Sitting of 11 June 1982

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Orders of the Day
  Merchant Shipping (Liner Conferences) Bill
  As amended (in the Standing Committee), considered.
  Merchant Shipping (Liner Conferences) Bill
    New Clause 1

      LIABILITY OF MEMBERS OF CONFERENCE TO BE IN PROPORTION TO THEIR RESPONSIBILITY
      '.—(1) Where proceedings arising out of the Code are brought against a member of a conference in respect of damage or loss suffered by any person and other members of the conference are also liable (whether jointly or otherwise) in respect of the same damage or loss, the liability of that member to make good that damage or loss shall be in proportion to his responsibility.
      The reference above to the liability of other members of the conference is to any such liability which has been or could be established in proceedings brought before the same court or other tribunal by or on behalf of the person suffering the damage or loss; and for the purposes of this subsection it is immaterial by reference to what law the issue of liability was, or would be determined.
      (2)In ascertaining the responsibility of a member of a conference for the purposes of subsection (1), regard shall be had not only to the member's part (if any) in the particular matters giving rise to the proceedings but also to his general involvement in the affairs of the conference as shown, for example, by his share of the conference trade, the nature of pooling arrangements to which he is a party and the extent to which he contributes to the administrative expenses of the conference.
      (3)Subsections (1) and (2) apply to any proceedings in the United Kingdom and to proceedings elswhere in which the extent of the liability of a member of a conference falls to be determined by reference to the law of a part of the United Kingdom.
      (4)Where in proceedings arising out of the Code—

      (a) judgment is given against a member of a conference in respect of damage or loss caused to any person, and

      (b) the extent of the member's liability is not determined by reference to subsections (1) and (2),

      the member shall not, if it is sought to enforce the judgment in the United Kingdom, be liable to make good any greater proportion of that damage or loss than if the extent of his liability had been determined by reference to those subsections.
      (5)A member of an unincorporated conference against which judgment is given, whether in the United Kingdom or elsewhere, in proceedings arising out of the Code in respect of damage or loss caused by any person by a breach of duty by the conference, shall not, by virtue of section 5(3), be liable to make good any greater proportion of that damage or loss than he would have been if the proceedings had been brought against him and the other members of the conference in respect of a duty owed by all the members of the conference and the extent of his liability had been determined by reference to subsections (1) and (2).
      (6) subsections (4) and (5) shall not affect the ecforcement in the United Kingdom of a judgment required to be enforced
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      thereby by virtue of Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (judgments given in countries with whom reciprocal arrangements exist) or Part I of the Civil Jurisdiction and Judgments Act 1982 (judgments given in other E. E.0 . member states).'.—[Mr. Sproat.]
      Brought up, and read the First time.
      9.34 am
      The Under-Secretary of State for Trade (Mr. Ian Sproat): 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 Government amendments Nos. 3, 4, 5, 6, 7, and 9.
      Mr. Sproat: The new clause will replace clause 9 as a result of concern expressed to us especially by the General Council of British Shipping that clause 9 as drafted protected shipping lines only in limited cases. The purpose of clause 9 was to ensure that British shipping lines or other shipping lines with substantial assets here were not unduly prejudiced by the efficiency of the British legal system. Where a person—I am speaking of shipping lines rather than of shippers of goods—suffers damage as a result of a failure by the conference to fulfil its code obligations, for example, to admit that person into the conference it might be easy to sue the conference in the United Kingdom and by virtue of clause 5 enforce that obligation against a shipping line here. While a shipping line would have a right of recourse against fellow conference members, such a right may not be very useful in, say, Ruritania, if the currency of that country cannot be changed into sterling.
      Clause 9 limited the member's responsiblity here to a "just and equitable" share. However, clause 9 dealt only with enforcement against members of judgments given against conferences. What if the original proceedings and judgment were against an individual member or members? Clause 3(7) would have enabled us to make similar provisions in regulations protecting members. Accordingly, sub section (1) provides that, in any case where proceedings arising out of the code are brought against a member of a conference and other members could also be sued for the same liability, liability of the member shall be only in proportion to his responsibility Subsection (2) repeats clause 9(2) in explaining how a member's responsibility is to be worked out. Subsection (3) explains that subsections (1) and (2) apply not only to proceedings in the United Kingdom but elsewhere if United Kingdom law applies, for example, because that is the law being applied to a case before international mandatory conciliation.
      Subsection (4) deals with judgments given against members where the law of some other State applies. That is usually because a case is before a foreign court in the same way as subsection (1) deals with judgments given in the United Kingdom. Subsection (5) repeats clause 9(1)(a) that deals with enforcement against members of judgments against unincorporated conferences. Subsection (6) provides a saving for the cases where, as a result of our international obligations, we are required to enforce without qualification judgments given abroad.
      The other amendments grouped with the new clause are consequential to it . Amendment No.3 brings the wording of clause 5(2) into line with the wording of subsection (3) of the new clause and makes it clear that the provisions of

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      clause 5(1) apply not merely in cases before courts of the United Kingdom but also where United Kingdom law is applied, for example, again, in international mandatory conciliation. Amendment No. 4 replaces reference to clause 9 by reference to the new clause. Amendment No. 5 deletes clause 5(5) dealing with the definition of the judgment which now appears in clause 13. The definition now includes a reference to the word "decree" for the purposes of Scottish law. Amendment No. 6 also adds the word "decree" after "judgment" in clause 8 since there the word "judgment" is not used in relation to proceedings arising out of the code.
      I hope that my explanation and clarification, which I think met the wishes of hon. Members in Committee, will satisfy the House.
      Mr. Terence Higgins: I recall that when I had closer connections with the shipping industry it used to be the practice for the captain of a vessel, if he had been through a bad storm, to go to a notary and register a protest when he had arrived in port, as a result of which he was exonerated to some extent from any damage that was caused to the cargo because of the bad weather.
      I should like to register a protest about the new clause. As we are on Report, it is possible, unlike a Committee stage, for hon. Members to speak only once, except possibly with the permission of the House. To put down this large and complex new clause with the related amendments at this stage, when the preparation of the Bill has been going on for six or seven years, is unsatisfactory. The weather is so bad from a procedural point of view that it is not conceivable for hon. Members to examine every detail of the new clause. Therefore, I shall refer only to one or two points to which my hon. Friend the Minister might like to reply.
      My hon. referred to the mandatory conciliation procedures. My recollection of our earlier debate is that there are not to be any mandatory conciliation procedures. Perhaps my hon. Friend will tell us whether that is so.
      New clause 1(1) provides:
      "Where proceedings arising out of the Code are brought against a member of a conference in respect of damage or loss suffered by any person and other members of the conference are also liable (whether jointly or otherwise) in respect of the same damage or loss, the liability of that member to make good that damage or loss shall be in proportion to his responsibility."
      If the members of the conference are not liable jointly, I presume that they are liable severally. If that is so, I do not understand why the new clause does not say so. If the members are liable jointly and severally, I do not see why the subsequent parts of the new clause split responsibility up on the basis that my hon. Friend the Minister optimistically mentioned. He said that in subsection (2) we are told how to work out in what proportion the members are responsible. In subsection (2), there is a series of generalities, with no indication as to what weight is to be given in general or in particular. It is not true to say that one can work out from subsection (2) the extent to which any individual member is liable. If that is so, it seems to undermine the purpose of the new clause.
      Effectively, the conferences are not to be bodies corporate. That is why there are the provisions for them to be individually liable or proportionately liable. In the light of the new clause, we are giving the members all the advantages of a body corporate in respect of claims against
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      them in the context that the Minister mentioned, without having any of the responsibilities that such a body would have. That is a worrying development.
      As I have said, it is virtually impossible on Report to deal with such matters in detail, as should be done. I hope that those in another place will seek to probe that aspect of the Bill a little more. Generally speaking, My hon. Friend's officials have not done a good job. I hope that my hon. Friend will give them a rocket.
      Mr. David Ginsberg: I endorse what the right hon. Member for Worthing (Mr. Higgins) has said about the text of the new clause. It is weighty and complex. I also feel that procedurally what has happened should give the House and Ministers some cause to reflect.
      This matter has been with the Department for six or seven years. It could and should have been anticipated. The Committee spent much time smoking out a lot of information from the Government, which should properly have been before the Committee and the House much earlier.
      It is impossible this morning to decide whether the wording of the new clause is satisfactory. I accept what the Minister said, that the reasons for tabling it were proper. Therefore, I am prepared to accept it.
      9.45 am
      Mr. Sproat: I apologise to the House, and particularly to my right hon. Friend the Member for Worthing (Mr. Higgins). I agree that what I am asking the House to do this morning is not the best way to proceed. However, I believe that it is the best way of proceeding that is open to us. It became clear in Committee when not only Government Members studied the wording of the Bill but various interested bodies outside studied it that the protection that we intended to give to members of conferences was not absolutely certain. We thought that it was when we drafted the Bill, but when the General Council of British Shipping and other bodies looked at the Bill they were not satisfied that that was so. My hon. Friend the Member for Eastleigh (Sir D. Price) made some pertinent remarks about that. It was to try to meet what my hon. Friend said that we decided that the best way, although not necessarily a good way, was to proceed as we have done.
      I have no doubt that my noble Friends in another place will wish to take the advice of my right hon. Friend the Member for Worthing and look at the matter. All I can do is apologise for the fact the the Ministers did not foresee all the problems. We thought that we had, but the Committee convinced us otherwise. I hope that that general reassurance, and the knowledge that the matter can be considered again in another place, will persuade my right hon. Friend to accept the situation.
      I am grateful to the hon. Member for Dewsbury (Mr. Ginsburg) for his remarks. He has got it exactly right. We are proceeding in this way because it is the best that we can do in the circumstances.
      When I mentioned international mandatory conciliation I was referring to part two, chapter VI of the Schedule, which refers to the provisions and machinery for the settling of disputes and also international mandatory proceedings. My right hon. Friend said that subsection (2) did not give good guidance, but I believe that that is the most precise guidance that we can give in the circumstances. It provides a basis for all parties to know

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      how responsibility can be deployed in general, but the precise way in which responsibility should be deployed will depend on the circumstances of the case. We believe that what we have said gives sufficient general guidance.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      EXCLUSION OF RESTRICTIVE PRACTICES LAW
      '.—(1) No account shall be taken of any restriction to which this section applies for the purposes of the Restrictive Trade Practices Act 1976, and no agreement shall so far as it relates to any such restriction be unenforceable by virtue of any rule of law about unreasonable restraint of trade.
      (2) This section applies to restrictions of any of the following descriptions which relate to the trade between states which are Contracting Parties to the Code and are accepted within the framework of a conference, that is to say—

      (a) restrictions in respect of the provision of international liner services accepted by the operators of such services under an agreement to which two or more such operators are parties;

      (b) restrictions in respect of international liner services accepted by operators of such services or persons for whom such services are provided under an agreement to which one or more such operators and one or more such persons are parties;

      (c) restrictions in respect of the supply or acquisition of any service in connection with the operation of international liner services accepted by operators of such services or persons in the business of supplying such a service under an agreement to which one or more such operators and one such supplier are parties.

      (3) Where a restriction relates only in part to the matters mentioned in subsection (2), this section applies to the restriction so far as it relates to those matters.
      (4) For the purposes of paragraph (a), (b) or (c) of subsection (2) it is immaterial that there are other parties to an agreement in addition to those mentioned in that paragraph, except that paragraph (c) does not apply where the parties to an agreement include more than one such supplier as is mentioned in that paragraph.
      (5) If provision with respect to any such service as is mentioned in subsection (2) is made by order under section 11 or 12 of the Restrictive Trade Practices Act 1976 (under which provision may be made as respects the application of the Act to restrictive agreements or information agreements as to services), provision may also be made by order under that section for such consequential modifications of this section as appear to the Secretary of State to be appropriate.
      (6) Without prejudice to subsection (5), this section shall, so far as it relates to the Restrictive Trade Practices Act 1976, be construed as one with that Act.'.—[Mr. Sproat.]
      Brought up, and read the First time.
      Mr. Sproat: I beg to move, That the clause be read a Second time.
      Hon. Members will remember that reference was made at earlier stages in the Bill to the interaction of the code's provisions and other domestic competition laws. The new clause is intended to make certain that there will be no conflict between the Bill and such law, in particular the Restrictive Trade Practices Act 1976 and the common law doctrine of restraint of trade. At present an exclusion for certain types of agreement relating to international sea transport services from the Restrictive Trade Practices Act 1976 is contained in paragraph 2 of the schedule to the Restrictive Trade Practices (Services) Order 1976. The paragraph deals with three types of agreement: first, agreements between shipowners, secondly, agreements between shipowners and shippers and thirdly agreements between shipowners and a supplier of ancillary services.
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      The limits of such excluded agreements are tightly drawn. Agreements are required to be between only certain parties and to contain only certain restrictions. If those limits are exceeded, the whole agreement becomes registrable under the 1976 Act, including restrictions relating to international sea transport services.
      Building on the foundation of the present exclusion for agreements relating to international sea transport services, the new clause enables restrictions relating to codist trade, accepted within the framework of a conference, to be separated from the rest of the agreement and to be disregarded for the purposes of the 1976 Act. If the agreement exceeds the limits of the exclusion in paragraph 2 of the 1976 services order to which I referred, it would still be registrable under the 1976 Act, but the codist aspects would not be subject to the sanctions of the Act in that way. Any breach of our international obligations in relation to the code that could be caused by the automatic operation of the 1976 Act is avoided. With the same objective the amendment also excludes the corresponding common law of restraint of trade.
      Mr. K. J. Woolmer: I echo what has been said already this morning—that, while we can understand the position in which the Minister found himself, it is unfortunate that matters of such complexity and, in the case of this clause, of considerable substance, should be brought forward at this late stage with such little notice and such little time for the House to consider them.
      The new clause was published only on Tuesday. Given its significance, surely we should have had longer to consider this important matter. However, I do not complain that important and necessary changes are made to ensure that the legislation reflects the wishes of the House, but rather that this is part of a procedure which, over the past three years, has started to form a pattern.
      The Brussels package was agreed on 15 May 1979 It enabled both this Administration and the previous Administration to agree, however reluctantly, to go along with this proposed legislation. However, to conclude only three or four days before Report that it is important that the relationship to the restrictive practices law should be got right, is unfortunate.
      Committee Members will know that the whole question of the relationship between the formalisation and important heightening of the profile of the restrictive practices in international shipping to competition and to the proper interests of the shippers and consumers of shipping services, was very much to the forefront of the Committee's mind. I am sure that the Minister will agree that this is a matter of mutual concern to all hon. Members. With your permission, Mr. Deputy Speaker, I shall reserve my comments on those important matters for new clause 3 so that I do not repeat myself.
      Although I enter that strong reservation about the way in which we have been considering the adequacy or otherwise of the restrictive practices law in Britain in relation to this important Bill, I shall not oppose the clause. If, after careful scrutiny, amendments are found necessary in another place it will give us the opportunity to reconsider the matter.
      Mr. Higgins: We are entitled to an explanation as to why the new clause appeared suddenly at this stage. We understand the point that the Minister made about the previous clause in relation to proceedings in Committee,

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      but the relationship of the Bill to the Restrictive Trade Practices Act 1976 and generally to monopolies legislation must have been considered in the greatest detail over many years. We really should have had the clause earlier.
      None the less, will the Minister clarify two points? I understood him to say that some of the practices would be registrable with the Registrar of Restrictive Trade Practices despite the clause, though not enforceable. Will he say whether that is so and what practices he has in mind?
      Secondly, the Minister said that if a conference went beyond the strict confines of the exclusions from registration and enforceability that are granted by the clause, the full weight of earlier restrictive trade practices legislation would apply. I am not clear what restrictive trade practices he has in mind. Will he give an example, falling within the circumstances that he has described, of a conference practice going beyond the exclusions granted under the new clause which would bring upon it the impact of the existing restrictive trade practices legislation?
      Mr. Ginsburg: I rise only briefly to associate myself with the comments that have been made by the hon. Member for Batley and Morley (Mr. Woolmer). It is difficult for the House to form a considered view of new clause 2. If one were minded to be obstructive—and one is not—it would be easy to ask the Minister what discussions he has had with the Law Officers and why a Law Officer is not here to brief hon. Members on the problem.
      I content myself with leaving the Minister with two questions, which, if he does not wish to answer now, he might ensure are dealt with in another place. Apart from the problem of the Restrictive Trade Practices Act may I ask whether monopolies legislation applies in such agreements? I am literally thinking aloud. It could be that the exemption that he has given is not sufficiently widely drawn.
      I put my next question in general terms, because it can perhaps be discussed later. Although the clause appears to deal with the problem of the British end of the conference, what is the position of a foreign carrier if he finds himself, unlike his British counterpart, in breach of the Restrictive Trade Practices Act 1976?
      With those comments, I am prepared to recommend that we accept the clause.
      Mr. Michael Shersby: I endorse the remarks of my right hon. Friend the Member for Worthing (Mr. Higgins), and the hon. Members for Batley and Morley (Mr. Woolmer) and Dewsbury (Mr. Ginsburg). This morning we are considering an important new clause of great complexity which hon. Members have had only four days to digest. The House has this week considered not only the Falkland Islands crisis, but many hon. Members, myself included, have spent two nights considering the complexities of the Northern Ireland Bill. Due to our assiduous attention to that measure, it has proved difficult to absorb the mind-boggling complexities of the clause.
      As the hon. Member for Batley and Morley pointed out, that is partly due to the procedures of the House. However, I agree with my right hon. Friend the Member for Worthing that it is extraordinary that after years of consideration the House should be given four days' notice
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      to accept a new clause that has such profound implications. It is not good enough to rely simply on our colleagues in the other place to pick up all the problems that may arise. It is not good enough to hope that they will be dealt with in the other place. Once the Bill leaves this House, our control is greatly diminished, no matter what communications we may have with the other place.
      10 am
      I greatly regret that it has been necessary to deal with such a complex matter in this way. The Bill's ramifications have been considered, and not only in Committee, for many months. During that time, consultations took place between the Department of Trade and interested parties representing a wide spectrum of interests in the City. During that consultative period we did not have any opportunity to consider such extremely important legal matters. Therefore, it is right to register our protest this morning. After all, we may be considering one of the most extraordinary measures for several years. Hon. Members on both sides of the House have expressed considerable reservations about it. Although I pay great tribute to the way in which my hon. Friend the Minister dealt with these matters in Committee and elsewhere, I am sure that he realises that we are concerned that we are being bounced into nodding through a difficult and complex new clause. Therefore, I share the feelings that have been expressed by other hon. Members. We are entitled to a fuller explanation than we have received.
      Mr. Sproat: I shall begin by dealing with a point that was raised with the hon. Member for Batley and Morley (Mr. Woolmer), and which has been referred to by other hon. Members, about the procedure in such matters. I am not so long departed from the Back Benches, or so recently arrived on the Front Bench, as to have forgotten the intense irritation felt by Back Benchers about the suddenness with which a new clause can be presented to the House. I agree that it is unsatisfactory to introduce it at such short notice. It is also unsatisfactory that the House should work by suddenly telling hon. Members that a measure must be debated, perhaps two weeks ahead of time, and that everyone should run round saying that a measure must be brought before the House because it is our only chance.
      My right hon. Friend the Member for Worthing (Mr. Higgins) mentioned giving a rocket to officials. I do not intend to pursue that advice in great detail, but I shall discover why it proved necessary to introduce this measure at such a late stage, without more warning. However, the general reason is that Committee stages bring out new points. Rightly or wrongly, the Government thought that the consultations had made matters clear. In Committee, it became obvious that they were not clear. In response to my right hon. Friend's first point, I should point out that if there were restrictions that did not relate to codist trade or international sea transport services, they would be registrable under the 1976 Act. He asked for a specific example of the sort of thing that I had in mind. Under the order, matters are tightly drawn to the precise supply of international sea transport services. If two parties were, for example, to go beyond that and to start placing restrictions on the secretarial services that they should use, or on those who should clean the vessels, and so on, they would be in breach, and would fall foul of the restrictive practices. That is the type of thing that might apply and vitiate the whole agreement.
      Mr. Higgins: Would a restriction that said that members of a liner conference should only use a particular port be registrable?
      Mr. Sproat: I think not, but I shall check. I think that that would apply directly to the provision of international sea transport services. However, I shall check and let my right hon. Friend know the answer.
      The hon. Member for Dewsbury (Mr. Ginsburg) asked whether foreign carriers could be included. If they are members of a conference, the answer is "Yes". I accept the point made by my hon. Friend the Member for Uxbridge (Mr. Shersby). Being fairly new to the job, I am not sure whether all Governments find that they cannot get out of such a situation or whether the Department was at fault in not seeing the problems earlier and letting the House know. However, I understand the strength of his feeling.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 3

      SELF POLICING (ARTICLE 5)
      'Each Conference shall lodge copies of its list of practices specified in Article 5 of the Code with the Office of the Director General of Fair Trading and any amendments to it and no conference which has not done this shall be entitled to any rights or privileges under this Act or the Code.'—[Mr. Higgins.]
      Brought up, and read the First time.
      Mr. Higgins: I beg to move, That the clause be read a Second time.
      There has been considerable concern about the provisions in the Bill and the corresponding articles in the code that refer to self-policing by conferences. The extent to which self-policing is likely to be effective is open to doubt. The hon. Member for Hackney, Central (Mr. Davis), with whom I used to debate trade matters, has always taken the view that there is more to be said for self-regulation than legislation when it comes to controlling commercial organisations. However, it is important that the self-policing or self-regulation should be effective. One can judge that only if it is conducted in a comparatively open way.
      Therefore, I thought it right to table the new clause, because under article 5 of the code—headed "Self-Policing"—the conference will have to
      "adopt and keep up to date an illustrative list, which shall be as comprehensive as possible, of practices which are regarded as malpractices and/or breaches of the conference agreement".
      If we are to conduct such matters in a reasonably open way, there is a case for making the list more generally available. Therefore, I suggest that each conference should lodge copies of the list required under article 5 with the Office of the Director General of Fair Trading and that it should be kept up to date. I suggest that unless that is done no benefit should accrue under the Bill or code.
      Since these are likely to be restrictive practices of one sort or another—where there is a public interest in how they are being conducted—there is a strong case for knowing what the situation is, even though such matters relate to the international carriage of goods by sea. Therefore, I hope that I can persuade the Minister to accept the new clause. Perhaps for the first time in the context of shipping and the existing restrictive practices legislation there should be some scrutiny by the Director General and others.
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      My hon. Friend mentioned in the context of new clause 1 that some practices might be registrable though not enforceable. The lists to which I referred might well come within that category. I hope, therefore, that my right hon. Friend will accept the new clause.
      Mr. Woolmer: There is a wider problem here to which the right hon. Member for Worthing (Mr. Higgins) rightly drew attention. But, as I said in Committee, the problem goes beyond article 5 of the code. It also concerns articles 6 and 9. If the matter were put to a vote or if the Minister were searching for the feeling of the House, I should certainly give our support to the new clause but I believe that it is by no means adequate in its coverage and not necessarily the best way of tackling the problem.
      Articles 6 and 9 make it clear that not only is there a question of practices that are regarded as malpractices or breaches of the agreement but that conference arrangements and agreements on pooling, berthing, sailing rights, tariffs, regulations and related conditions are also properly matters of public concern.
      I do not completely share the view of those who believe that we can endorse private actions in civil courts as the best way of enforcing and reinforcing the public interest. The code and its method of implementation are not satisfactory in the protection of wider interests. After all, the purpose of the Bill is to enable this country to join an international agreement that enables shipping lines to enter into internationally recognised cartels that share out and control certain shipping trade operations.
      Although conferences have existed for a long time, there can be no doubt that this is a significant heightening of that system, but:, more importantly, it brings the system within a framework where the intent behind it is consciously and deliberately to enable certain nations to operate shipping lines that would almost certainly not be in operation were it not for the protection afforded by the code. The reason why the Bill causes concern and some unhappiness on both sides of the House is that its purpose inevitably raises worries about the effects that it may have on wider interests.
      For that reason, I say today, as I said in Committee, that these proposals will cause increasing anxiety as the code comes into operation. After the first year or two of operation of the code, it will be important to examine with care whether there is a better way of protecting those wider interests. I am happy to support the new clause today because it goes in the right direction. However, the coverage does not satisfy me and the instrument that is chosen in the new clause is not the best way of going about the matter.
      10.15 am
      Will the Minister assure the House that he will not close his mind to improving the openness and oversight of the operation of the code? That would reassure me, because in Committee he showed himself to be willing to examine points made and to respond to our anxiety. We shall ewer a minefield when the code comes into operation and it would be better for the Minister to consider carefully how the code is operating, not after five years but after one to two years, to see whether the public interest is being properly protected.
      Article 52 of the code makes it clear that there will be an international review of the working of the convention after five years. I stressed in Committee that it is important that the Government should lay before the House their

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      assessment of the working of the code before the international review. It is important that the public and the House should realise that nothing is built into the Bill to ensure either a close scrutiny by outside bodies of the public interest or a review process by Parliament. I am sure that Parliament will wish to have a strengthened review and scrutiny process.
      I welcomed the Minister's prompt and unreserved commitment to provide the House with the Government's review in the four to five-year review process. I hope that he will respond to the reservations expressed on both sides of the House and will assure us that, whether or not he accepts this way forward, he will examine during the next two years whether the public interest is being properly protected or whether there is a better way of achieving that than has been suggested so far.
      Mr. Shersby: I support the new clause, which is an important and valuable addition to the Bill. I hope that my hon. Friend the Minister can accept it. It is important to remind ourselves and those who study such matters about the nature of conferences, their lack of accountability and their need to be more transparent. We must also remind ourselves of the way in which conferences are viewed internationally. Unless we do so, today's procedure might seem rather obscure to those who study our words and who take an interest in these important matters.
      I remind the House of some considerations that I attempted to put forward in Committee that are highly relevant to what we are now considering. On the question of liner conferences and why we are attempting to improve arrangements—the self-policing described by my right hon. Friend the Member for Worthing (Mr. Higgins)—may I quote a passage from Vol. 13 of the "British Shipping Laws" on liner conferences. It states:
      "Considering the very long history of shipping, conferences are of relatively recent development, originating a hundred years ago. The conference works on the close collaboration of all shipowners who are members of this well-knit private international organisation, which often resorts to pooling and rationalisation of services and, to keep its monopolistic position, works on deferred rebates and dual rates, which are unknown to the tramp world, remaining a special feature of the conference system. Thus a conference, though a non-governmental body comprising private shipping companies, is nevertheless negotiating with shippers as a strong unbending monopoly, and also with sovereign States, assuming a footing of equality. The tramps are in no such position, and in fact no other mode or method of sea transport has been able to work up its way to a position of vantage in relation to the shipper and his State to the same extent as has the conference machinery in the shipping world of today."
      That is a good quotation because it sets the debate in context. In Committee, the hon. Member for Batley and Morley (Mr. Woolmer) said:
      "At the heart of the matter is the legitimisation of liner conferences—price fixing and market sharing in the shipping industry. Those may be necessary or, at least, supportable, but it makes it even more important to maintain proper oversight over their operation. I note the relevant parts of the code, but an outsider looking at the code may wonder who will watch over and assess the wider consumer national and international interest, and how that is to be done."—[Official Report, Second Reading Committee, 28 April 1982, c. 11–12.]
      I am therefore pleased that this morning the hon. Member for Batley and Morley has been as good as his word and has supported the new clause.
      We are trying to improve the arrangements for self-policing and to ensure that conferences carry out their
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      obligations under the code because we cannot amend the code itself. That is one of the extraordinary features of the Bill. New clause 3 provides that
      "no conference … shall be entitled to any rights or privileges"
      unless it has lodged a copy of its list of practices.
      Conferences therefore must be seen to be accountable organisations. British legislation should reflect the highest standards of accountability and professionalism, which has always been part of our commercial standing. This can be achieved only if my hon. Friend feels in his wisdom that he is able to accept the new clause. I hope that he will do so. He is a generous man and, quite apart from his generosity, he has paid close attention to the arguments that have been deployed in Committee and elsewhere. Even if there are difficulties about the wording of the new clause or, to use the time-honoured words of all Ministers, it is deficient in its drafting in some way, I hope that he will nevertheless give an assurance to the House that if he cannot accept it now he will cause it to be accepted in another form in another place. Unless the arrangements for self-policing can be improved there will be the greatest concern outside the House among all those who take a professional interest in these matters.
      Mr. Sproat: I am always susceptible to flattery, particularly when it is expressed so eloquently. However, I must say that for once the springs of generosity have run dry. I shall explain my reasons in a moment. I shall deal generally with the important matter raised by my right hon. Friend the Member for Worthing (Mr. Higgins) in the new clause and then I shall deal with some of the specific points which arose out of discussion of the new clause.
      Article 5 of the code deals with the elimination of malpractices and/or breaches of the conference agreement which might undermine a conference's basis of operations. Article 5 certainly requires a conference to draw up a comprehensive and illustrative list of practices which might be regarded as malpractices and/or breaches of the conference agreement. But, more important, it requires effective self-policing machinery to be provided. It is that self-policing machinery that will be of greatest value because it gives rise to a number of enforceable rights and duties.
      Under paragraph 1(a) of article 5 penalties levied for malpractice might be required to be reasonably commensurate with the seriousness of the offence. Under paragraph 1(b) a review of action or inaction on a complaint may be demanded. Paragraph 1(c) will also enable the Secretary of State to obtain reports on action taken in connection with complaints about malpractices.
      The duties imposed by article 5 on the conference and its members and the right of the Secretary of State to require the conference's report on action taken in relation to complaints represents a reasonable balance. The new clause focuses on only one aspect of the problem and does not, in my view, go to the heart of the matter. The heart of the matter is likely to be the way in which complaints are handled.
      Mr. Higgins: My hon. Friend says that the heart of the matter is likely to be the way in which complaints are handled. Paragraph 1(b) refers to complaints by persons or bodies unconnected with any of the shipping lines. How are they to know what is in the list if it is not generally available?
      Mr. Sproat: They will know if they believe that they have grounds for such complaint because they will

      541
      consider themselves hard done by arising out of the agreement that they made with the conference or conferences. There is no understanding on my part that the list will be a secret document. I am simply resisting any suggestion that it be lodged in the way that new clause 3 seeks it to be lodged. Under article 6, "Conference Agreements", the documents are to be published. There is no question here of people trying to keep the malpractices secret.
      Mr. Higgins: With great respect to my hon. Friend, article 6 does not state that they are to be published. If that were so, I would be reassured. Article 6 requires that the list, the various provisions and so on
      "shall be made available on request to the appropriate authorities of the countries whose trade is served by the conference and of the countries whose shipping lines are members of the conference."
      It does not say anything about their being made available to countries which are not signatories to the code or the conference, nor does it say anything about their being made available to other people who are not members of the conference and are not members of the Government. If my hon. Friend can give a clear and categoric assurance that all these matters can be published, I shall be considerably reassured. That was what he said, but it is not true.
      Mr. Sproat: I admit that I did use the word "published". I was subconsciously reverting to remarks that I made in Committee. I said then that if the Secretary of State were to request the documents there would be no reason why there should not then be put in the Library of the House and made public. I was simply picking up in shorthand form the suggestion that I made in Committee and which I would be happy to carry out.
      It is right that we are talking only about documents that relate to the country that is involved in the trade. That is a fair enough restriction under article 6.
      Mr. Higgins: I am sorry to keep interrupting my hon. Friend, but on Report there is no other way of getting to the bottom of the matter. It is also difficult for us to ascertain what is going through the Minister's mind if he has not referred to it in his speech. In the light of what he said in Committee, can he give a categoric assurance that the list will be published and will be available so that those who might wish to make complaints will be able to do so?
      Mr. Sproat: At this moment, I can see no objection to these matters being put in the House of Commons Library. I shall check and find out the precise legal position, and will then let my right hon. Friend know. My intention is that nothing should be kept secret that is not commercially confidential. That would be the only restriction relating to this matter.
      Mr. Higgins: Much of this is likely to be commercially confidential in the sense that those who want to make complaints will want information while those who are making the agreements will prefer the information not to be known. If that is what is meant by "commercially confidential", it is a somewhat doubtful restriction. I am grateful to my hon. Friend for his assurance, but he should have thought this through beforehand.
      10.30 am
      Mr. Woolmer: Did the Minister's slip of the tongue reveal his aspirations? As he has said, under article 5 the appropriate authorities can get information. Article 6 provides that the information
      "shall be made available … to the appropriate authorities".
      Article 9 provides that the information
      "shall be made available … at reasonable cost".
      Will the hon. Gentleman ensure that all the information that will be available under articles 5, 6, and 9 will be made publicly available by the Government, either by tabling it in the Library or by publishing more widely? If he can give that assurance, he will go a long way to enabling others to do some policing, even if there is no formal machinery.
      Mr. Sproat: I cannot give that specific assurance. The hon. Member for Batley and Morley (Mr. Woolmer) referred to my slip of the tongue, but I should like to think that it was a true definition of the way in which these procedures should work. However, it showed my intention to be as open as possible. I cannot go any further in defining what "as open as possible" means because we have not started to operate the code. The precise ways in which it will operate the precise details which will be commercially confidential have yet to arise in practice, but it is my intention that as much information as possible should be made widely available. Clearly that cannot contravene commercial confidentially and the precise limits of what car, be laid in the Library will have to be decided by the Secretary of State of the day in the light of practice.
      It is my intention that if the Secretary of State calls for reports under article 5, or for a conference agreement under article 6, the relevant information should be made available on request to the extent that he feels proper. This matter can be left to his judgment in the light of the way in which the conference works in practice.
      The hon. Member rightly said that he raised these issues in Committee. He is much more worried about policing than the Government are. We believe that the less bureaucratic we can make the procedure the better. The more that we can rely on self-policing the better we shall like it. We are not inclined to introduce any further elements of bureaucracy into the Bill. That is why I cannot be as generous as my hon. Friend the Member for Uxbridge (Mr. Shersby) would like and why I cannot accept the new clause.
      The hon. Member for Batley and Morley and my hon. Friend the Member for Uxbridge talked rightly about the need for conferences to be transparent. I hope that they will agree that the new transparency that is provided for in articles 5 and 6 is an advance. I know that there are some who dislike the conference system, but I hope that they will agree that there has been an advance. There will have to be much more openness and discipline in effecting policing.
      Mr. Woolmer: Does the Minister recognise that the Bill will create private bureaucracies? If they were to be Government bureaucracies the public would expect the Government to be publicly accountable in the House for the way in which they conducted their side of the bureaucratic cartel arrangements. This is not a question whether the House should seek to create a bureaucracy to

      543
      supervise a procedure. A bureaucracy is being created and the question is whether it will be supervised adequately in the public interest.
      Mr. Sproat: The hon. Gentleman must distinguish between the bureaucracy created between shipping organisations, shippers and other organisations and the necessity for them to consult and recognise international mandatory conciliation procedures. That is one form of bureaucracy that arises from the Bill. It arose originally from the UNCTAD liner conference code. On the other hand, there is an absence of Government bureaucracy. I do not want to set up a Government bureaucracy. I accept that we are going a short distance down that road. Article 5 provides that the appropriate authorities—in this instance the Secretary of State—will have the right to make inquiries into the results of an inquiry into a malpractice. That is one piece of bureaucracy and I do not wish to go further than that.
      I have given the House the assurance that, within the limits of commercial confidentiality and within the limits which experience teaches us to be appropriate, I shall seek to make as open as I can the results of any inquiry into the workings of the liner code in practice. Self-policing is one bulwark against malpractice. Secondly, the Secretary of State will see reports of any inquires into malpractice. The third bulwark is that there will be an international review after five years. Preparations will have to be made for that review after four years. We are not talking about a very long time scale. If the review shows that there is a better way of conducting these procedures, we shall be open-minded about accepting it.
      The hon. Member for Batley and Morley asked me to give an assurance that the Government would not close their mind to ways of making examinations more open before the five years have passed. I give him the assurance that it is my intention to operate the code as required by the Bill and to monitor it. Our doors will always be open to the General Council of British Shipping, to the shippers and to the commodity organisations. If they say "This is not working and we want you to improve it before the United Nations five-year review takes place", we shall, of course, try to do so.
      My mind is open to ways of improving these procedures that might be open multilaterally to this Government and to suggesting to the conference ways in which self-policing could be improved. I reiterate the undertaking that I gave in Committee that the Government will lay their views before the House of Commons on the way in which the conference has been working in time for the House to make whatever input it thinks best to the Government's views which will be put before the conference.
      Mr. Ginsburg: The Minister has said that he has an open mind. Although we wish him well personally, he will not be in his present office for ever. Will he consider imposing an obligation on the Government to report in another place along the lines that he has suggested? I leave that thought with him.
      Mr. Sproat: That is an interesting thought. I hope that I shall not be in my present office for ever—
      Mr. Clinton Davis: So do I.
      Mr. Sproat: The hon. Gentleman must have spent what seemed to him an eternity in the job that is now mine. I am sure that he knows how I feel about these matters.
      I cannot give the hon. Member for Dewsbury (Mr. Ginsburg) the precise assurance that he seeks. However, if, in the other place, a suitable way of tabling an amendment was found, I dare say that the Government would look at it in a friendly and sympathetic light.
      Mr. Higgins: My hon. Friend seems to be going back on what he was saying earlier, which was reasonable and satisfactory. He said then that he would look carefully at ways in which the information in the lists could be made available to those who might wish to make a complaint, either on the request of the Government, payment of a suitable fee, or whatever. I hope that my hon. Friend is not going back on that—not in the context of the five-year review or before the five-year review, but before the Bill goes through—because, on the basis of good faith, I should be prepared to accept what he has said.
      Mr. Sproat: I did not intend to say that I would do it before the Bill reached the other place. What I do say is that I am prepared to examine ways in which the Government, or whoever happens to be in my job, can examine these matters as experience tells us how the Bill is operating. I am sorry if I have misled my right hon. Friend.
      I cannot go any further today than I have done, first, because of the constraints of commercial confidentiality, and, secondly, because of the common sense constraint that we must see how the Bill will operate. When I see how the Bill is operating, I shall look, in the most open-minded way, at how we can make most widely available such information as does not contraven common sense or commercial confidentiality. However, I do not expect to arrive at any conclusions before the Bill goes to another place, because the liner conference will not have come into practice.
      Mr. Higgins: I apologise for intervening again, because of the restraints under which we are placed. With regard to commercial confidentiality, one understands that in a narrow sense it might be necessary to impose restraints, but in the broader sense, to which I have referred, they would be unjustifiable. Be that as it may, all that we are asking of my hon. Friend is that, when the Bill gets to the other place and his Department and my noble Friend the Secretary of State have had a chance of examining the matter, they will comment on the point raised in the debate.
      That has nothing to do with how the Bill works in practice, or with seeing how it goes. We do not have to know how it works in practice. If people want to make complaints—and they are entitled to make complaints—they should be able to apply for the information that it is necessary for them to have to know whether they have a complaint. It should be made available on request.
      I see no earthly reason why my hon. Friend cannot say that my noble Friend will make a statement in the House of Lords on that point when the Bill reaches the other place. That is what I understood him to be saying clearly a few moments ago. I hope that he will not go back on it.
      Mr. Sproat: I shall not go back on that. I shall lay the onerous obligation of looking at this matter on my noble

      545
      Friend. I thought that my right hon. Friend was now asking that conclusions should be defined in the other place. We shall certainly comment on this important point when the Bill goes there.
      My hon. Friend the Member for Uxbridge listed, succinctly and fairly enough, some of his well-known objections to liner conferences as a whole. Fortunately or unfortunately, that is not the matter that we are discussing in the Bill, although it arises out of the Bill. All that we are discussing is the code and how it could be modified and applied through British law. My hon. Friend may think that liner conferences are not acceptable. However, the Bill, particularly in articles 5 and 6 of the code, makes them less objectionable in so far as it imposes more obligations on the conference.
      With those few words, I must advise my right hon. Friend that I cannot accept the new clause, and I hope that he will withdraw it.
      Question put and negatived.

    Clause 3

      MATTERS WHICH MAY BE PROVIDED FOR BY REGULATIONS
      Mr. Sproat: I beg to move amendment No. 1, in page 3, line 6, leave out from 'contract' to end of line 12 and insert:
      "and where a term is so implied—

      (a) any agreed terms which are to any extent inconsistent with that term shall to that extent be of no effect; and

      (b) without prejudice to paragraph (a), any agreed provision for the settlement of disputes arising out of the contract shall apply to disputes arising out of that term only if—

      (i) the parties to the contract have expressly agreed that that provision shall apply to such disputes; or

      (ii) the parties to the dispute in question agree that it should apply to that dispute.".

      The amemdment gives effect to the undertaking that I gave in Committee that I would meet the point raised by my hon. Friend the Member for Eastleigh (Sir D. Price) that arbitration clauses should not apply to disputes about terms implied in contracts unless the parties expressly agreed. The amendment replaces part of subsection (5) of clause 3. The subsection remains as agreed in Committee up to and including the end of paragraph (a) of the amendment.
      10.45 am
      However, subsection (b) now makes it clear that where regulations imply a term that is a mandatory provision of the code into an agreement, any arbitration clause—or similar clause for the settlement of disputes that governs the agreement—does not apply to dispute under implied terms unless the parties have expressly agreed either that such an arbitration clause is to apply to such disputes or, after a dispute has arisen, the parties agree that the clause should apply to the dispute in question.
      There is now no question of regulations requiring that an arbitration clause should apply to implied terms. It is for the parties to decide.
      This was the clear view of my hon. Friend the Member for Eastleigh. It was the clear view of the General Council of British Shipping, and I am happy to have tabled this amendment, which is I hope is all that they require.
      Amendment agreed to.
      Mr. Higgins: I beg to move amendment No. 2, in page 3, line 31, leave out from 'State' to end of line 33 and insert
      546
      'for the purposes of Article 11 (consultation machinery) to add to or delete persons or organisations specified in Schedule (Persons or Organisations to be consulted under Article 11, Paragraph 1 of the Code) to this Act.'
      Mr. Deputy Speaker: With this amendment it will be convenient to take the new schedule—
      'Persons or Organisations to be consulted under Article 11 Paragraph 1 of the Code.
      (1) The British Federation of Commodity Associations.'..
      Mr. Higgins: In Committee, the view was expressed that the extent to which certain important matters were to be defined by regulation rather than be specified in the Bill was unsatisfactory. There were two main areas where we thought that the Government ought by now to have been able to make up their mind. One was the question of the definition of the national line, which is the subject of a later amendment on the Order Paper, and the other is this amendment, which is related to the definition of what is a shippers' organisation.
      If we refer to the Bill we find that it is possible for the Government to carry out consultations with particular bodies and they will set out what the conditions are for qualifications as a shippers' organisation. That is to say, an organisation of those who are seeking to have their goods, or the goods of their clients, carried by a particular conference line. None the less, as I understand it, but perhaps the Minister can clarify the point, the exact set of decisions that are to be used to define a shippers' organisation have not yet been agreed or defined by the Government.
      As a result, there are certain organisations that feel that they are likely to be left out of any continuing consultation process under the code. That is obviously a matter of some cause for concern Therefore, I have sought in my amendment to delete the provisions that stand at the moment for imposing the conditions that would define a shipping organisation, and to adopt a technique that was used in the Companies Acts, that is, actually to specify what the organisations are, in the same way, for example, that in companies' legislation, certain accountancy bodies are specified in a separate part of the Bill. I know now that that is something of a controversy in another part of my hon. Friend's Department, so I shall not stray into those areas. I merely point out that the technique that I am using has an honourable and effective precedent. That being so, in the schedule I have specified only one organisation that is concerned with commodities. It is important that it should be included in the list. The amendment gives the Minister power to add as may shippers' organisations as he wishes. The General Council of British Shipping, for instance, may wish to be included. My amendment does not inhibit my hon. Friend from adding to the list. I have not had time to consult other organisations so I thought it improper to include them.
      One could specify recognised shippers' organisations for consultation purposes. The Minister may say that that will result in a clumsy or lengthy list, but the consultations will be important. Most of them will be with trade organisations rather than with individual companies and it is, therefore, important that everyone should know whether they are entitled to be consulted under the code.
      Whatever happens, our legislation can affect only the United Kingdom position. Unfortunately, or perhaps fortunately, we cannot ensure that other Governments consult shippers' organisations in Britain, even when they

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      are engaged in trade with other countries. We should clarify the United Kingdom position and that is what I seek to do.
      Whether or not my hon. Friend is able to accept the amendment and new schedule, perhaps he can give an assurance that the British Federation of Commodity Associations will be among those organisations entitled to be consulted and that it will be consulted both in advance of the code coming into operation and on the terms of the code. That would be helpful. I understand that some wider organisations, such as the General Council British Shipping, do not believe that they are qualified to represent some of the more specific organisations that have an interest as shippers and will be radically affected by the code.
      Mr. Shersby: I support the amendment moved by my right hon. Friend the Member for Worthing (Mr. Higgins). Instead of leaving consultation arrangements to be designated in regulations by the Secretary of State under clause 3, my right hon. Friend proposes to make a start by designating them now in a schedule. The name of one important organisation that should be consulted is included. That organisation's cargoes are carried by liner conferences world-wide. The Secretary of State is left free to add other organisations and persons to the list.
      I hope that if the Minister accepts the amendment he will cause additions to be tabled to the schedule in another place, so that everyone knows what is intended, instead of leaving the important matter of consultation to be dealt with by subsequent regulations. The amendment makes a marked improvement to the Bill. Organisations outside the House which have a tremendous interest in these matters, will be reassured if they are included in the list. The Minister has been deeply involved with such organisations in the past few months and valuable consultations have taken place.
      The events of the past few months have done a great deal to improve relations between his Department and the associations. Both his Department and the associations now understand each other's views better. Some of the justifiable complaints to the effect that people have not been consulted have been settled as a result. The amendment is important if for no other reason than that it demonstrates to all those concerned that the legislation is intended to enshrine proper consultation processes. The schedule is not complete. I should like it to be completed by amendments in another place. I hope that the Minister will accept the amendment in the spirit in which it is moved, as a genuine attempt to improve the consultation arrangements provided for in the Bill.
      Mr. Sproat: Before I deal with the precise amendments I must tell my hon. Friend the Member for Uxbridge (Mr. Shersby) how glad I was to hear that he felt that there is a better understanding between the commodity associations and the Department of Trade. That will be a great benefit, whatever other benefits arise. I hope that we can continue to build on that good relationship and, at another time, I should be interested to discuss with my hon. Friend how we can find practical ways of building, consolidating and maintaining that good relationship.
      A shippers' organisation is defined in chapter I of the code as a
      548
      "body which promotes, represents and protects the interests of shippers".
      The code leaves it open to national authorities to recognise shippers' organisations and permits them to specify conditions for such recognition.
      The Department will, of course, be consulting interested parties on what the conditions should be. The conditions themselves will be specified in regulations made under clause 2(1). Interested parties will wish to consider a number of important matters. Shippers' organisations necessarily will incur the major responsibility for carrying out consultation and conciliation procedures on behalf of shippers. Such organisations may be under an implied duty to their members to carry out such consultations properly.
      The willingness of a body to be recognised is an important factor. We wish to avoid undue proliferation of bodies to be recognised as shippers' organisations, but we see a role for the smaller specialist or regional shippers' organisation in addition, of course, to the British Shippers Council. One possible criterion for recognition as a shippers' organisation might be that the body represents shippers that carry a certain percentage, for example, of conference trade on a particular route.
      Given the further consultations required in this complex area, I do not think that it would be right at this stage to single out any one organisation for recognition, but I can, of course, give the assurance for which my right hon. Friend the Member for Worthing asked. In drawing up the regulations, the British Federation of Commodity Associations, like all other interested parties, will be properly consulted. Therefore, although I cannot accept the amendment, I hope that my right hon. Friend will accept that I accept the spirit of what he is proposing—that the commodity associations should be properly consulted. They will be properly consulted. What they say in the consultations will be fully taken into account in the regulations that we shall later draft.
      Mr. Higgins: In view of that assurance that the commodity associations will be properly consulted in relation to the code as a whole, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 5

      PROCEEDINGS BY OR AGAINST UNINCORPORATED CONFERENCES
      Amendments made: No. 3, in page 4, line 11, after 'by', insert 'reference to'.
      No. 4, in page 4, line 20, leave out 'the provisions of section 9' and insert
      section (Liability of members of conference to be in proportion to their responsibility) (5)'.
      No. 5, in page 4, line 25, leave out subsection (5).—[Mr. Sproat.]

    Clause 8
      RECOGNITION AND ENFORCEMENT OF RECOMMENDATIONS, ETC. OF CONCILIATORS
      Amendment made: No. 6, in page 7, line 12, after 'judgment', insert 'or decree'.
    Clause 9
      ENFORCEMENT OF JUDGMENTS ETC. AGAINST CONFERENCE MEMBERS
      Amendment made: No. 7, in page 7, line 22, leave out Clause 9.—[Mr. Sproat.]
    Clause 12

      REGULATIONS AND ORDERS: CONSULTATION AND PARLIAMENTARY CONTROL
      Mr. Sproat: I beg to move amendment No. 8, in page 9, leave out lines 19 to 25 and insert—

      '(2) The following shall be subject to affirmative resolution—

      (a) regulations under section 2(1) made before the expiry of the period of three months beginning with the date on which this Act comes into force;

      (b) any Order in Council under section 11.

      (3) The following shall be subject to negative resolution—

      (a) regulations under section 2(1) made after the expiry of the period mentioned in subsection (2)(a);

      (b) any regulations under section 4.

      (4) In subsection (2) "subject to affirmative resolution" means that the instrument in question shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament; and in subsection (3) "subject to negative resolution" means that the instrument in question shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.
      Mr. Deputy Speaker: With this we shall discuss amendment (a) to the proposed amendment, in line 1, at end insert—
      '(a) any regulation, whenever made defining a national shipping line'.
      Mr. Sproat: The amendment seeks to meet some of the concerns properly and understandably expressed by hon. Members in Committee to the effect that clause 12 provides insufficient opportunity for the House to scrutinise regulations. As I explained then, I have sympathy with those views, but I made it clear that a balance had to be struck between scrutinising important issues and avoiding affirmative procedures for issues of lesser significance and, in some cases, of minor significance. The amendment seeks to strike a balance between those two factors. The change introduced by the amendment is that regulations made under section 2(1) within three months of the Act coming into force shall be subject to affirmative resolution. That is an important change, as previously the regulations were not so subject.
      11 am
      Three important factors have led to the amendment. First, as provided by clause 14(2) the Bill will be enacted on a day to be appointed by the Secretary of State. Secondly, clause 2(1) empowers the Secretary of State to make regulations that will give effect in the United Kingdom to the key provisions of the code. Thirdly, the Secretary of State is required by clause 12(1) to consult such persons as he considers will be affected before making any regulation under clause 2(1). We shall ensure that the programme of consultations is carried through in good time so that the main regulations that we intend to make under clause 2(1) are laid within three months of the
      550
      Bill being enacted, and are subject to affirmative resolution. I hope that represents a satisfactory assurance that the issues of major importance to be covered by the regulations will be subject to adequate scrutiny by the House.
      Mr. Higgins: We have said some fairly harsh things about the Government's position on the Bill and I am glad to have the opportunity to welcome the amendment tabled by my hon. Friend the Under-Secretary of State.
      We felt that it would have been better if some of the important points to be covered by regulation had been dealt with in the Bill. One of the points that has given rise to considerable controversy was the definition of a national line. We were worried that, despite all the consultations that have taken place, it was possible that the definition of a national line eventually arrived at might not be satisfactory to some of the other interests involved.
      If the matter were to proceed by negative resolution we might find that the House had no opportunity to debate it. Many regulations subject to negative resolution never come forward for debate, whereas those subject to affirmative resolution necessarily do so, albeit for only one and a half hours, and can be voted upon.
      The Minister seems to have met our point. I understand why the qualificaticn is made of a three-month time limit. I was unfortunately distracted for a moment during the Minister's speech, so can he confirm that the point covered by my amendment (a) is covered by his amendment? If the controversy taking place about a national line were not resolved within three months of the Bill being enacted, would the definition of a national line be subject to the negative resolution rather than an affirmative resolution? I do not suggest that there is any Machiavellian intention on the Minister's part, but if the definition arrived at was not liked by outside bodies there might be a case for making it subject to negative rather than affirmative resolution. Is my amendment necessary to cover the possibility that the national line will not be defined within three months?
      Mr. Sproat: It is technically possible that we would not have reached agreement about national shipping lines before we put forward the regulations. It is my firm intention that we shall come to such an agreement before we make any regulations and that that would be included in the first batch of regulations and would therefore be subject to the three-months procedure that is mentioned in my amendment. That is 99·9 per cent. certain. I assure my right hon. Friend the Member for Worthing (Mr. Higgins) that if by any fluke the matter were not to come within the three-months procedure I should certainly ensure that it was debated in the House under other procedures.
      Mr. Higgins: I am grateful for that undertaking. We all look forward to the Minister's promotion at some stage. He will not be in his present position for ever. It is not entirely clear that what he has said will wholly bind the Government. I am not clear why he cannot accept my amendment, which seems to be impeccably drafted and makes the position clear beyond peradventure.
      Mr. Shersby: The purpose of Government amendment No. 8 is to provide that any regulation made under clause 2(1) shall be subject to affirmative resolution within three months of the enactment of the Bill. It may take some time to obtain a satisfactory definition of a shipping line. That

      551
      is an important issue and the purpose of the amendment of my right hon. Friend the Member for Worthing (Mr. Higgins) is clear. It would ensure that the definition of a shipping line in secondary legislation was always subject to affirmative resolution. The Minister said that he clearly understood the feelings of the Committee on that point. I hope that he will accept my right hon. Friend's amendment. It would be a valuable addition to the clause.
      Mr. Woolmer: The amendment deals with procedures in the House. I welcome the Minister's willingness to respond to the Committee's feeling. It would be wrong not to thank him for that response. However, there is always a "but", and I must agree with his right hon. and hon. Friends who drew attention to national shipping lines.
      In Committee I drew the Minister's attention to the importance of the meaning of United Kingdom flight registration and national shipping lines to the trade unions. I asked him whether they were participating in the present consultations. We were surprised, pleasantly or otherwise, on the day of the last sitting to read a letter in the Financial Times from an outside source that assured us that there was virtual agreement on everything except the issue of national shipping lines. We were encouraged to feel that the Minister was almost at the end of a long tunnel. When the Minister responded to me, he stated:
      "The unions are also being consulted about this, and they will also be consulted about the regulations."—[Official Report, Standing Committee E, 13 May 1982; c. 68.]
      Hon. Members may remember that, as it turned out, the regulations were virtually already agreed. My understanding is—I may be doing an injustice to someone—that the unions have not been consulted at all about the matter. They were certainly not party to the current consultations. The Minister cannot know in detail everything that is happening, but will he see whether the consultations on the national shipping line issue are going ahead with the trade unions?
      Let me explain why I give particular attention to the national shipping line issue. People tend to think that a United Kingdom ship is a United Kingdom ship. In the code it is sensibly envisaged that a United Kingdom ship may be built outside the United Kingdom, the shipping line effectively owned outside the United Kingdom and the ship simply registered in the United Kingdom for convenience. Alternatively, a ship could be registered in Liberia but owned and controlled by the United Kingdom interests. The connections between where a ship is registered, who owns it and effectively derives the benefit from the line, who is employed on the line and who manages it may differ.
      The latest estimates that I have show that between 40 and 50 per cent. of all United Kingdom registered shipping tonnage is beneficially owned by non-United Kingdom companies. A member of the public may not realise what is actually meant by a United Kingdom shipping line. He may not realise that that can happen. We should consider whether our national shipping lines are deriving benefit on our behalf under the code.
      Over half of the United Kingdom beneficially owned shipping tonnage is owned by only six companies. I am sure that that fact is not generally appreciated either.
      On the back page of The Guardian yesterday reference was made to two container ships flying under the British
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      flag that found it convenient to continue trading with Argentina by transferring to a Liberian flag only days after the Falkland Islands hostilities had begun.
      Let me explain why, among his many other arduous duties, the Minister faces the problem of defining a national shipping line and why I support the amendment of the right hon. Member for Worthing (Mr. Higgins) to ensure that not only the initial definition of a national shipping line, but subsequent changes, should be specifically subject to affirmative resolution.
      11.15 am
      The "Pacific Charger" was stranded on its maiden voyage in May last .year. It was built in Japan. Its registered owners were Ocean Chargers Co. Ltd. of Monrovia, Liberia which was a wholly owned subsidiary of Kansai Steamship Co. Ltd. of Japan, which apparently had been incorporated in Liberia solely for the purpose of owning the ship. The ship was chartered by Ocean Chargers to Kansai for five years. Ocean Chargers was to place her at the disposal of the charterer with a full crew and to meet full crew costs. Operation of the ship was entrusted by Kansai to an offshoot of OCL, Crusader Swire Container Service Ltd. of London, with the documents being signed by agents from Japan.
      There was a further agreement under which Ocean Chargers appointed another company to be the ship's manager—Harmony Maritime Co. Inc., which had the responsibility of carrying out the function of Ocean Chargers and being obliged to perform under the time charter. Harmony Maritime apparently sublet the job of recruiting the officers and crew. The officers were engaged by Union Maritime Company Inc. and the ratings were engaged by Ocean Services Corporation Ltd. of Hong Kong. Harmony also used a totally different Japanese company as its general agent in Japan.
      When the matter came before the New Zealand court, it noted that Harmony Maritime's registered office was in Panama, that its main office was elsewhere and that it had yet another office in Tokyo. The second office was shared with one of the web of companies that I have mentioned.
      People expert in the shipping world will not be surprised by the complicated web of different national interests, national registrations and different people doing different things subject to different countries' laws. People who work in the industry—certainly the trade unions—are anxious about the way in which the web works not in their interests.
      I hope that when the Minister brings forward his definition of a national shipping line he will have reappraised the way in which flags of convenience are working. They cannot be wished away. Nor do I believe that some degree of internationalisation of shipping ownership and management and shipbuilding will not occur. But the web—often of deceit and frequently to the detriment of safety and other conditions of people working on ships—partly explains why I support the amendment that provides that the definition of national shipping line should be specifically brought forward for affirmative resolution.
      I hope that the Minister will ensure that the trade unions are carefully and fully consulted in working out a definition of a national shipping line. That has not happened so far.
      Mr. Sproat: I shall look into the allegation—if that is not too strong a word—that the hon. Member for Batley

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      and Morley (Mr. Woolmer) makes about consultations with the trade unions on definitions of national shipping lines. I understood that they were consulted. It is my intention that they should be. It would be improper if they were not given a full opportunity, equal with every other interested party, to make their views known. I shall write to the hon. Gentleman, with copies to anyone else who may be interested.
      The hon. Gentleman quoted an interesting and intricate web, to use his word, to show how international and national companies, however defined, get mixed up in the business of international shipping. It illustrated the complexity of the matter.
      Mr. Woolmer: It was the intention.
      Mr. Sproat: I am very grateful to the hon. Gentleman for giving an excellent example of the problems that make these consultations so lengthy. He underlined both the difficulty and importance of having a satisfactory definition of a national shipping line.
      Perhaps I can go even further than I did earlier. With my well-known interest in being as accurate and as fair as possible, I said that it was 99·9 per cent. certain that a definition of a national shipping line would be decided before we came to the House again. I now give a 100 per cent. guarantee that we shall get that definition before we bring any other regulations to the House. I give an unequivocal guarantee that we shall discuss the matter and that it will be subject to the affirmative resolution procedure. Assuming that I shall be a few more weeks in my present job, I hope that my right hon. Friend will accept my assurance and accordingly withdraw his amendment.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): There is no need to withdraw the amendment if the right hon. Gentleman is not pressing it.
      Mr. Higgins: It is my amendment, so I think that I am entitled to say a word about it.
      The late lain Macleod had an expression for how one should respond to the kind of assurance that I have just been given. He said that one ought not to shoot Santa Claus by then voting. That is a rather unseasonable way of putting it. My hon. Friend's assurance has been absolute and complete, and I am therefore happy not to press the amendment to the amendment.
      Amendment agreed to.

    Clause 13

      INTERPRETATION
      Amendment made: No. 9, in page 9, line 35, at end insert
      "judgment", in relation to proceedings arising out of the Code, means any judgment, decree, order, award, recommendation or determination of any description given or made in such proceedings, and references to the giving of a judgment shall be construed accordingly;'—[Mr. Sproat.]
      11.25 am
      Mr. Sproat: I beg to move, That the Bill be now read the Third time.
      As the House will know by this stage in our proceedings, this Bill is an enabling measure. It will empower the Secretary of State to make regulations to create the necessary rights and duties in domestic law to enable the United Kingdom to implement the United
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      Nations convention on a code of conduct for liner conferences. Our accession to the convention will be subject to the significant reservations that are already established in Community law and are embodied in Community Regulation No. 954/79. The code convention and the Community regulation need to be read together. Many of the code's provisions concern the relationship between shippers and shipowners and these have been generally welcomed. However, the United Kingdom and a number of other countries found other provisions of the code objectionable, and that was why the United Kingdom voted against the code when it was first drawn up. In particular both the Government and the British shipping industry concluded that British interests would be damaged if the code's cargo-sharing provisions were adopted without modification.
      The most serious problem facing British shipping was that a number of continental European countries had signed the code convention, and there was the clear prospect that the code might eventually apply generally on the Continent, Imposing serious restrictions on our shipping lines' trading opportunities, and thus job opportunities, in the cross-trades to and from European ports. We faced this possibility whether or not we ourselves acceded to the United Nations code, by virtue of the Continental countries' intention to do so.
      It was the development of the Community policy on the code convention that was the key to reconciling the code with British national interests. The principal effect of the policy will be to ensure that the code's cargo-sharing provisions will protect the shipping of only those countries, mainly developing countries, that wish to undertake cargo-sharing.
      Most member States now have legislation corresponding to this Bill before their national Parliaments. Some will be ready to accede to the code by the end of this year, most will be able to accede by early 1983. All are obliged to make the agreed reservations when they accede.
      The Bill does not provide for the code to have the force of law in the United Kingdom; the drafting of the code makes it unsuitable for such treatment. The code contains a mixture of mandatory provisions, usually where the word "shall" is used, and recommendatory provisions, usually containing the word "should". Even apparently mandatory provisions sometimes contain so many qualifications as to make them impossible to be regarded as mandatory.
      The Department's consultative document published in August 1980 set out in some detail those code provisions that we intend by regulations to identify as mandatory and also those that we shall clarify. I am in no doubt that it was right to leave these matters to subordinate legislation. These questions are extremely complex and interested parties, whom the Secretary of State will be obliged to consult before making Regulations, will wish to consider these issues again in great detail. As I have explained, our intention is to carry out these consultations in good time so that the main regulations that we shall make under section 2(1) are laid within three months of the day on which the Act comes into force and are therefore subject to affirmative resolution. I would envisage regulations being made in the latter part of this year so that we can stay in step with those of our European Community partners who are also pressing ahead with their own legislation.

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      Certainly, it remains important to us to be able to accede to the code by the time the code comes into effect, which seems likely to be some time in the first half of 1983.
      It is to be hoped that when the code becomes operative it will bring to an end a protracted source of uncertainty in the world of liner shipping, and on terms which, while no one could pretend they were designed expressly to advance British interests, give us reasons for some satisfaction that we have been able to avert serious threats that were apprehended by our industry at an earlier stage. Moreover, in a world where countries are divided in their views on the wisdom of protecting their shipping industries, and have the ability to do so, whether or not their trading partners agree, an internationally agreed code, laying down an internationally agreed trading regime, is less likely to lead to international friction than a variety of conflicting unilateral national protectionist measures, even when it cannot give every country, or perhaps even any country, 100 per cent. of what it would like.
      Having made those few comprehensive remarks which spring out of what we have been discussing over the past weeks, it is perhaps appropriate for me to say two sentences—and I mean two sentences—about the role of our merchant fleet in the Falklands. It has for centuries been the role of the Merchant Service to support the Royal Navy in times of crisis. There is a long and distinguished record of that support, and we are now seeing in the Falklands a further dramatic example of the skilful and brave way in which the Merchant Service fulfils that historic role. I am sure that the whole House welcomes this opportunity to pay that tribute.
      I commend the Bill to the House.
      11.29 am
      Mr. Woolmer: Before I turn to this important Bill on international shipping trade agreements, on the day when the QE2 has returned to our shores and when the Minister has made a most welcome statement on the role of the Merchant Navy in the Falkland Islands, I should like on behalf of the Opposition to pay a sincere and deep tribute to the services of the Merchant Navy and to the merchant seamen in the South Atlantic. I paid tribute to the merchant fleet and the seamen on 28 April, when the Bill was in Committee. I said then that the difficult operations in the South Atlantic underline the extreme importance of having a strong merchant shipping fleet. Since I first praised the bravery and dedication to service of our merchant seamen, events have surely strengthened the justice of that praise and assessment.
      A large number of merchant vessels have been involved in the South Atlantic. The exact number of merchant seamen who are involved is not known, but it must be between 3,000 and 4,000. It is often forgotten that civilian merchant seamen crew the Royal fleet auxiliary ships, and it was with a special and deep concern that we heard the news a few days ago, on which we await further information, of the attacks on Tuesday on the "Sir Galahad" and the "Sir Tristram". Our sympathy and understanding go out to those who have been bereaved of loved ones in the most recent action and in the attack on the "Atlantic Conveyor". On behalf of the Opposition, I associate myself wholeheartedly with the views expressed by the Minister.
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      This Bill, when passed, will enable the United Kingdom to join in an international agreement on the sharing out of shipping services in an arbitrary andunsatisfactory manner. Most hon. Members go along with the measure with considerable reluctance. They do so only because it is better to be part of an agreement between nations rather than to be left out in the cold and also because of the vital and significant derogation from the main code of the agreement that will permit the continued competitive and free access of our shipping to 75 per cent. of world sea-borne trade. That important qualification and reservation was the result of an EEC agreement promoted largely on the insistence of the Labour Government. Because of that, the Opposition do not oppose the Bill today.
      There remain four essential conditions over which we shall maintain a close watch to ensure the acceptability of the agreement in practice. First, the operation of the agreement must leave open the door to competition from non-conference lines. Secondly, it must not be taken as a signal to extend international and State cartel market-sharing in shipping beyond the liner shipping trade. Thirdly, it must not lead to high-cost inefficiency behind a wall of protection with consequential damaging effects on customers of shipping and ultimately upon consumers and workers. Fourthly, there must be the maximum openness and, in my view, Government supervision to ensure that the public interest is seen to be protected.
      This ranks as a unique Bill in my short experience of the House. I hope that we rarely see the like of it again. With those reservations and important qualifications in respect of the period ahead, we do not oppose the Bill but share the concern to ensure that the interests of British shipping, of those who use British shipping and of the workers employed by British shipping are paramount. We shall stand with the Government in making sure that the Bill, when implemented through the code, does not contravene those interests.
      11.33 am
      Mr. Higgins: I join the Front Benches in paying tribute to the magnificent work done by the Merchant Navy and its members in the Falklands conflict. All hon. Members are profoundly impressed by the skill and courage that they have shown. Those of us who have been at sea in difficult and dangerous conditions appreciate their tremendously difficult task. I also echo the points made to the effect that it is vitally important that we have a strong and adequate Merchant Marine. This has been brought out by the Falklands crisis.
      Trends over the years have not been wholly to our advantage. The fact is that our shipping industry is immensely efficient, which has meant that it has not been necessary for the Merchant Marine in this country, unlike other countries, for example, the United States, to be subsidised. We have maintained the size of our fleet on the basis of efficiency and keeping down costs. The provisions within the Bill that are likely to create a less competitive environment in which costs tend to rise and in which our share of the market is not reflected by the efficiency of our Merchant Marine, are a cause for concern.
      The Minister gave a categoric assurance in Committee that the Government were wholly opposed to the extension of the cargo-sharing arrangements into the bulk trades. I take that to mean that we shall not merely express a view at international shipping conferences but that we shall

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      actively oppose any moves to extend the cargo-sharing provisions to the bulk trades. Many hon. Members will be watching carefully to see the line taken by the Government in any such negotiations.
      There is considerable cause for concern that some of the developing countries do not stick to, or abide by, the letter of the code and that this is to the disadvantage of countries such as the United Kingdom that do abide by it. It is essential that the Government, having gone along with the provisions of the code and put forward the Bill, ensure that developing countries take a responsible line within the confines of the code.
      I viewed with some concern an article in the Financial Times on 8 June referring to the fact that the Indonesian Government have apparently decreed unilaterally that Government-owned goods shall be entirely carried in their own shipping lines. That is a worrying development. This has happened, I gather, despite the fact that provision is generally made when we extend export credit to ensure that some of the business goes to our own shipping lines.
      The United States Government have apparently already protested about this decree but the British Government and the EEC, some months later, have not positively done so. It is not good enough, if the House is to pass this type of legislation, for the Government and the EEC not to take urgent action if developing countries seek to impose unilaterally the sort of measure that the Indonesian Government have introduced, outside the provisions of the code. The Government should take positive action to protect our national interest and to ensure that goods are not carried by high-cost, inefficient lines. Matters should be kept on a competitive level. Otherwise, consumers will clearly suffer.
      The Bill, as it stands, is, in some senses, significantly better than when it was introduced. We have done quite a lot of work on it. I wish to pay tribute to the unfailing courtesy and sympathetic response of the Minister despite all the complexities. He has done a good ministerial job in answering the debates. I feel bound to say, however, that my doubts about the Bill are, if anything, even greater than at the time of Second Reading. I hope to see more improvements made in the other place. I shall, therefore, not wish to oppose the Third Reading.
      11.39 am
      Mr. Ginsburg: Reference was made in Committee to the importance of the Merchant Navy to this country and to the contribution that it was making to the Falklands campaign. It is only right that these words should have been reiterated by the Minister and other hon. Members. I should like to associate myself with them.
      The Bill is, from a party point of view, noncontroversial. I do not know whether the Minister is able to confirm that the Bill is the same to the last comma as that over which the hon. Member for Hackney, Central (Mr. Davis) presided in the Labour Administration. It has, however, been altered appreciably today by some weighty new clauses. From a parliamentary point of view, the Bill has raised considerable doubts in the minds of hon. Members as an enabling Bill that gives considerable powers to bodies unaccountable to this place. Hon. Members were justified in expressing misgivings and considering whether such a blank cheque could be issued.
      I am convinced that the Government were right to proceed with the measure because there is substantial evidence that, unlike that of the United States, which is
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      perhaps in a special position, this country's merchant shipping would have been seriously disadvantaged if we had not joined in the measure. If the measure were proceeded with internationally, as is happening, and Britain were one of the few countries that did not take it, the consequences to our shipping would be serious.
      That is not to say that we are happy with everything that has happened either in Committee or on Report. Some procedural aspects of the measure are unique and not satisfactory. The committee did its job. Although the Bill has been changed only in certain respects today, the Committee was able to find out much information which, I think hon. Members will agree, it was the duty of the Government to have conveyed to Parliament much earlier.
      We are right in paying a tribute to the Minister. He was unfailingly courteous and communicative, and wrote many letters. Nevertheless, information about accession to the treaty, who had acceded to it and who had not and what the reservations were was not known by Parliament or Committee Members until the Minister eventually came clean.
      The Minister has provided substantial information about the accession. Some of what we learnt was not exactly reassuring. There are substantial reservations about the Soviet Government, the French Government and the Indian Government. Indian trade is important to this country. I ask the Minister to consider carefully whether we are in any way disadvantaged.
      As to the future, perhaps "blank cheque" is not the right phrase, but certainly we are issuing a promissory note. The spirit of our deliberations is that considerable responsibility is laid on the Minister and whoever succeeds him to ensure that Parliament is kept informed of the way in which the wide powers under the legislation are implemented. Otherwise there are dangers that non-accountable powers could be exercised. In that spirit, I shall not wish to oppose the Third Reading of the Bill.
      11.43 am
      Mr. Michael Colvin: I support the Third Reading of the Bill. Hon. Members will be aware that I have not taken part in debates on the measure, so I should explain that my eleventh hour interest stems from my recent involvement in the activities of the Conservative parliamentary sub-committee that deals with shipping and shipbuilding affairs.
      Having read the Official Report of the debates on the Bill to date, I am truck by the well-informed remarks of hon. Members. I pay tribute to the two-man opposition on Conservative Benches in the form of my right hon. Friend the Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Uxbridge (Mr. Shersby). There is little that I can add at this late stage to what has already been said on the measure, so my contribution will be short.
      Experience with both shipping and civil aviation has shown that regulation is far from essential in international transport markets. British shipping would still be better off without it. A measure of self-regulation, for that is what the conference system is, may be required, but not a Government-imposed carve-up. Equally abhorrent to me is the idea of a system devised by the United Nations, which should have better things to do, such as preserving world peace.
      However, we live in an imperfect world. Developing countries are determined to have their slice of the cake. The UNCTAD liter code that is the subject of the Bill

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      seems to be an acceptable way of sharing out the business, particularly when the exclusion of infra-EEC trade is taken into account, so I hope that the Bill will get a Third Reading.
      However, the European Commission needs to do a little more urgent work on its sea transport competition policy. At first sight, there appear to be possible areas of inconsistency or conflict between the policy in the EEC council regulation 954/79, which was much discussed in Committee, and what is set out in document 10150/81 entitled "Competition Policy—Sea Transport", which came through my letter box earlier this week and which has recently been looked at by the Select Committee on European Legislation, &c. That Committee concluded, having taken outside evidence from bodies such as the General Council of British Shipping and the National Union of Seamen, that it should recommend that the instrument be considered further by the House. When we do that, we should bear in mind also the provisions of the Bill and regulation 954/79.
      The Bill is only an enabling measure. I am sure that there will be time to iron out the European wrinkles, perhaps before the Bill reaches another place and certainly before the Secretary of State seeks to give effect to the code.
      Hon. Members have referred to the vital role of our Merchant Navy in the Falkland Islands task force. I associate myself wholeheartedly with their praise for the heroism of our merchant seafarers who have plied, and are still plying, their business in the great waters of the South Atlantic. I also associate myself with the expressions of sympathy for the families of those who have laid down their lives in the fight for freedom.
      This fourth arm of defence, as the Merchant Navy is often called, has shown that the operation to restore the international rule of law in the Falkland Islands could not have been mounted without British merchant shipping. That is why I would not support the Bill if I thought that it would damage our shipping industry. There are enough other difficulties for shipowners to overcome. The Falkland Islands crisis, by reminding us of the importance of a strong Merchant Navy, has, in the words of last Sunday's edition of The Observer,
      "thrown the industry a life-line."
      We should now redouble our efforts to persuade Her Majesty's Government to throw that vital industry more than a life-line. I sould like to see investment incentives improved. The extra 40 per cent. tax allowance called for by the General Council of British Shipping should be reinstated, perhaps for a limited period of three years. The world recession has hit the shipping industry hard. Grain markets have slumped. The developing nations, which have created the need for the Bill, are increasing their competition and manning and operating costs continue to rocket.
      It is little wonder that our fleet declined by 18 per cent. over the five years from 1975 to 1981, while the world fleet grew by 25 per cent. Britain's fleet now represents only 4·3 per cent. of the world total as against 40 per cent. 20 years ago. Nevertheless, the British fleet still contributes £1·5 billion annually in foreign exchange to Britain's balance of payments.
      If something is not done to restore investment confidence in shipping, it has been suggested that there
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      will be a growing number of so-called flagging out deals involving the sale and leaseback of ships, to which the hon. Member for Batley and Morley (Mr.Woolmer) has just referred.
      If ship owners sell their ships to lower cost flags and charter them back at lower operating costs, problems of definition of national lines for the purpose of the UNCTAD liner code in the Bill are raised. I welcome the Minister's assurance in that regard.
      It is appropriate to be debating shipping matters as the QE2 steams triumphantly back up the Solent having earned her Falklands battle honour. There will be just as many wet eyes at Southampton as when she left, but this time they will be tears of joy.
      There is a verse in Walt Whitman's poem "Oh Captain, my Captain" which reads:
      "The ship is anchored safe and sound
      its voyage is closed and done.
      From fearful trip the victor ship
      comes in—with object won."
      It is with those words in salute of the QE2 and those who serve and are now travelling in her that I conclude my remarks and encourage the House to give the Bill a Third Reading.
      11.51 am
      Mr. Shersby: First, I should like to associate myself with the remarks from both Front Benches as to the contribution made by our merchant fleet and seamen in the Falkland Islands. I share 100 per cent. the admiration for their courage and bravery in this terrible conflict. I hope that it will serve to remind us all of the part that they have played not only in this conflict but in the Second World War.
      On Third Reading, I find myself the only opponent of this curious measure. The liner code that the Bill seeks to implement is the first movement in the symphony that is being carefully orchestrated by the UNCTAD composers of the new economic order. It might well be entitled the "Sea Symphony", because its theme is an attack on the world shipping industry as we know it.
      Advocates of the Bill deploy their arguments as if it were an aid measure for the developing countries. That could not be further from the truth, because it is not based on commercial reality. The cost to developing countries of running national shipping lines will have to be borne by the producers of their raw materials, thus lowering the revenue to the producers.
      Ian Middleton, in a recent article in the Financial Times supplement on world shipping and shipbuilding, published on 3 June 1981, said:
      "Attempts to radically restructure international shipping in keeping with the principles of the 'new economic order' are gathering pace. The elements for an international regulatory framework covering all the fundamental aspects of shipping are on the agenda of Unctad's (United Nations Conference on Trade and Development) shipping committee. However, the progress made so far disguises a hardening of attitudes on all sides."
      I wish that attitudes had hardened earlier so that the Bill, which is recognised by many people who know about shipping to be what Dr. Hermann, the legal correspondent of the Financial Times, described recently, following the first of our Standing Committee sittings, as the "worst of a bad job." The House of Commons is today debating the worst of a bad job. I do not regard it as a proud day for those who take an interest in such matters.
      That was recognised by the commodity trades in the City of London when the possible ratification of the liner

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      code was first mooted in the Department of Trade's consultative document published in the late summer of 1980. Since then, the commodity trades have deployed every reasonable argument against the code and the Bill and have cited many examples to show what the code will do to their trade. In particular, they have pointed to the threat to non-conference operators. Even now the Bill does not contain any real safeguards for non-conference operators and the traders who use their vessels.
      That is the first movement in the symphony. The second movement is UNCTAD's proposal for a code on bulk shipping. I say that because next week there is to be a conference in Geneva, and the fifth item on the agenda is a report by a group of experts on the problems of developing countries in the carriage of bulk cargoes. As my right hon. Friend the Member for Worthing (Mr. Higgins) pointed out, we have received a satisfactory assurance from the Minister that in no circumstances will the Government go down the road of a code for bulk cargoes. In Committee, the hon. Member for Batley and Morley (Mr. Woolmer) supported that line of thought. It is important that the House should make it clear today that Britain is not prepared to go down that road, despite UNCTAD's initiative to bring about what, as surely as night follows day, will be an attempt to produce just that effect.
      That is not surprising. The Secretary General of UNCTAD made it clear some time ago that a greater participation by the developing countries in the carriage of bulk cargoes is one of UNCTAD's objectives as part of the new economic order. Therefore, it will require considerable strength and determination by the Minister and his successors to resist such a move. To return to the point made by my hon. Friend the Member for Bristol, North-West (Mr. Colvin), as approximately 80 per cent. of world shipping is bulk and free from any form of regulation, any move towards a bulk code poses a real threat to our shipping and commercial interests.
      The third movement in the UNCTAD "Sea Symphony" develops the theme that was deployed in the first and second movements. It deals with flags of convenience or open registry shipping and will affect ships operating as liners or bulk carriers. UNCTAD would have us believe that ships carrying flags of convenience are old, unseaworthy, inefficient and crewed by under-paid seamen. That is not the case. Many vessels operating under flags of convenience are models of good design, efficiency and fair employment. Moreover, they provide a free, flexible and attractive development of the world shipping fleet. The removal of that facility would greatly damage our commercial interests.
      We must listen to the whole symphony—one movement leading us on to the next. Ratification of the liner code will encourage integrity to achieve some form of regulation in the bulk trade, at the same time tapping out the tune of flags of convenience. The symphony has begun andante, but it will progress to molto vivace.
      I see the liner code as unnecessary and unworkable, and a forerunner to other impositions on world shipping. Therefore, I cannot support the Bill. I believe that it is one of the most curious measures to be enacted in this Parliament.
      Like many hon. Members, I am often asked at constituency meetings whether there are times when I disagree with my party. When asked "Are there times when, as a man of principle, you are prepared to show your
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      determination by voting against measures with which you fundamentally disagree?", I have always replied "Yes, of course. I am your man and a man of principle". So I have been throughout the passage of the Bill. I voted against its provisions in Committee, because the Bill is fundamentally wrong. In years to come, my belief will be justified.
      I am only sorry that I do not face the assembled ranks of the Opposition parties on those empty green Benches. Opposition Members and other absent hon. Members might have been willing to join me in torpedoing the Bill and sending it to the watery grave that it so richly deserves. Unfortunately, it is a Friday and the Opposition parties, in their wisdom, have decided to support the Bill. Therefore, there is not much point in trying to drive that final nail into the coffin. I stand here as the opponent of the Bill. Be it known that the hon. Member for Uxbridge (Mr. Shersby) did not support it. I only hope that my words in Committee and in the House will not come true, but I greatly fear that, as the years go by, they will.
      12.1 pm
      Mr. Sproat: By leave of the House, I should like to make a few comments.
      The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): Very few.
      Mr. Sproat: My hon. Friend the Under-Secretary of State is keen to get on with Foreign Office matters.
      I begin by giving an unsolicited testimonial to my hen. Friend the Member for Uxbridge (Mr. Shersby) that he can wave at his constituents next time they ask him whether he ever opposes a Government measure. The answer is that he does and that he has shown great principle in so doing. I am grateful to him, and the whole House should be grateful to him and to my right hon. Friend the Member for Worthing (Mr. Higgins), for having raised many objections to the Bill and for having thus brought about improvements. Certainly my hon. Friend the Member for Uxbridge has made his opposition clear throughout. It has enabled us to discuss the Bill in greater detail and perhaps to understand objections put, in particular, by the commodity assoc ations. His objections have been valuable to all of us.
      I shall deal swiftly and in order with some of the points raised. The hon. Member for Batley and Morley (Mr. Woolmer) gave his general approval to the Bill as making the best of a bad job. He said that the principle should not be extended to the bulk trades, and we agree with him 100 per cent. He said that there must be competition to liner conferences, and we agree 100 per cent. He said that we must protect United Kingdom interests, and we agree 100 per cent. Although we all agree that in a perfect world this is not the Bill that we should have liked to introduce, I am grateful for the hon. Gentleman's constructive criticism and support throughout the Bill's passage.
      My right hon. Friend the Member for Worthing has the unsolicited testimonial of having put me through the most gruelling time as a result of his opposition to the Government's proposals. That is an extremely important part of our parliamentary procedures. On Third Reading he mentioned the importance of the Merchant Marine, which is directly relevant to the Bill. Although the importance of the Merchant Marine was recognised before, the events in the Falkland Islands mean that the

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      Government will have to look again at the future of the Merchant Marine and its role in support of the Royal Navy.
      My right hon. Friend asked whether, in addition to making general remarks about not extending the principle to the bulk trades, we would actively ensure that that did not happen. The answer is "Yes." This very week I have been engaged in shipping discussions with my colleagues abroad on that matter. I made it clear that we must now prepare our ground to ensure that that principle does not extend to the bulk trades.
      My right hon. Friend mentioned Indonesia. There is no compatibility with the liner conference code. The Indonesians have signed that code. The two actions are incompatible. We shall certainly point that out to the Indonesians and will try to persuade them that they cannot act in that way. The existence of the code, with its recommendation for a 40:40:20 split will make it easier for us to explain to them that they cannot proceed along the road of 100 per cent. of their own goods and vessels.
      I thank the hon. Member for Dewsbury (Mr. Ginsburg) for his constructive support throughout the Bill and for drawing out of me—completely willingly—all those arcane facts about who had signed and why the Bulgarians had objected to certain parts of the code. Indeed, that remains something of a mystery to me. Nevertheless Romania and Czechoslovakia entered interesting reservations along a rather capitalist line. They seemed to say that there should be a great deal of competition for the liner conferences. I am all for that and am glad of their support. [Interruption.] I do not want to say more than those few words of commendation on their attitude. I also thank the
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      hon. Gentleman for underlining the difference between the United Kingdom and the United States of America in relation to cross trades.
      I am extremely sorry that my hon. Friend the Member for Bristol, North-West (Mr. Colvin) was not a member of the Committee. I very much welcome his entry into our debates, even at this late stage. His important point about the European shipping competition policy interacts with what we are discussing. We are discussing the matter within the Community now and will certainly bear in mind what he said. I endorse what he said about the importance of the Merchant Marine and about the moving moment about seven minutes ago when the QE2 returned to Southampton from her hazardous voyage.
      Perhaps my hon. Friend the Member for Uxbridge (Mr. Shersby) was the fons et origo of much of the opposition to the Bill. I have used that phrase because he flashed some Italian phrases at me and I thought that I would use a Latin one in response. He quoted Dr. Hermann of the Financial Times as saying that the Bill was the worst of a bad job. What Dr. Hermann meant, or should have meant, was that it made the best of a bad job. I see signs of dissent, but I am loth, at this late stage, to enter into altercations. However, the Bill would have made a much worse job of things if we had not got the derogations within the EEC that we obtained. Whatever else this Bill may be, it is not the worst of a bad job. As we know, in this vale of tears the best is often the enemy of the good and I would certainly have agreed with Dr. Hermann if he had said that.
      I commend the Bill to the House.
      Question put and agreed to.
      Bill read the Third time and passed.

  Taking of Hostages Bill [Lords]
  As amended (in the Standing Committee), considered.
  Taking of Hostages Bill [Lords]
    Clause 1

      HOSTAGE TAKING
      12.8 pm
      Mr. Clinton Davis: I beg to move amendment No. 1, in page 1, line 7, after '(a)', insert 'seizes or'.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take amendment No. 2, in page 1, line 7, after 'detains' insert
      'or makes a threat with the purpose of detaining'.
      Mr. Davis: I am glad that we can discuss amendment No. 2 with amendment No. 1. I am indebted to my hon. Friend the Member for Hamilton (Mr. Robertson) for having dealt with the Bill hitherto. However, he is helping to win a by-election in Scotland, which will be a nice experience. I intend not to undermine the purposes of the Bill, but to try to strengthen its purposes and to support the ratification of the convention by the Government.
      In moving amendment No. 1, I wish to ascertain why the Government departed from the terminology of the international convention against the taking of hostages, which defines hostage-taking as
      "whenever a person seizes or detains and threatens to kill, injure or continue to detain a person in order to obtain something from someone."
      The words that I stress are "seizes or" which are contained in amendment No. 1.
      The Government consider rightly that in approaching an international convention by wishing to legislate for it we need not use the exact phraseology of the convention provided that the legislation embodies its purpose and spirit. Therefore, the Government would argue that it is not incumbent on them to adopt the word "seizes" if it is tautologous bearing in mind the presence of the word "detains". If that is the correct assumption, was that point taken by British representatives who participated in the drafting? Secondly, did they argue at that or at any other time that the term "seizes or" was tautologous? Thirdly, is there any room for doubt in the interpretation of clause 1?
      Evidently, the international draftsmen considered that they needed to include the words "seizes or" and if there is the remotest doubt that the word "detains" does not incorporate that meaning, would it not be wiser to adhere to the terminology of the convention?
      I readily admit that the words of amendment No. 2 go outside the terms of the convention. If the Government tried to advance that argument, they would be estopped from doing so because I should claim that the words do not represent a departure from the spirit or the real terminology of the convention. The Government were propared to depart from that terminology in. the previous amendment. Until persuaded that they were wrong in Committee, they also wished to import the words "without lawful excuse", which were not within the convention.
      I pay tribute to the Minister for being flexible and for changing the Government's mind.
      12.15 pm
      My amendment is designed to define more clearly the word "detains". Whether it achieves that is another matter,
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      but I do not wish to discuss the difficulties of drafting, even on small issue; of draftsmanship such as this, because the Government could show possible errors in this drafting.
      Does the use of the word "detains" catch the case of what I call constructive detention? I wish to assess whether the Government's phraseology includes terrorists who are not in direct physical contact with a hostage but who issue threats from afar that if he moves from a place something evil will befall him. In an age of modern technology, apparatus and sophisticated machines, threats such as those in my example can be uttered easily with dire consequences similar to those contemplated in Committee and those that have formed a large part of the international activity of terrorists in recent years.
      Was there any discussion of that point when the convention was drafted? It was not discussed in Committee. If there is room for the slightest doubt, would it not be better to err on the side of tautology rather than to risk the escape from punishment, through a technical fault, of someone who has been found guilty of such obscene behaviour?
      The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I am pleased to be able to reply to the hon. Member for Hackney, Central (Mr. Davis) and deal with the two amendments that he has introduced. The first amendment seeks to include the word "seizes" as well as "detains". The hon. Gentleman relies on the wording of the international convention in putting forward that suggestion. The purpose of legislation following an international convention is not necessarily to reproduce in exactly the same words, the new statutory provisions. Legislation is required only when the consequences of an international convention affect British law and some legislative changes flow from it. When we are dealing with specific statute law, much greater attention is paid to the drafting details as well as to the policy implications of the provisions.
      There is no difference between the policy implications of the convention and the Bill. The simple question is, from a legislative point of view, what is more appropriate for the drafting? The word "seizes" adds nothing to the word "detains" in the context of the Bill and given the purpose for which it is drafted. The offence of hostage-taking, which is created by the Bill, has two elements. The first is the original detention of the hostage and the second is the threat to do something to him if another person does not act in a certain way.
      If the person who has been defined as the hostage has not been detained, the offence cannot have been committed. Other offences might have been committed, but not hostage-taking. Therefore, either the seizure of the hostage amounts to detention, in which case we need only the word "detain", or it does not fulfil the requirements of detention, in which case whatever other offences might have been committed it would not constitute hostage-taking, nor should it.
      Mr. Clinton Davis: I agree with the Minister. I was anxious to obtain his thinking about it. If he has the knowledge available, could he explain how it came about that this form of tautology was incorporated? Did the international draftsman think that there was a distinction between "seizing' and "detaining"? What was the rationale?
      Mr. Rifkind: I cannot give an immediate answer about the thinking of the international draftsman. An international convention appears in numerous languages. Language is often used to ensure that the policy of the United Nations, or whatever organisation is involved, is fully understood and comprehended.
      It is not intended to be a document in the sense of an Act of Parliament. Therefore, wording which may be more flexible in an international convention would not be appropriate in a statute. There may be some unnecessary duplication of language in an international convention that would not be appropriate in legislation. We are always conscious—although perhaps not all legislatures are—that if one word is sufficient, one word should be used, and unless a second word adds to the policy objectives of the legislation it would not be appropriate to put it in for appearance's sake.
      An international convention does not contain an article full of definitions of the meanings of individual terms, unlike our own legislation which almost always contains such a provision defining the specific terms in order to give greater precision to its interpretation.
      The second amendment seeks to introduce the words
      "or makes a threat with the purpose of detaining".
      What concerns the hon. Gentleman is what he has correctly chosen to describe as "constructive detention"—detention which comes about not because of a physical restraint on the hostage but because of certain threats, the accumulative effect of which might in practice lead to the individual concerned being detained. The hon. Gentleman wishes to know whether the offence would have been committed.
      I would make two points to the hon. Gentleman. First, detention, which is the matter that has to be satisfied, is a question of fact rather than a question of law. If the matter were in dispute it would surely be for the court to determine whether the facts and the circumstances amount to detention of the person concerned. If they do amount to detention, it should not matter one whit whether the detention has come about through physical restraint or because of threats or other actions which in practice have removed the voluntary element from the action taken by the individual described as the hostage, and which have led to his remaining in a place in which he would not otherwise have chosen to remain but for the action of the accused person. If those conditions have been fulfilled, detention will have taken place and "detains" is sufficient.
      There is another reason why the hon. Gentleman's amendment is not appropriate. His amendment seeks to insert
      "or makes a threat with the purpose of detaining".
      That purpose might or might not be achieved. Clearly, those words could envisage circumstances where, although the threat had been made, the purpose was not achieved and the person was not detained. If that happened, the offence of hostage-taking would not have been committed because the offence, to be committed, requires both elements to be fulfilled. There may still be an attempted crime but that is a separate matter and would not be directly relevant to the hon. Gentleman's purpose.
      Mr. Clinton Davis: Would that inchoate offence still be caught by the Bill? I suspect that the answer is "No". Presumably, therefore, unless a person is amenable to our criminal law in one way or another, such an inchoate offence could not result in the sanctions envisaged by the Bill. Is that correct?
      Mr. Rifkind: Not entirely. Under section 1 of the Criminal Attempts Act 1981 the attempt to commit the crime of hostage-taking would itself be an offence.
      Mr. Clinton Davis: The Bill ranges far wider than the normal jurisdictional authority that is provided by our criminal law. If an offence is committed outside this jurisdiction, or by somebody other than a British national—I am talking now of an inchoate offence—it appears that they would not be amenable to British criminal law. Is that right?
      Mr. Rifkind: The accused would come within the jurisdiction of the British courts because of the provisions of the Taking of Hostages Act, in which event the actual offence and the attempt to commit the offence would be equally possible as a consequence of the Act. If the act of hostage-taking did not fall within the jurisdiction of the British courts, the attempt to commit such an act would fail to follow. The two go together. I cannot imagine circumstances in which one would apply but not the other.
      In a sense, this consideration is incidental to the main purpose of the amendment. The hon. Gentleman's main concern and the main assurance that he sought was that in circumstances which he described as constructive, detention would result in the offence being committed. I can give him the categoric assurance that that would be so. That is my view in terms of interpreting the legal basis of the clause and it is consistent with common sense. If detention, which is a matter of fact, has taken place, the relevant consideration is not whether it comes about because of physical restraint, or the threat to use restraint, but whether detention has happened, and has been followed by threats in relation to the other part of the offence. In those circumstances, the offence will have been committed. I hope that with that assurance the hon. Gentleman will feel that it is not necessary to press the amendment.
      Mr. Edward Lyons: Am I right in thinking that the Bill catches hijacking wherever it occurs, even when there is no nexus with Britain, provided that the person involved in the hijacking comes to Britain? I am speaking of circumstances where there has been a detention of a person on the aeroplane, with a threat of some sort even to the pilot.
      Mr. Rifkind: The international convention is concerned basically with a situation where a person may have either fled to or ended up in a particular country. Therefore, it provides two options to the country concerned. It can either prosecute the person concerned within the country, although the offence has been committed elsewhere, or it can extradite the individual to another country where prosecution will presumably follow. If in the action of hijacking the specific requirements in clause 1 were satisfied—detention of individuals followed by specific threats to them—that would constitute the offence of hostage-taking.
      Mr. Lyons: Let us suppose that someone hijacks a plane to escape from what we would consider to be tyranny. If that person arrives in Britain at a later stage, perhaps years later, will we have to face the possibility that, as a result of the Bill, a country with which we are not in sympathy might make a demand for extradition, provided that we are in an extradition arrangement with that country? Will we not find ourselves in rather embarrassing situations from time to time?
      Mr. Rifkind: That might be a factor in determining whether such a person might be more appropriately prosecuted in this country rather than being returned to the country from which he had fled. If it were thought that because of the political or other nature of the offence which had been committed the individual might suffer undue and unreasonable punishment, that factor might be taken into account.
      It is the generally held view of the international community that it is highly desirable that the offence of hostage-taking should be discouraged by all means possible. Therefore, it is difficult to avoid the conclusion that where it takes place, even if there are background circumstances that mitigate the offence, it should be properly recognised as an offence. Given circumstances of the sort to which the hon. and learned Member for Bradford, West (Mr. Lyons) has drawn attention, these are factors that might be taken into account when determining whether extradition would be appropriate as opposed to other options that would be available under the convention and this proposed legislation.
      Mr. Clinton Davis: Am I not right in thinking that article 9 of the convention specifically deals with the point raised by the hon. and learned Member for Bradford, West (Mr. Lyons)? The article says that it is not incumbent upon States to extradite where there is a possibility of some harassment or unreasonable penal measures being taken by reason of a person's beliefs, ethnic origins, or a whole host of other matters.
      Mr. Rifkind: Yes, in the sense that article 9 of the convention deals with the possibility that extradition might be for the purpose of prosecuting or punishing a person on account of his race, religion, nationality, ethnic origin or political opinion, or that the person's position may be prejudiced for any of the reasons mentioned in the rest of the article. There are circumstances in which the political nature of the offence might be taken into account.
      That relates to the request for the extradition of the alleged offender. I must again point out that there is, in any event, an alternative available to the State concerned, which is to prosecute within the country of the alleged offender for the action that he has taken.
      Mr. Clinton Davis: The Minister has given a convincing explanation as to why the amendments are superfluous. I hope that he is right, and the courts uphold his judgment.
      Mr. Rifkind: So do I.
      Mr. Davis: As what the Minister has to say is not read in the courts, he will not be subject to any great criticism. I am not quite as happy about the Minister's explanation of the question of the attempted offence, but that is not within the scope of the amendment. Having regard to the Minister's explanation. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      2.32 pm
      Mr. Rifkind: I beg to move, That the Bill be now read the Third time.
      As the House will be aware, the Bill is the legislative consequence of the decision by the United Kingdom to ratify the international convention against the taking of hostages. As I mentioned earlier, the offence of hostage-taking is defined as involving two elements—the detention
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      of a person, followed by a specific threat as to certain action that will follow if third parties do not perform in a way acceptable to the person responsible for the taking of a hostage.
      Clearly this is a matter that the international community as a whole has been concerned about for some years. This convention, following as it does on other conventions relating to other forms of international terrorism or other undesirable forms of activity, is one to which the House will no doubt wish, to give its support.
      Although the primary purpose of the convention is to deal with the possible taking of hostages in political or international acts of terrorism, the wording of both the convention and the legislation is not restricted to political or international acts of this kind. It also envisages the possibility that hostages may be taken for the purpose of private gain. There may be no political or international implications, but a person might detain another person and threaten to take certain action unless certain demands were met. That is also something that must be guarded against, and it is appropriate that it should be covered by the legislation.
      The Bill has already been welcomed by both sides of the House, and it is on that basis that I commend it to the House.
      12.34 pm
      Mr. Davis: As one who has come recently to the Bill, I am perhaps permitted to range a little more widely than has the Minister. In so doing, I wish to give an unqualified welcome to the Bill, as did my hon. Friend the Member for Hamilton (Mr. Robertson) in earlier debates.
      There can be no doubt that the taking of hostages, 'with the concurrent threat to the safety or lives of those held hostage for the purpose of bargaining for some, often dubious, political advantage, is an obscene crime that in recent years has multiplied far beyond what would have been considered possible some years ago. Taking hostages is a cancerous tactic engaged in by gangster elements. It represents a dagger thrust against the heart of democratic societies and orderly, civilised international relationships. It is on the same level as the murder, or attempted murder, of diplomats, as regrettably we witnessed on the streets of this very city only days ago in the attempted assassination of a distinguished diplomat, Mr. Shlomo Argov, who happens to be a friend of mine.
      The tragedy is that thousands of people are trained and educated as merchants of terror. They are armed for that purpose with the most sophisticated weapons and techniques, notably in the Soviet Union and its satellites, in Syria, Libya and many other places. It is no less a tragedy that many tyrannies of the Left and the Right hold whole communities hostage. They, of course, cannot be dealt with by a convention. However, the inability to deal legislatively with that behaviour cannot justify a refusal to take the limited action prescribed by the convention and the Bill.
      The further tragedy is that so many countries are prepared to aid and abet such forms of crime by the provision of safe havens for the perpetrators, or by weakness in the face of threats. Such conduct is an incentive for further criminality. There can be no doubt that such crimes are highly infectious.
      I regret that Britain itself has not always been strong and resolute in dealing with such crimes. While the Iranian embassy siege was a supreme example of courage by our

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      police and Armed Forces, which must have inspired confidence in counter-terrorist activities throughout the world, I hope that never again will we be guilty of the cowardice depicted by the way in which we treated the case of Leila Khaled in the autumn of 1970. Having clearly been involved in an outrageous crime, she was released and sought refuge in an Arab country. She never suffered at all for having been involved in an appalling offence. We have learnt a lot since then. The seige of the Iranian embassy—and there are other examples—has made up for the weakness to which I have referred.
      I compliment the Minister on the way in which he has taken the Bill through the House. I have not had an opportunity to compliment him publicly, although I have done so privately, on his move to the Foreign Office. My hon. Friend the Member for Hamilton was astonished that an appointment to the Foreign Office should be regarded as a promotion from the Scottish Office, but that is the way of things. I am sure that the Minister will be a distinguished member of the Foreign Office team, although I hope not for too long.
      The Minister rightly said that the Bill is not confined to political acts of terrorism and that the taking of hostages for extortion for private gain or other purposes will also be caught by the Bill's provisions. That is as it should be. The other great benefit of the Bill is that it enables us to try and, if they are convicted, punish persons, regardless of nationality for such offences committed here or elsewhere.
      That is important for the reasons that the Minister stressed in answer to the hon. and learned Member for Bradford, West (Mr. Lyons), because there is no certainty in all cases that extradition is the appropriate way to deal with the matter. Where the result of extradition would be to punish or harass a person because of his religious, political or other beliefs mentioned by the Minister, it would be highly improper to extradite. It would be equally improper when there is a reasonable belief that a trial would not take place.
      For instance, an Arab country might be prepared to harbour members of the PLO carrying out such offences. I do not confine my remarks to the PLO; there are many others involved in this merciless activity. In those circumstances, it is absolutely right for us to reserve the right to try such persons. The House will hope that international society would recognise that that form of offence has to be properly and effectively dealt with by a fair trial.
      My sadness about the Bill is similar to that reflected by my hon. Friend the Member for Hamilton in the Second Reading Committee on the length of the time that it had taken for the Bill to be considered by the House. Regrettably, we are not alone in that dilatory action. Many other countries that ought to have ratified by now have not done so. Only 22 nations are required to ratify to bring the convention into effect. I believe that only 17 have done so. Belatedly, progress is now being made which would suggest that ratification is not far removed.
      However, I find the Minister's explanation for the delay less than convincing. He stated:
      "He"—
      my hon. Friend the Member for Hamilton—
      "will of course be aware that there has been a heavy legislative timetable over the past couple of years, and the Bill must be
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      considered in this context. The position of the United Kingdom is favourable in relation to the international community."—[Official Report, Second Reading Committee, 28 April 1982, c. 11.]
      The Minister sought to put the matter into perspective.
      I find it unacceptable that in more than three years legislation of that kind cannot be brought forward because of other legislative demands. It is not a politically contentious Bill. It has taken up little time in Committee and in the House. Everybody who has spoken has tried to improve and strengthen the Bill. The Minister has played a noble part in answering those debates and putting forward convincing explanations. We have to find a better way to ensure that this type of legislation is brought forward far more rapidly so that the country can exemplify a will to proceed expeditiously. Unless we are prepared to provide that example, others will be only too happy to follow on far behind and, as a result, the implementation and enforcement of the convention will be deferred. If we deal with such matters in the future, I hope that the Government recognise that it is the will of the House to ensure that consideration of the legislation is expedited.
      I am glad that the Bill is proceeding to its conclusion. It is an important part of the apparatus to deal with the problem of international terrorism. I end by quoting the words of the Nobel prize winner Andrei Sakharov in 1980. He was interviewed by the Washington Post soon after he had been compelled to go into exile. He spoke of to deteriorating terrorist phenomenon, and stated:
      "Among the problems which trouble me is the irrationality of international terrorism. No matter how high the aims predicated by terrorists (and often there are no such justifications), their activities are always criminal, always destructive, throwing humankind back to a time of lawlessness and chaos, provoking (perhaps with the help of the secret services of foreign governments) internal and international complications, contradicting the goals of peace and progress.
      I unreservedly condemn the terror of the 'Red Brigades', the Basque and Irish nationalists, the Palestinian, Jewish and Ukranian extremists, the Moslem Brotherhood, the Armenian 'avengers of the genocide of 1915, and all other terrorists. I hope that people all over the world will understand the deadly nature of terrorism whatever its goals and will deprive them of any kind of support, even the most passive, and surround them with a wall of condemnation."
      I believe that through the passage of this Bill we are doing our part to translate those memorable words into effect.
      12.46 pm
      Mr. Edward Lyons: The Social Democratic and Liberal Parties have welcomed the Bill throughout. Any measure that adds to the flexibility of the international community to deal with terrorism should be welcomed.
      With modern travel, the world is contracting rapidly. We can no longer view matters, including the enforcement of international law, in an insular way. The principle has always been that a British court could not prosecute an offender if the crime had no contact with Britain. But with international terrorist networks, the growth of terrorism, the ruthless methods of operation and the fact that terrorists have several passports and can move rapidly from one country to another, any country that has within it a terrorist who is alleged to have committed crimes should be able to arrest and try him.
      The convention that the Government seek to implement allows prosecution only for taking hostages. In some ways that is artificial. If the crime were committed in Britain, a range of charges could be brought, such as carrying

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      firearms or murder. Had the crime taken place in Britain, the prosecuting authorities doubtless would not use this legislation, as a range of other charges could be brought. If they did use the legislation, they would use it in addition to the range of other available charges.
      Where offences are committed abroad and the trial takes place here, since the charge of carrying firearms or murder cannot be brought, because the offences had no nexus with this country, a judge would be driven to sentence for those offences not because they have been charged, but because they emerged during the trial as having taken place. That is not an entirely desirable way of sentencing people, because it is sentencing them for doing things with which they are not charged. None the less, despite that drawback, the convention represents a step forward. It means that we are marking in an international convention, enforced in a number of countries, our disapproval of and distaste for international terrorism.
      I am a little worried that some of the examples of the ways in which this convention will work in due course will turn out to be rather surprising, in a way that we do not like. Suppose, for example, that we want to extradite a person, who has committed a crime in Britain, who is in the territory of another signatory to the convention which has introduced legislation similar to the legislation that we have introduced to implement the convention. That country could say "Sorry, you cannot have this man back. We intend to charge him under our domestic legislation implementing that convention for taking hostages." We may know that the intention is either to ensure that that man does not get a fair trial or, as is more likely, to ensure that he gets off lightly.
      Mr. Clinton Davis: That situation could almost certainly arise outside the scope of the convention. It could be argued that the person would not get a fair trial here. If a Government were to act with such mala fides, they could invent arguments of that nature to justify a refusal to allow extradition, and perhaps such an argument could be entertained. In my opinion, that is not a very convincing argument.
      Mr. Lyons: I thank the hon. Member for Hackney, Central (Mr. Davis) for those comments. I agree that for most of the time what he says will be correct, but there could be circumstances in which a court in such a country, listening to an application for extradition on behalf of the Government, might say "The Government of this country"—that is, the Government of the country where the application is being heard—"now have power to opt for a different course which involves justice"—apparently—"being done." It could, therefore, refuse the application for extradition in cases where, but for a similar Act in that country, it would have to say, "We must accede to this application by the British Government for extradition because we have no right to try it in our country." I hope that one day there will be a convention to deal specifically with murder in a similar way to what is proposed in the Bill.
      The hon. Member for Hackney, Central complained about the delay in making progress on the Bill. He should also consider, as I am sure he does, the delay in implementing the European Convention on Human Rights. That convention has been in existence for a long time, but no British Government have yet decided to introduce domestic legislation to enforce it.
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      None the less, the Bill is a step forward in the protection of human rights. Therefore, it is to be supported and welcomed. We hope that it will assist in the drive to deal strongly with international terrorism. I concur with the remarks that have been made about the increasingly strong way in which the British Government are dealing with terrorism. It contrasts sharply with the treatment of terrorists years ago. It is obvious that one encourages terrorism unless one deals with it totally. There is no alternative but to deal with it in a principled and firm way, and the Bill will help in that regard.
      12.50 pm
      Mr. Rifkind: With the leave of the House, Mr. Deputy Speaker, may I say that I thank hon. Members for the warm welcome that they have given to the Bill and associate myself with their strong condemnation of all kinds of terrorism, whatever form it might take. I agree with the comment of the hon. Member for Hackney, Central (Mr. Davis) about the attempted assassination of the Israeli ambassador. That is a good example of the behaviour that we must all unite to try to prevent wherever possible.
      The hon. Member for Hackney, Central suggested that there had been undue delay in bringing forward the legislation. I do not think that that is an entirely reasonable point to make in the circumstances. In the ratification of international conventions, two years is not considered significantly long by most standards. Of the 40 countries that signed the convention now under discussion, only 11 have completed the process of ratification. A further five among those that (lid not sign the convention have acceded to it.
      Even if the Government had brought forward the legislation earlier, it would not have made any difference. Until 22 countries have ratified, the convention does not take effect. I am not suggesting that this in itself is an argument for delay. The more countries that bring forward legislation at an early stage and ratify at an early stage, the sooner the convention will come into force. I am merely indicating a simple fact that the enactment of the legislation will not produce any significant changes until the twenty-second State has ratified and the convention comes into force.
      Mr. Davis: I accept what the Minister says. I believe, however, that this country should be eager to lead the way. I do not discern that eagerness in this instance. Such eagerness would encourage other nations to do likewise. I do not understand why we have deferred taking action up to the present time. If there are the legislative difficulties to which the Minister has alluded, I am certain that the Opposition would wish in the future to do everything possible to assist the Government to ensure the speedy legislation of this form of Bill.
      Mr. Rifkind: The hon. Gentleman will acknowledge that, over the last couple of years, the House has not been exactly short of legislation. Inevitably, it was legislation that had greater priority in terms of its passage through the House. On the matter of setting an example, I would point out that, of the 40 signatories of the convention, only 11 have ratified. The United Kingdom is therefore in the forefront of countries completing the process of ratification.
      The hon. and learned Member for Bradford, West (Mr. Lyons) was concerned that, because the question of

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      jurisdiction for offences related only to offences under the Bill in respect of actions that take place in other parts of the world, this might result in people being sentenced for things that did not come under the crime with which they had been charged. Under the terms of the Bill, the maximum penalty for the crime of hostage-taking is life imprisonment. There is nothing undesirable in principle in a court, when determining what should be the appropriate penalty for one convicted of this crime, looking into the circumstances of the crime and the consequences of the crime. If a person had lost his life as a consequence, that itself would be sufficient ground for imposing a sentence of life imprisonment.
      The implication of the hon. and learned Gentleman's remarks was that there is some technical way of imposing life imprisonment even though a person cannot be charged with murder. It does not matter in this context whether he can be charged with murder. The crime of hostage-taking, if it was to result in the death of a person, would be sufficiently serious to justify life imprisonment in certain circumstances.
      Mr. Edward Lyons: I agree entirely with the Minister except to say that, if one concludes that killing a number of hostages is more important than the taking of the hostages and one charges only the lesser offence, and than the judge sentences really for the more serious matter because life imprisonment is the maximum sentence, there is no alternative but to do that. That is the limit of the convention. None the less, it is an undesirable principle to punish people by a side wind for more serious offences when they have been charged with lesser offences. A man may have massive evidence against him for hostage-taking but possibly has some defence never fully adduced on a charge for one or more of the killings. The court might say that that is not the charge, although at the end of the day, if the judge came to the conclusion that the man was responsible for the killing, the judge would ensure that he got life imprisonment, whereas otherwise he might get only 12 years. I am saying not that there is any way out of that, in view of the convention, but that on the whole it is undesirable that men should be sentenced for one offence when charged with a different one.
      Mr. Rifkind: The hon. Gentleman says that that is what is likely to happen. I agree with him. I do not think the man would be sentenced for an offence that he had not been charged with. He would be sentenced for an offence for which he had been charged and convicted. If that offence were hostage-taking and if the hostage-taking involved loss of life, it would be a sufficiently serious example of hostage-taking to justify a life sentence. It would be wrong to create the impression that judges would have the opportunity to impose sentences for crimes with which a person had not been charged.
      The fact that the House has agreed and the convention anticipates that the maximum penalty for the crime of hostage-taking should be heavy, which in United Kingdom law means life imprisonment, is justifiable. There are manifold circumstances, not necessarily involving just loss of life, where a heavy sentence would be appropriate.
      It is on that basis that I say that the wording is appropriate and that the concern expressed by the hon. Gentleman, although I understand his reasons for it, need not be maintained for any period. I accordingly commend the Bill to the House and thank the House for its support.
      Question put and agreed to.
      Bill read the Third time and passed.

      ENVIRONMENT
      Ordered,
      That Dr. Brian Mawhinney and Mr. James Pawsey be discharged from the Environment Committee and Mr. John Heddle and Mr. Richard Alexander be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

      ENERGY
      Ordered,
      That Mr. John Watson be discharged from the Energy Committee and Mr. Tony Speller be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

      TRANSPORT
      Ordered,
      That Mr. Gary Waller be discharged from the Transport Committee and Mr. David Mudd be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

  Video Cassettes
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
  1.3 pm
  Sir Paul Bryan: I declare my interest as a director of Granada Television.
  I bring to the attention of the House a scandal of which we should be thoroughly ashamed. Over the years the British law on copyright has been respected and has been a model for the law in many other countries. That is an area in which we presume to advise others. However, in the exploding trade of video tape recording we are the world leader, not in copyright, but in video piracy. The Government sit inactive in the background while an industry that should have been the saving of the film industry and a unique stimulus to artistic production is becoming a den of thieves.
  When video piracy started no more than two years ago it was the plaything of amateurs, but with the rewards so great and penalties so laughable it is inevitably sinking into the hands of gangsters, the same people who run the drug rings. What I am asking for today is not a new copyright Act, which could take five years, but an immediate increase in the penalties provided for in the 1956 Act, which could be achieved in five hours by a simple noncontroversial amending Bill.
  Britain is internationally regarded as the world leader in video piracy. Three factors combine to bring about that national disgrace. The first is the wide international use of the English language, the second is the fact that our PAL colour television system is used throughout the world, unlike the American system, and the third and most important is that our laws, and especially our criminal laws, do not provide remedies and punishments for piracy remotely adequate to deal with the size of the current problem.
  The astonishing phenomenon that has left the Government standing and has frankly surprised us all is the speed and the size of the video boom. There are now 1·5 million video tape recorders in Britain. At the end of the year there will be 3 million—one recorder for every six homes. By the end of the decade half the homes in Britain will have video tape recorders.
  People do not buy or rent expensive video recorders without meaning to use them every day. Therefore, an enormous video tape industry has sprung up overnight. "Star Wars", "Chariots of Fire", "Watership Down"—all the most popular films—can now be seen in the home. At first sight this looks like the rebirth of the film industry. In the event, no money from the sale of over half the tapes goes to artistes, producers, distributors, or in VAT to the Government. Video piracy now accounts for at least 65 per cent. of the market—a staggering £100 million.
  One has only to see how simply copyright material can be recorded, and how rich are the pickings, to understand this eruption. At the amateur end of the trade is the lady on the council house estate who records feature films from her television and rents them to her friends. At the professional end there is the bent projectionist who, after the evening performance of "Star Wars" lends the film for a consideration, perhaps £300 or £400, to a local recording organisation. From the reels of celluloid film a master video tape is made from which hundreds of illicit video
  578
  casettes are made. The pirate operator can have up to 40 video cassette recorders working 24 hours a day to churn out copies at £30 a time.
  Alternatively, the film will be taken from the cinema to a duplicating bank where it will probably be run through a Rank Cintel machine and transferred on to video tape. Thirty or 40 master copies might be made, and each one of those can be sold to dealers at a price of more than £1,000 each.
  When the illicit trade started, one could easily detect pirate tapes by the crude packaging and labels. However, the trade has now been picked up by sophisticated criminals and the whole tape package is indistinguishable from the genuine article. Small-scale film piracy is now being superseded by internationally organised crime with professionally counterfeited video cassettes supplanting the easily recognisable pirated copies. London is at the centre of this illegal industry and London and the Home Counties boast more duplicating organisations than the whole of America.
  The legitimate trade has not taken the illegal developments lying down. Independent television companies, the BBC and the Society of Film Distributors have formed the Video Copyright Protection Society under the chairmanship of Barry Heads. The British Video Association has been active in defending the legitimate trade.
  Both those organisations are understandably desperate at the complete lack of any Government reaction as their industry sinks rapidly into this mire of corruption. The Government sit peacefully waiting for observations on last year's Green Paper which, in turn, is a commentary on the Whitford report published in 1977 but instigated in 1973.
  Mr. Michael Shersby: I am most interested in what my hon. Friend is saying. Is he aware that I am looking after a Private Member's Bill designed to amend the Copyright Act 1956 which would be an interim solution until there is a major Government reform of the copyright law? That Bill has already passed through another place and I hope that it will have its Committee stage and its Third Reading on 9 July. That would be an interim measure to deal with this serious problem.
  Sir Paul Bryan: I know about that and I hope that my hon. Friend will contribute to the debate and tell us all about it.
  The Government are still waiting for observations on the Green Paper. All that is entirely irrelevant to the present crisis. Technology has raced past the Government's deliberations. Lord Lyell, speaking on behalf of the Government in another place, said:
  "We are of the opinion that this particular subject, and piracy of videos and films, requires a little more detailed thought before we move to definite legislation, and when we introduce legislation, as we shall in due course—and I hope much sooner, rather than later— would hope to produce a series of effective measures, with effective remedies."—[Official Report, House of Lords, 15 February 1982; Vol, 427, c. 370.]
  He was speaking not only in another place but in another world.
  The Government are oblivious to what is happening. They must increase the penalties at once. Although effective civil law remedies are available to copyright owners in the form of High Court injunctions, they are extremely costly, with preliminary private investigations, the acquisition of evidence and legal fees. The expense to

  579
  the copyright owners of a group of cases can amount to a six-figure sum. That means that copyright owners can deal with only a few of the piracy operations reported to them.
  Civil law remedies are no deterrent. For video piracy to be crushed, it is imperative that the police should be involved and the criminal law invoked. At present the penalties under the Copyright Act 1956 are restricted on first offences to the imposition of fines not exceeding £2 per cassette with a maximum of £50. Partly because of the ludicrously low penalties and partly because of manpower considerations, many police forces, including the Metropolitan Police, have issued directives to their officers not to investigate or prosecute cases of video piracy but instead to leave it to the aggrieved copyright owners to take the civil action that I have described. Can one imagine a more agreeable bed of roses for the criminal?
  Before setting off for Europe, President Reagan signed into law the Piracy and Counterfeiting Amendment Act 1982, which provides for stricter criminal penalties for record, tape and motion picture piracy and counterfeiting. Under the new law, which came into effect the next day, 25 May, sound recording and motion picture pirates and counterfeiters, including first-time offenders, face maximum felony penalties of up to five years imprisonment or fines of up to $250,000. Previously first time offenders faced maximum misdemeanour penalties of one year in jail and/or a fine of $25,000. That is the reaction of a Government in a country with less video piracy than Britain. It is precisely the action that I wish from the British Government and it would have an immediate affect.
  At the same time, I ask my right hon. Friend the Home Secretary to direct the police, especially the Metropolitan Police, to tackle the problem before it gets even further out of hand. Until the penalties are made punitive, we cannot expect the police to take serious action. It is an affront to the police to expect them to bring people to court with the prospect of a £50 fine on those earning many thousands of pounds from their criminal business.
  Finally, I warn the Government that the problem is not merely increasing but rocketing. I have already forecast the inevitable increase due to the rise in numbers of video tape recorders, but the advent of cable television will give the video cassette industry yet another boost, for there will be so much more to record. Time is running out. The longer this illicit industry is allowed to grow, the more criminals will be financially committed to it and the harder it will be to eradicate. Meanwhile, through lack of Government action, many honest businesses will go to the wall and artistes will continue to be cheated of their just rewards.
  1.16 pm
  The Under-Secretary of State for Trade (Mr. Iain Sproat): I congratulate my hon. Friend the Member for Howden (Sir P. Bryan) on bringing this matter before the House. I am pleased that my hon. Friend the Member for Uxbridge (Mr. Shersby) had the opportunity to intervene, albeit briefly, because I pay tribute to the hard work he is putting in behind the scenes in trying to ameliorate the present problems through a Private Member's Bill. Like him, I have every hope that when the Bill returns to the House on 9 July it will receive the blessing of the House.
  580
  We are grateful for the way in which he has helped us to try to find interim remedies for a problem that is quite shocking.
  The Government share the concern of the film and video industries about the growth of commercial video piracy. Of course, there are legal remedies and they are most effective when applied energetically and systematically. Extensive damages can result from civil actions in the courts launched by copyright owners for infringement of their copyright. The civil remedies available under the Copyright Act 1956 provide for injunctions and damages, and prosecutions are helped considerably by Anton Piller orders. These empower a plaintiff to enter a defendant's premises to obtain evidence, that is, infringing articles. Anton Piller orders have been successfully used on a number of occasions as hon. Members may have seen recently in the newspapers.
  The Copyright Act also provides criminal remedies against those making for sale or hire, importing, dealing in or exhibiting in public by way of trade, articles that they know to be infringing copies of copyright works. However, as my hon. Friend the Member for Howden made very clear, and I have great sympathy with his view, the penalties at present laid down are, to say the very least, not high but they do include imprisonment as a possible penalty for second and subsequent offences. Under the terms of the Criminal Justice Bill, the maximum penalty for each transaction that contravenes the Act will increase with the option of imprisonment being extended to first convictions. This goes some way towards meeting my hon. Friend's point and a further opportunity will arise when more general changes in the copyright law are introduced.
  Nevertheless, I entirely accept that video piracy is a growing and extremely worrying criminal activity which, if allowed to continue to develop unchecked, can only undermine the legitimate market, including film producers, who need the profit from legitimate video sales as a contribution to the cost of film-making. Furthermore, pirate video films that appear on the market before the legitimate version—as many do—damage the trade of cinemas showing the screen version.
  The industry now claims—I have no reason to dispute it—that pirate copies constitute almost three-quarters of the market in this country, with a retail value of perhaps over £100 million. These are deeply worrying statistics and something must be done to check this activity.
  The Green Paper on copyright, published last July, makes several proposals to strengthen and improve existing remedies. They include extending the scope of the courts so that they can award exemplary penal damages in cases of flagrant infringements, making the possession of an infringing copy of a video recording in the knowledge that it infringes copyright an infringing act, and increasing the fines applicable in the cases of criminal proceedings to a deterrent level.
  I should certainly want to consider the legislation that President Reagan has recently signed to see what lessons can be learnt from the American experience. It is, indeed, extraordinary that the larger and more populous country of America—I must consider my words carefully—where criminal activity is usually further advanced than in Britain, should appear to be less criminally advanced than Britain in this case, although it has been quicker to take action.

  581
  The Government must consider that example closely and quickly. I certainly undertake to do so. However, consultations on the Green Paper will pave the way for negotiations with our Community partners on harmonising copyright laws in the Community and, beyond that, will lead to a major reform of United Kingdom copyright law. Therefore, these procedures cannot be short-circuited. They can be extremely exasperating for those involved but they must he gone through.
  Meanwhile, we must bear in mind the damage to legitimate commerce and the standing of the law. That is an important point. If nothing is being done about the fact that people believe that three-quarters of the video cassettes on sale are pirated and the result of criminal activity, the law will be undermined more by that than by those activities themselves.
  I hope that I have said enough to show that I accept that more needs to be done to reinforce the law. I agree that there is a great discrepancy between the extended remedies proposed in the Criminal Justice Bill and what President Reagan has apparently been up to in the United States of America. That discrepancy between the present remedies, the proposed British remedies and the American remedies must be considered carefully. We must try to relate it to the facts and figures that the trade brings to our attention.
  It has been said that £100 million of pirated cassettes are on the market and that value added tax is being lost. Many hon. Members might be jolly pleased that I am not a Treasury Minister, but even those Ministers who are most remote from the Treasury would quickly understand that £100 million of goods that are not paying VAT cause considerable suffering to the Treasury and to the Revenue. I am acutely aware of that because in my Department there are many areas in which £15 million would make a great difference to the amount spent on services, such as safety at sea.
  Sir Paul Bryan: Will my hon. Friend comment on my remarks about the inactivity of the police and the directions received by some police departments that they are not to intervene in this world of crime?
  Mr. Sproat: I am keen to respond to that point but I am restrained by the fact that this is primarily a matter for the Home Office. I agree with the implication of my hon. Friend's remarks, if I have understood that implication correctly. It is always worrying when one is told that the police have been instructed not to proceed against a
  582
  criminal activity. That is worrying in principle at any time, but it is perhaps particularly worrying when it affects a criminal activity with a turnover of £100 million a year. I suspect that £100 million is an underestimate now and with 1½ million video recorders and the number growing all the time—I am one of the 1½ million—we can expect that £100 million trnover figure to increase rapidly.
  Mr. Shersby: Does my hon. Friend agree that the issue of police manpower would undoubtedly arise in dealing with the problem in the way that my hon. Friend has so rightly suggested? My investigations of the matter over many months now have made me aware that police manpower is one of the problems. It is not that the police are unwilling to deal with the matter but that the huge extent of the problem means that any increase in penalties, which I would fully support, must take into consideration the issue of police manpower.
  Mr. Sproat: My hon. Friend raises an extremely interesting point. A turnover of £100 million with a VAT figure of £15 million could be used to increase manpower to fund the necessary exercise. I shall see that my lion. Friend's point about instructions to the police not to prosecute in such cases is drawn to the attention of my right hon. Friend the Home Secretary.
  I have done all that I can to encourage the passage of the Copyright Act 1956 (Amendment) [Lords] Bill which was introduced by the noble Lord Fletcher. The Bill states that it is an offence for anyone to have in his or her possession by sway of trade a copyright, sound recording or cinematograph film which he knows to be an infringing copy.
  The Bill is a good step in the right direction even though it perhaps does not go far enough. The Bill passed through all its stages in the House of Lords. It received its Second Reading in the House of Commons on 7 May and appeared for its remaining stages on 14 May. I thought then that the Bill was well on its way to the statute book as did my hon. Friend the Member for Uxbridge. We were all disappointed when it was blocked, perfectly properly, on procedural grounds for reasons we understand. It was an important Bill that was lost in one of those not too rare House of Commons deliberate procedural tangles. When the Bill returns on 9 July, I hope that it will receive the approval of the House. In the meantime, I hope that that will satisfy my hon. Friend that the Government are not so comatose or inactive as he might think.

  Seal Culling
  1.28 pm
  Mr. Michael Shersby: I am grateful for the opportunity, by way of a second Adjournment debate, to raise a matter of enormous concern to all Members of the House of Commons. I refer to the clubbing of baby seals and the proposed ban on the importation of seal products, which has been the subject of discussion in the European Assembly in recent weeks.
  There are few subjects about which I have received more letters from my constituents in the past few weeks than that of the clubbing to death of baby seals in the presence of their mothers. It is clear to me that my constituents share the feelings of horror which have been expressed throughout the land about this objectionable practice. My constituents wish me, as their Member of Parliament, to raise this matter at the earliest possible opportunity with a view to getting something done about it. It is for that reason that I am glad to have this opportunity to talk on the matter.
  I am glad to see my right hon. Friend the Leader of the House in his place. No one can be more aware than he that on the Order Paper are two important early-day motions dealing with the importation of seal products. Early-day motion No. 342 draws attention to the slaughter of 200,000 baby seals in northern Canada and calls for a ban on the importation into the European Community of all skins and products derived from the young harp and hooded seals. The motion has been signed by no fewer than 279 hon. Members. The latest addition is the name of my hon. Friend the Member for Beaconsfield (Mr. Smith), whom I had the pleasure of introducing on Tuesday. Early-day motion No. 344, which stands in the name of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), is in similar terms and has been signed by 232 hon. Members.
  I know that my right hon. Friend the Leader of the House has tremendous difficulty in finding time for parliamentary debates, but I am sure that he will share my pleasure that we have a little time today to talk about the slaughter of seals, thus meeting the wishes expressed by so many of our colleagues in signing the early-day motions. I am glad that my hon. and learned Friend the Minister for Trade is on the Treasury Bench and ready to reply.
  My right hon. Friend the Member for Worthing (Mr. Higgins), who was in the Chamber this morning and earlier this afternoon, shares my keen interest in this subject. Were it not for the fact that he has a surgery in Worthing this afternoon, for which he has had to depart, he would be in his place and anxious to participate in the debate.
  I am glad to see my hon. Friend the Member for Watford (Mr. Garel-Jones) on the Treasury Bench. We all know that as a Government Whip he has great difficulty in contributing to our debates, but he is well known for his keen interest in animal welfare, especially the difficult problem that is the subject of this debate.
  In recent weeks we have all become aware of the debates that have taken place in the European Assembly. The country knows that the European Assembly considered a petition that attracted about 3 million signatures, which was on display in the Assembly building. The Assembly considered public opinion and
  584
  passed a resolution by 160 votes to 10 that called for a ban on the importation of seal products from Canada in an attempt to draw to the attention of our Canadian friends the serious concern that is felt in Europe.
  I pay tribute to the international animal welfare fund, which did so much to bring the matter to the attention of the European Parliament. It was largely responsible for the resolution being passed.
  The crux of the matter is that the British people and the people of many other European countries are strongly opposed to the clumsy and brutal killing of these beautiful creatures in the presence of their mothers. The fact that they are killed in a clumsy and brutal manner is substantiated by all the reports that we have read in the press and seen on television. I shall quote briefly from an article that appeared in The Times on 11 March. It reads:
  "Charlottetown, Prince Edward Island, March 10.—The annual seal hunt in the Gulf of St. Lawrence lasted only a few hours for land-based hunters before it was closed because of bad ice and wasteful killing by inexperienced hunters."
  The report continues:
  "The main reason for closing the hunt was poor ice conditions"
  The reporter added that
  "most of the Prince Edward Islands hunters were inexperienced. 'Hunters are just ruining pelts in some cases. Conditions were so bad that we just can't control the thing."
  This method of slaughter, which some Canadians have attempted to justify as being humane, is, on their own admission, a clumsy method. Quite apart from the dreadful suffering that it must inflict on these poor creatures, it is also ruining the pelts, which are exported by Canada, and which bring in £3.2 million a year.
  Our objection is that it is a degrading practice that we find very difficult, indeed, almost impossible, to accept. Every hon. Member would wish to acknowledge that the Canadians are hunters. However, in recognising that, we say that they cannot continue their long-established practice of hunting and at the same time ignore the revulsion felt by so many of their fellow citizens in other parts of the world. I am sorry that the Canadian Minister of Customs and Excise, Mr. Bill Rompkey, has taken it upon himself to threaten that Canada might refuse EEC fishermen access to Canadian waters if the EEC were to impose a ban on products derived from seals.
  The Canadians are our friends and relatives and we share with them a common heritage and a love and respect for all animals. It is difficult for us in Britain to accept, as do our Canadian cousins, the killing of these animals for their pelts in this brutal way. They are more used to hunting than we are. We in Britain are today remote from the hunting and killing of animals for food and skins. It is something that has faded into the background of our consciousness.
  What is to be done? Is a ban on the importation of seal products, as is desired by so many of our colleagues in this House and the European Assembly, the best way to deal with this matter? Will the labelling order, enabling those opposed to seal killing to avoid the unwitting purchase of sealskin products, be enough to satisfy public opinion? I welcome the change in the labelling regulations introduced by my right hon. Friend the Minister of State earlier this year. However, I suspect that the changes in this labelling regulation, although they are welcome and demonstrate the concern of the British Government about this product, are not enough to satisfy public opinion, or Members of the House or of the European Assembly.

  585
  It is not just sealskin products that are the cause of this massive protest. It is the method of the killing of the animals that is at the root of the problem. Therefore, we need to try to persuade our Canadian friends that there must be some change in this practice. I appeal to my right hon. Friend to say whether he feels that the British Government can, through their many contacts with the Canadian Government, make it clear to them that it is the practice of killing these animals in this way that is at the root of the problem. It is that which, if changed, would help to deal with the problem.
  In addition, I should like to suggest that our Canadian friends might like, through the high commission in London and embassies abroad, to improve their contact with parliamentarians and initiate discussions with them that would enable them better to understand the strength of feeling and perhaps take action that would remedy the problem. It is important that the Canadians should not feel that we in Britain are attacking them. We have the most tremendous respect and affection for all Canadians. They are our friends and allies, and we do not want them to misunderstand us. We want them to understand that we and people in other parts of Europe find it difficult to accept the practices that are familiar to them and by which they continue killing these animals for their pelts. I hope that the Canadians will address themselves to the problem and recognise that a step forward in the direction that I suggest would be helpful, and enable proper debate and a solution to be found.
  Any hon. Member thinks twice about bringing a busy Minister to the House late on a Friday afternoon to deal with any issue. I know how busy my hon. and learned Friend is and I thought twice before asking him to come to the House, but I took the view, which I think he shares, that the subject is so important and generates so many letters that we cannot delay further before hearing a statement of the Government's feelings.
  I am glad that we have been able to ventilate a problem which has drawn to the attention of the Leader of the House and the Government by the many right hon. and hon. Members who have signed early-day motions Nos. 342 and 344.
  1.40 pm
  Mr. Richard Page: I support my hon. Friend the Member for Uxbridge (Mr. Shersby) and congratulate him on his ingenuity in seizing a window in parliamentary time to raise this important issue. We are neighbours, not only because of the closeness of our constituencies, but in our agreement on the issue. I am delighted to see in the Chamber my hon. Friend the Member for Watford (Mr. Garel-Jones) who guards the northern reaches of my constituency and agrees with us. I do not wish to be political, but I am disappointed that the Opposition Benches are vacant. Not one Opposition Member is here to express a view on an important and serious subject.
  I am not against culls. With mankind's involvement or interference in the environmental balance of the world, various animal population surges will produce imbalances. I regret that they must be checked. I wish only that the enthusiastic efforts which go into controlling such surges were matched at least by equal efforts to prevent the declines. The list of endangered species grows daily.
  I approve of the EEC's concern and understand the reasons for the total ban on pelt imports, but the EEC
  586
  resolution, although passed almost unanimously. will do little if anything to stop the annual cull. The EEC countries may not buy the pelts and the products, but the cull will continue. Perhaps it will not continue to such an extent, but it will still happen. We must ensure that culling is done in a more humane fashion. The bashing of seal pups on the head is not only barbaric but, putting it charitably, an inexact science. Surely, with all man's skill and ingenuity, we can devise a more humane and certain method.
  In the United Kingdom we have a selective conscience. I have been deluged with letters from many constituents about the import of seal products, but I have received only one complaint about the ritual slaughter of animals which takes place daily in Britain. That process is legally approved by the House. I find it even more barbaric because the health reasons that prompted such centuries old practices no longer apply.
  However, I shall work on the well-known military practice of fighting only one battle at a time. I hope that pressures from tie House and the Government will expedite legislation in Canada so that more humane culling methods are used. Such methods are available and must be introduced.
  1.44 pm
  The Minister for Trade (Mr. Peter Rees): May I without reservation congratulate my hon. Friend the Member for Uxbridge (Mr. Shersby) on introducing this important subject. He is far too modest in apologising for bringing me here today because I am grateful to have the opportunity to say how far Government thinking has developed on such a sensitive issue.
  I need not emphasise that there can be no hon. Member who is not aware of the depth of feeling on this subject not only from personal observation and contact but from the flood of letters that I am sure all hon. Members have received. I shall single out those hon. Gentlemen whom I know have been worried about the matter. My hon. Friend the Member for Uxbridge has been ably supported by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). We are aware of the continuing anxiety shown by my right hon. Friend the Member for Worthng (Mr. Higgins) and my hon, Friends the Members for Eye (Mr. Gummer) and for Watford (Mr. Garel-Jones). The strength of the House's interest has been demonstrated by the early-day motions to which my hon. Friends have drawn attention.
  I should not like the world to imagine that the House is not fully alert to the feelings of people up and down the country on this topic or that the Government are insensitive to those feelings. I was delighted when I heard that my hon. Friend the Member for Uxbridge had seized this opportunity to raise the matter. It gives me a chance to state the Government's position.
  There has been continuing interest shown by successive Governments in the question of seal culls and in the conservation of wildlife species in general. There was the Conservation of Seals Act 1970 under which the Home Office licenses the cull of common grey seals. Both the Home Office and the Ministry of Agriculture, Fisheries and Food are interested in the matter in Scotland. There was the Endangered Species (Import and Export) Act 1976 under which the Department of the Environment operates control on the import of skins and other derivatives of wildlife species.

  587
  I hope that the House will not think that I am shirking my responsibilities, but the responsibilities of the Department of Trade are marginal to the whole question. We are delighted to play our part in advancing causes which the House has at heart and which have been so ably articulated by my two hon. Friends.
  The Department of Trade has played its part because in June 1980 my predecessor introduced an order under the Trade Descriptions Act 1968 under which all sealskin goods offered for sale have to be marked with the place from which the seal was taken. That was a considerable step forward. It enabled people to exercise their judgment on whether they wished to buy sealskin products. The order was welcomed by the many organisations that have been involved in the campaign on this subject. I do not want to pretend that they thought that it was an end to the subject. They wished to move on to a complete ban. It was in conformity with our traditions that people should be given the fullest opportunity to know exactly what it was they were buying and to exercise their judgment on whether to buy such products in the knowledge that the seals may have been killed in the unattractive way that my hon. Friends have described. Public opinion was focused by the media on the question as it affected baby harp and hooded seals culled in Canada. The essential problem is on the other side of the Atlantic. We are merely anxious to do what we can to make our feelings known.
  The Government have taken every opportunity to make the sentiments generally expressed well known to the Canadian Government. There will be sensitivities across the other side of the Atlantic on the question. My hon. Friends have drawn attention to the Canadian feelings on fisheries protection and how they may respond if the European Community acted in a certain way.
  The Government have made the strength of feeling known to the Canadian Government through the high commission in London. My noble Friend the Secretary of State for Trade, who a few days ago returned from Canada, also took the opportunity to make the strength of public feeling known. By a fortunate coincidence I shall have the privilege of meeting the Canadian director general of fisheries this afternoon. I shall take the opportunity to emphasise the sentiments eloquently voiced in the Chamber for transmission to his colleagues in Canada.
  The issue was properly taken up in the European Parliament in March. A resolution was passed requesting the Commission,
  "following the example of the United States, the Netherlands and Italy and taking into account the actions of retail traders in France, to introduce, by means of regulation, a ban on Community imports of all skins and products derived from young hooded and harp seals and on these and other products corning from seals whose stocks are depleted, threatened or endangered".
  The third part of the resolution commended the action that the Government had taken. It suggested that
  "all seal products imported into the Community are clearly marked as made of or derived from seal skin, indicating the type of seal and where the seal was killed."
  That is the basis of the order laid in 1980 under the Trade Descriptions Act by my predecessor. To a degree, he can be said to have anticipated what was in the mind of the European Parliament.
  Since my hon. Friends and the European Parliament have drawn attention to what other countries have done,
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  I shall refer briefly to those countries in case it should be thought that we have been slower or less sensitive. In France, there is no official import ban but there has been voluntary action by the furriers, who have said that they will not use the skins of baby harp and hooded seals. In Italy, there is a ban on the import of sealskins but it is restricted to pelts of a very small size. With all respect to our Italian friends, I am not sure whether it is an effective ban. It certainly would not satisfy my hon. Friends In Holland and the United States there are bans but they are not specifically aimed at baby harp or hooded seals. They cover almost all seals. In the United States the marine mammals protection legislation of 1972 covers all marine mammals. It is not a specific ban. There may be a ban in Sweden but in the time available I have not been able to discover its basis and scope. I realise that more may need to be done in this connection, but I think that we can say, without undue modesty, that we have not lagged behind our neighbours.
  Mr. Shersby: I am sure that the Government are not lagging behind, but can my hon. and learned Friend give me an assurance that the Government are keeping the matter very much in mind and will examine what other ways are open to them, either to discourage the Canadian Government from permitting the practice of clubbing seals, or to consider whether there are other ways in which we could discourage the practice, without causing any breach in relations with our Canadian friends?
  Mr. Rees: We shall, of course, watch developments in this connection closely, as well as developments in other countries. I am very sorry that I have been unable to discover exactly what is in force in Sweden, but as my hon. Friends will appreciate, I had barely an hour's notice in which to master the details of this subject, although I am familiar with the outline, having signed many letters to my colleagues and even to you, Mr. Deputy Speaker—the House knows of your concern in the matter—and I was not, therefore, able to cover some of the more recondite aspects. Certainly, the Government will keep themselves informed.
  That brings me back to the aftermath of the important debate and resolution in March of this year in the European Parliament. I have drawn attention to only two aspects of that resolution, but there were many others. The resolution was forwarded to the Council of Ministers for information, and to the European Commission for any action that it thought appropriate. I was pressed by my hon. Friends about whether we had been in touch with the Canadian Government. I understand that the Commission has been in touch with the Canadian Government, and it has explored with that Government the possibility of devising proper methods of policing the seal cull—I hope that this will encourage my two hon. Friends—to see whether more humane methods of killing could be devised, if and when a cull proves to be necessary. For the moment, I am not arguing about whether the harp or hooded seals deserve to be culled. That is the next important point.
  As the House will be aware, there is a Washington convention on trade in endangered species of wild flora and fauna. It was first signed in March 1973, and this country is a signatory to it. It is a most important convention. Various species are to be found in the annex, but unfortunately not yet the harp or hooded seal. The

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  Commission feels that the proper way to proceed, if it was thought appropriate, would be to add various categories of seal, particularly the harp and hooded seal, to the annexes to the convention, and then recommend some form of European Community regulation. That is very much in the Commission's mind, and Her Majesty's Government would welcome that approach.
  Following that, the Commission asked the Nature Conservancy Council in this country—it is a great tribute to that organisation to be singled out for this job—to update its previous report on seals, with particular emphasis on the harp and hooded seals. I understand that the report has just been handed to the Commission, and I believe that a copy has just been given to my right hon. Friend the Secretary of State for the Environment, who is responsible for implementing the Washington convention. I am not trying to shirk any responsibility on the part of the Department of Trade, but constitutionally it is a matter for my right hon. Friend. I know that he and the Commission will study closely the updated report of the Nature Conservancy Council. It is, therefore, singularly appropriate that this House have an opportunity to debate this subject—although I accept that all hon. Members have not been quite so assiduous as my two hon. Friends in taking advantage of that opportunity—and to express a view before a final decision is taken about what action
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  could be taken by the Commission, the Council of Ministers or Her Majesty's Government, in the light of that updated evidence.
  I hope that the House will recognise that neither the European Commission nor the Government have been dragging their feet on this issue. We recognise the considerable feeling that exists not only in the House but outside. But it is right to proceed in a proper manner. A unilateral ban by this country would not be totally effective, as I am sure hon. Members recognise. If every country of the Community focuses on the issue, there is a greater chance of achieving a solution that can have some practical impact an this delicate and sensitive question.
  I congratulate my hon. Friends. I hope that I have been able to assure them that action is being taken and that this is a singularly appropriate moment for us to register our views. My right hon. Friend the Secretary of State for the Environment, who has particular responsibility for conservation matters, my right hon. Friend the Home Secretary, who is responsible for licensing under the Conservation of Seals Act, and myself, will take careful note of what has been said and written to us. I can assure the House that it is not my intention that this important and sensitive problem should be brushed under the table.
  Question put and agreed to.
  Adjourned accordingly at one minute past Two o' clock.

SCOTLAND
  Fisheries Research and Development (Rayner Report)
  Fisheries Research and Development (Rayner Report)
ENVIRONMENT
  Enterprise Zones
  Enterprise Zones
  Aircraft Hangars, Pollington
  Aircraft Hangars, Pollington
  Hillingdon (Caravan Sites)
  Hillingdon (Caravan Sites)
TRANSPORT
  Railways
  Railways
  M180 (Caistor)
  M180 (Caistor)
HOME DEPARTMENT
  Unconvicted Prisoners
  Unconvicted Prisoners
  Animal Experimentation and Vivisection
  Animal Experimentation and Vivisection
  Representation of the People Act 1949
  Representation of the People Act 1949
  Papal Visit
  Papal Visit
  "Public Disorder" (Document)
  "Public Disorder" (Document)
PRIME MINISTER
  Youth Opportunities Projects (Closure)
  Youth Opportunities Projects (Closure)
  Falkland Islands
  Falkland Islands
EMPLOYMENT
  Training
  Training
  Secret Postal Ballot Scheme
  Secret Postal Ballot Scheme
FOREIGN AND COMMONWEALTH AFFAIRS
  Passports
  Passports
  Lieut. Commander Alfredo Astiz
  Lieut. Commander Alfredo Astiz
DEFENCE
  Napalm Bombs
  Napalm Bombs
  Naval Reserve
  Naval Reserve
  HMS "Invincible"
  HMS "Invincible"
  Naval Vessels (Replacements)
  Naval Vessels (Replacements)
  Sea Wolf
  Sea Wolf
  Torpedo Development
  Torpedo Development
  Arms Sales (Export Licences)
  Arms Sales (Export Licences)
WALES
  Nissan Car Plant
  Nissan Car Plant
TRADE
  Investor Protection
  Investor Protection
  Travel Agents
  Travel Agents
  Steel Imports
  Steel Imports
NATIONAL FINANCE
  Gross Domestic Product
  Gross Domestic Product
  Incentive Travel (Staff)
  Incentive Travel (Staff)
  Second Hand Investment Bonds
  Second Hand Investment Bonds
CIVIL SERVICE
  Higher-paid Civil Servants (Redundancies)
  Higher-paid Civil Servants (Redundancies)
  Senior Civil Servants (Premature Retirement)
  Senior Civil Servants (Premature Retirement)
AGRICULTURE, FISHERIES AND FOOD
  Egg Producers (Returns)
  Egg Producers (Returns)
  Illegal Egg Imports
  Illegal Egg Imports
  Fisheries Research and Development (Rayner Report)
  Fisheries Research and Development (Rayner Report)
SOCIAL SERVICES
  Departmental Staff (Retirement)
  Departmental Staff (Retirement)
  Hearing Aid Batteries
  Hearing Aid Batteries
  Incapacity Benefit Claim Forms
  Incapacity Benefit Claim Forms
  Two-parent Families
  Two-parent Families
  Supplementary Benefits Take-up Campaign (Birmingham)
  Supplementary Benefits Take-up Campaign (Birmingham)
  Child Benefit
  Child Benefit
  Pensions
  Pensions
  Drug Abuse Centres
  Drug Abuse Centres
  Hearing Aids
  Hearing Aids
  Mental Hospitals (National Health Service Dispute)
  Mental Hospitals (National Health Service Dispute)
INDUSTRY
  Glass Industry (Electric Smelting)
  Glass Industry (Electric Smelting)
  British Steel Corporation
  British Steel Corporation
  Industrial Development (North-West)
  Industrial Development (North-West)

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.

Accountancy Bodies: Recognition
Lord Benson: 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, in considering any applications from additional accountancy bodies for authority to conduct audits under Section 161(1)(a) of the Companies Act 1948, they propose to abide by the principles set out in the letter from the Department of Trade and Industry dated 12th September 1975 to the then presidents of the existing authorised bodies, and, if not, why those principles are no longer considered necessary for the protection of the public.
The Secretary of State for Trade (Lord Cockfield): My Lords, the letter to which the noble Lord refers starts with the statement that,
" we will, of course, deal with every application on its merits ".
This is what we propose doing. So far as the other issues raised by the noble Lord are concerned, I am giving the matter careful consideration and will write to the noble Lord in due course.
Lord Benson: My Lords, I am most grateful to the noble Lord for that information. May I ask the noble Lord whether it might be helpful to have discussions with the recognised bodies, because I am sure that, if they were to take place, some reasonable agreement could be reached on this difficult problem?
Lord Cockfield: My Lords, I will certainly bear in mind the suggestion that the noble Lord makes. But I think that the best course would be for him to give me the opportunity of going into the matter in detail, and I will let him know what conclusion I come to as to the course that we should follow.
Lord Wigoder: My Lords, is it still the current policy of the Government that no new body will be recognised until a substantial majority of its members match the existing standards of the bodies so far recognised?
Lord Cockfield: My Lords, this is one of the points to which consideration needs to be given.
Lord Chorley: My Lords, I hope that the existing bodies can take some comfort from the reply of the noble Lord the Minister. But is the noble Lord aware that, if his Answer is what I take it to be, it should be of some help in the United Kingdom profession in,
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to take just one instance, its negotiations with its sister organisations in the EEC, which have the object of securing practising rights in the EEC countries? Would he accept that a rather fuller and more explicit statement of support by the Government in due course for the standards set by the existing recognised bodies would, by removing any lingering doubts or ambiguities, also be desirable? Would he not agree that objectives such as this one are very much in the public interest?
Lord Cockfield: My Lords, I am aware that strong feelings are held on this matter. This is why I say that I will give it very full and careful consideration.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the exchanges have shown that there is something of some importance in this Question and Answer? I have not been able to understand what it is all about and, since my noble friend has said that he will write a letter to the noble Lord, could those of us who are not able to interpret the historic exchange that has taken place have a copy of it as well?
Lord Cockfield: My Lords, the matter is of importance, which is why I promised to give it careful consideration. So far as the rest of my noble friend's question is concerned, I will certainly ensure that the views that the Government come to are made widely known.
Lord Leatherland: My Lords, did I hear correctly that the noble Lord accused the noble Lord the Minister of hypocrisy? If so, may I dissociate myself from such an accusation?
Lord Cockfield: My Lords, I am absolutely certain that my noble friend was not accusing me of any such thing, and I would be horrified to believe that the noble Lord himself harboured any such unkind thoughts.

Capital Ownership in the United Kingdom
11.10 a.m.
Lord Gainford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made to date in stimulating the wider ownership of capital in the United Kingdom.
Lord Cockfield: My Lords, the Government have made significant progress in promoting the wider ownership of capital in a number of different areas. In particular, improvements in the tax incentives for profit sharing and share option schemes in the 1980 Finance Act have been successful in encouraging wider ownership of shares, and the further improvements announced in this year's Budget should help to build on this success. Other examples of Government actions designed to spread the ownership of capital are the arrangements made to give council tenants the right to buy their homes, and improvements in the

403
capital gains tax régime. We have also introduced various measures, such as the Business Start-Up Scheme and Venture Capital Scheme, which are designed to encourage wider investment in new businesses.
Lord Gainford: My Lords, I thank my noble friend for that Answer. May I ask him to enlarge a little on two of the schemes he has mentioned? First, as regards council houses, has he a figure of the number of tenants who have taken up their rights under the Housing Act 1980 and, secondly, what success has the Business Start-Up Scheme had so far?
Lord Cockfield: My Lords, so far as the first of my noble friend's points is concerned, approximately 250,000 tenants have now bought their houses and a further ⅓ million have had their right to buy acknowledged by their landlords. So far as the Business Start-Up Scheme is concerned, this was introduced in the 1981 Budget. It is still too early to give actual figures of the take-up of relief, but there have been a number of investment funds set up for this purpose, and a great deal of interest has been shown. The present Finance Bill does, in fact, contain further improvements in the scheme.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that the very desirable objective which the Government have in mind could be enhanced by a more generous approach to the lower paid sections of the community, such as hospital ancillary workers, nurses et cetera?
Lord Cockfield: My Lords, if I may say so, that raises a quite different issue from the Question on the Order Paper.
Lord Morris: My Lords, would my noble friend agree that perhaps the greatest stimulation to the wider ownership of capital is Her Majesty's Government's highly successful fight against inflation, in that that in itself stimulates savings with which capital can be acquired by ordinary members of the public?
Lord Cockfield: My Lords, I entirely agree with my noble friend. A reduction in the rate of inflation has many beneficial effects.
Lord Oram: My Lords, does the noble Lord's memory go back so far as mine, to the day when the Conservative Party came out with the revolutionary slogan, "A Property-owning Democracy"? While the answer which the noble Lord has given this morning indicates some approach to wider ownership of capital, is it not the case that we await the day when we can have a better approach to democracy relating to the democratic decisions concerning the use of that capital? Can the noble Lord give us any hope in that respect?
Lord Cockfield: My Lords, my memory does indeed go back to the days when the Conservative Party invented the slogan, "A Property-owning Democracy", and it extends over the period when they have brought
404
that slogan into real effect. So far as control over the ownership of property is concerned, this country is a democracy and its laws are passed by Parliament, and they make whatever provisions may be thought to be appropriate in that respect.
Lord Northfield: My Lords, is it not the case that pension funds and life insurance companies now own more than half of the shares on the Stock Exchange and that, on present trends, they will probably own most of them in the 1990s? Is it not important for the Government, politics quite apart, to begin to examine whether such pension funds are fully democratic, fully accountable, since these 11½million people who, quite properly, are spreading ownership in this way by their contributions to these pension funds are at the moment not fully protected democratically and are not totally in control, as they should be, of the decision-makers in those funds? This is an issue which is now causing increasing concern.
Lord Cockfield: My Lords, the noble Lord's question strays far from the one on the Order Paper. I would, however, join him in paying tribute to the very valuable part played by the pension funds and the insurance companies in enabling people to build up modest amounts of capital and to protect themselves against their old age and other contingencies.
Lord Kilmarnock: My Lords, first may I declare an interest as a member of the Wider Share Ownership Council and then ask the noble Lord whether the Government will give serious consideration to introducing something along the lines of the French loi Monory?
Lord Cockfield: My Lords, the question of the introduction of a scheme on the lines of the loi Monory has been considered on many occasions. We believe that the series of specific measures which we have taken, including the Venture Capital Scheme and the Business Start-Up Scheme, are targeted more directly to the problem and are likely to be more cost effective.

Video-Cassettes: Legislation
11.16 a.m.
Lord Wigoder: 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 satisfied that existing or proposed legislation is adequate to deal with the problems caused by the sale or rental of hard porn and horror video-cassettes.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, existing legislation relating to obscene publications and indecent displays applies equally to material contained in video-cassettes as it does to other forms of publication or display. As to proposed legislation, the Cinematograph (Amendment) Bill would apply to the exhibition for private gain of video films, and the Local Government

405
(Miscellaneous Provisions) Bill would enable local authorities to exercise control over the numbers of shops dealing to a signficant degree in pornographic material. That of course would include such material contained in video-cassettes. The Government have at present no plans for further legislation, but we will keep the operation of the law under close review, particularly in relation to material involving horror or violence.
Lord Wigoder: My Lords, while thanking the noble Lord for that Answer, may I ask whether he would not agree that there are three particular problems which lead to the view that neither the present nor the proposed legislation is adequate, the first problem being that the material, by its very nature, is not immediately identifiable so that police officers entering premises do not know what it is that is there to be seized; the second problem being that this material can be shown to young people without any control under either the present or the proposed legislation; the third problem being that the depraving effect of this appalling rubbish is enhanced in the home by the facilities that are available there for the particularly nauseating bits to be played and replayed at will?
Lord Elton: My Lords, I accept that the medium we are looking at now is different in kind and intensity of effect from the traditional sort of pornographic material which was available in the noble Lord's youth and my own. It poses particular difficulties. The noble Lord will be aware of the lack of agreement that there is in general on the control of this difficult area and may take courage from the voluntary approach now being looked at by a working party which has been set up by the British Board of Film Censors and the British Videogram Association, with the intention of setting up some kind of certification scheme similar to that used in the film industry.
Lord Boston of Faversham: My Lords, would the noble Lord the Minister bear in mind that there is growing and widespread concern about the matter? While the Minister has clearly indicated to the House the current state of legislation, it does not quite go so far as I think the noble Lord, Lord Wigoder, had in mind; namely, whether the Minister is satisfied that those measures which he has mentioned to the House this morning are adequate to deal with the very problems which he has indicated. Can he go a stage further so far as the interesting point about classification which he mentioned is concerned and say whether the Government will give very serious consideration to it? Perhaps he would also bear in mind the need to deal with the problem of video-cassette piracy, which is not unconnected with these matters.
Lord Elton: My Lords, as to the first part of the noble Lord's question, the system of classification—if it involves a voluntary sense—is a very good answer in part to the problem. Under the provisions of the Local Government (Miscellaneous Provisions) Bill as it left your Lordships' House, it will be open to licensing authorities to require shops to indicate the classification given by such a body to the material which they sell. As to the noble Lord's second question, I regret that
406
for the moment it escapes me. Could he remind me what it was?
Lord Boston of Faversham: The second part of my question concerned the question of video cassette piracy and the need to bear that in mind.
Lord Elton: My Lords, perhaps it escaped me because it is a little far from what we are discussing at the moment. What we are now looking at is the nature of the stuff on the tapes, or discs as they may later be, when they are sold. Questions of copyright and so on are outside the brief for which I have prepared myself on this occasion, because they do not relate to the original Question.
Lord Kennet: My Lords, can the Government tell us whether any of the existing obscenity laws affects cable television and, if not, whether the Government have any proposals to legislate on that matter?
Lord Elton: My Lords, although that is a related question, I regret that I shall have to write to the noble Lord, Lord Kennet, and give my answer.
Lord Leatherland: My Lords, can the noble Lord the Minister explain to me, in view of my maidenly innocence, what is meant by the expression "hard core" in this Question'?
Lord Elton: My Lords, if the noble Lord's innocence is so maidenly at his stage in life, I am afraid that my explanation might shock him.
Lord Sudeley: My Lords, is the Minister aware that children under the age of 16 can obtain X certificate films, and does he think there might be some advantage in amending the Children and Young Persons (Harmful Publications) Act in order to include video-cassettes?
Lord Elton: My Lords, I think that I have gone as far as I can in saying that I believe we should proceed at present along the voluntary path and see how it works. We shall look at this very closely in the context of two pieces of legislation which are currently going through this Parliament.

NHS Nurses' Pay Claim
11.23 a.m.
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will acknowledge the justice of the National Health Service nurses' wage claim and thus relieve them of the necessity of contemplating strike action.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, the Government have recognised the dedication and commitment of nurses and midwives

407
by enabling a pay offer to be made which is 2.4 per cent. above the general NHS pay factor. We regret that this offer has now been rejected by the Staff Side of the Nurses and Midwives Whitley Council, but that offer is still on the table.
Lord Molloy: My Lords, I wish to thank the noble Lord the Minister for the courteous nature of his response to my Question, although I deplore its content. Is the noble Lord aware that, notwithstanding the offer, members of the Royal College of Nursing and of the Confederation of Health Service Employees will still be the lowest paid in public service? Is the noble Lord further aware that, in the view of the Royal College of Nursing and the Confederation of Health Service Employees, it is the Government's intention to destroy their solidarity and to impose humiliation? Would it not be better for the nation and for the organisations involved if the Government were to resort to a policy of conciliation?
Lord Trefgarne: My Lords, I can assure the noble Lord, Lord Molloy, that the Government have no intention of trying to humiliate anybody. We have made the very best offer that we can in the circumstances. We have recognised the very special position of nurses and midwives by giving them a rather larger offer than it is possible to give to other workers, and also by declaring our determination to establish permanent machinery for determining nurses' pay in future.
Lord Wilson of Langside: My Lords, will the noble Lord the Minister and the Government have it in mind for the future that, in the view of many, against the background of the nurses' claim, to accord to judges an increase in salary of 18 per cent. is consistent neither with commonsense nor with justice? Will he bear in mind for the future the need for recognition of the fact that this kind of thing encourages militants and discourages moderates?
Lord Trefgarne: My Lords, the TSRB covers a very small number of senior staff. Its recommendations are for "catching up" awards from 1980 recommended levels, which could, perhaps, be analogous to the Clegg awards of 1979–80. Even after the recent TSRB award, the pay of those persons affected is at the very most only I42 per cent. above the level recommended for 1st April 1980. Since then, NHS staff have received increases nearer to 20 per cent.
Lord Morris: My Lords, in view of the supplementary question asked by the noble Lord, Lord Wilson of Langside, is my noble friend aware that the pay of judges has never, in real terms, ever matched that set by the judicature Act of 1872?
Lord Trefgarne: My Lords, while my noble friend Lord Morris might be right, there have of course been a good many other changes since that time as well.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that, while paying tribute to the work of ACAS, the move to call in the chairman of ACAS to
408
try to resolve this matter by discussion is a pretty hopeless one? Would it not be far better if the Government agreed to arbitration? I am sure that the nurses' claim would be freely admitted. Is the Government's position here the same as when the teachers went to arbitration and secured an increase? Are the Government objecting to arbitration in this instance in case the nurses' justice is admitted?
Lord Trefgarne: My Lords, perhaps I should make it clear that Mr. Lowry has not been asked to solve this problem but rather to act as a line of communication in this matter between the Government and the TUC, to see whether he can determine what common ground may exist. The other matter which the noble Lord raised is, of course, an important one too.
Lord Wynne-Jones: My Lords, will the Government bear in mind that, although we all recognise the great devotion and hard work put in by nurses, for which we admire them, there is a further point—which is that they have a long period of training? They train for three, four or even five years and, during that period, they do not receive a training grant as a student would, but only low pay for the hard work they put in. Will the Government bear in mind that most of us in the community feel that we owe a very great debt to the nursing profession and that it is time we recognised that debt by making a substantial award to its members?
Lord Trefgarne: My Lords, the Government certainly agree that the nurses occupy a very special place in the National Health Service. That is why we have offered rather more to the nurses on this occasion than we have to other workers in the same service, and why we have agreed to establish the special negotiating machinery to which I referred earlier. We hope that these special considerations will weigh with the other members of the service as well.
Lord Auckland: My Lords, while accepting that the offer to the nurses within the pay code policy is a reasonably generous one, may I ask whether my noble friend does not accept that the increased rents, increased laundry charges and increases in other charges, too, have largely swallowed up the pay increases? Will he bear that point in mind?
Lord Trefgarne: My Lords, only about 10 per cent. of nurses in the health service actually live in accommodation provided within the health service. Quite a wide range of nurses, student nurses, pupils and others enjoy discounts from the accommodation charges, and indeed those who live in substandard accommodation also have discounts. Furthermore, the charges are being introduced on a progressive basis and will not be fully in place until 1984.
Lord Davies of Leek: My Lords, is the noble Lord aware that some of us do not like to press the noble Lord the Minister, who we know is a kindly individual? But is he not aware that there is such a disparity between the attention we give to police force increases and the attention we give to the nurses, and I regard the nurses' service to the nation just as well? Is he not aware that now, with our young men in the

409
services being damaged and wounded in the Falklands, we may have more need than ever for a well-trained nursing profession? Consequently, I think this contingency should he taken into account during the discussions.
Lord Trefgarne: My Lords, as I have already said, the Government certainly accept that the nurses deserve, and indeed have received, special consideration in this matter; that is why we have made the provision to which I have already referred. But, at the end of the day, the cost of the health service can only be within what we can afford, and that is why arbitration, for example, is not a possibility open to us, because it is for the Government to decide what the nation can afford in the circumstances.
Lord Wallace of Coslany: My Lords, does the noble Lord mean by that reply that if arbitration was carried out and the nurses got an increased pay award the money would have to come out of the health service, which is already strained financially too much at the present time?
Lord Trefgarne: My Lords, I have to say that arbitration is not a possibility in these circumstances. The Government have, through the Whitley Council, made the best offer that can be made within the limits of the resources available. The noble Lord is quite right that if a larger offer had been made it would have had to come from within existing funds available to the health service.
The Lord Privy Seal (Baroness Young): My Lords, we have now had nine minutes on this Question, and there is other business to take today. I think we have covered this very fully. I do not in any way wish to stop noble Lords asking questions, but I think it really would be the wish of the House that we might now move on to the next business.
Lord Molloy: My Lords, may I ask the noble Baroness the Leader of the House if I can have just one more minute to put a very vital point, not from my own point of view, but from the point of view of the nation and the feeling towards the nurses?
Baroness Young: My Lords, I do appreciate that the noble Lord feels very strongly about this matter. Could he ask one very short question—not make a point, but ask one short supplementary question?
Lord Molloy: My Lords, I will be as short as I can. With regard to the noble Minister's last answer, on refusing arbitration, will he now tell the House what happened to the Conservative Party's election pledge to permit free bargaining?
Lord Trefgarne: My Lords, in any situation of free bargaining, the employer, whoever he may be, whether the Government or some private company, has to decide the maximum sum he can afford in terms of wage increases. That is what is going on now. We have decided the maximum sum that is available for this purpose. Arbitration would only threaten that
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position, and perhaps suggest additional payments, but it would not say where those funds were to come from.

Planning Inquiries (Attendance of Public) Bill
11.34 a.m.
Lord Sandford: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Sandford.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AMPTHILL in the Chair.]
Clause 1 [Planning inquiries to be held in public, subject to certain exceptions]:
On Question, Whether Clause 1 shall be agreed to?
Lord Gifford: I have a point to raise on Clause 1 of this short Bill. The Bill gives the right to the public to attend planning inquiries and to inspect the documents which are presented in evidence to them. I wholcheatedly support that measure. The point I want to raise arises out of this. The effect of the noble Lord's Bill would, I think, be limited if, after the public were allowed to hear the evidence and inspect the documents, they were not allowed to be acquainted with the decision which is made at the end of the inquiry by the Secretary of State concerned and of the reasons for it.
The whole point of admitting the public to any administrative or judicial proceeding is so that the process can be scrutinised and appraised and criticised by the public and their representatives the press, in order to see whether wise decisions are being reached. At the moment, although the Bill gives the right to the public to hear the evidence and read the evidence, there is not a right to know about the decision and the reasons for it. Although sometimes, I am told, the press and public, if they ask for it, will receive a copy of the Minister's decision and the reasons, that is not always the case; there is no right. Sometimes the request for reasons and for a copy of the decision is refused.
I had thought that it might be possible by a short amendment to bring this further matter within the scope of the Bill, but the amendment would have to be quite substantial and there may even be doubt, given the Title of the Bill, whether an amendment to that effect would be in order. Therefore, I hope that perhaps the noble Earl who is acting for the Government on this Bill—I apologise to him for not having given him longer notice than a day of this point—can give some assurance that it is the Government's intention, and the intention of the various departments involved in planning inquiries, that the same principles that apply to this Bill—that is to say, openness to the public subject only to security questions—would be applied when members of the public or the press

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request to be given information about the final decision which comes out at the end of the inquiry, and the reasons for it.
The Earl of Avon: My Lords, I can assure the noble Lord, Lord Gifford, that it is the intention that information about planning decisions and the reasons for them in the form of planning decision letters are always made available, not only to those parties who have a statutory right to receive them but also to the press and anyone else who asks for them. This will continue to be the practice, and we do not feel that there is reason for a statutory provision. In the light of this longstanding departmental practice, and the extreme rarity of any complaints of the kind to which the noble Lord, Lord Gifford, has referred, the Government cannot accept that a need arises to provide a specific right for members of the public and press to receive reasoned decision letters on request. Even if need for such a right were established, arguably it would be more appropriate by amendment of the statutory procedural rules governing many classes of planning inquiry which already deal with details of this kind rather than through primary legislation. I hope that this explanation will allay any fears the noble Lord has.
Lord Gifford: I am very grateful to the noble Earl, and I am sure his assurance will be of value to all those who wish to follow public inquiries and who have from time to time, although only in rare cases, been thwarted in their desire to know the reasons for the decision.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment.

Firearms Bill
11.40 a.m.
Lord Renton: My Lords, I beg to move that this Bill be now read a second time. I cannot begin without paying tribute to my honourable friend Mr. Eldon Griffiths who promoted this Bill as a Private Member's Bill in another place. It is a measure of his experience and parliamentary skill, and the respect in which he is held, that the Bill passed so easily through another place and arrived in this House unamended. It also reflects the all-party support which the Bill received and which I venture to hope it may receive also in your Lordships' House.
The existing controls over firearms arc contained in the Firearms Act 1968 which is a somewhat massive consolidation measure. Indeed, it is so thorough that one wonders how there could be any gaps in it. But circumstances being as they are, and as crime increases and the use of firearms in the commission of serious crimes increases, any gap which does arise should be filled. I shall hope to show your Lordships that there is a gap here which should be filled and which will be filled by this Bill.
Many noble Lords like my noble friend Lord Swansea are familiar with the law relating to firearms
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under the Act to which I have referred and, indeed, the rules made under it. These controls require any person wishing to possess, purchase or acquire a firearm, to hold a valid certificate issued by a chief officer of police. It is generally acknowledged, I think, that these controls are reasonably effective in ensuring that firearms do not fall into the wrong hands. I must stress "reasonably effective" because they are not completely so—nobody could maintain that. But because of the difficulty which some criminals experience in obtaining a real firearm, there is a danger that they will turn to the adaptation and misuse of an imitation firearm.
The law already recognises the seriousness of the criminal use of imitation firearms by providing that there shall be the same maximum penalties for certain offences in relation to them as for the use of a real firearm. Those offences include carrying a firearm or imitation firearm with intent to commit an indictable offence or to resist arrest. It would, of course, be preferable if we could find a way of ensuring that all imitation firearms were not available to criminals. But the promoter of the Bill, whose concern for these matters is so well known through the advice which he gives and which he now has given to the Police Federation for many years, has looked closely at the problem and he has concluded, rightly in my view, that the introduction of controls over imitation firearms merely on the grounds of appearance would not be feasible. The Home Secretary who recently completed an exhaustive review of this matter has reluctantly arrived at the same conclusion. I think it will probably be generally accepted that it is not feasible.
However odious the criminal misuse of an imitation firearm might be, obviously it cannot be used to shoot a victim so long as it remains merely an imitation. That is a glimpse of the obvious which I think I have to make. But real distress can be and is caused to those threatened by a firearm, whether it is real or imitation. Indeed, a toy firearm, completely innocuous and incapable of being fired in any way, is sometimes used by criminals in pursuit of serious crime.
With the increased availability of tools used, for example, by do-it-yourself enthusiasts, there is a real risk that criminals may convert some imitation firearms so as to enable them to fire live ammunition. Some of them indeed are so constructed as to require very little work to enable them to to fire live ammunition. Although the act of conversion is, I must tell your Lordships, already an offence under the Firearms Act unless undertaken by a registered firearms dealer, it would be giving criminals an easy opportunity to convert an imitation firearm—an opportunity which should not be presented to the criminal—in circumstances, for example, where the barrel has merely to be bored to be converted from a false barrel into a real one. That is the type of thing which the Bill now before your Lordships seeks to prevent.
The substance of the Bill is contained in Clause 1. That provides that any imitation firearm which has the appearance of a firearm to which Section 1 of the Firearms Act 1968 applies, and which can be readily converted into such a firearm, is to be treated as if it were an actual firearm for most of the purposes of the 1968 Act. That means that the possession, purchase or acquisition of a readily convertible imitation fire-

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arm will become unlawful unless its possession et cetera is covered by a firearms certificate. People dealing in such imitation firearms in future will have to be registered dealers.
In practice it seems unlikely that many certificates would have to be issued in respect of readily convertible imitation firearms, because it will be difficult for an applicant to show that he had good reason for having such an imitation rather than one that was incapable of being readily converted into a firearm. The words "readily convertible" are, of course, the operative words.
Some noble Lords may wonder why the Bill does not extend to all convertible imitation firearms rather than to those which are merely readily convertible. With the aid of special tools and equipment and with the necessary expertise, virtually any imitation firearm, including many toys, could be converted to fire live ammunition. But I suggest that it would clearly be inappropriate to bring all such imitations under strict control. This view was taken in another place after a good deal of discussion. The Bill, therefore, is confined to those imitations which could be converted without any special skill and using ordinary do-it-yourself tools and equipment.
Clause 1(6), to which I should invite your Lordships' attention, embodies that formula and puts it into statutory form. I trust that your Lordships will agree that this is the right approach. It is the essence of the Bill. Of course, it will ultimately be for the courts to decide in any doubtful cases which are brought before them whether a particular imitation firearm is readily convertible. But, in order to help manufacturers, importers and retailers to comply with the law, the Home Office will draw up non-statutory guidelines, and these will describe measures which can be incorporated in an imitation firearm to render it capable of being readily converted.
Assurances were given in another place that these guidelines would be drawn up in consultation with representatives of the trade and other interested parties, and would be available to them before the new legislation is brought into force. Indeed, subsection (3) of the commencement clause—Clause 4—is, somewhat to my personal regret, as the noble and learned Lord, Lord Elwyn-Jones, will understand, left open. There is no fixed date. There is no time limit after the Bill receives Royal Assent, but it is to be done by an order of the Secretary of State when everybody is ready. I do not find that totally satisfactory, but there are many worse cases, so I am prepared to let this one run if noble Lords will agree that it should be so.
There is one other point which is of interest to lawyers, which I think I should just mention. I only hope that I have it right. However, it seems to me that these non-statutory guidelines will not be part of the law and, indeed, there may be doubt as to whether the courts' attention could even be drawn to them. Taking a somewhat strict view of those matters, I would lean against those being available to the courts, but I would be very interested to know what noble Lords think about that. However, they will not be part of the law. It may be that they might have the same sort of status as the Highway Code, but I do not know.
I do not think that there is much else in the Bill to which I should refer, but perhaps I should draw
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attention to the special defence in subsection (5) of Clause 1, because this will help to safeguard the position of a person who might already have an imitation firearm for perfectly innocent purposes without knowing, and having no reason to suspect, that it was readily convertible.
Your Lordships will appreciate from what I have said that this Bill is only a modest addition to the existing firearms law. Indeed, it is true that there have been some cases where the courts have considered an easily-convertible imitation firearm to be caught by the present legislation as being parts of a firearm within the meaning of the Act.
But in spite of that, which does not remove all uncertainty in this matter, the promoter of the Bill felt and I am sure that he was right—that it would be helpful to all concerned with the application of firearms law to have the status of such devices clearly set out in statutory form, and particularly to know the circumstances in which an imitation firearm could be regarded as readily convertible, whether or not the statement of the circumstances is part of the law.
I know that my noble friend Lord Elton, the Parliamentary Under-Secretary of State at the Home Office, intends to say a few words about some of the provisions of the Bill, and no doubt he will endeavour to answer any points that are raised by your Lordships. With the leave of the House, I shall endeavour to deal with them as best I can at the end of the debate. My Lords, I beg to move.
Moved, That the Bill be now read a second time. —(Lord Renton.)
11.56 a.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble Lord, Lord Renton, for undertaking the carriage of this, I think, useful little Bill through the House. It is reassuring to me that a great expert in this field in the person of the noble Lord, Lord Swansea—who knows more about guns, used lawfully, of course, than any other person so far as I know in the United Kingdom and even including Wales—is to speak.
It is a mournful fact that the carriage of weapons is increasingly being used in crime and, therefore, any gap in the legislation to control and limit it, as far as one can, ought to be filled. There seems to be a gap here which I think that this little Bill probably helps to stop. I am bound to say that I am not sure that I am able to agree with the noble Lord, Lord Renton, on one matter, when he expressed the hopeful opinion that firearms controls are reasonably effective. In the debate in another place there was a startling statement made by one of the Members, that whereas now there are only 50,000 to 60,000 legally-held and licensed hand guns in Britain, there are no fewer than 350,000 illicitly-held pistols. Where that interesting figure emanated from and what the basis of it was, I do not know, but it is a startling figure.
The opinion has been expressed that illicit hand guns can now be bought in our major cities more cheaply than it would cost to buy an imitation hand gun. I do not know whether the noble Lord, Lord Elton, will be able to give us any hope, comfort or reassurance in the face of those assertions of fact,

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because they present a very worrying situation indeed. The gap that, therefore, needs to be filled—if that is right—is a review of the licensing system and the degree of controls that presently exist, and perhaps even the attitude of the courts towards offences in this part of the criminal law. But if it be the case that the criminal can get the real thing pretty easily—and I fear that that may well be the case—we cannot take a great deal of comfort from the little entry that this Bill will effect into the field of limiting the accessibility of weapons to the criminal.
As regards the gap that needs to be filled, it seems to me—I must confess on a fairly limited study of the problem—that the attempt in the Bill to cover the situation seems to be as good as any that can be attempted. It is not easy. There is, on the one hand, the desire not to render inaccessible that which has become part of the upbringing of children in this day and age.
I am not sure that I have wholly welcomed the fact that television and cowboys, the wild west plethora that invades the television box day in day out, firearms and wielding them, have become part of life that the young become addicted to. It is alarming at times to see the youths and boys in action, hiding, concealing themselves, and making all the relevant noises in a most frightening way at times. I do not suppose there is anything we can do about that. As parents all of us have suffered the hazard of water pistols, and I do not suppose there is a great deal of harm in that. But we are becoming over-conditioned, and I think we are over-conditioning our young people in television to the acceptability of the handling and use of a gun as part of manhood. It is not a happy development.
However, the fact that there should be available now, without licence, readily convertible imitation weapons is, of course, a serious matter. If this Bill becomes law, they will need to be licensed. I come back to my question. If they need to he licensed it seems unlikely that the criminal will ever seek to acquire one. What puzzles me is this: what does the applicant for a firearm which is not a real firearm, but is readily convertible to one, want it for? If he wants it for an honest purpose of self-protection and self-defence, he can apply for a licence. In the appropriate case he can get one. What does the man who wants an imitation firearm that can easily be converted say to the police when he applies for the licence? It puzzles me.
I do not know what the point really is. In so far as it is said, after much discussion in another place, that this would apparently stop the criminal using these things, I suppose it must be right; but I confess to being mystified at the moment as to what are the grounds on which a person would seek to go to the trouble of acquiring a licence to have possession of these guns. Perhaps the noble Lord, Lord Renton, with his ability to understand these things so readily, may be able to give us a reassuring explanation.
I was delighted to see that he was able to have an opportunity, in introducing what is now his own Bill, to ride his favourite hobbyhorse; namely, the appointed day in question. If it is sought to achieve a satisfactory arrangement with manufacturers, et cetera, and effective
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guidelines, the sooner the Home Secretary has the power in his hands by this Bill becoming law, the greater will be the pressure he could exercise on those who are going to be putting these things on the market, or distributing them, or whatever it may be. I confess that on this occasion I unreservedly share the views, the concern, of the noble Lord, Lord Renton, about this provision. Perhaps we could get an explanation as to why this should be necessary.
Having raised these questions, if the Home Office is assured that there is a practical gap here, and we are not merely cluttering up the statute book with that which (a), is not needed or, (b), is unenforceable, it seems to me that this is a Bill which, within the limits of its sphere of operation, could possibly he useful in the battle against dangerous crime. Any step to promote our success in that struggle is, of course, welcome.
12.5 p.m.
Lord Swansea: My Lords, I shall not detain your Lordships for long. I should like to congratulate my noble friend Lord Renton on the able way in which he has outlined this Bill to the House, and to give the Bill a welcome, as it is a praiseworthy attempt to strengthen the law relating to the criminal use of firearms. I shall not weary your Lordships with too many details of a technical nature.
It is evident that the Firearms Act 1968 needs bringing up to date in this respect. Most of the content of that Act goes back a great deal beyond the time when this question of replica firearms arose and they became available on the market in such large numbers as they are now. Previous attempts to define replica firearms fell down on the question of definition and distinguishing them from the toy firearms which children—and who can blame them?— are so found of using in playing cops and robbers and cowboys and Indians, despite the best endeavours of their parents and other well meaning individuals to discourage them from warlike acts of that sort. Those of your Lordships who have read that short story by Saki entitled The Toys of Peace will know what I mean.
These replica firearms have now been freely available for a good many years. They are a legitimate item for collectors and for serious students of firearms design who may wish to study the mechanism, and so on, without all the palaver of acquiring the genuine article and having to go through all the formalities of getting a firearms certificate. The trouble is that the more faithful the replica is to the original in its appearance and mechanism, the more likely it is that these replicas may be used for criminal purposes.
No-one knows how many of these articles there are in circulation. It is certain that they have been used in many cases in the commission of crime. When the average layman sees one of these things pointed at him he cannot be blamed for not being able to distinguish the imitation from the genuine article. As your Lordships will remember, there was that well-known case in the Indian High Commission a few years ago. Two men armed with imitation firearms went in there, and they were discovered by one or two plain-clothed policemen who were armed. In the full belief that the arms in the possession of these two men were genuine, they opened fire on them. with the tragic results that we all know.

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It is highly probable that replica firearms have been used in the assistance of many robberies and other crimes where the criminals have not been apprehended, and of course there is no way of finding out to what extent they have been used, except where the perpetrators are arrested. In such cases, they can be caught under Sections 17 and 18 of the Act as it stands. The present Bill is to cover the case where a replica firearm can be converted into what I shall term as a "shooter". There is a great temptation to do that by the criminal, and in some cases it is not difficult.
What is difficult is how to define a replica which can readily be converted. The honourable Member for Bury St. Edmunds, with the assistance of the Parliamentary draftsmen, has made a valiant attempt at achieving such a definition, but even so this part of the Bill can only be described as being a rather grey area. It is open to wide interpretation and so much hangs on what the court may decide is needed in the way of the skill of the individual and the resources and tools available to him. I foresee wide and differing interpretations being placed on that part of the Bill by the courts. Many of us are do-it-yourself enthusiasts—I dabble in it a bit myself—and it is conceivable that some replicas could be converted using ordinary tools available to the householder. "Do-it-yourselfery" has grown more sophisticated, with more elaborate implements and tools becoming available on the market, and some household workshops would do credit to an engineering works.
The question, therefore, is how to define that part of the Bill properly. It is conceivable that a particular replica firearm could be held to be not readily convertible with the equipment that is freely available at any one time, and then a couple of years later a new or improved tool might appear on the market rendering that same replica capable of conversion, and then it could be illegal. What would he the position of the owner in those circumstances? Could he take shelter under Clause 1(5), for example? Perhaps my noble friend would address himself to that.
The gun trade are willing and anxious to co-operate with the Government in making the Bill workable, and I hope they will be called into consultation to work out guidelines and a code of practice jointly with the Home Office experts to ensure that replicas put on the market in future are of such a nature as not easily to lend themselves to conversion. My noble friend mentioned non-statutory guidelines. He is a lawyer, I am not; it is a question which needs careful consideration in terms of how much force the guidelines will have and whether the courts will take any notice of them.
Among the points which occur to me and which could be covered in the guidelines are that the skill and equipment required should be more than that available to the ordinary person; that it should not be possible, with a given replica firearm, to exchange some of its components for the genuine articles so as to turn it into a shooter (that can he done, without greatly affecting the fidelity of the replica to the original, by minor dimensional differences); that the replica should be constructed of materials which, if it could be turned into a shooter, would prevent it from standing up to the shock of firing. That is an important point because, if it were generally known that replicas,
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if converted to shooters, would not withstand the shock of firing, a potential criminal would be deterred by the knowledge that it might do as much harm to him as to his intended victim, and the problem would be half way to being solved.
I shall not detain the House longer on what is a useful measure which deserves an easy passage through your Lordships' House. I wish the Bill well and commend it to your Lordships.
12.15
Lord Kilbracken: I intervene briefly, my Lords, largely as a result of some remarks made by the noble Lord, Lord Swansea. It seems to me—I believe it is more than just a Committee point—that the measure will be seriously weakened by Cluase 1(6), which says the Bill will apply only if the imitation firearm can be converted without any special skill. In other words, if any special skill is needed, no illegal act will have been committed. I should have thought it impossible for anyone to convert an imitation into a real firearm without having any special skill. It might not be necessary for him to have special equipment; if he has enough special skill, he might be able to do it with a screwdriver or some ordinary domestic tool. Surely special skill must always be necessary for such a conversion to be made, and in that case the offence would not be covered.
12.16 p.m.
Baroness Phillips: My Lords, I intervene mainly to congratulate the noble Lord, Lord Renton, on introducing the Bill. In the debate on law and order I referred to the violent crime now perpetrated against many workers in the course of their duty. Particularly in my work with shopkeepers, I have discovered that many holdups are carried out with replica firearms. As we have heard, if something is stuck in your ribs or you are threatened with something, unless you are an expert you have no way of knowing whether it is a replica or the genuine article, and it is too late to find out after discovering it was a real gun.
My noble and learned friend Lord Elwyn-Jones wondered why people wanted collections of replica guns. I must tell him that a certain shop I pass every day in my locality is known as an aqua store and sells not only all the necessary diving equipment but has a tremendous number of replica guns in stock. I complained about that on one occasion because they were openly displayed in a window which anybody could break. In addition, they sell some fearsome things which I gather are used for dealing with sharks. I am not aware that we need such equipment in our waters. It seems that people collect items, perhaps like a trophy, rather as in the old days people collected the heads of the animals they shot.
There is no doubt that it is a flourishing trade. Anything which will make it less possible for people with criminal intent to obtain something which will make the commission of crime easier must be welcome. With other noble Lords, on one occasion I tried to promote much keener laws on firearms generally Nevertheless, we have a very good record in this country I compliment the noble Lord on introducing the Bill. May it have a speedy passage through the House.
12.18 p.m.
Baroness Hornsby-Smith: My Lords, I apologise to my noble friend Lord Renton for not being here for the opening, but I fully support his Bill. My noble friend Lord Swansea went into the detail of the matter, and indeed the Bill appears to refer to what look like replicas, which I assume means things that could easily be mistaken for real weapons. I had the privilege when in New York of being taken through one of the most difficult precincts. I was present when a gang were pulled in. They were stripped of their weapons and I was permitted to examine them.
I recall jocularly saying, "Nobody would be worried by that", which was a fair-sized gun made of cheap alloy with silver metal painting on it, the sort of thing you would expect a young child to have with a cowboy outfit. The policeman said to me, "Look down the barrel, ma'am. It looks so innocent with that cheap paint on the outside—look down the barrel Down the barrel had been placed copper tubing of a size that was readily available under planning arrangements for city buildings, to enclose electric wiring. The tubing was perfectly easy to obtain, and anybody faced with that trivial looking toy would never have thought that it was capable of firing. Admittedly it would be only one shot, and there is some doubt as to whether it would be totally lethal. But the police assured me that certainly at close range it would have blinded somebody, or caused very serious injury. So such a firearm need not necessarily look like a genuine replica, but can be turned into a lethal weapon.
12.21 p.m.
Lord Elton: My Lords, at this stage your Lordships may wish me to give an indication of the Government's attitude towards my noble friend's Bill, and I should like to congratulate him on the eloquent way in which he has introduced it to the House. The purpose of the Bill has already been explained by my noble friend, and we do indeed recognise the debt of gratitude that we owe not only to my noble friend, but also to his and my honourable friend Mr. Eldon Griffiths, the promoter of the Bill in another place, for their efforts in steering through Parliament this modest, but important, contribution to firearms legislation.
My noble friend has already pointed out that the Bill extends only to certain imitation firearms which can be readily converted to fire live ammunition. Those are the weapons which it was set out to catch. He made clear that neither he nor Mr. Griffiths felt that the introduction of controls over imitation firearms generally was feasible, and mentioned that my right honourable friend the Home Secretary shared that view. Perhaps I should explain to the House briefly why my right honourable friend reached this conclusion, which was announced shortly before Easter in another place.
The Government share fully the concern which has been expressed about the criminal misuse of imitation firearms of all kinds. At this point I must say that I have no idea where the figures quoted by the noble and learned Lord, Lord Elwyn-Jones originally came from. I do not get the impression from the police, with whom my department is fairly closely in touch, that existing controls of real firearms are defective, and if they were
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defective on the scale mentioned it could not possibly have escaped anybody's notice —
Lord Elwyn-Jones: My Lords, if the noble Lord will allow me to intervene, I would say that the source of my information is entirely what was said in another place. One cannot always believe what is said in another place, but at any rate that is my sole authority. I hope that I have not spread alarm and despondency, though 1 could give my own personal vouching of the figures: but that is the origin.
Lord Elton: My Lords, what I intended to express was ignorance of the original source of the figures, not the words that the noble and learned Lord quoted. I would equally say that we have no evidence that such weapons are available at the kind of knock-down prices to which the noble and learned Lord referred. I hope that I can reassure anybody who is worried about that.
As 1 was saying, we share the anxiety expressed by my noble friend, and it was for that reason that a thorough examination was undertaken of possible ways of tackling the problem. However, there are already millions of toy firearms in circulation and many of them are modelled on real firearms. We concluded that it would be impossible to exclude these in their present form from any controls over "look-alike firearms that might be devised. Measures to achieve conspicuous dissimilarity could easily be circumvented by a determined criminal. In the final analysis, even if the manufacture, sale, and possession of all imitation firearms, including toys, were to be outlawed, it would still be possible for criminals to fashion guns out of wood which, under the conditions of stress in which they might be used, would easily pass for the real thing.
Against that background, my right honourable friend concluded that there were no practicable steps which could be taken to bring "lookalike" firearms under further legislative control. I fear that that will not comfort the noble Baroness, Lady Phillips. However, it is clearly right that those imitation firearms which can be readily converted to fire live ammunition —and I dare say that what my noble friend Lady Hornsby-Smith referred to would fall into that category—should be subject to the same controls as actual firearms. The Bill now before the House therefore has the full support of the Government.
I do not propose to comment on all the provisions of the Bill, since my noble friend has already highlighted the main points. I should however say a few words about the non-statutory guidelines which have been mentioned—and they are a subject of interest since it will fall to the Home Office itself to draw them up. Perhaps I could first of all reassure your Lordships, especially those of you who might be particularly concerned about the possible effects of the Bill on the trade. by repeating the assurances which have been given in another place. As my noble friend said, the guidelines will consist of measures designed to render an imitation firearm incapable of being readily converted. They will be prepared in consultation with the trade—and that I think answers the question asked by my noble friend Lord Swansea—and other interested parties. The provision in Clause 4(3) to bring the new legislation into force by commencement order, will not be used until

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the guidelines have been completed and made available, but I can assure your Lordships that that will be done as soon as possible in the light of the consultation that must be gone through. As I am sure my noble friend knows, the admissibility of references to the guidelines in a court will of course be for the courts themselves to decide.
Although the guidelines will not have any statutory force, it is difficult to imagine that an imitation firearm which incorporated suggested features designed to render it incapable of being readily converted, would become the subject of a prosecution. The guidelines will be revised from time to time to take account of changes in technology, and those engaged in business transactions involving imitation firearms will be expected to keep abreast of these developments. However, I do not think that any responsible manufacturer, importer, or retailer will be at risk of prosecution.
My noble friend has touched on the certification under the 1968 Act of readily convertible imitation firearms. Although the issue of a firearm certificate is a matter for the appropriate chief officer of police, we agree that there are unlikely to be many occasions when the possession of a readily convertible imitation firearm would be authorised. Noble Lords may ask why an absolute prohibition is not therefore being introduced. Perhaps I ought to remind the House that under the Firearms Act 1968 no firearms are subject to an absolute prohibition, and even the most dangerous weapons can be possessed in certain circumstances, provided an authority is held from the Secretary of State. Moreover, there may be instances where a collector's item may fall within the scope of this Bill, but where it would not be appropriate to render the device incapable of being readily converted.
It is, I suppose, for my noble friend to reply to the principal question posed by the noble and learned Lord, Lord Elwyn-Jones, on the effect of licences and who would require a licensed weapon. I do not doubt that one consideration is that, if there is imposed a licensing system which makes nobody want the item, then the item will not be produced and the menace to society will have been removed. The noble and learned Lord mentioned the earlier, and more infantile, menace—the water pistol—as a kind of precursor of the menace of later years, and said that all parents were subject to it. I cannot help wondering whether in fact the noble and learned Lord's own parents were not subject to this menace at an earlier stage, and he is such a civilised example of the membership of your Lordships' House that I cannot believe that the water pistol is really such a malevolent precursor of violence as he would suggest.
I think that I have replied to all the points which it is proper for the Government to reply to at this stage, and I therefore conclude by once again congratulating my noble friend on the task that he has performed today and by commending the Bill to the House.
12.29 p.m.
Lord Renton: My Lords, I am grateful to my noble friend Lord Elton. If I may have the leave of the House to speak again very briefly, I should like to thank him and other noble Lords who have supported the Bill. I am grateful for the Government support. I should like to comment briefly on some points which I found
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so interesting and so welcome, made by the noble and learned Lord, Lord Elwyn-Jones. He made the very telling point that, thanks to television, in the minds of many young people firearms seem to have become part of the way of life. Of course the reason for that, as I understand it, is that "the Westerns" are made mostly in the United States, and in the United States there is no equivalent firearms control. I think there is possibly an arguable case for the media to point this out, that the mass of films that they show from another country are produced in circumstances which are quite different from those which prevail here. I am not in a position, of course, to comment on the number of firearms illicitly held here. I think there was some confusion in another place, quite frankly, about that matter, and I have nothing to add to what my noble friend Lord Elton said about it.
I welcome the support on this occasion of the noble and learned Lord about the desirability of a fixed date in a commencement order, but I must confess that I have no intention of moving an amendment to that effect in your Lordships' Committee in view of what has been said by my noble friend Lord Elton about the Government's intention to expedite the matter so far as they can. I was very interested in what my noble friend said about the non-statutory guidelines, and I must accept it that it will be for the courts to decide upon their admissibility.
May I say how interested I was, as I am sure all your Lordships were, in the speech of my noble friend Lord Swansea, with his great knowledge of these matters. If I may comment upon one or two of the things that he mentioned, reference has been made to the difficulty of defining what is really convertible. I hope that the non-statutory guidelines will resolve that difficulty. I was somewhat reassured by the statement of my noble friend Lord Elton that the guidelines will be revised from time to time. Obviously, this is a matter in which we have got to feel our way forward in the light of experience, and I hope that that prospect will reassure my noble friend Lord Swansea and, indeed, cover a good deal of what he said.
As to Clause 1(5), of course, it is unthinkable that there should be a blanket defence in respect of all the perhaps hundreds of thousands of imitation weapons which could conceivably be covered, but I hope that he feels that subsection (5) of Clause 1 gives a reasonable let-out for the innocent people concerned. The noble Baroness, Lady Phillips, and my noble friend Lady Hornsby-Smith each gave direct evidence of matters which they have observed from their own experience, and that evidence is welcome evidence in support of the Bill. With gratitude, I trust that your Lordships will now give this Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Supply of Goods and Services Bill
12.34 p.m.
Lord Mishcon: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that The House do now resolve itself into Committee.—(Lord Mishcon.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD AMPTHILL in the Chair.]
Clauses 1 to 11 agreed to.
Lord Drumalbyn Lord Drumalbyn moved Amendment
No.1:
After Clause 11, insert the following new clause:
(" Amendment of Unfair Contract Terms Act 1977 and Misrepresentation Act 1967.

.—(1) In section 12(2) of the Unfair Contract Terms Act 1977 the words "by auction or" are hereby deleted.

(2) After the words "of no effect" in section 3 of the Misrepresentation Act 1967 there shall be inserted "in consumer contracts and shall be of no effect in other contracts".

(3) In subsection (2) above "consumer contract" has the same meaning as in section 12 of the Unfair Contract Terms Act 1977.

(4) The Secretary of State may by order provide that in relation to auction sales of a description specified in the Order such sales shall be other than consumer sales, and such an order may include different provisions for different circumstances.").

The noble Lord said: I feel some embarrassment, I am bound to say, in introducing an amendment to this excellent Bill, which has not only received no opposition so far—and it will not get any from me, either—but has been so widely applauded, both in its content and in the manner in which it has been handled. Nevertheless, the Bill offers an opportunity to raise again a matter which was of some difficulty and was only at the last moment resolved when the 1973 Bill was before the House.
The purpose of this new clause is to bring consumer sales at auctions into line with other consumer sales by removing the right of auctioneers to exclude or limit the terms which are implied in contracts of sale under the Sale of Goods Act—terms which (I may say in parenthesis) under this Bill are also to be implied in contracts for the transfer of goods otherwise than by sale. This exceptional right of auctioneers is contained in Section 12 of the Unfair Contract Terms Act 1977. Subsection (1) of the new clause would remove it. The rest of the first amendment and also the second new clause are consequential.
The two clauses emanate from the body which represents dealers in antiques and the like, the London and Provincial Antique Dealers' Association (which is known as LAPADA for short) with whom auctioneers are in competition. Indeed, it seems that in recent years auctioneers have been tending more and more to handle the same classes of goods as antique dealers, and have been actively seeking sources of supply for sale by auction. It is not greater competition that LAPADA objects to: it welcomes the stimulus to the market and the benefits to the public that competition evokes. All it asks is that the terms of competition should not be weighted against it, as they are now, in ways I shall try to explain.
The Law Commission said this in paragraph 114 of their report in 1979, at the beginning of the passage dealing with auction sales:
" We deal separately with auction sales because they have certain features which call for special consideration. An auction sale, as such, is of course merely a method of selling either to private purchasers or to business purchasers, or to both. In some
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cases, for example in certain classes of commodity sales by auction, sales will clearly be to business purchasers. Other types of auction on the other hand, for example, those held in some markets, are obviously a method of selling to consumers. But there are many auctions where the purchaser may or may not be a private purchaser, and this practical consideration must clearly affect the question how, if at all, contracting out in auction sales should be controlled ".
With the greatest respect, I suggest that this practical consideration is one for the auctioneers. If it raises a problem, it is one for the auctioneers themselves to solve, not at the expense of their competitors, the antique dealers, or of the purchasers. Surely any problem that exists should not be invoked to justify enjoyment by one set of traders of the advantage over others of being able to claim exemption from complying fully with rules of fair trading which govern consumer contracts in the form of implied conditions—to the detriment of consumers.
I am not saying that there may not be certain kinds of auction sales which should be treated differently, notably where in practice all the purchasers, or nearly all, are acting in the course of business. I had in mind the commodity or fat-stock markets, in which not to my knowledge are antique dealers interested. This kind of exception can be dealt with along the lines of subsection (4) of the amendment, which would enable the Secretary of State to specify by order certain kinds of auction sale to be treated as other than consumer sales. This would mean that in such auction sales exclusion clauses would be allowed as at present so long as they were adjudged to be reasonable in the circumstances.
The reason why I move this amendment is that it seems to me to be obviously unfair that, where two sets of traders are selling the same goods by two different methods, one set should be given legal privileges in the strict sense of the word which not only place the other set at a disadvantage but also place the private purchaser, the consumer, at a disadvantage. In my submission, that should be put right if at all possible.
May I describe as best I can what the new clauses will do? I am not a lawyer, and I would claim indulgence for any shortcomings in my explanation, but there arc lawyers here who, I am sure, will be glad, however kindly, to correct any of my mistakes. The Supply of Goods (Implied Terms) Act 1973 introduced for the first time in this country a distinction between what were called consumer sales and those which could not be so described. For the sake of convenience, the latter are usually referred to as "business sales", although that phrase is not to be found in any statute. The Act rendered void and ineffective all clauses which sought to exclude or limit the terms implied by the Sale of Goods Act 1893 (now by the Sale of Goods Act 1979) if they appeared in consumer sales.
If they appeared in business sales, those excluding clauses could be effective if they were proved reasonable. These provisions were carried forward into the Unfair Contract Terms Act 1977, which replaced most of the 1973 Act.
The Unfair Contract Terms Act contains a definition of "consumer sale" in Section 12(1). I give it to your Lordships although you may be very familiar with it:

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" A party to a contract deals as a consumer in relation to another party if he neither makes the contract in the course of a business nor holds himself out as doing so and if the other party does make the contract in the course of a business ",
and (and I abbreviate here) if the goods passing under or in pursuance of the contract are of a type ordinarily supplied for private use or consumption. That is in Subsection 12(1). Then comes Section 12(2), which says:
" But on a sale by auction or by competitive tender the buyer is not in any circumstances to be regarded as dealing as a consumer ".
My recollection is that this section was added towards the end of the passage of the Bill before it became an Act. One thing is certain and it is that the Law Commission were more or less equally divided in the matter. They recommended that further study should be given to it, but I do not think that it has. Two things follow. First, that the use of exclusion clauses in a sale by auction has only one constraint at present—that of the reasonableness of the exclusion clauses used—and, secondly, that, even if the buyer is a private buyer, the exclusion or limitation clauses will not automatically be void but will be void only if the court finds them unreasonable.
On the other hand, in vivid contrast, if a dealer attempts to use clauses which seem to exclude or limit the contractual liability imposed by Sections 13 and 14 of the Sale of Goods Act (which is about merchantable quality or fitness for a particular purpose or correspondence with description) not only will such a clause be immediately void, whether or not it could be adjudged reasonable, but also the dealer would be committing a criminal offence punishable by a fine of up to £1,000 if he attempted to make use of such void and ineffective clauses. This last sanction was introduced by order made under the Fair Trading Act 1973. It is called the Consumer Transactions (Restrictions on Statements) Amendment Order 1976.
If this new clause is accepted, the next new clause will be needed to amend the existing order to ensure that all consumer transactions, whether or not they take place at auction sales are covered. A complication arises because, under the Fair Trading Act, an order must be recommended by the Director-General of Fair Trading as needed to deal with a practice detrimental to the interest of consumers. If that recommendation is made, it must be approved by the Consumer Protection Advisory Committee before it is made by the Secretary of State.
I hope I have made it clear the use of exemption clauses at auctions in the case of consumer sales is, or can be, detrimental to the interests of consumers as they are not protected by the implied terms. I hope I have made it clear that that is so. It seems to me so obvious as not even to need clarification. The order made by the Secretary of State would be laid before Parliament in draft to be approved by each House. I hope that the first new clause satisfactorily resolves the complication, but it is a complicated matter and, all the same, if it does not, it cannot be beyond the wit of man to devise other ways to overcome it.
I would not expect the auctioneers to welcome these amendments any more than any persons or group of persons welcome the loss of privileges, but all that these clauses seek to do is to place auction houses and dealers on an equal footing and to allow them to
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compete on equal terms in areas where they compete. I put it to your Lordships that this is fair and reasonable. I beg to move.
Lord Mishcon: The role of anyone who attempts in Parliament to pilot through a Private Member's Bill is a hazardous and at times an unhappy one. It could not have been put better than it was some two days ago in the Cinematograph Amendment Bill, a Private Member's Bill moved in this House, which had the support of the Government, The Minister, the noble Lord, Lord Elton, put it in this way:
" This Bill has the Government's support. I hope your Lordships will assist its passage through this House. Private Members' Bills are a little less robust, if I can so put it, than Government legislation, and they need that help. In particular, therefore, I hope that your Lordships will be very sparing indeed of amendments to it. Some for the purposes I have mentioned may be unavoidable. But clearly the more there arc, the riskier will be the future of the Bill when it returns to another place. It deserves a place on the statute book. It can protect many of our fellow citizens from affront, and some of them, I believe, from real harm ".—[Official Report, col. 264; 9/6/82.]
I could not put it better myself and in regard to this present Bill. I preface these remarks to my answer to the amendment of the noble Lord, Lord Drumalbyn, because nobody could have put his case more clearly, lucidly or courteously than he did; and it may be a very strong case.
Unfortunately, it is completely inappropriate for inclusion in this Bill. Here is a Bill which one is hoping will be non-controversial. This amendment seeks to amend two Acts of Parliament already passed and following upon a report of the Law Commission, so far as one part of that legislation is concerned.
As I say, the case may be a very powerful one, but I submit not for the amendment of this Bill. I say this not because I feel that the noble Lord's points are not valid and may find a more successful result through another journey. Nobody could be a better guide on that journey than the noble Lord. However, on this journey I must point out to him the arguments against —not that I support them but I merely show that this would be a controversial addition to this Bill and therefore would jeopardise its future to a very great extent.
I summarise some of the arguments against. I repeat that I do not necessarily support them. The first is that the Law Commission recommended that sales by auction should, like competitive tenders, be excluded from the definition of consumer sale. This was accordingly incorporated into the 1973 and 1977 Acts. When that was debated at that time, so far as I can trace there was no attempt to make any provisions such as the noble Lord suggested completely void. It was only a question of whether one made them subject to certain defences or whether one did not. Furthermore, it is said that people buying at auctions have different expectations of their legal rights.
It is also argued by some that it will not be possible or easy to distinguish between consumer bidders and business bidders at auctions. It is further said by others that the auctioneer may not know whether the seller is a private individual or a dealer. It is claimed by others that auctions provide a convenient method of selling goods, where the seller may not be able to give normal undertakings. I refer to such

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sales as sales by executors or by order of a liquidator or receiver.
I merely say this in order that the Committee will realise that this is unfortunately an addition, not only one which would not be properly embodied in this Bill but also one which would be controversial and therefore may well impede the passage of the Bill if it were incorporated in it. For that reason, and for that reason alone, I am afraid that I shall have to oppose this amendment.
Lord Cockfield: Perhaps it will be for the convenience of the Committee if I indicate the views of the Government on my noble friend's amendment. We enter the fascinating if at times perilous world of sales by auction. Many people who bid at auctions do so in the expectation of acquiring a bargain; many are disappointed. I do not suggest that auction rooms should carry the immortal words of Dante:
"All hope abandon, ye who enter here".
But they certainly ought to bear the maxim of the common law: "Caveat emptor".
The present law follows the recommendations of the Law Commission. The chief reason for those recommendations is a purely practical one. The very full protection which is given by the 1977 Act applies only where a person buys as a consumer. There are two elements in buying as a consumer. The first is that he himself is a consumer. Secondly, he buys from a trader. There are those two elements in the equation. Where you have a sale by auction, the auctioneer is a mere agent. The contract is between the owner of the goods and the final purchaser. The owner of the goods may be a trader; he may be a private individual. Those of you who have experience of sales at auction will remember the well-known phrase appearing in so many catalogues:
" The property of a gentleman ".
The identity of the vendor therefore is frequently not disclosed. By definition, the identity of the purchaser cannot be disclosed until the sale is completed. It is quite impossible therefore at the outset to know whether or not the full protection of the 1977 Act, which applies only where a person buys as a consumer, would or would not be relevant. It would introduce an element of confusion and doubt which we think would raise serious practical problems.
There is the further point that auction sales provide a valuable forum for the disposal—if I may put it in this way—of second-hand goods, personal effects, household effects, and so forth. Very often of course there are properties of deceased estates and the owners of them are in no position to give any warranties or assurances. The people who buy these goods do so well-knowing what the position is. As a practical matter, therefore, I fear that I need to advise the Committee that we would not think that the amendment was a feasible one.
There is, however, a further point. My noble friend was good enough to make it quite clear that he was expressing the anxieties felt by the London and Provincial Antique Dealers' Association. In other words, from this point of view what was really involved was not so much consumer protection as protection of the interests of one section of the trade against the interests of an-
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other. This, if I may say so, does rather go outside the spirit of the Bill. I would not want on this occasion to enter into any debate on the merits of the proposition, but it would seem to me to be straying rather wide. But primarily on the basis that such a new clause as that proposed by my noble friend would create serious practical difficulties in working, the view of the Government would be that the amendment is not one which should commend itself to the Committee. I hope that my noble friend will take this advice into account.
Lord Drumalbyn: I am grateful to my noble friend and the noble Lord, Lord Mishcon, for the way in which they have dealt with this amendment. I am particularly grateful to the noble Lord, Lord Mishcon, because I realise that this is an embarrassment to him. I entirely accept what he says, that at this time of the year particularly, whenever a Private Member's Bill has come from another place and is amended here it places in jeopardy the possibility of the Bill becoming an Act. I am fully conscious of that. I do not know whether I need to apologise for taking up the time of the Committee because this is an important matter that deserves to be studied.
I have expressed my opinion that it is primarily a matter for the auctioneers themselves to sort out. It also has to be dealt with at the instance of the Government. And as the Law Commission suggested that it needed further study, I hope it will get the further study that has been suggested. I fully recognise, of course, as indeed did the Law Commission, that there are peculiar difficulties in this, but the fact remains that while the auctioneer is an agent it is the agent who sets up the terms on which the auction is conducted: it is not the seller. It is therefore for the agent to establish conditions, I would have thought, which are compatible with fair and equal competition with the dealers. That is what I have suggested, and I still believe this to be true. It is not that I "have it in" for the auctioneers in any way at all—far from it; I think they are a distinguished body and many of them hold great international reputations. That was also recognised in the Law Commission's report.
However, the fact remains that the Law Commission were not quite so definite as was suggested by my noble friend the Minister. In fact the actual words they used were:
" We are divided on the question whether there should be any control on a sale by auction of the seller's freedom to contract out of the conditions and warranties implied by Sections 13 to 15 of the Sale of Goods Act ".
If my recollection is correct—and I was there at the time when the 1973 Act was going through—this was the amendment which gave the exemptions from the implied terms of the contract and it was introduced at a very late stage and rather took Parliament unawares at the time. I may be wrong, but that is my strong recollection. I quite see that the owners who are sellers are not always in a position to alert the auctioneer to defects in the goods, but I think there is an obligation on them to do so and any action taken by the auctioneers should recognise that obligation.
Plainly this amendment at this stage and in this context—because I recognise that it does not fit very easily into the Bill—is not going to make very much progress, especially on a Friday morning when the House is relatively thin. Simply because the House is

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relatively thin and because the opportunity for discussion of it has been limited although, so far as it goes, it has been pretty comprehensive, it would obviously be wrong for me to test the opinion of the House today. Therefore, I should like simply to acknowledge the way in which this amendment has been received by your Lordships and ask leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Clause 12 [The contracts concerned]:
1.5 p.m.
Lord Nathan Lord Nathan moved Amendment No. 3:
Page 8, line 7, at end insert (", and" the supply of a service" does not include—

(a) the making of a loan or the provision of credit, or

(b) the supply of the services of a solicitor in his capacity as an advocate.").

The noble Lord said: This amendment, which covers two matters, is designed to avoid confusion and difficulty arising in the future. The Long Title of the Bill refers to the amendment of the law, although I recognise that on Second Reading both the noble Lord, Lord Mishcon, and the noble Lord, Lord Cockfield, indicated that their purpose was not, in this part of the Act, to amend but rather to codify the law.
There is no doubt at the moment that the grant of credit or the making of a loan imposes no duty of care or skill owed by a banker to consider the prudence of the customer in borrowing. This has been well established and understood, but was contested in a case where the court held strongly that there was no such duty on the bank. The case to which I refer is Williams and Glyn's Bank v. Barnes, which was reported in the Commercial Law Reports of 5th October 1981. The report starts on page 205 and the passage to which I refer occurs on page 208.
The question therefore is whether the making of a loan or the giving of credit may be, within the meaning of this Part of the Act, the supply of a service. That question could be one of crucial importance to potential litigants, and it is with a view to avoiding that difficulty that this amendment is put forward. If it were held or thought to be a supply of a service, then that would be governed by Clause 13 and therefore would import a duty which presently does not exist.
In view of the Long Title referring to amendment of the law, I believe there is real cause for concern that a court might feel that the decision in Williams and Glyn's case no longer stood and that this Act had an effect upon the position, which is clearly not in the minds of the noble Lords, Lord Mishcon and Lord Cockfield. On those grounds I would propose that the amendment set out in paragraph (a)—
" the making of a loan or the provision of credit ",—
should be adopted. As to paragraph (b)—
" the supply of the services of a solicitor in his capacity as an advocate "—
the position is that either a barrister or a solicitor may be an advocate in certain courts. So far as barristers are concerned, no contract exists between a barrister and his instructing solicitor, nor with his client. Therefore, Clause 13 could not be applicable in any
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event. The solicitor is in a different position. He has a contract with his client—his retainer—and he has a contract with his client whether his function is in the court as an advocate or not in the court, which is his most common function. This question as to the responsibility of a solicitor when acting as an advocate came before the court in the case of Rondel v. Worsley, and there it was held that barrister and solicitor advocates enjoy the same immunity in respect of negligence while functioning as advocates.
In view of the terms of this Part of the Act, some doubt might be cast upon the decision in Ronde! v. Worsley and it seems very desirable that any possibility of that should be resisted or, in the case of a loan or credit, should be avoided. It may be said that these matters could easily be dealt with, as indeed they could, by an exclusion order made under Clause 12(4) of the Bill. If that were so, if an undertaking to make such an exclusion order were given, that would seem to me entirely satisfactory. However, the response on Second Reading to the possibility of a specific exclusion order of this kind from the noble Lord, Lord Cockfield, was far from such an undertaking. For that reason, I thought it right to put before your Lordships this amendment.
May I say one further word? A few moments ago, the noble Lord, Lord Lloyd, mentioned to me that he would like added to the amendment as printed, after the words "the services of a solicitor" in paragraph (b), the words "or chartered patent agent". I would entirely support such an amendment, if the procedural requirements have been complied with, but in that respect I think it would be appropriate that I should leave the matter to the noble Lord, Lord Lloyd. I beg to move.
Lord Lloyd of Kilgerran: May I briefly support what the noble Lord, Lord Nathan, has said in introducing this amendment. He has mentioned that only this morning I approached him to see whether he would agree to the addition of the words "or chartered patent agent" being inserted after the word "solicitor". In my experience, I have seen, and been involved with, chartered patent agents as advocates in the patent court. I therefore consulted the clerk who is concerned with this Bill, and he suggested that the procedure which we have now adopted would be suitable, rather than that a manuscript amendment should be circulated at this stage. I have also notified the Table on this matter. But, if there is some kind of procedural difficulty that was not disclosed to me earlier, I shall, of course, withdraw this kind of amendment. But I was assured that it was perfectly in order to proceed in this way. May I add that Part II of this Bill may substantially alter the existing law. There is some ambiguity about this, but it seems that this is not merely a codifying Bill. Therefore, I strongly support this amendment.
Lord Mishcon: I have been introduced to a new procedure. One is always anxious to learn and, from these Benches, it may be convenient to throw last minute verbal amendments at the Government, in the hope that they can be embarrassed thereby. I can only say that this is a new procedure to me. But I am taking it as an intimation that someone who is

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supporting the amendment that has been moved by my noble friend Lord Nathan would also like to see patent agents included in this connection. With his usual courtesy, to which we are so accustomed, the noble Lord, Lord Lloyd of Kilgerran, has intimated this to those who are responsible for the Bill, in order that they may have warning on another occasion. Having so interpreted his words, I continue to deal with the amendment.
One obviously wants to see that this Bill is as clear as it possibly can be. My own view, and the view of those who are guiding me on this Bill, is that it is quite impossible to construe as a service the granting of a loan or the giving of credit simpliciter. Naturally, if someone who is going to advance money or give credit decides to take on the garb of an adviser on whether or not the transaction, in respect of which the loan is being made or the credit is being given, is an advisable one, or on whether the person concerned ought to be taking the loan or credit, in any event, having regard to his means and his ability to pay, that will be a service, and I would be the last one to think that it was proper to exempt such a person from the duty of acting with reasonable care when he is giving such advice.
I cannot conceive—this is my personal view and the view of those who advise me on this Bill—that the service recorded in paragraph (a),
"the making of a loan or the provision of credit "
is a service that is caught by the Bill. But if there is any doubt about it, and if someone of the stature as a lawyer of my noble friend Lord Nathan regards it as being doubtful, then anyone who has the respect that I have for my noble friend would immediately say that it was a matter that ought to be looked at. If one says that, one then asks: what is the best way of looking at it? —bearing in mind my anxiety, which I have expressed before, that there should not be amendments to this Bill, in order that it may progress and get upon the statute book as quickly as possible.
There is, of course, the alternative way of taking advantage of Clause 12(4), which was indicated by my noble friend, but that is very much a matter for the noble Lord the Secretary of State. That subsection reads:
" The Secretary of State may by order provide that one or more of sections 13 to 15 below shall not apply to services of a description specified in the order, and such an order may make different provision for different circumstances."
If I may respectfully suggest this to the Secretary of State, who, I believe, will courteously be rising in a moment to guide the Committee, I should have thought that the interval of time between now and Third Reading might usefully be employed by a discussion—unless the noble Lord can give some kind of firm assurance now that this is the sort of case where he would exercise his powers and give an exclusion order—as to whether it is more sensible to deal with the matter by way of an exclusion order or by way of an amendment. And I believe that the noble Lord the Secretary of State is as anxious as I am to see that there are as few amendments as possible to this Bill.
Turning to paragraph (b), which reads,
" the supply of the services of a solicitor in his capacity as an advocate ",
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that has already been dealt with in another place. I see that the right honourable gentleman the Minister for Consumer Affairs dealt with it at col. 596 of the Official Report of another place on 2nd April 1982. He then said:
" If in future we discover that there are problems—for example, for people providing a particular type of service which clearly should be exempted from some of the provisions of Part III—the amendment "—
and he was, of course, referring to the very clause that I am talking about—
" will enable the Secretary of State to make an exclusion order.
The only example that I have been able to discover where this might be necessary—and I am still not sure that it will be—is the highly specialised case where there is a contract with a solicitor which includes a provision for him to provide his services as an advocate. As I say, we shall look into this further."
That is, of course, the very case to which my noble friend is referring in paragraph (b) of this amendment.
I imagine—though it is not for me to forecast what the noble Lord the Secretary of State will say—that he may wish to refer to this and to say that this is the type of case where one can take it for granted that an exclusion order will be made.
The noble Lord the Minister is of such capacity that he needs no assistance from me. Nevertheless, in fairness to him I ought to say that at Second Reading he made it very clear, for the protection of everybody, that he had no intention of Part II of this Bill being operative until he had given the fullest opportunity to those who felt they might be unfairly affected to make representations in order that they could be considered in relation to this power to make an exclusion order.
So I turn, with the friendliness which I hope I always exercise, towards him, to the noble Lord, Lord Lloyd of Kilgerran, who endeavoured to put patent agents into this amendment. I had no notice of it. Nevertheless, may I say to the noble Lord that if there is a strong case for patent agents they will no doubt make it in due course.
Lord Cockfield: If I may speak briefly on this subject, so far as making of loans is concerned the Government take the same view as the noble Lord, Lord Mishcon. In the case of the provision of credit there is an arguable case that this is a provision of services, but at this stage I am not at all certain that an adequate case has been made out for their exclusion. The right course, I would suggest, is that which the noble Lord, Lord Mishcon, has suggested; namely, that there should be further consultations on this matter to see what the right way of proceeding is. I shall be only too happy for such consultations to proceed.
In the case of a solicitor acting as an advocate, we recognise that there exists at present a rule of law which gives to a solicitor the same immunity from actions for negligence in relation to those particular activities as is enjoyed by a barrister, and it was not intended that the Bill should alter this position. There is an argument, which I do not want to press at this stage, that the Bill does not in fact affect the defence which would be open to a solicitor if somebody tried to proceed against him. There is a reputable argument there that the Bill does not alter the nature of the defences open to a solicitor. Nevertheless, I realise the anxieties which exist on this score.

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As the noble Lord, Lord Mishcon, has said, there is power under Clause 12(4) for me to make an exclusion order. I hesitate to give a categorical assurance today that such an order will be made because I think it is only right that the legal profession should themselves reflect upon the matter and come along to me with their own clear-cut recommendations about what should be done. I promise the noble Lord that I shall then approach the matter with a completely open, if sympathetic mind. I hope he will accept this as the kind of assurance for which he is looking.
Lord Nathan: Of course I accept the offer of an open and sympathetic hearing. As the position of solicitor-advocates was raised, which I did not previously realise, as long ago as October, it is remarkable that the consideration has not been able to be given to this matter until now.
So far as the exclusion orders are concerned, as the noble Lord, Lord Mishcon, said, they must be effective as at the date of the bringing into operation of Part II, otherwise there would be a complete distortion of the position. So far as the loan and credit situation is concerned, I was interested in the distinction drawn by the noble Lord, Lord Cockfield. As he has suggested, I should certainly like to consider that aspect. In withdrawing the amendment I think I ought to say that I reserve the position for a later stage of the Bill as it proceeds. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clauses 13 and 14 agreed to.
Clause 15 [Implied term about consideration]:
1.26 p.m.
Lord Nathan Lord Nathan moved Amendment No. 4:
Page 8, line 34, at end insert (" where the supplier is acting in the course of a business ").
The noble Lord said: This is a very simple point, I believe. The amendment brings Clause 15 into line with Clauses 13 and 14. It introduces the words which appear in those other clauses: "acting in the course of a business". The concern is that there are many informal agreements for the supply of a service—for example, between neighbours—with no intention of any monetary consideration passing: say, in relation to mutual arrangements concerning gardens, mowing and so forth.
It has been suggested to me that the words "in the course of a business" were omitted from the clause by analogy with the sale of goods under Section 8 of the Sale of Goods Act 1979. But it is an implied term that consideration for the sale of goods shall be a monetary one. I do not think that applies at all in the case of a supply of services. The introduction of this provision under Clause 15, which has no relation to the person carrying on the supply of a service in the course of business, will I think extend the Act far further than was intended or is desirable. It is for that reason that I move the amendment.
Lord Mishcon: As the noble Lord, Lord Nathan, has just said, this is not one of the major points which
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he has brought before the Committee this afternoon. It so happens—I wish frankly to say this—that in the draft Bill which accompanied the report of the Consumer Council these words, or similar words, occur. But the advice which was received from the draftsman—and I rather imagine that it was correct advice—was that the words were unnecessary.
The type of transaction to which the noble Lord referred and the chances of it ever reaching even a solicitor's office, let alone the court, must be minimal: neighbour swapping a service with neighbour and finding that he had certain rights (or that one or other of them did) under the Bill. However, everything must be taken into account when one accepts the responsible role of legislator, as this House does.
Therefore, may I suggest that between now and Third Reading—in saying that I am assuming that no Report stage is necessary—one should take further advice to see whether these words are necessary. If they are necessary, then I can no doubt bring an amendment before the House at Third Reading in words which will not be quite the same as the words of this amendment, for certain reasons with which I shall not weary the Committee. If one can avoid it, I should like to do so, for the reasons which have already been given.
I do not think that an amendment of this kind, if it is necessary to be brought forward, will impede the progress of the Bill in another place, although it would mean a report back, with the Bill amended, to another place. Upon that basis, I hope that my noble friend can see his way clear to withdraw his important amendment.
Lord Cockfield: There is very little for me to add to what has been said by the noble Lord, Lord Mishcon. I myself would be remarkably surprised to find, if one entered into a mutual arrangement with a neighbour under which he mowed your lawn while you were on holiday and you mowed his when he was on holiday, that the law regarded that as a contract. Indeed, I think the important thing is that the clause as drafted applies only to contracts and does not apply to friendly arrangements which do not in fact constitute contracts. I believe that this is the real answer to the case for the amendment. But in the light of what has been said by the noble Lord, Lord Mishcon, I do not consider that it is really necessary for me to say anything more.
Lord Nathan: In the light of the statement made by my noble friend Lord Mishcon, I will withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Exclusion of implied terms, etc.]:
1.31 p.m.
Lord Nathan Lord Nathan moved Amendment No. 5:
Page 9, line 19, at end insert—
(" (5) Nothing in this part of this Act affects the duties owed to a company by any of its directors in his capacity as such.").
The noble Lord said: Whatever may have been said about the last amendment, this clause really does raise matters of considerable difficulty and importance. It is a vexed question, in practising the law, to know whether a contract is one of service or for

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the supply of a service. It is precisely that problem that arises in this case. In my view, it is probable that non-executive directors supply a service while executive directors operate under a contract of service. I believe this approach is the one that must be generally applied. There are, of course, some non-executive directors who are non-executive directors of quite a number of companies, and in that context it may be said that they are acting in the course of a business. It is for this business that an anomaly arises. Under this part of the Bill, if non-executive directors are supplying a service, whereas executive directors are not, they are exercising a responsibility towards the same company but their responsibilities are governed by different rules.
Under Clause 13 there is a duty to take reasonable care and skill which is, as I interpret it, to be assessed objectively—that is to say, that the exercise of the reasonable care and skill is to be assessed objectively, whereas in brief it might be said that the duty of directors generally under company law is assessed subjectively, having regard to the qualifications of the person exercising it. Therefore, one could find that if the directors of a company entered into a contract on the company's behalf in perfectly good faith but for some reason or another it did not turn out well, then any possible liability of the executive directors would, it seems to me, be assessed on a different basis to that of the liability of the non-executive directors. I cannot imagine that was ever intended.
The purpose of this amendment is merely to ensure that in relation to the duties of directors to the company of which they are directors, nothing in the Act shall have any effect. I beg to move.
Lord Mishcon: As my noble friend Lord Nathan has said so correctly, there is a difference, very often worrying to lawyers, between a contract of service and a contract for service. There is no doubt at all that a non-executive director comes into the latter category. I can only say for those who are responsible for this Bill that there certainly was no intention to include the non-executive directors in this sense; it would be recognised as extremely untidy from the point of view of the law if outside company legislation there was a provision in an Act somewhere which dealt with, or covered the duties of, some directors of a company who were in fact non-executive directors. This would be a very untidy way of dealing with company law and the duties of directors. If I may say so, that point is recognised. Whether it is necessary to deal with it in this way—and I know that my noble friend will forgive me if I say that the wide term, undefined, of "company" and the wide term, undefined, of "directors" in this amendment would have to be looked at more carefully—or whether it is a question of an exclusion order, or whether the Government with the benefit of their great advice and wisdom take another view of how to deal with this matter, I shall await to hear with interest.
Lord Cockfield: I wonder whether I might express the view that I have some reservations as to whether this case is well-founded in law. As far as I know, there is no legal distinction between an executive director and
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a non-executive director. They are both directors of a company and their duties and obligations as directors must be identical. It is perfectly true that some directors also have a contract of service as managers or as executives, but that is a separate contract quite distinct from their office as director. Admittedly, it is a matter of convenience to be able to refer to some people as executive directors and to other people as non-executive directors. It is equally a matter of convenience to refer to some people as finance directors, production directors, sales directors, marketing directors or public relations directors—but none of these phrases has any foundation in law.
If this is not the position I would have expected some authority to have been quoted in support of the contrary view. But no such authority has been quoted, either statutory or case law, or even a statement of a leading text book. Therefore, in so far as this argument is based upon a claimed difference in law between executive and non-executive directors, I wonder whether it is soundly based and whether the position may not in fact be that all directors of a company are covered by the decision in City Equitable Fire Insurance Co. Ltd., and that the problem which the noble Lord sees does not exist.
There is another aspect of this—mainly that the provisions of the Bill would apply only if the services were rendered in the course of a business. A directorship is not a business. It is assessed under Schedule E of income tax as an office or appointment. It is not assessed under Schedule D as the profits of a trade, profession or business. That this is so is clearly borne out by the fact that where a director's fees are brought into the computation of the profits of a partnership or of solicitors or accountants, that is done by way of an extra-statutory concession. In fact, the concession is No. 40 in the latest list of statutory concessions published by the Inland Revenue.
I would, therefore, suggest to the noble Lord that he should consider the question whether, if it is necessary to make an extra-statutory concession, it does not therefore follow that the strict law is precisely the opposite; namely, that in law even if a director is a member of a firm of solicitors or accountants, and even if as a result of the extra-statutory concession his fees are brought into the computation of their profits, nevertheless in law he remains a holder of an office assessable under Schedule E and he is not carrying on a business. I put it no stronger than that it seems to me, at first sight, that the fears which have been expressed are not well supported on either ground, and had the position been different I would have expected to have seen it more closely argued.
I would, therefore, like to make two suggestions. The first one is that the people who entertain these doubts, and I agree they include the Law Society, should give further thought to the matter to see whether the doubts are well founded. Secondly, of course, there is the provision in Clause 12(4) for an exclusion order to be made, and if in fact a case can be established I would be very willing to give consideration to such an order. But I hope the noble Lord will not in any way misunderstand my position if I say that I believe it does need to be established first that there is a problem before we then set out to solve the problem.
Lord Misheon: I would make only one comment, if I may. The noble Lord the Secretary of State when addressing us from the Dispatch Box does so in a remarkable manner. 1 was full of wonder, as he quoted rules and cases and so on, looking straight at the members of the Committee and without once looking at his notes. My admiration, I hope, is going to be genuine. I found myself in a similar situation when listening to the President of the United States some few days ago: I was full of absolute wonder when after 40 minutes he sat down, having looked at his notes but a couple of times, and having spoken very rapidly and with admirable quotations, not least from Sir Winston Churchill's speeches. I was only told afterwards that it was as a result of a device which I hope is not in your Lordships' Chamber at this moment that he was able to do this. Having been fooled once, I am sure I have not been fooled again.
Lord Nathan: I am very grateful for the comments of the noble Lord, Lord Mishcon, and the noble Lord, Lord Cockfield. Of course, I will look into the matter further, and, if necessary, contact the noble Lord, Lord Cockfield, with such material as there is on the point. I would only add that I have found it extraordinarily dangerous, particularly in the field of charities, and elsewhere, to ascertain what the law is according to what are the rules of the Inland Revenue in relation to a particular situation, though I was much interested in what the noble Lord had to say on that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clauses 17 to 19 agreed to.
Clause 20 [Short title, etc.]:
Lord Wilson of Langside Lord Wilson of Langside moved Amendment No. 6:
Page 11, line 38, leave out (" but not to Scotland").
The noble and learned Lord said: I beg leave to move Amendment No. 6 on the Marshalled List. In view of the day and the hour, I shall not pursue those aspects of Private Members' Bills touched on earlier by the noble Lord, Lord Mishcon, nor shall I pursue the possibilities of the use of laser beams as ready prompts in your Lordships' House.
The purpose of this amendment is simply to seek the application to Scotland of the provisions of the Bill, or at least to elicit from the Government a more satisfactory explanation than has so far been afforded to Parliament for the absence of Scotland from these provisions. One thing, I think, is certain, and that is that if the machinery of government had operated properly and as it ought to have operated, Scotland would indeed have been covered by the provisions of the Bill. In saying that, let me emphasise that I am not directing any generalised criticism, much less attack, on either the Scottish Law Commission or anyone else. All I am saying is that there is a question to answer as to why Scotland was not covered in the Bill.
What in fact happened, as your Lordships know, was that when the Bill was originally published Scotland was not covered, but thereafter in the Standing Committee in the other place an amendment was effected
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to provide that Scotland should be covered by a new Part II of the Act and should also be covered by Part III of the Act with certain adaptations thereto. That amendment having been effected, on Third Reading the Government successfully moved to delete those provisions applicable to Scotland which had been added in the Standing Committee.
It is important to observe that in so doing the Government did not oppose in principle the need for legislation in this context for Scotland. Indeed they conceded, as I understand what was said—I cannot, of course, quote—that the existing law was scrappy and uncertain and required clarification. The reason for seeking to delete the application of the Bill to Scotland was that it had not been possible to carry out the necessary close consideration. I find this—and I must confine myself to the understatement, beloved of your Lordships' House—very difficult to accept, because of course the report on implied terms in contracts for the sale of goods, on which this Bill is largely based so far as the supply of goods is concerned, was the third in a sequence of three. The first two, presented if my memory is correct in 1969 and 1975, on exemption clauses in contracts, were joint reports carried out by the Law Commission jointly with the Scottish Law Commission.
The third report quite properly did not proceed as a joint report. The development of the law in the two countries had been slightly different, and for that reason the Law Commission proceeded in this matter on its own. But the point I seek to make is that at that point the Government and the Scottish Law Commission were, of course, alerted to this situation, and indeed it is a provision of the Law Commissions Act that the commissioners shall act in consultation with one another in exercise of their functions.
In that situation, I find it, as I have already said, very difficult to accept that it was not possible to give the matter of the law in this particular context full consideration and to be ready to proceed on the basis of a statute applicable not only to England, Wales and, I think, Northern Ireland, but also to Scotland. In those circumstances, if the Government are unable to accept that the Bill should be amended to cover Scotland here and now, then at least I hope that we would have an assurance that the necessary examination of the law in relation to the supply of goods and services will take place and that that examination will be given a reasonably high priority—certainly a significantly higher priority than I gather, from reading the reports of the debates in the other place, the Government were then prepared to give.
There is grave concern in many circles in Scotland that the matter, so far as that country is concerned, has been overlooked. Accordingly, I suggest that the matter should now be given, as a matter of urgency, the necessary consideration in order that we may be assured of the desirability, as regards the law in this matter, that the two parts of the country should be on the same footing. It is not a question of slavishly following the English, but in the context of the consumer interests involved here it is clearly desirable that the law should not be out of step further than necessary.
Baroness Burton of Coventry: In another place we always felt that it was a bold English Member who

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intervened in Scottish affairs. But I was glad that my noble friend Lord Wilson of Langside had tabled this amendment for today. During Second Reading in our own House on 5th May each of us supporting the amendment today, mentioned the exclusion of Scotland. I should like to point out that my noble friend Lady Seear has just sent an apology to me. She has been trying to be in two places today and unfortunately at 1.30 she had to succumb only to be in one. Therefore, she has left her support for the amendment and regrets that she cannot be here to add to it. Additionally, in this respect, my noble friend Lady Elliot of Harwood also had to be in Scotland and she herself is not here. Therefore, your Lordships are left with a Scottish speaker and an English speaker in support of the amendment.
The noble Lord, Lord Young of Dartington, made the point on Second Reading that the noble Lord, Lord Wilson, has made today; namely, that he felt there was an advantage in having a uniform body of commercial law in the two countries unless there was strong reason to the contrary. In the few remarks that I wish to make today, I think it obviously would be better if I confine myself to the Scottish support for the amendment rather than to my own thoughts.
When we were discussing the Second Reading of the Bill great tribute was paid, and I think deservedly paid, to the work of the National Consumer Council in so far as the Bill was concerned. I am hoping very much that the noble and learned Lord the Lord Advocate, whom I assume will be speaking, will feel able to pay an equal tribute to the Scottish Consumer Council for the part that they played in the clauses relating to Scotland.
On 29th March the Scottish Consumer Council wrote to the Solicitor General for Scotland saying how disappointed the council were at the proposed exclusion of Scotland from the Bill. They asked a question and 1 should like to quote it. They asked:
" how, without Scotland's inclusion in the Bill, the Government hopes to achieve clarity in this area of law, so that judges, traders and consumers alike can quote it authoritatively? "
Matters did not go very well for the Scottish Consumer Council. So a month later on 29th April they wrote again saying how disappointed they were at the decision taken and furthermore that, although they had given very careful consideration to the points raised in the debate on Second Reading, the council remained convinced that Scotland should have been included.
We move on to the third letter—it seems to be my fate to deal with letters—dated 17th May when the Scottish Consumer Council tried again. First, they made the point that the Scottish Consumer Council were largely responsible for the inclusion of clauses applicable to Scotland in the Bill. They then went on to express the hope that it would still be possible to persuade the Government to offer some commitment that the law in Scotland in relation to the supply of services be the object of consideration by the Scottish Law Commission in the near future. Of course, as he will know, this last appeal was made to the noble and learned Lord, the Lord Advocate.
I have just received a letter from the Scottish Consumer Council dated 9th June. They informed me that they had not yet had a reply from the Lord
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Advocate to their last letter which the Chairman of the Scottish Consumer Council wrote to him. It may be, of course, that since 9th June the noble and learned Lord may have already replied, but if not, let me point out that they did ask me if I would mention today a matter which I have already mentioned—namely, that in particular their concern is that the Lord Advocate refers the matter of supply of services to the Scottish Law Commission.
Therefore, in paying tribute to the Scottish Consumer Council I hope—as indeed did the mover of the amendment my noble friend Lord Wilson—that if the Government cannot include Scotland at this present stage, then the Lord Advocate, as the very minimum, will offer the statement that has been asked for by the Scottish Consumer Council.
Lord Drumalbyn: I should like briefly to support what has been said by both of the speakers so far. What is left in doubt in the Bill as it stands is the date upon which Part II will be brought into operation. I understood my noble friend the Secretary of State to have indicated at an earlier stage that in the interval he was going to make inquiries as to how far it will be possible to exempt certain forms of activities before the Bill was brought into operation in Scotland. Could not this time be used for the Scottish Law Commission to inquire into the matter and even for legislation to be carried through? Is it too tight a programme? We just do not know how long it will be before the England and Wales Bill will be brought into operation in respect of Part II. However, I emphasise and strongly support the proposition that the same kind of provisions should be provided for Scotland and at the same time, if at all possible, as for England. Perhaps my noble and learned friend the Lord Advocate could deal with that point.
Lord Mishcon: I do not assist the popularity of this Bill in Committee by speaking at any length at two o'clock and by repeating points that have already been made by those who support the amendment. Briefly, so far as I and those who are involved with the promotion of the Bill are concerned, it would indeed be ideal if the law could be the same throughout the United Kingdom on a matter of this kind. But one realises the difficulty again in regard to the passage of this Bill if one attempted to amend it in the way that is sought, for that would be contrary to the already expressed wish—even if it be the second expressed wish and not the first expressed wish—of another place.
So in view of that desire, which I should have thought would be a common desire, one can only hope that the noble and learned Lord the Lord Advocate can give us some assurance that he will use the influence that he has in regard to the Scottish Law Commission or, to put it another way, will ensure that recommendations are made to the Scottish Law Commission on what has been said this afternoon, and that he will add his own authority to any representations that may be made that this is deemed by this House to be an urgent measure and something that is urgently required to be examined in order that Scotland may have the same advantages as other parts of the United Kingdom by benefiting from this legislation.
2.2 p.m.
The Lord Advocate (Lord Mackay of Clashfern): I think there are three matters with which I would wish to deal in seeking to state the Government's position in relation to this amendment. First, the noble and learned Lord, Lord Wilson, in introducing his amendment, pointed out that on two earlier occasions the two Law Commissions had worked together. When it came to the stage which gave rise to the report on which Part I of this Bill is founded, the Law Commission made it perfectly plain that in their view the development of the law in the two countries in this particular area had been different, and therefore it was not appropriate to engage in a joint examination of the law at that stage.
I do not know whether that is being challenged as being incorrect, but I would certainly strongly take the view that the advice given by the Law Commissions in the exercise of their role is sound advice and we ought to accept it. When the two commissions are not working together in relation to a particular project they, of course, keep very closely in touch with one another as to what they are doing. The Scottish Law Commission has a working party whose responsibility it is to receive the working papers of the Law Commission and study them and their probable implications for Scotland, and to make comments to the Law Commission at an early stage. In my experience, that has been a satisfactory way of proceeding.
As regards this particular Bill—and I refer specially to Part I—the results of the English Law Commission's efforts are embodied in it. The Scottish Law Commission proposes to examine this area of the law in conjunction with an examination of a closely related and very important area of the law; that is to say the implied terms and buyers' remedies in relation to the sale of goods. In other words, they take the view very strongly that it is right that buyers' remedies in relation to the sale of goods should be somewhat the same as the remedies in relation to the supply of goods.
Therefore, before one reaches a conclusion on what is the correct formulation in relation to contracts for the supply of goods, this particular related area should be examined. The Law Commissions have the responsibility to develop the law in an orderly fashion and not in a piecemeal fashion. In fact, it is a keynote of the Law Commissions' Act—which the noble and learned Lord, Lord Gardiner, introduced with such skill into this House, laying the foundations for these institutions in such a very remarkable way—that they should operate in that way. In this part of the project, the two commissions are again able to work together because the buyers' remedies and the related matters of implied terms in relation to the sale of goods are matters which the Law Commissions consider that they can examine together, and they are in the process of doing so.
It will be seen from the nature of the Law Commission's own report, on which this Bill is founded, that difficulties are involved, which I need not go into, in legislating on these two matters separately. There are advantages in doing it together and it is that advantage that we seek.
When that work by the Scottish Law Commission is completed, I am unable to give a commitment that we shall be able there and then to legislate on the report. But I claim—T think very easily and fully in the light of
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the record—that the Scottish Law Commission's reports are usually implemented by Parliament very fully and pretty quickly. I see no reason to anticipate any difference in this particular part of the operation.
As regards the supply of services, that is an immensely large area. There is much to be said for the view that good law reform proceeds after a proper examination of the law in that area has taken place. We have seen that there are certain difficulties which can arise if that is not the order of events.
On the Scottish Law Commission, this particular subject matter is part of its first programme of law reform —the law of obligations. I think that your Lordships can take it that the Scottish Law Commission will give it the appropriate priority in the light of the other claims on the attention of that commission. There are many matters in the law of Scotland that urgently require reform and the Scottish Law Commission is in a very good position to judge the urgency and the priorities that exist in that field. It has a number of fields to cover that, as it happens, are not covered by the Law Commission at the present time: it is not working in these areas at the present time. Perhaps the one that occurs most frequently in reference is the study on the law of diligence. Certainly for my part—and the Scottish Law Commission agree with this—it is of the highest priority that we should get our court enforcement procedures right.
What I can say to your Lordships is that I have discussed this matter from time to time with the chairman of the Scottish Law Commission. He is well aware of the situation and he will take full account of what has been said in your Lordships' House in reviewing the priorities of the commission with his colleagues on the commission, as they do from time to time. The Law Commission is in fact undertaking work in the supply of services area, and the Scottish Law Commission will keep closely in touch with that work and will certainly consider fully the implications for Scotland as the work proceeds. I do not think that it would be right for me to go further than that. I would only say that it does not necessarily follow that the introduction of legislation is necessary in order to secure rights for the people of Scotland. The Scottish Law Commission, as well as myself, are anxious to secure that the rights which exist in this area in Scotland are appropriate.
Finally, may I say that I should like to accept the invitation that the noble Baroness, Lady Burton, gave me to say something about the Scottish Consumer Council? I most gladly pay tribute to their work. They have done excellent work. I think I can also say that I keep in pretty close touch with them in a number of areas as well as this. I believe that we shall be able to work satisfactorily for the future as we have done in the past, but we have to recognise that their interests are not the only interests that the Scottish Law Commission have to serve, and the Law Commission does its best to balance these interests. I hope that in the light of that explanation your Lordships will not feel that the machinery of Government, so far as Scotland is concerned, did not operate properly in this connection.
Lord Wilson of Langside: We must all be most grateful to the noble and learned Lord for all that he

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has said. It was, of course, like everything he says, most impressive. Of course I did not challenge—I thought I had made it clear, but I am sure that I did not—the decision of the two Law Commissions to carry out the report on which this Bill is based not as a joint exercise. That was perfectly understandable and perfectly appropriate. I mentioned the matter merely to focus on the point that all concerned must have been alerted to the needs of the situation about at least five years ago. That was the sole point that I made today. I found the noble and learned Lord's reply to the amendment much more impressive than I did that which was made in the other place. In the whole circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
The Schedule agreed to.
House resumed: Bill reported without amendment: Report received.

Food and Drugs (Amendment) Bill
2.13 p.m.
Lord Darling of Hillsborough: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Darling of Hillsborough.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clauses 1 to 5 agreed to.
Lord Mottistone Lord Mottistone moved Amendment
No.1:
After Clause 5, insert the following new clause:
(" Seizure by inspectors
. Section 102 of the principal Act (Powers of inspectors of weights and measures) shall be renumbered as subsection (1) and the following new subsection shall be added at the end—
"(2) Subject to the production if so requested of his credentials, an inspector may at any time within the premises seize and detain—

(a) any article which he has reasonable cause to believe is liable to be forfeited under this Act, and

(b) any document or goods which the inspector has reason to believe may be required as evidence in proceedings for an offence under this Act.".").

The noble Lord said: I am advised by the Food and Drink Industries Council and the Retail Consortium on these amendments. Amendments Nos. 2 and 3 will be familiar as being copies of amendments moved in another place by the Government and later withdrawn. No. 1 has been added because it is understood that in updating the Food and Drugs Act 1955 in relation to Amendments Nos. 2 and 3 and defences, it would be appropriate to update it also in relation to the seizure of documents where it is in line, for example, with the Weights and Measures Act 1979, it being another factor which has arisen over the last 25 years and in which the Food and Drugs Act requires updating. I have tabled these amendments as promised on
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Second Reading because the Government have not seen their way to tabling them themselves, and I hope my noble friend Lord Sandys will tell us a little about the results of the quick inquiry that was initiated to see how interested parties reacted to the amendments.
The point at issue is that, whatever your Lordships decide to do with the amendments and whatever happens to the Bill, the potential injustices in not bringing the food legislation up to date in respect of defences on the same lines as other consumer protection legislation will remain. I hope, therefore, that my noble friend will be able to show us that the Government understand fully that it is a potential injustice and that they will do something without delay. There will obviously have to be some delay, but I hope he will show us that it is not something that will just be shelved because it is too difficult, but that something will happen. I think that is as far as I need go at this stage. I beg to move.
Lord Darling of Hillsborough: I understand from my reading of the first amendment that it is defective because the provision to which it refers was repealed from the Food and Drugs Act 1955 by the Weights and Measures Act 1963. That places us in some confusion and therefore it might be helpful if the Minister would give us the benefit of his advice on how we should proceed.
Lord Sandys: It would probably be suitable for our deliberations if at this stage I were to respond to the comments of my noble friend Lord Mottistone and the noble Lord, Lord Darling. My noble friend referred to the fact that when the Bill was being considered in another place, the Government moved two amendments which would have altered the statutory defences available under the Food and Drugs Act 1955. Section 113 of that Act makes the seller of a defective article liable in law unless he can prove that the contravention was due to the default of another person and has that other person brought before the court. That degree of liability on the seller goes considerably further than in other major legislation designed to protect the consumer, such as the Weights and Measures Acts 1963 to 1979, the Trade Descriptions Act 1968 or the Consumer Safety Act 1978, whose provisions operate satisfactorily. The Government therefore thought it right to take the opportunity presented by the Bill to move those amendments to the Food and Drugs Act which would have made it a defence to prove that due diligence had been exercised to prevent the contravention.
The Government hoped that that proposal would be acceptable to all interests concerned in the proper administration and enforcement of the food and drugs legislation. However, representation was made in another place that a major change of principle in the legislation ought not to be made until all interests had been consulted and their views had been considered. The Government accepted that, and therefore withdrew their amendments, and immediately sought the views of interested organisations. These have been received, and unfortunately there is no consensus of opinion.
It is clear that this is a case where the Government ought to follow the normal procedure of allowing ample time for consultation. In the light of the amendments tabled by the noble Lord, Lord Mottistone, it is

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especially important that there should be proper consultation and exchange of views before Parliament is asked to take a final decision. However, if that is to be done, there will not be time to incorporate new clauses in the present Bill. In any case, the first amendment is deficient in its drafting, not least because it refers to Section 102 of the principal Act, which has been repealed by the Weights and Measures Act 1963. Clearly we need more time for thought.
Industry, trade and advertising interests are generally in favour of the principle of a defence of due diligence, while representatives of enforcement authorities and consumer groups have serious misgivings. However, even some of those in favour recognised that the defence provisions cannot stand alone. It is now clear that powers of enforcement officers, sampling procedures, and related matters, need to be studied in depth, and there has been insufficient time for that to be done. Indeed, on reflection we might well argue that a Private Member's Bill was inappropriate to tackle such a complex issue. I realise that this is a disappointment to my noble friend and the interests on whose behalf he has spoken. But I know also that he and they fully recognise the importance of allowing full prior consultation in cases of this type, and that they would indeed expect it.
The Government remain of the view that it would have been preferable to provide for a due diligence defence. They therefore intend to re-open consultation on this issue when the next opportunity arises for a review of the food and drugs legislation. I regret that 1 cannot say when that will be, and the Government have already said that they do not believe that a review would be justified at present, but they will give serious consideration to arranging one when resources allow.
Finally, my noble friend has suggested that the Bill would seriously alter the balance between prosecution and defence, because the penalties would be considerably more severe while the defence would remain subject to the existing provisions of the Food and Drugs Act. Much higher financial penalties would indeed be possible but, on the other hand, the power of magistrates to imprison would be removed—that is under Clause 5 of the Bill. Noble Lords will also recognise that the penalties laid down in the 1955 Act have become nugatory as a result of the fall in the value of money since then. Above all, everyone recognises—not least the reputable majority of the food industry—that the appropriate penalties must be available to the courts in order to deter the illegal and highly lucrative trade that has been detected in unfit meat. In view of what I have said, 1 very much hope that my noble friend Lord Mottistone will not press his amendments to the Bill.
2.24 p.m.
Lord Darling of Hillsborough: In view of the undertakings that we have heard from the noble Lord, Lord Sandys, I think that it would be inappropriate to continue any discussion on the Bill; rather we should hope that the noble Lord, Lord Mottistone, will withdraw the amendments and thus allow us to speed the Bill on its way to the statute book unamended. Since I am not going to say much more, I want it to be clearly understood that I do not agree with any of the views expressed by the noble Lord, Lord Mottistone, on behalf of the interests for which he was speaking.
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I would add only two other comments. The noble Lord, Lord Sandys, has given us an undertaking that the defence will be considered in relation to a review of the Food and Drugs Act. I think it deplorable that the Government ended the review that had already started, and on which a great deal of progress had been made, and I would hope that that review can be resurrected, as it were, as speedily as possible.
The other comment I should like to make is that in light of the views that have been expressed that is, that there ought to be a great deal more uniformity in the defences in this very wide field of consumer protection legislation—the question of the defences should be referred to full examination by the Law Commission. I think that this is a matter that is most suitable for an inquiry of that kind. In fact, I do not think that a review of what is major legislation should be conducted by any body but the Law Commission. With those very few remarks, I must again thank the noble Lord, Lord Sandys, for helping us out of a difficulty and for helping us to get the Bill on its way to the statute book.
Lord Spens: I was approached by my borough health officer for Ashford in Kent, and also by the Institution of Environmental Health Officers, to oppose Amendments Nos. 2 and 3 to this Bill. They do not consider that they are good amendments; they do not consider that they have been given enough time for adequate consultation since the amendments were first introduced in another place: and they consider that if they were to be accepted the Bill would be seriously weakened. So I hope that the noble 'Lord. Lord Mottistone, will see his way clear to not pressing his amendments.
Lord Wallace of Coslany: This is a Private Member's Bill, of course, and from this Bench I should merely like to say that I think the Committee should accept the detailed explanation given by the noble Lord, Lord Sandys, and that under the circumstances the noble Lord, Lord Mottistone, should withdraw his amendment; and I would echo the words of my noble friend Lord Darling, that the Committee should allow the Bill to proceed with the greatest dispatch, and then the Government can carry on with the detailed work that they have announced.
Lord Lloyd of Kilgerran: Like the noble Lord, Lord Spens, I came here this morning with a whole sheaf of letters from various health and environmental authorities deploring the fact that the Government were proposing to have any sympathy towards the amendments put forward by the noble Lord, Lord Mottistone. The basic principle of law in relation to the sale of bad food (I had come along this morning to argue) should be quite simply that it is an absolute offence. Any person marketing bad food should be strictly liable for such an act. Food is totally different from other commodities. Mistakes should not be tolerated, in the public interest, as the consequences of one mistake can be disastrous and can cause considerable suffering.
Therefore, the matters referred to in the amendments should not be allowed to provide a defence to a prosecution. Of course, they would be important as

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factors in mitigation of the penalties that a court might impose. Naturally, the question of due diligence would be a factor which might influence the court in the amount of penalty it imposed, but it should not be a defence.
On the question of due diligence, from the letters I have had—and I agree with them, in view of the fact that I have had some experience of these matters as a county magistrate in Surrey for a number of years—I would say that the fact that due diligence should afford a defence would make a farce of prosecution proceedings, particularly in a magistrates' court.
Lord Sainsbury: I am no lawyer, and I always listen with great attention to what lawyers have to say, but from the point of view of a retailer of some long experience, as your Lordships know, I think it would be wrong, in the ultimate, to do away with the defence of due diligence. Although the noble Lord, Lord Mottistone, may have withdrawn his amendments for reasons that have already been stated, I still think it is a very important thing that should be embodied in the legislation.
Lord Mottistone: I am grateful to all noble Lords who have spoken, even those against me, and so briefly. It is obvious that the bulk of noble Lords who spoke are against me. I would ask them and, in particular the noble Lord, Lord Lloyd of Kilgerran, to observe that we are all very distressed at the meat traders who have given rise to this legislation in the first place. Meat falls into a special category in this area, as is widely recognised within the food processing industry. Immense trouble is taken by food processors to avoid this sort of situation, not least because if they did not they would not sell their goods. It is not fair that, because there are a few people who have been guilty of a malpractice, all the rest should be swept together by the same argument and assumed to be as potentially guilty.
Lord Lloyd of Kilgerran: I am grateful to the noble Lord for giving way. He has misunderstood the position. It is not a question of suggesting that other firms are guilty in the same way as those dreadful cases in relation to meat distribution. Once you put into a statute that there is a defence of due diligence there are almost endless opportunities for lawyers to find, sincerely and properly, circumstances in which it would be of assistance. It seems to me as a matter of principle a mistake that there can be a defence of due diligence against a prosecution for the sale of bad food.
In saying that there should be an absolute offence, I would take the analogy of the Belisha beacon crossing. I know that all analogies raise problems; but, there, it is no good a motorist who interferes with the passage of a person on a Belisha beacon crossing saying that he looked around and was very diligent in approaching it. It is an absolute offence to interfere with the passage of a person on a Belisha beacon crossing. So far as bad food is concerned, that should be an absolute offence also, if there is any marketing of such a product.
Lord Mottistone: I do not think that it is as simple as that, but this is not the time or place to pursue the argument. I should like to ask my noble friend Lord Sandys before making my decision on what to do whether I got the impression correctly that there would be a deeper review of this issue immediately, notwithstanding the fact that it may be some time, as he explained to us, before the overall review, as one may call it, of the 1955 Act takes place. Is the inquiry which was started three or four weeks ago to be further studied, so that, when it comes to a chance to fit something into legislation, this subject will have been dealt with in a clearer way?
Lord Sandys: In response to my noble friend, I think that if he reads my reply in Hansard he will see that what has taken place (that is, the review which was set in motion early in May by a letter which went out from the department on the 5th of that month) has produced a number of replies. I think it would be informative to him to realise the scale on which it has been done. He will be interested to know that letters were sent to 269 representative bodies. It would be tedious to inform the House which they were but I have a list in front of me. On this particular matter of the due diligence consultations, 269 letters went out and, to date, 220 replies have been received. Those in favour of a due diligence defence amounted to 42. Those against it amount to 178—an overwhelming refusal of the position proposed by the present amendments before your Lordships' Committee. These replies are being studied. Naturally, we still hope that all those letters sent out will eventually be responded to by the representative bodies concerned; but of course it is only a matter of weeks and legal advice has had to be obtained at some speed on a very complicated matter. I can only reassure the noble Lord to the extent that I have in my reply, and, also, my noble friend Lord Ferrers gave certain assurances on Second Reading.
Lord Darling of Hillsborough: I am sorry to intervene again, but I have been shocked by the last statement that was made by the noble Lord, Lord Sandys. I think it utterly inappropriate to base a constructive review of Section 113 of the Food and Drugs Act on replies to the kind of letter sent out inviting comments. I invite the noble Lord to look at that letter again. It is a positive invitation to many of the organisations who received it to reply favourably to the Government's propositions. Apart from that, to try to measure arithmetically the 260 letters that were sent to trade associations and some nine to the local government authorities, the professional associations of environmental health officers and trading standards officers, seems to be altogether inappropriate.
I accepted when the noble Lord made his first intervention that there would be a proper review of the defence procedure and the prosecution procedure on the Food and Drugs Act. I hope that that proper review will take place. I sincerely hope that it will not take place on the basis of the letter that was sent out on 5th May to the various organisations. The noble Lord should bear in mind that that letter was posted, second-class post, on Friday, 7th May. I do not need to tell the Committee what happens to

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second-class post which is posted on a Friday. There is not an organisation in the country that received that letter before 10th May. They were asked to reply by 21st May. Organisations had to consult their members in eight or nine days, because time has to be allowed for the information to be posted in order to arrive at the Ministry by 21st May. Therefore, the time they had for proper consultation and consideration was at the most nine days. To try to build up a constructive case on that flimsy basis is something we should not accept.
Lord Sandford: I must rise to support the noble Lord, Lord Darling, in the last point that he made. I have been watching this issue with some concern on behalf of the London Boroughs Association, 32 authorities that administer this legislation, and the 333 district councils. I very much hope that my noble friend has no intention whatever of taking into account this exercise, which amounts to little more than a straw vote, in the reviews and reconsiderations to which he referred in the earlier part of his speech. The exercise needed in this must be much more thorough.
Lord Sandys: I think at this stage it would be appropriate to say that of course I recognise what the noble Lord, Lord Darling of Hillsborough, has said with regard to the arithmetical aspect. His arguments are quite strong in that regard. While I was attempting to show that a review has taken place to the extent that I have described, it was merely to demonstrate that an effort was made between the consideration in another place and the consideration of this matter in your Lordships' House. Naturally the Government recognise that this is not a full review, but it did constitute a real effort, carried out with some speed and with the co-operation of those concerned, to furnish the Ministry with some material on which to base their preliminary examinations. I hope that to some extent what I have said will reassure the noble Lord, Lord Darling, on that point and also my noble friend Lord Sandford.
Lord Mottistone: I am grateful to all noble Lords for those supplementary remarks. There is a serious concern on the part of food processors that they may be unfairly treated. I fully accept the points that have been made by all sides. I, too, thought that the arithmetical proportions could be criticised the other way round, just as much as from the angle put forward by the noble Lord, Lord Darling. 1 trust the Government will really take note that this is not something which should be allowed to die but needs to be tackled seriously. However, I am very much aware of the fact that none of us wishes to destroy this Bill, notwithstanding the arguments put forward, because of itself it is good even though it does not go far enough in every respect. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 and 3 not moved.]
Remaining clauses agreed to.
House resumed: Bill reported without amendment: Report received.

  TAXATION THRESHOLDS
  TAXATION THRESHOLDS
  WILDLIFE AND COUNTRYSIDE ACT, SECTION 48
  WILDLIFE AND COUNTRYSIDE ACT, SECTION 48
  LORRIES: MAXIMUM WEIGHTS AND AXLE ARRANGEMENTS
  LORRIES: MAXIMUM WEIGHTS AND AXLE ARRANGEMENTS