then of course it is always possible for any employer, public or private—it is no better and no worse whether he is public or private—to decide that he wants this particular man out because, whatever an unfair dismissal tribunal may say, he thinks he is a rotten workman, is lazy, is no good and he has just had enough. That is the state of the law. It happens every day and it is no good the noble Earl looking shocked.
On Question, amendment negatived.
Lord Glenarthur: My Lords, I think that it might be for your Lordships convenience if we now took a break. Therefore, I beg to move that consideration on Report be now adjourned until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Northern Ireland Assembly (Day of Election) Order 1982
7 p.m.
The Earl of Gowrie: My Lords, I beg to move that the draft Northern Ireland Assembly (Day of Election) Order, which was laid before this House on 14th July, be approved. The draft order which, if approved, will be made under Section 27(7) of the Northern Ireland Constitution Act 1973, appoints Wednesday, 20th October, as the date on which the election to a new Northern Ireland Assembly will be held. The Assembly was dissolved with effect from 28th March 1975 under Section 1(1) of the Northern Ireland Act 1974.
The proposed election to the Northern Ireland Assembly will be fresh in the minds of your Lordships who have so recently discussed, and given their approval to, what is now the Northern Ireland Act 1982. The scope of the present draft order is very narrow—it simply appoints the date of the election to the Assembly. The House will be in no doubt about the Government's commitment to offering the people of Northern Ireland a framework for political progress and your Lordships will, I am sure, agree that to proceed to an early election to an Assembly is the right course. I am convinced that there is an expectation of, and a desire for, progress in Northern Ireland, and after much speculation about how the act will work, surely there is nothing to be gained by delay in putting its provisions into effect by electing an Assembly at the earliest reasonable opportunity.
We believe that the date chosen, 20th October, allows sufficient time for the chief electoral officer and his staff to prepare for the election, and for the Northern Ireland parties to campaign effectively after the holiday season, while at the same time the date avoids the oncoming winter period, with its limited daylight hours, and weather, and possible security problems in consequence. The election will take place on a Wednesday—like local elections in Northern Ireland—so that the counting of votes, which inevitably will be a lengthy process in the larger constituencies, can be completed before the weekend. The order setting out the election timetable and the rules for the conduct of the election, which is subject to negative resolution, will be made shortly, thus giving the electoral staff and the parties plenty of time for preparation. I commend the draft order to the House.
Moved, That the draft order laid before the House on 14th July be approved.—(The Earl of Gowrie.)
Lord Blease: My Lords, I should like to thank the noble Earl the Minister for explaining to the House
288
the general outline and details of the order. In welcoming the order, I note that it was debated at some length in another place on Monday last, 26th July. As one who has actively participated in the political life of Northern Ireland for almost 50 years, I am pleased that there now appears to be concern expressed and debated by Northern Ireland political parties and politicians about upholding and supporting the principles of parliamentary democracy. I consider that this is a pleasant change, for I can recall the great hostility and vigorous resistance shown by some Northern Ireland politicians towards the labour and trade union campaign for changes in the Northern Ireland local government franchise and for the adoption of the Westminster principle of one man, one vote.
However, I agree with the noble Earl that there is an expectation of, and a desire for, an early election for the Assembly to be held, and I believe that that expectation and desire are based on the reasons stated by him in regard to timing. Indeed, I would go further. I would say that if ever there was a time when Northern Ireland needed friends and understanding, that time is now. I would hope that in the forthcoming election for a Northern Ireland Assembly citizens from all walks of life, and from the various interests in the Province, will offer themselves as candidates for the new Assembly.
I believe that the political and economic issues confronting the Northern Ireland people require that the electorate should be given a real opportunity to decide who should genuinely represent them in the new Assembly.
I note what the noble Earl the Minister has stated in the House on a previous occasion, and what has been repeated in another place, about the current review of the criteria for disqualification from the United Kingdom Parliament, and that the findings of the review should have a close link with the criteria for the Assembly. I support the view that we should await the outcome of the review before deciding any changes concerning the Assembly.
There is just one point that I should like to put to the Minister. I understand that the proposed Northern Ireland Assembly election will be held under the Electoral Law (Northern Ireland) Order 1972 and the Polling Schemes Regulations 1972. I hope that I am right in that assumption, and I think that this is an appropriate occasion on which I should put this question to the Minister. Will the Minister give an undertaking that every possible facility and opportunity are given to provide adequate and suitable siting of polling stations to ensure reasonable access to all wishing to record their vote? I believe that there are 545 separate premises designated by the chief electoral officer in his report for the period ended 31st March 1981. Perhaps since that date a few adjustments in the siting arrangements are necessary. With those remarks I certainly welcome and support the proposal for an election to be held for the new Assembly.
Lord Hampton: My Lords, I, too, should like to thank the noble Earl for introducing the order fairly briefly, and once again I congratulate him on slipping from Bill to order and back to Bill with such apparent ease. The order is consequential upon the passage of the Northern Ireland Bill which we supported,

289
and the arrangements seem entirely satisfactory to us. I would say that my party, and I am authorised by the noble Lord, Lord Donaldson of Kingsbridge, to add the SDP, support the Government in the order.
Baroness Ewart-Biggs: My Lords, I, too, should like very briefly to support what has been said. There can be no doubt that those of us who have supported the principle of the Assembly can do no other than support the arrangements and decisions made about the election. I think it very important that there has been no postponement. On the one hand people have expected the election and have made preparations for it, and postponement could only have encouraged the forces of disruption in the feeling that they had succeeded in what, tragically, they have already started to try to do.
I should like to make just one point in support of what my noble friend has said regarding the one problem that has posed itself in the context of the Northern Ireland Assembly Disqualification Act. This matter has already been raised, and the Minister gave us to understand that the criteria would be examined and that there would be a report on it. One can only stress the importance of the fact that the future of the Assembly depends on there being strong cross-community support for the election, and it would seem too tragic if there were an obstacle and an excuse were given to certain people—
Lord Blease: An excuse, an excuse.
Baroness Ewart-Biggs: Not to participate in the election, and therefore the future were undermined. So I would implore the Minister to do whatever he can to find a way around this predicament. It is a question not just of the anomalies in the Disqualification Act, but also the results that will arise from the disqualification of certain people. So much is in the balance, and I hope that a way can be found to get around the problem.
The Earl of Gowrie: My Lords, I am extremely gratified by the response of the two noble Lords and the noble Baroness who have spoken, and I should like to offer my thanks to them. I should like to answer in reverse order the two points that have been made to me. Obviously I am very much seized of the problem which the noble Baroness has outlined. But it is difficult to alter primary legislation in respect of individual cases and for individual activities, whether successful or unsuccessful, that are still somewhat hypothetical. I do not think that quite enough people appreciate that the parliamentary machinery is very cumbersome and parliamentary timetables are inevitably very crowded. However, I shall consider the point. I would perhaps prefer to direct the noble Baroness's attention to the very wise words uttered by her noble friend Lord Blease from the Labour Benches, expressing the hope that those who stand for the Assembly, or who freely chose to stand, will exercise choice in the interests of all the people of Northern Ireland. That would seem to me to be where, perhaps, I should leave the point for the moment.
On the question put to me by the noble Lord, Lord Blease, the Assembly Election Rules, which will form
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the second Schedule to the Northern Ireland Assembly Elections Order 1982, which my right honourable friend is making, will provide for the chief electoral officer, who is an independent official, to provide a sufficient number of polling stations for the election. The chief electoral officer will, as he has had to do in other Northern Ireland elections, devise a polling station scheme for the Province which strikes a balance between making polling stations readily available to all electors in the Province, as the noble Lord, Lord Blease, quite fairly wanted, while taking into account, of course, the resources available to the security forces in order to give adequate protection to polling stations at the same time.
It is a sad and inevitable fact that the path to political progress and free choice in Northern Ireland is very easily interrupted by violent activities. It is all the more essential that people be as protected from these as best they can be, and that the purpose of the community as a whole is not deflected in any way in response to the men of violence. But I will take the point that the noble Lord has made and will refer it to the chief electoral officer, and I am sure he will do his best.
On Question, Motion agreed to.

Valuation (Postponement of Revaluation) (Scotland) Order 1982
7.12 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield)The Minister of State, Scottish Office (The Earl of Mansfield) rose to move, That the order laid before the House on 6th July be approved.
The noble Earl said: My Lords, from the detailed debate which we had on 7th April on the Valuation (Scotland) Order 1982, I know that your Lordships are already acquainted with the history of the proposal to hold a partial revaluation next year and I do not therefore propose to dwell on that at length. The order which we considered then gave effect to the Secretary of State's decision that the rating revaluation to be held in Scotland in 1983 should apply to non-domestic property only. We acknowledged at that time that there were a number of problems inherent in holding a partial revaluation, and, indeed, the noble Lord, Lord Ross of Marnock, and other noble Lords, drew attention to many of them.
Subsequently, my right honourable friend the Secretary of State met representatives of the Convention of Scottish Local Authorities to discuss the resolution of the practical problems associated with the partial revaluation. The convention's representatives made strong representations that they considered the likely results of a partial revaluation to be sufficiently difficult to work with that it would be better to delay revaluation to a later year than to hold a partial one. In the light of these representations the Secretary of State reconsidered his decision, and announced on 18th June that he intended to revoke the order which prescribed a partial revaluation in 1983–84 and, in its place, to introduce an order deferring the next Scottish revaluation for two years; in other words, until 1985–86.
In implementation of this decision the Valuation (Postponement of Revaluation) (Scotland) Order 1982, which we are considering today, was laid before Parliament. It is, of course, a very simple order

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indeed, as it does only two things. First, it prescribes 1985–86 as the next year of revaluation in Scotland, and, secondly, it revokes the previous order. Given the concern which was expressed in our earlier debate over the proposal to hold a partial revaluation, I would think that your Lordships will welcome this order. The concept of the partial revaluation was introduced to enable valuation rolls to be kept up to date while the Government consider the future of the domestic rating system. It is still important that rolls should be kept up-to-date for as long as the rating system is with us, and that is why this order postpones revaluation for only two years, thus allowing the next revaluation to proceed seven years after the previous one, which is, of course, the same period as occurred between the last two revaluations in 1971 and 1978. Assessors now have over two-and-a-half years' notice of the intention to proceed with a new revaluation in 1985, and this should be time enough to make a fresh start and complete a revaluation then.
I would say that the fact that my right honourable friend is not proceeding as he originally proposed is proof of his willingness to heed the views of the Convention of Scottish Local Authorities and, if he is persuaded that they have a good case to make, to go along with those views. I trust, therefore, that your Lordships will agree that it is sensible to postpone for two years, abandoning the 1983 partial revaluation. I commend this order to the House and beg to move.
Moved, That the order laid before the House on 6th July be approved.—(The Earl of Mansfield.)
Lord Ross of Marnock: My Lords, we have to thank the Minister for his explanation of this order. I have been sitting here waiting, wondering what the explanation was going to be: whether it was that they had found some legal snag, because, remember, the last order came before us only on, I think it was, 7th April. I am the last person who should forget that date, because it happened to be my 71st birthday. But that order was no birthday present, because it was departing considerably from what we in Scotland had prided ourselves on; namely, that apart from the one period that the Minister mentioned, which really was created by the reorganisation of local authorities, we have a very good record in maintaining the quinquennial revaluations in Scotland. That is essential, because unless you keep the rolls up-to-date, and unless you give the opportunity (many people would argue that five years is long enough for that) to get rid of the anomalies that come to light during those five years, then you get into very considerable elements of unfairness. It was disappointing to me, though not surprising, that we got this partial revaluation promised us for 1983.
We have to bear in mind, too, the work of the valuation officers. We do not call them that in Scotland; we call them assessors. Whereas in England and Wales this is done by the Inland Revenue department, in Scotland it is done by assessors who are appointed by the local authorities—easy to appoint but very difficult to sack, for the simple reason that they must have a measure of independence. But these assessors in Scotland have another job as well. When there is an election—and I am sure my noble friends
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from Northern Ireland will be interested in this—they become the electoral registration officers. I could see building up, following a year of revaluation and the necessary appeals that follow that, a considerable amount of work for them. We have been told fairly recently that the Prime Minister would like to have an election next year, and I think this would run into some difficulty. Indeed, I wondered whether that was the reason for this order. But, no, the reason is that there are difficulties, and these difficulties have been brought to the notice of the Government by the local authorities, by COSLA.
I am surprised that they were not brought to the notice of the local authorities by the Scottish Valuation Advisory Committee—and, remember, we have been waiting. We have just had the first order. Your Lordships will remember that when we passed the 1981 Act, which was only just about this time last year, it was provided that if there was to be a revaluation in part then that was to be done by order. We had that order, which was to come into force on, I think it was, 8th April. We were then expecting another order, because under, I think, Section 2(b) the Government had to come to the House with an order telling us how they were going to do it, the method of revaluation of these properties—not in this case the specified properties but (because they had done it the other way round) the unspecified properties. They also had to tell us how they were going to do the impossible: to have this revaluation of only part of the subjects—and the subjects were industrial properties, commercial properties and the miscellaneous properties. But when that had been done, they had to produce a formula that meant that the domestic properties that were unvalued had not to pay any more than the share of rates that they had been paying previously.
It was pointed out to the Government, both when we passed the Act of 1981 and when we discussed this matter in April of this year, that partial revaluation is not a simple process—and these words should ring in the ears of the Minister because these were the words that were used by Mr. Rifkind who, since he dealt with this matter in the Statutory Instruments Committee in another place, has now gone to sort out the Foreign Office.
I think that this is what the Government are now discovering. It is usual to give for revaluation about two years' notice to those who have to do the work. I think it was in January 1981 that the Secretary of State announced that there was going to be partial revaluation. My colleagues in another place pressed him then and kept on pressing him as to what was going to be done. We must remember that this is to come into operation in the beginning of April next year. This means that the Government and everyone else concerned will want the estimates by November of this year; because even the rate support grant calculations depend upon the assessments, and if not the rate support grant itself, the division of rate support grant among the local authorities depends upon what the estimates are. The estimates are then divided out, and one of the very considerable factors affecting this is the actual assessments for each valuation area.
Now here we are. We have been waiting for this second necessary order to come. Let us remember

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that we told them about its difficulties and complexities. We discussed them, the Minister agreed but he brushed them aside and said that it was going to be quite easy; that, after all, there are fewer properties and plenty of time. After passing that in April—two months ago now—we have got this; just revoking that one altogether and going back to a general revaluation, and that a postponed one. It had to be postponed now because it was far too late to do the statutory one for 1983–84. My Lords, what does that mean? It means that where I complained that in respect of the domestic properties there were unfairnesses that had arisen over five years, and where people had the opportunity of appealing in a year of revaluation the fact that there was going to be only partial revaluation meant that they were being dealt with unfairly, now, they have to wait for another two years before they get that opportunity.
But the other point is this. I wonder whether the Minister can remember the justification that was given for the partial revaluation. This is the Minister responsible speaking on 31st March this year:
"It is generally accepted that for as long as the rating system remains with us, the rating base should be kept fairly up to date. That can be achieved only by having regular revaluation "—
well, we are not having regular ones but having it postponed for two years. He continues:
"It is, for example, quite likely that a revaluation at this time "—
that is, this year—
"may tend to shift the rating burden away from some of the older property occupied by traditional industries and commerce. It would not be fair that those sectors should continue to shoulder a burden that is no longer properly theirs".
But, whether we like it or not, the Government have done not a U-turn but a double somersault with twists—and these people who, a few months ago, could not be left to shoulder this burden have got to shoulder the burden until 1985–86. How can that be justified?
Let us remember that we have also the complications of this alternative domestic rate. We were given the impression that something was going to be done about it within the lifetime of this Parliament. One of the reasons we could not have a general revaluation in Scotland was given in these words:
"We could not embark on genuine reform if that had been pre-empted by a major step to preserve the existing system "—
that is, a general revaluation. The reason is that if you revalue it takes years to sort the thing out in respect of appeals and of appeals to the courts. As a matter of fact, it was only last March that people in a certain part of Troon had their valuations heard and upheld. This is true. That was a revaluation which took place several years ago—over four years ago—so that if you are going to have a revaluation in 1985–86, it is going to be about the end of the decade before it is settled; and you are not going to get any major reform within that.
Obviously if you are going to have a general revaluation in 1985–86, that will be after the next election. My Lords, to put the blame for all this muddle and this floundering around in the very deep and murky waters of valuation and revaluation on the local authorities is just a little unfair. I know that the Minister is having a heavy day and I have tried to help him as much as possible by not interfering in this House. He has had to help in the announcement to the people
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of Invergordon that there will be no smelter there; that the Government have failed to get a new operator. He has had the job of giving the local authorities in Scotland today the bad news about the rate support grant, how Government manipulation has been continued in respect of that. Now he comes along and says, "Ah, but we listened to the local authorities about their difficulties and it is they who are responsible for this order". It is not. It is the muddled thinking of the Government, eventually facing up to the practical difficulties of revaluation, even partial revaluation, and realising that it cannot be done.
I should have been grateful if the Minister had been honest about it. The Government were told about it in another place, they were told about it in March of this year. They were told about it in this House; but, no, they went ahead. When I consider how valuable is parliamentary time and how it is here being wasted by the Government in this way, with their coming forward with an ill-considered order and then within a couple of months or so, revoking that order and completely changing their policy, there is no vote of thanks from me for this "Mansfield miracle" tonight—rather a lack of confidence in Ministers and doubt about whether they know what they are doing in this or any other local government field. I will not be opposing it.
7.30 p.m.
Lord Kilmany: My Lords, if I may intervene—only for a minute or two—I certainly undertake that I shall not stand in the way of my noble friend Lord Mansfield in replying to the noble Lord, Lord Ross. I have only one small complaint to make. I readily accept I have an interest in this matter—it is not a financial one but it is an important interest—and this is in the general sport and enjoyment of the whole of Scotland. But in particular I have an interest regarding the racecourse at Ayr. As the noble Lord, Lord Ross, will know, it had been counting upon a revaluation because those connected with the course were led to believe that there was very good hope of having a reassessment of their rate burden which would allow those concerned to continue with Ayr racecourse on the same high class lines that they have learned to show to all who attend the races, notably those who attend the September meeting when the Ayr Gold Cup takes place. This attracts so many good horses, trainers and owners. It has a good attendance of people who count on seeing the best at a very good time of year for Scotland.
Then again, talking about my own particular interest (for which I hope your Lordships will forgive me), Ayr is also the site of the Scottish Grand National. Whenever doubts are voiced—I hope they are not serious ones—about continuation of the Grand National at Liverpool, it has always been at the back of my mind that at any rate the Ayr Grand National, a four-mile steeplechase of very high class, would go some way towards preserving what I regard as a national sport from an English point of view and also from a Scottish point of view, too.
I must not waste time, which is limited, but the point that I endeavour to make is the gross unfairness between the situation of that racecourse and the situation with comparable English racecourses. The racecourse of Newcastle, I think most people would

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agree, is just about comparable to Ayr. What are the rates they are required to pay? They are required to pay between £7,000 and £8,000 a year. What are the rates that Ayr is required to pay? It is required to pay between £80,000 and £90,000 a year. I say quite frankly to my noble friend that that is a figure which, if allowed to continue indefinitely, could kill dead the racecourse at Ayr and with it the finest racecourse in Scotland, and I—
The Earl of Mansfield: One of the finest racecourses, my Lords.
Lord Kilmany: Yes, my Lords; I readily agree with my noble friend about that. But does he really understand how serious this matter is? The noble Lord opposite—with whom I disagree about very many things—feels that what I am saying on this point is worthy of support. I want to beg of my noble friend to bear this in mind and see what can be done. Looking at what we are now discussing, I cannot see it being made any easier to do. But that does not prevent my hoping and urging my noble friend and his right honourable friend the Secretary of State for Scotland to realise the danger and do something without too much delay—indeed, without any delay at all—to set it right.
7.35 p.m.
Lord Hughes: My Lords, I do not wish to follow what has been said by the noble Lord, Lord Kilmany, in this matter which is of great interest to himself and obviously equally to my noble friend Lord Ross—
Lord Ross of Marnock: My Lords, and also to the Secretary of State for Scotland, who is the Member of Parliament for Ayr.
Lord Hughes: Yes, my Lords, but it is enough for me to keep it to members of this House at this stage. I particularly would not want to follow it in view of the intervention by the Minister when he, I thought, made a rather oblique reference to Scone in comparison. So I will leave that alone.
I must apologise to the Minister because a meeting in another part of the building delayed me from getting here and so I heard only the last part of his remarks. I gathered enough from what my noble friend Lord Ross said to understand that the noble Earl did not persuade 100 per cent. my noble friend that everything was being done as it ought to be done.
My noble friend is obviously right that, if you depart from the quinquennial valuation, anomalies will persist and there will be people who feel that they are being unfairly done by. I should like to add that when the valuation takes place there will be a new group of people who will feel unfairly done by. I think I can say quite truthfully that those people whose properties have not been altered in any way since the last valuation—and they generally are by far the greatest number of people concerned—feel badly done by, because I think it is a matter of knowledge that at each valuation that takes place the local authorities take advantage of it to get more money out of the ratepayers. Theoretically, it ought not to change anything. As the value goes up,
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the rate poundage should go down. All experience shows that the rate poundage does not go down sufficiently to balance the rise in the actual value. So out of (perhaps my noble friend would say) the evil of deferring this for two years will come the bonus for some people that it will at least remove from local authorities the opportunity of creating a surreptitious rate increase.
7.38 p.m.
The Earl of Mansfield: My Lords, I am grateful to noble Lords who have taken part in the debate. I wondered when the noble Lord, Lord Ross, was speaking what was the point to which he was gradually drawing. Eventually it was a mixture of "I told you so" and "having it both ways", accusing the Government of acting, at best, with incompetence and, at worst, in bad faith. So there was nothing new about that.
The House will recall that the Green Paper was issued and thereafter my right honourable friend started to have consultations—and I refer now to the autumn of last year. The detailed consequences of having a non-domestic partial revaluation could not be realistically discussed with local authorities until the Secretary of State announced—and it happened in January—that he was going to hold a partial revaluation. It was then important as a matter of urgency to bring forward the order defining the lands and heritages to be revalued as assessors, as the noble Lord, Lord Ross, said, in effect only had a year to complete revaluation before 1983. So during that period, of course, our consultations concentrated on the scope of revaluation rather than on its details. Then it became apparent that there were real difficulties, and these were put up by the convention.
And here is where the noble Lord, Lord Ross, seeks to have the matter both ways. If the Government make up their minds to govern and provide a lead, we are then told that we do not pay attention to the democratically-elected local authorities, that the Secretary of State acts as a dictator or gauleiter, or some such expression, and that the Government in fact have no mandate and therefore are ill serving the people of Scotland. When we do consult the convention, take very seriously what it says and act accordingly then, once more, we are acting wrongly. I do not think that in all the circumstances the matter could really have been taken further or faster than it has been.
The noble Lord, Lord Ross, once more directed our attention to Troon. If the partial revaluation had taken place it would have made not the slightest difference to the householders of Troon in any event. As I understand it, the final decision in the original Troon case was taken only in 1981 and there is still a further consequential appeal outstanding; so their position has not been changed at all.
The people whose position has been changed are the non-domestic ratepayers who would have been taken into account, so to speak, within their own sector. Here I come to the matter raised by my noble friend: Ayr racecourse. May I say that my purpose in intervening to say that Ayr was only one of many outstanding racecourses in Scotland was by no means to provide a "puff" but merely to set the record straight. I am no great racing man, I am afraid, but I

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have had the odd extremely pleasurable afternoon in Kelso, which is set in beautiful grounds, and I do not think my noble friend, however keen he is to extol the delights of Ayr, should quite make that claim.
There are a number of cases which are very similar to Ayr, and not only racecourses. My right honourable friend has received a number of representations from racing interests, among others, to the effect that racecourses do have unduly high valuations considering how few days in the year they are used. Of course, one has to say two things to my noble friend. First, certainly their circumstances have changed for the worse since the 1978 revaluation took place. The second thing is that the rate poundages have gone up enormously, and not least in Strathclyde and Kyle and Catterick. Therefore I know that my noble friend will be applauding the efforts of my right honourable friend to contain the local authorities in their general extravagance—because it is this which represents one of the reasons why such places as Ayr racecourse now have to pay such a very high rate.
At any rate, what my right honourable friend did when he received these representations was to advise the racecourse proprietors to discuss their predicament with the assessors' association with a view to the assessors adopting a scheme of valuation at the next revaluation which would result in a lightening of the burden on racecourses. I believe this is a process which has started, but I do concede to my noble friend that because of what has happened they must now wait a further two years for any benefit. I need hardly say that my right honourable friend and indeed I, in my personal capacity, are very sympathetic to the problem which comes about and which is only too clearly exemplified by Ayr racecourse; but neither my right honourable friend nor local assessors can do anything to bring about what I might call an amendment of a valuation roll in between revaluations, unless of course there is a change of circumstances—and I do not anticipate that there has been, so far as Ayr is concerned. For that I am very sorry.
Lord Ross of Marnock: My Lords, if the Minister will allow me, he is quite wrong there. They could introduce points into an Act of Parliament, as indeed they did in respect of certain aspects of revaluation in the last local government Act we had.
The Earl of Mansfield: Yes, my Lords; of course we could bring in primary legislation, and Parliament can do whatever it likes in primary legislation. What I was saying was that, short of such drastic action and bearing in mind that the revaluation will be within two and a half years, there is nothing that can be done short of a change of circumstances. As I have said, I do not think I can take the matter further. It is unfortunate that the period between revaluations is going to extend for this extra period but I hope I have convinced the House that it has been done with good reasons and from the best of motives. On that note, I commend the Motion to the House.
On Question, Motion agreed to.
Lord Lyell: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended from 7.46 until 8 p.m.]

Employment Bill
Further considered on Report, on Clause 3.
Lord Underhill Lord Underhill moved Amendment No. 14:
Page 6, line 33, leave out ("section 58 or 59(a)") and insert ("a ground described in section 71(3)").
The noble Lord said: My Lords, I beg to move Amendment No. 14, and, with leave, will speak also to Amendment No. 17. Under present legislation when a case of unfair dismissal is upheld, the basic award is generally 13 weeks' wages as a minimum and 26 weeks' wages as a maximum. There is a slight increase in the award of 26 weeks' wages as a minimum and 52 weeks' wages as a maximum, where the grounds for dismissal involve trade union membership activities and cases of sex discrimination and racial discrimination under the 1975 and 1976 Acts respectively.
The Bill brings in a fourth special category of dismissal on the grounds of not being a member of a trade union. For this additional category the minimum basic award is £2,000, plus the possibility of a special award of up to £10,000, as well as the possibility of a compensatory award making a total of, I think, £32,000. But these provisions do not at all cover dismissal on the grounds of sex discrimination or racial discrimination, as in the present legislation. In this amendment we ask why. Why should the special awards and the new compensation be limited only to two categories of dismissals—although there are now four special categories—that is, where trade union membership or refusal to join a trade union are concerned?
The Government say that it is necessary to have the additional awards in those two cases as a sufficient deterrent, and that point was made by the noble Earl, Lord Gowrie, in Committee. But, surely, the same argument could be used in the case of sex discrimination and racial discrimination; that we must have a deterrent order to stop employers from acting in that way. If I may quote the noble Earl, he said during the Committee stage in column 12 of the Official Report for 12th July:
"It is our view that unfair dismissals, because of non-union membership of a union in a closed shop or because of trade union membership or activities call for substantially greater compensation than is the case in regard to the generality of unfair dismissals."
But I am not referring to the generality of unfair dismissals. I am referring to the special cases for which there is now an additional minimum award outside the generality of cases; that is, the racial discrimination dismissals and the sex discrimination dismissals.
I have read very carefully the report of the Committee stage, but I shall not take up the time of your Lordships by making quotations. I appreciate that the noble Earl, Lord Gowrie, accepted the position advanced by my noble friend Lord Wedderburn and he shared his condemnation of unfair dismissals involving race or sex. I readily accept that the noble Earl is as much concerned, and I think that he used the word "condemnation" as being stronger than the word

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"distaste". But the noble Earl's general case seemed to be that, because there were very few cases of dismissal involving sex and racial discrimination, there was therefore no need to put anything into the Bill.
I ask your Lordships: Can we regard that as an acceptable argument? I am certain that such an argument would not impress a young black, who already feels discriminated against in many parts of the country. Even if there are only a few limited cases, we can surely say that there are only a few known cases of dismissal for non-trade union membership—a point which my noble friends Lord McCarthy and Lord Wedderburn have made time and time again. There is only a handful of cases. Therefore, the argument that there are insufficient cases of dismissal because of sex discrimination or racial discrimination does not hold up.
The issue is that, at present, there are three special categories and the Government have added a fourth. In this clause we are asking: Why should these special awards cover only two of these special categories? Why should there be a possibility of upwards of £12,000 compensation for those two cases of dismissal for trade union activities, or for not joining a trade union, when there is only minor compensation for dismissal due to racial discrimination or sex discrimination?
My noble friend Lord Wedderburn referred in Committee to the statement by the General Council of British Shipping, and as that council was mentioned in another context, I should like to quote what he said. The General Council of British Shipping stated—and I am quoting my noble friend Lord Wedderburn at column 18 of the Official Report for 12th July—
"It seems paradoxical to suggest that a special award for dismissal for non-compliance with a closed shop agreement could be three times that for dismissal on the grounds of sex or race."
Here we are not arguing about the principle of bringing in the new class of dismissal for non-membership of a trade union; neither are we arguing about the principle of the new award. What we are saying is that it is absolutely wrong to cover those two special cases, and to leave the most important cases of racial discrimination dismissals and sex discrimination dismissals outside the provisions of this clause. That is the principle involved, and I hope that the Government may feel disposed to accept the amendment.
Baroness Seear: My Lords, I should like very strongly to support this amendment. I understand that the reasons given for the very high levels of payment in the closed shop cases were, first, that there should be a deterrent; and, secondly, that such cases were in breach of a piece of legislation and contrary to the law. Both those arguments apply in relation to offences under the Sex Discrimination Act and the Race Relations Act. It is embodied in Acts of Parliament that there should be no discrimination. So, to that extent, closed shop considerations are on all fours with being embodied in an Act of Parliament. Similarly—and I would argue even more strongly than in the case of closed shop cases—there is a need for deterrence in relation to both sex discrimination cases and race relations cases. We know that the law in this country is much weaker in both regards than the law in the
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United States. I am not arguing that the law should, in itself, be greatly strengthened, although some changes would be advantageous. But it is not a strong deterrent and this would give that extra element of deterrence which our present legislation does not possess. I very much hope that the Government will accept this amendment.
Lord Hatch of Lusby: My Lords, I should like to add my voice, very briefly, to the pleas that have been made by my noble friend Lord Underhill and by the noble Baroness, Lady Seear, particularly as I was the first to raise this issue during the Committee stage and pressed the noble Earl, Lord Gowrie, to explain to us how he saw the difference between unfair dismissal on the grounds on non-union membership, and unfair dismissal on the grounds of sex or racial discrimination. His answer to me—and I quote from column 723 of the Official Report for 6th July—was:
"I made no apology for the strong element of deterrence in this legislation."
But as both my noble friend and the noble Baroness who have preceded me have said, surely the issue of deterrence is as important in the case of unfair dismissal under either the Sex Discrimination Act or the Race Relations Act. All the way through the Bill the Government have stoutly objected to our accusation that the Bill is anti-union. If they want to maintain that position, surely it is incumbent upon them to include all forms of unfair dismissal rather than, as the Bill now stands, to give a preference, in deterrence and in compensation, to the person who is objecting to union membership or to the closed shop.
I would go further than the noble Baroness. It seems to me that it is even more important to have a deterrence against unfair dismissal on grounds of sex or race than on grounds of conscientious objection, whatever form it may take, to membership of a union. Surely the difference here is that one is born with one's gender and one's skin colour. One is born with these, and there is no way in which an individual can change them. On union membership, while I fully sympathise with those who have a conscientious objection to membership of anything, that is a decision of the mind. They can decide, Yes or no. But on sex and race there is no question of deciding. You are permanently of one gender or the other and of one skin colour.
Although I know that a number of members of the noble Earl's party would be somewhat hesitant about accepting the argument on sex or race, particularly on race, I am certain that he himself is not. I am also quite certain that the pleas which are being made to him tonight on the ground of unfair dismissal because of sex or race would to him be at least equal if not more serious than the ground of unfair dismissal because of objections to union membership. So I would plead with the noble Earl at least to take this back and look again at it. If he does not, it will appear, not just in this country but elsewhere, as though the Government consider that the objections to membership of a union are more important and warrant greater deterrence and greater compensation than unfair dismissal on grounds of either sex or race.
Lord Campbell of Alloway: My Lords, may I be permitted to say a word in opposition to this amendment. Let us assume that there is a common element in deterrence. Let us assume that there is a common element in what the noble Baroness, Lady Seear, referred to as the breach of law clement. But superimposed on this there is something which is not a common element. The reason for this distinction is that in these days it is difficult to find employment and that the loss of employment which arises from this situation can cause very substantial damage to the workman. It is not only difficult to prove through the ordinary, judicial process of the courts, but often in practice it involves a delay of some two to three years—as I know, having appeared in the High Court for workmen in such circumstances. With the utmost respect to the noble Lords opposite, there is a real distinction. It is therefore wrong to equate all this as though it were covered totally by a common element.
8.15 p.m.
Lord Pitt of Hampstead: My Lords, I had intended to wait until the Minister had spoken before intervening, but I cannot wait any longer. The very arguments which the noble Lord, Lord Campbell of Alloway, has used for supporting the additional award because of people being dismissed for conscientious objection to belonging to a union hold equally true for people dismissed because of their colour or their sex. The truth of the matter is that it is common knowledge that people do have difficulty in getting employment because of the colour of their skin. If, therefore, they are deprived of such employment as they have managed to secure because of the colour of their skin they are in a very serious plight. So it is an even stronger argument for them than for people who are deprived of their employment because of conscientious objections to being members of a trade union.
How shall I put it? The problem of discrimination is more of a continuing one than the problem of facing up to the fact that you will or will not join a union. As my noble friend Lord Hatch of Lusby said, you may decide that you cannot take the pressure any more and that although you have a conscientious objection you will join the union. You still have that choice. But if you are black you are black, and if the objections to your having a job are because you are black there is nothing you can do about it. Therefore, I am afraid that they are not on all fours.
The noble Earl's argument for a special award was that there should be a strong deterrent. I should have thought that that argument was stronger still on the deliberate abuse of the Race Relations Act. Under that Act it is illegal to discriminate against a person because of race, colour, ethnic or national origin. However, as the law now stands, the employer who has been brought before a tribunal can elect to pay.
If he can elect to pay, he should have to pay such a large sum that he will hestitate to elect to pay. Again, I am merely using the argument which the noble Earl used earlier. If you need a strong award in order to deter employers from deliberately flouting the law, which is what will happen if they dismiss people because of their conscientious objection to joining a trade union, they should also be flouting the law if they dismiss people because of the colour of their skin or
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because of their sex and the same principles should therefore be at stake.
Since I cannot speak again—that is why I was going to wait until the Minister had spoken but the noble Lord, Lord Campbell of Alloway, forced me to use my right at this stage—may I say that I hope the Minister will recognise the points which have been made to him. I know that the Minister may personally share many of the views I am expressing, and I hope that the brief he has been given of the situation vis-à-vis the department will enable him to take all this on board. If he cannot say tonight that he will accept the amendment then I hope he will at least undertake to look at this matter again.
Lord McCarthy: My Lords, I was going to jump up at the precise moment at which the noble Lord, Lord Pitt of Hampstead, did to answer the points made by the noble Lord, Lord Campbell of Alloway, although I wanted to intervene briefly in order to put one or two points to the noble Earl, Lord Gowrie. But the noble Lord, Lord Pitt of Hampstead, has covered virtually all the points that I was going to make to the noble Lord, Lord Campbell of Alloway, except one. The point he made which was not answered by the noble Lord, Lord Pitt of Hampstead, was that in cases which he had been concerned with—especially, I believe he was saying, in relation either to exclusion or expulsion from a union, or it could have been unfair dismissal—sometimes a case took a long time; that it might take two years. That is exactly what could be said about any dismissal case or any case of unfair exclusion from any organisation. It all takes a very long time. So far as I know, there are no figures which would justify our giving extra compensation on the basis that a particular kind of dismissal takes rather longer to get to the tribunal than any other kind of case. I do not think that is a distinction which we can accept.
To come to the point I want to put to the noble Earl, a number of arguments have been put forward today and all of them make the point that we are seeking to make in this amendment. The only point on the other side is something which the noble Earl said on 12th July (Hansard, column 23), and which I will come to. What has been said tonight by the noble Baroness, Lady Seear, and it is very true, is that public policy is quite clear: sex discrimination and race discrimination is particularly ruled against in the 1975 and 1976 Acts. So as far as public policy is concerned, if we want to stand by what we say we believe, then we should put race discrimination and sex discrimination at the very least alongside union membership and union activity. Those things should be square so far as public policy is concerned.
From the point of view of options and of choices, as the noble Lord, Lord Hatch of Lusby, has said, it is additionally and especially the case that we should have extra compensation — not even the same, but extra compensation, because union membership or non-membership is a matter of choice whereas one cannot opt not to be of a particular race or of a particular sex; at least, if one tried to do the second it would be all rather complicated.
So we come to the final reason, and I think the only reason, which was put forward by the noble Earl on 12th July, when he said:

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"We have not in the sex and race fields had the unsavoury sight of public sector employers engaging in politically motivated defiance of statutory rights provided by Parliament. If we found some notionally extreme Right-wing council sacking somebody as a result of the colour of their skin,"
and I suppose one might say, as a result of their sex,
"and if we did not feel that the compensation was adequate to deter other such notional councils in this regard, no doubt we would bring in legislation accordingly."
The difficulty with that is that we do not have any facts on which the noble Earl rests his case. It is true that we have had our old friends Salford Council and one or two other examples given to us. Maybe the noble Earl has such figures and I should be pleased to see them. We have not been given figures, for example, in respect of the number of unfair dismissals by local authorities which relate to sex or race, and whether in relation to sex or race there are fewer or more cases of unfair dismissal by local councils going against those councils, cases which are therefore, presumably, equally in defiance of the Act as the two cases we have been given in respect of trade union membership. If we do not have these figures, how can the noble Earl come before us and say,
"If we found some notionally extreme Right-wing council … ",
because he does not have the figures? If he says that this is being done for the deterrent effect, I suppose that is his final answer. What we are saying is, why not have an equally deterrent effect, if you do not have the figures to support your argument, both for sex and race as well as for trade union membership?
8.25 p.m.
The Earl of Gowrie: My Lords, some frustration occurs in debates not when people disagree but when they are in very substantial agreement and both parties cannot understand why, given the overall level of agreement, the other party cannot see the point of view being, expressed. This was put very clearly by the noble Lord, Lord Pitt of Hampstead, when, admittedly in a different context, he said that the provision was not "on all fours" with the sentiments expressed deploring sexual and racial discrimination.
The provisions in this part of the Bill are indeed not on all fours with sexual and racial discrimination. Sexual and racial discrimination is covered by the law. It is unlawful to refuse to engage someone on the grounds of their sex or race, except in a very few cases which nearly everybody agrees about as being reasonable. It is not unlawful to refuse to engage somebody in respect of union membership or non-membership. This is where the point made very eloquently by my noble friend Lord Campbell of Alloway comes into being. If someone is dismissed in an era of rising high unemployment on account of his sex or the colour of his skin, then of course that is a very grave matter for him. But the matter is somewhat different when he is dismissed on grounds of refusal of or conscientious objection to trade union membership or a closed shop problem, because the withdrawing of the union card may preclude the person statutorily or quasi-statutorily from further employment. That is why we sought to make this distinction in this part of the Bill.
Coming to the point made by the noble Lord, Lord McCarthy, I make no apology for saying that this
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part of the Bill was partial. We were out to "clobber" certain types of person; certain types of employer. We were out to "clobber" the rogue public employer, and we gave as the instances the Sandwell and Walsall cases where a public authority was using its authority and its public position to behave in a way we thought was quite wrong. The Government have always made it clear that where industrial relations legislation is concerned they are committed to a step-by-step approach. On an earlier occasion, I tried to gloss this by saying that a step-by-step approach was really an abuse-by-abuse approach.
If it is clear that there are these rogue public authorities who are dismissing people because they are black or some other colour, or because they happen to be male or happen to be female, it would be perfectly reasonable to amend the legislation in this way. But there is no evidence whatsoever that I am aware of that any public authority is behaving in that manner. It was for what we thought were the two sensible reasons of providing a deterrent effect to public authorities, occasioned by known and consciously effected abuses in the Sandwell and Walsall cases, and because of the distinction which is engendered by the possession of a union card in terms of much modern employment, which has been brought to the attention of the House by my noble friend, that we decided to have this special level of deterrence. I really cannot apologise for that. It seems to me to be in no way on all fours with the sentiments on racial and sexual discrimination which have been expressed from the opposite side of the House and with which I myself and indeed my party are in total agreement. I just do not think that in this amendment we have been comparing like with like at all, and that is why I think the House should resist the amendment.
Lord Rochester: My Lords, would not the noble Earl, however, agree that, although, as we understand it, he has openly said that he and his party are out to clobber certain public authorities in the closed shop area, there are also cases in the private sector of employers who, on the grounds of race or colour, may find it possible to make people redundant, for example? Are there not cases of injustice of that kind which it is fair to treat on a par with those he mentions in relation to public authorities in another connection?
The Earl of Gowrie: My Lords, if you are an employer, and you unfairly dismiss on grounds of sex or race, you can be sued for unfair dismissal. The higher level of compensation in the cases of unfair dismissal where a closed shop situation is involved is distinguished precisely for the reason given by my noble friend Lord Campbell, that a person may be precluded from getting another job because of his refusal to become a member of the union. That is the reason for the distinction. I go back to the point made by the noble Lord, Lord Pitt. He says very fairly that it is equally grave to lose your job if you are black or a woman or whatever, and of course it is equally grave, but in terms of future hiring you are covered by anti-discrimination legislation, which does not cover you in the case of union membership or non-membership. So the distinction is quite clear.
Lord Underhill: My Lords, I think the noble Earl, frankly, has done his best with a bad case. The reference he makes to the fact that discrimination on grounds of sex and race are included in other Acts does not alter the matter; if we want to be logical, where is the deterrent? I do not want to be unfair, but at the Committee stage I see that in column 23 the noble Earl said:
"Until I was translated to Northern Ireland I was the Minister at the Department of Employment concerned with discrimination in employment on sexual grounds and on grounds of race."
So the Department of Employment was sufficiently worried about discrimination to put the noble Earl in charge of that particular matter. Surely that will justify making an adequate deterrent to stop its going on.
That is what we are trying to do in this amendment The noble Earl has not moved at all on behalf of the Government. I think the case has been made from this side. It is a principle. We are not arguing about the merits or demerits of the new classification brought into the Bill; we are not arguing about the merits or demerits of the additional awards. What we are saying is that if there is sufficient justification for special awards in the case he has mentioned we ought to do likewise and have an adequate deterrent for the detestable practice of discrimination in employment on grounds of race or sex. On that basis we must ask the House to divide.
8.35 p.m.
On Question, Whether the said Amendment (No. 14) shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 69.

DIVISION NO. 3

CONTENTS

Ardwick, L.

Mais, L.

Aylestone, L.

Milner of Leeds, L.

Birk, B.

Molloy, L.

Bishopston, L.

Oram, L.

Blease, L.

Parry, L.

Brockway, L.

Peart, L.

Byers, L.

Phillips, B.

Caradon, L.

Pitt of Hampstead, L.

Cledwyn of Penrhos, L.

Ponsonby of Shulbrede, L.—[Teller.]

Collison, L.

Davies of Leek, L.

Rea, L.

Evans of Claughton, L.

Rochester, L.

Ewart-Biggs, B.

Ross of Marnock, L.

Hatch of Lusby, L.

Seear, B.

Hirshfield, L.

Sefton of Garston, L.

Jeger, B.

Stedman, B.

Jenkins of Putney, L.

Stewart of Alvechurch, B.

John-Mackie, L.

Stewart of Fulham, L.

Kilmarnock, L.

Stone, L.

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

Taylor of Gryfe, L.

Tordoff, L.

Lloyd of Kilgerran, L.

Underhill, L.

Lovell-Davis, L.

Wade, L.

McCarthy, L.

White, B.

Mackie of Benshie, L.

Wynne-Jones, L.

McNair, L.

NOT-CONTENTS

Alexander of Tunis, E.

Beloff, L.

Auckland, L.

Belstead, L.

Avon, E.

Boardman, L.

Bellwin, L.

Campbell of Alloway, L.

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Cathcart, E.

Lyell, L.

Chelwood, L.

Mackay of Clashfern, L.

Cork and Orrery, E.

Mansfield, E.

Crathorne, L.

Marley, L.

Cullen of Ashbourne, L.

Marshall of Leeds, L.

Davidson, V.

Massereene and Ferrard, V.

De La Warr, E.

Mersey, V.

Denham, L.—[Teller.]

Mottistone, L.

Drumalbyn, L.

Moyne, L.

Eccles, V.

Murton of Lindisfarne, L.

Elles, B.

Orkney, E.

Elton, L.

Platt of Writtle, B.

Fairfax of Cameron, L.

Rochdale, V.

Ferrers, E.

Romney, E.

Ferrier, L.

St. John of Bletso, L.

Fortescue, L.

Sandys, L.—[Teller.]

Gainford, L.

Sharples, B.

Gardner of Parkes, B.

Skelmersdale, L.

Glenarthur, L.

Sudeley, L.

Gowrie, E.

Teviot, L.

Gridley, L.

Thomas of Swynnerton, L.

Hayter, L.

Tranmire, L.

Henley, L.

Trefgarne, L.

Hives, L.

Trenchard, V.

Holderness, L.

Trumpington, B.

Home of the Hirsel, L.

Vaux of Harrowden, L.

Hornsby-Smith, B.

Vickers, B.

Inglewood, L.

Vivian, L.

Killearn, L.

Windlesham, L.

Kilmany, L.

Young, B.

Long, V.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 15 not moved.]
Clause 4 [New special award]:
8.42 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 16:
Page 7, line 32, after ("74") insert ("but to which the provisions of section 75 shall not apply where the dismissal is to be regarded as unfair by virtue of section 58 or 59(a)").
The noble Lord said: My Lords, I beg to move Amendment No. 16. I am advised in my amendment by the Institute of Journalists. It deals with a slightly different aspect of what we have recently been discussing. I understand that when the Government published their proposals for the Bill last November, they intended not only to introduce new and basic special awards for workers unfairly dismissed for trade union reasons, but also to remove the upper limit on the compensatory awards in such cases. The new basic and special awards survive in the Bill, but the upper limit on the compensatory awards—currently £7,000—has not been removed. The Government, it is understood, modified their original attitude on this point in response to fears widely expressed by employers that unlimited compensation combined with the special awards would encourage greedy and unscrupulous workers to engineer their own dismissals for trade union reasons. These fears, though natural, do not stand up to examination.
The Government themselves have conceded in a letter from my honourable friend Mr. Waddington, the Parliamentary Under-Secretary of State for Employment, to the general secretary of the Institute of Journalists, on 17th March this year, that the removal of the limit on compensatory awards will make no difference, save in the most exceptional cases. This view receives full support from the statistics.
In 1980, the latest year for which figures are available, total awards were less than £750 for 58.3 per cent.

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of the successful applicants and less than £1,500 for 80.9 per cent. The median award was £598. The maximum compensatory award, which was then £6,000, applied in only 0.4 per cent. of the cases. The figures for preceding years are comparable. In any case, as I see it, under Section 74 the amount actually awarded, whether with a limit or not, is at the discretion of the tribunal, subject to all kinds of rules set out in that section. It follows that the retention of the limit on the compensatory award does nothing in reality to meet the employers' fears but it does create the possibility of injustice, unless it is thought that exceptional victims do not deserve justice.
The special awards are substantial and it is not difficult to think of cases in which they could be too little. For example, the dismissed worker might be a middle-aged, highly-paid person in an occupation in which closed shops are general or in an area where opportunities are limited. Not only will his dismissal mean the immediate loss of substantial income, but he is likely to face the choice between permanent unemployment and a bady paid job without the opportunity to use his talents, with the frustration that this will induce.
But the greatest injustice is created for a dismissed worker who does not apply for re-employment. As the concluding words of the subsection make clear, he will be ineligible for special awards and receive only the basic and limited compensatory awards. However, he may have excellent reasons for not wanting his job back. He may know that if he gets it, his employer or fellow workers will set out to make his life intolerable or, at the earliest opportunity, a new pretext will be found to dismiss him; yet his dismissal may have been grossly unfair and his consequent loss particularly severe. It cannot be right that the sum that he is awarded should be substantially and automatically less than that given to a worker whose loss may be much slighter, but who elects to apply for re-employment.
I suggest that this simple amendment meets all those points. It adds nothing in reality to the financial burden on employers and trade unions, save in that minute portion of cases when it is only right that their liability should be greater. Furthermore, I must re-emphasise that in removing the upper limits on compensatory award the amendment simply accords with the Government's original thinking on this Bill as announced last November. I beg to move.
Lord McCarthy: My Lords, the noble Lord, Lord Mottistone, is a dangerous man because he always sounds so reasonable. This amendment is what I call, "the insult to injury amendment". It is an attempt to add still further to the discrimination, to the bonanza, which the Government insist on introducing for the non-unionist. As the noble Lord says, it has the effect of removing any limit on compensation at all for this one single group of unfairly dismissed people. The Government have just turned down our attempt to put sex and race discrimination at square with this. Now we are being asked further to widen the difference between those who are dismissed on grounds of union membership and all other forms of dismissal.
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It is perfectly true, as the noble Lord said, that it is possible for there to be a dismissal of someone in a non-union situation where the consequence, the damage, the disadvantage, goes beyond £31,000. Of course, it is possible. If somebody is earning £21,000 a year and he is dismissed and he does not get a job for two years, you have gone beyond £31,000. But the case, as I have been arguing all day, is that a middle manager who gets £10,000 goes beyond the maximum on unfair dismissal grounds on every other reason when he goes beyond £7,000. So, of course, unless the sky were the limit for all forms of unfair dismissal, someone could always, in any category, go beyond the limit. But, since the sky is not the limit in any category of dismissal, we must ask ourselves why, now that the Government have made this special provision for union membership, we should further put them in, as it were, an extra special category and make them the only people who, in effect, can get full compensation for what they do. I do not think that in that respect the noble Lord has put forward any answers at all. He has not really used any arguments. He has merely pointed out that these people may sometimes go beyond the limit of £31,000. Of course—but other people's limit is much lower than that now and we see no reason whatever specially to privilege this man further.
Earl De La Warr: My Lords, I should like to support this amendment. What my noble friend has said very ably, which I do not think the noble Lord, Lord McCarthy, has taken account of, is that if a man seeks to get his job back and fails, he can then get the special award. If, as is very likely, he is, say, a highly-paid ournalist—he does not have to be a journalist; he may be a highly paid executive—who finds that it would be intolerable for him to go back on account of the conditions of his dismissal and relationship with his colleagues, then he is not able to ask for that which, if refused, would give him the opportunity to get the special award. He is then limited to the basic award and the compensatory award. There may be cases—and I think what my noble friend has said has shown us that there will not be very many, but they can be significant—where a man is inadequately compensated if he is subject to the limit, which is at present £7,000.
My noble friend is not asking the Government to give away very much in money, because we know what few people are likely to be affected. But surely they can properly be said to be disadvantaged if they find it understandably desirable not to seek to get their jobs back, but to go off and seek their livelihood in some other way that may well be considerably lower paid. I very much hope that the Government will take this on board and do what they can.
Lord McCarthy: My Lords, before the noble Lord sits down, is it not true to say that it is not quite as he said? It does not stop at £7,000. He gets the £2,000 basic in addition. Of course, if he applies and the tribunal decides that it is not practicable, he still qualifies.
Earl De La Warr: My Lords, as I understand it he gets the £2,000, but he cannot get more than a compensatory £7,000 in addition. So it is £9,000, and our case is that for a highly-paid executive who suffers in this way that may be too little.
Lord Underhill: My Lords, I hope that we may receive some firm explanation as to why these special categories are deserving of this special consideration. A tribunal decision can inform a person that he has been unfairly dismissed and he can be offered his job back. But he knows very well that if he goes back people will make merry hell for him. At the moment he only comes under the very low level; he does not come under special awards at all. Surely there is a justification there as well. For some strange reason certain people are being put on a pedestal, which is something that we have said throughout our consideration of this Bill.
8.55 p.m.
The Earl of Gowrie: My Lords, it may help your Lordships in considering my noble friend's amendment if I very briefly recap on the compensation which the Bill will introduce for cases of unfair dismissal because of non-membership of a union or for union membership or activities. First, there will be a basic award which, as now, will reflect the employee's age, salary and length of service but will be subject in the cases we are considering to a minimum of £2,000 under Clause 3. The maximum of this award is currently £4,050.
Secondly, there will be a compensatory award which is not affected in any way by the Bill's provisions. This is currently subject to a maximum of £7,000 and is to cover actual losses such as loss of earnings or pension arising from the dismissal. Finally, where the employee requests but does not obtain reinstatement, he will be eligible for a special award under Clause 4. This award, as noble Lords will know, will comprise two years' pay, subject to a minimum of £10,000 and a maximum of £20,000, where an order for reinstatement is not made; and three years' pay, subject to a minimum of £15,000, where a reinstatement order is made by the tribunal but defied without good cause by the employer.
This amendment seeks in addition to these increases to remove the £7,000 limit on the compensatory award. My noble friend Lord Mottistone has pointed to the higher paid employee who may not seek reinstatement after an unfair dismissal, in which case he will only be eligible for the basic and compensatory awards which might not, in my noble friend's view, cover his total loss. I, of course, understand the concern that has led by noble friend to move the amendment, but I wonder whether I can ask him and the House to reflect with me for a moment on what an employee unfairly sacked from a closed shop is likely to receive as compensation even if he does not seek reinstatement. In such a case he will normally be eligible for a basic award of £2,000 which in the case of an older higher paid employee could rise to over £4,000. In addition, depending on the actual losses which he has suffered as a result of his being unfairly dismissed, he will be eligible for up to £7,000 as a compensatory award. We are, therefore, talking of a potential maximum award of over £11,000, which is far from an insignificant amount.
I accept that even so there may be the very odd case—and I think that my noble friend Lord De La Warr said that there would not be many cases here—where the £7,000 limit on the compensatory award will limit the compensation which might otherwise be received. That is precisely why when we issued our consultative paper with proposals for legislation on 23rd November
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last year we proposed that in trade union membership cases the limit on the compensatory award should be removed. However, the response to that proposal, particularly from employers' organisations, convinced us that the prospect of "unlimited" compensation—however theoretical or unlikely to be applied—might have been an incentive to unscrupulous employees to seek to engineer their dismissals simply to obtain compensation. Employers also pointed out that it was not normal for tribunals—as opposed to courts—to be able to award unlimited compensation. The Government listened carefully to these arguments as part of our consultation process, and we were persuaded by them. We therefore decided to retain the existing limit on the compensatory award.
Although my noble friend has, as always, presented his case forcefully he has not convinced me that our decision to retain the upper limit on the compensatory award, taken as it was after consultation and representations by many employers, was wrong. In taking this view, I am mindful of just the risks which my noble friend pointed to in Committee in relation to shipping, when he argued that overall the Bill's proposals on compensation were in danger of causing disruption, and he argued, of course, cogently about the problems which might be caused by rogue or piratical employees. I think that my noble friend's fears along those grounds could, indeed, be aggravated by this amendment and I, therefore, hope that, on reflection, he will agree to withdraw it.
Lord Mottistone: My Lords, I feared that my noble friend might see that I was arguing a case the other way at Committee stage for another purpose. I must say that at that stage I had not read Clause 74 of the 1978 Act. I made this point in my opening remarks, but I think there is great significance in the fact that we are only talking about maximums, we are not talking about "actuals". People get fixed in their minds if there is a special maximum, or an unlimited position in this sort of situation, it is automatically going to the people you do not like. The answer to that is that it is not.
It is clear to me—and I shall not bore your Lordships by reading the whole of Section 74—that the tribunal carefully directed as to what it should award the compensatory amount on. It could well come to the conclusion as a tribunal that in the case of these relatively few people—and I think we are all agreed that it is relatively few—who might be otherwise unfairly dealt with, it will follow the strict rules in Section 74 and give the award accordingly.
However, it could well be that there will be certain cases in which the £4,000 plus £7,000 that my noble friend mentioned would not be enough to meet the rules of Section 74. All we say, where this happens, is: could it not be permissable for the tribunal to go up to whatever the right figure should be? I do not know whether my noble friend would care to comment on that before I finally reach a conclusion on this point.
The Earl of Gowrie: My Lords, I do not, I am afraid, think that I have much to add over what I have said. The general principles under which the Government have been guided throughout not only the present Bill but the 1980 Act have been to make

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proposals, to take consultations, to try to see how things would work out on the ground, and in the light of the representations made to us we are not convinced that it would be right to change things in the way that my noble friend suggests.
I do not think that I can add more to that. My noble friend was kind enough, in his courteous way, to give us notice of what he wanted to say. We looked at it closely. It is always painful not to be able to give in to one's most experienced and loyal supporters, and it is with that grief that I have no more comment to make.
Lord Mottistone: My Lords, courtesy will get you nowhere! I accept the points made. I am not entirely happy. Although it would be unusual, I appreciate, I should like to reserve the right to say something perhaps by way of an amendment at Third Reading when we come to it, and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
(Amendment No. 17 not moved.)
Lord McCarthy Lord McCarthy moved Amendment No. 18:
Page 7, line 34, after ("59(a),") insert ("and the tribunal determines that special compensation should be awarded having regard to equity and the substantial merits of the case,").
The noble Lord said: My Lords, the purpose of this amendment is to reduce what we might term the automaticity of the special award which can, as we know, carry the compensation up to £31,000. We say that there should be a kind of trip, and that the tribunal should determine, at the point where the complaint could go on to the special award, that special compensation should be awarded
"having regard to equity and the substantial merits of the case".
The position at the moment, as we all know, is that the complainant, if he sustains his case before a tribunal in a trade union membership dismissal, gets the basic award. That is an automatic, and not reducible for contribution to dismissal, £2,000 minimum. It may advance to £4,000 in certain circumstances but it is £2,000 minimum. There then comes the compensatory award. That, as the noble Lord, Lord Mottistone, said, is based on the provisions of Section 74 of the 1978 Act.
I am bound to say, having listened to what the noble Lord said in his last contribution to our debate, that I do not see why he is so concerned that the non-unionist, or would-be trade unionist, would not get, under the calculations of the compensatory award, everything to which he is entitled. The compensatory award is related to the loss attributable to the action taken by the employer. That is what Section 74 says. It says:
"The said loss shall be taken to include—
any expenses reasonably incurred by the complainant in consequence of the dismissal, and
subject to subsection (3), loss of any benefit which he might reasonably be expected to have had but for the dismissal".
Therefore, so far as his actual loss is concerned, if he can show himself to have had a £7,000 loss, then he will get the maximum of the compensatory award. If he has not got a loss of £7,000, if he got an equally
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good job the next day, then he will not be in need of anything more than £7,000. But he will still have the basic award, which is automatically not reducible for contribution, going to run at £2,000. Therefore, we say: why should he automatically go on to what I will term the Rolls-Royce award, which is a minimum of £10,000 if no reinstatement is awarded and a maximum of £15,000 if reinstatement is awarded but not accepted?
To go back to a point made in the earlier debate, note that the complainant does not have to take reinstatement. He has to offer himself for reinstatement, and there is no particular reason why he should not because of course it is up to the tribunal to decide whether reinstatement is reasonable. The tribunal might decide that no reinstatement should be awarded because it is not reasonable, and therefore he qualifies for the £10,000 minimum, but if they think it is possible and they offer £15,000 and the award is not accepted, then £15,000 is what he gets.
It is true, of course, that the special award can be reduced. We do not know enough to say how it will be reduced. The Bill suggests that it could be reduced, for example, if the worker goes beyond the anniversary date for calculation of the pay due. Or it is where the conduct of the worker is thought to justify it, though we are not told what that conduct would be. Or if he is given by the tribunal an offer which has the effect of reinstatement and he unreasonably refuses such an offer. None of that, at least so far as I can see, is related to the actual degree of loss. The only element in this complicated structure related to the actual degree of loss is the compensatory award.
None of it is related to the actual degree of loss and none of it is related to the difficulty of finding an alternative job, or whether indeed he even looks for such an alternative job. As I read the Bill—I hope the noble Earl will tell me if I am wrong—the only part of this complicated structure which leads to a possible maximum of £31,000 which relates to the conduct of the employee himself, in terms of the actual loss or the attempts he makes to mitigate that loss, is the compensatory award. The implication surely is that in most circumstances the complainant will go on to the maximum, irrespective of the circumstances of the dismissal. The object of the amendment is to put in a trip and to say: The man has his £2,000 minimum. He has whatever compensation he requires because he suffered actual loss up to £7,000. Surely at this point the tribunal might stop and consider the equity and substantial merits of the case and introduce the special award only if it thinks that is justified.
The Earl of Gowrie: My Lords, the amendment would mean that instead of a special award being payable virtually automatically—I must say that "auto-maticity" sounds like something dreamed up by Saatchi & Saatchi for the Electricity Board—to employees who are unfairly dismissed for non-membership of a union, the special award would be payable only at the discretion of the tribunal where they thought it should be paid having regard to equity and the substantial merits of each case.
I understand the concern of those who are worried that employees could gain large amounts of compensation by engineering their dismissals, but, as I said

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earlier, we have provided extensive powers in the Bill to cope with that possibility. On the noble Lord's point that the compensatory award is enough, the point surely is that many people dismissed unfairly for non-membership of a union will not have very high actual losses. The compensatory awards to the four Walsall dinner ladies were, in three of the four cases, under £850. The point therefore is that compensation of this size is clearly not enough to deter such dismissals, and hence, as I have argued previously, the special nature of the awards.
If an employee opts out of trade union membership in a closed shop—this is back to the point about engineering ones own dismissal—and then sets about disrupting his employer's business in order deliberately to be dismissed, he would surely be judged to be fairly dismissed because of that conduct. But even if the dismissal were judged unfair—because he was dismissed for non-membership—he would almost certainly have any special award reduced under Section 75A(4) which requires the tribunal to reduce the special award where it considers that it would be just and equitable to do so on account of any conduct of the complainant before dismissal.
There is a further answer to these worries. If you are an employer, why not ballot your employees? And if you are a trade union, why not co-operate with the ballot? If your closed shop is genuinely popular you have nothing to fear, and if, as a result of the ballot, the closed shop is approved, you will have no cause for concern about the unscrupulous employee; so both objections and both anxieties are covered. For all those reasons I hope the noble Lord will not press the amendment.
Lord McCarthy: Automaticity or not, I am afraid it was automatic that the noble Earl would reject the amendment, and we shall have to leave it there.
On Question, amendment negatived.
Clause 5 [Reduction of compensation: matters to be disregarded]:
9.13 p.m.
Earl Ferrers Earl Ferrers moved Amendment No. 19:
Page 9, line 35, leave out from ("and") to ("him") in line 36 and insert ("requires").
The noble Earl said: This is virtually drafting, my Lords, the parliamentary draftsman cutting down on superfluous words. The amendment replaces the words,
"has the effect in practice of requiring"
with the single word, "requires". I hope that meets with the approval of the noble Lord, Lord McCarthy, because compared with his words such as "auto-maticity"—which apparently is not even in the dictionary—and such phrases as "recrudescence of voluntarism", this amendment is short, simple and intelligible.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 20:
Page 9, line 37, after ("of") insert ("any trade union or of").
The noble Earl said: My Lords, in moving this amendment, if I may, I should like to speak at the
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same time also to Amendments Nos. 21, 29, and 30. These amendments are all virtually drafting amendments. Clause 2 of the Bill establishes a general right, that is qualified in some circumstances in a closed shop, not to be unfairly dismissed for not being a member
"of any trade union, or of a particular trade union, or of one of a number of particular trade unions".
We are concerned that that particular phraseology should be used throughout the Bill. Therefore, I beg to move Amendment No. 20, which seeks to achieve that.
On Question, amendment agreed to.
Clause 6 [Awards against third parties]:
Earl Ferrers Earl Ferrers moved Amendment No. 21:
Page 10, line 19, at end insert ("or of one of a number of particular trade unions").
On Question, amendment agreed to.
Lord McCarthy Lord McCarthy moved Amendment No. 22:
Page 10, lint 20, after ("or") insert ("(with the leave of the tribunal on an application made by him before or during the hearing)").
The noble Lord said: My Lords, I am a little worried about this amendment because I was going to say that it is the one about joinder, but I am not sure that that is in OUD, either. I think that the terms are all in Webster, but it is obvious that the noble Earl, Lord Ferrers, does not use Webster—
Earl Ferrers: I wonder whether they are in Gennard, too, which the noble Lord, Lord McCarthy, will realise we have not seen, though which I believe he has seen.
Lord McCarthy: Well, the noble Earl must be the only one left in the world who has not seen Gennard—he and the Secretary of State. It is worth seeing, believe me; but it will be too late when the Government publish it.
So, as I way saying, the present amendment is about joinder, and the aim of the clause as it stands is to create a situation where the complainant is given equal rights with the employer to join the union in an action. The clause as it stands provides that the tribunal must grant the request if it is made before the hearing begins; that is to say, before the consequences of the justice of the matter can be assessed. The purpose of our amendment is to preserve that arrangement for the employer only. We are saying that the tribunal must give leave.
This returns us to another argument which we used at the Committee stage, when we debated the dangers of the joinder procedure. Members on this side of the Chamber quoted, for example, the Donovan Report, which stated that the decision to dismiss was the employer's decision and that he should take the responsibility. Personally, I consider that more persuasive than that was the argument that any other action which would join the union, or which would result in joinder, would involve the courts in making a decision as to the justice or equity of particular forms of industrial action, and we believe

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that that is something that the courts should do very sparingly, and indeed not at all if they can help it.
But, of course, joinder is especially dangerous when it can be invoked by the complainant unilaterally—which is the position under the clause, which the amendment wants to change—and when the complainant can do that irrespective of the wishes of the employer, and in a way which, I emphasise, has no effect whatever on the compensation. The compensation is awarded by the tribunal and the complainant receives the compensation, whatever it is. So in fact joinder is not affecting the complainant per se in terms of the money he receives; it is simply the point that presumably he wants the union to be joined.
Not surprisingly, we have not had from the Government any general arguments as to why they particularly want the provision. All we have had is an argument advanced by both the noble Lord, Lord Glenarthur, and the noble Earl, Lord Ferrers. At col. 65, on 12th July the noble Lord, Lord Glenarthur, put it with commendable frankness. He said:
"The extension of this right to the dismissed employee is intended to increase the likelihood of unions being joined"—
Well, of course we know that; but why?—
"in unfair dismissal proceedings and, therefore, of becoming liable to pay compensation where they force an employer to dismiss unfairly".
In reply to that we asked the Government, why do you want to join the trade union? Why, in particular, do you want to join the trade union if the employer does not want to join the trade union? To that Lord Glenarthur replied, "So what?". Or, rather, he said:
"We know that employers, for their own industrial relations reasons, will often be reluctant to join unions in unfair dismissal proceedings. They may, for example, fear the industrial relations consequences of doing so."
So the Government admit this. The noble Lord continued:
"However, the result is that unions at the moment know that they have a pretty good chance of getting away with it if they force an employer to dismiss unfairly. But, of course, a dismissed employee is unlikely to be swayed by the same considerations as his former employer. He may well choose to use his right of joinder where his ex-employer declines to do so."
So we say: What about the industrial relations consequences? What about the employer, and his fearing industrial action? To that we are told:
"… in the Government's view it is not the case that employee joinder will cause industrial relations difficulties",
which seems to be a contradiction. It goes on:
"If any employer does not 'join' a union in unfair dismissal proceedings, but his dismissed employee does, how can the employer be held responsible for that by the union concerned? The employer would be able to make clear to the unions that he had nothing whatever to do with his ex-employee's decision; that the employee was no longer on his premises, and was thus out of his sphere of influence."
I suggest that this is nonsense and that the Government know it is a nonsense. I suggest that the Government are much more honest when they said, in the first quotation I made from the noble Lord, Lord Glenarthur, that in fact they do not really care if the result is industrial action; that they want the union to be "got", and they want the union to pay irrespective of what the employer wants to happen and, in fact,
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in defiance of the employer's wishes. It is nonsense to say that if people feel that this is disruptive industrial relations they do not know about it and the Government do; and that the Government's view is that it will not have the effect which in the employer's view it will have, because the Government believe that the workers will say, "How can the employer be held responsible by the union concerned, because he did not start the action?"
I suggest that the Government know that that is not true. I suggest, in fact, that the arguments which the Government used when a similar proposal was put forward in another place in 1980 by the Member for Rochdale are the proper arguments, which they know are as true now as they were when they were put forward then. Because, on 11th March 1980, in col. 1072, in the Official Report, the then Under-Secretary of State said, answering the Member for Rochdale:
"There is a potential here for considerable industrial disruption, to the disadvantage of the firm and its workers as a whole, to say nothing of the employer himself. It will be open to the individual, for example, not to sue the union as to sue individual workers. One might then have a kind of running sore, which could lead to a great disruption and bring harm to the firm itself".
We suggest that the Government know this all too well. Indeed, it is pitifully obvious; and the object of this amendment is to let the tribunal have a reserve power to take action to prevent it if they think there is good reason to do so. I beg to move.
Lord Glenarthur: My Lords, the noble Lord, Lord McCarthy, has quoted at length what I said at the Committee stage. We made it clear that the main intention of Clause 6 of the Bill is to increase the likelihood that trade unions will have to face the consequences of their actions where they force an employer to dismiss an employee unfairly for not being a union member. It is with this firm intention in mind that I approach these amendments.
I accept that the amendments do not take away entirely the employee's right of joinder, but they do reduce that right considerably. Clause 6 of the Bill currently provides that either the dismissed employee or the employer has the absolute right to require a third party to be joined in unfair dismissal proceedings if such a request is made before the hearing of the complaint begins. If a request is made during the hearing but before a remedy for the unfair dismissal is awarded, then joinder will take place only with the tribunal's consent. This is perfectly normal practice in civil litigation.
These amendments seek to qualify the employee's right of joinder but not the employer's, so that the employee can join a third party to proceedings only with the tribunal's consent, no matter when he requests that that joinder should take place. I submit that there is no justification on procedural grounds for these amendments. Where joinder takes place before a hearing begins, whether it be through the employer's or through the employee's request, all parties to the complaint can be present throughout the hearing. Additionally, if a late request for a joinder is made, whether by the employer or the employee, and this request is allowed by the tribunal, any inconvenience to the joined party can be accommodated through an adjournment.

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But there is no case for treating the rights of a dismissed employee and employer differently on procedural grounds. They give rise to precisely the same issues of timing and convenience. We have heard the argument that tribunals should have discretion over whether to allow employee joinder because otherwise this could harm the employer's industrial relations. We had this argument in Committee. Again, I can only repeat our view that we do not believe that an employee joinder will cause industrial relations difficulties. If an employer does not join a union in unfair dismissal proceedings but his dismissed employee does, how can the employer be held responsible for that by the union concerned? The employer would be able to make clear to the union that he had nothing to do with his ex-employee's decision, that the employee was no longer on his premises and thus was out of his sphere of influence.
If we were to accept these amendments, there would be no automatic right of joinder by an employee and, therefore, much reduced prospects of unions being made to pay where they force an employer to dismiss an employee unfairly for not being a union member. That is simply not acceptable. Therefore I must ask your Lordships to reject the amendment.
Lord McCarthy: My Lords, the noble Lord says that it is not acceptable. We know that it is not acceptable. He does not give us any reason; he just keeps saying that he does not think it will happen. He does not say why we should not believe the Under-Secretary of State on 11th March 1980. I do not withdraw the amendment.
On Question, amendment negatived.
[Amendment No. 23 not moved.]
9.28 p.m.
Lord McCarthy Lord McCarthy moved Amendment No. 24:
Page 10, line 41, at end insert—
("(4) Pressure is exercised by a trade union within the meaning of subsection (1) above where and only where one or more of the acts which constitute the pressure are done by a person acting on behalf of the union.").
The noble Lord said: My Lords, the aim of this amendment is to start a debate about the principles of trade union pressure. This may be the amendment on which we are going to get a change of batting on the part of the Government; I am not sure. If so, then I shall probably be out-classed on this matter, but I struggle on all the same. The aim of this amendment is to start a debate on the principles of trade union pressure. We want to ask the Government to help us by defining the kind, type and rules—the code—which will govern the pressure and the responsibility for exerting pressure in this Part of the Bill.
It seems to us that there are two alternative sets of principles which could govern the rules of responsibility in respect of pressure. In the past, in the area where unions were liable for the acts of their agents, we relied in crude terms on the common law, on what one might call the Heaton principle; that is to say, in broad terms the union was responsible under the rules, or rather, was responsible under the rules as modified by the custom and practice of the union concerned.
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This was summarised by the noble and learned Lord, Lord Wilberforce, when he said:
"If the authority to take a particular type of action is not excluded by the rules and if the authority is reasonably to be implied by custom and practice, then such authority will continue to exist until it is unequivocally withdrawn".
We take the view that our amendment would have the effect of embodying what I have called the Heaton principle from the point of view of responsibility for pressure.
The alternative would be the approach of the Bill. This Bill has a different code of responsibility, as set out in Clause 14. In Clause 14 the Government create this artificial construction of the responsible person. The union is responsible if the responsible person does something, whether he is the general secretary, president, or a principal of the executive committee or some other authority, unless of course he repudiates it in ways which are laid down in the Bill. That is one code of responsibility; the common law code of responsibility is another.
We tried in Committee to get the Government to say that they would have one code of responsibility both for industrial torts and what might be termed non-industrial torts. But the Government were not prepared to say that. They preferred a mixed system and they seem to prefer an equally—if not mixed—confused system. There is nothing in this Part of the Bill which tells us exactly what principles, code of responsibility or rules the tribunals are to use in deciding in joinder whether the union really was in terms of the organisation responsible for what has been done. What we are really asking in this amendment is whether it would be a good idea to say what those principles would be. Our personal preference is for the Heaton principles. I beg to move.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, I have to compliment the noble Lord on the accuracy of his forecast in one respect, but one respect only. Regarding the argument that he has advanced, having attended to it as closely as I can, I consider that the amendment still seems to me to be unnecessary and potentially confusing. The amendment seeks to provide that a union cannot be found liable for compensation as a result of having been joined in an unfair dismissal case unless the pressure, or some part of the pressure, which has been exerted on the employer has been exerted on behalf of the union. The point is surely a simple one: whether one includes such words or not there can be no question of a union becoming liable for something not done on its behalf.
As the noble Lord pointed out, we have provided detailed rules in relation to industrial torts later in the Bill; but it does not appear necessary to provide detailed rules at this stage and the basic provisions on which this amendment operates are the provisions which were incorporated in the 1980 Act. It was not found necessary to depart from the principles of the common law in relation to the 1980 Act and I do not see why it should be thought necessary to depart from that principle in relation to this same basic liability in the joinder provisions of this Bill. Equally, it was not thought necessary in the 1980 Act to make explicit that unions were only to be liable for compensation

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where action had been taken by them or on their behalf. That was considered to be, and remains, self evident.
Lord Molloy: My Lords, does that really mean that if an ordinary trade union member committed some act or made some threat which was nothing to do with his branch, region, national officers, general secretary or president, nevertheless they could be held guilty for the behaviour of one single member? That act might be done deliberately to get somebody in an embarrassing situation. Does it mean that?
Lord Mackay of Clashfern: No, my Lords. The answer to that is short and immediate. The law, without the amendment, is the same as the law with the amendment. The amendment appears to me to be unnecessary and confusing. The union will be held liable only if the court regards the pressure as exerted truly on behalf of the union or exerted truly by the union. So the point that the noble Lord, Lord Molloy, made is very properly met—a point which think ought to be met and is met. I hope for these reasons that your Lordships will find it possible not to accept this amendment.
Lord McCarthy: My Lords, I do not know whether the noble and learned Lord the Lord Advocate was present when the Government were saying in a previous amendment that of course they knew it did not make ally difference but they could not be sure, so they would accept it. I said at the time that I wished they would be equally generous all night, but they are clearly not going to be. We will not press this to a Division.
On Question, Amendment negatived.
[Amendment No. 25 not moved.]
Clause 8 [Dismissal in connection with strike or other industrial action.]:
Lord Underhill Lord Underhill moved Amendment No. 26:
Page 11, line 36, leave out from ("who") to end of line 37 and insert ("took part in it").
The noble Lord said: My Lords, at present efforts by an employer to victimise some of the employees who may be involved in industrial action have some limitation placed upon them. If an employer was enabled to re-engage just some of the employees involved, that would imperil almost every industrial action, and as noble Lords opposite have agreed with those from this side of the House that workers have the right to strike where the circumstances justify it, I am certain the Government would not wish to see any industrial action imperilled by victimisation by any employer.
The present law enables a tribunal to consider a claim for unfair dismissal where an employer makes an offer of re-engagement to only some of the employees who have been involved in industrial action. In this clause, the Government are seeking to change the rules in two ways. First, it is narrowing the description of the establishment to be at or from that which the complainant works. Therefore, industrial action in a number of different departments or depots will no longer cover all the plants but only the particular
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plant at or from which a particular complainant works.
The second change proposed by the Government is varying who are the relevant employees to be considered. The Government are proposing that an employer does not have to consider all the employees involved in industrial action. He has to take account only of thoses who were actually taking part in industrial action at the date of the complainant's dismissal. That is a considerable change from the present law, and under the Bill as drafted an employer could tempt some employees to go back to work and break the strike and maybe he could do that by picking off employees one by one. In effect, the Bill will do what I asserted at Second Reading—legalise the dismissal of those who are the activists, maybe the leaders of the majority of the employees.
For that reason I spoke against this on clause stand part, at the Committee stage. In the debate that followed, the noble and learned Lord the Lord Advocate dismissed the objections put forward because he said it was very a modest measure. Subsection (3) of the clause relates a strike or other industrial action to—here I quote:
"those employees at the establishment who were taking part in the action at the complainant's date of dismissal."
I would say to the noble and learned Lord that this amendment is also a very modest measure, because it proposes to leave out certain words and replaces them by other words so that the new phrase would read:
"in relation to a strike or other industrial action at the establishment who took part in it."
That would refer to any employee who took part in the industrial action and not just those who were still taking part in it at the date of the complainant's dismissal. That is a very important change, and the amendment says that we must go further to encourage any unscrupulous employer to have legal support in splitting his employees where there is industrial action. I hope that all noble Lords who believe that the workers have a right, where it is justified, to take industrial action will support this amendment, because it puts the law back to where it ought to be and does not restrict it as proposed by the Government. I beg to move.
Lord Mackay of Clashfern: My Lords, as the noble Lord, Lord Underhill, has explained, this amendment would preserve an anomaly in the existing provisions which Clause 8 seeks to correct. It may be helpful if I seek to remind your Lordships of the background. When the principle that employees have a right not to be unfairly dismissed was introduced for the first time in 1971 by the then Conservative Government, it was decided that a balance had to be struck between the need for employers to be able to dismiss employees in fundamental breach of their contracts, and the right of individual employees to be protected against dismissal which could be accounted unfair, even though by their actions they had repudiated their contract of employment. The balance was struck in the test of discrimination which is currently set out in Section 62 of the Employment Protection (Consolidation) Act 1978.
Section 62 excludes the industrial tribunals from jurisdiction to hear a complaint of unfair dismissal made by an employee who was participating in a strike or other industrial action, or involved in a lockout,

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at the time of his dismissal, provided the employer has dismissed all the "relevant employees":—that is, those who took part in the action in question—and either does not make any of them at any time an offer of re-engagement, or makes an offer of re-engagement to all of them.
A decision of your Lordships House sitting judicially in 1978, in the case of Stock v. Frank Jones (Tipton), found that there was discrimination, and a claim of unfair dismissal could be heard, if the employer had not dismissed all employees who had participated at any time in the industrial action in question, rather than, as had previously been generally thought, just those who were striking or taking other industrial action at the time of the dismissal in question. This means that if an employee who had participated in the action returned to work, the employer could face a claim for unfair dismissal from any of the other employees who continued with the action, even if he dismissed them all. However, if the employer also dismissed those who had returned to work, then they would be able to complain to an industrial tribunal, because they were dismissed while not taking industrial action. So at present, under the clause as so construed, an employer with a strike on his hands is, so far as this provision is concerned, in a "Catch 22" situation.
Some very strange examples can arise from this and let me just give one. An employer could allow strikers back to work in the belief that the action was ended, without knowing, or having any means of knowing, that others who possibly could be based in a different part of the country proposed to continue the action, even at a later date. If he accepted the return to work of the first group, he would risk complaints of unfair dismissal in the way described if he dismissed those who continued to strike. On the other hand, if he delayed their return until he was certain that none other of his employees intended to participate in the action, then he would be ignoring the wish of the first group to remedy the fundamental breach of contract involved in taking industrial action, and might be held to have locked-out his employees although he had been forced into that situation by the anomaly in the law as it now operates.
The noble Lord, Lord Underhill, referred to the possibility that the leaders or activists might be victimised, if our provision proceeds in its present form. But the truth of the matter is that our provision would differentiate between those who have returned to work and those who have remained on strike. Therefore, if what the noble Lord is saying is that those who remain on strike are the leaders, then they have ceased to lead because they have lost their flock and the flock have returned to work. Why should the law not recognise the fact that the flock have voluntarily decided, on their own, to go back to work, that the leaders no longer lead and are now taking action in which the flock do not follow them? Why should the law operate in this way in that situation? Accordingly, in my submission, the proposal that we are making for a change is a very reasonable one, and I ask your Lordships not to accept this amendment.
Lord Underhill: My Lords, I have listened very carefully to what the noble and learned Lord the Lord Advocate has said and there are two points which
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I wish to take up. First, he said that one could have a situation where workers have returned to work from other parts of the country; but the clause being put forward by the Government defines the establishment where the employees are concerned as being only at or where or from which the complainant works. Therefore the question of other parts of the country must be dropped from this argument.
Secondly, the noble and learned Lord spoke about all the flock having gone back to work. We are discussing a situation where the employer can reengage just a few people and take them back into work but not take the whole lot back. All the trade unions regard this as legalisation of the possibility of victimisation. This is a principle which I am certain everybody in this House would stand for, and in the light of the Government's refusal we must press it to a Division.
9.46 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 35; Not-Contents, 60.

DIVISION NO. 4

CONTENTS

Ardwick, L.

McCarthy, L.

Aylestone, L.

Mackie of Benshie, L.

Birk, B.

Mais, L.

Bishopston, L.

Milner of Leeds, L.

Blease, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Parry, L.

David, B.—[Teller.]

Peart, L.

Ewart-Biggs, B.

Rochester, L.

Hirshfield, L.

Seear, B.

Houghton of Sowerby, L.

Sefton of Garston, L.

Jeger, B.

Stedman, B.

Jenkins of Putney, L.

Stewart of Alvechurch, B.

John-Mackie, L.

Stewart of Fulham, L.

Kilmarnock, L.

Strabolgi, L.

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

Underhill, L.

White, B.

Lovell-Davis, L.

Wynne-Jones, L.

NOT-CONTENTS

Alexander of Tunis, E.

Elliot of Harwood, B.

Auckland, L.

Elton, L.

Avon, E.

Ferrers, E.

Bellwin, L.

Ferrier, L.

Belstead, L.

Fortescue, E.

Boardman, L.

Gainford, L.

Campbell of Alloway, L.

Gardner of Parkes, B.

Cathcart, E.

Glenarthur, L.

Chelwood, L.

Gowrie, E.

Cork and Orrery, E.

Gridley, L.

Craigmyle, L.

Hives, L.

Crathorne, L.

Holderness, L.

Cullen of Ashbourne, L.

Home of the Hirsel, L.

Davidson, V.

Hornsby-Smith, B.

De La Warr, E.

Killearn, L.

Denham, L.—[Teller.]

Lauderdale, E.

Drumalbyn, L.

Long, V.

Eccles, V.

Lyell, L.

Elles, B.

Mackay of Clashfern, L.

323

Mansfield, E.

Romney, E.

Marley, L.

St. John of Bletso, L.

Marshall of Leeds, L.

Sandys, L.—[Teller.]

Mersey, V.

Sharples, B.

Mottistone, L.

Sudeley, L.

Murton of Lindisfarne, L.

Thomas of Swynnerton, L.

Renton, L.

Trefgarne, L.

Rochdale, V.

Trenchard, V.

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Trumpington, B.

Vivian, L.

Vaux of Harrowden, L.

Windlesham, L.

Vickers, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
9.53 p.m.
Lord Oram Lord Oram moved Amendment No. 27:
Page 11, line 40, at end insert—
("(3A) After subsection (4)(c) there shall be added—
("(d) "taking part in the action" in paragraph (b) above means taking action with the same or a connected interest in a dispute, whether or not different groups of those employees take the action by way of a strike or of other various forms of industrial action.".").
The noble Lord said: My Lords, I beg to move Amendment No. 27. The House will remember that at Committee stage, because at that time we were under timetable pressure, we dealt not with specific amendments to Clause 8 but with the clause as a whole. In so doing the noble and learned Lord the Lord Advocate took the same stance in relation to this clause as the Government do to the Bill as a whole. As my noble friend Lord Underhill pointed out in relation to the last amendment, the noble and learned Lord the Lord Advocate suggested that this clause was modest in its intention and effect. He suggested that its purpose was little more than to clear up anomalies which had emerged, particularly in case law. In fact, I believe that that argument is but the sheep's clothing that attempts to conceal the wolf underneath.
The effect of this clause, in my view, as of the Bills of which it is a part, is to undermine certain fundamental pillars of trade union strength. Its purpose and its method are to make unity of action by trade unionists much more difficult to achieve. On the one hand, it seeks to divide those who are resolute about a particular dispute from those who are less resolute, and, on the other hand, it seeks to divide employees in one establishment of a business from those in other establishments.
Unionists often quote the slogan, "United we stand, divided we fall". Clause 8 seeks, in my view, to ensure that trade unionists shall be divided and therefore shall fall, and it will give to employers a greatly increased capacity to divide and conquer. That I believe to be the effect of the clause if it goes un-amended, because by virtue of Clause 8 the employer no longer has to look at all those who are taking part in the industrial action, but only at a more narrowly defined reference group at a particular establishment, and, as I see it also, at those engaged in a narrowly defined dispute.
The purpose of the amendment which I am moving is to prevent at least some of the stresses and divisions between workers which the Bill will bring about. The amendment would ensure that a wider range of employees would be able to bring valid complaints to an industrial tribunal than would be the case if Clause 8 were not so amended. It would ensure that the definition of "relevant employees" for the purposes of Clause 8 was not so restricted as to isolate a few workers from their fellow employees who might be taking similar action, such as working to rule rather than striking, in relation to a different but clearly connected grievance. If my amendment is accepted, as I hope it will be, it would not, of course, remove the fundamental objection which my noble friends and I have to the clause as a whole, but it would at least, in my judgment, limit to some extent the harm that
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the clause as it stands threatens to cause. It is for those reasons that I beg to move.
Lord Mackay of Clashfern: My Lords, as I understand the amendment, it seeks to define the phrase "taking part in the action", which I must say at first sight seems a fairly simple phrase, readily comprehensible, by a fairly long formula, and not to do much more than that. As the noble Lord, Lord Oram, has said, the amendment is concerned with the definition of "relevant employees". The amendment aims to include explicitly in the definition of "relevant employees" all employees with the same or a connected interest in the dispute and all employees involved in industrial action irrespective of the form the action takes. We believe that these classes of employees are already included in the provisions and, as it seems to us, included more simply in the phrase "taking part in the action". When one looks at the factual situation one sees what the action is and you just take all the employees taking part in that. I must say, with great respect, that I do not see that the noble Lord's amendment adds anything to that or does anything to effect the general purpose he mentioned.
I understand perfectly, of course, his objection and that of his noble friends to Clause 8, which has been expounded very clearly both tonight and earlier. But, at the moment anyway, I do not see that this particular amendment assists the matter and for our part we would prefer to rest with the simple words, "taking part in the action". I hope that your Lordships will find it possible to agree with us.
Lord Oram: My Lords, I do not think that the noble and learned Lord the Lord Advocate dealt with the point that I attempted to make, that "action" is not sufficiently defined. It might or it might not include action like working to rule where one group might be on strike and another group might be working to rule, and they might be involved in a related, but not exactly the same, dispute. It is the purpose of my amendment to make sure that that wider definition is incorporated in the Bill. However, I heard what the noble and learned said about how, in his view, the present wording is wide enough for that purpose. I wish to look at what he said more closely. Certainly, I do not wish at this stage to press this particular amendment to a Division and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Action relating to trade union membership]:
Lord McCarthy Lord McCarthy moved Amendment No. 28:
Page 12, line 16, at end insert—
("(1A) In section 23 of the 1978 Act there shall be inserted after subsection (1)—
"(1A) An employee shall not have the right conferred by subsection (1)(c) above except in respect of action which deprives or threatens to deprive him of some benefit or advantage relating to this employment which has not been the subject of collective bargaining between the employer and a recognised trade union.".").
The noble Lord said: My Lords, I beg to move

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Amendment No. 28. In my opinion this is the most reasonable amendment that we have put before the House in the entire Committee stage and Report stage. It is an attempt to preserve the right of benefit for members only. We did not move it at the Committee stage because there was not time and it is rather complicated and needs some explanation. However, I will deal with it as quickly as I can.
The Government have now created a right to be protected from action short of dismissal to force someone into a union. Indeed, the aim of the present Clause 9, as we debated in Committee, is to make it clear that it is action short of dismissal to operate an agency shop—that is even if you do not belong to the union, you might pay an equivalent in dues. We are not concerned with the agency shop aspects of Clause 9 tonight: we are aiming to use this to add a new section to the 1978 Act dealing with the general extent of the liability of action short of dismissal in the case of non-unionism. We do not want to prevent a situation where all that the employer is doing is to deprive the non-unionist of the results of collective bargaining. That, in effect, is a rather legalistic way of providing benefits for members only.
There was a time when the Conservative Party was very much in favour of benefits for members only. This was one of the ways in which they argued against a need for the closed shop. They used to ask at the time, for example, of the giant strength, why the trade union movement needed a closed shop, and when the answer was that it was to make people accept their obligations and not to be free-riders they said, "There is a simple way out of that; you just give the trade union benefits to members of the trade union and if you are not a member of the trade union you do not get the benefits, you do not get the wages, you do not get the conditions. That is perfectly fair and as a result people will join the union because they will see the relationship between benefits and union membership"—benefits for members only.
There always were good reasons why the trade unions were somewhat reluctant, in this country at least, to operate the principle of benefit for members only. Traditionally, trade unions have believed that the way in which you demonstrate to non-unionists the benefits of trade unionism, is to get benefits for all so that you operate what the Webbs called "the common rule"; and when people ask, "What are the benefits of trade unions?", you can say, "The benefits are the terms and conditions of employment which you enjoy, whether you are a member of a union or not. Do you not think that as we have all these things for you and you are enjoying all these things, you ought to join a union?" That was the traditional argument against benefits for members only.
But, secondly, of course, they always feared—particularly where they were weak and where they had certain suspicions of employers—that the employers might be given an incentive to employ non-unionists; if you could not get non-unionists at lower rates and conditions of employment, then you had to pay trade unionists. So, for these reasons, in this country at least, the trade union movement—not universally,
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but generally—turned its back on benefits for members only.
But there were examples. For many years, there were some examples in, for instance, the Post Office of certain benefits negotiated for members only, and there are many more examples in other industrial relations systems. The United States' benefits for members only for a period was a very common way of inducing people to join the union. We are saying, "Let us make this lawful; let us make this legal". In the days when the closed shop was easily enforceable, benefits for members only were perhaps not an attractive alternative. But if you are making the closed shop—as you are—increasingly impossible to operate, as we have sought to argue tonight, as we have argued in particular in respect, say, of Equity and as I think we shall also go on to argue in respect of certain other amendments when we come to Clause 11, for unions that are in a very difficult situation, surely it ought to be possible for them to operate benefits for members only.
It may be that the noble and learned Lord the Lord Advocate will tell me that, in fact, Clause 9 does not strike at benefits for members only—I do not know. If he does, I say let us have this amendment because he cannot prove it, in the same way as he or his noble friends could not prove it earlier about professional men. But, if there is any doubt, let us have it.
Of course, it would mean that such things as wage increases and reductions in the working week—all the things that were quite clearly the result of collective bargaining—could, if the employer and the union agreed, be confined to members only; whereas other things, for example, promotion opportunities, non-negotiated benefits, merit ratings and so on—all those aspects of the employer's relationship with the employee which he does not bargain about, and there are still a large number of those—would not be covered by this clause.
It is not just that we are trying to make something possible for unions which they do not do now and which you might say that they have shown very little sign up to now that they would necessarily want to do. There is a real problem here, and I should very much like the Government to tell me what they take the law to be.
There is one way in which trade unions universally now give benefits for members only, as has always been the case. You cannot gain access to a procedure in industry, if that procedure is a joint procedure and if it is operated by, for example, shop stewards. No shop steward will ever take up a grievance for a nonmember and I think that that is reasonable. If the stewards operate the system and represent the people in the system, they will not represent the interests of non-members. One of the traditional ways in which open shop unions have members, is that a non-unionist has not seen the point of trade unionism until he has a problem and he has wanted someone to go to the foreman and argue on his behalf. The foreman may say, "I think you ought to get yourself a shop steward".
So the non-member has said to the shop steward, "I would like you to take up this grievance", and

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the shop steward has said, "You are not a member". Of all the recruiting agents that is probably the single most important recruiting agent of trade unionism—people with problems who want a representative. We are not certain—perhaps the noble and learned Lord the Lord Advocate is certain—whether a practice in which trade unionists said, and in which employers co-operated, that you could not get access to the higher levels of the procedure (for example, you could not get a grievance raised about whether or not your job evaluation assessment was correct) because that is a benefit which is confined to trade unionists only, could be said to be something which was against this clause—that is, action short of dismissal. There are a range of benefits which de facto tend to be confined to trade unionists, so we are saying, let us make this clear, self-evident and lawful, and let us accept the amendment.
10.10 p.m.
Earl Ferrers: My Lords, as the bowling has returned to me, the noble Lord, Lord McCarthy, will have the satisfaction of knowing, as he put it in his own words, that he will not be outclassed, so he may relax. The noble Lord generously acknowledged that his amendment was complicated. I will also acknowledge that Clause 9 is complicated and is quite difficult to follow. It may therefore help if I briefly explain the background to the clause before I deal directly with the noble Lord's amendment.
Section 15 of the 1980 Act provides a general right in closed shops, although it is one which is qualified, for an employee not to have action which is short of dismissal taken against him by his employer in order to compel him to join a union. What might be action short of dismissal has in fact never been defined in legislation, but it could clearly cover actions such as withholding promotion, or taking away fringe benefits, or even giving lower pay. Of course it was the Government's view that it was right that where no closed shop existed employees should not be forced by these methods into union membership.
The position, though, where a closed shop is in operation is of course a different one. The 1980 Act recognised that fact by giving the right not to be forced into union membership only to those employees who cannot be fairly dismissed if they are not members in a closed shop under the 1980 Act. Clause 9 of the Bill does no more than to extend the rights of an employee in a closed shop not to be forced in this way to be a member to the additional situations in which dismissal for not being a member will be unfair under the provisions of Clause 2. This will be principally where a closed shop has not been approved in a secret ballot.
Lord McCarthy's amendment adopts an alternative approach whereby all employees in a closed shop would have the right not to have action short of dismissal taken against them to compel union membership, except if the action against them amounted to depriving them of benefits which have been negotiated by a trade union, in which case such action would be all right. It has been argued that if a union has negotiated benefits for its members and certain employees refuse to join or remain in that union, they should not be entitled to the union-negotiated benefits—the old argument of the free rider. Therefore, if an employer
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deprives them of these benefits he is, goes the argument, justified in doing so and he should not be subject to tribunal proceedings on that account.
This line of argument, I suggest with respect, misunderstands the right given to employees in the 1980 Act and which is extended by this clause. For this right to apply it must be shown that the employer has taken action against his employee for the purposes of compelling him to be a trade unionist. There is nothing to stop an employer negotiating a benefit for his employees with a trade union, such as an extra week's holiday, but withholding this from his nonunion employees. That is perfectly fair, so long as he does not do this in order to compel them to join a union.
May one give an example. It is perfectly acceptable for union members to be paid, say, 5 per cent. wages above non-union members, but it would be obviously unfair to have wage increases for union members but none to those who are not union members. An employer is not prevented from ever differentiating between his union and non-union employees. But the whole point of this clause is that he must not use this differentiation process as a backdoor method to force into union membership an employee who does not wish to join, and whose employer knows that dismissing him for non-membership would constitute an act of unfair dismissal. The amendment, by contrast, could allow such an employee to be squeezed into membership without a remedy. I do not think that is reasonable, and that is why I hope the noble Lord will not press the amendment.
Lord McCarthy: My Lords, I must say immediately that I acquit myself of any desire to put myself in the same class as the Minister. I was not trying to do that at all but merely implying that the noble and learned Lord the Lord Advocate outclassed me, certainly when it came to the case law, or what I always refer to, in relation to my noble friend Lord Wedderburn, as "Stock v. Jones and all that jazz". When it comes to that, he outclasses me.
Having said that, I come to remarks of the noble Earl, and a considerable part of them I found reassuring. I only hope that some such legal luminary as the new Master of the Rolls might take a similar view if the matter ever came before him. He said, if I understood the noble Earl aright, that you could take action as an employer, for example, to give 5 per cent. more wages to the trade unionist than the non-unionist, and that that would not be action short of dismissal. That is well worth having on the record. I was not so happy when he said you could not give any increase to the non-unionist, because I am not sure of the difference between giving 5 per cent. more—that is, 5 per cent. of nothing—rather than 10 per cent. and 5 per cent., and I am not sure the Master of the Rolls would follow that either. It is, however, helping us.
The difficulty of what the noble Earl says is that you must not do any of it with the purpose of compelling anybody to join a union, when in a way that is the purpose; it benefits the members only and it is a way of getting people to see the point of trade unionism. I gave a concrete example of what actually happens, but he did not answer me on that. Take,

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for example, the case where somebody is deliberately—by the shop steward and with the acceptance and encouragement of the employer—blocked off from the use of certain procedures, which may or may not result in upgrading. Would that be action short of dismissal? There could be no doubt about the purpose; namely, to compel people to join the union. What the shop steward says is, "I am not going to do all this work for somebody who is not even a member. Go away and be a member". I am not sure whether the noble Earl is saying that that is action short of dismissal and would or would not be unlawful. As, therefore, he has not reassured me on all those matters but only some of them, I cannot withdraw the amendment.
Baroness Seear: My Lords, may I ask the noble Earl, Lord Ferrers, to say what he means by "compel"? If you offer somebody a lower level of pay, which is not a nice thing to be offered, it might induce them to go, without compelling them to go; they could still take a lower level of pay if they wished to do so. You may be inducing them or motivating them in that direction, but not compelling them. May I ask the noble Earl to explain that rather more fully?
Earl Ferrers: My Lords, I will, with the leave of the House, try to answer that question and the point worrying the noble Lord, Lord McCarthy. I would say that it is perfectly reasonable to have a differentiation, for instance, between wage rates for union and non-union members. It is perfectly reasonable to say, "Those who are union members will get a 5 per cent. rate above non-union employees", and I take that merely as an example. When negotiating new wage rates, maybe they will all go up, and you will still have a 5 per cent. differentiation. What would be unfair would be to say, "We shall negotiate a wage increase for union members and union members will have a wage increase, but meanwhile non-union employees will have no increase". However, it would not be unfair to have differentiation between the two.
The noble Baroness asked what is meant when one talks about "compelling". Clearly, it would be unfair if an employee were, for instance, to have taken away from him his company car because he was not a member of a trade union. Likewise it would be unfair if it were said that because a person were not a member of a trade union, he would be denied promotion. That would be unfair, but it would not be unfair to have a differentiation between rates of pay, provided that they are consistent.
Lord McCarthy: My Lords, I should like to raise just one point before the noble Earl finally sits down. This is a very important matter, and the noble Earl is giving us great help. But I should like to ask, how does one move towards that situation? There is now the situation where everybody is on the same rate of pay, and one wants to move towards a situation, which the noble Earl says would be lawful, where trade unionists receive 5 per cent. more than non-trade unionists. But the only way to achieve that is to give a 5 per cent. increase to trade unionists and nothing to non-trade
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unionists. That is how one would reach the situation which the noble Earl says would be lawful, but it would be reached by what he says are unlawful means.
On Question, amendment negatived.
Earl Ferrers Earl Ferrers moved Amendment No. 29:
Page 13, line 4, at end insert—
("(4) In subsection (1)(c) of that section, for the words "a trade union" there shall be substituted the words "any trade union or of a particular trade union or of one of a number of particular trade unions".").
The noble Earl said: My Lords, this amendment is consequential upon Amendment No. 20. I beg to move.
On Question, amendment agreed to.
Clause 10 [Awards against third parties]:
Earl Ferrers Earl Ferrers moved Amendment No. 30:
Page 13, line 13, leave out ("a trade union") and insert ("any trade union or of a particular trade union or of one of a number of particular trade unions").
The noble Earl said: My Lords, this amendment is in the same vein; it is also consequential. I beg to move.
On Question, amendment agreed to.
Clause 11 [Prohibition on union membership requirements]:
[Amendments Nos. 31 and 32 not moved.]
The Deputy Speaker (Earl Cathcart): My Lords, in calling Amendment No. 33 I should say that, if it is agreed to, I cannot call Amendment No. 34.
10.23 p.m.
Lord Ardwick Lord Ardwick moved Amendment No. 33:
Page 15, line 34, leave out from ("above;") to end of line 36.
The noble Lord said: My Lords, I beg to move Amendment No. 33, with which goes Amendment No. 34. We are endeavouring to amend and make narrow in its scope subsection (7). The subsection defines those to whom a duty is owed to comply with subsection (2), which deals with lists of potential suppliers and people who may be invited to tender. If the duty is not carried out, there is a contravention and damages may be claimed. Subsection (7)(d)—which we are seeking to amend—adds to the people to whom a duty is owed and who can claim damages,
"any other person who may be adversely affected by its contravention".
Surely that is far too wide a category. The danger is that we have here a subject which can easily feed the litigious, or feed the zeal of a paranoid or a crank. The subsection in effect opens the front door and invites anyone and everyone to come to the party and try to win a piece of cake.
The amendment simply proposes that the obligation to comply is a duty owed only to the excluded person against whom the contravention was directed. But as it appears in the Bill, subsection (7) is a step in the dark, a step into the unknown. It refers to any person "adversely affected". How long must the train of causation be before someone is excluded from taking

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action? Can damages be claimed, for example, by the creditors of a company who have not been paid because the company was left off a list? The sub-contractor of an excluded main contractor may presumably claim damages, and so presumably could an employee of the sub-contractor who has been made redundant through its plight.
Of course, the courts have rules about the remoteness of damage, but where does the remoteness stop? It is argued that a plaintiff would have to show a locus standi, but will this be really difficult? How far can a plaintiff get in an action before proving that he has suffered damage? Can he drag a defendant into court on what may prove to be a useless but expensive and time-consuming exercise? It is these fears that have caused us to put down this amendment, and surely it is one which is sheer common sense and which the Government ought to accept.
Lord Campbell of Alloway: My Lords, very briefly, I see the problem raised by the noble Lord opposite, but persons adversely affected, questions of causation and questions of remoteness of damage really and truly belie exact definition, and any attempt to do so could only add a wholly unworkable provision. All that one can do within this sphere is to take aboard the case law in the three aspects of this problem that exist and allow the tribunal to adjudicate accordingly. There is no way that this can be improved by definition. One of the problems of law is seeking to over-define, and, in submission, there really is no advantage in this amendment.
Lord McCarthy: My Lords, if I may say this to the noble Lord, look at the clause. In number and circumstances the clause already defines these things in the widest possible way. If you ask to whom a duty is owed, then already a large number of people are mentioned in a whole range of circumstances. The clause covers all or part of work done under a contract for the supply of goods or services; it covers lists of suppliers; it covers failing to permit a particular person to submit a tender; it covers work done or likely to be done.
Then there are the circumstances in which the liability is to arise. If one asks who, then, is to be compensated, the clause says the would-be supplier of goods or services; any other party to the contract who is affected; any other person covered by subsection (3), which is a person excluded from the tender process, a person not permitted to submit a tender; or a person otherwise affected—
"otherwise determining not to enter into a contract with a particular person for the supply of the goods or services".
Surely one would be justified in thinking that, already, the clause included virtually everyone under the sun; and yet at subsection (7)(d)—and this is all that my noble friend is saying—we have yet another unspecified general character:
"in any case, any other person who may be adversely affected …".
All we are saying is, can we not drop that paragraph from the clause?
Lord Mackay of Clashfern: My Lords, with this amendment we return to the question of who can bring a legal action for a breach of statutory duty under Clause 11, and since we did not perhaps debate this
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question fully at Committee stage it may be helpful if, at the outset, I remind your Lordships how Clause 11(7) is constructed.
As the noble Lord, Lord McCarthy, has just said, subsection (7) sets out those who have a right of action under Clause 11. Paragraphs (a), (b) and (c) of subsection (7) give that right to those who are directly on the receiving end of the unlawful practices described in subsections (2) and (3). In other words, broadly the non-union firms who are excluded from a tender list or a party to a contract which is terminated or otherwise prevented from tendering for or entering into a contract on union membership grounds. The purpose of paragraph (d) is to cover anyone else who may be able to show that he has suffered loss as a result of such union membership requirements. It is this paragraph which the noble Lord, Lord Ardwick, by this amendment, seeks to remove.
Perhaps I should say, in passing, that if the noble Lord, Lord McCarthy, is right that (a), (b) and (c) cover everything under the sun, (d) adds nothing; so there is no point in removing it. Paragraph (d) is based on the simple principle that someone who suffers loss or damage as a result of an unlawful act should have the right to bring court proceedings against the wrongdoer to recover the loss. This is not a new principle. It runs through much of the statute and civil law of this country; and it is fenced around with the principles that the noble Lord, Lord Ardwick, referred to, of remoteness of damage and the courts take a realistic view of these matters in considering particular cases.
I believe that, in another context, even noble Lords opposite would not want to question this general principle very much. The reason they do so in this case is that they disagree not just with this paragraph or this subsection but rather with the clause as a whole. They do not accept that union membership requirements should be made unlawful and therefore they want to limit as much as possible the rights of those who are on the receiving end of such requirements. This is the fundamental difference between the Government and noble Lords opposite on this question. At root, it is not a difference of legal interpretation or application but a difference of policy.
We believe that union membership requirements imposed on contractors are unacceptable. It follows from this that anyone who suffers loss as a result of these practices should have a legal remedy. That is why we cannot accept the noble Lord's criticism of paragraph (d). The noble Lord has questioned who will come into the category covered by paragraph (d). The answer is: anyone who can show he has suffered loss directly as a result of the unlawful acts described in the clause. This does not mean that everyone will have a cause of action, however remote he is from the unlawful act, or however slight the effect he has suffered. I think that Lord Ardwick in moving his amendment recognised that.
As my noble friend Lord Gowrie explained at Committee stage, anyone bringing proceedings will have to show that he has sufficient locus standi to establish his case; that is to say, that he is party to a legal relationship sufficient to enable him to state a case. Nevertheless, we believe that if he can show a sufficient cause of action he should have the right to

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bring legal proceedings. Perhaps I can give two examples of people who might be able to show a sufficient cause of action to bring legal proceedings and who might be deprived of that right if paragraph (d) were removed. First, there is the employee of the contractor who may, for example, be made redundant by the contractor because the contractor fails to get a contract or has his contract terminated on union membership grounds. Secondly, there is the subcontractor—and this is one of the questions the noble Lord asked—to the main contractor who is not a direct party to the contract concerned but who may suffer loss as a result of the main contractor having his contract terminated because of union membership requirements.
There is, of course, also the point that the only people who have anything to fear from Clause 11 are those who continue with the practices which it makes unlawful. In other words, they will only be liable to be sued under any branch of subsection (7) if they act unlawfully under one of the earlier branches of the clause. From the Government's point of view, the possible widening by paragraph (d) of those who may take action to advantage must surely increase the effectiveness of the main provisions. I hope that in the light of these reasons the noble Lord may feel able to withdraw his amendment and that, if he does not, your Lordships will feel able to reject it.
Lord Ardwick: I do not propose to withdraw it. We dealt with the contractor, and the sub-contractor; but you can have the sub-sub-contractor. It does seem that it can go on for a long, long way and has its absurdities.
On Question, amendment negatived.
[Amendments Nos. 34 and 35 not moved.]
10.34 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney moved Amendment No. 36:
Page 15, line 39, at end insert—
("(9) Nothing in this section shall be held to void a contract which is a contract of service or a contract for the supply of services between parties whose relationship is that of employer and employee or whose service is or services are provided personally by one of two contracting parties.").
The noble Lord said: This amendment refers to Clause 11 but, as noble Lords will be aware, Clauses 11, 12 and 13 (to which I also have amendments) deal with the same subject and come under a general heading. Therefore, although I am moving only Clause 11, at this late hour it might be for the convenience of the House if I spoke not only to the amendment to Clause 11, but also to the amendments we have down to Clauses 12 and 13. I do not know whether that is going too far; but I think it would be generally agreed that these clauses are all dealing with a single subject. Therefore it might be for the convenience of the House if we were allowed to speak to all the amendments.
The point one wants to make, dealing with the amendment to Clause 11, is this. In seeking to prevent the enforcement of a trade union obligation upon contractors, these clauses catch a group of people whom it was not intended to catch. They appear to me—and correspondence with the noble and learned
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Lord the Lord Advocate has not entirely removed the problem—to catch any person who is in an employee relationship if that person is engaged on a contract for services and not on a contract of service.
I accept the point made on behalf of the Government by the noble and learned Lord in a letter that he has been good enough to send me, that if a person is an employee in the ordinary sense of the word and is engaged in a contract of service, as is the case with an employee—that is, somebody who pays PAYE and is in the ordinary position of an employee—then he is not caught by any of these three clauses.
The noble and learned Lord will agree with me when I say that there is a group of people, those who are on a contract of service who are in the business of providing a service rather than selling their services, who are still caught under these clauses. That is why the amendments have been put down. The amendments seek to exclude from the clauses a group of people which the Government did not intend to catch in them but which nevertheless are caught. The three amendments with which I am associated all seek to protect the interests of this group.
There is a good deal of confusion in the documents which have been issued in support of an explanation of the clauses. In the Notes on Clauses, referring to Clause 11 and Clause 12 the explanation begins by saying that the clause will make void any term in a commercial contract requiring a contractor to use only union labour or only non-union labour in fulfilling the contract. It envisages, in other words, a contractual situation between a contractor and a principal. It is not the intention—and it is not suggested in the explanation—that it covers a person whose relationship is in effect that of an employer and employee.
If one looks at the Notes and Guidance, it says that Clause 11 makes void any term in a commercial contract requiring the contractor to use only union labour. The document from the Conservative Central Office is in a state of total confusion. This document, issued by the Conservative Research Department confuses—I think accidentally—Clausel2 with Clause 11; and Clause 10 with Clause 11. In a section about Clause 13 it talks continuously about Clause 12. This confusion which exists in the Conservative Research Department document of explanation can only do harm in what is a complex clause by creating a certain amount of confusion in the minds of noble Lords if they are relying on this document to understand this rather complex situation.
My amendment seeks to insert the following words:
"Nothing in this section shall be held to void a contract which is a contract of service or a contract for the supply of services between parties whose relationship is that of employer and employee or whose service is or services are provided personally by one of two contracting parties".
I accept that the exact wording of this amendment may not necessarily be acceptable to the Government, and if in replying to this debate the Government were able to give an assurance that they accept that the clause as at present drafted embraces a body of people it was not intended to embrace, and if they would say they will look at this problem with a view to excluding the kind of people I have in mind, I—and I hope my noble colleagues will agree with me—would not seek to press this to a Division. But if the Government

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are not able to do that, then I hope that my noble friends on this side of the House will say that it must be pressed to a Division, because I believe that in these clauses the Government are doing something which they did not seek to do. In my opinion, it is impossible for any rearrangement to be made which will exclude the freelance person who offers his services.
I believe that person is caught under the clause as at present drafted. I believe that the Government recognise that they are caught; and in saying that the employee or employees should rearrange their arrangements so as to exclude themselves they are in fact saying: "We have drafted the clause in these words and they catch these people: so these people must do something to get themselves out of it". That is not right. It is the legislation which should be altered and not the relationship between people. For that reason, I beg to move this amendment.
Lord Ardwick: My Lords, if I have got it right—and after what my noble friend has just said I am not at all certain that I have got it right—this amendment and these other amendments are an endeavour to distinguish between an ordinary commercial contract and a contract between an employer and a worker for the supply of his services. The definition of a worker of this kind was given in the Act of 1974, which refers to the worker who is an independent contractor, provides his own labour and hires out his labour on the basis of an independent contract.
The object of the amendment in effect is to exclude such contracts from the clause. Such workers are in one respect self-employed persons and in another they are employees and they are, or have been until now, responsible not only for their own national insurance payments but also for directly paying their own income tax. It is not, or was not, the responsibility of the employer of people who are under contract for services to deduct tax, but I will come back to that in a minute.
I have worked in various newspaper offices alongside a number of people who have had a contract with our employer for their services. Usually these were "star" writers, celebrities, people with several strings to their how—novelists, broadcasters and so forth. Sometimes they are earning more than the editor himself, but in a newspaper office they were indistinguishable from all of us who were working under ordinary contracts of employment. They belonged to our union, they took part in the meetings of the chapel—indeed, they were eligible for positions in the chapel—and, of course, they responded normally, like the rest of us, to editorial disciplines.
On some newspapers that I have served it was part of their contract that they must be members of the National Union of Journalists, or more delicately, that they were expected to be members of the NUJ. When I was an editor, if there had been an Act of this kind I should not have been able to recruit the services of some highly gifted people without making it a condition that they should be members of the union. But now an editor might not be able to recruit a star writer or a cartoonist, because he cannot insist that he should be a member of a union. Yet if he is not willing to become a member, there will be trouble with the chapel. The Minister
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may say that it is impossible to distinguish between a virtual employee on a contract for services and an outsider who contracts to do the occasional job—like the late T. W. H. Crosland, who described himself as a jobbing journalist, on his card, adding "Cashiers waited on in their own apartments."
Although the Department of Employment may not be able to distinguish between the two, the Inland Revenue has, only during the past few weeks, found a way. An edict has been issued that newspaper managements in Fleet Street who have journalists employed under contracts for their services must deduct PAYE, and they are saying that these employees can no longer be treated as Schedule D payers. I understand that the Musicians' Union, and even people on North Sea oil rigs, have recently been caught in this same net. The Revenue seem to regard people in these circumstances, whatever their contracts, as having a master and servant relationship, which I think is precisely what the Department of Employment is denying. The Department of Employment says that it can make no such distinction. You may not insert a condition about union membership in a contract for the service of somebody, though you may insert it in a contract of employment. It seems to be an absurdity, an inconvenience to employers and a potential cause of unnecessary friction.
Lord McCarthy: My Lords, I do not want to delay the House for very long. I merely want to point to something at the end of a very helpful letter from the noble and learned Lord. Lord Mackay of Clash-fern, in which he says—and if he thinks about it, he knows that he connot mean it—
"There is, of course, nothing to prevent Equity or the theatre managements from exempting themselves from the provisions of these clauses by ensuring that in future contracts under which performers work are contracts of employment".
Everything that has been said from our side of the House tonight has been to show that there is everything to prevent Equity, theatre managements, the National Union of Journalists, the Daily Mirror or anybody else from acting in this way. The fact is that the nature of the work is such that these performers or jobbing journalists cannot be dealt with as though they were simply routine contract of employment workers, and that is the essence of our amendment.
Lord Mackay of Clashfern: My Lords, this amendment, as has been explained, is primarily designed to exempt members of, for example, the British Actors' Equity Associations, with the particular arrangements that they have, from the provisions of Clause 11. Because the principles are the same in relation to the later amendments to which the noble Lord, Lord Jenkins of Putney, referred, it is helpful to discuss them all at the same time.
As noble Lords are aware, Clause 11 is about the imposition of union membership requirements through commercial contracts—about the practice of companies and councils refusing to do business with other firms or individuals because they do not use trade union members to carry out the work. I think I should say at the outset that Clause 11 and the subsequent clauses

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do not affect the requirements about union membership or recognition which appear in contracts of employment or contracts of service. This means that it does not impinge upon the normal employment relationship between an employer and his employees.
I think there may have been some confusion about this point at earlier stages and it perhaps appears again in the amendment. When we talk about employees as a matter of law, we are referring specifically to those who work for an employer under a contract of employment or a contract of service. If a person works under any other contract, he is not regarded by the employment legislation or by the law generally as an employee. So, in saying that the clause does not affect the relationship between an employer and his employees, we have in mind specifically those who work under contracts of employment or contracts of service.
Perhaps I should say at this stage that on the previous occasion when we discussed this I think the noble Lord, Lord Jenkins of Putney, referred to an undertaking given by my right honourable friend the Secretary of State for Employment and made some remark about the reliability or worth of such undertakings. I felt it right to inquire into this. So far as I know, my right honourable friend the Secretary of State for Employment has given no undertaking of any kind to Equity. He was not himself able to meet Equity. They did in fact meet my honourable and learned friend the Parliamentary Under-Secretary of State for Employment who sought to explain the position to them. But so far as I understand the matter, no assurance was given in relation to the matters that were then raised.
Lord Jenkins of Putney: My Lords, if indeed I have made a statement which was incorrect, I unreservedly withdraw it. However, my strong impression is that Equity have the idea, rightly or wrongly, that some kind of undertaking was given to them. If, however, I am wrong, I withdraw.
Lord Mackay of Clashfern: I am much obliged to the noble Lord. All I can do is to state the position as I understand it to be. It may be just as well to clear up the point in case there is any misunderstanding. I am sure it will be in the nature of a misunderstanding and not anything deliberate in the way of misleading people. It is useful that we should take the opportunity to dispose of any misunderstanding which may exist, and I am obliged to the noble Lord for what he has just said.
Following our earlier debate, the noble Lord, Lord Jenkins of Putney, very kindly supplied me with a copy of an Equity standard contract which I undertook to study with Clauses 11 to 13 in mind. This standard contract, under which many actors and performers work, includes many detailed provisions of minimum standards and terms and conditions of work. While many of these are features which would also be found in a contract of employment, it seems likely that for the purposes of the law the contract would be regarded not as a contract of employment but as a contract for services.
After saying that, perhaps I should pause to point out that the noble Lord, Lord Jenkins of Putney,
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himself kindly wrote at the end of the contract that this, although a contract of employment, is also a contract for the provision of services. I think he recognised that it is hardly possible to be both. Therefore, closing the quotation, he added an exclamation mark. The situation is that many actors wish the benefits of being self-employed for tax purposes. If that is what they seek, then it is not surprising that the contract under which they work is a contract for services and not a contract of service. In taking work in that form they forgo the benefits which accrue to an employee working under a contract of service.
The problem underlying this amendment is therefore that, in some circumstances, actors and actresses work under contracts which are not contracts of employment. This applies to others who the noble Lord, Lord Ardwick, figured in the course of his observations. By choosing to work under contracts for services they are not employees but are in what the law regards as a commercial relationship with theatre managers. This means that they come within, and are affected by, the provisions of Clauses 11 to 13, in the same way as the other self-employed people and small businessmen whom the clauses are designed to protect.
I should emphasise that we do intend to protect people in this category. Because it is impossible to distinguish between the actors' contracts for service and contracts for service under which other small businessmen perform work, it follows that it is impossible to exempt the acting profession, for example, from Clause 11 in the way proposed in the amendment. If we were to accept the noble Lord's amendment, it would exempt from the provisions of the first part of this clause all self-employed people; freelance artists, draughtsmen, building contractors—some of the people who are most in need of the protection against the imposition of union membership requirements which Clause 11 provides. In other words, although the amendment of the noble Lord, Lord Jenkins of Putney, arises principally from his concern about actors and performers, its effects would be very much wider.
I must, however, question the noble Lord's assertion that Clauses 11 to 13 will have a very important effect on employment in the theatre and entertainment industry, or on the agreements which Equity has negotiated with such as the Society of West End Theatre Managers—a copy of which he kindly provided. The Bill is concerned only with the specific problems of union membership and recognition requirements in commercial contracts. It does not invalidate any provision of a collective agreement between a trade union and an employers' body. Nor does it make unlawful other provisions of commercial contracts or contracts for service which do not involve union membership requirements.
I believe it is important to emphasise this last point, because it means that the minimum standards and minimum terms and conditions of employment which Equity has negotiated—many of which are contained in the standard form of contract—can continue to be enforced as before. There is nothing, for example, in Clause 11 to prevent a theatre manager from agreeing with Equity that the theatre will employ only actors who

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have served their time with a repertory company or have attained an agreed level of proficiency.
There is nothing in Clause 11 to stop other Equity terms and conditions from being imposed through contracts. The fact that Equity has negotiated them does not mean that one has to be an Equity member to be paid a particular rate or to work for so many hours. Indeed, if Equity contracts are used unchanged after the passage of this Bill, the only effect of Clause 11 on the terms of the contract will be to make void the union membership requirement. The other terms and conditions would retain their enforceability under the contract.
To sum up, we understand the concern which underlies this amendment but we would not accept it—even if we thought it desirable to do so—because it would go much wider than the acting profession, or the journalistic examples which the noble Lord, Lord Ardwick, gave, and would deprive many self-employed people of the protection of Clause 11, which in our belief is very much required. I hope that in the light of that explanation, at least the position is clear between us, even if I have not been able to meet fully the position which the noble Lords would desire to attain.
Lord Ardwick: But, my Lords, there is a very—
Lord Denham: Order! My Lords, if the noble Lord, Lord Ardwick, wants to ask a question, he may say something before my noble friend sits down. But he really must not ask a question at this stage.
Lord Jenkins of Putney: My Lords, the noble and learned Lord the Lord Advocate places us in a very difficult situation. He does not in fact say, as I hoped he might, that the Government would see whether they could devise a form of wording which would exclude from the provision persons who, although not contractually and legally in an employer/employee relationship, had a relationship which was nonetheless that of an employer and employee. This clause does not intend to catch people who are in that relationship.
I accept that my own amendment has not succeeded in excluding such persons, because, in wording it to cover as wide a group of people in that area as possible, I may have gone too wide for the Government's convenience. At the same time, it seems to me that the Government have not answered the point that the clause as at present drafted does in fact catch a large and important group of people whom it does not intend to catch. In view of the fact that the noble and learned Lord the Lord Advocate has not been able to say that he will devise a form of words, or even try to devise a form of words, which would have the effect of excluding that group of people, it is my own feeling that we have no alternative but to press this amendment.
11.1 p.m.
On Question, Whether the said amendment (No. 36) shall be agreed to?
Their Lordships divided: Contents, 17; Not-Contents, 55.

DIVISION NO. 5

CONTENTS

Ardwick, L.

Lovell-Davis, L.

Birk, B.

McCarthy, L.

Bishopston, L.

Oram, L.

Blease, L.

Peart, L.

Brooks of Tremorfa, L.

Ponsonby of Shulbrede, L.—[Teller.]

David, B.

Ewart-Biggs, B.

Underhill, L.

Jeger, B.

White, B.

Jenkins of Putney, L.

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

NOT-CONTENTS

Alexander of Tunis, E.

Long, V.

Avon, E.

Lyell, L.

Aylestone, L.

Mackay of Clashfern, L.

Bellwin, L.

Mackie of Benshie, L.

Belstead, L.

Mansfield, E.

Boardman, L.

Marley, L.

Cathcart, E.

Marshall of Leeds, L.

Chelwood, L.

Mersey, V.

Cork and Orrery, E.

Mottistone, L.

Craigmyle, L.

Mountgarret, V.

Cullen of Ashbourne, L.

Renton, L.

Davidson, V.

Rochester, L.

De La Warr, E.

Romney, E.

Denham, L.—[Teller.]

St. John of Bletso, L.

Drumalbyn, L.

Sandford, L.

Eccles, V.

Sandys, L.—[Teller.]

Elles, B.

Seear, B.

Elton, L.

Sudeley, L.

Evans of Claughton, L.

Thomas of Swynnerton, L.

Ferrers, E.

Tordoff, L.

Fortescue, E.

Trefgarne, L.

Gardner of Parkes, B.

Trenchard, V.

Glenarthur, L.

Trumpington, B.

Harmar-Nicholls, L.

Vickers, B.

Hives, L.

Vivian, L.

Holderness, L.

Windlesham, L.

Hornsby-Smith, B.

Young, B.

Kilmarnock, L.

Resolved in the negative, and amendment disagreed to accordingly.
11.9 p.m.
Lord Denham: My Lords, I think that this is probably the time, in what has been rather a long session, at which we should interrupt the proceedings tonight. I therefore beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Greater London Council (Money) Bill
Reported from the Unopposed Bill Committee without amendment.
  ALCOHOL-RELATED PROBLEMS OF OFFENDERS
  ALCOHOL-RELATED PROBLEMS OF OFFENDERS
  IMMIGRATION: ACCOMMODATION IN DETENTION
  IMMIGRATION: ACCOMMODATION IN DETENTION
  PRISONERS: UN STANDARD MINIMUM RULES
  PRISONERS: UN STANDARD MINIMUM RULES
  PRISONERS: COMMUNICATION THROUGH INTERPRETERS
  PRISONERS: COMMUNICATION THROUGH INTERPRETERS
  PREVENTION OF TERRORISM: USE OF LEGISLATION
  PREVENTION OF TERRORISM: USE OF LEGISLATION
  STATISTICAL SERVICES: REVIEW RECOMMENDATION
  STATISTICAL SERVICES: REVIEW RECOMMENDATION
  AUJESZKY'S DISEASE: THE PIG INDUSTRY
  AUJESZKY'S DISEASE: THE PIG INDUSTRY
  EEC INSTITUTIONS: UK CIVIL SERVANTS
  EEC INSTITUTIONS: UK CIVIL SERVANTS
  ELECTRIC SHOCK WEAPONS: ALDERSHOT EXHIBITION
  ELECTRIC SHOCK WEAPONS: ALDERSHOT EXHIBITION
  FALKLAND ISLANDS DISPUTE: NUCLEAR WEAPONS
  FALKLAND ISLANDS DISPUTE: NUCLEAR WEAPONS
  THE ORDNANCE SURVEY
  THE ORDNANCE SURVEY